- Accelerated revenue growth in all operating segments, including
Merchant to 45%, Banking to 8%, and Capital Markets to 6% as
compared to the prior year period
- Increases full-year 2021 revenue guidance by $250 million to
$13.9-$14.0 billion in order to reflect new sales and a growing
backlog of revenue under contract during the second quarter
- Raises year-end 2021 revenue synergy target by $100 million to
approximately $700 million on an annual run-rate basis, in order to
reflect strong cross-selling performance during the second
quarter
FIS™ (NYSE:FIS), a global leader in financial services
technology, today reported its second quarter 2021 results.
“FIS delivered an exceptional quarter,” said Gary Norcross, FIS
chairman and chief executive officer. “Our transformation has
created strong demand with our clients. Even as the world slowed,
we continued to invest in our talent and our cloud-native solutions
portfolio, creating a significant pipeline with our clients and
prospects. With strong new sales and our largest revenue synergy
quarter to-date, we are raising our guidance for the second time
this year.”
Second Quarter 2021
As compared to the prior year period, revenue grew by more than
$500 million, or 17%, to approximately $3.5 billion. Revenue growth
accelerated across all three operating segments, including Merchant
to 45%, Banking to 8%, and Capital Markets to 6%. Net earnings
attributable to common stockholders was $341 million or $0.55 per
diluted share.
Organic revenue growth, which reflects the impact of foreign
currency exchange fluctuation (FX), was 16%. Adjusted EBITDA margin
expanded by 460 basis points (bps) over the prior year period to
43.7%, primarily reflecting high contribution margins of revenue
growth as well as ongoing revenue and expense synergies. Adjusted
net earnings and adjusted net earnings per share each increased by
40% to approximately $1 billion or $1.61 per diluted share,
respectively.
($ millions, except per share data,
unaudited)
Three Months Ended June
30,
%
Organic
2021
2020
Change
Growth1
Revenue
$
3,475
$
2,962
17%
16%
Merchant Solutions
1,177
812
45%
41%
Banking Solutions
1,578
1,462
8%
7%
Capital Market Solutions
630
593
6%
4%
Corporate and Other
90
95
(5)%
Adjusted EBITDA
$
1,520
$
1,157
31%
Adjusted EBITDA Margin
43.7
%
39.1
%
460 bps
Net earnings attributable to FIS common
stockholders (GAAP)
$
341
$
19
*
Diluted EPS (GAAP)
$
0.55
$
0.03
*
Adjusted net earnings
$
1,004
$
718
40%
Adjusted EPS
$
1.61
$
1.15
40%
* Indicates comparison not meaningful
1 Organic growth adjusts for the impact of
foreign currency fluctuation (FX) as there was no M&A impact
during the second quarter
Operating Segment
Information
- Merchant Solutions: As compared to the prior year period,
revenue grew by nearly $400 million, or 45%, to approximately $1.2
billion, which includes 31% eCommerce revenue growth. On an organic
basis, which reflects the impact of FX, revenue increased 41%.
Adjusted EBITDA margin expanded 910 basis points over the prior
year period to 50%, primarily reflecting high contribution margins
from new revenue as well as ongoing synergies. As compared to the
prior period in 2019, Merchant revenue grew 9% during the second
quarter, including 12% growth in the U.S., proforma for the
Worldpay acquisition. We expect Merchant revenue growth to further
accelerate into the mid-to-high teens in the second half of the
year as compared to the 2019 periods on a proforma basis, primarily
driven by continued recovery in International revenue and
discretionary verticals, like Travel & Airlines.
- Banking Solutions: As compared to the prior year period,
revenue grew by more than $100 million, or 8%, to approximately
$1.6 billion. Banking’s strong second quarter performance is
primarily due to strong new sales execution and a growing backlog
of revenue under contract. On an organic basis, which reflects the
impact of FX, revenue increased 7%. Adjusted EBITDA margin expanded
410 basis points over the prior year period to 46%, primarily
reflecting high contribution margins from new revenue as well as
ongoing synergies.
- Capital Market Solutions: As compared to the prior year period,
revenue grew by nearly $40 million, or 6%, to $630 million. Capital
Market’s strong second quarter performance is primarily due to
robust new sales of our end-to-end SAAS solutions. On an organic
basis, which reflects the impact of FX, revenue increased 4%.
Adjusted EBITDA margin expanded 100 basis points over the prior
year period to 46%, primarily reflecting high contribution margins
from new revenue.
Integration Update
The Company achieved synergies related to the Worldpay
acquisition, exiting the second quarter of 2021 as follows:
- Revenue synergies of approximately $450 million on an annual
run-rate basis, including strong cross-selling wins spanning the
Premium Payback loyalty network, digital banking, issuer, core
software and data wins.
- Reflecting strong attainment of revenue synergies to date, the
Company increased its 2021 revenue synergy target. Annual run-rate
revenue synergies are expected to be approximately $700 million
exiting 2021, an increase of $100 million above the previous target
of $600 million.
- Cost synergies of approximately $850 million, including
approximately $450 million of operating expense synergies. Annual
run-rate cost synergies are expected to be approximately $900
million exiting 2021, including operating expense synergies of
approximately $500 million.
Balance Sheet and Cash
Flows
As of June 30, 2021, debt outstanding totaled $19.4 billion.
Second quarter net cash provided by operating activities was $1.0
billion, and free cash flow was $1.0 billion.
FIS paid dividends of $242 million and repurchased approximately
2.7 million shares during the quarter for $400 million.
Third Quarter and Full-Year 2021 GAAP
Guidance
($ millions, except share data)
3Q 2021
FY 2021
Revenue
$3,490 - $3,520
$13,900 - $14,000
Diluted EPS
$0.40 - $0.50
$1.20 - $1.45
Third Quarter and Full-Year 2021
Non-GAAP Guidance
($ millions, except share data)
3Q 2021
FY 2021
Revenue (GAAP)
$3,490 - $3,520
$13,900 - $14,000
Adjusted EPS
$1.66 - $1.69
$6.45 - $6.60
COVID-19 Update
We have continued to prioritize investments in solutions and
services that help address the needs of our clients throughout the
ongoing global pandemic in order to increase the Company’s
potential to accelerate revenue growth. During the second quarter,
the Company’s revenue growth continued to accelerate across all
three operating segments as COVID-19’s impact on our financial
results lessened due to the gradual opening of markets.
Webcast
FIS will sponsor a live webcast of its earnings conference call
with the investment community beginning at 8:30 a.m. (EDT) Tuesday,
August 3, 2021. To access the webcast, go to the Investor Relations
section of FIS’ homepage, www.fisglobal.com. A replay will be
available after the conclusion of the live webcast.
About FIS
FIS is a leading provider of technology solutions for merchants,
banks and capital markets firms globally. Our employees are
dedicated to advancing the way the world pays, banks and invests by
applying our scale, deep expertise and data-driven insights. We
help our clients use technology in innovative ways to solve
business-critical challenges and deliver superior experiences for
their customers. Headquartered in Jacksonville, Florida, FIS is a
Fortune 500® company and is a member of Standard & Poor’s 500®
Index.
To learn more, visit www.fisglobal.com. Follow FIS on Facebook,
LinkedIn and Twitter (@FISGlobal).
FIS Use of Non-GAAP Financial
Information
Generally Accepted Accounting Principles (GAAP) is the term used
to refer to the standard framework of guidelines for financial
accounting in the United States. GAAP includes the standards,
conventions, and rules accountants follow in recording and
summarizing transactions and in the preparation of financial
statements. In addition to reporting financial results in
accordance with GAAP, we have provided certain non-GAAP financial
measures.
These non-GAAP measures include constant currency revenue,
organic revenue growth, adjusted EBITDA, adjusted EBITDA margin,
adjusted net earnings, adjusted EPS, and free cash flow. These
non-GAAP measures may be used in this release and/or in the
attached supplemental financial information.
We believe these non-GAAP measures help investors better
understand the underlying fundamentals of our business. As further
described below, the non-GAAP revenue and earnings measures
presented eliminate items management believes are not indicative of
FIS’ operating performance. The constant currency and organic
revenue growth measures adjust for the effects of exchange rate
fluctuations, while organic revenue growth also adjusts for
acquisitions and divestitures and excludes revenue from Corporate
and Other, giving investors further insight into our performance.
Finally, free cash flow provides further information about the
ability of our business to generate cash. For these reasons,
management also uses these non-GAAP measures in its assessment and
management of FIS’ performance.
As described below, our Adjusted EBITDA and Adjusted Net
Earnings measures also exclude incremental and direct costs
resulting from the COVID-19 pandemic. Management believes that this
adjustment may help investors understand the longer-term
fundamentals of our underlying business.
Constant currency revenue represents reported operating
segment revenue excluding the impact of fluctuations in foreign
currency exchange rates in the current period.
Organic revenue growth is constant currency revenue, as
defined above, for the current period compared to an adjusted
revenue base for the prior period, which is adjusted to add
pre-acquisition revenue of acquired businesses for a portion of the
prior year matching the portion of the current year for which the
business was owned, and subtract pre-divestiture revenue for
divested businesses for the portion of the prior year matching the
portion of the current year for which the business was not owned,
for any acquisitions or divestitures by FIS. When referring to
organic revenue growth, revenues from our Corporate and Other
segment, which is comprised of revenue from non-strategic
businesses, are excluded.
Adjusted EBITDA reflects net earnings before interest,
other income (expense), taxes, equity method investment earnings
(loss), and depreciation and amortization, and excludes certain
costs and other transactions that management deems non-operational
in nature, the removal of which improves comparability of operating
results across reporting periods. It also excludes incremental and
direct costs resulting from the COVID-19 pandemic. This measure is
reported to the chief operating decision maker for purposes of
making decisions about allocating resources to the segments and
assessing their performance. For this reason, adjusted EBITDA, as
it relates to our segments, is presented in conformity with
Accounting Standards Codification 280, Segment Reporting, and is
excluded from the definition of non-GAAP financial measures under
the Securities and Exchange Commission's Regulation G and Item
10(e) of Regulation S-K.
Adjusted EBITDA margin reflects adjusted EBITDA, as
defined above, divided by revenue.
Adjusted net earnings excludes the impact of certain
costs and other transactions which management deems non-operational
in nature, the removal of which improves comparability of operating
results across reporting periods. It also excludes the impact of
acquisition-related purchase accounting amortization and equity
method investment earnings (loss), both of which are recurring. It
also excludes incremental and direct costs resulting from the
COVID-19 pandemic.
Adjusted EPS reflects adjusted net earnings, as defined
above, divided by weighted average diluted shares outstanding.
Free cash flow reflects net cash provided by operating
activities, adjusted for the net change in settlement assets and
obligations and excluding certain transactions that are closely
associated with non-operating activities or are otherwise
non-operational in nature and not indicative of future operating
cash flows, including incremental and direct costs resulting from
the COVID-19 pandemic, less capital expenditures excluding capital
expenditures related to the Company’s new headquarters. Free cash
flow does not represent our residual cash flow available for
discretionary expenditures, since we have mandatory debt service
requirements and other non-discretionary expenditures that are not
deducted from the measure.
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 measures. Further, FIS’
non-GAAP measures may be calculated differently from similarly
titled measures of other companies. Reconciliations of these
non-GAAP measures to related GAAP measures, including footnotes
describing the specific adjustments, are provided in the attached
schedules and in the Investor Relations section of the FIS website,
www.fisglobal.com.
Forward-Looking
Statements
This earnings release and today’s webcast contain
“forward-looking statements” within the meaning of the U.S. federal
securities laws. Statements that are not historical facts,
including statements about anticipated financial outcomes,
including any earnings guidance or projections of the Company,
projected revenue or expense synergies, business and market
conditions, outlook, foreign currency exchange rates, deleveraging
plans, expected dividends and share repurchases, the Company’s
sales pipeline and anticipated profitability and growth, as well as
other statements about our expectations, beliefs, intentions, or
strategies regarding the future, or other characterizations of
future events or circumstances, are forward-looking statements.
These statements relate to future events and our future results and
involve a number of risks and uncertainties. Forward-looking
statements are based on management’s beliefs as well as assumptions
made by, and information currently available to, management.
Actual results, performance or achievement could differ
materially from those contained in these forward-looking
statements. The risks and uncertainties to which forward-looking
statements are subject include the following, without
limitation:
- the outbreak or recurrence of the novel coronavirus
(“COVID-19”) and measures to reduce its spread, including the
impact of governmental or voluntary actions such as business
shutdowns and stay-at-home orders in certain geographies;
- the duration, including any recurrence, of the COVID-19
pandemic and its impacts, including reductions in consumer and
business spending, and instability of the financial markets in
heavily impacted areas across the globe;
- the economic and other impacts of COVID-19 on our clients which
affect the sales of our solutions and services and the
implementation of such solutions;
- the risk of losses in the event of defaults by merchants (or
other parties) to which we extend credit in our card settlement
operations or in respect of any chargeback liability, either of
which could adversely impact liquidity and results of
operations;
- changes in general economic, business and political conditions,
including those resulting from COVID-19 or other pandemics,
intensified international hostilities, acts of terrorism, changes
in either or both the United States and international lending,
capital and financial markets and currency fluctuations;
- the risk that the Worldpay transaction will not provide the
expected benefits or that we will not be able to achieve the
revenue synergies anticipated;
- the risk that other acquired businesses will not be integrated
successfully or that the integration will be more costly or more
time-consuming and complex than anticipated;
- the risk that cost savings and other synergies anticipated to
be realized from other acquisitions may not be fully realized or
may take longer to realize than expected;
- the risks of doing business internationally;
- the effect of legislative initiatives or proposals, statutory
changes, governmental or other applicable regulations and/or
changes in industry requirements, including privacy and
cybersecurity laws and 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 unauthorized access, theft, corruption
or loss of personal information and computer viruses and other
malware affecting our software or platforms, and the reactions of
customers, card associations, government regulators and others to
any such events;
- the risk that implementation of software, including software
updates, for customers or at customer locations or employee error
in monitoring our software and platforms may result in the
corruption or loss of data or customer information, interruption of
business operations, outages, exposure to liability claims or loss
of customers;
- the reaction of current and potential customers to
communications from us or regulators regarding information
security, risk management, internal audit or other matters;
- the risk that policies and resulting actions of the current
administration in the U.S. may result in additional regulations and
executive orders, as well as additional regulatory and tax
costs;
- competitive pressures on pricing related to the decreasing
number of community banks in the U.S., the development of new
disruptive technologies competing with one or more of our
solutions, increasing presence of international competitors in the
U.S. market and the entry into the market by global banks and
global companies with respect to certain competitive solutions,
each of which may have the impact of unbundling individual
solutions from a comprehensive suite of solutions we provide to
many of our customers;
- the failure to innovate in order to keep up with new emerging
technologies, which could impact our solutions and our ability to
attract new, or retain existing, customers;
- an operational or natural disaster at one of our major
operations centers;
- failure to comply with applicable requirements of payment
networks or changes in those requirements;
- fraud by merchants or bad actors; and
- other risks detailed in the “Risk Factors” and other sections
of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, in our quarterly reports on Form 10-Q and in our
other filings with the Securities and Exchange Commission.
Other unknown or unpredictable factors also could have a
material adverse effect on our business, financial condition,
results of operations and prospects. Accordingly, readers should
not place undue reliance on these forward-looking statements. These
forward-looking statements are inherently subject to uncertainties,
risks and changes in circumstances that are difficult to predict.
Except as required by applicable law or regulation, we do not
undertake (and expressly disclaim) any obligation and do not intend
to publicly update or review any of these forward-looking
statements, whether as a result of new information, future events
or otherwise.
Fidelity National Information
Services, Inc.
Earnings Release Supplemental
Financial Information
August 3, 2021
Exhibit A
Condensed Consolidated Statements of
Earnings (Loss) - Unaudited for the three and six months ended June
30, 2021 and 2020
Exhibit B
Condensed Consolidated Balance Sheets -
Unaudited as of June 30, 2021 and December 31, 2020
Exhibit C
Condensed Consolidated Statements of Cash
Flows - Unaudited for the six months ended June 30, 2021 and
2020
Exhibit D
Supplemental Non-GAAP Financial
Information - Unaudited for the three and six months ended June 30,
2021 and 2020
Exhibit E
Supplemental GAAP to Non-GAAP
Reconciliations - Unaudited for the three and six months ended June
30, 2021 and 2020
Exhibit F
Supplemental GAAP to Non-GAAP
Reconciliations on Guidance - Unaudited for the three months ended
September 30, 2021 and year ended December 31, 2021
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS (LOSS)— UNAUDITED
(In millions, except per share
amounts)
Exhibit A
Three months ended June 30,
Six months ended June 30,
2021
2020
2021
2020
Revenue
$
3,475
$
2,962
$
6,699
$
6,039
Cost of revenue
2,135
2,046
4,253
4,134
Gross profit
1,340
916
2,446
1,905
Selling, general, and administrative
expenses
977
870
1,983
1,751
Operating income
363
46
463
154
Other income (expense):
Interest expense, net
(48
)
(88
)
(122
)
(167
)
Other income (expense), net
324
74
(170
)
34
Total other income (expense), net
276
(14
)
(292
)
(133
)
Earnings before income taxes and equity
method investment earnings (loss)
639
32
171
21
Provision (benefit) for income taxes
302
4
205
(27
)
Equity method investment earnings
(loss)
5
(7
)
6
(8
)
Net earnings (loss)
342
21
(28
)
40
Net (earnings) loss attributable to
noncontrolling interest
(1
)
(2
)
(4
)
(5
)
Net earnings (loss) attributable to FIS
common stockholders
$
341
$
19
$
(32
)
$
35
Net earnings (loss) per share-basic
attributable to FIS common stockholders
$
0.55
$
0.03
$
(0.05
)
$
0.06
Weighted average shares
outstanding-basic
619
618
620
617
Net earnings (loss) per share-diluted
attributable to FIS common stockholders
$
0.55
$
0.03
$
(0.05
)
$
0.06
Weighted average shares
outstanding-diluted
624
625
620
625
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS — UNAUDITED
(In millions, except per share
amounts)
Exhibit B
June 30, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
1,301
$
1,959
Settlement deposits and merchant float
3,005
3,252
Trade receivables, net
3,466
3,314
Settlement receivables
729
662
Other receivables
380
317
Prepaid expenses and other current
assets
557
394
Total current assets
9,438
9,898
Property and equipment, net
864
887
Goodwill
53,191
53,268
Intangible assets, net
12,758
13,928
Software, net
3,398
3,370
Other noncurrent assets
1,655
1,574
Deferred contract costs, net
984
917
Total assets
$
82,288
$
83,842
LIABILITIES, REDEEMABLE
NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable, accrued and other
liabilities
$
2,376
$
2,482
Settlement payables
4,840
4,934
Deferred revenue
923
881
Short-term borrowings
2,873
2,750
Current portion of long-term debt
482
1,314
Total current liabilities
11,494
12,361
Long-term debt, excluding current
portion
16,062
15,951
Deferred income taxes
4,239
4,017
Other noncurrent liabilities
1,865
1,967
Deferred revenue
49
59
Total liabilities
33,709
34,355
Redeemable noncontrolling interest
175
174
Equity:
FIS stockholders’ equity:
Preferred stock $0.01 par value
—
—
Common stock $0.01 par value
6
6
Additional paid in capital
46,274
45,947
Retained earnings
2,921
3,440
Accumulated other comprehensive earnings
(loss)
249
57
Treasury stock, at cost
(1,058
)
(150
)
Total FIS stockholders’ equity
48,392
49,300
Noncontrolling interest
12
13
Total equity
48,404
49,313
Total liabilities, redeemable
noncontrolling interest and equity
$
82,288
$
83,842
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS — UNAUDITED
(In millions)
Exhibit C
Six months ended June 30,
2021
2020
Cash flows from operating activities:
Net earnings (loss)
$
(28
)
$
40
Adjustment to reconcile net earnings
(loss) to net cash provided by operating activities:
Depreciation and amortization
1,924
1,830
Amortization of debt issue costs
15
16
Loss (gain) on sale of businesses,
investments and other
(230
)
3
Loss on extinguishment of debt
528
—
Stock-based compensation
241
125
Deferred income taxes
87
(118
)
Net changes in assets and liabilities, net
of effects from acquisitions and foreign currency:
Trade and other receivables
(171
)
105
Settlement activity
10
172
Prepaid expenses and other assets
(308
)
(181
)
Deferred contract costs
(212
)
(252
)
Deferred revenue
35
22
Accounts payable, accrued liabilities and
other liabilities
(27
)
(149
)
Net cash provided by operating
activities
1,864
1,613
Cash flows from investing
activities:
Additions to property and equipment
(143
)
(110
)
Additions to software
(470
)
(457
)
Acquisitions, net of cash acquired
—
(469
)
Net proceeds from sale of businesses and
investments
367
—
Other investing activities, net
(77
)
90
Net cash provided by (used in) investing
activities
(323
)
(946
)
Cash flows from financing
activities:
Borrowings
26,969
27,025
Repayment of borrowings and other
financing obligations
(27,696
)
(27,196
)
Debt issuance costs
(74
)
—
Proceeds from stock issued under
stock-based compensation plans
76
274
Treasury stock activity
(908
)
(49
)
Dividends paid
(486
)
(433
)
Other financing activities, net
(136
)
(18
)
Net cash provided by (used in) financing
activities
(2,255
)
(397
)
Effect of foreign currency exchange rate
changes on cash
(31
)
(23
)
Net increase (decrease) in cash and cash
equivalents
(745
)
247
Cash and cash equivalents, beginning of
period
4,030
3,211
Cash and cash equivalents, end of
period
$
3,285
$
3,458
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP ORGANIC
REVENUE GROWTH — UNAUDITED
(In millions)
Exhibit D
Three months ended June 30,
2021
2020
Constant
Currency
Organic
Revenue
FX
Revenue
Revenue
Growth (1)
Merchant Solutions
$
1,177
$
(32
)
$
1,145
$
812
41
%
Banking Solutions
1,578
(13
)
1,566
1,462
7
%
Capital Market Solutions
630
(12
)
618
593
4
%
Corporate and Other
90
(2
)
88
95
Total
$
3,475
$
(59
)
$
3,417
$
2,962
16
%
Six months ended June 30,
2021
2020
Constant
Currency
Organic
Revenue
FX
Revenue
Revenue
Growth (1)
Merchant Solutions
$
2,143
$
(54
)
$
2,089
$
1,747
20
%
Banking Solutions
3,119
(17
)
3,102
2,906
7
%
Capital Market Solutions
1,255
(22
)
1,233
1,190
4
%
Corporate and Other
182
(2
)
180
196
Total
$
6,699
$
(95
)
$
6,604
$
6,039
10
%
Amounts in tables may not sum or calculate
due to rounding.
(1)
Organic growth excludes the impact of
foreign currency exchange rates in the current period, acquisition
or divestiture impact from the prior period, as applicable, and
Corporate and Other revenue from the current and prior periods.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP CASH
FLOW MEASURES — UNAUDITED
(In millions)
Exhibit D (continued)
Three months ended
Six months ended
June 30, 2021
June 30, 2021
Net cash provided by operating
activities
$
1,028
$
1,864
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
149
267
Settlement activity
112
(10
)
Adjusted cash flows from operations
1,289
2,121
Capital expenditures (2)
(284
)
(560
)
Free cash flow
$
1,005
$
1,561
Three months ended
Six months ended
June 30, 2020
June 30, 2020
Net cash provided by operating
activities
$
1,231
$
1,613
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
208
299
Settlement activity
(541
)
(172
)
Adjusted cash flows from operations
898
1,740
Capital expenditures (2)
(243
)
(546
)
Free cash flow
$
655
$
1,194
Free cash flow reflects adjusted cash
flows from operations less capital expenditures (additions to
property and equipment and additions to software, excluding capital
spend related to the construction of our new headquarters). Free
cash flow does not represent our residual cash flows available for
discretionary expenditures, since we have mandatory debt service
requirements and other non-discretionary expenditures that are not
deducted from the measure.
(1)
Adjusted cash flows from operations and
free cash flow for the three and six months ended June 30, 2021 and
2020 exclude cash payments for certain acquisition, integration and
other costs (see Note 2 to Exhibit E), net of related tax impact.
The related tax impact totaled $25 million and $32 million for the
three months and $45 million and $47 million for the six months
ended June 30, 2021 and 2020, respectively.
(2)
Capital expenditures for free cash flow
exclude capital spend related to the construction of our new
headquarters totaling $30 million and $18 million for the three
months and $53 million and $21 million for the six months ended
June 30, 2021 and 2020, respectively.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit E
Three months ended June 30,
Six months ended June 30,
2021
2020
2021
2020
Net earnings (loss) attributable to FIS
common stockholders
$
341
$
19
$
(32
)
$
35
Provision (benefit) for income taxes
302
4
205
(27
)
Interest expense, net
48
88
122
167
Other, net
(328
)
(65
)
168
(21
)
Operating income, as reported
363
46
463
154
Depreciation and amortization, excluding
purchase accounting amortization
297
237
575
468
Non-GAAP adjustments:
Purchase accounting amortization (1)
675
678
1,349
1,362
Acquisition, integration and other costs
(2)
185
196
440
420
Adjusted EBITDA
$
1,520
$
1,157
$
2,827
$
2,404
See Notes to Exhibit E.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit E (continued)
Three months ended June 30,
Six months ended June 30,
2021
2020
2021
2020
Earnings before income taxes and equity
method investment earnings (loss)
$
639
$
32
$
171
$
21
(Provision) benefit for income taxes
(302
)
(4
)
(205
)
27
Equity method investment earnings
(loss)
5
(7
)
6
(8
)
Net (earnings) loss attributable to
noncontrolling interest
(1
)
(2
)
(4
)
(5
)
Net earnings (loss) attributable to FIS
common stockholders
341
19
(32
)
35
Non-GAAP adjustments:
Purchase accounting amortization (1)
675
678
1,349
1,362
Acquisition, integration and other costs
(2)
185
202
440
426
Non-operating (income) expense (3)
(324
)
(74
)
170
(34
)
Equity method investment (earnings) loss
(4)
(5
)
7
(6
)
8
Tax rate change (5)
178
—
178
—
(Provision) benefit for income taxes on
non-GAAP adjustments
(46
)
(114
)
(282
)
(277
)
Total non-GAAP adjustments
663
699
1,849
1,485
Adjusted net earnings
$
1,004
$
718
$
1,817
$
1,520
Net earnings per share-diluted
attributable to FIS common stockholders
$
0.55
$
0.03
$
(0.05
)
$
0.06
Non-GAAP adjustments:
Purchase accounting amortization (1)
1.08
1.08
2.16
2.18
Acquisition, integration and other costs
(2)
0.30
0.32
0.70
0.68
Non-operating (income) expense (3)
(0.52
)
(0.12
)
0.27
(0.05
)
Equity method investment (earnings) loss
(4)
(0.01
)
0.01
(0.01
)
0.01
Tax rate change (5)
0.29
—
0.28
—
(Provision) benefit for income taxes on
non-GAAP adjustments
(0.07
)
(0.18
)
(0.45
)
(0.44
)
Adjusted net earnings per share-diluted
attributable to FIS common stockholders
$
1.61
$
1.15
$
2.91
$
2.43
Weighted average shares
outstanding-diluted (6)
624
625
625
625
Amounts in table may not sum or calculate
due to rounding.
See Notes to Exhibit E.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit E (continued)
Notes to Unaudited - Supplemental GAAP
to Non-GAAP Reconciliations for the three and six months ended June
30, 2021 and 2020.
The adjustments are as follows:
(1)
This item represents purchase price
amortization expense on all intangible assets acquired through
various Company acquisitions, including customer relationships,
contract value, trademarks and tradenames, and technology assets.
The Company has excluded the impact of this amortization expense as
such amounts can be significantly impacted by the timing and/or
size of acquisitions. Although the Company excludes these amounts
from its non-GAAP expenses, the Company believes that it is
important for investors to understand that such intangible assets
contribute to revenue generation. Amortization of assets that
relate to past acquisitions will recur in future periods until such
assets have been fully amortized. Any future acquisitions may
result in the amortization of additional intangible assets.
(2)
This item represents acquisition and
integration costs primarily related to the acquisition of Worldpay
and certain other costs including those associated with data center
consolidation activities of totaling $12 million and $22 million
for the three months and $28 million and $40 million for the six
months ended June 30, 2021 and 2020, respectively. The Company also
recorded incremental charges directly related to COVID-19 of $10
million and $12 million for the three months and $19 million and
$15 million for the six months ended June 30, 2021 and 2020,
respectively. For the six months ended June 30, 2021, this item
also includes $104 million in accelerated stock compensation
expense to reflect the impact of establishing a Qualified
Retirement Equity Program that modified unvested equity awards
outstanding at January 1, 2021.
(3)
Non-operating (income) expense primarily
consists of other income and expense items outside of the Company's
operating activities, including fair value adjustments on certain
non-operating assets and liabilities and foreign currency
transaction remeasurement gains and losses. For the three and six
months ended June 30, 2021, this item also includes $225 million
related to the gain on the sale of our equity ownership interest in
Cardinal Holdings, LP. In addition, for the six months ended June
30, 2021, this item includes loss on extinguishment of debt of
approximately $528 million relating to tender premiums, make-whole
amounts, and fees; the write-off of unamortized bond discounts and
debt issuance costs; and losses on related derivative
instruments.
(4)
This item represents our equity method
investment earnings or loss and was predominantly due to our equity
ownership interest in Cardinal Holdings, LP, which was sold on
April 29, 2021.
(5)
This item represents the one-time net
remeasurement of certain deferred tax liabilities due to the
increase in the U.K. corporate statutory tax rate from 19% to 25%
effective April 1, 2023, enacted on June 10, 2021.
(6)
For the six months ended June 30, 2021,
Adjusted net earnings is a gain, while the corresponding GAAP
amount for the period is a loss. As a result, in calculating
Adjusted net earnings per share-diluted for this period, the
weighted average shares outstanding-diluted amount of approximately
625 million shares used in the calculation includes approximately 5
million shares that in accordance with GAAP are excluded from the
calculation of the GAAP Net loss per share-diluted for the period,
due to their anti-dilutive impact.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit F
Three months ended
Year ended
September 30, 2021
December 31, 2021
Low
High
Low
High
Net earnings per share-diluted
attributable to FIS common stockholders
$
0.40
$
0.50
$
1.20
$
1.45
Estimated adjustments (1)
1.26
1.19
5.25
5.15
Adjusted net earnings per share-diluted
attributable to FIS common stockholders
$
1.66
$
1.69
$
6.45
$
6.60
(1)
Estimated adjustments include purchase
accounting amortization, acquisition, integration and other costs,
equity method investment earnings (loss) and other items, net of
tax impact.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005294/en/
Ellyn Raftery, 904.438.6083 Chief Marketing Officer FIS Global
Marketing and Corporate Communications
Ellyn.Raftery@fisglobal.com
Nathan Rozof, CFA, 904.438.6918 Executive Vice President FIS
Corporate Finance and Investor Relations
Nathan.Rozof@fisglobal.com
Fidelity National Inform... (NYSE:FIS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Fidelity National Inform... (NYSE:FIS)
Historical Stock Chart
From Apr 2023 to Apr 2024