Georgia | 37-1490331 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number) |
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)) |
Exhibit | Description | |
99.1 | Press release of Fidelity National Information Services, Inc. dated November 3, 2015 regarding third quarter 2015 financial results. |
Fidelity National Information Services, Inc. | ||||
Date: November 3, 2015 | By: | /s/ James W. Woodall | ||
Name: | James W. Woodall | |||
Title: | Corporate Executive Vice President and Chief Financial Officer | |||
Fidelity National Information Services, Inc. | ||||
Date: November 3, 2015 | By: | /s/ Michael A. Nussbaum | ||
Name: | Michael A. Nussbaum | |||
Title: | Chief Accounting Officer |
Exhibit | Description | |
99.1 | Press release of Fidelity National Information Services, Inc. dated November 3, 2015 regarding third quarter 2015 financial results. |
• | Revenue of $1.6 billion |
• | EPS from continuing operations of $0.62, or $0.90 on an adjusted basis |
• | $73 million returned to shareholders through dividends |
• | Integrated Financial Solutions: |
• | Global Financial Solutions: |
• | Corporate/Other: |
• | the occurrence of any event, change or other circumstances that could give rise to modifications of or the termination of the pending Merger Agreement between us and SunGard, a Delaware corporation, under which we have agreed to acquire SunGard and its subsidiaries through a series of mergers (the “Mergers”); |
• | the inability to complete the Mergers due to the failure to obtain stockholder approvals or the failure to satisfy other conditions to the closing of the Mergers; |
• | the failure of the Mergers to be completed for any other reason; |
• | legal or regulatory proceedings or other matters that affect the timing or ability to complete the Mergers as contemplated; |
• | the risk that the proposed Mergers disrupt current plans and operations; |
• | the effects of the Mergers on our financial results; |
• | potential difficulties in employee retention as a result of the Mergers; |
• | disruption from the Mergers, making it difficult to maintain business and operational relationships; |
• | the risk that the businesses will not be integrated successfully, or that the integration will be more costly or more time-consuming and complex than anticipated; |
• | the risk that cost savings and other synergies anticipated to be realized from the Mergers may not be fully realized or may take longer to realize than expected; |
• | the risk of doing business internationally; |
• | changes in general economic, business and political conditions, including the possibility of intensified international hostilities, acts of terrorism, and changes in either or both the United States and international lending, capital and financial markets; |
• | the effect of legislative initiatives or proposals, statutory changes, governmental or other applicable regulations and/or changes in industry requirements, including privacy regulations; |
• | the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in, or new laws or regulations affecting, the banking, retail and financial services industries or due to financial failures or other setbacks suffered by firms in those industries; |
• | changes in the growth rates of the markets for our and SunGard’s solutions; |
• | failures to adapt solutions to changes in technology or in the marketplace; |
• | internal or external security breaches of our and SunGard’s systems, including those relating to the unauthorized access, theft, corruption or loss of personal information and computer viruses and other malware affecting our and SunGard’s software or platforms, and the reactions of customers, card associations, government regulators and others to any such events; |
• | the risk that implementation of software (including software updates) for customers or at customer locations may result in the corruption or loss of data or customer information, interruption of business operations, exposure to liability claims or loss of customers; |
• | the reaction of current and potential customers to communications from us or regulators regarding information security, risk management, internal audit or other matters; |
• | competitive pressures on pricing related to our and SunGard’s solutions including the ability to attract new, or retain existing, customers; |
• | an operational or natural disaster at one of our or SunGard’s major operations centers; and |
• | other risks detailed under “Risk Factors” and other sections of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and other filings with the SEC. |
Ellyn Raftery, 904.438.6083 | Peter Gunnlaugsson, 904.438.6603 | |
Chief Marketing Officer | Senior Vice President | |
FIS Global Marketing and Communications | FIS Corporate Finance and Investor Relations | |
ellyn.raftery@fisglobal.com | pete.gunnlaugsson@fisglobal.com |
Exhibit A | Consolidated Statements of Earnings - Unaudited for the three and nine months ended September 30, 2015 and 2014 |
Exhibit B | Consolidated Balance Sheets - Unaudited as of September 30, 2015 and December 31, 2014 |
Exhibit C | Consolidated Statements of Cash Flows - Unaudited for the nine months ended September 30, 2015 and 2014 |
Exhibit D | Supplemental Non-GAAP Financial Information - Unaudited for the three and nine months ended September 30, 2015 and 2014 |
Exhibit E | Supplemental GAAP to Non-GAAP Reconciliation - Unaudited for the three and nine months ended September 30, 2015 and 2014 |
Exhibit A | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Processing and services revenues | $ | 1,578.8 | $ | 1,605.3 | $ | 4,720.4 | $ | 4,724.7 | |||||||
Cost of revenues | 1,021.3 | 1,074.5 | 3,160.6 | 3,211.4 | |||||||||||
Gross profit | 557.5 | 530.8 | 1,559.8 | 1,513.3 | |||||||||||
Selling, general and administrative expenses | 219.2 | 207.1 | 719.4 | 593.8 | |||||||||||
Operating income | 338.3 | 323.7 | 840.4 | 919.5 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (35.6 | ) | (37.7 | ) | (108.8 | ) | (120.7 | ) | |||||||
Other income (expense), net | (21.2 | ) | (54.8 | ) | 129.5 | (56.5 | ) | ||||||||
Total other income (expense), net | (56.8 | ) | (92.5 | ) | 20.7 | (177.2 | ) | ||||||||
Earnings from continuing operations before income taxes | 281.5 | 231.2 | 861.1 | 742.3 | |||||||||||
Provision for income taxes | 100.0 | 72.1 | 314.2 | 233.7 | |||||||||||
Earnings from continuing operations, net of tax | 181.5 | 159.1 | 546.9 | 508.6 | |||||||||||
Earnings (loss) from discontinued operations, net of tax | (1.7 | ) | (1.2 | ) | (7.0 | ) | (4.3 | ) | |||||||
Net earnings | 179.8 | 157.9 | 539.9 | 504.3 | |||||||||||
Net earnings attributable to noncontrolling interest | (4.6 | ) | (7.4 | ) | (13.6 | ) | (20.5 | ) | |||||||
Net earnings attributable to FIS common stockholders | $ | 175.2 | $ | 150.5 | $ | 526.3 | $ | 483.8 | |||||||
Net earnings per share-basic from continuing operations attributable to FIS common stockholders | $ | 0.63 | $ | 0.54 | $ | 1.89 | $ | 1.71 | |||||||
Net earnings (loss) per share-basic from discontinued operations attributable to FIS common stockholders | (0.01 | ) | — | (0.02 | ) | (0.02 | ) | ||||||||
Net earnings per share-basic attributable to FIS common stockholders * | $ | 0.62 | $ | 0.53 | $ | 1.87 | $ | 1.69 | |||||||
Weighted average shares outstanding-basic | 280.4 | 283.1 | 281.5 | 285.5 | |||||||||||
Net earnings per share-diluted from continuing operations attributable to FIS common stockholders | $ | 0.62 | $ | 0.53 | $ | 1.87 | $ | 1.69 | |||||||
Net earnings (loss) per share-diluted from discontinued operations attributable to FIS common stockholders | (0.01 | ) | — | (0.02 | ) | (0.01 | ) | ||||||||
Net earnings per share-diluted attributable to FIS common stockholders * | $ | 0.62 | $ | 0.52 | $ | 1.85 | $ | 1.67 | |||||||
Weighted average shares outstanding-diluted | 283.8 | 287.0 | 285.0 | 289.3 | |||||||||||
Amounts attributable to FIS common stockholders: | |||||||||||||||
Earnings from continuing operations, net of tax | $ | 176.9 | $ | 151.7 | $ | 533.3 | $ | 488.1 | |||||||
Earnings (loss) from discontinued operations, net of tax | (1.7 | ) | (1.2 | ) | (7.0 | ) | (4.3 | ) | |||||||
Net earnings attributable to FIS common stockholders | $ | 175.2 | $ | 150.5 | $ | 526.3 | $ | 483.8 |
Exhibit B | |||||||
September 30, | December 31, | ||||||
2015 | 2014 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 441.5 | $ | 492.8 | |||
Settlement deposits | 309.2 | 393.9 | |||||
Trade receivables, net | 1,125.1 | 1,126.4 | |||||
Settlement receivables | 239.9 | 153.7 | |||||
Other receivables | 24.5 | 31.5 | |||||
Due from Brazilian venture partner | 29.7 | 33.6 | |||||
Prepaid expenses and other current assets | 186.8 | 167.0 | |||||
Deferred income taxes | 79.6 | 67.4 | |||||
Assets held for sale | — | 6.8 | |||||
Total current assets | 2,436.3 | 2,473.1 | |||||
Property and equipment, net | 481.0 | 483.3 | |||||
Goodwill | 8,761.5 | 8,877.6 | |||||
Intangible assets, net | 1,053.9 | 1,268.0 | |||||
Computer software, net | 902.1 | 893.4 | |||||
Deferred contract costs, net | 238.4 | 213.2 | |||||
Other noncurrent assets | 314.6 | 311.9 | |||||
Total assets | $ | 14,187.8 | $ | 14,520.5 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 722.3 | $ | 730.3 | |||
Settlement payables | 555.9 | 558.4 | |||||
Deferred revenues | 273.5 | 279.4 | |||||
Current portion of long-term debt | 13.4 | 13.1 | |||||
Due to Brazilian venture partner | 9.0 | 13.3 | |||||
Liabilities held for sale | — | 4.4 | |||||
Total current liabilities | 1,574.1 | 1,598.9 | |||||
Long-term debt, excluding current portion | 4,957.0 | 5,054.6 | |||||
Deferred income taxes | 843.9 | 874.4 | |||||
Due to Brazilian venture partner | 23.1 | 29.6 | |||||
Deferred revenues | 27.9 | 26.1 | |||||
Other long-term liabilities | 165.5 | 245.4 | |||||
Total liabilities | 7,591.5 | 7,829.0 | |||||
Equity: | |||||||
FIS stockholders’ equity: | |||||||
Preferred stock $0.01 par value | — | — | |||||
Common stock $0.01 par value | 3.9 | 3.9 | |||||
Additional paid in capital | 7,408.5 | 7,336.8 | |||||
Retained earnings | 3,053.1 | 2,746.8 | |||||
Accumulated other comprehensive earnings (loss) | (261.4 | ) | (107.2 | ) | |||
Treasury stock $0.01 par value | (3,683.3 | ) | (3,423.6 | ) | |||
Total FIS stockholders’ equity | 6,520.8 | 6,556.7 | |||||
Noncontrolling interest | 75.5 | 134.8 | |||||
Total equity | 6,596.3 | 6,691.5 | |||||
Total liabilities and equity | $ | 14,187.8 | $ | 14,520.5 |
Exhibit C | |||||||
Nine months ended September 30, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net earnings | $ | 539.9 | $ | 504.3 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation and amortization | 464.3 | 466.1 | |||||
Amortization of debt issue costs | 6.7 | 15.2 | |||||
Gain on sale of assets | (149.5 | ) | — | ||||
Stock-based compensation | 58.8 | 40.5 | |||||
Deferred income taxes | (41.2 | ) | (14.2 | ) | |||
Excess income tax benefit from exercise of stock options | (21.0 | ) | (24.2 | ) | |||
Other operating activities, net | 3.7 | 15.7 | |||||
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency: | |||||||
Trade receivables | (34.0 | ) | (53.1 | ) | |||
Settlement activity | 7.4 | (30.7 | ) | ||||
Prepaid expenses and other assets | (19.1 | ) | (24.2 | ) | |||
Deferred contract costs | (85.3 | ) | (63.4 | ) | |||
Deferred revenue | (3.9 | ) | 15.8 | ||||
Accounts payable, accrued liabilities and other liabilities | (29.3 | ) | (160.7 | ) | |||
Net cash provided by operating activities | 697.5 | 687.1 | |||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | (106.0 | ) | (110.5 | ) | |||
Additions to computer software | (199.7 | ) | (162.1 | ) | |||
Proceeds from sale of assets | 240.7 | — | |||||
Acquisitions, net of cash acquired and equity investments | (16.8 | ) | (133.6 | ) | |||
Other investing activities, net | (0.5 | ) | 7.5 | ||||
Net cash used in investing activities | (82.3 | ) | (398.7 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings | 4,662.0 | 6,089.1 | |||||
Repayment of borrowings and capital lease obligations | (4,762.4 | ) | (5,586.3 | ) | |||
Debt issuance costs | (2.6 | ) | (7.9 | ) | |||
Excess income tax benefit from exercise of stock options | 21.0 | 24.2 | |||||
Proceeds from exercise of stock options | 45.5 | 41.3 | |||||
Treasury stock activity | (307.7 | ) | (506.2 | ) | |||
Dividends paid | (219.5 | ) | (205.7 | ) | |||
Distribution to Brazilian Venture partner | (23.6 | ) | (34.8 | ) | |||
Other financing activities, net | (24.0 | ) | (21.8 | ) | |||
Net cash used in financing activities | (611.3 | ) | (208.1 | ) | |||
Effect of foreign currency exchange rate changes on cash | (55.2 | ) | (16.0 | ) | |||
Net (decrease) increase in cash and cash equivalents | (51.3 | ) | 64.3 | ||||
Cash and cash equivalents, at beginning of period | 492.8 | 547.5 | |||||
Cash and cash equivalents, at end of period | $ | 441.5 | $ | 611.8 |
Exhibit D | |||||||||||||||
Three months ended September 30, 2015 | |||||||||||||||
Integrated Financial Solutions | Global Financial Solutions | Corporate and Other | Consolidated | ||||||||||||
Processing and services revenue | $ | 970.7 | $ | 609.1 | $ | (1.0 | ) | $ | 1,578.8 | ||||||
Operating income (loss) | $ | 348.9 | $ | 116.9 | $ | (127.5 | ) | $ | 338.3 | ||||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition, integration and severance costs (1) | — | — | 35.6 | 35.6 | |||||||||||
Purchase price amortization | — | 0.1 | 50.6 | 50.7 | |||||||||||
Non-GAAP operating income (loss) | 348.9 | 117.0 | (41.3 | ) | 424.6 | ||||||||||
Depreciation and amortization from continuing operations | 58.7 | 40.2 | 6.8 | 105.7 | |||||||||||
Adjusted EBITDA | $ | 407.6 | $ | 157.2 | $ | (34.5 | ) | $ | 530.3 | ||||||
Non-GAAP operating margin | 35.9 | % | 19.2 | % | N/M | 26.9 | % | ||||||||
Adjusted EBITDA margin | 42.0 | % | 25.8 | % | N/M | 33.6 | % | ||||||||
Three months ended September 30, 2014 | |||||||||||||||
Integrated Financial Solutions | Global Financial Solutions | Corporate and Other | Consolidated | ||||||||||||
Processing and services revenue | $ | 963.6 | $ | 642.2 | $ | (0.5 | ) | $ | 1,605.3 | ||||||
Operating income (loss) | $ | 331.5 | $ | 101.8 | $ | (109.6 | ) | $ | 323.7 | ||||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition, integration and severance costs (1) | — | — | 7.2 | 7.2 | |||||||||||
Purchase price amortization | — | — | 54.0 | 54.0 | |||||||||||
Non-GAAP operating income (loss) | 331.5 | 101.8 | (48.4 | ) | 384.9 | ||||||||||
Depreciation and amortization from continuing operations | 54.3 | 39.5 | 9.2 | 103.0 | |||||||||||
Adjusted EBITDA | $ | 385.8 | $ | 141.3 | $ | (39.2 | ) | $ | 487.9 | ||||||
Non-GAAP operating margin | 34.4 | % | 15.9 | % | N/M | 24.0 | % | ||||||||
Adjusted EBITDA margin | 40.0 | % | 22.0 | % | N/M | 30.4 | % | ||||||||
Total revenue growth from prior year period | |||||||||||||||
Three months ended September 30, 2015 | 0.7 | % | (5.2 | )% | N/M | (1.7 | )% |
Exhibit D (continued) | |||||||||||||||
Nine months ended September 30, 2015 | |||||||||||||||
Integrated Financial Solutions | Global Financial Solutions | Corporate and Other | Consolidated | ||||||||||||
Processing and services revenue | $ | 2,908.5 | $ | 1,814.9 | $ | (3.0 | ) | $ | 4,720.4 | ||||||
Operating income (loss) | $ | 996.3 | $ | 245.3 | $ | (401.2 | ) | $ | 840.4 | ||||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition, integration and severance costs (1) | — | — | 59.2 | 59.2 | |||||||||||
Global restructure (2) | — | — | 44.6 | 44.6 | |||||||||||
Purchase price amortization | — | 0.1 | 150.6 | 150.7 | |||||||||||
Non-GAAP operating income (loss) | 996.3 | 245.4 | (146.8 | ) | 1,094.9 | ||||||||||
Depreciation and amortization from continuing operations | 168.0 | 124.5 | 21.1 | 313.6 | |||||||||||
Adjusted EBITDA | $ | 1,164.3 | $ | 369.9 | $ | (125.7 | ) | $ | 1,408.5 | ||||||
Non-GAAP operating margin | 34.3 | % | 13.5 | % | N/M | 23.2 | % | ||||||||
Adjusted EBITDA margin | 40.0 | % | 20.4 | % | N/M | 29.8 | % | ||||||||
Nine months ended September 30, 2014 | |||||||||||||||
Integrated Financial Solutions | Global Financial Solutions | Corporate and Other | Consolidated | ||||||||||||
Processing and services revenue | $ | 2,869.5 | $ | 1,856.3 | $ | (1.1 | ) | $ | 4,724.7 | ||||||
Non-GAAP adjustments: | |||||||||||||||
Contract settlement (3) | 9.0 | — | — | 9.0 | |||||||||||
Adjusted processing and services revenue | $ | 2,878.5 | $ | 1,856.3 | $ | (1.1 | ) | $ | 4,733.7 | ||||||
Operating income (loss) | $ | 977.4 | $ | 254.8 | $ | (312.7 | ) | $ | 919.5 | ||||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition, integration and severance costs (1) | — | — | 7.2 | 7.2 | |||||||||||
Contract settlement (3) | 9.0 | — | — | 9.0 | |||||||||||
Purchase price amortization | — | 0.1 | 162.8 | 162.9 | |||||||||||
Non-GAAP operating income (loss) | 986.4 | 254.9 | (142.7 | ) | 1,098.6 | ||||||||||
Depreciation and amortization from continuing operations | 159.5 | 117.7 | 26.0 | 303.2 | |||||||||||
Adjusted EBITDA | $ | 1,145.9 | $ | 372.6 | $ | (116.7 | ) | $ | 1,401.8 | ||||||
Non-GAAP operating margin | 34.3 | % | 13.7 | % | N/M | 23.2 | % | ||||||||
Adjusted EBITDA margin | 39.8 | % | 20.1 | % | N/M | 29.6 | % | ||||||||
Total adjusted revenue growth from prior year period | |||||||||||||||
Nine months ended September 30, 2015 | 1.0 | % | (2.2 | )% | N/M | (0.3 | )% |
Exhibit D (continued) | ||||||||||||||||||
Three months ended September 30, | ||||||||||||||||||
2015 | 2014 | |||||||||||||||||
Constant | Constant | |||||||||||||||||
Currency | Currency | |||||||||||||||||
Revenue | FX | Revenue | Revenue | Growth | ||||||||||||||
Integrated Financial Solutions | $ | 970.7 | $ | 0.3 | $ | 971.0 | $ | 963.6 | 0.8 | % | ||||||||
Global Financial Solutions | 609.1 | 70.9 | 680.0 | 642.2 | 5.9 | % | ||||||||||||
Corporate and Other | (1.0 | ) | — | (1.0 | ) | (0.5 | ) | N/M | ||||||||||
Total processing and services revenue | $ | 1,578.8 | $ | 71.2 | $ | 1,650.0 | $ | 1,605.3 | 2.8 | % |
Nine months ended September 30, | ||||||||||||||||||
2015 | 2014 | |||||||||||||||||
Constant | Constant | |||||||||||||||||
Currency | Currency | |||||||||||||||||
Revenue | FX | Revenue | Revenue (1) | Growth | ||||||||||||||
Integrated Financial Solutions | $ | 2,908.5 | $ | 1.6 | $ | 2,910.1 | $ | 2,878.5 | 1.1 | % | ||||||||
Global Financial Solutions | 1,814.9 | 178.7 | 1,993.6 | 1,856.3 | 7.4 | % | ||||||||||||
Corporate and Other | (3.0 | ) | (0.3 | ) | (3.3 | ) | (1.1 | ) | N/M | |||||||||
Total processing and services revenue | $ | 4,720.4 | $ | 180.0 | $ | 4,900.4 | $ | 4,733.7 | 3.5 | % |
(1) | As adjusted. See note (5) to exhibit E. |
Exhibit D (continued) | |||||||
Three months ended | Nine months ended | ||||||
September 30, 2015 | September 30, 2015 | ||||||
Net cash provided by operating activities | $ | 255.0 | $ | 697.5 | |||
Non-GAAP adjustments: | |||||||
Capco acquisition related payments (1) | 4.8 | 36.2 | |||||
Severance payments (2) | 6.5 | 21.0 | |||||
Tax payment for Gaming sale (3) | 65.7 | 65.7 | |||||
SunGard acquisition expenses (4) | 14.5 | 14.5 | |||||
Settlement activity | (36.9 | ) | (7.4 | ) | |||
Adjusted cash flows from operations | 309.6 | 827.5 | |||||
Capital expenditures | (87.1 | ) | (305.7 | ) | |||
Free cash flow | $ | 222.5 | $ | 521.8 |
Three months ended | Nine months ended | ||||||
September 30, 2014 | September 30, 2014 | ||||||
Net cash provided by operating activities | $ | 208.0 | $ | 687.1 | |||
Non-GAAP adjustments: | |||||||
Capco acquisition related payments (1) | 2.7 | 32.8 | |||||
Bond premium payment (5) | 29.5 | 29.5 | |||||
Settlement activity | 46.5 | 30.7 | |||||
Adjusted cash flows from operations | 286.7 | 780.1 | |||||
Capital expenditures | (86.0 | ) | (272.6 | ) | |||
Free cash flow | $ | 200.7 | $ | 507.5 |
(1) | Adjusted cash flow from operations for the three and nine months ended September 30, 2015 and 2014 excludes payments for contingent purchase price and the New Hires and Promotions Incentive Plan associated with the 2010 acquisition of Capco. In accordance with the accounting guidance, contingent purchase price payments are included in financing activities on the Statement of Cash Flows only to the extent they represent the original liability established at the acquisition date. Payments related to subsequent adjustments to the contingent purchase price are included in the net cash provided by operating activities. |
(2) | Adjusted cash flow from operations for the three and nine months ended September 30, 2015 excludes certain severance payments, net of the related tax impact. |
(3) | Adjusted cash flow from operations excludes the third quarter tax payment related to the gain on the sale of check warranty contracts in the gaming industry, which was recognized during the second quarter. |
(4) | Adjusted cash flow from operations excludes cash payments associated with the Company's planned acquisition of SunGard, net of the related tax impact. |
(5) | Free cash flow for the three and nine months ended September 30, 2014 is adjusted for the one time bond premium payment on our 2020 senior notes that were redeemed in July 2014. |
Exhibit E | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net earnings from continuing operations attributable to FIS | $ | 176.9 | $ | 151.7 | $ | 533.3 | $ | 488.1 | ||||||||
Plus provision for income taxes | 100.0 | 72.1 | 314.2 | 233.7 | ||||||||||||
Interest expense, net | 35.6 | 37.7 | 108.8 | 120.7 | ||||||||||||
Other, net | 25.8 | 62.2 | (115.9 | ) | 77.0 | |||||||||||
Operating income | 338.3 | 323.7 | 840.4 | 919.5 | ||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
Acquisition, integration and severance (1) | 35.6 | 7.2 | 59.2 | 7.2 | ||||||||||||
Global restructure (2) | — | — | 44.6 | — | ||||||||||||
Contract settlement (3) | — | — | — | 9.0 | ||||||||||||
Purchase price amortization | 50.7 | 54.0 | 150.7 | 162.9 | ||||||||||||
Non-GAAP operating income | 424.6 | 384.9 | 1,094.9 | 1,098.6 | ||||||||||||
Depreciation and amortization from continuing operations | 105.7 | 103.0 | 313.6 | 303.2 | ||||||||||||
Adjusted EBITDA | $ | 530.3 | $ | 487.9 | $ | 1,408.5 | $ | 1,401.8 |
Exhibit E (continued) | ||||||||||||||||||||||||
Three months ended September 30, 2015 | ||||||||||||||||||||||||
Acquisition, | ||||||||||||||||||||||||
Integration, | ||||||||||||||||||||||||
and | Sale of | Purchase | ||||||||||||||||||||||
Severance | Gaming | Price | ||||||||||||||||||||||
GAAP | Costs (1) | Contracts (2) | Subtotal | Amort. (6) | Non-GAAP | |||||||||||||||||||
Processing and services revenue | $ | 1,578.8 | $ | — | $ | — | $ | 1,578.8 | $ | — | $ | 1,578.8 | ||||||||||||
Cost of revenues | 1,021.3 | — | — | 1,021.3 | (50.7 | ) | 970.6 | |||||||||||||||||
Gross profit | 557.5 | — | — | 557.5 | 50.7 | 608.2 | ||||||||||||||||||
Selling, general and administrative expenses | 219.2 | (35.6 | ) | — | 183.6 | — | 183.6 | |||||||||||||||||
Operating income | 338.3 | 35.6 | — | 373.9 | 50.7 | 424.6 | ||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Interest income (expense), net | (35.6 | ) | — | — | (35.6 | ) | — | (35.6 | ) | |||||||||||||||
Other income (expense), net | (21.2 | ) | 17.0 | 1.0 | (3.2 | ) | — | (3.2 | ) | |||||||||||||||
Total other income (expense) | (56.8 | ) | 17.0 | 1.0 | (38.8 | ) | — | (38.8 | ) | |||||||||||||||
Earnings (loss) from continuing operations before income taxes | 281.5 | 52.6 | 1.0 | 335.1 | 50.7 | 385.8 | ||||||||||||||||||
Provision for income taxes | 100.0 | 17.6 | (8.1 | ) | 109.5 | 17.0 | 126.5 | |||||||||||||||||
Earnings (loss) from continuing operations, net of tax | 181.5 | 35.0 | 9.1 | 225.6 | 33.7 | 259.3 | ||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax (7) | (1.7 | ) | — | — | (1.7 | ) | — | (1.7 | ) | |||||||||||||||
Net earnings (loss) | 179.8 | 35.0 | 9.1 | 223.9 | 33.7 | 257.6 | ||||||||||||||||||
Net (earnings) loss attributable to noncontrolling interest | (4.6 | ) | — | — | (4.6 | ) | — | (4.6 | ) | |||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 175.2 | $ | 35.0 | $ | 9.1 | $ | 219.3 | $ | 33.7 | $ | 253.0 | ||||||||||||
Amounts attributable to FIS common stockholders | ||||||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 176.9 | $ | 35.0 | $ | 9.1 | $ | 221.0 | $ | 33.7 | $ | 254.7 | ||||||||||||
Earnings (loss) from discontinued operations, net of tax (7) | (1.7 | ) | — | — | (1.7 | ) | — | (1.7 | ) | |||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 175.2 | $ | 35.0 | $ | 9.1 | $ | 219.3 | $ | 33.7 | $ | 253.0 | ||||||||||||
Net earnings (loss) per share — diluted from continuing operations attributable to FIS common stockholders* | $ | 0.62 | $ | 0.12 | $ | 0.03 | $ | 0.78 | $ | 0.12 | $ | 0.90 | ||||||||||||
Weighted average shares outstanding — diluted | 283.8 | 283.8 | 283.8 | 283.8 | 283.8 | 283.8 | ||||||||||||||||||
Effective tax rate | 36 | % | 33 | % | ||||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||
Depreciation and amortization | $ | 156.4 | (50.7 | ) | $ | 105.7 | ||||||||||||||||||
Stock compensation expense | $ | 23.0 |
Exhibit E (continued) | ||||||||||||||||||||||||||||
Nine months ended September 30, 2015 | ||||||||||||||||||||||||||||
Acquisition, | ||||||||||||||||||||||||||||
Integration, | ||||||||||||||||||||||||||||
and | Sale of | Purchase | ||||||||||||||||||||||||||
Severance | Gaming | Global | Price | |||||||||||||||||||||||||
GAAP | Costs (1) | Contracts (2) | Restructure (3) | Subtotal | Amort. (6) | Non-GAAP | ||||||||||||||||||||||
Processing and services revenue | $ | 4,720.4 | $ | — | $ | — | $ | — | $ | 4,720.4 | $ | — | $ | 4,720.4 | ||||||||||||||
Cost of revenues | 3,160.6 | — | — | — | 3,160.6 | (150.7 | ) | 3,009.9 | ||||||||||||||||||||
Gross profit | 1,559.8 | — | — | — | 1,559.8 | 150.7 | 1,710.5 | |||||||||||||||||||||
Selling, general and administrative expenses | 719.4 | (59.2 | ) | — | (44.6 | ) | 615.6 | — | 615.6 | |||||||||||||||||||
Operating income | 840.4 | 59.2 | — | 44.6 | 944.2 | 150.7 | 1,094.9 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Interest income (expense), net | (108.8 | ) | — | — | — | (108.8 | ) | — | (108.8 | ) | ||||||||||||||||||
Other income (expense), net | 129.5 | 17.0 | (139.4 | ) | — | 7.1 | — | 7.1 | ||||||||||||||||||||
Total other income (expense) | 20.7 | 17.0 | (139.4 | ) | — | (101.7 | ) | — | (101.7 | ) | ||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | 861.1 | 76.2 | (139.4 | ) | 44.6 | 842.5 | 150.7 | 993.2 | ||||||||||||||||||||
Provision for income taxes | 314.2 | 25.4 | (76.7 | ) | 14.6 | 277.5 | 50.1 | 327.6 | ||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | 546.9 | 50.8 | (62.7 | ) | 30.0 | 565.0 | 100.6 | 665.6 | ||||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax (7) | (7.0 | ) | — | — | — | (7.0 | ) | — | (7.0 | ) | ||||||||||||||||||
Net earnings (loss) | 539.9 | 50.8 | (62.7 | ) | 30.0 | 558.0 | 100.6 | 658.6 | ||||||||||||||||||||
Net (earnings) loss attributable to noncontrolling interest | (13.6 | ) | — | — | — | (13.6 | ) | — | (13.6 | ) | ||||||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 526.3 | $ | 50.8 | $ | (62.7 | ) | $ | 30.0 | $ | 544.4 | $ | 100.6 | $ | 645.0 | |||||||||||||
Amounts attributable to FIS common stockholders | ||||||||||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 533.3 | $ | 50.8 | $ | (62.7 | ) | $ | 30.0 | $ | 551.4 | $ | 100.6 | $ | 652.0 | |||||||||||||
Earnings (loss) from discontinued operations, net of tax (7) | (7.0 | ) | — | — | — | (7.0 | ) | — | (7.0 | ) | ||||||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 526.3 | $ | 50.8 | $ | (62.7 | ) | $ | 30.0 | $ | 544.4 | $ | 100.6 | $ | 645.0 | |||||||||||||
Net earnings (loss) per share — diluted from continuing operations attributable to FIS common stockholders* | $ | 1.87 | $ | 0.18 | $ | (0.22 | ) | $ | 0.11 | $ | 1.93 | $ | 0.35 | $ | 2.29 | |||||||||||||
Weighted average shares outstanding — diluted | 285.0 | 285.0 | 285.0 | 285.0 | 285.0 | 285.0 | 285.0 | |||||||||||||||||||||
Effective tax rate | 36 | % | 33 | % | ||||||||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||||||
Depreciation and amortization | $ | 464.3 | (150.7 | ) | $ | 313.6 | ||||||||||||||||||||||
Stock compensation expense | $ | 58.8 |
Exhibit E (continued) | ||||||||||||||||||||||||
Three months ended September 30, 2014 | ||||||||||||||||||||||||
Acquisition | ||||||||||||||||||||||||
Integration | ||||||||||||||||||||||||
and | Purchase | |||||||||||||||||||||||
Severance | Refinance | Price | ||||||||||||||||||||||
GAAP | Costs (1) | Costs (4) | Subtotal | Amort. (6) | Non-GAAP | |||||||||||||||||||
Processing and services revenue | $ | 1,605.3 | $ | — | $ | — | $ | 1,605.3 | $ | — | $ | 1,605.3 | ||||||||||||
Cost of revenues | 1,074.5 | — | — | 1,074.5 | (54.0 | ) | 1,020.5 | |||||||||||||||||
Gross profit | 530.8 | — | — | 530.8 | 54.0 | 584.8 | ||||||||||||||||||
Selling, general and administrative expenses | 207.1 | (7.2 | ) | — | 199.9 | — | 199.9 | |||||||||||||||||
Operating income | 323.7 | 7.2 | — | 330.9 | 54.0 | 384.9 | ||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Interest income (expense), net | (37.7 | ) | — | — | (37.7 | ) | — | (37.7 | ) | |||||||||||||||
Other income (expense), net | (54.8 | ) | 16.2 | 35.4 | (3.2 | ) | — | (3.2 | ) | |||||||||||||||
Total other income (expense) | (92.5 | ) | 16.2 | 35.4 | (40.9 | ) | — | (40.9 | ) | |||||||||||||||
Earnings (loss) from continuing operations before income taxes | 231.2 | 23.4 | 35.4 | 290.0 | 54.0 | 344.0 | ||||||||||||||||||
Provision for income taxes | 72.1 | 7.3 | 11.0 | 90.4 | 16.8 | 107.2 | ||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | 159.1 | 16.1 | 24.4 | 199.6 | 37.2 | 236.8 | ||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax (7) | (1.2 | ) | — | — | (1.2 | ) | — | (1.2 | ) | |||||||||||||||
Net earnings (loss) | 157.9 | 16.1 | 24.4 | 198.4 | 37.2 | 235.6 | ||||||||||||||||||
Net (earnings) loss attributable to noncontrolling interest | (7.4 | ) | — | — | (7.4 | ) | — | (7.4 | ) | |||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 150.5 | $ | 16.1 | $ | 24.4 | $ | 191.0 | $ | 37.2 | $ | 228.2 | ||||||||||||
Amounts attributable to FIS common stockholders | ||||||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 151.7 | $ | 16.1 | $ | 24.4 | $ | 192.2 | $ | 37.2 | $ | 229.4 | ||||||||||||
Earnings (loss) from discontinued operations, net of tax (7) | (1.2 | ) | — | — | (1.2 | ) | — | (1.2 | ) | |||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 150.5 | $ | 16.1 | $ | 24.4 | $ | 191.0 | $ | 37.2 | $ | 228.2 | ||||||||||||
Net earnings (loss) per share — diluted from continuing operations attributable to FIS common stockholders* | $ | 0.53 | $ | 0.06 | $ | 0.09 | $ | 0.67 | $ | 0.13 | $ | 0.80 | ||||||||||||
Weighted average shares outstanding — diluted | 287.0 | 287.0 | 287.0 | 287.0 | 287.0 | 287.0 | ||||||||||||||||||
Effective tax rate | 31 | % | 31 | % | ||||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||
Depreciation and amortization | $ | 157.0 | (54.0 | ) | $ | 103.0 | ||||||||||||||||||
Stock compensation expense | $ | 13.9 |
Exhibit E (continued) | ||||||||||||||||||||||||||||
Nine months ended September 30, 2014 | ||||||||||||||||||||||||||||
Acquisition | ||||||||||||||||||||||||||||
Integration | ||||||||||||||||||||||||||||
and | Purchase | |||||||||||||||||||||||||||
Severance | Refinance | Contract | Price | |||||||||||||||||||||||||
GAAP | Costs (1) | Costs (4) | Settlement (5) | Subtotal | Amort. (6) | Non-GAAP | ||||||||||||||||||||||
Processing and services revenue | $ | 4,724.7 | $ | — | $ | — | $ | 9.0 | $ | 4,733.7 | $ | — | $ | 4,733.7 | ||||||||||||||
Cost of revenues | 3,211.4 | — | — | — | 3,211.4 | (162.9 | ) | 3,048.5 | ||||||||||||||||||||
Gross profit | 1,513.3 | — | — | 9.0 | 1,522.3 | 162.9 | 1,685.2 | |||||||||||||||||||||
Selling, general and administrative expenses | 593.8 | (7.2 | ) | — | — | 586.6 | — | 586.6 | ||||||||||||||||||||
Operating income | 919.5 | 7.2 | — | 9.0 | 935.7 | 162.9 | 1,098.6 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Interest income (expense), net | (120.7 | ) | — | — | — | (120.7 | ) | — | (120.7 | ) | ||||||||||||||||||
Other income (expense), net | (56.5 | ) | 16.2 | 35.4 | — | (4.9 | ) | — | (4.9 | ) | ||||||||||||||||||
Total other income (expense) | (177.2 | ) | 16.2 | 35.4 | — | (125.6 | ) | — | (125.6 | ) | ||||||||||||||||||
Earnings (loss) from continuing operations before income taxes | 742.3 | 23.4 | 35.4 | 9.0 | 810.1 | 162.9 | 973.0 | |||||||||||||||||||||
Provision for income taxes | 233.7 | 7.3 | 11.0 | 3.0 | 255.0 | 51.5 | 306.5 | |||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | 508.6 | 16.1 | 24.4 | 6.0 | 555.1 | 111.4 | 666.5 | |||||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax (7) | (4.3 | ) | — | — | — | (4.3 | ) | — | (4.3 | ) | ||||||||||||||||||
Net earnings (loss) | 504.3 | 16.1 | 24.4 | 6.0 | 550.8 | 111.4 | 662.2 | |||||||||||||||||||||
Net (earnings) loss attributable to noncontrolling interest | (20.5 | ) | — | — | — | (20.5 | ) | — | (20.5 | ) | ||||||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 483.8 | $ | 16.1 | $ | 24.4 | $ | 6.0 | $ | 530.3 | $ | 111.4 | $ | 641.7 | ||||||||||||||
Amounts attributable to FIS common stockholders | ||||||||||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 488.1 | $ | 16.1 | $ | 24.4 | $ | 6.0 | $ | 534.6 | $ | 111.4 | $ | 646.0 | ||||||||||||||
Earnings (loss) from discontinued operations, net of tax (7) | (4.3 | ) | — | — | — | (4.3 | ) | — | (4.3 | ) | ||||||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 483.8 | $ | 16.1 | $ | 24.4 | $ | 6.0 | $ | 530.3 | $ | 111.4 | $ | 641.7 | ||||||||||||||
Net earnings (loss) per share — diluted from continuing operations attributable to FIS common stockholders* | $ | 1.69 | $ | 0.06 | $ | 0.08 | $ | 0.02 | $ | 1.85 | $ | 0.39 | $ | 2.23 | ||||||||||||||
Weighted average shares outstanding — diluted | 289.3 | 289.3 | 289.3 | 289.3 | 289.3 | 289.3 | 289.3 | |||||||||||||||||||||
Effective tax rate | 31 | % | 32 | % | ||||||||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||||||
Depreciation and amortization | $ | 466.1 | (162.9 | ) | $ | 303.2 | ||||||||||||||||||||||
Stock compensation expense | $ | 40.5 |
(1) | This column represents non-recurring transaction and other costs, including integration activities, related to acquisitions and other severance costs. |
(2) | This column represents gain on the sale of check warranty contracts and other assets in the gaming industry. The sale did not meet the standard necessary to be reported as discontinued operations and, therefore, the gain and related prior period earnings remain reported within earnings from continuing operations. The income tax adjustment for the three months ended September 30, 2015 represents the current quarter tax rate impact of the gain recorded earlier in the year. |
(3) | The Global Restructure column represents severance costs incurred in connection with the reorganization and streamlining of operations in our Global Financial Solutions segment in order to focus on growth and specific market demands of clientele in that market. |
(4) | This column represents the write-off of certain previously capitalized debt issuance costs and the payment of a $29.5 million bond premium associated with the early redemption of certain debt. |
(5) | The revenue adjustment in this column represents a cash settlement for the extinguishment of certain contractual minimums with a reseller. Although the 2014 cash settlement has no contract performance obligation, revenue is amortized in this circumstance over the remaining relationship with the reseller. |
(6) | This column represents purchase price amortization expense on intangible assets acquired through various Company acquisitions. |
(7) | During the 2015 and 2014 periods, certain operations were classified as discontinued. Reporting for discontinued operations classifies revenues and expenses as one line item net of tax in the consolidated statements of earnings. The table below outlines the components of discontinued operations for the periods presented, net of tax. During the second quarter of 2014, management committed to a plan to sell our primary business operations in China because they do not align with our strategic plans. The activity for Fidelity National Participacoes Ltda. ("Participacoes"), our former item processing and remittance services business in Brazil, relates to the ongoing settlement of labor claims as a result of the dismissal of employees in that business. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
China business line | $ | (0.3 | ) | $ | 0.2 | $ | (3.9 | ) | $ | (2.0 | ) | ||||
Participacoes | (1.4 | ) | (1.4 | ) | (3.1 | ) | (2.3 | ) | |||||||
Total discontinued operations | $ | (1.7 | ) | $ | (1.2 | ) | $ | (7.0 | ) | $ | (4.3 | ) |