01—Abstract
Summary
Summary of the 10-K filed February 24, 2012. Cited figures are marked; the original filing is the authoritative source.
Fidelity National Information Services, Inc. (FIS) presented a strong financial performance in its 2011 10-K filing.
The company demonstrated robust revenue growth, largely driven by strategic acquisitions such as Metavante and Capco, which expanded its service offerings and market reach. FIS maintains leading positions in banking and payment technologies, serving a global customer base.
The company's diversified revenue streams, driven by recurring service contracts and a growing international presence, provide a stable financial foundation. While facing competitive pressures and the evolving regulatory landscape, FIS appears well-positioned to leverage its technological capabilities and integrated solutions to drive future growth and maintain its market leadership.
02—Key points
Key Highlights
- FIS achieved significant revenue growth, reaching $5.75 billion in 2011, a 9% increase over 2010, primarily due to acquisitions and increased demand for professional services.
- The company reported operating income of $1.07 billion in 2011, a substantial increase from $801.1 million in 2010, indicating improved operational efficiency and profitability.
- FIS completed the acquisition of Capco in December 2010, expanding its consulting and transformation services capabilities, contributing to revenue growth but also impacting gross margins due to lower-margin professional services.
- The company's recurring revenue, representing over 80% of total revenue, provides a stable revenue stream, though transaction-based revenues are subject to economic fluctuations.
- FIS's strong balance sheet includes $415.5 million in cash and cash equivalents as of December 31, 2011, alongside prudent management of its $4.8 billion debt.
- The company announced an increase in its quarterly dividend to $0.20 per share starting in 2012, signaling confidence in future earnings.
- FIS actively engaged in share repurchases, repurchasing $361.2 million worth of stock in 2011 under its existing authorization, demonstrating a commitment to returning value to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Fidelity National Information Services, Inc. kept $0.08.
- Revenue$5.63B100.0%
- Cost of revenue−$3.92B69.7%
- Gross profit$1.71B30.3%
- Operating costs−$657.0M11.7%
- Operating income$1.05B18.7%
- Interest, other & tax−$579.9M10.3%
- Net income$469.6M8.3%
Where FY2011 revenue went
$5.63B- Cost of revenue: $3.92B, 70% of revenue
- Net income: $469.6M, 8.3% of revenue
- SG&A: $647.9M, 12% of revenue
- Interest, other & tax: $579.9M, 10% of revenue
Kept 8.3% as net incomeNet income $469.6M · 8.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 24, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $5.63B$5.15B | +9.3% |
| Gross Profit | $1.71B$1.59B | +7.2% |
| SG&A Expenses | $647.90M$654.00M | −0.9% |
| Operating Expenses | $4.58B$4.36B | +4.9% |
| Operating Income | $1.05B$783.00M | +34.0% |
| Interest Expense | $264.80M$179.80M | +47.3% |
| Net Income | $469.60M$404.50M | +16.1% |
| EPS (Basic) | $1.56$1.17 | +33.3% |
| EPS (Diluted) | $1.53$1.15 | +33.0% |
| Shares Outstanding (Basic) | 300.60M345.10M | −12.9% |
| Shares Outstanding (Diluted) | 307.00M352.00M | −12.8% |
05—Questions
Frequently Asked Questions
What were the key strategic acquisitions that impacted FIS's performance in 2011?
FIS's performance in 2011 was significantly influenced by its acquisition of Metavante in October 2009, which expanded its core processing and payment capabilities, and the acquisition of Capco in December 2010, which broadened its strategic consulting and technology transformation services.
How does FIS manage its debt?
As of December 31, 2011, FIS had approximately $4.8 billion in debt. The company has a diversified debt structure, including revolving credit facilities and senior notes. FIS actively manages its debt through refinancing and a portion of its variable rate debt is hedged using interest rate swaps to mitigate interest rate risk. The company's cash flows from operations and borrowing programs are considered sufficient to meet its debt obligations.
What are the main risks and challenges FIS faces?
FIS operates in a competitive environment and faces risks including consolidation within the financial services industry, the need to adapt to rapid technological changes, and the potential impact of global economic conditions. Regulatory changes, such as those stemming from the Dodd-Frank Act, also present challenges and compliance requirements. Additionally, security breaches and the loss of key personnel are identified as operational risks.
How does FIS's dividend policy reflect its financial health?
FIS historically paid a quarterly dividend of $0.05 per share. The company's announcement to increase the quarterly dividend to $0.20 per share beginning in 2012 indicates management's confidence in sustained earnings and cash flow generation. However, future dividend payments are at the discretion of the Board of Directors and subject to financial performance and debt covenants.
06—Continue