01—Abstract
Summary
Summary of the 10-K filed February 26, 2013. Cited figures are marked; the original filing is the authoritative source.
Fidelity National Information Services, Inc. (FIS) reported a strong financial performance for the fiscal year ended December 31, 2012, with total revenues reaching $5.81 billiona, a 3.2% increase from the prior year.
The company operates across four segments: Financial Solutions Group (FSG), Payment Solutions Group (PSG), International Solutions Group (ISG), and Corporate and Other. Key drivers for revenue growth included increased processing volumes and transaction growth, alongside contributions from acquisitions. Despite a challenging economic environment and the impact of foreign currency fluctuations, FIS demonstrated resilience, reporting operating income of $1.08 billionb.
The company's strategy focuses on expanding client relationships, acquiring complementary solutions, supporting clients through market transformation, driving margin expansion, and building global diversification. FIS is well-positioned to benefit from the ongoing shift towards electronic transactions and outsourcing within the financial services industry. The company also continues to invest in enhancing its security infrastructure and adapting its services to evolving technological and market demands, while navigating a complex regulatory landscape.
02—Key points
Key Highlights
- Total revenues increased by 3.2% to $5.81 billion in 2012, driven by higher processing volumes and transaction growth.
- Operating income grew to $1.08 billion, with operating margins remaining robust at 18.6% in 2012.
- The company continued its dividend growth, increasing quarterly dividends from $0.05 to $0.20 per share in 2012 and announcing a further increase to $0.22 for 2013.
- FIS repurchased approximately $350.3 million of its common stock under its authorized repurchase plan during 2012.
- The International Solutions Group (ISG) showed strong growth, despite unfavorable foreign currency impacts, benefiting from increased card transaction volumes in Brazil and consulting growth in Europe.
- The company's strategy includes expanding client relationships, acquiring complementary solutions, and focusing on margin expansion and global diversification.
- FIS maintained effective internal controls over financial reporting as of December 31, 2012, as attested by independent auditors.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Fidelity National Information Services, Inc. kept $0.08.
- Revenue$5.80B100.0%
- Cost of revenue−$3.96B68.3%
- Gross profit$1.84B31.7%
- Operating costs−$763.3M13.2%
- Operating income$1.08B18.6%
- Interest, other & tax−$615.1M10.6%
- Net income$461.2M8.0%
Where FY2012 revenue went
$5.80B- Cost of revenue: $3.96B, 68% of revenue
- SG&A: $763.3M, 13% of revenue
- Net income: $461.2M, 8.0% of revenue
- Interest, other & tax: $615.1M, 11% of revenue
Kept 8.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 26, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $5.80B$5.63B | +3.0% |
| Gross Profit | $1.84B$1.71B | +7.8% |
| SG&A Expenses | $763.30M$647.90M | +17.8% |
| Operating Expenses | $4.73B$4.58B | +3.3% |
| Operating Income | $1.08B$1.05B | +2.6% |
| Interest Expense | $231.30M$264.80M | −12.7% |
| Net Income | $461.20M$469.60M | −1.8% |
| EPS (Basic) | $1.58$1.56 | +1.3% |
| EPS (Diluted) | $1.55$1.53 | +1.3% |
| Shares Outstanding (Basic) | 291.80M300.60M | −2.9% |
| Shares Outstanding (Diluted) | 297.50M307.00M | −3.1% |
05—Questions
Frequently Asked Questions
What was FIS's revenue growth in 2012 and what were the main drivers?
FIS reported a 3.2% increase in processing and services revenues to $5.81 billion in 2012. This growth was primarily driven by increased processing volumes, transaction growth, and the addition of revenues from 2012 acquisitions. However, this growth was partially offset by lower item processing and retail check activity, as well as unfavorable foreign currency impacts.
How did FIS manage its debt and capital structure in 2012?
As of December 31, 2012, FIS had total debt of approximately $4.39 billion. The company actively managed its debt through various financing activities, including refinancing and offering new senior notes. FIS also had substantial borrowing capacity available under its credit agreement and continued to return capital to shareholders through share repurchases and dividends.
What is the company's outlook and strategy moving forward?
FIS's strategy is centered on expanding client relationships, acquiring complementary solutions, supporting clients through market transformation, continually improving to drive margin expansion, and building global diversification. The company anticipates that banks will continue to invest in new technology and believes it is well-positioned to capitalize on this trend, as well as the broader industry shift towards outsourcing. They are also focused on enhancing their information security and risk management functions.
Were there any significant legal proceedings or risks identified in the filing?
The filing mentions an ongoing patent infringement lawsuit filed by CheckFree Corporation and CashEdge, Inc. (subsidiaries of Fiserv) against FIS and its subsidiary, Metavante Corporation. The trial is scheduled for January 2014, and the outcome is currently uncertain, making it impossible to estimate a potential loss. The company also highlighted various other risks, including competitive pressures, technological changes, cybersecurity threats, and regulatory changes like the Dodd-Frank Act, which could impact future operations.
06—Continue