EX-99.1 2 dex991.htm INVESTOR PRESENTATION DATED DECEMBER 2006 Investor Presentation dated December 2006
Transaction Systems Architects
Investor Overview
December 2006
VERSION 2.0 9-14-06
Exhibit 99.1

Private Securities Litigation Reform Act of 1995
Safe Harbor For Forward-Looking Statements
This presentation contains forward-looking statements based on current expectations that involve a
number of risks and uncertainties. The forward-looking statements are made pursuant to safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. A discussion of these forward-
looking statements and risk factors is set forth at the end of this presentation. The company assumes no
obligation to update any forward-looking statement in this presentation.
As  announced on October 27, 2006, the Company’s Audit Committee is conducting a voluntary review
of its historical stock option grants for all periods from 1995 through the present.  On October 27, 2006,
the
Company
also
announced
that
its
financial
statements
and
all
earnings
releases
and
similar
communications relating to financial periods since fiscal year 1995 should not be relied upon in light of
the stock option review.  The review and the related audit procedures to be performed by the
Company’s outside auditors are not complete.  As a result, on December 14, 2006, the Company
announced that the Company would not file its Annual Report on Form 10-K for the year ended
September 30, 2006 on the December 14, 2006 required filing date.  The Company intends to continue
to devote all available resources with the objective of filing its Form 10-K for such period as promptly
as practicable.
2

3
Investment Considerations
•
Leader in Global Payments Software and Solutions
–
Customers
include
~
60%
of
the
top
500
global
banks
that
use
3
rd
party
payments software and 9 of the top 20 global retailers
•
Long-Term Blue-Chip Customer Base
–
Average 18-year relationship with top ten customers
•
Significant Recurring Revenue Base
–
54% of fiscal 2006 revenue was contractually recurring on a monthly basis
–
Volume-based,
term
license
model
–
high
customer
retention
rates
•
Large Contractual Backlog
–
60-month backlog of over $1.24 billion provides significant visibility into future
operating results
•
Strong Cash Flow Generation
–
High margins combined with minimal capital expenditure $4.3 million (P&E)
excluding acquisitions and working capital requirements

4
Investment Considerations (cont’d)
•
New Opportunity With Software as a Service Business Model
–
Significantly expands potential opportunity
•
Leadership Advantages in Areas of Focus
–
30 years of providing leading payments processing solutions
–
Approximately 12% of annual revenue invested in product development
–
High degree of product integration, strong customer support and ongoing product
investment results in low customer turnover
•
Positive Industry Fundamentals
–
Global
electronic
payment
volume
estimated
to
grow
approximately
13%
annually
through 2009, 4x GDP
–
Aging legacy systems
–
Drive for better payment systems productivity
•
Experienced Management Team and Vision for the Future
–
Significant payments processing domain expertise
–
Strategy for growth

5
Business Overview
•
Leader in global enterprise electronic payment software and solutions
–
Gold standard for single-message format payments
–
Listed on the NASDAQ (ticker: TSAI)
–
Member of the S&P MidCap 400 and Russell 2000
•
Operates
through
one
operating
division
-
ACI
Worldwide
(“ACI”)
–
Products sold and supported primarily through direct global distribution network
–
Solutions
are
used
to
process
retail
and
wholesale
payments
-
credit
and
debit
cards,
smartcards,
checks,
high
value
payments
and
bulk
file
payments
–
Additional capabilities for fraud management, transaction settlement, card
management and infrastructure support
•
Over 820 customers in 83 countries
–
Primary customers include large banks, retailers and payment processors
Global business with long and successful operating history

6
Company History
Over 30 years of delivering market leading e-payments solutions
1975
1975
1981
1981
1983
1983
1991
1991
1987
1987
1995
1995
1997
1997
Founded as
custom
development
firm
First
international
sale
Went public
on NASDAQ
as ACI
Purchased by
US West
Purchased by
Tandem
Computers
TSA IPO and
Secondary
Offering
Proactive Risk
Manager
product launch
1982
1982
First product offering
(BASE24)
2002
2002
Phil Heasley
joins as CEO
Restructuring of
TSA organization
to combine
business units
March
2005
March
2005
LBO
1993
1993
Closed P&H
Acquisition
September
2006
September
2006
October
2005
October
2005
BASE24-es
product launch

7
TSA Business Strategy
•
Globalization
–
Extend geographic reach
–
Global infrastructure will drive efficiencies
•
Filling in the payments “supply chain”
–
Build, buy, partner
•
Software as a Service
–
Alternative mechanisms for offering payments technology to the marketplace
–
Opens up new market opportunities
•
Payments convergence
•
Focus on growth
Management has developed a strong vision for the Industry

8
Continuation of the Strategy
Phil Heasley joins
as CEO
Acquisition
•
Payments software
•
Added customers
•
Integration completed
Acquisition
•
Payments software
•
Entered Germany, access to new
products, initiated offshore efforts
•
Integration on schedule
(Q2‘05)
(Q3‘05)
Announced global realignment of
organization structure
•
Created cost efficiencies,
consolidated brand and positioned
for payments convergence
•
Realignment completed
(Q1‘06)
(Q2‘06)
Acquisition
•
Web-based enterprise
business banking for U.S.
banks
•
Extends product family,
catalyst for broad distribution
of software as a service
•
In-house and services-based
delivery
(Q4‘06)
Timeline based on TSA September Fiscal Year End.
•
Globalization
•
Solutions Leadership
•
Software as a Service
•
Payments Convergence
•
Scale

9
An End-to-End Payments Architecture
TSA solutions can be deployed in-house or used as Software as a Service

10
Solutions Overview
•
BASE24/BASE24-es
–
Gold standard for online e-payment processing
–
Strong in ATM and POS markets
–
Customers process over 60 billion transactions
per year
–
BASE24-es opens up the IBM-centric and open
systems markets, plus secures migration path
for existing base
•
Wholesale Payments System
–
High value money transfer system
–
Strengths = scale, reliability, security
–
Customers process over $3 trillion per day
•
Proactive Risk Manager
–
Emerging leader in enterprise fraud detection
–
Includes rules and custom model deployment
options
•
Software as a Service
–
Domain management
–
ASP-based services, starts with P&H
–
Significantly expands market opportunity
•
Payments Manager
–
Back-office payment settlement
•
Smart Chip Manager
–
Smartcard lifecycle management
–
Supports Europay/Mastercard/Visa (“EMV”)
standards
–
Facilitates “multi-application”
on the chip
•
Retail Commerce Server
–
Suite of e-payments products targeted at
retailers
–
Runs on open systems including Windows and
Unix
Portfolio of products that provide end-to-end e-payments solutions architecture

11
Where TSA’s Solutions Fit –
Wholesale Payments
National
Payment
Network
SWIFT
Wholesale Bank
(e.g. BofA,
Wachovia, PNC)
Domestic
Bank
Corporate Treasurer
or Individual
e.g.. FEDWIRE, CHIPS,
LVTS, CHAPS)
Foreign
Bank
Corporate Treasurer
or Individual
Corporate Treasurer
or Individual
Notifications,
Alerts
Domestic
Payments
International
Payments
Notifications,
Alerts
Bank peer-to-peer payments
TSA facilitates multiple processing models and straight-through processing

12
Where TSA’s Solutions Fit –
Consumer Payments
Regional
Network
National
Network
ATM
Retailer
(e.g. Target, Safeway,
The Gap, Winn Dixie)
Acquiring
Institution
(e.g. BofA,
Citibank, US Bank)
Regional
Network
Issuing Institution
(e.g. BofA,
Citibank, Wells Fargo.
Wachovia)
Merchant Acquirer
(e.g. FDC, Paymentech,
TSYS)
(e.g. Mastercard
Visa, Cirrus, Plus)
(e.g. Star, NYCE,
Instant Cash)
TSA offers services at every point in the payment flow

13
TSA Industry Focus
•
Top 2000 world banks
•
Top 500 global retailers
•
Top 200 global and regional payment processors
•
Software as a Service
–
Designed to expand addressable market to lower tiers
–
P&H acquisition is catalyst
Dynamic industry with significant potential for growth

14
TSA’s Footprint
9 of the top 20 global
retailers, and 33 of the
top 100 U.S. retailers
11 of the top 15 U.S.
banks running the
ACI Wholesale
Payments System, and
23 of the top 500
world banks
32 of the top 500 world
banks running ACI
Proactive Risk Manager
for fraud detection
12 of the top 25 U.S.
banks running the Web
Cash Manager Suite
(with P&H)
116 of  the top 500
world banks running
Retail Payment
Engines
TSA revenue represents less than 1% of the total revenue in the
2005 “Fintech
100”

15
Blue-Chip Customer Base
Processors/Switchers
Retailers
Financial Institutions
Long term relationships with blue chip customer base

16
3-Dimensional Licensing Model –
Key Elements
•
Term (no perpetual licenses)
–
Typical term is 5 years
–
Leverages longevity of customer relationship
•
Feature/function
–
Pricing by module (TSA has thousands of modules)
–
Return from R&D initiatives
•
Business volumes
–
Usually based on transactions, can be based on cards, accounts, etc.
–
Generally results in customers paying a fee per transaction
–
Ties the company to market volume growth
Attractive financial model tied to transaction volumes and contractually recurring revenue

17
•
Maintenance provided to license customers
–
15-20% of license amount and include annual CPI adjustments
–
Includes periodic product updates in addition to usual product support
•
Professional services include design, development,
implementation, integration and installation
–
Standard is time and materials
–
Niche-specific, high-margin
•
Software as a Service
–
Offers customers options for using IP
–
Customers pay “by the drink”
–
P&H brings new ASP offering
Value-Added Services
~50% of TSA’s revenue comes from maintenance and services

18
TSA’s Next Growth Opportunities
•
Tier 1 banks where IBM is the preference
–
Increases opportunity by 2-3 times
•
Tier 2 banks and retailers
–
Via Software as a Service
–
Via open-systems platforms (Unix, Windows, Linux)
•
Expansion into countries with large and/or high growth in
payment volumes (e.g. Germany, Brazil, China)
–
Unique opportunity to replace retail AND wholesale payments infrastructures
•
Global banks, deploying global solutions
•
Cross-selling solutions into the base (e.g. fraud detection)
–
Average customer today has approximately 2 TSA products
TSA is well positioned to capitalize on significant growth opportunities

19
•
Focus is product extension,  geographic expansion and
delivery
•
Purchase of S2 Systems (product extension)
–
Adds technology and expertise
•
Purchase of eps Electronic Payment Systems AG (geographic,
product extension)
–
Leading supplier of consumer payments software in Germany
–
Created presence in key electronic payments region
–
Added strong technology and expertise in open-systems electronic payments
•
Purchase of P&H (delivery, product extension)
–
Catalyzes software as a service initiative
–
Adds gold-standard wholesale banking solutions
TSA’s Acquisition Strategy
Disciplined acquisition strategy focused on integration

Industry Overview
*
*
*
20

21
Market Trends
•
Electronic payment volumes still increasing,
especially debit
–
Movement towards single-message format
•
Focus on increasing payments productivity
•
Growing fraud losses and a focus on enterprise-wide fraud
detection and management
•
Regulatory
mandates
accelerate
–
SEPA,
Basel
II,
EMV,
TDES
•
Emerging interest in payments system convergence
–
Creating re-usable payments functions
–
Eliminating redundant systems
–
Creating homogenous systems images for global deployment
Long-term electronic payments volume growth is superior to software spend growth and GDP

22
Global Electronic Payments
Transaction Growth
Compound Annual Growth Rate, 2004 to 2009
12.9%
13.1%
13.1%
10.5%
-3.3%
10.3%
3.2%
Electronic
Retail Payments
Retail Transfers
Wholesale
Checks
Total Non-Cash
Real GDP
Global Payment Transactions
2004
Transactions
(billion)
Change in
Transactions
2004 -
2009
(billion)
2004 -
2009
Compound
Annual
Growth Rate
Electronic
209.8
174.4
12.9%
Retail Payments
140.2
119.6
13.1%
Retail Transfers
47.6
40.6
13.1%
21.9
14.2
10.5%
Checks
52.4
-8.0
-3.3%
Total Non-Cash
262.2
166.4
10.3%
Real GDP
$34,854
$6,027
3.2%
Wholesale
Source: 2006 ACI Payments Market Forecast
Electronic
Payments
Top
210
Billion
&
Double
by
2010

23
Top 15 Countries –
Electronic Payments
**
**
**
**
**
**
**
**
** Countries where TSA’s presence is limited
Source: 2006 ACI Payments Market Forecast
Electronic Payments -
2004
Top 15 Countries
Total
Transactions
(millions)
% of World
Transactions
% of World Real
GDP
% of World TSA
revenue
1
United States
66,014
31.5%
30.9%
41.5%
2
United Kingdom
18,446
8.8%
4.6%
9.1%
3
Germany
17,301
8.2%
5.6%
1.2%
4
France
11,488
5.5%
4.1%
0.2%
5
Brazil
10,856
5.2%
1.9%
1.6%
6
Canada
9,189
4.4%
2.3%
5.9%
7
China
5,794
2.8%
4.3%
0.0%
8
South Korea
5,591
2.7%
1.8%
1.8%
9
Australia
5,529
2.6%
1.2%
2.9%
10
Japan
4,771
2.3%
14.2%
0.4%
11
Spain
4,571
2.2%
1.9%
0.4%
12
Netherlands
4,269
2.0%
1.1%
2.5%
13
Italy
3,517
1.7%
3.2%
3.2%
14
Belgium
3,395
1.6%
0.7%
0.1%
15
Mexico
3,129
1.5%
1.8%
2.4%
Total Top 15
173,860
82.9%
79.3%
73.4%
World
209,762
--
--
--

24
Top 15 Growing Countries –
Electronic Payments
** Countries where TSA’s presence is limited
**
**
**
**
**
**
**
**
Source: 2006 ACI Payments Market Forecast
Electronic Payments -
Growth 2004 to 2009
Top 15 Countries
Change in
Transactions
(millions)
Compound
Annual Growth
Transactions
Compound
Annual Growth
Real GDP
1
United States
52,273
12.4%
3.3%
2
China
17,080
31.6%
8.1%
3
United Kingdom
10,994
9.8%
2.5%
4
Brazil
9,978
13.9%
3.4%
5
South Korea
8,317
20.0%
5.2%
6
Germany
6,433
6.5%
1.5%
7
France
5,780
8.5%
2.0%
8
Canada
5,638
10.0%
2.8%
9
Russia
4,084
18.9%
4.8%
10
Mexico
3,763
17.1%
3.7%
11
Australia
3,544
10.4%
2.5%
12
Spain
3,261
11.4%
2.7%
13
Poland
3,243
20.3%
4.6%
14
India
3,180
26.1%
6.5%
15
Singapore
2,856
17.4%
4.5%
Total Top 15
140,423
13.0%
3.5%
World
174,414
12.9%
3.2%

25
Heavy Volumes
Increased Cost/Age
Regulatory Change
Increased Risk
Today’s Payment Systems are Under Pressure
Emerging Solutions
ARC
Check Conversion
Web and
Telephone
Payments
Mobile Payments
Proximity
Payments
Stored Value
Cards
EMV
Emerged Solutions
Traditional
Solutions
PayPal
Biometrics

26
Why is Convergence Coming?
•
Banks face cost issues
–
Competitive pressures
–
Ongoing mandate compliance
•
Risk management issues
–
Authentication (ACI core competency)
–
SEPA, operational fraud, AML
•
Time-to-market needs
–
Reusable services are needed
•
Need for distinctive brand and image
TSA is well positioned as the premier provider of end-to-end payments solutions

27
Wire
Platform
Settle
Platform
Switch
Platform
ACH
Platform
Risk
Platform
Card
Platform
Wire
Platform
Settle
Platform
Switch
Platform
ACH
Platform
Risk
Platform
Card
Platform
Multiple, Redundant “Payment Engines”
Banks and processors are beginning to consolidate their payment systems

28
Common Services Can be Leveraged
POS, ATM
BRNCH
ARC, LBX
TW, WEB
BRANCH
CORE
CORE
FX
, TSVCS
ATM
, POS
BRANCH
ATM
, POS
BRANCH
CARD
CORE,
CARD
CHANNEL
MANAGE-
MENT
ATM
ENTER-
PRISE
ACCESS
TW, WEB
WEB, ATM
CORE
CORE
Check
Wire
D License
Check Card
ID+PW
TESTKEY
Credit
Debit
CARD
CARD PIN
TYPE
Cash
ID
ACH
Bill
Payment
CARD
WEB
LOGON
DDA
DDA
SORT
COMPLEX
CARD
DDA
STP
STP
AUTHORI-
ZATION
PAYMENT
PREP
Counters
Recyclers
DDA
DDA
STP
STP
GRNTY
SWIFT
RTGS
MICR
,
CARD
KEY, MAC
BIC
VISA
, MC
AMEX
, JCB
STAR
,
LINK,
NETS
BIN, CVV
EMV
PIN, EMV
NETWORK
ACCESS
AUTHENTI-
CATION
Watermark
NACHA
BACS
CHKFREE
DEST
DEST
IMAGE
CORR
RECON
RULES
NEURAL
MANY
DUAL
SINGLE
DUAL
RULES
NEURAL
RULES
NEURAL
CLEARING
SETTLE-
MENT
Paper
Based
RISK
MANAGE-
MENT
Physical
Controls
DUAL
DUAL
RULES
NEURAL
RULES
NEURAL
P
a
y
m
e
n 
t 
I 
n
s 
t  
r 
u
m
e
n 
t
Payment Value Chain

29
Payment
Systems
Reconciliation
Reconciliation
G/L
G/L
DDA
DDA
Check
Check
ACH
ACH
Debit Card
Wire
Wire
Payments
Database
Providing an “Enterprise Payments Hub”
Teller
Teller
Call Center
Call Center
Web Site
Web Site
IVR
IVR
Mobile
Mobile
Enterprise-based services increase overall efficiency and help reduce risk

Financial Overview
30

31
Summary TSA Historical Financials –
Revenue
$348.1
$313.2
$292.8
$277.3
$0.0
$100.0
$200.0
$300.0
$400.0
2003
2004
2005
2006
($ millions)

32
Services
16%
Monthly
License Fees
20%
Maintenance
30%
Facilities
Management
4%
Initial
License Fees
30%
Revenue Mix
Asia/Pacific
10%
EMEA
38%
United States
34%
Americas Int'l
18%
Fiscal 2006 Revenue of $348.1 million
Highly recurring and geographically diverse revenue streams
Non-Recurring
Recurring 54%

33
Summary TSA Historical Financials –
EBITDA*
$62.5
$67.9
$63.7
$44.4
$0.0
$25.0
$50.0
$75.0
2003
2004
2005
2006
0
10
20
30
40
50
EBITDA
EBITDA Margin
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
21.9%
*Fiscal 2006 includes class action settlement of $8.5 million and $5.7 million of special expenses.
EBITDA non-GAAP reconciliation is provided.
16.0%
16.0%
21.7%
21.7%
21.6%
21.6%
18.0%
18.0%

34
Backlog Overview*
60-Month Backlog –
$1.24 billion
12-Month Backlog –
$291 million
Backlog provides significant visibility into future operating results
*
As
of
9/30/06,
includes
P&H
backlog
net
of
accounting
adjustment,
12
month
backlog
of
$25
million
and
60
month
backlog
of
$135
million
Americas
54%
EMEA
36%
Asia/Pacific
10%
Non-Recurring
26%
Monthly
Recurring
74%

35
Fiscal 2007 Guidance
•
Revenue Guidance for fiscal 2007 is expected to be in the
range of $430 million to $442 million
–
P&H Revenue expected to be $39 million to $41 million
•
Earnings per share guidance for fiscal 2007 is expected to
be in the range of $1.46* to $1.61*
–
P&H is expected to be dilutive on a GAAP basis of $0.17 to $0.19
per diluted share, accretive on a cash basis
•
Non-GAAP adjusted earnings per share expected to be in
the range of $1.82* to $1.97* (see Non-GAAP Financial
Measure reconciliation)
*The Company’s fiscal 2007 financial guidance excludes any financial impact that may
result from its options review and the costs associated with it.

36
Conclusion
•
TSA is the category leader in global electronic
payments software and solutions
•
Long-term blue-chip customer base
•
Significant recurring revenue base
•
Large contracted backlog
•
Strong cash flow generation
•
Leadership advantages in areas of focus
•
Positive industry fundamentals
•
Experienced management team

37
www.tsainc.com

38
Financial Appendix A
•
Sales-to-revenue discussion
•
Backlog analysis
•
Valuation considerations

39
Sales-to-Revenue Mechanics
•
Sales order mix (license fees, maintenance, services,
ASP, etc.) and delivery or other acceptance provisions
drive revenue recognition
•
Key attributes are type of sale, contract terms and
payment terms
•
Maintenance and facilities management or ASP (P&H
Solutions) revenue is generally recognized ratably over
term of contract

40
TSA Sales Cycle by Type of Deal
New accounts
Major new applications
Capacity upgrades with existing customers
Add-ons for existing customers
Services
Term renewals
Term renewals with new products
ASP/FM
90 days
90 -
180 days
180 -
450 days
Note –
TSA expenses sales commissions when the deal is signed (paid later)
Sales cycle ranges from 90 to 450 days
Core solution
renewal rates are in
excess of 97%

41
Sales-to-Revenue Flow
12-Month
and
60-Month
Backlog
(1)
Current Period Revenue
Traditional Term Renewals
No
add-ons:
Revenue
recognized
monthly
over
term, depending on payment terms. Balance in 12-
and 60-month backlog.
Term License Renewals (with add-ons or new product)
Revenue recognized upon shipment or customer acceptance. (All revenue may be in
12-
and 60-month backlog)
Services
Revenue recognized as performed.  Portion of contracted services
in 12-
month backlog.
Maintenance & Facilities Mgmt
Capacity Upgrades
Revenue recognized ratably over term. Balance in
12-
and 60-month backlog.
Add-ons, Tools
New Application to Existing Customer
Revenue recognized upon shipment or customer acceptance assuming
some
customization. (All revenue in 12-
and 60-month backlog)
New Customer
Revenue recognized upon shipment or customer acceptance. (All revenue may be in
60-month backlog)
P&H Solutions
License fees recognized over term of contract
-
1/5th
in
current
year,
4/5th
to
12-
and
60-month
backlog.
Maintenance fees recognized ratably over term.
Annual minimum
ASP
processing
fees
(escalate
annually)
recognized
over
term
of
contract
and
balance
in
12-
and
60-month
backlog.
(1) At September 30, 2006, 12-
and 60-month backlog were $291.5M and $1.24B, respectively.
Revenue associated with up-front payment
generally recognized in current period, balance to 12-
and 60-month backlog. 
Revenue generally
recognized in current period.

42
General Payment Terms
•
Paid monthly, quarterly or annually
Maintenance
•
Paid as performed
Services
•
50% of up-front payment at contract signing
•
50% of up-front payment at shipment or acceptance
•
Periodic payments for maintenance or ongoing license fees (monthly, quarterly,
annually) once system is up and running (90-day warranty before maintenance begins)
Term Fees
TSA Products
•
Paid as performed
Services
•
Maintenance paid annually
•
Minimum
ASP
processing
fees
paid
annually
(minimums
increase
over
term
of
contract)
On-going Fees
•
100% paid of up-front payment at contract signing
License Fees
P&H Products

43
TSA Backlog/Revenue Correlation
TSA’s
current
12
month
($291.5M)
(1)
and
60
month
($1.24B)
(1)
backlogs
support
long-term
growth
objectives and recurring nature of revenue reduces the risk profile of the business
Revenue growth estimated to be in the low double digits (company’s stated goal)
Backlog
excludes
services
(2)
revenue
not
yet
contracted
and
transaction
volume
capacity
upgrades.
However,
based
on
historical
results,
they
can
be
considered
recurring
components
of
TSA’s
business.
(1) As of September 30, 2006.
(2) Services under contract are included in the 12-month backlog.
Backlog
Existing contracts renewed at
historical renewal rates
Excludes non-contracted
services, no capacity upgrades,
no COLA, no up-front payments
assumed for renewals
Gap Fill
Services (not yet contracted):
historically ~20% of revenue
Capacity upgrades:
historically
~10% of revenue
New business represents revenue
from sales of new applications or
new customers 
2007
2008
2009
2010
2011
Revenue Breakdown Estimates
Revenue to come from current backlog
66%
49%
46%
43%
40%
Gap to revenue target
34%
51%
54%
57%
60%
Total Revenue %
100%
100%
100%
100%
100%
Operational View of Revenue Breakdown
Contracted Revenue
From 12-month and 60-month backlog
66%
49%
46%
43%
40%
Sources of Revenue from Existing Clients
Services not already in the backlog
10%
20%
20%
20%
20%
Transaction volume capacity upgrades
10%
10%
10%
10%
10%
Revenue from New Customers/Accounts
14%
21%
24%
27%
30%
Total Revenue %
100%
100%
100%
100%
100%

44
Valuation Considerations of 60-month Backlog
Split backlog and gap fill into two components over 5-year forecast
–
Backlog: Year 1 equals TSA’s
12-month backlog, Years 2-5 assume equal amounts of remaining backlog (60-month less
12-month backlog) with minimal growth
–
Gap Fill: equals revenue target less backlog 
Assume operating margins ~25%
Applied different discount rates to backlog and gap fill over 5-year forecast to reflect risk of forecast
–
Backlog: lower discount rate (risk-free rate + premium) due to reduced risk related to contracted revenue
–
Gap Fill: traditional WACC
–
Blended discount rate lower compared to companies without significant backlog because of lower risk profile
Assume historical investment in the business
Standard terminal value approaches (e.g., current market multiples)
Discounted Cash Flow Analysis Methodology
Reviewed sample of application software vendors that report backlog greater than their 2007 revenue estimates
Mean and Median Enterprise Value to Backlog Multiple estimated at approximately 1.4x
TSA valued at approximately 1.0x 60-month backlog
Comparable Backlog Analysis
Long-term recurring nature of TSA’s
business and significant backlog represent a compelling
and differentiated value proposition for long-term investors and should be considered when
valuing the company.

45
Forward-Looking Statements
This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward
looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. A discussion of these forward
looking statements and risk factors is set forth below. The company assumes no obligation to update any forward-looking statement in this presentation.
Generally,
forward-looking
statements
do
not
relate
strictly
to
historical
or
current
facts
and
may
include
words
or
phrases
such
as
the
Company
“believes,”
“
will,”
“expects,”
“looks
forward
to,”
and
words
and
phrases
of
similar
impact,
and
include
but
are
not
limited
to
statements
regarding
future operations, business strategy and business environment and specifically include amounts estimated in the 12-month and 60-month backlogs, the
Company’s revenue and earnings guidance, and the Company’s long-term revenue and earnings growth objectives.
The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements
in
this
presentation
include,
but
are
not
limited
to,
statements
regarding
the:
Company’s expectations regarding the timing of completing the review of its historical stock option practices;
Company’s
expected
timing
regarding
completion
of
the
audit
of
its
2006
consolidated
financial
statements
and
the
filing
of
its
Annual
Report
on
Form 10-K;
Results of the option review;
Expected amounts of the charges relating to the settlement of the class-action lawsuit;
Company’s 12-month and 60-month backlog estimates;
Company’s calculation of recurring and non-recurring backlog;
Company’s revenues and EPS estimates for fiscal 2007;
Company’s belief of emerging interest in payments system convergence; and
Company’s belief of electronic payment volumes increasing.
Any or all of the forward-looking statements may turn out to be wrong. They can be affected by the judgments and estimates underlying such
assumptions or by known or unknown risks and uncertainties. These factors include, without limitation, the risk that additional information may arise
from the preparation of the Company’s financial statements or other subsequent events that would require the Company to make additional adjustments
than
those
previously
disclosed.
Consequently,
no
forward-looking
statement
can
be
guaranteed.
Actual
future
results
may
vary
materially
from
those
expressed or implied in any forward-looking statement. In addition, the Company disclaims any obligation to update any forward-looking statements
after the date of this presentation.

46
Forward-Looking Statements (continued)
All
of
the
foregoing
forward-looking
statements
are
expressly
qualified
by
the
risk
factors
discussed
in
the
Company’s
filings
with
the
Securities
and
Exchange
Commission.
For
a
detailed
discussion
of
these
risk
factors,
parties
that
are
relying
on
the
forward-looking
statements
should
review
the
Company’s
filings
with
the
Securities
and
Exchange
Commission,
including
the
Company’s
form
10-K
filed
on
December
14,
2005,
the
Company’s
form
10-Q
filed
on
February
9,
2006,
the
Company’s
form
10-Q
filed
on
May
10,
2006,
the
Company’s
form
10-Q
filed
on
August
9,
2006
and
specifically
the
sections
entitled
“Factors
That
May
Affect
the
Company’s
Future
Results
or
the
Market
Price
of
the
Company’s
Common
Stock.”
The
risks
identified
in
the
Company’s
filings
with
the
Securities
and
Exchange
Commission
include:
•
Risks
inherent
in
making
an
estimate
of
the
Company’s
12-month
and
60-month
backlog
which
involve
substantial
judgment
and
estimates;
•
Risks
associated
with
tax
positions
taken
by
the
Company
which
require
substantial
judgment
and
with
which
taxing
authorities
may
not agree;
•
Risks
associated
with
litigation
in
the
software
industry
regarding
intellectual
proprietary
rights;
•
Risks
associated
with
the
Company’s
ability
to
protect
its
proprietary
rights;
•
Risks
associated
with
the
Company’s
concentration
of
business
in
the
financial
services
industry;
•
Risks
associated
with
fluctuations
in
quarterly
operating
results
and
resulting
stock
price
volatility;
•
Risks
associated
with
conducting
international
operations;
•
Risks
regarding
the
Company’s
new
BASE24-es
product;
•
Risks
associated
with
the
Company’s
dependence
on
its
BASE24
solution;
•
Risks
associated
with
the
Company’s
dependence
on
the
licensing
of
software
products
that
operate
on
Hewlett-Packard
NonStop
servers;
•
Risks
associated
with
the
complexity
of
the
Company’s
software
products;
•
Risks
associated
with
the
Company’s
acquisition
of
new
products
and
services
or
enhancement
of
existing
products
and
services
through
acquisitions
of
other
companies,
product
lines,
technologies
and
personnel,
or
through
investments
in
other
companies;
•
Risks
associated
with
the
acquisition
of
S2
Systems
and
the
integration
of
its
operations
and
customers,
including,
without     
limitation,
the
risks
described
in
the
Company’s
Form
8-K
filed
July
1,
2005;
•
Risks
associated
with
the
integration
of
its
eps
Electronic
Payment
Systems
AG’s
operations
and
customers,
including,
without
limitation,
the
risks
described
in
the
Company’s
Form
8-K
filed
May
11,
2006;
•
Risks
associated
with
the
acquisition
of
its
P&H
operations
and
customers,
including,
without
limitation,
the
risks
described
in
the  
Company’s Form 8-K filed September 1, 2006;
•
Risks
associated
with
new
accounting
standards
or
revised
interpretations
or
guidance
regarding
existing
standards;
and
•
Risks
associated
with
the
assessment
and
maintenance
of
internal
controls
over
the
Company’s
financial
reporting.

47
Forward-Looking Statements (continued)
Backlog Estimates
The
Company’s
12-month
and
60-month
backlog
estimates
are
based
on
the
Company’s
judgment
about
future
events
which,
as
described
above,
involve
a
number
of
risks
and
uncertainties.
The
Company
estimates
backlog
using
the
methodology
described
in
the
Company’s
Form
10-Q
filed
on
August
9,
2006
in
the
section
entitled
“Backlog”
under
Item
2.
–
MANAGEMENT’S
DISCUSSION
AND
ANALYSIS
OF
FINANCIAL
CONDITION
AND
RESULTS
OF
OPERATION
–
and
on
the
Company’s
Web
site
at
www.tsainc.com.
Non-GAAP Financial Measures
This
presentation
includes,
EBITDA,
a
non-GAAP
financial
measure.
EBITDA
is
defined
as
net
income
before
interest,
taxes,
depreciation
and
amortization.
The
Company
uses
EBITDA
as
a
performance
measure
and
provides
EBITDA
to
investors
to
complement
results
provided
in
accordance
with
GAAP,
as
management
believes
the
measure
helps
illustrate
underlying
operating
trends
in
the
Company's
business
and
uses
the
measure
to
establish
internal
budgets
and
goals,
manage
the
business
and
evaluate
performance.
Because
EBITDA
excludes
some,
but
not
all,
items
that
affect
net
income
and
the
definition
of
EBITDA
may
vary
among
other
companies,
the
EBITDA
measure
presented
by
the
Company
may
not
be
comparable
to
EBITDA
measures
of
other
companies.
EBITDA
should
not
be
considered
in
isolation
or
as
a
substitute
for
comparable
measures
calculated
and
presented
in
accordance
with
GAAP.
EBITDA
reconciliation
table:
($ thousands)
TSA
Net Income
Taxes
Interest Expense
Depreciation & Amortization
Interest Income
EBITDA
2003
14,347
19,288
2,999
9,015
(1,211)
44,438
2004
46,685
10,750
1,434
6,571
(1,762)
63,678
2005
43,246
22,861
510
5,180
(3,843)
67,954
2006
55,804
5,986
185
8,362
(7,825)
62,512

48
Non-GAAP Financial Measure
Non GAAP Financial Measure
This
presentation
includes
earnings
per
share
guidance
on
an
adjusted,
non-GAAP
basis.
TSA
is
presenting
this
non-GAAP
guidance
to
provide
more
transparency
to
its
earnings,
focusing
on
operations
before
selected
non-cash
items.
The
Company
believes
that
providing
this
non-GAAP
financial
measure
is
useful
to
its
investors
as
an
operating
measure
because
it
excludes
certain
expenses
and
therefore
provides
a
consistent
basis
for
comparison
of
the
Company's
expenses
from
period
to
period.
The
presentation
of
this
non-GAAP
financial
measure
should
be
considered
in
addition
to
the
Company’s
GAAP
results
and
is
not
intended
to
be
considered
in
isolation
or
as
a
substitute
for
the
financial
information
prepared
and
presented
in
accordance
with
GAAP.
A
reconciliation
of
GAAP
earnings
per
share
to
non-GAAP
adjusted
earnings
per
share
is
below.
FY06 Preliminary
FY07 Guidance
GAAP earnings per share
$1.46
$1.46
to $1.61**
Tax benefit (first and third quarter FY06)
(0.46)
n/a
Lawsuit settlement cost
0.14
n/a
Adjusted earnings per share after selected one-time items
$1.14
$1.46 to $1.61**
Amortization of acquisition-related intangibles
0.05
0.22
Non-cash equity-based compensation
0.11
0.14
Non-GAAP adjusted earnings per share
$1.30*
$1.82 to $1.97**
*FY06 Not adjusted for special expenses of $0.10 for the fourth quarter
**Reflects P&H dilution in fiscal 2007 (detail as follows):
Projected contribution of P&H
$0.06 to   $0.08
Amortization of intangible assets from P&H          
($0.12) to ($0.12)
P&H non cash stock based compensation               
($0.02) to ($0.02)
P&H deferred revenue impact                         
($0.10) to ($0.10)
Other net
($0.01) to ($0.01)
Total P&H dilution for fiscal 2007                   
($0.17) to ($0.19)

www.tsainc.com