Fourth Quarter 2016
JACKSONVILLE Fla., Feb. 7, 2017 – FIS™ (NYSE:FIS), a global leader in financial services technology, today reported that fourth quarter revenue increased 30.4 percent on a reported basis to $2.4 billion from $1.9 billion in the prior year quarter. Net earnings from continuing operations attributable to common stockholders was $207 million, with a margin of 8.5 percent, compared to $105 million in the prior year quarter. Diluted EPS from continuing operations was $0.63 compared to $0.35 in the prior year quarter, an increase of 80.0 percent.
For the quarter, organic revenue increased 4.8 percent. Adjusted EBITDA increased 15.2 percent to $846 million for the quarter, from $734 million adjusted combined EBITDA in the prior year quarter, while adjusted EBITDA margin was 34.4 percent. Adjusted net earnings from continuing operations attributable to common stockholders was $377 million for the quarter, or $1.14 per share compared to $0.93 per share in the prior year quarter, an increase of 22.6 percent.
“One year after the acquisition of SunGard, the combination is surpassing our goals on all dimensions,” said Gary Norcross, FIS president and chief executive officer. “FIS delivered a consistently strong performance in 2016, exceeding our original expectations on every meaningful measure.”
Full-year revenue increased 40.1 percent on a reported basis to $9.2 billion from $6.6 billion in the prior year period. Net earnings from continuing operations attributable to common stockholders was $567 million, with a margin of 6.1 percent, compared to $639 million in the prior year period. Diluted EPS from continuing operations was $1.72 compared to $2.21 in the prior year period, a decrease of 22.2 percent.
For the full year, organic revenue increased 4.6 percent. Adjusted EBITDA increased 11.1 percent to $2.9 billion in the year, from $2.7 billion adjusted combined EBITDA in the prior year period, while adjusted EBITDA margin was 31.2 percent. Adjusted net earnings from continuing operations attributable to common stockholders was $1.3 billion for the year, or $3.82 per share compared to $3.22 per share in the prior year period, an increase of 18.6 percent.
Balance Sheet and Cash Flow
As of Dec. 31, 2016, cash and cash equivalents totaled $683 million and debt outstanding totaled $10.5 billion. Fourth quarter net cash provided by operating activities was $583 million and free cash flow was $435 million. Full-year net cash provided by operating activities was $1.9 billion and free cash flow was $1.5 billion. The company reduced outstanding debt by $1.0 billion in the year.
The company paid dividends totaling $86 million in the fourth quarter and $341 million in the year.
FIS has not provided a reconciliation of the foregoing forward-looking guidance to the most comparable GAAP measures for Adjusted EBITDA or Adjusted EPS because such measures are not available at this time without unreasonable efforts. The significant impact of the SunGard acquisition, including among other things, the timing and amount of integration and severance costs, and the transition of systems, facilities and personnel, make it difficult to provide meaningful and comparable GAAP guidance.
FIS will announce fourth quarter and full-year 2016 financial results on Tues., Feb. 7, prior to market open. The company will sponsor a live webcast of its earnings conference call with the investment community beginning at 8:30 a.m. (EST) Tues., Feb. 7. To access the webcast, go to the Investor Relations section of FIS’ homepage, www.fisglobal.com. A replay will be available after the conclusion of the live webcast.
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, we have provided certain non-GAAP financial measures.
These non-GAAP measures include adjusted revenue, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted combined revenue, adjusted combined EBITDA, adjusted combined EBITDA margin, constant currency revenue, organic revenue growth, adjusted net earnings from continuing operations (including per share amounts), adjusted cash flow from operations, and free cash flow. These non-GAAP measures may be used in this release and/or in the attached supplemental financial information.
We believe these non-GAAP measures help investors better understand the underlying fundamentals of our business. As further described below, the non-GAAP revenue and earnings measures presented eliminate items management believes are not indicative of FIS’s core operating performance. The “adjusted combined” revenue and earnings measures additionally provide information that adjusts for our acquisition of SunGard in November 2015, to improve comparability across reporting periods. The “constant currency” and “organic revenue” measures adjust for the effects of exchange rate fluctuations, while organic revenue also adjusts for acquisitions and divestitures, giving investors further insight into our core performance. Finally, the non-GAAP cash flow measures provide further information about the ability of our business to generate cash. For these reasons, management also uses these non-GAAP measures in its assessment and management of FIS’s performance.
Adjusted revenue consists of reported revenue, increased to reverse the purchase accounting deferred revenue adjustment made upon the acquisition of SunGard. The deferred revenue adjustment represents revenue that would have been recognized in the normal course of business by SunGard under GAAP but was not recognized due to GAAP purchase accounting adjustments. The deferred revenue adjustment in purchase accounting was made entirely in the Corporate and Other segment; reported GAAP results for the IFS and GFS segments are not affected by this adjustment and, therefore, no adjusted revenue is presented for these segments.
EBITDA reflects earnings from continuing operations before interest, taxes, depreciation and amortization.
Adjusted EBITDA excludes certain costs and other transactions which management deems non-operational in nature, the removal of which improves comparability of operating results across reporting periods. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to our segments, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's Regulation G and Item 10(e) of Regulation S-K.
Adjusted EBITDA margin reflects adjusted EBITDA divided by adjusted revenue.
Adjusted combined revenue includes reported revenue for FIS and SunGard combined for pre-acquisition periods in 2015 and excludes the impacts of SunGard businesses that were divested prior to SunGard being purchased by FIS.
Adjusted combined EBITDA includes EBITDA for FIS and SunGard combined for pre-acquisition periods in 2015 and excludes certain costs and other transactions which management deems non-operational in nature, such as purchase accounting amortization, acquisition, integration and severance costs and restructuring costs, the removal of which improves comparability of operating results across reporting periods.
Adjusted combined EBITDA margin reflects adjusted combined EBITDA divided by adjusted combined revenue.
Constant currency revenue represents (i) adjusted revenue in respect of the consolidated results and the corporate and other segment and (ii) reported revenue in respect of the IFS and GFS segments, in each case excluding the impact of fluctuations in foreign currency exchange rates in the current period.
Organic revenue growth is constant currency revenue, as defined above, for the current period compared to an adjusted revenue base for the prior period which consists of adjusted combined revenue, further adjusted to exclude revenue of any divestitures by FIS and include pre-acquisition revenue for companies acquired by FIS, in addition to SunGard, during the applicable reporting period.
Adjusted net earnings from continuing operations excludes the impact of certain costs and other transactions which management deems non-operational in nature, the removal of which improves comparability of operating results across reporting periods. It also excludes the impact of acquisition-related purchase accounting amortization, which is recurring.
Adjusted net earnings per diluted share, or Adjusted EPS, reflects adjusted net earnings from continuing operations divided by weighted average diluted shares outstanding.
Adjusted cash flow from operations reflects GAAP cash flow from operations as adjusted for the net change in settlement assets and obligations, and excludes certain transactions that are closely associated with non-operating activities or are otherwise non-operational in nature and not indicative of future operating cash flows.
Free cash flow reflects adjusted cash flow from operations less capital expenditures. Free cash flow does not represent our residual cash flow available for discretionary expenditures, since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure.
Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures. Further, FIS’ non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures, including footnotes describing the specific adjustments, are provided in the attached schedules and in the Investor Relations section of the FIS web site, www.fisglobal.com.
FIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, consulting, and outsourcing solutions. Through the depth and breadth of our solutions portfolio, global capabilities and domain expertise, FIS serves more than 20,000 clients in over 130 countries. Headquartered in Jacksonville, Fla., FIS employs more than 55,000 people worldwide and holds global leadership positions in payment processing, financial software and banking solutions. Providing software, services and outsourcing of the technology that empowers the financial world, FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.
This news release and today’s webcast contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance of the Company, business and market conditions, outlook, foreign currency exchange rates, expected dividends and share repurchases, the Company’s sales pipeline and anticipated profitability and growth, as well as other statements about our expectations, beliefs, intentions, or strategies regarding the future, 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:
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
Ellyn Raftery, 904.438.6083
Chief Marketing Officer
FIS Global Marketing and Corporate Communications
Peter Gunnlaugsson, 904.438.6603
Senior Vice President
FIS Investor Relations
JACKSONVILLE, Fla., Feb. 6, 2017 – The U.S. subsidiary of Mirae Asset Financial Group, one of Asia’s leading independent financial services firms, has selected FIS™ (NYSE: FIS), a global leader in financial services technology, as its technology partner as it enters the prime brokerage, global securities lending, repo, delta one and correspondent clearing businesses in the United States.
FIS’ Securities360 solution will serve as the infrastructure to power Mirae Asset Securities (USA) current business operations as well as its future growth plans. Securities360 is a complete and integrated securities processing suite that automates and streamlines critical operations into a single platform, with industry-leading solutions for investor services, trading, compliance and risk, middle- and back-office services, securities finance, corporate actions, tax services, reconciliation and more.
“As a non-bank financial institution, and given our significant financial resources and experienced team, Mirae Asset Securities (USA) sees unique opportunities to connect with clients whose counterparties, prime brokers, clearing firms and execution agents may be rethinking their position in the market because of Basel III and other regulations,” said Robert Akeson, chief operating officer, Mirae Asset Securities (USA). “Working with FIS will give us the ability to strategically focus on our business and meet all of our clients’ needs securely, quickly and efficiently. This partnership will allow us to establish a strong foundation for growth.”
“The depth and breadth of FIS’ capabilities are unlike those of any other provider in the securities market,” said Marianne Brown, chief operating officer, Institutional and Wholesale, FIS. “Our solutions span the entire transaction lifecycle, which significantly increases our ability to reduce operational and regulatory complexity, and streamline how broker-dealers respond to new business opportunities and client needs. Leveraging FIS for our full set of end-to-end capabilities will allow Mirae Asset Securities (USA) to focus on its growth and success as it enters the market.”
FIS’ breadth of solutions, flexible deployment options and global footprint allow firms to optimize and integrate their securities solutions worldwide. Securities360 combines FIS’ unmatched domain and technology experience to create an enterprise data management system that governs trading and risk activities, simplifies enrollment and provides for content-rich investor portals, while streamlining efforts to execute trades across platforms, instruments and locations.
Mirae Asset Financial Group has a global presence with offices in 15 markets, including the United States, United Kingdom, China, India, Australia, Singapore, Hong Kong and Brazil. Over the years, the group also has made a significant commitment to the alternative investment space, including real estate, SOC, PEF and hedge funds.
Through its various subsidiaries, the Mirae Asset Financial Group has invested, allocated and maintained significant quantities of assets. As of Sept. 2016, the group had assets under management of $100 billion, wealth management-related assets of $203 billion and insurance services operations of $29 billion. Mirae Asset Financial Groups broker-dealer affiliates had a combined $5.8 billion in capital, as of the same period.
FIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, consulting, and outsourcing solutions. Through the depth and breadth of our solutions portfolio, global capabilities and domain expertise, FIS serves more than 20,000 clients in over 130 countries. Headquartered in Jacksonville, Fla., FIS employs more than 55,000 people worldwide and holds leadership positions in payment processing, financial software and banking solutions. Providing software, services and outsourcing of the technology that empowers the financial world, FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.
This press release may contain statements, estimates or projections that constitute “forward-looking statements” pursuant to the safe harbor provisions of the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from FIS’ historical experience and our present expectations or projections. These risks include, but are not limited to, changes in general economic, business and political conditions, developmental and conversion delays or disruptions inherent with new software products and technology, and risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in customers or new laws or regulations affecting the banking, retail and financial services industries, changes in the growth rates of the markets for our solutions, and other risks detailed in our filings with the Securities and Exchange Commission (SEC), including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2015, and subsequent SEC filings. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. FIS undertakes no obligation to publicly update or revise any forward-looking statements.
For More Information
Kim Snider, 904.438.6278
Senior Vice President
FIS Global Marketing and Communications
Robert Akeson, 212.407.0277
Chief Operating Officer
Mirae Asset Securities (USA) Inc.
Gaylord Palms Resort & Convention Center
FIS Connect 2017 is the perfect blend of educational and networking opportunities in an ideal forum to mingle with your business acquaintances, industry analysts and the FIS™ team. The 2017 conference is designed to help you evolve, adapt and change to meet market demands. Multiple Break-out Session tracks and our world-class Solutions Expo enable you to tailor the conference experience to address your top-of-mind business issues.
You may address your questions about FIS Connect 2017 to Cynthia Bauer by phone at 407.551.8310 or via email to email@example.com.Conference website
Gaylord Palms Resort & Convention Center
At FIS, our security controls are part of an overall Secure by Design philosophy. We invite you to join us at the FIS In-Depth Conference to not only examine our control environment, but also discover what it really means to be Secure by Design. Through detailed presentations and discussions, you’ll learn how we’ve built our systems, our processes, and our culture upon a foundation of vigilance with the goal of protecting your data and safeguarding your organization’s reputation.
Risk, Information Security, and Compliance are top priorities at FIS. While we launched the In-Depth series as a way for you to fulfill your vendor due-diligence obligations, it has grown to include a more robust look at security and regulatory concerns and best practices to achieve sustainable security.
For more information on the FIS presence, please contact Beverly Bersch, at firstname.lastname@example.org, 414.357.3058.Conference website
Gaylord Palms Resort & Convention Center
The annual InfoShare conference provides opportunities to learn about FIS’ strategies, technologies and relationships that can help your institution succeed in today’s increasingly competitive market. With topic-focused tracks, educational sessions and FIS’ world-class Solutions Expo designed expressly to meet your needs, you’ll have access to in-depth information and hands-on demonstrations that will transform the way you think about your organization’s technology.
From HORIZON to Bankway, from BancPac to MISER, from Image Solutions to FIS Payment Solutions and much more, FIS leaders, clients and experts will give you a firsthand look at the key technology, products and challenges shaping our industry today.
Website coming soon! You may address your questions about InfoShare 2017 to Stephanie Hunicke by phone at 407.551.8683 or via email to email@example.com.