EX-99.1 2 a50280exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
PRESS RELEASE
     
(FIS LOGO)    
FIDELITY NATIONAL INFORMATION SERVICES REPORTS
REVENUE GROWTH OF 25.4%
ORGANIC REVENUE INCREASES 9.4%
Strong organic growth across all business lines
Integrated Financial Solutions increases 9.0%
Enterprise Solutions increases 3.7%
International increases 25.5%
Pro forma free cash flow of $118 million
     Jacksonville, Fla. — October 27, 2008 — Fidelity National Information Services, Inc. (NYSE:FIS), a leading global provider of technology services to financial institutions, today announced consolidated financial results for the third quarter of 2008.
     Consolidated revenue increased 25.4% to $893.8 million, including approximately $142.8 million in revenue from eFunds, which FIS acquired in September 2007. Excluding eFunds, organic revenue increased 9.4% over the comparable 2007 quarter. GAAP net earnings from continuing operations totaled $0.24 per share, compared to $0.68 per share in the third quarter of 2007, which included an after-tax gain of $0.58 from the sale of Covansys stock.
     Non-GAAP adjusted net earnings from continuing operations for the third quarter of 2008 totaled $0.42 per share, compared to $0.31 in the prior year, an increase of 35.5%. Adjusted EBITDA increased 27.9% to $228.9 million compared to $179.0 million in the third quarter of 2007. The EBITDA margin improved to 25.6% compared to 25.1% in the prior-year quarter and increased sequentially from 23.1% in the second quarter of 2008. Pro forma free cash flow (cash from operations, adjusted for merger and integration costs, less capital expenditures) increased to $118.2 million in the third quarter of 2008. Pro forma free cash flow for the first nine months of 2008 totaled $209.3 million, or 102% of adjusted net earnings, compared with $41.5 million in the same period in the prior year.

 


 

     “FIS has achieved consistent improvement in organic revenue growth, EBITDA margin and free cash flow throughout 2008, and we are very pleased with these results,” stated William P. Foley, II, executive chairman of FIS. “Despite the increasingly challenging economic environment, we are reaffirming our previously communicated earnings guidance.”
     “FIS is executing to plan, despite persistent challenges in the marketplace,” added Lee A. Kennedy, president and chief executive officer. “We continue to focus on the goals that we established early in the year, including driving higher organic revenue growth through market share gains and cross sales, reducing our overall cost structure, completing the eFunds integration, reducing capital expenditures and improving cash flow. We are making solid progress on each of these initiatives, as demonstrated by the strong results across all business lines.”
     FIS’ operating results are presented in accordance with generally accepted accounting principles (“GAAP”) and on an adjusted pro forma basis, which management believes may provide more meaningful comparisons with respect to our current operations between the periods presented. The adjusted results exclude the after-tax impact of merger and acquisition and integration expenses, LPS spin-off related costs, debt restructuring and other charges, gains (losses) on the sale of certain non-strategic assets and acquisition related amortization.
Divestitures and Discontinued Operations
     During the first half of 2008, FIS completed the sale of two non-strategic businesses, FIS Credit Services and Certegy Gaming Services. The company also exited a small operation that provided services to the residential homebuilding market. On July 2, 2008, FIS completed the spin-off of Lender Processing Services, Inc., (NYSE:LPS). These businesses are reported as discontinued operations for the periods presented.
     On October 13, 2008, FIS completed the previously announced sale of Certegy Australia, Ltd., and will report this business as a discontinued operation beginning in the fourth quarter of 2008. Certegy Australia provides retail lending services to consumers.
Supplemental Information
     Consolidated third quarter revenue increased 25.4% to $893.8 million (including eFunds revenue of $142.8 million) compared to $712.8 million (including eFunds revenue of $26.6 from the acquisition date of September 12, 2007) in the prior year quarter. Excluding eFunds revenue from both periods, revenue increased 9.4% to $751.0 million, driven by 25.5% growth in International, 9.0% growth in Integrated Financial Solutions and 3.7% growth in Enterprise Solutions. Termination fees totaled $1.7 million in the third quarter of 2008, compared to $3.0 million in the third quarter of 2007.

 


 

     The strong performance in International was driven by growth in FIS’ core bank processing operation in Germany, new customer implementations, the company’s Brazilian card processing joint venture and favorable currency rates, which benefitted revenue by $13.6 million. The increase in Integrated Financial Solutions was due to growth in core processing services, ebusiness solutions, card marketing programs and a $5.6 million year-to-date adjustment for pass-through interchange revenue. Excluding the interchange adjustment, Integrated Financial Solutions revenue increased approximately 7.2%.
     Enterprise Solutions revenue, excluding eFunds, increased 3.7% to $240.1 million compared to the prior-year quarter and increased 5.6% compared to the second quarter of 2008. Increased software license sales and outsourced technology revenue more than offset a $6.9 million decline in retail check risk management revenue.
     Adjusted EBITDA increased 27.9% to $228.9 million. The adjusted EBITDA margin increased 50 basis points to 25.6% compared to the third quarter of 2007, and increased 250 basis points compared to 23.1% in the second quarter of 2008. The improvement was driven by increasing profitability in the company’s International business, efficiency gains and higher software license fees.
     Corporate overhead expense totaled $23.7 million in the third quarter of 2008, compared to $15.6 million in the third quarter of 2007. The increase was driven by higher incentive compensation accruals and stock option expense.
Balance Sheet
     During the quarter, FIS retired $200 million of secured 4.75% fixed rate notes. As of September 30, 2008, the company had $238.5 million in cash and cash equivalents and $2.6 billion in outstanding debt, of which $2.1 billion has been swapped to fixed interest rates. The effective interest rate on FIS total debt at September 30, 2008, was 5.5%.
Outlook
FIS reaffirmed its previously communicated full year 2008 earnings guidance as follows:
                                 
    Years Ended  
    FY 2008     FY 2007  
Adjusted net earnings per share:
                               
Continuing operations
  $ 1.51     to   $ 1.57     $ 1.23  
Certegy Australia
    (0.07 )             (0.07 )   $ (0.05 )
 
                         
Continuing operations, excluding Certegy Australia
  $ 1.44     to     1.50     $ 1.18  
 
                         

 


 

In addition, the company provided guidance for fourth quarter 2008 as follows:
                                 
    Quarters Ended  
    12/31/2008     12/31/2007  
Adjusted net earnings per share:
                               
Continuing operations
  $ 0.45     to   $ 0.49     $ 0.36  
Certegy Australia
    (0.02 )                   (0.01 )
 
                         
Continuing operations, excluding Certegy Australia
  $ 0.43     to     0.49     $ 0.35  
 
                         
Use of Non-GAAP Financial Information
     FIS reports several non-GAAP measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted net earnings, free cash flow and organic revenues. The adjusted results exclude the after-tax impact of merger and acquisition and integration expenses, certain stock compensation charges, debt restructuring and other costs, gains (losses) on the sale of certain non-strategic assets and acquisition related amortization. Organic revenue excludes eFunds during the periods being compared. 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. A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.
Conference Call and Webcast
     FIS will host a call with investors and analysts to discuss third quarter 2008 results on Monday, October 27, 2008, 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.fidelityinfoservices.com and click on “Events and Multimedia.” A webcast replay will be available on FIS’ Investor Relations website, and a telephone replay will be available through November 10, 2008, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 965579. To access a PDF version of this release and accompanying financial tables, go to http://www.investor.fidelityinfoservices.com.
About Fidelity National Information Services, Inc.
     Fidelity National Information Services, Inc. (NYSE: FIS), a Fortune 500 company, is a leading provider of core processing for financial institutions; card issuer and transaction processing services; and outsourcing services to financial institutions and

 


 

retailers. FIS has processing and technology relationships with 40 of the top 50 global banks, including nine of the top 10. FIS is a member of Standard and Poor’s (S&P) 500(R) Index and has been ranked the number one overall financial technology provider in the world by American Banker and the research firm Financial Insights in the annual FinTech 100 rankings. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 13,000 financial institutions in more than 80 countries worldwide. For more information on Fidelity National Information Services, please visit www.fidelityinfoservices.com.
Forward-Looking Statements
     This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage which may limit the funds available to make acquisitions and invest in our business; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in the banking, retail and financial services industries or due to financial failures suffered by firms in those industries; failures to adapt our services to changes in technology or in the marketplace; our potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; the possibility that our acquisition of EFD/eFunds may not be accretive to our earnings due to undisclosed liabilities, management or integration issues, loss of customers, the inability to achieve targeted cost savings, or other factors; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission.
FIS-e
SOURCE: Fidelity National Information Services, Inc.
CONTACTS: Mary Waggoner, Senior Vice President, Investor Relations (FIS), 904-854-3282, mary.waggoner@fnis.com;
###

 


 

Fidelity National Information Services, Inc.
Earnings Release Supplemental Financial Information
October 27, 2008
     
 
   
Exhibit A
  Consolidated Statements of Earnings for the Three and Nine-Month Periods ended September 30, 2008 and 2007
 
   
Exhibit B
  Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007
 
   
Exhibit C
  Consolidated Statements of Cash Flows for the Nine-Month Periods ended September 30, 2008 and 2007
 
   
Exhibit D
  Supplemental Financial Information for the Three and Nine-Month Periods ended September 30, 2008 and 2007
 
   
Exhibit E
  Supplemental Non-GAAP Financial Information for the Three and Nine-Month Periods ended September 30, 2008 and 2007
 
   
Exhibit F
  Supplemental GAAP to Non-GAAP Reconciliation — Unaudited for the Three and Nine-Month Periods ended September 30, 2008 and 2007

1


 

Exhibit A
FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS — UNAUDITED
(In thousands, except per share data)
                                 
    Three months ended September 30,     Nine months ended September 30,  
    2008     2007     2008     2007  
Processing and services revenues
  $ 893,844     $ 712,812     $ 2,610,720     $ 2,085,694  
 
                               
Cost of revenues
    661,995       562,998       1,984,295       1,624,463  
Selling, general and administrative expenses
    79,944       72,387       308,846       216,612  
Research and development costs
    26,155       17,579       73,308       50,002  
 
                       
 
                               
Operating income
    125,750       59,848       244,271       194,617  
 
                               
Other income (expense):
                               
Interest income
    978       719       5,373       1,093  
Gain on sale of Covansys stock
          182,444             274,488  
Other income
    (1,884 )     3,327       (101 )     4,755  
Interest expense
    (48,397 )     (37,856 )     (132,415 )     (152,863 )
 
                       
Total other income (expense)
    (49,303 )     148,634       (127,143 )     127,473  
 
                       
 
                               
Earnings before income taxes, equity earnings and minority interest
    76,447       208,482       117,128       322,090  
Provision for income taxes
    28,071       75,238       37,481       113,802  
Equity in (losses) earnings of unconsolidated entities
          86       (157 )     2,824  
Minority interest expense
    (2,751 )     41       (2,867 )     369  
 
                       
 
                               
Net earnings from continuing operations
    45,625       133,371       76,623       211,481  
Earnings from discontinued operations, net of tax
    (2,002 )     111,933       109,407       241,330  
 
                       
 
                               
Net earnings
  $ 43,623     $ 245,304     $ 186,030     $ 452,811  
 
                       
 
                               
Net earnings per share-basic from continuing operations*
  $ 0.24     $ 0.69     $ 0.40     $ 1.10  
Net earnings per share-basic from discontinued operations*
    (0.01 )     0.58       0.57       1.25  
 
                       
Net earnings per share-basic*
  $ 0.23     $ 1.27     $ 0.97     $ 2.35  
 
                       
 
                               
Weighted average shares outstanding-basic
    189,541       193,171       192,198       192,609  
 
                       
 
                               
Net earnings per share-diluted from continuing operations*
  $ 0.24     $ 0.68     $ 0.39     $ 1.08  
Net earnings per share-diluted from discontinued operations*
    (0.01 )     0.57       0.56       1.23  
 
                       
Net earnings per share-diluted*
  $ 0.23     $ 1.25     $ 0.96     $ 2.30  
 
                       
 
                               
Weighted average shares outstanding-diluted
    191,822       196,649       194,261       196,480  
 
                       
 
*   Amounts may not sum due to rounding.

2


 

Exhibit B
FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    As of     As of  
    September 30,     December 31,  
    2008     2007  
    (unaudited)          
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 238,458     $ 355,278  
Settlement deposits
    30,218       21,162  
Trade receivables, net
    518,640       825,915  
Other receivables
    165,391       206,746  
Settlement receivables
    41,243       116,935  
Receivable from FNF and LPS
    8,627       14,907  
Prepaid expenses and other current assets
    119,604       168,454  
Deferred income taxes
    83,317       120,098  
 
           
Total current assets
    1,205,498       1,829,495  
 
           
 
               
Property and equipment, net of accumulated depreciation and amortization
    280,502       392,508  
Goodwill
    4,232,979       5,326,831  
Other intangible assets, net of accumulated amortization
    853,360       1,030,582  
Computer software, net of accumulated amortization
    639,867       775,151  
Deferred contract costs
    233,574       256,852  
Investment in FNRES
          30,491  
Long-term notes receivable from FNF
    5,659       6,154  
Other noncurrent assets
    100,036       146,519  
 
           
Total assets
  $ 7,551,475     $ 9,794,583  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 392,564     $ 606,179  
Settlement payables
    75,927       129,799  
Deferred revenues
    159,837       246,222  
Current portion of long-term debt
    93,962       272,014  
 
           
Total current liabilities
    722,290       1,254,214  
 
           
 
               
Deferred revenues
    88,853       111,884  
Deferred income taxes
    354,636       394,972  
Long-term debt, excluding current portion
    2,554,799       4,003,383  
Other long-term liabilities
    175,248       234,757  
 
           
Total liabilities
    3,895,826       5,999,210  
 
           
 
               
Minority interest
    66,293       14,194  
 
           
 
               
Stockholders equity:
               
Preferred stock $0.01 par value
           
Common stock $0.01 par value
    1,994       1,990  
Additional paid in capital
    2,957,937       3,038,203  
Retained earnings
    1,056,801       899,512  
Accumulated other comprehensive earnings
    (24,617 )     53,389  
Treasury stock
    (402,759 )     (211,915 )
 
           
Total stockholders equity
    3,589,356       3,781,179  
 
           
Total liabilities and stockholders equity
  $ 7,551,475     $ 9,794,583  
 
           

3


 

Exhibit C
FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
(In thousands)
                 
    Nine Months ended September 30,  
    2008     2007  
Cash flows from operating activities:
               
Net earnings
  $ 186,030     $ 452,811  
Adjustment to reconcile net earnings to net cash provided by operating activities:
               
Depreciation and amortization
    344,520       358,943  
Amortization of debt issue costs
    16,043       29,224  
(Gain) on sale of Covansys stock
          (274,488 )
Net (Gain) on sale of Non Strategic businesses
    2,496       (71,675 )
Stock-based compensation cost
    50,594       27,130  
Deferred income taxes
    3,096       (26,713 )
Income tax benefit from exercise of stock options
    (139 )     (44,243 )
Equity in (earnings) loss of unconsolidated entities
    2,274       (1,266 )
Minority interest
    3,589       1,463  
Changes in assets and liabilities, net of effects from acquisitions:
               
Net increase in trade receivables
    (30,983 )     (115,811 )
Net increase in prepaid expenses and other assets
    (11,388 )     (41,571 )
Additions to deferred contract costs
    (54,736 )     (41,335 )
Net decrease in deferred revenue
    (9,328 )     (11,630 )
Net (decrease) increase in accounts payable, accrued liabilities and other liabilities
    (103,408 )     15,567  
 
           
 
               
Net cash provided by operating activities
    398,660       256,406  
 
           
 
               
Cash flows from investing activities:
               
Additions to property and equipment
    (57,084 )     (85,386 )
Additions to capitalized software
    (146,725 )     (159,285 )
Other Investing Activities
    (4,665 )      
Cash received from sale of Covansys stock
          430,157  
Net proceeds from sale of company assets
    33,506       81,235  
Acquisitions, net of cash acquired
    (17,404 )     (1,722,257 )
 
           
 
               
Net cash used in investing activities
    (192,372 )     (1,455,536 )
 
           
 
               
Cash flows from financing activities:
               
Borrowings
    3,796,198       4,300,300  
Debt service payments
    (3,839,311 )     (2,987,160 )
Capitalized debt issue costs
    (12 )     (28,052 )
Dividends paid
    (28,752 )     (28,931 )
LPS spin-off
    (20,770 )      
Income tax benefit from exercise of stock options
    139       44,243  
Stock options exercised
    18,626       44,960  
Treasury stock purchases
    (236,168 )     (80,339 )
 
           
 
               
Net cash (used in) provided by financing activities
    (310,050 )     1,265,021  
 
           
 
               
Effect of foreign currency exchange rates on cash
    (13,058 )     1,432  
 
               
Net (decrease) increase in cash and cash equivalents
    (116,820 )     67,323  
 
               
Cash and cash equivalents, at beginning of period
    355,278       211,753  
 
           
 
               
Cash and cash equivalents, at end of period
  $ 238,458     $ 279,076  
 
           

4


 

Exhibit D
FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
                                 
    Three Month Periods ended     Nine Month Periods ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
1. Revenues
                               
 
                               
Revenue from Operations:
                               
 
                               
TPS
                               
Integrated Financial Solutions
  $ 390,746     $ 309,729     $ 1,139,794     $ 890,599  
Enterprise Solutions
    301,386       243,003       870,080       722,737  
International
    192,420       144,707       570,412       426,185  
Other
    (666 )     (1,789 )     (2,370 )     (3,110 )
 
                       
Total TPS Revenue
    883,886       695,650       2,577,916       2,036,411  
 
                               
Corporate
    9,958       17,162       32,804       49,283  
 
                       
 
                               
Total Revenue from Operations
    893,844       712,812       2,610,720       2,085,694  
 
                       
 
                               
Total Revenue from Operations, excluding eFunds
  $ 750,979     $ 686,185     $ 2,189,323     $ 2,059,067  
 
                       
 
                               
Revenue Growth from Prior Year Period
                               
 
                               
Revenue from Operations:
                               
 
                               
TPS
                               
Integrated Financial Solutions
    26.2 %     11.9 %     28.0 %     14.9 %
Enterprise Solutions
    24.0 %     3.8 %     20.4 %     21.0 %
International
    33.0 %     21.8 %     33.8 %     47.3 %
Other
    62.8 %     33.6 %     23.8 %     65.3 %
 
                       
Total TPS Revenue Growth
    27.1 %     11.0 %     26.6 %     19.6 %
 
                       
 
                               
Corporate
    -42.0 %     24.6 %     -33.4 %     -2.0 %
 
                       
 
                               
Total Revenue from Operations
    25.4 %     11.3 %     25.2 %     19.0 %
 
                       
 
                               
Total Revenue Growth, excluding eFunds
    9.4 %     7.1 %     6.3 %     17.5 %
 
                       

5


 

Exhibit E
FIDELITY NATIONAL INFORMATION SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
                                 
    Three Month Periods ended     Nine Month Periods ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
1. EBIT and EBITDA Consolidated
                               
 
                               
Revenue from Operations
  $ 893,844     $ 712,812     $ 2,610,720     $ 2,085,694  
 
                               
Operating Income
  $ 125,750     $ 59,848     $ 244,271     $ 194,617  
M&A, Restructuring and Integration Costs
    2,236       19,455       46,277       26,611  
Corporate Costs Non — Disc. Ops
          5,697       18,118       18,613  
LPS Spin Costs
    898             9,338        
 
                       
EBIT, as adjusted
  $ 128,884     $ 85,000     $ 318,004     $ 239,841  
 
                       
 
                               
Depr and Amort from Cont Ops, as adjusted
    99,980       93,973       298,424       261,818  
 
                       
EBITDA, as adjusted
  $ 228,864     $ 178,973     $ 616,428     $ 501,659  
 
                       
 
                               
EBIT Margin, as adjusted
    14.4 %     11.9 %     12.2 %     11.5 %
 
                       
 
                               
EBITDA Margin, as adjusted
    25.6 %     25.1 %     23.6 %     24.1 %
 
                       
 
                               
2. EBITDA — TPS
                               
 
                               
Revenue from Operations
  $ 883,886     $ 695,650     $ 2,577,916     $ 2,036,411  
 
                               
Operating Income
  $ 148,677     $ 86,088     $ 372,562     $ 275,318  
Depreciation
    43,140       56,450       128,123       128,059  
Purchase Price Amortization
    35,380       29,104       106,925       85,329  
Other Amortization
    10,998       9,585       29,654       23,970  
 
                       
EBITDA , before other items
  $ 238,195     $ 181,227     $ 637,264     $ 512,676  
 
                       
 
                               
M&A, Restructuring and Integration Costs
    708       4,614       13,250       4,614  
 
                       
 
                               
EBITDA, excluding other items
  $ 238,903     $ 185,841     $ 650,514     $ 517,290  
 
                       
 
                               
EBITDA Margin, as adjusted
    27.0 %     26.7 %     25.2 %     25.4 %
 
                       

6


 

     
Exhibit E
FIDELITY NATIONAL INFORMATION SERVICES, INC.
RECONCILIATION OF PRO FORMA TO ADJUSTED PRO FORMA CASH FLOW MEASURES — UNAUDITED
(In thousands)
     
                                                                                                 
    Quarter Ended September 30, 2008     Quarter Ended June 30, 2008     Quarter Ended March 31, 2008     Year to Date September 30, 2008  
    GAAP     Adj     Adjusted     Pro forma (1)     Adj     Adj Pro forma     Pro forma (1)     Adj     Adj Pro forma     Pro forma (1)     Adj     Adj Pro forma  
Cash flows from operating activities:
                                                                                               
Net earnings (2)
  $ 43,623     $ 2,022     $ 45,645     $ 15,593     $ 28,862     $ 44,455     $ 15,439     $ 8,270     $ 23,709     $ 74,655     $ 39,154     $ 113,809  
Adjustments to reconcile net earnings to net cash provided by operating activities:
                                                                                               
Non-cash adjustments
    128,760             128,760       118,947             118,947       114,008             114,008       361,715             361,715  
Working capital adjustments (3)
    (16,555 )     8,560       (7,995 )     (43,039 )     18,090       (24,949 )     (100,899 )     46,340       (54,559 )     (160,493 )     72,990       (87,503 )
 
                                                                       
 
                                                                                               
Net cash provided by operating activities
    155,828       10,582       166,410       91,501       46,952       138,453       28,548       54,610       83,158       275,877       112,144       388,021  
 
                                                                                               
Capital expenditures
    (48,163 )           (48,163 )     (52,260 )           (52,260 )     (78,250 )           (78,250 )     (178,673 )           (178,673 )
 
                                                                       
 
                                                                                               
Net free cash flow
  $ 107,665     $ 10,582     $ 118,247     $ 39,241     $ 46,952     $ 86,193     $ (49,702 )   $ 54,610     $ 4,908     $ 97,204     $ 112,144     $ 209,348  
 
                                                                       
                                                                                                 
    Quarter Ended September 30, 2007     Quarter Ended June 30, 2007     Quarter Ended March 31, 2007     Year to Date September 30, 2007  
    Pro forma (1)     Adj     Adj Pro forma     Pro forma (1)     Adj     Adj Pro forma     Pro forma (1)     Adj     Adj Pro forma     Pro forma (1)     Adj     Adj Pro forma  
Cash flows from operating activities:
                                                                                               
Net earnings (2)
  $ 177,551     $ 15,521     $ 193,072     $ 83,069     $ 17,541     $ 100,610     $ 819     $ 18,810     $ 19,629     $ 261,439     $ 51,872     $ 313,311  
Adjustments to reconcile net earnings to net cash provided by operating activities:
                                                                                               
Non-cash adjustments
    (212,517 )           (212,517 )     (6,481 )           (6,481 )     111,782             111,782       (107,216 )           (107,216 )
Working capital adjustments (3)
    (13,236 )     116,060       102,824       23,250       18,100       41,350       (111,715 )     12,700       (99,015 )     (101,701 )     146,860       45,159  
 
                                                                       
 
                                                                                               
Net cash provided by operating activities
    (48,202 )     131,581       83,379       99,838       35,641       135,479       886       31,510       32,396       52,522       198,732       251,254  
 
                                                                                               
Capital expenditures
    (81,213 )           (81,213 )     (64,963 )           (64,963 )     (63,611 )           (63,611 )     (209,787 )           (209,787 )
 
                                                                       
 
                                                                                               
Net free cash flow
  $ (129,415 )   $ 131,581     $ 2,166     $ 34,875     $ 35,641     $ 70,516     $ (62,725 )   $ 31,510     $ (31,215 )   $ (157,265 )   $ 198,732     $ 41,467  
 
                                                                       
 
(1)   Pro forma cash flows are presented as if the LPS spin-off was completed on January 1, 2007 and represents FIS on a post-spin basis.
 
(2)   Adjustments to Net Earnings reflect the elimination of the after-tax impact of non-recurring M&A and related integration costs, costs associated with the LPS spin-off, restructuring costs and the elimination of corporate costs attributable to LPS. The adjustments also include a recast of Q1 and Q2 2008 to reflect proper allocation of stock based compensation related to LPS.
 
(3)   Adjustments to working capital reflect elimination of settlement of various acquisition related liabilities.

7


 

Exhibit F
FIDELITY NATIONAL INFORMATION SERVICES, INC.
GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(in thousands, except per share data)
                                                 
            M&A                                
    GAAP     Restructuring                             Non-GAAP  
    Three Months     And     LPS             Purchase     Three Months  
    Ended     Integration     Spin             Price     Ended  
    September 30, 2008     Costs (1)     Costs (3)     Subtotal     Amortization (4)     September 30, 2008  
    (Unaudited)                             (Unaudited)  
Processing and services revenue
  $ 893,844     $     $     $ 893,844     $     $ 893,844  
Cost of revenues
    661,995       (1,311 )           660,684       (35,382 )     625,302  
 
                                   
Gross profit
    231,849       1,311             233,160       35,382       268,542  
 
                                   
 
                                               
Selling, general and administrative
    79,944       (925 )     (898 )     78,121             78,121  
Research and development costs
    26,155                   26,155             26,155  
 
                                   
Operating income
    125,750       2,236       898       128,884       35,382       164,266  
 
                                   
 
                                               
Other income (expense):
                                               
Interest income
    978                   978             978  
Interest expense
    (48,397 )           12,371       (36,026 )           (36,026 )
Other income, net
    (1,884 )                 (1,884 )           (1,884 )
 
                                   
Total other income (expense)
    (49,303 )           12,371       (36,932 )           (36,932 )
 
                                   
 
                                               
Earnings before income taxes, equity in (losses) earnings of unconsolidated entities, minority interest, and discontinued operations
    76,447       2,236       13,269       91,952       35,382       127,334  
Provision (benefit) for income taxes
    28,071       716       4,246       33,033       11,322       44,355  
 
                                   
 
                                               
Earnings before equity in (losses) earnings of unconsolidated entities, minority interest, and discontinued operations
    48,376       1,520       9,023       58,919       24,060       82,979  
Equity in earnings (losses) of unconsolidated entities
                                   
Minority interest
    (2,751 )                 (2,751 )           (2,751 )
 
                                   
Net earnings from continuing operations
  $ 45,625     $ 1,520     $ 9,023     $ 56,168     $ 24,060     $ 80,228  
 
                                   
 
                                               
Net earnings per share — diluted from continuing operations*
  $ 0.24     $ 0.01     $ 0.05     $ 0.29     $ 0.13     $ 0.42  
 
                                   
Weighted average shares outstanding — diluted
    191,822       191,822       191,822       191,822       191,822       191,822  
 
                                   
 
                                               
Supplemental Information:
                                               
 
                                               
Depreciation and amortization from continuing operations
                          $ 99,980     $ (35,382 )   $ 64,598  
 
                                         
 
                                               
Stock compensation expense from continuing operations, excluding acceleration charges
                                          $ 8,427  
Stock acceleration charges
                                             
 
                                             
Total stock compensation expense from continuing operations
                                          $ 8,427  
 
                                             
 
*   Amounts may not sum due to rounding.
See accompanying notes.

8


 

Exhibit F
FIDELITY NATIONAL INFORMATION SERVICES, INC.
GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(in thousands, except per share data)
                                                         
            M&A                                      
    GAAP     Restructuring     Corporate                             Non-GAAP  
    Nine Months     And     Costs     LPS             Purchase     Nine Months  
    Ended     Integration     Non-Disc     Spin             Price     Ended  
    September 30, 2008     Costs (1)     Ops (2)     Costs (3)     Subtotal     Amortization (4)     September 30, 2008  
    (Unaudited)                                   (Unaudited)  
Processing and services revenue
  $ 2,610,720     $     $     $     $ 2,610,720     $     $ 2,610,720  
Cost of revenues
    1,984,295       (25,261 )                 1,959,034       (107,341 )     1,851,693  
 
                                         
Gross profit
    626,425       25,261                   651,686       107,341       759,027  
 
                                         
 
                                                       
Selling, general and administrative
    308,846       (21,016 )     (18,118 )     (9,338 )     260,374             260,374  
Research and development costs
    73,308                         73,308             73,308  
 
                                         
Operating income
    244,271       46,277       18,118       9,338       318,004       107,341       425,345  
 
                                         
 
                                                       
Other income (expense):
                                                       
Interest income
    5,373                         5,373             5,373  
Interest expense
    (132,415 )     2,722             12,371       (117,322 )           (117,322 )
Other income, net
    (101 )                       (101 )           (101 )
 
                                         
Total other income (expense)
    (127,143 )     2,722             12,371       (112,050 )           (112,050 )
 
                                         
 
                                                       
Earnings before income taxes, equity in (losses) earnings of unconsolidated entities, minority interest, and discontinued operations
    117,128       48,999       18,118       21,709       205,954       107,341       313,295  
Provision (benefit) for income taxes
    37,481       17,450       5,538       7,268       67,737       36,600       104,337  
 
                                         
 
                                                       
Earnings before equity in (losses) earnings of unconsolidated entities, minority interest, and discontinued operations
    79,647       31,549       12,580       14,441       138,217       70,741       208,958  
Equity in earnings (losses) of unconsolidated entities
    (157 )                       (157 )           (157 )
Minority interest income (expense)
    (2,867 )                       (2,867 )           (2,867 )
 
                                         
Net earnings from continuing operations
  $ 76,623     $ 31,549     $ 12,580     $ 14,441     $ 135,193     $ 70,741     $ 205,934  
 
                                         
 
                                                       
Net earnings per share — diluted from continuing operations *
  $ 0.39     $ 0.16     $ 0.06     $ 0.07     $ 0.70     $ 0.36     $ 1.06  
 
                                         
Weighted average shares outstanding — diluted
    194,261       194,261       194,261       194,261       194,261       194,261       194,261  
 
                                         
 
                                                       
Supplemental Information:
                                                       
 
                                                       
Depreciation and amortization from continuing operations
                                  $ 298,424     $ (107,341 )   $ 191,083  
 
                                                 
 
                                                       
Stock compensation expense from continuing operations, excluding acceleration charges
                                                  $ 24,795  
Stock acceleration charges
                                                    16,662  
 
                                                     
Total stock compensation expense from continuing operations
                                                  $ 41,457  
 
                                                     
 
*   Amounts may not sum due to rounding.
See accompanying notes.

9


 

Exhibit F
FIDELITY NATIONAL INFORMATION SERVICES, INC.
GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(in thousands, except per share data)
                                                                 
            M&A                                            
    GAAP     Restructuring     Corporate     Gain                             Non-GAAP  
    Three Months     And     Costs     On Sale     Interest             Purchase     Three Months  
    Ended     Integration     Non-Disc     Covansys     Expense             Price     Ended  
    September 30, 2007     Costs (1)     Ops (2)     Stock (5)     Allocation (6)     Subtotal     Amortization (4)     September 30, 2007  
    (Unaudited)                                         (Unaudited)  
Processing and services revenue
  $ 712,812     $     $     $     $     $ 712,812     $     $ 712,812  
Cost of revenues
    562,998       (15,133 )                       547,865       (29,574 )     518,291  
 
                                               
Gross profit
    149,814       15,133                         164,947       29,574       194,521  
 
                                               
 
                                                               
Selling, general and administrative
    72,387       (4,322 )     (5,697 )                 62,368             62,368  
Research and development costs
    17,579                               17,579             17,579  
 
                                               
Operating income
    59,848       19,455       5,697                   85,000       29,574       114,574  
 
                                               
 
                                                               
Other income (expense):
                                                               
Interest income
    719                               719             719  
Interest expense
    (37,856 )                       16,122       (21,734 )           (21,734 )
Gain on sale of Covansys stock
    182,444                   (182,444 )                        
Other income, net
    3,327       (2,781 )                       546             546  
 
                                               
Total other income (expense)
    148,634       (2,781 )           (182,444 )     16,122       (20,469 )           (20,469 )
 
                                               
 
                                                               
Earnings before income taxes, equity in (losses) earnings of unconsolidated entities, minority interest, and discontinued operations
    208,482       16,674       5,697       (182,444 )     16,122       64,531       29,574       94,105  
Provision (benefit) for income taxes
    75,238       6,169       2,153       (67,505 )     6,236       22,291       10,536       32,827  
 
                                               
 
                                                               
Earnings before equity in (losses) earnings of unconsolidated entities, minority interest, and discontinued operations
    133,244       10,505       3,544       (114,939 )     9,886       42,240       19,038       61,278  
Equity in earnings (losses) of unconsolidated entities
    86                               86             86  
Minority interest income (expense)
    41                               41             41  
 
                                               
Net earnings from continuing operations
  $ 133,371     $ 10,505     $ 3,544     $ (114,939 )   $ 9,886     $ 42,367     $ 19,038     $ 61,405  
 
                                               
 
                                                               
Net earnings per share — diluted from continuing operations*
  $ 0.68     $ 0.05     $ 0.02     $ (0.58 )   $ 0.05     $ 0.22     $ 0.10     $ 0.31  
 
                                               
Weighted average shares outstanding — diluted
    196,649       196,649       196,649       196,649       196,649       196,649       196,649       196,649  
 
                                               
 
                                                               
Supplemental Information:
                                                               
 
                                                               
Depreciation and amortization from continuing operations
                                          $ 93,973     $ (29,574 )   $ 64,399  
 
                                                         
 
                                                               
Stock compensation expense from continuing operations, excluding acceleration charges
                                                          $ 5,657  
Stock acceleration charges
                                                            603  
 
                                                             
Total stock compensation expense from continuing operations
                                                          $ 6,260  
 
                                                             
 
*   Amounts may not sum due to rounding.
See accompanying notes.

10


 

Exhibit F
FIDELITY NATIONAL INFORMATION SERVICES, INC.
GAAP TO NON-GAAP RECONCILIATION — UNAUDITED
(in thousands, except per share data)
                                                                         
            M&A                                                    
    GAAP     Restructuring     Corporate     Gain                                     Non-GAAP  
    Nine Months     And     Costs     On Sale     Interest     Debt             Purchase     Nine Months  
    Ended     Integration     Non-Disc     Covansys     Expense     Restructure             Price     Ended  
    September 30, 2007     Costs (1)     Ops (2)     Stock (5)     Allocation (6)     Charge (7)     Subtotal     Amortization (4)     September 30, 2007  
    (Unaudited)                                               (Unaudited)  
Processing and services revenue
  $ 2,085,694     $     $     $     $     $     $ 2,085,694     $     $ 2,085,694  
Cost of revenues
    1,624,463       (22,289 )                             1,602,174       (85,868 )     1,516,306  
 
                                                     
Gross profit
    461,231       22,289                               483,520       85,868       569,388  
 
                                                     
 
                                                                       
Selling, general and administrative
    216,612       (4,322 )     (18,613 )                       193,677             193,677  
Research and development costs
    50,002                                     50,002             50,002  
 
                                                     
Operating income
    194,617       26,611       18,613                         239,841       85,868       325,709  
 
                                                     
 
                                                                       
Other income (expense):
                                                                       
Interest income
    1,093                                     1,093             1,093  
Interest expense
    (152,863 )                       55,800       27,164       (69,899 )           (69,899 )
Gain on sale of Covansys stock
    274,488                   (274,488 )                              
Other income, net
    4,755       (2,781 )                             1,974             1,974  
 
                                                     
Total other income (expense)
    127,473       (2,781 )           (274,488 )     55,800       27,164       (66,832 )           (66,832 )
 
                                                     
 
                                                                       
Earnings before income taxes, equity in (losses) earnings of unconsolidated entities, minority interest, and discontinued operations
    322,090       23,830       18,613       (274,488 )     55,800       27,164       173,009       85,868       258,877  
Provision (benefit) for income taxes
    113,802       8,824       7,036       (101,561 )     21,584       10,105       59,790       30,367       90,157  
 
                                                     
 
                                                                       
Earnings before equity in (losses) earnings of unconsolidated entities, minority interest, and discontinued operations
    208,288       15,006       11,577       (172,927 )     34,216       17,059       113,219       55,501       168,720  
Equity in earnings (losses) of unconsolidated entities
    2,824                                     2,824             2,824  
Minority interest income (expense)
    369                                     369             369  
 
                                                     
Net earnings from continuing operations
  $ 211,481     $ 15,006     $ 11,577     $ (172,927 )   $ 34,216     $ 17,059     $ 116,412     $ 55,501     $ 171,913  
 
                                                     
 
                                                                       
Net earnings per share — diluted from continuing operations*
  $ 1.08     $ 0.08     $ 0.06     $ (0.88 )   $ 0.17     $ 0.09     $ 0.59     $ 0.28     $ 0.87  
 
                                                     
Weighted average shares outstanding — diluted
    196,480       196,480       196,480       196,480       196,480       196,480       196,480       196,480       196,480  
 
                                                     
 
                                                                       
Supplemental Information:
                                                                       
 
                                                                       
Depreciation and amortization from continuing operations
                                                  $ 261,818     $ (85,868 )   $ 175,950  
 
                                                                 
 
                                                                       
Stock compensation expense from continuing operations, excluding acceleration charges
                                                                  $ 15,683  
Stock acceleration charges
                                                                    603  
 
                                                                     
Total stock compensation expense from continuing operations
                                                                  $ 16,286  
 
                                                                     
 
*   Amounts may not sum due to rounding.
See accompanying notes.

11


 

Notes to Unaudited — Supplemental GAAP to Non-GAAP Reconciliation for the Three and Nine-Month Periods ended September 30, 2008
The adjustments are as follows:
(1)   This column represents charges for restructuring and integration costs relating to merger and acquisition activities.
 
(2)   This column represents corporate costs attributable to LPS as previously reported in our investor package furnished on form 8-K on May 28, 2008. These amounts are not allocable to discontinued operations under U.S. Generally Accepted Accounting Principles.
 
(3)   This column represents incremental transaction costs incurred by the Company directly related to the LPS spin-off.
 
(4)   This column represents purchase price amortization expense on intangibles assets acquired through various Company acquisitions.
 
(5)   This column represents a gain on sale of investment in Covansys to a third party recorded in the second and third quarters of 2007.
 
(6)   This column represents the allocation of interest expense for the periods presented, as if the debt retired in conjunction with the LPS spin-off had occurred on January 1, 2007, as previously reported in our investor package furnished on form 8-K on May 28, 2008
 
(7)   This column represents debt restructuring charges recorded in the first quarter of 2007, to write-off capitalized unamortized debt issuance costs.

12