Total System Services (TSS) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Total System Services, Inc. One TSYS Way P.O. Box 2567 Columbus, GA 31902-2567 +1.706.649.2307 +1.706.649.5740 www.tsys.com

For immediate release:

Contacts:

Shawn Roberts

TSYS Investor Relations

+1.706.644.6081

shawnroberts@tsys.com

TSYS Reports 2014’s Fourth Quarter Adjusted EPS Grew 20.8%

And The Full Year Grew 13.2%

Provides 2015 Adjusted EPS Guidance Growth of 11-13%

COLUMBUS, Ga., Jan. 27, 2015 — TSYS (NYSE: TSS) today reported results for the fourth quarter and full year of 2014.

“We finished 2014 on a high note. Organic revenue grew 5.8%, year over year, with total revenues growing 18.5% and revenues before reimbursable items up 20.2%,” said M. Troy Woods, president and chief executive officer of TSYS.

Highlights for the fourth quarter of 2014 include:

• Adjusted earnings per share (EPS) from continuing operations were $0.58, an increase of 20.8%. On a GAAP basis, basic EPS from continuing operations were $0.45, an increase of 28.8%.

• Income from continuing operations attributable to TSYS’ shareholders was $83.2 million, an increase of 25.9%.

• Adjusted EBITDA was $193.7 million, an increase of 7.0%.

• Total revenues for the quarter were $635.1 million, an increase of 8.9%. Revenues before reimbursable items were $569.3 million, an increase of 8.4%.

• Adjusted operating margin was 27.2%. GAAP operating margin was 19.3%.

• TSYS repurchased 1.5 million shares during the quarter.

Highlights for the full year 2014 results include:

• Adjusted EPS from continuing operations were $1.96, an increase of 13.2%. On a GAAP basis, basic EPS from continuing operations were $1.48, an increase of 12.8%.

• Income from continuing operations attributable to TSYS’ shareholders was $275.2 million, an increase of 11.5%.

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TSYS Reports 2014’s Fourth Quarter Adjusted EPS Grew 20.8%

And The Full Year Grew 13.2%

• Adjusted EBITDA was $712.3 million, an increase of 14.1%.

• Total revenues were $2.4 billion, an increase of 18.5%. Revenues before reimbursable items were $2.2 billion, an increase of 20.2%.

• Adjusted operating margin was 25.7%. GAAP operating margin was 17.6%.

• TSYS repurchased 5.2 million shares for the year.

“With the purchase of 5.2 million shares of our stock during the year and our annual dividend of $0.40 per share, we deployed over 94% of available free cash flow to our shareholders in 2014. Including our purchase of 3.1 million shares in December of 2013, we repurchased 8.3 million shares of our stock deploying $262.9 million of capital during that 13 month period,” said Woods.

TSYS also announced that its Board of Directors has approved a new share repurchase plan that authorizes the repurchase of up to 20 million shares of TSYS stock, which replaces its existing share repurchase plan. The shares may be repurchased from time to time in the open market or in privately negotiated transactions at prices TSYS deems appropriate, subject to market conditions, business opportunities and other factors. This authorization has no expiration date and may be suspended or terminated at any time.

2015 Financial Outlook

“Our guidance for 2015 is included in the table below and we expect another year of strong growth in revenues and adjusted EPS. The results for 2014 and our guidance for 2015 reflect our focus on diversification, growth and the exceptional performance of our TSYS team,” said Woods.

	2015 Financial Outlook
	Range (in millions, except per share amounts)					Percent Change
Total revenues	$	2,620	to	$	2,660		7	%	to	9	%
Revenues before reimbursable items	$	2,370	to	$	2,410		8	%	to	10	%
Adjusted EPS attributable to TSYS common shareholders from continuing operations*	$	2.17	to	$	2.21		11	%	to	13	%

* Average Basic Weighted Shares 186

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TSYS Reports 2014’s Fourth Quarter Adjusted EPS Grew 20.8%

And The Full Year Grew 13.2%

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, January 27. The conference call can be accessed via simultaneous Internet broadcast attsys.com by clicking on the link under “Webcasts” on the main homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call. A slide presentation to accompany the call will be available by clicking on the link under “Webcasts” on the main homepage oftsys.com.

Non-GAAP Measures

This press release contains information prepared in conformity with GAAP as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of its consolidated financial information as prepared in accordance with GAAP. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure and the most directly comparable GAAP financial measure are presented so as not to imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies.

Additional information about non-GAAP financial measures, including, but not limited to, adjusted EBITDA and adjusted EPS, and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 13 to 16 of this release.

About TSYS

At TSYS^® (NYSE: TSS), we believe payments should revolve around people, not the other way around. We call this belief “People-Centered Payments^®.” By putting people at the center of every decision we make, TSYS supports financial institutions, businesses and governments in more than 80 countries. Through NetSpend^®, A TSYS Company, we empower consumers with the convenience, security, and freedom to be self-banked. TSYS offers issuer services and merchant payment acceptance for credit, debit, prepaid, healthcare and business solutions.

TSYS’ headquarters are located in Columbus, Ga., U.S.A., with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS is a member of The Civic 50 and was named one of the 2013 World’s Most Ethical Companies by Ethisphere magazine. TSYS routinely posts all important information on its website. For more, please visit us atwww.tsys.com.

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TSYS Reports 2014’s Fourth Quarter Adjusted EPS Grew 20.8%

And The Full Year Grew 13.2%

Forward-Looking Statements

This press release contains “forward-looking statements” – that is, statements related to future, not past, events. Forward-looking statements often address our expected future business and financial performance and often contain words such as “expect,” “anticipate,” “intend,” “believe,” “should,” “plan,” “potential,” “will,” “could,” and similar expressions. These forward-looking statements include, among others, statements regarding TSYS’ expectation that it will have another year of strong growth in revenues and adjusted EPS and its earnings guidance for 2015 total revenues, revenues before reimbursable items and adjusted EPS, and the assumptions underlying such statements. These statements are based on the current beliefs and expectations of TSYS’ management, are based on management’s assumptions and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements. A number of important factors could cause actual results or events to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond TSYS’ ability to control or predict. These factors include, but are not limited to, the material breach of security of any of TSYS’ systems; TSYS’ ability to integrate acquisitions and achieve the anticipated growth opportunities and other benefits of the acquisitions; the effect of current domestic and worldwide economic conditions; risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates; expenses are incurred associated with the signing of a significant client; TSYS does not convert clients’ portfolios as scheduled; the deconversion of a significant client; changes occur in laws, rules, regulations, credit card association rules, prepaid industry rules or other industry standards affecting TSYS and our clients that may result in costly new compliance burdens on TSYS and our clients and lead to a decrease in the volume and/or number of transactions processed or limit the types and amounts of fees that can be charged to customers; the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto; adverse developments with respect to the payment card industry in general, including a decline in the use of cards as a payment mechanism; and growth rates of TSYS’ existing clients are lower than anticipated or attrition rates of existing clients are higher than anticipated. Additional risks and other factors that could cause actual results or events to differ materially from those contemplated in this release can be found in TSYS’ filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.

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TSYS Announces Fourth Quarter 2014 Earnings

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TSYS

Financial Highlights

(unaudited)

(in thousands, except per share data)

	Three Months Ended									Twelve Months Ended
	December 31,									December 31,
							Percent									Percent
	2014			2013			Change			2014			2013			Change
Total revenues	$	635,104			583,103			8.9	%	$	2,446,877			2,064,305			18.5	%
Cost of services		422,129			386,295			9.3			1,668,892			1,369,438			21.9
Selling, general and administrative expenses		90,199			85,739			5.2			343,128			298,147			15.1
Merger and acquisition expenses		3			2,211			(99.9	)		3,217			14,220			(77.4	)
Operating income		122,773			108,858			12.8			431,640			382,500			12.8
Nonoperating income (expenses)		968			(718	)		nm			(763	)		(804	)		5.1
Merger and acquisition expenses—bridge loan facility & other financing		(9,484	)		(9,754	)		2.8			(37,948	)		(29,220	)		(29.9	)
Income before income taxes, noncontrolling interests and equity in income of equity investments		114,257			98,386			16.1			392,929			352,476			11.5
Income taxes		35,428			33,435			6.0			129,761			110,981			16.9
Income before noncontrolling interests and equity in income of equity investments		78,829			64,951			21.4			263,168			241,495			9.0
Equity in income of equity investments, net of tax		5,751			3,691			55.8			17,583			13,047			34.8
Income from continuing operations, net of tax		84,580			68,642			23.2			280,751	��		254,542			10.3
(Loss) Gain from discontinued operations, net of tax		(3,338	)		751			nm			48,655			2,055			nm
Net income		81,242			69,393			17.1			329,406			256,597			28.4
Net income attributable to noncontrolling interests		(1,382	)		(3,738	)		63.0			(6,534	)		(11,847	)		44.8
Net income attributable to TSYS common shareholders	$	79,860			65,655			21.6	%	$	322,872			244,750			31.9	%
Basic earnings per share(EPS):
Income from continuing operations to TSYS common shareholders*	$	0.45			0.35			28.8	%	$	1.48			1.31			12.8	%
(Loss) Gain from discontinued operations to TSYS common shareholders*		(0.02	)		(0.00	)		nm			0.26			(0.01	)		nm
Basic EPS	$	0.43			0.35			24.4	%	$	1.73			1.30			33.5	%
Diluted EPS
Income from continuing operations to TSYS common shareholders*	$	0.44			0.34			28.9	%	$	1.46			1.30			12.4	%
(Loss) Gain from discontinued operations to TSYS common shareholders*		(0.02	)		(0.00	)		nm			0.25			(0.01	)		nm
Diluted EPS	$	0.43			0.34			24.5	%	$	1.71			1.29			33.0	%
Dividends declared per share	$	0.10			0.10					$	0.40			0.40
Amounts attributable to TSYS common shareholders:
Income from continuing operations, net of tax	$	83,198			66,058			25.9	%	$	275,216			246,893			11.5	%
(Loss) Gain from discontinued operations, net of tax		(3,338	)		(403	)		nm			47,656			(2,143	)		nm
Net income	$	79,860			65,655			21.6	%	$	322,872			244,750			31.9	%
Non-GAAP measures:
Adjusted EPS from continuing operations	$	0.58			0.48			20.8	%	$	1.96			1.73			13.2	%
Adjusted EBITDA	$	193,738			181,097			7.0	%	$	712,267			624,093			14.1	%

nm = not meaningful

* EPS amounts may not total due to rounding.

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TSYS Announces Fourth Quarter 2014 Earnings

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TSYS

Consolidated Statements of Comprehensive Income

(unaudited)

(in thousands)

	Three Months Ended December 31,					Twelve Months Ended December 31,
	2014			2013		2014			2013
Net income	$	81,242			69,393	$	329,406			256,597
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment as a result of discontinued operations		—			—		3,514			—
Foreign currency translation adjustments		(13,410	)		2,407		(19,531	)		(4,081	)
Postretirement healthcare plan adjustments		147			473		(668	)		1,895
Unrealized (loss) gain on available-for-sale securities		(28	)		294		589			1,773
Other comprehensive income (loss)		(13,291	)		3,174		(16,096	)		(413	)
Comprehensive income		67,951			72,567		313,310			256,184
Comprehensive income attributable to noncontrolling interests		1,063			2,943		6,113			9,092
Comprehensive income attributable to TSYS common shareholders	$	66,888			69,624	$	307,197			247,092

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TSYS Announces Fourth Quarter 2014 Earnings

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TSYS

Earnings Per Share

(unaudited)

(in thousands, except per share data)

	Three Months Ended					Three Months Ended					Twelve Months Ended					Twelve Months Ended
	December 31, 2014					December 31, 2013					December 31, 2014					December 31, 2013
	Common			Participating		Common			Participating		Common			Participating		Common			Participating
	Stock			Securities		Stock			Securities		Stock			Securities		Stock			Securities
Basic earnings per share:
Net income attributable to TSYS common shareholders	$	79,860					65,655				$	322,872					244,750
Less income allocated to nonvested awards		(831	)		831		(643	)		643		(3,308	)		3,308		(1,595	)		1,595
Net income allocated to common stock for EPS calculation (a)
	$	79,029			831		65,012			643	$	319,564			3,308		243,155			1,595
Average common shares outstanding (b)		183,276			1,945		187,572			1,874		184,297			1,925		187,145			1,246
Average common shares and participating securities		185,221					189,446					186,222					188,391
Basic earnings per share (a)/(b)	$	0.43			0.43		0.35			0.34	$	1.73			1.72		1.30			1.28
Diluted earnings per share:
Net income attributable to TSYS common shareholders	$	79,860					65,655				$	322,872					244,750
Less income allocated to nonvested awards		(824	)		824		(638	)		638		(3,278	)		3,278		(1,585	)		1,585
Net income allocated to common stock for EPS calculation (c)
	$	79,036			824		65,017			638	$	319,594			3,278		243,165			1,585
Average common shares outstanding		183,276			1,945		187,572			1,874		184,297			1,925		187,145			1,246
Increase due to assumed issuance of shares related to common equivalent shares outstanding		1,964					2,176					2,205					1,648
Average common and common equivalent shares outstanding (d)		185,240			1,945		189,748			1,874		186,502			1,925		188,793			1,246
Average common and common equivalent shares and participating securities		187,185					191,622					188,427					190,039
Diluted earnings per share (c)/(d)	$	0.43			0.42		0.34			0.34	$	1.71			1.70		1.29			1.27

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TSYS Announces Fourth Quarter 2014 Earnings

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TSYS

Segment Breakdown

(unaudited)

(in thousands)

	Three Months Ended December 31,												Twelve Months Ended December 31,
							Change												Change
	2014			2013			$			%			2014			2013			$			%
Revenues before reimbursable items:
North America Services	$	255,539			223,266			32,273			14.5	%	$	954,082			860,645			93,437			10.9	%
International Services		92,895			90,595			2,300			2.5			341,785			321,484			20,301			6.3
Merchant Services		107,677			110,375			(2,698	)		(2.4	)		435,649			446,277			(10,628	)		(2.4	)
NetSpend		119,165			104,144	��		15,021			14.4			482,686			207,851			274,835			nm
Intersegment revenues		(5,975	)		(3,121	)		(2,854	)		(91.4	)		(21,224	)		(12,549	)		(8,675	)		(69.1	)
Revenues before reimbursable items from external customers	$	569,301			525,259			44,042			8.4	%	$	2,192,978			1,823,708			369,270			20.2	%
Total revenues:
North America Services	$	299,429			259,067			40,362			15.6	%	$	1,117,764			1,000,073			117,691			11.8	%
International Services		98,650			96,129			2,521			2.6			363,359			341,549			21,810			6.4
Merchant Services		125,296			128,075			(2,779	)		(2.2	)		510,120			533,050			(22,930	)		(4.3	)
NetSpend		119,165			104,144			15,021			14.4			482,686			207,851			274,835			nm
Intersegment revenues		(7,436	)		(4,312	)		(3,124	)		(72.4	)		(27,052	)		(18,218	)		(8,834	)		(48.5	)
Revenues from external customers	$	635,104			583,103			52,001			8.9	%	$	2,446,877			2,064,305			382,572			18.5	%
Depreciation and amortization:
North America Services	$	23,136			19,420			3,716			19.1	%	$	86,513			74,480			12,033			16.2	%
International Services		9,733			11,974			(2,241	)		(18.7	)		38,909			41,708			(2,799	)		(6.7	)
Merchant Services		3,980			3,004			976			32.5			14,571			12,034			2,537			21.1
NetSpend		1,730			1,651			79			4.8			7,509			3,121			4,388			nm
		��
Segment depreciation and amortization		38,579			36,049			2,530			7.0			147,502			131,343			16,159			12.3
Acquisition intangible amortization		24,166			24,751			(585	)		(2.4	)		96,971			65,893			31,078			47.2
Corporate admin and other		446			468			(22	)		(4.7	)		2,147			1,790			357			19.9
Total depreciation and amortization	$	63,191			61,268			1,923			3.1	%	$	246,620			199,026			47,594			23.9	%
Adjusted segment operating income:
North America Services	$	99,620			87,110			12,510			14.4	%	$	351,512			321,619			29,893			9.3	%
International Services		22,849			17,986			4,863			27.0			55,123			42,068			13,055			31.0
Merchant Services		31,399			35,952			(4,553	)		(12.7	)		134,872			155,643			(20,771	)		(13.3	)
NetSpend		32,742			31,737			1,005			3.2			128,285			66,353			61,932			93.3
Total adjusted segment operating income		186,610			172,785			13,825			8.0			669,792			585,683			84,109			14.4
Acquisition intangible amorization		(24,166	)		(24,751	)		585			2.4			(96,971	)		(65,893	)		(31,078	)		(47.2	)
NetSpend M&A operating expenses		(3	)		(2,211	)		2,208			99.9			(3,217	)		(14,220	)		11,003			77.4
Share-based compensation		(7,771	)		(9,345	)		1,574			16.8			(30,790	)		(28,933	)		(1,857	)		(6.4	)
Corporate admin and other		(31,897	)		(27,620	)		(4,277	)		(15.5	)		(107,175	)		(94,137	)		(13,038	)		(13.9	)
Operating income	$	122,773			108,858			13,915			12.8	%	$	431,639			382,500			49,139			12.8	%
Other:
Reimbursable items:
North America Services	$	43,890			35,801			8,089			22.6	%	$	163,682			139,428			24,254			17.4	%
International Services		5,755			5,534			221			4.0			21,574			20,065			1,509			7.5
Merchant Services		17,619			17,700			(81	)		(0.5	)		74,471			86,773			(12,302	)		(14.2	)
NetSpend		—			—			—			na			—			—			—			na
Intersegment revenues		(1,461	)		(1,191	)		(270	)		(22.7	)		(5,828	)		(5,669	)		(159	)		(2.8	)
Reimbursable items	$	65,803			57,844			7,959			13.8	%	$	253,899			240,597			13,302			5.5	%

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TSYS Announces Fourth Quarter 2014 Earnings

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TSYS

Segment Breakdown

(unaudited)

(in thousands)

Other:
Volumes:											At						Change
FTEs (full-time equivalents)											12/31/2014			12/31/2013			#			%
North America Services												4,724			4,484			240			5.4	%
International Services												2,403			2,412			(9	)		(0.4	)
Merchant Services												1,590			1,598			(8	)		(0.5	)
NetSpend												552			470			82			17.4
Corporate Admin and Other												583			547			36			6.6
FTEs—Continuing Operations												9,852			9,511			341			3.6	%
Discontinued Operations												—			84			(84	)		na
FTEs												9,852			9,595			257			2.7	%
											At						Change
Total assets (in thousands)											12/31/2014			12/31/2013			$			%
North America Services											$	3,326,730			3,215,333			111,397			3.5	%
International Services												356,590			417,379			(60,789	)		(14.6	)
Merchant Services												695,744			676,592			19,152			2.8
NetSpend												1,555,273			1,596,150			(40,877	)		(2.6	)
Intersegment assets												(2,202,283	)		(2,218,886	)		16,603			0.7
Total assets											$	3,732,054			3,686,568			45,486			1.2	%
	Three Months Ended December 31,										Twelve Months Ended December 31,
					Change												Change
	2014		2013		Inc(Dec)			%			2014			2013			Inc(Dec)			%
North America Segment:
Accounts on File (AOF) (in millions)												550.0			481.9			68.2			14.1	%
Transactions (in millions)		2,980.0		2,488.6		491.4			19.8	%		10,838.0			9,132.8			1,705.1			18.7	%
International Segment:
AOF (in millions)												66.6			59.1			7.5			12.7	%
Transactions (in millions)		618.1		555.6		62.5			11.3	%		2,268.4			2,007.4			261.0			13.0	%
Merchant Segment:
Point-of-sale Transactions (in millions)		991.0		1,034.6		(43.6	)		(4.2	)%		4,052.7			4,359.8			(307.1	)		(7.0	)%
Dollar sales volume (in millions)	$	12,392.6	$	12,021.0		371.6			3.1	%	$	46,846.4		$	44,144.0		$	2,702.4			6.1	%
NetSpend Segment:
Gross Dollar Volume (in millions)	$	4,691.5	$	3,967.6	$	723.9			18.2	%	$	20,296.0		$	17,075.1		$	3,220.9			18.9	%
90-Day Active Cards (in thousands)												1,610.2			1,321.1			289.1			21.9	%
Direct Deposit 90-Day Active Cards (in thousands)												3,215.0			2,835.1			379.9			13.4	%
% of 90-Day Active Cards with Direct Deposit												50.1	%		46.6	%

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TSYS Announces Fourth Quarter 2014 Earnings

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TSYS

Balance Sheet

(unaudited)

(in thousands)

	Dec 31, 2014			Dec 31, 2013
Assets
Current assets:
Cash and cash equivalents	$	289,183			247,700
Accounts receivable, net		283,204			255,773
Deferred income tax assets		17,095			14,158
Prepaid expenses and other current assets		95,758			95,109
Current assets of discontinued operations		4,003			41,193
Total current assets		689,243			653,933
Goodwill		1,546,300			1,541,574
Other intangible assets, net		404,107			481,419
Computer software, net		366,148			363,880
Property and equipment, net		290,585			259,968
Contract acquisition costs, net		236,305			184,828
Equity investments, net		100,468			94,133
Deferred income tax assets, net		7,882			3,972
Other assets		91,016			87,146
Long-term assets of discontinued operations		—			15,715
Total assets	$	3,732,054			3,686,568
Liabilities
Current liabilities:
Accounts payable	$	48,793			33,651
Current portion of borrowings		43,784			34,257
Accrued salaries and employee benefits		38,001			38,339
Current portion of obligations under capital leases		7,127			22,662
Other current liabilities		154,805			159,170
Current liabilities of discontinued operations		4,003			9,136
Total current liabilities		296,513			297,215
Long-term borrowings, excluding current portion		1,398,132			1,428,251
Deferred income tax liabilities		205,868			228,727
Obligations under capital leases, excluding current portion		6,974			7,500
Other long-term liabilities		98,006			81,600
Long-term liabilities of discontinued operations		—			1,197
Total liabilities		2,005,493			2,044,490
Redeemable noncontrolling interest		22,492			39,652
Equity
Shareholders’ equity:
Common stock		20,278			20,279
Additional paid-in capital		175,695			165,841
Accumulated other comprehensive income (loss), net		(11,926	)		3,749
Treasury stock		(453,230	)		(326,996	)
Retained earnings		1,966,370			1,718,204
Total shareholders’ equity		1,697,187			1,581,077
Noncontrolling interests in consolidated subsidiaries		6,882			21,349
Total equity		1,704,069			1,602,426
Total liabilities and equity	$	3,732,054			3,686,568

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TSYS Announces Fourth Quarter 2014 Earnings

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TSYS

Cash Flow

(unaudited)

(in thousands)

	Twelve Months Ended December 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	329,406			256,597
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of equity investments		(17,583	)		(13,047	)
Dividends received from equity investments		9,188			8,595
Loss on foreign currency		999			1,027
Depreciation and amortization		248,018			205,351
Amortization of debt issuance costs		1,817			7,269
Amortization of bond discount		383			225
Changes in fair value of private equity investments		(793	)		(966	)
Share-based compensation		30,790			28,933
Excess tax benefit from share-based compensation		(7,185	)		(3,528	)
Provisions for bad debt expense and billing adjustments		2,823			2,000
Charges for transaction processing provisions		9,468			7,458
Provision for fraud and other losses		38,381			11,912
Deferred income tax expense (benefit)		(13,274	)		26,945
Loss on disposal of equipment, net		(293	)		(79	)
Gain on disposal of subsidiaries		(86,961	)		—
Changes in operating assets and liabilities:
Accounts receivable		(33,406	)		(8,667	)
Prepaid expenses, other current assets and other long-term assets		(10,525	)		(571	)
Accounts payable		8,765			(52,042	)
Accrued salaries and employee benefits		414			(403	)
Other current liabilities and other long-term liabilities		50,661			(24,611	)
Net cash provided by operating activities		561,093			452,398
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net		(75,913	)		(40,598	)
Additions to licensed computer software from vendors		(29,638	)		(63,635	)
Additions to internally developed computer software		(41,501	)		(33,600	)
Proceeds from insurance recovery for loss on disposal		6,212			—
Proceeds from dispositions, net of expenses paid and cash disposed		44,979			—
Cash used in acquisitions, net of cash acquired		(38,584	)		(1,314,660	)
Purchase of private equity investments		(3,291	)		(1,378	)
Additions to contract acquisition costs		(88,871	)		(55,965	)
Net cash used in investing activities		(226,607	)		(1,509,836	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings and capital lease obligations		(69,940	)		(166,805	)
Proceeds from borrowings of long-term borrowings		1,396			1,395,661
Proceeds from exercise of stock options		34,869			40,691
Excess tax benefit from share-based compensation		7,185			3,528
Repurchase of common stock under plans and tax withholding		(170,515	)		(103,857	)
Debt issuance costs		—			(13,573	)
Purchase of noncontrolling interests		(37,500	)		—
Subsidiary dividends paid to noncontrolling shareholders		(7,172	)		(7,321	)
Dividends paid on common stock		(74,796	)		(56,510	)
Net cash (used in) provided by financing activities		(316,473	)		1,091,814
CASH AND CASH EQUIVALENTS:
Effect of exchange rate changes on cash and cash equivalents		(7,060	)		(3,758	)
Net increase in cash and cash equivalents		10,953			30,618
Cash and cash equivalents at beginning of period		278,230			247,612
Cash and cash equivalents at end of period		289,183			278,230
Less cash and cash equivalents of discontinued operations at end of period		—			(30,530	)
Cash and cash equivalents of continuing operations at end of period	$	289,183			247,700

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Supplemental Information:

	Total Accounts on File
(in millions)	December 2014		December 2013		% Change
Consumer Credit		270.0		228.9		18.0
Retail		28.4		27.8		2.2
Total Consumer		298.4		256.7		16.3
Commercial		41.6		39.9		4.2
Other		22.4		18.9		18.7
Subtotal		362.4		315.5		14.9
Prepaid/Stored Value		127.3		118.0		7.9
Government Services		67.4		62.2		8.2
Commercial Card Single Use		59.6		45.3		31.5
Total AOF		616.7		541.0		14.0

Growth in Accounts on File(in millions):
	December 2013 to December 2014	December 2012 to December 2013
Beginning balance	541.0		479.3
Change in accounts on file due to:
Internal growth of existing clients	40.0		37.6
New clients	75.3		61.2
Purges/Sales	(39.0)		(36.4	)
Deconversions	(0.6)		(0.7	)
Ending balance	616.7		541.0

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TSYS Announces Fourth Quarter 2014 Earnings

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Reconciliation of GAAP to Non-GAAP Financial Measures

Non-GAAP Measures

The schedule below provides a reconciliation of revenues and operating results on a constant currency basis to reported revenues and operating income. This non-GAAP measure presents fourth quarter 2014 financial results using the previous year’s foreign currency exchange rates. On a full year constant currency basis, TSYS’ total revenues grew 17.8% as compared to a reported GAAP increase of 18.5%.

The schedule below also provides a reconciliation of basic EPS, adjusted for the after-tax impact of acquisition intangible amortization, share-based compensation and merger and acquisition costs, to adjusted EPS.

The tax rate used in the calculation of adjusted EPS for the quarter and year is equal to an estimate of our annual effective tax rate on GAAP income. This effective rate is estimated annually and may be adjusted during the year to take into account events or trends that materially impact the effective tax rate including, but not limited to, significant changes resulting from tax legislation, material changes in the mix of revenues and expenses by entity and other significant events.

The schedule also provides a reconciliation of net income, adjusted for income from discontinued operations, equity in income of equity investments, income taxes, nonoperating expense, depreciation and amortization, share-based compensation, and merger and acquisition expenses, to adjusted EBITDA.

TSYS believes that non-GAAP financial measures are important to enable investors to understand and evaluate its ongoing operating results. Accordingly, TSYS includes non-GAAP financial measures when reporting its financial results to shareholders and potential investors in order to provide them with an additional tool to evaluate TSYS’ ongoing business operations. TSYS believes that the non-GAAP financial measures are representative of comparative financial performance that reflects the economic substance of TSYS’ current and ongoing business operations.

Although non-GAAP financial measures are often used to measure TSYS’ operating results and assess its financial performance, they are not necessarily comparable to similarly titled captions of other companies due to potential inconsistencies in the method of calculation.

TSYS believes that its use of non-GAAP financial measures provides investors with the same key financial performance indicators that are utilized by management to assess TSYS’ operating results, evaluate the business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of non-GAAP financial measures to give shareholders and potential investors an opportunity to see TSYS as viewed by management, to assess TSYS with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. TSYS believes that the presentation of GAAP financial measures alone would not provide its shareholders and potential investors with the ability to appropriately analyze its ongoing operational results, and therefore expected future results. TSYS therefore believes that inclusion of non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources.

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TSYS Announces Fourth Quarter 2014 Earnings

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Reconciliation of GAAP to Non-GAAP

Constant Currency Comparison

(unaudited)

(in thousands)

	Three Months Ended December 31,								Twelve Months Ended December 31,
	2014			2013		Percent Change			2014		2013		Percent Change
Consolidated
Constant currency (1)	$	638,111			583,103		9.4	%	$	2,431,947		2,064,305		17.8	%
Foreign currency (2)		(3,007	)		—					14,930		—
Total revenues	$	635,104			583,103		8.9	%	$	2,446,877		2,064,305		18.5	%
Constant currency (1)	$	572,166			525,259		8.9	%	$	2,178,951		1,823,708		19.5	%
Foreign currency (2)		(2,865	)		—					14,027		—
Total revenues before reimbursable items	$	569,301			525,259		8.4	%	$	2,192,978		1,823,708		20.2	%
Constant currency (1)	$	122,786			108,858		12.8	%	$	422,646		382,500		10.5	%
Foreign currency (2)		(13	)		—					8,994		—
Operating income	$	122,773			108,858		12.8	%	$	431,640		382,500		12.8	%
International Services
Constant currency (1)	$	101,655			96,129		5.7	%	$	348,595		341,549		2.1	%
Foreign currency (2)		(3,005	)		—					14,764		—
Total revenues	$	98,650			96,129		2.6	%	$	363,359		341,549		6.4	%

(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.

Revenues Before Reimbursable Items

(unaudited)

(in thousands)

	Three Months Ended December 31,							Twelve Months Ended December 31,
	2014		2013		Percent Change			2014		2013		Percent Change
Total revenues	$	635,104		583,103		8.9	%	$	2,446,877		2,064,305		18.5	%
Reimbursable items		65,803		57,844		13.8			253,899		240,597		5.5
Revenues before reimbursable items	$	569,301		525,259		8.4	%	$	2,192,978		1,823,708		20.2	%

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TSYS Announces Fourth Quarter 2014 Earnings

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Reconciliation of GAAP to Non-GAAP

Adjusted Earnings per Share

(unaudited)

(in thousands, except per share data)

	Three Months Ended December 31,							Twelve Months Ended December 31,
	2014		2013		Percent Change			2014		2013		Percent Change
Income from continuing operations attributable to TSYS common shareholders	$	83,198		66,058		25.9	%	$	275,216		246,893		11.5	%
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization, net of taxes	$	17,747		16,609		6.9	%		65,127		43,743		48.9	%
Add: Share-based compensation, net of taxes		5,777		6,405		(9.8	)		20,944		19,830		5.6
Add: NetSpend M&A expenses, net of taxes*		3		1,318		(99.8	)		3,115		15,251		(79.6	)
Adjusted earnings	$	106,725		90,390		18.1	%	$	364,402		325,717		11.9	%
Basic EPS—Income from continuing operations attributable to TSYS common shareholders
As reported (GAAP)	$	0.45		0.35		28.8	%	$	1.48		1.31		12.8	%
Adjust for amounts attributable to TSYS common shareholders:
Add: Acquisition intangible amortization, net of taxes		0.10		0.09		9.2			0.35		0.23		50.6
Add: Share-based compensation, net of taxes		0.03		0.03		(7.7	)		0.11		0.11		6.8
Add: NetSpend M&A expenses, net of taxes*		—		0.01		(100.0	)		0.02		0.08		(79.4	)
Adjusted EPS **	$	0.58		0.48		20.8	%	$	1.96		1.73		13.2	%
Average common shares and participating securities		185,221		189,447					186,222		188,389

* Certain merger and acquisition costs are nondeductible for income tax purposes

** Adjusted EPS amounts may not total due to rounding.

Adjusted EBITDA

(unaudited)

(in thousands)

	Three Months Ended December 31,									Twelve Months Ended December 31,
	2014			2013			Percent Change			2014			2013			Percent Change
Net income	$	81,242			69,393			17.1	%	$	329,406			256,597			28.4	%
Adjust for:
Deduct: Loss (Income) from discontinued operations		3,338			(751	)		nm			(48,655	)		(2,055	)		nm
Deduct: Equity in income of equity investments		(5,751	)		(3,691	)		(55.8	)		(17,583	)		(13,047	)		(34.8	)
Add: Income taxes		35,428			33,435			6.0			129,761			110,981			16.9
Add: Nonoperating expense		8,516			10,472			(18.7	)		38,711			30,024			28.9
Add: Depreciation and amortization		63,191			61,268			3.1			246,620			199,026			23.9
EBITDA	$	185,964			170,126			9.3	%	$	678,260			581,526			16.6	%
Adjust for:
Add: Share-based compensation		7,771			9,345			(16.8	)		30,790			28,933			6.4
Add: NetSpend M&A operating expenses*		3			1,626			(99.8	)		3,217			13,634			(76.4	)
Adjusted EBITDA	$	193,738			181,097			7.0	%	$	712,267			624,093			14.1	%

nm = not meaningful

* Excludes share-based compensation

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TSYS Announces Fourth Quarter 2014 Earnings

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Reconciliation of GAAP to Non-GAAP

Segment Operating Margin and Consolidated Adjusted Operating Margin

(unaudited)

(in thousands)

	Three Months Ended December 31, 2014									Three Months Ended December 31, 2013
	Adjusted Segment Operating Income			Revenues before Reimbursable Items			Adjusted Operating Margin			Adjusted Segment Operating Income			Revenues before Reimbursable Items			Adjusted Operating Margin
North America Services	$	99,620			255,539			38.98	%	$	87,110			223,266			39.02	%
International Services		22,849			92,895			24.60			17,986			90,595			19.85
Merchant Services		31,399			107,677			29.16			35,952			110,375			32.57
NetSpend		32,742			119,165			27.48			31,737			104,144			30.47
Intersegment		—			(5,975	)					—			(3,121	)
Corporate admin and other		(31,897	)		—						(27,620	)		—
Adjusted operating margin	$	154,713			569,301			27.18	%	$	145,165			525,259			27.64	%
Acquisition intangible amortization		(24,166	)								(24,751	)
NetSpend M&A operating expenses		(3	)								(2,211	)
Share-based compensation		(7,771	)								(9,345	)
Operating income and margin*	$	122,773			569,301			21.57	%	$	108,858			525,259			20.72	%
Reimbursable items					65,803									57,844
Operating margin (US GAAP)	$	122,773			635,104			19.33	%	$	108,858			583,103			18.67	%
	Twelve Months Ended December 31, 2014									Twelve Months Ended December 31, 2013
	Adjusted Segment Operating Income			Revenues before Reimbursable Items			Adjusted Operating Margin			Adjusted Segment Operating Income			Revenues before Reimbursable Items			Adjusted Operating Margin
North America Services	$	351,512			954,082			36.84	%	$	321,619			860,645			37.37	%
International Services		55,123			341,785			16.13			42,068			321,484			13.09
Merchant Services		134,872			435,649			30.96			155,643			446,277			34.88
NetSpend		128,285			482,686			26.58			66,353			207,851			31.92
Intersegment		—			(21,224	)					—			(12,549	)
Corporate admin and other		(107,175	)		—						(94,137	)		—
Adjusted operating margin	$	562,617			2,192,978			25.66	%	$	491,546			1,823,708			26.95	%
Acquisition intangible amortization		(96,971	)								(65,893	)
NetSpend M&A operating expenses		(3,217	)								(14,220	)
Share-based compensation		(30,790	)								(28,933	)
Operating income and margin*	$	431,639			2,192,978			19.68	%	$	382,500			1,823,708			20.97	%
Reimbursable items					253,899									240,597
Operating margin (US GAAP)	$	431,639			2,446,877			17.64	%	$	382,500			2,064,305			18.53	%

* Operating margin on revenue before reimbursable items

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