EX-99.1 2 a42792exv99w1.htm EXHIBIT 99.1 exv99w1
Exhibit 99.1
(FIS LOGO)   PRESS RELEASE
FIS ANNOUNCES SECOND QUARTER RESULTS
Transaction Processing Revenue Increases 26.6%
Strong Organic Revenue Growth of 6.6%
     Jacksonville, Fla. –August 5, 2008 — Fidelity National Information Services, Inc. (NYSE:FIS), a leading global provider of technology services to financial institutions, today announced consolidated financial results for the second quarter of 2008.
     Consolidated revenue increased 19.0% to $1.3 billion, including approximately $137.2 million in revenue from eFunds, which FIS acquired in September 2007. Excluding eFunds, consolidated revenue increased 6.8% over the comparable 2007 quarter, driven by 8.2% growth in the Lender Processing Services segment and 6.6% growth in Transaction Processing Services segment. GAAP net earnings totaled $71.9 million, and net earnings from continuing operations totaled $0.38 per diluted share.
     Adjusted EBITDA increased 13.0% to $331.5 million compared to $293.3 million in the second quarter of 2007. The EBITDA margin was 24.8% compared to 26.1% in the prior-year quarter. Margins were negatively impacted by revenue mix, declines in certain mortgage origination services and higher corporate expense. Adjusted net earnings from continuing operations totaled $0.66 per diluted share compared to $0.57 per diluted share in the prior year, an increase of 15.8%.
     “FIS delivered solid revenue and earnings growth, despite continued economic volatility,” stated William P. Foley, II, executive chairman of FIS. “The strong performance by both businesses demonstrates the strength of our operating models and the advantages that come from diverse revenue streams and a broadly distributed customer base.”
     FIS’ operating results are presented in accordance with generally accepted accounting principles (“GAAP”) and on an adjusted pro forma basis, which management believes provides more meaningful comparisons between the periods presented. The adjusted results exclude the after-tax impact of merger and acquisition and integration expenses, certain stock compensation charges, debt restructuring and other charges, gains (losses) on the sale of certain non-strategic assets and acquisition related amortization.

 


 

Divestitures and Discontinued Operations
     During the first half of 2008, FIS completed the sale of two non-strategic businesses, FIS Credit Services and Certegy Gaming Services. The company also exited a small operation that provided services to the residential homebuilding market. Information pertaining to historical revenue and earnings per diluted share is provided in the attachments to the company’s first quarter 2008 press release dated April 22, 2008, which is posted on FIS’ website www.fidelityinfoservices.com.
     On July 2, 2008, FIS successfully completed the spin-off of Lender Processing Services, Inc., (NYSE:LPS) and on July 14, 2008, the company announced that it reached an agreement to sell the operating assets of Certegy Australia, Ltd. FIS anticipates reporting both businesses as discontinued operations beginning in the third quarter of 2008. For comparative purposes, Exhibit F of this press release presents the operating results of LPS as discontinued operations, consistent with the manner in which FIS expects to report results in future periods.
Segment Information
     The following discussion, together with Exhibits A through E of the press release, provides information for the Transaction Processing Services segment and the Lender Processing Services segment as historically reported by FIS. Exhibit F of this press release recasts results for FIS (stand-alone TPS) for the three months ended June 30, 2008 and 2007 in a manner consistent with future reporting periods. Lender Processing Services, Inc. has provided additional segment information in a separate press release dated August 5, 2008. Both companies distributed information regarding previously reported periods in separate Form 8-K filings on August 1, 2008.
     Transaction Processing Services (TPS), which provides core processing and payment technology solutions to financial institutions, generated revenue of $867.2 million in the quarter (including $137.2 million from eFunds) compared to $684.8 million in the prior-year period, an increase of 26.6%.
     Excluding eFunds, TPS revenue increased 6.6% to $730.0 million driven by strong growth in International, which rose 34.2% to $192.3 million, and Integrated Financial Solutions which increased 4.5% to $310.6 million. Termination fees totaled $1.6 million in the second quarter of 2008 compared to $10.6 million in the second quarter of 2007. Excluding eFunds and termination fees, TPS revenue increased 8.0%.
     The strong performance in International was fueled by growth in core bank processing and related services, the company’s Brazilian card processing joint venture and favorable currency rates. IFS reported solid growth, despite the previously referenced $9.0 million reduction in termination fees. Excluding the impact of these fees from both years, IFS revenue increased 7.9% compared to the prior-year quarter.

 


 

     Enterprise Solutions revenue, excluding eFunds, totaled $227.4 million reflecting a 7.3% decline compared to the prior-year quarter revenue of $245.2 million. The decrease is primarily attributable to a significant customer implementation which generated revenue of $11.2 million in the prior-year quarter, as previously referenced by the company. Revenue in the company’s retail check risk management business declined $6.1 million from the prior year quarter and also adversely impacted Enterprise Solutions’ comparative growth rate.
     Transaction Processing Services adjusted EBITDA increased 26.0% to $216.1 million. The adjusted EBITDA margin was 24.9% compared to 25.1% in second quarter of 2007, and increased sequentially over the 23.6% margin realized in the first quarter of 2008.
     The Lender Processing Services segment (LPS), which provides integrated technology and services to the mortgage industry, generated revenue of $471.8 million, or 8.2% above the prior-year period, driven primarily by continued strong growth in default services. Lender Processing Services’ adjusted EBITDA increased 5.7% to $150.9 million, and the adjusted EBITDA margin was 32.0% compared to 32.9% in the prior-year quarter.
     Consolidated corporate expense, as adjusted, increased $11.7 million to $39.3 million in the second quarter of 2008, primarily due to higher incentive compensation accruals and stock option expense. FIS’ consolidated effective tax rate was 35.4% in the second quarter and 36.0% for the first six months of 2008.
Update on Review of Strategic Initiatives
On August 2, 2007, FIS announced a plan to review strategic alternatives for its retail check risk management business. Subsequently, on April 24, 2008, FIS announced the sale of Certegy Gaming Services, Inc., which was a part of that business. On July 14, 2008, FIS announced the sale of the operating assets of Certegy Australia, which was also a part of the check risk management business. Upon further review, FIS has determined that it will not pursue the sale of the remaining point-of-sale check risk management business at this time.
Outlook
     FIS (on a post-spin basis) reported adjusted net earnings of $0.28 per diluted share and $0.36 per diluted share in the first and second quarters of 2008, respectively. Due to a lower than expected effective tax rate, the company anticipates full year 2008 adjusted net earnings to approximate $1.51 to $1.57 per diluted share, compared to previous guidance of $1.48 to $1.54 per diluted share based on an expected tax rate of 35.0% in the second half of the year. This compares to adjusted net earnings of $1.23 per diluted share in 2007 as presented at the company’s May 28, 2008, investor meeting. The $1.23 per diluted share in 2007 reconciles to $0.99 per diluted share when accounting for LPS as a discontinued operation, as presented in Exhibit B of the Form 8-K filed on August 1, 2008.

 


 

     Lender Processing Services, Inc. provided full year earnings guidance in a separate press release dated August 5, 2008.
Use of Non-GAAP Financial Information
     FIS reports several non-GAAP measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted net earnings. The adjusted results exclude the after-tax impact of merger and acquisition and integration expenses, certain stock compensation charges, debt restructuring and other costs, gains (losses) on the sale of certain non-strategic assets and acquisition related amortization. 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. A reconciliation of these non-GAAP measures to related GAAP measures is included in the attachments to this release.
Conference Call and Webcast
     FIS and LPS will host a joint call with investors and analysts to discuss second quarter 2008 results on Tuesday, August 5, 2008, beginning at 5:00 p.m. Eastern daylight time. To register for the event and to access supplemental materials, go to the Investor Relations section at www.fidelityinfoservices.com and click on “Events and Multimedia.” Those wishing to participate via the telephone may do so by calling 800-762-4832 (USA) or 480-248-5088 (International). The webcast replay will be available on FIS’ Investor Relations website. The telephone replay will be available through August 12, 2008, by dialing 800-475-6701 (USA) or 320-365-3844 (International). The access code will be 953904. To access a PDF version of this release and accompanying financial tables, go to http://www.investor.fidelityinfoservices.com.
About Fidelity National Information Services, Inc.
     Fidelity National Information Services, Inc. (NYSE: FIS), a Fortune 500 company, is a leading provider of core processing for financial institutions; card issuer and transaction processing services; and outsourcing services to financial institutions and retailers. FIS has processing and technology relationships with 40 of the top 50 global banks, including nine of the top 10. FIS is a member of Standard and Poor’s (S&P) 500(R) Index and has been ranked the number one overall financial technology provider in the world by American Banker and the research firm Financial Insights in the annual FinTech 100 rankings. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 13,000 financial institutions in more than 80 countries worldwide. For more information on Fidelity National Information Services, please visit www.fidelityinfoservices.com.

 


 

About Lender Processing Services, Inc.
     Lender Processing Services, Inc. (NYSE: LPS) is a leading provider of integrated technology and services to the mortgage industry. LPS offers solutions that span the mortgage continuum, including lead generation, origination, servicing, portfolio retention and default, augmented by the company’s award-winning customer support and professional services. Approximately 50 percent of all U.S. mortgages are serviced using LPS’ Mortgage Servicing Package (MSP). In fact, many of the nation’s top servicers rely on MSP, including seven of the top 10 and 16 of the top 20. LPS also offers proprietary mortgage and real estate data and analytics for the mortgage and capital markets industries. For more information about LPS, please visit www.lpsvcs.com.
Forward-Looking Statements
     This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business and political conditions, including changes in the financial markets; the effects of our substantial leverage which may limit the funds available to make acquisitions and invest in our business; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in the banking, retail and financial services industries; failures to adapt our services to changes in technology or in the marketplace; our potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; significant competition that our operating subsidiaries face; the possibility that our acquisition of EFD/eFunds may not be accretive to our earnings due to undisclosed liabilities, management or integration issues, loss of customers, the inability to achieve targeted cost savings, or other factors; and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of the Company’s Form 10-K and other filings with the Securities and Exchange Commission.
FIS-e
SOURCE: Fidelity National Information Services, Inc.
CONTACTS: Mary Waggoner, Senior Vice President, Investor Relations (FIS), 904-854-3282, mary.waggoner@fnis.com;
###

 


 

Fidelity National Information Services, Inc.
Earnings Release Supplemental Financial Information
August 5, 2008
     
Exhibit A
  Consolidated Statements of Earnings for the Three and Six-Month Periods ended June 30, 2008 and 2007
 
   
Exhibit B
  Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007
 
   
Exhibit C
  Consolidated Statements of Cash Flows for the Six-Month Periods ended June 30, 2008 and 2007
 
   
Exhibit D
  Supplemental Financial Information for the Three and Six-Month Periods ended June 30, 2008 and 2007
 
   
Exhibit E
  Supplemental Non-GAAP Financial Information for the Three and Six-Month Periods ended June 30, 2008 and 2007
 
   
Exhibit F
  FIS Recast Consolidated Income Statements and Supplemental Financial Information -Unaudited for the Three and Six-Month Periods Ended June 30, 2008 and 2007, presenting LPS as a discontinued operation

 


 

Exhibit A
FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS — UNAUDITED
(In thousands, except per share data)
                                 
    Three months     Six months  
    ended June 30,     ended June 30,  
    2008     2007     2008     2007  
Processing and services revenues
  $ 1,339,038     $ 1,125,034     $ 2,629,990     $ 2,196,474  
 
                               
Cost of revenues
    962,964       802,461       1,891,519       1,574,842  
Selling, general and administrative expenses
    175,384       119,616       338,935       232,698  
Research and development costs
    26,567       23,588       53,635       50,697  
 
                       
 
                               
Operating income
    174,123       179,369       345,901       338,237  
 
                               
Other income (expense):
                               
Interest income
    1,904       490       4,922       1,049  
Gain on sale of Covansys stock
          92,044             92,044  
Other income
    2,183       811       1,732       1,476  
Interest expense
    (62,800 )     (42,969 )     (125,248 )     (115,084 )
 
                       
Total other income (expense)
    (58,713 )     50,376       (118,594 )     (20,515 )
 
                       
 
                               
Earnings before income taxes, equity earnings and minority interest
    115,410       229,745       227,307       317,722  
Provision for income taxes
    40,867       84,580       81,822       117,309  
Equity in (losses) earnings of unconsolidated entities
    (317 )     736       (2,274 )     1,672  
Minority interest expense
    (716 )     (286 )     (838 )     (110 )
 
                       
 
                               
Net earnings from continuing operations
    73,510       145,615       142,373       201,975  
(Loss) earnings from discontinued operations, net of tax
    (1,603 )     2,389       34       5,532  
 
                       
 
                               
Net earnings
  $ 71,907     $ 148,004     $ 142,407     $ 207,507  
 
                       
 
                               
Net earnings per share-basic from continuing operations
  $ 0.38     $ 0.76     $ 0.74     $ 1.05  
Net earnings (loss) per share-basic from discontinued operations
    (0.01 )     0.01       0.00       0.03  
 
                       
Net earnings per share-basic
  $ 0.37     $ 0.77     $ 0.74     $ 1.08  
 
                       
 
                               
Weighted average shares outstanding-basic
    192,538       192,743       193,541       192,323  
 
                       
 
Net earnings per share-diluted from continuing operations
  $ 0.38     $ 0.74     $ 0.73     $ 1.03  
Net earnings (loss) per share-diluted from discontinued operations
    (0.01 )     0.01       0.00       0.03  
 
                       
Net earnings per share-diluted
  $ 0.37     $ 0.75     $ 0.73     $ 1.06  
 
                       
 
                               
Weighted average shares outstanding-diluted
    194,448       196,977       195,493       196,395  
 
                       

 


 

Exhibit B
FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
                 
    As of     As of  
    June 30,     December 31,  
    2008     2007  
    (unaudited)          
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 207,035     $ 355,278  
Settlement deposits
    33,665       21,162  
Trade receivables, net
    914,204       825,915  
Other receivables
    189,248       206,746  
Settlement receivables
    109,056       116,935  
Receivable from FNF
    8,727       14,907  
Prepaid expenses and other current assets
    155,187       168,454  
Deferred income taxes
    120,479       120,098  
 
           
Total current assets
    1,737,601       1,829,495  
 
           
 
               
Property and equipment, net of accumulated depreciation and amortization
    394,496       392,508  
Goodwill
    5,337,592       5,326,831  
Other intangible assets, net of accumulated amortization
    1,007,613       1,030,582  
Computer software, net of accumulated amortization
    825,929       775,151  
Deferred contract costs
    274,758       256,852  
Investment in FNRES
    28,136       30,491  
Long-term notes receivable from FNF
    5,859       6,154  
Other noncurrent assets
    166,461       146,519  
 
           
Total assets
  $ 9,778,445     $ 9,794,583  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 540,845     $ 606,179  
Settlement payables
    140,411       129,799  
Deferred revenues
    243,717       246,222  
Current portion of long-term debt
    297,129       272,014  
 
           
Total current liabilities
    1,222,102       1,254,214  
 
           
 
               
Deferred revenues
    130,349       111,884  
Deferred income taxes
    402,753       394,972  
Long-term debt, excluding current portion
    3,975,078       4,003,383  
Other long-term liabilities
    217,356       234,757  
 
           
Total liabilities
    5,947,638       5,999,210  
 
           
 
               
Minority interest
    75,290       14,194  
 
           
 
               
Stockholders’ equity:
               
Preferred stock $0.01 par value
           
Common stock $0.01 par value
    1,994       1,990  
Additional paid in capital
    3,068,804       3,038,203  
Retained earnings
    1,022,664       899,512  
Accumulated other comprehensive earnings
    86,099       53,389  
Treasury stock
    (424,044 )     (211,915 )
 
           
Total stockholders’ equity
    3,755,517       3,781,179  
 
           
Total liabilities and stockholders’ equity
  $ 9,778,445     $ 9,794,583  
 
           

 


 

Exhibit C
FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
(In thousands)
                 
    Six months  
    ended June 30,  
    2008     2007  
Cash flows from operating activities:
               
Net earnings
  $ 142,407     $ 207,507  
Adjustment to reconcile net earnings to net cash provided by operating activities:
               
Depreciation and amortization
    244,517       224,504  
Amortization of debt issue costs
    2,859       28,436  
(Gain) on sale of Covansys stock
          (92,044 )
Net (Gain) on sale of Non Strategic businesses
    (1,040 )      
Stock-based compensation cost
    42,167       17,240  
Deferred income taxes
    3,030       3,551  
Income tax benefit from exercise of stock options
    (932 )     (11,161 )
Equity in (earnings) loss of unconsolidated entities
    2,274       (1,672 )
Minority interest
    838       664  
Changes in assets and liabilities, net of effects from acquisitions:
               
Net increase in trade receivables
    (58,199 )     (119,223 )
Net decrease (increase) in prepaid expenses and other assets
    (6,714 )     (45,890 )
Additions to deferred contract costs
    (39,502 )     (25,741 )
Net increase in deferred revenue
    15,696       4,389  
Net (decrease) increase in accounts payable, accrued liabilities and other liabilities
    (104,569 )     52,527  
 
           
 
               
Net cash provided by operating activities
    242,832       243,087  
 
           
 
               
Cash flows from investing activities:
               
Additions to property and equipment
    (43,896 )     (60,202 )
Additions to capitalized software
    (111,750 )     (93,808 )
Other Investing Activities
    (4,665 )      
Cash received from sale of Covansys stock
          136,338  
Net proceeds from sale of company assets
    33,506        
Acquisitions, net of cash acquired
    (17,404 )     (65,750 )
 
           
 
               
Net cash used in investing activities
    (144,209 )     (83,422 )
 
           
 
               
Cash flows from financing activities:
               
Borrowings
    2,699,600       2,700,300  
Debt service payments
    (2,704,573 )     (2,874,198 )
Capitalized debt issue costs
    (13 )     (12,577 )
Dividends paid
    (19,255 )     (19,267 )
Income tax benefit from exercise of stock options
    932       11,161  
Stock options exercised
    11,545       43,194  
Treasury stock purchases
    (236,168 )      
 
           
 
               
Net cash used in financing activities
    (247,932 )     (151,387 )
 
           
 
               
Effect of foreign currency exchange rates on cash
    1,066       859  
 
               
Net (decrease) increase in cash and cash equivalents
    (148,243 )     9,137  
 
               
Cash and cash equivalents, at beginning of period
    355,278       211,753  
 
           
 
               
Cash and cash equivalents, at end of period
  $ 207,035     $ 220,890  
 
           

 


 

Exhibit D
FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
                                 
    Three Month Periods ended     Six Month Periods ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
1. Revenues
                               
 
                               
Revenue from Continuing Operations:
                               
 
                               
TPS
                               
Integrated Financial Solutions
  $ 380,463     $ 297,117     $ 749,048     $ 580,870  
Enterprise Solutions
    284,278       245,174       564,822       479,734  
International
    203,755       143,293       381,864       281,478  
Other
    (1,265 )     (773 )     (1,704 )     (1,321 )
 
                       
Total TPS Revenue
    867,231       684,811       1,694,030       1,340,761  
 
                       
 
                               
 
                       
Total LPS Revenue
    471,757       436,202       935,870       848,560  
 
                       
 
                               
Corporate
    50       4,021       90       7,153  
 
                       
 
                               
Total Revenue from Continuing Operations
    1,339,038       1,125,034       2,629,990       2,196,474  
 
                       
 
                               
 
                       
Total Revenue from Continuing Operations, excluding eFunds
  $ 1,201,838     $ 1,125,034     $ 2,351,480     $ 2,196,474  
 
                       
 
                               
Revenue Growth from Prior Year Period
                               
 
                               
Revenue from Continuing Operations:
                               
 
                               
TPS
                               
Integrated Financial Solutions
    28.1 %     9.1 %     29.0 %     7.1 %
Enterprise Solutions
    15.9 %     10.8 %     17.7 %     9.2 %
International
    42.2 %     44.3 %     35.7 %     50.9 %
Other
    -63.6 %     73.2 %     -29.0 %     78.9 %
 
                       
Total TPS Revenue Growth
    26.6 %     16.1 %     26.3 %     15.4 %
 
                       
 
                               
 
                       
Total LPS Revenue Growth
    8.2 %     16.6 %     10.3 %     14.2 %
 
                       
 
                               
Corporate
    -98.8 %     47.3 %     -98.7 %     64.9 %
 
                               
 
                       
Total Revenue from Continuing Operations
    19.0 %     16.4 %     19.7 %     15.0 %
 
                       
 
                               
 
                       
Total Revenue Growth, excluding Efunds
    6.8 %     16.4 %     7.1 %     15.0 %
 
                       
 
                               
2. TPS Revenue from Continuing Operations, Excluding eFunds
                               
 
                               
TPS
                               
Integrated Financial Solutions
  $ 310,613     $ 297,117     $ 608,179     $ 580,870  
Enterprise Solutions
    227,398       245,174       454,003       479,734  
International
    192,345       143,293       354,087       281,478  
Other
    (355 )     (773 )     (778 )     (1,321 )
 
                       
Total TPS Revenue, excluding eFunds
  $ 730,001     $ 684,811     $ 1,415,491     $ 1,340,761  
 
                       
 
                               
TPS Revenue Growth from Prior Year Period, excluding eFunds
                               
 
                               
TPS
                               
Integrated Financial Solutions
    4.5 %     9.1 %     4.7 %     7.1 %
Enterprise Solutions
    -7.3 %     10.8 %     -5.4 %     9.2 %
International
    34.2 %     44.3 %     25.8 %     50.9 %
Other
    54.1 %     73.2 %     41.1 %     78.9 %
 
                       
Total TPS Revenue Growth, excluding Efunds
    6.6 %     16.1 %     5.6 %     15.4 %
 
                       

 


 

Exhibit D
FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
                                 
    Three Month Periods ended     Six Month Periods ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
3. Depreciation and Amortization
                               
 
                               
Depreciation and Amortization
  $ 65,082     $ 68,027     $ 133,793     $ 130,590  
Purchase Price Amortization
    44,439       37,897       90,999       78,677  
Other Amortization
    10,864       7,968       19,725       15,237  
 
                       
Total Depreciation and Amortization
  $ 120,385     $ 113,892     $ 244,517     $ 224,504  
 
                       
 
                               
Depreciation and Amortization Relating to Non-recurring Adjustments
  $     $ 393     $     $ 1,076  
Depreciation and Amortization from Discontinued Operations
    102       1,714       1,496       3,430  
 
                               
Total Depreciation and Amortization from Continuing
Operations, as adjusted
  $ 120,283     $ 111,785     $ 243,021     $ 219,998  
 
                       
 
                               
4. Stock Compensation Expense
                               
 
                               
Stock Compensation Expense, Excluding Acceleration Charges
  $ 13,183     $ 8,751     $ 25,367     $ 17,240  
Stock Acceleration Expense
    2,606             16,800        
 
                       
Total Stock Compensation Expense
  $ 15,789     $ 8,751     $ 42,167     $ 17,240  
 
                       

 


 

Exhibit E
FIDELITY NATIONAL INFORMATION SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
                                 
    Three Month Periods ended     Six Month Periods ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
1. EBIT and EBITDA — Consolidated
                               
 
                               
Revenue from Continuing Operations
  $ 1,339,038     $ 1,125,034     $ 2,629,990     $ 2,196,474  
 
                               
Operating Income
  $ 174,123     $ 179,369     $ 345,901     $ 338,237  
M&A, Restructuring and Integration Costs
    31,555       2,195       46,525       7,156  
LPS Spin Costs
    5,582             8,440        
 
                       
EBIT, as adjusted
  $ 211,260     $ 181,564     $ 400,866     $ 345,393  
 
                       
 
                               
Depr and Amort from Cont Ops, as adjusted
    120,283       111,785       243,021       219,998  
 
                       
EBITDA , as adjusted
  $ 331,543     $ 293,349     $ 643,887     $ 565,391  
 
                       
 
                               
EBIT Margin, as adjusted
    15.8 %     16.1 %     15.2 %     15.7 %
 
                       
 
                               
EBITDA Margin, as adjusted
    24.8 %     26.1 %     24.5 %     25.7 %
 
                       
 
                               
2. EBITDA — TPS
                               
 
                               
Revenue from Continuing Operations
  $ 867,231     $ 684,811     $ 1,694,030     $ 1,340,761  
 
                               
Operating Income
  $ 116,006     $ 99,172     $ 223,885     $ 189,231  
Depreciation
    41,858       37,859       84,982       71,610  
Purchase Price Amortization
    35,459       27,027       71,545       56,225  
Other Amortization
    10,270       7,516       18,656       14,385  
 
                       
EBITDA , before other items
  $ 203,593     $ 171,574     $ 399,068     $ 331,451  
 
                       
 
                               
M&A, Restructuring and Integration Costs
    12,542             12,542        
 
                       
EBITDA, excluding other items
  $ 216,135     $ 171,574     $ 411,610     $ 331,451  
 
                       
 
                               
EBITDA Margin, as adjusted
    24.9 %     25.1 %     24.3 %     24.7 %
 
                       
 
                               
3. Net Earnings — Reconciliation
                               
 
                               
Net Earnings from Continuing Operations
  $ 73,510     $ 145,615     $ 142,373     $ 201,975  
M&A, Restructuring and Integration Costs, net of tax
    22,143       1,385       31,634       4,501  
LPS Spin Costs, net of tax
    3,606             5,418        
Covansys Gain, net of tax
          (57,988 )           (57,988 )
Debt Restructure Charge, net of tax
                      17,059  
 
                       
Net Earnings from Continuing Operations, excluding other items
    99,259       89,012       179,425       165,547  
 
                       
 
                               
After-tax Purchase Price Amortization
    28,595       23,901       58,113       49,513  
 
                               
 
                       
Adjusted Net Earnings from Continuing Operations
  $ 127,854     $ 112,913     $ 237,538     $ 215,060  
 
                       
 
                               
 
                       
Net Earnings Per Share from Continuing Operations, excluding other items
  $ 0.51     $ 0.45     $ 0.92     $ 0.84  
 
                       
 
                               
 
                       
Adjusted Net Earnings from Continuing Operations Per Share
  $ 0.66     $ 0.57     $ 1.22     $ 1.10  
 
                       
 
                               
 
                       
Diluted Weighted Average Shares
    194,448       196,977       195,493       196,395  
 
                       

 


 

Exhibit E
FIDELITY NATIONAL INFORMATION SERVICES, INC.
RECONCILIATION OF GAAP TO NON-GAAP CASHFLOW MEASURES — UNAUDITED
(In thousands)
                                                 
    Six Months Ended June 30, 2008     Six Months Ended 6/30/2007  
    GAAP     Adj     Non-GAAP     GAAP     Adj     Non-GAAP  
         
Cash flows from operating activities:
                                               
Net earnings (1)
  $ 142,407       26,207       168,614     $ 207,507       4,498       212,005  
Adjustments to reconcile net earnings to net cash provided by operating activities:
                                               
Non-cash adjustments
    294,645             294,645       180,679             180,679  
Working capital adjustments (2)
    (194,220 )     64,432       (129,788 )     (145,099 )     30,800       (114,299 )
         
Net cash provided by operating activities
    242,832       90,639       333,471       243,087       35,298       278,385  
         
 
                                               
Capital expenditures included in investing activities:
                                               
Additions to property and equipment
    (43,896 )           (43,896 )     (60,202 )           (60,202 )
Additions to capitalized software
    (111,750 )           (111,750 )     (93,808 )           (93,808 )
         
Net capital expenditures
    (155,646 )           (155,646 )     (154,010 )           (154,010 )
         
 
                                               
         
Net free cash flow
  $ 87,186       90,639       177,825     $ 89,077       35,298       124,375  
         
 
Notes:
 
(1)   Adjustments to Net Earnings to eliminate the after-tax impact of non-recurring integration costs and LPS spin-off costs
 
(2)   Adjustments to working capital reflect elimination of settlement of various acquisition related liabilities.

 


 

Exhibit F
FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
On July 2, 2008, FIS completed the spin-off of Lender Processing Services, Inc. (“LPS”). Since the Completion of the spin-off occurred subsequent to the reporting period ended June 30, 2008, generally accepted accounting principals do not allow presentation of LPS as a discontinued operation until FIS presents operating results for the three and nine-month periods ended September 30, 2008.
Because of these requirements and desire to furnish additional information to investors to improve the understanding of the Company’s operating performance, management is separately furnishing information which reflects the operations of LPS as a discontinued operation.
The purpose of the schedule below is to recast the three and six-month periods ended June 30, 2008 and 2007 in a manner consistent with how FIS will report results beginning in the third quarter of 2008. These schedules report the the operating results of LPS, and other smaller operations which we have exited, as discontinued operations. Revenues and expenses associated with LPS and other disposed entities are presented as discontinued operations in the consolidated statements of earnings. Discontinued operations are reflected separately, net of tax, below net earnings from continuing operations.
                                 
    Three Months     Three Months     Six Months     Six Months  
    Ended     Ended     Ended     Ended  
    6/30/2008     6/30/2007     6/30/2008     6/30/2007  
1. Income Statement-Assumes LPS as a Discontinued Operation
                               
 
                               
Processing and services revenues
  $ 878,653     $ 701,630     $ 1,716,876     $ 1,372,882  
Cost of revenues
    674,032       540,269       1,322,300       1,061,465  
 
                       
Gross profit
    204,621       161,361       394,576       311,417  
Selling, general and administrative
    122,223       74,668       238,415       144,225  
Research and development costs
    19,357       14,905       37,640       32,423  
 
                       
Operating Income
    63,041       71,788       118,521       134,769  
Interest income
    1,637       165       4,395       374  
Interest expense
    (44,441 )     (42,934 )     (84,018 )     (115,007 )
Gain on sale of Covansys stock
          92,044             92,044  
Other income
    2,224       1,336       1,783       1,428  
 
                       
Earnings from continuing operations before tax and minority interest
    22,461       122,399       40,681       113,608  
Provision for income tax
    4,802       43,284       9,410       38,564  
 
                       
Earnings before equity in earnings (losses) and minority interest
    17,659       79,115       31,271       75,044  
Equity in earnings (losses) of unconsolidated entities, net
    (157 )     1,330       (157 )     2,738  
Minority interest expense (income), net of tax
    306       11       116       (328 )
 
                       
Net earnings from continuing operations
    17,196       80,434       30,998       78,110  
Earnings from discontinued operations
    54,711       67,570       111,409       129,397  
 
                       
Net earnings
    71,907       148,004       142,407       207,507  
 
                       
 
                               
Net Earnings from Continuing Operations Per Share — Diluted
  $ 0.09     $ 0.41     $ 0.16     $ 0.40  
 
                       

 


 

Exhibit F
FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
                                 
    Three Months     Three Months     Six Months     Six Months  
    Ended     Ended     Ended     Ended  
    6/30/2008     6/30/2007     6/30/2008     6/30/2007  
2. Revenues
                               
 
Revenue from Continuing Operations:
                               
TPS
                               
Integrated Financial Solutions
  $ 380,463     $ 297,117     $ 749,048     $ 580,870  
Enterprise Solutions
    284,278       245,174       564,822       479,734  
International
    203,755       143,293       381,864       281,478  
Other
    (1,265 )     (773 )     (1,704 )     (1,321 )
 
                       
Total TPS Revenue
    867,231       684,811       1,694,030       1,340,761  
 
                       
 
                               
Corporate
    11,422       16,819       22,846       32,121  
 
                       
 
                               
Total Revenue from Continuing Operations
    878,653       701,630       1,716,876       1,372,882  
 
                       
 
                               
Revenue Growth from Prior Year Period
                               
 
                               
Revenue from Continuing Operations:
                               
 
                               
TPS
                               
Integrated Financial Solutions
    28.1 %     9.1 %     29.0 %     7.1 %
Enterprise Solutions
    15.9 %     10.8 %     17.7 %     9.2 %
International
    42.2 %     44.3 %     35.7 %     50.9 %
Other
    -63.6 %     73.2 %     -29.0 %     78.9 %
 
                       
Total TPS Revenue Growth
    26.6 %     16.1 %     26.3 %     15.4 %
 
                       
 
                               
Corporate
    -32.1 %     -19.6 %     -28.9 %     -21.1 %
 
                               
 
                       
Total Revenue from Continuing Operations
    25.2 %     14.7 %     25.1 %     14.6 %
 
                       
 
                               
3. TPS Revenue from Continuing Operations, excluding eFunds
                               
 
                               
TPS
                               
Integrated Financial Solutions
  $ 310,613     $ 297,117     $ 608,179     $ 580,870  
Enterprise Solutions
    227,398       245,174       454,003       479,734  
International
    192,345       143,293       354,087       281,478  
Other
    (355 )     (773 )     (778 )     (1,321 )
 
                       
Total TPS Revenue, excluding eFunds
  $ 730,001     $ 684,811     $ 1,415,491     $ 1,340,761  
 
                       
 
                               
TPS Revenue Growth from Prior Year Period, excluding eFunds
                               
 
                               
TPS
                               
Integrated Financial Solutions
    4.5 %     9.1 %     4.7 %     7.1 %
Enterprise Solutions
    -7.3 %     10.8 %     -5.4 %     9.2 %
International
    34.2 %     44.3 %     25.8 %     50.9 %
Other
    54.1 %     73.2 %     -41.1 %     78.9 %
 
                       
Total TPS Revenue Growth, excluding Efunds
    6.6 %     16.1 %     5.6 %     15.4 %
 
                       
 

 


 

Exhibit F
FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
                                 
    Three Months     Three Months     Six Months     Six Months  
    Ended     Ended     Ended     Ended  
    6/30/2008     6/30/2007     6/30/2008     6/30/2007  
4. Depreciation and Amortization
                               
 
                               
Depreciation and Amortization
  $ 65,082     $ 68,027     $ 133,793     $ 130,590  
Purchase Price Amortization
    44,439       37,897       90,999       78,677  
Other Amortization
    10,864       7,968       19,725       15,237  
 
                       
Total Depreciation and Amortization
  $ 120,385     $ 113,892     $ 244,517     $ 224,504  
 
                       
 
                               
Depreciation and Amortization Related to Non-recurring Adjustments
  $     $ 393     $     $ 1,076  
Depreciation and Amortization from Discontinued Operations
    22,506       26,491       43,246       53,048  
 
                               
 
                       
Total Depreciation and Amortization from Continuing Operations, as adjusted
  $ 97,879     $ 87,008     $ 201,271     $ 170,380  
 
                       
 
                               
5. Capital Expenditures
                               
 
                               
Total Capital Expenditures - Continuing Operations
    52,260       65,642       130,509       125,438  
 
                               
Total Capital Expenditures - Discontinued Operations
    13,838       14,252       25,137       28,572  
 
                               
 
                       
Total Capital Expenditures
  $ 66,098     $ 79,894     $ 155,646     $ 154,010  
 
                       
 
                               
6. Stock Compensation
                               
 
                               
Stock Compensation, Excluding Acceleration Charges
  $ 13,183     $ 8,751     $ 25,367     $ 17,240  
Stock Compensation Acceleration Charges
    2,606             16,800        
 
                       
Total Stock Compensation
  $ 15,789     $ 8,751     $ 42,167     $ 17,240  
 
                       
 
                               
Stock Compensation Related to Discontinued Operations for LPS
    4,433       3,645       9,120       7,215  
 
                       
Stock Compensation from Continuing Operations
  $ 11,356     $ 5,106     $ 33,047     $ 10,025  
 
                       


 

Exhibit F
FIDELITY NATIONAL INFORMATION SERVICES, INC.
NON-GAAP FINANCIAL INFORMATION — UNAUDITED
(In thousands, except per share data)
                                 
    Three Months     Three Months     Six Months     Six Months  
    Ended     Ended     Ended     Ended  
    6/30/2008     6/30/2007     6/30/2008     6/30/2007  
1. EBIT and EBITDA - Consolidated
                               
 
                               
Revenue from Continuing Operations
  $ 878,653     $ 701,630     $ 1,716,876     $ 1,372,882  
 
                               
Operating Income from Continuing Operations
  $ 63,041       71,788     $ 118,521       134,769  
M&A, Restructuring and Integration Costs
    29,071       2,195       44,041       7,156  
LPS Spin Costs
    5,582             8,440        
 
                       
EBIT, as adjusted
  $ 97,694       73,983     $ 171,002       141,925  
 
                       
 
                               
Depr and Amort from Cont Ops, as adjusted
    97,879       87,008       201,271       170,380  
 
                       
EBITDA , as adjusted
  $ 195,573       160,991     $ 372,273       312,305  
 
                       
 
                               
EBIT Margin, as adjusted
    11.1 %     10.5 %     10.0 %     10.3 %
 
                       
 
                               
EBITDA Margin, as adjusted
    22.3 %     22.9 %     21.7 %     22.7 %
 
                       
 
                               
2. Net Earnings - Reconciliation
                               
Net Earnings from Continuing Operations
  $ 17,196       80,434     $ 30,998       78,110  
M&A, Restructuring and Integration Costs, net of tax
    20,538       1,385       30,029       4,501  
LPS Spin Costs, net of tax
    3,606             5,418        
Covansys Gain, net of tax
          (57,988 )           (57,988 )
Debt Restructure Charge, net of tax
                      17,059  
Corporate Costs-LPS Non-Disc Ops
    6,342       3,940       12,580       5,892  
Interest Expense-LPS Non-Disc Ops
          11,819             23,567  
 
                       
Net Earnings from Continuing Operations, Excluding Certain Items
    47,682       39,590       79,025       71,141  
 
                       
 
                               
After-tax Purchase Price Amortization
    23,099       17,578       46,681       36,463  
 
                               
 
                       
Adjusted Net Earnings from Continuing Operations
  $ 70,781       57,168     $ 125,706       107,604  
 
                       
 
                               
 
                       
 
Net Earnings from Continuing Operations Per Share, excluding other items
  $ 0.25       0.20     $ 0.40       0.36  
 
                       
 
                               
 
                       
Adjusted Net Earnings Per Share
  $ 0.36       0.29     $ 0.64       0.55  
 
                       
 
                               
 
                       
Diluted Weighted Average Shares
    194,448       196,977       195,493       196,395  
 
                       

 


 

Exhibit F
Fidelity National Information Services
2008 Recast Income Statements
                                                                 
    Q/E 6/30/08 (A)     Disc Ops     Q/E 6/30/08 Recast (C)  
                                                    Corporate &        
Three Months Ended June 30, 2008   TPS     LPS     Corporate     FIS     LPS (B)     TPS     Other     FIS  
Total revenue
  $ 867,231     $ 471,757     $ 50     $ 1,339,038     $ 460,385     $ 867,231     $ 11,422     $ 878,653  
Total cost of revenue
    665,660       297,304             962,964       288,932       665,660       8,372       674,032  
        —                
Gross profit
    201,571       174,453       50       376,074       171,453       201,571       3,050       204,621  
General and administrative
    66,208       53,161       56,015       175,384       53,161       66,208       56,015       122,223  
Research and development costs
    19,357       7,210             26,567       7,210       19,357             19,357  
        —             —  
Income from operations
    116,006       114,082       (55,965 )     174,123       111,082       116,006       (52,965 )     63,041  
Interest income
                    1,904       1,904       267               1,637       1,637  
Interest expense
                    (62,800 )     (62,800 )     (18,359 )             (44,441 )     (44,441 )
Other income
                    2,183       2,183       (41 )             2,224       2,224  
                       
 
                                                               
Income from continuing operations before tax and minority interest
    116,006       114,082       (114,678 )     115,410       92,949       116,006       (93,545 )     22,461  
Provision for income tax
                    40,867       40,867       36,065               4,802       4,802  
                       
Income from operations
    116,006       114,082       (155,545 )     74,543       56,884       116,006       (98,347 )     17,659  
Equity in earnings of unconsolidated entities, net
                    (317 )     (317 )     (160 )             (157 )     (157 )
Minority interests in earnings, net of tax
                    716       716       410               306       306  
                         
Net earnings from continuing operations
    116,006       114,082       (156,578 )     73,510       56,314       116,006       (98,810 )     17,196  
                         
Earnings from discontinued operations
                (1,603 )     (1,603 )                   54,711       54,711  
                         
Net earnings
  $ 116,006     $ 114,082     $ (158,181 )   $ 71,907     $ 56,314     $ 116,006     $ (44,099 )   $ 71,907  
                         
 
                                                               
Net earnings per share-basic - continuing operations
                          $ 0.38                             $ 0.09  
Net earnings per share-basic - discontinued operations
                            (0.01 )                             0.28  
 
                                                           
Net earnings per share-basic
                          $ 0.37                             $ 0.37  
 
                                                           
 
                                                               
Pro forma Weighted average shares-basic
                            192,538                               192,538  
 
                                                           
 
Net earnings per share-diluted - continuing operations
                          $ 0.38                             $ 0.09  
Net earnings per share-diluted - discontinued operations
                            (0.01 )                             0.28  
 
                                                           
Net earnings per share-diluted
                          $ 0.37                             $ 0.37  
 
                                                           
 
                                                               
Pro forma Weighted average shares-diluted
                            194,448                               194,448  
 
                                                           
 
(A)   These columns represents the historical segment presentation of FIS.
 
(B)   This column represents the components of LPS previously reported within the Lender Processing Services segment that will be presented as discontinued operations beginning with FIS’s reported results beginning with the three and nine-month periods ended September 30, 2008
 
(C)   This presentation represents FIS’s consolidated results recast to reflect discontinued operations consistent with how earnings will be reported by FIS beginning with the three and nine-month periods ended September 30, 2008.

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