EX-99.1 2 q22011ex991.htm EX 99.1 Q2 2011 EX 99.1
            
Exhibit 99.1
News Release
FIS Announces Second Quarter Results

Revenue of $1.44 billion, up 13.4%; organic growth of 5.8%
EPS of $0.55, as adjusted, up 17.0%
Free cash flow of $195 million

JACKSONVILLE, Fla., July 19, 2011 - FIS (NYSE:FIS), the world's largest provider of banking and payments technology, today reported financial results for the quarter ended June 30, 2011.

GAAP Results

Revenue from continuing operations increased 13.4% to $1.44 billion in the second quarter of 2011, compared to $1.27 billion in the second quarter of 2010. GAAP net earnings from continuing operations attributable to common stockholders totaled $129.3 million, or $0.42 per diluted share, in the second quarter of 2011, compared to $94.9 million, or $0.25 per diluted share, in the prior year quarter.

Non-GAAP Results

Adjusted revenue growth was 13.0% in the second quarter of 2011, and organic revenue growth was 5.8%. EBITDA increased 5.9% to $414.5 million, compared to EBITDA of $391.5 million, as adjusted, in the second quarter of 2010. EBITDA margin was 28.8% in the second quarter of 2011, compared to 30.7%, as adjusted, in the prior year quarter. The current year quarter reflects strong growth in lower margin services revenue, the addition of Capco and approximately $5.0 million of integration, severance and merger and acquisition costs that are included in the current period.
  
Adjusted net earnings from continuing operations totaled $171.7 million, or $0.55 per diluted share, compared to $181.0 million, or $0.47 per diluted share, in the second quarter of 2010. Integration, severance and merger and acquisition costs reduced second quarter 2011 adjusted earnings by approximately $0.01 per share. Free cash flow increased to $195.3 million compared to free cash flow of $107.5 million, as adjusted, in the 2010 quarter. Definitions of non-GAAP financial measures and reconciliations of non-GAAP measures to related GAAP measures are provided in subsequent sections of the press release narrative and supplemental schedules.

“We are pleased with the continued revenue momentum and the strong growth in earnings per share,” commented Frank Martire, president and chief executive officer of FIS. “These results reflect our ongoing focus on expanding client relationships, driving operational excellence and further extending our market leadership position.”

Segment Information

The following is a discussion of second quarter results by segment:

Financial Solutions:

Second quarter 2011 Financial Solutions revenue increased 12.7% to $516.5 million compared to $458.3 million in the 2010 quarter, driven by growth in account processing, higher services revenue, and the addition of Capco's North American operations. Financial Solutions revenue increased 5.2% on an organic basis. Financial Solutions EBITDA increased 3.5% to $208.3 million compared to $201.3 million in the second quarter of 2010. The EBITDA margin was

40.3% compared to 43.9% in the prior year quarter, reflecting strong growth in lower margin services revenue and the addition of Capco.

Payment Solutions:

Second quarter 2011 Payment Solutions revenue totaled $632.0 million compared to $630.6 million in the 2010 quarter. The consolidation of our merchant processing platforms resulted in utilization of the net method to account for certain merchant interchange fees which negatively impacted year-over-year comparisons by $17.8 million. In addition, declining check usage negatively impacted revenue growth by $1.2 million. Payment Solutions revenue increased 4.1%, excluding the impact of the gross-to-net accounting mentioned above and the check related businesses. Payment Solutions EBITDA increased 2.9% to $238.9 million in the second quarter of 2011 compared to EBITDA of $232.2 million in the 2010 quarter. The EBITDA margin improved to 37.8% compared to 36.8% in the prior year quarter.

International Solutions:

International Solutions revenue increased 57.8% to $293.0 million compared to $185.7 million in the 2010 quarter. The growth was driven by higher payment volumes in Brazil, increased license revenue and the addition of Capco's international operations. International Solutions revenue increased 25.2% on an organic basis. International Solutions EBITDA increased 44.3% to $61.2 million compared to $42.4 million in the second quarter of 2010. The EBITDA margin was 20.9% compared to 22.8% in the prior year quarter, reflecting the addition of Capco.
  
Corporate/Other:

Corporate expense totaled $93.9 million in the second quarter 2011, compared to $84.4 million in the prior year quarter.
Net interest expense totaled $65.8 million compared to $19.3 million in the prior year quarter due primarily to the recapitalization completed in the third quarter of 2010. The effective tax rate declined to 32.0% in the second quarter of 2011 compared to 37.0% in the prior year, reflecting a one-time benefit in the current year quarter.


Balance Sheet and Cash Flow

Cash and cash equivalents totaled $427.3 million as of June 30, 2011. Debt outstanding declined to approximately $4.9 billion as of June 30, 2011. Capital expenditures totaled $68.0 million in the second quarter of 2011, compared to $76.0 million in capital expenditures in the prior year quarter.

Free cash flow totaled $195.3 million in the second quarter of 2011 compared to adjusted free cash flow of $107.5 million in the 2010 quarter.

2011 Outlook
FIS reiterated its full year outlook for 2011 as follows:
    
Revenue growth of 9% to 11% (4% to 6% organic revenue growth);
EBITDA growth of 7% to 9%, reflecting a higher proportion of consulting and services revenue;
Adjusted net earnings per share from continuing operations of $2.24 to $2.34;
Free cash flow is expected to approximate adjusted net earnings in 2011.
 
Use of Non-GAAP Financial Information

Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the Company has provided non-GAAP financial measures, which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include adjusted revenue, organic revenue, adjusted earnings before interest, taxes and depreciation and amortization (EBITDA), adjusted net earnings, free cash flow and adjusted free cash flow. Adjusted revenue (2010 comparative data) excludes the impact of deferred revenue purchase accounting. Organic revenue (2011 and 2010 comparative data) includes reported revenue plus pre-acquisition revenue for companies acquired during the applicable reporting periods. Organic revenue excludes the impact of foreign currency fluctuation in 2011 and the impact of deferred

revenue purchase accounting in 2010. Adjusted EBITDA (2010 comparative data) excludes the impact of merger and acquisition and integration expenses, accelerated stock compensation charges associated with merger and acquisition activity, deferred revenue purchase accounting and certain other costs. Adjusted net earnings (2010 comparative data) exclude the after-tax impact of merger and acquisition and integration expenses, accelerated stock compensation charges associated with merger and acquisition activity, acquisition related amortization, deferred revenue purchase accounting and certain other costs. Adjusted net earnings (2011 comparative data) exclude the after-tax impact of acquisition related amortization. Adjusted free cash flow (2010 comparative data) is GAAP operating cash flow less capital expenditures and acquisition related cash items. Free cash flow (2011 comparative data) is GAAP operating cash flow less capital expenditures. Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. Further, FIS' non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures are provided in the attached schedules and in the Investor Relations section of the FIS Web site, www.fisglobal.com.

Conference Call and Webcast

FIS will host a call with investors and analysts to discuss second quarter 2011 results on Tuesday, July 19, 2011 beginning at 5:00 p.m. Eastern daylight time. To register for the live event and to access a supplemental slide presentation, go to the Investor Relations section at www.fisglobal.com and click on “News and Events.” A webcast replay will be available on FIS' Investor Relations website, and a telephone replay will be available through August 2, 2011, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 163692. To access a PDF version of this release and accompanying financial tables, go to http://www.investor.fisglobal.com.

About FIS

FIS (NYSE: FIS) is the world's largest global provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100 countries. Headquartered in Jacksonville, Fla., FIS employs more than 32,000 people worldwide and holds leadership positions in payment processing and banking solutions, providing software, services and outsourcing of the technology that drives financial institutions. FIS is ranked 426 on the Fortune 500, is a member of Standard & Poor's 500® Index and consistently holds a leading ranking in the annual FinTech 100 list. For more information about FIS, visit www.fisglobal.com.


Forward-Looking Statements

This news release and today's conference call contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about revenue, organic revenue, earnings per share, margin expansion and cash flow, as well as other statements about our expectations, hopes, intentions, or strategies regarding the future, are forward-looking statements. These statements relate to future events and our future results, and involve a number of risks and uncertainties. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Any statements that refer to beliefs, expectations, projections or other characterizations of future events or circumstances and other statements that are not historical facts are forward-looking statements.

Actual results, performance or achievement could differ materially from those contained in these forward-looking statements. The risks and uncertainties that forward-looking statements are subject to include without limitation: changes and conditions in general economic, business and political conditions, including the possibility of intensified international hostilities, acts of terrorism, and changes and conditions 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 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 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 core processing, card issuer, and transaction processing services; failures to adapt our services and products to changes in technology or in the marketplace; internal or external security breaches of our systems, including those relating to the theft of personal information and computer viruses affecting our software or platforms, and the reactions of customers, card associations and others to any such future events; the failure to achieve some or all of the benefits that we expect from acquisitions; our potential inability to find suitable acquisition candidates or finance such acquisitions, which depends upon the availability of adequate cash reserves from operations or of acceptable financing terms and the variability of our stock price, or difficulties in integrating past and future acquired technology or business' operations, services, clients and personnel; competitive pressures on product pricing and services 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 in “Risk Factors” and other sections of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and other filings with the SEC.

Other unknown or unpredictable factors also could have a material adverse effect on our business, financial condition, results of operations and prospects. Accordingly, readers should not place undue reliance on these forward-looking statements. These forward-looking statements are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Except as required by applicable law or regulation, we do not undertake (and expressly disclaim) any obligation and do not intend to publicly update or review any of these forward-looking statements, whether as a result of new information, future events or otherwise.

FIS-e

 
 
 
Marcia Danzeisen, 904.854.5083
 
Mary Waggoner, 904.854.3282
Senior Vice President
 
Senior Vice President
FIS Global Marketing and Communications
 
FIS Investor Relations
marcia.danzeisen@fisglobal.com
 
mary.waggoner@fisglobal.com


Fidelity National Information Services, Inc.
Earnings Release Supplemental Financial Information
July 19, 2011


Exhibit A    Consolidated Statements of Earnings - Unaudited for the three and six months ended June 30, 2011 and 2010

Exhibit B    Consolidated Balance Sheets - Unaudited as of June 30, 2011 and December 31, 2010

Exhibit C    Consolidated Statements of Cash Flows - Unaudited for the six months ended June 30, 2011 and 2010

Exhibit D    Supplemental Non-GAAP Financial Information - Unaudited for the three and six months ended June 30, 2011 and 2010

Exhibit E    Supplemental GAAP to Non-GAAP Reconciliation - Unaudited for the three and six months ended June 30, 2011 and 2010



FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
(In millions, except per share data)

 
 
 
 
 
Exhibit A
 
 
 
 
 
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2011
 
2010
 
2011
 
2010
Processing and services revenues
$
1,441.7

 
$
1,271.0

 
$
2,825.1

 
$
2,506.0

Cost of revenues
1,007.5

 
893.2

 
2,003.5

 
1,783.6

Gross profit
434.2

 
377.8

 
821.6

 
722.4

Selling, general and administrative expenses
175.3

 
193.7

 
348.8

 
350.9

Operating income
258.9

 
184.1

 
472.8

 
371.5

Other income (expense):
 
 
 

 
 
 
 
Interest expense, net
(65.8
)
 
(19.3
)
 
(133.8
)
 
(47.5
)
Other income (expense), net
(0.2
)
 
(12.6
)
 
3.1

 
(17.9
)
Total other income (expense)
(66.0
)
 
(31.9
)
 
(130.7
)
 
(65.4
)
Earnings from continuing operations before income taxes
192.9

 
152.2

 
342.1

 
306.1

Provision for income taxes
61.8

 
56.1

 
114.1

 
113.0

Earnings from continuing operations, net of tax
131.1

 
96.1

 
228.0

 
193.1

Earnings from discontinued operations, net of tax
(5.8
)
 
(5.0
)
 
(9.1
)
 
(8.5
)
Net earnings
125.3

 
91.1

 
218.9

 
184.6

Net (earnings) loss attributable to noncontrolling interest
(1.8
)
 
(1.2
)
 
(2.6
)
 
(1.1
)
Net earnings attributable to FIS common stockholders
$
123.5

 
$
89.9

 
$
216.3

 
$
183.5

Net earnings per share-basic from continuing operations attributable to FIS common stockholders *
$
0.43

 
$
0.25

 
$
0.74

 
$
0.51

Net earnings (loss) per share-basic from discontinued operations attributable to FIS common stockholders *
(0.02
)
 
(0.01
)
 
(0.03
)
 
(0.02
)
Net earnings per share-basic attributable to FIS common stockholders *
$
0.41

 
$
0.24

 
$
0.71

 
$
0.49

Weighted average shares outstanding-basic
303.6

 
376.5

 
302.6

 
374.9

Net earnings per share-diluted from continuing operations attributable to FIS common stockholders *
$
0.42

 
$
0.25

 
$
0.73

 
$
0.50

Net earnings (loss) per share-diluted from discontinued operations attributable to FIS common stockholders *
(0.02
)
 
(0.01
)
 
(0.03
)
 
(0.02
)
Net earnings per share-diluted attributable to FIS common stockholders *
$
0.40

 
$
0.23

 
$
0.70

 
$
0.48

Weighted average shares outstanding-diluted
310.9

 
384.6

 
309.8

 
382.3

Amounts attributable to FIS common stockholders:
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
$
129.3

 
$
94.9

 
$
225.4

 
$
192.0

Earnings (loss) from discontinued operations, net of tax
(5.8
)
 
(5.0
)
 
(9.1
)
 
(8.5
)
Net earnings attributable to FIS common stockholders
$
123.5

 
$
89.9

 
$
216.3

 
$
183.5

 

* Amounts may not sum due to rounding.


1

FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS — UNAUDITED
(In millions)

 
 
 
Exhibit B

 
 
 
 
 
As of
 
As of
 
June 30, 2011
 
December 31, 2010
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
427.3

 
$
338.0

Settlement deposits
43.8

 
35.9

Trade receivables, net
865.1

 
856.1

Settlement receivables
68.9

 
157.3

Other receivables
41.1

 
38.7

Receivable from related parties
30.7

 
33.5

Prepaid expenses and other current assets
154.2

 
138.0

Deferred income taxes
74.5

 
58.1

Assets held for sale

 
17.4

Total current assets
1,705.6

 
1,673.0

Property and equipment, net
408.9

 
390.0

Goodwill
8,571.3

 
8,550.0

Intangible assets, net
2,093.9

 
2,202.9

Computer software, net
926.3

 
909.0

Deferred contract costs
261.8

 
254.2

Other noncurrent assets
193.8

 
197.2

Total assets
$
14,161.6

 
$
14,176.3

 
 
 
 
Liabilities and Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
605.8

 
$
591.8

Due to Brazilian venture partner
40.0

 

Settlement payables
128.7

 
140.6

Current portion of long-term debt
564.4

 
256.9

Deferred revenues
276.6

 
268.6

Liabilities held for sale

 
42.5

Total current liabilities
1,615.5

 
1,300.4

Deferred revenues
70.1

 
86.3

Deferred income taxes
874.6

 
859.3

Long-term debt, excluding current portion
4,320.0

 
4,935.2

Due to Brazilian venture partner
54.8

 
85.7

Other long-term liabilities
332.2

 
347.8

Total liabilities
7,267.2

 
7,614.7

Equity:
 

 
 

FIS stockholders’ equity:
 

 
 

Preferred stock $0.01 par value

 

Common stock $0.01 par value
3.8

 
3.8

Additional paid in capital
7,197.3

 
7,199.7

Retained earnings
1,657.1

 
1,471.2

Accumulated other comprehensive earnings
120.7

 
87.9

Treasury stock
(2,252.6
)
 
(2,359.4
)
Total FIS stockholders’ equity
6,726.3

 
6,403.2

Noncontrolling interest
168.1

 
158.4

Total equity
6,894.4

 
6,561.6

Total liabilities and equity
$
14,161.6

 
$
14,176.3



2




FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
(In millions)


 
 
 
Exhibit C

 
 
 
 
 
Six months ended June 30,
 
2011
 
2010
Cash flows from operating activities:
 
 
 
Net earnings
$
218.9

 
$
184.6

Adjustment to reconcile net earnings to net cash provided by operating activities:
 

 
 

Depreciation and amortization
310.0

 
305.1

Amortization of debt issue costs
7.1

 
5.5

Stock-based compensation
31.1

 
26.4

Deferred income taxes
1.9

 
(44.9
)
Excess income tax benefit from exercise of stock options
(6.9
)
 
(5.3
)
Other operating activities
(4.5
)
 
4.0

Net changes in assets and liabilities, net of effects from acquisitions:
 

 
 

Trade receivables
12.5

 
48.8

Settlement activity
68.6

 
0.7

Prepaid expenses and other assets
(18.3
)
 
(5.9
)
Deferred contract costs
(28.7
)
 
(20.6
)
Deferred revenue
(17.9
)
 
(4.4
)
Accounts payable, accrued liabilities and other liabilities
(50.3
)
 
(48.8
)
Net cash provided by operating activities
523.5

 
445.2

 
 

 
 

Cash flows from investing activities:
 

 
 

Additions to property and equipment
(50.3
)
 
(47.6
)
Additions to computer software
(89.3
)
 
(86.6
)
Net proceeds from sale of assets
5.9

 
71.5

Acquisitions, net of cash acquired
(12.7
)
 
(46.6
)
Other investing activity

 
36.0

Net cash provided by (used in) investing activities
(146.4
)
 
(73.3
)
 
 

 
 

Cash flows from financing activities:
 

 
 

Borrowings
5,160.9

 
4,250.1

Repayment of borrowings and capital lease obligations
(5,500.9
)
 
(4,544.3
)
Capitalized debt issuance costs

 
(17.7
)
Excess income tax benefit from exercise of stock options
6.9

 
5.3

Proceeds from exercise of stock options
66.4

 
86.3

Treasury stock purchases

 
(32.2
)
Dividends paid and other distributions
(32.1
)
 
(39.3
)
Other financing activity
1.4

 
3.3

Net cash used in financing activities
(297.4
)
 
(288.5
)
 
 
 
 
Effect of foreign currency exchange rate changes on cash
9.6

 
(12.3
)
 
 
 
 
Net increase in cash and cash equivalents
89.3

 
71.1

Cash and cash equivalents, at beginning of period
338.0

 
430.9

Cash and cash equivalents, at end of period
$
427.3

 
$
502.0



3




FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In millions)

 
 
 
 
 
 
 
 
 
Exhibit D

 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2011
 
Financial
Solutions
 
Payment
Solutions
 
International
Solutions
 
Corporate
and Other
 
Consolidated
Revenue from continuing operations
$
516.5

 
$
632.0

 
$
293.0

 
$
0.2

 
$
1,441.7

Operating income (loss)
$
168.8

 
$
216.3

 
$
41.5

 
$
(167.7
)
 
$
258.9

Purchase price amortization

 

 
0.1

 
62.3

 
62.4

Non GAAP operating income (loss)
168.8

 
216.3

 
41.6

 
(105.4
)
 
321.3

 
 

 
 

 
 

 
 

 
 

Depreciation and amortization from continuing operations
39.5

 
22.6

 
19.6

 
11.5

 
93.2

EBITDA
$
208.3

 
$
238.9

 
$
61.2

 
$
(93.9
)
 
$
414.5

 
 
 
 
 
 
 
 
 
 
Non GAAP operating margin
32.7
%
 
34.2
%
 
14.2
%
 
N/M

 
22.3
%
 
 

 
 

 
 

 
 

 
 

EBITDA margin
40.3
%
 
37.8
%
 
20.9
%
 
N/M

 
28.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2010
 
Financial
Solutions
 
Payment
Solutions
 
International
Solutions
 
Corporate
and Other
 
Consolidated
Revenue from continuing operations, as adjusted
$
458.3

 
$
630.6

 
$
185.7

 
$
1.7

 
$
1,276.3

Operating income (loss)
$
163.6

 
$
207.6

 
$
28.4

 
$
(215.5
)
 
$
184.1

M&A, restructuring and integration costs

 

 

 
51.6

 
51.6

Acquisition deferred revenue adjustment

 

 

 
5.3

 
5.3

Purchase price amortization

 
0.2

 
0.1

 
65.8

 
66.1

Non GAAP operating income (loss)
163.6

 
207.8

 
28.5

 
(92.8
)
 
307.1

Depreciation and amortization from continuing operations
37.7

 
24.4

 
13.9

 
8.4

 
84.4

EBITDA, as adjusted
$
201.3

 
$
232.2

 
$
42.4

 
$
(84.4
)
 
$
391.5

 
 

 
 
 
 
 
 
 
 
Non GAAP operating margin
35.7
%
 
33.0
%
 
15.3
%
 
N/M

 
24.1
%
 
 

 
 

 
 

 
 

 
 

EBITDA margin, as adjusted
43.9
%
 
36.8
%
 
22.8
%
 
N/M

 
30.7
%
 
 
 
 
 
 
 
 
 
 
Total revenue growth from prior year period
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2011
12.7
%
 
0.2
%
 
57.8
%
 
N/M

 
13.0
%













4




FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In millions)

 
 
 
 
 
 
 
 
 
Exhibit D

 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2011
 
Financial
Solutions
 
Payment
Solutions
 
International
Solutions
 
Corporate
and Other
 
Consolidated
Revenue from continuing operations
$
1,020.2

 
$
1,246.5

 
$
561.1

 
$
(2.7
)
 
$
2,825.1

Operating income (loss)
$
325.0

 
$
412.3

 
$
72.0

 
$
(336.5
)
 
$
472.8

Purchase price amortization
0.1

 
0.1

 
0.2

 
126.0

 
126.4

Non GAAP operating income (loss)
325.1

 
412.4

 
72.2

 
(210.5
)
 
599.2

 
 

 
 

 
 

 
 

 
 

Depreciation and amortization from continuing operations
78.3

 
45.8

 
37.9

 
21.6

 
183.6

EBITDA
$
403.4

 
$
458.2

 
$
110.1

 
$
(188.9
)
 
$
782.8

 
 
 
 
 
 
 
 
 
 
Non GAAP operating margin
31.9
%
 
33.1
 %
 
12.9
%
 
N/M

 
21.2
%
 
 

 
 

 
 

 
 

 
 

EBITDA margin
39.5
%
 
36.8
 %
 
19.6
%
 
N/M

 
27.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2010
 
Financial
Solutions
 
Payment
Solutions
 
International
Solutions
 
Corporate
and Other
 
Consolidated
Revenue from continuing operations, as adjusted
$
901.8

 
$
1,249.4

 
$
366.1

 
$
2.9

 
$
2,520.2

Operating income (loss)
$
312.2

 
$
412.4

 
$
48.0

 
$
(401.1
)
 
$
371.5

M&A, restructuring and integration costs

 

 

 
68.9

 
68.9

Acquisition deferred revenue adjustment

 

 

 
14.2

 
14.2

Purchase price amortization

 
0.5

 
0.2

 
130.4

 
131.1

Non GAAP operating income (loss)
312.2

 
412.9

 
48.2

 
(187.6
)
 
585.7

Depreciation and amortization from continuing operations
75.6

 
48.8

 
28.1

 
18.4

 
170.9

EBITDA, as adjusted
$
387.8

 
$
461.7

 
$
76.3

 
$
(169.2
)
 
$
756.6

 
 

 
 
 
 
 
 
 
 
Non GAAP operating margin
34.6
%
 
33.0
 %
 
13.2
%
 
N/M

 
23.2
%
 
 

 
 

 
 

 
 

 
 

EBITDA margin, as adjusted
43.0
%
 
37.0
 %
 
20.8
%
 
N/M

 
30.0
%
 
 
 
 
 
 
 
 
 
 
Total revenue growth from prior year period
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2011
13.1
%
 
(0.2
)%
 
53.3
%
 
N/M

 
12.1
%


5




FIDELITY NATIONAL INFORMATION SERVICES, INC.
RECONCILIATION OF CASH FLOW MEASURES - UNAUDITED
(In millions)

 
Exhibit D (continued)
 
 
 
 
 
 
Three months ended
 
Six months ended
 
June 30, 2011
 
June 30, 2011
 
GAAP
 
GAAP
Cash flows from operating activities:
 
 
 
Net earnings
$
125.3

 
$
218.9

Adjustments to reconcile net earnings to net cash provided by operating activities:
 

 
 
Non-cash adjustments
153.3

 
338.7

Working capital adjustments
(15.3
)
 
(34.1
)
 
 

 
 
Net cash provided by operating activities
263.3

 
523.5

Capital expenditures
(68.0
)
 
(139.6
)
 
 

 
 
Free cash flow
$
195.3

 
$
383.9

 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
Six months ended
 
June 30, 2010
 
June 30, 2010
 
GAAP
 
Adjustments
 
Adjusted
 
GAAP
 
Adjustments
 
Adjusted
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net earnings (1)
$
91.1

 
$
86.3

 
$
177.4

 
$
184.6

 
$
145.7

 
$
330.3

Adjustments to reconcile net earnings to net cash provided by operating activities:
 

 
 

 
 

 
 
 
 

 
 
Non-cash adjustments (2)
127.1

 
(31.1
)
 
96.0

 
290.8

 
(76.5
)
 
214.3

Working capital adjustments (3)
(44.7
)
 
(45.2
)
 
(89.9
)
 
(30.2
)
 
(31.4
)
 
(61.6
)
 
 

 
 

 
 

 
 
 
 
 
 
Net cash provided by operating activities
173.5

 
10.0

 
183.5

 
445.2

 
37.8

 
483.0

Capital expenditures
(76.0
)
 

 
(76.0
)
 
(134.2
)
 

 
(134.2
)
 
 

 
 

 
 

 
 
 
 
 
 
Free cash flow
$
97.5

 
$
10.0

 
$
107.5

 
$
311.0

 
$
37.8

 
$
348.8

 
 
 
 
 
 
 
 
 
 
 
 

(1)
Adjustments to Net Earnings reflect the elimination of the after-tax impact of M&A and related integration costs, as well as stock acceleration charges and purchase price amortization.

(2)
Non Cash Adjustments reflects the after-tax impact of stock acceleration charges and purchase price amortization.

(3)
Adjustments to working capital reflect elimination of settlement of various acquisition related liabilities.




6

FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(In millions)

 
 
 
 
 
 
Exhibit E
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
Six months ended
 
 
June 30,
 
June 30,
 
 
2011
 
2010
 
2011
 
2010
 
 
 
 
 
 
 
 
 
Net earnings from continuing operations attributable to FIS
 
$
129.3

 
$
94.9

 
$
225.4

 
$
192.0

Plus provision for income taxes
 
61.8

 
56.1

 
114.1

 
113.0

Interest expense, net
 
(65.8
)
 
(19.3
)
 
(133.8
)
 
(47.5
)
Less other, net
 
(2.0
)
 
(13.8
)
 
0.5

 
(19.0
)
 
 
 

 
 

 
 
 
 
Operating income
 
258.9

 
184.1

 
472.8

 
371.5

 
 
 

 
 

 
 
 
 
Purchase price amortization
 
62.4

 
66.1

 
126.4

 
131.1

M&A, restructuring and integration costs
 

 
51.6

 

 
68.9

Acquisition deferred revenue adjustments
 

 
5.3

 

 
14.2

 
 
 

 
 

 
 
 
 
Non GAAP operating income
 
321.3

 
307.1

 
599.2

 
585.7

 
 
 

 
 

 
 
 
 
Depreciation and amortization from continuing operations
 
93.2

 
84.4

 
183.6

 
170.9

EBITDA, as adjusted
 
$
414.5

 
$
391.5

 
$
782.8

 
$
756.6


























7




FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(In millions)

 
 
 
 
Exhibit E (continued)
 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2011
 
 
 
 
Purchase Price
 
 
 
 
GAAP
 
Amort. (3)
 
Non-GAAP
Processing and services revenue
 
$
1,441.7

 
$

 
$
1,441.7

Cost of revenues
 
1,007.5

 
(62.4
)
 
945.1

Gross profit
 
434.2

 
62.4

 
496.6

Selling, general and administrative
 
175.3

 

 
175.3

Operating income
 
258.9

 
62.4

 
321.3

Other income (expense):
 
 

 
 

 
 

Interest income (expense), net
 
(65.8
)
 

 
(65.8
)
Other income (expense), net
 
(0.2
)
 

 
(0.2
)
Total other income (expense)
 
(66.0
)
 

 
(66.0
)
Earnings from continuing operations before income taxes
 
192.9

 
62.4

 
255.3

Provision for income taxes
 
61.8

 
20.0

 
81.8

Earnings from continuing operations, net of tax
 
131.1

 
42.4

 
173.5

Earnings (losses) from discontinued operations, net of tax (4)
 
(5.8
)
 

 
(5.8
)
Net earnings
 
125.3

 
42.4

 
167.7

Net (earnings) loss attributable to noncontrolling interest
 
(1.8
)
 

 
(1.8
)
Net earnings attributable to FIS common stockholders
 
$
123.5

 
$
42.4

 
$
165.9

 
 
 
 
 
 
 
Amounts attributable to FIS common stockholders
 
 
 
 
 
 
Earnings from continuing operations, net of tax
 
$
129.3

 
$
42.4

 
$
171.7

Earnings (losses) from discontinued operations, net of tax (4)
 
(5.8
)
 

 
(5.8
)
Net earnings attributable to FIS common stockholders
 
$
123.5

 
$
42.4

 
$
165.9

 
 
 
 
 
 
 
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders*
 
$
0.42

 
$
0.14

 
$
0.55

Weighted average shares outstanding — diluted
 
310.9

 
310.9

 
310.9

 
 
 
 
 
 
 
Effective tax rate
 
32
%
 
 
 
32
%
 
 
 
 
 
 
 
Supplemental information:
 
 
 
 
 
 
Depreciation and amortization from continuing operations
 
$
155.6

 
(62.4
)
 
$
93.2

Stock compensation expense from continuing operations, excluding acceleration charges
 
 
 
 
 
$
15.7

Stock acceleration charges
 
 
 
 
 

Total stock compensation expense from continuing operations
 
 
 
 
 
$
15.7

 
* Amounts may not sum due to rounding.

See accompanying notes.










8




FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(In millions)

 
 
 
 
Exhibit E (continued)
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2011
 
 
 
 
Purchase Price
 
 
 
 
GAAP
 
Amort. (3)
 
Non-GAAP
Processing and services revenue
 
$
2,825.1

 
$

 
$
2,825.1

Cost of revenues
 
2,003.5

 
(126.4
)
 
1,877.1

Gross profit
 
821.6

 
126.4

 
948.0

Selling, general and administrative
 
348.8

 

 
348.8

Operating income
 
472.8

 
126.4

 
599.2

Other income (expense):
 
 

 
 

 
 

Interest income (expense), net
 
(133.8
)
 

 
(133.8
)
Other income (expense), net
 
3.1

 

 
3.1

Total other income (expense)
 
(130.7
)
 

 
(130.7
)
Earnings from continuing operations before income taxes
 
342.1

 
126.4

 
468.5

Provision for income taxes
 
114.1

 
42.4

 
156.5

Earnings from continuing operations, net of tax
 
228.0

 
84.0

 
312.0

Earnings (losses) from discontinued operations, net of tax (4)
 
(9.1
)
 

 
(9.1
)
Net earnings
 
218.9

 
84.0

 
302.9

Net (earnings) loss attributable to noncontrolling interest
 
(2.6
)
 

 
(2.6
)
Net earnings attributable to FIS common stockholders
 
$
216.3

 
$
84.0

 
$
300.3

 
 
 
 
 
 
 
Amounts attributable to FIS common stockholders
 
 
 
 
 
 
Earnings from continuing operations, net of tax
 
$
225.4

 
$
84.0

 
$
309.4

Earnings (losses) from discontinued operations, net of tax (4)
 
(9.1
)
 

 
(9.1
)
Net earnings attributable to FIS common stockholders
 
$
216.3

 
$
84.0

 
$
300.3

 
 
 
 
 
 
 
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders*
 
$
0.73

 
$
0.27

 
$
1.00

Weighted average shares outstanding — diluted
 
309.8

 
309.8

 
309.8

 
 
 
 
 
 
 
Effective tax rate
 
33
%
 
 
 
33
%
 
 
 
 
 
 
 
Supplemental information:
 
 
 
 
 
 
Depreciation and amortization from continuing operations
 
$
310.0

 
(126.4
)
 
$
183.6

Stock compensation expense from continuing operations, excluding acceleration charges
 
 
 
 
 
$
31.1

Stock acceleration charges
 
 
 
 
 

Total stock compensation expense from continuing operations
 
 
 
 
 
$
31.1














9




FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(In millions)



 
 
 
 
 
 
 
 
Exhibit E (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2010
 
 
 
 
M&A
 
Acquisition
 
 
 
 
 
 
 
 
 
 
Restructuring &
 
Deferred
 
 
 
Purchase
 
 
 
 
 
 
Integration
 
Revenue
 
 
 
Price
 
 
 
 
GAAP
 
Costs (1)
 
Adj (2)
 
Subtotal
 
Amort. (3)
 
Non-GAAP
Processing and services revenue
 
$
1,271.0

 
$

 
$
5.3

 
$
1,276.3

 
$

 
$
1,276.3

Cost of revenues
 
893.2

 

 

 
893.2

 
(66.1
)
 
827.1

Gross profit
 
377.8

 

 
5.3

 
383.1

 
66.1

 
449.2

Selling, general and administrative
 
193.7

 
(51.6
)
 

 
142.1

 

 
142.1

Operating income
 
184.1

 
51.6

 
5.3

 
241.0

 
66.1

 
307.1

Other income (expense):
 
 

 
 

 
 

 
 

 
 

 
 

Interest income (expense), net
 
(19.3
)
 

 

 
(19.3
)
 

 
(19.3
)
Other income (expense), net
 
(12.6
)
 
13.8

 

 
1.2

 

 
1.2

Total other income (expense)
 
(31.9
)
 
13.8

 

 
(18.1
)
 

 
(18.1
)
Earnings from continuing operations before income taxes
 
152.2

 
65.4

 
5.3

 
222.9

 
66.1

 
289.0

Provision for income taxes
 
56.1

 
24.2

 
2.0

 
82.3

 
24.5

 
106.8

Earnings from continuing operations, net of tax
 
96.1

 
41.2

 
3.3

 
140.6

 
41.6

 
182.2

Earnings (losses) from discontinued operations, net of tax (4)
 
(5.0
)
 

 

 
(5.0
)
 
0.2

 
(4.8
)
Net earnings
 
91.1

 
41.2

 
3.3

 
135.6

 
41.8

 
177.4

Net (earnings) loss attributable to noncontrolling interest
 
(1.2
)
 

 

 
(1.2
)
 

 
(1.2
)
Net earnings attributable to FIS common stockholders
 
$
89.9

 
$
41.2

 
$
3.3

 
$
134.4

 
$
41.8

 
$
176.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts attributable to FIS common stockholders
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
 
$
94.9

 
$
41.2

 
$
3.3

 
$
139.4

 
$
41.6

 
$
181.0

Earnings (losses) from discontinued operations, net of tax (4)
 
(5.0
)
 

 

 
(5.0
)
 
0.2

 
(4.8
)
Net earnings attributable to FIS common stockholders
 
$
89.9

 
$
41.2

 
$
3.3

 
$
134.4

 
$
41.8

 
$
176.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders*
 
$
0.25

 
$
0.11

 
$
0.01

 
$
0.36

 
$
0.11

 
$
0.47

Weighted average shares outstanding — diluted
 
384.6

 
384.6

 
384.6

 
384.6

 
384.6

 
384.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
37
%
 
 
 
 
 
 
 
 
 
37
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental information:
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization from continuing operations
 
 
 
 
 
 
 
$
150.5

 
(66.1
)
 
$
84.4

Stock compensation expense from continuing operations, excluding acceleration charges
 
 
 
 
 
 
 
 
 
 
 
$
10.4

Stock acceleration charges
 
 
 
 
 
 
 
 
 
 
 

Total stock compensation expense from continuing operations
 
 
 
 
 
 
 
 
 
 
 
$
10.4


* Amounts may not sum due to rounding.

See accompanying notes.
















10




FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(In millions)


 
 
 
 
 
 
 
 
Exhibit E (continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2010
 
 
 
 
M&A
 
Acquisition
 
 
 
 
 
 
 
 
 
 
Restructuring &
 
Deferred
 
 
 
Purchase
 
 
 
 
 
 
Integration
 
Revenue
 
 
 
Price
 
 
 
 
GAAP
 
Costs (1)
 
Adj (2)
 
Subtotal
 
Amort. (3)
 
Non-GAAP
Processing and services revenue
 
$
2,506.0

 
$

 
$
14.2

 
$
2,520.2

 
$

 
$
2,520.2

Cost of revenues
 
1,783.6

 

 

 
1,783.6

 
(131.1
)
 
1,652.5

Gross profit
 
722.4

 

 
14.2

 
736.6

 
131.1

 
867.7

Selling, general and administrative
 
350.9

 
(68.9
)
 

 
282.0

 

 
282.0

Operating income
 
371.5

 
68.9

 
14.2

 
454.6

 
131.1

 
585.7

Other income (expense):
 
 

 
 

 
 

 
 

 
 

 
 

Interest income (expense), net
 
(47.5
)
 

 

 
(47.5
)
 

 
(47.5
)
Other income (expense), net
 
(17.9
)
 
16.8

 

 
(1.1
)
 

 
(1.1
)
Total other income (expense)
 
(65.4
)
 
16.8

 

 
(48.6
)
 

 
(48.6
)
Earnings from continuing operations before income taxes
 
306.1

 
85.7

 
14.2

 
406.0

 
131.1

 
537.1

Provision for income taxes
 
113.0

 
31.7

 
5.3

 
150.0

 
48.5

 
198.5

Earnings from continuing operations, net of tax
 
193.1

 
54.0

 
8.9

 
256.0

 
82.6

 
338.6

Earnings (losses) from discontinued operations, net of tax (4)
 
(8.5
)
 

 

 
(8.5
)
 
0.3

 
(8.2
)
Net earnings
 
184.6

 
54.0

 
8.9

 
247.5

 
82.9

 
330.4

Net (earnings) loss attributable to noncontrolling interest
 
(1.1
)
 

 

 
(1.1
)
 

 
(1.1
)
Net earnings attributable to FIS common stockholders
 
$
183.5

 
$
54.0

 
$
8.9

 
$
246.4

 
$
82.9

 
$
329.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts attributable to FIS common stockholders
 
 
 
 
 
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
 
$
192.0

 
$
54.0

 
$
8.9

 
$
254.9

 
$
82.6

 
$
337.5

Earnings (losses) from discontinued operations, net of tax (4)
 
(8.5
)
 

 

 
(8.5
)
 
0.3

 
(8.2
)
Net earnings attributable to FIS common stockholders
 
$
183.5

 
$
54.0

 
$
8.9

 
$
246.4

 
$
82.9

 
$
329.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders*
 
$
0.50

 
$
0.14

 
$
0.02

 
$
0.67

 
$
0.22

 
$
0.88

Weighted average shares outstanding — diluted
 
382.3

 
382.3

 
382.3

 
382.3

 
382.3

 
382.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
37
%
 
 
 
 
 
 
 
 
 
37
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental information:
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization from continuing operations
 
 
 
 
 
 
 
$
302.0

 
(131.1
)
 
$
170.9

Stock compensation expense from continuing operations, excluding acceleration charges
 
 
 
 
 
 
 
 
 
 
 
$
21.0

Stock acceleration charges
 
 
 
 
 
 
 
 
 
 
 
5.4

Total stock compensation expense from continuing operations
 
 
 
 
 
 
 
 
 
 
 
$
26.4



11




FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(In millions)


Notes to Unaudited - Supplemental GAAP to Non-GAAP Reconciliation for the three and six months ended June 30, 2011 and 2010.

The adjustments are as follows:

(1)
This column represents (1) charges for restructuring and integration costs relating to merger and acquisition activities and (2) costs associated with the 2010 leveraged recapitalization plan. For the three and six months ended June 30, 2010, the adjustments to "Selling, general and administrative" expenses primarily represent incremental transaction costs incurred by the Company related to the acquisition of Metavante Technologies, Inc., completed on October 1, 2009. The adjustments to "Other income (expense), net" represent certain costs associated with the leveraged recapitalization, the write-off of certain previously deferred debt issue costs associated with the amended and extended debt facility and the write-off of unamortized discount associated with the portion of the Metavante debt that was paid with the proceeds thereof.

(2)
This column represents the impact of the purchase accounting adjustment to reduce Metavante'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 Metavante but was not recognized due to GAAP purchase accounting requirements.

(3)
This column represents purchase price amortization expense on intangible assets acquired through various Company acquisitions.

(4)
During the 2011 and 2010 periods, certain operations are classified as discontinued. Reporting for discontinued operations classifies revenues and expenses as one line item net of tax in the consolidated statement of earnings. During the third quarter 2010, we determined that Fidelity National Participacoes Ltda. ("Participacoes"), our item processing and remittance services business in Brazil should be treated as a discontinued operation. In January 2010, we closed on the sale of ClearPar. The table below outlines the components of discontinued operations for the periods presented, net of tax (in millions):

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2011
 
2010
 
2011
 
2010
 
 
 
 
 
 
 
 
Participacoes operations
$
(5.8
)
 
$
(4.8
)
 
$
(9.1
)
 
$
(7.3
)
ClearPar and other

 
(0.2
)
 

 
(1.2
)
   Total discontinued operations
$
(5.8
)
 
$
(5.0
)
 
$
(9.1
)
 
$
(8.5
)

12