Fidelity National Information Services, Inc. (FIS)

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Fidelity National Information Services (FIS)

Q4 2010 Earnings Call

February 08, 2011 8:30 am ET


Gary Norcross - Chief Operating Officer and Corporate Executive Vice President

Frank Martire - Chief Executive Officer, President, Director and Member of Executive Committee

Mary Waggoner - Senior Vice President of Investor Relations

Michael Hayford - Chief Financial Officer and Corporate Executive Vice President


Brett Huff - Stephens Inc.

David Togut - Evercore Partners Inc.

Bryan Keane - Crédit Suisse AG

Tien-Tsin Huang - JP Morgan Chase & Co

David Parker - Lazard Capital Markets LLC

David Koning - Robert W. Baird & Co. Incorporated

Andrew Jeffrey - SunTrust Robinson Humphrey Capital Markets

John Kraft - D.A. Davidson & Co.

Ashwin Shirvaikar - Citigroup Inc

Glenn Greene - Oppenheimer & Co. Inc.



Ladies and gentlemen, thank you for standing by. Welcome to the FIS Fourth Quarter Earnings Call. [Operator Instructions] I would now like to turn the conference over to Mary Waggoner, please go ahead.

Mary Waggoner

Thank you, Mary, and welcome to everyone joining us this morning. Today's news release and supplemental slide presentation have been posted to our website at A webcast replay of the audio portion will also be available on the website shortly after the call. Joining us this morning are Frank Martire, President and Chief Executive Officer; Gary Norcross, Chief Operating Officer; and Mike Hayford, Chief Financial Officer.

Please refer to the Safe Harbor language on Page 2 of the presentation. Today's discussion will contain forward-looking statements. These statements are subject to risks and uncertainties as described in the press release and other filings with the SEC. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Today's comments will focus on results from continuing operations and will include references to non-GAAP measures in order to provide more meaningful comparisons between the periods presented. Reconciliations between GAAP and non-GAAP results are provided in the attachments to the press release and the supplemental slide presentation. In addition, references to revenue and EBITDA for the full year 2009 will be on a pro-forma basis to include results from Metavante.

I will now turn the call over to Frank Martire.

Frank Martire

Thanks, Mary. Good morning, everyone, and thank you for joining us on today's call. I'll begin today's business review with the summary of financial results and business highlights for 2010. Gary will follow with the operations report, and Mike will provide additional insight into our financial results and outlook for 2011.

It was a strong quarter and a very good year for our company. Revenue growth earnings per share and free cash flow exceeded our expectations. For the full year, revenue increased 4.2% to $5.2 billion and increased 3.2% on an organic basis. Earnings per share came in at $2.02 and we generated $791 million in free cash flow.

We had many notable achievements in 2010 including the successful execution of the Metavante integration plan and global rebranding initiatives. We are most proud of the fact that our employees remained focused on serving our clients during a transitional year. I am also pleased with how the entire global organization has come together and that we are working as one integrated company.

The sales team did an outstanding job closing new deals and driving cross sales in 2010 as evidenced by the acceleration in revenue growth. We returned additional value to our shareholders with a $2.5 billion leverage recapitalization and share repurchase program.

And we also made good progress building out our global market strategy. We successfully converted the Visa Vale and Bradesco portfolios to our Brazilian card operations. We improved our competitive positioning with the acquisition of Capco, and we also established a new strategic call center in the Philippines to support our growing global client base.

We entered 2011 as a much stronger company and we are very excited about the future. We continue to invest for growth and we are well positioned to participate in the ongoing market recovery. As always, we remain focused on our client relationships and further expanding our market leadership.

Last, but not least, I would like to thank our employees for the hard work and dedication and our shareholders for your ongoing support. Now Gary will continue with the business report. Gary?

Gary Norcross

Thank you, Frank, and thanks to everyone on the call. I'm pleased to be joining you today. I'll begin today's review with a few comments on the Metavante integration plan, followed by an update on our competitive positioning and a few comments regarding our outlook for the banking industry in 2011.

As Frank mentioned, our employees have done a phenomenal job executing the integration plan and accomplishing our planned synergy objectives while minimizing any distractions in the market. While the integration is not 100% complete, the remaining projects are now being managed as part of our ongoing business plan. Our primary focus in 2011 will be to drive higher organic revenue growth and continue the strong sales momentum we had in 2010.

Looking back on 2010, we saw a meaningful increase in investment decisions. It was an especially good year for core platform decisions, as well as professional services engagements. This is in contrast to 2009 when most financial institutions focused primarily on managing risks and strengthening their balance sheets.

We were excited to have Capco join FIS during the fourth quarter of 2010. Capco's consulting expertise and focus on large U.S. and global financial institutions are critical components of our growth strategy in those markets. The Capco team has been on board for a short period of time and we are already having joint FIS and Capco discussions for opportunities that neither company could pursue independently. This reinforces our belief that having domain expertise and relationships with top-tier managements in large institutions in the U.S. and globally will drive pull-through revenue in other business lines.

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