Business Context and Reporting Period
This Form 8-K, filed on May 3, 2016, by Fidelity National Information Services, Inc. (FIS), reports the announcement of financial results for the quarter ended March 31, 2016. The filing incorporates a press release (Exhibit 99.1) and supplemental financial data (Exhibit 99.2).
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These figures are contained within the referenced press release (Exhibit 99.1) and supplemental schedules (Exhibit 99.2), which are not included in the provided text.
Management has furnished unaudited adjusted combined financial information (non-GAAP) to recalculate adjusted revenues, adjusted operating income, and adjusted EBITDA. These metrics account for the SunGard acquisition to provide a comparable view of performance for 2014 and 2015.
Material Changes and Segment Reclassification
- SunGard Acquisition: FIS completed the acquisition of SunGard on November 30, 2015. SunGard's results have been included in consolidated results since that date.
- Segment Reorganization: In 2015, FIS reorganized into three segments: Integrated Financial Solutions (IFS), Global Financial Solutions (GFS), and Corporate and Other. All prior periods were recast to conform.
- Integration Adjustments: Following the acquisition, SunGard was initially placed in the GFS segment. By March 31, 2016, certain SunGard businesses (corporate liquidity and wealth management) were reclassified to IFS. Non-strategic businesses from both SunGard (public sector, education) and legacy FIS (commercial services, check processing) were reclassified to Corporate and Other.
Guidance, Outlook, and Management Commentary
Management utilizes the non-GAAP measures presented in Exhibit 99.2 to assess performance and provide a reasonable basis for comparison with post-acquisition periods. The filing explicitly states that the unaudited adjusted combined financial information is for illustrative purposes only. It does not indicate what results would have been had the companies been combined at the beginning of 2014, nor does it account for potential impacts of current market conditions, revenue changes, or expense efficiencies.
The filing includes standard disclaimers that non-GAAP measures should not be used in isolation or as a substitute for GAAP measures and may differ from similarly titled measures used by other companies.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific Q1 2016 GAAP revenue, earnings, and cash flow figures.
- Examine Exhibit 99.2 to understand the pro forma adjustments made for the SunGard acquisition and the specific non-GAAP metrics used by management.
- Verify the impact of the segment reclassification on year-over-year comparability for IFS, GFS, and Corporate and Other.
- Confirm the treatment of SunGard administrative expenses and non-strategic business divestitures within the Corporate and Other segment.