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)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | ||
Emerging growth company o | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o |
Exhibit | Description | |
99.1 | Press release of Fidelity National Information Services, Inc. dated October 31, 2017 regarding financial results for the quarter ended September 30, 2017. |
Fidelity National Information Services, Inc. | ||||
Date: October 31, 2017 | By: | /s/ James W. Woodall | ||
Name: | James W. Woodall | |||
Title: | Corporate Executive Vice President and Chief Financial Officer | |||
Fidelity National Information Services, Inc. | ||||
Date: October 31, 2017 | By: | /s/ Katy Thompson | ||
Name: | Katy Thompson | |||
Title: | Corporate Senior Vice President and Chief Accounting Officer |
• | GAAP revenue of $2.2 billion |
• | Diluted EPS from continuing operations of $0.18, and Adjusted EPS of $1.18 |
• | Net cash provided by operating activities of $534 million, and free cash flow of $402 million |
• | Integrated Financial Solutions (IFS): |
• | Global Financial Solutions (GFS): |
• | Corporate / Other: |
• | Consolidated GAAP revenue flat to down 1 percent; |
– | IFS GAAP revenue growth of 2 to 2.5 percent; and |
– | GFS GAAP revenue flat to down 1 percent |
• | Consolidated organic revenue growth of 2 to 3 percent; |
– | IFS organic revenue growth of 2.5 to 3 percent; and |
– | GFS organic revenue growth of 4 to 5 percent |
• | Adjusted EBITDA of $3,040 million to $3,065 million |
• | Adjusted EPS of $4.38 to $4.43, representing growth of 15 to 16 percent |
• | the risk that acquired 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 acquisitions 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, changes in either or both the United States and international lending, capital and financial markets, and currency fluctuations; |
• | 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 solutions; |
• | failures to adapt our solutions to changes in technology or in the marketplace; |
• | internal or external security breaches of our systems, including those relating to unauthorized access, theft, corruption or loss of personal information and computer viruses and other malware affecting our 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 the decreasing number of community banks in the U.S., the development of new disruptive technologies competing with one or more of our solutions, increasing presence of international competitors in the U.S. market and the entry into the market by global banks and global companies with respect to certain competitive solutions, each of which may have the impact of unbundling individual solutions from a comprehensive suite of solutions we provide to many of our customers; |
• | the failure to innovate in order to keep up with new emerging technologies could impact our solutions including the ability to attract new, or retain existing, customers; |
• | an operational or natural disaster at one of our 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, 2016 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 Corporate Communications | FIS Investor Relations | |
ellyn.raftery@fisglobal.com | pete.gunnlaugsson@fisglobal.com |
Exhibit A | Condensed Consolidated Statements of Earnings - Unaudited for the three and nine months ended September 30, 2017 and 2016 |
Exhibit B | Condensed Consolidated Balance Sheets - Unaudited as of September 30, 2017 and December 31, 2016 |
Exhibit C | Condensed Consolidated Statements of Cash Flows - Unaudited for the nine months ended September 30, 2017 and 2016 |
Exhibit D | Supplemental Non-GAAP Financial Information - Unaudited for the three and nine months ended September 30, 2017 and 2016 |
Exhibit E | Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three and nine months ended September 30, 2017 and 2016 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Processing and services revenues | $ | 2,198 | $ | 2,309 | $ | 6,794 | $ | 6,795 | |||||||
Cost of revenues | 1,483 | 1,527 | 4,677 | 4,680 | |||||||||||
Gross profit | 715 | 782 | 2,117 | 2,115 | |||||||||||
Selling, general and administrative expenses | 327 | 384 | 1,110 | 1,250 | |||||||||||
Operating income | 388 | 398 | 1,007 | 865 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (84 | ) | (98 | ) | (267 | ) | (284 | ) | |||||||
Other income (expense), net | (182 | ) | (6 | ) | (123 | ) | (8 | ) | |||||||
Total other income (expense), net | (266 | ) | (104 | ) | (390 | ) | (292 | ) | |||||||
Earnings from continuing operations before income taxes and equity method investment earnings | 122 | 294 | 617 | 573 | |||||||||||
Provision for income taxes | 51 | 103 | 262 | 200 | |||||||||||
Equity method investment earnings | — | — | — | — | |||||||||||
Earnings from continuing operations, net of tax | 71 | 191 | 355 | 373 | |||||||||||
Earnings (loss) from discontinued operations, net of tax | — | — | — | 1 | |||||||||||
Net earnings | 71 | 191 | 355 | 374 | |||||||||||
Net earnings attributable to noncontrolling interest | (10 | ) | (6 | ) | (24 | ) | (13 | ) | |||||||
Net earnings attributable to FIS common stockholders | $ | 61 | $ | 185 | $ | 331 | $ | 361 | |||||||
Net earnings per share-basic from continuing operations attributable to FIS common stockholders | $ | 0.18 | $ | 0.57 | $ | 1.00 | $ | 1.11 | |||||||
Net earnings (loss) per share-basic from discontinued operations attributable to FIS common stockholders | — | — | — | — | |||||||||||
Net earnings per share-basic attributable to FIS common stockholders | $ | 0.18 | $ | 0.57 | $ | 1.00 | $ | 1.11 | |||||||
Weighted average shares outstanding-basic | 331 | 326 | 330 | 325 | |||||||||||
Net earnings per share-diluted from continuing operations attributable to FIS common stockholders | $ | 0.18 | $ | 0.56 | $ | 0.99 | $ | 1.09 | |||||||
Net earnings (loss) per share-diluted from discontinued operations attributable to FIS common stockholders | — | — | — | — | |||||||||||
Net earnings per share-diluted attributable to FIS common stockholders | $ | 0.18 | $ | 0.56 | $ | 0.99 | $ | 1.10 | |||||||
Weighted average shares outstanding-diluted | 336 | 330 | 335 | 329 | |||||||||||
Amounts attributable to FIS common stockholders: | |||||||||||||||
Net earnings from continuing operations | $ | 61 | $ | 185 | $ | 331 | $ | 360 | |||||||
Net earnings (loss) from discontinued operations | — | — | — | 1 | |||||||||||
Net earnings attributable to FIS common stockholders | $ | 61 | $ | 185 | $ | 331 | $ | 361 |
Exhibit B | |||||||
September 30, | December 31, | ||||||
2017 | 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 720 | $ | 683 | |||
Settlement deposits | 479 | 520 | |||||
Trade receivables, net | 1,598 | 1,639 | |||||
Settlement receivables | 199 | 175 | |||||
Other receivables | 72 | 65 | |||||
Prepaid expenses and other current assets | 256 | 236 | |||||
Deferred income taxes | — | 101 | |||||
Assets held for sale | — | 863 | |||||
Total current assets | 3,324 | 4,282 | |||||
Property and equipment, net | 576 | 626 | |||||
Goodwill | 13,699 | 14,178 | |||||
Intangible assets, net | 4,089 | 4,664 | |||||
Computer software, net | 1,706 | 1,608 | |||||
Deferred contract costs, net | 350 | 310 | |||||
Other noncurrent assets | 550 | 363 | |||||
Total assets | $ | 24,294 | $ | 26,031 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 1,064 | $ | 1,146 | |||
Settlement payables | 671 | 714 | |||||
Deferred revenues | 627 | 680 | |||||
Current portion of long-term debt | 296 | 332 | |||||
Liabilities held for sale | — | 279 | |||||
Total current liabilities | 2,658 | 3,151 | |||||
Long-term debt, excluding current portion | 8,813 | 10,146 | |||||
Deferred income taxes | 2,305 | 2,484 | |||||
Deferred revenues | 22 | 19 | |||||
Other long-term liabilities | 407 | 386 | |||||
Total liabilities | 14,205 | 16,186 | |||||
Equity: | |||||||
FIS stockholders’ equity: | |||||||
Preferred stock $0.01 par value | — | — | |||||
Common stock $0.01 par value | 4 | 4 | |||||
Additional paid in capital | 10,495 | 10,380 | |||||
Retained earnings | 3,341 | 3,299 | |||||
Accumulated other comprehensive earnings (loss) | (340 | ) | (331 | ) | |||
Treasury stock, at cost | (3,515 | ) | (3,611 | ) | |||
Total FIS stockholders’ equity | 9,985 | 9,741 | |||||
Noncontrolling interest | 104 | 104 | |||||
Total equity | 10,089 | 9,845 | |||||
Total liabilities and equity | $ | 24,294 | $ | 26,031 |
Exhibit C | |||||||
Nine months ended September 30, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net earnings | $ | 355 | $ | 374 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation and amortization | 1,033 | 876 | |||||
Amortization of debt issue costs | 15 | 14 | |||||
Gain on sale of businesses | (55 | ) | — | ||||
Loss on extinguishment of debt | 192 | — | |||||
Stock-based compensation | 86 | 101 | |||||
Deferred income taxes | (197 | ) | (125 | ) | |||
Excess income tax benefit from exercise of stock options | — | (26 | ) | ||||
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency: | |||||||
Trade receivables | (105 | ) | 126 | ||||
Settlement activity | (27 | ) | (4 | ) | |||
Prepaid expenses and other assets | (20 | ) | (32 | ) | |||
Deferred contract costs | (121 | ) | (94 | ) | |||
Deferred revenue | (70 | ) | 121 | ||||
Accounts payable, accrued liabilities and other liabilities | (7 | ) | 11 | ||||
Net cash provided by operating activities | 1,079 | 1,342 | |||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | (98 | ) | (110 | ) | |||
Additions to computer software | (350 | ) | (336 | ) | |||
Proceeds from sale of businesses | 1,307 | — | |||||
Other investing activities, net | (3 | ) | (4 | ) | |||
Net cash provided by (used in) investing activities | 856 | (450 | ) | ||||
Cash flows from financing activities: | |||||||
Borrowings | 7,900 | 5,763 | |||||
Repayment of borrowings and capital lease obligations | (9,594 | ) | (6,429 | ) | |||
Debt issuance costs | (13 | ) | (20 | ) | |||
Excess income tax benefit from exercise of stock options | — | 26 | |||||
Proceeds from exercise of stock options | 168 | 88 | |||||
Treasury stock activity | (46 | ) | (27 | ) | |||
Dividends paid | (289 | ) | (255 | ) | |||
Distribution to Brazilian venture partner | (23 | ) | (20 | ) | |||
Other financing activities, net | (36 | ) | (17 | ) | |||
Net cash used in financing activities | (1,933 | ) | (891 | ) | |||
Effect of foreign currency exchange rate changes on cash | 35 | 18 | |||||
Net increase in cash and cash equivalents | 37 | 19 | |||||
Cash and cash equivalents, at beginning of period | 683 | 682 | |||||
Cash and cash equivalents, at end of period | $ | 720 | $ | 701 |
Exhibit D | |||||||||||||||
Three months ended September 30, 2017 | |||||||||||||||
Integrated Financial Solutions | Global Financial Solutions | Corporate and Other | Consolidated | ||||||||||||
Processing and services revenue | $ | 1,120 | $ | 997 | $ | 81 | $ | 2,198 | |||||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition deferred revenue adjustment (1) | — | — | 2 | 2 | |||||||||||
Adjusted revenue | $ | 1,120 | $ | 997 | $ | 83 | $ | 2,200 |
Nine months ended September 30, 2017 | |||||||||||||||
Integrated Financial Solutions | Global Financial Solutions | Corporate and Other | Consolidated | ||||||||||||
Processing and services revenue | $ | 3,430 | $ | 3,092 | $ | 272 | $ | 6,794 | |||||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition deferred revenue adjustment (1) | — | — | 6 | 6 | |||||||||||
Adjusted revenue | $ | 3,430 | $ | 3,092 | $ | 278 | $ | 6,800 |
Three months ended September 30, 2016 | |||||||||||||||
Integrated Financial Solutions | Global Financial Solutions | Corporate and Other | Consolidated | ||||||||||||
Processing and services revenue | $ | 1,114 | $ | 1,068 | $ | 127 | $ | 2,309 | |||||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition deferred revenue adjustment (1) | — | — | 37 | 37 | |||||||||||
Adjusted revenue | 1,114 | 1,068 | 164 | 2,346 |
Nine months ended September 30, 2016 | |||||||||||||||
Integrated Financial Solutions | Global Financial Solutions | Corporate and Other | Consolidated | ||||||||||||
Processing and services revenue | $ | 3,379 | $ | 3,106 | $ | 310 | $ | 6,795 | |||||||
Non-GAAP adjustments: | |||||||||||||||
Acquisition deferred revenue adjustment (1) | — | — | 177 | 177 | |||||||||||
Adjusted revenue | 3,379 | 3,106 | 487 | 6,972 |
(1) | See note (3) to Exhibit E. |
Exhibit D (continued) | ||||||||||||||||||||||||||
Three months ended September 30, | ||||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||
Constant | ||||||||||||||||||||||||||
Adjusted | Currency | Adjusted | In Year | Adjusted | Organic | |||||||||||||||||||||
Revenue (1) | FX | Revenue | Revenue (1) | Adjustments (2) | Base | Growth (3) | ||||||||||||||||||||
Integrated Financial Solutions | $ | 1,120 | $ | — | $ | 1,120 | $ | 1,114 | $ | (9 | ) | $ | 1,105 | 1.3 | % | |||||||||||
Global Financial Solutions | 997 | (10 | ) | 987 | 1,068 | (105 | ) | 963 | 2.5 | % | ||||||||||||||||
Corporate and Other | 83 | — | 83 | 164 | (60 | ) | 104 | (20.6 | )% | |||||||||||||||||
Total | $ | 2,200 | $ | (10 | ) | $ | 2,190 | $ | 2,346 | $ | (174 | ) | $ | 2,172 | 0.8 | % |
Nine months ended September 30, | ||||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||
Constant | ||||||||||||||||||||||||||
Adjusted | Currency | Adjusted | In Year | Adjusted | Organic | |||||||||||||||||||||
Revenue (1) | FX | Revenue | Revenue (1) | Adjustments (2) | Base | Growth (3) | ||||||||||||||||||||
Integrated Financial Solutions | $ | 3,430 | $ | 2 | $ | 3,432 | $ | 3,379 | $ | (9 | ) | $ | 3,370 | 1.8 | % | |||||||||||
Global Financial Solutions | 3,092 | (2 | ) | 3,090 | 3,106 | (110 | ) | 2,996 | 3.2 | % | ||||||||||||||||
Corporate and Other | 278 | 1 | 279 | 487 | (160 | ) | 327 | (14.8 | )% | |||||||||||||||||
Total | $ | 6,800 | $ | 1 | $ | 6,801 | $ | 6,972 | $ | (279 | ) | $ | 6,693 | 1.6 | % |
(1) | See Note (3) to Exhibit E. |
(2) | In year adjustments primarily include removing revenue from the PS&E and Capco consulting business and risk and compliance consulting business divestitures, as well as removing revenue from other businesses divested by FIS. |
(3) | Organic growth percentages are calculated utilizing more precise amounts than the rounding to millions included in the tables above. |
Exhibit D (continued) | |||||||
Three months ended | Nine months ended | ||||||
September 30, 2017 | September 30, 2017 | ||||||
Net cash provided by operating activities | $ | 534 | $ | 1,079 | |||
Non-GAAP adjustments: | |||||||
Acquisition, integration and severance payments (2) | 11 | 74 | |||||
Tax payments on divestitures (3) | — | 312 | |||||
Settlement activity | 8 | 27 | |||||
Adjusted cash flows from operations | 553 | 1,492 | |||||
Capital expenditures | (151 | ) | (448 | ) | |||
Free cash flow | $ | 402 | $ | 1,044 |
Three months ended | Nine months ended | ||||||
September 30, 2016 | September 30, 2016 | ||||||
Net cash provided by operating activities | $ | 522 | $ | 1,342 | |||
Non-GAAP adjustments: | |||||||
Capco acquisition related payments (1) | — | 20 | |||||
Acquisition, integration and severance payments (2) | 51 | 135 | |||||
Settlement activity | 6 | 4 | |||||
Adjusted cash flows from operations | 579 | 1,501 | |||||
Capital expenditures | (153 | ) | (446 | ) | |||
Free cash flow | $ | 426 | $ | 1,055 |
(1) | Adjusted cash flow from operations and free cash flow for the nine months ended September 30, 2016 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 Condensed Consolidated Statements 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 and free cash flow for the three and nine months ended September 30, 2017 and 2016 excludes cash payments for certain acquisition, integration and severance expenses, net of related tax impact. The related tax impact totaled $9 million and $27 million for the three months and $54 million and $70 million for the nine months ended September 30, 2017 and 2016, respectively. |
(3) | Adjusted cash flow from operations excludes the second quarter tax payment related to the gain on the sale of PS&E and other divestitures, which were recognized during the first and second quarters of 2017. |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net earnings from continuing operations attributable to FIS | $ | 61 | $ | 185 | $ | 331 | $ | 360 | ||||||||
Provision for income taxes | 51 | 103 | 262 | 200 | ||||||||||||
Interest expense, net | 84 | 98 | 267 | 284 | ||||||||||||
Other, net | 192 | 12 | 147 | 21 | ||||||||||||
Operating income, as reported | 388 | 398 | 1,007 | 865 | ||||||||||||
FIS depreciation and amortization from continuing operations, excluding purchase accounting amortization | 163 | 148 | 482 | 431 | ||||||||||||
FIS non-GAAP adjustments: | ||||||||||||||||
Purchase accounting amortization (1) | 185 | 144 | 551 | 445 | ||||||||||||
Acquisition, integration and severance (2) | 22 | 39 | 141 | 181 | ||||||||||||
Acquisition deferred revenue adjustment (3) | 2 | 37 | 6 | 177 | ||||||||||||
Adjusted EBITDA | $ | 760 | $ | 766 | $ | 2,187 | $ | 2,099 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Earnings from continuing operations before income taxes and equity method investment earnings | $ | 122 | $ | 294 | $ | 617 | $ | 573 | ||||||||
Provision for income taxes | 51 | 103 | 262 | 200 | ||||||||||||
Net earnings attributable to noncontrolling interest | (10 | ) | (6 | ) | (24 | ) | (13 | ) | ||||||||
Net earnings from continuing operations attributable to FIS | 61 | 185 | 331 | 360 | ||||||||||||
FIS non-GAAP adjustments: | ||||||||||||||||
Purchase accounting amortization (1) | 185 | 144 | 551 | 445 | ||||||||||||
Acquisition, integration and severance (2) | 22 | 39 | 141 | 181 | ||||||||||||
Acquisition deferred revenue adjustment (3) | 2 | 37 | 6 | 177 | ||||||||||||
Loss (gain) on sale of businesses (4) | 33 | — | (55 | ) | — | |||||||||||
Debt financing activities (5) | 167 | 4 | 196 | 4 | ||||||||||||
Provision for income taxes on non-GAAP adjustments | (73 | ) | (78 | ) | (145 | ) | (282 | ) | ||||||||
Total non-GAAP adjustments | 336 | 146 | 694 | 525 | ||||||||||||
Adjusted net earnings (loss) from continuing operations, net of tax | $ | 397 | $ | 330 | $ | 1,025 | $ | 885 | ||||||||
Net earnings per share - diluted from continuing operations attributable to FIS common stockholders | $ | 0.18 | $ | 0.56 | $ | 0.99 | $ | 1.09 | ||||||||
FIS non-GAAP adjustments: | ||||||||||||||||
Purchase accounting amortization (1) | 0.55 | 0.44 | 1.64 | 1.35 | ||||||||||||
Acquisition, integration and severance (2) | 0.07 | 0.12 | 0.42 | 0.55 | ||||||||||||
Acquisition deferred revenue adjustment (3) | 0.01 | 0.11 | 0.02 | 0.54 | ||||||||||||
Loss (gain) on sale of businesses (4) | 0.10 | — | (0.16 | ) | — | |||||||||||
Debt financing activities (5) | 0.50 | 0.01 | 0.59 | 0.01 | ||||||||||||
Provision for income taxes on non-GAAP adjustments | (0.22 | ) | (0.24 | ) | (0.43 | ) | (0.86 | ) | ||||||||
Adjusted net earnings (loss) per share - diluted from continuing operations attributable to FIS common stockholders | $ | 1.18 | $ | 1.00 | $ | 3.06 | $ | 2.69 | ||||||||
Weighted average shares outstanding-diluted | 336 | 330 | 335 | 329 |
(1) | This item represents purchase price amortization expense on all intangible assets acquired through various Company acquisitions, including customer relationships, contract value, trademarks and tradenames, and non-compete agreements. |
(2) | This item represents certain costs and other transactions which management deems non-operational primarily related to integration and severance activity from the SunGard acquisition. |
(3) | This item represents the impact of the purchase accounting adjustment to reduce SunGard's deferred revenues to estimated fair value, determined as fulfillment cost plus a normal profit margin. The deferred revenue adjustment represents revenue that would have been recognized in the normal course of business by SunGard under GAAP if the acquisition had not occurred, but was not recognized due to GAAP purchase accounting requirements. |
(4) | This item represents the pre-tax loss on the sale of the Capco consulting business and risk and compliance consulting business ("Capco") during the third quarter of 2017. It also includes the pre-tax gain on the sale of the Public Sector and Education ("PS&E") businesses and other divestitures during the first half of 2017. |
(5) | This item represents a pre-tax charge upon extinguishment of approximately $167 million in tender premiums and the write-off of previously capitalized debt issuance costs on the repurchased of approximately $2,000 million in aggregate principal of debt securities during the 2017 third quarter. The year to date amount also includes the write-off of certain previously capitalized debt issuance costs, the payment of an $18 million bond premium associated with the early redemption of our senior notes due March 2022 during March 2017 and other costs related to debt refinancing. |