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FIS Announces Fourth Quarter and Full Year 2011 Results - FIS™ (NYSE: FIS), the world's largest provider of banking and payments technology, today reported financial results for the quarter and full year ended December 31, 2011 - FISglobal.com
FIS Announces Fourth Quarter and Full Year 2011 Results

 

NewswireToday - /newswire/ - Jacksonville, FL, United States, 2012/02/13 - FIS™ (NYSE: FIS), the world's largest provider of banking and payments technology, today reported financial results for the quarter and full year ended December 31, 2011 - FISglobal.com. NYSE: FIS

   
 
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5.2% Organic Revenue Growth for the Year.
12.4% Growth in Adjusted Earnings Per Share.

• Full year revenue of $5.7 billion; organic growth of 5.2%
• International Solutions full year revenue of $1.2 billion, organic growth of 21.7%
• Adjusted EPS of $2.27 for the year, up 12.4%
• Free cash flow of $871 million for the year
• $399 million in share repurchases for the year; 5% of total shares outstanding.

Fourth Quarter 2011
Revenue from continuing operations increased 7.0% to $1.5 billion in the fourth quarter of 2011, compared to $1.4 billion in the fourth quarter of 2010 and increased 4.9% on an organic basis. GAAP net earnings from continuing operations attributable to common stockholders totaled $123.0 million, or $0.41 per diluted share, compared to $121.3 million, or $0.40 per diluted share, in the prior year quarter.

Adjusted EBITDA increased 5.7% to $470.0 million in the fourth quarter of 2011, compared to adjusted EBITDA of $444.6 million in the 2010 quarter. The adjusted EBITDA margin was 31.5% compared to 31.8% in the fourth quarter of 2010. Adjusted net earnings from continuing operations increased to $199.3 million, or $0.66 per diluted share, compared to $196.9 million, or $0.64 per diluted share in the prior year quarter. Free cash flow totaled $293.9 million in the fourth quarter of 2011, compared to adjusted free cash flow of $221.6 million in the 2010 quarter.

Fourth quarter results exclude a $13.2 million, or $0.05 per share, net benefit related to adjustments from the Capco acquisition; debt extinguishment and refinancing costs of $38.8 million, or $0.09 per share; a $34.0 million, or $0.08 per share, non-cash charge related to an other than temporary decline in the market value of a non-strategic investment; and $62.1 million, or $0.14 per share, of acquisition related amortization as outlined in Exhibit E of the press release schedules.

Approximately $16.3 million, or $0.04 per share, of integration, severance and merger and acquisition costs are included in the current quarter results.

Definitions of non-GAAP financial measures and reconciliations of non-GAAP measures to related GAAP measures are provided in subsequent sections of the press release narrative and supplemental schedules.

Full Year 2011
GAAP revenue for the full year 2011 totaled $5.7 billion compared to $5.3 billion for full year 2010.
GAAP net earnings from continuing operations attributable to common stockholders totaled $493.8 million, or $1.61 per diluted share, compared to $447.6 million, or $1.27 per diluted share, in the prior year.

Full year revenue increased 10.4% to $5.7 billion in 2011, compared to adjusted revenue of $5.2 billion in 2010, and increased 5.2% organically. Adjusted EBITDA increased 3.9% to $1.7 billion, compared to adjusted EBITDA of $1.6 billion in the prior year. The adjusted EBITDA margin was 29.4% for full year 2011, compared to 31.3% in 2010. Adjusted net earnings from continuing operations totaled $697.5 million, or $2.27 per diluted share, which is a 12.4% increase compared to $2.02 per diluted share in 2010. Free cash flow increased to $871.2 million for the full year 2011 compared to $790.8 million in 2010.

Excluded from the 2011 results is a $13.2 million, or $0.05 per share, net benefit related to adjustments from the Capco acquisition; debt extinguishment and refinancing costs of $38.8 million, or $0.09 per share; a non-cash charge of $34.0 million, or $0.08 per share, related to an other than temporary decline in the market value of a non-strategic investment; and $251.0 million, or $0.55 per share, of acquisition related amortization as outlined in Exhibit E of the press release schedules.

The full year 2011 results include approximately $38.4 million, or $0.09 per share, of integration, severance and merger and acquisition costs.

Definitions of non-GAAP financial measures and reconciliations of non-GAAP measures to related GAAP measures are provided in subsequent sections of the press release narrative and supplemental schedules.

"It was a solid quarter and another successful year for FIS. Organic revenue growth improved to 5.2% for the year, and adjusted earnings per share grew by 12.4%," stated Frank Martire, president and chief executive officer. "We continue to build scale and finished 2011 with more than $5.7 billion in revenue and $1.2 billion of operating cash flow. We are very pleased with the continued solid execution by our management team and employees around the world."

Segment Information

The following is a discussion of fourth quarter and full year results by segment:

– Financial Solutions:
Fourth quarter 2011 Financial Solutions revenue increased 5.9% to $533.4 million compared to $503.5 million in the 2010 quarter, driven by the addition of Capco's North American operations, growth in account processing and higher services revenue. Financial Solutions revenue increased 2.1% on an organic basis compared to the fourth quarter of 2010. Financial Solutions EBITDA was $213.7 million, including approximately $9.1 million in integration and severance costs, compared to EBITDA of $219.9 million in the fourth quarter of 2010. The EBITDA margin was 40.1% compared to 43.7% in the prior year quarter, reflecting the addition of Capco, lower license revenue, growth in lower margin services revenue and integration and severance costs in the current year quarter.

For the full year 2011, Financial Solutions revenue increased 9.8% to $2.1 billion compared to $1.9 billion in 2010 and increased 3.6% on an organic basis. Full year 2011 EBITDA increased 1.6% to $841.1 million compared to $827.5 million in 2010. Approximately $12.4 million of integration and severance costs are included in the full year 2011 results.

– Payment Solutions:
Fourth quarter 2011 Payment Solutions revenue increased 2.2% to $642.0 million compared to $628.1 million in the 2010 quarter. Payment Solutions revenue increased 3.6% excluding the check-related businesses, which decreased $4.2 million to $117.1 million in the fourth quarter of 2011. Payment Solutions EBITDA increased 7.2% to $257.1 million in the fourth quarter of 2011 compared to $239.8 million in the fourth quarter of 2010. Integration and severance and merger and acquisition costs of approximately $3.2 million are included in the current year quarter. The EBITDA margin expanded 180 basis points to 40.0% compared to 38.2% in the prior year quarter.

For the full year 2011, Payment Solutions revenue totaled $2.5 billion which was comparable to 2010. Payment Solutions revenue increased 3.5% excluding the check related businesses which declined to $463.7 million in 2011 compared to $483.6 million in 2010, and excluding a $34.4 million gross-to-net accounting change for certain merchant interchange fees, which impacted comparisons in the first half of 2011. Full year 2011 EBITDA, which included integration and severance costs of approximately $13.6 million, increased 1.3% to $944.9 million compared to $932.4 million in 2010.

– International Solutions:
Fourth quarter International Solutions revenue increased 18.9% to $318.8 million compared to $268.2 million in the 2010 quarter, and increased 14.9% on an organic basis. The strong performance was driven primarily by continued growth in all regions including within Brazil card processing and Capco's European business. International Solutions EBITDA increased 14.1% to $92.8 million compared to $81.3 million in the fourth quarter of 2010. Integration and severance costs of approximately $1.5 million are included in the current year quarter. The EBITDA margin was 29.1% compared to 30.3% in the prior year quarter, reflecting the addition of Capco and lower license sales.

For the full year 2011, International Solutions revenue increased $343.9 million, or 41.2%, to a record $1.2 billion compared to $0.8 billion in 2010, and increased 21.7% on an organic basis. Full year 2011 EBITDA increased 32.2% to $269.9 million compared to $204.1 million in 2010. Approximately $2.9 million in integration and severance costs are included in the 2011 results.

– Corporate/Other:
Corporate costs, as adjusted, totaled $93.6 million in the fourth quarter 2011, excluding a $13.2 million net benefit related to adjustments from the Capco acquisition. This compares to corporate costs of $96.4 million in the prior year quarter. Included in the 2011 quarter were approximately $2.5 million of severance and merger and acquisition costs. Corporate costs, as adjusted, were $365.1 million for full year 2011 compared to $336.2 million in 2010, including approximately $9.5 million of severance and merger and integration costs in 2011.

Interest expense, net of interest income, was $64.5 million in the fourth quarter of 2011 which is comparable to the prior year quarter. Full year interest expense, net of interest income, increased to $258.8 million in 2011 compared to $172.9 million in 2010. The increase in interest expense for full year 2011 was due primarily to the recapitalization completed in the third quarter of 2010.

Other income, which totaled $6.7 million for the fourth quarter of 2011 and $9.1 million for full year 2011, excludes $38.8 million of debt refinancing costs and a $34.0 million non-cash charge related to an other than temporary decline in the market value of a non-strategic investment.

The effective tax rate was 33.8% in the fourth quarter of 2011 compared to 30.6% in the prior year quarter. The effective tax rate for full year 2011 was 32.8% compared to 35.2% in 2010.

Balance Sheet
Cash and cash equivalents totaled $415.5 million as of December 31, 2011. Debt outstanding totaled approximately $4.8 billion as of December 31, 2011. Capital expenditures totaled $78.5 million in the fourth quarter of 2011, compared to $86.7 million in the prior year quarter. Full year capital expenditures declined to $300.3 million or 5.2% of revenue in 2011 compared to $314.0 million or 6.0% of revenue in 2010.

FIS repurchased 8.5 million shares of its common stock in the fourth quarter of 2011 at a total cost of approximately $218.2 million, bringing the total number of shares repurchased to 15 million for the year at a total cost of approximately $399.2 million.

Webcast
FIS will host a webcast in conjunction with the 2012 Investor Day to discuss fourth quarter 2011 results and management's outlook for 2012 on Tuesday, February 14, 2012 beginning at 8:30 am. Eastern time. To listen to the live event and to access a supplemental slide presentation, go to the Investor Relations section at fisglobal.com and click on "News and Events." A webcast replay will also be available on FIS' Investor Relations website. To access a PDF version of this release and accompanying financial tables, go to investor.fisglobal.com.

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. 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, the Company has provided non-GAAP financial measures, which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future.

These non-GAAP measures include adjusted revenue, organic revenue, adjusted earnings before interest, taxes and depreciation and amortization (EBITDA), adjusted net earnings, free cash flow and adjusted free cash flow. Adjusted revenue (2010 comparative data) excludes the impact of deferred revenue purchase accounting and a settlement related to the card processing joint venture in Brazil. Organic revenue (2011 and 2010 comparative data) includes reported revenue plus pre-acquisition revenue for companies acquired during the applicable reporting periods. Organic revenue excludes the impact of foreign currency fluctuation in 2011, the impact of deferred revenue purchase accounting and a settlement related to the card processing joint venture in Brazil in 2010.

Adjusted EBITDA in 2011 excludes a net benefit related to adjustments from the Capco acquisition. Adjusted EBITDA in 2010 excludes the impact of merger and acquisition and integration expenses, accelerated stock compensation charges associated with merger and acquisition activity, costs associated with the 2010 recapitalization plan, settlement revenue and an impairment charge related to the card processing joint venture in Brazil, deferred revenue purchase accounting and certain other costs.

Adjusted net earnings in 2011 exclude the after-tax impact of acquisition related amortization, a non-cash charge related to an other than temporary decline in the market value of investments, debt refinancing costs and a net benefit related to adjustments from the Capco acquisition. Adjusted net earnings in 2010 exclude the after-tax impact of merger and acquisition and integration expenses, accelerated stock compensation charges associated with merger and acquisition activity, costs associated with the 2010 recapitalization plan, an impairment charge and settlement related to the card processing joint venture in Brazil, acquisition related amortization, deferred revenue purchase accounting and certain other costs.

Adjusted free cash flow (2010 comparative data) is GAAP operating cash flow less capital expenditures, acquisition related cash items and cash items associated with the 2010 recapitalization plan. Free cash flow (2011 comparative data) is GAAP operating cash flow less capital expenditures.

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. 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 are provided in the attached schedules and in the Investor Relations section of the FIS Website, fisglobal.com.

About FIS
FIS (fisglobal.com) is the world's largest global provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100 countries. Headquartered in Jacksonville, Fla., FIS employs approximately 33,000 people worldwide and holds leadership positions in payment processing and banking solutions, providing software, services and outsourcing of the technology that drives financial institutions. First in financial technology, FIS tops the annual FinTech 100 list, is ranked third on the Barron's 500, 426 on the Fortune 500 and is a member of Standard & Poor's 500® Index.

Forward-Looking Statements
This news release and today's conference call contain "forward-looking statements" within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about whether or the magnitude and manner in which we pay any future dividends or make share repurchases and our expected revenue, organic revenue, earnings before interest, taxes, depreciation and amortization ("EBITDA"), earnings per share, margin expansion and cash flow, as well as other statements about our expectations, hopes, intentions, or strategies regarding the future, 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. Any statements that refer to beliefs, expectations, projections or other characterizations of future events or circumstances and other statements that are not historical facts are forward-looking statements.

Actual results, performance or achievement could differ materially from those contained in these forward-looking statements. The risks and uncertainties that forward-looking statements are subject to include without limitation:

– changes and conditions in general economic, business and political conditions, including the possibility of intensified international hostilities, acts of terrorism, and changes and conditions in either or both the United States and international lending, capital and financial markets;
– the effect of legislative initiatives or proposals, statutory changes, governmental or other applicable regulations and/or changes in industry requirements, including privacy regulations;
– the adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level;
– the effects of our substantial leverage which may limit the funds available to make acquisitions and invest in our business, pay dividends and repurchase shares;
– 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 core processing, card issuer, and transaction processing services;
– failures to adapt our services and products to changes in technology or in the marketplace;
– internal or external security breaches of our systems, including those relating to the theft of personal information and computer viruses affecting our software or platforms, and the reactions of customers, card associations and others to any such future events;
– the failure to achieve some or all of the benefits that we expect from acquisitions;
– our potential inability to find suitable acquisition candidates or finance such acquisitions, which depends upon the availability of adequate cash reserves from operations or of acceptable financing terms and the variability of our stock price, or difficulties in integrating past and future acquired technology or business' operations, services, clients and personnel;
– competitive pressures on product pricing and services including the ability to attract new, or retain existing, customers;
– an operational or natural disaster at one of our major operations centers;
– and other risks detailed in "Risk Factors" and other sections of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and other filings with the SEC.

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.

For More Information:
Mary Waggoner, SVP, FIS Investor Relations
P: 904-438-6282 - E: mary.waggoner[.]fisglobal.com.

 
 
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FIS Announces Fourth Quarter and Full Year 2011 Results

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FIS |
Publisher Contact: Marcia Danzeisen - FISglobal.com 
904-438-6083 marcia.danzeisen[.]fisglobal.com
 
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