JACKSONVILLE, Fla., Feb. 6 /PRNewswire-FirstCall/ -- Fidelity National Information Services, Inc. , a leading global provider of technology services to financial institutions, today announced financial results for the fourth quarter of 2006. Consolidated revenue increased to $1.1 billion, net earnings increased to $75.1 million and net earnings per diluted share was $0.39. For the full year 2006, consolidated revenue increased to $4.1 billion, net earnings increased to $259.1 million and net earnings per diluted share was $1.37. In accordance with Generally Accepted Accounting Principles ("GAAP"), these results reflect the combination between FIS and Certegy Inc. as of February 1, 2006, the effective date of the merger.
"FIS reported excellent fourth quarter results with pro forma revenue growth of 12.5%, EBITDA growth of 11.0% and adjusted cash earnings of $0.58 per diluted share," stated FIS Chairman William P. Foley, II. For the full year 2006, the company reported pro forma revenue growth of 8.8% and adjusted pro forma EBITDA growth of 10.6%. "We are extremely pleased with the outstanding results we achieved in 2006, which was our first year as a new public company. Our strong operating performance provides an excellent foundation for the continued growth and success of our company."
FIS' operating results are presented on a GAAP and on an adjusted pro forma basis, which management believes provides more meaningful comparisons between the periods presented. FIS' pro forma results reflect a January 1, 2005, effective date for the merger between FIS and Certegy, the March 2005 recapitalization and sale of minority interests by FIS. Additionally, the adjusted pro forma results exclude merger and acquisition and integration expenses. Reconciliations between GAAP and pro forma results are provided in the attachments to this press release, which are posted on the company's website at http://www.fidelityinfoservices.com/.
GAAP
(amounts in millions) 4th Quarter 4th Quarter
2006 2005
Total Revenue $1,129.1 million $707.7 million
Net Earnings $75.1 million $45.5 million
Net Earnings Per Diluted Share $0.39 $0.35
Adjusted Pro Forma (see Appendix A)
(amounts in millions) 4th Quarter 4th Quarter %
2006 2005 Chg
Total Revenue $1,129.1 million $1,003.6 million 12.5%
EBITDA $294.8 million $265.6 million 11.0%
Net Earnings $84.3 million $71.7 million 17.7%
Net Earnings Per Diluted Share $0.43 $0.37 16.2%
Cash Earnings $111.9 million $ 100.8 million 11.0%
Cash Earnings Per Diluted Share $0.58 $0.52 11.5%
FIS presents its financial results in accordance with GAAP. However, in order to provide the investment community with a broader means of evaluating the operating performance of its operations, FIS also reports several non-GAAP measures, including earnings before interest, taxes, depreciation and amortization ("EBITDA"), net earnings plus depreciation and amortization less capital expenditures ("Free Cash Flow") and net earnings plus tax-adjusted purchase price amortization ("Cash Earnings"). 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.
Pro Forma Segment Information
FIS' Transaction Processing Services generated revenue of $694.7 million, or 16.1% over the prior-year period, driven by 55.0% growth in International, 8.9% growth in Enterprise Solutions and 8.6% growth in Integrated Financial Solutions. The company's new item processing operation in Brazil, new account wins and deeper penetration of the existing customer base contributed to the strong revenue growth. Transaction Processing Services' EBITDA increased 16.6% over the prior-year quarter to $179.2 million. The EBITDA margin of 25.8% was comparable to the fourth quarter of 2005, and 160 basis points above the third quarter 2006 EBITDA margin.
Lender Processing Services revenue increased 7.9% to $437.1 million, driven by 10.6% growth in Information Services, which continues to benefit from strong results within the default solutions and appraisal product lines. Lender Processing Services' EBITDA was $138.8 million, or 0.6%, below the prior year quarter. The EBITDA margin was 31.7% compared to 34.4% in the prior year. The declines in EBITDA and the EBITDA margin are primarily the result of strong growth in lower margin product lines, lower tax processing volumes and a decline in revenue from the company's investment property exchange services.
Additional segment and pro forma information is provided in the following table:
Segment Revenues
(amounts in millions) 4th Quarter 4th Quarter
2006 2005 % Chg.
Transaction Processing Services:
Integrated Financial Solutions $285.3 $262.7 8.6%
Enterprise Solutions 270.4 248.3 8.9%
International 141.0 91.0 55.0%
Other (2.0) (3.4) -
$694.7 $598.6 16.1%
Lender Processing Services:
Mortgage Processing $92.5 $94.0 (1.6)%
Information Outsourcing 344.7 311.6 10.6%
Other (0.1) (0.3) -
$437.1 $405.3 7.9%
Corporate $(2.8) $(0.3) -
Total FIS $1,129.1 $1,003.6 12.5%
Pro forma corporate expense for the fourth quarter of 2006 totaled $23.3 million. The $4.5 million, or 16.1%, decline from the prior-year quarter was primarily attributable to the consolidation of duplicate administrative functions. Pro forma interest expense for the quarter increased $8.2 million to $50.8 million, driven primarily by higher interest rates. The effective tax rate was 37.1% for the quarter.
2007 Outlook
FIS provided its outlook for 2007 as follows:
- Revenue growth of 7% to 9%, compared to pro forma revenue of $4.2
billion in 2006.
- Pro forma earnings per diluted share of $1.97 to $2.03, compared to
$1.52 in 2006;
- Pro forma cash earnings per diluted share of $2.47 to $2.53, compared
to $2.10 in 2006;
- Pro forma EBITDA growth of 10% to 12%, compared to pro forma EBITDA of
$1.1 billion in 2006;
- Capital expenditures of approximately $300 million.
- Pro forma free cash flow, which the company defines as net earnings
plus depreciation and amortization less capital expenditures, of $530
million to $560 million.
The company's 2007 guidance includes after-tax stock option expense of approximately $21.5 million, or $0.11 per diluted share. This compares to after-tax stock option expense of $31.4 million in 2006, which included $12.1 million, or $0.06 per diluted share in comparable expense, and $19.3 million in non-recurring performance based and accelerated stock option expense. The guidance excludes the remaining integration costs associated with the February 1, 2006, combination of FIS and Certegy Inc., and the previously announced first quarter 2007 non-cash charge of approximately $17.2 million after tax, or $0.09 per diluted share, incurred in conjunction with refinancing the company's credit facilities, which was completed January 18, 2007.
FIS will host a call with investors and analysts to discuss first quarter results on Wednesday, February 7, 2007, beginning at 8:30 a.m. Eastern daylight time. Those wishing to participate via the webcast should access the call through FIS' Investor Relations website at http://www.fidelityinfoservices.com/. Those wishing to participate via the telephone may do so by calling 800-288-8961 (USA) or 612-332-0107 (International). The webcast replay will be available on FIS' Investor Relations website. The telephone replay will be available through February 14, 2007, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 859909.
About Fidelity National Information Services
Fidelity National Information Services, Inc. is a leading provider of core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage-related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top 10. Approximately 50 percent of all U.S. residential mortgages are processed using FIS software. FIS is a member of Standard and Poor's (S&P) 500(R) Index and has been ranked the number one banking service provider in the world by American Banker and the research firm Financial Insights and the number two overall financial technology provider in the annual FinTech 100 rankings. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 7,800 financial institutions in more than 60 countries worldwide. For more information on Fidelity National Information Services, please visit http://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; failures to adapt our services to changes in technology or in the marketplace; adverse changes in the level of real estate activity, which would adversely affect certain of our businesses; our potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; 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.
FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES AND AFFILIATES
UNAUDITED CONSOLIDATED AND COMBINED RESULTS FOR
THE QUARTERS AND YEARS ENDING DECEMBER 31, 2006 AND
2005
(In thousands)
Three Months Ending Twelve Months Ending
December 31, December 31,
2006 2005 2006 2005
Processing and services
revenues $1,129,069 $707,683 $4,132,602 $2,766,085
Cost of revenues 814,932 461,912 2,929,567 1,793,285
Selling, general, and
administrative expenses 121,209 109,702 505,528 422,623
Research and development
costs 28,019 27,714 105,580 113,498
Operating income 164,909 108,355 591,927 436,679
Other income (expense)
Interest income 845 1,566 4,746 6,392
Realized gains and
losses 1,613 (1,846) (224) (4,237)
Interest expense (50,801) (39,421) (192,819) (126,778)
Total other income
(expense) (48,343) (39,701) (188,297) (124,623)
Earnings before income
taxes, equity earnings and
minority interest 116,566 68,654 403,630 312,056
Income tax expense 43,235 25,539 150,150 116,085
Equity in earnings of
unconsolidated entities (2,014) (650) (5,792) (5,029)
Minority interest 225 (1,721) 185 4,450
Net earnings $75,120 $45,486 $259,087 $196,550
Net earnings per share-basic $0.39 $0.36 $1.39 $1.54
Weighted average shares
outstanding-basic 190,534 127,920 185,926 127,920
Net earnings per share-
diluted $0.39 $0.35 $1.37 $1.53
Weighted average shares
outstanding-diluted 194,521 129,657 189,196 128,354
Appendix A- Historical Detail and Reconciliation of Non-GAAP Measures
NOTE: The Adjustments Column represents pro forma adjustments relating to
the merger transaction between CEY and FIS, the recapitalization
transaction at FIS in March 2005, and the purchase of the remaining
minority interest in Kordoba in September 2005 to reflect such
transactions as if they occurred January 1, 2005
EBITDA Detail
2006 Q4 FIS
Net Earnings $75,120
+ Interest Expense 50,801
+ Minority Interest 225
+ Income Taxes 43,235
+ Depreciation/Amortization 115,246
- Interest Income (845)
- Equity in (Earnings)
Loss of Unconsolidated
Entities, net of tax (2,014)
- Other (Income) Expense (1,613)
EBITDA $280,155
2005 Q4 FIS CEY ADJ Pro Forma
Net Earnings $45,486 $36,301 $(10,135) $71,652
+ Interest Expense 39,421 3,155 - 42,576
+ Minority Interest (1,721) - - (1,721)
+ Income Taxes 25,539 22,958 (6,003) 42,494
+ Depreciation/Amort 77,752 13,506 20,570 111,828
- Interest Income (1,566) (2,435) - (4,001)
- Equity in (Earnings)
Loss of Non-Consolidated
Entities, net of tax (650) 117 - (533)
- Other (Income) Expense 1,846 1,412 - 3,258
EBITDA $186,107 $75,014 $4,432 $265,553
EBITDA Margin
2006 Q4 FIS
EBITDA $280,155
Revenue $1,129,069
EBITDA Margin 24.8 %
2005 Q4 FIS CEY ADJ Pro Forma
EBITDA $186,107 $75,014 $4,432 $265,553
Revenue $707,683 $295,886 $ - $1,003,569
EBITDA Margin 26.3 % 25.4 % 26.5 %
EBIT Detail
2006 Q4 FIS
Net Earnings $75,120
+ Interest Expense 50,801
+ Minority Interest 225
+ Income Taxes 43,235
- Interest Income (845)
- Equity in (Earnings)
Loss of Unconsolidated
Entities, net of tax (2,014)
- Other (Income) Expense (1,613)
EBIT $164,909
2005 Q4 FIS CEY ADJ Pro Forma
Net Earnings $45,486 $36,301 $(10,135) $71,652
+ Interest Expense 39,421 3,155 - 42,576
+ Minority Interest (1,721) - - (1,721)
+ Income Taxes 25,539 22,958 (6,003) 42,494
- Interest Income (1,566) (2,435) - (4,001)
- Equity in (Earnings)
Loss of Non-Consolidated
Entities, net of tax (650) 117 - (533)
- Other (Income) Expense 1,846 1,412 - 3,258
EBIT $108,355 $61,508 $(16,138) $153,725
EBIT Margin
2006 Q4 FIS
EBIT $164,909
Revenue $1,129,069
EBIT Margin 14.6 %
2005 Q4 FIS CEY ADJ Pro Forma
EBIT $108,355 $61,508 $(16,138) $153,725
Revenue $707,683 $295,886 $ - $1,003,569
EBIT Margin 15.3 % 20.8 % 15.3 %
Adjusted Diluted EPS
2006 Q4 FIS
Net Earnings $75,120
Adjusted EPS $0.39
Diluted Shares Outstanding 194,521
2005 Q4 FIS CEY ADJ Pro Forma
Net Earnings $45,486 $36,301 $(10,135) $71,652
Adjusted EPS $0.35 $0.37
Diluted Shares Outstanding 129,657 193,453
Cash Earnings
2006 Q4 FIS
Net Earnings $75,120
+ Tax Adjusted Purchase Price Amortization 27,601
Cash Earnings $102,721
Diluted Cash EPS $0.53
Diluted Shares Outstanding 194,521
2005 Q4 FIS CEY ADJ Pro Forma
Net Earnings $45,486 $36,301 $(10,135) $71,652
+ Tax Adjusted Purchase Price
Amortization 17,876 680 10,606 29,162
Cash Earnings $63,362 $36,981 $471 $100,814
Diluted Cash EPS $0.49 $0.52
Diluted Shares Outstanding 129,657 - - 193,453
Free Cash Flow
2006 Q4 FIS
Net Earnings $75,120
+ Depreciation/Amort 115,246
- Capital Expenditures (83,663)
Free Cash Flow $106,703
2005 Q4 FIS CEY ADJ Pro Forma
Net Earnings $45,486 $36,301 $(10,135) $71,652
+ Depreciation/Amort 77,752 13,506 20,570 111,828
- Capital Expenditures (58,168) (20,683) - (78,851)
Free Cash Flow $65,070 $29,124 $10,435 $104,629
2006 Q4
Stock Compensation $12,853
2005 Q4
Stock Compensation $4,350 $3,005 $(3,005) $4,350
Financial Measures Excluding Selected Items
EBITDA $280,155
M&A and Integration costs 14,595
EBITDA, excluding selected items $294,750
Net Earnings $75,120
M&A and Integration Costs, net of tax 9,165
Net Earnings, excluding selected items $84,285
Net Earnings per diluted share $0.39
M&A and Integration costs per share 0.04
Net Earnings per diluted share, excluding selected items $0.43
Net Earnings, excluding selected items $84,285
+ Tax Adjusted Purchase Price Amortization 27,601
Cash Earnings, excluding selected items $111,886
Net Earnings per diluted share, excluding selected items $0.43
+ Tax Adjusted Purchase Price Amortization-per share 0.15
Cash Earnings per diluted share, excluding selected items $0.58
Net Earnings, excluding selected items $84,285
+ Depreciation/Amort $115,246
- Capital Expenditures (83,663)
Free Cash Flow, excluding selected items $115,868
Appendix A- Historical Detail and Reconciliation of Non-GAAP Measures
NOTE: The Adjustments Column represents pro forma adjustments relating to
the merger transaction between CEY and FIS, the recapitalization
transaction at FIS in March 2005, and the purchase of the remaining
minority interest in Kordoba in September 2005 to reflect such
transactions as if they occurred January 1, 2005
EBITDA Detail
2006 Full Year FIS CEY-Jan ADJ Pro Forma
Net Earnings $259,087 $(42,523) (3,708) $212,856
+ Interest Expense 192,819 1,081 - 193,900
+ Minority Interest 185 - - 185
+ Income Taxes 150,150 (26,396) (2,626) 121,128
+ Depreciation/Amort 433,550 4,274 6,856 444,680
- Interest Income (4,746) - - (4,746)
- Equity in (Earnings)
Loss of Unconsolidated
Entities, net of tax (5,792) - (5,792)
- Other (Income) Expense 224 123 347
EBITDA $1,025,477 $(63,441) $522 $962,558
2005 Full Year FIS CEY ADJ Pro Forma
Net Earnings $196,550 $105,514 $(52,616) $249,448
+ Interest Expense 126,778 12,832 21,031 160,641
+ Minority Interest 4,450 - (2,368) 2,082
+ Income Taxes 116,085 68,927 (32,571) 152,441
+ Depreciation/Amort 299,638 51,858 83,969 435,465
- Interest Income (6,392) (2,435) - (8,827)
- Equity in (Earnings)
Loss of Non-Consolidated
Entities, net of tax (5,029) 117 - (4,912)
- Other (Income) Expense 4,237 - - 4,237
EBITDA $736,317 $236,813 $17,445 $990,575
EBITDA Margin
2006 Full Year FIS CEY-Jan ADJ Pro Forma
EBITDA $1,025,477 $(63,441) $522 $962,558
Revenue $4,132,602 $92,915 $ - $4,225,517
EBITDA Margin 24.8 % -68.3 % 22.8 %
2005 Full Year FIS CEY ADJ Pro Forma
EBITDA $736,317 $236,813 $17,445 $990,575
Revenue $2,766,085 $1,117,141 $ - $3,883,226
EBITDA Margin 26.6 % 21.2 % 25.5 %
EBIT Detail
2006 Full Year FIS CEY-Jan ADJ Pro Forma
Net Earnings $259,087 $(42,523) $(3,708) $212,856
+ Interest Expense 192,819 1,081 - 193,900
+ Minority Interest 185 - - 185
+ Income Taxes 150,150 (26,396) (2,626) 121,128
- Interest Income (4,746) - - (4,746)
- Equity in (Earnings)
Loss of Unconsolidated
Entities, net of tax (5,792) - - (5,792)
- Other (Income) Expense 224 123 - 347
EBIT $591,927 $(67,715) $(6,334) $517,878
2005 Full Year FIS CEY ADJ Pro Forma
Net Earnings $196,550 $105,514 $(52,616) $249,448
+ Interest Expense 126,778 12,832 21,031 160,641
+ Minority Interest 4,450 - (2,368) 2,082
+ Income Taxes 116,085 68,927 (32,571) 152,441
- Interest Income (6,392) (2,435) - (8,827)
- Equity in (Earnings)
Loss of Non-Consolidated
Entities, net of tax (5,029) 117 - (4,912)
- Other (Income) Expense 4,237 - - 4,237
EBIT $436,679 $184,955 $(66,524) $555,110
EBIT Margin
2006 Full Year FIS CEY-Jan ADJ Pro Forma
EBIT $591,927 $(67,715) $(6,334) $517,878
Revenue $4,132,602 $92,915 $ - $4,225,517
EBIT Margin 14.3 % -72.9 % 12.3 %
2005 Full Year FIS CEY ADJ Pro Forma
EBIT $436,679 $184,955 $(66,524) $555,110
Revenue $2,766,085 $1,117,141 $ - $3,883,226
EBIT Margin 15.8 % 16.6 % 14.3 %
Adjusted Diluted EPS
2006 Full Year FIS CEY-Jan ADJ Pro Forma
Net Earnings $259,087 $(42,523) $(3,708) $212,856
Adjusted EPS $1.37 $1.09
Diluted Shares Outstanding 189,196 194,653
2005 Full Year FIS CEY ADJ Pro Forma
Net Earnings $196,550 $105,514 $(52,616) $249,448
Adjusted EPS $1.53 $1.30
Diluted Shares Outstanding 128,354 191,580
Cash Earnings
2006 Full Year FIS CEY-Jan ADJ Pro Forma
Net Earnings $259,087 $(42,523) $(3,708) $212,856
+ Tax Adjusted Purchase
Price Amortization $109,467 233 3,524 113,224
Cash Earnings $368,554 $(42,290) $(184) $326,080
Diluted Cash EPS $1.95 $1.68
Diluted Shares Outstanding 189,196 194,653
2005 Full Year FIS CEY ADJ Pro Forma
Net Earnings $196,550 $105,514 $(52,616) $249,448
+ Tax Adjusted Purchase
Price Amortization 78,733 2,721 42,425 123,879
Cash Earnings $275,283 $108,235 $(10,191) $373,327
Diluted Cash EPS $2.14 $1.95
Diluted Shares Outstanding 128,354 - - 191,580
Free Cash Flow
2006 Full Year FIS CEY-Jan ADJ Pro Forma
Net Earnings $259,087 $(42,523) $(3,708) $212,856
+ Depreciation/Amort 433,550 4,274 6,856 444,680
- Capital Expenditures (300,197) (5,200) - (305,397)
Free Cash Flow $392,440 $(43,449) $3,148 $352,139
2005 Full Year FIS CEY ADJ Pro Forma
Net Earnings $196,550 $105,514 $(52,616) $249,448
+ Depreciation/Amort 299,638 51,858 83,969 435,465
- Capital Expenditures (238,665) (63,566) - (302,231)
Free Cash Flow $257,523 $93,806 $31,353 $382,682
2006 Full Year
Stock Compensation $50,074 $552 $(552) $50,074
2005 Full Year
Stock Compensation $20,367 $12,205 $(12,205) $20,367
Pro Forma Measures Excluding Selected Items
Pro Forma EBITDA $962,558
M&A and Integration costs 108,945
Performance Based Stock Option Costs 24,130
Pro Forma EBITDA, excluding selected items $1,095,633
Pro Forma Net Earnings 212,856
M&A and Integration Costs, net of tax 67,654
Performance Based Stock Option Costs, net of tax 14,888
Pro Forma Net Earnings, excluding selected items $295,398
Weighted Average Shares 189,196
Adjustment as if transaction took place 1/1/2005 5,457
Pro Forma Weighted Average Shares 194,653
Pro Forma Net Earnings per diluted share $1.09
M&A and Integration costs per share 0.35
Performance Based Stock Option Costs per share 0.08
Pro Forma Net Earnings per diluted share, excluding selected items $1.52
Net Earnings, excluding selected items 295,398
+ Tax Adjusted Purchase Price Amortization 113,224
Cash Earnings, excluding selected items 408,622
Net Earnings per diluted share, excluding selected items 1.52
+ Tax Adjusted Purchase Price Amortization-per share 0.58
Cash Earnings per diluted share, excluding selected items $2.10
Net Earnings, excluding selected items $295,398
+ Depreciation/Amort 444,680
- Capital Expenditures (305,397)
Free Cash Flow, excluding selected items $434,681
Appendix B
Unaudited Pro Forma Combined Statement of Continuing Operations
for the Twelve Months Ended December 31, 2006
(In thousands Except Per Share Data)
Pro Forma
Certegy-Jan FIS Adjustments
Total revenue $92,915 $4,132,602
Total cost of revenue 73,218 2,929,567 6,856
Gross profit (loss) 19,697 1,203,035 (6,856)
General and administrative 7,645 476,350 (522)
Research and development costs - 105,580
Merger and Acquisition costs 79,767 29,178
Income (loss) from operations (67,715) 591,927 (6,334)
Interest income (expense) and other (1,204) (188,297) -
Income from continuing operations
before tax and min. int (68,919) 403,630 (6,334)
Provision for income tax (26,396) 150,150 (2,626)
Income from continuing operations (42,523) 253,480 (3,708)
Equity in earnings (loss) of
unconsolidated entities, net - 5,792 -
Minority interests in earnings, net
of tax - (185) -
Net income $(42,523) $259,087 $(3,708)
Net income per share-basic $(0.68) $1.39
Pro forma Weighted average shares-
basic 62,326 185,926
Net income per share-diluted $(0.67) $1.37
Pro forma Weighted average shares-
diluted 63,796 189,196
Tax Adjusted
Purchase Price Cash
Pro Forma Amortization Earnings
Total revenue $4,225,517
Total cost of revenue 3,009,641
Gross profit (loss) 1,215,876
General and administrative 483,473
Research and development costs 105,580
Merger and Acquisition costs 108,945
Income (loss) from operations 517,878
Interest income (expense) and other (189,501)
Income from continuing operations
before tax and min. int 328,377
Provision for income tax 121,128
Income from continuing operations 207,249
Equity in earnings (loss) of
unconsolidated entities, net 5,792
Minority interests in earnings, net of
tax (185)
Net income $212,856 $113,224 $326,080
Net income per share-basic $1.11 $1.70
Pro forma Weighted average shares-
basic 191,307 191,307
Net income per share-diluted $1.09 $1.68
Pro forma Weighted average shares-
diluted 194,652 194,652
Pro Forma Net Earnings $212,856
Merger and Acquisition and
Integration Costs, net of tax 67,654
Performance Based Stock Option Costs,
net of tax 14,888
Pro Forma Net Earnings, excluding
selected items $295,398
Appendix C
Unaudited Pro Forma and Historical Segment Information
for the Quarters and Years Ended December 31, 2006 and 2005
(In thousands Except Per Share Data)
2006- Quarter 4 Pro Forma
Transaction Lender
Processing Processing Corporate
Services Services and Other Total
Processing and services revenue 694,748 437,133 (2,812) 1,129,069
Cost of revenues 537,295 277,637 - 814,932
Gross profit 157,453 159,496 (2,812) 314,137
Selling, general and admin costs 40,765 47,124 33,320 121,209
Research development costs 18,696 9,323 - 28,019
Operating income 97,992 103,049 (36,132) 164,909
Depreciation and amortization 75,696 34,933 4,617 115,246
EBITDA 173,688 137,982 (31,515) 280,155
ProForma EBITDA 173,688 137,982 (31,515) 280,155
Merger and Acquisition and
Integration costs 5,547 804 8,244 14,595
ProForma EBITDA, excluding
selected items 179,235 138,786 (23,271) 294,750
2006- Quarter 4 Historical
Transaction Lender
Processing Processing Corporate
Services Services and Other Total
Processing and services revenue 694,748 437,133 (2,812) 1,129,069
Cost of revenues 537,295 277,637 - 814,932
Gross profit 157,453 159,496 (2,812) 314,137
Selling, general and admin costs 40,765 47,124 33,320 121,209
Research development costs 18,696 9,323 - 28,019
Operating income 97,992 103,049 (36,132) 164,909
Depreciation and amortization 75,696 34,933 4,617 115,246
EBITDA 173,688 137,982 (31,515) 280,155
2006-Full Year Pro Forma
Transaction Lender
Processing Processing Corporate
Services Services and Other Total
Processing and services revenue 2,549,741 1,678,606 (2,829) 4,225,517
Cost of revenues 1,994,223 1,015,419 - 3,009,641
Gross profit 555,518 663,187 (2,829) 1,215,876
Selling, general and admin
costs 175,516 208,698 208,204 592,418
Research development costs 70,879 34,701 - 105,580
Operating income 309,123 419,788 (211,033) 517,878
Depreciation and amortization 294,394 139,815 10,471 444,680
EBITDA 603,517 559,603 (200,562) 962,558
ProForma EBITDA 603,517 559,603 (200,562) 962,558
Merger and Acquisition and
Integration costs 13,398 4,153 91,394 108,945
Acceleration of performance-
based shares 24,130 24,130
ProForma EBITDA, excluding
selected items 616,915 563,756 (85,038) 1,095,633
2006-Full Year Historical
Transaction Lender
Processing Processing Corporate
Services Services and Other Total
Processing and services revenue 2,458,777 1,678,606 (4,781) 4,132,602
Cost of revenues 1,914,148 1,015,419 - 2,929,567
Gross profit 544,629 663,187 (4,781) 1,203,035
Selling, general and admin
costs 171,106 208,698 125,724 505,528
Research development costs 70,879 34,701 - 105,580
Operating income 302,644 419,788 (130,505) 591,927
Depreciation and amortization 283,354 139,815 10,381 433,550
EBITDA 585,998 559,603 (120,124) 1,025,477
2005 - Quarter 4 Pro Forma
Transaction Lender
Processing Processing Corporate
Services Services and Other Total
Processing and services revenue 598,576 405,313 (320) 1,003,569
Cost of revenues 455,542 229,504 - 685,046
Gross profit 143,034 175,809 (320) 318,523
Selling, general and admin costs 44,480 63,062 29,542 137,084
Research development costs 19,172 8,542 - 27,714
Operating income 79,382 104,205 (29,862) 153,725
Depreciation and amortization 74,328 35,358 2,142 111,828
EBITDA 153,710 139,563 (27,720) 265,553
2005 - Quarter 4 Historical
Transaction Lender
Processing Processing Corporate
Services Services and Other Total
Processing and services revenue 302,690 405,313 (320) 707,683
Cost of revenues 232,408 229,504 - 461,912
Gross profit 70,282 175,809 (320) 245,771
Selling, general and admin costs 23,873 63,062 22,767 109,702
Research development costs 19,172 8,542 - 27,714
Operating income 27,237 104,205 (23,087) 108,355
Depreciation and amortization 40,522 35,358 1,872 77,752
EBITDA 67,759 139,563 (21,215) 186,107
2005 - Full Year Pro Forma
Transaction Lender
Processing Processing Corporate
Services Services and Other Total
Processing and services revenue 2,325,571 1,562,161 (4,506) 3,883,226
Cost of revenues 1,778,630 889,161 - 2,667,791
Gross profit 546,941 673,000 (4,506) 1,215,435
Selling, general and admin
costs 186,098 234,655 126,074 546,827
Research development costs 85,702 27,796 - 113,498
Operating income 275,141 410,549 (130,580) 555,110
Depreciation and amortization 283,483 144,593 7,389 435,465
EBITDA 558,624 555,142 (123,191) 990,575
2005 - Full Year Historical
Transaction Lender
Processing Processing Corporate
Services Services and Other Total
Processing and services revenue 1,208,430 1,562,161 (4,506) 2,766,085
Cost of revenues 904,124 889,161 - 1,793,285
Gross profit 304,306 673,000 (4,506) 972,800
Selling, general and admin costs 94,889 234,655 93,079 422,623
Research development costs 85,702 27,796 - 113,498
Operating income 123,715 410,549 (97,585) 436,679
Depreciation and amortization 148,850 144,593 6,195 299,638
EBITDA 272,565 555,142 (91,390) 736,317
Appendix D
Fidelity National Information Services, Inc.
Reconciliation of Non-GAAP Measures - 2007 Projections
(All amounts in millions, except per share amounts)
FIS presents its financial results in accordance with Generally Accepted Accounting Principles ("GAAP"). However, in order to provide the investment community with a more thorough means of evaluating the operating performance of its operations, FIS also reports several non-GAAP measures, including earnings before interest, taxes, depreciation and amortization ("EBITDA"), net earnings plus depreciation and amortization less capital expenditures ("Free Cash Flow") and net earnings plus intangible amortization, net of income tax ("Cash Earnings"). 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.
The amounts below are projections based on the guidance range given by FIS regarding its 2007 results. The tables below are reconciliations of pro forma projections of non-GAAP measures to the nearest GAAP measurement.
Low High
Pro Forma 2007 Net Earnings-
Projected
Projected 2007 Net Earnings $361 $372
Projected Write-off of Deferred
Debt Costs, net of tax 17 17
Projected Merger and Acquisition
Integration Costs, net of tax 5 5
Pro Forma Projected Net Earnings $383 $394
Pro Forma 2007 Net Earnings Per
Diluted Share-Projected
Projected 2007 Net Earnings Per
Share $1.86 $1.92
Projected Write-off of Deferred
Debt Costs, net of tax 0.09 0.09
Projected Merger and Acquisition
Integration Costs, net of tax 0.02 0.02
Pro Forma Projected Net Earnings
per Diluted Share $1.97 $2.03
Projected Diluted Weighted Average
Shares Outstanding 194.4 194.4
Pro Forma 2007 Cash Earnings-
Projected
Pro Forma Projected Net Earnings $383 $394
Tax Adjusted Purchase Price
Amortization 97 97
Pro Forma Projected Cash Earnings $480 $491
Pro Forma 2007 Cash Earnings Per
Diluted Share-Projected
Pro Forma Projected Net Earnings
Per Share $1.97 $2.03
Tax Adjusted Purchase Price
Amortization Per Share 0.50 0.50
Pro Forma Projected Cash Earnings
Per Diluted Share $2.47 $2.53
Pro Forma EBITDA-Projected
Pro Forma Projected Net Earnings $383 $394
Projected Income Tax Expense 219 223
Projected Interest Expense 176 176
Projected Depreciation and
Amortization 459 459
Projected Equity in Earnings of
Subsidiaries & Minority Interest (13) (13)
Projected Other, net (Other Income
& Interest Income) (18) (12)
Pro Forma Projected EBITDA $1,206 $1,227
Pro Forma Free Cash Flow-Projected
Pro Forma Projected Net Earnings $383 $394
Projected Depreciation and
Amortization 459 459
Projected Capital Expenditures (310) (290)
Pro Forma Projected Free Cash Flow $532 $563
FIS-e
