- Accelerated revenue growth sequentially in Banking and Capital
Markets
- Achieved annual run-rate revenue synergies in excess of $200
million and annual run-rate expense synergies in excess of $750
million, including annual run-rate operating expense synergies of
$400 million
- Generated net cash provided by operating activities of $1,417
million and $4,442 million and free cash flow of $977 million and
$3,037 million in the quarter and full-year, respectively
- Announces first quarter and full-year 2021 guidance
FIS® (NYSE:FIS), a global leader in financial services
technology, today reported its fourth quarter and full-year 2020
results.
“A year into the COVID-19 pandemic, I’m proud of how FIS has
stood firm in support of our clients, colleagues and communities,”
said Gary Norcross, chairman, president and chief executive
officer, FIS. “The strength of our strategy and our continued
investments in innovation are helping our clients rebound and
thrive in an increasingly digital financial world. These successes
combined with our operational efficiency gains are also delivering
long-term value to our shareholders.”
Fourth Quarter 2020
On a GAAP basis, consolidated revenue decreased 1% to $3,316
million, primarily due to negative consumer spending trends
associated with the ongoing COVID-19 pandemic. Net earnings
attributable to common stockholders were $103 million or $0.16 per
diluted share.
On an organic basis, revenue was flat as compared to the prior
year period, primarily due to negative consumer spending trends
associated with the ongoing COVID-19 pandemic. Adjusted EBITDA
margin expanded by 60 basis points (bps) over the prior year period
to 45.2%, primarily due to short-term cost actions and the
achievement of cost synergies associated with the July 31, 2019
acquisition of Worldpay, Inc. (Worldpay). Adjusted net earnings
were $1,016 million or $1.62 per diluted share.
Organic growth excludes the impact of foreign currency exchange
rates in the current period, acquisition or divestiture impact from
the prior period and beginning this quarter and for the full year,
excludes Corporate and Other revenue from the current and prior
period. Corporate and Other revenue is generated by non-strategic
businesses that we plan to wind down or sell.
($ millions, except per share data,
unaudited)
Three Months Ended December
31,
%
Organic
2020
2019
Change
Growth(1)
Revenue
$
3,316
$
3,341
(1)%
-
Merchant Solutions
1,003
1,090
(8)%
(9)%
Banking Solutions
1,551
1,480
5%
5%
Capital Market Solutions
663
626
6%
3%
Corporate and Other
99
145
(32)%
Adjusted EBITDA
$
1,498
$
1,490
1%
Adjusted EBITDA Margin
45.2
%
44.6
%
60 bps
Net earnings attributable to FIS common
stockholders (GAAP)
$
103
$
(158)
*
Diluted EPS (GAAP)
$
0.16
$
(0.26)
*
Adjusted net earnings
$
1,016
$
977
4%
Adjusted EPS
$
1.62
$
1.57
3%
(1) Organic growth excludes the impact of foreign currency
exchange rates in the current period, acquisition or divestiture
impact from the prior period and Corporate and Other revenue from
the current and prior period.
* Indicates comparison not meaningful
Full-Year 2020
On a GAAP basis, revenue increased 21% to $12,552 million as
compared to the prior year, primarily due to the acquisition of
Worldpay. Net earnings attributable to common stockholders was $158
million or $0.25 per diluted share.
On an organic basis, revenue decreased 1% as compared to the
prior year period, primarily due to negative consumer spending
trends associated with the ongoing COVID-19 pandemic. Adjusted
EBITDA margin expanded by 120 basis points (bps) over the prior
year period to 41.9%, primarily due to the achievement of Worldpay
cost synergies. Adjusted net earnings were $3,423 million or $5.46
per diluted share.
($ millions, except per share data,
unaudited)
Twelve Months Ended December
31,
%
Organic
2020
2019
Change
Growth(1)
Revenue
$
12,552
$
10,333
21%
(1)%
Merchant Solutions
3,767
1,942
*
(9)%
Banking Solutions
5,944
5,592
6%
3%
Capital Market Solutions
2,440
2,318
5%
2%
Corporate and Other
401
481
(17)%
Adjusted EBITDA
$
5,260
$
4,204
25%
Adjusted EBITDA Margin
41.9
%
40.7
%
120 bps
Net earnings attributable to FIS common
stockholders (GAAP)
$
158
$
298
*
Diluted EPS (GAAP)
$
0.25
$
0.66
*
Adjusted net earnings
$
3,423
$
2,530
35%
Adjusted EPS
$
5.46
$
5.61
(3)%
(1) Organic growth excludes the impact of foreign currency
exchange rates in the current period, acquisition or divestiture
impact from the prior period and Corporate and Other revenue from
the current and prior period. * Indicates comparison not
meaningful
Segment Information
- Merchant Solutions: Fourth quarter revenue decreased 8% to
$1,003 million. On an organic basis, revenue decreased 9% compared
to the prior year period, primarily due to negative consumer
spending trends associated with the ongoing COVID-19 pandemic as
well as a headwind of approximately 2% associated with a step-up in
debit card routing revenue synergies achieved in the prior year
period following the Worldpay acquisition. Adjusted EBITDA margin
was 50.9%.
Full-year revenue increased significantly to
$3,767 million, primarily due to the Worldpay acquisition. On an
organic basis, revenue decreased 9% compared to the prior year
period. Adjusted EBITDA margin was 46.5%.
- Banking Solutions: Fourth quarter revenue increased 5% to
$1,551 million. On an organic basis, revenue increased 5% compared
to the prior year period, primarily due to strength in recurring
revenue, partially offset by a headwind of approximately 1.5%
associated with a decline in termination fees. Adjusted EBITDA
margin was 44.4%.
Full-year revenue increased 6% to $5,944
million. On an organic basis, revenue increased 3% compared to the
prior year period. Adjusted EBITDA margin was 43.0%.
- Capital Market Solutions: Fourth quarter revenue increased 6%
to $663 million. On an organic basis, revenue increased 3% compared
to the prior year period, primarily due to strength in recurring
revenue, partially offset by a headwind of approximately 1%
associated with the timing of license renewals. Adjusted EBITDA
margin was 52.2%.
Full-year revenue increased 5% to $2,440
million. On an organic basis, revenue increased 2% compared to the
prior year period. Adjusted EBITDA margin was 47.0%.
- Corporate and Other: Fourth quarter revenue decreased 32% to
$99 million. Adjusted EBITDA loss was $48 million, including $78
million of corporate expenses.
Full-year revenue decreased 17% to $401
million. Adjusted EBITDA loss was $195 million, including $312
million of corporate expenses.
Consistent with historical practice, the
Company regularly assesses its portfolio of assets and reclassified
certain non-strategic businesses from Banking Solutions and Capital
Market Solutions into the Corporate and Other segment. In total,
Corporate and Other revenue represents 3% of fourth quarter and
full-year 2020 revenue, and we plan to wind down or sell these
non-strategic businesses.
Integration Update
The Company achieved annual run-rate synergies related to the
Worldpay acquisition, exiting the fourth quarter of 2020 as
follows:
- Revenue synergies in excess of $200 million on an annual
run-rate basis, including ongoing execution of Premium Payback
distribution, bank referral agreements, geographic expansion and
broad-based cross-selling initiatives. Revenue synergies are
expected to continue to increase and reach approximately $400
million on an annual run-rate basis by the end of 2021 and remain
on track to exceed $550 million on an annual run-rate basis exiting
2022.
- Expense synergies in excess of $750 million on an annual
run-rate basis, including $400 million of operating expense
savings. The Company originally targeted $400 million in expense
synergies by the end of 2022 and exceeded this target more than two
years early. Operating expense synergies are expected to continue
to increase and reach approximately $500 million on an annual
run-rate basis exiting 2021.
Balance Sheet and Cash
Flows
As of December 31, 2020, the Company had $4,600 million of
available liquidity, including $1,959 million of cash and cash
equivalents and $2,641 million of capacity available under its
revolving credit facility. Debt outstanding totaled $20,015 million
with an effective weighted average interest rate of 1.7%.
Fourth quarter net cash provided by operating activities was
$1,417 million, and free cash flow was $977 million or 29% of
revenue. Full-year net cash provided by operating activities was
$4,442 million, and free cash flow was $3,037 million or 24% of
revenue. Additionally, FIS paid dividends of $218 million during
the quarter and $868 million for the full year.
The Company also recently announced an 11% increase to its
annual dividend and a share repurchase authorization for 100
million shares in order to enable ongoing return of capital to its
shareholders.
First Quarter and
Full-Year 2021 GAAP Guidance
($ millions, except share data)
1Q 2021
FY 2021
Revenue
$3,130 - $3,160
$13,500 - $13,700
Diluted EPS
$(0.20) - $(0.05)
$1.50 - $1.95
First Quarter and
Full-Year 2021 Non-GAAP Guidance
($ millions, except share data)
1Q 2021
FY 2021
Revenue (GAAP)
$3,130 - $3,160
$13,500 - $13,700
Adjusted EPS
$1.20 - $1.25
$6.20 - $6.40
COVID-19 Update
COVID-19 continued to impact our financial results in the fourth
quarter of 2020. In certain locations, where government lockdowns
and shelter-in-place orders have been tightened, consumer spending
impacting our Merchant Solutions payments volume and transaction
revenue has been adversely impacted after partially recovering in
the third quarter of 2020. Certain verticals like travel, airlines
and restaurants continue to be significantly impacted. The
Company’s revenue continues to be impacted by reduced payment
processing volumes within our Merchant Solutions segment and, to a
lesser extent, transaction volume within our Banking Solutions
segment. The Company’s liquidity remains strong and improved this
quarter, as noted above.
Webcast
FIS will sponsor a live webcast of its earnings conference call
with the investment community beginning at 8:30 a.m. (EST) Tuesday,
February 9, 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. 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;
- the duration, including any recurrence, of the COVID-19
pandemic and its impacts, including the general impact of an
economic recession, reductions in consumer and business spending,
and instability of the financial markets 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 2020 election results in the U.S. may result in
additional regulation and 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, 2019, 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
February 9, 2021
Exhibit
A
Condensed Consolidated Statements of
Earnings - Unaudited for the three months and years ended
December 31, 2020 and 2019
Exhibit
B
Condensed Consolidated Balance Sheets -
Unaudited as of December 31, 2020 and 2019
Exhibit
C
Condensed Consolidated Statements of Cash
Flows - Unaudited for the years ended December 31, 2020 and
2019
Exhibit
D
Supplemental Non-GAAP Financial
Information - Unaudited for the three months and years ended
December 31, 2020 and 2019
Exhibit
E
Supplemental GAAP to Non-GAAP
Reconciliations - Unaudited for the three months and years ended
December 31, 2020 and 2019
Exhibit
F
Supplemental GAAP to Non-GAAP
Reconciliations on Guidance - Unaudited for the three months ended
March 31, 2021 and year
ended December 31, 2021
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS ON GUIDANCE — UNAUDITED
(In millions, except per share
amounts)
Exhibit A
Three months ended
Years ended
December 31,
December 31,
2020
2019
2020
2019
Revenue
$
3,316
$
3,341
$
12,552
$
10,333
Cost of revenue
2,110
1,986
8,348
6,610
Gross profit
1,206
1,355
4,204
3,723
Selling, general and administrative
expenses
903
1,232
3,516
2,667
Asset impairments
136
—
136
87
Operating income
167
123
552
969
Other income (expense):
Interest expense, net
(82)
(95)
(334)
(337)
Other income (expense), net
17
(211)
48
(219)
Total other income (expense), net
(65)
(306)
(286)
(556)
Earnings (loss) before income taxes and
equity method investment earnings
(loss)
102
(183)
266
413
Provision (benefit) for income taxes
2
(19)
96
100
Equity method investment earnings
(loss)
2
7
(6)
(10)
Net earnings (loss)
102
(157)
164
303
Net (earnings) loss attributable to
noncontrolling interest
1
(1)
(6)
(5)
Net earnings (loss) attributable to FIS
common stockholders
$
103
$
(158)
$
158
$
298
Net earnings (loss) per share-basic
attributable to FIS common stockholders
$
0.17
$
(0.26)
$
0.26
$
0.67
Weighted average shares
outstanding-basic
621
614
619
445
Net earnings (loss) per share-diluted
attributable to FIS common stockholders
$
0.16
$
(0.26)
$
0.25
$
0.66
Weighted average shares
outstanding-diluted
628
614
627
451
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS--UNAUDITED
(In millions, except per share
amounts)
Exhibit B
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
1,959
$
1,152
Settlement deposits and merchant float
3,252
2,882
Trade receivables, net
3,314
3,242
Contract assets
140
124
Settlement receivables
662
647
Other receivables
317
337
Prepaid expenses and other current
assets
254
308
Total current assets
9,898
8,692
Property and equipment, net
887
900
Goodwill
53,268
52,242
Intangible assets, net
13,928
15,798
Software, net
3,370
3,204
Other noncurrent assets
1,574
2,303
Deferred contract costs, net
917
667
Total assets
$
83,842
$
83,806
LIABILITIES, REDEEMABLE
NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable, accrued and other
liabilities
$
2,482
$
2,374
Settlement payables
4,934
4,228
Deferred revenue
881
817
Short-term borrowings
2,750
2,823
Current portion of long-term debt
1,314
140
Total current liabilities
12,361
10,382
Long-term debt, excluding current
portion
15,951
17,229
Deferred income taxes
4,017
4,281
Other noncurrent liabilities
1,967
2,406
Deferred revenue
59
52
Total liabilities
34,355
34,350
Redeemable noncontrolling interest
174
—
Equity:
FIS stockholders’ equity:
Preferred stock $0.01 par value
—
—
Common stock $0.01 par value
6
6
Additional paid in capital
45,947
45,358
Retained earnings
3,440
4,161
Accumulated other comprehensive earnings
(loss)
57
(33)
Treasury stock, at cost
(150)
(52)
Total FIS stockholders’ equity
49,300
49,440
Noncontrolling interest
13
16
Total equity
49,313
49,456
Total liabilities, redeemable
noncontrolling interest and equity
$
83,842
$
83,806
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS — UNAUDITED
(In millions)
Exhibit C
Years ended December 31,
2020
2019
Cash flows from operating
activities:
Net earnings
$
164
$
303
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
3,714
2,444
Amortization of debt issue costs
31
24
Acquisition-related financing foreign
exchange
—
(125)
Asset impairments
136
87
Loss (gain) on sale of businesses,
investments and other
9
18
Loss on extinguishment of debt
—
217
Stock-based compensation
283
402
Deferred income taxes
(206)
(109)
Net changes in assets and liabilities, net
of effects from acquisitions and foreign currency:
Trade and other receivables
(75)
(161)
Contract assets
(14)
17
Settlement activity
862
(165)
Prepaid expenses and other assets
(264)
(129)
Deferred contract costs
(473)
(379)
Deferred revenue
58
40
Accounts payable, accrued liabilities and
other liabilities
217
(74)
Net cash provided by operating
activities
4,442
2,410
Cash flows from investing
activities:
Additions to property and equipment
(263)
(200)
Additions to software
(866)
(628)
Acquisitions, net of cash acquired
(469)
(6,632)
Net proceeds from sale of businesses and
investments
—
49
Other investing activities, net
684
(90)
Net cash provided by (used in) investing
activities
(914)
(7,501)
Cash flows from financing
activities:
Borrowings
47,695
33,352
Repayment of borrowings and other
financing obligations
(49,067)
(24,672)
Debt issuance costs
—
(101)
Proceeds from stock issued under
stock-based compensation plans
332
161
Treasury stock activity
(112)
(453)
Dividends paid
(868)
(656)
Other financing activities, net
(731)
(50)
Net cash provided by (used in) financing
activities
(2,751)
7,581
Effect of foreign currency exchange rate
changes on cash
42
18
Net increase (decrease) in cash and cash
equivalents
819
2,508
Cash and cash equivalents, beginning of
period
3,211
703
Cash and cash equivalents, end of
period
$
4,030
$
3,211
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP ORGANIC
REVENUE GROWTH — UNAUDITED
(In millions)
Exhibit D
Three months ended December
31,
2020
2019
Constant
Currency
In Year
Adjusted
Organic
Revenue
FX
Revenue
Revenue
Adjustments (1)
Base
Growth (2)
Merchant Solutions
$
1,003
$
(7)
$
997
$
1,090
$
—
$
1,090
(9)
%
Banking Solutions
1,551
3
1,554
1,480
—
1,480
5
%
Capital Market Solutions
663
(7)
656
626
10
636
3
%
Corporate and Other
99
—
99
145
—
145
Total
$
3,316
$
(11)
$
3,305
$
3,341
$
10
$
3,352
0
%
Years ended December 31,
2020
2019
Constant
Currency
In Year
Adjusted
Organic
Revenue
FX
Revenue
Revenue
Adjustments (1)
Base
Growth (2)
Merchant Solutions
$
3,767
$
(9)
$
3,758
$
1,942
$
2,171
$
4,113
(9)
%
Banking Solutions
5,944
32
5,976
5,592
200
5,792
3
%
Capital Market Solutions
2,440
(5)
2,435
2,318
68
2,385
2
%
Corporate and Other
401
2
403
481
—
481
Total
$
12,552
$
20
$
12,572
$
10,333
$
2,439
$
12,772
(1)
%
Amounts in table may not sum or calculate due to rounding.
(1) In year adjustments primarily include adding revenue from
the Worldpay acquisition and Virtus acquisition.
(2) Organic growth excludes the impact of foreign currency
exchange rates in the current period, acquisition or divestiture
impact from the prior period and Corporate and Other revenue from
the current and prior period.
Exhibit D (continued)
Three months ended
Year ended
December 31, 2020
December 31, 2020
Net cash provided by operating
activities
$
1,417
$
4,442
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
109
545
Settlement activity
(268)
(862)
Adjusted cash flows from operations
1,258
4,125
Capital expenditures (2)
(281)
(1,088)
Free cash flow
$
977
$
3,037
Three months ended
Year ended
December 31, 2019
December 31, 2019
Net cash provided by operating
activities
$
670
$
2,410
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
96
356
Tax payments on divestitures (3)
—
10
Settlement activity
330
165
Adjusted cash flows from operations
1,096
2,941
Capital expenditures
(284)
(828)
Free cash flow
$
812
$
2,113
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 months and years ended December 31,
2020 and 2019 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 $15 million and
$22 million for the three months and $85 million and $73 million
for years ended December 31, 2020 and 2019, respectively.
(2) Capital expenditures for free cash flow
for the three months and year ended December 31, 2020 exclude $11
million and $41 million, respectively, in capital spend related to
the construction of our new headquarters.
(3) Adjusted cash flows from operations and
free cash flow exclude tax payments made in 2019 related to the
sale of Reliance Trust Company of Delaware and the unwinding of the
Brazilian Venture recognized during 2018.
FIDELITY NATIONAL
INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit E
Three months ended
Years ended
December 31,
December 31,
2020
2019
2020
2019
Net earnings (loss) attributable to FIS
common stockholders
$
103
$
(158)
$
158
$
298
Provision (benefit) for income taxes
2
(19)
96
100
Interest expense, net
82
95
334
337
Other, net
(20)
205
(36)
234
Operating income, as reported
167
123
552
969
Depreciation and amortization, excluding
purchase accounting amortization
258
217
964
809
Non-GAAP adjustments:
Purchase accounting amortization (1)
694
740
2,750
1,635
Acquisition, integration and other costs
(2)
243
410
858
704
Asset impairments (3)
136
—
136
87
Adjusted EBITDA
$
1,498
$
1,490
$
5,260
$
4,204
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
Years ended
December 31,
December 31,
2020
2019
2020
2019
Earnings (loss) before income taxes and
equity method
investment earnings (loss)
$
102
$
(183)
$
266
$
413
(Provision) benefit for income taxes
(2)
19
(96)
(100)
Equity method investment earnings
(loss)
2
7
(6)
(10)
Net (earnings) loss attributable to
noncontrolling interest
1
(1)
(6)
(5)
Net earnings (loss) attributable to FIS
common stockholders
103
(158)
158
298
Non-GAAP adjustments:
Purchase accounting amortization (1)
694
740
2,750
1,635
Acquisition, integration and other costs
(2)
201
410
822
768
Asset impairments (3)
136
—
136
87
Loss (gain) on sale of businesses and
investments (4)
—
—
—
6
Debt financing activities (5)
—
—
—
98
Non-operating (income) expense (6)
(17)
211
(48)
47
Equity method investment (earnings) loss
(7)
(2)
(7)
6
10
Tax rate change (8)
—
—
103
—
(Provision) benefit for income taxes on
non-GAAP adjustments
(99)
(219)
(504)
(419)
Total non-GAAP adjustments
913
1,135
3,265
2,232
Adjusted net earnings
$
1,016
$
977
$
3,423
$
2,530
Net earnings (loss) per share-diluted
attributable to FIS
common stockholders
$
0.16
$
(0.26)
$
0.25
$
0.66
Non-GAAP adjustments:
Purchase accounting amortization (1)
1.11
1.19
4.39
3.63
Acquisition, integration and other costs
(2)
0.32
0.66
1.31
1.70
Asset impairments (3)
0.22
—
0.22
0.19
Loss (gain) on sale of businesses and
investments (4)
—
—
—
0.01
Debt financing activities (5)
—
—
—
0.22
Non-operating (income) expense (6)
(0.03)
0.34
(0.08)
0.10
Equity method investment (earnings) loss
(7)
—
(0.01)
0.01
0.02
Tax rate change (8)
—
—
0.16
—
(Provision) benefit for income taxes on
non-GAAP adjustments
(0.16)
(0.35)
(0.80)
(0.93)
Adjusted net earnings per share-diluted
attributable to FIS
common stockholders
$
1.62
$
1.57
$
5.46
$
5.61
Weighted average shares
outstanding-diluted (9)
628
623
627
451
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 months and years ended December 31,
2020 and 2019.
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 future 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 $28 million and $20 million for the three months and
$88 million and $70 million for the years ended December 31, 2020
and 2019, respectively, and incremental charges directly related to
COVID-19 of $15 million and $71 million for the three months and
year ended December 31, 2020, respectively.
(3) For the three months and year ended December 31, 2020, this
item primarily represents impairment of goodwill related to certain
non-strategic businesses in the Corporate and Other segment and
certain long-lived assets related to reducing office space. For the
year ended December 31, 2019, this item primarily represents
impairment of certain software assets resulting from the Company's
net realizable value analysis.
(4) This item represents the net pre-tax loss (gain) on sale of
businesses and investments during the year ended December 31,
2019.
(5) This item primarily represents the non-cash foreign currency
impact of non-hedged Euro- and Pound Sterling-denominated notes
issued during the three months ended June 30, 2019 to finance the
Worldpay acquisition.
(6) Non-operating (income) expense primarily consists of other
income and expense items outside of the Company's operating
activities. For the three months and year ended December 31, 2020,
this item primarily represents the fair value adjustment on certain
non-operating assets and liabilities and foreign currency
transaction remeasurement gains and losses. The year ended December
31, 2020 also includes the pending settlement of the Reliance Trust
claims described in our Commitments and Contingencies note in our
annual report on Form 10-K. For the three months ended December 31,
2019, this item primarily represents a pre-tax charge of
approximately $217 million in tender premiums and fees as well as
the write-off of previously capitalized debt issuance costs on the
early redemption of approximately $3.0 billion in aggregate
principal of our senior notes. The year ended December 31, 2019
also includes the non-cash foreign currency gain on non-hedged
Euro- and Pound Sterling-denominated notes to finance the Worldpay
acquisition.
(7) This item represents our equity method investment earnings
or loss and is predominantly due to our equity ownership interest
in Cardinal Holdings, LP.
(8) 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 17% to 19% enacted on July 22,
2020.
(9) For the three months ended December 31, 2019, 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 623 million shares that
we use in the calculation includes approximately 9 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 ON GUIDANCE — UNAUDITED
Exhibit F
Three months Ended
Year ended
March 31, 2021
December 31, 2021
Low
High
Low
High
Net earnings per share-diluted
attributable to FIS common stockholders
$
(0.20)
$
(0.05)
$
1.50
$
1.95
Estimated adjustments (1)
1.40
1.30
4.70
4.45
Adjusted net earnings per share-diluted
attributable to FIS common stockholders
$
1.20
$
1.25
$
6.20
$
6.40
(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/20210209005316/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
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