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): April 24, 2003
CERTEGY INC.
(Exact name of Registrant as Specified in its Charter)
| Georgia |
001-16427 |
58-2606325 | ||
| (State or other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 11720 Amber Park Drive Suite 600 Alpharetta, Georgia |
30004 | |
| (Address of principal executive offices) |
(Zip code) |
Registrant’s telephone number, including area code: (678) 867-8000
Not Applicable
(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired:
None.
(b) Pro Forma Financial Information:
None.
(c) Exhibits:
| Exhibit No. |
Description | |
| 99.1 |
Certegy Inc. press release dated April 24, 2003, announcing the Company’s financial results for the first quarter of 2003 (furnished pursuant to Items 9 and 12 of Form 8-K). |
ITEM 9. REGULATION FD DISCLOSURE
Pursuant to Exchange Act Release 47583, Certegy Inc. (“Certegy”) is furnishing the following information and Exhibit pursuant to Items 9 and 12 of Form 8-K.
On April 24, 2003, Certegy issued a press release to announce its financial results for the first quarter of 2003. A copy of the press release is attached as Exhibit 99.1.
During the first quarter of 2003, Certegy recognized $12.6 million of charges ($7.9 million after-tax, or $0.12 per diluted share) for contract termination, severance and other costs. The press release contains a reconciliation of first quarter 2003 financial results calculated and presented in accordance with GAAP to the results excluding these charges.
Management believes that presentation of the first quarter 2003 financial results excluding these charges is useful because it allows investors and management to evaluate and compare Certegy’s core operating results from ongoing operations from period to period in a more meaningful and consistent manner than relying exclusively on GAAP financial measures. Non-GAAP financial measures however should not be considered in isolation or as an alternative to financial measures calculated and presented in accordance with GAAP.
As used herein, “GAAP” refers to accounting principles generally accepted in the United States.
The information in this Report, including the Exhibit attached hereto, is furnished solely pursuant to Items 9 and 12 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K.
SIGNATURES
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 hereunto duly authorized.
| CERTEGY INC
| ||||||||
| Date: April 24, 2003 |
By: |
/s/ Michael T. Vollkommer | ||||||
| Michael T. Vollkommer Corporate Vice President and Chief Financial Officer | ||||||||
EXHIBIT 99.1
| Press release |
Certegy Inc. 11720 Amber Park Drive Suite 600 Alpharetta, Georgia 30004 | |||||
| Date: April 24, 2003 |
Phone 678-867-8000 Fax 678-867-8100 | |||||
| Contact: Mary K. Waggoner Vice President – Investor and Public Relations 678-867-8004 mary.waggoner@certegy.com |
FOR IMMEDIATE RELEASE
CERTEGY REPORTS FIRST QUARTER EARNINGS
DILUTED EPS OF $0.18, OR $0.30 BEFORE CHARGES
Alpharetta, GA., April 24, 2003—Certegy Inc. (NYSE:CEY) today reported first quarter 2003 diluted earnings per share of $0.18 on revenue of $240.2 million, operating income of $21.0 million and net income of $12.2 million. The operating income decline of 24.6% includes pretax charges of $12.6 million ($7.9 million after-tax, or $0.12 per diluted share) for contract termination, severance and other costs. Excluding these charges, diluted earnings per share was $0.30, operating income was $33.6 million and net income was $20.1 million.
“We are pleased with the solid performance of our U.S. card issuing business, where revenue grew by 13.7% over the prior year quarter. Also, consolidated operating income increased a strong 20.9%, excluding charges, driven by transaction growth, new product sales and actions implemented in the fourth quarter of 2002 to improve operating efficiencies,” stated Lee Kennedy, chairman, president and chief executive officer of Certegy.
FIRST QUARTER FINANCIAL HIGHLIGHTS
The following table summarizes a comparison of the 2003 first quarter financial results to the first quarter 2002 results:
| Actual |
Excluding Charges |
|||||||||||
| ($ in millions) |
$ |
Increase (Decrease) |
$ |
Increase (Decrease) |
||||||||
| Revenue |
$ |
240.2 |
2.3 |
% |
$ |
240.2 |
2.3 |
% | ||||
| Operating Income |
$ |
21.0 |
(24.6 |
)% |
$ |
33.6 |
20.9 |
% | ||||
| Interest Expense |
$ |
1.7 |
(15.0 |
)% |
$ |
1.7 |
(15.0 |
)% | ||||
| Net Income |
$ |
12.2 |
(24.0 |
)% |
$ |
20.1 |
25.4 |
% | ||||
| Diluted EPS |
$ |
0.18 |
(21.7 |
)% |
$ |
0.30 |
30.4 |
% | ||||
A reconciliation of actual 2003 first quarter financial results to results excluding the pre-tax charges of $12.6 million is included in Item 5 of the supplemental information attached to this press release and in the “Investor Center” section of the Company’s website. Highlights of the 2003 first quarter results, excluding charges, as compared to 2002, are as follows:
| • | Revenue increased 2.3% (3.0% in local currency) to $240.2 million. |
| • | Operating income of $33.6 million grew 20.9%. |
| • | Interest expense declined 15.0% to $1.7 million. |
| • | Net income grew by 25.4% to $20.1 million. |
| • | Diluted earnings per share of $0.30 increased by 30.4%. |
| • | Total debt outstanding was $207.0 million at March 31, 2003. |
| • | 500,000 shares of common stock were repurchased at a cost of $11.8 million. |
| • | The effective tax rate for 2003 of 37.3% declined from 38.3%. |
SEGMENT RESULTS
Card Services generated revenue of $157.2 million in the first quarter of 2003, unchanged from the 2002 first quarter. In local currency, Card Services’ revenue increased 2.0%. Growth of 13.7% (9.1% excluding acquisition) in North American card issuing revenue was largely offset by a 16.8% decline in merchant processing revenue. International card issuing revenue declined 14.1% primarily due to the net effects of currency and the Banco Real deconversion in Brazil at the beginning of March. In local currency, international card issuing revenue declined 4.0%. Card Services’ operating income of $20.0 million declined by $4.7 million, or 19.0%, compared to the 2002 first quarter. Excluding $11.5 million of charges, Card Services’ operating income increased $6.8 million, or 27.6% over the prior year quarter.
Check Services generated revenue of $83.0 million in the first quarter of 2003, an increase of $5.4 million, or 6.9% over the 2002 first quarter. In local currency, Check Services revenue increased 4.9%. Revenue growth was impacted by weak retail sales caused by poor weather conditions in some parts of the country, the war in Iraq and soft consumer spending. Check Services’ operating income of $6.0 million declined by $1.4 million, or 18.6%, compared to the 2002 first quarter. Excluding $1.0 million of charges, Check Services’ operating income declined by $0.3 million, or 4.6% below the 2002 first quarter.
Corporate expense of $5.0 million increased by $0.8 million over the 2002 first quarter due to the timing of certain administrative expenses. Excluding the $0.1 million charge, corporate expense increased by $0.7 million.
BUSINESS HIGHLIGHTS
During the first quarter of 2003, domestic card issuing transaction volumes increased by 10.6%, driven primarily by 22% growth in debit card transactions. Certegy added 0.7 million cards since year-end 2002, excluding the 1.6 million card Banco Real deconversion in Brazil, ending the quarter with a global card base of 45.8 million cards. During the first quarter, Certegy successfully converted Banco Dominicano del Progreso’s American Express card portfolio, which is being serviced by Card Services’ North American processing center.
Check Services entered into a multi-year agreement to provide check cashing services to all Safeway Inc. locations in the United States. Also during the quarter, Certegy announced plans to provide check risk management services to Pep Boys and an agreement to offer full-service check processing to National Processing Inc. merchants. Certegy also announced a multi-year extension of its agreement to provide check warranty services for Bed Bath and Beyond.
OUTLOOK
Certegy reiterated its diluted earnings per share guidance. The Company expects full year 2003 diluted earnings per share to range from $1.40 to $1.43, including first quarter charges of $0.12 per diluted share. This is unchanged from previous guidance of $1.52 to $1.55, excluding charges, for full year 2003. Certegy also provided second quarter 2003 diluted earnings per share guidance of $0.33 to $0.35. When commenting on the 2003 expectations, Kennedy stated, “Our earnings per share outlook for 2003 remains within the range of $1.52 to $1.55, excluding charges. Strength in our domestic card issuing business, on-going cost efficiencies and a lowered effective tax rate should offset the effects of soft consumer spending, which could affect our check business.”
TELECONFERENCE
Management will host a teleconference to discuss first quarter earnings on Thursday, April 24, 2003, at 9:00 a.m. Eastern Time. The live audio Webcast will be available at www.certegy.com. Please be advised that Microsoft’s Windows Media PlayerTM must be downloaded prior to accessing the presentation. It can be downloaded from www.microsoft.com/windows/mediaplayer. A replay of the Webcast will be available in the Investor Section of the website one hour after the call ends through 10:00 p.m. Eastern time May 1, 2003.
###
The statements in this release include forward-looking statements that are based on current expectations, assumptions, estimates, and projections about Certegy and our industry. They are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Certegy’s control, that may cause actual results to differ significantly from what is expressed in those statements. The factors that could, either individually or in the aggregate, affect our performance include the following, which are described in greater detail in the section entitled “Certain Factors Affecting Forward-Looking Statements” in our 2002 Annual Report on Form 10-K filed with the SEC: Our ability to maintain or improve our competitive positions against current and potential competitors; the level of economic growth or other factors affecting demand for our products and services; loss of key customer contracts or strategic relationships; changes in regulation or industry standards applicable to our businesses or those of our customers; risks associated with investments and operations in foreign countries, including exchange rate fluctuations and local political, social, and economic factors, and those other risks listed in the above-referenced section of our Form 10-K.
###
Certegy (NYSE:CEY) provides credit and debit card processing, check risk management and check cashing services, and merchant processing to over 6,000 financial institutions, 117,000 retailers and 100 million consumers worldwide. Headquartered in Alpharetta, Georgia, Certegy maintains a strong global presence with operations in the United States, Canada, United Kingdom, Ireland, France, Chile, Brazil, Australia and New Zealand. As a leading payment services provider, Certegy offers a comprehensive range of transaction processing services, check risk management solutions and integrated customer support programs that facilitate the exchange of business and consumer payments. Certegy generated $1.0 billion in revenue in 2002. For more information on Certegy, please visit www.certegy.com.
CERTEGY INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ |
240,169 |
|
$ |
234,842 |
| ||
| Operating expenses: |
||||||||
| Costs of services |
|
176,057 |
|
|
179,108 |
| ||
| Selling, general and administrative |
|
30,516 |
|
|
27,953 |
| ||
| Other charges(1) |
|
12,640 |
|
|
— |
| ||
|
|
219,213 |
|
|
207,061 |
| |||
| Operating income |
|
20,956 |
|
|
27,781 |
| ||
| Other income, net |
|
155 |
|
|
184 |
| ||
| Interest expense |
|
(1,681 |
) |
|
(1,978 |
) | ||
| Income before income taxes |
|
19,430 |
|
|
25,987 |
| ||
| Provision for income taxes |
|
(7,238 |
) |
|
(9,940 |
) | ||
| Net income |
$ |
12,192 |
|
$ |
16,047 |
| ||
| Basic earnings per share |
$ |
0.19 |
|
$ |
0.23 |
| ||
| Average shares outstanding |
|
65,840 |
|
|
68,868 |
| ||
| Diluted earnings per share |
$ |
0.18 |
|
$ |
0.23 |
| ||
| Average shares outstanding |
|
66,202 |
|
|
69,963 |
| ||
| Revenues and operating income of the Company’s reportable segments for the | ||||||||
| three months ended March 31, 2003 and 2002 are as follows:
| ||||||||
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues: |
||||||||
| Card Services |
$ |
157,176 |
|
$ |
157,219 |
| ||
| Check Services |
|
82,993 |
|
|
77,623 |
| ||
| $ |
240,169 |
|
$ |
234,842 |
| |||
| Operating income(1): |
||||||||
| Card Services |
$ |
19,958 |
|
$ |
24,644 |
| ||
| Check Services |
|
5,974 |
|
|
7,336 |
| ||
|
|
25,932 |
|
|
31,980 |
| |||
| General corporate expense |
|
(4,976 |
) |
|
(4,199 |
) | ||
| $ |
20,956 |
|
$ |
27,781 |
| |||
| (1) | Other charges of $12.6 million ($7.9 million after-tax, or $0.12 per diluted share) in the first quarter of 2003 include $9.6 million of early termination costs associated with a data processing contract, $2.7 million of charges related to the downsizing of our Brazilian operation, and $0.3 million of other charges. See Item 5 in the Supplemental Information for details of these charges by segment. |
CERTEGY INC.
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2003 AND DECEMBER 31, 2002
(In thousands)
| March 31, 2003 |
December 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
34,597 |
|
$ |
14,166 |
| ||
| Settlement deposits |
|
23,208 |
|
|
27,104 |
| ||
| Trade accounts receivable, net of allowance for doubtful accounts of $2,148 and $2,628, respectively |
|
87,816 |
|
|
104,597 |
| ||
| Settlement receivables |
|
114,761 |
|
|
78,636 |
| ||
| Claims recoverable |
|
32,512 |
|
|
50,309 |
| ||
| Other current assets |
|
33,110 |
|
|
37,188 |
| ||
| Total current assets |
|
326,004 |
|
|
312,000 |
| ||
| Property and equipment, net |
|
37,484 |
|
|
38,637 |
| ||
| Goodwill, net |
|
172,601 |
|
|
168,956 |
| ||
| Other intangible assets, net |
|
30,268 |
|
|
31,342 |
| ||
| Systems development and other deferred costs, net |
|
98,757 |
|
|
96,706 |
| ||
| Other assets, net |
|
52,935 |
|
|
54,500 |
| ||
| Total assets |
$ |
718,049 |
|
$ |
702,141 |
| ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Trade accounts payable |
$ |
21,470 |
|
$ |
22,916 |
| ||
| Settlement payables |
|
137,969 |
|
|
105,740 |
| ||
| Claims payable |
|
25,555 |
|
|
48,306 |
| ||
| Accrued salaries and bonuses |
|
6,547 |
|
|
10,639 |
| ||
| Income taxes payable |
|
7,727 |
|
|
8,545 |
| ||
| Other current liabilities |
|
67,646 |
|
|
54,784 |
| ||
| Total current liabilities |
|
266,914 |
|
|
250,930 |
| ||
| Long-term debt |
|
207,000 |
|
|
214,200 |
| ||
| Deferred income taxes |
|
33,320 |
|
|
32,801 |
| ||
| Other long-term liabilities |
|
5,590 |
|
|
5,767 |
| ||
| Total liabilities |
|
512,824 |
|
|
503,698 |
| ||
| Shareholders’ equity: |
||||||||
| Common stock |
|
695 |
|
|
695 |
| ||
| Paid-in capital |
|
248,299 |
|
|
249,115 |
| ||
| Retained earnings |
|
152,744 |
|
|
140,552 |
| ||
| Deferred compensation |
|
(8,565 |
) |
|
(9,116 |
) | ||
| Accumulated other comprehensive loss |
|
(109,707 |
) |
|
(114,799 |
) | ||
| Treasury stock |
|
(78,241 |
) |
|
(68,004 |
) | ||
| Total shareholders’ equity |
|
205,225 |
|
|
198,443 |
| ||
| Total liabilities and shareholders’ equity |
$ |
718,049 |
|
$ |
702,141 |
| ||
CERTEGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(In thousands)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ |
12,192 |
|
$ |
16,047 |
| ||
| Adjustments to reconcile net income to net cash provided by |
||||||||
| operating activities: |
||||||||
| Depreciation and amortization |
|
9,812 |
|
|
10,006 |
| ||
| Noncash other charges |
|
2,670 |
|
|
— |
| ||
| Other, net |
|
803 |
|
|
932 |
| ||
| Deferred income taxes |
|
558 |
|
|
3,479 |
| ||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable, net |
|
17,121 |
|
|
13,685 |
| ||
| Current liabilities, excluding settlement and claims payables |
|
4,435 |
|
|
(11,430 |
) | ||
| Claims accounts, net |
|
(2,854 |
) |
|
(6,075 |
) | ||
| Other current assets |
|
3,148 |
|
|
(832 |
) | ||
| Other long-term liabilities |
|
(180 |
) |
|
696 |
| ||
| Other assets |
|
857 |
|
|
(401 |
) | ||
| Net cash provided by operating activities |
|
48,562 |
|
|
26,107 |
| ||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
|
(8,432 |
) |
|
(12,137 |
) | ||
| Net cash used in investing activities |
|
(8,432 |
) |
|
(12,137 |
) | ||
| Cash flows from financing activities: |
||||||||
| Net repayments of long-term debt |
|
(7,200 |
) |
|
(25,000 |
) | ||
| Proceeds from exercise of stock options |
|
491 |
|
|
8,486 |
| ||
| Treasury stock purchases |
|
(11,796 |
) |
|
— |
| ||
| Other |
|
— |
|
|
(165 |
) | ||
| Net cash used in financing activities |
|
(18,505 |
) |
|
(16,679 |
) | ||
| Effect of foreign currency exchange rates on cash |
|
(1,194 |
) |
|
(1,026 |
) | ||
| Net cash provided (used) |
|
20,431 |
|
|
(3,735 |
) | ||
| Cash and cash equivalents, beginning of period |
|
14,166 |
|
|
27,674 |
| ||
| Cash and cash equivalents, end of period |
$ |
34,597 |
|
$ |
23,939 |
| ||
CERTEGY INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
1. Revenues by product and service offering are as follows (in thousands):
| 2002 |
2003 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Card Issuer Services |
$ |
107,648 |
$ |
116,145 |
$ |
110,573 |
$ |
114,130 |
$ |
448,496 |
$ |
113,470 | ||||||
| Check Services |
|
77,623 |
|
82,857 |
|
86,897 |
|
99,688 |
|
347,065 |
|
82,993 | ||||||
| Merchant Processing Services |
|
48,566 |
|
54,248 |
|
54,104 |
|
45,988 |
|
202,906 |
|
40,385 | ||||||
| Software and Support |
|
1,005 |
|
2,119 |
|
2,932 |
|
3,445 |
|
9,501 |
|
3,321 | ||||||
| $ |
234,842 |
$ |
255,369 |
$ |
254,506 |
$ |
263,251 |
$ |
1,007,968 |
$ |
240,169 | |||||||
2. Revenues by geographic area (based on location of customer) are as follows (in thousands):
| 2002 |
2003 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Domestic |
$ |
190,106 |
$ |
208,711 |
$ |
209,988 |
$ |
215,802 |
$ |
824,607 |
$ |
195,090 | ||||||
| International |
|
44,736 |
|
46,658 |
|
44,518 |
|
47,449 |
|
183,361 |
|
45,079 | ||||||
| $ |
234,842 |
$ |
255,369 |
$ |
254,506 |
$ |
263,251 |
$ |
1,007,968 |
$ |
240,169 | |||||||
3. Revenues are comprised of the following (in thousands):
| 2002 |
2003 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Product and Service Fees |
$ |
180,310 |
$ |
192,809 |
$ |
194,984 |
$ |
212,002 |
$ |
780,105 |
$ |
191,527 | ||||||
| Interchange Fees |
|
39,475 |
|
43,932 |
|
43,834 |
|
35,391 |
|
162,632 |
|
31,699 | ||||||
| Reimbursable Expenses |
|
15,057 |
|
18,628 |
|
15,688 |
|
15,858 |
|
65,231 |
|
16,943 | ||||||
| $ |
234,842 |
$ |
255,369 |
$ |
254,506 |
$ |
263,251 |
$ |
1,007,968 |
$ |
240,169 | |||||||
In 2002, the Company adopted Emerging Issues Task Force Issue No. 01-14 (“EITF 01-14”), “Income Statement Characterization of Reimbursements Received for ‘Out-of-Pocket’ Expenses Incurred,” which required that reimbursements received for out-of-pocket expenses be reclassified as revenues. In the prior year, the Company disclosed the quarterly amounts reclassified to revenues as required by the adoption of EITF 01-14 and certain other reclassifications, including service fees from collection activities related to our check guarantee business. Prior to the adoption of EITF 01-14, service fees were netted against collection expense in the consolidated statement of income. These fees are included in product and service fees above.
4. Currency translation increased (decreased) revenues and operating income in the first quarter of 2003 as compared with
the first quarter of 2002 as follows (in thousands):
| Operating Income | |||||||||||
| Revenues |
Before Charges |
After Charges | |||||||||
| Card Services |
$ |
(3,243 |
) |
$ |
(580 |
) |
$ |
811 | |||
| Check Services |
|
1,533 |
|
|
225 |
|
|
208 | |||
| $ |
(1,710 |
) |
$ |
(355 |
) |
$ |
1,019 | ||||
CERTEGY INC.
SUPPLEMENTAL INFORMATION, CONTINUED
(Unaudited)
5. A reconciliation of the first quarter 2003 actual results to results excluding other charges is as follows (in thousands):
| Actual |
Other Charges |
Excluding Charges |
||||||||||
| Revenues |
$ |
240,169 |
|
$ |
— |
|
$ |
240,169 |
| |||
| Operating expenses |
|
219,213 |
|
|
(12,640 |
) |
|
206,573 |
| |||
| Operating income |
|
20,956 |
|
|
12,640 |
|
|
33,596 |
| |||
| Other income, net |
|
155 |
|
|
— |
|
|
155 |
| |||
| Interest expense |
|
(1,681 |
) |
|
— |
|
|
(1,681 |
) | |||
| Income before income taxes |
|
19,430 |
|
|
12,640 |
|
|
32,070 |
| |||
| Provision of income taxes |
|
(7,238 |
) |
|
(4,708 |
) |
|
(11,946 |
) | |||
| Net income |
$ |
12,192 |
|
$ |
7,932 |
|
$ |
20,124 |
| |||
| Basic earnings per share |
$ |
0.19 |
|
$ |
0.12 |
|
$ |
0.31 |
| |||
| Diluted earnings per share |
$ |
0.18 |
|
$ |
0.12 |
|
$ |
0.30 |
| |||
Other charges by segment are as follows:
| Card |
Check |
Corp |
Total | ||||||||||
| Operating income, actual |
$ |
19,958 |
$ |
5,974 |
$ |
(4,976 |
) |
$ |
20,956 | ||||
| Contract termination costs |
|
8,757 |
|
865 |
|
— |
|
|
9,622 | ||||
| Brazil downsizing |
|
2,740 |
|
— |
|
— |
|
|
2,740 | ||||
| Other severance charges |
|
— |
|
156 |
|
— |
|
|
156 | ||||
| Write-down of collateral assignment in life insurance policies |
|
— |
|
— |
|
122 |
|
|
122 | ||||
| Operating income, excluding charges |
$ |
31,455 |
$ |
6,995 |
$ |
(4,854 |
) |
$ |
33,596 | ||||
6. Check volumes in dollars are as follows (in millions):
| 2002 |
2003 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Domestic |
$ |
7,107 |
$ |
7,662 |
$ |
7,683 |
$ |
9,197 |
$ |
31,649 |
$ |
7,145 | ||||||
| International |
|
734 |
|
805 |
|
832 |
|
934 |
|
3,305 |
|
761 | ||||||
| $ |
7,841 |
$ |
8,467 |
$ |
8,515 |
$ |
10,131 |
$ |
34,954 |
$ |
7,906 | |||||||
| Guarantee |
$ |
5,931 |
$ |
6,413 |
$ |
6,533 |
$ |
7,787 |
$ |
26,664 |
$ |
6,251 | ||||||
| Verification |
|
1,910 |
|
2,054 |
|
1,982 |
|
2,344 |
|
8,290 |
|
1,655 | ||||||
| $ |
7,841 |
$ |
8,467 |
$ |
8,515 |
$ |
10,131 |
$ |
34,954 |
$ |
7,906 | |||||||
7. Number of cards and accounts processed (end of period) are as follows (in thousands):
| 2002 |
2003 | |||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
1st Qtr | ||||||||||||
| Cards: |
||||||||||||||||
| Domestic |
21,850 |
22,014 |
22,246 |
22,497 |
22,749 | |||||||||||
| International |
21,317 |
21,960 |
23,970 |
24,182 |
23,094 | |||||||||||
| 43,167 |
43,974 |
46,216 |
46,679 |
45,843 | ||||||||||||
| Accounts: |
||||||||||||||||
| Domestic |
16,699 |
16,889 |
17,111 |
17,089 |
17,411 | |||||||||||
| International |
18,937 |
19,302 |
20,538 |
20,766 |
19,977 | |||||||||||
| 35,636 |
36,191 |
37,649 |
37,855 |
37,388 | ||||||||||||
CERTEGY INC.
SUPPLEMENTAL INFORMATION, CONTINUED
(Unaudited)
8. Merchant volumes in dollars and number of transactions are as follows:
| 2002 |
2003 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Dollars (in millions) |
$ |
2,169 |
$ |
2,422 |
$ |
2,409 |
$ |
1,941 |
$ |
8,941 |
$ |
1,763 | ||||||
| Number of Transactions (in thousands) |
|
30,940 |
|
33,658 |
|
33,627 |
|
25,883 |
|
124,108 |
|
20,616 | ||||||
9. Depreciation and amortization by segment is as follows (in thousands):
| 2002 |
2003 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Card Services |
$ |
8,111 |
$ |
7,918 |
$ |
7,961 |
$ |
7,896 |
$ |
31,886 |
$ |
7,715 | ||||||
| Check Services |
|
1,809 |
|
1,616 |
|
1,632 |
|
1,515 |
|
6,572 |
|
1,801 | ||||||
| Corporate |
|
86 |
|
97 |
|
135 |
|
274 |
|
592 |
|
296 | ||||||
| $ |
10,006 |
$ |
9,631 |
$ |
9,728 |
$ |
9,685 |
$ |
39,050 |
$ |
9,812 | |||||||
10. Capital expenditures and acquisitions are as follows (in thousands):
| 2002 |
2003 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Capital expenditures |
$ |
12,137 |
$ |
14,713 |
$ |
12,847 |
$ |
9,264 |
$ |
48,961 |
$ |
8,432 | ||||||
| Acquisitions, net of cash acquired |
$ |
— |
$ |
— |
$ |
— |
$ |
10,433 |
$ |
10,433 |
$ |
— | ||||||