UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 16, 2007
METAVANTE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| Wisconsin | 001-33747 | 39-0968604 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
4900 West Brown Deer Road
Milwaukee, Wisconsin 53223
(Address of Principal executive offices, including Zip Code)
(414) 357-2290
(Registrant’s 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:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure. |
On November 16, 2007, Metavante Technologies, Inc. (“Metavante”) made available on its website a databook containing supplemental financial data. This data is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit No. | Description | |
| 99.1 | Databook of Supplemental Financial Data |
2
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 hereunto duly authorized.
| METAVANTE TECHNOLOGIES, INC. | ||||
| Date: November 16, 2007 | /s/ Navroz J. Daroga | |||
| Name: | Navroz J. Daroga | |||
| Title: | Executive Vice President, Chief Administrative Officer and Secretary | |||
3
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Databook of Supplemental Financial Data |
E-1
Exhibit 99.1
Supplemental Financial Data
(Issued November 16, 2007)
Metavante Technologies, Inc.
4900 West Brown Deer Road
Milwaukee, WI 53223
Investor Relations Contacts
Kirk Larsen
Phone: 1-414-357-3553
Email: kirk.larsen@metavante.com
Kimberly Buxbaum
Phone: 1-414-357-9092
Email: kimberly.buxbaum@metavante.com
Website
www.metavante.com
The following summary financial information has been derived from the financial statements of Metavante Corporation included in the definitive proxy statement/prospectus—information statement contained in the registration statement (“S-4 Registration Statement”) on Form S-4 of Metavante Technologies, Inc. (f/k/a Metavante Holding Company) (Registration No. 333-143143), as amended, which was declared effective on September 14, 2007 and the quarterly report on Form 10-Q for the quarterly period ended September 30, 2007.
This summary information is unaudited and subject to revision.
All information should be read in conjunction with the historical financial statements included in the S-4 Registration Statement and Form 10-Q referred to above and other periodic reports.
Table of Contents
| Page | ||
| Statements of Income |
||
| - Three months ended September 30, 2007 and 2006 |
1 | |
| - Nine months ended September 30, 2007 and 2006 |
1 | |
| - Years ended December 31, 2006, 2005 and 2004 |
2 | |
| Revenue and Earnings Information |
3 | |
| Quarterly Revenue and Earnings Information |
||
| - Fiscal year 2007 |
4 | |
| - Fiscal year 2006 |
5 | |
| - Fiscal year 2005 |
6 | |
| Balance Sheet Information |
7 | |
| Cash Flow Information |
8 | |
| Non-GAAP Financial Measures |
9 | |
Statements of Income
(in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, |
|||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Revenue |
$ | 406,913 | $ | 373,774 | $ | 1,189,889 | $ | 1,118,261 | ||||||||
| Expenses: |
||||||||||||||||
| Cost of processing and services |
270,318 | 236,751 | 788,331 | 742,625 | ||||||||||||
| Selling, general, and administrative |
49,045 | 65,043 | 163,128 | 175,948 | ||||||||||||
| Transaction costs |
1,443 | — | 2,343 | — | ||||||||||||
| Total Expenses |
320,806 | 301,794 | 953,802 | 918,573 | ||||||||||||
| Income from operations |
86,107 | 71,980 | 236,087 | 199,688 | ||||||||||||
| Other non-operating items: |
||||||||||||||||
| Interest income |
5,207 | 4,156 | 12,824 | 10,025 | ||||||||||||
| Interest expense |
(10,828 | ) | (10,834 | ) | (32,493 | ) | (32,538 | ) | ||||||||
| Net gains/(losses) related to Firstsource |
(6 | ) | — | 7,039 | — | |||||||||||
| Other - net |
(523 | ) | (250 | ) | (494 | ) | 291 | |||||||||
| Income before income taxes |
79,957 | 65,052 | 222,963 | 177,466 | ||||||||||||
| Allocated income tax provision |
29,796 | 23,812 | 80,666 | 61,322 | ||||||||||||
| Net income |
$ | 50,161 | $ | 41,240 | $ | 142,297 | $ | 116,144 | ||||||||
| EBITDA (1) |
$ | 126,392 | $ | 107,152 | $ | 358,141 | $ | 307,884 | ||||||||
| EBITDA Margin % |
31.1 | % | 28.7 | % | 30.1 | % | 27.5 | % | ||||||||
| Cash net income (1) |
$ | 55,464 | $ | 46,596 | $ | 157,930 | $ | 132,023 | ||||||||
| (1) EBITDA and Cash net income are non-GAAP financial measures. See page 9 for a discussion of why management believes these measures are useful to investors. |
| |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Reconciliation of Net Income to EBITDA: |
||||||||||||||||
| Net income |
$ | 50,161 | $ | 41,240 | $ | 142,297 | $ | 116,144 | ||||||||
| Add: |
||||||||||||||||
| Interest expense, net |
5,621 | 6,678 | 19,669 | 22,513 | ||||||||||||
| Allocated income tax provision |
29,796 | 23,812 | 80,666 | 61,322 | ||||||||||||
| Depreciation and amortization |
40,814 | 35,422 | 115,509 | 107,905 | ||||||||||||
| EBITDA |
$ | 126,392 | $ | 107,152 | $ | 358,141 | $ | 307,884 | ||||||||
| Reconciliation of Net Income to Cash Net Income: |
||||||||||||||||
| Net income |
$ | 50,161 | $ | 41,240 | $ | 142,297 | $ | 116,144 | ||||||||
| Add: |
||||||||||||||||
| Acquisition intangible amortization, net of tax |
4,250 | 4,100 | 12,577 | 11,824 | ||||||||||||
| Stock-based compensation, net of tax |
1,053 | 1,256 | 3,056 | 4,055 | ||||||||||||
| Cash net income |
$ | 55,464 | $ | 46,596 | $ | 157,930 | $ | 132,023 | ||||||||
1
Statements of Income
(in thousands)
| Year Ended December 31, | ||||||||||||
| 2006 | 2005 | 2004 | ||||||||||
| Revenue |
$ | 1,504,178 | $ | 1,284,997 | $ | 1,015,393 | ||||||
| Expenses: |
||||||||||||
| Cost of processing and services |
998,041 | 877,856 | 744,485 | |||||||||
| Selling, general, and administrative |
234,170 | 178,626 | 124,364 | |||||||||
| Total Expenses |
1,232,211 | 1,056,482 | 868,849 | |||||||||
| Income from operations |
271,967 | 228,515 | 146,544 | |||||||||
| Other non-operating items: |
||||||||||||
| Interest income |
14,734 | 6,761 | 1,446 | |||||||||
| Interest expense |
(43,365 | ) | (44,032 | ) | (23,265 | ) | ||||||
| Other - net |
(2,853 | ) | 1,626 | 1,119 | ||||||||
| Income before income taxes |
240,483 | 192,870 | 125,844 | |||||||||
| Allocated income tax provision |
80,359 | 73,339 | 49,030 | |||||||||
| Net income |
$ | 160,124 | $ | 119,531 | $ | 76,814 | ||||||
| EBITDA (1) |
$ | 413,555 | $ | 369,275 | $ | 278,197 | ||||||
| EBITDA Margin % |
27.5 | % | 28.7 | % | 27.4 | % | ||||||
| Cash net income (1) |
$ | 181,493 | $ | 135,432 | $ | 87,741 | ||||||
| (1) EBITDA and Cash net income are non-GAAP financial measures. See page 9 for a discussion of why management believes these measures are useful to investors. |
| |||||||||||
| Year Ended December 31, | ||||||||||||
| 2006 | 2005 | 2004 | ||||||||||
| Reconciliation of Net Income to EBITDA: |
||||||||||||
| Net income |
$ | 160,124 | $ | 119,531 | $ | 76,814 | ||||||
| Add: |
||||||||||||
| Interest expense, net |
28,631 | 37,271 | 21,819 | |||||||||
| Allocated income tax provision |
80,359 | 73,339 | 49,030 | |||||||||
| Depreciation and amortization |
144,441 | 139,134 | 130,534 | |||||||||
| EBITDA |
$ | 413,555 | $ | 369,275 | $ | 278,197 | ||||||
| Reconciliation of Net Income to Cash Net Income: |
||||||||||||
| Net income |
$ | 160,124 | $ | 119,531 | $ | 76,814 | ||||||
| Add: |
||||||||||||
| Acquisition intangible amortization, net of tax |
16,038 | 10,829 | 6,555 | |||||||||
| Stock-based compensation, net of tax |
5,331 | 5,072 | 4,372 | |||||||||
| Cash net income |
$ | 181,493 | $ | 135,432 | $ | 87,741 | ||||||
2
Revenue and Earnings Information
(in thousands)
| Year Ended December 31, | ||||||||||||
| 2006 | 2005 | 2004 | ||||||||||
| Revenue |
||||||||||||
| Financial Solutions Group |
$ | 606,574 | $ | 544,635 | $ | 484,234 | ||||||
| Payment Solutions Group |
897,604 | 740,362 | 531,159 | |||||||||
| Total |
$ | 1,504,178 | $ | 1,284,997 | $ | 1,015,393 | ||||||
| Segment Income |
||||||||||||
| Financial Solutions Group |
$ | 145,134 | $ | 108,127 | $ | 69,528 | ||||||
| Payment Solutions Group |
267,341 | 219,797 | 150,927 | |||||||||
| Total |
412,475 | 327,924 | 220,455 | |||||||||
| Corporate/other (1) |
(116,631 | ) | (79,734 | ) | (61,867 | ) | ||||||
| Acquisition intangible amortization |
(26,730 | ) | (18,049 | ) | (10,925 | ) | ||||||
| Interest income |
14,734 | 6,761 | 1,446 | |||||||||
| Interest expense |
(43,365 | ) | (44,032 | ) | (23,265 | ) | ||||||
| Income before income taxes |
240,483 | 192,870 | 125,844 | |||||||||
| Allocated income tax provision |
80,359 | 73,339 | 49,030 | |||||||||
| Net income |
$ | 160,124 | $ | 119,531 | $ | 76,814 | ||||||
| Segment income margin |
||||||||||||
| Financial Solutions Group |
23.9 | % | 19.9 | % | 14.4 | % | ||||||
| Payment Solutions Group |
29.8 | % | 29.7 | % | 28.4 | % | ||||||
| (1) | Corporate/other includes human resources, legal, finance and accounting, and various other unallocated charges. |
Note: As disclosed in the Metavante Technologies, Inc. Form 10-Q filed on November 14, 2007, Metavante transferred its Image Solutions business from the Financial Solutions segment to the Payment Solutions segment. Segment reporting for all periods presented has been adjusted to reflect this change.
3
Quarterly Revenue and Earnings Information
(in thousands)
| Fiscal Year 2007 | ||||||||||||
| Q1 | Q2 | Q3 | ||||||||||
| Revenue |
||||||||||||
| Financial Solutions Group |
$ | 150,464 | $ | 154,085 | $ | 165,405 | ||||||
| Payment Solutions Group |
236,779 | 241,650 | 241,508 | |||||||||
| Total |
$ | 387,243 | $ | 395,735 | $ | 406,913 | ||||||
| Segment Income |
||||||||||||
| Financial Solutions Group |
$ | 39,662 | $ | 41,440 | $ | 39,518 | ||||||
| Payment Solutions Group |
66,303 | 69,120 | 77,351 | |||||||||
| Total |
105,965 | 110,560 | 116,869 | |||||||||
| Corporate/other (1) |
(22,966 | ) | (28,773 | ) | (22,758 | ) | ||||||
| Acquisition intangible amortization |
(6,780 | ) | (7,096 | ) | (7,084 | ) | ||||||
| Interest income |
3,548 | 4,067 | 5,207 | |||||||||
| Interest expense |
(10,834 | ) | (10,831 | ) | (10,828 | ) | ||||||
| Net gains/(losses related to Firstsource) |
8,028 | (982 | ) | (6 | ) | |||||||
| Transaction costs |
— | (900 | ) | (1,443 | ) | |||||||
| Income before income taxes |
76,961 | 66,045 | 79,957 | |||||||||
| Allocated income tax provision |
27,686 | 23,184 | 29,796 | |||||||||
| Net income |
$ | 49,275 | $ | 42,861 | $ | 50,161 | ||||||
| EBITDA (2) |
$ | 121,492 | $ | 110,258 | $ | 126,392 | ||||||
| EBITDA Margin % |
31.4 | % | 27.9 | % | 31.1 | % | ||||||
| Cash net income (2) |
$ | 54,380 | $ | 48,086 | $ | 55,464 | ||||||
| Segment income margin |
||||||||||||
| Financial Solutions Group |
26.4 | % | 26.9 | % | 23.9 | % | ||||||
| Payment Solutions Group |
28.0 | % | 28.6 | % | 32.0 | % | ||||||
| (1) Corporate/other includes human resources, legal, finance and accounting, and various other unallocated charges.
(2) EBITDA and Cash net income are non-GAAP financial measures. See page 9 for a discussion of why management believes these measures are useful to investors. |
| |||||||||||
| Fiscal Year 2007 | ||||||||||||
| Q1 | Q2 | Q3 | ||||||||||
| Reconciliation of Net Income to EBITDA: |
||||||||||||
| Net income |
$ | 49,275 | $ | 42,861 | $ | 50,161 | ||||||
| Add: |
||||||||||||
| Interest expense, net |
7,286 | 6,764 | 5,621 | |||||||||
| Allocated income tax provision |
27,686 | 23,184 | 29,796 | |||||||||
| Depreciation and amortization |
37,245 | 37,449 | 40,814 | |||||||||
| EBITDA |
$ | 121,492 | $ | 110,258 | $ | 126,392 | ||||||
| Reconciliation of Net Income to Cash Net Income: |
||||||||||||
| Net income |
$ | 49,275 | $ | 42,861 | $ | 50,161 | ||||||
| Add: |
||||||||||||
| Acquisition intangible amortization, net of tax |
4,069 | 4,258 | 4,250 | |||||||||
| Stock-based compensation, net of tax |
1,036 | 967 | 1,053 | |||||||||
| Cash net income |
$ | 54,380 | $ | 48,086 | $ | 55,464 | ||||||
4
Quarterly Revenue and Earnings Information
(in thousands)
| Fiscal Year 2006 | ||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | |||||||||||||
| Revenue |
||||||||||||||||
| Financial Solutions Group |
$ | 146,708 | $ | 151,702 | $ | 160,295 | $ | 147,869 | ||||||||
| Payment Solutions Group |
224,240 | 221,838 | 213,479 | 238,048 | ||||||||||||
| Total |
$ | 370,948 | $ | 373,540 | $ | 373,774 | $ | 385,917 | ||||||||
| Segment Income |
||||||||||||||||
| Financial Solutions Group |
$ | 26,563 | $ | 36,469 | $ | 52,947 | $ | 29,155 | ||||||||
| Payment Solutions Group |
67,882 | 60,389 | 61,463 | 77,607 | ||||||||||||
| Total |
94,445 | 96,858 | 114,410 | 106,762 | ||||||||||||
| Corporate/other (1) |
(25,949 | ) | (24,231 | ) | (35,846 | ) | (30,605 | ) | ||||||||
| Acquisition intangible amortization |
(6,168 | ) | (6,705 | ) | (6,834 | ) | (7,023 | ) | ||||||||
| Interest income |
2,593 | 3,276 | 4,156 | 4,709 | ||||||||||||
| Interest expense |
(10,859 | ) | (10,845 | ) | (10,834 | ) | (10,827 | ) | ||||||||
| Income before income taxes |
54,062 | 58,353 | 65,052 | 63,016 | ||||||||||||
| Allocated income tax provision |
19,532 | 17,979 | 23,812 | 19,036 | ||||||||||||
| Net income |
$ | 34,530 | $ | 40,374 | $ | 41,240 | $ | 43,980 | ||||||||
| EBITDA (2) |
$ | 98,745 | $ | 101,989 | $ | 107,152 | $ | 105,670 | ||||||||
| EBITDA Margin % |
26.6 | % | 27.3 | % | 28.7 | % | 27.4 | % | ||||||||
| Cash net income (2) |
$ | 39,633 | $ | 45,794 | $ | 46,596 | $ | 49,470 | ||||||||
| Segment income margin |
||||||||||||||||
| Financial Solutions Group |
18.1 | % | 24.0 | % | 33.0 | % | 19.7 | % | ||||||||
| Payment Solutions Group |
30.3 | % | 27.2 | % | 28.8 | % | 32.6 | % | ||||||||
| (1) Corporate/other includes human resources, legal, finance and accounting, and various other unallocated charges.
(2) EBITDA and Cash net income are non-GAAP financial measures. See page 9 for a discussion of why management believes these measures are useful to investors. |
| |||||||||||||||
| Fiscal Year 2006 | ||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | |||||||||||||
| Reconciliation of Net Income to EBITDA: |
||||||||||||||||
| Net income |
$ | 34,530 | $ | 40,374 | $ | 41,240 | $ | 43,980 | ||||||||
| Add: |
||||||||||||||||
| Interest expense, net |
8,266 | 7,569 | 6,678 | 6,118 | ||||||||||||
| Allocated income tax provision |
19,532 | 17,979 | 23,812 | 19,036 | ||||||||||||
| Depreciation and amortization |
36,417 | 36,067 | 35,422 | 36,536 | ||||||||||||
| EBITDA |
$ | 98,745 | $ | 101,989 | $ | 107,152 | $ | 105,670 | ||||||||
| Reconciliation of Net Income to Cash Net Income: |
||||||||||||||||
| Net income |
$ | 34,530 | $ | 40,374 | $ | 41,240 | $ | 43,980 | ||||||||
| Add: |
||||||||||||||||
| Acquisition intangible amortization, net of tax |
3,701 | 4,023 | 4,100 | 4,214 | ||||||||||||
| Stock-based compensation, net of tax |
1,402 | 1,397 | 1,256 | 1,276 | ||||||||||||
| Cash net income |
$ | 39,633 | $ | 45,794 | $ | 46,596 | $ | 49,470 | ||||||||
5
Quarterly Revenue and Earnings Information
(in thousands)
| Fiscal Year 2005 | ||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | |||||||||||||
| Revenue |
||||||||||||||||
| Financial Solutions Group |
$ | 131,045 | $ | 129,396 | $ | 135,869 | $ | 148,325 | ||||||||
| Payment Solutions Group |
175,206 | 177,784 | 185,497 | 201,876 | ||||||||||||
| Total |
$ | 306,251 | $ | 307,180 | $ | 321,366 | $ | 350,201 | ||||||||
| Segment Income |
||||||||||||||||
| Financial Solutions Group |
$ | 27,398 | $ | 26,627 | $ | 26,387 | $ | 27,715 | ||||||||
| Payment Solutions Group |
46,138 | 56,389 | 57,159 | 60,111 | ||||||||||||
| Total |
73,536 | 83,016 | 83,546 | 87,826 | ||||||||||||
| Corporate/other (1) |
(14,576 | ) | (18,644 | ) | (22,328 | ) | (24,186 | ) | ||||||||
| Acquisition intangible amortization |
(4,812 | ) | (4,852 | ) | (2,856 | ) | (5,529 | ) | ||||||||
| Interest income |
966 | 1,348 | 1,863 | 2,584 | ||||||||||||
| Interest expense |
(11,339 | ) | (10,958 | ) | (10,879 | ) | (10,856 | ) | ||||||||
| Income before income taxes |
43,775 | 49,910 | 49,346 | 49,839 | ||||||||||||
| Allocated income tax provision |
17,452 | 19,940 | 18,290 | 17,657 | ||||||||||||
| Net income |
$ | 26,323 | $ | 29,970 | $ | 31,056 | $ | 32,182 | ||||||||
| EBITDA (2) |
$ | 89,469 | $ | 95,435 | $ | 90,074 | $ | 94,298 | ||||||||
| EBITDA Margin % |
29.2 | % | 31.1 | % | 28.0 | % | 26.9 | % | ||||||||
| Cash net income (2) |
$ | 30,352 | $ | 34,022 | $ | 33,982 | $ | 37,077 | ||||||||
| Segment income margin |
||||||||||||||||
| Financial Solutions Group |
20.9 | % | 20.6 | % | 19.4 | % | 18.7 | % | ||||||||
| Payment Solutions Group |
26.3 | % | 31.7 | % | 30.8 | % | 29.8 | % | ||||||||
| (1) Corporate/other includes human resources, legal, finance and accounting, and various other unallocated charges.
(2) EBITDA and Cash net income are non-GAAP financial measures. See page 9 for a discussion of why management believes these measures are useful to investors. |
| |||||||||||||||
| Fiscal Year 2005 | ||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | |||||||||||||
| Reconciliation of Net Income to EBITDA: |
||||||||||||||||
| Net income |
$ | 26,323 | $ | 29,970 | $ | 31,056 | $ | 32,182 | ||||||||
| Add: |
||||||||||||||||
| Interest expense, net |
10,373 | 9,610 | 9,016 | 8,272 | ||||||||||||
| Allocated income tax provision |
17,452 | 19,940 | 18,290 | 17,657 | ||||||||||||
| Depreciation and amortization |
35,321 | 35,915 | 31,712 | 36,187 | ||||||||||||
| EBITDA |
$ | 89,469 | $ | 95,435 | $ | 90,074 | $ | 94,298 | ||||||||
| Reconciliation of Net Income to Cash Net Income: |
||||||||||||||||
| Net income |
$ | 26,323 | $ | 29,970 | $ | 31,056 | $ | 32,182 | ||||||||
| Add: |
||||||||||||||||
| Acquisition intangible amortization, net of tax |
2,887 | 2,911 | 1,714 | 3,318 | ||||||||||||
| Stock-based compensation, net of tax |
1,142 | 1,141 | 1,212 | 1,577 | ||||||||||||
| Cash net income |
$ | 30,352 | $ | 34,022 | $ | 33,982 | $ | 37,077 | ||||||||
6
Balance Sheet Information
(in thousands)
| September 30, 2007 |
December 31, | ||||||||
| 2006 | 2005 | ||||||||
| Assets |
|||||||||
| Current assets |
|||||||||
| Cash and cash equivalents |
$ | 490,389 | $ | 344,241 | $ | 208,028 | |||
| Short-term investments |
— | — | 80,000 | ||||||
| Restricted funds |
172,708 | 247,585 | 308,282 | ||||||
| Accounts receivable, net |
135,739 | 123,702 | 111,417 | ||||||
| EFD processing receivables |
53,220 | 50,893 | 45,207 | ||||||
| Unbilled revenues |
94,167 | 98,861 | 83,664 | ||||||
| Deferred income taxes |
34,590 | 34,110 | 35,647 | ||||||
| Other current assets |
41,736 | 41,183 | 33,265 | ||||||
| Total current assets |
1,022,549 | 940,575 | 905,510 | ||||||
| Capitalized software and conversions-net |
242,256 | 214,520 | 217,577 | ||||||
| Premises and equipment-net |
131,083 | 135,221 | 137,340 | ||||||
| Goodwill and intangibles-net |
1,665,850 | 1,639,170 | 1,564,699 | ||||||
| Long-term restricted funds |
— | — | 10,000 | ||||||
| Other assets |
103,200 | 85,828 | 22,663 | ||||||
| Total |
$ | 3,164,938 | $ | 3,015,314 | $ | 2,857,789 | |||
| Liabilities and equity |
|||||||||
| Current liabilities |
|||||||||
| Accounts payable |
$ | 26,190 | $ | 24,632 | $ | 25,576 | |||
| Accrued compensation and related benefits |
45,004 | 52,379 | 46,176 | ||||||
| Accrued expenses |
161,539 | 124,219 | 125,168 | ||||||
| Payments held for third party remittance |
178,140 | 241,325 | 319,771 | ||||||
| Deferred revenues |
147,809 | 110,768 | 111,900 | ||||||
| Other current liabilities |
13,876 | 17,803 | 18,576 | ||||||
| Total current liabilities |
572,558 | 571,126 | 647,167 | ||||||
| Long-term debt to related party |
982,000 | 982,000 | 982,000 | ||||||
| Other long-term debt and capital lease obligations |
22 | — | 386 | ||||||
| Due to parent |
19,495 | 19,495 | 20,309 | ||||||
| Deferred income taxes |
159,513 | 157,645 | 147,243 | ||||||
| Postretirement benefit obligation and other liabilities |
8,962 | 10,157 | 13,514 | ||||||
| Total liabilities |
1,742,550 | 1,740,423 | 1,810,619 | ||||||
| Minority interest |
13,350 | 12,757 | 11,503 | ||||||
| Shareholder’s equity |
1,409,038 | 1,262,134 | 1,035,667 | ||||||
| Total liabilities and equity |
$ | 3,164,938 | $ | 3,015,314 | $ | 2,857,789 | |||
7
Cash Flow Information
(in thousands)
| Nine Months Ended |
Year Ended December 31, | |||||||||||||||
| 2006 | 2005 | 2004 | ||||||||||||||
| Operating Activities |
||||||||||||||||
| Net income |
$ | 142,297 | $ | 160,124 | $ | 119,531 | $ | 76,814 | ||||||||
| Adjustments to reconcile net income to net cash from operating activities: |
||||||||||||||||
| Depreciation of premises and equipment |
30,675 | 40,882 | 40,448 | 35,659 | ||||||||||||
| Amortization |
84,834 | 103,559 | 98,686 | 94,875 | ||||||||||||
| Deferred income taxes |
(1,245 | ) | 8,865 | (1,067 | ) | 5,620 | ||||||||||
| Stock-based compensation expense |
4,606 | 8,104 | 7,624 | 7,286 | ||||||||||||
| Excess tax benefit from stock-based compensation arrangements |
— | (1,940 | ) | (2,415 | ) | (2,231 | ) | |||||||||
| Loss on sale of assets |
— | 1,777 | 1,104 | 7,102 | ||||||||||||
| Other non-cash items |
4,251 | — | — | — | ||||||||||||
| Net gains related to Firstsource |
(7,039 | ) | — | — | — | |||||||||||
| Changes in assets and liabilities-net of effect from acquisitions of businesses |
||||||||||||||||
| Accounts receivable |
(11,751 | ) | (7,190 | ) | (20,033 | ) | 9,828 | |||||||||
| EFD processing receivables |
(2,326 | ) | (18,969 | ) | 4,201 | (11,299 | ) | |||||||||
| Unbilled revenues |
4,694 | (12,307 | ) | 1,244 | (16,019 | ) | ||||||||||
| Other current assets |
(404 | ) | (6,109 | ) | 6,012 | (5,592 | ) | |||||||||
| Other assets |
4,569 | 3,988 | (8,575 | ) | 3,018 | |||||||||||
| Accounts payable and accrued liabilities |
25,107 | 18,335 | (417 | ) | 4,225 | |||||||||||
| Deferred revenues |
12,286 | (7,524 | ) | 2,419 | (44 | ) | ||||||||||
| Postretirement benefit obligation and other liabilities |
(4,859 | ) | 827 | 1,570 | 1,990 | |||||||||||
| Cash provided by operating activities |
285,695 | 292,422 | 250,332 | 211,232 | ||||||||||||
| Investing Activities: |
||||||||||||||||
| Capital expenditures for premises and equipment |
(26,479 | ) | (37,362 | ) | (44,175 | ) | (27,603 | ) | ||||||||
| Capital expenditures for capitalized software and conversion costs |
(77,198 | ) | (72,059 | ) | (67,797 | ) | (59,861 | ) | ||||||||
| Purchase of equity investment |
— | (66,777 | ) | — | — | |||||||||||
| Purchase of short-term investments |
— | (190,000 | ) | (80,000 | ) | — | ||||||||||
| Maturity of short-term investments |
— | 270,000 | 2,454 | — | ||||||||||||
| Change in restricted cash |
75,752 | 696 | 269,669 | (88,522 | ) | |||||||||||
| Purchase of restricted CD’s |
(50,000 | ) | (150,000 | ) | (300,000 | ) | — | |||||||||
| Maturities of restricted CD’s |
50,000 | 220,000 | 110,000 | — | ||||||||||||
| Acquisitions-net of cash acquired |
(48,196 | ) | (82,554 | ) | (90,764 | ) | (990,286 | ) | ||||||||
| Other |
— | — | — | 5,927 | ||||||||||||
| Cash used in investing activities |
(76,121 | ) | (108,056 | ) | (200,613 | ) | (1,160,345 | ) | ||||||||
| Financing Activities: |
||||||||||||||||
| Repayment of debt and capital lease obligations |
(241 | ) | (2,647 | ) | (42,634 | ) | (1,812 | ) | ||||||||
| Change in payments held for third party remittance |
(63,185 | ) | (78,446 | ) | (78,180 | ) | 88,522 | |||||||||
| Cash contribution from minority shareholders |
— | — | 12,561 | — | ||||||||||||
| Proceeds from issuance of debt and capital lease obligations |
— | — | — | 907,251 | ||||||||||||
| Excess tax benefit from stock-based compensation arrangements |
— | 1,940 | 2,415 | 2,231 | ||||||||||||
| Capital contribution form parent for acquisition |
— | 35,000 | 94,899 | 100,000 | ||||||||||||
| Dividend paid to parent |
— | (4,000 | ) | (4,000 | ) | (4,000 | ) | |||||||||
| Cash (used in) provided by financing activities |
(63,426 | ) | (48,153 | ) | (14,939 | ) | 1,092,192 | |||||||||
| Change in cash and cash equivalents |
146,148 | 136,213 | 34,780 | 143,079 | ||||||||||||
| Cash and cash equivalents-beginning of period |
344,241 | 208,028 | 173,248 | 30,169 | ||||||||||||
| Cash and cash equivalents-end of period |
$ | 490,389 | $ | 344,241 | $ | 208,028 | $ | 173,248 | ||||||||
| Free Cash Flow (1): |
||||||||||||||||
| Cash provided by operating activities |
$ | 285,695 | $ | 292,422 | $ | 250,332 | $ | 211,232 | ||||||||
| Less: |
||||||||||||||||
| Capital expenditures for premises and equipment |
(26,479 | ) | (37,362 | ) | (44,175 | ) | (27,603 | ) | ||||||||
| Capital expenditures for capitalized software and conversion costs |
(77,198 | ) | (72,059 | ) | (67,797 | ) | (59,861 | ) | ||||||||
| Free cash flow |
$ | 182,018 | $ | 183,001 | $ | 138,360 | $ | 123,768 | ||||||||
| (1) | Free cash flow is a non-GAAP financial measure. See page 9 for a discussion of why management believes free cash flow is useful to investors. |
8
Non-GAAP Financial Measures
This presentation contains non-GAAP financial measures such as “EBITDA”, “Cash Net Income” and “Free Cash Flow”. These measures should not be considered substitutes for GAAP measures. The following is a specific discussion of each measure:
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Metavante’s management believes that “EBITDA” is useful for evaluating performance against peer companies within its industry, as well as providing investors additional transparency to a financial measure used by management in its financial and operational decision-making. In addition, Metavante utilizes EBITDA in its evaluation and determination of the price of potential acquisition candidates, to explain trends in its operating performance, and to provide useful information about its ability to incur and service indebtedness. Also, EBITDA is included in the financial covenants applicable to Metavante’s credit facilities. Metavante’s definition of EBITDA may differ from definitions used by other companies.
Cash Net Income
Metavante’s management defines “cash net income” as net income before (1) stock-based compensation expense, net of tax, and (2) the amortization of intangible assets resulting from business acquisitions, net of tax. Metavante’s management uses cash net income to assess business performance and believes that it is useful for evaluating performance against peer companies within its industry, as well as providing investors additional transparency to a financial measure used by management in its financial and operational decision-making. Metavante’s definition of cash net income may differ from definitions used by other companies.
Free Cash Flow
Metavante’s management defines “free cash flow” as cash flows provided by operating activities less capital expenditures. Management uses free cash flow to assess business performance and believes that it provides useful information to investors regarding Metavante’s ability to generate cash from business operations that is available for acquisitions and other investments, and debt service. Metavante’s definition of free cash flow may differ from definitions used by other companies.
9