Press Release Details

5% Revenue Growth to Record $6.1 Billion; 13% Adjusted EPS Growth for the Year

Full year 2013

• Revenue of $6.1 billion, up 5 percent on organic basis
• Adjusted EPS from continuing operations of $2.83, up 13 percent
• Free cash flow of $826 million
• $732 million in share repurchases and cash dividends returned to shareholders

Fourth quarter 2013

• Revenue of $1.6 billion; up 5 percent on organic basis
• International organic revenue growth accelerates to 13 percent
• Adjusted EPS from continuing operations of $0.76, up 12 percent
• Free cash flow of $334 million

JACKSONVILLE, Fla.--(BUSINESS WIRE)--Feb. 4, 2014-- FIS™ (NYSE:FIS), the world’s largest provider of banking and payments technology, today reported a 2013 revenue increase of 5 percent on a reported basis to $6.1 billion from $5.8 billion a year earlier. GAAP net earnings from continuing operations attributable to common stockholders was $491.2 million, or $1.67 per diluted share, compared to $540.4 million, or $1.82 per diluted share in 2012. GAAP net earnings in 2013 includes previously announced charges for amended acquisition-related earn-out and incentive plan provisions of $0.48 per share attributable to Capco’s performance and growth expectations, and debt refinancing costs of $0.14 per share.

Full year 2013 revenue increased 5 percent on an organic basis from the prior year, which excludes the impact of acquisitions and changes in foreign currency. Adjusted EBITDA increased 5 percent to $1.84 billion and adjusted EBITDA margin increased 10 basis points to 30.2 percent. Adjusted net earnings from continuing operations attributable to common stockholders increased to $831.3 million from $743.6 million in 2012. Adjusted net earnings per diluted share increased 13 percent to $2.83 from $2.50 in 2012.

“FIS delivered another year of record adjusted earnings driven by successful execution of our global growth strategy. These results mark our third consecutive year of 5 percent organic revenue growth and our sixth consecutive year of double-digit adjusted EPS growth,” said Frank Martire, chairman and CEO of FIS. “Strong cash flow allowed FIS to return $732 million in share repurchases and dividends to our shareholders in 2013 while increasing investment for future growth. The significant increase in the new share repurchase authorization and dividend reflect our confidence in FIS’ long-term growth strategy and deep client relationships.”

FIS’ scale, solution breadth and financial industry expertise enable clients to succeed in this era of rapid financial services evolution.

“We enter 2014 focused on continuing to deliver significant value to our clients and shareholders,” continued Martire. “We expect 2014 revenue growth of 4.5 percent to 6.5 percent fueled by increased investment in global growth initiatives and adjusted earnings per share growth of 8 percent to 12 percent.”

Fourth Quarter 2013

Revenue increased to $1.6 billion from $1.5 billion in the fourth quarter 2012 or 5 percent on a reported and organic basis. GAAP net earnings from continuing operations attributable to common stockholders were $76.4 million, or $0.26 per diluted share, compared to $145.3 million, or $0.49 per diluted share in the prior year quarter. Fourth quarter 2013 GAAP net earnings include the previously announced charge for amended acquisition-related earn-out and incentive plan provisions related to Capco of $0.35 per share, acquisition-related purchase amortization of $0.13 per share and international restructuring charges of $0.02 per share.

Adjusted EBITDA increased 4 percent to $486.9 million from $470.3 million in the fourth quarter 2012. Adjusted EBITDA margin was 30.8 percent compared to 31.4 percent in the prior year quarter reflecting growth in consulting and services, and higher corporate expenses. Adjusted net earnings from continuing operations attributable to common stockholders increased 10 percent to $222.0 million from $201.4 million in the fourth quarter 2012. Adjusted net earnings per diluted share increased 12 percent to $0.76 from $0.68 in the fourth quarter 2012.

Definitions of non-GAAP financial measures and reconciliations of non-GAAP measures to related GAAP measures are provided in subsequent sections of the press release narrative and supplemental schedules.

Segment Information

• Financial Solutions:
  
  Fourth quarter 2013 revenue increased 4 percent on a reported and organic basis to $603.5 million from $578.4 million a year earlier reflecting growth in consulting and digital delivery channels. Adjusted EBITDA increased 1 percent to $239.7 million from $236.9 million a year ago. Adjusted EBITDA margin was 39.7 percent compared to 41.0 percent a year earlier, reflecting a change in revenue mix.
  
  Full year 2013 revenue increased 4 percent to $2.3 billion from $2.2 billion a year earlier and rose 3 percent on an organic basis driven by growth in consulting and services. Full year adjusted EBITDA increased 6 percent to $937.9 million compared to $884.2 million in 2012 and adjusted EBITDA margin increased 60 basis points to 40.0 percent. Higher termination fees also contributed to full year results.

• Payment Solutions:
  
  Fourth quarter 2013 revenue increased 3 percent on a reported and organic basis to $618.3 million from $601.3 million a year earlier. Revenue from check-related businesses was $110.3 million, down 4 percent from the prior year quarter. Adjusted EBITDA increased 7 percent to $261.9 million from $245.9 million a year earlier. Adjusted EBITDA margin expanded 150 basis points to 42.4 percent.
  
  Full year 2013 revenue increased 3 percent on a reported and organic basis to $2.5 billion from $2.4 billion a year earlier driven by continued growth in image and output solutions, loyalty programs, network solutions and bill payment, and higher termination fees. Revenue from check-related businesses was $434.6 million in 2013, down 1 percent from 2012. Full year adjusted EBITDA increased 7 percent to $1.0 billion compared to $968.0 million in 2012. Adjusted EBITDA margin increased 160 basis points to 42.3 percent.

• International Solutions:
  
  Fourth quarter 2013 revenue increased 11 percent to $357.1 million from $320.9 million a year earlier. Revenue rose 13 percent on an organic basis including double digit growth in Latin America and continued growth in Europe and Asia. Adjusted EBITDA increased 11 percent to $98.9 million from $89.2 million in the prior-year quarter, and adjusted EBITDA margin was 27.7 percent, compared to 27.8 percent in the prior-year quarter reflecting continued strong demand for consulting and professional services and increased processing revenue, partially offset by lower license revenue.
  
  Full year 2013 revenue increased 8 percent to $1.3 billion from $1.2 billion a year earlier and rose 11 percent on an organic basis including double digit growth in Latin America and Asia. Full year adjusted EBITDA increased 11 percent to $304.3 million compared to $275.3 million in 2012. Adjusted EBITDA margin increased 60 basis points to 23.9 percent.

• Corporate/Other:
  
  Fourth quarter 2013 corporate costs, as adjusted, were $113.6 million, up from $101.7 million in the prior-year quarter. For the year, corporate costs, as adjusted, were $445.0 million, up from $382.3 million in the prior year. The increase for both periods reflects higher sales and marketing expense and an increase in health-care expense. The full year expense increase also reflects increased investment in security and risk management.
  
  Interest expense, net of interest income, decreased to $43.4 million in the fourth quarter from $52.7 million a year earlier. Full year interest expense, net of interest income, decreased to $188.2 million from $222.7 million in 2012, resulting from lower borrowing costs.
  
  The non-GAAP effective tax rate was 33.1 percent in the fourth quarter and 32.4 percent for the full year, compared to 34.0 percent and 32.7 percent in the prior year periods, respectively.

Balance Sheet and Cash Flow

Cash and cash equivalents totaled $547.5 million as of Dec. 31, 2013. Debt outstanding totaled approximately $4.5 billion compared to $4.4 billion as of year-end 2012.

Net cash provided by operations was $1.1 billion for the year compared to $1.0 billion in 2012. Capital expenditures increased to $336.2 million from $296.1 million in 2012 reflecting incremental growth investment. Free cash flow was $826.2 million for the year, compared to $872.8 million in the prior year, reflecting higher cash tax payments and incremental capital expenditures in 2013.

FIS repurchased approximately 10.7 million common shares at a total cost of approximately $476 million and an average cost of $44.58 per share in 2013, including fourth quarter purchases of approximately 2.5 million shares at a total cost of approximately $126 million. The company paid shareholder dividends totaling $256 million in 2013, compared to $235 million in 2012.

2014 Outlook

FIS’ outlook for revenue growth and earnings per share in 2014 is as follows:

• Revenue growth of 4.5 to 6.5 percent
• Adjusted EPS from continuing operations of $3.05 to $3.16, an increase of 8 to 12 percent compared to $2.83 per share in 2013
• Free cash flow is expected to approximate adjusted net earnings

Webcast

FIS will host a webcast on February 4 to discuss fourth quarter and full year 2013 results beginning at 8:30 a.m. ET. To listen to the live event and to access a supplemental slide presentation, go to the Investor Relations section at www.fisglobal.com and click on “News and Events.” A webcast replay will be available on FIS’ Investor Relations Web site, and a telephone replay will be available through February 18 by dialing 800.475.6701 (U.S.) or 320.365.3844 (International). The access code is 315027. To access a .PDF version of this release and accompanying financial tables, go to www.investor.fisglobal.com.

Use of Non-GAAP Financial Information

Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the Company has provided non-GAAP financial measures, which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. For these reasons, management also uses these measures in part to assess its performance.

These non-GAAP measures include organic revenue, adjusted earnings before interest, taxes and depreciation and amortization (adjusted EBITDA), adjusted EBITDA margin, adjusted net earnings (including per share amounts) and free cash flow.

Organic revenue includes reported revenue plus pre-acquisition revenue for companies acquired during the applicable reporting periods. Organic revenue excludes the impact of foreign currency fluctuation in 2013.

EBITDA is earnings from continuing operations before interest, taxes, depreciation and amortization.

Adjusted EBITDA (2013 comparative data) excludes adjustments related to the December 2010 acquisition of Capco and severance and other charges related to cost management initiatives in certain international markets.

Adjusted EBITDA (2012 comparative data) excludes charges for payments and accelerated vesting of stock option and restricted stock grants associated with the departure or change in role of certain company executives.

Adjusted net earnings (2013 comparative data) exclude the after-tax impact of acquisition-related amortization, a net benefit related to a gain on the mFoundry acquisition, debt issuance and refinancing costs, adjustments related to the Capco acquisition and severance and other charges related to cost management initiatives in certain international markets.

Adjusted net earnings (2012 comparative data) exclude the after-tax impact of acquisition-related amortization, debt refinancing costs and charges for payments and accelerated vesting of stock option and restricted stock grants associated with the departure or change in role of certain company executives.

Adjusted net earnings per diluted share, or adjusted EPS, is equal to adjusted net earnings divided by weighted average diluted shares outstanding.

Adjusted operating cash flow is GAAP cash flow from operations adjusted for the net change in settlement assets and obligations, the cash payment premium related to the early redemption of senior notes, adjustments for cash payments related to the acquisition of Capco, adjustments for cash payments for executive severance, and the 2012 tax payment attributable to the sale of the Healthcare Benefit Solutions Business.

Free cash flow is adjusted operating cash flow less capital expenditures. Free cash flow does not represent our residual cash flow available for discretionary expenditures, since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure.

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. Further, FIS’ non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures are provided in the attached schedules and in the Investor Relations section of the FIS Web site, www.fisglobal.com.

About FIS

FIS (NYSE: FIS) is the world’s largest global provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100 countries. Headquartered in Jacksonville, Fla., FIS employs more than 35,000 people worldwide and holds leadership positions in payment processing and banking solutions, providing software, services and outsourcing of the technology that drives financial institutions. First in financial technology, FIS tops the annual FinTech 100 list, is 434 on the Fortune 500 and is a member of Standard & Poor’s 500^® Index. For more information about FIS, visit www.fisglobal.com.

Forward-Looking Statements

This news release and today’s webcast contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about future revenue, organic revenue, earnings before interest, taxes, depreciation and amortization (“EBITDA”), earnings per share and margin expansion, as well as other statements about our expectations, hopes, intentions, or strategies regarding the future, are forward-looking statements. These statements relate to future events and our future results, and involve a number of risks and uncertainties. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Any statements that refer to beliefs, expectations, projections or other characterizations of future events or circumstances and other statements that are not historical facts are forward-looking statements.

Actual results, performance or achievement could differ materially from those contained in these forward-looking statements. The risks and uncertainties that forward-looking statements are subject to include without limitation:

• changes in general economic, business and political conditions, including the possibility of intensified international hostilities, acts of terrorism, and changes in either or both the United States and international lending, capital and financial markets;
• the effect of legislative initiatives or proposals, statutory changes, governmental or other applicable regulations and/or changes in industry requirements, including privacy regulations;
• the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in, or new laws or regulations affecting the banking, retail and financial services industries or due to financial failures or other setbacks suffered by firms in those industries;
• changes in the growth rates of the markets for our solutions;
• failures to adapt our solutions to changes in technology or in the marketplace;
• internal or external security breaches of our systems, including those relating to the theft of personal information and computer viruses affecting our software or platforms, and the reactions of customers, card associations, government regulators and others to any such events;
• the reaction of our current and potential customers to communications from us or our regulators regarding information security, risk management, internal audit or other matters;
• competitive pressures on pricing related to our solutions including the ability to attract new, or retain existing, customers;
• an operational or natural disaster at one of our major operations centers;
• and other risks detailed in “Risk Factors” and other sections of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and other filings with the SEC.

Other unknown or unpredictable factors also could have a material adverse effect on our business, financial condition, results of operations and prospects. Accordingly, readers should not place undue reliance on these forward-looking statements. These forward-looking statements are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Except as required by applicable law or regulation, we do not undertake (and expressly disclaim) any obligation and do not intend to publicly update or review any of these forward-looking statements, whether as a result of new information, future events or otherwise.

Source: Fidelity National Information Services

Ellyn Raftery, 904.438.6083
Chief Marketing Officer
FIS Global Marketing and Communications
ellyn.raftery@fisglobal.com
or
Nancy Murphy, 904.438.6192
Senior Vice President
FIS Investor Relations
nancy.murphy@fisglobal.com