0001136893-13-000037.txt : 20130802 0001136893-13-000037.hdr.sgml : 20130802 20130802144210 ACCESSION NUMBER: 0001136893-13-000037 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20130630 FILED AS OF DATE: 20130802 DATE AS OF CHANGE: 20130802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Fidelity National Information Services, Inc. CENTRAL INDEX KEY: 0001136893 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 371490331 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-16427 FILM NUMBER: 131006056 BUSINESS ADDRESS: STREET 1: 601 RIVERSIDE AVENUE CITY: JACKSONVILLE STATE: FL ZIP: 32204 BUSINESS PHONE: 904-854-8547 MAIL ADDRESS: STREET 1: 601 RIVERSIDE AVENUE CITY: JACKSONVILLE STATE: FL ZIP: 32204 FORMER COMPANY: FORMER CONFORMED NAME: CERTEGY INC DATE OF NAME CHANGE: 20010607 FORMER COMPANY: FORMER CONFORMED NAME: EQUIFAX PS INC DATE OF NAME CHANGE: 20010315 10-Q 1 fis-10xq06x30x2013.htm 10-Q FIS-10-Q 06-30-2013
 
 
 
 
 
 
 
 
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________
Form 10-Q
_______________________________________________
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the quarterly period ended June 30, 2013
Or
o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from                      to
Commission File No. 001-16427
_______________________________________________
Fidelity National Information Services, Inc.
(Exact name of registrant as specified in its charter)
Georgia
 
37-1490331
(State or other jurisdiction
 
(I.R.S. Employer Identification No.)
of incorporation or organization)
 
 
 
 
 
601 Riverside Avenue
 
 
Jacksonville, Florida
 
32204
(Address of principal executive offices)
 
(Zip Code)
(904) 438-6000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer x
Accelerated filer o
Non-accelerated filer o
(Do not check if a smaller reporting company)
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES o NO x
As of July 31, 2013, 292,107,324 shares of the Registrant’s Common Stock were outstanding.
 
 
 
 
 
 
 
 
 
 



FORM 10-Q
QUARTERLY REPORT
Quarter Ended June 30, 2013
INDEX
 
Page
 
 
 
 EX-31.1
 
 EX-31.2
 
 EX-32.1
 
 EX-32.2
 
 EX-101 INSTANCE DOCUMENT
 
 EX-101 SCHEMA DOCUMENT
 
 EX-101 CALCULATION LINKBASE DOCUMENT
 
 EX-101 DEFINITION LINKBASE DOCUMENT
 
 EX-101 LABELS LINKBASE DOCUMENT
 
 EX-101 PRESENTATION LINKBASE DOCUMENT
 


1




FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
 
June 30, 2013
 
December 31, 2012
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
653.1

 
$
517.6

Settlement deposits
28.0

 
32.6

Trade receivables, net of allowance for doubtful accounts of $21.3 and $19.9 as of
June 30, 2013 and December 31, 2012, respectively
948.5

 
925.7

Settlement receivables
85.6

 
128.3

Other receivables
58.2

 
30.2

Due from Brazilian venture partner
38.1

 
42.0

Prepaid expenses and other current assets
181.2

 
111.9

Deferred income taxes
58.6

 
55.9

Total current assets
2,051.3

 
1,844.2

Property and equipment, net
415.8

 
419.5

Goodwill
8,487.4

 
8,381.5

Intangible assets, net
1,466.2

 
1,576.2

Computer software, net
848.4

 
847.0

Deferred contract costs, net
213.2

 
211.2

Other noncurrent assets
267.8

 
270.1

Total assets
$
13,750.1

 
$
13,549.7

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
657.1

 
$
624.6

Due to Brazilian venture partner
14.3

 
18.8

Settlement payables
121.1

 
172.2

Current portion of long-term debt
83.7

 
153.9

Deferred revenues
266.7

 
287.3

Total current liabilities
1,142.9

 
1,256.8

Deferred revenues
35.6

 
42.2

Deferred income taxes
801.2

 
821.8

Long-term debt, excluding current portion
4,672.7

 
4,231.6

Due to Brazilian venture partner
34.5

 
40.5

Other long-term liabilities
313.0

 
363.2

Total liabilities
6,999.9

 
6,756.1

Equity:
 
 
 
FIS stockholders’ equity:
 
 
 
Preferred stock, $0.01 par value, 200 shares authorized, none issued and outstanding as of June 30, 2013 and December 31, 2012

 

Common stock, $0.01 par value, 600 shares authorized, 386.1 and 385.9 shares issued as of June 30, 2013 and December 31, 2012, respectively
3.8

 
3.8

Additional paid in capital
7,207.1

 
7,197.0

Retained earnings
2,226.1

 
2,105.8

Accumulated other comprehensive earnings
(10.3
)
 
30.0

Treasury stock, $0.01 par value, 94.0 and 91.8 shares as of June 30, 2013 and December 31, 2012, respectively, at cost
(2,828.1
)
 
(2,695.7
)
Total FIS stockholders’ equity
6,598.6

 
6,640.9

Noncontrolling interest
151.6

 
152.7

Total equity
6,750.2

 
6,793.6

Total liabilities and equity
$
13,750.1

 
$
13,549.7

See accompanying notes to unaudited condensed consolidated financial statements.

2


FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In millions, except per share data)
(Unaudited)

 
Three months ended
June 30,
 
Six months ended
 June 30,
 
2013
 
2012
 
2013
 
2012
Processing and services revenues (for related party activity, see note 2)
$
1,512.5

 
$
1,457.2

 
$
2,990.5

 
$
2,870.6

Cost of revenues
1,028.2

 
981.1

 
2,036.2

 
1,970.6

Gross profit
484.3

 
476.1

 
954.3

 
900.0

Selling, general, and administrative expenses (for related party activity, see note 2)
236.7

 
193.4

 
431.6

 
394.8

Operating income
247.6

 
282.7

 
522.7

 
505.2

Other income (expense):
 
 
 
 
 
 
 
Interest expense, net
(49.4
)
 
(56.6
)
 
(101.1
)
 
(116.0
)
Other income (expense), net
(61.9
)
 
(1.8
)
 
(56.8
)
 
(22.7
)
Total other income (expense), net
(111.3
)
 
(58.4
)
 
(157.9
)
 
(138.7
)
Earnings from continuing operations before income taxes
136.3

 
224.3

 
364.8

 
366.5

Provision for income taxes
40.9

 
65.3

 
116.1

 
113.0

Earnings from continuing operations, net of tax
95.4

 
159.0

 
248.7

 
253.5

Earnings (loss) from discontinued operations, net of tax
13.6

 
(5.2
)
 
9.7

 
(9.6
)
Net earnings
109.0

 
153.8

 
258.4

 
243.9

Net (earnings) loss attributable to noncontrolling interest
(4.2
)
 
(3.2
)
 
(9.5
)
 
(6.2
)
Net earnings attributable to FIS
$
104.8

 
$
150.6

 
$
248.9

 
$
237.7

Net earnings per share — basic from continuing operations attributable to FIS common stockholders
$
0.31

 
$
0.53

 
$
0.82

 
$
0.85

Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders
0.05

 
(0.02
)
 
0.03

 
(0.03
)
Net earnings per share — basic attributable to FIS common stockholders *
$
0.36

 
$
0.51

 
$
0.86

 
$
0.82

Weighted average shares outstanding — basic
289.9

 
292.7

 
290.5

 
291.2

Net earnings per share — diluted from continuing operations attributable to FIS common stockholders
$
0.31

 
$
0.52

 
$
0.81

 
$
0.83

Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders
0.05

 
(0.02
)
 
0.03

 
(0.03
)
Net earnings per share — diluted attributable to FIS common stockholders *
$
0.36

 
$
0.50

 
$
0.84

 
$
0.80

Weighted average shares outstanding — diluted
294.3

 
298.3

 
294.8

 
296.8

Cash dividends paid per share
$
0.22

 
$
0.20

 
$
0.44

 
$
0.40

Amounts attributable to FIS common stockholders:
 
 
 
 
 
 
 
Earnings from continuing operations, net of tax
$
91.2

 
$
155.8

 
$
239.2

 
$
247.3

Earnings (loss) from discontinued operations, net of tax
13.6

 
(5.2
)
 
9.7

 
(9.6
)
Net earnings attributable to FIS
$
104.8

 
$
150.6

 
$
248.9

 
$
237.7

* Amounts may not sum due to rounding.
See accompanying notes to unaudited condensed consolidated financial statements.

3



FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Earnings
(In millions)
(Unaudited)

 
Three months ended June 30,
 
Six months ended June 30,
 
2013
 
2012
 
2013
 
2012
Net earnings
 
 
$
109.0

 
 
 
$
153.8

 
 
 
$
258.4

 
 
 
$
243.9

Other comprehensive earnings, before tax:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on investments and derivatives
$
2.3

 
 
 
$
(7.6
)
 
 
 
$
1.1

 
 
 
$
(1.9
)
 
 
Reclassification adjustment for losses included in net earnings
1.3

 
 
 
1.5

 
 
 
3.0

 
 
 
4.1

 
 
Unrealized gain (loss) on investments and derivatives, net
3.6

 
 
 
(6.1
)
 
 
 
4.1

 
 
 
2.2

 
 
Foreign currency translation adjustments
(46.5
)
 
 
 
(52.0
)
 
 
 
(53.7
)
 
 
 
(27.6
)
 
 
Other comprehensive earnings (loss), before tax
(42.9
)
 
 
 
(58.1
)
 
 
 
(49.6
)
 
 
 
(25.4
)
 
 
Provision for income tax expense (benefit) related to items of other comprehensive earnings
(1.0
)
 
 
 
(4.2
)
 
 
 
(0.2
)
 
 
 
(0.4
)
 
 
Other comprehensive earnings (loss), net of tax
$
(41.9
)
 
(41.9
)
 
$
(53.9
)
 
(53.9
)
 
$
(49.4
)
 
(49.4
)
 
$
(25.0
)
 
(25.0
)
Comprehensive earnings
 
 
67.1

 
 
 
99.9

 
 
 
209.0

 
 
 
218.9

Net (earnings) loss attributable to noncontrolling interest
 
 
(4.2
)
 
 
 
(3.2
)
 
 
 
(9.5
)
 
 
 
(6.2
)
Other comprehensive (earnings) losses attributable to noncontrolling interest
 
 
10.6

 
 
 
11.0

 
 
 
9.1

 
 
 
8.8

Comprehensive earnings attributable to FIS
 
 
$
73.5

 
 
 
$
107.7

 
 
 
$
208.6

 
 
 
$
221.5


See accompanying notes to unaudited condensed consolidated financial statements.





4


FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statement of Equity
Six months ended June 30, 2013
(In millions, except per share amounts)
(Unaudited)

 
 
 
 
 
Amount
 
 
 
 
 
FIS Stockholders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
Number of shares
 
 
 
Additional
 
 
 
other
 
 
 
 
 
 
 
Common
 
Treasury
 
Common
 
paid in
 
Retained
 
comprehensive
 
Treasury
 
Noncontrolling
 
Total
 
shares
 
shares
 
stock
 
capital
 
earnings
 
earnings
 
stock
 
interest
 
equity
Balances, December 31, 2012
385.9

 
(91.8
)
 
$
3.8

 
$
7,197.0

 
$
2,105.8

 
$
30.0

 
$
(2,695.7
)
 
$
152.7

 
$
6,793.6

Issuance of restricted stock
0.2

 

 

 

 

 

 

 

 

Exercise of stock options and stock purchase right

 
3.4

 

 
(33.9
)
 

 

 
98.4

 

 
64.5

Treasury shares held for taxes due upon exercise of stock options

 
(0.1
)
 

 

 

 

 
(5.5
)
 

 
(5.5
)
Excess income tax benefit from exercise of stock options

 

 

 
14.5

 

 

 

 

 
14.5

Stock-based compensation

 

 

 
29.5

 

 

 

 

 
29.5

Cash dividends paid ($0.22 per share per quarter) and other distributions

 

 

 

 
(128.6
)
 

 

 
(1.5
)
 
(130.1
)
Purchases of treasury stock

 
(5.5
)
 

 

 

 

 
(225.3
)
 

 
(225.3
)
Net earnings

 

 

 

 
248.9

 

 

 
9.5

 
258.4

Other comprehensive earnings

 

 

 

 

 
(40.3
)
 

 
(9.1
)
 
(49.4
)
Balances, June 30, 2013
386.1

 
(94.0
)
 
$
3.8

 
$
7,207.1

 
$
2,226.1

 
$
(10.3
)
 
$
(2,828.1
)
 
$
151.6

 
$
6,750.2

See accompanying notes to unaudited condensed consolidated financial statements.


5


FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)

 
Six months ended
June 30,
 
2013
 
2012
Cash flows from operating activities:
 
 
 
Net earnings
$
258.4

 
$
243.9

Adjustment to reconcile net earnings to net cash provided by operating activities:
 
 
 
Depreciation and amortization
305.5

 
317.2

Amortization of debt issue costs
14.6

 
24.6

ClearPar contingent consideration included in discontinued operations
(26.8
)
 

Gain on mFoundry acquisition
(9.2
)
 

Stock-based compensation
26.4

 
42.9

Deferred income taxes
(24.7
)
 
5.8

Excess income tax benefit from exercise of stock options
(14.5
)
 
(10.3
)
Other operating activities
1.7

 

Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
 
 
 
Trade receivables
(26.1
)
 
(55.6
)
Settlement activity
(3.6
)
 
(7.5
)
Prepaid expenses and other assets
(60.7
)
 
(16.7
)
Deferred contract costs
(37.3
)
 
(34.9
)
Deferred revenue
(26.0
)
 
(21.0
)
Accounts payable, accrued liabilities, and other liabilities
(12.9
)
 
(25.7
)
Net cash provided by operating activities
364.8

 
462.7

 
 
 
 
Cash flows from investing activities:
 
 
 
Additions to property and equipment
(59.5
)
 
(66.6
)
Additions to computer software
(97.5
)
 
(89.1
)
Receipt of contingent consideration from ClearPar sale
26.8

 

Acquisitions, net of cash acquired, and equity investments
(130.1
)
 
(41.7
)
Other investing activities, net
(22.8
)
 

Net cash used in investing activities
(283.1
)
 
(197.4
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Borrowings
7,151.6

 
7,483.3

Repayment of borrowings
(6,776.0
)
 
(7,430.8
)
Debt issuance costs
(17.0
)
 
(47.5
)
Excess income tax benefit from exercise of stock options
14.5

 
10.3

Proceeds from exercise of stock options
72.9

 
152.9

Treasury stock activity
(230.8
)
 
(186.0
)
Dividends paid
(127.9
)
 
(117.7
)
Other financing activities, net
(11.8
)
 
(4.7
)
Net cash provided by (used in) financing activities
75.5

 
(140.2
)
Effect of foreign currency exchange rate changes on cash
(21.7
)
 
(6.8
)
Net increase in cash and cash equivalents
135.5

 
118.3

Cash and cash equivalents, beginning of period
517.6

 
415.5

Cash and cash equivalents, end of period
$
653.1

 
$
533.8

 
 
 
 
Supplemental cash flow information:
 
 
 
Cash paid for interest
$
112.9

 
$
97.8

Cash paid for income taxes
$
186.7

 
$
87.3

See accompanying notes to unaudited condensed consolidated financial statements.

6


FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Unless stated otherwise or the context otherwise requires, all references to “FIS,” “we,” the “Company” or the “registrant” are to Fidelity National Information Services, Inc., a Georgia corporation.

(1) Basis of Presentation
The unaudited financial information included in this report includes the accounts of FIS and its subsidiaries prepared in accordance with U.S. generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements (Unaudited) and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. Certain reclassifications have been made in the 2012 Condensed Consolidated Financial Statements (Unaudited) to conform to the classifications used in 2013.
We report the results of our operations in four reporting segments: 1) Financial Solutions Group (“FSG”), 2) Payment Solutions Group (“PSG”), 3) International Solutions Group (“ISG”) and 4) Corporate and Other (Note 12).

(2) Related Party Transactions
We are a party to certain agreements with related parties described below.
Revenues and Expenses
Related party transactions included in revenues for the three and six months ended June 30, 2013 and 2012, are as follows (in millions):
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2013
 
2012
 
2013
 
2012
Banco Bradesco Brazilian Venture revenue
$
78.5

 
$
67.2

 
$
153.8

 
$
142.6

FNF data processing services revenue

 
8.5

 

 
20.5

Ceridian data processing and services revenue

 
28.1

 

 
46.7

Total related party revenues
$
78.5

 
$
103.8

 
$
153.8

 
$
209.8


The three and six months ended June 30, 2012 also included $1.1 million and $2.1 million, respectively, in expenses for administrative corporate support and other services with FNF (net of expense reimbursements) and $0.3 million and $0.5 million, respectively, of expenses related to employee benefits services provided by Ceridian. These costs were included in selling, general and administrative expenses.

Brazilian Venture

The Company operates a joint venture ("Brazilian Venture") with Banco Bradesco S.A. ("Banco Bradesco") in which we own a 51% controlling interest, to provide comprehensive, fully outsourced transaction processing, call center, cardholder support and collection services to multiple card issuing clients in Brazil, including Banco Bradesco.

FNF

FIS had shared a number of directors and executives with Fidelity National Financial, Inc. ("FNF"), our former parent, subsequent to becoming an independent company. As a result, FNF qualified as a related party from an accounting perspective. As previously reported, William P. Foley II, who serves as Chairman of the Board of Directors of FNF, transitioned from

7

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Executive Chairman to Chairman of the Board of FIS in February 2011, and then to Vice Chairman in March 2012. Certain other key executives shared between the two companies ended their employment with FIS during 2012. As a result, FNF's level of influence over the management or operating policies of FIS was diminished below the level required to meet the definition of a related party as of September 30, 2012. All transactions with FNF are, therefore, included in the related party disclosures through that date.

Ceridian

We provide data processing services to Ceridian Corporation (“Ceridian”), and Ceridian provides us with outsourced employee benefits services. FNF holds an approximate 32% equity interest in Ceridian; therefore, transactions with Ceridian are included as related party activity through September 30, 2012, consistent with the inclusion of FNF as addressed above.

We believe the amounts earned from or charged by us under each of the foregoing arrangements are fair and reasonable. We believe our service arrangements are priced within the range of prices we offer to third parties. However, the amounts we earned or that we were charged under these arrangements were not negotiated at arm's-length, and may not represent the terms that we might have obtained from an unrelated third party.

(3) Unaudited Net Earnings per Share
The basic weighted average shares and common stock equivalents for the three and six months ended June 30, 2013 and 2012 are computed using the treasury stock method.
The following table summarizes the earnings per share attributable to FIS common stockholders for the three and six months ended June 30, 2013 and 2012 (in millions, except per share amounts):
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2013
 
2012
 
2013
 
2012
Earnings from continuing operations attributable to FIS, net of tax
$
91.2

 
$
155.8

 
$
239.2

 
$
247.3

Earnings (loss) from discontinued operations attributable to FIS, net of tax
13.6

 
(5.2
)
 
9.7

 
(9.6
)
Net earnings attributable to FIS common stockholders
$
104.8

 
$
150.6

 
$
248.9

 
$
237.7

Weighted average shares outstanding — basic
289.9

 
292.7

 
290.5

 
291.2

Plus: Common stock equivalent shares
4.4

 
5.6

 
4.3

 
5.6

Weighted average shares outstanding — diluted
294.3

 
298.3

 
294.8

 
296.8

Net earnings per share — basic from continuing operations attributable to FIS common stockholders
$
0.31

 
$
0.53

 
$
0.82

 
$
0.85

Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders
0.05

 
(0.02
)
 
0.03

 
(0.03
)
Net earnings per share — basic attributable to FIS common stockholders *
$
0.36

 
$
0.51

 
$
0.86

 
$
0.82

Net earnings per share — diluted from continuing operations attributable to FIS common stockholders
$
0.31

 
$
0.52

 
$
0.81

 
$
0.83

Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders
0.05

 
(0.02
)
 
0.03

 
(0.03
)
Net earnings per share — diluted attributable to FIS common stockholders *
$
0.36

 
$
0.50

 
$
0.84

 
$
0.80

 
 
 
 
 
 
 
 
* Amounts may not sum due to rounding.
 
 
 
 
 
 
 
Options to purchase approximately 0.1 million and 0.4 million shares of our common stock for the three months and 1.6 million and 3.4 million for the six months ended June 30, 2013 and 2012, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive.





8

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


(4) Discontinued Operations

Certain operations are reported as discontinued in the Condensed Consolidated Statements of Earnings (Unaudited) for the three and six months ended June 30, 2013 and 2012.

 Healthcare Benefit Solutions Business

On June 25, 2012, we entered into a definitive agreement to sell our Healthcare Benefit Solutions Business ("Healthcare Business") because its operations did not align with our strategic plans. The all-cash transaction closed on August 15, 2012 and we received cash proceeds of $332.2 million. We recorded a pre-tax gain of $22.0 million and tax expense on the sale of $78.3 million, which resulted from the allocation of goodwill with minimal tax basis.

The results of operations of the Healthcare Business, which were previously included in the PSG segment, have been classified as discontinued operations for all periods presented. The Healthcare Business had no revenue or pretax earnings for the six months ended June 30, 2013. The Healthcare Business had revenues of $31.7 million and $65.2 million and pretax earnings of $6.7 million and $13.7 million for the three and six months ended June 30, 2012, respectively.

Brazil Item Processing and Remittance Services Operations

During the third quarter of 2010, the Company decided to pursue strategic alternatives for Fidelity National Participacoes Ltda. (“Participacoes”). There were no revenues for the 2013 and 2012 periods. Participacoes had losses before taxes of $4.7 million and $14.3 million for the three months and $10.7 million and $27.3 million for the six months ended June 30, 2013 and 2012, respectively. Participacoes' processing volume was transitioned to other vendors or back to its customers during the second quarter of 2011. As a result of the dismissal of employees related to the shut-down activities completed in 2011, the three months and six months ended June 30, 2013 and 2012 included charges of $4.5 million and $12.7 million and $9.2 million and $24.4 million, respectively, to settle claims or increase our provision for potential labor claims. The shut-down activities involved the transfer and termination of approximately 2,600 employees. As of June 30, 2013, there were approximately 1,400 active labor claims. Former employees generally had up to two years from the date of termination to file labor claims, which extended through April 2013. Consequently, we have continued exposure on these active claims, which were not transferred with other assets and liabilities in the disposal. Our accrued liability for active and unasserted labor claims considered probable of assertion, net of $16.9 million in court ordered deposits, is $32.2 million as of June 30, 2013. Any changes in the estimated liability related to these labor claims will be recorded as discontinued operations.

ClearPar

On January 1, 2010, FIS sold certain assets and liabilities constituting our ClearPar automated syndicated loan trade settlement business. Terms of the sale included an initial cash payment of $71.5 million at closing, with the potential for an additional earn-out payment calculated as a function of the business' 2012 operating results. In May 2013, we recorded in discontinued operations a gain of $26.8 million ($16.7 million, net of tax) upon final determination and receipt of the earn-out payment.
 
(5) Changes in Accumulated Other Comprehensive Earnings Attributable to FIS by Component, Net of Tax

The following table shows accumulated other comprehensive earnings ("AOCE") attributable to FIS by component, net of tax, for the six months ended June 30, 2013 (in millions):

9

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


 
 
 
 
Foreign
 
 
 
 
 
 
Interest Rate
 
Currency
 
 
 
 
 
 
Swap
 
Translation
 
 
 
 
 
 
Contracts
 
Adjustments
 
Other
 
Total
Balances, December 31, 2012
 
$
(6.1
)
 
$
36.3

 
$
(0.2
)
 
$
30.0

Other comprehensive gain/(loss) before reclassifications
 
2.9

 
(42.5
)
 
(2.5
)
 
(42.1
)
Amounts reclassified from AOCE
 
1.8

 

 

 
1.8

Net current period AOCE attributable to FIS
 
4.7

 
(42.5
)
 
(2.5
)
 
(40.3
)
Balances, June 30, 2013
 
$
(1.4
)
 
$
(6.2
)
 
$
(2.7
)
 
$
(10.3
)

The amount reclassified from AOCE for interest rate swap contracts includes $3.0 million recorded as interest expense, reduced by a related $1.2 million provision for income taxes.

(6) Condensed Consolidated Financial Statement Details
The following tables show the Company’s condensed consolidated financial statement details as of June 30, 2013 and December 31, 2012 (in millions):

 
June 30, 2013
 
December 31, 2012
 
Cost
 
Accumulated
depreciation and amortization
 
Net
 
Cost
 
Accumulated
depreciation and amortization
 
Net
Property and equipment
$
1,016.0

 
$
600.2

 
$
415.8

 
$
975.5

 
$
556.0

 
$
419.5

Intangible assets
$
2,803.9

 
$
1,337.7

 
$
1,466.2

 
$
2,962.6

 
$
1,386.4

 
$
1,576.2

Computer software
$
1,511.0

 
$
662.6

 
$
848.4

 
$
1,451.6

 
$
604.6

 
$
847.0

       
The Company entered into capital lease obligations of $2.0 million and $1.8 million during the six months ended June 30, 2013 and 2012, respectively, primarily consisting of computer hardware and software. The assets are included in property and equipment and computer software and the remaining capital lease obligation is classified as long-term debt on our Condensed Consolidated Balance Sheet (Unaudited) as of June 30, 2013. Periodic payments are included in repayment of borrowings on the Condensed Consolidated Statements of Cash Flows (Unaudited).






















10

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



(7) Long-Term Debt
Long-term debt as of June 30, 2013 and December 31, 2012, consisted of the following (in millions):
 
June 30, 2013
 
December 31, 2012
Term Loans A-2 (1)
$

 
$
250.0

Term Loans A-3, quarterly principal amortization (2)

 
2,021.3

Term Loans A-4, quarterly principal amortization (3)
1,987.5

 

Senior Notes due 2017, interest payable semi-annually at 7.625%

 
750.0

Senior Notes due 2018, interest payable semi-annually at 2.000%
250.0

 

Senior Notes due 2020, interest payable semi-annually at 7.875%
500.0

 
500.0

Senior Notes due 2022, interest payable semi-annually at 5.000%
700.0

 
700.0

Senior Notes due 2023, interest payable semi-annually at 3.500%
1,000.0

 

Revolving Loan (4)
300.0

 
126.3

Other
18.9

 
37.9

 
4,756.4

 
4,385.5

Current portion
(83.7
)
 
(153.9
)
Long-term debt, excluding current portion
$
4,672.7

 
$
4,231.6

__________________________________________
(1)
The Term Loans A-2 were repaid in full on January 11, 2013 through additional borrowings on our Revolving Loan.
(2)
The Term Loans A-3 were repaid in full on April 23, 2013 and replaced with Term Loans A-4 as discussed below.
(3)
Interest on the Term Loans A-4 is generally payable at LIBOR plus an applicable margin of up to 2.00% based upon the Company's corporate credit ratings and the ratings on the FIS Credit Agreement. As of June 30, 2013, the weighted average interest rate on the Term Loans A-4 was 1.69%.
(4)
Interest on the Revolving Loan is generally payable at LIBOR plus an applicable margin of up to 2.00% plus an unused commitment fee of up to 0.35%, each based upon the Company's corporate credit ratings and the ratings on the FIS Credit Agreement. As of June 30, 2013, the applicable margin on the Revolving Loan, excluding facility fees and unused commitment fees, was 1.50%.

On April 23, 2013, FIS amended and restated its syndicated credit agreement (the “FIS Credit Agreement”). The transaction resulted in the increase of FIS' revolving loan capacity by $850.0 million to $2,000.0 million and the amendment of certain terms and conditions, including the removal of provisions regarding the granting of collateral by FIS and its subsidiaries. As of June 30, 2013, the FIS Credit Agreement provided total committed capital of $3,987.5 million comprised of: (1) a revolving credit facility in an aggregate maximum principal amount of $2,000.0 million maturing on March 30, 2017 (the "Revolving Loan"); and (2) term loans of $1,987.5 million maturing on March 30, 2017 (the "Term Loans A-4"). As of June 30, 2013, the outstanding principal balance of the Revolving Loan was $300.0 million, with $1,699.2 million of borrowing capacity remaining thereunder (net of $0.8 million in outstanding letters of credit issued under the Revolving Loan).

On April 15, 2013, FIS completed the issuance and sale of $250.0 million in aggregate principal amount of 2.0% unsecured senior notes due April 15, 2018 (the "2018 Notes") and $1,000.0 million in aggregate principal amount of 3.5% unsecured senior notes due April 15, 2023 (the "2023 Notes"). Net proceeds from the offering, after deducting the underwriting discounts and commissions, were $1,233.1 million. The 2018 Notes and 2023 Notes were offered and sold pursuant to the Form S-3 Automatic Shelf Registration filed with the Securities and Exchange Commission on March 5, 2013, as supplemented by the prospectus supplement dated April 10, 2013. On April 15, 2013, FIS used a portion of the proceeds from the offering to pay down the outstanding balance of its Revolving Loan. On May 15, 2013, the Company completed a call for redemption of the 2017 Notes for $801.6 million, comprised of $750.0 million in principal and a call premium of $51.6 million.

The obligations of FIS under the FIS Credit Agreement and under all its outstanding senior notes rank equal in priority, are unsecured and are guaranteed by substantially all of the domestic subsidiaries of FIS. The FIS Credit Agreement and the senior notes remain subject to customary covenants, including, among others, limitations on the payment of dividends by FIS, and events of default.

The following table summarizes the mandatory annual principal payments pursuant to the FIS Credit Agreement and the senior notes' indentures as of June 30, 2013 (in millions). There are no mandatory principal payments on the Revolving Loan and any balance outstanding on the Revolving Loan will be due and payable at its scheduled maturity date:

11

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


 
Term Loan
 
2018
 
2020
 
2022
 
2023
 
 
 
A-4
 
Notes
 
Notes
 
Notes
 
Notes
 
Total
2013
$
25.0

 
$

 
$

 
$

 
$

 
$
25.0

2014
100.0

 

 

 

 

 
100.0

2015
100.0

 

 

 

 

 
100.0

2016
100.0

 

 

 

 

 
100.0

2017
1,662.5

 

 

 

 

 
1,662.5

Thereafter

 
250.0

 
500.0

 
700.0

 
1,000.0

 
2,450.0

Total
$
1,987.5

 
$
250.0

 
$
500.0

 
$
700.0

 
$
1,000.0

 
$
4,437.5


Voluntary prepayment of the Term Loans is generally permitted at any time without fee upon proper notice and subject to a minimum dollar requirement. In addition to scheduled principal payments, the Term Loans are (with certain exceptions) subject to mandatory prepayment upon the occurrence of certain events.

FIS may redeem some or all of the 2020 Notes and the 2022 Notes on or before July 14, 2017 and May 14, 2020, respectively, at specified premiums to par, and thereafter at par. FIS may also redeem the 2018 Notes and the 2023 Notes at its option in whole or in part, at any time and from time to time, at a redemption price equal to the greater of 100% of the principal amount to be redeemed and a make-whole amount calculated as described in the related indenture in each case plus accrued and unpaid interest to, but excluding, the date of redemption; provided no make-whole amount will be paid for redemptions on the 2023 Notes during the three months prior to their maturity.

We monitor the financial stability of our counterparties on an ongoing basis. The lender commitments under the undrawn portions of the Revolving Loan are comprised of a diversified set of financial institutions, both domestic and international. The combined commitments of our top 10 revolving lenders comprise about 58% of our Revolving Loan. The failure of any single lender to perform its obligations under the Revolving Loan would not adversely impact our ability to fund operations. If the single largest lender were to default under the terms of the FIS Credit Agreement (impacting the capacity of the Revolving Loan), the maximum loss of available capacity on the undrawn portion of the Revolving Loan, as of June 30, 2013, would be approximately $116.9 million.

In connection with a March 2012 refinancing and bond offering, we wrote off certain previously capitalized debt issuance costs and transaction expenses totaling $18.4 million and capitalized $29.3 million of other costs. The Company capitalized approximately $18.0 million in additional debt issuance costs with respect to the FIS Credit Agreement refinancing and the issuance of the 2018 Notes and the 2023 Notes, and wrote off approximately $14.1 million of previously capitalized costs as well as certain transaction fees and expenses of under $2.0 million. Upon the early redemption of the 2017 Notes, the Company also expensed approximately $45.3 million, representing the $51.6 million early-redemption premium offset by the premium reflected in the carrying value of this debt. Debt issuance costs of $50.1 million, net of accumulated amortization, remain capitalized as of June 30, 2013, related to all of the above outstanding debt.

The fair value of the Company’s long-term debt is estimated to be approximately $24.4 million lower than the carrying value as of June 30, 2013. This estimate is based on quoted prices of our senior notes and trades of our other debt in close proximity to June 30, 2013, which are considered Level 2-type measurements. This estimate is subjective in nature and involves uncertainties and significant judgment in the interpretation of current market data. Therefore, the values presented are not necessarily indicative of amounts the Company could realize or settle currently.

As of June 30, 2013, we have entered into the following interest rate swap transactions converting a portion of the interest rate exposure on our Term and Revolving Loans from variable to fixed (in millions):


12

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Effective date
 
Termination date
 
Notional amount
 
Bank pays
variable rate of
 
FIS pays
 fixed rate of
 
September 1, 2011
 
September 1, 2014
 
$
150.0

 
1 Month LIBOR (1)
 
0.74
%
(2)
September 1, 2011
 
September 1, 2014
 
150.0

 
1 Month LIBOR (1)
 
0.74
%
(2)
September 1, 2011
 
September 1, 2014
 
300.0

 
1 Month LIBOR (1)
 
0.72
%
(2)
July 1, 2012
 
July 1, 2015
 
300.0

 
1 Month LIBOR (1)
 
0.58
%
(2)
February 1, 2013
 
February 3, 2014
 
200.0

 
1 Month LIBOR (1)
 
0.28
%
(2)
February 1, 2013
 
February 3, 2014
 
200.0

 
1 Month LIBOR (1)
 
0.28
%
(2)
February 3, 2014
 
February 1, 2017
 
400.0

 
1 Month LIBOR (1)
 
0.89
%
(2)
 
 
 
 
$
1,700.0

 
 
 
 

 
___________________________________
(1)
0.19% in effect as of June 30, 2013.
(2)
Does not include the applicable margin and facility fees paid to lenders on the Term Loans and Revolving Loan as described above.
We have designated these interest rate swaps as cash flow hedges and, as such, they are carried on the Condensed Consolidated Balance Sheets (Unaudited) at fair value with changes in fair value included in other comprehensive earnings, net of tax.

A summary of the fair value of the Company’s derivative instruments as of June 30, 2013 and December 31, 2012, is as follows (in millions):
 
June 30, 2013
 
December 31, 2012
 
Balance sheet location
 
Fair
value
 
Balance sheet location
 
Fair
value
Interest rate swap contracts
Other noncurrent assets
 
$
2.1

 
Other noncurrent assets
 
$

Interest rate swap contracts
Accounts payable and accrued liabilities
 
0.2

 
Accounts payable and accrued liabilities
 
1.0

Interest rate swap contracts
Other long-term liabilities
 
4.5

 
Other long-term liabilities
 
9.4


In accordance with the authoritative guidance for fair value measurements, the inputs used to determine the estimated fair value of our interest rate swaps are Level 2-type measurements. We considered our own credit risk and the credit risk of the counterparties when determining the fair value of our interest rate swaps. Adjustments are made to these amounts and to AOCE within the Condensed Consolidated Statements of Equity (Unaudited) and the Condensed Consolidated Statements of Comprehensive Earnings (Unaudited) as the factors that impact fair value change, including current and projected interest rates, time to maturity and required cash transfers/settlements with our counterparties. Periodic actual and estimated settlements with counterparties are recorded to interest expense as a yield adjustment to effectively fix the otherwise variable rate interest expense associated with the Term and Revolving Loans.

A summary of the effect of derivative instruments on the Company’s Condensed Consolidated Statements of Comprehensive Earnings (Unaudited) and recognized in AOCE for the three and six months ended June 30, 2013 and 2012 is as follows (in millions):
 
 
Amount of gain (loss)
recognized in AOCE on
derivatives
 
 
 
Amount of loss reclassified
from AOCE into
income
Derivatives in cash
 
Three months ended
 
Location of loss
 
Three months ended
flow hedging
 
June 30,
 
reclassified from
 
June 30,
relationships
 
2013
 
2012
 
AOCE into income
 
2013
 
2012
Interest rate swap contracts
 
$
4.8

 
$
(2.8
)
 
Interest expense
 
$
(1.3
)
 
$
(1.5
)


13

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


 
 
Amount of gain (loss)recognized in AOCE on
derivatives
 
 
 
Amount of loss reclassified
from AOCE into
income
Derivatives in cash
 
Six months ended
 
Location of loss
 
Six months ended
flow hedging
 
June 30,
 
reclassified from
 
June 30,
relationships
 
2013
 
2012
 
AOCE into income
 
2013
 
2012
Interest rate swap contracts
 
$
4.8

 
$
(4.6
)
 
Interest expense
 
$
(3.0
)
 
$
(4.1
)

Approximately $1.4 million of the balance in AOCE as of June 30, 2013, is expected to be reclassified into income over the next twelve months.
Our existing cash flow hedges are highly effective and there was no impact on earnings due to hedge ineffectiveness. It is our practice to execute such instruments with credit-worthy banks at the time of execution and not to enter into derivative financial instruments for speculative purposes. As of June 30, 2013, we believe that our interest rate swap counterparties will be able to fulfill their obligations under our agreements and we believe we will have debt outstanding through the various expiration dates of the swaps such that the forecasted transactions remain probable of occurring.

(8) Supplemental Guarantor Financial Information

The following supplemental financial information sets forth for FIS and its guarantor and non-guarantor subsidiaries: (a) the Condensed Consolidating Balance Sheets as of June 30, 2013 and December 31, 2012; (b) the Condensed Consolidating Statements of Earnings and Comprehensive Earnings for the three and six months ended June 30, 2013 and 2012; and (c) the Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2013 and 2012. Each guarantor subsidiary is 100% owned by FIS and all guarantees are full and unconditional as well as joint and several.
 
Condensed Consolidating Balance Sheets
 
June 30, 2013
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
12.9

 
$
206.9

 
$
433.3

 
$

 
$
653.1

Settlement deposits

 
28.0

 

 

 
28.0

Trade receivables, net

 
692.8

 
255.7

 

 
948.5

Investment in subsidiaries, intercompany and receivables from related parties
9,548.7

 
10,052.0

 
1,028.0

 
(20,590.6
)
 
38.1

Other current assets
64.5

 
244.3

 
74.8

 

 
383.6

Total current assets
9,626.1

 
11,224.0

 
1,791.8

 
(20,590.6
)
 
2,051.3

Property and equipment, net
7.6

 
320.8

 
87.4

 

 
415.8

Goodwill

 
7,205.5

 
1,281.9

 

 
8,487.4

Intangible assets, net

 
1,091.5

 
374.7

 

 
1,466.2

Computer software, net
38.4

 
646.7

 
163.3

 

 
848.4

Other noncurrent assets
73.3

 
329.7

 
78.0

 

 
481.0

Total assets
$
9,745.4

 
$
20,818.2

 
$
3,777.1

 
$
(20,590.6
)
 
$
13,750.1

Liabilities and Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
146.0

 
$
225.9

 
$
285.2

 
$

 
$
657.1

Settlement payables

 
112.3

 
8.8

 

 
121.1

Current portion of long-term debt
75.0

 
6.8

 
1.9

 

 
83.7

Deferred revenues

 
188.4

 
78.3

 

 
266.7

Other current liabilites

 

 
14.3

 

 
14.3

Total current liabilities
221.0

 
533.4

 
388.5

 

 
1,142.9

Deferred income taxes

 
784.9

 
16.3

 

 
801.2

Long-term debt, excluding current portion
4,667.9

 
4.2

 
0.6

 

 
4,672.7

Other long-term liabilities
6.3

 
89.7

 
287.1

 

 
383.1

Total liabilities
4,895.2

 
1,412.2

 
692.5

 

 
6,999.9

Total equity
4,850.2

 
19,406.0

 
3,084.6

 
(20,590.6
)
 
6,750.2

Total liabilities and equity
$
9,745.4

 
$
20,818.2

 
$
3,777.1

 
$
(20,590.6
)
 
$
13,750.1


14

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


 
Condensed Consolidating Balance Sheets
 
December 31, 2012
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
18.4

 
$
226.8

 
$
272.4

 
$

 
$
517.6

Settlement deposits

 
32.6

 

 

 
32.6

Trade receivables, net

 
693.9

 
231.8

 

 
925.7

Investment in subsidiaries, intercompany and receivables from related parties
9,207.5

 
9,482.0

 
1,087.8

 
(19,735.3
)
 
42.0

Other current assets
21.2

 
259.6

 
45.5

 

 
326.3

Total current assets
9,247.1

 
10,694.9

 
1,637.5

 
(19,735.3
)
 
1,844.2

Property and equipment, net
12.0

 
328.8

 
78.7

 

 
419.5

Goodwill

 
7,205.7

 
1,175.8

 

 
8,381.5

Intangible assets, net

 
1,191.4

 
384.8

 

 
1,576.2

Computer software, net
39.7

 
641.9

 
165.4

 

 
847.0

Other noncurrent assets
103.2

 
288.3

 
89.8

 

 
481.3

Total assets
$
9,402.0

 
$
20,351.0

 
$
3,532.0

 
$
(19,735.3
)
 
$
13,549.7

Liabilities and Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
110.7

 
$
257.1

 
$
256.8

 
$

 
$
624.6

Settlement payables

 
165.6

 
6.6

 

 
172.2

Current portion of long-term debt
144.4

 
7.4

 
2.1

 

 
153.9

Deferred revenues

 
224.0

 
63.3

 

 
287.3

Other current liabilites

 

 
18.8

 

 
18.8

Total current liabilities
255.1

 
654.1

 
347.6

 

 
1,256.8

Deferred income taxes

 
820.4

 
1.4

 

 
821.8

Long-term debt, excluding current portion
4,224.1

 
7.2

 
0.3

 

 
4,231.6

Other long-term liabilities
29.0

 
99.7

 
317.2

 

 
445.9

Total liabilities
4,508.2

 
1,581.4

 
666.5

 

 
6,756.1

Total equity
4,893.8

 
18,769.6

 
2,865.5

 
(19,735.3
)
 
6,793.6

Total liabilities and equity
$
9,402.0

 
$
20,351.0

 
$
3,532.0

 
$
(19,735.3
)
 
$
13,549.7


 
Condensed Consolidating Statements of Earnings and Comprehensive Earnings
 
Three months ended June 30, 2013
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$

 
$
1,180.8

 
$
331.7

 
$

 
$
1,512.5

Operating expenses
56.6

 
876.0

 
332.3

 

 
1,264.9

Operating income
(56.6
)
 
304.8

 
(0.6
)
 

 
247.6

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(48.1
)
 
(0.4
)
 
(0.9
)
 

 
(49.4
)
Other income (expense)
(63.8
)
 
3.1

 
(1.2
)
 

 
(61.9
)
Net earnings (loss) of equity affiliates
212.9

 

 

 
(212.9
)
 

Total other income (expense)
101.0

 
2.7

 
(2.1
)
 
(212.9
)
 
(111.3
)
Earnings (loss) from continuing operations before income taxes
44.4

 
307.5

 
(2.7
)
 
(212.9
)
 
136.3

Provision for income taxes
(51.0
)
 
92.9

 
(1.0
)
 

 
40.9

Net earnings (loss) from continuing operations
95.4

 
214.6

 
(1.7
)
 
(212.9
)
 
95.4

Earnings (loss) from discontinued operations, net of tax
13.6

 

 
(3.1
)
 
3.1

 
13.6

Net earnings (loss)
109.0

 
214.6

 
(4.8
)
 
(209.8
)
 
109.0

Net (earnings) loss attributable to noncontrolling interest
(4.2
)
 
0.1

 
(4.3
)
 
4.2

 
(4.2
)
Net earnings (loss) attributable to FIS common stockholders
$
104.8

 
$
214.7

 
$
(9.1
)
 
$
(205.6
)
 
$
104.8

Comprehensive earnings (loss) attributable to FIS
$
73.5

 
$
216.1

 
$
(44.6
)
 
$
(171.5
)
 
$
73.5




15

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


 
Condensed Consolidating Statements of Earnings and Comprehensive Earnings
 
Three months ended June 30, 2012
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$

 
$
1,145.5

 
$
311.7

 
$

 
$
1,457.2

Operating expenses
39.1

 
858.4

 
277.0

 

 
1,174.5

Operating income
(39.1
)
 
287.1

 
34.7

 

 
282.7

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(55.2
)
 
(0.5
)
 
(0.9
)
 

 
(56.6
)
Other income (expense)
(1.3
)
 
2.9

 
(3.4
)
 

 
(1.8
)
Net earnings (loss) of equity affiliates
227.7

 

 

 
(227.7
)
 

Total other income (expense)
171.2

 
2.4

 
(4.3
)
 
(227.7
)
 
(58.4
)
Earnings (loss) from continuing operations before income taxes
132.1

 
289.5

 
30.4

 
(227.7
)
 
224.3

Provision for income taxes
(26.9
)
 
81.5

 
10.7

 

 
65.3

Net earnings (loss) from continuing operations
159.0

 
208.0

 
19.7

 
(227.7
)
 
159.0

Earnings (loss) from discontinued operations, net of tax
(5.2
)
 
4.2

 
(9.4
)
 
5.2

 
(5.2
)
Net earnings (loss)
153.8

 
212.2

 
10.3

 
(222.5
)
 
153.8

Net (earnings) loss attributable to noncontrolling interest
(3.2
)
 

 
(3.2
)
 
3.2

 
(3.2
)
Net earnings (loss) attributable to FIS common stockholders
$
150.6

 
$
212.2

 
$
7.1

 
$
(219.3
)
 
$
150.6

Comprehensive earnings (loss) attributable to FIS
$
107.7

 
$
212.1

 
$
(27.4
)
 
$
(184.7
)
 
$
107.7


 
Condensed Consolidating Statements of Earnings and Comprehensive Earnings
 
Six months ended June 30, 2013
 
 
 
Guarantor
 
Non-guarantor
 
 
 
 
 
FIS
 
subsidiaries
 
subsidiaries
 
Eliminations
 
Consolidated
 
(in millions)
Processing and services revenues
$

 
$
2,340.2

 
$
650.3

 
$

 
$
2,990.5

Operating expenses
118.1

 
1,742.4

 
607.3

 

 
2,467.8

Operating income
(118.1
)
 
597.8

 
43.0

 

 
522.7

Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net
(98.3
)
 
(0.8
)
 
(2.0
)
 

 
(101.1
)
Other income (expense)
(54.2
)
 
3.2

 
(5.8
)
 

 
(56.8
)
Net earnings (loss) of equity affiliates
435.2