WPY Worldpay Inc.

Worldpay, Inc. Fourth Quarter 2018 Results

(unaudited)

(in millions, except share data)

December 31,
2017⁽¹⁾

Pro Forma⁽²⁾ 
% Change

Pro Forma⁽²⁾
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
to Worldpay, Inc.

$

0.36

$

(0.37)

NM

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.

Worldpay, Inc. Full-Year 2018 Results

(unaudited)

(in millions, except share data)

Year Ended

December 31,
2018

December 31,
2017⁽¹⁾

% Change

Pro Forma⁽²⁾  
% Change

Pro Forma⁽²⁾
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

GAAP Net income per diluted share attributable to
Worldpay, Inc.

$

0.04

$

0.80

(95)%

Adjusted net income attributable to Worldpay, Inc.

$

1,246.7

$

641.1

94%

Adjusted net income per share attributable to Worldpay,
Inc.

$

4.05

$

3.37

20%

⁽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.

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
Worldpay, Inc

$0.01 - $0.08

$(0.36)

$1.00 - $1.50

$0.04

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.

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,

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⁾

419.1

NM

(41.8)

432.8

NM

(Loss) income before applicable
income taxes

93.1

501.1

(81)%

(8.1)

813.7

NM

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-
controlling interests

(5.3)

(13.3)

NM

(6.8)

(52.6)

NM

Net income (loss) attributable to
Worldpay, Inc.

$

110.5

$

NM

$

12.8

$

130.1

(90)%

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
income taxes

$

93.1

$

501.1

(81)%

$

$

813.7

NM

Non-GAAP Adjustments:

Transition, acquisition and
integration costs⁽¹⁾⁽²⁾

59.1

62.2

(5)%

336.7

130.1

159%

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
before applicable income taxes

409.1

213.3

92%

1,433.6

776.7

85%

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

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, Acquisition & Integration

Share-Based Compensation

Amortization Of Intangible Assets

Transition, Acquisition & Integration

Share-Based Compensation

Amortization Of Intangible Assets

Other operating costs

$

$

—

$

—

$

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, Acquisition & Integration

Share-Based Compensation

Amortization Of Intangible Assets

Transition, Acquisition & Integration

Share-Based Compensation

Amortization Of Intangible 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,
2018

December 31,
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

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%

⁽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
Worldpay, Inc.

$0.01 - $0.08

$

(0.36)

$1.00 - $1.50

$

0.04

Adjustments to reconcile GAAP to non-GAAP
adjusted net income per share⁽²⁾

$0.86 - $0.82

$

1.17

$3.50 - $3.10

$

4.01

Adjusted net income per share

$0.87 - $0.90

0.81

$4.50 - $4.60

$

4.05

⁽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.