EX-99.3 10 a2103322zex-99_3.htm EXHIBIT 99.3

Exhibit 99.3

        The following Non-GAAP Consolidated Statements of Income for the Years Ended December 31, 2001 and 2000 are presented for informational purposes.

CERTEGY INC.
NON-GAAP CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 
    
   Non-GAAP Adjustments
    
  
 
   GAAP
   Spin-off(1)
   SFAS 142(2)
   Non-GAAP
  
Revenues   $ 935,971   $ —   $ —   $ 935,971  
Operating expenses:                          
  Costs of services     686,588     2,350     (8,560 )   680,378  
  Selling, general and administrative expenses     97,964     900     —     98,864  
      784,552     3,250     (8,560 )   779,242  
Operating income     151,419     (3,250 )   8,560     156,729  
Other income, net     78     —     —     78  
Interest expense     (7,200 )   (8,413 )   —     (15,613 )
Income before income taxes and minority interests     144,297     (11,663 )   8,560     141,194  
(Provision) benefit for income taxes     (56,276 )   4,549     (1,309 )   (53,036 )
Minority interests in earnings, net of tax     (945 )   —     —     (945 )
Net income   $ 87,076   $ (7,114 ) $ 7,251   $ 87,213  
Basic:                          
  Earnings per share   $ 1.27               $ 1.28  
   
             
 
  Average shares outstanding     68,317                 68,317  
   
             
 
Diluted:                          
  Earnings per share   $ 1.26               $ 1.26  
   
             
 
  Average shares outstanding     69,063                 69,063  
   
             
 

        A reconciliation of GAAP operating income of the Company's reportable segments to non-GAAP operating income for the year-ended December 31, 2001 is as follows:

 
    
   Non-GAAP Adjustments
    
  
 
   GAAP
   Spin-off(1)
   SFAS 142(2)
   Non-GAAP
  
Operating income:                          
  Card Services   $ 119,767   $ —   $ 7,637   $ 127,404  
  Check Services     43,502     —     923     44,425  
   
 
 
 
 
      163,269     —     8,560     171,829  
General corporate expense     (11,850 )   (3,250 )   —     (15,100 )
   
 
 
 
 
    $ 151,419   $ (3,250 ) $ 8,560   $ 156,729  
   
 
 
 
 
(1)
Spin-off adjustments include: a) additional operating expenses of $3.2 million, which specifically relate to incremental pension expense, insurance costs, corporate headquarters rent, and stand-alone public company costs for audit, director, and stock exchange fees; b) interest on the $275 million of debt used to fund a cash payment to Equifax in conjunction with the spin-off, at an annual rate of LIBOR plus 100 basis points (5.76 percent for the six months ended June 30, 2001), plus amortization of financing costs over the three-year term of the debt; and c) the income tax benefit resulting from the non-GAAP adjustments using the Company's effective tax rate for the period.

(2)
Non-GAAP adjustment to exclude goodwill amortization expense in accordance with SFAS 142, "Goodwill and Other Intangible Assets," as if the standard had been effective on January 1, 2001.

CERTEGY INC.
NON-GAAP CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2000
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 
    
   Non-GAAP Adjustments
    
  
 
   GAAP
   Spin-off(1)
   SFAS 142(2)
   Non-GAAP
  
Revenues   $ 865,907   $ —   $ —   $ 865,907  
Operating expenses:                          
  Costs of services     623,096     4,700     (8,022 )   619,774  
  Selling, general and administrative expenses     95,652     1,800     —     97,452  
   
 
 
 
 
      718,748     6,500     (8,022 )   717,226  
   
 
 
 
 
Operating income     147,159     (6,500 )   8,022     148,681  
Other income, net     1,309     —     —     1,309  
Interest expense     (1,301 )   (21,735 )   —     (23,036 )
   
 
 
 
 
Income before income taxes and minority interests     147,167     (28,235 )   8,022     126,954  
(Provision) benefit for income taxes     (57,609 )   11,040     (1,259 )   (47,828 )
Minority interests in earnings, net of tax     (1,096 )   —     —     (1,096 )
   
 
 
 
 
Net income   $ 88,462   $ (17,195 ) $ 6,763   $ 78,030  
   
 
 
 
 
Basic:                          
  Earnings per share   $ 1.32               $ 1.16  
   
             
 
  Average shares outstanding     67,200                 67,200  
   
             
 
Diluted:                          
  Earnings per share   $ 1.30               $ 1.15  
   
             
 
  Average shares outstanding     67,933                 67,933  
   
             
 

        A reconciliation of GAAP operating income of the Company's reportable segments to non-GAAP operating income for the year-ended December 31, 2000 is as follows:

 
    
   Non-GAAP Adjustments
    
  
 
   GAAP
   Spin-off(1)
   SFAS 142(2)
   Non-GAAP
  
Operating income:                          
  Card Services   $ 110,757   $ —   $ 7,090   $ 117,847  
  Check Services     44,205     —     932     45,137  
   
 
 
 
 
      154,962     —     8,022     162,984  
General corporate expense     (7,803 )   (6,500 )   —     (14,303 )
   
 
 
 
 
    $ 147,159   $ (6,500 ) $ 8,022   $ 148,681  
   
 
 
 
 
(1)
Spin-off adjustments include: a) additional operating expenses of $6.5 million, which specifically relate to incremental pension expense, insurance costs, corporate headquarters rent, and stand-alone public company costs for audit, director, and stock exchange fees; b) interest on the $275 million of debt used to fund a cash payment to Equifax in conjunction with the spin-off, at an annual rate of LIBOR plus 100 basis points (7.54 percent for the year ended December 31, 2000), plus amortization of financing costs over the three-year term of the debt; and c) the income tax benefit resulting from the non-GAAP adjustments using the Company's effective tax rate for the period.

(2)
Non-GAAP adjustment to exclude goodwill amortization expense in accordance with SFAS 142, "Goodwill and Other Intangible Assets," as if the standard had been effective on January 1, 2000.