NetSpend 2013 Annual Report Download - page 74

Pro Forma Results of Operations
The amounts of NetSpend revenue and earnings included in TSYS’ consolidated income statement for the years
ended December 31, 2013 and 2012, and the pro forma revenue and earnings of the combined entity had the
acquisition date been January 1, 2012 are:
Actual Supplemental pro forma
Years Ended
December 31, Years Ended December 31,
(in thousands, except per share data) 2013 2012 2013 2012
Revenue ............................................ $2,132,353 1,870,972 2,354,396 2,222,069
Net income attributable to TSYS common shareholders .... $ 244,750 244,280 239,775 193,255
Basic EPS attributable to TSYS common shareholders ...... $ 1.30 1.30 1.27 1.03
Diluted EPS attributable to TSYS common shareholders .... $ 1.29 1.29 1.26 1.03
The unaudited pro forma financial information presented above does not purport to represent what the actual
results of operations would have been if the acquisition of NetSpend’s operations had occurred prior to
January 1, 2012, nor is it indicative of the future operating results of TSYS. The unaudited pro forma financial
information does not reflect the impact of future events that may occur after the acquisition, including, but not
limited to, anticipated cost savings from operating synergies.
The unaudited pro forma financial information presented in the table above has been adjusted to give effect to
adjustments that are (1) directly related to the business combination; (2) factually supportable; and (3) expected
to have a continuing impact. These adjustments include, but are not limited to, the application of accounting
policies; and depreciation and amortization related to fair value adjustments to property, plant and equipment
and intangible assets.
The pro forma adjustments do not reflect the following material items that result directly from the acquisition and
which impacted our statement of operations following the acquisition:
• Acquisition and related financing transactions costs relating to fees to investment bankers, attorneys,
accountants, and other professional advisors, and other transaction-related costs that were not capitalized as
deferred financing costs; and
• The effect of anticipated cost savings or operating efficiencies expected to be realized and related
restructuring charges such as technology and infrastructure integration expenses, and other costs related to
the integration of NetSpend into TSYS.
2012
On December 26, 2012, TSYS completed its
acquisition of ProPay for $123.7 million. ProPay
previously operated as a privately-held company, and
offers simple, secure and affordable payment
solutions for organizations ranging from small, home
based entrepreneurs to multi-billion dollar
enterprises. The results of operations for ProPay are
immaterial and therefore not included in the
Company’s results for the year ended December 31,
2012. The goodwill of $93.5 million recorded arises
largely from synergies and economies of scale
expected to be realized from combining the
operations of TSYS and ProPay. None of the goodwill
is tax deductible. ProPay is included as part of the
Merchant Services segment.
On August 8, 2012, TSYS completed its acquisition of
60% of CPAY, a privately held direct merchant
acquirer, for $66 million in cash. CPAY provides
merchant services to small- to medium-sized
merchants through an Independent Sales Agent (ISA)
model, with a focus on merchants in the restaurant,
personal services and retail sectors. The acquisition of
CPAY expands the Company’s presence in the
merchant acquiring industry and enhances the
Company’s distribution model with CPAY’s strong
sales agent channel. The results of operations for
CPAY have been included in the Company’s results
beginning August 8, 2012, and are included in the
Merchant Services segment. The goodwill of $68.6
million recorded arises largely from synergies and
economies of scale expected to be realized from
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