Georgia | 37-1490331 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification Number) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit | Description | |
99.1 | Press release announcing Fidelity National Information Services, Inc. reports second quarter 2014 earnings. |
Fidelity National Information Services, Inc. | ||||
Date July 29, 2014 | By: | /s/ James W. Woodall | ||
Name: | James W. Woodall | |||
Title: | Corporate Executive Vice President and Chief Financial Officer | |||
Fidelity National Information Services, Inc. | ||||
Date July 29, 2014 | By: | /s/ Peter J.S. Smith | ||
Name: | Peter J.S. Smith | |||
Title: | Corporate Senior Vice President and Chief Accounting Officer |
Exhibit | Description | |
99.1 | Press release announcing Fidelity National Information Services, Inc. reports second quarter 2014 earnings. |
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• | Revenue of $1.6 billion, up 6 percent for the quarter |
• | Adjusted EPS from continuing operations of $0.75, up 6 percent for the quarter |
• | $463 million in share repurchases and cash dividends returned to shareholders year to date |
• | Financial Solutions: |
• | Payment Solutions: |
• | International Solutions: |
• | Corporate/Other: |
• | Organic revenue growth of 4.5 to 6.5 percent |
• | EBITDA, as adjusted, growth of 4.5 to 6.5 percent |
• | EPS from continuing operations of $3.05 to $3.16, as adjusted, an increase of 8 to 12 percent |
• | Free cash flow is expected to approximate adjusted net earnings |
• | changes in general economic, business and political conditions, including the possibility of intensified international hostilities, acts of terrorism, and changes in either or both the United States and international lending, capital and financial markets; |
• | the effect of legislative initiatives or proposals, statutory changes, governmental or other applicable regulations and/or changes in industry requirements, including privacy regulations; |
• | the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in, or new laws or regulations affecting, the banking, retail and financial services industries or due to financial failures or other setbacks suffered by firms in those industries; |
• | changes in the growth rates of the markets for our solutions; |
• | failures to adapt our solutions to changes in technology or in the marketplace; |
• | internal or external security breaches of our systems, including those relating to the theft of personal information and computer viruses affecting our software or platforms, and the reactions of customers, card associations, government regulators and others to any such events; |
• | the reaction of our current and potential customers to communications from us or our regulators regarding information security, risk management, internal audit or other matters; |
• | competitive pressures on pricing related to our solutions including the ability to attract new, or retain existing, customers; |
• | an operational or natural disaster at one of our major operations centers; |
• | and other risks detailed in “Risk Factors” and other sections of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and other filings with the SEC. |
Ellyn Raftery, 904.438.6083 | Nancy Murphy, 904.438.6192 | |
Chief Marketing Officer | Senior Vice President | |
FIS Global Marketing and Communications | FIS Investor Relations | |
ellyn.raftery@fisglobal.com | nancy.murphy@fisglobal.com |
Exhibit A | Consolidated Statements of Earnings - Unaudited for the three and six months ended June 30, 2014 and 2013 |
Exhibit B | Consolidated Balance Sheets - Unaudited as of June 30, 2014 and December 31, 2013 |
Exhibit C | Consolidated Statements of Cash Flows - Unaudited for the six months ended June 30, 2014 and 2013 |
Exhibit D | Supplemental Non-GAAP Financial Information - Unaudited for the three and six months ended June 30, 2014 and 2013 |
Exhibit E | Supplemental GAAP to Non-GAAP Reconciliation - Unaudited for the three and six months ended June 30, 2014 and 2013 |
Exhibit A | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Processing and services revenues | $ | 1,599.1 | $ | 1,512.8 | $ | 3,119.4 | $ | 2,990.1 | |||||||
Cost of revenues | 1,092.8 | 1,031.5 | 2,140.4 | 2,040.9 | |||||||||||
Gross profit | 506.3 | 481.3 | 979.0 | 949.2 | |||||||||||
Selling, general and administrative expenses | 196.6 | 232.6 | 383.2 | 424.7 | |||||||||||
Operating income | 309.7 | 248.7 | 595.8 | 524.5 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (41.9 | ) | (49.4 | ) | (83.0 | ) | (101.1 | ) | |||||||
Other income (expense), net | (1.2 | ) | (61.9 | ) | (1.7 | ) | (56.8 | ) | |||||||
Total other income (expense), net | (43.1 | ) | (111.3 | ) | (84.7 | ) | (157.9 | ) | |||||||
Earnings from continuing operations before income taxes | 266.6 | 137.4 | 511.1 | 366.6 | |||||||||||
Provision for income taxes | 80.4 | 41.2 | 161.6 | 116.6 | |||||||||||
Earnings from continuing operations, net of tax | 186.2 | 96.2 | 349.5 | 250.0 | |||||||||||
Earnings (loss) from discontinued operations, net of tax | (0.9 | ) | 12.8 | (3.1 | ) | 8.4 | |||||||||
Net earnings | 185.3 | 109.0 | 346.4 | 258.4 | |||||||||||
Net earnings attributable to noncontrolling interest | (6.5 | ) | (4.2 | ) | (13.1 | ) | (9.5 | ) | |||||||
Net earnings attributable to FIS common stockholders | $ | 178.8 | $ | 104.8 | $ | 333.3 | $ | 248.9 | |||||||
Net earnings per share-basic from continuing operations attributable to FIS common stockholders | $ | 0.63 | $ | 0.32 | $ | 1.17 | $ | 0.83 | |||||||
Net earnings (loss) per share-basic from discontinued operations attributable to FIS common stockholders | — | 0.04 | (0.01 | ) | 0.03 | ||||||||||
Net earnings per share-basic attributable to FIS common stockholders * | $ | 0.63 | $ | 0.36 | $ | 1.16 | $ | 0.86 | |||||||
Weighted average shares outstanding-basic | 285.5 | 289.9 | 286.7 | 290.5 | |||||||||||
Net earnings per share-diluted from continuing operations attributable to FIS common stockholders | $ | 0.62 | $ | 0.31 | $ | 1.16 | $ | 0.82 | |||||||
Net earnings (loss) per share-diluted from discontinued operations attributable to FIS common stockholders | — | 0.04 | (0.01 | ) | 0.03 | ||||||||||
Net earnings per share-diluted attributable to FIS common stockholders * | $ | 0.62 | $ | 0.36 | $ | 1.15 | $ | 0.84 | |||||||
Weighted average shares outstanding-diluted | 289.2 | 294.3 | 290.5 | 294.8 | |||||||||||
Amounts attributable to FIS common stockholders: | |||||||||||||||
Earnings from continuing operations, net of tax | $ | 179.7 | $ | 92.0 | $ | 336.4 | $ | 240.5 | |||||||
Earnings (loss) from discontinued operations, net of tax | (0.9 | ) | 12.8 | (3.1 | ) | 8.4 | |||||||||
Net earnings attributable to FIS common stockholders | $ | 178.8 | $ | 104.8 | $ | 333.3 | $ | 248.9 |
Exhibit B | |||||||
As of | As of | ||||||
June 30, | December 31, | ||||||
2014 | 2013 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 793.7 | $ | 547.5 | |||
Settlement deposits | 439.5 | 327.4 | |||||
Trade receivables, net | 1,018.2 | 987.9 | |||||
Settlement receivables | 262.4 | 178.2 | |||||
Other receivables | 41.2 | 62.1 | |||||
Due from Brazilian venture partner | 38.2 | 35.8 | |||||
Prepaid expenses and other current assets | 167.7 | 154.1 | |||||
Deferred income taxes | 65.7 | 58.9 | |||||
Assets held for sale | 8.3 | — | |||||
Total current assets | 2,834.9 | 2,351.9 | |||||
Property and equipment, net | 459.0 | 439.0 | |||||
Goodwill | 8,517.7 | 8,500.0 | |||||
Intangible assets, net | 1,246.5 | 1,339.3 | |||||
Computer software, net | 869.7 | 856.5 | |||||
Deferred contract costs, net | 212.2 | 206.8 | |||||
Other noncurrent assets | 300.8 | 266.6 | |||||
Total assets | $ | 14,440.8 | $ | 13,960.1 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 648.5 | $ | 768.0 | |||
Settlement payables | 730.7 | 518.6 | |||||
Deferred revenues | 276.0 | 243.6 | |||||
Current portion of long-term debt | 23.0 | 128.8 | |||||
Due to Brazilian venture partner | 20.1 | 13.7 | |||||
Liabilities held for sale | 3.0 | — | |||||
Total current liabilities | 1,701.3 | 1,672.7 | |||||
Long-term debt, excluding current portion | 4,900.5 | 4,339.8 | |||||
Deferred income taxes | 816.4 | 823.6 | |||||
Due to Brazilian venture partner | 32.7 | 34.5 | |||||
Deferred revenues | 28.2 | 27.2 | |||||
Other long-term liabilities | 261.6 | 325.0 | |||||
Total liabilities | 7,740.7 | 7,222.8 | |||||
Equity: | |||||||
FIS stockholders’ equity: | |||||||
Preferred stock $0.01 par value | — | — | |||||
Common stock $0.01 par value | 3.9 | 3.9 | |||||
Additional paid in capital | 7,286.5 | 7,247.6 | |||||
Retained earnings | 2,538.0 | 2,341.9 | |||||
Accumulated other comprehensive earnings (loss) | 12.9 | (9.9 | ) | ||||
Treasury stock $0.01 par value | (3,319.2 | ) | (3,003.0 | ) | |||
Total FIS stockholders’ equity | 6,522.1 | 6,580.5 | |||||
Noncontrolling interest | 178.0 | 156.8 | |||||
Total equity | 6,700.1 | 6,737.3 | |||||
Total liabilities and equity | $ | 14,440.8 | $ | 13,960.1 |
Exhibit C | |||||||
Six months ended June 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Net earnings | $ | 346.4 | $ | 258.4 | |||
Adjustment to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation and amortization | 309.1 | 305.5 | |||||
Amortization of debt issue costs | 6.7 | 14.6 | |||||
Gain on sale of assets | — | (26.8 | ) | ||||
Gain on mFoundry | — | (9.2 | ) | ||||
Stock-based compensation | 26.6 | 26.4 | |||||
Deferred income taxes | (19.0 | ) | (24.7 | ) | |||
Excess income tax benefit from exercise of stock options | (10.1 | ) | (14.5 | ) | |||
Other operating activities, net | (1.9 | ) | 1.7 | ||||
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency: | |||||||
Trade receivables | (22.4 | ) | (26.1 | ) | |||
Settlement activity | 15.8 | (3.6 | ) | ||||
Prepaid expenses and other assets | (35.7 | ) | (60.7 | ) | |||
Deferred contract costs | (40.4 | ) | (37.3 | ) | |||
Deferred revenue | 30.9 | (26.0 | ) | ||||
Accounts payable, accrued liabilities and other liabilities | (126.9 | ) | (12.9 | ) | |||
Net cash provided by operating activities | 479.1 | 364.8 | |||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | (77.3 | ) | (59.5 | ) | |||
Additions to computer software | (109.3 | ) | (97.5 | ) | |||
Proceeds from sale of assets | — | 26.8 | |||||
Acquisitions, net of cash acquired and equity investments | (29.0 | ) | (130.1 | ) | |||
Other investing activities, net | 9.3 | (22.8 | ) | ||||
Net cash used in investing activities | (206.3 | ) | (283.1 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings | 4,430.1 | 7,151.6 | |||||
Repayment of borrowings and capital lease obligations | (3,976.6 | ) | (6,776.0 | ) | |||
Debt issuance costs | (6.6 | ) | (17.0 | ) | |||
Excess income tax benefit from exercise of stock options | 10.1 | 14.5 | |||||
Proceeds from exercise of stock options | 15.5 | 72.9 | |||||
Treasury stock activity | (355.6 | ) | (230.8 | ) | |||
Dividends paid | (137.9 | ) | (127.9 | ) | |||
Other financing activities, net | (18.3 | ) | (11.8 | ) | |||
Net cash (used in) provided by financing activities | (39.3 | ) | 75.5 | ||||
Effect of foreign currency exchange rate changes on cash | 12.7 | (21.7 | ) | ||||
Net increase in cash and cash equivalents | 246.2 | 135.5 | |||||
Cash and cash equivalents, at beginning of period | 547.5 | 517.6 | |||||
Cash and cash equivalents, at end of period | $ | 793.7 | $ | 653.1 |
Exhibit D | |||||||||||||||||||
Three months ended June 30, 2014 | |||||||||||||||||||
Financial Solutions | Payment Solutions | International Solutions | Corporate and Other | Consolidated | |||||||||||||||
Processing and services revenue | $ | 629.0 | $ | 623.6 | $ | 346.8 | $ | (0.3 | ) | $ | 1,599.1 | ||||||||
Operating income (loss) | $ | 208.0 | $ | 232.9 | $ | 51.7 | $ | (182.9 | ) | $ | 309.7 | ||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Purchase price amortization | — | — | — | 54.0 | 54.0 | ||||||||||||||
Non-GAAP operating income (loss) | 208.0 | 232.9 | 51.7 | (128.9 | ) | 363.7 | |||||||||||||
Depreciation and amortization from continuing operations | 41.0 | 20.5 | 21.5 | 19.5 | 102.5 | ||||||||||||||
Adjusted EBITDA | $ | 249.0 | $ | 253.4 | $ | 73.2 | $ | (109.4 | ) | $ | 466.2 | ||||||||
Non-GAAP operating margin | 33.1 | % | 37.3 | % | 14.9 | % | N/M | 22.7 | % | ||||||||||
Adjusted EBITDA margin | 39.6 | % | 40.6 | % | 21.1 | % | N/M | 29.2 | % | ||||||||||
Three months ended June 30, 2013 | |||||||||||||||||||
Financial Solutions | Payment Solutions | International Solutions | Corporate and Other | Consolidated | |||||||||||||||
Processing and services revenue | $ | 587.0 | $ | 623.1 | $ | 303.8 | $ | (1.1 | ) | $ | 1,512.8 | ||||||||
Operating income (loss) | $ | 190.8 | $ | 242.8 | $ | 47.4 | $ | (232.3 | ) | $ | 248.7 | ||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Capco acquisition adjustment | — | — | — | 50.2 | 50.2 | ||||||||||||||
Purchase price amortization | — | — | — | 57.3 | 57.3 | ||||||||||||||
Non-GAAP operating income (loss) | 190.8 | 242.8 | 47.4 | (124.8 | ) | 356.2 | |||||||||||||
Depreciation and amortization from continuing operations | 40.4 | 20.1 | 18.7 | 15.8 | 95.0 | ||||||||||||||
Adjusted EBITDA | $ | 231.2 | $ | 262.9 | $ | 66.1 | $ | (109.0 | ) | $ | 451.2 | ||||||||
Non-GAAP operating margin | 32.5 | % | 39.0 | % | 15.6 | % | N/M | 23.5 | % | ||||||||||
Adjusted EBITDA margin | 39.4 | % | 42.2 | % | 21.8 | % | N/M | 29.8 | % | ||||||||||
Total revenue growth from prior year period | |||||||||||||||||||
Three months ended June 30, 2014 | 7.2 | % | 0.1 | % | 14.2 | % | N/M | 5.7 | % |
Exhibit D (continued) | |||||||||||||||||||
Six months ended June 30, 2014 | |||||||||||||||||||
Financial Solutions | Payment Solutions | International Solutions | Corporate and Other | Consolidated | |||||||||||||||
Processing and services revenue | $ | 1,215.8 | $ | 1,243.1 | $ | 661.2 | $ | (0.7 | ) | $ | 3,119.4 | ||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Contract settlement | — | 9.0 | — | — | 9.0 | ||||||||||||||
Adjusted processing and services revenue | $ | 1,215.8 | $ | 1,252.1 | $ | 661.2 | $ | (0.7 | ) | $ | 3,128.4 | ||||||||
Operating income (loss) | $ | 395.0 | $ | 468.4 | $ | 93.5 | $ | (361.1 | ) | $ | 595.8 | ||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Contract settlement | — | 9.0 | — | — | 9.0 | ||||||||||||||
Purchase price amortization | — | — | 0.1 | 108.8 | 108.9 | ||||||||||||||
Non-GAAP operating income (loss) | 395.0 | 477.4 | 93.6 | (252.3 | ) | 713.7 | |||||||||||||
Depreciation and amortization from continuing operations | 80.9 | 40.4 | 41.0 | 37.9 | 200.2 | ||||||||||||||
Adjusted EBITDA | $ | 475.9 | $ | 517.8 | $ | 134.6 | $ | (214.4 | ) | $ | 913.9 | ||||||||
Non-GAAP operating margin | 32.5 | % | 38.1 | % | 14.2 | % | N/M | 22.8 | % | ||||||||||
Adjusted EBITDA margin | 39.1 | % | 41.4 | % | 20.4 | % | N/M | 29.2 | % | ||||||||||
Six months ended June 30, 2013 | |||||||||||||||||||
Financial Solutions | Payment Solutions | International Solutions | Corporate and Other | Consolidated | |||||||||||||||
Processing and services revenue | $ | 1,162.3 | $ | 1,234.9 | $ | 594.7 | $ | (1.8 | ) | $ | 2,990.1 | ||||||||
Operating income (loss) | $ | 379.2 | $ | 481.3 | $ | 88.4 | $ | (424.4 | ) | $ | 524.5 | ||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Capco acquisition adjustment | — | — | — | 50.2 | 50.2 | ||||||||||||||
Purchase price amortization | — | — | 0.1 | 117.5 | 117.6 | ||||||||||||||
Non-GAAP operating income (loss) | 379.2 | 481.3 | 88.5 | (256.7 | ) | 692.3 | |||||||||||||
Depreciation and amortization from continuing operations | 79.6 | 39.9 | 37.4 | 31.0 | 187.9 | ||||||||||||||
Adjusted EBITDA | $ | 458.8 | $ | 521.2 | $ | 125.9 | $ | (225.7 | ) | $ | 880.2 | ||||||||
Non-GAAP operating margin | 32.6 | % | 39.0 | % | 14.9 | % | N/M | 23.2 | % | ||||||||||
Adjusted EBITDA margin | 39.5 | % | 42.2 | % | 21.2 | % | N/M | 29.4 | % | ||||||||||
Total revenue growth from prior year period | |||||||||||||||||||
Six months ended June 30, 2014 | 4.6 | % | 1.4 | % | 11.2 | % | N/M | 4.6 | % |
Exhibit D (continued) | ||||||||||||||||||||||||||
Three months ended June 30, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Constant | Adjusted | Organic | ||||||||||||||||||||||||
Currency | In Year | Base | Revenue | |||||||||||||||||||||||
Revenue | FX | Revenue | Revenue | Acquisitions | Revenue | Growth | ||||||||||||||||||||
Financial Solutions | $ | 629.0 | $ | 0.6 | $ | 629.6 | $ | 587.0 | $ | 4.5 | $ | 591.5 | 6.4 | % | ||||||||||||
Payment Solutions | 623.6 | 0.4 | 624.0 | 623.1 | — | 623.1 | 0.1 | % | ||||||||||||||||||
International Solutions | 346.8 | 0.1 | 346.9 | 303.8 | 5.8 | 309.6 | 12.0 | % | ||||||||||||||||||
Corporate and Other | (0.3 | ) | — | (0.3 | ) | (1.1 | ) | — | (1.1 | ) | N/M | |||||||||||||||
Total processing and services revenue | $ | 1,599.1 | $ | 1.1 | $ | 1,600.2 | $ | 1,512.8 | $ | 10.3 | $ | 1,523.1 | 5.1 | % |
Six months ended June 30, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Constant | Adjusted | Organic | ||||||||||||||||||||||||
Currency | In Year | Base | Revenue | |||||||||||||||||||||||
Revenue (1) | FX | Revenue | Revenue | Acquisitions | Revenue | Growth | ||||||||||||||||||||
Financial Solutions | $ | 1,215.8 | $ | 1.8 | $ | 1,217.6 | $ | 1,162.3 | $ | 8.3 | $ | 1,170.6 | 4.0 | % | ||||||||||||
Payment Solutions | 1,252.1 | 0.9 | 1,253.0 | 1,234.9 | — | 1,234.9 | 1.5 | % | ||||||||||||||||||
International Solutions | 661.2 | 14.1 | 675.3 | 594.7 | 11.6 | 606.3 | 11.4 | % | ||||||||||||||||||
Corporate and Other | (0.7 | ) | — | (0.7 | ) | (1.8 | ) | — | (1.8 | ) | N/M | |||||||||||||||
Total processing and services revenue | $ | 3,128.4 | $ | 16.8 | $ | 3,145.2 | $ | 2,990.1 | $ | 19.9 | $ | 3,010.0 | 4.5 | % |
Exhibit D (continued) | |||||||
Three months ended | Six months ended | ||||||
June 30, 2014 | June 30, 2014 | ||||||
Net cash provided by operating activities | $ | 256.5 | $ | 479.1 | |||
Non-GAAP adjustments: | |||||||
Capco acquisition related payments (1) | 2.1 | 30.1 | |||||
Settlement activity | (13.3 | ) | (15.8 | ) | |||
Adjusted cash flows from operations | 245.3 | 493.4 | |||||
Capital expenditures | (96.7 | ) | (186.6 | ) | |||
Free cash flow | $ | 148.6 | $ | 306.8 |
Three months ended | Six months ended | ||||||
June 30, 2013 | June 30, 2013 | ||||||
Net cash provided by operating activities | $ | 157.3 | $ | 364.8 | |||
Non-GAAP adjustments: | |||||||
Settlement activity | (10.3 | ) | 3.6 | ||||
Bond premium payment (2) | 51.6 | 51.6 | |||||
Adjusted cash flows from operations | 198.6 | 420.0 | |||||
Capital expenditures | (83.3 | ) | (157.0 | ) | |||
Free cash flow | $ | 115.3 | $ | 263.0 |
(1) | Free cash flow for the three and six months ended June 30, 2014 excludes payments for contingent purchase price and the New Hires and Promotions Incentive Plan associated with the 2010 acquisition of Capco. In accordance with the accounting guidance, contingent purchase price payments are included in other financing activities on the Statement of Cash Flows only to the extent they represent the original liability established at the acquisition date. Payments related to subsequent adjustments to the contingent purchase price are included in the net cash provided by operating activities. |
(2) | Free cash flow for the three and six months ended June 30, 2013 is adjusted for the one time bond premium payment on our 2017 senior notes that were redeemed in May 2013. |
Exhibit E | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net earnings from continuing operations attributable to FIS | $ | 179.7 | $ | 92.0 | $ | 336.4 | $ | 240.5 | ||||||||
Plus provision for income taxes | 80.4 | 41.2 | 161.6 | 116.6 | ||||||||||||
Interest expense, net | 41.9 | 49.4 | 83.0 | 101.1 | ||||||||||||
Other, net | 7.7 | 66.1 | 14.8 | 66.3 | ||||||||||||
Operating income | 309.7 | 248.7 | 595.8 | 524.5 | ||||||||||||
Non-GAAP adjustments: | ||||||||||||||||
Contract settlement | — | — | 9.0 | — | ||||||||||||
Capco acquisition adjustment | — | 50.2 | — | 50.2 | ||||||||||||
Purchase price amortization | 54.0 | 57.3 | 108.9 | 117.6 | ||||||||||||
Non-GAAP operating income | 363.7 | 356.2 | 713.7 | 692.3 | ||||||||||||
Depreciation and amortization from continuing operations | 102.5 | 95.0 | 200.2 | 187.9 | ||||||||||||
Adjusted EBITDA | $ | 466.2 | $ | 451.2 | $ | 913.9 | $ | 880.2 |
Exhibit E (continued) | ||||||||||||
Three months ended June 30, 2014 | ||||||||||||
Purchase | ||||||||||||
Price | ||||||||||||
GAAP | Amort. (5) | Non-GAAP | ||||||||||
Processing and services revenue | $ | 1,599.1 | $ | — | $ | 1,599.1 | ||||||
Cost of revenues | 1,092.8 | (54.0 | ) | 1,038.8 | ||||||||
Gross profit | 506.3 | 54.0 | 560.3 | |||||||||
Selling, general and administrative | 196.6 | — | 196.6 | |||||||||
Operating income | 309.7 | 54.0 | 363.7 | |||||||||
Other income (expense): | ||||||||||||
Interest income (expense), net | (41.9 | ) | — | (41.9 | ) | |||||||
Other income (expense), net | (1.2 | ) | — | (1.2 | ) | |||||||
Total other income (expense) | (43.1 | ) | — | (43.1 | ) | |||||||
Earnings (loss) from continuing operations before income taxes | 266.6 | 54.0 | 320.6 | |||||||||
Provision for income taxes | 80.4 | 16.3 | 96.7 | |||||||||
Earnings (loss) from continuing operations, net of tax | 186.2 | 37.7 | 223.9 | |||||||||
Earnings (loss) from discontinued operations, net of tax (6) | (0.9 | ) | — | (0.9 | ) | |||||||
Net earnings (loss) | 185.3 | 37.7 | 223.0 | |||||||||
Net (earnings) loss attributable to noncontrolling interest | (6.5 | ) | — | (6.5 | ) | |||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 178.8 | $ | 37.7 | $ | 216.5 | ||||||
Amounts attributable to FIS common stockholders | ||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 179.7 | $ | 37.7 | $ | 217.4 | ||||||
Earnings (loss) from discontinued operations, net of tax (6) | (0.9 | ) | — | (0.9 | ) | |||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 178.8 | $ | 37.7 | $ | 216.5 | ||||||
Net earnings (loss) per share — diluted from continuing operations attributable to FIS common stockholders* | $ | 0.62 | $ | 0.13 | $ | 0.75 | ||||||
Weighted average shares outstanding — diluted | 289.2 | 289.2 | 289.2 | |||||||||
Effective tax rate | 30 | % | 30 | % | ||||||||
Supplemental information: | ||||||||||||
Depreciation and amortization | $ | 156.5 | (54.0 | ) | $ | 102.5 | ||||||
Stock compensation expense | $ | 13.3 |
Exhibit E (continued) | ||||||||||||||||||||
Six months ended June 30, 2014 | ||||||||||||||||||||
Purchase | ||||||||||||||||||||
Contract | Price | |||||||||||||||||||
GAAP | Settlement (1) | Subtotal | Amort. (5) | Non-GAAP | ||||||||||||||||
Processing and services revenue | $ | 3,119.4 | $ | 9.0 | $ | 3,128.4 | $ | — | $ | 3,128.4 | ||||||||||
Cost of revenues | 2,140.4 | — | 2,140.4 | (108.9 | ) | 2,031.5 | ||||||||||||||
Gross profit | 979.0 | 9.0 | 988.0 | 108.9 | 1,096.9 | |||||||||||||||
Selling, general and administrative | 383.2 | — | 383.2 | — | 383.2 | |||||||||||||||
Operating income | 595.8 | 9.0 | 604.8 | 108.9 | 713.7 | |||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income (expense), net | (83.0 | ) | — | (83.0 | ) | — | (83.0 | ) | ||||||||||||
Other income (expense), net | (1.7 | ) | — | (1.7 | ) | — | (1.7 | ) | ||||||||||||
Total other income (expense) | (84.7 | ) | — | (84.7 | ) | — | (84.7 | ) | ||||||||||||
Earnings (loss) from continuing operations before income taxes | 511.1 | 9.0 | 520.1 | 108.9 | 629.0 | |||||||||||||||
Provision for income taxes | 161.6 | 3.0 | 164.6 | 34.7 | 199.3 | |||||||||||||||
Earnings (loss) from continuing operations, net of tax | 349.5 | 6.0 | 355.5 | 74.2 | 429.7 | |||||||||||||||
Earnings (loss) from discontinued operations, net of tax (6) | (3.1 | ) | — | (3.1 | ) | — | (3.1 | ) | ||||||||||||
Net earnings (loss) | 346.4 | 6.0 | 352.4 | 74.2 | 426.6 | |||||||||||||||
Net (earnings) loss attributable to noncontrolling interest | (13.1 | ) | — | (13.1 | ) | — | (13.1 | ) | ||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 333.3 | $ | 6.0 | $ | 339.3 | $ | 74.2 | $ | 413.5 | ||||||||||
Amounts attributable to FIS common stockholders | ||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 336.4 | $ | 6.0 | $ | 342.4 | $ | 74.2 | $ | 416.6 | ||||||||||
Earnings (loss) from discontinued operations, net of tax (6) | (3.1 | ) | — | (3.1 | ) | — | (3.1 | ) | ||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 333.3 | $ | 6.0 | $ | 339.3 | $ | 74.2 | $ | 413.5 | ||||||||||
Net earnings (loss) per share — diluted from continuing operations attributable to FIS common stockholders* | $ | 1.16 | $ | 0.02 | $ | 1.18 | $ | 0.26 | $ | 1.43 | ||||||||||
Weighted average shares outstanding — diluted | 290.5 | 290.5 | 290.5 | 290.5 | 290.5 | |||||||||||||||
Effective tax rate | 32 | % | 32 | % | ||||||||||||||||
Supplemental information: | ||||||||||||||||||||
Depreciation and amortization | $ | 309.1 | (108.9 | ) | $ | 200.2 | ||||||||||||||
Stock compensation expense | $ | 26.6 |
Exhibit E (continued) | ||||||||||||||||||||||||
Three months ended June 30, 2013 | ||||||||||||||||||||||||
Long-term | Capco | Purchase | ||||||||||||||||||||||
Debt | Acquisition | Price | ||||||||||||||||||||||
GAAP | Refinance (2) | Adjustments (3) | Subtotal | Amort. (5) | Non-GAAP | |||||||||||||||||||
Processing and services revenue | $ | 1,512.8 | $ | — | $ | — | $ | 1,512.8 | $ | — | $ | 1,512.8 | ||||||||||||
Cost of revenues | 1,031.5 | — | (6.3 | ) | 1,025.2 | (57.3 | ) | 967.9 | ||||||||||||||||
Gross profit | 481.3 | — | 6.3 | 487.6 | 57.3 | 544.9 | ||||||||||||||||||
Selling, general and administrative | 232.6 | — | (43.9 | ) | 188.7 | — | 188.7 | |||||||||||||||||
Operating income | 248.7 | — | 50.2 | 298.9 | 57.3 | 356.2 | ||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Interest income (expense), net | (49.4 | ) | — | — | (49.4 | ) | — | (49.4 | ) | |||||||||||||||
Other income (expense), net | (61.9 | ) | 60.9 | — | (1.0 | ) | — | (1.0 | ) | |||||||||||||||
Total other income (expense) | (111.3 | ) | 60.9 | — | (50.4 | ) | — | (50.4 | ) | |||||||||||||||
Earnings (loss) from continuing operations before income taxes | 137.4 | 60.9 | 50.2 | 248.5 | 57.3 | 305.8 | ||||||||||||||||||
Provision for income taxes | 41.2 | 18.3 | 15.1 | 74.6 | 17.2 | 91.8 | ||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | 96.2 | 42.6 | 35.1 | 173.9 | 40.1 | 214.0 | ||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax (6) | 12.8 | — | — | 12.8 | — | 12.8 | ||||||||||||||||||
Net earnings (loss) | 109.0 | 42.6 | 35.1 | 186.7 | 40.1 | 226.8 | ||||||||||||||||||
Net (earnings) loss attributable to noncontrolling interest | (4.2 | ) | — | — | (4.2 | ) | — | (4.2 | ) | |||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 104.8 | $ | 42.6 | $ | 35.1 | $ | 182.5 | $ | 40.1 | $ | 222.6 | ||||||||||||
Amounts attributable to FIS common stockholders | ||||||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 92.0 | $ | 42.6 | $ | 35.1 | $ | 169.7 | $ | 40.1 | $ | 209.8 | ||||||||||||
Earnings (loss) from discontinued operations, net of tax (6) | 12.8 | — | — | 12.8 | — | 12.8 | ||||||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 104.8 | $ | 42.6 | $ | 35.1 | $ | 182.5 | $ | 40.1 | $ | 222.6 | ||||||||||||
Net earnings (loss) per share — diluted from continuing operations attributable to FIS common stockholders* | $ | 0.31 | $ | 0.14 | $ | 0.12 | $ | 0.58 | $ | 0.14 | $ | 0.71 | ||||||||||||
Weighted average shares outstanding — diluted | 294.3 | 294.3 | 294.3 | 294.3 | 294.3 | 294.3 | ||||||||||||||||||
Effective tax rate | 30 | % | 30 | % | ||||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||
Depreciation and amortization | $ | 152.3 | (57.3 | ) | $ | 95.0 | ||||||||||||||||||
Stock compensation expense | $ | 13.2 |
Exhibit E (continued) | ||||||||||||||||||||||||||||
Six months ended June 30, 2013 | ||||||||||||||||||||||||||||
Long-term | Capco | Purchase | ||||||||||||||||||||||||||
Debt | Acquisition | Gain on | Price | |||||||||||||||||||||||||
GAAP | Refinance (2) | Adjustments (3) | mFoundry (4) | Subtotal | Amort. (5) | Non-GAAP | ||||||||||||||||||||||
Processing and services revenue | $ | 2,990.1 | $ | — | $ | — | $ | — | $ | 2,990.1 | $ | — | $ | 2,990.1 | ||||||||||||||
Cost of revenues | 2,040.9 | — | (6.3 | ) | — | 2,034.6 | (117.6 | ) | 1,917.0 | |||||||||||||||||||
Gross profit | 949.2 | — | 6.3 | — | 955.5 | 117.6 | 1,073.1 | |||||||||||||||||||||
Selling, general and administrative | 424.7 | — | (43.9 | ) | — | 380.8 | — | 380.8 | ||||||||||||||||||||
Operating income | 524.5 | — | 50.2 | — | 574.7 | 117.6 | 692.3 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Interest income (expense), net | (101.1 | ) | — | — | — | (101.1 | ) | — | (101.1 | ) | ||||||||||||||||||
Other income (expense), net | (56.8 | ) | 60.9 | — | (9.2 | ) | (5.1 | ) | — | (5.1 | ) | |||||||||||||||||
Total other income (expense) | (157.9 | ) | 60.9 | — | (9.2 | ) | (106.2 | ) | — | (106.2 | ) | |||||||||||||||||
Earnings (loss) from continuing operations before income taxes | 366.6 | 60.9 | 50.2 | (9.2 | ) | 468.5 | 117.6 | 586.1 | ||||||||||||||||||||
Provision for income taxes | 116.6 | 18.3 | 15.1 | (3.0 | ) | 147.0 | 37.0 | 184.0 | ||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | 250.0 | 42.6 | 35.1 | (6.2 | ) | 321.5 | 80.6 | 402.1 | ||||||||||||||||||||
Earnings (loss) from discontinued operations, net of tax (6) | 8.4 | — | — | — | 8.4 | — | 8.4 | |||||||||||||||||||||
Net earnings (loss) | 258.4 | 42.6 | 35.1 | (6.2 | ) | 329.9 | 80.6 | 410.5 | ||||||||||||||||||||
Net (earnings) loss attributable to noncontrolling interest | (9.5 | ) | — | — | — | (9.5 | ) | — | (9.5 | ) | ||||||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 248.9 | $ | 42.6 | $ | 35.1 | $ | (6.2 | ) | $ | 320.4 | $ | 80.6 | $ | 401.0 | |||||||||||||
Amounts attributable to FIS common stockholders | ||||||||||||||||||||||||||||
Earnings (loss) from continuing operations, net of tax | $ | 240.5 | $ | 42.6 | $ | 35.1 | $ | (6.2 | ) | $ | 312.0 | $ | 80.6 | $ | 392.6 | |||||||||||||
Earnings (loss) from discontinued operations, net of tax (6) | 8.4 | — | — | — | 8.4 | — | 8.4 | |||||||||||||||||||||
Net earnings (loss) attributable to FIS common stockholders | $ | 248.9 | $ | 42.6 | $ | 35.1 | $ | (6.2 | ) | $ | 320.4 | $ | 80.6 | $ | 401.0 | |||||||||||||
Net earnings (loss) per share — diluted from continuing operations attributable to FIS common stockholders* | $ | 0.82 | $ | 0.14 | $ | 0.12 | $ | (0.02 | ) | $ | 1.06 | $ | 0.27 | $ | 1.33 | |||||||||||||
Weighted average shares outstanding — diluted | 294.8 | 294.8 | 294.8 | 294.8 | 294.8 | 294.8 | 294.8 | |||||||||||||||||||||
Effective tax rate | 32 | % | 31 | % | ||||||||||||||||||||||||
Supplemental information: | ||||||||||||||||||||||||||||
Depreciation and amortization | $ | 305.5 | (117.6 | ) | $ | 187.9 | ||||||||||||||||||||||
Stock compensation expense | $ | 26.4 |
(1) | The revenue adjustment in this column represents a cash settlement for the extinguishment of certain contractual minimums with a reseller. Although the 2014 cash settlement has no contract performance obligation, revenue is amortized in this circumstance over the remaining relationship with the reseller. |
(2) | This column represents the write-off of certain previously capitalized debt issuance costs and transaction expenses related to refinancing activities undertaken in the second quarter of 2013, including a $51.6 million bond premium incurred as a result of the early redemption of certain debt. |
(3) | The adjustment in this column represents an increase in the liability established at the acquisition of Capco for contingent payments based on expected operating performance in 2013 through 2015. |
(4) | Gain resulting from the purchase of the remaining shares of mFoundry, Inc., representing the difference between the fair value and carrying value of the minority interest investment previously held. |
(5) | This column represents purchase price amortization expense on intangible assets acquired through various Company acquisitions. |
(6) | During the 2014 and 2013 periods, certain operations were classified as discontinued. Reporting for discontinued operations classifies revenues and expenses as one line item net of tax in the consolidated statements of earnings. The table below outlines the components of discontinued operations for the periods presented, net of tax. During the second quarter of 2014, management committed to a plan to sell our primary business operations in China because they don't align with our strategic plans. The activity for Fidelity National Participacoes Ltda. ("Participacoes"), our former item processing and remittance services business in Brazil, relates to the ongoing settlement of labor claims as a result of the dismissal of employees in that business. In the second quarter of 2013, we received an earn-out payment related to the 2010 sale of our ClearPar business. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
China business line | $ | (0.4 | ) | $ | (0.8 | ) | $ | (2.2 | ) | $ | (1.3 | ) | |||
ClearPar | — | 16.7 | — | 16.7 | |||||||||||
Participacoes | (0.5 | ) | (3.1 | ) | (0.9 | ) | (7.0 | ) | |||||||
Total discontinued operations | $ | (0.9 | ) | $ | 12.8 | $ | (3.1 | ) | $ | 8.4 |