ACI Worldwide (ACIW) 8-K ACI Worldwide, Inc. Reports Financial

Quarter and Year Ended December 31, 2013

Results Presentation

February 27, 2014

ACI’s software underpins electronic

payments throughout retail and

wholesale banking, and commerce

all the time.

1

Exhibit 99.2

2

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 that may affect them

is set forth at the end of this presentation.  The Company assumes no

obligation to update any forward-looking statement in this presentation,

except as required by law.

Quarterly Overview

Phil Heasley

Chief Executive Officer

3

2013 in Review

4

•

Online Resources and Official Payments acquisitions expand payment capabilities

•

Completed $300 million bond offering

•

Repurchased ~1.7 million shares in 2013, or 4% of outstanding shares and have

repurchased ~930,000 shares in 2014 YTD

•

Increased authorization by an additional $100 million

•

Strong new sales bookings, up 20% in 2013 compared with 2012

•

Full year hosted subscription and transaction revenues up 132%, now represent over

40% of total

•

2013 non-GAAP operating income up 21% and adjusted EBITDA up 25%

•

Pipeline strong across all regions

•

Showing early success with Universal Payments (UP)

•

Positioned extremely well for growth

Financial Review

Scott Behrens

Chief Financial Officer

5

6

Key  Takeaways from the Quarter

•

Official Payments acquisition completed November 5

2013

–

$8 million in cost synergies are substantially complete

•

New Sales Bookings

–

Q4 organic net new sales bookings up 13% over last year

–

ORCC  net new sales bookings up 49% over last year’s Q4

•

Backlog versus Q3

–

60 month backlog of $3.9 billion, up $748 million

–

12 month backlog of $870 million, up $130 million

–

OPAY added $696 million and $142 million to 60 month and 12 month backlog, respectively

•

Revenue Growth

–

Non-GAAP revenue grew 25% over Q4 2012

–

ORCC and OPAY contributed $61 million in Q4

•

Non-GAAP Operating Income and Adjusted EBIDTA

–

Q4 non-GAAP operating income of $94 million, up $10 million, or 12% from last year

–

Adjusted EBITDA of $117 million, up $15 million, or 15% over last year

–

Incurred $7 million of significant transaction and integration related expenses

•

Strong Operating Free Cash Flow

–

Q4 OFCF $62 million, up from $24 million last year’s Q4

th

7

Key  Takeaways from the Year

•

New Sales Bookings

–

2013 new sales bookings up 20%, or 7% organically

•

Revenue Growth

–

2013 Non-GAAP revenue grew 26% over 2012

–

Organic

revenue

growth

of

1%

driven

by

organic

monthly

recurring

revenue

growth

of

$28 million offset by non-recurring revenue decline of $21 million

–

Monthly recurring revenue now represents ~70% of total revenue, from ~60% in 2012

•

Non-GAAP Operating Income and Adjusted EBIDTA

–

2013 non-GAAP operating income of $155 million, up $27 million, or 21%, over last year

–

2013 Adjusted EBITDA of $239 million, up $47 million, or 25%, over last year

•

Strong Operating Free Cash Flow

–

2013 OFCF $151 million, up $128 million over last year

•

Debt & Liquidity

–

Ended year with $95 million in cash and $755 million in debt

–

Repurchased ~1.7 million shares in 2013, or 4% of outstanding shares

–

Repurchased ~930,000 shares in 2014 YTD

–

$156 million remaining on share buy-back authorization, following incremental $100

million authorization

8

2014 Guidance

Guidance

•

Sales, net of term extension, growth in the upper single digits

•

Revenue and margin phasing by quarter consistent with seasonal history

•

Q1 revenue

expected

to

represent

$220

-

$230

million

Other assumptions:

•

Interest expense of $35 million and cash interest of $30 million

•

Capital expenditures to be $35-$40 million

•

Depreciation

and

amortization

expected

to

approximate

$88

-

$92

million

•

Non-cash

compensation

expense

of

approximately

$18

-$20

million

•

Pass

through

interchange

revenues

in

the

range

of

$120

-

$125

million

•

GAAP tax rate of 35% and cash taxes paid of $30-$35 million

•

Diluted share count to approximate 40 million

•

Guidance does not assume future share buy-back activity

•

These metrics exclude approximately $13-$15 million in one-time integration related expenses

and $2 million of deferred revenue haircut

•

Guidance assumes estimates for non-cash purchase accounting adjustments, intangible

valuations and deferred revenue haircut

Key Metrics

2013 Actual

2014 Guidance

Low

High

Non-GAAP Revenue

$871

$1,060

$1,080

Adjusted EBITDA

$239

$290

$300

$s in millions

Appendix

9

Monthly Recurring Revenue ($ millions)

10

Quarter Ended

Monthly Recurring Revenue (millions)

December 31,

2013

2012

Monthly Software license fees

$23.4

$21.4

Maintenance fees

60.3

54.7

Processing services

91.9

32.9

Monthly Recurring Revenue

$175.6

$109.0

11

Historic Sales Bookings By Quarter 2012-2013

Quarter-End

Total Economic

Value of Sales

Sales Mix by Category

Add-on Business

inc. Capacity

Upgrades &

Services

Term Extension

New Accounts /

New Applications

8%

61%

32%

3/31/2012

$108,462

$5,958

$58,602

$43,902

5%

54%

40%

6/30/2012

$156,188

$9,855

$102,417

$43,916

6%

66%

28%

9/30/2012

$192,310

$23,802

$102,576

$65,932

12%

53%

34%

12/31/2012

$309,143

$52,206

$145,917

$111,020

12%

53%

34%

3/31/2013

$111,588

$5,778

$70,736

$35,074

5%

63%

31%

6/30/2013

$180,107

$33,717

$95,461

$50,929

19%

53%

28%

9/30/2013

$211,827

$42,345

$105,609

$63,874

20%

50%

30%

12/31/2013

$384,322

$45,846

$200,748

$137,729

12%

52%

36%

Sales

New Accounts /

New Applications

Add-on Business

inc. Capacity

Upgrades &

Services

Term Extension

DEC YTD 13

$887,844

$127,685

$472,553

$287,606

DEC YTD 12

$766,103

$91,820

$409,512

$264,771

Variance

$121,741

$35,865

$63,041

$22,835

Sales Bookings, Net of Term Extensions (SNET)

12

Channel

Qtr Ended

Dec 13

Qtr Ended

Dec 12

% Growth or

Decline

Americas

$117,011

$84,631

38.3%

EMEA

104,408

76,004

37.4%

Asia-Pacific

25,175

37,488

-32.8%

Total Sales Net of Term Ext.

$246,594

$198,123

24.5%

ORCC and OPAY SNET

$22,582

ACI Organic SNET

$224,012

$198,123

13.1%

Sales Net of Term Extensions

Non-GAAP Operating Income ($ millions)

13

Non-GAAP Operating Income (millions)

2013

2012

2013

2012

Operating income

$86.0

$75.5

$123.0

$74.4

Plus:

Deferred revenue fair value adjustment

0.9

3.6

5.8

22.5

Employee related actions

1.2

0.2

10.7

14.0

Facility closure costs

1.2

1.3

2.2

4.9

IT exit costs

-

-

-

3.2

Significant transaction related expenses

4.5

3.0

13.2

9.3

Non-GAAP Operating Income

$                 93.8

$                   83.6

$              154.9

$            128.3

December 31,

December 31,

Quarter Ended

Year Ended

Adjusted EBITDA ($ millions)

14

Adjusted EBITDA (millions)

2013

2012

2013

2012

Net income

$50.4

$49.7

$63.9

$48.8

Plus:

Income tax expense

24.1

24.3

29.3

16.4

Net interest expense

9.7

2.8

26.6

9.5

Net other expense (income)

1.8

(1.3)

3.3

(0.4)

Depreciation expense

5.2

3.6

18.8

13.3

Amortization expense

15.0

10.4

51.2

37.5

Non-cash compensation expense

2.5

3.5

13.6

15.2

Adjusted EBIDTA

$108.7

$93.0

$206.7

$140.3

Deferred revenue fair value adjustment

0.9

3.6

5.8

22.5

Employee related actions

1.2

0.2

10.7

11.2

Facility closure costs

1.2

1.3

2.2

4.9

IT exit costs

-

-

-

3.2

Significant transaction related expenses

4.5

3.0

13.2

9.3

Adjusted EBIDTA excluding one-time transaction

expenses

$                     116.5

$                 101.1

$              238.6

$              191.4

Quarter Ended

December 31,

Year Ended

December 31,

Operating Free Cash Flow ($ millions)

15

* Tax effected at 35%

Reconciliation of Operating Free Cash Flow (millions)

2013

2012

2013

2012

Net cash provided (used) by operating activities

$51.9

$3.5

$138.4

($9.3)

Payments associated with cash settlement of acquisition

related options

10.2

-

10.2

10.2

Payments associated with acquired opening balance sheet

liabilties

4.5

-

4.5

-

Net after-tax payments associated with employee-related

actions

1.8

0.4

9.7

6.2

Net after-tax payments associated with lease terminations

0.4

1.9

1.0

2.7

Net after-tax payments associated with significant

transaction related expenses

6.9

-

18.1

8.8

Net after-tax payments associated with IBM IT

Outsourcing Transition

-

0.2

1.9

0.9

Plus IBM Alliance liability payment

-

20.7

-

20.7

Less capital expenditures

(14.2)

(3.1)

(32.5)

(16.7)

Operating Free Cash Flow

$61.5

$23.6

$151.3

$23.5

Quarter Ended December 31,

Year Ended December 31,

Non-Cash Compensation, Acquisition Intangibles and

Software, and Significant Transaction Related Expenses

16

Acquisition Intangibles & Software, Non-cash equity

based compensation

Quarter Ended

(millions)

December 31,

2013

2012

EPS Impact

$ in Millions

(Net of Tax)

EPS Impact

$ in Millions

(Net of Tax)

Significant transaction related expenses

$                 

0.11

$               

4.5

0.07

$             2.9

Deferred revenue fair value adjustment

0.02

0.6

0.06

2.4

Amortization of acquisition

-related intangibles

0.09

3.4

0.05

2.2

Amortization of acquisition

-related software

0.08

3.0

0.06

2.3

Non-cash equity-based compensation

0.04

1.6

0.06

2.3

Total

$                     0.34

$                 13.1

0.30

$           12.1

* Tax Effected at 35%

Acquisition Intangibles & Software, Non-cash equity

based compensation

Year Ended

(millions)

December 31,

2013

2012

EPS Impact

$ in Millions

(Net of Tax)

EPS Impact

$ in Millions

(Net of Tax)

Significant transaction related expenses

$                  

0.43

$                 16.9

0.33

$           12.7

Deferred revenue fair value adjustment

0.09

3.8

0.37

14.6

Amortization of acquisition

-related intangibles

0.30

12.1

0.20

7.9

Amortization of acquisition

-related software

0.27

10.9

0.21

8.3

Non-cash equity-based compensation

0.22

8.9

0.25

9.9

Total

$                     1.31

$                 52.6

1.36

$           53.4

* Tax Effected at 35%

$

$

$

$

60-Month Backlog ($ millions)

17

Quarter Ended

Backlog 60-Month (millions)

December 31,

September 30,

December 31,

2013

2013

2012

Americas

$2,831

$2,125

$1,429

EMEA

746

704

719

Asia/Pacific

283

283

268

Backlog 60-Month

$3,860

$3,112

$2,416

Deferred Revenue

$168

$196

$191

Other

3,692

2,916

2,225

Backlog 60-Month

$3,860

$3,112

$2,416

Backlog as a Contributor of Quarterly Revenue

•

Backlog from monthly recurring revenues and project go-lives

continues to drive current quarter GAAP revenue

•

Revenue from current quarter sales consistent with prior quarters

18

Backlog as Contributor of Revenue (thousands)

Quarter Ended December 31,

% Growth

2013

2012

Revenue from Backlog

$                268,845

$          213,411

26.0%

Revenue from Sales

14,317

10,684

34.0%

Total Revenue

$                283,162

$          224,095

26.4%

Revenue from Backlog

95%

95%

Revenue from Sales

5%

5%

Contract Duration Metric

•

New Metric Intended to Boost Transparency

–

Represents dollar average remaining contract life (in years) for

term license software contracts

–

Excludes perpetual contracts (primarily heritage S1 licensed

software contracts)

–

Excludes all hosted contracts as both cash and revenue are ratable

over the contract term

19

Non-GAAP Financial Measures

•

To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the

tables, which exclude certain business combination accounting entries related to the acquisitions of S1, Online

Resources and Official Payments and significant transaction related expenses, as well as other significant non-cash

expenses such as depreciation, amortization and share-based compensation, that we believe are helpful in

understanding our past financial performance and our future results.  The presentation of these non-GAAP

financial measures should be considered in addition to our GAAP results and are not intended to be considered in

isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Management generally compensates for limitations in the use of non-GAAP financial measures by relying on

comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures

only

in

addition

to

and

in

conjunction

with

results

presented

in

accordance

with

GAAP.

We

believe

that

these

non-

GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our

GAAP results, provide a more complete understanding of factors and trends affecting our business.  Certain non-

GAAP measures include:  

•

Non-GAAP

revenue:

revenue

plus

deferred

revenue

that

would

have

been

recognized

in

the

normal

course

of

business by S1 and Online Resources if not for GAAP purchase accounting requirements.  Non-GAAP revenue

should

be

considered

in

addition

to,

rather

than

as

a

substitute

for,

revenue.

•

Non-GAAP operating income: operating income (loss) plus deferred revenue that would have been recognized in

the normal course of business by S1 and Online Resources if not for GAAP purchase accounting requirements

and significant transaction related expenses.  Non-GAAP operating income should be considered in addition to,

rather than as a substitute for, operating income.

•

Adjusted EBITDA: net income (loss) plus income tax expense, net interest income (expense), net other income

(expense), depreciation, amortization and non-cash compensation, as well as deferred revenue that would have

been recognized in the normal course of business by S1 and Online Resources if not for GAAP purchase

accounting requirements and significant transaction related expenses.  Adjusted EBITDA should be considered

in addition to, rather than as a substitute for, operating income.

20

Non-GAAP Financial Measures

ACI is also presenting operating free cash flow, which is defined as net cash provided by operating

activities, plus net after-tax payments associated with employee-related actions and facility closures, net

after-tax payments associated with significant transaction related expenses, net after-tax payments

associated with IBM IT outsourcing transition and termination, and less capital expenditures. Operating

free cash flow is considered a non-GAAP financial measure as defined by SEC Regulation G.  We utilize

this non-GAAP financial measure, and believe it is useful to investors, as an indicator of cash flow

available for debt repayment and other investing activities, such as capital investments and acquisitions.

We utilize operating free cash flow as a further indicator of operating performance and for planning

investing activities.  Operating free cash flow should be considered in addition to, rather than as a

substitute for, net cash provided by operating activities.  A limitation of operating free cash flow is that it

does not represent the total increase or decrease in the cash balance for the period. This measure also

does not exclude mandatory debt service obligations and, therefore, does not represent the residual

cash flow available for discretionary expenditures. We believe that operating free cash flow is useful to

investors

to

provide

disclosures

of

our

operating

results

on

the

same

basis

as

that

used

by

our

management.

ACI also includes backlog estimates, which include all software license fees, maintenance fees and

services specified in executed contracts, as well as revenues from assumed contract renewals to the

extent that we believe recognition of the related revenue will occur within the corresponding backlog

period.  We have historically included assumed renewals in backlog estimates based upon automatic

renewal provisions in the executed contract and our historic experience with customer renewal rates. 

21

Non-GAAP Financial Measures

Estimates

of

future

financial

results

are

inherently

unreliable.

Our

backlog

estimates

require

substantial

judgment and are based on a number of assumptions as described above. These assumptions may turn out to

be inaccurate or wrong, including for reasons outside of management’s control. For example, our customers

may attempt to renegotiate or terminate their contracts for a number of reasons, including mergers, changes

in their financial condition, or general changes in economic conditions in the customer’s industry or geographic

location, or we may experience delays in the development or delivery of products or services specified in

customer contracts which may cause the actual renewal rates and amounts to differ from historical

experiences.  Changes in foreign currency exchange rates may also impact the amount of revenue actually

recognized in future periods.  Accordingly, there can be no assurance that contracts included in backlog

estimates will actually generate the specified revenues or that the actual revenues will be generated within the

corresponding 60-month period.

Backlog should be considered in addition to, rather than as a substitute for, reported revenue and deferred

revenue.

22

•

Maintenance fees are assumed to exist for the duration of the license term for those contracts in which the

committed maintenance term is less than the committed license term.

•

License, facilities management, and software hosting arrangements are assumed to renew at the end of

their committed term at a rate consistent with our historical experiences.

•

Non-recurring

license

arrangements

are

assumed

to

renew

as

recurring

revenue

streams.

•

Foreign currency exchange rates are assumed to remain constant over the 60-month backlog period for

those contracts stated in currencies other than the U.S. dollar.

•

Our pricing policies and practices are assumed to remain constant over the 60-month backlog period.

Backlog is considered a non-GAAP financial measure as defined by SEC Regulation G.  Our 60-month backlog

estimate represents expected revenues from existing customers using the following key assumptions:

Forward-Looking Statements

This presentation contains forward-looking statements based on current expectations that involve a number

of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current

facts

and

may

include

words

or

phrases

such

as

“believes,”

“

will,”

“expects,”

“anticipates,”

“intends,”

and

words and phrases of similar impact.  The forward-looking statements are made pursuant to safe harbor

provisions of the Private Securities Litigation Reform Act of 1995.

23

Forward-looking statements in this presentation include, but are not limited to, statements regarding:

•

(i) our sales pipeline;

•

(ii) success with Universal Payments;

•

(iii) being positioned extremely well for growth;

•

(iv) expectations regarding 2014 financial guidance, including non-GAAP revenue, adjusted

EBITDA, and net new sales bookings; and

•

(v) expectations regarding Q1 revenue.

Forward-Looking Statements

24

All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in our

filings with the Securities and Exchange Commission. Such factors include but are not limited to, increased

competition, the performance of our strategic product, BASE24-eps, demand for our products, restrictions

and other financial covenants in our credit facility, consolidations and failures in the financial services

industry, customer reluctance to switch to a new vendor, the accuracy of management’s backlog estimates,

the maturity of certain products, our strategy to migrate customers to our next generation products, ratable

or deferred recognition of certain revenue associated with customer migrations and the maturity of certain of

our products, failure to obtain renewals of customer contracts or to obtain such renewals on favorable

terms, delay or cancellation of customer projects or inaccurate project completion estimates, volatility and

disruption of the capital and credit markets and adverse changes in the global economy, our existing levels

of debt, impairment of our goodwill or intangible assets, litigation, future acquisitions, strategic partnerships

and investments, risks related to the expected benefits to be achieved in the transaction with Online

Resources, the complexity of our products and services and the risk that they may contain hidden defects or

be subjected to security breaches or viruses, compliance of our products with applicable legislation,

governmental regulations and industry standards, our compliance with privacy regulations, the protection of

our intellectual property in intellectual property litigation, the cyclical nature of our revenue and earnings

and the accuracy of forecasts due to the concentration of revenue generating activity during the final weeks

of each quarter, business interruptions or failure of our information technology and communication systems,

our offshore software development activities, risks from operating internationally, including fluctuations in

currency exchange rates, exposure to unknown tax liabilities, and volatility in our stock price.  For a detailed

discussion of these risk factors, parties that are relying on the forward-looking statements should review our

filings with the Securities and Exchange Commission, including our most recently filed Annual Report on

Form 10-K, Registration Statement on Form S-4, and subsequent reports on Forms 10-Q and 8-K.