10-KPeriod: FY2010

Fidelity National Information Services, Inc. Annual Report, Year Ended Dec 31, 2010

Filed February 25, 2011For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) reported strong revenue growth in 2010, reaching $5.27 billion, 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.

Financial Highlights

56 data points
Beta

Revenue

$5.15B

30.9% Gross Margin

Net Income

$404.50M

7.9% Net Margin

EPS (Diluted)

$1.15

Total Assets

$14.18B

Cash & Equivalents

$338.00M

Free Cash Flow

$938.50M

Financial Statements
Beta
Revenue$5.15B
Gross Profit$1.59B
SG&A Expenses$654.00M
Operating Expenses$4.36B
Operating Income$783.00M
Interest Expense$179.80M
Net Income$404.50M
EPS (Basic)$1.17
EPS (Diluted)$1.15
Shares Outstanding (Basic)345.10M
Shares Outstanding (Diluted)352.00M

Key Highlights

  • 12010 revenues reached $5.27 billion, a 42% increase over 2009, driven by the Metavante acquisition.
  • 2Acquisition of Capco in December 2010 further expanded consulting and transformation services for the financial industry.
  • 3Operating income increased significantly to $801.1 million in 2010, up from $285.6 million in 2009, reflecting improved margins and synergies from acquisitions.
  • 4The company's core segments, FSG and PSG, showed strong revenue and operating income growth.
  • 5FIS paid down a substantial amount of debt, with total debt at $5.19 billion at the end of 2010.
  • 6Despite 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.
  • 7FIS continued its quarterly dividend of $0.05 per share, underscoring a commitment to shareholder returns.

Frequently Asked Questions

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.

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.

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.

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.