United States
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
April 24, 2008
Fidelity National Information Services, Inc.
1-16427
(Commission File Number)
Georgia | 58-2606325 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number) |
601 Riverside Avenue
Jacksonville, Florida 32204
(904) 854-8100
(Registrants Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
o |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition | ||||||||
Item 9.01. Financial Statements and Exhibits | ||||||||
SIGNATURE | ||||||||
EXHIBIT INDEX | ||||||||
EXHIBIT 99.1 | ||||||||
EXHIBIT 99.2 |
Item 2.02. Results of Operations and Financial Condition
On April 24, 2008, Fidelity National Information Services, Inc. issued an earnings release announcing its financial results for the First Quarter of 2008. The information included in Items 2.02 and 9.01 within this Current Report are being furnished and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that Section. The information included in Items 2.02 and 9.01 within this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
A copy of the earnings release is attached as Exhibit 99.1 and a copy of the financial results presentation is attached as Exhibit 99.2
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
Exhibit |
Description |
|
99.1 |
Press release announcing Fidelity National Information Services, Inc. Reports First Quarter 2008 Earnings. | |
99.2 |
Financial results presentation. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Fidelity National Information Services, Inc. |
||||
Date: April 24, 2008 | By: | /s/ Jeffrey S. Carbiener | ||
Name: Jeffrey S. Carbiener Title: Executive Vice President and Chief Financial Officer |
||||
EXHIBIT INDEX
Exhibit |
Description |
|
99.1 |
Press release announcing Fidelity National Information Services, Inc. Reports First Quarter 2008 Earnings. | |
99.2 |
Financial results presentation. |
PRESS RELEASE |
Three months ended March31, | ||||||||
2008 | 2007 | |||||||
Processing and services revenues |
$ | 1,290,952 | $ | 1,071,440 | ||||
Cost of revenues |
928,555 | 772,381 | ||||||
Selling, general and administrative expenses |
163,551 | 113,082 | ||||||
Research and development costs |
27,068 | 27,109 | ||||||
Operating income |
171,778 | 158,868 | ||||||
Other income (expense): |
||||||||
Interest income |
3,018 | 559 | ||||||
Other income (expense) |
(451 | ) | 665 | |||||
Interest expense |
(62,448 | ) | (72,115 | ) | ||||
Total other income (expense) |
(59,881 | ) | (70,891 | ) | ||||
Earnings before income taxes, equity earnings and minority interest |
111,897 | 87,977 | ||||||
Provision for income taxes |
40,955 | 32,729 | ||||||
Equity in (losses) earnings of unconsolidated entities |
(1,957 | ) | 936 | |||||
Minority interest (expense) income |
(122 | ) | 176 | |||||
Net earnings from continuing operations |
68,863 | 56,360 | ||||||
(Loss) earnings from discontinued operations, net of tax |
(884 | ) | 3,143 | |||||
Gain on disposition of discontinued operations, net of tax |
2,521 | | ||||||
Net earnings |
$ | 70,500 | $ | 59,503 | ||||
Net earnings per share-basic from continuing operations |
$ | 0.35 | $ | 0.29 | ||||
Net earnings per share-basic from discontined operations |
$ | 0.01 | $ | 0.02 | ||||
Net earnings per share-basic |
$ | 0.36 | $ | 0.31 | ||||
Weighted average shares outstanding-basic |
194,542 | 191,898 | ||||||
Net earnings per share-diluted from continuing operations |
$ | 0.35 | $ | 0.29 | ||||
Net earnings per share-diluted from discontinued operations |
0.01 | 0.01 | ||||||
Net earnings per share-diluted |
$ | 0.36 | $ | 0.30 | ||||
Weighted average shares outstanding-diluted |
196,537 | 195,807 | ||||||
As of March 31, | As of December 31, | |||||||
2008 | 2007 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 327,965 | $ | 355,278 | ||||
Settlement deposits |
42,742 | 21,162 | ||||||
Trade receivables, net |
857,881 | 825,915 | ||||||
Other receivables |
184,971 | 206,746 | ||||||
Settlement receivables |
119,954 | 116,935 | ||||||
Receivable from FNF |
11,687 | 14,907 | ||||||
Prepaid expenses and other current assets |
174,914 | 168,454 | ||||||
Deferred income taxes |
119,983 | 120,098 | ||||||
Total current assets |
1,840,097 | 1,829,495 | ||||||
Property and equipment, net of accumulated depreciation
and amortization |
402,848 | 392,508 | ||||||
Goodwill |
5,338,727 | 5,326,831 | ||||||
Other intangible assets, net of accumulated amortization |
986,084 | 1,030,582 | ||||||
Computer software, net of accumulated amortization |
809,497 | 775,151 | ||||||
Deferred costs |
269,946 | 256,852 | ||||||
Investment in FNRES |
28,546 | 30,491 | ||||||
Long-term notes receivable from FNF |
6,059 | 6,154 | ||||||
Other noncurrent assets |
150,426 | 146,519 | ||||||
Total assets |
$ | 9,832,230 | $ | 9,794,583 | ||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 606,250 | $ | 606,179 | ||||
Settlement payables |
161,631 | 129,799 | ||||||
Deferred revenues |
241,308 | 246,222 | ||||||
Current portion of long-term debt |
270,615 | 272,014 | ||||||
Total current liabilities |
1,279,804 | 1,254,214 | ||||||
Deferred revenues |
121,468 | 111,884 | ||||||
Deferred income taxes |
382,245 | 394,972 | ||||||
Long-term debt, excluding current portion |
3,908,702 | 4,003,383 | ||||||
Other long-term liabilities |
288,930 | 234,757 | ||||||
Total liabilities |
5,981,149 | 5,999,210 | ||||||
Minority interest |
11,249 | 14,194 | ||||||
Stockholders equity: |
||||||||
Preferred stock $0.01 par value |
| | ||||||
Common stock $0.01 par value |
1,990 | 1,990 | ||||||
Additional paid in capital |
3,058,585 | 3,038,203 | ||||||
Retained earnings |
960,296 | 899,512 | ||||||
Accumulated other comprehensive earnings |
28,476 | 53,389 | ||||||
Treasury stock |
(209,515 | ) | (211,915 | ) | ||||
Total stockholders equity |
3,839,832 | 3,781,179 | ||||||
Total liabilities and stockholdersequity |
$ | 9,832,230 | $ | 9,794,583 | ||||
Three months ended March 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net earnings |
$ | 70,500 | $ | 59,503 | ||||
Adjustment to reconcile net earnings to net
cash provided by operating activities: |
||||||||
Depreciation and amortization |
124,132 | 110,612 | ||||||
Amortization of debt issue costs |
1,424 | 28,324 | ||||||
(Gain) on sale of Credit business |
(3,976 | ) | | |||||
Stock-based compensation cost |
26,378 | 8,489 | ||||||
Deferred income taxes |
6,823 | 8,950 | ||||||
Income tax benefit from exercise of stock options |
(357 | ) | (10,752 | ) | ||||
Equity in earnings (loss) of unconsolidated entities |
1,957 | (936 | ) | |||||
Minority interest |
122 | 88 | ||||||
Changes in assets and liabilities, net of
effects from acquisitions: |
||||||||
Net increase in trade receivables |
(8,094 | ) | (65,348 | ) | ||||
Net increase in prepaid expenses
and other assets |
(12,023 | ) | (19,813 | ) | ||||
Additions to deferred contract costs |
(21,955 | ) | (8,095 | ) | ||||
Net increase in deferred revenue |
4,616 | 1,504 | ||||||
Net decrease in accounts payable,
accrued liabilities and other liabilities |
(21,321 | ) | (40,096 | ) | ||||
Net cash provided by operating activities |
168,226 | 72,430 | ||||||
Cash flows from investing activities: |
||||||||
Additions to property and equipment |
(24,292 | ) | (27,410 | ) | ||||
Additions to capitalized software |
(65,256 | ) | (46,706 | ) | ||||
Net proceeds from sale of company assets |
6,000 | | ||||||
Acquisitions, net of cash acquired |
(1,916 | ) | (21,196 | ) | ||||
Net cash used in investing activities |
(85,464 | ) | (95,312 | ) | ||||
Cash flows from financing activities: |
||||||||
Borrowings |
1,283,600 | 2,700,300 | ||||||
Debt service payments |
(1,381,398 | ) | (2,689,045 | ) | ||||
Capitalized debt issue costs |
(13 | ) | (12,573 | ) | ||||
Dividends paid |
(9,716 | ) | (9,621 | ) | ||||
Income tax benefit from exercise of stock options |
357 | 10,752 | ||||||
Stock options exercised |
5,991 | 33,157 | ||||||
Treasury stock purchases |
(9,944 | ) | | |||||
Net cash (used in) provided by financing activities |
(111,123 | ) | 32,970 | |||||
Effect of foreign currency exchange rates on cash |
1,048 | 163 | ||||||
Net (decrease) increase in cash and cash
equivalents |
(27,313 | ) | 10,251 | |||||
Cash and cash equivalents, at beginning of year |
355,278 | 211,753 | ||||||
Cash and cash equivalents, at end of year |
$ | 327,965 | $ | 222,004 | ||||
Full Year | ||||||||||||||||||||||||
3/31/2008 | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 2007 | |||||||||||||||||||
1. Revenues |
||||||||||||||||||||||||
Revenue from Continuing Operations: |
||||||||||||||||||||||||
TPS |
||||||||||||||||||||||||
Integrated Financial Solutions |
$ | 368,585 | 364,612 | 308,803 | 297,117 | 283,753 | 1,254,285 | |||||||||||||||||
Enterprise Solutions |
280,544 | 289,492 | 241,395 | 245,174 | 234,560 | 1,010,621 | ||||||||||||||||||
International |
178,109 | 199,811 | 147,242 | 143,293 | 138,185 | 628,531 | ||||||||||||||||||
Other |
(439 | ) | (1,657 | ) | (1,789 | ) | (773 | ) | (548 | ) | (4,767 | ) | ||||||||||||
Total TPS Revenue |
826,799 | 852,258 | 695,651 | 684,811 | 655,950 | 2,888,670 | ||||||||||||||||||
LPS |
||||||||||||||||||||||||
Mortgage Processing |
84,268 | 98,310 | 88,323 | 94,163 | 91,005 | 371,801 | ||||||||||||||||||
Information Services |
380,014 | 352,556 | 350,377 | 342,090 | 321,353 | 1,366,376 | ||||||||||||||||||
Other |
(169 | ) | (457 | ) | (1,463 | ) | (51 | ) | | (1,971 | ) | |||||||||||||
Total LPS Revenue |
464,113 | 450,409 | 437,237 | 436,202 | 412,358 | 1,736,206 | ||||||||||||||||||
Corporate |
40 | 341 | 4,343 | 4,021 | 3,132 | 11,837 | ||||||||||||||||||
Total Revenue from Continuing Operations |
1,290,952 | 1,303,008 | 1,137,231 | 1,125,034 | 1,071,440 | 4,636,713 | ||||||||||||||||||
Total Revenue from Discontinued Operations |
29,720 | 27,406 | 42,667 | 51,204 | 52,626 | 173,903 | ||||||||||||||||||
Revenue Growth from Prior Year Period (A) |
||||||||||||||||||||||||
Revenue from Continuing Operations: |
||||||||||||||||||||||||
TPS |
||||||||||||||||||||||||
Integrated Financial Solutions |
29.9 | % | 28.7 | % | 11.6 | % | 9.1 | % | 5.1 | % | 13.8 | % | ||||||||||||
Enterprise Solutions |
19.6 | % | 15.9 | % | 3.1 | % | 10.8 | % | 7.6 | % | 9.5 | % | ||||||||||||
International |
28.9 | % | 41.7 | % | 23.9 | % | 44.3 | % | 58.4 | % | 40.8 | % | ||||||||||||
Other |
19.9 | % | 14.1 | % | 33.6 | % | 73.2 | % | 83.9 | % | 56.3 | % | ||||||||||||
Total TPS Revenue Growth |
26.0 | % | 26.8 | % | 11.0 | % | 16.1 | % | 14.7 | % | 17.4 | % | ||||||||||||
LPS |
||||||||||||||||||||||||
Mortgage Information |
-7.4 | % | 9.6 | % | -2.3 | % | 4.6 | % | 2.5 | % | 3.6 | % | ||||||||||||
Information Services |
18.3 | % | 14.0 | % | 16.7 | % | 25.4 | % | 19.6 | % | 18.7 | % | ||||||||||||
Other |
| -104.6 | % | -112.7 | % | -100.4 | % | -100.0 | % | -104.4 | % | |||||||||||||
Total LPS Revenue Growth |
12.6 | % | 10.1 | % | 8.7 | % | 16.6 | % | 11.8 | % | 11.7 | % | ||||||||||||
Corporate |
-98.7 | % | 120.9 | % | 364.8 | % | 47.3 | % | 94.5 | % | 1007.3 | % | ||||||||||||
Total Revenue from Continuing Operations |
20.5 | % | 20.7 | % | 10.7 | % | 16.4 | % | 13.7 | % | 15.4 | % | ||||||||||||
2. TPS Revenue from Continuing Operations, Excluding eFunds |
||||||||||||||||||||||||
TPS |
||||||||||||||||||||||||
Integrated Financial Solutions |
$ | 297,566 | 297,912 | 296,142 | 297,117 | 283,753 | 1,174,924 | |||||||||||||||||
Enterprise Solutions |
226,605 | 244,121 | 231,613 | 245,174 | 234,560 | 955,468 | ||||||||||||||||||
International |
161,742 | 170,782 | 142,057 | 143,293 | 138,185 | 594,317 | ||||||||||||||||||
Other |
(423 | ) | (515 | ) | (789 | ) | (773 | ) | (548 | ) | (2,625 | ) | ||||||||||||
Total TPS Revenue, excluding eFunds |
$ | 685,489 | 712,300 | 669,023 | 684,811 | 655,950 | 2,722,083 | |||||||||||||||||
Total Revenue from Continuing Operations, excluding eFunds |
$ | 1,149,642 | 1,163,050 | 1,110,603 | 1,125,034 | 1,071,440 | 4,470,126 | |||||||||||||||||
TPS Revenue Growth from Prior Year Period, excluding eFunds (A) |
||||||||||||||||||||||||
TPS |
||||||||||||||||||||||||
Integrated Financial Solutions |
4.9 | % | 5.2 | % | 7.0 | % | 9.1 | % | 5.1 | % | 6.6 | % | ||||||||||||
Enterprise Solutions |
-3.4 | % | -2.3 | % | -1.0 | % | 10.8 | % | 7.6 | % | 3.5 | % | ||||||||||||
International |
17.0 | % | 21.2 | % | 19.5 | % | 44.3 | % | 58.4 | % | 33.2 | % | ||||||||||||
Other |
22.7 | % | 73.3 | % | 70.7 | % | 73.2 | % | 83.9 | % | 75.9 | % | ||||||||||||
Total TPS Revenue Growth, excluding Efunds |
4.5 | % | 6.0 | % | 6.7 | % | 16.1 | % | 14.7 | % | 10.6 | % | ||||||||||||
Total Revenue Growth, excluding Efunds |
7.3 | % | 7.7 | % | 8.1 | % | 16.4 | % | 13.7 | % | 11.3 | % | ||||||||||||
3. Depreciation and Amortization |
||||||||||||||||||||||||
Depreciation and Amortization |
$ | 68,711 | 79,171 | 83,653 | 68,027 | 62,563 | 293,414 | |||||||||||||||||
Purchase Price Amortization |
46,560 | 49,385 | 40,599 | 37,897 | 40,780 | 168,661 | ||||||||||||||||||
Other Amortization |
8,861 | 9,347 | 10,187 | 7,968 | 7,269 | 34,771 | ||||||||||||||||||
Total Depreciation and Amortization |
$ | 124,132 | 137,903 | 134,439 | 113,892 | 110,612 | 496,846 | |||||||||||||||||
Depreciation and Amortization Relating to Non-recurring Adjustments |
$ | | | 13,531 | 393 | 683 | 14,608 | |||||||||||||||||
Depreciation and Amortization from Discontinued Operations |
1,394 | 1,322 | 1,558 | 1,714 | 1,716 | 6,310 | ||||||||||||||||||
Total Depreciation and Amortization from Continuing Operations, as adjusted |
$ | 122,738 | 136,581 | 119,350 | 111,785 | 108,213 | 475,928 | |||||||||||||||||
Full Year | ||||||||||||||||||||||||
3/31/2008 | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 2007 | |||||||||||||||||||
4. Capital Expenditures |
||||||||||||||||||||||||
TPS |
$ | 72,506 | 71,664 | 57,976 | 50,279 | 43,482 | 223,401 | |||||||||||||||||
LPS |
16,574 | 23,706 | 34,680 | 22,039 | 25,426 | 105,851 | ||||||||||||||||||
Corporate |
(522 | ) | 2,341 | (3,057 | ) | 7,196 | 4,183 | 10,663 | ||||||||||||||||
Total Capital Expenditures Continuing Operations |
88,558 | 97,711 | 89,599 | 79,514 | 73,091 | 339,915 | ||||||||||||||||||
Total Capital Expenditures Discontinued Operations |
990 | 917 | 1,062 | 380 | 1,025 | 3,384 | ||||||||||||||||||
Total Capital Expenditures |
$ | 89,548 | 98,628 | 90,661 | 79,894 | 74,116 | 343,299 | |||||||||||||||||
5. Long-term Debt as of Period End and Interest Expense and Rates |
||||||||||||||||||||||||
2008 Q1 | 2007 Q4 | 2007 Q3 | 2007 Q2 | 2007 Q1 | ||||||||||||||||||||
Term Note A |
$ | 2,034,375 | 2,047,500 | 2,060,625 | 2,073,750 | 2,086,875 | ||||||||||||||||||
Term Note B |
1,592,000 | 1,596,000 | 1,600,000 | | | |||||||||||||||||||
Revolver |
330,000 | 308,000 | 332,200 | 430,500 | 600,300 | |||||||||||||||||||
eFunds Notes |
| 98,533 | 98,226 | | | |||||||||||||||||||
Certegy Notes |
198,837 | 198,221 | 197,638 | 197,040 | 196,474 | |||||||||||||||||||
Other Long-term Debt |
24,105 | 27,143 | 32,187 | 151,134 | 145,631 | |||||||||||||||||||
Total Long-term Debt |
$ | 4,179,317 | 4,275,397 | 4,320,876 | 2,852,424 | 3,029,280 | ||||||||||||||||||
Total Interest Expense |
$ | 62,450 | 68,864 | 44,370 | 42,991 | 72,115 | ||||||||||||||||||
Less Debt Restructuring Charge |
| | | | (27,164 | ) | ||||||||||||||||||
Adjusted Interest Expense |
$ | 62,450 | 68,864 | 44,370 | 42,991 | 44,951 | ||||||||||||||||||
Average Interest Rate |
5.8 | % | 6.4 | % | 6.3 | % | 6.1 | % | 6.2 | % | ||||||||||||||
6. Stock Compensation Expense |
||||||||||||||||||||||||
Stock Compensation Expense, Excluding Acceleration Charges |
$ | 12,184 | 10,170 | 9,287 | 8,751 | 8,489 | 36,697 | |||||||||||||||||
Stock Acceleration Expense |
14,194 | 1,653 | 603 | | | 2,256 | ||||||||||||||||||
Total Stock Compensation Expense |
$ | 26,378 | 11,823 | 9,890 | 8,751 | 8,489 | 38,953 | |||||||||||||||||
(A) | Growth calculation for 3/31/2007 growth includes Certegy revenue for January 2006. |
Full Year | ||||||||||||||||||||||||
3/31/2008 | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 2007 | |||||||||||||||||||
1. EBIT and EBITDA Consolidated |
||||||||||||||||||||||||
Revenue from Continuing Operations |
$ | 1,290,952 | 1,303,008 | 1,137,231 | 1,125,034 | 1,071,440 | 4,636,713 | |||||||||||||||||
Operating Income |
$ | 171,778 | 229,550 | 177,831 | 179,368 | 158,868 | 745,617 | |||||||||||||||||
M&A, Restructuring and Integration Costs |
14,970 | 1,653 | 19,455 | 2,195 | 4,961 | 28,264 | ||||||||||||||||||
LPS Spin Costs |
2,858 | 500 | | | | 500 | ||||||||||||||||||
EBIT, as adjusted |
$ | 189,606 | 231,703 | 197,286 | 181,563 | 163,829 | 774,381 | |||||||||||||||||
Depr and Amort from Cont Ops, as adjusted |
122,738 | 136,581 | 119,350 | 111,785 | 108,213 | 475,928 | ||||||||||||||||||
EBITDA , as adjusted |
$ | 312,344 | 368,284 | 316,636 | 293,348 | 272,042 | 1,250,309 | |||||||||||||||||
EBIT Margin, as adjusted |
14.7 | % | 17.8 | % | 17.3 | % | 16.1 | % | 15.3 | % | 16.7 | % | ||||||||||||
EBITDA Margin, as adjusted |
24.2 | % | 28.3 | % | 27.8 | % | 26.1 | % | 25.4 | % | 27.0 | % | ||||||||||||
2. EBITDA from Discontinued Operations |
||||||||||||||||||||||||
Total EBITDA from Discontinued Operations |
$ | (3,128 | ) | 1,029 | 5,646 | 6,279 | 7,007 | 19,961 | ||||||||||||||||
3. EBITDA TPS |
||||||||||||||||||||||||
Revenue from Continuing Operations |
$ | 826,799 | 852,258 | 695,651 | 684,811 | 655,950 | 2,888,670 | |||||||||||||||||
Operating Income |
$ | 107,879 | 140,313 | 86,092 | 99,172 | 90,059 | 415,636 | |||||||||||||||||
Depreciation |
43,124 | 56,626 | 56,447 | 37,859 | 33,751 | 184,683 | ||||||||||||||||||
Purchase Price Amortization |
36,086 | 35,949 | 29,104 | 27,027 | 29,198 | 121,278 | ||||||||||||||||||
Other Amortization |
8,386 | 8,851 | 9,585 | 7,516 | 6,869 | 32,821 | ||||||||||||||||||
EBITDA , before other items |
$ | 195,475 | 241,739 | 181,228 | 171,574 | 159,877 | 754,418 | |||||||||||||||||
M&A, Restructuring and Integration Costs |
| | 4,614 | | | 4,614 | ||||||||||||||||||
EBITDA, excluding other items |
$ | 195,475 | 241,739 | 185,842 | 171,574 | 159,877 | 759,032 | |||||||||||||||||
EBITDA Margin, as adjusted |
23.6 | % | 28.4 | % | 26.7 | % | 25.1 | % | 24.4 | % | 26.3 | % | ||||||||||||
4. EBITDA LPS |
||||||||||||||||||||||||
Revenue from Continuing Operations |
$ | 464,113 | 450,409 | 437,237 | 436,202 | 412,358 | 1,736,206 | |||||||||||||||||
Operating Income |
$ | 116,350 | 122,527 | 116,392 | 107,846 | 95,165 | 441,930 | |||||||||||||||||
Depreciation |
20,794 | 20,455 | 20,887 | 22,281 | 21,544 | 85,167 | ||||||||||||||||||
Purchase Price Amortization |
10,107 | 10,605 | 10,538 | 10,345 | 11,046 | 42,534 | ||||||||||||||||||
Other Amortization |
475 | 496 | 602 | 452 | 400 | 1,950 | ||||||||||||||||||
EBITDA , before other items |
$ | 147,726 | 154,083 | 148,419 | 140,924 | 128,155 | 571,581 | |||||||||||||||||
M&A, Restructuring and Integration Costs |
630 | | 707 | 1,802 | 4,278 | 6,787 | ||||||||||||||||||
EBITDA, excluding other items |
$ | 148,356 | 154,083 | 149,126 | 142,726 | 132,433 | 578,368 | |||||||||||||||||
EBITDA Margin, as adjusted |
32.0 | % | 34.2 | % | 34.1 | % | 32.7 | % | 32.1 | % | 33.3 | % | ||||||||||||
5. Net Earnings Reconciliation |
||||||||||||||||||||||||
Net Earnings |
$ | 70,500 | 108,411 | 245,304 | 148,004 | 59,503 | 561,222 | |||||||||||||||||
M&A, Restructuring and Integration Costs, net of tax |
9,491 | (6,560 | ) | 10,505 | 1,385 | 3,116 | 8,446 | |||||||||||||||||
LPS Spin Costs, net of tax |
1,812 | 315 | | | | 315 | ||||||||||||||||||
Covansys Gain, net of tax |
| | (114,939 | ) | (57,988 | ) | | (172,927 | ) | |||||||||||||||
Gain on Property Insight, net of tax |
| | (42,124 | ) | | | (42,124 | ) | ||||||||||||||||
Debt Restructure Charge, net of tax |
| | | | 17,059 | 17,059 | ||||||||||||||||||
Net Earnings, excluding other items |
81,803 | 102,166 | 98,746 | 91,401 | 79,678 | 371,991 | ||||||||||||||||||
After-tax Purchase Price Amortization |
29,518 | 31,112 | 25,578 | 23,901 | 25,612 | 106,203 | ||||||||||||||||||
Adjusted Net Earnings |
$ | 111,321 | 133,278 | 124,324 | 115,302 | 105,290 | 478,194 | |||||||||||||||||
Net Earnings Per Share, excluding other items |
$ | 0.42 | 0.52 | 0.50 | 0.46 | 0.41 | 1.89 | |||||||||||||||||
Adjusted Net Earnings Per Share |
$ | 0.57 | 0.68 | 0.63 | 0.59 | 0.54 | 2.43 | |||||||||||||||||
Diluted Weighted Average Shares |
196,537 | 196,741 | 196,649 | 196,977 | 195,807 | 196,546 | ||||||||||||||||||
3/31/2007 | 6/30/2007 | 9/30/2007 | ||||||||||||||||||||||||||||||||||
GAAP | Adj | Non-GAAP | GAAP | Adj | Non-GAAP | GAAP | Adj | Non-GAAP | ||||||||||||||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||||||||||||||||||
Net earnings (1) |
$ | 59,503 | 3,115 | 62,618 | $ | 148,004 | 1,383 | 149,387 | $ | 245,304 | 109,728 | 355,032 | ||||||||||||||||||||||||
Adjustments to reconcile net earnings to net
cash provided by operating activities: |
||||||||||||||||||||||||||||||||||||
Non-cash adjustments |
155,527 | 155,527 | 25,152 | 25,152 | (182,304 | ) | (182,304 | ) | ||||||||||||||||||||||||||||
Working capital adjustments (2) |
(142,600 | ) | 12,700 | (129,900 | ) | (2,499 | ) | 18,100 | 15,601 | (49,681 | ) | 9,500 | (40,181 | ) | ||||||||||||||||||||||
Net cash provided by operating activities |
72,430 | 15,815 | 88,245 | 170,657 | 19,483 | 190,140 | 13,319 | 119,228 | 132,547 | |||||||||||||||||||||||||||
Capital expenditures included in investing activities: |
||||||||||||||||||||||||||||||||||||
Additions to property and equipment |
(27,410 | ) | (27,410 | ) | (32,792 | ) | (32,792 | ) | (25,184 | ) | (25,184 | ) | ||||||||||||||||||||||||
Additions to capitalized software |
(46,706 | ) | (46,706 | ) | (47,102 | ) | (47,102 | ) | (65,477 | ) | (65,477 | ) | ||||||||||||||||||||||||
Net capital expenditures |
(74,116 | ) | | (74,116 | ) | (79,894 | ) | | (79,894 | ) | (90,661 | ) | | (90,661 | ) | |||||||||||||||||||||
Net free cash flow |
$ | (1,686 | ) | 15,815 | 14,129 | $ | 90,763 | 19,483 | 110,246 | $ | (77,342 | ) | 119,228 | 41,886 | ||||||||||||||||||||||
Notes: |
||||||||||||||||||||||||||||||||||||
(1) Adjustments to Net Earnings |
||||||||||||||||||||||||||||||||||||
Eliminate after-tax impact of
non-recurring integration costs |
3,115 | 1,383 | 3,168 | |||||||||||||||||||||||||||||||||
Eliminate payment of tax liabilities
associated with disposition of
non-strategic investments |
| | 106,560 | |||||||||||||||||||||||||||||||||
3,115 | 1,383 | 109,728 | ||||||||||||||||||||||||||||||||||
(2) Adjustments to working capital reflect elimination of
settlement of various acquisition related liabilities. |
12/31/2007 | Full Year - 2007 | 3/31/2008 | ||||||||||||||||||||||||||||||||||
GAAP | Adj | Non-GAAP | GAAP | Adj | Non-GAAP | GAAP | Adj | Non-GAAP | ||||||||||||||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||||||||||||||||||
Net earnings (1) |
$ | 108,411 | 38,990 | 147,401 | $ | 561,222 | 153,216 | 714,438 | $ | 70,500 | 2,304 | 72,804 | ||||||||||||||||||||||||
Adjustments to reconcile net earnings to net
cash provided by operating activities: |
||||||||||||||||||||||||||||||||||||
Non-cash adjustments |
181,495 | 181,495 | 179,870 | | 179,870 | 156,504 | 156,504 | |||||||||||||||||||||||||||||
Working capital adjustments (2) |
(82,760 | ) | 8,870 | (73,890 | ) | (277,540 | ) | 49,170 | (228,370 | ) | (58,778 | ) | 46,342 | (12,436 | ) | |||||||||||||||||||||
Net cash provided by operating activities |
207,146 | 47,860 | 255,006 | 463,552 | 202,386 | 665,938 | 168,226 | 48,646 | 216,872 | |||||||||||||||||||||||||||
Capital expenditures included in investing activities: |
||||||||||||||||||||||||||||||||||||
Additions to property and equipment |
(28,446 | ) | (28,446 | ) | (113,832 | ) | | (113,832 | ) | (24,292 | ) | (24,292 | ) | |||||||||||||||||||||||
Additions to capitalized software |
(70,182 | ) | (70,182 | ) | (229,467 | ) | | (229,467 | ) | (65,256 | ) | (65,256 | ) | |||||||||||||||||||||||
Net capital expenditures |
(98,628 | ) | | (98,628 | ) | (343,299 | ) | | (343,299 | ) | (89,548 | ) | | (89,548 | ) | |||||||||||||||||||||
Net free cash flow |
$ | 108,518 | 47,860 | 156,378 | $ | 120,253 | 202,386 | 322,639 | $ | 78,678 | 48,646 | 127,324 | ||||||||||||||||||||||||
Notes: |
||||||||||||||||||||||||||||||||||||
(1) Adjustments to Net Earnings |
||||||||||||||||||||||||||||||||||||
Eliminate after-tax impact of
non-recurring integration costs |
| 7,666 | 2,304 | |||||||||||||||||||||||||||||||||
Eliminate payment of tax liabilities
associated with disposition of
non-strategic investments |
38,990 | 145,550 | | |||||||||||||||||||||||||||||||||
38,990 | 153,216 | 2,304 | ||||||||||||||||||||||||||||||||||
(2) Adjustments to working capital reflect elimination of
settlement of various acquisition related liabilities. |
Transaction | Lender | Corporate | ||||||||||||||
Processing Services | Processing Services | and Other | Total | |||||||||||||
Processing and services revenue |
$ | 826,799 | 464,113 | 40 | 1,290,952 | |||||||||||
Cost of revenues |
634,264 | 294,291 | | 928,555 | ||||||||||||
Gross profit |
192,535 | 169,822 | 40 | 362,397 | ||||||||||||
Selling, general and admin costs |
65,176 | 45,884 | 52,491 | 163,551 | ||||||||||||
Research development costs |
19,480 | 7,588 | | 27,068 | ||||||||||||
Operating income |
107,879 | 116,350 | (52,451 | ) | 171,778 | |||||||||||
Depreciation and amortization |
87,596 | 31,376 | 3,766 | 122,738 | ||||||||||||
EBITDA |
$ | 195,475 | 147,726 | (48,685 | ) | 294,516 | ||||||||||
Merger and acquisition costs |
| 630 | 14,340 | 14,970 | ||||||||||||
LPS spin costs |
| | 2,858 | 2,858 | ||||||||||||
EBITDA, excluding selected items |
$ | 195,475 | 148,356 | (31,487 | ) | 312,344 | ||||||||||
Transaction | Lender | Corporate | ||||||||||||||
Processing Services | Processing Services | and Other | Total | |||||||||||||
Processing and services revenue |
$ | 655,950 | 412,358 | 3,132 | 1,071,440 | |||||||||||
Cost of revenues |
507,487 | 264,894 | | 772,381 | ||||||||||||
Gross profit |
148,463 | 147,464 | 3,132 | 299,059 | ||||||||||||
Selling, general and admin costs |
40,886 | 42,708 | 29,488 | 113,082 | ||||||||||||
Research development costs |
17,518 | 9,591 | | 27,109 | ||||||||||||
Operating income |
90,059 | 95,165 | (26,356 | ) | 158,868 | |||||||||||
Depreciation and amortization |
69,818 | 32,990 | 6,088 | 108,896 | ||||||||||||
EBITDA |
$ | 159,877 | 128,155 | (20,268 | ) | 267,764 | ||||||||||
Merger and acquisition costs |
| 4,278 | | 4,278 | ||||||||||||
EBITDA, excluding selected items |
$ | 159,877 | 132,433 | (20,268 | ) | 272,042 | ||||||||||
2008 Guidance Reflects original free cash flow guidance adjusted for previous guidance of $75 million to $100 million in working capital and other adjustments. |
Forward Looking Statement |
Use of Non-GAAP Measures |
Revenue from Continuing Operations (in millions) |
(1) Including depreciation and amortization of $3.8 million and $6.1 million, Corporate expense totaled $35.3 million and $29.5 million in the respective 2008 and 2007 quarters. Adjusted EBITDA (in millions) |
Adjusted Net Earnings (in millions, except per share amounts) |
Divestiture & Other Investment Activity (in millions) |
Free Cash Flow Reconciliation (in millions) Adjustments to net earnings reflect the elimination of the after-tax impact of non-recurring M & A and related integration costs. Adjustments to working capital reflect the add-back of the settlement of various acquisition related liabilities. |
2008 Guidance Reflects original free cash flow guidance adjusted for previous guidance of $75 million to $100 million in working capital and other adjustments. |