Fidelity National Information Services, Inc.
Supplemental Financial Schedules
May 3, 2016
Exhibit 99.2
SunGard Acquisition
On August 12, 2015, FIS and certain of its wholly owned subsidiaries entered into an Agreement and Plan of Merger (the "Merger Agreement") with SunGard and SunGard Capital Corp. II (collectively “SunGard”) pursuant to which, through a series of mergers, FIS acquired SunGard (collectively the "Acquisition" or the "SunGard acquisition"). FIS completed the Acquisition on November 30, 2015, and SunGard's results of operations and financial position have been included in the consolidated results of FIS from and after the date of acquisition.
Supplemental Financial Data
Due to the financial impact of the transactions described above, FIS management desires to furnish investors with the additional information set forth herein to improve the understanding of the Company’s operating performance. The purpose of the schedules included in this Exhibit 99.2 is to recalculate certain non-GAAP measures of the Company’s financial performance (specifically, adjusted revenues, adjusted operating income and adjusted EBITDA) taking into account the Acquisition, for each of the quarters in 2014 and 2015 and for the full years 2014 and 2015. These schedules have been prepared by (i) adding the adjusted historical revenues of SunGard to the adjusted revenues of the Company, (ii) adding the adjusted historical operating income of SunGard to adjusted operating income of the Company and (iii) for purposes of adjusted EBITDA, adding depreciation and amortization expense back to the adjusted combined operating income. The content of these schedules is as follows:
| |
| • | Exhibit A shows the totals of these adjusted combined amounts on a total company basis, including the totals of the components of expense that reduce adjusted operating income; |
| |
| • | Exhibit B shows the totals of these adjusted combined amounts by segment (based on the Company’s segments effective for the three months ended March 31, 2016), and breaks out the non-GAAP adjustments applicable to the Company; and |
| |
| • | Exhibit C reconciles the non-GAAP amounts for SunGard to its reported GAAP amounts. |
The unaudited adjusted combined financial information is presented for illustrative purposes only and does not reflect the financial results of the combined companies had the companies actually been combined at the beginning of 2014, nor the impact of possible business model changes. The unaudited adjusted combined financial information also does not consider any potential impacts of current market conditions on revenues, expense efficiencies and other factors.
Although this Exhibit 99.2 contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company believes that it provides information that may be useful in understanding its results of operations, including a reasonable basis of comparison with its results for post-Acquisition periods. FIS’ management uses these non-GAAP measures in part to assess the Company’s performance. Therefore, management believes these non-GAAP measures to be relevant and useful information for investors. These non-GAAP measures should not be used in isolation or as a substitute for other measures of financial performance reported in accordance with GAAP. In addition, the Company’s non-GAAP measures may be calculated differently from similarly titled measures of other companies.
Exhibit Index
|
| | |
| | | |
| Exhibit A | | Supplemental Non-GAAP Adjusted Combined Operating Data (Unaudited) |
| | | |
| Exhibit B | | Adjusted Combined Consolidated and Reporting Segments — (Unaudited) |
| | | |
| Exhibit C | | GAAP to Non-GAAP Adjusted Combined Operating Income (Unaudited) |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Supplemental Non-GAAP Adjusted Combined Operating Data (Unaudited)
(in millions)
Exhibit A
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2015 | | 2015 | | 2015 | | 2015 | | 2015 |
| Processing and services revenue, as adjusted | | $ | 2,221 |
| | $ | 2,269 |
| | $ | 2,275 |
| | $ | 2,368 |
| | $ | 9,133 |
|
| Expenses, as adjusted: | | | | | | | | | | |
| Cost of revenues | | 1,406 |
| | 1,419 |
| | 1,367 |
| | 1,399 |
| | 5,591 |
|
| Selling, general and administrative expenses | | 365 |
| | 372 |
| | 338 |
| | 378 |
| | 1,453 |
|
| Total expenses, as adjusted | | 1,771 |
| | 1,791 |
| | 1,705 |
| | 1,777 |
| | 7,044 |
|
| Operating income, as adjusted | | $ | 450 |
| | $ | 478 |
| | $ | 570 |
| | $ | 591 |
| | $ | 2,089 |
|
| | | | | | | | | | | |
| Operating margin, as adjusted | | 20.3 | % | | 21.1 | % | | 25.1 | % | | 25.0 | % | | 22.9 | % |
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2014 | | 2014 | | 2014 | | 2014 | | 2014 |
| Processing and services revenue, as adjusted | | $ | 2,178 |
| | $ | 2,266 |
| | $ | 2,289 |
| | $ | 2,475 |
| | $ | 9,208 |
|
| Expenses, as adjusted: | | | | | | | | | | |
| Cost of revenues | | 1,402 |
| | 1,451 |
| | 1,414 |
| | 1,460 |
| | 5,727 |
|
| Selling, general and administrative expenses | | 353 |
| | 357 |
| | 362 |
| | 379 |
| | 1,451 |
|
| Total expenses, as adjusted | | 1,755 |
| | 1,808 |
| | 1,776 |
| | 1,839 |
| | 7,178 |
|
| Operating income, as adjusted | | $ | 423 |
| | $ | 458 |
| | $ | 513 |
| | $ | 636 |
| | $ | 2,030 |
|
| | | | | | | | | | | |
| Operating margin, as adjusted | | 19.4 | % | | 20.2 | % | | 22.4 | % | | 25.7 | % | | 22.0 | % |
See Exhibit C for reconciliation of adjusted amounts to reported amounts.
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Adjusted Combined Consolidated and Reporting Segments (Unaudited)
(in millions)
Exhibit B
|
| | | | | | | | | | | | | | | |
| | | | | | | | |
| | Three months ended March 31, 2015 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 928 |
| | $ | 512 |
| | $ | 115 |
| | $ | 1,555 |
|
| Historical SunGard revenue, as adjusted (4) | 132 |
| | 475 |
| | 59 |
| | 666 |
|
| Adjusted combined revenue from continuing operations | $ | 1,060 |
| | $ | 987 |
| | $ | 174 |
| | $ | 2,221 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 319 |
| | $ | 46 |
| | $ | (150 | ) | | $ | 215 |
|
| Historical SunGard operating income, as adjusted (4) | 40 |
| | 119 |
| | (31 | ) | | 128 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Acquisition, integration and severance costs (1) | — |
| | — |
| | 12 |
| | 12 |
|
| Global restructure (2) | — |
| | — |
| | 45 |
| | 45 |
|
| Purchase accounting amortization (3) | — |
| | — |
| | 50 |
| | 50 |
|
| Adjusted combined operating income (loss) | 359 |
| | 165 |
| | (74 | ) | | 450 |
|
| FIS depreciation and amortization from continuing operations | 52 |
| | 35 |
| | 16 |
| | 103 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (4) | 6 |
| | 24 |
| | 6 |
| | 36 |
|
| Adjusted combined EBITDA | $ | 417 |
| | $ | 224 |
| | $ | (52 | ) | | $ | 589 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 33.9 | % | | 16.7 | % | | N/M |
| | 20.3 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 39.3 | % | | 22.7 | % | | N/M |
| | 26.5 | % |
| | | | | | | | |
| | Three months ended June 30, 2015 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 931 |
| | $ | 555 |
| | $ | 101 |
| | $ | 1,587 |
|
| Historical SunGard revenue, as adjusted (4) | 138 |
| | 483 |
| | 61 |
| | 682 |
|
| Adjusted combined revenue from continuing operations | $ | 1,069 |
| | $ | 1,038 |
| | $ | 162 |
| | $ | 2,269 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 313 |
| | $ | 82 |
| | $ | (108 | ) | | $ | 287 |
|
| Historical SunGard operating income, as adjusted (4) | 38 |
| | 123 |
| | (31 | ) | | 130 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Acquisition, integration and severance costs (1) | — |
| | — |
| | 11 |
| | 11 |
|
| Purchase accounting amortization (3) | — |
| | — |
| | 50 |
| | 50 |
|
| Adjusted combined operating income (loss) | 351 |
| | 205 |
| | (78 | ) | | 478 |
|
| FIS depreciation and amortization from continuing operations | 56 |
| | 35 |
| | 14 |
| | 105 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (4) | 6 |
| | 23 |
| | 5 |
| | 34 |
|
| Adjusted combined EBITDA | $ | 413 |
| | $ | 263 |
| | $ | (59 | ) | | $ | 617 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 32.8 | % | | 19.7 | % | | N/M |
| | 21.1 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 38.6 | % | | 25.3 | % | | N/M |
| | 27.2 | % |
| |
| (1) | See note (2) to Exhibit C. |
| |
| (2) | See note (3) to Exhibit C. |
| |
| (3) | See note (6) to Exhibit C. |
| |
| (4) | See note (5) to Exhibit C. |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Adjusted Combined Consolidated and Reporting Segments (Unaudited)
(in millions)
Exhibit B (continued)
|
| | | | | | | | | | | | | | | |
| | | | | | | | |
| | Three months ended September 30, 2015 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 944 |
| | $ | 539 |
| | $ | 96 |
| | $ | 1,579 |
|
| Historical SunGard revenue, as adjusted (4) | 138 |
| | 497 |
| | 61 |
| | 696 |
|
| Adjusted combined revenue from continuing operations | $ | 1,082 |
| | $ | 1,036 |
| | $ | 157 |
| | $ | 2,275 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 346 |
| | $ | 107 |
| | $ | (115 | ) | | $ | 338 |
|
| Historical SunGard operating income, as adjusted (4) | 42 |
| | 137 |
| | (33 | ) | | 146 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Acquisition, integration and severance costs (1) | — |
| | — |
| | 36 |
| | 36 |
|
| Purchase accounting amortization (2) | — |
| | — |
| | 50 |
| | 50 |
|
| Adjusted combined operating income (loss) | 388 |
| | 244 |
| | (62 | ) | | 570 |
|
| FIS depreciation and amortization from continuing operations | 58 |
| | 34 |
| | 13 |
| | 105 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (4) | 7 |
| | 25 |
| | 5 |
| | 37 |
|
| Adjusted combined EBITDA | $ | 453 |
| | $ | 303 |
| | $ | (44 | ) | | $ | 712 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 35.9 | % | | 23.6 | % | | N/M |
| | 25.1 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 41.9 | % | | 29.2 | % | | N/M |
| | 31.3 | % |
| | | | | | | | |
| | Three months ended December 31, 2015 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 1,043 |
| | $ | 754 |
| | $ | 78 |
| | $ | 1,875 |
|
| Historical SunGard revenue, as adjusted (4) | 88 |
| | 325 |
| | 32 |
| | 445 |
|
| FIS non-GAAP adjustments: | | | | | | |
|
|
| Acquisition deferred revenue adjustment (3) | — |
| | — |
| | $ | 48 |
| | 48 |
|
| Adjusted combined revenue from continuing operations | $ | 1,131 |
| | $ | 1,079 |
| | $ | 158 |
| | $ | 2,368 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 364 |
| | $ | 172 |
| | $ | (277 | ) | | $ | 259 |
|
| Historical SunGard operating income, as adjusted (4) | 26 |
| | 82 |
| | (24 | ) | | 84 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Acquisition deferred revenue adjustment (3) | — |
| | — |
| | 48 |
| | 48 |
|
| Acquisition, integration and severance costs (1) | — |
| | — |
| | 112 |
| | 112 |
|
| Purchase accounting amortization (2) | — |
| | — |
| | 88 |
| | 88 |
|
| Adjusted combined operating income (loss) | 390 |
| | 254 |
| | (53 | ) | | 591 |
|
| FIS depreciation and amortization from continuing operations | 60 |
| | 42 |
| | 16 |
| | 118 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (4) | 5 |
| | 17 |
| | 3 |
| | 25 |
|
| Adjusted combined EBITDA | $ | 455 |
| | $ | 313 |
| | $ | (34 | ) | | $ | 734 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 34.5 | % | | 23.5 | % | | N/M |
| | 25.0 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 40.2 | % | | 29.0 | % | | N/M |
| | 31.0 | % |
| |
| (1) | See note (2) to Exhibit C. |
| |
| (2) | See note (6) to Exhibit C. |
| |
| (3) | See note (1) to Exhibit C. |
| |
| (4) | See note (5) to Exhibit C. |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Adjusted Combined Consolidated and Reporting Segments (Unaudited)
(in millions)
Exhibit B (continued)
|
| | | | | | | | | | | | | | | |
| | | | | | | | |
| | Year ended December 31, 2015 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 3,846 |
| | $ | 2,360 |
| | $ | 390 |
| | $ | 6,596 |
|
| Historical SunGard revenue, as adjusted (5) | 496 |
| | 1,780 |
| | 213 |
| | 2,489 |
|
| FIS non-GAAP adjustments: | | | | | | |
|
|
| Acquisition deferred revenue adjustment (3) | $ | — |
| | $ | — |
| | $ | 48 |
| | 48 |
|
| Adjusted combined revenue from continuing operations | $ | 4,342 |
| | $ | 4,140 |
| | $ | 651 |
| | $ | 9,133 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 1,342 |
| | $ | 407 |
| | $ | (650 | ) | | $ | 1,099 |
|
| Historical SunGard operating income, as adjusted (5) | 146 |
| | 461 |
| | (119 | ) | | 488 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Acquisition deferred revenue adjustment (1) | — |
| | — |
| | 48 |
| | 48 |
|
| Acquisition, integration and severance costs (2) | — |
| | — |
| | 171 |
| | 171 |
|
| Global restructure (3) | — |
| | — |
| | 45 |
| | 45 |
|
| Purchase accounting amortization (4) | — |
| | — |
| | 238 |
| | 238 |
|
| Adjusted combined operating income (loss) | 1,488 |
| | 868 |
| | (267 | ) | | 2,089 |
|
| FIS depreciation and amortization from continuing operations | 226 |
| | 146 |
| | 59 |
| | 431 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (5) | 24 |
| | 89 |
| | 19 |
| | 132 |
|
| Adjusted combined EBITDA | $ | 1,738 |
| | $ | 1,103 |
| | $ | (189 | ) | | $ | 2,652 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 34.3 | % | | 21.0 | % | | N/M |
| | 22.9 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 40.0 | % | | 26.6 | % | | N/M |
| | 29.0 | % |
| |
| (1) | See note (1) to Exhibit C. |
| |
| (2) | See note (2) to Exhibit C. |
| |
| (3) | See note (3) to Exhibit C. |
| |
| (4) | See note (6) to Exhibit C. |
| |
| (5) | See note (5) to Exhibit C. |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Adjusted Combined Consolidated and Reporting Segments (Unaudited)
(in millions)
Exhibit B (continued)
|
| | | | | | | | | | | | | | | |
| | | | | | | | |
| | Three months ended March 31, 2014 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 898 |
| | $ | 496 |
| | $ | 126 |
| | $ | 1,520 |
|
| Historical SunGard revenue, as adjusted (3) | 126 |
| | 465 |
| | 58 |
| | 649 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Contract settlement (1) | 9 |
| | — |
| | — |
| | 9 |
|
| Adjusted combined revenue from continuing operations | $ | 1,033 |
| | $ | 961 |
| | $ | 184 |
| | $ | 2,178 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 310 |
| | $ | 58 |
| | $ | (82 | ) | | $ | 286 |
|
| Historical SunGard operating income, as adjusted (3) | 28 |
| | 91 |
| | (46 | ) | | 73 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Contract settlement (1) | 9 |
| | — |
| | — |
| | 9 |
|
| Purchase accounting amortization (2) | — |
| | — |
| | 55 |
| | 55 |
|
| Adjusted combined operating income (loss) | 347 |
| | 149 |
| | (73 | ) | | 423 |
|
| FIS depreciation and amortization from continuing operations | 51 |
| | 32 |
| | 15 |
| | 98 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (3) | $ | 8 |
| | $ | 33 |
| | $ | 10 |
| | 51 |
|
| Adjusted combined EBITDA | $ | 406 |
| | $ | 214 |
| | $ | (48 | ) | | $ | 572 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 33.6 | % | | 15.5 | % | | N/M |
| | 19.4 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 39.3 | % | | 22.3 | % | | N/M |
| | 26.3 | % |
| | | | | | | | |
| | Three months ended June 30, 2014 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 928 |
| | $ | 543 |
| | $ | 128 |
| | $ | 1,599 |
|
| Historical SunGard revenue, as adjusted (3) | 134 |
| | 472 |
| | 61 |
| | 667 |
|
| Adjusted combined revenue from continuing operations | $ | 1,062 |
| | $ | 1,015 |
| | $ | 189 |
| | $ | 2,266 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 316 |
| | $ | 77 |
| | $ | (83 | ) | | $ | 310 |
|
| Historical SunGard operating income, as adjusted (3) | 31 |
| | 98 |
| | (35 | ) | | 94 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Purchase accounting amortization (2) | — |
| | — |
| | 54 |
| | 54 |
|
| Adjusted combined operating income (loss) | 347 |
| | 175 |
| | (64 | ) | | 458 |
|
| FIS depreciation and amortization from continuing operations | 53 |
| | 34 |
| | 15 |
| | 102 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (3) | $ | 8 |
| | $ | 35 |
| | $ | 10 |
| | 53 |
|
| Adjusted combined EBITDA | $ | 408 |
| | $ | 244 |
| | $ | (39 | ) | | $ | 613 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 32.7 | % | | 17.2 | % | | N/M |
| | 20.2 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 38.4 | % | | 24.0 | % | | N/M |
| | 27.1 | % |
| |
| (1) | See note (4) to Exhibit C. |
| |
| (2) | See note (6) to Exhibit C. |
| |
| (3) | See note (5) to Exhibit C. |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Adjusted Combined Consolidated and Reporting Segments (Unaudited)
(in millions)
Exhibit B (continued)
|
| | | | | | | | | | | | | | | |
| | | | | | | | |
| | Three months ended September 30, 2014 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 911 |
| | $ | 555 |
| | $ | 139 |
| | $ | 1,605 |
|
| Historical SunGard revenue, as adjusted (3) | 132 |
| | 492 |
| | 60 |
| | 684 |
|
| Adjusted combined revenue from continuing operations | $ | 1,043 |
| | $ | 1,047 |
| | $ | 199 |
| | $ | 2,289 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 311 |
| | $ | 93 |
| | $ | (80 | ) | | $ | 324 |
|
| Historical SunGard operating income, as adjusted (3) | 30 |
| | 132 |
| | (34 | ) | | 128 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Acquisition, integration and severance costs (1) | — |
| | — |
| | 7 |
| | 7 |
|
| Purchase accounting amortization (2) | — |
| | — |
| | 54 |
| | 54 |
|
| Adjusted combined operating income (loss) | 341 |
| | 225 |
| | (53 | ) | | 513 |
|
| FIS depreciation and amortization from continuing operations | 54 |
| | 33 |
| | 16 |
| | 103 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (3) | $ | 7 |
| | $ | 28 |
| | $ | 8 |
| | 43 |
|
| Adjusted combined EBITDA | $ | 402 |
| | $ | 286 |
| | $ | (29 | ) | | $ | 659 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 32.7 | % | | 21.5 | % | | N/M |
| | 22.4 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 38.5 | % | | 27.3 | % | | N/M |
| | 28.8 | % |
| | | | | | | | |
| | Three months ended December 31, 2014 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 942 |
| | $ | 604 |
| | $ | 143 |
| | $ | 1,689 |
|
| Historical SunGard revenue, as adjusted (3) | 143 |
| | 583 |
| | 60 |
| | 786 |
|
| Adjusted combined revenue from continuing operations | $ | 1,085 |
| | $ | 1,187 |
| | $ | 203 |
| | $ | 2,475 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 323 |
| | $ | 121 |
| | $ | (93 | ) | | $ | 351 |
|
| Historical SunGard operating income, as adjusted (3) | 44 |
| | 208 |
| | (33 | ) | | 219 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Acquisition, integration and severance costs (1) | — |
| | — |
| | 14 |
| | 14 |
|
| Purchase accounting amortization (2) | — |
| | — |
| | 52 |
| | 52 |
|
| Adjusted combined operating income (loss) | 367 |
| | 329 |
| | (60 | ) | | 636 |
|
| FIS depreciation and amortization from continuing operations | 56 |
| | 34 |
| | 18 |
| | 108 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (3) | $ | 6 |
| | $ | 24 |
| | $ | 6 |
| | 36 |
|
| Adjusted combined EBITDA | $ | 429 |
| | $ | 387 |
| | $ | (36 | ) | | $ | 780 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 33.8 | % | | 27.7 | % | | N/M |
| | 25.7 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 39.5 | % | | 32.6 | % | | N/M |
| | 31.5 | % |
| |
| (1) | See note (2) to Exhibit C. |
| |
| (2) | See note (6) to Exhibit C. |
| |
| (3) | See note (5) to Exhibit C. |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Adjusted Combined Consolidated and Reporting Segments (Unaudited)
(in millions)
Exhibit B (continued)
|
| | | | | | | | | | | | | | | |
| | | | | | | | |
| | Year ended December 31, 2014 |
| | Integrated Financial Solutions | | Global Financial Solutions | | Corporate and Other | | Consolidated |
| Processing and services revenue, as reported | $ | 3,679 |
| | $ | 2,198 |
| | $ | 536 |
| | $ | 6,413 |
|
| Historical SunGard revenue, as adjusted (4) | 535 |
| | 2,012 |
| | 239 |
| | 2,786 |
|
| FIS non-GAAP adjustments: | | | | | | |
|
|
| Contract settlement (1) | $ | 9 |
| | $ | — |
| | $ | — |
| | 9 |
|
| Adjusted combined revenue from continuing operations | $ | 4,223 |
| | $ | 4,210 |
| | $ | 775 |
| | $ | 9,208 |
|
| | | | | | | | |
| Operating income (loss), as reported | $ | 1,260 |
| | $ | 349 |
| | $ | (338 | ) | | $ | 1,271 |
|
| Historical SunGard operating income, as adjusted (4) | 133 |
| | 529 |
| | (148 | ) | | 514 |
|
| FIS non-GAAP adjustments: | | | | | | | |
| Contract settlement (1) | 9 |
| | — |
| | — |
| | 9 |
|
| Acquisition, integration and severance costs (2) | — |
| | — |
| | 21 |
| | 21 |
|
| Purchase accounting amortization (3) | — |
| | — |
| | 215 |
| | 215 |
|
| Adjusted combined operating income (loss) | 1,402 |
| | 878 |
| | (250 | ) | | 2,030 |
|
| FIS depreciation and amortization from continuing operations | 214 |
| | 133 |
| | 64 |
| | 411 |
|
| Historical SunGard depreciation and amortization from continuing operations, as adjusted (4) | $ | 29 |
| | $ | 120 |
| | $ | 34 |
| | 183 |
|
| Adjusted combined EBITDA | $ | 1,645 |
| | $ | 1,131 |
| | $ | (152 | ) | | $ | 2,624 |
|
| | |
| | | | | | |
| Non-GAAP combined operating margin | 33.2 | % | | 20.9 | % | | N/M |
| | 22.0 | % |
| | |
| | |
| | |
| | |
|
| Adjusted combined EBITDA margin | 39.0 | % | | 26.9 | % | | N/M |
| | 28.5 | % |
| |
| (1) | See note (4) to Exhibit C. |
| |
| (2) | See note (2) to Exhibit C. |
| |
| (3) | See note (6) to Exhibit C. |
| |
| (4) | See note (5) to Exhibit C. |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
GAAP to Non-GAAP Adjusted Combined Operating Income (Unaudited)
(in millions)
Exhibit C
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended March 31, 2015 |
| | As | | As | | | | | | Acquisition | | | | | | Purchase | | Non-GAAP |
| | Reported | | Reported | | SunGard | | Adjusted | | Integration & | | Global | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Severance (2) | | Restructure (3) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue, | $ | 1,555 |
| | $ | 671 |
| | $ | (5 | ) | (a) | $ | 2,221 |
| | $ | — |
| | $ | — |
| | $ | 2,221 |
| | $ | — |
| | $ | 2,221 |
|
| Expenses: | | | | | | | | | | | | | | | | | |
| Cost of revenues | 1,070 |
| | 404 |
| | (18 | ) | (a)(c) | 1,456 |
| | — |
| | — |
| | 1,456 |
| | (50 | ) | | 1,406 |
|
| Selling, general and administrative expenses | 270 |
| | 152 |
| | — |
| | 422 |
| | (12 | ) | | (45 | ) | | 365 |
| | — |
| | 365 |
|
| Total expenses | 1,340 |
| | 556 |
| | (18 | ) | | 1,878 |
| | (12 | ) | | (45 | ) | | 1,821 |
| | (50 | ) | | 1,771 |
|
| Operating income | $ | 215 |
| | $ | 115 |
| | $ | 13 |
| | $ | 343 |
| | $ | 12 |
| | $ | 45 |
| | $ | 400 |
| | $ | 50 |
| | $ | 450 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended June 30, 2015 |
| | As | | As | | | | | | Acquisition | | | | Purchase | | Non-GAAP |
| | Reported | | Reported | | SunGard | | Adjusted | | Integration & | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Severance (2) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 1,587 |
| | $ | 687 |
| | $ | (5 | ) | (a) | $ | 2,269 |
| | $ | — |
| | $ | 2,269 |
| | $ | — |
| | $ | 2,269 |
|
| Expenses: | | | | | | | | | | | | | | | |
| Cost of revenues | 1,069 |
| | 418 |
| | (18 | ) | (a)(c) | 1,469 |
| | — |
| | 1,469 |
| | (50 | ) | | 1,419 |
|
| Selling, general and administrative expenses | 231 |
| | 161 |
| | (9 | ) | (b) | 383 |
| | (11 | ) | | 372 |
| | — |
| | 372 |
|
| Total expenses | 1,300 |
| | 579 |
| | (27 | ) | | 1,852 |
| | (11 | ) | | 1,841 |
| | (50 | ) | | 1,791 |
|
| Operating income | $ | 287 |
| | $ | 108 |
| | $ | 22 |
| | $ | 417 |
| | $ | 11 |
| | $ | 428 |
| | $ | 50 |
| | $ | 478 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, 2015 |
| | As | | As | | | | | | Acquisition | | | | Purchase | | Non-GAAP |
| | Reported | | Reported | | SunGard | | Adjusted | | Integration & | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Severance (2) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 1,579 |
| | $ | 702 |
| | $ | (6 | ) | (a) | $ | 2,275 |
| | $ | — |
| | $ | 2,275 |
| | $ | — |
| | $ | 2,275 |
|
| Expenses: | | | | | | | | | | | | | | | |
| Cost of revenues | 1,021 |
| | 419 |
| | (23 | ) | (a)(c) | 1,417 |
| | — |
| | 1,417 |
| | (50 | ) | | 1,367 |
|
| Selling, general and administrative expenses | 220 |
| | 163 |
| | (9 | ) | (b) | 374 |
| | (36 | ) | | 338 |
| | — |
| | 338 |
|
| Total expenses | 1,241 |
| | 582 |
| | (32 | ) | | 1,791 |
| | (36 | ) | | 1,755 |
| | (50 | ) | | 1,705 |
|
| Operating income | $ | 338 |
| | $ | 120 |
| | $ | 26 |
| | $ | 484 |
| | $ | 36 |
| | $ | 520 |
| | $ | 50 |
| | $ | 570 |
|
FIDELITY NATIONAL INFORMATION SERVICES, INC.
GAAP to Non-GAAP Adjusted Combined Operating Income (Unaudited)
(in millions)
Exhibit C (continued)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended December 31, 2015 |
| | | | | | | | | | Acquisition | | | | | | | | |
| | As | | | | | | | | Deferred | | Acquisition | | | | Purchase | | Non-GAAP |
| | Reported | | Historical | | SunGard | | Adjusted | | Revenue | | Integration & | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Adjustment (1) | | Severance (2) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 1,875 |
| | $ | 445 |
| | $ | — |
| | $ | 2,320 |
| | $ | 48 |
| | $ | — |
| | $ | 2,368 |
| | $ | — |
| | $ | 2,368 |
|
| Expenses: | | | | | | | | | | | | | | | | | |
| Cost of revenues | 1,233 |
| | 254 |
| | — |
| | 1,487 |
| | — |
| | — |
| | 1,487 |
| | (88 | ) | | 1,399 |
|
| Selling, general and administrative expenses | 383 |
| | 107 |
| | — |
| | 490 |
| | — |
| | (112 | ) | | 378 |
| | — |
| | 378 |
|
| Total expenses | 1,616 |
| | 361 |
| | — |
| | 1,977 |
| | — |
| | (112 | ) | | 1,865 |
| | (88 | ) | | 1,777 |
|
| Operating income | $ | 259 |
| | $ | 84 |
| | $ | — |
| | $ | 343 |
| | $ | 48 |
| | $ | 112 |
| | $ | 503 |
| | $ | 88 |
| | $ | 591 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, 2015 |
| | | | | | | | | | Acquisition | | | | | | | | | | |
| | As | | | | | | | | Deferred | | Acquisition | | | | | | Purchase | | Non-GAAP |
| | Reported | | Historical | | SunGard | | Adjusted | | Revenue | | Integration & | | Global | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Adjustment (1) | | Severance (2) | | Restructure (3) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 6,596 |
| | $ | 2,505 |
| | $ | (16 | ) | (a) | $ | 9,085 |
| | $ | 48 |
| | $ | — |
| | $ | — |
| | $ | 9,133 |
| | $ | — |
| | $ | 9,133 |
|
| Expenses: | | | | | | | | | | | | | | | | | | | |
| Cost of revenues | 4,393 |
| | 1,495 |
| | (59 | ) | (a)(c) | 5,829 |
| | — |
| | — |
| | — |
| | 5,829 |
| | (238 | ) | | 5,591 |
|
| Selling, general and administrative expenses | 1,104 |
| | 583 |
| | (18 | ) | (b) | 1,669 |
| | — |
| | (171 | ) | | (45 | ) | | 1,453 |
| | — |
| | 1,453 |
|
| Total expenses | 5,497 |
| | 2,078 |
| | (77 | ) | | 7,498 |
| | — |
| | (171 | ) | | (45 | ) | | 7,282 |
| | (238 | ) | | 7,044 |
|
| Operating income | $ | 1,099 |
| | $ | 427 |
| | $ | 61 |
| | $ | 1,587 |
| | $ | 48 |
| | $ | 171 |
| | $ | 45 |
| | $ | 1,851 |
| | $ | 238 |
| | $ | 2,089 |
|
FIDELITY NATIONAL INFORMATION SERVICES, INC.
GAAP to Non-GAAP Adjusted Combined Operating Income (Unaudited)
(in millions)
Exhibit C (continued)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended March 31, 2014 | | |
| | | | | | | | | | | | | | | | |
| | As | | As | | | | | | | | | | Purchase | | Non-GAAP |
| | Reported | | Reported | | SunGard | | Adjusted | | Contract | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Settlement (4) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 1,520 |
| | $ | 653 |
| | $ | (4 | ) | (a) | $ | 2,169 |
| | $ | 9 |
| | $ | 2,178 |
| | $ | — |
| | $ | 2,178 |
|
| Expenses: | | | | | | | | | | | | | | | |
| Cost of revenues | 1,044 |
| | 433 |
| | (20 | ) | (a)(c) | 1,457 |
| | — |
| | 1,457 |
| | (55 | ) | | 1,402 |
|
| Selling, general and administrative expenses | 190 |
| | 170 |
| | (7 | ) | (b) | 353 |
| | — |
| | 353 |
| | — |
| | 353 |
|
| Impairment charges | — |
| | 339 |
| | (339 | ) | (c) | — |
| | — |
| | — |
| | — |
| | — |
|
| Total expenses | 1,234 |
| | 942 |
| | (366 | ) | | 1,810 |
| | — |
| | 1,810 |
| | (55 | ) | | 1,755 |
|
| Operating income | $ | 286 |
| | $ | (289 | ) | | $ | 362 |
| | $ | 359 |
| | $ | 9 |
| | $ | 368 |
| | $ | 55 |
| | $ | 423 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended June 30, 2014 |
| | | | | | | | | | | | |
| | As | | As | | | | | | Purchase | | Non-GAAP |
| | Reported | | Reported | | SunGard | | Adjusted | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 1,599 |
| | $ | 673 |
| | $ | (6 | ) | (a) | $ | 2,266 |
| | $ | — |
| | $ | 2,266 |
|
| Expenses: | | | | | | | | | | | |
| Cost of revenues | 1,092 |
| | 434 |
| | (21 | ) | (a)(c) | 1,505 |
| | (54 | ) | | 1,451 |
|
| Selling, general and administrative expenses | 197 |
| | 162 |
| | (2 | ) | (b) | 357 |
| | — |
| | 357 |
|
| Total expenses | 1,289 |
| | 596 |
| | (23 | ) | | 1,862 |
| | (54 | ) | | 1,808 |
|
| Operating income | $ | 310 |
| | $ | 77 |
| | $ | 17 |
| | $ | 404 |
| | $ | 54 |
| | $ | 458 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, 2014 |
| | | | | | | | | | | | | | | | |
| | As | | As | | | | | | Acquisition | | | | Purchase | | Non-GAAP |
| | Reported | | Reported | | SunGard | | Adjusted | | Integration & | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Severance (2) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 1,605 |
| | $ | 691 |
| | $ | (7 | ) | (a) | $ | 2,289 |
| | $ | — |
| | $ | 2,289 |
| | $ | — |
| | $ | 2,289 |
|
| Expenses: | | | | | | | | | | | | | | | |
| Cost of revenues | 1,074 |
| | 425 |
| | (31 | ) | (a)(b)(c) | 1,468 |
| | — |
| | 1,468 |
| | (54 | ) | | 1,414 |
|
| Selling, general and administrative expenses | 207 |
| | 171 |
| | (9 | ) | (b) | 369 |
| | (7 | ) | | 362 |
| | — |
| | 362 |
|
| Total expenses | 1,281 |
| | 596 |
| | (40 | ) | | 1,837 |
| | (7 | ) | | 1,830 |
| | (54 | ) | | 1,776 |
|
| Operating income | $ | 324 |
| | $ | 95 |
| | $ | 33 |
| | $ | 452 |
| | $ | 7 |
| | $ | 459 |
| | $ | 54 |
| | $ | 513 |
|
FIDELITY NATIONAL INFORMATION SERVICES, INC.
GAAP to Non-GAAP Adjusted Combined Operating Income (Unaudited)
(in millions)
Exhibit C (continued)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended December 31, 2014 |
| | | | | | | | | | | | | | | | |
| | As | | As | | | | | | Acquisition | | | | Purchase | | Non-GAAP |
| | Reported | | Reported | | SunGard | | Adjusted | | Integration & | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Severance (2) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 1,689 |
| | $ | 792 |
| | $ | (6 | ) | (a) | $ | 2,475 |
| | $ | — |
| | $ | 2,475 |
| | $ | — |
| | $ | 2,475 |
|
| Expenses: | | | | | | | | | | | | | | | |
| Cost of revenues | 1,117 |
| | 414 |
| | (19 | ) | (a)(c) | 1,512 |
| | — |
| | 1,512 |
| | (52 | ) | | 1,460 |
|
| Selling, general and administrative expenses | 221 |
| | 174 |
| | (2 | ) | (b) | 393 |
| | (14 | ) | | 379 |
| | — |
| | 379 |
|
| Total expenses | 1,338 |
| | 588 |
| | (21 | ) | | 1,905 |
| | (14 | ) | | 1,891 |
| | (52 | ) | | 1,839 |
|
| Operating income | $ | 351 |
| | $ | 204 |
| | $ | 15 |
| | $ | 570 |
| | $ | 14 |
| | $ | 584 |
| | $ | 52 |
| | $ | 636 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, 2014 |
| | | | | | | | | | | | | | | | | | |
| | As | | As | | | | | | | | Acquisition | | | | Purchase | | Non-GAAP |
| | Reported | | Reported | | SunGard | | Adjusted | | Contract | | Integration & | | | | Price | | Adjusted |
| | FIS | | SunGard | | Adjustments | | Combined | | Settlement (4) | | Severance (2) | | Subtotal | | Amortization (6) | | Combined |
| Processing and services revenue | $ | 6,413 |
| | $ | 2,809 |
| | $ | (23 | ) | (a) | $ | 9,199 |
| | $ | 9 |
| | $ | — |
| | $ | 9,208 |
| | $ | — |
| | $ | 9,208 |
|
| Expenses: | | | | | | | | | | | | | | | | | |
| Cost of revenues | 4,327 |
| | 1,706 |
| | (91 | ) | (a)(b)(c) | 5,942 |
| | — |
| | — |
| | 5,942 |
| | (215 | ) | | 5,727 |
|
| Selling, general and administrative expenses | 815 |
| | 677 |
| | (20 | ) | (b) | 1,472 |
| | — |
| | (21 | ) | | 1,451 |
| | — |
| | 1,451 |
|
| Impairment charges | — |
| | 339 |
| | (339 | ) | (c) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Total expenses | 5,142 |
| | 2,722 |
| | (450 | ) | | 7,414 |
| | — |
| | (21 | ) | | 7,393 |
| | (215 | ) | | 7,178 |
|
| Operating income | $ | 1,271 |
| | $ | 87 |
| | $ | 427 |
| | $ | 1,785 |
| | $ | 9 |
| | $ | 21 |
| | $ | 1,815 |
| | $ | 215 |
| | $ | 2,030 |
|
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Notes to Unaudited GAAP to Non-GAAP Adjusted Combined Operating Income
(in millions)
This presentation is limited to revenues and expenses that comprise operating income. The unaudited adjusted combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of each period presented, nor the impact of possible business model changes. The unaudited adjusted combined financial information also does not consider any potential impacts of current market conditions on revenues, expense efficiencies and other factors. In addition, the adjusted combined financial information does not reflect the amortization of purchased intangible assets nor the acquisition deferred revenue adjustment as those impacts would be adjusted as described in footnote 5.
Items a - c below represent adjustments needed to combine the results of SunGard with FIS on an adjusted combined basis.
| |
| (a) | To eliminate the retail banking business which was divested by SunGard prior to the merger with FIS. |
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2015 | | 2015 | | 2015 | | 2015 | | 2015 |
| Processing and services revenue | | $ | (5 | ) | | $ | (5 | ) | | $ | (6 | ) | | $ | — |
| | $ | (16 | ) |
| Cost of revenues | | $ | (4 | ) | | $ | (4 | ) | | $ | (9 | ) | | $ | — |
| | $ | (17 | ) |
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2014 | | 2014 | | 2014 | | 2014 | | 2014 |
| Processing and services revenue | | $ | (4 | ) | | $ | (6 | ) | | $ | (7 | ) | | $ | (6 | ) | | $ | (23 | ) |
| Cost of revenues | | $ | (4 | ) | | $ | (6 | ) | | $ | (6 | ) | | $ | (5 | ) | | $ | (21 | ) |
| |
| (b) | To eliminate management fees and severance from SunGard's results and to reclassify foreign currency gains and losses from operating income to Other Income (expense), net to conform with FIS classification. |
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2015 | | 2015 | | 2015 | | 2015 | | 2015 |
| Selling, general and administrative expenses | | $ | — |
| | $ | (9 | ) | | $ | (9 | ) | | $ | — |
| | $ | (18 | ) |
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2014 | | 2014 | | 2014 | | 2014 | | 2014 |
| Cost of revenues | | $ | — |
| | $ | — |
| | $ | (11 | ) | | $ | — |
| | $ | (11 | ) |
| Selling, general and administrative expenses | | $ | (7 | ) | | $ | (2 | ) | | $ | (9 | ) | | $ | (2 | ) | | $ | (20 | ) |
| |
| (c) | To eliminate the legacy SunGard purchase price amortization consistent with the description in footnote 5. The first quarter of 2014 includes a trademark impairment. |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Notes to Unaudited GAAP to Non-GAAP Adjusted Combined Operating Income
(in millions)
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2015 | | 2015 | | 2015 | | 2015 | | 2015 |
| Cost of revenues | | $ | (14 | ) | | $ | (14 | ) | | $ | (14 | ) | | $ | — |
| | $ | (42 | ) |
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2014 | | 2014 | | 2014 | | 2014 | | 2014 |
| Cost of revenues | | $ | (16 | ) | | $ | (15 | ) | | $ | (14 | ) | | $ | (14 | ) | | $ | (59 | ) |
| Trademark impairment | | $ | (339 | ) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | (339 | ) |
The combined impact of the items a - c above to Revenues, Expenses, and Operating income is summarized as follows:
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2015 | | 2015 | | 2015 | | 2015 | | 2015 |
| Processing and services revenue | | $ | (5 | ) | | $ | (5 | ) | | $ | (6 | ) | | $ | — |
| | $ | (16 | ) |
| Cost of revenues | | (18 | ) | | (18 | ) | | (23 | ) | | — |
| | (59 | ) |
| Selling, general and administrative expenses | | — |
| | (9 | ) | | (9 | ) | | — |
| | (18 | ) |
| Operating income | | $ | 13 |
| | $ | 22 |
| | $ | 26 |
| | $ | — |
| | $ | 61 |
|
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | |
| | | First | | Second | | Third | | Fourth | | Full |
| | | Quarter | | Quarter | | Quarter | | Quarter | | Year |
| | | 2014 | | 2014 | | 2014 | | 2014 | | 2014 |
| Processing and services revenue | | $ | (4 | ) | | $ | (6 | ) | | $ | (7 | ) | | $ | (6 | ) | | $ | (23 | ) |
| Cost of revenues | | (20 | ) | | (21 | ) | | (31 | ) | | (19 | ) | | (91 | ) |
| Selling, general and administrative expenses | | (7 | ) | | (2 | ) | | (9 | ) | | (2 | ) | | (20 | ) |
| Trademark impairment | | (339 | ) | | — |
| | — |
| | — |
| | (339 | ) |
| Operating income | | $ | 362 |
| | $ | 17 |
| | $ | 33 |
| | $ | 15 |
| | $ | 427 |
|
| | | | | | | | | | | |
FIDELITY NATIONAL INFORMATION SERVICES, INC.
Notes to Unaudited GAAP to Non-GAAP Adjusted Combined Operating Income
(in millions)
Items 1 — 6 represent FIS Non-GAAP adjustments to the adjusted combined historical results.
| |
| (1) | This item represents the impact of the purchase accounting adjustment to reduce SunGard's deferred revenues to estimated fair value, determined as fulfillment cost plus a normal profit margin. The deferred revenue adjustment represents revenue that would have been recognized in the normal course of business by SunGard but was not recognized due to GAAP purchase accounting requirements. |
| |
| (2) | This item represents non-recurring costs primarily related to integrations and severance activity from the SunGard acquisition. |
| |
| (3) | Global Restructure represents severance costs incurred in connection with the reorganization and streamlining of operations in our Global Financial Solutions segment. |
| |
| (4) | The revenue adjustment in this column represents a cash settlement for the extinguishment of certain contractual minimums with a reseller. Although the 2014 cash settlement has no contract performance obligation, revenue is amortized in this circumstance over the remaining relationship with the reseller. |
| |
| (5) | The unaudited historical SunGard financial information, as adjusted, is presented for illustrative purposes only. The adjusted financial information excludes amortization of purchased intangible assets, as well as the impact from the acquisition deferred revenue adjustment arising from the SunGard Acquisition as those impacts would be eliminated in the preparation of adjusted combined information. |
| |
| (6) | This item represents purchase price amortization expense on all intangible assets acquired through various Company acquisitions including customer relationships, contract value, trademarks and tradenames, and non-compete agreements. Beginning with the November 2015 acquisition of SunGard, this column also includes the incremental amortization associated with purchase price adjustments to technology assets acquired. The allocation of purchase price for SunGard to assets and liabilities as of December 31, 2015 is provisional and may be adjusted in future periods. The financial statements will not be retrospectively adjusted for any adjustments to provisional amounts that occur in subsequent periods. Rather, we will recognize any adjustments in the reporting period in which the adjustment is determined. We are also required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of any change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. |
