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WPY Worldpay Inc.

9,450.00
0.00 (0.00%)
10 May 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Worldpay Inc. LSE:WPY London Ordinary Share CLASS A COM STK USD0.00001 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 9,450.00 9,480.00 9,500.00 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Worldpay, Inc Half-year Report (3616X)

09/08/2018 12:00pm

UK Regulatory


Worldpay (LSE:WPY)
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RNS Number : 3616X

Worldpay, Inc

09 August 2018

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

August 9, 2018

Worldpay Reports Second Quarter 2018 Results

Accelerating Organic Growth and Expanding Margins Generated Superior Financial Results

Raising Full Year Guidance to Reflect Improving Trends

CINCINNATI and LONDON, August 9, 2018 - Worldpay, Inc. (NYSE: WP, LSE: WPY) ("Worldpay" or the "Company") today announced financial results for the second quarter ended June 30, 2018. Worldpay, Inc. was formed on January 16, 2018 through Vantiv, Inc.'s previously announced acquisition of Worldpay Group plc. Net revenue for Worldpay, Inc. increased 90% to $1.0 billion as compared to $530.0 million in Vantiv Inc.'s prior year period. Had the Vantiv Inc./Worldpay Group plc transaction closed on January 1, 2017, net revenue would have increased by 11% on a pro forma basis and by 9% on a pro forma constant currency basis as compared to the prior year period. On a GAAP basis, net income per diluted share attributable to Worldpay, Inc. decreased 102% to $(0.01) as compared to $0.42 in the prior year period. The GAAP loss is primarily due to transition, acquisition and integration costs and intangible amortization incurred in connection with the Vantiv, Inc./Worldpay Group plc transaction. Adjusted net income per share increased 25% to $1.04 as compared to $0.83 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.)

"Just two quarters after closing the Worldpay transaction, our combination is already delivering superior results through accelerating organic revenue growth and significant earnings accretion," said Charles Drucker, chairman and co-chief executive officer and Philip Jansen, co-chief executive officer at Worldpay. "With our leading global ecommerce and integrated payments capabilities, we are uniquely positioned to capitalize on the most significant areas of secular growth across the payments industry."

Adjusted EBITDA

Adjusted EBITDA was $492.9 million or 49.0% of net revenue in the second quarter, representing 70 basis points of margin expansion as compared to Vantiv, Inc. results on a stand-alone basis in the prior year period. Had the Vantiv, Inc./Worldpay Group plc transaction 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.

 
Worldpay, Inc. Second Quarter 2018 Results 
 (unaudited) 
 (in millions, except share data) 
                                              Three Months Ended 
                                                                                                  Pro Forma 
                                                                                    Pro Forma    (2) Constant 
                                           June 30,        June 30,                   (2) %        Currency 
                                             2018           2017 (1)     % Change     Change       % Change 
                                       ---------------  --------------  ---------  ----------  -------------- 
 
 Net revenue                           $   1,006.8      $    530.0         90%         11%           9% 
   Technology Solutions                      401.6           197.2         104%        21%           19% 
   Merchant Solutions                        520.4           251.9         107%        5%            3% 
   Issuer Solutions                           84.8            80.9          5%         2%            2% 
 
 Adjusted EBITDA                             492.9           256.2         92% 
   Adj. EBITDA Margin                         49.0%           48.3% 
 
 GAAP Net (loss) income attributable 
  to Worldpay, Inc.                    $      (2.9)     $     68.8        (104)% 
 GAAP Net (loss) income per 
  diluted share attributable 
  to Worldpay, Inc.                    $     (0.01)     $     0.42        (102)% 
 
 Adjusted net income                   $     327.1      $    164.7         99% 
 Adjusted net income per share         $      1.04      $     0.83         25% 
 

(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.

Increasing Financial Guidance

"We are raising our net revenue and adjusted earnings guidance ranges for the full year 2018," said Stephanie Ferris, chief financial officer at Worldpay. "We expect the accelerating organic growth trends that we achieved during the second quarter to continue for the rest of the year, and we are increasing our organic revenue growth expectations by one point for the full year with a partial offset due to currency. In addition, we continue to carefully manage expenses, resulting in further earnings accretion."

 
Worldpay, Inc. Third Quarter and Full-Year Financial Outlook 
 (in millions, except share data) 
                                        Third Quarter Financial 
                                                 Outlook               Full Year Financial Outlook 
                                    ------------------------------- 
                                      Three Months Ended September 
                                                   30,                   Year Ended December 31, 
                                                        2017 Actual    2018 Outlook     2017 Actual 
                                       2018 Outlook         (2)             (1)             (2) 
                                    -----------------  ------------  ----------------  ------------ 
 Net revenue                         $1,000 - $1,020       $554       $3,880 - $3,930     $2,123 
 GAAP Net income per diluted 
  share attributable to Worldpay,                                        ($0.06) - 
  Inc.                                $0.06 - $0.13        $0.57           $0.12           $0.80 
 Adjusted net income per 
  share                               $1.00 - $1.03        $0.90       $3.93 - $4.00       $3.37 
 

(1) Combined company guidance excludes Worldpay Group plc net revenue and EPS contribution for the period from January 1, 2018 - January 15, 2018, prior to the completion of its previously announced acquisition by Vantiv, Inc. on January 16, 2018. Combined company guidance is based on an assumed exchange rate of U.S. dollar/pound sterling of $1.31.

(2) 2017 actuals include Vantiv, Inc. results only.

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 second quarter 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 (800) 667-5617, in the U.K. by dialing 0800 756 3333, or for international callers +1 (334) 323-0509, and referencing code 3061646#. 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 3061646#. 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 integrated omni-commerce. With industry-leading scale and an unmatched integrated technology platform, Worldpay offers clients a comprehensive suite of products and services globally, delivered through a single provider.

Worldpay processes over 40 billion transactions annually through more than 300 payment types across 146 countries and 126 currencies. The company's growth strategy includes expanding into high-growth markets, verticals and customer segments, including global eCommerce, Integrated Payments and B2B.

Worldpay, Inc. was formed in 2018 through the combination of the No. 1 merchant acquirers in the U.S. and the U.K. Worldpay, Inc. trades on the New York Stock Exchange as "WP" and the London Stock Exchange as "WPY."

Non-GAAP and Pro Forma Financial Measures

This earnings release presents non-GAAP and pro forma financial information including 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) our ability to expand our market share or enter new markets; (vi) our ability to successfully integrate the businesses of our predecessor companies; (vii) our ability to identify and complete acquisitions, joint ventures and partnerships; (viii) failure to comply with applicable requirements of Visa, MasterCard or other payment networks or changes in those requirements; (ix) our ability to pass along fee increases; (x) termination of sponsorship or clearing services; (xi) loss of clients or referral partners; (xii) reductions in overall consumer, business and government spending; (xiii) fraud by merchants or others; (xiv) a decline in the use of credit, debit or prepaid cards; (xv) consolidation in the banking and retail industries; (xvi) changes in foreign currency exchange rates; (xvii) the effects of governmental regulation or changes in laws; (xviii) geopolitical, regulatory, tax and business risks associated with our international operations; and (xix) outcomes of future litigation or investigations and 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

Worldpay, Inc. LEI number: 213800TV56O7TZI4U902

Schedule 1

Worldpay, Inc.

Consolidated Statements of Income

(Unaudited)

(in millions, except share data)

 
                         Three Months Ended                          Six Months Ended 
                               June 30,                                   June 30, 
                        2018            2017         Change        2018            2017         Change 
                   --------------  --------------             --------------  --------------  --------- 
 Revenue           $     1,006.8   $       998.7       1%     $     1,857.5   $     1,926.9      (4)% 
 Network fees and 
  other costs                  -           468.7          NM              -           926.8          NM 
                   -------------   -------------              -------------   ------------- 
   Net Revenue(1)        1,006.8           530.0      90%           1,857.5         1,000.1      86% 
 Sales and 
  marketing                283.4           168.3      68%             549.4           323.3      70% 
 Other operating 
  costs                    185.5            79.0     135%             340.6           154.9     120% 
 General and 
  administrative           136.8            50.7     170%             386.9           140.0     176% 
 Depreciation and 
  amortization             287.9            78.4     267%             495.1           154.5     220% 
                   -------------   -------------              -------------   ------------- 
 Income from 
  operations               113.2           153.6     (26)%             85.5           227.4     (62)% 
 Interest 
  expense-net              (79.9)          (29.7)    169%            (155.1)          (58.9)    163% 
 Non-operating 
  expense(2)               (22.0)           (3.4)    547%             (30.6)           (7.5)    308% 
                   -------------   -------------              -------------   ------------- 
 Income (loss) 
  before 
  applicable 
  income taxes              11.3           120.5     (91)%           (100.2)          161.0    (162)% 
 Income tax 
  expense 
  (benefit)                 12.8            33.6     (62)%             (0.4)           38.8    (101)% 
                   -------------   -------------              -------------   ------------- 
 Net (loss) 
  income                    (1.5)           86.9    (102)%            (99.8)          122.2    (182)% 
 Less: Net income 
  attributable 
  to 
  non-controlling 
  interests                 (1.4)          (18.1)    (92)%             (0.7)          (24.5)    (97)% 
                   -------------   -------------              -------------   ------------- 
 Net (loss) 
  income 
  attributable 
  to Worldpay, 
  Inc.             $        (2.9)  $        68.8    (104)%    $      (100.5)  $        97.7    (203)% 
                       =========   ===  ========                  =========       ========= 
 Net (loss) 
 income per share 
 attributable to 
 Worldpay, 
 Inc. Class A 
 common stock: 
   Basic           $       (0.01)  $        0.43    (102)%    $       (0.35)  $        0.61    (157)% 
   Diluted (3)     $       (0.01)  $        0.42    (102)%    $       (0.35)  $        0.60    (158)% 
 Shares used in 
 computing 
 net (loss) 
 income per share 
 of Class A 
 common stock: 
   Basic             296,204,304     161,266,692                284,868,484     161,072,513 
   Diluted           296,204,304     162,510,616                284,868,484     162,483,315 
 
 
 
 

(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 and six months ended June 30, 2018, Revenue is equivalent to Net revenue as a result of the company's adoption of ASC 606. For the three and six months ended June 30, 2017, Net revenue is equivalent to Revenue less Network fees and other costs.

(2) Non-operating expense during the six months ended June 30, 2018 primarily consists of expenses relating to the Company's financing arrangements entered into in connection with the Legacy Worldpay 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 Legacy Worldpay. Non-operating expenses for the six months ended June 30, 2017 primarily relates to the change in fair value of the Mercury TRA.

(3) 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 and six months ended June 30, 2018, approximately 15.0 million and 15.1 million, respectively, 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. Additionally, during the three and six months ended June 30, 2017, approximately 35.0 million weighted-average dilutive 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 and six months ended June 30, 2018 and 2017, respectively. Additionally, due to the net loss for the three and six months ended June 30, 2018, any remaining potentially dilutive securities were also excluded from the denominator in computing dilutive net income per share.

 
                                          Three Months Ended                Six Months Ended 
                                               June 30,                         June 30, 
                                         2018             2017           2018             2017 
                                   ----------------  -------------  --------------  --------------- 
 (Loss) income before applicable 
  income taxes                     $             -   $           -  $           -   $           - 
 Taxes                                           -               -              -               - 
   Net (loss) income               $          (2.9)  $        68.8  $      (100.5)  $        97.7 
 Diluted shares                        296,204,304     162,510,616    284,868,484     162,483,315 
 Diluted EPS                       $         (0.01)  $        0.42  $       (0.35)  $        0.60 
 

Schedule 2

Worldpay, Inc.

Adjusted Net Income

(Unaudited)

(in millions, except share data)

 
                              Three Months Ended                                  Six Months Ended 
 
                          June 30,           June 30,                        June 30,           June 30, 
                            2018               2017          % Change          2018               2017          % Change 
                     -----------------  -----------------  -----------  -----------------  -----------------  ----------- 
 Net (loss) income 
  before applicable 
  income taxes       $        11.3      $       120.5         (91)%     $      (100.2)     $       161.0        (162)% 
 Non-GAAP 
 Adjustments: 
   Transition, 
    acquisition 
    and integration 
    costs(1) 
    (2)                       52.8               13.3         297%              230.2               62.8         267% 
   Share-based 
    compensation(2)           39.0               10.9         258%               56.2               21.5         161% 
   Intangible 
    amortization(2) 
    (3)                      252.7               54.3         365%              425.5              106.2         301% 
   Non-operating 
    expense(4)                22.0                3.4         547%               30.6                7.5         308% 
                     -------------      -------------                   -------------      ------------- 
     Non-GAAP 
      adjusted 
      income before 
      applicable 
      income taxes           377.8              202.4          87%              642.3              359.0          79% 
 Less: Adjustments 
 Adjusted tax 
  expense(5)                  50.3               37.2          35%               77.8               58.9          32% 
 Adjusted tax rate              13%                18%                             12%                16% 
 
   Other (6)                   0.4                0.5         (20)%               0.7                0.7           -% 
                     -------------      -------------                   -------------      ------------- 
 Adjusted net 
  income             $       327.1      $       164.7          99%      $       563.8      $       299.4          88% 
                     ===  ========      ===  ========                   ===  ========      ===  ======== 
 
 Adjusted net 
  income 
  per share          $        1.04      $        0.83          25%      $        1.87      $        1.52          23% 
 Adjusted shares 
  outstanding(7)       313,431,291        197,553,442                     302,127,796        197,526,141 
 

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. Included in Transition, acquisition and integration costs in the six months ended June 30, 2017 is a $38 million charge 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 June                            Three Months Ended June 
                                       30, 2018                                           30, 2017 
                    Transition,                      Amortization     Transition,                       Amortization 
                    Acquisition     Share-Based      of Intangible    Acquisition     Share-Based       of Intangible 
                   & Integration    Compensation        Assets       & Integration    Compensation         Assets 
                  --------------  ---------------  ---------------  --------------  ---------------  ----------------- 
 Other operating 
  costs           $         27.0  $             -  $             -  $          5.0  $             -  $             - 
 General and 
  administrative            25.8             39.0                -             8.3             10.9                - 
 Depreciation 
  and 
  amortization                 -                -            252.7               -                -             54.3 
                  --------------  ---------------  ---------------  --------------  ---------------  --------------- 
 Total 
  adjustments     $         52.8  $          39.0  $         252.7  $         13.3  $          10.9  $          54.3 
                  ====  ========  ====  =========  =====  ========  ====  ========  ====  =========  =====  ======== 
 
 
                                Six Months Ended June                              Six Months Ended June 
                                       30, 2018                                           30, 2017 
                    Transition,                      Amortization     Transition,                       Amortization 
                    Acquisition     Share-Based      of Intangible    Acquisition     Share-Based       of Intangible 
                   & Integration    Compensation        Assets       & Integration    Compensation         Assets 
                  --------------  ---------------  ---------------  --------------  ---------------  ----------------- 
 Other operating 
  costs           $         37.2  $             -  $             -  $          8.2  $             -  $             - 
 General and 
  administrative           193.0             56.2                -            54.6             21.5                - 
 Depreciation 
  and 
  amortization                 -                -            425.5               -                -            106.2 
                  --------------  ---------------  ---------------  --------------  ---------------  --------------- 
 Total 
  adjustments     $        230.2  $          56.2  $         425.5  $         62.8  $          21.5  $         106.2 
                  ====  ========  ====  =========  =====  ========  ====  ========  ====  =========  =====  ======== 
 

(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 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 the amortization of intangible assets and other tax attributes resulting from or acquired with our acquisitions, and to the tax basis step up associated with our separation from Fifth Third Bank and to 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 19.8% for the remainder of 2018.

(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 includes 15.0 million and 15.1 million for the three and six months ended June 30, 2018, respectively, of weighted average Class B units of Worldpay Holding and other potentially dilutive securities that are excluded from the GAAP dilutive net income per share calculation for the three and six months ended June 30, 2018 because including them would have an antidilutive effect. The adjusted shares outstanding includes 35.0 million for the three and six months ended June 30, 2017, respectively, of weighted average Class B units of Worldpay Holding that are excluded from the GAAP dilutive net income per share for the three and six months ended June 30, 2017, because including them would have an antidilutive effect.

Schedule 3

Worldpay, Inc.

Segment Information

(Unaudited)

(in millions)

Technology Solutions

 
                              Three Months Ended June 30, 
                                 2018              2017         % Change 
                          -----------------  ---------------  ----------- 
 Revenue                  $           401.6  $         307.6      31% 
 Network fees and other 
  costs                                   -            110.4           NM 
                          -----------------  --------------- 
 Net revenue(1)                       401.6            197.2     104% 
 Sales and marketing                   98.1             69.5      41% 
                          -----------------  --------------- 
 Segment profit           $           303.5  $         127.7     138% 
                          ===  ============      ===========  ====== 
 
 
                              Six Months Ended June 30, 
                                2018             2017         % Change 
                          ----------------  --------------  ----------- 
 Revenue                  $          738.0  $        579.5      27% 
 Network fees and other 
  costs                                  -           220.1           NM 
                          ----------------  -------------- 
 Net revenue(1)                      738.0           359.4     105% 
 Sales and marketing                 194.0           129.7      50% 
                          ----------------  -------------- 
 Segment profit           $          544.0  $        229.7     137% 
                          ===  ===========      ==========  ====== 
 

Merchant Solutions

 
                              Three Months Ended June 30, 
                                 2018              2017         % Change 
                          -----------------  ---------------  ----------- 
 Revenue                  $           520.4  $         579.1     (10)% 
 Network fees and other 
  costs                                   -            327.2           NM 
                          -----------------  --------------- 
 Net revenue(1)                       520.4            251.9     107% 
 Sales and marketing                  179.0             93.1      92% 
                          -----------------  --------------- 
 Segment profit           $           341.4  $         158.8     115% 
                          ===  ============      ===========  ====== 
 
 
                             Six Months Ended June 30, 
                               2018            2017         % Change 
                          --------------  --------------  ----------- 
 Revenue                  $        952.6  $      1,119.2     (15)% 
 Network fees and other 
  costs                                -           643.6           NM 
                          --------------  -------------- 
 Net revenue(1)                    952.6           475.6     100% 
 Sales and marketing               342.8           181.9      88% 
                          --------------  -------------- 
 Segment profit           $        609.8  $        293.7     108% 
                              ==========   =============  ====== 
 

Issuer Solutions

 
                              Three Months Ended June 30, 
                                2018              2017          % Change 
                          ----------------  ----------------  ----------- 
 Revenue                  $           84.8  $          112.0     (24)% 
 Network fees and other 
  costs                                  -              31.1           NM 
                          ----------------  ---------------- 
 Net revenue(1)                       84.8              80.9       5% 
 Sales and marketing                   6.3               5.7      11% 
                          ----------------  ----------------  ------ 
 Segment profit           $           78.5  $           75.2       4% 
                          ===  ===========      ============  ====== 
 
 
                              Six Months Ended June 30, 
                                2018             2017         % Change 
                          ----------------  --------------  ----------- 
 Revenue                  $          166.9  $        228.2     (27)% 
 Network fees and other 
  costs                                  -            63.1           NM 
                          ----------------  -------------- 
 Net revenue(1)                      166.9           165.1       1% 
 Sales and marketing                  12.6            11.7       8% 
                          ----------------  --------------  ------ 
 Segment profit           $          154.3  $        153.4       1% 
                          ===  ===========      ==========  ====== 
 

(1) Based on the Company's adoption of ASC 606 effective January 1, 2018, Network fees and other costs are now netted against Revenue. For the three and six months ended June 30, 2018, Revenue is equivalent to Net revenue as a result of the company's adoption of ASC 606. For the three and six months ended June 30, 2017, Net revenue is equivalent to Revenue less Network fees and other costs.

Schedule 4

Worldpay, Inc.

Condensed Consolidated Statements of Financial Position

(Unaudited)

(in millions)

 
                                                       June 30,     December 
                                                         2018        31, 2017 
                                                      ---------  -------------- 
 Assets 
 Current assets: 
   Cash and cash equivalents                          $   367.7  $      126.5 
   Accounts receivable-net                              1,577.6         986.6 
   Merchant float                                       1,873.2             - 
   Settlement assets                                    1,991.7         142.0 
   Prepaid expenses                                        81.0          33.5 
   Other                                                  540.4          84.0 
                                                      ---------  ------------ 
     Total current assets                               6,431.6       1,372.6 
 
  Customer incentives                                      69.2          68.4 
  Property, equipment and software-net                  1,032.2         473.7 
  Intangible assets-net                                 3,505.9         678.5 
  Goodwill                                             14,820.1       4,173.0 
  Deferred taxes                                          793.0         739.5 
  Proceeds from senior unsecured notes                        -       1,135.2 
  Other assets                                             69.8          26.1 
                                                                 ------------ 
 Total assets                                         $26,721.8  $    8,667.0 
                                                       ========      ======== 
 
 Liabilities and equity 
 Current liabilities: 
   Accounts payable and accrued expenses              $ 1,112.8  $      631.9 
   Settlement obligations                               4,561.6         816.2 
   Current portion of notes payable                       226.6         107.9 
   Current portion of tax receivable agreement 
    obligations                                           143.9         245.5 
   Deferred income                                         26.2          18.9 
   Current maturities of capital lease obligations         29.9           8.0 
   Other                                                  613.0           6.0 
                                                      ---------  ------------ 
     Total current liabilities                          6,714.0       1,834.4 
 Long-term liabilities: 
   Notes payable                                        7,860.9       5,586.4 
   Tax receivable agreement obligations                   589.7         535.0 
   Capital lease obligations                               26.8           4.5 
   Deferred taxes                                         546.4          65.6 
   Other                                                  109.4          40.5 
                                                      ---------  ------------ 
     Total long-term liabilities                        9,133.2       6,232.0 
 Total liabilities                                     15,847.2       8,066.4 
 
 Commitments and contingencies 
 Equity: 
       Total equity (1)                                10,874.6         600.6 
                                                      ---------  ------------ 
   Total liabilities and equity                       $26,721.8  $    8,667.0 
                                                       ========      ======== 
 
 
 
 

(1) Includes equity attributable to non-controlling interests.

Schedule 5

Worldpay, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in millions)

 
                                                                   Six Months Ended 
                                                          June 30, 2018       June 30, 2017 
                                                        ----------------   ------------------ 
 Operating Activities: 
 Net (loss) income                                      $         (99.8)   $         122.2 
 Adjustments to reconcile net income to net cash 
  provided by operating activities: 
   Depreciation and amortization expense                          495.1              154.5 
   Amortization of customer incentives                             12.6               13.0 
   Amortization and write-off of debt issuance 
    costs                                                          72.9                2.3 
   Realized gain on foreign currency forward                      (35.9)                 - 
   Share-based compensation expense                                56.2               21.5 
   Deferred tax expense                                            27.3               40.5 
   Tax receivable agreements non-cash items                        (6.4)              (9.2) 
   Other                                                            1.2                1.2 
   Change in operating assets and liabilities: 
       Accounts receivable                                        (50.3)              65.6 
       Net settlement assets and obligations                      105.7               40.8 
       Customer incentives                                        (14.8)             (13.6) 
       Prepaid and other assets                                   (18.6)             (34.0) 
       Accounts payable and accrued expenses                     (159.6)              28.6 
       Other liabilities                                           (6.8)             (15.2) 
                                                        ---------------    --------------- 
         Net cash provided by operating activities                378.8              418.2 
                                                        ---------------    --------------- 
 Investing Activities: 
   Purchases of property and equipment                           (103.1)             (58.9) 
   Acquisition of customer portfolios and related 
    assets and other                                              (51.1)             (19.6) 
   Purchase of interest rate caps                                  (8.1) 
   Proceeds from foreign currency forward                          71.5                  - 
   Cash acquired (used) in acquisitions, net of 
    cash used                                                   1,405.8             (531.5) 
                                                        ---------------    --------------- 
         Net cash provided by (used in) investing 
          activities                                            1,315.0             (610.0) 
                                                        ---------------    --------------- 
 Financing Activities: 
   Proceeds from issuance of long-term debt                     2,951.8                  - 
   Borrowings on revolving credit facility                      2,598.0            3,051.0 
   Repayment of revolving credit facility                      (2,823.0)          (2,693.0) 
   Repayment of debt and capital lease obligations             (2,590.3)  -          (70.2) 
   Payment of debt issuance costs                                 (91.1)              (1.1) 
   Proceeds from issuance of Class A common stock 
    under employee stock plans                                     14.9               10.1 
   Repurchase of Class A common stock (to satisfy 
    tax withholding obligations)                                  (11.7)              (5.7) 
   Settlement of certain tax receivable agreements                (85.3)             (61.3) 
   Payments under tax receivable agreements                       (55.3)             (46.5) 
   Distributions to non-controlling interests                      (6.4)             (10.7) 
                                                        ---------------    --------------- 
         Net cash (used in) provided by financing 
          activities                                              (98.4)             172.6 
                                                        ---------------    --------------- 
 Net increase (decrease) in cash and cash equivalents           1,595.4              (19.2) 
 Cash and cash equivalents-Beginning of period                  1,272.2              139.1 
 Effect of exchange rate changes on cash                         (139.2)                 - 
                                                        ---------------    --------------- 
 Cash and cash equivalents-End of period                $       2,728.4    $         119.9 
                                                            ===========    ====  ========= 
 Cash Payments: 
   Interest                                             $         149.3    $          56.6 
   Income taxes                                                     6.2               21.0 
 
 

Schedule 6

Worldpay, Inc.

Reconciliation of GAAP Net Income to Adjusted EBITDA

(Unaudited)

(in millions)

 
                           Three Months Ended                    Six Months Ended 
                                June 30,                             June 30, 
                             2018        2017      % Change       2018        2017     % Change 
                        -------------  --------  -----------  ------------  -------  ----------- 
 Net (loss) income      $       (1.5)  $   86.9    (102)%     $     (99.8)  $ 122.2    (182)% 
 Income tax expense 
  (benefit)                     12.8       33.6     (62)%            (0.4)     38.8    (101)% 
 Non-operating 
  expenses(1)                   22.0        3.4     547%             30.6       7.5     308% 
 Interest expense-net           79.9       29.7     169%            155.1      58.9     163% 
 Share-based 
  compensation                  39.0       10.9     258%             56.2      21.5     161% 
 Transition, 
  acquisition 
  and integration 
  costs(2)                      52.8       13.3     297%            230.2      62.8     267% 
 Depreciation and 
  amortization                 287.9       78.4     267%            495.1     154.5     220% 
                        ------------   --------               -----------   ------- 
 Adjusted EBITDA        $      492.9   $  256.2      92%      $     867.0   $ 466.2      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 (2) in Schedule 1.

(2) See note (3) in Schedule 2.

Schedule 7

Worldpay, Inc.

Outlook Summary

(Unaudited)

 
                                      Third Quarter Financial           Full Year Financial 
                                               Outlook                         Outlook 
                                 ---------------------------------  --------------------------- 
                                    Three Months Ended September        Year Ended December 
                                                 30,                             31, 
                                                      2017 Actual    2018 Outlook   2017 Actual 
                                    2018 Outlook           (2)            (1)           (2) 
                                 -----------------   -------------  -------------  ------------ 
 GAAP net income per share 
  attributable to Worldpay,                                             ($0.06) - 
  Inc.                                $0.06 - $0.13      $0.57              $0.12      $0.80 
 Adjustments to reconcile 
  GAAP to non-GAAP adjusted 
  net income per share(3)             $0.94 - $0.90      $0.33      $3.99 - $3.88      $2.57 
 Adjusted net income per share        $1.00 - $1.03      $0.90      $3.93 - $4.00      $3.37 
                                 ==================  =============  =============  ============ 
 

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.

 
 
 

The Company adopted 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.

(1) Combined company guidance excludes Worldpay Group plc EPS contribution for the period prior to the acquisition closing from January 1, 2018 to January 15, 2018. Combined company guidance is based on an assumed exchange rate of U.S. dollar/pound sterling of $1.31.

(2) 2017 actuals include Vantiv, Inc. results only.

(3) Represents estimated ranges of adjustments for the following items: (a) acquisition and integration costs incurred in connection with our acquisitions, charges related to employee termination benefits and other transition activities; (b) share-based compensation; (c) amortization of intangible assets acquired in business combinations and customer portfolio and related asset acquisitions; (d) non-operating expenses, (f) adjustments to income tax expense to reflect an effective tax rate based on tax reform and our new tax structure for the three months ended September 30, 2018 and the full year 2018, which includes the impact of the excess tax benefit relating to stock compensation as a result of the Company adopting the new stock compensation accounting guidance in 2017, assuming conversion of the Fifth Third Bank non-controlling interests into shares of Class A common stock, including the tax effect of adjustments described above; and (g) tax benefits due to the amortization of intangible assets and other tax attributes resulting from or acquired with our acquisitions, and to the tax basis step up associated with our separation from Fifth Third Bank and the purchase or exchange of Class B units of Worldpay Holding, net of payment obligations under tax receivable agreements.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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