Total System Services 8K Results of Operations and Financial Condition | TSS 22 Oct 13

2013 Third Quarter and YTD Results

October 22, 2013

2013

Total

System

Services,

Inc.®

Proprietary.

All

rights

reserved

worldwide.

Exhibit 99.2

Forward-Looking Statements

This presentation and comments made by management contain forward-

looking statements including, among others, statements regarding

the

expected future operating results of TSYS. These statements are

based on

management’s current expectations and assumptions and are subject to risks,

uncertainties and changes in circumstances. Forward-looking statements

include all statements that are not historical facts and can be identified by the

use

forward-looking

terminology

such

the

words

“believe,”

“expect,”

“anticipate,”

“intend,”

“plan,”

“potential,”

“estimate”

similar

expressions.

Actual results may differ materially from those set forth in the

forward-looking

statements due to a variety of factors. More information about these risks,

uncertainties and factors may be found in TSYS’

filings with the Securities and

Exchange Commission, including its 2012 Annual Report on Form 10-K,

Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. TSYS

does not assume any obligation to update any forward-looking statements as

a result of new information, future developments or otherwise.

Use of Non-GAAP Financial Measures

This slide presentation contains certain non-GAAP financial measures

determined by methods other than in accordance with generally accepted

accounting principles. Such non-GAAP financial measures include the

following: revenues before reimbursable items; operating margin excluding

reimbursable items; revenues measured on a constant currency basis; free

cash flow; EBITDA, adjusted EBITDA , adjusted cash earnings per share,

adjusted segment operating income and adjusted segment operating

margin.

The most comparable GAAP measures to these measures are revenues;

operating margin; revenues; cash flows from operating activities; net income;

net income; earnings per share, operating income and operating margin,

respectively. Management uses these non-GAAP financial measures to assess

the performance of TSYS’

core business. TSYS believes that these non-GAAP

financial measures provide meaningful additional information about TSYS to

assist investors in evaluating TSYS’

operating results. These non-GAAP

financial measures should not be considered as a substitute for operating

results determined in accordance with GAAP and may not be comparable to

other similarly titled measures of other companies. The computations of the

non-GAAP financial measures used in this slide presentation are set forth in the

Appendix to this slide presentation.

Phil Tomlinson

Chairman and Chief Executive Officer

Troy Woods

President & Chief Operating Officer

3Q 2013 North America Segment Highlights

(1)

Includes Credit, Debit,

Retail, Prepaid & Loyalty

(2)

Includes Healthcare

Improving Revenue Growth

Operating Income up 17.4%

Margin Expansion: up 343 BPS over 3Q12

Shifting Conversion Pipeline

(*) Revenues Before Reimbursable Items

Segment Revenue by Line of Business*

Adjusted Segment Operating Income

Operating Margin

Segment Revenue*

YOY Growth %

3Q 2013 North America Segment Highlights

(*)

Growth

Excluding

Prepaid,

Government

Services

and

Single

Use

Accounts

Eleventh Straight Quarter of Account On File YOY Growth

Fourteenth Straight Quarter of Transaction YOY Growth

Same Client Transactions up 15.2%: Sixteenth Straight Quarter of

YOY Growth

15.0%

12.1%

9.5%

12.7%

7.8%

11.5%

17.6%

Accounts on File

YOY Growth %

Transaction Volume

YOY Growth %

3Q 2013 International Segment Highlights

Revenue $95.4M* –

down 2.8%

–

Up 3.7% on Constant Currency

Currency Headwinds Continue: Q3 $6.4M* YTD $16.7M*

Margin Expansion Continues

Growth Through Greater Product and

Market Penetration

Expansion of Debit Processing

(*) Revenues Before Reimbursable Items

Segment Revenue by Region*

Segment Revenue*

YOY Growth %

Adjusted Segment Operating Income

Operating Margin

3Q 2013 International Segment Highlights

Record Number Accounts Processed

Double-digit Transaction Growth

Same Client Transaction Growth 11.7%

Accounts on File

YOY Growth %

Transaction Volume

YOY Growth %

3Q 2013 Merchant Segment Highlights

Growth in Direct Business Overpowered

by Indirect Business

Acquisitions Performing Well

Sales Productivity on the Rise

Back-end Integration on Schedule

–

Successful Pilot

(*) Revenues Before Reimbursable Items

Direct

Indirect

Segment Revenue*

YOY Growth %

Adjusted Segment Operating Income

Operating Margin

3Q 2013 Merchant Segment Highlights

Indirect Faces Headwinds Due to Consolidation Within the Market

Direct Faces Headwinds Due to Price Compression

POS Transactions Increased 3.9%, Excluding Deconverted Accounts

Continued Record SBS Sales Volume

(excl. ProPay)

(excl. BAMS)

(*) Excludes Managed Accounts and ProPay

SBS Sales Volume*

YOY Growth %

($ in millions)

YOY Growth Rate of Revenue

Adjusted Segment Operating Income

Operating Margin*

Segment Revenue

YOY Growth %

3Q 2013 NetSpend Segment Highlights

($ in millions)

Revenue $103.7M –

up 22.2%

Significant Sequential Quarter Margin Expansion

Added 1k+ Retail Locations

Added 75+ New PayCard Clients

($ in millions)

(*)

Operating Income Excluding Amortization of Acquisition Intangibles, M&A Costs and

Non-recurring Items, and beginning in 3Q13 also excludes corporate administrative expenses

3Q13 Adjusted Operating Income represents NetSpend Segment Op. Inc.

3Q 2013 NetSpend Segment Highlights

Gross Dollar Volume

YOY Growth %

30.1%

42.8%

18.2%

17.9 %

17.1%

18.4%

Direct Deposit Active Cards

YOY Growth %

42.3%

66.7%

25.1%

24.8%

24.2%

22.9%

Direct Deposit Active Cards up 23.8%

Gross Dollar Volume (GDV) up 22.4%

(in thousands)

($ in millions)

23.8 %

22.4%

Jim Lipham

Chief Financial Officer

Consolidated Selected Financial Highlights

$588,074

$468,059

25.6%

Total Revenues

$1,531,513

$1,391,872

10.0%

527,011

406,052

29.8

Revenues Before Reimbursable Items

1,348,760

1,199,922

12.4

105,628

90,893

16.2

Operating Income

275,845

267,821

3.0

64,350

60,312

6.7

Net Income Attributable to TSYS

Common Shareholders

179,095

183,418

(2.4)

Basic Earnings Per Share (EPS)

Attributable to TSYS Common

Shareholders:

$0.34

$0.32

5.8

As Reported (GAAP)

$0.95

$0.97

(2.1)

$0.37

$0.32

14.7

Excluding M&A expenses

$1.03

$0.97

5.5

$0.49

$0.36

37.0

Adjusted Cash EPS*

$1.25

$1.09

14.7

$182,140

$137,858

32.1

Adjusted EBITDA*

$449,931

$407,498

10.4

YTD

2013

YTD

2012

Percent

Change

(in thousands, except per share data)

Qtr

2013

Qtr

2012

Percent

Change

(*) Adjusted Cash EPS and Adjusted EBITDA definitions are contained in Appendix

2013 YTD Revenue Change

Revenues Before Reimbursable Items

Total

System

Services,

Inc.®

Proprietary.

All

rights

reserved

worldwide.

15%

20%

5.5%

Internal

Growth

New

Clients

3.1%

Acquisitions

Lost

Business

(5.0%)

Non-recurring

Items

(0.7%)

Price

Compression

(2.1%)

(7.8%)

Reported

12.4%

Currency

(1.4%)

13.0%

10%

Consumer Credit

224.2

195.0

15.0

224.2

208.6

7.4

Retail

26.8

24.1

11.2

26.8

25.9

3.6

Total Consumer

251.0

219.1

14.6

251.0

234.5

7.0

Commercial

38.9

36.3

7.2

38.9

38.6

0.8

Other

16.9

11.1

52.5

16.9

15.3

10.2

Subtotal

306.7

266.4

15.1

306.7

288.4

6.4

Prepaid /

Stored Value

110.7

114.3

(3.1)

110.7

102.8

7.7

Government

Services

61.6

48.8

26.2

61.6

60.6

1.7

Commercial Card

Single Use

41.6

36.8

13.0

41.6

37.0

12.5

Total AOF

520.7

466.4

11.7

520.7

488.8

6.5

Consolidated Accounts on File Portfolio Summary

(in millions)

Sep

2013

Sep

2012

Change

Sep

2013

Jun

2013

Change

Cash Flow Strength:

2013 TTM Consolidated Financial Highlights

TTM = Trailing Twelve Months

(in millions)

$589

$429

$277

$249

$397

$75

$150

$225

$300

$375

$450

$525

$600

$675

Adjusted EBITDA

Cash flow from operations

Free cash flow

Net income

Ending cash

Debt to EBITDA Ratio

7/1/2013*

9/30/2013

DEBT

$1,618

$1,556

EBITDA (ex. 1-times)

618

635

EBITDA Multiple

2.62x

2.45x

(in millions)

* June 30, 2013 plus $300M draw

Trailing Twelve Months

(TSYS + NetSpend)

Q&A

Appendix

Appendix: Non-GAAP Items –

Adjusted EBITDA and

Adjusted Cash EPS

•

Adjusted EBITDA is net income excluding equity in income of equity investments, nonoperating income/(expense), taxes, depreciation,

amortization and stock-based compensation expenses and other non-recurring items.

•

Adjusted cash EPS is adjusted cash earnings divided by weighted average shares outstanding used for basic EPS calculations. Adjusted

cash earnings is net income excluding the after-tax impact of stock-based compensation expenses, amortization of acquisition intangibles,

and other non-recurring items.

•

Adjusted segment operating income is operating income at the segment level adjusted for acquisition intangible amortization.

•

Adjusted segment operating margin is adjusted segment operating income divided by segment revenues before reimbursable items.

•

The Company believes that these non-GAAP financial measures it presents are useful to investors in evaluating the Company’s operating

performance for the following reasons:

–

adjusted EBITDA and adjusted cash EPS are widely used by investors to measure a company’s operating performance without regard to items,

such as interest expense, income tax expense, depreciation and amortization, merger and acquisition expenses and employee stock-based

compensation

expense

that

can

vary

substantially

from

company

depending

upon

their

respective

financing

structures

and

accounting policies, the book values of their assets, their capital structures and the methods by which their assets were acquired; and

–

securities

analysts

use

adjusted

EBITDA

and

adjusted

cash

EPS

supplemental

measures

evaluate

the

overall

operating

performance

companies.

•

By comparing the Company’s adjusted EBITDA and adjusted cash EPS in different historical periods, investors can evaluate the

Company’s operating results without the additional variations caused by employee stock-based compensation expense, which may not be

comparable from period to period due to changes in the fair market value of the Company’s common stock (which is influenced by external

factors like the volatility of public markets and the financial performance of the Company’s peers) and is not a key measure of the

Company’s operations.

•

The Company’s management uses the non-GAAP financial measures:

–

as measures of operating performance, because they exclude the impact of items not directly resulting from the Company’s core operations;

–

for planning purposes, including the preparation of the Company’s annual operating budget;

–

to allocate resources to enhance the financial performance of the Company’s business;

–

to evaluate the effectiveness of the Company’s business strategies; and

–

in communications with the Company’s board of directors concerning the Company’s financial performance.

Appendix: Non-GAAP Reconciliation –

Revenues Before Reimbursable Items

Total Revenues

$588,074

$468,059

$1,531,513

$1,391,872

Reimbursable Items

61,063

62,007

182,753

191,950

Revenues Before Reimbursable Items

$527,011

$406,052

$1,348,760

$1,199,922

(in thousands)

Three Months Ended

Nine Months Ended

9/30/13

9/30/12

Appendix: Non-GAAP Reconciliation –

Adjusted

Segment Operating Income and Operating Margin

Operating income

$105,628

$90,893

$275,845

$267,821

Less: acquisition intangible amort

(24,731)

(6,919)

(41,142)

(18,924)

Less: Corporate admin and other

(34,122)

(21,421)

(88,603)

(65,791)

Total segment adjusted operating income

$164,481

$119,233

$405,590

$352,536

By segment: North America services (a)

$82,274

$70,080

$229,373

$210,658

International services (b)

$10,729

$8,244

$26,448

$22,842

Merchant services (c)

$40,230

$40,909

$118,521

$119,036

NetSpend (d)

$31,248

$ --

$31,248

$ --

Total revenues

$588,074

$468,059

$1,531,513

$1,391,872

Reimbursable items

(61,063)

(62,007)

(182,753)

(191,950)

Total segment revenues before reimbursable items

$527,011

$406,052

$1,348,760

$1,199,922

Intersegment revenues

(4,373)

(5,003)

(13,904)

(15,542)

By segment: North America services (e)

$217,257

$203,497

$637,379

$613,111

International services (f)

$95,399

$98,184

$281,201

$293,722

Merchant services (g)

$113,650

$107,786

$335,903

$303,842

NetSpend (h)

$103,706

$ --

$103,706

$ --

Adjusted segment operating margin:

North America services (a) / (e)

37.87%

34.44%

35.99%

34.36%

International services (b) / (f)

11.25%

8.40%

9.41%

7.78%

Merchant services (c) / (g)

35.40%

37.95%

35.28%

39.18%

NetSpend (d) / (h)

30.13%

(in thousands)

Three Months Ended

Nine Months Ended

9/30/13

9/30/12

9/30/13

9/30/12

Nine

Months Ended

9/30/13 9/30/12

Percentage

Change

Three

Months Ended

9/30/13 9/30/12

Percentage

Change

Appendix: Non-GAAP Reconciliation –

Constant Currency

(1) Reflects current period results on a non-GAAP basis as if foreign currency rates did not change from the comparable prior year period.

(2) Reflects the impact of calculated changes in foreign currency rates from the comparable period.

(in thousands)

Consolidated:

Constant Currency (1)

$594,470

$468,059

27.0%

$1,548,296

$1,391,872

11.2%

Foreign Currency (2)

(6,396)

---

(16,783)

---

Total Revenues

$588,074

$468,059

25.6%

$1,531,513

$1,391,872

10.0%

International Services:

Constant Currency (1)

$107,050

$102,691

4.2%

$312,715

$306,466

2.0%

Foreign Currency (2)

(6,502)

---

(16,984)

---

Total Revenues

$100,548

$102,691

(2.1%)

$295,731

$306,466

(3.5%)

Nine

Months Ended

9/30/13 9/30/12

Percentage

Change

Three

Months Ended

9/30/13 9/30/12

Percentage

Change

Appendix: Non-GAAP Reconciliation –

Constant Currency

(1) Reflects current period results on a non-GAAP basis as if foreign currency rates did not change from the comparable prior year period.

(2) Reflects the impact of calculated changes in foreign currency rates from the comparable period.

(in thousands)

Consolidated:

Constant Currency (1)

$533,297

$406,052

31.3%

$1,365,215

$1,199,922

13.8%

Foreign Currency (2)

(6,286)

---

(16,455)

---

Revenues before

reimbursable items

$527,011

$406,052

29.8%

$1,348,760

$1,199,922

12.4%

International Services:

Constant Currency (1)

$101,790

$98,184

3.7%

$297,857

$293,722

1.4%

Foreign Currency (2)

(6,391)

---

(16,657)

---

Revenues before

reimbursable items

$95,399

$98,184

(2.8%)

$281,200

$293,722

(4.3%)

Appendix: Non-GAAP Reconciliation –

EBITDA and Adjusted EBITDA

(in thousands)

Three Months Ended

Nine Months Ended

Sep

2013

Sep

2012

Sep

2013

Sep

2012

Net income :

As reported (GAAP) (a)

$67,494

$62,043

$187,205

$187,666

Adjusted for:

Deduct: Equity in Income of Equity

Investments

(2,792)

(1,957)

(9,357)

(6,983)

Add: Income Taxes

30,592

30,228

78,384

84,336

Add: Nonoperating expenses

10,334

579

19,613

2,802

Add: Depreciation and

amortization

59,447

43,243

142,490

127,329

EBITDA

$165,075

$134,136

$418,335

395,150

Adjust for:

Add: Share-based compensation

9,784

3,722

19,587

12,348

Add: NetSpend M&A expenses

7,282

12,009

Adjusted EBITDA

$182,140

$137,858

$449,931

$407,498

Appendix: Non-GAAP Reconciliation –

Adjusted Cash EPS

(in thousands)

Three Months Ended

Nine Months Ended

Sep

2013

Sep

2012

Sep

2013

Sep

2012

Net income Available to TSYS Common

Shareholders:

As reported (GAAP) (a)

$64,350

$60,312

$179,095

$183,418

Adjusted for amounts attributable to TSYS

common shareholders (net of taxes):

Acquisition intangible amortization

16,420

4,383

27,532

12,746

Share-based compensation

6,635

2,489

13,622

8,480

Cash earnings

$87,405

$67,184

$220,250

$204,644

NetSpend M&A expenses (nonrecurring)

5,424

13,934

Adjusted cash earnings (b)

$92,829

$67,184

$234,184

$204,644

Average common shares outstanding and

participating securities (c)

189,525

187,878

188,035

188,553

Basic EPS Available to TSYS Common

Shareholders (a) / (c)

$0.34

$0.32

$0.95

$0.97

Adjusted cash EPS Available to TSYS Common

Shareholders

(b) / (c)

$0.49

$0.36

$1.25

$1.09

Appendix: Non-GAAP Reconciliation –

EBITDA and Adjusted EBITDA

Trailing Twelve

Months Ended

9/30/2013

Net Income

$249,461

Adjusted for:

Deduct: Equity in Income of Equity Investments

(12,544)

Add: Income Taxes

109,151

Add: Nonoperating expense

19,608

Add: Depreciation and Amortization

185,771

EBITDA

$551,447

Adjust for: Share-based compensation

25,860

NetSpend M&A Operating Expenses

12,009

Adjusted EBITDA

$589,316

(in thousands)

Appendix: Non-GAAP Reconciliation –

Free Cash Flow

Trailing Twelve

Months Ended

9/30/2013

Cash Flows from Operating Activities

$429,249

Less:

Purchase of Property and Equipment

(31,996)

Additions to Licensed Computer Software from Vendors

(48,027)

Additions to Internally Developed Computer Software

(26,601)

Additions to Contract Acquisition Costs

(45,509)

Free Cash Flow

$277,115

(in thousands)

Mar 31,

2013

Dec 31,

2012

Jun 30,

2012

Jun 30,

2013

Sep 30,

2012

Appendix: Non-GAAP Reconciliation –

NetSpend

Adjusted Operating Income

Mar 31,

2012

Operating income (loss) (GAAP)

($8,964)

$17,430

$7,869

$17,594

$18,332

$15,799

Adjusted for:

Add: Amortization of acquisition

intangibles

881

534

446

434

590

431

Add: Settlement (gains) and

other losses

25,315

1,533

10,300

(160)

3,423

Add: M&A expenses

2,656

3,219

Adjusted operating income

$17,232

$19,497

$18,615

$17,868

$21,626

$22,872

(in thousands)

Three Months Ended

Total System Services (TSS) Inactive 8-KResults of Operations and Financial Condition