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SEC Filings

8-K
WORLDPAY, INC. filed this Form 8-K on 05/02/2019
Entire Document
 


Schedule 2
Worldpay, Inc.
Adjusted Net Income
(Unaudited)
(in millions, except share data)
 
Three Months Ended
 
 
 
March 31,
 
March 31,
 
 
 
2019
 
2018
 
% Change
Income (loss) before applicable income taxes
$
37.7

 
$
(111.5
)
 
NM

Non-GAAP Adjustments:
 
 
 
 
 
Transition, acquisition and integration costs(1) (2)
42.4

 
177.4

 
(76
)%
Share-based compensation(2)
33.0

 
17.2

 
92
 %
Intangible amortization(2) (3)
226.2

 
172.8

 
31
 %
Non-operating (income) expense(4)
(3.5
)
 
8.6

 
NM

Non-GAAP adjusted income before applicable income taxes
335.8

 
264.5

 
27
 %
Less: Adjustments
 
 
 
 
 
Adjusted tax expense(5)
42.4

 
27.5

 
54
 %
Adjusted tax rate
13
%
 
10
%
 
 
 
 
 
 
 
 
Other(6)
0.4

 
0.3

 
33
 %
Adjusted net income
$
293.0

 
$
236.7

 
24
 %
 
 
 
 
 
 
Adjusted net income per share
$
0.94

 
$
0.81

 
16
 %
Adjusted shares outstanding(7)
312,534,909

 
290,880,798

 
 

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 terminations and other transition activities.
(2) 
Below are the adjustments to Other operating costs, General and administrative and Depreciation and amortization.
 
Three Months Ended March 31, 2019
 
Three Months Ended March 31, 2018
 
Transition, Acquisition & Integration
 
Share-Based Compensation
 
Amortization of Intangible Assets
 
Transition, Acquisition & Integration
 
Share-Based Compensation
 
Amortization of Intangible Assets
Other operating costs
$
20.5

 
$

 
$

 
$
10.2

 
$

 
$

General and administrative
21.9

 
33.0

 

 
167.2

 
17.2

 

Depreciation and amortization

 

 
226.2

 

 

 
172.8

Total adjustments
$
42.4

 
$
33.0

 
$
226.2

 
$
177.4

 
$
17.2

 
$
172.8


(3) 
Represents amortization of intangible assets acquired through business combinations and customer portfolio and related asset acquisitions as well as depreciation of acquired software.
(4) 
See note (1) in Schedule 1.
(5) 
Represents adjusted income tax expense to reflect a projected effective tax rate of 20.1% for 2019 and 19.7% for 2018, including the tax effect of adjustments described above. Adjusted tax expense includes tax benefits due to: (1) the amortization of intangible assets and other tax attributes resulting from or acquired with our acquisitions, (2) the tax basis step up associated with our separation from Fifth Third Bank and (3) the purchase or exchange of Class B units of Worldpay Holding, net of payment obligations under tax receivable agreements. The effective tax rate is expected to remain at 20.1% for the remainder of 2019.
(6) 
Represents the non-controlling interest, net of adjusted income tax expense, associated with a consolidated joint venture.
(7) 
The adjusted shares outstanding include 8.7 million and 15.3 million of weighted average Class B units that are excluded from the GAAP dilutive net income per share calculation for the three months ended March 31, 2019 and 2018. Additionally, the three

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