10-KPeriod: FY2012

Fidelity National Information Services, Inc. Annual Report, Year Ended Dec 31, 2012

Filed February 26, 2013For Securities:FIS

Summary

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 billion, 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 billion. 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.

Financial Highlights

56 data points
Beta

Revenue

$5.80B

31.7% Gross Margin

Net Income

$461.20M

8.0% Net Margin

EPS (Diluted)

$1.55

Total Assets

$13.55B

Cash & Equivalents

$517.60M

Free Cash Flow

$923.00M

Financial Statements
Beta
Revenue$5.80B
Gross Profit$1.84B
SG&A Expenses$763.30M
Operating Expenses$4.73B
Operating Income$1.08B
Interest Expense$231.30M
Net Income$461.20M
EPS (Basic)$1.58
EPS (Diluted)$1.55
Shares Outstanding (Basic)291.80M
Shares Outstanding (Diluted)297.50M

Key Highlights

  • 1Total revenues increased by 3.2% to $5.81 billion in 2012, driven by higher processing volumes and transaction growth.
  • 2Operating income grew to $1.08 billion, with operating margins remaining robust at 18.6% in 2012.
  • 3The 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.
  • 4FIS repurchased approximately $350.3 million of its common stock under its authorized repurchase plan during 2012.
  • 5The 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.
  • 6The company's strategy includes expanding client relationships, acquiring complementary solutions, and focusing on margin expansion and global diversification.
  • 7FIS maintained effective internal controls over financial reporting as of December 31, 2012, as attested by independent auditors.

Frequently Asked Questions

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.

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.

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.

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.