Exhibit 99.1
PRESS RELEASE |
FIS FOURTH QUARTER REVENUES INCREASE 20%
Lender Processing Services Revenue Growth Rate Accelerates to 9.5%
Jacksonville, Fla. — February 14, 2008— Fidelity National Information Services, Inc. (NYSE:FIS), a leading global provider of technology services to financial institutions, today announced financial results for the quarter and year ended December 31, 2007. Fourth quarter 2007 consolidated revenue increased 20.0% to $1.3 billion, net earnings totaled $108.4 million, and net earnings per diluted share was $0.55.
FIS’ fourth quarter 2007 results include approximately $140 million in revenue and approximately $45 million in EBITDA from eFunds. Excluding eFunds, the Company reported fourth quarter revenue growth of 7.4% and adjusted EBITDA growth of 12.5%. FIS’ adjusted cash earnings of $0.68 per diluted share increased 17.2% over the prior year period. eFunds was neutral to cash earnings.
For the full year 2007, consolidated revenue totaled $4.8 billion, net earnings totaled $561.2 million and net earnings per diluted share totaled $2.86. These results include revenue of approximately $167 million and EBITDA of approximately $51 million attributable to eFunds, which was acquired by FIS in September 2007. Excluding eFunds, full year revenue increased 11.0% to $4.6 billion, compared to pro forma revenue of $4.1 billion in 2006. The increase was driven by 10.5% growth in Transaction Processing Services and 11.2% growth in Lender Processing Services. Adjusted EBITDA increased 13.0% over 2006 pro forma results.
“It was a good quarter and great year for FIS,” stated William P. Foley, II, executive chairman of FIS. “Double digit revenue growth in Transaction Processing Services and Lender Processing Services enabled us to achieve excellent financial performance in 2007, despite a highly challenging economic environment. We expect to make significant progress with the eFunds integration, and are on track to complete the spin-off of our Lender Processing business by mid 2008.”
FIS’ operating results are presented in accordance with generally accepted accounting principles (“GAAP”) and on an adjusted pro forma basis, which management believes provides more meaningful comparisons between the periods presented. FIS’ pro forma results reflect a January 1, 2006 effective date for the merger between FIS and Certegy. The adjusted and adjusted pro forma results exclude certain merger and acquisition and integration expenses, certain stock compensation charges, restructuring and other charges, and gains on the sale of Covansys Corporation common stock, Property Insight and other assets.
4th Quarter | 4th Quarter | |||||||||||
(As Adjusted) | 2007 | 2006 | % Chg | |||||||||
Total Revenue | $ | 1,330.4 million | $ | 1,108.5 million | 20.0 | % | ||||||
EBITDA | $ | 369.3 million | $ | 288.3 million | 28.1 | % | ||||||
Net Earnings | $ | 102.2 million | $ | 84.3 million | 21.2 | % | ||||||
Net Earnings Per Diluted Share | $ | 0.52 | $ | 0.43 | 20.9 | % | ||||||
Cash Earnings (as defined below) | $ | 133.3 million | $ | 111.9 million | 19.1 | % | ||||||
Cash Earnings Per Diluted Share | $ | 0.68 | $ | 0.58 | 17.2 | % |
Segment Information
Transaction Processing Services generated revenue of $875.3 million compared to $694.7 million in the prior-year period, an increase of 26%. EBITDA increased 35.6% to $243.0 million. The EBITDA margin was 27.8% compared to 25.8% in the fourth quarter of 2006.
Excluding eFunds, TPS revenue increased 5.8% to $735.3 million driven by 21.2% growth in International to $170.8 million and 5.2% growth in Integrated Financial Solutions to $297.9 million. Enterprise Solutions revenue totaled $267.1 million, which is a 2% decrease compared to the prior year quarter. The decline is attributable to significant core banking customer implementations in the second half of 2006 and reduced retail volumes in Check Services in 2007. Excluding eFunds, EBITDA increased 7.6% to $192.8 million. The EBITDA margin increased 40 basis points to 26.2%, driven by improved profitability in Integrated Financial Solutions and International, partially offset by the lower retail volumes within Check Services.
Lender Processing Services revenue increased 9.5% to $454.8 million, driven by 13.4% growth in Information Services, which continues to benefit from strong results within the default solutions and appraisal product lines, and 8.7% growth in Mortgage Processing revenues, driven by a net increase in non-account based revenues which include termination fees. Lender Processing Services’ EBITDA increased to $153.8 million, or 16.2% above the prior year quarter. The EBITDA margin improved to 33.8% versus 31.9% in the prior year quarter. The increase was driven by continued margin expansion within Default Services and the aforementioned non-account based revenue.
Additional segment information is provided in the following table. Certain prior year numbers have been adjusted to reflect subsequent reclassifications between business units.
Segment Revenues | 4th Quarter | 4th Quarter | ||||||||||
(amounts in millions) | 2007 | 2006 | % Chg. | |||||||||
Transaction Processing Services: | ||||||||||||
Integrated Financial Solutions | $ | 364.6 | $ | 283.3 | 28.7 | % | ||||||
Enterprise Solutions | 312.5 | 272.5 | 14.7 | % | ||||||||
International | 199.8 | 141.0 | 41.7 | % | ||||||||
Other | (1.6 | ) | (2.1 | ) | — | |||||||
$ | 875.3 | $ | 694.7 | 26.0 | % | |||||||
Lender Processing Services: | ||||||||||||
Mortgage Processing | $ | 100.5 | $ | 92.5 | 8.7 | % | ||||||
Information Services | 354.7 | 312.9 | 13.4 | % | ||||||||
Other | (0.4 | ) | 10.0 | — | ||||||||
$ | 454.8 | $ | 415.4 | 9.5 | % | |||||||
Corporate | $ | 0.3 | $ | (1.6 | ) | — | ||||||
Total FIS | $ | 1,330.4 | $ | 1,108.5 | 20.0 | % | ||||||
Corporate expense, as adjusted, for the fourth quarter of 2007 totaled $31.1 million compared to $27.9 million in the fourth quarter of 2006. The increase is primarily attributable to the eFunds acquisition. The effective tax rate was 37.0%.
2008 Outlook
FIS provided its outlook for 2008 as follows:
• | Revenue growth of 14% to 16% (6% to 8% excluding eFunds); | ||
• | EBITDA growth of 15% to 17%; | ||
• | Adjusted earnings per diluted share of $2.15 to $2.25; | ||
• | Adjusted cash earnings per diluted share of $2.73 to $2.83 (including eFunds), compared to $2.44 in 2007. eFunds is expected to contribute approximately $0.05 to cash earnings per share; | ||
• | Capital expenditures of $280-$300 million; | ||
• | Total depreciation and amortization of approximately $530 million, including $180 million in pre-tax purchase amortization ($114 million after-tax); | ||
• | Free cash flow, which the Company defines as net earnings plus depreciation and amortization less capital expenditures, of $655-$695 million; |
• | Net interest expense of approximately $237 million; | ||
• | Corporate expense of approximately $130 million; | ||
• | Annual effective tax rate of 36.6%; | ||
• | Average diluted shares of 197.5 million. |
The Company’s 2008 guidance for corporate expense includes after-tax stock option expense of approximately $33.5 million, or $0.17 per diluted share. This compares to after-tax stock option expense of $23.2 million, or $0.12 per diluted share in 2007. The guidance excludes approximately $25 million in integration expense and approximately $25 million in integration capital associated with the eFunds acquisition. The guidance also excludes up-front costs associated with the spin-off of the Company’s Lender Processing Services division and incremental operating expenses for the proposed stand-alone entity.
In the first quarter of 2008, the Company expects to achieve earnings per diluted share of $0.42 to $0.45 and cash earnings per diluted share of $0.57 to $0.60. This guidance excludes integration expense associated with the eFunds acquisition and up-front costs and incremental operating expenses associated with the spin-off of the Lender Processing Services division.
Use of Non-GAAP Financial Information
FIS reports several non-GAAP measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”), net earnings plus depreciation and amortization less capital expenditures (“Free Cash Flow”) and net earnings plus tax-adjusted purchase price amortization (“Cash Earnings”). Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. A reconciliation of these non-GAAP measures to related GAAP measures is included in the appendices to this release.
Conference Call and Webcast
FIS will host a call with investors and analysts to discuss fourth quarter and full year 2007 results on Thursday, February 14, 2008, beginning at 8:30 a.m. Eastern daylight time. Those wishing to participate via the webcast should access the call through FIS’ Investor Relations website at http://www.fidelityinfoservices.com. Those wishing to participate via the telephone may do so by calling 800-230-1085 (USA) or 612-332-0335 (International). The webcast replay will be available on FIS’ Investor Relations website. The telephone replay will be available through February 28, 2008, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 906729.
About Fidelity National Information Services
Fidelity National Information Services, Inc. (NYSE:FIS) is a leading provider of core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage-related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top 10. Approximately 50 percent of all U.S. residential mortgages are processed using FIS software. FIS is a member of Standard and Poor’s (S&P) 500® Index and has been ranked the number one overall financial technology provider in the world byAmerican Bankerand the research firm Financial Insights in the annual FinTech 100 rankings. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 9,000 financial institutions in more than 80 countries worldwide. For more information on Fidelity National Information Services, please visit www.fidelityinfoservices.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: risks associated with the proposed spin-off of the Lender Processing Services (LPS) segment by FIS, including the ability of FIS to contribute certain LPS assets and liabilities to the entity to be spun off, the ability of LPS to obtain debt on acceptable terms and exchange that debt with certain holders of the FIS debt, obtaining government approvals, obtaining FIS Board of Directors approval, market conditions for the spin-off, and the risk that the spin-off will not be beneficial once accomplished, including as a result of unexpected dis-synergies resulting from the separation or unfavorable reaction from customers, rating agencies or other constituencies; changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage (both at FIS prior to the spin-off and at the separate companies after the spin-off), which may limit the funds available to make acquisitions and invest in our business; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in the banking, retail and financial services industries; failures to adapt our services to changes in technology or in the marketplace; adverse changes in the level of real estate activity, which would adversely affect certain of our businesses; our
potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; the possibility that our acquisition of EFD/eFunds may not be accretive to our earnings due to undisclosed liabilities, management or integration issues, loss of customers, the inability to achieve targeted cost savings, or other factors; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission.
FIS-e
SOURCE: Fidelity National Information Services, Inc.
CONTACT: Mary Waggoner, Senior Vice President, Investor Relations, 904-854-3282, mary.waggoner@fnis.com
CONTACT: Mary Waggoner, Senior Vice President, Investor Relations, 904-854-3282, mary.waggoner@fnis.com
###
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Processing and services revenues | $ | 1,330,414 | $ | 1,108,522 | $ | 4,758,016 | $ | 4,042,163 | ||||||||
Cost of revenues | 931,788 | 802,786 | 3,401,931 | 2,875,250 | ||||||||||||
Selling, general, and administrative expenses | 140,208 | 118,968 | 504,130 | 498,246 | ||||||||||||
Research and development costs | 29,161 | 28,019 | 106,314 | 105,580 | ||||||||||||
Operating income | 229,257 | 158,749 | 745,641 | 563,087 | ||||||||||||
Other income (expense) Interest income | 2,288 | 814 | 4,543 | 4,373 | ||||||||||||
Gain on sale of Covansys stock | — | — | 274,488 | — | ||||||||||||
Other income (expense) | 11,101 | 1,613 | 15,913 | (69 | ) | |||||||||||
Interest expense | (68,886 | ) | (50,801 | ) | (228,340 | ) | (192,819 | ) | ||||||||
Total other income (expense) | (55,497 | ) | (48,374 | ) | 66,604 | (188,515 | ) | |||||||||
Earnings before income taxes, equity earnings and minority interest | 173,760 | 110,375 | 812,245 | 374,572 | ||||||||||||
Provision for income taxes | 64,290 | 40,966 | 300,530 | 139,232 | ||||||||||||
Equity in (losses) earnings of unconsolidated entities | (330 | ) | 2,014 | 936 | 5,792 | |||||||||||
Minority interest expense | 729 | 225 | 2,192 | 185 | ||||||||||||
Net earnings from continuing operations | 108,411 | 71,198 | 510,459 | 240,947 | ||||||||||||
Earnings from discontinued operations, net of tax | — | 3,922 | 8,639 | 18,140 | ||||||||||||
Gain on disposition of discontinued operations, net of tax | — | — | 42,124 | — | ||||||||||||
Net earnings | $ | 108,411 | $ | 75,120 | $ | 561,222 | $ | 259,087 | ||||||||
Net earnings per share-basic from continuing operations | $ | 0.56 | $ | 0.37 | $ | 2.64 | $ | 1.29 | ||||||||
Net earnings per share-basic from discontined operations | $ | — | $ | 0.02 | $ | 0.27 | $ | 0.10 | ||||||||
Net earnings per share-basic | $ | 0.56 | $ | 0.39 | $ | 2.91 | $ | 1.39 | ||||||||
Weighted average shares outstanding-basic | 194,479 | 190,534 | 193,080 | 185,926 | ||||||||||||
Net earnings per share-diluted from continuing operations | $ | 0.55 | $ | 0.37 | $ | 2.60 | $ | 1.27 | ||||||||
Net earnings per share-diluted from discontinued operations | $ | — | $ | 0.02 | $ | 0.26 | $ | 0.10 | ||||||||
Net earnings per share-diluted | $ | 0.55 | $ | 0.39 | $ | 2.86 | $ | 1.37 | ||||||||
Weighted average shares outstanding-diluted | 196,741 | 194,521 | 196,546 | 189,196 | ||||||||||||
Appendix A — Unaudited Historical Detail and Reconciliation of Non-GAAP Measures
(In thousands, except per share data)
EBITDA Detail
2007 Q4 | ||||
Net Earnings from Continuing Operations | $ | 108,411 | ||
+ Interest Expense | 68,886 | |||
+ Minority Interest | 729 | |||
+ Income Taxes | 64,290 | |||
+ Depreciation | 30,175 | |||
+ Purchase Price Amortization | 49,384 | |||
+ Other Amortization | 58,344 | |||
- Interest Income | (2,288 | ) | ||
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax | 330 | |||
- Other (Income) Expense | (11,101 | ) | ||
EBITDA from Continuing Operations | $ | 367,160 | ||
EBITDA Margin
2007 Q4 | ||||
EBITDA from Continuing Operations | $ | 367,160 | ||
Revenue from Continuing Operations | $ | 1,330,414 | ||
EBITDA Margin | 27.6 | % |
EBIT Detail
2007 Q4 | ||||
Net Earnings from Continuing Operations | $ | 108,411 | ||
+ Interest Expense | 68,886 | |||
+ Minority Interest | 729 | |||
+ Income Taxes | 64,290 | |||
- Interest Income | (2,288 | ) | ||
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax | 330 | |||
- Other (Income) Expense | (11,101 | ) | ||
EBIT from Continuing Operations | $ | 229,257 | ||
EBIT Margin
2007 Q4 | ||||
EBIT from Continuing Operations | $ | 229,257 | ||
Revenue from Continuing Operations | $ | 1,330,414 | ||
EBIT Margin | 17.2 | % |
Cash Earnings
2007 Q4 | ||||
Net Earnings | $ | 108,411 | ||
+ Tax Adjusted Purchase Price Amortization | 31,112 | |||
Cash Earnings | $ | 139,523 | ||
Diluted Cash EPS | $ | 0.71 | ||
Diluted Shares Outstanding | 196,741 |
Free Cash Flow
2007 Q4 | ||||
Net Earnings | $ | 108,411 | ||
+ Depreciation/Amort from Continuing Operations | 137,903 | |||
+ Depreciation/Amort from Discontinued Operations | — | |||
- Capital Expenditures | (98,628 | ) | ||
Free Cash Flow | $ | 147,686 | ||
2007 Q4 | ||||
Stock Compensation | $ | 11,823 |
EBITDA Detail
2006 Q4 | ||||
Net Earnings from Continuing Operations | $ | 71,198 | ||
+ Interest Expense | 50,801 | |||
+ Minority Interest | 225 | |||
+ Income Taxes | 40,966 | |||
+ Depreciation | 26,685 | |||
+ Purchase Price Amortization | 43,906 | |||
+ Other Amortization | 44,412 | |||
- Interest Income | (814 | ) | ||
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax | (2,014 | ) | ||
- Other (Income) Expense | (1,613 | ) | ||
EBITDA from Continuing Operations | $ | 273,752 | ||
EBITDA Margin
2006 Q4 | ||||
EBITDA from Continuing Operations | $ | 273,752 | ||
Revenue from Continuing Operations | $ | 1,108,522 | ||
EBITDA Margin | 24.7 | % |
EBIT Detail
2006 Q4 | ||||
Net Earnings from Continuing Operations | $ | 71,198 | ||
+ Interest Expense | 50,801 | |||
+ Minority Interest | 225 | |||
+ Income Taxes | 40,966 | |||
- Interest Income | (814 | ) | ||
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax | (2,014 | ) | ||
- Other (Income) Expense | (1,613 | ) | ||
EBIT from Continuing Operations | $ | 158,749 | ||
EBIT Margin
2006 Q4 | ||||
EBIT from Continuing Operations | $ | 158,749 | ||
Revenue from Continuing Operations | $ | 1,108,522 | ||
EBIT Margin | 14.3 | % |
Cash Earnings
2006 Q4 | ||||
Net Earnings | $ | 75,120 | ||
+ Tax Adjusted Purchase Price Amortization | 27,601 | |||
Cash Earnings | $ | 102,721 | ||
Diluted Cash EPS | $ | 0.53 | ||
Diluted Shares Outstanding | 194,521 |
Free Cash Flow
2006 Q4 | ||||
Net Earnings | $ | 75,120 | ||
+ Depreciation/Amort from Continuing Operations | 115,003 | |||
+ Depreciation/Amort from Discontinued Operations | 243 | |||
- Capital Expenditures | (83,663 | ) | ||
Free Cash Flow | $ | 106,703 | ||
2006 Q4 | ||||
Stock Compensation | $ | 12,853 |
Appendix A — Unaudited Historical Detail and Reconciliation of Non-GAAP Measures
(In thousands, except per share data)
2007 Q4 | ||||
Financial Measures Excluding Non Recurring Items | ||||
EBITDA from Continuing Operations | $ | 367,160 | ||
Merger and Acquisition, Restructuring and Integration Costs | 2,153 | |||
EBITDA from Continuing Operations, excluding non recurring items | $ | 369,313 | ||
Net Earnings | $ | 108,411 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | (6,245 | ) | ||
Net Earnings , excluding non recurring items | $ | 102,166 | ||
Diluted Shares Outstanding | 196,741 | |||
Net Earnings per diluted share | $ | 0.55 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | (0.03 | ) | ||
Net Earnings per diluted share, excluding non recurring items | $ | 0.52 | ||
Cash Earnings | $ | 139,523 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | (6,245 | ) | ||
Cash Earnings, excluding non recurring items | $ | 133,278 | ||
Cash Earnings per diluted share | $ | 0.71 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | (0.03 | ) | ||
Cash Earnings per diluted share, excluding non recurring items | $ | 0.68 | ||
Free Cash Flow | $ | 147,686 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | (6,245 | ) | ||
Free Cash Flow, excluding non recurring items | $ | 141,441 | ||
2006 Q4 | ||||
Financial Measures Excluding Non Recurring Items | ||||
EBITDA from Continuing Operations | $ | 273,752 | ||
Merger and Acquisition, Restructuring and Integration Costs | 14,595 | |||
EBITDA from Continuing Operations, excluding non recurring items | $ | 288,347 | ||
Net Earnings | $ | 75,120 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 9,165 | |||
Net Earnings , excluding non recurring items | $ | 84,285 | ||
Diluted Shares Outstanding | 194,521 | |||
Net Earnings per diluted share | $ | 0.39 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 0.04 | |||
Net Earnings per diluted share, excluding non recurring items | $ | 0.43 | ||
Cash Earnings | $ | 102,721 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 9,165 | |||
Cash Earnings, excluding non recurring items | $ | 111,886 | ||
Cash Earnings per diluted share | $ | 0.53 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 0.05 | |||
Cash Earnings per diluted share, excluding non recurring items | $ | 0.58 | ||
Free Cash Flow | $ | 106,703 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 9,165 | |||
Free Cash Flow, excluding non recurring items | $ | 115,868 | ||
Appendix A — Unaudited Historical Detail and Reconciliation of Non-GAAP Measures
(In thousands, except per share data)
EBITDA Detail
2007 Year-to-date | 2006 Year-to-date | ||||||||||||||||||||||
FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||||||||||
Net Earnings from Continuing Operations | $ | 510,459 | $ | 240,947 | $ | (42,523 | ) | (3,708 | ) | $ | 194,716 | ||||||||||||
+ Interest Expense | 228,340 | 192,819 | 1,081 | — | 193,900 | ||||||||||||||||||
+ Minority Interest | 2,192 | 185 | — | — | 185 | ||||||||||||||||||
+ Income Taxes | 300,530 | 139,232 | (26,396 | ) | (2,626 | ) | 110,210 | ||||||||||||||||
+ Depreciation | 114,965 | 96,513 | 1,633 | — | 98,146 | ||||||||||||||||||
+ Purchase Price Amortization | 168,660 | 175,645 | 378 | 5,364 | 181,387 | ||||||||||||||||||
+ Other Amortization | 212,563 | 160,197 | 2,263 | 1,492 | 163,952 | ||||||||||||||||||
- Interest Income | (4,543 | ) | (4,373 | ) | — | — | (4,373 | ) | |||||||||||||||
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax | (936 | ) | (5,792 | ) | — | — | (5,792 | ) | |||||||||||||||
- Other (Income) Expense | (15,913 | ) | 69 | 123 | — | 192 | |||||||||||||||||
- Covansys Gain | (274,488 | ) | — | — | — | — | |||||||||||||||||
EBITDA from Continuing Operations | $ | 1,241,829 | $ | 995,442 | $ | (63,441 | ) | $ | 522 | $ | 932,523 | ||||||||||||
EBITDA Margin
2007 Year-to-date | 2006 Year-to-date | ||||||||||||||||||||||
FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||||||||||
EBITDA from Continuing Operations | $ | 1,241,829 | $ | 995,442 | $ | (63,441 | ) | $ | 522 | $ | 932,523 | ||||||||||||
Revenue from Continuing Operations | $ | 4,758,016 | $ | 4,042,163 | $ | 92,915 | $ | — | $ | 4,135,078 | |||||||||||||
EBITDA Margin | 26.1 | % | 24.6 | % | 22.6 | % | |||||||||||||||||
EBIT Detail
2007 Year-to-date | 2006 Year-to-date | ||||||||||||||||||||||
FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||||||||||
Net Earnings from Continuing Operations | $ | 510,459 | $ | 240,947 | $ | (42,523 | ) | $ | (3,708 | ) | $ | 194,716 | |||||||||||
+ Interest Expense | 228,340 | 192,819 | 1,081 | — | 193,900 | ||||||||||||||||||
+ Minority Interest | 2,192 | 185 | — | — | 185 | ||||||||||||||||||
+ Income Taxes | 300,530 | 139,232 | (26,396 | ) | (2,626 | ) | 110,210 | ||||||||||||||||
- Interest Income | (4,543 | ) | (4,373 | ) | — | — | (4,373 | ) | |||||||||||||||
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax | (936 | ) | (5,792 | ) | — | — | (5,792 | ) | |||||||||||||||
- Other (Income) Expense | (15,913 | ) | 69 | 123 | — | 192 | |||||||||||||||||
- Covansys Gain | (274,488 | ) | — | — | — | — | |||||||||||||||||
EBIT from Continuing Operations | $ | 745,641 | $ | 563,087 | $ | (67,715 | ) | $ | (6,334 | ) | $ | 489,038 | |||||||||||
EBIT Margin
2007 Year-to-date | 2006 Year-to-date | ||||||||||||||||||||||
FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||||||||||
EBIT from Continuing Operations | $ | 745,641 | $ | 563,087 | $ | (67,715 | ) | $ | (6,334 | ) | $ | 489,038 | |||||||||||
Revenue from Continuing Operations | $ | 4,758,016 | $ | 4,042,163 | $ | 92,915 | $ | — | $ | 4,135,078 | |||||||||||||
EBIT Margin | 15.7 | % | 13.9 | % | 11.8 | % | |||||||||||||||||
Cash Earnings
2007 Year-to-date | 2006 Year-to-date | ||||||||||||||||||||||
FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||||||||||
Net Earnings | $ | 561,222 | $ | 259,087 | $ | (42,523 | ) | $ | (3,708 | ) | $ | 212,856 | |||||||||||
+ Tax Adjusted Purchase Price Amortization | 106,203 | 109,467 | 233 | 3,524 | 113,224 | ||||||||||||||||||
Cash Earnings | $ | 667,425 | $ | 368,554 | $ | (42,290 | ) | $ | (184 | ) | $ | 326,080 | |||||||||||
Diluted Cash EPS | $ | 3.40 | $ | 1.95 | $ | 1.68 | |||||||||||||||||
Diluted Shares Outstanding | 196,546 | 189,196 | 194,653 | ||||||||||||||||||||
Free Cash Flow
2007 Year-to-date | 2006 Year-to-date | ||||||||||||||||||||||
FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||||||||||
Net Earnings | $ | 561,222 | $ | 259,087 | $ | (42,523 | ) | $ | (3,708 | ) | $ | 212,856 | |||||||||||
+ Depreciation/Amort from Continuing Operations | 496,188 | 432,355 | 4,274 | 6,856 | 443,485 | ||||||||||||||||||
+ Depreciation/Amort from Discontinued Operations | 658 | 1,195 | — | — | 1,195 | ||||||||||||||||||
- Capital Expenditures | (343,299 | ) | (300,197 | ) | (5,200 | ) | — | (305,397 | ) | ||||||||||||||
Free Cash Flow | $ | 714,769 | $ | 392,440 | $ | (43,449 | ) | $ | 3,148 | $ | 352,139 | ||||||||||||
2007 Year-to-date | 2006 Year-to-date | ||||||||||||||||||||||
FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||||||||||
Net Earnings from Continuing Operations | $ | 38,953 | $ | 50,074 | $ | 552 | ) | (552 | ) | $ | 50,074 | ||||||||||||
Appendix A — Unaudited Historical Detail and Reconciliation of Non-GAAP Measures
(In thousands, except per share data)
Financial Measures Excluding Non Recurring Items
2007 Year-to-date | ||||
EBITDA from Continuing Operations | $ | 1,241,829 | ||
Merger and Acquisition, Restructuring and Integration Costs | 14,157 | |||
Performance Based Stock Option Costs | — | |||
EBITDA from Continuing Operations, excluding non recurring items | $ | 1,255,986 | ||
Net Earnings | $ | 561,222 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 8,761 | |||
Covansys Gain, net of tax | (172,927 | ) | ||
Gain on Property Insight, net of tax | (42,124 | ) | ||
Debt Restructure Charge, net of tax | 17,059 | |||
Performance Based Stock Option Costs, net of tax | — | |||
Net Earnings , excluding non recurring items | $ | 371,991 | ||
Diluted Shares Outstanding | 196,546 | |||
Net Earnings per diluted share | $ | 2.86 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 0.04 | |||
Covansys Gain, net of tax | (0.88 | ) | ||
Gain on Property Insight, net of tax | (0.21 | ) | ||
Debt Restructure Charge, net of tax | 0.09 | |||
Performance Based Stock Option Costs, net of tax | — | |||
Net Earnings per diluted share, excluding non recurring items | $ | 1.90 | ||
Cash Earnings | $ | 667,425 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 8,761 | |||
Covansys Gain, net of tax | (172,927 | ) | ||
Gain on Property Insight, net of tax | (42,124 | ) | ||
Debt Restructure Charge, net of tax | 17,059 | |||
Performance Based Stock Option Costs, net of tax | — | |||
Cash Earnings, excluding non recurring items | $ | 478,194 | ||
Cash Earnings per diluted share | $ | 3.40 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 0.04 | |||
Covansys Gain, net of tax | (0.88 | ) | ||
Gain on Property Insight, net of tax | (0.21 | ) | ||
Debt Restructure Charge, net of tax | 0.09 | |||
Performance Based Stock Option Costs, net of tax | — | |||
Cash Earnings per diluted share, excluding non recurring items | $ | 2.44 | ||
Free Cash Flow | $ | 714,769 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | (5,707 | ) | ||
Covansys Gain, net of tax | (172,927 | ) | ||
Gain on Property Insight, net of tax | (42,124 | ) | ||
Debt Restructure Charge, net of tax | 17,059 | |||
Performance Based Stock Option Costs, net of tax | — | |||
Free Cash Flow, excluding non recurring items | $ | 511,070 | ||
2006 Year-to-date | ||||
Pro Forma | ||||
EBITDA from Continuing Operations | $ | 932,523 | ||
Merger and Acquisition, Restructuring and Integration Costs | 108,945 | |||
Performance Based Stock Option Costs | 24,130 | |||
EBITDA from Continuing Operations, excluding non recurring items | $ | 1,065,598 | ||
Net Earnings | $ | 212,856 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 67,654 | |||
Covansys Gain, net of tax | — | |||
Gain on Property Insight, net of tax | — | |||
Debt Restructure Charge, net of tax | — | |||
Performance Based Stock Option Costs, net of tax | 14,888 | |||
Net Earnings , excluding non recurring items | $ | 295,398 | ||
Diluted Shares Outstanding | 194,653 | |||
Net Earnings per diluted share | $ | 1.09 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 0.35 | |||
Covansys Gain, net of tax | — | |||
Gain on Property Insight, net of tax | — | |||
Debt Restructure Charge, net of tax | — | |||
Performance Based Stock Option Costs, net of tax | 0.08 | |||
Net Earnings per diluted share, excluding non recurring items | $ | 1.52 | ||
Cash Earnings | $ | 326,080 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 67,654 | |||
Covansys Gain, net of tax | — | |||
Gain on Property Insight, net of tax | — | |||
Debt Restructure Charge, net of tax | — | |||
Performance Based Stock Option Costs, net of tax | 14,888 | |||
Cash Earnings, excluding non recurring items | $ | 408,622 | ||
Cash Earnings per diluted share | $ | 1.68 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 0.35 | |||
Covansys Gain, net of tax | — | |||
Gain on Property Insight, net of tax | — | |||
Debt Restructure Charge, net of tax | — | |||
Performance Based Stock Option Costs, net of tax | 0.08 | |||
Cash Earnings per diluted share, excluding non recurring items | $ | 2.10 | ||
Free Cash Flow | $ | 352,139 | ||
Merger and Acquisition, Restructuring and Integration Costs, net of tax | 67,654 | |||
Covansys Gain, net of tax | — | |||
Gain on Property Insight, net of tax | — | |||
Debt Restructure Charge, net of tax | — | |||
Performance Based Stock Option Costs, net of tax | 14,888 | |||
Free Cash Flow, excluding non recurring items | $ | 434,681 | ||
Appendix B
Unaudited Historical Segment Information from Continuing Operations
For the Three Months Ended December 31, 2007 and 2006
(In thousands)
2007 — Quarter 4
Historical | ||||||||||||||||
Transaction | Lender | Corporate | ||||||||||||||
Processing Services | Processing Services | and Other | Total | |||||||||||||
Processing and services revenue | 875,267 | 454,806 | 341 | 1,330,414 | ||||||||||||
Cost of revenues | 658,550 | 273,238 | — | 931,788 | ||||||||||||
Gross profit | 216,717 | 181,568 | 341 | 398,626 | ||||||||||||
Selling, general and admin costs | 55,774 | 50,803 | 33,631 | 140,208 | ||||||||||||
Research development costs | 20,376 | 8,785 | — | 29,161 | ||||||||||||
Operating income | 140,567 | 121,980 | (33,290 | ) | 229,257 | |||||||||||
Depreciation and amortization | 102,451 | 31,853 | 3,599 | 137,903 | ||||||||||||
EBITDA | 243,018 | 153,833 | (29,691 | ) | 367,160 | |||||||||||
EBITDA | 243,018 | 153,833 | (29,691 | ) | 367,160 | |||||||||||
Merger and Acquisition costs | — | — | 2,153 | 2,153 | ||||||||||||
Acceleration of performance based options | — | — | — | — | ||||||||||||
EBITDA, excluding selected items | 243,018 | 153,833 | (27,538 | ) | 369,313 |
2006 — Quarter 4
Historical | ||||||||||||||||
Transaction | Lender | Corporate | ||||||||||||||
Processing Services | Processing Services | and Other | Total | |||||||||||||
Processing and services revenue | 694,748 | 415,404 | (1,630 | ) | 1,108,522 | |||||||||||
Cost of revenues | 537,295 | 265,491 | — | 802,786 | ||||||||||||
Gross profit | 157,453 | 149,913 | (1,630 | ) | 305,736 | |||||||||||
Selling, general and admin costs | 40,765 | 43,701 | 34,502 | 118,968 | ||||||||||||
Research development costs | 18,696 | 9,323 | — | 28,019 | ||||||||||||
Operating income | 97,992 | 96,889 | (36,132 | ) | 158,749 | |||||||||||
Depreciation and amortization | 75,696 | 34,690 | 4,617 | 115,003 | ||||||||||||
EBITDA | 173,688 | 131,579 | (31,515 | ) | 273,752 | |||||||||||
EBITDA | 173,688 | 131,579 | (31,515 | ) | 273,752 | |||||||||||
Merger and Acquisition costs | 5,547 | 804 | 8,244 | 14,595 | ||||||||||||
Acceleration of performance based options | — | — | — | — | ||||||||||||
EBITDA, excluding selected items | 179,235 | 132,383 | (23,271 | ) | 288,347 |
Appendix B
Unaudited Historical Segment Information from Continuing Operations
For the Twelve Months Ended December 31, 2007 and 2006
(In thousands)
2007 — Year-to-date
Historical | ||||||||||||||||
Transaction | Lender | Corporate | ||||||||||||||
Processing Services | Processing Services | and Other | Total | |||||||||||||
Processing and services revenue | 2,985,077 | 1,761,102 | 11,837 | 4,758,016 | ||||||||||||
Cost of revenues | 2,308,728 | 1,093,203 | — | 3,401,931 | ||||||||||||
Gross profit | 676,349 | 667,899 | 11,837 | 1,356,085 | ||||||||||||
Selling, general and admin costs | 191,440 | 188,902 | 123,788 | 504,130 | ||||||||||||
Research development costs | 70,378 | 35,936 | — | 106,314 | ||||||||||||
Operating income | 414,531 | 443,061 | (111,951 | ) | 745,641 | |||||||||||
Depreciation and amortization | 342,766 | 131,319 | 22,103 | 496,188 | ||||||||||||
EBITDA | 757,297 | 574,380 | (89,848 | ) | 1,241,829 | |||||||||||
EBITDA | 757,297 | 574,380 | (89,848 | ) | 1,241,829 | |||||||||||
Merger and Acquisition costs | 4,614 | 6,787 | 2,756 | 14,157 | ||||||||||||
EBITDA, excluding selected items | 761,911 | 581,167 | (87,092 | ) | 1,255,986 |
2006 — Year-to-date
Historical | ||||||||||||||||
Transaction | Lender | Corporate | ||||||||||||||
Processing Services | Processing Services | and Other | Total | |||||||||||||
Processing and services revenue | 2,458,776 | 1,584,170 | (783 | ) | 4,042,163 | |||||||||||
Cost of revenues | 1,914,148 | 961,102 | — | 2,875,250 | ||||||||||||
Gross profit | 544,628 | 623,068 | (783 | ) | 1,166,913 | |||||||||||
Selling, general and admin costs | 171,105 | 197,419 | 129,722 | 498,246 | ||||||||||||
Research development costs | 70,879 | 34,701 | — | 105,580 | ||||||||||||
Operating income | 302,644 | 390,948 | (130,505 | ) | 563,087 | |||||||||||
Depreciation and amortization | 283,354 | 138,620 | 10,381 | 432,355 | ||||||||||||
EBITDA | 585,998 | 529,568 | (120,124 | ) | 995,442 | |||||||||||
EBITDA | 585,998 | 529,568 | (120,124 | ) | 995,442 | |||||||||||
Merger and Acquisition costs | 13,398 | 4,153 | 91,394 | 108,945 | ||||||||||||
Acceleration of performance based options | — | — | 24,130 | 24,130 | ||||||||||||
EBITDA, excluding selected items | 599,396 | 533,721 | (4,600 | ) | 1,128,517 |
Appendix B
Unaudited Pro Forma Segment Information from Continuing Operations
Unaudited Pro Forma Segment Information from Continuing Operations
For the Twelve Months Ended December 31, 2006
(In thousands)
2006 — Year-to-date
Pro Forma | ||||||||||||||||
Transaction | Lender | Corporate | ||||||||||||||
Processing Services | Processing Services | and Other | Total | |||||||||||||
Processing and services revenue | 2,549,741 | 1,584,170 | 1,169 | 4,135,080 | ||||||||||||
Cost of revenues | 1,994,223 | 961,102 | — | 2,955,325 | ||||||||||||
Gross profit | 555,518 | 623,068 | 1,169 | 1,179,755 | ||||||||||||
Selling, general and admin costs | 175,516 | 197,419 | 212,202 | 585,137 | ||||||||||||
Research development costs | 70,879 | 34,701 | — | 105,580 | ||||||||||||
Operating income | 309,123 | 390,948 | (211,033 | ) | 489,038 | |||||||||||
Depreciation and amortization | 294,394 | 138,620 | 10,471 | 443,485 | ||||||||||||
EBITDA | 603,517 | 529,568 | (200,562 | ) | 932,523 | |||||||||||
EBITDA | 603,517 | 529,568 | (200,562 | ) | 932,523 | |||||||||||
Merger and Acquisition costs | 13,398 | 4,153 | 91,394 | 108,945 | ||||||||||||
Acceleration of performance based options | — | — | 24,130 | 24,130 | ||||||||||||
EBITDA, excluding selected items | 616,915 | 533,721 | (85,038 | ) | 1,065,598 |