Worldpay Reports Fourth Quarter and Full-Year 2018 Results
CINCINNATI and LONDON, Feb. 26, 2019 /PRNewswire/ -- Worldpay, Inc. (NYSE: WP, LSE: WPY) ("Worldpay" or the "Company") today announced financial results for the fourth quarter and full-year ended December 31, 2018. Worldpay, Inc. was formed on January 16, 2018 through Vantiv, Inc.'s acquisition of Worldpay Group plc. Net revenue for the Company increased 85% in the fourth quarter to $1,050 million as compared to $569 million in Vantiv, Inc.'s prior year period. Had the Company's acquisition of Worldpay Group plc closed on January 1, 2017, net revenue would have increased by 9% on a pro forma basis and by 10% on a pro forma constant currency basis, when excluding $6 million in foreign exchange headwinds. On a GAAP basis, net income per diluted share attributable to Worldpay, Inc. increased to $0.36 as compared to $(0.37) in the prior year period. Adjusted net income per share increased 15% to $1.12 as compared to $0.97 in the prior year period. (See Schedule 1 for net income per diluted share attributable to Worldpay, Inc. and Schedule 2 for adjusted net income per share.)
"The high rates of organic growth and the continued acceleration in technology solutions shows the power of our strategy," said Charles Drucker, chairman and chief executive officer. "Our strong business fundamentals position us for continued growth in 2019."
Worldpay, Inc. Fourth Quarter 2018 Results
(unaudited)
(in millions, except share data)
---
Three Months Ended
December 31, December 31,
% Change
Pro Forma(2)
Pro Forma(2)
2018 2017(1) % Change CC % Change
---
Net revenue $
1,050.0 $
569.0 85% 9% 10%
Technology Solutions 443.7 225.5 97% 20% 21%
Merchant Solutions 516.1 258.2 100% 2% 3%
Issuer Solutions 90.2 85.3 6% 4% 4%
Adjusted EBITDA $
531.3 $
281.7 89%
Adjusted. EBITDA Margin 50.6% 49.5%
GAAP Net income (loss) attributable to Worldpay, Inc. $
110.5 $
(59.7)
NM
GAAP Net income (loss) per diluted share attributable $
0.36 $
(0.37)
NM
to Worldpay, Inc.
Adjusted net income attributable to Worldpay, Inc. $
352.1 $
173.7 103%
Adjusted net income per share attributable to Worldpay, Inc. $
1.12 $
0.97 15%
(1) 2017 actuals include Vantiv, Inc. results only.
(2) Illustrates what the combined results would have been had the Vantiv, Inc./Worldpay Group plc transaction closed on January 1, 2017.
Fourth Quarter Adjusted EBITDA
For the fourth quarter, adjusted EBITDA was $531 million or 50.6% of net revenue, representing 110 basis points of adjusted EBITDA margin expansion as compared to Vantiv, Inc. results on a stand-alone basis in the prior year period. Had the Company's acquisition of Worldpay Group plc closed on January 1, 2017, adjusted EBITDA margins would have expanded by 160 basis points on a pro forma basis over the prior year period, including $16 million in cost synergies realized during the quarter.
Full-Year Results
For the full-year 2018, net revenue increased 85% to $3,925 million as compared to $2,123 million in Vantiv Inc.'s prior year. Had the Company's acquisition of Worldpay Group plc closed on January 1, 2017, net revenue would have increased by 10% on a pro forma basis and by 9% on a pro forma constant currency basis, when excluding $36 million in foreign exchange tailwinds. On a GAAP basis, net income per diluted share attributable to Worldpay, Inc. decreased to $0.04 as compared to $0.80 in the prior year period. The reduction in GAAP earnings is primarily due to transition, acquisition and integration costs and intangible amortization incurred in connection with the acquisition of Worldpay Group plc. Adjusted net income per share increased 20% to $4.05 as compared to $3.37 in the prior year period.
Worldpay, Inc. Full-Year 2018 Results
(unaudited)
(in millions, except share data)
---
Year Ended
December 31, December 31, % Change
Pro Forma(2)
Pro Forma(2)
2018 2017(1) % Change CC % Change
---
Net revenue $
3,925.4 $
2,123.3 85% 10% 9%
Technology Solutions 1,601.4 809.6 98% 21% 20%
Merchant Solutions 1,976.2 977.9 102% 4% 3%
Issuer Solutions 347.8 335.8 4% 1% 1%
Adjusted EBITDA $
1,895.1 $
1,018.0 86%
Adjusted. EBITDA Margin 48.3% 47.9%
GAAP Net income attributable to Worldpay, Inc. $
12.8 $
130.1 (90)%
GAAP Net income per diluted share attributable to $
0.04 $
0.80 (95)%
Worldpay, Inc.
Adjusted net income attributable to Worldpay, Inc. $
1,246.7 $
641.1 94%
Adjusted net income per share attributable to Worldpay, $
4.05 $
3.37 20%
Inc.
(1) 2017 actuals include Vantiv, Inc. results only.
(2) Illustrates what the combined results would have been had the Vantiv, Inc./Worldpay Group plc transaction closed on January 1, 2017.
Full-Year Adjusted EBITDA
For the full-year 2018, adjusted EBITDA was $1,895 million or 48.3% of net revenue, representing 40 basis points of margin expansion as compared to Vantiv, Inc. results on a stand-alone basis in the prior year period. Had the acquisition of Worldpay Group plc closed on January 1, 2017, adjusted EBITDA margins would have expanded by 140 basis points on a pro forma basis over the prior year period, including $52 million in cost synergies realized during the year.
Debt Repayment
During the three months ended December 31, 2018, Worldpay reached the 4.0x leverage target that it committed to achieving with the announcement of the Worldpay Group plc acquisition. The Company achieved this target more than six months ahead of its initial mid-2019 expectation. Subsequently, in January 2019, Worldpay paid down the remaining $520 million of its Term B-3 loan, further reducing its outstanding debt.
Having honored its commitment to focus exclusively on debt repayment until it reached 4.0x leverage, the company returned to its historical capital allocation priorities, which include investing for growth, both organically and through M&A, balanced with ongoing debt repayment and share repurchases.
$150 Million Share Repurchase and $500 Million Share Repurchase Authorization
Consistent with its capital allocation priorities, Worldpay repurchased approximately 1.8 million shares for $150 million during the three months ended December 31, 2018 under its October 2016 share repurchase authorization. Following this repurchase, $93 million of its October 2016 share repurchase authorization remained.
In February 2019, Worldpay's Board of Directors authorized the repurchase of up to $500 million in additional shares of Worldpay Class A common stock, providing the company with a total authorization of approximately $593 million available for share repurchases.
Worldpay, Inc. First Quarter and Full-Year 2019 Financial Outlook
(in millions, except share data)
---
First Quarter Outlook Full-Year Outlook
Three Months Ended March 31, Year Ended December 31,
2019 Outlook
2018 Actuals(1)
2019 Outlook
2018 Actuals(1)
---
Net revenue
$940 - $955 $851
$4,200- $4,260 $3,925
GAAP Net income per diluted share attributable to
$0.01 - $0.08 $(0.36)
$1.00 - $1.50 $0.04
Worldpay, Inc
Adjusted net income per share
$0.87 - $0.90 $0.81
$4.50 - $4.60 $4.05
(1) Excludes Worldpay Group plc results for the period which was prior to the January 16, 2018 transaction close.
ASC 606
Worldpay adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC 606"), effective January 1, 2018. Under ASC 606, Network fees and other costs are now netted against Revenue and no longer appear as an expense between Revenue and Net revenue as they were shown in prior periods. As a result, Revenue and Net revenue are now equivalent. This change in presentation reduces Revenue by the amount of Network fees and other costs to an amount equivalent to Net revenue, but has no impact on Net income, Adjusted net income, or Adjusted EBITDA.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss the fourth quarter and full-year 2018 financial results today at 8:00 a.m. ET. The conference call can be accessed live over the phone in the U.S. and Canada by dialing (866) 548-4713, in the U.K. by dialing 0800 358 6377, or for international callers +1 (323) 794-2093, and referencing code 4344097#. A replay will be available approximately two hours after the call concludes and can be accessed for the U.S. and Canada by dialing (888) 203-1112, in the U.K. by dialing 0808 101 1153, or for international callers +1 (719) 457-0820, and entering replay passcode 4344097#. The call will also be webcast live from the Company's investor relations website at http://investor.worldpay.com. Following completion of the call, a recorded replay of the webcast will be available on the website.
About Worldpay, Inc.
Worldpay, Inc. (NYSE: WP; LSE: WPY) is a leading payments technology company with unique capability to power global omni-commerce. With an integrated technology platform, Worldpay offers a comprehensive suite of products and services, delivered globally through a single provider. Worldpay processes over 40 billion transactions annually, supporting more than 300 payment types across 146 countries and 126 currencies. The company is focused on expanding into high-growth markets and customer segments, including global eCommerce, integrated payments and B2B. Visit us at www.worldpay.com.
Non-GAAP and Pro Forma Financial Measures
This earnings release presents non-GAAP and pro forma financial information including net revenue, adjusted EBITDA, Underlying EBITDA, adjusted net income, and adjusted net income per share. These are important financial performance measures for the Company, but are not financial measures as defined by GAAP. The presentation of this financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP and adjusted financial performance measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.
Forward-Looking Statements
This release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this release are forward-looking statements including any statements regarding guidance and statements of a general economic or industry specific nature. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, guidance, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
The forward-looking statements contained in this release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider information presented herein, you should understand that these statements are not guarantees of future performance or results. They depend upon future events and are subject to risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual future performance or results and cause them to differ materially from those anticipated in the forward-looking statements. Certain of these factors and other risks are discussed in the company's filings with the U.S. Securities and Exchange Commission (the "SEC") and include, but are not limited to: (i) our ability to adapt to developments and change in our industry; (ii) competition; (iii) unauthorized disclosure of data or security breaches; (iv) systems failures or interruptions; (v) implementation of our new acquiring platform; (vi) our ability to expand our market share or enter new markets; (vii) the outcome of Brexit; (viii) our ability to successfully integrate the businesses of our predecessor companies; (ix) our ability to identify and complete acquisitions and partnerships; (x) failure to comply with applicable requirements of Visa, MasterCard or other payment networks or card schemes or changes in those requirements; (xi) our ability to pass along fee increases; (xii) termination of sponsorship or clearing services; (xiii) loss of clients or referral partners; (xiv) geopolitical, regulatory, tax and business risks associated with our international operations; (xv) economic and political uncertainty; (xvi) reductions in overall consumer, business and government spending; (xvii) fraud by merchants or others; (xviii) a decline in the use of credit, debit or prepaid cards; (xix) consolidation in the banking and retail industries; (xx) our ability to mitigate risk; (xxi) government regulation, including regulation aimed at protecting consumer information and banking regulation; (xxii) changes in tax laws; (xxiii) changes in foreign currency exchange rates; (xxiv) outcomes of future litigation or investigations; and (xxv) our dual-listings with the NYSE and LSE. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. More information on potential factors that could affect the company's financial results and performance is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the company's periodic reports filed with the SEC, including the company's most recently filed Annual Report on Form 10-K and its subsequent filings with the SEC.
Any forward-looking statement made by us in this release speaks only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
CONTACTS
Investors
Nathan Rozof, CFA or Ignatius Njoku
Investor Relations
(866) 254-4811
(513) 900-4811
IR@worldpay.com
Media
Andrew Ciafardini
Corporate Communications
(513) 900-5308
Andrew.Ciafardini@worldpay.com
Schedule 1
Worldpay, Inc.
Consolidated Statements of Income
(Unaudited)
(in millions, except share data)
Three Months Ended
Year Ended
December 31, December 31, December 31, December 31,
2018 2017 % Change 2018 2017 % Change
Total revenue $
1,050.0 $
1,065.9 NM $
3,925.4 $
4,026.5 NM
Network fees and other costs(1) 496.9 NM 1,903.2 NM
Net revenue(1) 1,050.0 569.0 85% 3,925.4 2,123.3 85%
Sales and marketing 286.5 172.4 66% 1,131.7 669.5 69%
Other operating costs 182.6 84.4 116% 698.0 318.7 119%
General and administrative 134.5 105.5 27% 662.1 295.1 124%
Depreciation and amortization 271.0 81.5 233% 1,095.0 318.5 244%
Income from operations 175.4 125.2 40% 338.6 521.5 (35)%
Interest expense-net (74.6) (43.2) 73% (304.9) (140.6) NM
Non-operating (expense) income(2) (7.7) 419.1 NM (41.8) 432.8 NM
(Loss) income before applicable 93.1 501.1 (81)% (8.1) 813.7 NM
income taxes
Income tax (benefit) expense(3) (22.7) 547.5 NM (27.7) 631.0 NM
Net income (loss) 115.8 (46.4) NM 19.6 182.7 (89)%
Less: Net income attributable to non- (5.3) (13.3) NM (6.8) (52.6) NM
controlling interests
Net income (loss) attributable to $
110.5 $
(59.7) NM $
12.8 $
130.1 (90)%
Worldpay, Inc.
Net income (loss) per share attributable
to Worldpay, Inc. Class A common stock:
Basic $
0.37 $
(0.37) NM $
0.04 $
0.81 (95)%
Diluted(4) $
0.36 $
(0.37) NM $
0.04 $
0.80 (95)%
Shares used in computing net income
(loss) per share of Class A common stock:
Basic 300,728,982 161,554,183 292,992,892 161,293,062
Diluted 303,068,119 161,554,183 295,214,282 162,807,146
_________________________
(1) Based on the Company's adoption of Accounting Standard Update 2014-09, Revenue From Contracts With Customers (Topic 606) ("ASC 606") effective January 1, 2018,
Network fees and other costs are now netted against Revenue. For the three months and year ended December 31, 2018, Revenue is equivalent to Net revenue as a
result of the company's adoption of ASC 606. For the three months and year ended December 31, 2017, Net revenue is equivalent to Revenue less Network fees and
other costs.
(2) Non-operating expense for the year ended December 31, 2018 primarily consists of expenses relating to the Company's financing arrangements entered into in
connection with the Worldpay Group plc acquisition, repricing of the Company's debt in June 2018 and the change in fair value of the Mercury tax receivable
agreement ("TRA"), partially offset by a gain on the settlement of a deal contingent forward entered into in connection with the Company's acquisition of
Worldpay Group plc. Non-operating income for the three months and year ended December 31, 2017 primarily consists of a gain relating to the impact to the TRA
liability as a result of the Tax Cuts and Jobs Act ("Tax Reform") being enacted on December 22, 2017 and an unrealized gain relating to the change in the fair
value of a deal contingent forward entered into in connection with the Worldpay Group plc acquisition, partially offset by the change in fair value of the
Mercury TRA.
(3) Income tax expense for the three months and year ended December 31, 2017, includes an adjustment of $363.6 million to deferred taxes for the change in tax rates
and the impact to the TRA discussed in (2) above, both resulting from the Tax Reform enacted on December 22, 2017.
(4) Due to our structure as a C corporation and Worldpay Holding's structure as a pass-through entity for tax purposes, the numerator in the diluted net income per
share calculation is adjusted to reflect the Company's income tax expense at an expected effective tax rate assuming the conversion of the Class B units of
Worldpay Holding into shares of our Class A common stock. During the three months and year ended December 31, 2018, approximately 10.3 million and 12.7 million
weighted-average Class B units of Worldpay Holding were excluded in computing diluted net income per share because including them would have an antidilutive
effect. During the three months and year ended December 31, 2017, approximately 15.3 million and 27.2 million weighted-average Class B units of Worldpay
Holding were excluded in computing diluted net income per share because including them would have an antidilutive effect. As the Class B units of Worldpay
Holding were not included, the numerator used in the calculation of diluted net income per share was equal to the numerator used in the calculation of basic net
income per share for the three months and year ended December 31, 2017. Additionally, due to the net loss for the three months ended December 31, 2017, any
remaining potentially dilutive securities were also excluded from the denominator in computing dilutive net income per share.
Schedule 2
Worldpay, Inc.
Adjusted Net Income
(Unaudited)
(in millions, except share data)
Three Months Ended
Year Ended
December 31, December 31, December 31, December 31,
2018 2017 %Change 2018 2017 % Change
---
Income (loss) before applicable $
93.1 $
501.1 (81)% $
(8.1) $
813.7 NM
income taxes
Non-GAAP Adjustments:
Transition, acquisition and 59.1 62.2 (5)% 336.7 130.1 159%
integration costs(1)(2)
Share-based compensation(2) 25.8 12.8 102% 124.8 47.9 161%
Intangible amortization(2)(3) 223.4 56.3 297% 938.4 217.8 331%
Non-operating expense (income)(4) 7.7 (419.1) NM 41.8 (432.8) NM
Non-GAAP adjusted income 409.1 213.3 92% 1,433.6 776.7 85%
before applicable income taxes
Less: Adjustments
Adjusted tax expense(5) 56.2 39.0 44% 184.9 133.8 38%
Adjusted tax rate 14% 18% 13% 17%
Other(6) 0.8 0.6 33% 2.0 1.8 11%
Adjusted net income $
352.1 $
173.7 103% $
1,246.7 $
641.1 94%
Adjusted net income per share $
1.12 $
0.97 15% $
4.05 $
3.37 20%
Adjusted shares outstanding(7) 313,320,945 178,625,196 307,912,163 190,052,282
Non-GAAP and Adjusted Financial Measures
This schedule presents non-GAAP and adjusted financial measures, which are important financial performance measures for the Company, but are not financial measures as defined by GAAP. Such financial measures should not be considered as alternatives to GAAP, and such measures may not be comparable to those reported by other companies.
_______________
Adjusted net income is derived from GAAP income before applicable income taxes and adjusted for the following items described below:
(1) Represents acquisition and integration costs incurred in connection with our acquisitions, charges related to employee termination benefits and other transition activities. Included in Transition, acquisition and integration costs for the three months and year ended
December 31, 2017 is a charge of $3.5 million and $41.5 million, respectively, to G&A related to a settlement agreement stemming from legacy litigation of an acquired company.
(2)
Below are the adjustments to Other operating costs, General and administrative and Depreciation and amortization.
Three Months Ended December 31, 2018 Three Months Ended December 31, 2017
---
Transition, Share-Based Amortization Transition, Share-Based Amortization
Acquisition & Compensation Of Intangible Acquisition & Compensation Of Intangible
Integration Assets Integration Assets
---
Other operating costs $
23.9
$
$ $
4.0
$
$
General and administrative 35.2 25.8 58.2 12.8
Depreciation and amortization - 223.4 56.3
Total adjustments $
59.1 $
25.8 $
223.4 $
62.2 $
12.8 $
56.3
Year Ended December 31, 2018 Year Ended December 31, 2017
---
Transition, Share-Based Amortization Transition, Share-Based Amortization
Acquisition & Compensation Of Intangible Acquisition & Compensation Of Intangible
Integration Assets Integration Assets
---
Other operating costs $
77.9
$
$ $
14.8
$
$
General and administrative 258.8 124.8 115.3 47.9
Depreciation and amortization - 938.4 217.8
Total adjustments $
336.7 $
124.8 $
938.4 $
130.1 $
47.9 $
217.8
(3)
Represents amortization of intangible assets acquired through business combinations and customer portfolio and related asset acquisitions.
(4)
See note (2) in Schedule 1.
(5) Represents adjusted income tax expense to reflect an adjusted effective tax rate of 19.8% for 2018 and 34% for 2017, assuming the conversion of the Class B units of Worldpay Holding into shares of Class A common stock, including the tax effect of adjustments described above. Adjusted tax expense
includes tax benefits due to (a) the amortization of intangible assets and other tax attributes resulting from or acquired with our acquisitions and (b) the tax basis step up associated with our separation from Fifth Third Bank and the (c) purchase or exchange of Class B units of Worldpay Holding,
net of payment obligations under tax receivable agreements.
(6)
Represents the non-controlling interest, net of adjusted income tax expense discussed in (5) above, associated with a consolidated joint venture.
(7) The adjusted shares outstanding include 10.3 million and 12.7 million weighted-average Class B units that are excluded from the GAAP dilutive net income per share calculation for the year ended December 31, 2018. Additionally, the adjusted shares outstanding include 17.1 million and 27.2 million
weighted-average Class B units that are excluded from the GAAP dilutive net income per share calculation for the three months and year ended December 31, 2017, respectively.
Schedule 3
Worldpay, Inc.
Segment Information
(Unaudited)
(in millions)
Technology Solutions
---
Three Months Ended December 31,
2018 2017 % Change
---
Total
revenue $
443.7 $
345.1 NM
Network fees
and other
costs - 119.6 NM
---
Net revenue
(1) 443.7 225.5 97%
Sales and
marketing 113.7 74.6 52%
---
Segment
profit 330.0 150.9 119%
===
Year Ended December 31,
2018 2017 % Change
---
Total
revenue $
1,601.4 $
1,264.5 NM
Network fees
and other
costs - 454.9 NM
---
Net revenue
(1) 1,601.4 809.6 98%
Sales and
marketing 422.9 277.9 52%
Segment
profit $
1,178.5 $
531.7 122%
===
Merchant Solutions
---
Three Months Ended December 31,
2018 2017 % Change
---
Total
revenue $
516.1 $
607.2 NM
Network fees
and other
costs - 349.0 NM
---
Net revenue
(1) 516.1 258.2 100%
Sales and
marketing 166.9 92.3 81%
Segment
profit $
349.2 $
165.9 110%
===
Year Ended December 31,
2018 2017 % Change
---
Total
revenue $
1,976.2 $
2,303.1 NM
Network fees
and other
costs - 1,325.2 NM
---
Net revenue
(1) 1,976.2 977.9 102%
Sales and
marketing 683.7 368.6 85%
Segment
profit $
1,292.5 $
609.3 112%
===
Issuer Solutions
---
Three Months Ended December 31,
2018 2017 % Change
---
Total
revenue $
90.2 $
113.6 NM
Network fees
and other
costs - 28.3 NM
---
Net revenue
(1) 90.2 85.3 6%
Sales and
marketing 5.9 5.5 7%
---
Segment
profit $
84.3 $
79.8 6%
===
Year Ended December 31,
2018 2017 % Change
---
Total
revenue $
347.8 $
458.9 NM
Network fees
and other
costs - 123.1 NM
---
Net revenue
(1) 347.8 335.8 4%
Sales and
marketing 25.1 23.0 9%
---
Segment
profit $
322.7 $
312.8 3%
===
(1) See note (1) in Schedule 1.
Schedule 4
Worldpay, Inc.
Condensed Consolidated Statements of Financial Position
(Unaudited)
(in millions)
December 31, December 31,
2018 2017
Assets
Current assets:
Cash and cash equivalents $
196.5 $
126.5
Accounts receivable-net 1,694.8 986.6
Settlement assets and
merchant float 3,132.3 142.0
Prepaid expenses 80.0 33.5
Other 526.1 84.0
Total current assets 5,629.7 1,372.6
Property, equipment and
software-net 1,074.1 473.7
Intangible assets-net 3,127.8 678.5
Goodwill 14,137.9 4,173.0
Deferred taxes 789.9 739.5
Proceeds from senior
unsecured notes 1,135.2
Other assets 129.1 94.5
Total assets $
24,888.5 $
8,667.0
Liabilities and equity
Current liabilities:
Accounts payable and accrued
expenses $
1,188.7 $
631.9
Settlement obligations 3,723.6 816.2
Current portion of note
payable 225.7 107.9
Current portion of tax
receivable agreement
obligations 73.1 245.5
Deferred income 25.1 18.9
Current maturities of capital
lease obligations 22.7 8.0
Other 630.3 6.0
Total current liabilities 5,889.2 1,834.4
Long-term liabilities:
Note payable 7,622.1 5,586.4
Tax receivable agreement
obligations 590.8 535.0
Capital lease obligations 34.3 4.5
Deferred taxes 473.7 65.6
Other 74.4 40.5
Total long-term liabilities 8,795.3 6,232.0
Total liabilities 14,684.5 8,066.4
Commitments and contingencies
Equity:
Total equity (1) 10,204.0 600.6
Total liabilities and equity $
24,888.5 $
8,667.0
_______________
(1) Includes equity
attributable to non-
controlling interests.
Schedule 5
Worldpay, Inc.
Consolidated Statements of Cash Flows
(Unaudited)(in millions)
Year Ended
December 31, 2018 December 31, 2017
---
Operating Activities:
Net income $
19.6 $
182.7
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and
amortization expense 1,095.0 318.5
Amortization of customer
incentives 27.4 24.3
Amortization and write-
off of debt issuance
costs 69.6 6.0
Gain on foreign currency
forward (35.9) (33.1)
Share-based compensation
expense 124.8 47.9
Deferred tax (benefit)
expense (91.1) 596.8
Tax receivable agreements
non-cash items (3.0) (421.7)
Other 20.9 4.0
Change in operating assets and liabilities:
Accounts receivable (172.3) (38.9)
Net settlement assets and
obligations 63.0 25.3
Prepaid and other assets (64.7) (25.7)
Accounts payable and
accrued expenses (141.0) 130.5
Other liabilities 24.0 (31.8)
Net cash provided by
operating activities 936.3 784.8
Investing Activities:
Purchases of property and
equipment (304.9) (110.8)
Acquisition of customer
portfolios and related
assets and other (74.4) (41.8)
Purchase of interest rate
caps (8.1)
Proceeds from foreign
currency forward 71.5
Cash acquired (used) in
acquisitions, net of
cash used 1,389.6 (531.5)
Net cash provided by
(used in) investing
activities 1,073.7 (684.1)
Financing Activities:
Proceeds from issuance of
long-term debt 2,951.8 1,270.0
Proceeds from issuance of
senior unsecured notes - 1,135.2
Borrowings on revolving
credit facility 4,076.0 8,442.0
Repayment of revolving
credit facility (4,251.0) (8,217.0)
Repayment of debt and
capital lease
obligations (2,835.1) (143.7)
Payment of debt issuance
costs (91.1) (27.6)
Proceeds from issuance of
Class A common stock
under employee stock
plans 23.8 14.5
Purchase and cancellation
of Class A common stock - (1,268.0)
Repurchase of Class A
common stock (including
to satisfy tax
withholding obligations) (176.6) (10.1)
Settlement of and
payments under certain
tax receivable
agreements (196.0) (140.3)
Distribution to non-
controlling interests (10.5) (22.6)
Net cash (used in)
provided by financing
activities (508.7) 1,032.4
Net increase in cash and
cash equivalents 1,501.3 1,133.1
Cash and cash
equivalents-Beginning
of period 1,272.2 139.1
Effect of exchange rate
changes on cash (192.2)
Cash and cash
equivalents-End of
period $
2,581.3 $
1,272.2
Cash Payments:
Interest $
302.9 $
123.1
Income taxes 29.4 45.8
Non-cash Items:
Issuance of tax
receivable agreements to
related parties $
120.9 $
647.5
Schedule 5
Worldpay, Inc.
Consolidated Statements of Cash Flows (Continued)
(Unaudited)(in millions)
Reconciliation of cash and cash equivalents to the Condensed Consolidated Statement of Financial Position
Year Ended
December 31, 2018 December 31, 2017
---
Cash and cash
equivalents on
the Condensed
Consolidated
Financial
Statements $
196.5 $
126.5
Proceeds from senior
unsecured notes 1,135.2
Other restricted cash (in
other current assets) 482.1 10.5
Merchant float (in settlement
assets and merchant float) 1,902.7
Total cash and
cash equivalents
on the
Consolidated
Statements of
Cash Flows $
2,581.3 $
1,272.2
Schedule 6
Worldpay, Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(Unaudited)
(in millions)
Three Months Ended
Year Ended
December 31, December 31, December 31, December 31,
2018 2017 % Change 2018 2017 % Change
Net income (loss) $
115.8 $
(46.4) NM $
19.6 $
182.7 (89)%
Income tax (benefit) expense(1) (22.7) 547.5 NM (27.7) 631.0 NM
Non-operating expense (income)(2) 7.7 (419.1) NM 41.8 (432.8) NM
Interest expense-net 74.6 43.2 73% 304.9 140.6 117%
Share-based compensation 25.8 12.8 102% 124.8 47.9 161%
Transition, acquisition and integration costs(3) 59.1 62.2 (5)% 336.7 130.1 159%
Depreciation and amortization 271.0 81.5 233% 1,095.0 318.5 244%
Adjusted EBITDA $
531.3 $
281.7 89% $
1,895.1 $
1,018.0 86%
Non-GAAP Financial Measures
This schedule presents adjusted EBITDA, which is an important financial performance measure for the Company, but is not a financial measure as defined by GAAP. Such financial measure should not be considered as an alternative to GAAP net income, and such measure may not be comparable to those reported by other companies.
___________________
(1) See note (3) in Schedule
1.
(2) See note (2) in Schedule
1.
(3) See notes (1) and (2) in
Schedule 2.
Schedule 7
Worldpay, Inc.
Outlook Summary
(Unaudited)
First Quarter Financial Outlook Full Year Financial Outlook
Three Months Ended March 31, Year Ended December 31,
2019 Outlook 2018 Actual(1) 2019 Outlook 2018 Actual(1)
---
GAAP net income per share attributable to
$0.01 - $0.08 $
(0.36)
$1.00 - $1.50 $
0.04
Worldpay, Inc.
Adjustments to reconcile GAAP to non-GAAP
$0.86 - $0.82 $
1.17
$3.50 - $3.10 $
4.01
adjusted net income per share(2)
Adjusted net income per share
$0.87 - $0.90 $
0.81
$4.50 - $4.60 $
4.05
Non-GAAP and Adjusted Financial Measures
This schedule presents non-GAAP and adjusted financial measures, which are important financial performance measures for the Company, but are not financial measures as defined by GAAP. Such financial measures should not be considered as alternatives to GAAP, and such measures may not be comparable to those reported by other companies.
__________________
(1) Excludes Worldpay Group plc EPS
calculation for the period prior to the
acquisition closing from January 1,
2018 to January 15, 2018.
(2) 2019 represents an estimated range of
adjustments for the following items:
(a) integration costs incurred in
connection with our prior acquisitions,
charges related to employee termination
benefits resulting from acquisition
integration and other transition
activities; (b) share-based
compensation; (c) amortization of
acquired intangible assets and customer
portfolio and related asset
acquisitions; (d) non-operating
expense/income (f) adjustments to
income tax expense to reflect the tax
effect of adjustments described above,
tax benefits due to the amortization of
intangible assets and other tax
attributes resulting from or acquired
with our acquisitions, the tax basis
step up associated with our separation
from Fifth Third Bank and the purchase
or exchange of Class B units of Vantiv
Holding, net of payment obligations
under tax receivable agreements.
2018 includes adjustments for the
following items: (a) acquisition and
integration costs incurred in
connection with our acquisitions,
charges related to employee termination
benefits resulting from acquisition
integration and other transition
activities; (b) share-based
compensation; (c) amortization of
acquired intangible assets and customer
portfolio and related asset
acquisitions; (d) non-operating
expense/income (f) adjustments to
income tax expense to reflect the tax
effect of adjustments described above,
adjustments to deferred taxes and the
TRA liability both resulting from US
tax reform, adjustments to the TRA
liability tax benefits due to the
amortization of intangible assets and
other tax attributes resulting from or
acquired with our acquisitions, the
tax basis step up associated with our
separation from Fifth Third Bank and
the purchase or exchange of Class B
units of Vantiv Holding, net of payment
obligations under tax receivable
agreements.
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SOURCE Worldpay, Inc.
