JACKSONVILLE, Fla., Feb. 15 /PRNewswire-FirstCall/ -- Fidelity
National Information Services, Inc. (NYSE:FIS) announced today that
it expects pro forma full year 2006 diluted earnings per share of
$1.50 to $1.55, compared to $1.28 pro forma diluted earnings per
share in 2005, and pro forma diluted cash earnings per share of
$2.11 to $2.17, compared to $1.92 pro forma diluted cash earnings
per share in 2005. The company's outlook is based on the following
assumptions: -- Revenue growth of 4% to 6% over $3.9 billion
combined revenue in 2005. -- EBITDA growth of 9% to 11% over $1.0
billion pro forma combined EBITDA in 2005. -- Capital expenditures
of approximately $225 million to $275 million. -- Average weighted
diluted common shares outstanding of approximately 197 million. --
An effective tax rate of approximately 38.3%. -- Free cash flow of
approximately $475 million to $525 million. The merger between
Fidelity National Information Services, Inc. and Certegy Inc. was
effective February 1, 2006. Projected pro forma results for 2006
will include full year 2006 results for both companies, and will
exclude all merger related expenses and costs incurred in
conjunction with Certegy's previously announced potential joint
venture in Brazil. Also excluded will be approximately $24.5
million pre-tax expense associated with the vesting of certain FIS
performance based options issued in conjunction with the
recapitalization and sale of minority interests by FIS in March
2005, as described in Certegy's proxy statement filed with the
Securities and Exchange Commission on December 22, 2005. On a GAAP
basis, which will exclude January results for Certegy and include
the aforementioned stock option expense and joint venture costs,
the company expects full year 2006 diluted earnings per share of
$1.39 to $1.44. 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 other
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. Reconciliations between the
aforementioned pro forma, non-GAAP and GAAP results are provided in
the attachments to this press release. FIS will host an investor
and analyst meeting today at 8:30 a.m. EST. William P. Foley II,
chairman, and Lee A. Kennedy, chief executive officer, will host
the meeting. To listen to the broadcast and view the slide
presentation, please log on to
http://www.fidelityinfoservices.com/, and click on the link under
the Investor Relations section at least 15 minutes prior to the
start of the webcast. A replay of the webcast will be available on
the company website shortly after the meeting ends until 5:00 p.m.
EST March 14, 2006. About Fidelity National Information Services,
Inc. Fidelity National Information Services, Inc. (NYSE:FIS) 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 ten. Nearly 50 percent of all U.S.
residential mortgages are processed using FIS software.
Headquartered in Jacksonville, Florida, FIS maintains a strong
global presence, serving over 7,800 financial institutions and over
100,000 retailers in more than 60 countries worldwide. For more
information on Fidelity National Information Services, please visit
http://www.fidelityinfoservices.com/. FIS is a majority-owned
subsidiary of Fidelity National Financial Inc. (NYSE:FNF), number
261 on the Fortune 500. More information about FNF can be found at
http://www.fnf.com/. Forward-Looking Statements This presentation
contains statements related to future events and expectations,
including FIS's pro forma outlook for 2006 and the underlying
assumptions, and as such, constitute forward-looking statements.
These forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause actual
results, performance or achievements of the company to be different
from those expressed or implied above. The Company expressly
disclaims any duty to update or revise forward- looking statements.
The risks and uncertainties which forward-looking statements are
subject to include, but are not limited to, the effects of
governmental regulations, the economy, competition, the risk that
the merger may fail to achieve beneficial synergies or that it may
take longer than expected to do so, the effects of FIS's
substantial leverage, which may limit the funds available to make
acquisitions and invest in its business, the risk of reduction in
revenue from the elimination of existing and potential customers
due to consolidation in the banking, retail and financial services
industries, potential overdependence on a limited number of
customers due to consolidation in the banking, retail and financial
services industries, the risk of a downturn in the level of real
estate activity, which would adversely affect certain of FIS's
businesses, failure to adapt to changes in technology or in the
marketplace and other risks detailed from time to time in the Form
10-K and other reports and filings with the Securities and Exchange
Commission. 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 certain
2004 FIS acquisitions as if they occurred on January 1, 2004. 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, FNF 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 other
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. EBITDA Detail 2005 YTD FIS
CEY ADJ Pro Forma Net Earnings $196,550 $105,514 $(53,923) $248,141
+ Interest Expense 126,778 12,832 21,031 160,641 + Minority
Interest 4,450 117 - 4,567 + Income Taxes 116,085 68,927 (31,942)
153,070 + Depreciation/Amort 299,637 51,858 82,279 433,774 -
Interest Income (6,392) (2,435) - (8,827) - Equity in (Earnings)
Loss of Non-Consolidated Entities, net of tax (5,029) - - (5,029) -
Other (Income) Expense 4,237 - - 4,237 EBITDA $736,316 $236,813
$17,445 $990,574 EBITDA Margin 2005 YTD FIS CEY ADJ Pro Forma
EBITDA $736,316 $236,813 $17,445 $990,574 Revenue $2,766,085
$1,117,141 $- $3,883,226 EBITDA Margin 26.6% 21.2% 25.5% EBIT
Detail 2005 YTD FIS CEY ADJ Pro Forma Net Earnings $196,550
$105,514 $(53,923) $248,141 + Interest Expense 126,778 12,832
21,031 160,641 + Minority Interest 4,450 117 - 4,567 + Income Taxes
116,085 68,927 (31,942) 153,070 - Interest Income (6,392) (2,435) -
(8,827) - Equity in (Earnings) Loss of Non-Consolidated Entities,
net of tax (5,029) - - (5,029) - Other (Income) Expense 4,237 - -
4,237 EBIT $436,679 $184,955 $(64,834) $556,800 EBIT Margin 2005
YTD FIS CEY ADJ Pro Forma EBIT $436,679 $184,955 $(64,834) $556,800
Revenue $2,766,085 $1,117,141 $ - $3,883,226 EBIT Margin 15.8%
16.6% 14.3% Adjusted Diluted EPS 2005 YTD FIS CEY ADJ Pro Forma Net
Earnings $196,550 $105,514 $(53,923) $248,141 Adjusted EPS $1.02
$0.55 $(0.28) $1.28 Diluted Shares Outstanding 193,424 193,424
193,424 193,424 Cash Earnings 2005 YTD FIS CEY ADJ Pro Forma Net
Earnings $196,550 $105,514 $(53,923) $248,141 + Tax Adjusted
Purchase Price Amortization 78,733 2,721 42,425 123,879 Cash
Earnings $275,283 $108,235 $(11,498) $372,020 Diluted Cash EPS
$1.42 $0.56 $(0.06) $1.92 Diluted Shares Outstanding 193,424
193,424 193,424 193,424 Free Cash Flow 2005 YTD FIS CEY ADJ Pro
Forma Net Earnings $196,550 $105,514 $(53,923) $248,141 +
Depreciation/Amort 299,637 51,858 82,279 433,774 - Capital
Expenditures (239,006) (63,566) - (302,572) Free Cash Flow $257,181
$93,806 $28,356 $379,343 EBITDA Detail 2004 YTD FIS CEY ADJ Pro
Forma Net Earnings $189,417 $97,678 $(110,097) $176,998 + Interest
Expense 4,496 12,914 88,475 105,885 + Minority Interest 3,673 - 53
3,726 + Income Taxes 118,343 59,111 (67,830) 109,624 +
Depreciation/Amort 238,400 47,449 130,114 415,963 - Interest Income
(1,232) (1,207) - (2,439) - Equity in (Earnings) Loss of
Non-Consolidated Entities, net of tax 3,308 - - 3,308 - Other
(Income) Expense (18,175) - - (18,175) EBITDA $538,230 $215,945
$40,715 $794,890 EBITDA Margin 2004 YTD FIS CEY ADJ Pro Forma
EBITDA $538,230 $215,945 $40,715 $794,890 Revenue $2,331,527
$1,039,506 $318,426 $3,689,459 EBITDA Margin 23.1% 20.8% 21.5% EBIT
Detail 2004 YTD FIS CEY ADJ Pro Forma Net Earnings $189,417 $97,678
$(110,097) $176,998 + Interest Expense 4,496 12,914 88,475 105,885
+ Minority Interest 3,673 - 53 3,726 + Income Taxes 118,343 59,111
(67,830) 109,624 - Interest Income (1,232) (1,207) - (2,439) -
Equity in (Earnings) Loss of Non-Consolidated Entities, net of tax
3,308 - - 3,308 - Other (Income) Expense (18,175) - - (18,175) EBIT
$299,830 $168,496 $(89,399) $378,927 EBIT Margin 2004 YTD FIS CEY
ADJ Pro Forma EBIT $299,830 $168,496 $(89,399) $378,927 Revenue
$2,331,527 $1,039,506 $318,426 $3,689,459 EBIT Margin 12.9% 16.2%
10.3% Adjusted Diluted EPS 2004 YTD FIS CEY ADJ Pro Forma Net
Earnings $189,417 $97,678 $(110,097) $176,998 Adjusted EPS $0.99
$0.51 $(0.58) $0.92 Diluted Shares Outstanding 191,886 191,886
191,886 191,886 Cash Earnings 2004 YTD FIS CEY ADJ Pro Forma Net
Earnings $189,417 $97,678 $(110,097) $176,998 + Tax Adjusted
Purchase Price Amortization 64,436 2,489 56,663 123,588 Cash
Earnings $253,853 $100,167 $(53,434) $300,586 Diluted Cash EPS
$1.32 $0.52 $(0.28) $1.57 Diluted Shares Outstanding 191,886
191,886 191,886 191,886 Free Cash Flow 2004 YTD FIS CEY ADJ Pro
Forma Net Earnings $189,417 $97,678 $(110,097) $176,998 +
Depreciation/Amort 238,400 47,449 130,114 415,963 - Capital
Expenditures (177,502) (40,908) - (218,410) Free Cash Flow $250,315
$104,219 $20,017 $374,551 Appendix B Unaudited Pro Forma Combined
Statement of Continuing Operations for the Year Ended December 31,
2004 (In thousands Except Per Share Data) Pro Forma Adjust- Pro
Certegy FIS ments Note Forma Total revenue $1,039,506 $2,331,527
$3,371,033 Total cost of revenue 741,331 1,525,174 85,111 (1)
2,349,804 (1,812) (2) Gross profit (loss) 298,175 806,353 (83,299)
1,021,229 General and administrative 129,679 432,310 (8,510) (2)
553,479 Research and development costs - 74,214 - 74,214 Income
(loss) from operations 168,496 299,829 (74,789) 393,536 Interest
income (expense) and other (11,707) 14,911 - 3,204 Income from
continuing operations before tax and minority interest 156,789
314,740 (74,789) 396,740 Provision for income tax 59,111 118,343
(28,121) (4) 149,333 Income from continuing operations 97,678
196,397 (46,668) 247,407 Equity in earnings (loss) of
unconsolidated entities, net - (3,308) - (3,308) Minority interests
in earnings, net of tax - (3,673) - (3,673) Net income $97,678
$189,416 $(46,668) $240,426 Net income per share- basic $1.55 $0.95
$1.26 Pro forma Weighted average shares-basic 62,818 200,000
190,738 Net income per share- diluted $1.53 $0.95 $1.25 Pro forma
Weighted average shares-diluted 63,966 200,000 191,886 Acquisition/
Recapitalization 2004 FIS Adjust- Pro Forma, Acquisitions ments
Note as adjusted Total revenue $318,426 $ - $3,689,459 Total cost
of revenue 208,250 23,453 (6) $2,581,507 Gross profit (loss)
110,176 (23,453) 1,107,952 General and administrative 100,338 994
(7) 654,811 Research and development costs - 74,214 Income (loss)
from operations 9,838 (24,447) 378,927 Interest income (expense)
and other 2,607 (91,082) (8) (85,271) Income from continuing
operations before tax and minority interest 12,445 (115,529)
293,656 Provision for income tax 3,730 (43,439) (9) 109,624 Income
from continuing operations 8,715 (72,090) 184,032 Equity in
earnings (loss) of unconsolidated entities, net - - (3,308)
Minority interests in earnings, net of tax (53) - (3,726) Net
income $8,662 $(72,090) $176,998 Net income per share-basic $0.93
Pro forma Weighted average shares- basic 190,738 Net income per
share-diluted $0.92 Pro forma Weighted average shares- diluted
191,886 Unaudited Pro Forma Combined Statement of Continuing
Operations for the Year Ended December 31, 2005 (In thousands
Except Per Share Data) Pro Forma adjust- Certegy FIS ments Note
Total revenue $1,117,141 $2,766,085 $ - Total cost of revenue
791,581 1,793,285 82,279 (1) (1,044) (2) Gross profit (loss)
325,560 972,800 (81,235) General and administrative 129,443 422,623
(5,239) (2) Research and development costs 113,498 Merger and
Acquisition Costs 11,162 (11,162) (3) Income (loss) from operations
184,955 436,679 (64,834) Interest income (expense) and other
(10,397) (124,623) - Income from continuing operations before tax
and minority interest 174,558 312,056 (64,834) Provision for income
tax 68,927 116,085 (24,118) (4) Income from continuing operations
105,631 195,971 (40,716) Equity in earnings (loss) of
unconsolidated entities, net (117) 5,029 - Minority interests in
earnings, net of tax - (4,450) - Net income $105,514 $196,550
$(40,716) Net income per share-basic $1.70 $0.98 Pro forma Weighted
average shares- basic 62,011 200,000 Net income per share-diluted
$1.66 $0.97 Pro forma Weighted average shares- diluted 63,391
203,304 Recapitalization Adjustments Pro Forma, Pro Forma Note as
adjusted Total revenue $3,883,226 $ - $3,883,226 Total cost of
revenue 2,666,101 - $2,666,101 Gross profit (loss) 1,217,125 -
1,217,125 General and administrative 546,827 - 546,827 Research and
development costs 113,498 113,498 Merger and Acquisition Costs - -
- Income (loss) from operations 556,800 - 556,800 Interest income
(expense) and other (135,020) (21,031) (8) (156,051) Income from
continuing operations before tax and minority interest 421,780
(21,031) 400,749 Provision for income tax 160,894 (7,824) (9)
153,070 Income from continuing operations 260,886 (13,207) 247,679
Equity in earnings (loss) of unconsolidated entities, net 4,912 -
4,912 Minority interests in earnings, net of tax (4,450) - (4,450)
Net income $261,348 $(13,207) $248,141 Net income per share-basic
$1.38 $1.31 Pro forma Weighted average shares-basic 189,931 189,931
Net income per share-diluted $1.35 $1.28 Pro forma Weighted average
shares-diluted 193,424 193,424 Appendix B Notes to Unaudited Pro
Forma Combined Statements of Continuing Operations for the Year
Ended December 31, 2005 and Year Ended December 31, 2004 These
combined statements of continuing operations include the historical
statements of continuing operations of Certegy and FIS as though
the merger had occurred on January 1, 2004, adjusted for items
related to the transaction as described below: (1) Reflects the
increase in amortization expense as a result of allocating an
assumed portion of the merger consideration to intangible assets of
Certegy, namely customer relationship intangibles and acquired
software, and amortizing such intangibles over their estimated
useful lives commencing as of the assumed acquisition date, offset
by the amortization expense for such intangibles actually recorded
by Certegy during the respective periods. Customer relationships
are being amortized over 10 years on an accelerated method.
Acquired computer software is being amortized over its estimated
useful life of up to 10 years on an accelerated method. The
acquired trademarks are considered to have indefinite useful lives
and, therefore, are not reflected in these adjustments. The
increase in amortization expense is $111.7 million offset by
historical amortization of $26.6 million, or $85.1 million for the
year ended December 31, 2004, and $111.7 million offset by
historical amortization of $29.4 million, or $82.3 million for the
year ended December 31, 2005. For comparison purposes, the first
year purchase amortization for the Certegy purchase accounting is
used for both 2004 and 2005. (2) Under the merger agreement, all
Certegy stock options and restricted stock and restricted stock
units will vest upon the closing of the merger. Accordingly, this
adjustment reflects the elimination of historical stock
compensation expense relating to the vesting of Certegy options in
2004 and 2005, because such expense will be reflected at the time
of closing of the merger. This adjustment amounts to a reduction in
cost of revenues of $1.8 million and $1.0 million and in selling,
general and administrative costs of $14.4 million and $11.2 million
for the years ended December 31, 2004 and 2005, respectively. Also,
at closing, Certegy will grant approximately (1) 1.1 million
options, which based on current assumptions, would have a fair
value under SFAS No. 123R of approximately $11 per option, vesting
over four years, and (2) 750,000 options, which based on current
assumptions would have a fair value under SFAS No. 123R of
approximately $12 per option, vesting over three years. The pro
forma adjustment to increase stock compensation expense for these
option grants is $5.9 million in 2004 and 2005, all of which is
reflected in selling, general and administrative costs. (3)
Reflects the removal of merger and acquisition costs that were
recognized as expense by Certegy in 2005. A tax benefit for these
costs was not recorded because the ultimate tax treatment of these
costs cannot be determined with adequate certainty at this time.
(4) Reflects the tax benefit relating to the pro forma adjustments
at the FIS tax rate of approximately 37.6% for the year ended
December 31, 2004, and approximately 37.2% for the year ended
December 31, 2005. (5) This column is the sum of the historical
activity of Aurum, Sanchez, Kordoba and InterCept from January 1,
2004, through their respective acquisition dates in 2004. The
details for these acquisitions are noted as follows: Aurum Sanchez
Kordoba InterCept Historical Historical Historical Historical
(through (through (through (through March 10) April 13) September
29) November 7) Combined Processing and services revenues $33,560
$25,269 $70,126 $189,471 $318,426 Cost of revenues 21,948 16,526
45,862 123,914 208,250 Gross profit 11,612 8,743 24,264 65,557
110,176 Selling, general and administrative expenses 13,984 15,376
10,769 60,209 100,338 Operating income (loss) (2,372) (6,633)
13,495 5,348 9,838 Interest income (expense), net (743) 52 790
2,508 2,607 Earnings (loss) before income taxes and minority
interest (3,115) (6,581) 14,285 7,856 12,445 Income tax expense
(benefit) 52 (2,269) 2,854 3,093 3,730 Minority interest expense -
- - (53) (53) Net earnings (loss) $(3,167) $(4,312) $11,431 $4,710
$8,662 (6) Reflects the increase in amortization expense as a
result of allocating the purchase price of each acquisition to
intangible assets, namely customer relationship intangibles and
computer software, and amortizing such intangibles over their
estimated useful lives commencing as of the assumed acquisition
date. The increase in amortization expense is $23.4 million for the
year ended December 31, 2004 (Aurum-$1.6 million; Sanchez-$1.6
million; Kordoba-$5.9 million; and Intercept-$14.3 million). (7) In
accordance with SFAS No. 123, unearned compensation cost was
measured upon consummation of the Sanchez acquisition for the
unearned portion of the fair value of the unvested Sanchez options
that were exchanged for unvested FNF options. The amortization of
the unearned compensation cost over the remaining vesting periods
results in compensation expense, which is charged to the combined
statements of earnings, of $1.0 million for the year ended December
31, 2004. (8) Reflects an increase in interest expense for the
years ended December 31, 2004, and 2005, of $91.1 million and $21.0
million, respectively, as if the recapitalization completed on
March 9, 2005 was completed on January 1, 2004. (9) Reflects the
tax benefit relating to the pro forma adjustments at FIS's tax rate
of approximately 37.6% for the year ended December 31, 2004, and
approximately 37.2% for the year ended December 31, 2005. Appendix
C Fidelity National Information Services, Inc. Reconciliation of
Non-GAAP Measures-2006 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 other
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
2006 results. The tables below are reconciliations of pro forma
projections of non-GAAP measures to the nearest GAAP measurement.
Pro Forma 2006 Revenue-Projected Projected 2006 Revenue $3,983
Budgeted Certegy Revenue for January 2006 90 Pro Forma Projected
Revenue $4,073 Pro Forma 2006 Net Earnings-Projected Projected 2006
Net Earnings $279 Budgeted Certegy Net Earnings for January 2006 7
Stock Compensation Charge for FIS Performance Based Options, net of
tax 15 Pro Forma Projected Net Earnings $300 Pro-Forma 2006 Diluted
Earnings Per Share-Projected Projected Earnings Per Share-Diluted
$1.41 Budgeted Certegy Results for January 2006 0.03 Stock
Compensation Charge for FIS Performance Based Options 0.08 Pro
Forma Projected Net Earnings Per Share-Diluted $1.52 Projected
Weighted Average Shares Diluted 197 Pro Forma 2006 Cash
Earnings-Projected Pro Forma Projected Net Earnings $300 Tax
Adjusted Purchase Price Amortization 119 Pro Forma Cash Earnings
$420 Pro Forma 2006 Cash Earnings Per Share-Projected Pro forma
Projected Net Earnings Per Share $1.52 Tax Adjusted Purchase Price
Amortization Per Share 0.61 Pro Forma Cash Earnings Per Share $2.13
Pro Forma EBITDA-Projected Pro Forma Projected Net Earnings $300
Projected Income Tax Expense 186 Projected Interest Expense 170
Projected Depreciation and Amortization 460 Projected Other
Income/Minority Interest & Interest Income (27) Pro Forma
EBITDA $1,090 Pro Forma EBITDA Margin - Projected Pro Forma
Projected Revenue $4,073 Pro Forma EBITDA $1,090 Pro Forma EBITDA
Margin - Projected 27% Pro Forma Free Cash Flow-Projected Pro Forma
Projected Net Earnings $300 Projected Depreciation and Amortization
460 Projected Capital Expenditures (260) Pro Forma Free Cash Flow
$500 FCMN Contact: JFleetwood@fnf.com DATASOURCE: Fidelity National
Information Services CONTACT: Michelle Kersch, Senior Vice
President, Corporate Communications, +1-904-854-5043, , or Mary
Waggoner, Senior Vice President, Investor Relations,
+1-904-854-3282, , both of Fidelity National Information Services
Web site: http://www.fnf.com/
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