FIS Reports Fourth Quarter and Full-Year 2021 Results
- Fourth quarter and full-year 2021 revenue grew 11%
- Fourth quarter GAAP Diluted EPS was
$0.47 , and fourth quarter Adjusted EPS increased 19% to$1.92 - Full-year 2021 GAAP Diluted EPS was
$0.67 , and full-year 2021 Adjusted EPS increased 20% to$6.55 - Acquired Payrix to accelerate our eCommerce offering for platforms that primarily serve SMBs
- Announced first quarter and full-year 2022 guidance
“By all metrics, our colleagues delivered a historic operational performance for FIS in 2021,” said FIS Chairman and CEO
Fourth Quarter 2021
On a GAAP basis, consolidated revenue increased by more than
On an organic basis, revenue grew 11% as compared to the prior year period. Adjusted EBITDA margin expanded by 120 basis points (bps) over the prior year period to 46.4%, primarily due to revenue and cost synergies associated with the Worldpay acquisition as well as high contribution margins from revenue growth. Adjusted net earnings were
|
($ millions, except per share data, unaudited) |
|
Three Months Ended |
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|
|
|
|
|
|
|
% |
|
Organic |
||||
|
|
|
2021 |
|
2020 |
|
Change |
|
Growth |
||||
|
Revenue |
|
$ |
3,672 |
|
|
$ |
3,316 |
|
|
11% |
|
11% |
|
Merchant Solutions |
|
1,193 |
|
|
1,003 |
|
|
19% |
|
19% |
||
|
Banking Solutions |
|
1,667 |
|
|
1,551 |
|
|
8% |
|
8% |
||
|
Capital Market Solutions |
|
716 |
|
|
663 |
|
|
8% |
|
8% |
||
|
Corporate and Other |
|
|
96 |
|
|
|
99 |
|
|
(3)% |
|
|
|
Adjusted EBITDA |
|
$ |
1,705 |
|
|
$ |
1,498 |
|
|
14% |
|
|
|
Adjusted EBITDA Margin |
|
|
46.4 |
% |
|
|
45.2 |
% |
|
120 bps |
|
|
|
Net earnings (loss) attributable to FIS common stockholders (GAAP) |
|
$ |
291 |
|
|
$ |
103 |
|
|
* |
|
|
|
Diluted EPS (GAAP) |
|
$ |
0.47 |
|
|
$ |
0.16 |
|
|
* |
|
|
|
Adjusted net earnings |
|
$ |
1,179 |
|
|
$ |
1,016 |
|
|
16% |
|
|
|
Adjusted EPS |
|
$ |
1.92 |
|
|
$ |
1.62 |
|
|
19% |
|
|
|
* Indicates comparison not meaningful |
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Full-Year 2021
On a GAAP basis, consolidated revenue increased by more than
On an organic basis, revenue grew 10% as compared to the prior year. Adjusted EBITDA margin expanded by 220 basis points (bps) over the prior year to 44.1%, primarily due to revenue and cost synergies associated with the Worldpay acquisition as well as high contribution margins from revenue growth. Adjusted net earnings were
|
($ millions, except per share data, unaudited) |
|
Twelve Months Ended |
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|
|
|
|
|
|
% |
|
Organic |
||||
|
|
|
2021 |
|
2020 |
|
Change |
|
Growth |
||||
|
Revenue |
|
$ |
13,877 |
|
|
$ |
12,552 |
|
|
11% |
|
10% |
|
Merchant Solutions |
|
4,496 |
|
|
3,767 |
|
|
19% |
|
17% |
||
|
Banking Solutions |
|
6,396 |
|
|
5,944 |
|
|
8% |
|
7% |
||
|
Capital Market Solutions |
|
2,624 |
|
|
2,440 |
|
|
8% |
|
6% |
||
|
Corporate and Other |
|
|
361 |
|
|
401 |
|
|
(10)% |
|
|
|
|
Adjusted EBITDA |
|
$ |
6,117 |
|
|
$ |
5,260 |
|
|
16% |
|
|
|
Adjusted EBITDA Margin |
|
|
44.1 |
% |
|
|
41.9 |
% |
|
220 bps |
|
|
|
Net earnings (loss) attributable to FIS common stockholders (GAAP) |
|
$ |
417 |
|
|
$ |
158 |
|
|
* |
|
|
|
Diluted EPS (GAAP) |
|
$ |
0.67 |
|
|
$ |
0.25 |
|
|
* |
|
|
|
Adjusted net earnings |
|
$ |
4,066 |
|
|
$ |
3,423 |
|
|
19% |
|
|
|
Adjusted EPS |
|
$ |
6.55 |
|
|
$ |
5.46 |
|
|
20% |
|
|
|
* Indicates comparison not meaningful |
||||||||||||
Operating Segment Information
- Banking Solutions:
Fourth quarter revenue increased by 8% on both a GAAP and an organic basis as compared to the prior year period to
Full-year revenue increased by 8% as compared to the prior year to
- Capital Market Solutions:
Fourth quarter revenue increased by 8% on both a GAAP and an organic basis as compared to the prior year period to
Full-year revenue increased by 8% as compared to the prior year to
- Merchant Solutions:
Fourth quarter revenue increased by 19% as compared to the prior year period to
Full-year revenue increased 19% as compared to the prior year to
|
Merchant Revenue, Volume and Transactions Metrics1 |
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|
2020 |
2021 |
||||||||
|
|
1Q |
2Q |
3Q |
4Q |
FY |
1Q |
2Q |
3Q |
4Q |
FY |
|
Revenue ($M) |
|
|
|
|
|
|
|
|
|
|
|
Growth (Reported) |
—% |
(25)% |
1% |
(8)% |
(8)% |
3% |
45% |
14% |
19% |
19% |
|
Growth vs. 2019 (Reported)1 |
|
|
|
|
|
3% |
9% |
16% |
9% |
9% |
|
Adj. Growth vs. 20191,2 |
|
|
|
|
|
3% |
9% |
16% |
13% |
10% |
|
Global Volume3 ($B) |
|
|
|
|
|
|
|
|
|
|
|
Growth |
5% |
(8)% |
5% |
5% |
2% |
12% |
35% |
17% |
17% |
20% |
|
Growth vs. 2019 |
|
|
|
|
|
17% |
25% |
23% |
23% |
22% |
|
US Volume3 ($B) |
|
|
|
|
|
|
|
|
|
|
|
Growth |
7% |
(3)% |
7% |
6% |
4% |
12% |
30% |
17% |
19% |
19% |
|
Growth vs. 2019 |
|
|
|
|
|
20% |
26% |
25% |
26% |
24% |
|
Transactions4 (B) |
10.5 |
9.3 |
10.8 |
11.3 |
41.8 |
10.7 |
11.7 |
12.0 |
12.5 |
46.9 |
|
Growth |
7% |
(11)% |
2% |
1% |
—% |
2% |
26% |
11% |
11% |
12% |
|
Growth vs. 2019 |
|
|
|
|
|
10% |
12% |
13% |
12% |
12% |
| 1 |
Please refer to our 3Q 2021 earnings release for 2019 quarterly data |
| 2 |
Adjusted revenue growth vs. 2019 reflects a |
| 3 |
Volume refers to the total dollar value of the transactions processed during the stated period |
| 4 |
Transaction refers to an instance of buying or selling a good or service in exchange for money |
- Corporate and Other:
Fourth quarter revenue decreased by 3% as compared to the prior year period to
Full-year revenue decreased by 10% as compared to the prior year to
Integration Update
The Company achieved annual run-rate synergies related to the Worldpay acquisition, exiting the fourth quarter of 2021 as follows:
- Revenue synergies of approximately
$750 million on an annual run-rate basis, including ongoing execution of Premium Payback distribution, bank referral agreements, geographic expansion and broad-based cross-selling initiatives.
- Expense synergies of approximately
$900 million on an annual run-rate basis, including approximately$500 million of operating expense savings.
Payrix Acquisition
During the fourth quarter, FIS acquired Payrix. Payrix specializes in providing embedded payments solutions into SaaS-based platforms serving SMB e-commerce merchants. The acquisition will allow FIS to expand its e-commerce, embedded payments and finance experiences for SMBs, accelerating the company’s fast growing e-commerce business.
Balance Sheet and Cash Flows
As of
Fourth quarter net cash provided by operating activities was
Consistent with its capital allocation strategy, FIS plans to increase its annual dividend approximately 20% per year, beginning with the quarterly dividend payable in
|
First Quarter and Full-Year 2022 GAAP Guidance |
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|
($ millions, except share data) |
|
1Q 2022 |
|
FY 2022 |
|
Revenue |
|
|
|
|
|
Diluted EPS |
|
|
|
|
| First Quarter and Full-Year 2022 Non-GAAP Guidance | ||||
|
($ millions, except share data) |
|
1Q 2022 |
|
FY 2022 |
|
Revenue (GAAP) |
|
|
|
|
|
Adjusted EPS |
|
|
|
|
COVID-19 Update
We have continued to prioritize investments in solutions and services that help address the needs of our clients throughout the ongoing global pandemic in order to increase the Company’s potential to accelerate revenue growth.
Webcast
FIS will sponsor a live webcast of its earnings conference call with the investment community beginning at
About FIS
FIS is a leading provider of technology solutions for merchants, banks and capital markets firms globally. Our employees are dedicated to advancing the way the world pays, banks and invests by applying our scale, deep expertise and data-driven insights. We help our clients use technology in innovative ways to solve business-critical challenges and deliver superior experiences for their customers. Headquartered in
To learn more, visit www.fisglobal.com. Follow FIS on Facebook, LinkedIn and Twitter (@FISGlobal).
FIS 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 in
These non-GAAP measures include constant currency revenue, organic revenue growth, adjusted revenue growth vs. 2019, adjusted EBITDA, adjusted EBITDA margin, adjusted net earnings, adjusted EPS, and free cash flow. These non-GAAP measures may be used in this release and/or in the attached supplemental financial information.
We believe these non-GAAP measures help investors better understand the underlying fundamentals of our business. As further described below, the non-GAAP revenue and earnings measures presented eliminate items management believes are not indicative of FIS’ operating performance. The constant currency and organic revenue growth measures adjust for the effects of exchange rate fluctuations, while organic revenue growth also adjusts for acquisitions and divestitures and excludes revenue from Corporate and Other, giving investors further insight into our performance. Adjusted revenue growth vs. 2019 adjusts 4Q and full year 2019 revenue to conform FIS’ accounting determinations to those of pre-acquisition Worldpay to ensure consistency with growth measures previously provided and across the annual period shown. Finally, free cash flow provides further information about the ability of our business to generate cash. For these reasons, management also uses these non-GAAP measures in its assessment and management of FIS’ performance.
As described below, our Adjusted EBITDA and Adjusted Net Earnings measures also exclude incremental and direct costs resulting from the COVID-19 pandemic. Management believes that this adjustment may help investors understand the longer-term fundamentals of our underlying business.
Constant currency revenue represents reported operating segment revenue excluding the impact of fluctuations in foreign currency exchange rates in the current period.
Organic revenue growth is constant currency revenue, as defined above, for the current period compared to an adjusted revenue base for the prior period, which is adjusted to add pre-acquisition revenue of acquired businesses for a portion of the prior year matching the portion of the current year for which the business was owned, and subtract pre-divestiture revenue for divested businesses for the portion of the prior year matching the portion of the current year for which the business was not owned, for any acquisitions or divestitures by FIS. When referring to organic revenue growth, revenues from our Corporate and Other segment, which is comprised of revenue from non-strategic businesses, are excluded.
Adjusted EBITDA reflects net earnings before interest, other income (expense), taxes, equity method investment earnings (loss), and depreciation and amortization, and excludes certain costs and other transactions that management deems non-operational in nature, the removal of which improves comparability of operating results across reporting periods. It also excludes incremental and direct costs resulting from the COVID-19 pandemic. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, adjusted EBITDA, as it relates to our segments, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the
Adjusted EBITDA margin reflects adjusted EBITDA, as defined above, divided by revenue.
Adjusted net earnings excludes the impact of certain costs and other transactions which management deems non-operational in nature, the removal of which improves comparability of operating results across reporting periods. It also excludes the impact of purchase price amortization of acquired intangible assets and equity method investment earnings (loss), both of which are recurring. It also excludes incremental and direct costs resulting from the COVID-19 pandemic.
Adjusted EPS reflects adjusted net earnings, as defined above, divided by weighted average diluted shares outstanding.
Adjusted revenue growth vs. 2019 reflects revenue growth after adjusting revenue reported in comparative periods to conform FIS’ accounting determinations to those of pre-acquisition Worldpay to ensure consistency with growth measures previously provided and across the annual period shown.
Free cash flow reflects net cash provided by operating activities, adjusted for the net change in settlement assets and obligations and excluding certain transactions that are closely associated with non-operating activities or are otherwise non-operational in nature and not indicative of future operating cash flows, including incremental and direct costs resulting from the COVID-19 pandemic, less capital expenditures excluding capital expenditures related to the Company’s new headquarters. 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 measures. 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, including footnotes describing the specific adjustments, are provided in the attached schedules and in the Investor Relations section of the FIS website, www.fisglobal.com.
Forward-Looking Statements
This earnings release and today’s webcast contain “forward-looking statements” within the meaning of the
Actual results, performance or achievement could differ materially from those contained in these forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include the following, without limitation:
- the outbreak or recurrence of the novel coronavirus and any related variants (“COVID-19”) and measures to reduce its spread, including the impact of governmental or voluntary actions such as business shutdowns and stay-at-home orders in certain geographies;
- the duration, including any recurrence, of the COVID-19 pandemic and its impacts, including reductions in consumer and business spending, and instability of the financial markets in heavily impacted areas across the globe;
- the economic and other impacts of COVID-19 on our clients which affect the sales of our solutions and services and the implementation of such solutions;
- the risk of losses in the event of defaults by merchants (or other parties) to which we extend credit in our card settlement operations or in respect of any chargeback liability, either of which could adversely impact liquidity and results of operations;
- changes in general economic, business and political conditions, including those resulting from COVID-19 or other pandemics, intensified international hostilities, acts of terrorism, changes in either or both
the United States and international lending, capital and financial markets and currency fluctuations; - the risk that acquired businesses will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated;
- the risk that cost savings and other synergies anticipated to be realized from acquisitions may not be fully realized or may take longer to realize than expected;
- the risks of doing business internationally;
- the effect of legislative initiatives or proposals, statutory changes, governmental or other applicable regulations and/or changes in industry requirements, including privacy and cybersecurity laws and 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;
- the amount, declaration and payment of future dividends is at the discretion of our Board of Directors and depends on, among other things, our investment opportunities, results of operations, financial condition, cash requirements, future prospects, the duration and impact of the COVID-19 pandemic, and other factors that may be considered relevant by our Board of Directors, including legal and contractual restrictions;
- 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 unauthorized access, theft, corruption or loss of personal information and computer viruses and other malware affecting our software or platforms, and the reactions of customers, card associations, government regulators and others to any such events;
- the risk that implementation of software, including software updates, for customers or at customer locations or employee error in monitoring our software and platforms may result in the corruption or loss of data or customer information, interruption of business operations, outages, exposure to liability claims or loss of customers;
- the reaction of current and potential customers to communications from us or regulators regarding information security, risk management, internal audit or other matters;
- the risk that policies and resulting actions of the current administration in the
U.S. may result in additional regulations and executive orders, as well as additional regulatory and tax costs; - competitive pressures on pricing related to the decreasing number of community banks in the
U.S. , the development of new disruptive technologies competing with one or more of our solutions, increasing presence of international competitors in the U.S. market and the entry into the market by global banks and global companies with respect to certain competitive solutions, each of which may have the impact of unbundling individual solutions from a comprehensive suite of solutions we provide to many of our customers; - the failure to innovate in order to keep up with new emerging technologies, which could impact our solutions and our ability to attract new, or retain existing, customers;
- an operational or natural disaster at one of our major operations centers;
- failure to comply with applicable requirements of payment networks or changes in those requirements;
- fraud by merchants or bad actors; and
- other risks detailed in the “Risk Factors” and other sections of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2020 , in our quarterly reports on Form 10-Q and in our other filings with theSecurities and Exchange Commission .
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.
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Earnings Release Supplemental Financial Information |
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|
|
|
|
Exhibit A |
Condensed Consolidated Statements of Earnings - Unaudited for the three months and years ended |
|
|
|
|
Exhibit B |
Condensed Consolidated Balance Sheets - Unaudited as of |
|
|
|
|
Exhibit C |
Condensed Consolidated Statements of Cash Flows - Unaudited for the years ended |
|
|
|
|
Exhibit D |
Supplemental Non-GAAP Financial Information - Unaudited for the three months and years ended |
|
|
|
|
Exhibit E |
Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three months and years ended |
|
|
|
|
Exhibit F |
Supplemental GAAP to Non-GAAP Reconciliations on Guidance - Unaudited for the three months ended |
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|
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS — UNAUDITED |
|||||||||||||||
|
(In millions, except per share amounts) |
|||||||||||||||
|
Exhibit A |
|||||||||||||||
|
|
Three months ended |
|
Years ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
|
Revenue |
$ |
3,672 |
|
|
$ |
3,316 |
|
|
$ |
13,877 |
|
|
$ |
12,552 |
|
|
Cost of revenue |
|
2,251 |
|
|
|
2,110 |
|
|
|
8,682 |
|
|
|
8,348 |
|
|
Gross profit |
|
1,421 |
|
|
|
1,206 |
|
|
|
5,195 |
|
|
|
4,204 |
|
|
Selling, general and administrative expenses |
|
966 |
|
|
|
903 |
|
|
|
3,938 |
|
|
|
3,516 |
|
|
Asset impairments |
|
— |
|
|
|
136 |
|
|
|
202 |
|
|
|
136 |
|
|
Operating income |
|
455 |
|
|
|
167 |
|
|
|
1,055 |
|
|
|
552 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||
|
Interest expense, net |
|
(46 |
) |
|
|
(82 |
) |
|
|
(214 |
) |
|
|
(334 |
) |
|
Other income (expense), net |
|
7 |
|
|
|
17 |
|
|
|
(52 |
) |
|
|
48 |
|
|
Total other income (expense), net |
|
(39 |
) |
|
|
(65 |
) |
|
|
(266 |
) |
|
|
(286 |
) |
|
Earnings before income taxes and equity method investment earnings (loss) |
|
416 |
|
|
|
102 |
|
|
|
789 |
|
|
|
266 |
|
|
Provision (benefit) for income taxes |
|
125 |
|
|
|
2 |
|
|
|
371 |
|
|
|
96 |
|
|
Equity method investment earnings (loss) |
|
— |
|
|
|
2 |
|
|
|
6 |
|
|
|
(6 |
) |
|
Net earnings |
|
291 |
|
|
|
102 |
|
|
|
424 |
|
|
|
164 |
|
|
Net (earnings) loss attributable to noncontrolling interest |
|
— |
|
|
|
1 |
|
|
|
(7 |
) |
|
|
(6 |
) |
|
Net earnings attributable to FIS common stockholders |
$ |
291 |
|
|
$ |
103 |
|
|
$ |
417 |
|
|
$ |
158 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net earnings per share-basic attributable to FIS common stockholders |
$ |
0.48 |
|
|
$ |
0.17 |
|
|
$ |
0.68 |
|
|
$ |
0.26 |
|
|
Weighted average shares outstanding-basic |
|
609 |
|
|
|
621 |
|
|
|
616 |
|
|
|
619 |
|
|
Net earnings per share-diluted attributable to FIS common stockholders |
$ |
0.47 |
|
|
$ |
0.16 |
|
|
$ |
0.67 |
|
|
$ |
0.25 |
|
|
Weighted average shares outstanding-diluted |
|
614 |
|
|
|
628 |
|
|
|
621 |
|
|
|
627 |
|
|
|
|||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED |
|||||||
|
(In millions, except per share amounts) |
|||||||
|
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|
|
Exhibit B |
||||
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||||
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||||||
|
|
2021 |
|
2020 |
||||
|
ASSETS |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
2,010 |
|
|
$ |
1,959 |
|
|
Settlement assets |
|
4,020 |
|
|
|
3,914 |
|
|
Trade receivables, net |
|
3,772 |
|
|
|
3,314 |
|
|
Other receivables |
|
355 |
|
|
|
317 |
|
|
Prepaid expenses and other current assets |
|
551 |
|
|
|
394 |
|
|
Total current assets |
|
10,708 |
|
|
|
9,898 |
|
|
Property and equipment, net |
|
949 |
|
|
|
887 |
|
|
|
|
53,330 |
|
|
|
53,268 |
|
|
Intangible assets, net |
|
11,539 |
|
|
|
13,928 |
|
|
Software, net |
|
3,299 |
|
|
|
3,370 |
|
|
Other noncurrent assets |
|
2,137 |
|
|
|
1,574 |
|
|
Deferred contract costs, net |
|
969 |
|
|
|
917 |
|
|
Total assets |
$ |
82,931 |
|
|
$ |
83,842 |
|
|
|
|
|
|
||||
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable, accrued and other liabilities |
$ |
2,864 |
|
|
$ |
2,482 |
|
|
Settlement payables |
|
5,295 |
|
|
|
4,934 |
|
|
Deferred revenue |
|
779 |
|
|
|
881 |
|
|
Short-term borrowings |
|
3,911 |
|
|
|
2,750 |
|
|
Current portion of long-term debt |
|
1,617 |
|
|
|
1,314 |
|
|
Total current liabilities |
|
14,466 |
|
|
|
12,361 |
|
|
Long-term debt, excluding current portion |
|
14,825 |
|
|
|
15,951 |
|
|
Deferred income taxes |
|
4,193 |
|
|
|
4,017 |
|
|
Other noncurrent liabilities |
|
1,915 |
|
|
|
2,026 |
|
|
Total liabilities |
|
35,399 |
|
|
|
34,355 |
|
|
|
|
|
|
||||
|
Redeemable noncontrolling interest |
|
174 |
|
|
|
174 |
|
|
|
|
|
|
||||
|
Equity: |
|
|
|
||||
|
FIS stockholders’ equity: |
|
|
|
||||
|
Preferred stock |
|
— |
|
|
|
— |
|
|
Common stock |
|
6 |
|
|
|
6 |
|
|
Additional paid in capital |
|
46,466 |
|
|
|
45,947 |
|
|
Retained earnings |
|
2,889 |
|
|
|
3,440 |
|
|
Accumulated other comprehensive earnings (loss) |
|
252 |
|
|
|
57 |
|
|
|
|
(2,266 |
) |
|
|
(150 |
) |
|
Total FIS stockholders’ equity |
|
47,347 |
|
|
|
49,300 |
|
|
Noncontrolling interest |
|
11 |
|
|
|
13 |
|
|
Total equity |
|
47,358 |
|
|
|
49,313 |
|
|
Total liabilities, redeemable noncontrolling interest and equity |
$ |
82,931 |
|
|
$ |
83,842 |
|
|
|
|||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED |
|||||||
|
(In millions) |
|||||||
|
|
|
|
Exhibit C |
||||
|
|
|
|
|
||||
|
|
Years ended |
||||||
|
|
2021 |
|
2020 |
||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net earnings |
$ |
424 |
|
|
$ |
164 |
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
4,015 |
|
|
|
3,714 |
|
|
Amortization of debt issue costs |
|
30 |
|
|
|
31 |
|
|
Asset impairments |
|
202 |
|
|
|
136 |
|
|
Loss (gain) on sale of businesses, investments and other |
|
(227 |
) |
|
|
9 |
|
|
Loss on extinguishment of debt |
|
528 |
|
|
|
— |
|
|
Stock-based compensation |
|
383 |
|
|
|
283 |
|
|
Deferred income taxes |
|
(81 |
) |
|
|
(206 |
) |
|
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency: |
|
|
|
||||
|
Trade and other receivables |
|
(552 |
) |
|
|
(75 |
) |
|
Settlement activity |
|
653 |
|
|
|
862 |
|
|
Prepaid expenses and other assets |
|
(526 |
) |
|
|
(278 |
) |
|
Deferred contract costs |
|
(453 |
) |
|
|
(473 |
) |
|
Deferred revenue |
|
23 |
|
|
|
58 |
|
|
Accounts payable, accrued liabilities and other liabilities |
|
391 |
|
|
|
217 |
|
|
Net cash provided by operating activities |
|
4,810 |
|
|
|
4,442 |
|
|
|
|
|
|
||||
|
Cash flows from investing activities: |
|
|
|
||||
|
Additions to property and equipment |
|
(320 |
) |
|
|
(263 |
) |
|
Additions to software |
|
(931 |
) |
|
|
(866 |
) |
|
Acquisitions, net of cash acquired |
|
(767 |
) |
|
|
(469 |
) |
|
Net proceeds from sale of businesses and investments |
|
370 |
|
|
|
— |
|
|
Other investing activities, net |
|
(123 |
) |
|
|
684 |
|
|
Net cash provided by (used in) investing activities |
|
(1,771 |
) |
|
|
(914 |
) |
|
|
|
|
|
||||
|
Cash flows from financing activities: |
|
|
|
||||
|
Borrowings |
|
54,073 |
|
|
|
47,695 |
|
|
Repayment of borrowings and other financing obligations |
|
(53,440 |
) |
|
|
(49,067 |
) |
|
Debt issuance costs |
|
(74 |
) |
|
|
— |
|
|
Net proceeds from stock issued under stock-based compensation plans |
|
121 |
|
|
|
332 |
|
|
|
|
(2,114 |
) |
|
|
(112 |
) |
|
Dividends paid |
|
(961 |
) |
|
|
(868 |
) |
|
Other financing activities, net |
|
(143 |
) |
|
|
(731 |
) |
|
Net cash provided by (used in) financing activities |
|
(2,538 |
) |
|
|
(2,751 |
) |
|
|
|
|
|
||||
|
Effect of foreign currency exchange rate changes on cash |
|
(248 |
) |
|
|
42 |
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
253 |
|
|
|
819 |
|
|
Cash, cash equivalents and restricted cash, beginning of period |
|
4,030 |
|
|
|
3,211 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
4,283 |
|
|
$ |
4,030 |
|
|
|
|||||||||||||||
|
SUPPLEMENTAL NON-GAAP ORGANIC REVENUE GROWTH — UNAUDITED |
|||||||||||||||
|
(In millions) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
Exhibit D |
||||||
|
|
Three months ended |
||||||||||||||
|
|
2021 |
|
2020 |
|
|
||||||||||
|
|
|
|
|
|
Constant |
|
|
|
|
||||||
|
|
|
|
|
|
Currency |
|
|
|
Organic |
||||||
|
|
Revenue |
|
FX |
|
Revenue |
|
Revenue |
|
Growth (1) |
||||||
|
Merchant Solutions |
$ |
1,193 |
|
$ |
(2 |
) |
|
$ |
1,191 |
|
$ |
1,003 |
|
19 |
% |
|
Banking Solutions |
|
1,667 |
|
|
3 |
|
|
|
1,671 |
|
|
1,551 |
|
8 |
% |
|
Capital Market Solutions |
|
716 |
|
|
1 |
|
|
|
717 |
|
|
663 |
|
8 |
% |
|
Corporate and Other |
|
96 |
|
|
1 |
|
|
|
97 |
|
|
99 |
|
|
|
|
Total |
$ |
3,672 |
|
$ |
4 |
|
|
$ |
3,676 |
|
$ |
3,316 |
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Years ended |
||||||||||||||
|
|
2021 |
|
2020 |
|
|
||||||||||
|
|
|
|
|
|
Constant |
|
|
|
|
||||||
|
|
|
|
|
|
Currency |
|
|
|
Organic |
||||||
|
|
Revenue |
|
FX |
|
Revenue |
|
Revenue |
|
Growth (1) |
||||||
|
Merchant Solutions |
$ |
4,496 |
|
$ |
(72 |
) |
|
$ |
4,424 |
|
$ |
3,767 |
|
17 |
% |
|
Banking Solutions |
|
6,396 |
|
|
(18 |
) |
|
|
6,379 |
|
|
5,944 |
|
7 |
% |
|
Capital Market Solutions |
|
2,624 |
|
|
(26 |
) |
|
|
2,597 |
|
|
2,440 |
|
6 |
% |
|
Corporate and Other |
|
361 |
|
|
(2 |
) |
|
|
359 |
|
|
401 |
|
|
|
|
Total |
$ |
13,877 |
|
$ |
(118 |
) |
|
$ |
13,759 |
|
$ |
12,552 |
|
10 |
% |
|
Amounts in table may not sum or calculate due to rounding. |
|||||||||||||||
| (1) |
Organic growth excludes the impact of foreign currency exchange rates in the current period, acquisition or divestiture impact from the prior periods (which was not meaningful in the periods presented), and Corporate and Other revenue from the current and prior periods. |
|
|
|||||||
|
SUPPLEMENTAL NON-GAAP CASH FLOW MEASURES — UNAUDITED |
|||||||
|
(In millions) |
|||||||
|
Exhibit D (continued) |
|||||||
|
|
|
|
|
||||
|
|
Three months ended |
|
Year ended |
||||
|
|
|
|
|
||||
|
Net cash provided by operating activities |
$ |
961 |
|
|
$ |
4,810 |
|
|
Non-GAAP adjustments: |
|
|
|
||||
|
Acquisition, integration and other payments (1) |
|
139 |
|
|
|
523 |
|
|
Settlement activity |
|
75 |
|
|
|
(653 |
) |
|
Adjusted cash flows from operations |
|
1,175 |
|
|
|
4,680 |
|
|
Capital expenditures (2) |
|
(330 |
) |
|
|
(1,127 |
) |
|
Free cash flow |
$ |
845 |
|
|
$ |
3,553 |
|
|
|
Three months ended |
|
Year ended |
||||
|
|
|
|
|
||||
|
Net cash provided by operating activities |
$ |
1,417 |
|
|
$ |
4,442 |
|
|
Non-GAAP adjustments: |
|
|
|
||||
|
Acquisition, integration and other payments (1) |
|
109 |
|
|
|
545 |
|
|
Settlement activity |
|
(268 |
) |
|
|
(862 |
) |
|
Adjusted cash flows from operations |
|
1,258 |
|
|
|
4,125 |
|
|
Capital expenditures (2) |
|
(281 |
) |
|
|
(1,088 |
) |
|
Free cash flow |
$ |
977 |
|
|
$ |
3,037 |
|
Free cash flow reflects adjusted cash flows from operations less capital expenditures (additions to property and equipment and additions to software, excluding capital spend related to the construction of our new headquarters). Free cash flow does not represent our residual cash flows available for discretionary expenditures, since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure.
| (1) |
Adjusted cash flows from operations and free cash flow for the three months and years ended |
|
|
|
| (2) |
Capital expenditures for free cash flow exclude capital spend related to the construction of our new headquarters totaling |
|
|
|||||||||
|
SUPPLEMENTAL NON-GAAP ADJUSTED MERCHANT REVENUE GROWTH VS. 2019 — UNAUDITED |
|||||||||
|
(In millions) |
|||||||||
|
|
|
|
|
Exhibit D (continued) |
|||||
|
|
|
|
|
|
|
|
|||
|
|
|
Three months ended |
|||||||
|
|
|
2021 |
|
2019 |
|
Growth |
|||
|
Revenue |
|
$ |
1,193 |
|
$ |
1,090 |
|
9 |
% |
|
Adjustment |
|
|
|
|
|
4 |
% |
||
|
Adjusted revenue growth vs. 2019 (1) |
|
|
|
|
|
13 |
% |
||
|
|
|
|
|
|
|
|
|||
|
|
|
Year ended |
|||||||
|
|
|
2021 |
|
2019 |
|
Growth |
|||
|
Revenue |
|
$ |
4,496 |
|
$ |
4,113 |
|
9 |
% |
|
Adjustment |
|
|
|
|
|
1 |
% |
||
|
Adjusted revenue growth vs. 2019 (1) |
|
|
|
|
|
10 |
% |
||
| (1) |
Adjusted revenue growth vs. 2019 reflects a |
|
|
|||||||||||||||
|
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED |
|||||||||||||||
|
(In millions, except per share amounts) |
|||||||||||||||
|
Exhibit E |
|||||||||||||||
|
|
|
Three months ended |
|
Years ended |
|||||||||||
|
|
|
|
|
|
|||||||||||
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
Net earnings attributable to FIS common stockholders |
|
$ |
291 |
|
|
$ |
103 |
|
|
$ |
417 |
|
$ |
158 |
|
|
Provision (benefit) for income taxes |
|
|
125 |
|
|
|
2 |
|
|
|
371 |
|
|
96 |
|
|
Interest expense, net |
|
|
46 |
|
|
|
82 |
|
|
|
214 |
|
|
334 |
|
|
Other, net |
|
|
(7 |
) |
|
|
(20 |
) |
|
|
53 |
|
|
(36 |
) |
|
|
|
|
|
|
|
|
|
|
|||||||
|
Operating income, as reported |
|
|
455 |
|
|
|
167 |
|
|
|
1,055 |
|
|
552 |
|
|
Depreciation and amortization, excluding purchase accounting amortization |
|
|
332 |
|
|
|
258 |
|
|
|
1,251 |
|
|
964 |
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|||||||
|
Purchase accounting amortization (1) |
|
|
701 |
|
|
|
694 |
|
|
|
2,764 |
|
|
2,750 |
|
|
Acquisition, integration and other costs (2) |
|
|
217 |
|
|
|
243 |
|
|
|
845 |
|
|
858 |
|
|
Asset impairments (3) |
|
|
— |
|
|
|
136 |
|
|
|
202 |
|
|
136 |
|
|
Adjusted EBITDA |
|
$ |
1,705 |
|
|
$ |
1,498 |
|
|
$ |
6,117 |
|
$ |
5,260 |
|
|
See notes to Exhibit E. |
|||||||||||||||
|
|
||||||||||||||||
|
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED |
||||||||||||||||
|
(In millions, except per share amounts) |
||||||||||||||||
|
Exhibit E (continued) |
||||||||||||||||
|
|
|
Three months ended |
|
Years ended |
||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings before income taxes and equity method investment earnings (loss) |
|
$ |
416 |
|
|
$ |
102 |
|
|
$ |
789 |
|
|
$ |
266 |
|
|
(Provision) benefit for income taxes |
|
|
(125 |
) |
|
|
(2 |
) |
|
|
(371 |
) |
|
|
(96 |
) |
|
Equity method investment earnings (loss) |
|
|
— |
|
|
|
2 |
|
|
|
6 |
|
|
|
(6 |
) |
|
Net (earnings) loss attributable to noncontrolling interest |
|
|
— |
|
|
|
1 |
|
|
|
(7 |
) |
|
|
(6 |
) |
|
Net earnings attributable to FIS common stockholders |
|
|
291 |
|
|
|
103 |
|
|
|
417 |
|
|
|
158 |
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
||||||||
|
Purchase accounting amortization (1) |
|
|
701 |
|
|
|
694 |
|
|
|
2,764 |
|
|
|
2,750 |
|
|
Acquisition, integration and other costs (2) |
|
|
268 |
|
|
|
201 |
|
|
|
956 |
|
|
|
822 |
|
|
Asset impairments (3) |
|
|
— |
|
|
|
136 |
|
|
|
202 |
|
|
|
136 |
|
|
Non-operating (income) expense (4) |
|
|
(7 |
) |
|
|
(17 |
) |
|
|
52 |
|
|
|
(48 |
) |
|
Equity method investment (earnings) loss (5) |
|
|
— |
|
|
|
(2 |
) |
|
|
(6 |
) |
|
|
6 |
|
|
Tax rate change (6) |
|
|
— |
|
|
|
— |
|
|
|
178 |
|
|
|
103 |
|
|
(Provision) benefit for income taxes on non-GAAP adjustments |
|
|
(74 |
) |
|
|
(99 |
) |
|
|
(497 |
) |
|
|
(504 |
) |
|
Total non-GAAP adjustments |
|
|
888 |
|
|
|
913 |
|
|
|
3,649 |
|
|
|
3,265 |
|
|
Adjusted net earnings |
|
$ |
1,179 |
|
|
$ |
1,016 |
|
|
$ |
4,066 |
|
|
$ |
3,423 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net earnings per share-diluted attributable to FIS common stockholders |
|
$ |
0.47 |
|
|
$ |
0.16 |
|
|
$ |
0.67 |
|
|
$ |
0.25 |
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
||||||||
|
Purchase accounting amortization (1) |
|
|
1.14 |
|
|
|
1.11 |
|
|
|
4.45 |
|
|
|
4.39 |
|
|
Acquisition, integration and other costs (2) |
|
|
0.44 |
|
|
|
0.32 |
|
|
|
1.54 |
|
|
|
1.31 |
|
|
Asset impairments (3) |
|
|
— |
|
|
|
0.22 |
|
|
|
0.33 |
|
|
|
0.22 |
|
|
Non-operating (income) expense (4) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
0.08 |
|
|
|
(0.08 |
) |
|
Equity method investment (earnings) loss (5) |
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
Tax rate change (6) |
|
|
— |
|
|
|
— |
|
|
|
0.29 |
|
|
|
0.16 |
|
|
(Provision) benefit for income taxes on non-GAAP adjustments |
|
|
(0.12 |
) |
|
|
(0.16 |
) |
|
|
(0.80 |
) |
|
|
(0.80 |
) |
|
Adjusted net earnings per share-diluted attributable to FIS common stockholders |
|
$ |
1.92 |
|
|
$ |
1.62 |
|
|
$ |
6.55 |
|
|
$ |
5.46 |
|
|
Weighted average shares outstanding-diluted |
|
|
614 |
|
|
|
628 |
|
|
|
621 |
|
|
|
627 |
|
| Amounts in table may not sum or calculate due to rounding. | ||||||||||||||||
|
See notes to Exhibit E. |
||||||||||||||||
|
|
|
|
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — UNAUDITED |
|
|
(In millions, except per share amounts) |
|
|
Exhibit E (continued) |
|
| Notes to Unaudited - Supplemental GAAP to Non-GAAP Reconciliations for the three months and years ended |
|
| The adjustments are as follows: | |
| (1) |
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 technology assets. For the three months and year ended |
|
|
|
| (2) |
This item represents acquisition and integration costs primarily related to the acquisition of Worldpay as well as certain other costs, including costs associated with the Company's platform modernization, described in Note (1), totaling |
|
|
|
| (3) |
For the year ended |
|
|
|
| (4) |
Non-operating (income) expense primarily consists of other income and expense items outside of the Company's operating activities, including fair value adjustments on certain non-operating assets and liabilities and foreign currency transaction remeasurement gains and losses. For the three months and year ended |
|
|
|
| (5) |
This item represents our equity method investment earnings or loss and was predominantly due to our equity ownership interest in |
|
|
|
| (6) |
For the year ended |
|
|
|||||||||||
|
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS ON GUIDANCE — UNAUDITED |
|||||||||||
|
(In millions, except per share amounts) |
|||||||||||
|
Exhibit F |
|||||||||||
|
|
Three months Ended |
|
Year ended |
||||||||
|
|
|
|
|
||||||||
|
|
Low |
|
High |
|
Low |
|
High |
||||
|
|
|
|
|
|
|
|
|
||||
|
Net earnings per share-diluted attributable to FIS common stockholders |
$ |
0.15 |
|
$ |
0.25 |
|
$ |
2.10 |
|
$ |
2.50 |
|
|
|
|
|
|
|
|
|
||||
|
Estimated adjustments (1) |
|
1.29 |
|
|
1.22 |
|
|
5.15 |
|
|
4.87 |
|
|
|
|
|
|
|
|
|
||||
|
Adjusted net earnings per share-diluted attributable to FIS common stockholders |
$ |
1.44 |
|
$ |
1.47 |
|
$ |
7.25 |
|
$ |
7.37 |
| (1) |
Estimated adjustments include purchase accounting amortization, acquisition, integration and other costs, and other items, net of tax impact. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220215005350/en/
Chief Marketing Officer
Ellyn.Raftery@fisglobal.com
Executive Vice President
FIS Corporate Finance and Investor Relations
Nathan.Rozof@fisglobal.com
Source: