01—Abstract
Summary
Summary of the 10-K filed February 25, 2011. Cited figures are marked; the original filing is the authoritative source.
Fidelity National Information Services, Inc. (FIS) reported strong revenue growth in 2010, reaching $5.27 billiona, a significant increase from $3.71 billion in 2009.
This growth was primarily driven by the strategic acquisition of Metavante in late 2009 and Capco in late 2010, which expanded the company's offerings and market reach in banking and payments technologies. The company also benefited from a substantial termination fee related to its Brazilian venture. FIS's operational segments, Financial Solutions Group (FSG) and Payment Solutions Group (PSG), both demonstrated robust revenue and operating income growth.
The International Solutions Group (ISG) also saw revenue increases, though its operating margin declined due to significant impairment charges related to the Brazilian venture. Despite increased debt levels resulting from its recapitalization and acquisitions, FIS maintained positive cash flows from operations and a commitment to returning capital to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- 2010 revenues reached $5.27 billion, a 42% increase over 2009, driven by the Metavante acquisition.
- Acquisition of Capco in December 2010 further expanded consulting and transformation services for the financial industry.
- Operating income increased significantly to $801.1 million in 2010, up from $285.6 million in 2009, reflecting improved margins and synergies from acquisitions.
- The company's core segments, FSG and PSG, showed strong revenue and operating income growth.
- FIS paid down a substantial amount of debt, with total debt at $5.19 billion at the end of 2010.
- Despite a $154.9 million impairment charge in 2010, primarily related to the Brazilian venture, the company generated positive cash flow from operations of $1.07 billion.
- FIS continued its quarterly dividend of $0.05 per share, underscoring a commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Fidelity National Information Services, Inc. kept $0.08.
- Revenue$5.15B100.0%
- Cost of revenue−$3.55B69.1%
- Gross profit$1.59B30.9%
- Operating costs−$808.9M15.7%
- Operating income$783.0M15.2%
- Interest, other & tax−$378.5M7.4%
- Net income$404.5M7.9%
Where FY2010 revenue went
$5.15B- Cost of revenue: $3.55B, 69% of revenue
- SG&A: $654.0M, 13% of revenue
- Net income: $404.5M, 7.9% of revenue
- Other operating costs: $154.9M, 3.0% of revenue
- Interest, other & tax: $378.5M, 7.4% of revenue
Kept 7.9% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed February 25, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $5.15B$3.71B | +38.7% |
| Gross Profit | $1.59B$969.60M | +64.2% |
| SG&A Expenses | $654.00M$547.10M | +19.5% |
| Operating Expenses | $4.36B$3.43B | +27.4% |
| Operating Income | $783.00M$285.60M | +174.2% |
| Interest Expense | $179.80M$134.00M | +34.2% |
| Net Income | $404.50M$105.90M | +282.0% |
| EPS (Basic) | $1.17$0.45 | +160.0% |
| EPS (Diluted) | $1.15$0.44 | +161.4% |
| Shares Outstanding (Basic) | 345.10M236.40M | +46.0% |
| Shares Outstanding (Diluted) | 352.00M239.40M | +47.0% |
05—Questions
Frequently Asked Questions
What were the primary drivers of FIS's revenue growth in 2010?
The primary driver of FIS's revenue growth in 2010 was the acquisition of Metavante Technologies, Inc. in October 2009, which contributed a full year of results in 2010. The acquisition of Capco in December 2010 also contributed to revenue growth. Additionally, a significant termination fee related to the Brazilian Venture and an increase in professional services and software licenses contributed to the overall revenue increase.
How did the Metavante acquisition impact FIS's financial performance?
The Metavante acquisition significantly boosted FIS's revenues, operating income, and overall scale. It expanded the company's capabilities in core processing, payments, trust, wealth management, and entry into healthcare and government payments. Synergies from this acquisition were expected to continue generating cost and revenue benefits.
What is the significance of the impairment charges reported in 2010?
FIS reported impairment charges of $154.9 million in 2010. The majority of this amount, $140.3 million, was related to the impairment of an intangible asset associated with Banco Santander's exit from the Brazilian Venture. This charge negatively impacted operating income and net earnings for the year.
What is FIS's current debt situation and how is it being managed?
As of December 31, 2010, FIS had approximately $5.2 billion in total debt. The company undertook a leveraged recapitalization in 2010, which increased its debt load. However, FIS generated over $1 billion in cash flow from operations, indicating its ability to service this debt. The company also uses interest rate swaps to manage its exposure to variable interest rates.
06—Continue