ACI Worldwide, Inc.
Mar 2, 2017

ACI Worldwide, Inc. Reports Financial Results for the Quarter and Full Year Ended December 31, 2016

HIGHLIGHTS

            *Adjusted for FX, the Community Financial Services (CFS) divestiture and PAY.ON acquisition

NAPLES, Fla., March 02, 2017 (GLOBE NEWSWIRE) -- ACI Worldwide (NASDAQ:ACIW), a leading global provider of real-time electronic payment and banking solutions, today announced financial results for the quarter and full year ended December 31, 2016

"We delivered our strongest revenue growth of the year in Q4 and set another bookings record.  We signed three new UP BASE24-eps deals, one new UP Immediate Payments deal and our largest ever Universal Payments contract," commented Phil Heasley, President and CEO, ACI Worldwide.  "Entering 2017, we are signing some of the largest contracts in our history and we are very optimistic about ACI's growing opportunity in the rapidly changing payments landscape."

Q4 2016 FINANCIAL SUMMARY

Net new bookings grew 3% and overall bookings, including term extensions, grew 50% after adjusting for foreign currency fluctuations and the CFS divestiture.  Term extension growth was particularly strong, rebounding from earlier in 2016. 

Revenue in Q4 was $343 million, up 11% from last year.  Adjusting for the CFS divestiture, incremental contribution from the PAY.ON acquisition, and foreign currency fluctuations, Q4 revenue increased 21% from the same quarter last year. 

Adjusted EBITDA in Q4 grew $50 million to $160 million, an increase of 46%, from $110 million in Q4 2015 excluding the CFS contribution and related costs.  After adjusting for pass through interchange revenues of $39 million and $33 million in 2016 and 2015, respectively, net adjusted EBITDA margin in Q4 was 52% in 2016 versus 44% in Q4 of 2015.

Net income in Q4 was $67 million, or $0.56 per diluted share, versus $44 million, or $0.36 per diluted share in Q4 2015.

FULL YEAR 2016 FINANCIAL SUMMARY

Full year new bookings grew 6% and overall bookings, including term extensions, grew 16% to $1.3 billion, after adjusting for foreign currency fluctuations and the CFS divestiture.  

We ended the year with a 60-month backlog of $4 billion and a 12-month backlog of $816 million. Excluding the impact of the CFS divestiture and foreign currency movements, our 60-month backlog grew $126 million during 2016.

Full year revenue was $1.006 billion, up $39 million, or 4% over 2015, after adjusting for the CFS divestiture, the PAY.ON acquisition, and foreign currency fluctuations.

Adjusted EBITDA was $241 million, down $6 million compared to 2015, after adjusting for the CFS divestiture and related costs.  After adjusting for pass through interchange revenues of $144 million and $129 million in 2016 and 2015, respectively, net adjusted EBITDA margin was 28% in 2016 versus 30% in 2015.

Net income for the year was $130 million, or $1.09 per diluted share, versus $85 million, or $0.72 per diluted share in 2015.  Operating free cash flow for the year was $72 million, down from $143 million in 2015. Operating free cash flow was impacted by the timing of renewal events resulting in a $61 million higher accounts receivable balance compared to the prior year. Subsequent to year end, accounts receivable has declined $77 million. As of December 31, 2016, we had $76 million in cash on hand, a debt balance of $753 million, and $78 million remaining under our share repurchase authorization.

2017 GUIDANCE

In 2017, we expect to generate revenue in a range of $1.0 billion to $1.025 billion, which represents 2-5% organic growth after adjusting for foreign currency fluctuations and the CFS divestiture.  Adjusted EBITDA is expected to be in a range of $250 million to $255 million, which excludes approximately $14 million in one-time integration related expenses for PAY.ON, the CFS divestiture, and data center and facilities consolidation.  We expect to generate between $215 million and $220 million of revenue in the first quarter, which represents 3-5% organic growth after adjusting for foreign currency fluctuations and the CFS divestiture.  We expect full year 2017 new bookings to grow in the upper single digit range. 

CONFERENCE CALL TO DISCUSS FINANCIAL RESULTS AND OUTLOOK

Management will host a conference call at 8:30 am ET to discuss these results as well as 2017 guidance.  Interested persons may access a real-time audio broadcast of the teleconference at http://investor.aciworldwide.com/ or use the following numbers for dial-in participation:  US/Canada: (866) 914-7436, international:  +1 (817) 385-9117.   Please provide your name, the conference name ACI Worldwide, Inc. and conference code 66612410. There will be a replay of the call available for two weeks on (855) 859-2056 for US/Canada callers and +1 (404) 537-3406 for international participants.

About ACI Worldwide

ACI Worldwide, the Universal Payments (UP) company, powers electronic payments for more than 5,100 organizations around the world. More than 1,000 of the largest financial institutions and intermediaries as well as thousands of global merchants rely on ACI to execute $14 trillion each day in payments and securities. In addition, myriad organizations utilize our electronic bill presentment and payment services. Through our comprehensive suite of software and SaaS-based solutions, we deliver real-time, immediate payments capabilities and enable the industry's most complete omni-channel payments experience. To learn more about ACI, please visit www.aciworldwide.com. You can also find us on Twitter @ACI_Worldwide.

© Copyright ACI Worldwide, Inc. 2017.

To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries, significant transaction-related expenses, as well as other significant non-cash expenses such as depreciation, amortization and stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results.  The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.  Certain non-GAAP measures include:  

ACI is also presenting operating free cash flow, which is defined as net cash provided by operating activities, net after-tax payments associated with employee-related actions and facility closures, net after-tax payments associated with significant transaction-related expenses, and less capital expenditures plus European data center and cybersecurity capital expenditures.  Operating free cash flow is considered a non-GAAP financial measure as defined by SEC Regulation G.  We utilize this non-GAAP financial measure, and believe it is useful to investors, as an indicator of cash flow available for debt repayment and other investing activities, such as capital investments and acquisitions. We utilize operating free cash flow as a further indicator of operating performance and for planning investing activities.  Operating free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities.  A limitation of operating free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. This measure also does not exclude mandatory debt service obligations and, therefore, does not represent the residual cash flow available for discretionary expenditures. We believe that operating free cash flow is useful to investors to provide disclosures of our operating results on the same basis as that used by our management. 

ACI also includes backlog estimates, which include all license, maintenance, and services specified in executed contracts, as well as revenues from assumed contract renewals to the extent that we believe recognition of the related revenue will occur within the corresponding backlog period.  We have historically included assumed renewals in backlog estimates based upon automatic renewal provisions in the executed contract and our historic experience with customer renewal rates. 

Backlog is considered a non-GAAP financial measure as defined by SEC Regulation G.  Our 60-month backlog estimate represents expected revenues from existing customers using the following key assumptions:

Estimates of future financial results are inherently unreliable. Our backlog estimates require substantial judgment and are based on a number of assumptions as described above. These assumptions may turn out to be inaccurate or wrong, including, but not limited to, reasons outside of management's control. For example, our customers may attempt to renegotiate or terminate their contracts for a number of reasons, including mergers, changes in their financial condition, or general changes in economic conditions in the customer's industry or geographic location, or we may experience delays in the development or delivery of products or services specified in customer contracts which may cause the actual renewal rates and amounts to differ from historical experiences.  Changes in foreign currency exchange rates may also impact the amount of revenue actually recognized in future periods.  Accordingly, there can be no assurance that contracts included in backlog estimates will actually generate the specified revenues or that the actual revenues will be generated within the corresponding 60-month period.

Backlog should be considered in addition to, rather than as a substitute for, reported revenue and deferred revenue.

Forward-Looking Statements

This press release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as "believes," "will," "expects," "anticipates," "intends," and words and phrases of similar impact.  The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 

Forward-looking statements in this press release include, but are not limited to, statements regarding: (i) expectations that we are signing some of the largest contracts in our history; (ii) our optimism about ACI's growing opportunity in the rapidly changing payments landscape; (iii) expectations regarding revenue, adjusted EBITDA, and new bookings growth in 2017; and (iv) expectations regarding revenue in the first quarter of 2017.

All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include, but are not limited to, increased competition, the success of our Universal Payments strategy, demand for our products, restrictions and other financial covenants in our credit facility, consolidations and failures in the financial services industry, customer reluctance to switch to a new vendor, the accuracy of management's backlog estimates, the maturity of certain products, our strategy to migrate customers to our next generation products, ratable or deferred recognition of certain revenue associated with customer migrations and the maturity of certain of our products, failure to obtain renewals of customer contracts or to obtain such renewals on favorable terms, delay or cancellation of customer projects or inaccurate project completion estimates, volatility and disruption of the capital and credit markets and adverse changes in the global economy, our existing levels of debt, impairment of our goodwill or intangible assets, litigation, future acquisitions, strategic partnerships and investments, risks related to the expected benefits to be achieved in the transaction with PAY.ON, the complexity of our products and services and the risk that they may contain hidden defects or be subjected to security breaches or viruses, compliance of our products with applicable legislation, governmental regulations and industry standards, our ability to protect customer information from security breaches or attacks, our compliance with privacy regulations, the protection of our intellectual property in intellectual property litigation, exposure to credit or operating risks arising from certain payment funding methods, the cyclical nature of our revenue and earnings and the accuracy of forecasts due to the concentration of revenue-generating activity during the final weeks of each quarter, business interruptions or failure of our information technology and communication systems, our offshore software development activities, risks from operating internationally, including fluctuations in currency exchange rates, exposure to unknown tax liabilities, volatility in our stock price, our pending appeal of the $43 million judgement, plus $2.7 million of attorney fees and costs awarded against us in the BHMI litigation, and potential claims associated with our sale and transition of our CFS assets and liabilities.  For a detailed discussion of these risk factors, parties that are relying on the forward-looking statements should review our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.

 
 
ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)
 
  December 31, December 31,
   2016   2015 
ASSETS    
Current assets    
Cash and cash equivalents $75,753  $102,239 
Receivables, net of allowances of $3,873 and $5,045, respectively  268,162   219,116 
Recoverable income taxes  4,614   12,048 
Prepaid expenses  25,884   27,461 
Other current assets  33,578   21,637 
Total current assets  407,991    382,501 
     
Noncurrent assets    
Property and equipment, net  78,950   60,630 
Software, net  185,496   237,941 
Goodwill  909,691   913,261 
Intangible assets, net  203,634   256,925 
Deferred income taxes, net  77,479   90,872 
Other noncurrent assets  39,054   33,658 
TOTAL ASSETS $1,902,295  $1,975,788 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities    
Accounts payable $42,873  $55,420 
Employee compensation  47,804   31,213 
Current portion of long-term debt  90,323   89,710 
Deferred revenue  105,191   128,559 
Income taxes payable  11,334   4,734 
Other current liabilities  78,841   75,225 
Total current liabilities  376,366   384,861 
     
Noncurrent liabilities    
Deferred revenue  49,863   42,081 
Long-term debt  653,595   834,449 
Deferred income taxes, net  26,349   28,067 
Other noncurrent liabilities  41,205   31,930 
Total liabilities  1,147,378   1,321,388 
     
Commitments and contingencies    
     
Stockholders' equity    
Preferred stock  -   - 
Common stock  702   702 
Additional paid-in capital  600,344   561,379 
Retained earnings  545,731   416,851 
Treasury stock  (297,760)  (252,956)
Accumulated other comprehensive loss  (94,100)  (71,576)
Total stockholders' equity  754,917    654,400 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,902,295  $ 1,975,788 
     


  
ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in thousands, except per share amounts)
 
  
 For the Three Months
 Ended December 31,
 For the Years
 Ended December 31,
 
  2016   2015   2016   2015  
         
Revenues        
License$159,277  $94,230  $273,466  $251,205  
Maintenance 58,072   63,000   233,476   241,895  
Services 24,262   34,371   87,470   106,820  
Hosting 101,119   117,036   411,289   446,057  
Total revenues 342,730   308,637   1,005,701   1,045,977  
         
Operating expenses        
Cost of license (1) 7,043   5,810   22,345   23,245  
Cost of maintenance, services and hosting (1) 103,786   111,285   422,569   449,054  
Research and development 37,665   33,285   169,900    145,924  
Selling and marketing 29,421   40,747   118,082   129,407   
General and administrative 21,639   20,552   113,617   87,419  
Gain on sale of assets -   -   (151,463)  -  
Depreciation and amortization 22,833   22,985   89,521   82,980  
Total operating expenses 222,387   234,664   784,571   918,029  
         
Operating income 120,343   73,973   221,130   127,948  
         
Other income (expense)        
Interest expense (10,217)  (10,198)  (40,184)  (41,372) 
Interest income 114   132   530   386  
Other, net (378)  (1,284)  4,105   26,411  
Total other income (expense) (10,481)  (11,350)  (35,549)  (14,575) 
         
Income before income taxes 109,862   62,623   185,581   113,373   
Income tax expense 43,171   18,856   56,046   27,937  
Net income$66,691  $43,767  $129,535  $85,436  
         
Earnings per common share        
Basic$0.57  $0.37  $1.10  $0.73  
Diluted$0.56  $0.36  $1.09   $0.72  
         
Weighted average common shares outstanding        
Basic 117,316   118,739   117,533   117,465  
Diluted 118,477   120,167   118,847   118,919  
         
(1) The cost of software license fees excludes charges for depreciation but includes amortization of purchased and developed software for resale.  The cost of maintenance, services and hosting fees excludes charges for depreciation.  
  


      
ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)

 
      
  For the Three Months Ended December 31, For the Years Ended December 31, 
   2016    2015   2016    2015  
Cash flows from operating activities:         
Net income  $66,691  $43,767  $129,535  $85,436  
Adjustments to reconcile net income to net cash flows from operating activities:          
Depreciation  6,454   5,737   22,584   21,656  
Amortization  21,162   20,846   80,870   75,775  
Amortization of deferred debt issuance costs  1,369   1,490   5,567    6,244  
Deferred income taxes  19,263   15,555   17,702   19,328  
Stock-based compensation expense  9,801   8,330   43,613   18,380  
Gain on available for sale securities  -   -   -   (24,465) 
Gain on available for sale CFS assets  -   -   (151,463)  -  
Other  1,213   258   806   2,725  
Changes in operating assets and liabilities, net of impact of acquisitions:         
Receivables  (111,244)  (42,921)  (76,460)  (11,355) 
Accounts payable  1,978   13,998   (13,920)  8,557  
Accrued employee compensation  (200)  (9,139)  18,060   (1,998) 
Current income taxes  8,819   (164)  14,510   (8,244) 
Deferred revenue  (648)   300   3,015   (4,513) 
Other current and noncurrent assets and liabilities  10,316   6,094    5,411   468  
Net cash flows from operating activities  34,974   64,151   99,830   187,994  
          
Cash flows from investing activities:         
Purchases of property and equipment  (6,383)  (7,737)  (40,812)  (27,283) 
Purchases of software and distribution rights  (3,057)  (9,605)  (22,268)  (21,622) 
Proceeds from available-for-sale securities  -   -   -   35,311  
Proceeds from sale of CFS assets  -   -   199,481    -  
Acquisition of businesses, net of cash acquired  232   (179,367)  232   (179,367)  
Other  -   -   (7,000)  (7,000) 
Net cash flows from investing activities  (9,208)  (196,709)  129,633   (199,961) 
          
Cash flows from financing activities:         
Proceeds from issuance of common stock  592   806   2,987   3,104  
Proceeds from exercises of stock options  576   621   9,325   12,175  
Repurchases of common stock  -   -   (60,089)  -  
Repurchase of restricted stock and performance shares for tax withholdings  -   (96)  (2,975)  (4,649) 
Proceeds from revolving credit facility  24,000   186,000   76,000   298,000  
Repayments of revolving credit facility  -   (8,000)  (166,000)  (164,000) 
Repayment of term portion of credit agreement  (23,823)  (23,822)  (95,293)  (87,352) 
Payments on other debt and capital leases  (838)  (853)  (14,376)  (12,638) 
Payment for debt issuance costs  (285)  -   (655)  -  
Net cash flows from financing activities  222   154,656   (251,076)  44,640  
          
Effect of exchange rate fluctuations on cash  (1,147)  (716)  (4,873)  (7,735) 
Net increase (decrease) in cash and cash equivalents  24,841   21,382   (26,486)  24,938  
Cash and cash equivalents, beginning of period  50,912   80,857   102,239   77,301  
Cash and cash equivalents, end of period $75,753  $102,239  $75,753  $102,239  
          

 

  
ACI Worldwide, Inc. 
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) 
(unaudited and in thousands, except per share data) 
          
 FOR THE THREE MONTHS ENDED December 31, 
  2016   2016  2015   2015    
Selected Non-GAAP Financial DataGAAPAdjNon-GAAPGAAPAdjNon-GAAP$ Diff% Diff 
          
Total revenues (2)$342,730 $- $342,730 $308,637 $147 $308,784 $33,946 11% 
Total expenses (3) 222,387  (1,749) 220,638  234,664  (5,774)$228,890  (8,252)-4% 
Operating income (loss) 120,343  1,749  122,092  73,973  5,921 $79,894  42,198 53% 
Other income (expense) (10,481) -  (10,481) (11,350) - $(11,350) 869 -8% 
Income (loss) before income taxes 109,862  1,749  111,611  62,623  5,921 $68,544  43,067 63% 
Income tax expense (benefit) (4) 43,171  656  43,827  18,856  2,072 $20,928  22,899 109% 
Net income (loss)$66,691 $1,093 $67,784 $43,767 $3,849 $47,616 $20,168 42% 
          
Depreciation 6,454  -  6,454  5,737  -  5,737  717 12% 
Amortization - acquisition related intangibles 4,860  -  4,860  5,891  -  5,891  (1,031)-18% 
Amortization - acquisition related software 8,697  -  8,697  7,322  -  7,322  1,375 19% 
Amortization - other 7,605  -  7,605  7,633  -  7,633  (28)0% 
Stock-based compensation 9,801  -  9,801  8,330  -  8,330  1,471 18% 
          
Adjusted EBITDA$157,760 $1,749 $159,509 $108,886 $5,921 $114,807 $44,702  39% 
          
Earnings per share information         
Weighted average shares outstanding         
Basic  117,316  117,316  117,316  118,739  118,739  118,739    
Diluted  118,477  118,477  118,477  120,167  120,167  120,167    
          
Earnings per share         
Basic $0.57 $0.01 $0.58 $0.37 $0.03 $0.40 $0.18 45% 
Diluted $0.56 $0.01 $0.57 $0.36 $0.03 $0.40 $0.17 44% 
          
(1)  This presentation includes non-GAAP measures.  Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.  
          
(2)  Adjustment for Online Resources Corporation deferred revenue that would have been recognized in the normal course of business but was not recognized due to GAAP purchase accounting requirements.  
          
(3)  Adjustment in Q4 2016 include employee related expenses of $1.0 million, and $0.7 million for professional and other fees. In Q4 2015, we had adjustments for significant transaction related expenses, including, $2.4 million for employee related actions, $1.0 million for technology products and $2.4 million for professional and other fees. 
  
(4)  Tax effect of revenue and significant transaction related adjustments. 
           
                         
          
   Quarter Ended
December 31,
     
Reconciliation of Operating Free Cash Flow (millions) 
 2016  2015      
          
Net cash provided by operating activities  $35.0 $64.1      
Net after-tax payments associated with employee-related actions 1.1  2.0      
Net after-tax payments associated with facility closures  0.3  -      
Net after-tax payments associated with significant transaction related expenses 0.3  1.1      
Less capital expenditures   (9.4) (17.3)     
Plus capital expenditures for European datacenter and cyber security 3.9  -      
Operating Free Cash Flow  $   31.2  $   49.9       
          
          
          
   Quarter Ended
December 31,
     
Reconciliation excluding CFS impact (millions)   2016  2015      
          
Total non-GAAP revenue  $342.7 $308.8      
CFS product revenue   -  (24.1 )     
Total non-GAAP revenue excluding CFS  $   342.7  $   284.7       
          
Total adjusted EBITDA  $159.5 $114.8      
CFS adjusted EBITDA   -  (5.2)     
Total adjusted EBITDA excluding CFS impact   $   159.5  $   109.6       
          
          
          
    Quarter Ended     
Monthly Recurring Revenue (millions)  December 31,     
    2016   2015      
Monthly software license fees  $16.8 $20.6      
Maintenance fees   58.1  63.0      
Processing services   101.1  117.0      
Monthly Recurring Revenue     176.0     200.6       
CFS contribution   -  22.6      
Monthly Recurring Revenue  $   176.0  $   178.0       
               


 
ACI Worldwide, Inc.
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1)
(unaudited and in thousands, except per share data)
         
 FOR THE YEAR ENDED December 31,
  2016   2016  2015   2015   
Selected Non-GAAP Financial DataGAAPAdjNon-GAAPGAAPAdjNon-GAAP$ Diff% Diff
         
Total revenues (2)$1,005,701 $87 $1,005,788 $1,045,977 $743 $1,046,720 $(40,932)-4%
Total expenses (3) 784,571  131,161  915,732  918,029  (15,041) 902,988  12,744 1%
Operating income (loss) 221,130  (131,074) 90,056  127,948  15,784  143,732  (53,676)-37%
Other income (expense) (4) (35,549)  -  (35,549) (14,575) (24,465) (39,040) 3,491 -9%
Income (loss) before income taxes 185,581  (131,074) 54,507  113,373  (8,681) 104,692  (50,185)-48%
Income tax expense (benefit) (5) 56,046  (50,832) 5,214  27,937  (592) 27,345  (22,131)-81%
Net income (loss)$129,535 $(80,242)$49,293 $85,436 $(8,089)$ 77,347 $(28,054)-36%
         
Depreciation 22,584  -  22,584  21,656  -  21,656  928 4%
Amortization - acquisition related intangibles 21,220  -  21,220  22,959  -  22,959  (1,739)-8%
Amortization - acquisition related software 22,813  -  22,813   25,787  -  25,787  (2,974)-12%
Amortization - other 36,837  -  36,837  27,029  -  27,029  9,808 36%
Stock-based compensation 43,613  -  43,613  18,380  -  18,380  25,233 137%
         
Adjusted EBITDA$368,197 $(131,074)$237,123  $243,759 $15,784 $259,543 $(22,420)-9%
         
Earnings per share information        
Weighted average shares outstanding        
Basic  117,533  117,533  117,533  117,465  117,465  117,465   
Diluted  118,847  118,847  118,847  118,919  118,919  118,919   
         
Earnings per share        
Basic $1.10 $(0.68)$0.42 $0.73 $(0.07)$0.66 $(0.24)-36%
Diluted $1.09 $(0.68)$0.41 $0.72 $(0.07)$0.65 $(0.24)-37%
         
(1)  This presentation includes non-GAAP measures.  Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. 
         
(2)  Adjustment for Online Resources Corporation deferred revenue that would have been recognized in the normal course of business but was not recognized due to GAAP purchase accounting requirements. 
         
(3)  Adjustment in 2016 include $151.5 million gain recognized on the sale of CFS assets, facility closure expenses of $5.2 million, employee related expenses of $6.6 million, and $8.5 million for professional and other fees as well as a $0.5 million reduction in the gain recognized on the sale of CFS assets. In 2015, we had adjustments for significant transaction related transactions, including, $6.3 million for employee related actions, $5.6 million for transition and technology costs, and $3.1 million for professional and other fees
         
(4)  Adjustment in 2015 includes $24.5 million gain recognized on the sale of Yodlee stock.
         
(5)  Tax effect of revenue and significant transaction related adjustments.
                        
         
   Year Ended
December 31,
    
Reconciliation of Operating Free Cash Flow (millions) 
 2016  2015     
         
Net cash provided by operating activities  $99.8 $183.1     
Net after-tax payments associated with employee-related actions  5.2  5.0     
Net after-tax payments associated with facility closures  0.6  0.4     
Net after-tax payments associated with significant transaction related expenses 6.1  3.3     
Less capital expenditures   (63.1) (48.9)    
Plus capital expenditures for European datacenter and cyber security 23.4  -     
Operating Free Cash Flow  $   72.0  $   142.9      
          
         
         
   Year Ended
December 31,
    
Reconciliation excluding CFS impact (millions)   2016  2015     
         
Total non-GAAP revenue  $1,005.8 $1,046.7     
CFS product revenue   (15.7) (94.9)    
Total non-GAAP revenue excluding CFS  $   990.1  $   951.8      
         
Total adjusted EBITDA  $237.1 $259.5     
CFS adjusted EBITDA   (1.2) (12.1)    
Retained indirect costs during TSA period   4.9  -     
Total adjusted EBITDA excluding CFS impact  $   240.8  $   247.4      
         
          
   Year Ended    
Monthly Recurring Revenue (millions) December 31,    
    2016  2015     
Monthly software license fees  $70.4 $76.9     
Maintenance fees   233.4  241.9     
Processing services   411.3  446.1     
Monthly Recurring Revenue     715.1     764.9      
CFS contribution   14.3   89.8     
Monthly Recurring Revenue  $   700.8 $   675.1      


For more information contact:

John Kraft, Vice President, Investor Relations & Strategic Analysis

ACI Worldwide

239-403-4627

john.kraft@aciworldwide.com

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Source: ACI WORLDWIDE CORP

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