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 26, 2006
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 5.02. Election of Directors | ||||||||
Item 9.01. Financial Statements and Exhibits | ||||||||
SIGNATURE | ||||||||
EXHIBIT INDEX | ||||||||
EXHIBIT 99.1 |
Item 2.02. Results of Operations and Financial Condition
On April 26, 2006, Fidelity National Information Services, Inc. issued an earnings release announcing its financial results for the First Quarter of 2006. The information in this Current Report is 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 in 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 5.02. Election of Directors
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
Exhibit |
Description |
|
99.1 |
Press release announcing Fidelity National Information Services, Inc. Reports First Quarter 2006 Earnings. |
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: May 2, 2006 | 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 2006 Earnings. |
GAAP | 1st Quarter 2006 | 1st Quarter 2005 | ||
Total revenue |
$900.9 million | $651.6 million | ||
Net Earnings |
$39.4 million | $44.6 million | ||
Net Earnings Per Diluted Share |
$0.23 | $0.35 |
Pro Forma (see Appendix) | 1st Quarter 2006 | 1st Quarter 2005 | % Chg | |||||
Total Revenue |
$993.9 million | $914.0 million | 8.7 | % | ||||
EBITDA |
$244.6 million | $214.2 million | 14.2 | % | ||||
Pro Forma Net Earnings |
$58.6 million | $41.1 million | 42.6 | % | ||||
Pro Forma Net Earnings Per
Diluted Share |
$0.30 | $0.22 | 36.4 | % | ||||
Cash Earnings |
$86.9 million | $74.3 million | 16.9 | % | ||||
Cash Earnings Per Diluted Share |
$0.45 | $0.39 | 15.4 | % |
| Revenue growth of 4% to 6% over $3.9 billion combined revenue in 2005. | ||
| EBITDA growth of 9% to 11% over $1.0 billion pro forma combined EBITDA in 2005. | ||
| Pro forma full year 2006 earnings per diluted share of $1.50 to $1.55, compared to $1.28 pro forma earnings per diluted share in 2005. | ||
| Pro forma cash earnings per diluted share of $2.11 to $2.17 compared to $1.92 pro forma cash earnings per diluted share in 2005. | ||
| Free cash flow of approximately $475 million to $525 million. |
Three months ended March 31, | ||||||||
2006 | 2005 | |||||||
Processing and services revenues |
$ | 900,936 | $ | 651,580 | ||||
Cost of revenues |
622,337 | 430,075 | ||||||
Selling, general, and administrative expenses |
145,729 | 110,556 | ||||||
Research and development costs |
28,060 | 23,936 | ||||||
Operating income |
104,810 | 87,013 | ||||||
Other income (expense) |
||||||||
Interest income |
1,891 | 2,762 | ||||||
Realized gains and losses |
(2,110 | ) | (3,297 | ) | ||||
Interest expense |
(43,268 | ) | (13,421 | ) | ||||
Total other income (expense) |
(43,487 | ) | (13,956 | ) | ||||
Earnings before income taxes, equity earnings and minority interest |
61,323 | 73,057 | ||||||
Income tax expense |
23,487 | 28,054 | ||||||
Equity in earnings of unconsolidated entities |
1,833 | 1,238 | ||||||
Minority interest |
311 | 1,645 | ||||||
Net earnings |
$ | 39,358 | $ | 44,596 | ||||
Net earnings per share-basic |
$ | 0.23 | $ | 0.35 | ||||
Weighted average shares outstanding-basic |
169,989 | 127,920 | ||||||
Net earnings per share-diluted |
$ | 0.23 | $ | 0.35 | ||||
Weighted average shares outstanding-diluted |
172,987 | 127,920 | ||||||
NOTE: | The Adjustments Column represents pro forma adjustments relating to the merger transaction between CEY and FIS, the recapitalization transaction at FIS in March 2005, and the purchase of the remaining minority interest in Kordoba in September 2005 to reflect such transactions as if they occurred January 1, 2005 |
2006 Q1 | FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 39,358 | $ | (42,523 | ) | (3,708 | ) | $ | (6,873 | ) | ||||||
+ Interest Expense |
43,268 | 1,081 | | 44,349 | ||||||||||||
+ Minority Interest |
311 | | | 311 | ||||||||||||
+ Income Taxes |
23,487 | (26,396 | ) | (2,626 | ) | (5,535 | ) | |||||||||
+ Depreciation/Amort |
96,795 | 4,274 | 6,856 | 107,925 | ||||||||||||
- Interest Income |
(1,891 | ) | | | (1,891 | ) | ||||||||||
- Equity in (Earnings) Loss of Unconsolidated Entities, net of tax |
(1,833 | ) | | (1,833 | ) | |||||||||||
- Other (Income) Expense |
2,110 | 123 | 2,233 | |||||||||||||
EBITDA |
$ | 201,605 | $ | (63,441 | ) | $ | 522 | $ | 138,686 | |||||||
2006 Q1 | FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||
EBITDA |
$ | 201,605 | $ | (63,441 | ) | $ | 522 | $ | 138,686 | |||||||
Revenue |
$ | 900,936 | $ | 92,915 | $ | | $ | 993,851 | ||||||||
EBITDA Margin |
22.4 | % | -68.3 | % | 14.0 | % |
2006 Q1 | FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 39,358 | $ | (42,523 | ) | $ | (3,708 | ) | $ | (6,873 | ) | |||||
+ Interest Expense |
43,268 | 1,081 | | 44,349 | ||||||||||||
+ Minority Interest |
311 | | | 311 | ||||||||||||
+ Income Taxes |
23,487 | (26,396 | ) | (2,626 | ) | (5,535 | ) | |||||||||
- Interest Income |
(1,891 | ) | | | (1,891 | ) | ||||||||||
- Equity in (Earnings) Loss of Unconsolidated Entities, net of tax |
(1,833 | ) | | | (1,833 | ) | ||||||||||
- Other (Income) Expense |
2,110 | 123 | | 2,233 | ||||||||||||
EBIT |
$ | 104,810 | $ | (67,715 | ) | $ | (6,334 | ) | $ | 30,761 | ||||||
2006 Q1 | FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||
EBIT |
$ | 104,810 | $ | (67,715 | ) | $ | (6,334 | ) | $ | 30,761 | ||||||
Revenue |
$ | 900,936 | $ | 92,915 | $ | | $ | 993,851 | ||||||||
EBIT Margin |
11.6 | % | -72.9 | % | 3.1 | % |
2006 Q1 | FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 39,358 | $ | (42,523 | ) | $ | (3,708 | ) | $ | (6,873 | ) | |||||
Adjusted EPS |
$ | 0.23 | $ | (0.04 | ) | |||||||||||
Diluted Shares Outstanding |
172,987 | 195,111 |
2006 Q1 | FIS | CEY-Jan | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 39,358 | $ | (42,523 | ) | $ | (3,708 | ) | $ | (6,873 | ) | |||||
+ Tax Adjusted Purchase Price Amortization |
24,520 | 233 | 3,524 | 28,277 | ||||||||||||
Cash Earnings |
$ | 63,878 | $ | (42,290 | ) | $ | (184 | ) | $ | 21,404 | ||||||
Diluted Cash EPS |
$ | 0.37 | $ | 0.11 | ||||||||||||
Diluted Shares Outstanding |
172,987 | 195,111 |
2006 Q1 | FIS | CEY-Jan | ADJ | Pro Forma | |||||||||||||||
Net Earnings |
$ | 39,358 | $ | (42,523 | ) | $ | (3,708 | ) | $ | (6,873 | ) | ||||||||
+ Depreciation/Amort |
96,795 | 4,274 | 6,856 | 107,925 | |||||||||||||||
- Capital Expenditures |
(69,264 | ) | (5,200 | ) | | (74,464 | ) | ||||||||||||
Free Cash Flow |
$ | 66,889 | $ | (43,449 | ) | $ | 3,148 | $ | 26,588 |
2005 Q1 | FIS | CEY | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 44,596 | $ | 21,155 | $ | (24,665 | ) | $ | 41,086 | |||||||
+ Interest Expense |
13,421 | 3,305 | 21,031 | 37,757 | ||||||||||||
+ Minority Interest |
1,645 | | (640 | ) | 1,005 | |||||||||||
+ Income Taxes |
28,054 | 12,757 | (14,992 | ) | 25,819 | |||||||||||
+ Depreciation/Amort |
75,740 | 12,529 | 21,133 | 109,402 | ||||||||||||
- Interest Income |
(2,762 | ) | | | (2,762 | ) | ||||||||||
- Equity in (Earnings) Loss of Non-Consolidated Entities, net of tax |
(1,238 | ) | | | (1,238 | ) | ||||||||||
- Other (Income) Expense |
3,297 | (165 | ) | | 3,132 | |||||||||||
EBITDA |
$ | 162,753 | $ | 49,581 | $ | 1,867 | $ | 214,201 | ||||||||
2005 Q1 | FIS | CEY | ADJ | Pro Forma | ||||||||||||
EBITDA |
$ | 162,753 | $ | 49,581 | $ | 1,867 | $ | 214,201 | ||||||||
Revenue |
$ | 651,580 | $ | 262,458 | $ | | $ | 914,038 | ||||||||
EBITDA Margin |
25.0 | % | 18.9 | % | 23.4 | % |
2005 Q1 | FIS | CEY | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 44,596 | $ | 21,155 | $ | (24,665 | ) | $ | 41,086 | |||||||
+ Interest Expense |
13,421 | 3,305 | 21,031 | 37,757 | ||||||||||||
+ Minority Interest |
1,645 | | (640 | ) | 1,005 | |||||||||||
+ Income Taxes |
28,054 | 12,757 | (14,992 | ) | 25,819 | |||||||||||
- Interest Income |
(2,762 | ) | | | (2,762 | ) | ||||||||||
- Equity in (Earnings) Loss of Non-Consolidated Entities, net of tax |
(1,238 | ) | | | (1,238 | ) | ||||||||||
- Other (Income) Expense |
3,297 | (165 | ) | | 3,132 | |||||||||||
EBIT |
$ | 87,013 | $ | 37,052 | $ | (19,266 | ) | $ | 104,799 | |||||||
2005 Q1 | FIS | CEY | ADJ | Pro Forma | ||||||||||||
EBIT |
$ | 87,013 | $ | 37,052 | $ | (19,266 | ) | $ | 104,799 | |||||||
Revenue |
$ | 651,580 | $ | 262,458 | $ | | $ | 914,038 | ||||||||
EBIT Margin |
13.4 | % | 14.1 | % | 11.5 | % |
2005 Q1 | FIS | CEY | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 44,596 | $ | 21,155 | $ | (24,665 | ) | $ | 41,086 | |||||||
Adjusted EPS |
$ | 0.35 | $ | 0.22 | ||||||||||||
Diluted Shares Outstanding |
127,920 | 190,779 |
2005 Q1 | FIS | CEY | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 44,596 | $ | 21,155 | $ | (24,665 | ) | $ | 41,086 | |||||||
+ Tax Adjusted Purchase Price Amortization |
21,970 | 681 | 10,607 | 33,258 | ||||||||||||
Cash Earnings |
$ | 66,566 | $ | 21,836 | $ | (14,058 | ) | $ | 74,344 | |||||||
Diluted Cash EPS |
$ | 0.52 | $ | 0.39 | ||||||||||||
Diluted Shares Outstanding |
127,920 | | | 190,779 |
2005 Q1 | FIS | CEY | ADJ | Pro Forma | ||||||||||||
Net Earnings |
$ | 44,596 | $ | 21,155 | $ | (24,665 | ) | $ | 41,086 | |||||||
+ Depreciation/Amort |
75,740 | 12,529 | 21,133 | 109,402 | ||||||||||||
- Capital Expenditures |
(42,012 | ) | (12,037 | ) | | (54,049 | ) | |||||||||
Free Cash Flow |
$ | 78,324 | $ | 21,647 | $ | (3,532 | ) | $ | 96,439 |
Pro Forma EBITDA |
$ | 138,686 | ||
Merger and Acquisition Costs |
81,751 | |||
Performance Based Stock Option Costs |
24,130 | |||
Pro Forma EBITDA, excluding selected items |
$ | 244,567 | ||
Pro Forma Net Earnings |
(6,873 | ) | ||
Merger and Acquisition Costs, net of tax |
50,609 | |||
Performance Based Stock Option Costs, net of tax |
14,888 | |||
Pro Forma Net Earnings, excluding selected items |
$ | 58,624 | ||
Weighted Average Shares |
172,987 | |||
Adjustment as if transaction took place 1/1/2005 |
22,124 | |||
Pro Forma Weighted Average Shares |
195,111 | |||
Pro Forma Net Earnings per diluted share |
$ | (0.04 | ) | |
Merger and Acquisition Costs per share |
0.26 | |||
Performance Based Stock Option Costs per share |
0.08 | |||
Pro Forma Net Earnings per diluted share, excluding selected items |
$ | 0.30 | ||
Pro Forma Cash Earnings |
21,404 | |||
Merger and Acquisition Costs, net of tax |
50,609 | |||
Performance Based Stock Option Costs, net of tax |
14,888 | |||
Pro Forma Cash Earnings, excluding selected items |
$ | 86,901 | ||
Pro Forma Weighted Average Shares |
195,111 | |||
Pro Forma Cash Earnings per diluted share |
$ | 0.11 | ||
Merger and Acquisition Costs per share |
0.26 | |||
Performance Based Stock Option Costs per share |
0.08 | |||
Pro Forma Cash Earnings per diluted share, excluding selected items |
$ | 0.45 | ||
Pro Forma Free Cash Flow |
$ | 26,588 | ||
Merger and Acquisition Costs, net of tax |
50,609 | |||
Performance Based Stock Option Costs, net of tax |
14,888 | |||
Pro Forma Free Cash Flow, excluding selected items |
$ | 92,085 | ||
Pro Forma | Purchase Price | Cash | ||||||||||||||||||||||||||||||
Certegy-Jan | FIS | Adjustments | Note | Pro Forma | Amortization | Earnings | ||||||||||||||||||||||||||
Total revenue |
$ | 92,915 | $ | 900,936 | $ | 993,851 | ||||||||||||||||||||||||||
Total cost of revenue |
73,218 | 622,337 | 6,856 | (1 | ) | 702,411 | ||||||||||||||||||||||||||
Gross profit (loss) |
19,697 | 278,599 | (6,856 | ) | 291,440 | |||||||||||||||||||||||||||
General and administrative |
7,645 | 143,745 | (522 | ) | (2 | ) | 150,868 | |||||||||||||||||||||||||
Research and development costs |
| 28,060 | 28,060 | |||||||||||||||||||||||||||||
Merger and Acquisition costs |
79,767 | 1,984 | 81,751 | |||||||||||||||||||||||||||||
Income (loss) from operations |
(67,715 | ) | 104,810 | (6,334 | ) | 30,761 | ||||||||||||||||||||||||||
Interest income (expense) and other |
(1,204 | ) | (43,487 | ) | | (44,691 | ) | |||||||||||||||||||||||||
Income from continuing operations before tax and min. int |
(68,919 | ) | 61,323 | (6,334 | ) | (13,930 | ) | |||||||||||||||||||||||||
Provision for income tax |
(26,396 | ) | 23,487 | (2,626 | ) | (4 | ) | (5,535 | ) | |||||||||||||||||||||||
Income from continuing operations |
(42,523 | ) | 37,836 | (3,708 | ) | (8,395 | ) | |||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, net |
| 1,833 | | 1,833 | ||||||||||||||||||||||||||||
Minority interests in earnings, net of tax |
| (311 | ) | | (311 | ) | ||||||||||||||||||||||||||
Net income |
$ | (42,523 | ) | $ | 39,358 | $ | (3,708 | ) | $ | (6,873 | ) | $ | 28,277 | $ | 21,404 | |||||||||||||||||
Net income per share-basic |
$ | (0.68 | ) | $ | 0.23 | $ | (0.04 | ) | $ | 0.11 | ||||||||||||||||||||||
Pro forma Weighted average shares-basic |
62,326 | 169,989 | 191,809 | 191,809 | ||||||||||||||||||||||||||||
Net income per share-diluted |
$ | (0.67 | ) | $ | 0.23 | $ | (0.04 | ) | $ | 0.11 | ||||||||||||||||||||||
Pro forma Weighted average shares-diluted |
63,796 | 172,987 | 195,111 | 195,111 | ||||||||||||||||||||||||||||
Pro Forma Net Earnings |
$ | (6,873 | ) | |||||||||||||||||||||||||||||
Merger and Acquisition Costs, net of tax |
50,609 | |||||||||||||||||||||||||||||||
Performance Based Stock Option Costs, net of tax |
14,888 | |||||||||||||||||||||||||||||||
Pro Forma Net Earnings, excluding selected items |
$ | 58,623 |
Tax Adjusted | ||||||||||||||||||||||||||||||||||||||||||||
Pro Forma | Recapitalization | 2005 FIS | Pro Forma, | Purchase Price | ||||||||||||||||||||||||||||||||||||||||
Certegy | FIS | Adjustments | Note | Pro Forma | Adjustments | Acquisitions | Note | as adjusted | Amortization | Cash Earnings | ||||||||||||||||||||||||||||||||||
Total revenue |
$ | 262,458 | $ | 651,580 | $ | 914,038 | $ | 914,038 | ||||||||||||||||||||||||||||||||||||
Total cost of revenue |
190,292 | 430,075 | 20,569 | (1 | ) | 640,678 | 564 | (6 | ) | 641,242 | ||||||||||||||||||||||||||||||||||
(258 | ) | (2 | ) | |||||||||||||||||||||||||||||||||||||||||
Gross profit (loss) |
72,166 | 221,505 | (20,311 | ) | 273,360 | | (564 | ) | 272,796 | |||||||||||||||||||||||||||||||||||
General and administrative |
34,814 | 110,556 | (1,309 | ) | (2 | ) | 144,061 | 144,061 | ||||||||||||||||||||||||||||||||||||
Research and development costs |
| 23,936 | 23,936 | | 23,936 | |||||||||||||||||||||||||||||||||||||||
Merger and Acquisition costs |
300 | | (300 | ) | (3 | ) | | | | |||||||||||||||||||||||||||||||||||
Income (loss) from operations |
37,052 | 87,013 | (18,702 | ) | 105,363 | | (564 | ) | 104,799 | |||||||||||||||||||||||||||||||||||
Interest income (expense) and other |
(3,140 | ) | (13,956 | ) | | (17,096 | ) | (21,031 | ) (5) | (38,127 | ) | |||||||||||||||||||||||||||||||||
Income from continuing operations before tax and min. int |
33,912 | 73,057 | (18,702 | ) | 88,267 | (21,031 | ) | (564 | ) | 66,672 | ||||||||||||||||||||||||||||||||||
Provision for income tax |
12,757 | 28,054 | (6,958 | ) | (4 | ) | 33,853 | (7,824 | ) | (210 | ) | 25,819 | ||||||||||||||||||||||||||||||||
Income from continuing operations |
21,155 | 45,003 | (11,744 | ) | 54,414 | (13,207 | ) | (354 | ) | 40,853 | ||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, net |
| 1,238 | | 1,238 | | | 1,238 | |||||||||||||||||||||||||||||||||||||
Minority interests in earnings, net of tax |
| (1,645 | ) | | (1,645 | ) | 640 | (1,005 | ) | |||||||||||||||||||||||||||||||||||
Net income |
$ | 21,155 | $ | 44,596 | $ | (11,744 | ) | $ | 54,007 | $ | (13,207 | ) | $ | 286 | $ | 41,086 | $ | 33,258 | $ | 74,344 | ||||||||||||||||||||||||
Net income per share-basic |
$ | 0.34 | $ | 0.35 | $ | 0.28 | $ | 0.22 | $ | 0.39 | ||||||||||||||||||||||||||||||||||
Pro forma Weighted average shares-basic |
61,794 | 127,920 | 189,714 | 189,714 | 189,714 | |||||||||||||||||||||||||||||||||||||||
Net income per share-diluted |
$ | 0.34 | $ | 0.35 | $ | 0.28 | $ | 0.22 | $ | 0.39 | ||||||||||||||||||||||||||||||||||
Pro forma Weighted average shares-diluted |
62,859 | 127,920 | 190,779 | 190,779 | 190,779 | |||||||||||||||||||||||||||||||||||||||
Tax Adjusted | ||||||||||||||||||||||||||||||||||||||||||||
Pro Forma | Recapitalization | 2005 FIS | Pro Forma, | Purchase Price | ||||||||||||||||||||||||||||||||||||||||
Certegy | FIS | Adjustments | Note | Pro Forma | Adjustments | Acquisitions | Note | as adjusted | Amortization | Cash Earnings | ||||||||||||||||||||||||||||||||||
Total revenue |
$ | 276,023 | $ | 708,713 | $ | | $ | 984,736 | $ | | $ | 984,736 | ||||||||||||||||||||||||||||||||
Total cost of revenue |
196,466 | 453,504 | 20,570 | (1 | ) | 670,278 | | 563 | (6 | ) | 670,841 | |||||||||||||||||||||||||||||||||
| | (262 | ) | (2 | ) | |||||||||||||||||||||||||||||||||||||||
Gross profit (loss) |
79,557 | 255,209 | (20,308 | ) | 314,458 | | (563 | ) | 313,895 | |||||||||||||||||||||||||||||||||||
General and administrative |
35,188 | 109,318 | (1,310 | ) | (2 | ) | 143,196 | | 143,196 | |||||||||||||||||||||||||||||||||||
Research and development costs |
| 28,303 | 28,303 | | 28,303 | |||||||||||||||||||||||||||||||||||||||
Merger and Acquisition Costs |
992 | | (992 | ) | (3 | ) | | | | | ||||||||||||||||||||||||||||||||||
Income (loss) from operations |
43,377 | 117,588 | (18,006 | ) | 142,959 | | (563 | ) | 142,396 | |||||||||||||||||||||||||||||||||||
Interest income (expense) and other |
(2,674 | ) | (38,038 | ) | | (40,712 | ) | | (40,712 | ) | ||||||||||||||||||||||||||||||||||
Income from continuing operations before tax and min. int |
40,703 | 79,550 | (18,006 | ) | 102,247 | | (563 | ) | 101,684 | |||||||||||||||||||||||||||||||||||
Provision for income tax |
15,312 | 30,609 | (6,698 | ) | (4 | ) | 39,223 | | (209 | ) | 39,014 | |||||||||||||||||||||||||||||||||
Income from continuing operations |
25,391 | 48,941 | (11,308 | ) | 63,024 | | (354 | ) | 62,670 | |||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, net |
| 2,244 | | 2,244 | | | 2,244 | |||||||||||||||||||||||||||||||||||||
Minority interests in earnings, net of tax |
| (2,609 | ) | | (2,609 | ) | | 988 | (1,621 | ) | ||||||||||||||||||||||||||||||||||
Net income |
$ | 25,391 | $ | 48,576 | $ | (11,308 | ) | $ | 62,659 | $ | | $ | 634 | $ | 63,293 | $ | 32,232 | $ | 95,525 | |||||||||||||||||||||||||
Net income per share-basic |
$ | 0.41 | $ | 0.38 | $ | 0.33 | $ | 0.33 | $ | 0.50 | ||||||||||||||||||||||||||||||||||
Pro forma Weighted average shares-basic |
61,899 | 127,920 | 189,819 | 189,819 | 189,819 | |||||||||||||||||||||||||||||||||||||||
Net income per share-diluted |
$ | 0.40 | $ | 0.38 | $ | 0.33 | $ | 0.33 | $ | 0.50 | ||||||||||||||||||||||||||||||||||
Pro forma Weighted average shares-diluted |
63,029 | 127,920 | 190,949 | 190,949 | 190,949 | |||||||||||||||||||||||||||||||||||||||
Tax Adjusted | ||||||||||||||||||||||||||||||||||||||||||||
Pro Forma | Recapitalization | 2005 FIS | Pro Forma, | Purchase Price | ||||||||||||||||||||||||||||||||||||||||
Certegy | FIS | Adjustments | Note | Pro Forma | Adjustments | Acquisitions | Note | as adjusted | Amortization | Cash Earnings | ||||||||||||||||||||||||||||||||||
Total revenue |
$ | 282,774 | $ | 698,109 | $ | | $ | 980,883 | $ | | $ | 980,883 | ||||||||||||||||||||||||||||||||
Total cost of revenue |
201,997 | 447,794 | 20,570 | (1 | ) | 670,099 | | 563 | (6 | ) | 670,662 | |||||||||||||||||||||||||||||||||
| | (262 | ) | (2 | ) | |||||||||||||||||||||||||||||||||||||||
Gross profit (loss) |
80,777 | 250,315 | (20,308 | ) | 310,784 | | (563 | ) | 310,221 | |||||||||||||||||||||||||||||||||||
General and administrative |
30,749 | 93,047 | (1,310 | ) | (2 | ) | 122,486 | | 122,486 | |||||||||||||||||||||||||||||||||||
Research and development costs |
| 33,545 | 33,545 | | 33,545 | |||||||||||||||||||||||||||||||||||||||
Merger and Acquisition Costs |
7,010 | | (7,010 | ) | (3 | ) | | | | | ||||||||||||||||||||||||||||||||||
Income (loss) from operations |
43,018 | 123,723 | (11,988 | ) | 154,753 | | (563 | ) | 154,190 | |||||||||||||||||||||||||||||||||||
Interest income (expense) and other |
(2,451 | ) | (34,937 | ) | | (37,388 | ) | | (37,388 | ) | ||||||||||||||||||||||||||||||||||
Income from continuing operations before tax and min. int |
40,567 | 88,786 | (11,988 | ) | 117,365 | | (563 | ) | 116,802 | |||||||||||||||||||||||||||||||||||
Provision for income tax |
17,900 | 31,112 | (4,460 | ) | (4 | ) | 44,552 | | (209 | ) | 44,343 | |||||||||||||||||||||||||||||||||
Income from continuing operations |
22,667 | 57,674 | (7,528 | ) | 72,813 | | (354 | ) | 72,459 | |||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, net |
| 2,135 | | 2,135 | | | 2,135 | |||||||||||||||||||||||||||||||||||||
Minority interests in earnings, net of tax |
| (1,917 | ) | | (1,917 | ) | | 740 | (1,177 | ) | ||||||||||||||||||||||||||||||||||
Net income |
$ | 22,667 | $ | 57,892 | $ | (7,528 | ) | $ | 73,031 | $ | | $ | 386 | $ | 73,417 | $ | 29,227 | $ | 102,644 | |||||||||||||||||||||||||
Net income per share-basic |
$ | 0.37 | $ | 0.45 | $ | 0.38 | $ | 0.39 | $ | 0.54 | ||||||||||||||||||||||||||||||||||
Pro forma Weighted average shares-basic |
62,017 | 127,920 | 189,937 | 189,937 | 189,937 | |||||||||||||||||||||||||||||||||||||||
Net income per share-diluted |
$ | 0.36 | $ | 0.45 | $ | 0.38 | $ | 0.38 | $ | 0.54 | ||||||||||||||||||||||||||||||||||
Pro forma Weighted average shares-diluted |
63,313 | 127,920 | 191,233 | 191,233 | 191,233 | |||||||||||||||||||||||||||||||||||||||
Tax Adjusted | ||||||||||||||||||||||||||||||||||||||||||||
Pro Forma | Recapitalization | 2005 FIS | Pro Forma, | Purchase Price | ||||||||||||||||||||||||||||||||||||||||
Certegy | FIS | Adjustments | Note | Pro Forma | Adjustments | Acquisitions | Note | as adjusted | Amortization | Cash Earnings | ||||||||||||||||||||||||||||||||||
Total revenue |
$ | 295,886 | $ | 707,683 | $ | | $ | 1,003,569 | $ | | $ | 1,003,569 | ||||||||||||||||||||||||||||||||
Total cost of revenue |
202,826 | 461,912 | 20,570 | (1 | ) | 685,046 | | 685,046 | ||||||||||||||||||||||||||||||||||||
| | (262 | ) | (2 | ) | |||||||||||||||||||||||||||||||||||||||
Gross profit (loss) |
93,060 | 245,771 | (20,308 | ) | 318,523 | | | 318,523 | ||||||||||||||||||||||||||||||||||||
General and administrative |
28,692 | 109,702 | (1,310 | ) | (2 | ) | 137,084 | | 137,084 | |||||||||||||||||||||||||||||||||||
Research and development costs |
| 27,714 | 27,714 | | 27,714 | |||||||||||||||||||||||||||||||||||||||
Merger and Acquisition Costs |
2,860 | | (2,860 | ) | (3 | ) | | | | | ||||||||||||||||||||||||||||||||||
Income (loss) from operations |
61,508 | 108,355 | (16,138 | ) | 153,725 | | | 153,725 | ||||||||||||||||||||||||||||||||||||
Interest income (expense) and other |
(2,132 | ) | (39,701 | ) | | (41,833 | ) | | (41,833 | ) | ||||||||||||||||||||||||||||||||||
Income from continuing operations before tax and min. int |
59,376 | 68,654 | (16,138 | ) | 111,892 | | | 111,892 | ||||||||||||||||||||||||||||||||||||
Provision for income tax |
22,958 | 25,539 | (6,003 | ) | (4 | ) | 42,494 | | | 42,494 | ||||||||||||||||||||||||||||||||||
Income from continuing operations |
36,418 | 43,115 | (10,135 | ) | 69,398 | | | 69,398 | ||||||||||||||||||||||||||||||||||||
Equity in earnings (loss) of unconsolidated entities, net |
(117 | ) | 650 | | 533 | | | 533 | ||||||||||||||||||||||||||||||||||||
Minority interests in earnings, net of tax |
| 1,721 | | 1,721 | | | 1,721 | |||||||||||||||||||||||||||||||||||||
Net income |
$ | 36,301 | $ | 45,486 | $ | (10,135 | ) | $ | 71,652 | $ | | $ | | $ | 71,652 | $ | 29,162 | $ | 100,814 | |||||||||||||||||||||||||
Net income per share-basic |
$ | 0.58 | $ | 0.36 | $ | 0.38 | $ | 0.38 | $ | 0.53 | ||||||||||||||||||||||||||||||||||
Pro forma Weighted average shares-basic |
62,326 | 127,920 | 190,246 | 190,246 | 190,246 | |||||||||||||||||||||||||||||||||||||||
Net income per share-diluted |
$ | 0.57 | $ | 0.35 | $ | 0.37 | $ | 0.37 | $ | 0.52 | ||||||||||||||||||||||||||||||||||
Pro forma Weighted average shares-diluted |
63,796 | 129,657 | 193,453 | 193,453 | 193,453 | |||||||||||||||||||||||||||||||||||||||
(1) | Reflects the increase in amortization expense as a result of allocating an assumed portion of the merger consideration to intangible assets of Certegy, namely customer relationship intangibles and acquired software, and amortizing such intangibles over their estimated useful lives commencing as of the assumed acquisition date, offset by the amortization expense for such intangibles actually recorded by Certegy during the respective periods. Customer relationships are being amortized over 10 years on an accelerated method. Acquired computer software is being amortized over its estimated useful life of up to 10 years on an accelerated method. The acquired trademarks are considered to have indefinite useful lives and, therefore, are not reflected in these adjustments. The increase in amortization expense is $111.7 million offset by historical amortization of $29.4 million, or $82.3 million for the year ended December 31, 2005 and is allocated straight-line over the four quarters as presented and for January 2006 prior to the merger. | |
(2) | Under the merger agreement, all Certegy stock options and restricted stock and restricted stock units will vest upon the closing of the merger. Accordingly, this adjustment reflects the elimination of historical stock compensation expense relating to the vesting of Certegy options in 2005, because such expense will be reflected at the time of closing of the merger. This adjustment amounts to a reduction in cost of revenues of $1.0 million and in selling, general and administrative costs of $11.2 million for the year ended December 31, 2005 and is allocated straight line over the four quarters presented and for the January 2006 period prior to the merger. Also, at closing, Certegy will grant approximately (1) 1.1 million options, which based on current assumptions, would have a fair value under SFAS No. 123R of approximately $11 per option, vesting over four years, and (2) 750,000 options, which based on current assumptions would have a fair value under SFAS No. 123R of approximately $12 per option, vesting over three years. The pro forma adjustment to increase stock compensation expense for these option grants is $5.9 million in 2005, all of which is reflected in selling, general and administrative costs and allocated straight line over the four quarters presented. | |
(3) | Reflects the removal of merger and acquisition costs that were recognized as expense by Certegy in 2005. | |
(4) | Reflects the tax benefit relating to the pro forma adjustments at the FIS tax rate of approximately 37.2% for the year ended December 31, 2005. | |
(5) | Reflects an increase in interest expense for the year ended December 31, 2005 of $21.0 million, as if the recapitalization completed on March 9, 2005 was completed on January 1, 2005. | |
(6) | This column represents the adjustments to purchase amortization and minority interest expense relating to the September 30, 2005 acquisition of the remaining 25.1% interest in Kordoba that FIS did not already own as if that acquisition occurred on January 1, 2005. |
2006 - Quarter 1 | Pro Forma | Historical | ||||||||||||||||||||||||||||||
Transaction | Lender | Transaction | Lender | |||||||||||||||||||||||||||||
Processing | Processing | Corporate and | Processing | Processing | Corporate and | |||||||||||||||||||||||||||
Services | Services | Other | Total | Services | Services | Other | Total | |||||||||||||||||||||||||
Processing and services revenue |
592,511 | 400,500 | 840 | 993,851 | 501,548 | 400,500 | (1,112 | ) | 900,936 | |||||||||||||||||||||||
Cost of revenues |
467,890 | 234,521 | | 702,411 | 387,816 | 234,521 | | 622,337 | ||||||||||||||||||||||||
Gross profit |
124,621 | 165,979 | 840 | 291,440 | 113,732 | 165,979 | (1,112 | ) | 278,599 | |||||||||||||||||||||||
Selling, general and admin costs |
43,926 | 59,063 | 129,630 | 232,619 | 39,516 | 59,063 | 47,150 | 145,729 | ||||||||||||||||||||||||
Research development costs |
19,077 | 8,983 | | 28,060 | 19,077 | 8,983 | | 28,060 | ||||||||||||||||||||||||
Operating income |
61,618 | 97,933 | (128,790 | ) | 30,761 | 55,139 | 97,933 | (48,262 | ) | 104,810 | ||||||||||||||||||||||
Depreciation and amortization |
70,634 | 36,120 | 1,171 | 107,925 | 59,594 | 36,120 | 1,081 | 96,795 | ||||||||||||||||||||||||
EBITDA |
132,252 | 134,053 | (127,619 | ) | 138,686 | 114,733 | 134,053 | (47,181 | ) | 201,605 | ||||||||||||||||||||||
ProForma EBITDA |
132,252 | 134,053 | (127,619 | ) | 138,686 | |||||||||||||||||||||||||||
Merger and Acquisition costs |
753 | 170 | 80,828 | 81,751 | ||||||||||||||||||||||||||||
Acceleration of performance-based shares |
| | 24,130 | 24,130 | ||||||||||||||||||||||||||||
ProForma EBITDA, excluding selected items |
133,005 | 134,223 | (22,661 | ) | 244,567 |
2005 - Quarter 1 | Pro Forma | Historical | ||||||||||||||||||||||||||||||
Transaction | Lender | Transaction | Lender | |||||||||||||||||||||||||||||
Processing | Processing | Corporate and | Processing | Processing | Corporate and | |||||||||||||||||||||||||||
Services | Services | Other | Total | Services | Services | Other | Total | |||||||||||||||||||||||||
Processing and services revenue |
560,284 | 354,867 | (1,113 | ) | 914,038 | 297,826 | 354,867 | (1,113 | ) | 651,580 | ||||||||||||||||||||||
Cost of revenues |
437,462 | 203,780 | | 641,242 | 226,295 | 203,780 | | 430,075 | ||||||||||||||||||||||||
Gross profit |
122,822 | 151,087 | (1,113 | ) | 272,796 | 71,531 | 151,087 | (1,113 | ) | 221,505 | ||||||||||||||||||||||
Selling, general and admin costs |
52,334 | 62,821 | 28,906 | 144,061 | 28,506 | 62,821 | 19,229 | 110,556 | ||||||||||||||||||||||||
Research development costs |
19,461 | 4,475 | | 23,936 | 19,461 | 4,475 | | 23,936 | ||||||||||||||||||||||||
Operating income |
51,027 | 83,791 | (30,019 | ) | 104,799 | 23,564 | 83,791 | (20,342 | ) | 87,013 | ||||||||||||||||||||||
Depreciation and amortization |
70,375 | 38,502 | 525 | 109,402 | 37,039 | 38,502 | 199 | 75,740 | ||||||||||||||||||||||||
EBITDA |
121,402 | 122,293 | (29,494 | ) | 214,201 | 60,603 | 122,293 | (20,143 | ) | 162,753 | ||||||||||||||||||||||