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Table of Contents



United States
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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):
February 14, 2008

Fidelity National Information Services, Inc.

(Exact name of Registrant as Specified in its Charter)

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

(Addresses of Principal Executive Offices)

(904) 854-8100
(Registrant’s Telephone Number, Including Area Code)


(Former Name or Former Address, if Changed Since Last Report)

     
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))



 


TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition
Item 9.01. Financial Statements and Exhibits
SIGNATURE
EXHIBIT INDEX
EXHIBIT 99.1


Table of Contents

Item 2.02. Results of Operations and Financial Condition

On February 14, 2008, Fidelity National Information Services, Inc. issued an earnings release announcing its financial results for the Fourth Quarter of 2007. 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.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

     
Exhibit
  Description
99.1
  Press release announcing Fidelity National Information Services, Inc. Reports Fourth Quarter 2007 Earnings.

 


Table of Contents

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: February 19, 2008 By:   /s/ Jeffrey S. Carbiener  
    Name: Jeffrey S. Carbiener
Title: Executive Vice President and
Chief Financial Officer
 
       
 

 


Table of Contents

EXHIBIT INDEX

     
Exhibit
  Description
99.1
  Press release announcing Fidelity National Information Services, Inc. Reports Fourth Quarter 2007 Earnings.

 

exv99w1
 

Exhibit 99.1
     
(FIDELITY NATIONAL INFORMATION SERVICES)   PRESS RELEASE
FIS FOURTH QUARTER REVENUES INCREASE 20%
Lender Processing Services Revenue Growth Rate Accelerates to 9.5%
     Jacksonville, Fla. — February 14, 2008 — Fidelity National Information Services, Inc. (NYSE:FIS), a leading global provider of technology services to financial institutions, today announced financial results for the quarter and year ended December 31, 2007. Fourth quarter 2007 consolidated revenue increased 20.0% to $1.3 billion, net earnings totaled $108.4 million, and net earnings per diluted share was $0.55.
     FIS’ fourth quarter 2007 results include approximately $140 million in revenue and approximately $45 million in EBITDA from eFunds. Excluding eFunds, the Company reported fourth quarter revenue growth of 7.4% and adjusted EBITDA growth of 12.5%. FIS’ adjusted cash earnings of $0.68 per diluted share increased 17.2% over the prior year period. eFunds was neutral to cash earnings.
     For the full year 2007, consolidated revenue totaled $4.8 billion, net earnings totaled $561.2 million and net earnings per diluted share totaled $2.86. These results include revenue of approximately $167 million and EBITDA of approximately $51 million attributable to eFunds, which was acquired by FIS in September 2007. Excluding eFunds, full year revenue increased 11.0% to $4.6 billion, compared to pro forma revenue of $4.1 billion in 2006. The increase was driven by 10.5% growth in Transaction Processing Services and 11.2% growth in Lender Processing Services. Adjusted EBITDA increased 13.0% over 2006 pro forma results.
     “It was a good quarter and great year for FIS,” stated William P. Foley, II, executive chairman of FIS. “Double digit revenue growth in Transaction Processing Services and Lender Processing Services enabled us to achieve excellent financial performance in 2007, despite a highly challenging economic environment. We expect to make significant progress with the eFunds integration, and are on track to complete the spin-off of our Lender Processing business by mid 2008.”
     FIS’ operating results are presented in accordance with generally accepted accounting principles (“GAAP”) and on an adjusted pro forma basis, which management believes provides more meaningful comparisons between the periods presented. FIS’ pro forma results reflect a January 1, 2006 effective date for the merger between FIS and Certegy. The adjusted and adjusted pro forma results exclude certain merger and acquisition and integration expenses, certain stock compensation charges, restructuring and other charges, and gains on the sale of Covansys Corporation common stock, Property Insight and other assets.

 


 

                         
    4th Quarter   4th Quarter    
(As Adjusted)   2007   2006   % Chg
Total Revenue
  $ 1,330.4 million     $ 1,108.5 million       20.0 %
EBITDA
  $ 369.3 million     $ 288.3 million       28.1 %
Net Earnings
  $ 102.2 million     $ 84.3 million       21.2 %
Net Earnings Per Diluted Share
  $ 0.52     $ 0.43       20.9 %
Cash Earnings (as defined below)
  $ 133.3 million     $ 111.9 million       19.1 %
Cash Earnings Per Diluted Share
  $ 0.68     $ 0.58       17.2 %
Segment Information
     Transaction Processing Services generated revenue of $875.3 million compared to $694.7 million in the prior-year period, an increase of 26%. EBITDA increased 35.6% to $243.0 million. The EBITDA margin was 27.8% compared to 25.8% in the fourth quarter of 2006.
     Excluding eFunds, TPS revenue increased 5.8% to $735.3 million driven by 21.2% growth in International to $170.8 million and 5.2% growth in Integrated Financial Solutions to $297.9 million. Enterprise Solutions revenue totaled $267.1 million, which is a 2% decrease compared to the prior year quarter. The decline is attributable to significant core banking customer implementations in the second half of 2006 and reduced retail volumes in Check Services in 2007. Excluding eFunds, EBITDA increased 7.6% to $192.8 million. The EBITDA margin increased 40 basis points to 26.2%, driven by improved profitability in Integrated Financial Solutions and International, partially offset by the lower retail volumes within Check Services.
     Lender Processing Services revenue increased 9.5% to $454.8 million, driven by 13.4% growth in Information Services, which continues to benefit from strong results within the default solutions and appraisal product lines, and 8.7% growth in Mortgage Processing revenues, driven by a net increase in non-account based revenues which include termination fees. Lender Processing Services’ EBITDA increased to $153.8 million, or 16.2% above the prior year quarter. The EBITDA margin improved to 33.8% versus 31.9% in the prior year quarter. The increase was driven by continued margin expansion within Default Services and the aforementioned non-account based revenue.
     Additional segment information is provided in the following table. Certain prior year numbers have been adjusted to reflect subsequent reclassifications between business units.

 


 

                         
Segment Revenues   4th Quarter     4th Quarter        
(amounts in millions)   2007     2006     % Chg.  
Transaction Processing Services:
                       
Integrated Financial Solutions
  $ 364.6     $ 283.3       28.7 %
Enterprise Solutions
    312.5       272.5       14.7 %
International
    199.8       141.0       41.7 %
Other
    (1.6 )     (2.1 )      
 
                 
 
  $ 875.3     $ 694.7       26.0 %
 
                 
Lender Processing Services:
                       
Mortgage Processing
  $ 100.5     $ 92.5       8.7 %
Information Services
    354.7       312.9       13.4 %
Other
    (0.4 )     10.0        
 
                 
 
  $ 454.8     $ 415.4       9.5 %
 
                 
 
                       
Corporate
  $ 0.3     $ (1.6 )      
 
                 
Total FIS
  $ 1,330.4     $ 1,108.5       20.0 %
 
                 
     Corporate expense, as adjusted, for the fourth quarter of 2007 totaled $31.1 million compared to $27.9 million in the fourth quarter of 2006. The increase is primarily attributable to the eFunds acquisition. The effective tax rate was 37.0%.
2008 Outlook
     FIS provided its outlook for 2008 as follows:
    Revenue growth of 14% to 16% (6% to 8% excluding eFunds);
 
    EBITDA growth of 15% to 17%;
 
    Adjusted earnings per diluted share of $2.15 to $2.25;
 
    Adjusted cash earnings per diluted share of $2.73 to $2.83 (including eFunds), compared to $2.44 in 2007. eFunds is expected to contribute approximately $0.05 to cash earnings per share;
 
    Capital expenditures of $280-$300 million;
 
    Total depreciation and amortization of approximately $530 million, including $180 million in pre-tax purchase amortization ($114 million after-tax);
 
    Free cash flow, which the Company defines as net earnings plus depreciation and amortization less capital expenditures, of $655-$695 million;

 


 

    Net interest expense of approximately $237 million;
 
    Corporate expense of approximately $130 million;
 
    Annual effective tax rate of 36.6%;
 
    Average diluted shares of 197.5 million.
     The Company’s 2008 guidance for corporate expense includes after-tax stock option expense of approximately $33.5 million, or $0.17 per diluted share. This compares to after-tax stock option expense of $23.2 million, or $0.12 per diluted share in 2007. The guidance excludes approximately $25 million in integration expense and approximately $25 million in integration capital associated with the eFunds acquisition. The guidance also excludes up-front costs associated with the spin-off of the Company’s Lender Processing Services division and incremental operating expenses for the proposed stand-alone entity.
     In the first quarter of 2008, the Company expects to achieve earnings per diluted share of $0.42 to $0.45 and cash earnings per diluted share of $0.57 to $0.60. This guidance excludes integration expense associated with the eFunds acquisition and up-front costs and incremental operating expenses associated with the spin-off of the Lender Processing Services division.
Use of Non-GAAP Financial Information
     FIS reports several non-GAAP measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”), net earnings plus depreciation and amortization less capital expenditures (“Free Cash Flow”) and net earnings plus tax-adjusted purchase price amortization (“Cash Earnings”). Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. A reconciliation of these non-GAAP measures to related GAAP measures is included in the appendices to this release.
Conference Call and Webcast
     FIS will host a call with investors and analysts to discuss fourth quarter and full year 2007 results on Thursday, February 14, 2008, beginning at 8:30 a.m. Eastern daylight time. Those wishing to participate via the webcast should access the call through FIS’ Investor Relations website at http://www.fidelityinfoservices.com. Those wishing to participate via the telephone may do so by calling 800-230-1085 (USA) or 612-332-0335 (International). The webcast replay will be available on FIS’ Investor Relations website. The telephone replay will be available through February 28, 2008, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 906729.

 


 

About Fidelity National Information Services
     Fidelity National Information Services, Inc. (NYSE:FIS) is a leading provider of core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage-related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top 10. Approximately 50 percent of all U.S. residential mortgages are processed using FIS software. FIS is a member of Standard and Poor’s (S&P) 500® Index and has been ranked the number one overall financial technology provider in the world by American Banker and the research firm Financial Insights in the annual FinTech 100 rankings. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 9,000 financial institutions in more than 80 countries worldwide. For more information on Fidelity National Information Services, please visit www.fidelityinfoservices.com.
Forward-Looking Statements
     This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: risks associated with the proposed spin-off of the Lender Processing Services (LPS) segment by FIS, including the ability of FIS to contribute certain LPS assets and liabilities to the entity to be spun off, the ability of LPS to obtain debt on acceptable terms and exchange that debt with certain holders of the FIS debt, obtaining government approvals, obtaining FIS Board of Directors approval, market conditions for the spin-off, and the risk that the spin-off will not be beneficial once accomplished, including as a result of unexpected dis-synergies resulting from the separation or unfavorable reaction from customers, rating agencies or other constituencies; changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage (both at FIS prior to the spin-off and at the separate companies after the spin-off), which may limit the funds available to make acquisitions and invest in our business; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in the banking, retail and financial services industries; failures to adapt our services to changes in technology or in the marketplace; adverse changes in the level of real estate activity, which would adversely affect certain of our businesses; our

 


 

potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; the possibility that our acquisition of EFD/eFunds may not be accretive to our earnings due to undisclosed liabilities, management or integration issues, loss of customers, the inability to achieve targeted cost savings, or other factors; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission.
FIS-e
SOURCE: Fidelity National Information Services, Inc.
CONTACT: Mary Waggoner, Senior Vice President, Investor Relations, 904-854-3282, mary.waggoner@fnis.com
###

 


 

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
                                 
    Three months ended December 31,     Twelve months ended December 31,  
    2007     2006     2007     2006  
Processing and services revenues
  $ 1,330,414     $ 1,108,522     $ 4,758,016     $ 4,042,163  
Cost of revenues
    931,788       802,786       3,401,931       2,875,250  
Selling, general, and administrative expenses
    140,208       118,968       504,130       498,246  
Research and development costs
    29,161       28,019       106,314       105,580  
 
                       
 
                               
Operating income
    229,257       158,749       745,641       563,087  
 
                               
Other income (expense) Interest income
    2,288       814       4,543       4,373  
Gain on sale of Covansys stock
                274,488        
Other income (expense)
    11,101       1,613       15,913       (69 )
Interest expense
    (68,886 )     (50,801 )     (228,340 )     (192,819 )
 
                       
Total other income (expense)
    (55,497 )     (48,374 )     66,604       (188,515 )
 
                       
 
                               
Earnings before income taxes, equity earnings and minority interest
    173,760       110,375       812,245       374,572  
Provision for income taxes
    64,290       40,966       300,530       139,232  
Equity in (losses) earnings of unconsolidated entities
    (330 )     2,014       936       5,792  
Minority interest expense
    729       225       2,192       185  
 
                       
 
                               
Net earnings from continuing operations
    108,411       71,198       510,459       240,947  
Earnings from discontinued operations, net of tax
          3,922       8,639       18,140  
Gain on disposition of discontinued operations, net of tax
                42,124        
 
                       
 
                               
Net earnings
  $ 108,411     $ 75,120     $ 561,222     $ 259,087  
 
                       
 
                               
Net earnings per share-basic from continuing operations
  $ 0.56     $ 0.37     $ 2.64     $ 1.29  
Net earnings per share-basic from discontined operations
  $     $ 0.02     $ 0.27     $ 0.10  
 
                       
Net earnings per share-basic
  $ 0.56     $ 0.39     $ 2.91     $ 1.39  
 
                       
 
                               
Weighted average shares outstanding-basic
    194,479       190,534       193,080       185,926  
 
                       
 
                               
Net earnings per share-diluted from continuing operations
  $ 0.55     $ 0.37     $ 2.60     $ 1.27  
Net earnings per share-diluted from discontinued operations
  $     $ 0.02     $ 0.26     $ 0.10  
 
                       
Net earnings per share-diluted
  $ 0.55     $ 0.39     $ 2.86     $ 1.37  
 
                       
 
                               
Weighted average shares outstanding-diluted
    196,741       194,521       196,546       189,196  
 
                       


 

Appendix A — Unaudited Historical Detail and Reconciliation of Non-GAAP Measures
(In thousands, except per share data)

EBITDA Detail

         
    2007 Q4  
Net Earnings from Continuing Operations
  $ 108,411  
+ Interest Expense
    68,886  
+ Minority Interest
    729  
+ Income Taxes
    64,290  
+ Depreciation
    30,175  
+ Purchase Price Amortization
    49,384  
+ Other Amortization
    58,344  
- Interest Income
    (2,288 )
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax
    330  
- Other (Income) Expense
    (11,101 )
 
     
EBITDA from Continuing Operations
  $ 367,160  
 
     
EBITDA Margin

         
    2007 Q4  
EBITDA from Continuing Operations
  $ 367,160  
Revenue from Continuing Operations
  $ 1,330,414  
EBITDA Margin
    27.6 %
EBIT Detail

         
    2007 Q4  
Net Earnings from Continuing Operations
  $ 108,411  
+ Interest Expense
    68,886  
+ Minority Interest
    729  
+ Income Taxes
    64,290  
- Interest Income
    (2,288 )
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax
    330  
- Other (Income) Expense
    (11,101 )
 
     
EBIT from Continuing Operations
  $ 229,257  
 
     
EBIT Margin

         
    2007 Q4  
EBIT from Continuing Operations
  $ 229,257  
Revenue from Continuing Operations
  $ 1,330,414  
EBIT Margin
    17.2 %
Cash Earnings

         
    2007 Q4  
Net Earnings
  $ 108,411  
+ Tax Adjusted Purchase Price Amortization
    31,112  
 
     
Cash Earnings
  $ 139,523  
 
     
 
       
Diluted Cash EPS
  $ 0.71  
Diluted Shares Outstanding
    196,741  
Free Cash Flow

         
    2007 Q4  
Net Earnings
  $ 108,411  
+ Depreciation/Amort from Continuing Operations
    137,903  
+ Depreciation/Amort from Discontinued Operations
     
- Capital Expenditures
    (98,628 )
 
     
Free Cash Flow
  $ 147,686  
 
     

         
    2007 Q4  
Stock Compensation
  $ 11,823  
EBITDA Detail

         
    2006 Q4  
Net Earnings from Continuing Operations
  $ 71,198  
+ Interest Expense
    50,801  
+ Minority Interest
    225  
+ Income Taxes
    40,966  
+ Depreciation
    26,685  
+ Purchase Price Amortization
    43,906  
+ Other Amortization
    44,412  
- Interest Income
    (814 )
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax
    (2,014 )
- Other (Income) Expense
    (1,613 )
 
     
EBITDA from Continuing Operations
  $ 273,752  
 
     
EBITDA Margin

         
    2006 Q4  
EBITDA from Continuing Operations
  $ 273,752  
Revenue from Continuing Operations
  $ 1,108,522  
EBITDA Margin
    24.7 %
EBIT Detail

         
    2006 Q4  
Net Earnings from Continuing Operations
  $ 71,198  
+ Interest Expense
    50,801  
+ Minority Interest
    225  
+ Income Taxes
    40,966  
- Interest Income
    (814 )
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax
    (2,014 )
- Other (Income) Expense
    (1,613 )
 
     
EBIT from Continuing Operations
  $ 158,749  
 
     
EBIT Margin

         
    2006 Q4  
EBIT from Continuing Operations
  $ 158,749  
Revenue from Continuing Operations
  $ 1,108,522  
EBIT Margin
    14.3 %
Cash Earnings

         
    2006 Q4  
Net Earnings
  $ 75,120  
+ Tax Adjusted Purchase Price Amortization
    27,601  
 
     
Cash Earnings
  $ 102,721  
 
     
 
       
Diluted Cash EPS
  $ 0.53  
Diluted Shares Outstanding
    194,521  
Free Cash Flow

         
    2006 Q4  
Net Earnings
  $ 75,120  
+ Depreciation/Amort from Continuing Operations
    115,003  
+ Depreciation/Amort from Discontinued Operations
    243  
- Capital Expenditures
    (83,663 )
 
     
Free Cash Flow
  $ 106,703  
 
     

         
    2006 Q4  
Stock Compensation
  $ 12,853  


 


 

Appendix A — Unaudited Historical Detail and Reconciliation of Non-GAAP Measures
(In thousands, except per share data)

         
    2007 Q4  
Financial Measures Excluding Non Recurring Items
 
       
EBITDA from Continuing Operations
  $ 367,160  
Merger and Acquisition, Restructuring and Integration Costs
    2,153  
 
     
EBITDA from Continuing Operations, excluding non recurring items
  $ 369,313  
 
     
 
       
Net Earnings
  $ 108,411  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    (6,245 )
 
     
Net Earnings , excluding non recurring items
  $ 102,166  
 
     
 
       
Diluted Shares Outstanding
    196,741  
 
       
Net Earnings per diluted share
  $ 0.55  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    (0.03 )
 
     
Net Earnings per diluted share, excluding non recurring items
  $ 0.52  
 
     
 
       
Cash Earnings
  $ 139,523  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    (6,245 )
 
     
Cash Earnings, excluding non recurring items
  $ 133,278  
 
     
 
       
Cash Earnings per diluted share
  $ 0.71  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    (0.03 )
 
     
Cash Earnings per diluted share, excluding non recurring items
  $ 0.68  
 
     
 
       
Free Cash Flow
  $ 147,686  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    (6,245 )
 
     
Free Cash Flow, excluding non recurring items
  $ 141,441  
 
     

         
    2006 Q4  
Financial Measures Excluding Non Recurring Items
 
       
EBITDA from Continuing Operations
  $ 273,752  
Merger and Acquisition, Restructuring and Integration Costs
    14,595  
 
     
EBITDA from Continuing Operations, excluding non recurring items
  $ 288,347  
 
     
 
       
Net Earnings
  $ 75,120  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    9,165  
 
     
Net Earnings , excluding non recurring items
  $ 84,285  
 
     
 
       
Diluted Shares Outstanding
    194,521  
 
       
Net Earnings per diluted share
  $ 0.39  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    0.04  
 
     
Net Earnings per diluted share, excluding non recurring items
  $ 0.43  
 
     
 
       
Cash Earnings
  $ 102,721  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    9,165  
 
     
Cash Earnings, excluding non recurring items
  $ 111,886  
 
     
 
       
Cash Earnings per diluted share
  $ 0.53  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    0.05  
 
     
Cash Earnings per diluted share, excluding non recurring items
  $ 0.58  
 
     
 
       
Free Cash Flow
  $ 106,703  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    9,165  
 
     
Free Cash Flow, excluding non recurring items
  $ 115,868  
 
     


 


 

Appendix A — Unaudited Historical Detail and Reconciliation of Non-GAAP Measures
(In thousands, except per share data)
EBITDA Detail
                                               
      2007 Year-to-date       2006 Year-to-date    
           
                FIS     CEY-Jan     ADJ     Pro Forma    
 
Net Earnings from Continuing Operations
  $ 510,459       $ 240,947     $ (42,523 )     (3,708 )   $ 194,716    
 
+ Interest Expense
    228,340         192,819       1,081             193,900    
 
+ Minority Interest
    2,192         185                   185    
 
+ Income Taxes
    300,530         139,232       (26,396 )     (2,626 )     110,210    
 
+ Depreciation
    114,965         96,513       1,633             98,146    
 
+ Purchase Price Amortization
    168,660         175,645       378       5,364       181,387    
 
+ Other Amortization
    212,563         160,197       2,263       1,492       163,952    
 
- Interest Income
    (4,543 )       (4,373 )                 (4,373 )  
 
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax
    (936 )       (5,792 )                 (5,792 )  
 
- Other (Income) Expense
    (15,913 )       69       123             192    
 
- Covansys Gain
    (274,488 )                            
                   
 
EBITDA from Continuing Operations
  $ 1,241,829       $ 995,442     $ (63,441 )   $ 522     $ 932,523    
                   
 
 
                                           
           
EBITDA Margin
                                               
      2007 Year-to-date       2006 Year-to-date    
           
                FIS     CEY-Jan     ADJ     Pro Forma    
 
EBITDA from Continuing Operations
  $ 1,241,829       $ 995,442     $ (63,441 )   $ 522     $ 932,523    
 
Revenue from Continuing Operations
  $ 4,758,016       $ 4,042,163     $ 92,915     $     $ 4,135,078    
 
EBITDA Margin
    26.1 %       24.6 %                     22.6 %  
           
EBIT Detail
                                               
      2007 Year-to-date       2006 Year-to-date    
           
                FIS     CEY-Jan     ADJ     Pro Forma    
 
Net Earnings from Continuing Operations
  $ 510,459       $ 240,947     $ (42,523 )   $ (3,708 )   $ 194,716    
 
+ Interest Expense
    228,340         192,819       1,081             193,900    
 
+ Minority Interest
    2,192         185                   185    
 
+ Income Taxes
    300,530         139,232       (26,396 )     (2,626 )     110,210    
 
- Interest Income
    (4,543 )       (4,373 )                 (4,373 )  
 
- Equity in (Earnings) Losses of Unconsolidated Entities, net of tax
    (936 )       (5,792 )                 (5,792 )  
 
- Other (Income) Expense
    (15,913 )       69       123             192    
 
- Covansys Gain
    (274,488 )                            
                   
 
EBIT from Continuing Operations
  $ 745,641       $ 563,087     $ (67,715 )   $ (6,334 )   $ 489,038    
                   
 
 
                                           
           
EBIT Margin
                                               
      2007 Year-to-date       2006 Year-to-date    
           
                FIS     CEY-Jan     ADJ     Pro Forma    
 
EBIT from Continuing Operations
  $ 745,641       $ 563,087     $ (67,715 )   $ (6,334 )   $ 489,038    
 
Revenue from Continuing Operations
  $ 4,758,016       $ 4,042,163     $ 92,915     $     $ 4,135,078    
 
EBIT Margin
    15.7 %       13.9 %                     11.8 %  
           
Cash Earnings
                                               
      2007 Year-to-date       2006 Year-to-date    
           
                FIS     CEY-Jan     ADJ     Pro Forma    
 
Net Earnings
  $ 561,222       $ 259,087     $ (42,523 )   $ (3,708 )   $ 212,856    
 
+ Tax Adjusted Purchase Price Amortization
    106,203         109,467       233       3,524       113,224    
                   
 
Cash Earnings
  $ 667,425       $ 368,554     $ (42,290 )   $ (184 )   $ 326,080    
                   
 
 
                                           
 
Diluted Cash EPS
  $ 3.40       $ 1.95                     $ 1.68    
 
Diluted Shares Outstanding
    196,546         189,196                       194,653    
           
Free Cash Flow
                                               
      2007 Year-to-date       2006 Year-to-date    
           
                FIS     CEY-Jan     ADJ     Pro Forma    
 
Net Earnings
  $ 561,222       $ 259,087     $ (42,523 )   $ (3,708 )   $ 212,856    
 
+ Depreciation/Amort from Continuing Operations
    496,188         432,355       4,274       6,856       443,485    
 
+ Depreciation/Amort from Discontinued Operations
    658         1,195                   1,195    
 
- Capital Expenditures
    (343,299 )       (300,197 )     (5,200 )           (305,397 )  
                   
 
Free Cash Flow
  $ 714,769       $ 392,440     $ (43,449 )   $ 3,148     $ 352,139    
                   
 
 
                                           
           
                                               
      2007 Year-to-date       2006 Year-to-date    
           
                FIS     CEY-Jan     ADJ     Pro Forma    
 
Net Earnings from Continuing Operations
  $ 38,953       $ 50,074     $ 552 )     (552 )   $ 50,074    
           

 


 

Appendix A — Unaudited Historical Detail and Reconciliation of Non-GAAP Measures
(In thousands, except per share data)
Financial Measures Excluding Non Recurring Items

         
    2007 Year-to-date  
         
EBITDA from Continuing Operations
  $ 1,241,829  
Merger and Acquisition, Restructuring and Integration Costs
    14,157  
Performance Based Stock Option Costs
     
 
     
EBITDA from Continuing Operations, excluding non recurring items
  $ 1,255,986  
 
     
 
       
Net Earnings
  $ 561,222  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    8,761  
Covansys Gain, net of tax
    (172,927 )
Gain on Property Insight, net of tax
    (42,124 )
Debt Restructure Charge, net of tax
    17,059  
Performance Based Stock Option Costs, net of tax
     
 
     
Net Earnings , excluding non recurring items
  $ 371,991  
 
     
 
       
Diluted Shares Outstanding
    196,546  
 
       
Net Earnings per diluted share
  $ 2.86  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    0.04  
Covansys Gain, net of tax
    (0.88 )
Gain on Property Insight, net of tax
    (0.21 )
Debt Restructure Charge, net of tax
    0.09  
Performance Based Stock Option Costs, net of tax
     
 
     
Net Earnings per diluted share, excluding non recurring items
  $ 1.90  
 
     
 
       
Cash Earnings
  $ 667,425  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    8,761  
Covansys Gain, net of tax
    (172,927 )
Gain on Property Insight, net of tax
    (42,124 )
Debt Restructure Charge, net of tax
    17,059  
Performance Based Stock Option Costs, net of tax
     
 
     
Cash Earnings, excluding non recurring items
  $ 478,194  
 
     
 
       
Cash Earnings per diluted share
  $ 3.40  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    0.04  
Covansys Gain, net of tax
    (0.88 )
Gain on Property Insight, net of tax
    (0.21 )
Debt Restructure Charge, net of tax
    0.09  
Performance Based Stock Option Costs, net of tax
     
 
     
Cash Earnings per diluted share, excluding non recurring items
  $ 2.44  
 
     
 
       
Free Cash Flow
  $ 714,769  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    (5,707 )
Covansys Gain, net of tax
    (172,927 )
Gain on Property Insight, net of tax
    (42,124 )
Debt Restructure Charge, net of tax
    17,059  
Performance Based Stock Option Costs, net of tax
     
 
     
Free Cash Flow, excluding non recurring items
  $ 511,070  
 
     
 
       

         
    2006 Year-to-date  
    Pro Forma  
EBITDA from Continuing Operations
  $ 932,523  
Merger and Acquisition, Restructuring and Integration Costs
    108,945  
Performance Based Stock Option Costs
    24,130  
 
     
EBITDA from Continuing Operations, excluding non recurring items
  $ 1,065,598  
 
     
 
       
Net Earnings
  $ 212,856  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    67,654  
Covansys Gain, net of tax
     
Gain on Property Insight, net of tax
     
Debt Restructure Charge, net of tax
     
Performance Based Stock Option Costs, net of tax
    14,888  
 
     
Net Earnings , excluding non recurring items
  $ 295,398  
 
     
 
       
Diluted Shares Outstanding
    194,653  
 
       
Net Earnings per diluted share
  $ 1.09  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    0.35  
Covansys Gain, net of tax
     
Gain on Property Insight, net of tax
     
Debt Restructure Charge, net of tax
     
Performance Based Stock Option Costs, net of tax
    0.08  
 
     
Net Earnings per diluted share, excluding non recurring items
  $ 1.52  
 
     
 
       
Cash Earnings
  $ 326,080  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    67,654  
Covansys Gain, net of tax
     
Gain on Property Insight, net of tax
     
Debt Restructure Charge, net of tax
     
Performance Based Stock Option Costs, net of tax
    14,888  
 
     
Cash Earnings, excluding non recurring items
  $ 408,622  
 
     
 
       
Cash Earnings per diluted share
  $ 1.68  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    0.35  
Covansys Gain, net of tax
     
Gain on Property Insight, net of tax
     
Debt Restructure Charge, net of tax
     
Performance Based Stock Option Costs, net of tax
    0.08  
 
     
Cash Earnings per diluted share, excluding non recurring items
  $ 2.10  
 
     
 
       
Free Cash Flow
  $ 352,139  
Merger and Acquisition, Restructuring and Integration Costs, net of tax
    67,654  
Covansys Gain, net of tax
     
Gain on Property Insight, net of tax
     
Debt Restructure Charge, net of tax
     
Performance Based Stock Option Costs, net of tax
    14,888  
 
     
Free Cash Flow, excluding non recurring items
  $ 434,681  
 
     
 
       


 


 

Appendix B
Unaudited Historical Segment Information from Continuing Operations
For the Three Months Ended December 31, 2007 and 2006
(In thousands)
2007 — Quarter 4
                                 
    Historical  
    Transaction     Lender     Corporate        
    Processing Services     Processing Services     and Other     Total  
Processing and services revenue
    875,267       454,806       341       1,330,414  
Cost of revenues
    658,550       273,238             931,788  
 
                       
Gross profit
    216,717       181,568       341       398,626  
Selling, general and admin costs
    55,774       50,803       33,631       140,208  
Research development costs
    20,376       8,785             29,161  
 
                       
Operating income
    140,567       121,980       (33,290 )     229,257  
 
                               
Depreciation and amortization
    102,451       31,853       3,599       137,903  
 
                       
EBITDA
    243,018       153,833       (29,691 )     367,160  
 
                       
 
                               
EBITDA
    243,018       153,833       (29,691 )     367,160  
Merger and Acquisition costs
                2,153       2,153  
Acceleration of performance based options
                       
 
                       
EBITDA, excluding selected items
    243,018       153,833       (27,538 )     369,313  
2006 — Quarter 4
                                 
    Historical  
    Transaction     Lender     Corporate        
    Processing Services     Processing Services     and Other     Total  
Processing and services revenue
    694,748       415,404       (1,630 )     1,108,522  
Cost of revenues
    537,295       265,491             802,786  
 
                       
Gross profit
    157,453       149,913       (1,630 )     305,736  
Selling, general and admin costs
    40,765       43,701       34,502       118,968  
Research development costs
    18,696       9,323             28,019  
 
                       
Operating income
    97,992       96,889       (36,132 )     158,749  
 
                               
Depreciation and amortization
    75,696       34,690       4,617       115,003  
 
                       
EBITDA
    173,688       131,579       (31,515 )     273,752  
 
                       
 
                               
EBITDA
    173,688       131,579       (31,515 )     273,752  
Merger and Acquisition costs
    5,547       804       8,244       14,595  
Acceleration of performance based options
                       
 
                       
EBITDA, excluding selected items
    179,235       132,383       (23,271 )     288,347  

 


 

Appendix B
Unaudited Historical Segment Information from Continuing Operations
For the Twelve Months Ended December 31, 2007 and 2006
(In thousands)
2007 — Year-to-date
                                 
    Historical  
    Transaction     Lender     Corporate        
    Processing Services     Processing Services     and Other     Total  
Processing and services revenue
    2,985,077       1,761,102       11,837       4,758,016  
Cost of revenues
    2,308,728       1,093,203             3,401,931  
 
                       
Gross profit
    676,349       667,899       11,837       1,356,085  
Selling, general and admin costs
    191,440       188,902       123,788       504,130  
Research development costs
    70,378       35,936             106,314  
 
                       
Operating income
    414,531       443,061       (111,951 )     745,641  
 
                               
Depreciation and amortization
    342,766       131,319       22,103       496,188  
 
                       
EBITDA
    757,297       574,380       (89,848 )     1,241,829  
 
                       
 
                               
EBITDA
    757,297       574,380       (89,848 )     1,241,829  
Merger and Acquisition costs
    4,614       6,787       2,756       14,157  
 
                       
EBITDA, excluding selected items
    761,911       581,167       (87,092 )     1,255,986  
2006 — Year-to-date
                                 
    Historical  
    Transaction     Lender     Corporate        
    Processing Services     Processing Services     and Other     Total  
Processing and services revenue
    2,458,776       1,584,170       (783 )     4,042,163  
Cost of revenues
    1,914,148       961,102             2,875,250  
 
                       
Gross profit
    544,628       623,068       (783 )     1,166,913  
Selling, general and admin costs
    171,105       197,419       129,722       498,246  
Research development costs
    70,879       34,701             105,580  
 
                       
Operating income
    302,644       390,948       (130,505 )     563,087  
 
                               
Depreciation and amortization
    283,354       138,620       10,381       432,355  
 
                       
EBITDA
    585,998       529,568       (120,124 )     995,442  
 
                       
 
                               
EBITDA
    585,998       529,568       (120,124 )     995,442  
Merger and Acquisition costs
    13,398       4,153       91,394       108,945  
Acceleration of performance based options
                24,130       24,130  
 
                       
EBITDA, excluding selected items
    599,396       533,721       (4,600 )     1,128,517  

 


 

Appendix B

Unaudited Pro Forma Segment Information from Continuing Operations
For the Twelve Months Ended December 31, 2006
(In thousands)
2006 — Year-to-date
                                 
    Pro Forma  
    Transaction     Lender     Corporate        
    Processing Services     Processing Services     and Other     Total  
Processing and services revenue
    2,549,741       1,584,170       1,169       4,135,080  
Cost of revenues
    1,994,223       961,102             2,955,325  
 
                       
Gross profit
    555,518       623,068       1,169       1,179,755  
Selling, general and admin costs
    175,516       197,419       212,202       585,137  
Research development costs
    70,879       34,701             105,580  
 
                       
Operating income
    309,123       390,948       (211,033 )     489,038  
 
                               
Depreciation and amortization
    294,394       138,620       10,471       443,485  
 
                       
EBITDA
    603,517       529,568       (200,562 )     932,523  
 
                       
 
                               
EBITDA
    603,517       529,568       (200,562 )     932,523  
Merger and Acquisition costs
    13,398       4,153       91,394       108,945  
Acceleration of performance based options
                24,130       24,130  
 
                       
EBITDA, excluding selected items
    616,915       533,721       (85,038 )     1,065,598