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):
August 5, 2008
Fidelity National Information Services, Inc.
1-16427
(Commission File Number)
Georgia | 58-2606325 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number) |
601 Riverside Avenue
Jacksonville, Florida 32204
(904) 854-8100
(Registrants Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
o |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition | ||||||||
Item 9.01. Financial Statements and Exhibits | ||||||||
SIGNATURE | ||||||||
EXHIBIT INDEX | ||||||||
EXHIBIT 99.1 | ||||||||
EXHIBIT 99.2 |
Item 2.02. Results of Operations and Financial Condition
On August 5, 2008, Fidelity National Information Services, Inc. issued an earnings release announcing its financial results for the Second Quarter of 2008. The information included in Items 2.02 and 9.01 within this Current Report are being furnished and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that Section. The information included in Items 2.02 and 9.01 within this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
A copy of the earnings release is attached as Exhibit 99.1 and a copy of the financial results presentation is attached as Exhibit 99.2
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
Exhibit |
Description |
|
99.1 |
Press release announcing Fidelity National Information Services, Inc. Reports Second Quarter 2008 Earnings. | |
99.2 |
Financial results presentation. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Fidelity National Information Services, Inc. |
||||
Date: August 6, 2008 | By: | /s/ George P. Scanlon | ||
Name: George
P. Scanlon Title: Executive Vice President and Chief Financial Officer |
||||
EXHIBIT INDEX
Exhibit |
Description |
|
99.1 |
Press release announcing Fidelity National Information Services, Inc. Reports Second Quarter 2008 Earnings. | |
99.2 |
Financial results presentation. |
PRESS RELEASE |
Exhibit A
|
Consolidated Statements of Earnings for the Three and Six-Month Periods ended June 30, 2008 and 2007 | |
Exhibit B
|
Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007 | |
Exhibit C
|
Consolidated Statements of Cash Flows for the Six-Month Periods ended June 30, 2008 and 2007 | |
Exhibit D
|
Supplemental Financial Information for the Three and Six-Month Periods ended June 30, 2008 and 2007 | |
Exhibit E
|
Supplemental Non-GAAP Financial Information for the Three and Six-Month Periods ended June 30, 2008 and 2007 | |
Exhibit F
|
FIS Recast Consolidated Income Statements and Supplemental Financial Information -Unaudited for the Three and Six-Month Periods Ended June 30, 2008 and 2007, presenting LPS as a discontinued operation |
Three months | Six months | |||||||||||||||
ended June 30, | ended June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Processing and services revenues |
$ | 1,339,038 | $ | 1,125,034 | $ | 2,629,990 | $ | 2,196,474 | ||||||||
Cost of revenues |
962,964 | 802,461 | 1,891,519 | 1,574,842 | ||||||||||||
Selling, general and administrative expenses |
175,384 | 119,616 | 338,935 | 232,698 | ||||||||||||
Research and development costs |
26,567 | 23,588 | 53,635 | 50,697 | ||||||||||||
Operating income |
174,123 | 179,369 | 345,901 | 338,237 | ||||||||||||
Other income (expense): |
||||||||||||||||
Interest income |
1,904 | 490 | 4,922 | 1,049 | ||||||||||||
Gain on sale
of Covansys stock |
| 92,044 | | 92,044 | ||||||||||||
Other income |
2,183 | 811 | 1,732 | 1,476 | ||||||||||||
Interest expense |
(62,800 | ) | (42,969 | ) | (125,248 | ) | (115,084 | ) | ||||||||
Total other
income (expense) |
(58,713 | ) | 50,376 | (118,594 | ) | (20,515 | ) | |||||||||
Earnings before income taxes, equity earnings and minority interest |
115,410 | 229,745 | 227,307 | 317,722 | ||||||||||||
Provision
for income taxes |
40,867 | 84,580 | 81,822 | 117,309 | ||||||||||||
Equity in
(losses) earnings of unconsolidated entities |
(317 | ) | 736 | (2,274 | ) | 1,672 | ||||||||||
Minority
interest expense |
(716 | ) | (286 | ) | (838 | ) | (110 | ) | ||||||||
Net earnings
from continuing operations |
73,510 | 145,615 | 142,373 | 201,975 | ||||||||||||
(Loss)
earnings from discontinued operations, net of tax |
(1,603 | ) | 2,389 | 34 | 5,532 | |||||||||||
Net earnings |
$ | 71,907 | $ | 148,004 | $ | 142,407 | $ | 207,507 | ||||||||
Net earnings per share-basic from continuing operations |
$ | 0.38 | $ | 0.76 | $ | 0.74 | $ | 1.05 | ||||||||
Net earnings (loss) per share-basic from discontinued operations |
(0.01 | ) | 0.01 | 0.00 | 0.03 | |||||||||||
Net earnings per share-basic |
$ | 0.37 | $ | 0.77 | $ | 0.74 | $ | 1.08 | ||||||||
Weighted average shares outstanding-basic |
192,538 | 192,743 | 193,541 | 192,323 | ||||||||||||
Net earnings per share-diluted from continuing operations |
$ | 0.38 | $ | 0.74 | $ | 0.73 | $ | 1.03 | ||||||||
Net earnings (loss) per share-diluted from discontinued operations |
(0.01 | ) | 0.01 | 0.00 | 0.03 | |||||||||||
Net earnings per share-diluted |
$ | 0.37 | $ | 0.75 | $ | 0.73 | $ | 1.06 | ||||||||
Weighted average shares outstanding-diluted |
194,448 | 196,977 | 195,493 | 196,395 | ||||||||||||
As of | As of | |||||||
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 207,035 | $ | 355,278 | ||||
Settlement deposits |
33,665 | 21,162 | ||||||
Trade receivables, net |
914,204 | 825,915 | ||||||
Other receivables |
189,248 | 206,746 | ||||||
Settlement receivables |
109,056 | 116,935 | ||||||
Receivable from FNF |
8,727 | 14,907 | ||||||
Prepaid expenses and other current assets |
155,187 | 168,454 | ||||||
Deferred income taxes |
120,479 | 120,098 | ||||||
Total
current assets |
1,737,601 | 1,829,495 | ||||||
Property and equipment, net of accumulated depreciation
and amortization |
394,496 | 392,508 | ||||||
Goodwill |
5,337,592 | 5,326,831 | ||||||
Other intangible assets, net of accumulated amortization |
1,007,613 | 1,030,582 | ||||||
Computer software, net of accumulated amortization |
825,929 | 775,151 | ||||||
Deferred contract costs |
274,758 | 256,852 | ||||||
Investment in FNRES |
28,136 | 30,491 | ||||||
Long-term notes receivable from FNF |
5,859 | 6,154 | ||||||
Other noncurrent assets |
166,461 | 146,519 | ||||||
Total assets |
$ | 9,778,445 | $ | 9,794,583 | ||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 540,845 | $ | 606,179 | ||||
Settlement payables |
140,411 | 129,799 | ||||||
Deferred revenues |
243,717 | 246,222 | ||||||
Current portion of long-term debt |
297,129 | 272,014 | ||||||
Total
current liabilities |
1,222,102 | 1,254,214 | ||||||
Deferred revenues |
130,349 | 111,884 | ||||||
Deferred income taxes |
402,753 | 394,972 | ||||||
Long-term debt, excluding current portion |
3,975,078 | 4,003,383 | ||||||
Other long-term liabilities |
217,356 | 234,757 | ||||||
Total liabilities |
5,947,638 | 5,999,210 | ||||||
Minority interest |
75,290 | 14,194 | ||||||
Stockholders equity: |
||||||||
Preferred stock $0.01 par value |
| | ||||||
Common stock $0.01 par value |
1,994 | 1,990 | ||||||
Additional paid in capital |
3,068,804 | 3,038,203 | ||||||
Retained earnings |
1,022,664 | 899,512 | ||||||
Accumulated other comprehensive earnings |
86,099 | 53,389 | ||||||
Treasury stock |
(424,044 | ) | (211,915 | ) | ||||
Total stockholders equity |
3,755,517 | 3,781,179 | ||||||
Total
liabilities and stockholders equity |
$ | 9,778,445 | $ | 9,794,583 | ||||
Six months | ||||||||
ended June 30, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net earnings |
$ | 142,407 | $ | 207,507 | ||||
Adjustment to reconcile net earnings to net
cash provided by operating activities: |
||||||||
Depreciation and amortization |
244,517 | 224,504 | ||||||
Amortization of debt issue costs |
2,859 | 28,436 | ||||||
(Gain) on sale of Covansys stock |
| (92,044 | ) | |||||
Net (Gain) on sale of Non Strategic businesses |
(1,040 | ) | | |||||
Stock-based compensation cost |
42,167 | 17,240 | ||||||
Deferred income taxes |
3,030 | 3,551 | ||||||
Income tax benefit from exercise of stock options |
(932 | ) | (11,161 | ) | ||||
Equity in (earnings) loss of unconsolidated entities |
2,274 | (1,672 | ) | |||||
Minority interest |
838 | 664 | ||||||
Changes in assets and liabilities, net of
effects from acquisitions: |
||||||||
Net increase in trade receivables |
(58,199 | ) | (119,223 | ) | ||||
Net decrease (increase) in prepaid expenses
and other assets |
(6,714 | ) | (45,890 | ) | ||||
Additions to deferred contract costs |
(39,502 | ) | (25,741 | ) | ||||
Net increase in deferred revenue |
15,696 | 4,389 | ||||||
Net (decrease) increase in accounts payable,
accrued liabilities and other liabilities |
(104,569 | ) | 52,527 | |||||
Net cash
provided by operating activities |
242,832 | 243,087 | ||||||
Cash flows from investing activities: |
||||||||
Additions to property and equipment |
(43,896 | ) | (60,202 | ) | ||||
Additions to capitalized software |
(111,750 | ) | (93,808 | ) | ||||
Other Investing Activities |
(4,665 | ) | | |||||
Cash received from sale of Covansys stock |
| 136,338 | ||||||
Net proceeds from sale of company assets |
33,506 | | ||||||
Acquisitions, net of cash acquired |
(17,404 | ) | (65,750 | ) | ||||
Net cash
used in investing activities |
(144,209 | ) | (83,422 | ) | ||||
Cash flows from financing activities: |
||||||||
Borrowings |
2,699,600 | 2,700,300 | ||||||
Debt service payments |
(2,704,573 | ) | (2,874,198 | ) | ||||
Capitalized debt issue costs |
(13 | ) | (12,577 | ) | ||||
Dividends paid |
(19,255 | ) | (19,267 | ) | ||||
Income tax benefit from exercise of stock options |
932 | 11,161 | ||||||
Stock options exercised |
11,545 | 43,194 | ||||||
Treasury stock purchases |
(236,168 | ) | | |||||
Net cash
used in financing activities |
(247,932 | ) | (151,387 | ) | ||||
Effect of foreign currency exchange rates on cash |
1,066 | 859 | ||||||
Net
(decrease) increase in cash and cash equivalents |
(148,243 | ) | 9,137 | |||||
Cash and cash equivalents, at beginning of period |
355,278 | 211,753 | ||||||
Cash and cash equivalents, at end of period |
$ | 207,035 | $ | 220,890 | ||||
Three Month Periods ended | Six Month Periods ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
1. Revenues |
||||||||||||||||
Revenue from Continuing Operations: |
||||||||||||||||
TPS |
||||||||||||||||
Integrated Financial Solutions |
$ | 380,463 | $ | 297,117 | $ | 749,048 | $ | 580,870 | ||||||||
Enterprise Solutions |
284,278 | 245,174 | 564,822 | 479,734 | ||||||||||||
International |
203,755 | 143,293 | 381,864 | 281,478 | ||||||||||||
Other |
(1,265 | ) | (773 | ) | (1,704 | ) | (1,321 | ) | ||||||||
Total TPS Revenue |
867,231 | 684,811 | 1,694,030 | 1,340,761 | ||||||||||||
Total LPS Revenue |
471,757 | 436,202 | 935,870 | 848,560 | ||||||||||||
Corporate |
50 | 4,021 | 90 | 7,153 | ||||||||||||
Total Revenue from Continuing Operations |
1,339,038 | 1,125,034 | 2,629,990 | 2,196,474 | ||||||||||||
Total Revenue from Continuing Operations, excluding eFunds |
$ | 1,201,838 | $ | 1,125,034 | $ | 2,351,480 | $ | 2,196,474 | ||||||||
Revenue Growth from Prior Year Period |
||||||||||||||||
Revenue from Continuing Operations: |
||||||||||||||||
TPS |
||||||||||||||||
Integrated Financial Solutions |
28.1 | % | 9.1 | % | 29.0 | % | 7.1 | % | ||||||||
Enterprise Solutions |
15.9 | % | 10.8 | % | 17.7 | % | 9.2 | % | ||||||||
International |
42.2 | % | 44.3 | % | 35.7 | % | 50.9 | % | ||||||||
Other |
-63.6 | % | 73.2 | % | -29.0 | % | 78.9 | % | ||||||||
Total TPS Revenue Growth |
26.6 | % | 16.1 | % | 26.3 | % | 15.4 | % | ||||||||
Total LPS Revenue Growth |
8.2 | % | 16.6 | % | 10.3 | % | 14.2 | % | ||||||||
Corporate |
-98.8 | % | 47.3 | % | -98.7 | % | 64.9 | % | ||||||||
Total Revenue from Continuing Operations |
19.0 | % | 16.4 | % | 19.7 | % | 15.0 | % | ||||||||
Total Revenue Growth, excluding Efunds |
6.8 | % | 16.4 | % | 7.1 | % | 15.0 | % | ||||||||
2. TPS Revenue from Continuing Operations, Excluding eFunds |
||||||||||||||||
TPS |
||||||||||||||||
Integrated Financial Solutions |
$ | 310,613 | $ | 297,117 | $ | 608,179 | $ | 580,870 | ||||||||
Enterprise Solutions |
227,398 | 245,174 | 454,003 | 479,734 | ||||||||||||
International |
192,345 | 143,293 | 354,087 | 281,478 | ||||||||||||
Other |
(355 | ) | (773 | ) | (778 | ) | (1,321 | ) | ||||||||
Total TPS Revenue, excluding eFunds |
$ | 730,001 | $ | 684,811 | $ | 1,415,491 | $ | 1,340,761 | ||||||||
TPS Revenue Growth from Prior Year Period, excluding eFunds |
||||||||||||||||
TPS |
||||||||||||||||
Integrated Financial Solutions |
4.5 | % | 9.1 | % | 4.7 | % | 7.1 | % | ||||||||
Enterprise Solutions |
-7.3 | % | 10.8 | % | -5.4 | % | 9.2 | % | ||||||||
International |
34.2 | % | 44.3 | % | 25.8 | % | 50.9 | % | ||||||||
Other |
54.1 | % | 73.2 | % | 41.1 | % | 78.9 | % | ||||||||
Total TPS Revenue Growth, excluding Efunds |
6.6 | % | 16.1 | % | 5.6 | % | 15.4 | % | ||||||||
Three Month Periods ended | Six Month Periods ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
3. Depreciation and Amortization |
||||||||||||||||
Depreciation and Amortization |
$ | 65,082 | $ | 68,027 | $ | 133,793 | $ | 130,590 | ||||||||
Purchase Price Amortization |
44,439 | 37,897 | 90,999 | 78,677 | ||||||||||||
Other Amortization |
10,864 | 7,968 | 19,725 | 15,237 | ||||||||||||
Total Depreciation and Amortization |
$ | 120,385 | $ | 113,892 | $ | 244,517 | $ | 224,504 | ||||||||
Depreciation and Amortization Relating to Non-recurring Adjustments |
$ | | $ | 393 | $ | | $ | 1,076 | ||||||||
Depreciation and Amortization from Discontinued Operations |
102 | 1,714 | 1,496 | 3,430 | ||||||||||||
Total Depreciation and Amortization from Continuing
|
||||||||||||||||
Operations, as adjusted |
$ | 120,283 | $ | 111,785 | $ | 243,021 | $ | 219,998 | ||||||||
4. Stock Compensation Expense |
||||||||||||||||
Stock Compensation Expense, Excluding Acceleration Charges |
$ | 13,183 | $ | 8,751 | $ | 25,367 | $ | 17,240 | ||||||||
Stock Acceleration Expense |
2,606 | | 16,800 | | ||||||||||||
Total Stock Compensation Expense |
$ | 15,789 | $ | 8,751 | $ | 42,167 | $ | 17,240 | ||||||||
Three Month Periods ended | Six Month Periods ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
1. EBIT and EBITDA Consolidated |
||||||||||||||||
Revenue from Continuing Operations |
$ | 1,339,038 | $ | 1,125,034 | $ | 2,629,990 | $ | 2,196,474 | ||||||||
Operating Income |
$ | 174,123 | $ | 179,369 | $ | 345,901 | $ | 338,237 | ||||||||
M&A, Restructuring and Integration Costs |
31,555 | 2,195 | 46,525 | 7,156 | ||||||||||||
LPS Spin Costs |
5,582 | | 8,440 | | ||||||||||||
EBIT, as adjusted |
$ | 211,260 | $ | 181,564 | $ | 400,866 | $ | 345,393 | ||||||||
Depr and Amort from Cont Ops, as adjusted |
120,283 | 111,785 | 243,021 | 219,998 | ||||||||||||
EBITDA , as adjusted |
$ | 331,543 | $ | 293,349 | $ | 643,887 | $ | 565,391 | ||||||||
EBIT Margin, as adjusted |
15.8 | % | 16.1 | % | 15.2 | % | 15.7 | % | ||||||||
EBITDA Margin, as adjusted |
24.8 | % | 26.1 | % | 24.5 | % | 25.7 | % | ||||||||
2. EBITDA TPS |
||||||||||||||||
Revenue from Continuing Operations |
$ | 867,231 | $ | 684,811 | $ | 1,694,030 | $ | 1,340,761 | ||||||||
Operating Income |
$ | 116,006 | $ | 99,172 | $ | 223,885 | $ | 189,231 | ||||||||
Depreciation |
41,858 | 37,859 | 84,982 | 71,610 | ||||||||||||
Purchase Price Amortization |
35,459 | 27,027 | 71,545 | 56,225 | ||||||||||||
Other Amortization |
10,270 | 7,516 | 18,656 | 14,385 | ||||||||||||
EBITDA , before other items |
$ | 203,593 | $ | 171,574 | $ | 399,068 | $ | 331,451 | ||||||||
M&A, Restructuring and Integration Costs |
12,542 | | 12,542 | | ||||||||||||
EBITDA, excluding other items |
$ | 216,135 | $ | 171,574 | $ | 411,610 | $ | 331,451 | ||||||||
EBITDA Margin, as adjusted |
24.9 | % | 25.1 | % | 24.3 | % | 24.7 | % | ||||||||
3. Net Earnings Reconciliation |
||||||||||||||||
Net Earnings from Continuing Operations |
$ | 73,510 | $ | 145,615 | $ | 142,373 | $ | 201,975 | ||||||||
M&A, Restructuring and Integration Costs, net of tax |
22,143 | 1,385 | 31,634 | 4,501 | ||||||||||||
LPS Spin Costs, net of tax |
3,606 | | 5,418 | | ||||||||||||
Covansys Gain, net of tax |
| (57,988 | ) | | (57,988 | ) | ||||||||||
Debt Restructure Charge, net of tax |
| | | 17,059 | ||||||||||||
Net Earnings from Continuing Operations, excluding other items |
99,259 | 89,012 | 179,425 | 165,547 | ||||||||||||
After-tax Purchase Price Amortization |
28,595 | 23,901 | 58,113 | 49,513 | ||||||||||||
Adjusted Net Earnings from Continuing Operations |
$ | 127,854 | $ | 112,913 | $ | 237,538 | $ | 215,060 | ||||||||
Net Earnings Per Share from Continuing Operations, excluding other items |
$ | 0.51 | $ | 0.45 | $ | 0.92 | $ | 0.84 | ||||||||
Adjusted Net Earnings from Continuing Operations Per Share |
$ | 0.66 | $ | 0.57 | $ | 1.22 | $ | 1.10 | ||||||||
Diluted Weighted Average Shares |
194,448 | 196,977 | 195,493 | 196,395 | ||||||||||||
Six Months Ended June 30, 2008 | Six Months Ended 6/30/2007 | |||||||||||||||||||||||
GAAP | Adj | Non-GAAP | GAAP | Adj | Non-GAAP | |||||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||||||
Net earnings (1) |
$ | 142,407 | 26,207 | 168,614 | $ | 207,507 | 4,498 | 212,005 | ||||||||||||||||
Adjustments to reconcile net earnings to net
cash provided by operating activities: |
||||||||||||||||||||||||
Non-cash adjustments |
294,645 | | 294,645 | 180,679 | | 180,679 | ||||||||||||||||||
Working
capital adjustments (2) |
(194,220 | ) | 64,432 | (129,788 | ) | (145,099 | ) | 30,800 | (114,299 | ) | ||||||||||||||
Net cash
provided by operating activities |
242,832 | 90,639 | 333,471 | 243,087 | 35,298 | 278,385 | ||||||||||||||||||
Capital expenditures included in investing activities: |
||||||||||||||||||||||||
Additions
to property and equipment |
(43,896 | ) | | (43,896 | ) | (60,202 | ) | | (60,202 | ) | ||||||||||||||
Additions to
capitalized software |
(111,750 | ) | | (111,750 | ) | (93,808 | ) | | (93,808 | ) | ||||||||||||||
Net capital expenditures |
(155,646 | ) | | (155,646 | ) | (154,010 | ) | | (154,010 | ) | ||||||||||||||
Net free cash flow |
$ | 87,186 | 90,639 | 177,825 | $ | 89,077 | 35,298 | 124,375 | ||||||||||||||||
(1) | Adjustments to Net Earnings to eliminate the after-tax impact of non-recurring integration costs and LPS spin-off costs | |
(2) | Adjustments to working capital reflect elimination of settlement of various acquisition related liabilities. |
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
6/30/2008 | 6/30/2007 | 6/30/2008 | 6/30/2007 | |||||||||||||
1. Income Statement-Assumes LPS as a
Discontinued Operation |
||||||||||||||||
Processing and services revenues |
$ | 878,653 | $ | 701,630 | $ | 1,716,876 | $ | 1,372,882 | ||||||||
Cost of revenues |
674,032 | 540,269 | 1,322,300 | 1,061,465 | ||||||||||||
Gross profit |
204,621 | 161,361 | 394,576 | 311,417 | ||||||||||||
Selling, general and administrative |
122,223 | 74,668 | 238,415 | 144,225 | ||||||||||||
Research and development costs |
19,357 | 14,905 | 37,640 | 32,423 | ||||||||||||
Operating Income |
63,041 | 71,788 | 118,521 | 134,769 | ||||||||||||
Interest income |
1,637 | 165 | 4,395 | 374 | ||||||||||||
Interest expense |
(44,441 | ) | (42,934 | ) | (84,018 | ) | (115,007 | ) | ||||||||
Gain on sale of Covansys stock |
| 92,044 | | 92,044 | ||||||||||||
Other income |
2,224 | 1,336 | 1,783 | 1,428 | ||||||||||||
Earnings from continuing
operations before tax and minority
interest |
22,461 | 122,399 | 40,681 | 113,608 | ||||||||||||
Provision for income tax |
4,802 | 43,284 | 9,410 | 38,564 | ||||||||||||
Earnings before equity in earnings
(losses) and minority interest |
17,659 | 79,115 | 31,271 | 75,044 | ||||||||||||
Equity in earnings (losses) of
unconsolidated entities, net |
(157 | ) | 1,330 | (157 | ) | 2,738 | ||||||||||
Minority interest expense
(income), net of tax |
306 | 11 | 116 | (328 | ) | |||||||||||
Net earnings from continuing
operations |
17,196 | 80,434 | 30,998 | 78,110 | ||||||||||||
Earnings from discontinued
operations |
54,711 | 67,570 | 111,409 | 129,397 | ||||||||||||
Net earnings |
71,907 | 148,004 | 142,407 | 207,507 | ||||||||||||
Net Earnings from Continuing
Operations Per Share Diluted |
$ | 0.09 | $ | 0.41 | $ | 0.16 | $ | 0.40 | ||||||||
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
6/30/2008 | 6/30/2007 | 6/30/2008 | 6/30/2007 | |||||||||||||
2. Revenues |
||||||||||||||||
Revenue from Continuing Operations: |
||||||||||||||||
TPS |
||||||||||||||||
Integrated Financial Solutions |
$ | 380,463 | $ | 297,117 | $ | 749,048 | $ | 580,870 | ||||||||
Enterprise Solutions |
284,278 | 245,174 | 564,822 | 479,734 | ||||||||||||
International |
203,755 | 143,293 | 381,864 | 281,478 | ||||||||||||
Other |
(1,265 | ) | (773 | ) | (1,704 | ) | (1,321 | ) | ||||||||
Total TPS Revenue |
867,231 | 684,811 | 1,694,030 | 1,340,761 | ||||||||||||
Corporate |
11,422 | 16,819 | 22,846 | 32,121 | ||||||||||||
Total Revenue from Continuing
Operations |
878,653 | 701,630 | 1,716,876 | 1,372,882 | ||||||||||||
Revenue Growth from Prior Year Period |
||||||||||||||||
Revenue from Continuing Operations: |
||||||||||||||||
TPS |
||||||||||||||||
Integrated Financial Solutions |
28.1 | % | 9.1 | % | 29.0 | % | 7.1 | % | ||||||||
Enterprise Solutions |
15.9 | % | 10.8 | % | 17.7 | % | 9.2 | % | ||||||||
International |
42.2 | % | 44.3 | % | 35.7 | % | 50.9 | % | ||||||||
Other |
-63.6 | % | 73.2 | % | -29.0 | % | 78.9 | % | ||||||||
Total TPS Revenue Growth |
26.6 | % | 16.1 | % | 26.3 | % | 15.4 | % | ||||||||
Corporate |
-32.1 | % | -19.6 | % | -28.9 | % | -21.1 | % | ||||||||
Total Revenue from Continuing
Operations |
25.2 | % | 14.7 | % | 25.1 | % | 14.6 | % | ||||||||
3. TPS Revenue from Continuing
Operations, excluding eFunds |
||||||||||||||||
TPS |
||||||||||||||||
Integrated Financial Solutions |
$ | 310,613 | $ | 297,117 | $ | 608,179 | $ | 580,870 | ||||||||
Enterprise Solutions |
227,398 | 245,174 | 454,003 | 479,734 | ||||||||||||
International |
192,345 | 143,293 | 354,087 | 281,478 | ||||||||||||
Other |
(355 | ) | (773 | ) | (778 | ) | (1,321 | ) | ||||||||
Total TPS Revenue, excluding eFunds |
$ | 730,001 | $ | 684,811 | $ | 1,415,491 | $ | 1,340,761 | ||||||||
TPS Revenue Growth from Prior Year
Period, excluding eFunds |
||||||||||||||||
TPS |
||||||||||||||||
Integrated Financial Solutions |
4.5 | % | 9.1 | % | 4.7 | % | 7.1 | % | ||||||||
Enterprise Solutions |
-7.3 | % | 10.8 | % | -5.4 | % | 9.2 | % | ||||||||
International |
34.2 | % | 44.3 | % | 25.8 | % | 50.9 | % | ||||||||
Other |
54.1 | % | 73.2 | % | -41.1 | % | 78.9 | % | ||||||||
Total TPS Revenue Growth,
excluding Efunds |
6.6 | % | 16.1 | % | 5.6 | % | 15.4 | % | ||||||||
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
6/30/2008 | 6/30/2007 | 6/30/2008 | 6/30/2007 | |||||||||||||
4. Depreciation and Amortization |
||||||||||||||||
Depreciation and Amortization |
$ | 65,082 | $ | 68,027 | $ | 133,793 | $ | 130,590 | ||||||||
Purchase Price Amortization |
44,439 | 37,897 | 90,999 | 78,677 | ||||||||||||
Other Amortization |
10,864 | 7,968 | 19,725 | 15,237 | ||||||||||||
Total Depreciation and
Amortization |
$ | 120,385 | $ | 113,892 | $ | 244,517 | $ | 224,504 | ||||||||
Depreciation and Amortization
Related to Non-recurring
Adjustments |
$ | | $ | 393 | $ | | $ | 1,076 | ||||||||
Depreciation and Amortization
from Discontinued Operations |
22,506 | 26,491 | 43,246 | 53,048 | ||||||||||||
Total Depreciation and
Amortization from Continuing
Operations, as adjusted |
$ | 97,879 | $ | 87,008 | $ | 201,271 | $ | 170,380 | ||||||||
5. Capital Expenditures |
||||||||||||||||
Total Capital Expenditures -
Continuing Operations |
52,260 | 65,642 | 130,509 | 125,438 | ||||||||||||
Total Capital Expenditures -
Discontinued Operations |
13,838 | 14,252 | 25,137 | 28,572 | ||||||||||||
Total Capital Expenditures |
$ | 66,098 | $ | 79,894 | $ | 155,646 | $ | 154,010 | ||||||||
6. Stock Compensation |
||||||||||||||||
Stock Compensation, Excluding
Acceleration Charges |
$ | 13,183 | $ | 8,751 | $ | 25,367 | $ | 17,240 | ||||||||
Stock Compensation Acceleration
Charges |
2,606 | | 16,800 | | ||||||||||||
Total Stock Compensation |
$ | 15,789 | $ | 8,751 | $ | 42,167 | $ | 17,240 | ||||||||
Stock Compensation Related to
Discontinued Operations for LPS |
4,433 | 3,645 | 9,120 | 7,215 | ||||||||||||
Stock Compensation from
Continuing Operations |
$ | 11,356 | $ | 5,106 | $ | 33,047 | $ | 10,025 | ||||||||
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
6/30/2008 | 6/30/2007 | 6/30/2008 | 6/30/2007 | |||||||||||||
1. EBIT and EBITDA -
Consolidated |
||||||||||||||||
Revenue from Continuing
Operations |
$ | 878,653 | $ | 701,630 | $ | 1,716,876 | $ | 1,372,882 | ||||||||
Operating Income from
Continuing Operations |
$ | 63,041 | 71,788 | $ | 118,521 | 134,769 | ||||||||||
M&A, Restructuring and
Integration Costs |
29,071 | 2,195 | 44,041 | 7,156 | ||||||||||||
LPS Spin Costs |
5,582 | | 8,440 | | ||||||||||||
EBIT, as adjusted |
$ | 97,694 | 73,983 | $ | 171,002 | 141,925 | ||||||||||
Depr and Amort from Cont
Ops, as adjusted |
97,879 | 87,008 | 201,271 | 170,380 | ||||||||||||
EBITDA , as adjusted |
$ | 195,573 | 160,991 | $ | 372,273 | 312,305 | ||||||||||
EBIT Margin, as adjusted |
11.1 | % | 10.5 | % | 10.0 | % | 10.3 | % | ||||||||
EBITDA Margin, as adjusted |
22.3 | % | 22.9 | % | 21.7 | % | 22.7 | % | ||||||||
2. Net Earnings -
Reconciliation |
||||||||||||||||
Net Earnings from
Continuing Operations |
$ | 17,196 | 80,434 | $ | 30,998 | 78,110 | ||||||||||
M&A, Restructuring and
Integration Costs, net of
tax |
20,538 | 1,385 | 30,029 | 4,501 | ||||||||||||
LPS Spin Costs, net of tax |
3,606 | | 5,418 | | ||||||||||||
Covansys Gain, net of tax |
| (57,988 | ) | | (57,988 | ) | ||||||||||
Debt Restructure Charge,
net of tax |
| | | 17,059 | ||||||||||||
Corporate Costs-LPS
Non-Disc Ops |
6,342 | 3,940 | 12,580 | 5,892 | ||||||||||||
Interest Expense-LPS
Non-Disc Ops |
| 11,819 | | 23,567 | ||||||||||||
Net Earnings from
Continuing Operations,
Excluding Certain
Items |
47,682 | 39,590 | 79,025 | 71,141 | ||||||||||||
After-tax Purchase Price
Amortization |
23,099 | 17,578 | 46,681 | 36,463 | ||||||||||||
Adjusted Net Earnings from
Continuing Operations |
$ | 70,781 | 57,168 | $ | 125,706 | 107,604 | ||||||||||
Net Earnings from
Continuing Operations Per
Share, excluding other
items |
$ | 0.25 | 0.20 | $ | 0.40 | 0.36 | ||||||||||
Adjusted Net Earnings Per
Share |
$ | 0.36 | 0.29 | $ | 0.64 | 0.55 | ||||||||||
Diluted Weighted Average
Shares |
194,448 | 196,977 | 195,493 | 196,395 | ||||||||||||
Q/E 6/30/08 (A) | Disc Ops | Q/E 6/30/08 Recast (C) | ||||||||||||||||||||||||||||||
Corporate & | ||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2008 | TPS | LPS | Corporate | FIS | LPS (B) | TPS | Other | FIS | ||||||||||||||||||||||||
Total revenue |
$ | 867,231 | $ | 471,757 | $ | 50 | $ | 1,339,038 | $ | 460,385 | $ | 867,231 | $ | 11,422 | $ | 878,653 | ||||||||||||||||
Total cost of
revenue |
665,660 | 297,304 | | 962,964 | 288,932 | 665,660 | 8,372 | 674,032 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
Gross profit |
201,571 | 174,453 | 50 | 376,074 | 171,453 | 201,571 | 3,050 | 204,621 | ||||||||||||||||||||||||
General and
administrative |
66,208 | 53,161 | 56,015 | 175,384 | 53,161 | 66,208 | 56,015 | 122,223 | ||||||||||||||||||||||||
Research and
development costs |
19,357 | 7,210 | | 26,567 | 7,210 | 19,357 | | 19,357 | ||||||||||||||||||||||||
| | |||||||||||||||||||||||||||||||
Income from
operations |
116,006 | 114,082 | (55,965 | ) | 174,123 | 111,082 | 116,006 | (52,965 | ) | 63,041 | ||||||||||||||||||||||
Interest income |
1,904 | 1,904 | 267 | 1,637 | 1,637 | |||||||||||||||||||||||||||
Interest expense |
(62,800 | ) | (62,800 | ) | (18,359 | ) | (44,441 | ) | (44,441 | ) | ||||||||||||||||||||||
Other income |
2,183 | 2,183 | (41 | ) | 2,224 | 2,224 | ||||||||||||||||||||||||||
Income from
continuing
operations before
tax and minority
interest |
116,006 | 114,082 | (114,678 | ) | 115,410 | 92,949 | 116,006 | (93,545 | ) | 22,461 | ||||||||||||||||||||||
Provision for
income tax |
40,867 | 40,867 | 36,065 | 4,802 | 4,802 | |||||||||||||||||||||||||||
Income from
operations |
116,006 | 114,082 | (155,545 | ) | 74,543 | 56,884 | 116,006 | (98,347 | ) | 17,659 | ||||||||||||||||||||||
Equity in earnings
of unconsolidated
entities, net |
(317 | ) | (317 | ) | (160 | ) | (157 | ) | (157 | ) | ||||||||||||||||||||||
Minority interests
in earnings, net of
tax |
716 | 716 | 410 | 306 | 306 | |||||||||||||||||||||||||||
Net earnings from
continuing
operations |
116,006 | 114,082 | (156,578 | ) | 73,510 | 56,314 | 116,006 | (98,810 | ) | 17,196 | ||||||||||||||||||||||
Earnings from
discontinued
operations |
| | (1,603 | ) | (1,603 | ) | | 54,711 | 54,711 | |||||||||||||||||||||||
Net earnings |
$ | 116,006 | $ | 114,082 | $ | (158,181 | ) | $ | 71,907 | $ | 56,314 | $ | 116,006 | $ | (44,099 | ) | $ | 71,907 | ||||||||||||||
Net earnings per
share-basic -
continuing
operations |
$ | 0.38 | $ | 0.09 | ||||||||||||||||||||||||||||
Net earnings per
share-basic -
discontinued
operations |
(0.01 | ) | 0.28 | |||||||||||||||||||||||||||||
Net earnings per
share-basic |
$ | 0.37 | $ | 0.37 | ||||||||||||||||||||||||||||
Pro forma Weighted
average
shares-basic |
192,538 | 192,538 | ||||||||||||||||||||||||||||||
Net earnings per
share-diluted -
continuing
operations |
$ | 0.38 | $ | 0.09 | ||||||||||||||||||||||||||||
Net earnings per
share-diluted -
discontinued
operations |
(0.01 | ) | 0.28 | |||||||||||||||||||||||||||||
Net earnings per
share-diluted |
$ | 0.37 | $ | 0.37 | ||||||||||||||||||||||||||||
Pro forma Weighted
average
shares-diluted |
194,448 | 194,448 | ||||||||||||||||||||||||||||||
(A) | These columns represents the historical segment presentation of FIS. | |
(B) | This column represents the components of LPS previously reported within the Lender Processing Services segment that will be presented as discontinued operations beginning with FISs reported results beginning with the three and nine-month periods ended September 30, 2008 | |
(C) | This presentation represents FISs consolidated results recast to reflect discontinued operations consistent with how earnings will be reported by FIS beginning with the three and nine-month periods ended September 30, 2008. |
7
Supplemental Materials FIS Post-Spin 2nd Quarter 2008 |
Forward Looking Statements This presentation 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: changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage 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; 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. |
Use of Non-GAAP Measures |
Presentation Methods for Comparability Post Spin Basis 2nd Quarter 2008 And Prior Periods 3rd Quarter 2008 And Future Periods Property Insight FIS Credit Services Homebuilders Financial Network Game Cash Discontinued Discontinued Certegy Australia Continuing Discontinued LPS Continuing (1) Discontinued In accordance with U.S. Generally Accepted Accounting Principles, LPS will be reported as a discontinued operation beginning in the third quarter of 2008. To improve comparability and understanding of our operating performance, LPS is being presented in the 6/30/2008 supplemental schedules as a discontinued operation which conforms to the company's pro forma presentation included in the Form 8-K filed August 1, 2008. SEC Filings |
FIS Post-Spin Revenue 2Q-08 vs. 2Q-07 |
FIS Post-Spin EBITDA and EBIT 2Q-08 vs. 2Q-07 |
FIS Adjusted Net Earnings Post Spin Basis |
FIS Free Cash Flow Reconciliation Post Spin Basis (in millions, except per share amounts) |
FIS Post-Spin Long-term Debt |
FIS Post-Spin Income Statement Reconciliation to Investor Day Presentation |
FIS 2007 EBITDA Margin Reconciliation Post Spin Basis (in thousands) |
FIS 2008 Outlook Post Spin (1) Change in EPS guidance is due solely to a lower-than anticipated effective tax rate. Adjusted EPS guidance also excludes after-tax adjustments related to M&A, restructuring and integration costs, spin-off costs and the expected write down of debt issuance costs in Q3-08. (2) Cash from operations less capital expenditures. |