NetSpend 2013 Annual Report Download - page 4

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* 2011 FDIC National Survey of Unbanked and Underbanked Households
2
• Earnings Per Share: Adjusted cash earnings
per share (EPS) was $1.72, an increase of
17.8 percent. For the year, adjusted EBITDA
was $634.2 million, an increase of 16 percent.
Basic EPS was $1.30, which was the same as 2012.
Diluted EPS was $1.29, a decrease of 0.2 percent.
• Return to Shareholders: For the year, net
income attributable to common shareholders
was $244.8 million, an increase of 0.2 percent.
Our closing stock price at year’s end was $33.28,
and our total shareholder return for 2013 was
57.2 percent. In the fourth quarter, we repurchased
3.1 million shares of our stock for $97.6 million.
Our Board of Directors has approved increasing
the number of shares that may be repurchased
under our current share repurchase plan from
20 million shares to 28 million shares, and
extended the expiration date of the plan to
April 30, 2015. With the increase, we have
approximately 12 million shares available
to be repurchased under the plan.
Our Strategic Plays
For years, TSYS’ core business has been third-party
processing for bank issuers and merchant acquirers.
In the United States, our issuer processing business
has achieved steady growth, as financial institutions
outsource services not core to their businesses in
order to avoid mounting technology costs and
dealing with a challenging and ever-increasing
regulatory environment.
Since 2010, we have been on a journey to transform
our merchant acquiring business from a third-party
merchant processor to a direct merchant acquirer.
We’ve made solid progress toward this trans-
formation, but we are only at the beginning of
this multi-year journey.
Here are four key areas we focused on in 2013,
with reports on our progress.
• Direct to Merchant: We achieved a significant
milestone in 2013, as our direct merchant
acquiring business now comprises 55 percent
of the revenue for the merchant segment. Our
long-term goal is to grow the direct merchant
acquiring business to be more than 80 percent
of the segment’s revenue through a combination
of organic and acquisition-based growth plays.
• Direct to Consumer: NetSpend® is our first venture
that connects directly with consumers. Through
research, analytics and usability testing, we hone
these product offerings and services to better
meet the needs of the more than 65 million
consumers in the United States* who either don’t
have a bank account or don’t want a bank account.
NetSpend is a leading provider of general purpose
reloadable prepaid cards in the United States. Its
mission is to give consumers the convenience,
security and freedom to be self-banked.
• Processing and Other Solutions for Card
Issuers: We continue to win in the commercial
and consumer credit card processing space.
Later this year, we expect to complete the
migration of Bank of America to our TS2®
processing platform. At that time, TSYS will
process 40 percent of the Visa and MasterCard
consumer credit card accounts issued by the