- The Company now presents the operating results of the Worldpay
Merchant Solutions business as discontinued operations
- Third quarter GAAP Diluted Earnings Per Share for continuing
operations of $0.44 and Adjusted EPS of $0.94
- Including discontinued operations, third quarter GAAP Diluted
Earnings (Loss) Per Share of $(0.76), including a $1.5 billion
non-cash charge related to the Worldpay Merchant Solutions
business, and Adjusted EPS of $1.65
- Continuing operations revenue increased 3% on a GAAP basis and
4% on an organic basis to $2.5 billion; continuing operations
adjusted EBITDA margin expanded 70 basis points (bps) to 43.0%
- Announces increase to 2023 outlook, including discontinued
operations, and introduces outlook for continuing operations
- Announces plans to repurchase approximately $500 million of
shares in the fourth quarter of 2023, as part of broader goal to
repurchase at least $3.5 billion of shares by year end 2024
- Pending Worldpay transaction on track for expected close date
in Q1 2024
FIS® (NYSE:FIS), a global leader in financial services
technology, today reported its third quarter 2023 results.
“This quarter’s results demonstrate continued positive momentum
of the business as we delivered on our financial commitments for
the third consecutive quarter, increased our full-year outlook on a
consolidated basis, and remain on track to close the pending
Worldpay transaction in Q1 2024,” said FIS CEO and President
Stephanie Ferris. “I am pleased to announce that we plan to resume
share repurchases in the fourth quarter of 2023, ahead of the
transaction close, reflecting our confidence in the business and
our strengthening financial position. I remain proud of our team
members and the essential role they are playing to drive the future
of FIS forward for both clients and shareholders.”
Financial Reporting Considerations for
Pending Worldpay Transaction
On July 6, 2023, the Company announced an acceleration of its
previously announced separation plan to create two highly focused
global companies with greater strategic flexibility. FIS signed a
definitive agreement to sell a 55% stake in its Worldpay Merchant
Solutions business to private equity funds managed by GTCR. The
Worldpay transaction is expected to close in Q1 2024, subject to
regulatory approvals and other customary closing conditions.
Effective this quarter, the Company began accounting for the
assets and liabilities of the Worldpay Merchant Solutions business
as held for sale and its operating results as discontinued
operations. The Company also stopped recording depreciation and
amortization of the long-lived assets held for sale beginning July
5, 2023.
Unless otherwise noted, all results are presented on a
continuing operations basis and exclude the results of the
Company’s Worldpay Merchant Solutions business that is now
classified as discontinued operations.
Capital Allocation
Update
The Company remains committed to shareholder returns and plans
to repurchase approximately $500 million of shares in the fourth
quarter of 2023, as part of its broader goal to repurchase at least
$3.5 billion of shares by year end 2024. Additionally, the Company
continues to target a dividend payout ratio of 35% of adjusted net
earnings, excluding net earnings (loss) attributable to the
Worldpay Merchant Solutions business non-controlling interest that
will be retained post-separation.
Third Quarter 2023 Financial
Results
On a GAAP basis, excluding $1.2 billion of revenue classified as
discontinued operations, revenue increased 3% as compared to the
prior year period to approximately $2.5 billion. GAAP net earnings
attributable to common stockholders for continuing operations were
$260 million or $0.44 per diluted share. Including discontinued
operations, GAAP net earnings (loss) attributable to common
stockholders were $(449) million or $(0.76) per diluted share.
On an organic basis, revenue increased 4% as compared to the
prior-year period to approximately $2.5 billion. Adjusted EBITDA
margin expanded by 70 basis points (bps) over the prior-year period
to 43.0%. Adjusted net earnings for continuing operations were
approximately $560 million, and adjusted EPS decreased by 7% as
compared to the prior-year period to $0.94 per diluted share
primarily reflecting higher interest costs. Including discontinued
operations, adjusted net earnings were approximately $982 million
and adjusted EPS decreased 5% as compared to the prior-year period
to $1.65 per diluted share primarily reflecting higher interest
costs.
($ millions, except per share data,
unaudited)
Three Months Ended September
30,
%
Constant
Organic
Continuing
Operations
2023
2022
Change
Currency
Growth
Revenue
$
2,489
$
2,415
3%
3%
4%
Banking Solutions
1,756
1,703
3%
3%
3%
Capital Market Solutions
677
633
7%
6%
6%
Corporate and Other
56
79
(29)%
(31)%
Adjusted EBITDA
$
1,070
$
1,022
5%
Adjusted EBITDA Margin
43.0
%
42.3
%
70 bps
Net Earnings (GAAP)
$
260
$
218
19%
Diluted Earnings Per Common Share
(GAAP)
$
0.44
$
0.36
22%
Adjusted Net Earnings
$
560
$
613
(9)%
Adjusted EPS
$
0.94
$
1.01
(7)%
($ millions, except per share data,
unaudited)
Three Months Ended September
30,
%
Constant
Organic
Total FIS
(Including Discontinued Operations)
2023
2022
Change
Currency
Growth
Net Earnings (Loss) (GAAP)
$
(449
)
$
249
*
Diluted Earnings (Loss) Per Common Share
(GAAP)
$
(0.76
)
$
0.41
*
Adjusted Net Earnings
$
982
$
1,054
(7)%
Adjusted EPS
$
1.65
$
1.74
(5)%
*Indicates comparison not meaningful
Operating Segment
Information
- Banking Solutions: Third quarter revenue increased by 3%
on a GAAP basis and 3% on an organic basis as compared to the
prior-year period to $1.8 billion reflecting organic recurring
revenue growth of 7%, which was aided by approximately 4 percentage
points of benefit associated with the servicing of federally funded
pandemic relief programs. Adjusted EBITDA margin expanded by 120
basis points as compared to the prior-year period to 44.6%
primarily driven by cost efficiencies.
- Capital Market Solutions: Third quarter revenue
increased by 7% on a GAAP basis and 6% on an organic basis as
compared to the prior-year period to $677 million primarily due to
strong organic recurring revenue growth of 8%. Adjusted EBITDA
margin contracted by 80 basis points over the prior-year period to
49.0% primarily due to the timing of operating expenses.
- Corporate and Other: Revenue decreased by 29% as
compared to the prior-year period to $56 million primarily due to
the divestitures of non-strategic businesses. Adjusted EBITDA loss
was $45 million, including $68 million of corporate expenses.
Discontinued Operations (Worldpay
Merchant Solutions)
Third quarter revenue increased by 1% on a GAAP basis and
decreased 1% on an organic basis as compared to the prior-year
period to $1.2 billion. Adjusted EBITDA increased 2% to $562
million. Adjusted EBITDA margin expanded by 30 basis points as
compared to the prior-year period to 46.8%, reflecting continued
Future Forward savings.
Balance Sheet and Cash Flows (Total
Company, Including Discontinued Operations)
As of September 30, 2023, debt outstanding totaled $18.7
billion. Third quarter net cash provided by operating activities
was $1.1 billion, and free cash flow was $907 million. In the
quarter, the Company returned $308 million of capital to
shareholders through dividends paid.
Update on Enterprise Transformation
Program (Future Forward)
As of September 30, 2023, on a continuing operations basis, the
Company achieved annualized run-rate Future Forward cash savings of
over $220 million exiting the quarter, including over $150 million
of operational expense savings and approximately $70 million of
capital expense savings. In light of the pending Worldpay
separation, the Company is reiterating its target post-separation
cash savings exiting 2024 of $1.0 billion, of which over two-thirds
represents annualized run-rate savings.
Full-Year 2023 Outlook
The Company now presents the operating results of the Worldpay
Merchant Solutions business as discontinued operations for all
periods presented beginning Q3 2023. As a result, the Worldpay
Merchant Solutions business is incorporated into "Discontinued
operations, net of tax" rather than included within each line item
of the income statement. From a total Company perspective prior to
reflecting this change, the Company has raised its outlook range as
follows:
($ millions)
FY 2023 (Continuing &
Discontinued Operations)
Revenue
$14,600 - $14,650
Adjusted EBITDA1
$6,100 - $6,150
The Company is now introducing its full-year 2023 outlook for
continuing operations, which excludes the impact from discontinued
operations for both revenue and adjusted EBITDA.
($ millions)
FY 2023 (Continuing Operations
Only)
Revenue
$9,810 - $9,840
Adjusted EBITDA1
$3,930 - $3,970
1The Company does not provide a
reconciliation for non-GAAP estimates on a forward-looking basis
where it is unable to provide a meaningful or accurate calculation
or estimation of reconciling items and the information is not
available without unreasonable effort. The Company is unable to
address the probable significance of the unavailable
information.
Webcast
FIS will sponsor a live webcast of its earnings conference call
with the investment community beginning at 8:30 a.m. (EDT) on
Tuesday, November 7, 2023. To access the webcast, go to the
Investor Relations section of FIS’
homepage, www.fisglobal.com. A replay will be available after the
conclusion of the live webcast.
About FIS
FIS is a leading provider of technology solutions for financial
institutions and businesses of all sizes and across any industry
globally. We enable the movement of commerce by unlocking the
financial technology that powers the world’s economy. Our employees
are dedicated to advancing the way the world pays, banks and
invests through our trusted innovation, system performance and
flexible architecture. We help our clients use technology in
innovative ways to solve business-critical challenges and deliver
superior experiences for their customers. Headquartered in
Jacksonville, Florida, FIS is a member of the Fortune 500® and the
Standard & Poor’s 500® Index.
To learn more, visit www.fisglobal.com. Follow FIS on Facebook,
LinkedIn and Twitter (@FISGlobal).
FIS Use of Non-GAAP Financial
Information
Generally Accepted Accounting Principles (GAAP) is the term used
to refer to the standard framework of guidelines for financial
accounting in the United States. GAAP includes the standards,
conventions, and rules accountants follow in recording and
summarizing transactions and in the preparation of financial
statements. In addition to reporting financial results in
accordance with GAAP, we have provided certain non-GAAP financial
measures.
These non-GAAP measures include constant currency revenue,
organic revenue growth, adjusted EBITDA, adjusted EBITDA margin,
adjusted net earnings, adjusted EPS, and free cash flow. These
non-GAAP measures may be used in this release and/or in the
attached supplemental financial information.
We believe these non-GAAP measures help investors better
understand the underlying fundamentals of our business. As further
described below, the non-GAAP revenue and earnings measures
presented eliminate items management believes are not indicative of
FIS’ operating performance. The constant currency and organic
revenue growth measures adjust for the effects of exchange rate
fluctuations, while organic revenue growth also adjusts for
acquisitions and divestitures and excludes revenue from Corporate
and Other and from discontinued operations, giving investors
further insight into our performance. Finally, free cash flow
provides further information about the ability of our business to
generate cash. For these reasons, management also uses these
non-GAAP measures in its assessment and management of FIS’
performance.
Constant currency revenue represents reported operating
segment revenue excluding the impact of fluctuations in foreign
currency exchange rates in the current period.
Organic revenue growth is constant currency revenue, as
defined above, for the current period compared to an adjusted
revenue base for the prior period, which is adjusted to add
pre-acquisition revenue of acquired businesses for a portion of the
prior year matching the portion of the current year for which the
business was owned, and subtract pre-divestiture revenue for
divested businesses for the portion of the prior year matching the
portion of the current year for which the business was not owned,
for any acquisitions or divestitures by FIS. When referring to
organic revenue growth, revenues from our Corporate and Other
segment, which is comprised of revenue from non-strategic
businesses, are excluded.
Adjusted EBITDA reflects net earnings (loss) before
interest, other income (expense), taxes, and depreciation and
amortization, and excludes certain costs and other transactions
that management deems non-operational in nature, or that otherwise
improve the comparability of operating results across reporting
periods by their exclusion. This measure is reported to the chief
operating decision maker for purposes of making decisions about
allocating resources to the segments and assessing their
performance. For this reason, adjusted EBITDA, as it relates to our
segments, is presented in conformity with Accounting Standards
Codification 280, Segment Reporting, and is excluded from the
definition of non-GAAP financial measures under the Securities and
Exchange Commission's Regulation G and Item 10(e) of Regulation
S-K.
Adjusted EBITDA margin reflects adjusted EBITDA, as
defined above, divided by revenue.
Adjusted net earnings excludes the impact of certain
costs and other transactions which management deems non-operational
in nature or that otherwise improve the comparability of operating
results across reporting periods by their exclusion. These include,
among others, the impact of acquisition-related purchase accounting
amortization which is recurring.
Adjusted EPS reflects adjusted net earnings, as defined
above, divided by weighted average diluted shares outstanding.
Free cash flow reflects net cash provided by operating
activities, adjusted for the net change in settlement assets and
obligations and excluding certain transactions that are closely
associated with non-operating activities or are otherwise
non-operational in nature and not indicative of future operating
cash flows, less capital expenditures. Free cash flow does not
represent our residual cash flow available for discretionary
expenditures since we have mandatory debt service requirements and
other non-discretionary expenditures that are not deducted from the
measure. Free cash flow as presented in this earnings release
includes cash flow from discontinued operations, which our
management will not be able to freely access following the Worldpay
separation.
Any non-GAAP measures should be considered in context with the
GAAP financial presentation and should not be considered in
isolation or as a substitute for GAAP measures. Further, FIS’
non-GAAP measures may be calculated differently from similarly
titled measures of other companies. Reconciliations of these
non-GAAP measures to related GAAP measures, including footnotes
describing the adjustments, are provided in the attached schedules
and in the Investor Relations section of the FIS website,
www.fisglobal.com.
Forward-Looking
Statements
This earnings release and today’s webcast contain
“forward-looking statements” within the meaning of the U.S. federal
securities laws. Statements that are not historical facts,
including statements about anticipated financial outcomes,
including any earnings outlook or projections, projected revenue or
expense synergies or dis-synergies, business and market conditions,
outlook, foreign currency exchange rates, deleveraging plans,
expected dividends and share repurchases of the Company, the
Company’s sales pipeline and anticipated profitability and growth,
plans, strategies and objectives for future operations, strategic
value creation, risk profile and investment strategies, any
statements regarding future economic conditions or performance and
any statements with respect to the previously announced pending
sale of a 55% equity stake in the Worldpay Merchant Solutions
business ("pending Worldpay transaction"), the expected financial
and operational results of the Company, and expectations regarding
the Company’s business or organization after the pending Worldpay
transaction, as well as other statements about our expectations,
beliefs, intentions, or strategies regarding the future, or other
characterizations of future events or circumstances, are
forward-looking statements. These statements may be identified by
words such as “expect,” “anticipate,” “intend,” “plan,” “believe,”
“will,” “should,” “could,” “would,” “project,” “continue,”
“likely,” and similar expressions, and include statements
reflecting future results or outlook, statements of outlook and
various accruals and estimates. These statements relate to future
events and our future results and involve a number of risks and
uncertainties. Forward-looking statements are based on management’s
beliefs as well as assumptions made by, and information currently
available to, management.
Actual results, performance or achievement could differ
materially from these forward-looking statements. The risks and
uncertainties to which forward-looking statements are subject
include the following, without limitation:
- changes in general economic, business and political conditions,
including those resulting from COVID-19 or other pandemics, a
recession, intensified international hostilities, acts of
terrorism, increased rates of inflation or interest, changes in
either or both the United States and international lending, capital
and financial markets or currency fluctuations;
- the risk of losses in the event of defaults by merchants (or
other parties) to which we extend credit in our card settlement
operations or in respect of any chargeback liability, either of
which could adversely impact liquidity and results of
operations;
- the risk that acquired businesses will not be integrated
successfully or that the integration will be more costly or more
time-consuming and complex than anticipated;
- the risk that cost savings and synergies anticipated to be
realized from acquisitions may not be fully realized or may take
longer to realize than expected;
- the risks of doing business internationally;
- the effect of legislative initiatives or proposals, statutory
changes, governmental or applicable regulations and/or changes in
industry requirements, including privacy and cybersecurity laws and
regulations;
- the risks of reduction in revenue from the elimination of
existing and potential customers due to consolidation in, or new
laws or regulations affecting, the banking, retail and financial
services industries or due to financial failures or other setbacks
suffered by firms in those industries;
- changes in the growth rates of the markets for our
solutions;
- the amount, declaration and payment of future dividends is at
the discretion of our Board of Directors and depends on, among
other things, our investment opportunities, results of operations,
financial condition, cash requirements, future prospects, and other
factors that may be considered relevant by our Board of Directors,
including legal and contractual restrictions;
- the amount and timing of any future share repurchases is
subject to, among other things, our share price, our other
investment opportunities and cash requirements, our results of
operations and financial condition, our future prospects and other
factors that may be considered relevant by our Board of Directors
and management;
- failures to adapt our solutions to changes in technology or in
the marketplace;
- internal or external security or privacy breaches of our
systems, including those relating to unauthorized access, theft,
corruption or loss of personal information and computer viruses and
other malware affecting our software or platforms, and the
reactions of customers, card associations, government regulators
and others to any such events;
- the risk that implementation of software, including software
updates, for customers or at customer locations or employee error
in monitoring our software and platforms may result in the
corruption or loss of data or customer information, interruption of
business operations, outages, exposure to liability claims or loss
of customers;
- the risk that partners and third parties may fail to satisfy
their legal obligations and risks associated with managing pension
cost, cybersecurity issues, IT outages and data privacy;
- the reaction of current and potential customers to
communications from us or regulators regarding information
security, risk management, internal audit or other matters;
- uncertainties as to the timing of the consummation of the
pending Worldpay transaction or whether such sale will be
completed;
- risks associated with the impact, timing or terms of the
pending Worldpay transaction;
- risks associated with the expected benefits and costs of the
pending Worldpay transaction, including the risk that the expected
benefits of the pending Worldpay transaction or any contingent
purchase price will not be realized within the expected timeframe,
in full or at all;
- the risk that conditions to the pending Worldpay transaction
will not be satisfied and/or that the pending Worldpay transaction
will not be completed within the expected timeframe, on the
expected terms or at all;
- the risk that any consents or regulatory or other approvals
required in connection with the pending Worldpay transaction will
not be received or obtained within the expected timeframe, on the
expected terms or at all;
- the risk that the financing intended to fund the pending
Worldpay transaction may not be obtained;
- the risk that the costs of restructuring transactions and other
costs incurred in connection with the pending Worldpay transaction
will exceed our estimates or otherwise adversely affect our
business or operations;
- the impact of the pending Worldpay transaction on our
businesses and the risk that the pending Worldpay transaction may
be more difficult, time-consuming or costly than expected,
including the impact on our resources, systems, procedures and
controls, diversion of management’s attention and the impact on
relationships with customers, governmental authorities, suppliers,
employees and other business counterparties;
- the risk that policies and resulting actions of the current
administration in the U.S. may result in additional regulations and
executive orders, as well as additional regulatory and tax
costs;
- competitive pressures on pricing related to the decreasing
number of community banks in the U.S., the development of new
disruptive technologies competing with one or more of our
solutions, increasing presence of international competitors in the
U.S. market and the entry into the market by global banks and
global companies with respect to certain competitive solutions,
each of which may have the impact of unbundling individual
solutions from a comprehensive suite of solutions we provide to
many of our customers;
- the failure to innovate in order to keep up with new emerging
technologies, which could impact our solutions and our ability to
attract new, or retain existing, customers;
- an operational or natural disaster at one of our major
operations centers;
- failure to comply with applicable requirements of payment
networks or changes in those requirements;
- fraud by merchants or bad actors; and
- other risks detailed elsewhere in the "Risk Factors" and other
sections of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2022, in our Quarterly Reports on Form 10-Q and
in our other filings with the Securities and Exchange
Commission.
Other unknown or unpredictable factors also could have a
material adverse effect on our business, financial condition,
results of operations and prospects. Accordingly, readers should
not place undue reliance on these forward-looking statements. These
forward-looking statements are inherently subject to uncertainties,
risks and changes in circumstances that are difficult to predict.
Except as required by applicable law or regulation, we do not
undertake (and expressly disclaim) any obligation and do not intend
to publicly update or review any of these forward-looking
statements, whether as a result of new information, future events
or otherwise.
Fidelity National Information
Services, Inc.
Earnings Release Supplemental
Financial Information
November 7, 2023
Exhibit A
Condensed Consolidated Statements of
Earnings (Loss) - Unaudited for the three and nine months ended
September 30, 2023 and 2022
Exhibit B
Condensed Consolidated Balance Sheets -
Unaudited as of September 30, 2023, and December 31, 2022
Exhibit C
Condensed Consolidated Statements of Cash
Flows - Unaudited for the nine months ended September 30, 2023 and
2022
Exhibit D
Supplemental Non-GAAP Financial
Information - Unaudited for the three and nine months ended
September 30, 2023 and 2022
Exhibit E
Supplemental GAAP to Non-GAAP
Reconciliations - Unaudited for the three and nine months ended
September 30, 2023 and 2022
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS (LOSS)— UNAUDITED
(In millions, except per share
amounts)
Exhibit A
Three months ended September
30,
Nine months ended September
30,
2023
2022
2023
2022
Revenue
$
2,489
$
2,415
$
7,311
$
7,194
Cost of revenue
1,523
1,534
4,610
4,646
Gross profit
966
881
2,701
2,548
Selling, general, and administrative
expenses
484
480
1,557
1,623
Asset impairments
7
17
8
86
Operating income (loss)
475
384
1,136
839
Other income (expense):
Interest expense, net
(162
)
(78
)
(464
)
(169
)
Other income (expense), net
22
18
(91
)
53
Total other income (expense), net
(140
)
(60
)
(555
)
(116
)
Earnings (loss) before income taxes
335
324
581
723
Provision (benefit) for income taxes
74
102
139
218
Net earnings (loss) from continuing
operations
261
222
442
505
Earnings (loss) from discontinued
operations, net of tax
(708
)
32
(7,342
)
150
Net earnings (loss)
(447
)
254
(6,900
)
655
Net (earnings) loss attributable to
noncontrolling interest from continuing operations
(1
)
(4
)
(2
)
(6
)
Net (earnings) loss attributable to
noncontrolling interest from discontinued operations
(1
)
(1
)
(3
)
(3
)
Net earnings (loss) attributable to
FIS
$
(449
)
$
249
$
(6,905
)
$
646
Net earnings (loss) attributable to
FIS:
Continuing operations
$
260
$
218
$
440
$
499
Discontinued operations
(709
)
31
(7,345
)
147
Total
$
(449
)
$
249
$
(6,905
)
$
646
Basic earnings (loss) per common
share
attributable to FIS:
Continuing operations
$
0.44
$
0.36
$
0.74
$
0.82
Discontinued operations
(1.20
)
0.05
(12.41
)
0.24
Total
$
(0.76
)
$
0.41
$
(11.66
)
$
1.06
Diluted earnings (loss) per common
share attributable to FIS:
Continuing operations
$
0.44
$
0.36
$
0.74
$
0.82
Discontinued operations
(1.20
)
0.05
(12.41
)
0.24
Total
$
(0.76
)
$
0.41
$
(11.66
)
$
1.06
Weighted average common shares
outstanding:
Basic
592
605
592
608
Diluted
592
607
592
611
Amounts in table may not sum or calculate
due to rounding.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS — UNAUDITED
(In millions, except per share
amounts)
Exhibit B
September 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
466
$
456
Settlement assets
605
592
Trade receivables, net
1,719
1,834
Other receivables
315
437
Prepaid expenses and other current
assets
546
509
Current assets held for sale
8,502
8,990
Total current assets
12,153
12,818
Property and equipment, net
682
709
Goodwill
16,811
16,816
Intangible assets, net
1,947
2,468
Software, net
2,082
2,055
Other noncurrent assets
1,616
1,705
Deferred contract costs, net
1,008
973
Noncurrent assets held for sale
16,875
25,734
Total assets
$
53,174
$
63,278
LIABILITIES, REDEEMABLE
NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable, accrued and other
liabilities
$
1,473
$
1,583
Settlement payables
631
613
Deferred revenue
739
777
Short-term borrowings
4,595
3,755
Current portion of long-term debt
1,320
2,130
Current liabilities held for sale
7,323
7,366
Total current liabilities
16,081
16,224
Long-term debt, excluding current
portion
12,741
14,206
Deferred income taxes
2,346
2,689
Other noncurrent liabilities
1,478
1,382
Noncurrent liabilities held for sale
1,044
1,371
Total liabilities
33,690
35,872
Redeemable noncontrolling interest
—
180
Equity:
FIS stockholders' equity:
Preferred stock $0.01 par value
—
—
Common stock $0.01 par value
6
6
Additional paid in capital
46,895
46,735
(Accumulated deficit) retained
earnings
(22,808
)
(14,971
)
Accumulated other comprehensive earnings
(loss)
(408
)
(360
)
Treasury stock, at cost
(4,208
)
(4,192
)
Total FIS stockholders' equity
19,477
27,218
Noncontrolling interest
7
8
Total equity
19,484
27,226
Total liabilities, redeemable
noncontrolling interest and equity
$
53,174
$
63,278
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS — UNAUDITED
(In millions, except per share
amounts)
Exhibit C
Nine months ended September
30,
2023
2022
Cash flows from operating
activities:
Net earnings (loss)
$
(6,900
)
$
655
Adjustment to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
2,245
2,920
Amortization of debt issuance costs
22
23
Asset impairments
6,850
104
Loss on assets held for sale
1,549
—
Loss (gain) on sale of businesses,
investments and other
31
(13
)
Stock-based compensation
116
198
Deferred income taxes
(624
)
(519
)
Net changes in assets and liabilities, net
of effects from acquisitions and foreign currency:
Trade and other receivables
226
161
Settlement activity
(252
)
(38
)
Prepaid expenses and other assets
(73
)
(250
)
Deferred contract costs
(320
)
(314
)
Deferred revenue
(38
)
(59
)
Accounts payable, accrued liabilities and
other liabilities
(22
)
(70
)
Net cash provided by operating
activities
2,810
2,798
Cash flows from investing
activities:
Additions to property and equipment
(108
)
(216
)
Additions to software
(736
)
(867
)
Settlement of net investment hedge
cross-currency interest rate swaps
(20
)
684
Net proceeds from sale of businesses and
investments
45
12
Net proceeds from sale of Visa preferred
stock
—
269
Other investing activities, net
(37
)
(50
)
Net cash provided by (used in) investing
activities
(856
)
(168
)
Cash flows from financing
activities:
Borrowings
64,461
50,006
Repayment of borrowings and other
financing obligations
(65,868
)
(49,349
)
Debt issuance costs
(2
)
(23
)
Net proceeds from stock issued under
stock-based compensation plans
41
53
Treasury stock activity
(16
)
(1,390
)
Dividends paid
(926
)
(858
)
Payments on contingent value rights
—
(186
)
Payments on tax receivable agreement
(162
)
(138
)
Purchase of noncontrolling interest
(173
)
—
Other financing activities, net
(13
)
(5
)
Net cash provided by (used in) financing
activities
(2,658
)
(1,890
)
Effect of foreign currency exchange rate
changes on cash
(28
)
(782
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(732
)
(42
)
Cash, cash equivalents and restricted
cash, beginning of period
4,813
4,283
Cash, cash equivalents and restricted
cash, end of period
$
4,081
$
4,241
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP ORGANIC
REVENUE GROWTH — UNAUDITED
(In millions)
Exhibit D
Three months ended September
30,
2023
2022
Constant
Acquisition &
Currency
Divestiture
Adjusted
Organic
Revenue
FX
Revenue
Revenue
Adjustment
Base
Growth (1)
Banking Solutions
$
1,756
$
(6
)
$
1,750
$
1,703
$
—
$
1,703
3
%
Capital Market Solutions
677
(5
)
671
633
—
633
6
%
Corporate and Other
56
(2
)
55
79
—
79
N/A
Total (1)
$
2,489
$
(14
)
$
2,476
$
2,415
$
—
$
2,415
4
%
Nine months ended September
30,
2023
2022
Constant
Acquisition &
Currency
Divestiture
Adjusted
Organic
Revenue
FX
Revenue
Revenue
Adjustment
Base
Growth (1)
Banking Solutions
$
5,144
$
4
$
5,147
$
5,039
$
—
$
5,039
2
%
Capital Market Solutions
2,011
7
2,019
1,892
—
1,892
7
%
Corporate and Other
156
(4
)
152
263
—
263
N/A
Total (1)
$
7,311
$
7
$
7,318
$
7,194
$
—
$
7,194
3
%
Amounts in table may not sum or calculate
due to rounding.
(1)
Total organic growth excludes Corporate
and Other.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP CASH
FLOW MEASURES — UNAUDITED
(In millions)
Exhibit D (continued)
Three months ended
Nine months ended
September 30, 2023
September 30, 2023
Net cash provided by operating
activities
$
1,091
$
2,810
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
104
283
Settlement activity
10
252
Adjusted cash flows from operations
1,205
3,345
Capital expenditures
(298
)
(844
)
Free cash flow
$
907
$
2,501
Three months ended
Nine months ended
September 30, 2022
September 30, 2022
Net cash provided by operating
activities
$
878
$
2,798
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
187
469
Settlement activity
(67
)
38
Adjusted cash flows from operations
998
3,305
Capital expenditures (2)
(314
)
(1,029
)
Free cash flow
$
684
$
2,276
Free cash flow reflects adjusted cash flows from operations less
capital expenditures (additions to property and equipment and
additions to software, excluding capital spend related to the
construction of our new headquarters). Free cash flow does not
represent our residual cash flows available for discretionary
expenditures, since we have mandatory debt service requirements and
other non-discretionary expenditures that are not deducted from the
measure. Free cash flow as presented in this earnings release
includes cash flows from discontinued operations, which our
management will not be able to freely access following the Worldpay
separation.
(1)
Adjusted cash flows from operations and
free cash flow for the three and nine months ended September 30,
2023 and 2022, exclude cash payments for certain acquisition,
integration and other costs (see Note 2 to Exhibit E), net of
related tax impact. The related tax impact totaled $17 million and
$19 million for the three months and $46 million and $69 million
for the nine months ended September 30, 2023 and 2022,
respectively.
(2)
Capital expenditures for free cash flow
exclude capital spend related to the construction of our new
headquarters totaling $17 million and $54 million for the three and
nine months ended September 30, 2022, respectively.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit E
Three months ended September
30,
Nine months ended September
30,
2023
2022
2023
2022
Net earnings (loss) attributable to FIS
from continuing operations
$
260
$
218
$
440
$
499
Provision (benefit) for income taxes
74
102
139
218
Interest expense, net
162
78
464
169
Other, net
(21
)
(14
)
93
(47
)
Operating income (loss), as reported
475
384
1,136
839
Depreciation and amortization, excluding
purchase accounting amortization
262
262
798
837
Non-GAAP adjustments:
Purchase accounting amortization (1)
173
193
524
589
Acquisition, integration and other costs
(2)
113
123
326
427
Asset impairments (3)
7
17
8
86
Indirect Worldpay business support costs
(5)
40
43
123
137
Adjusted EBITDA from continuing
operations
$
1,070
$
1,022
$
2,915
$
2,915
Net earnings (loss) attributable to FIS
from discontinued operations
$
(709
)
$
31
$
(7,345
)
$
147
Provision (benefit) for income taxes
(382
)
(11
)
(327
)
5
Interest expense, net
(4
)
(2
)
(15
)
(3
)
Other, net
30
60
(17
)
5
Operating income (loss)
(1,065
)
78
(7,704
)
154
Depreciation and amortization, excluding
purchase accounting amortization
11
62
160
198
Non-GAAP adjustments:
Purchase accounting amortization (1)
17
415
762
1,296
Acquisition, integration and other costs
(2)
86
41
140
147
Asset impairments (3)
4
—
6,843
18
Loss on assets held for sale (4)
1,549
—
1,549
—
Indirect Worldpay business support costs
(5)
(40
)
(43
)
(123
)
(137
)
Adjusted EBITDA from discontinued
operations
$
562
$
553
$
1,627
$
1,676
Adjusted EBITDA
$
1,632
$
1,575
$
4,542
$
4,591
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit E (continued)
Three months ended September
30,
Nine months ended September
30,
2023
2022
2023
2022
Earnings (loss) attributable to FIS from
continuing operations
$
260
$
218
$
440
$
499
Non-GAAP adjustments from continuing
operations:
Purchase accounting amortization (1)
173
193
524
589
Acquisition, integration and other costs
(2)
118
144
349
515
Asset impairments (3)
7
17
8
86
Indirect Worldpay business support costs
(5)
40
43
123
137
Non-operating (income) expense (7)
(22
)
(18
)
91
(53
)
(Provision) benefit for income taxes on
non-GAAP adjustments
(16
)
16
(95
)
(59
)
Total non-GAAP adjustments from continuing
operations
300
395
1,000
1,215
Adjusted net earnings attributable to FIS
from continuing operations
$
560
$
613
$
1,440
$
1,714
Earnings (loss) attributable to FIS from
discontinued operations, net of tax
$
(709
)
$
31
$
(7,345
)
$
147
Non-GAAP adjustments from discontinued
operations:
Purchase accounting amortization (1)
17
415
762
1,296
Acquisition, integration and other costs
(2)
86
50
155
183
Asset impairments (3)
4
—
6,843
18
Loss on assets held for sale (4)
1,549
—
1,549
—
Indirect Worldpay business support costs
(5)
(40
)
(43
)
(123
)
(137
)
Amortization on long-lived assets held for
sale (6)
(63
)
—
(63
)
—
Non-operating (income) expense (7)
29
59
(21
)
2
(Provision) benefit for income taxes on
non-GAAP adjustments
(451
)
(71
)
(528
)
(209
)
Total non-GAAP adjustments from
discontinued operations
1,131
410
8,574
1,153
Adjusted net earnings attributable to FIS
from discontinued operations
$
422
$
441
$
1,229
$
1,300
Adjusted net earnings attributable to FIS
common stockholders
$
982
$
1,054
$
2,669
$
3,014
Amounts in table may not sum or calculate
due to rounding.
See Notes to Exhibit E.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit E (continued)
Three months ended September
30,
Nine months ended September
30,
2023
2022
2023
2022
Net earnings (loss) per share-diluted
attributable to FIS from continuing operations
$
0.44
$
0.36
$
0.74
$
0.82
Non-GAAP adjustments from continuing
operations:
Purchase accounting amortization (1)
0.29
0.32
0.88
0.96
Acquisition, integration and other costs
(2)
0.20
0.24
0.59
0.84
Asset impairments (3)
0.01
0.03
0.01
0.14
Loss on assets held for sale (4)
—
—
—
—
Indirect Worldpay business support costs
(5)
0.07
0.07
0.21
0.22
Non-operating (income) expense (7)
(0.04
)
(0.03
)
0.15
(0.09
)
(Provision) benefit for income taxes on
non-GAAP adjustments
(0.03
)
0.03
(0.16
)
(0.10
)
Adjusted net earnings (loss) per
share-diluted attributable to FIS from continuing operations
$
0.94
$
1.01
$
2.42
$
2.81
Net earnings (loss) per share-diluted
attributable to FIS from discontinued operation
$
(1.19
)
$
0.05
$
(12.37
)
$
0.24
Non-GAAP adjustments from discontinued
operations:
Purchase accounting amortization (1)
0.03
0.68
1.28
2.12
Acquisition, integration and other costs
(2)
0.14
0.08
0.26
0.30
Asset impairments (3)
0.01
—
11.52
0.03
Loss on assets held for sale (4)
2.61
—
2.61
—
Indirect Worldpay business support costs
(5)
(0.07
)
(0.07
)
(0.21
)
(0.22
)
Amortization on long-lived assets held for
sale (6)
(0.11
)
—
(0.11
)
—
Non-operating (income) expense (7)
0.05
0.10
(0.04
)
—
(Provision) benefit for income taxes on
non-GAAP adjustments
(0.76
)
(0.12
)
(0.89
)
(0.34
)
Adjusted net earnings (loss) per
share-diluted attributable to FIS from discontinued operations
$
0.71
$
0.73
$
2.07
$
2.13
Adjusted net earnings (loss) per
share-diluted attributable to FIS
$
1.65
$
1.74
$
4.49
$
4.94
Weighted average shares
outstanding-diluted (8)
594
607
594
611
Amounts in table may not sum or calculate
due to rounding.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit E (continued)
Notes to Unaudited - Supplemental GAAP
to Non-GAAP Reconciliations for the three and nine months ended
September 30, 2023 and 2022.
The adjustments are as follows:
(1)
This item represents purchase price
amortization expense on all intangible assets acquired through
various Company acquisitions, including customer relationships,
contract value, technology assets, trademarks and trade names. This
item also includes $9 million and $52 million for the three and
nine months ended September 30, 2022, of incremental amortization
expense associated with shortened estimated useful lives and
accelerated amortization methods for certain acquired software
driven by the Company's platform modernization. The Company has
excluded the impact of purchase price amortization expense as such
amounts can be significantly impacted by the timing and/or size of
acquisitions. Although the Company excludes these amounts from its
non-GAAP expenses, the Company believes that it is important for
investors to understand that such intangible assets contribute to
revenue generation. Amortization of assets that relate to past
acquisitions will recur in future periods until such assets have
been fully amortized. Any future acquisitions may result in the
amortization of future assets.
(2)
This item represents costs comprised of
the following:
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Three months ended
Nine months ended
September 30,
September 30,
2023
2022
2023
2022
Continuing operations:
Acquisition and integration
$
12
$
14
$
21
$
33
Enterprise transformation, including
Future Forward and platform modernization
79
55
223
191
Severance and other termination
expenses
6
16
48
52
Pending separation of the Worldpay
Merchant Solutions business
5
—
7
—
Incremental stock compensation directly
attributable to specific programs
9
25
13
79
Other, including divestiture-related
expenses and enterprise cost control and other initiatives
2
13
14
72
Subtotal
113
123
326
427
Accelerated amortization (a)
5
21
23
88
Total from continuing operations
$
118
$
144
$
349
$
515
Discontinued operations:
Acquisition and integration
$
4
$
24
$
11
$
81
Enterprise transformation, including
Future Forward and platform modernization
7
5
16
29
Severance and other termination
expenses
1
1
10
8
Pending separation of the Worldpay
Merchant Solutions business
68
—
97
—
Incremental stock compensation directly
attributable to specific programs
4
5
6
15
Other, including divestiture-related
expenses and enterprise cost control and other initiatives
2
6
—
14
Subtotal
86
41
140
147
Accelerated amortization (a)
—
9
14
35
Total from discontinued operations
$
86
$
50
$
154
$
182
Total consolidated
$
204
$
194
$
503
$
697
Amounts in table may not sum due to
rounding.
(a)
For purposes of calculating Adjusted net
earnings, this item includes incremental amortization expense
associated with shortened estimated useful lives and accelerated
amortization methods for certain software and deferred contract
cost assets driven by the Company's platform modernization. The
incremental amortization expenses are included in the Depreciation
and amortization, excluding purchase accounting amortization line
item within the Adjusted EBITDA reconciliation.
(3)
For the three and nine months ended
September 30, 2023, this item includes impairments primarily
related to the termination of certain internally developed software
projects. For the nine months ended September 30, 2023, this item
also includes a $6.8 billion impairment of goodwill related to the
Merchant Solutions reporting unit due to its estimated fair value
being less than its carrying value based on the price, including
estimated selling price adjustments and fair value of contingent
consideration, at which the Company has agreed to sell a majority
stake in the unit, recorded in discontinued operations. For the
three months ended September 30, 2022, this item includes
impairments related primarily to certain software rendered obsolete
by the Company's Platform modernization initiatives. For the nine
months ended September 30, 2022, the Company also recorded
impairments related primarily to real estate-related assets as a
result of office space reductions and to a non-strategic
business.
(4)
For the three and nine months ended
September 30, 2023, this item includes a $1.5 billion reduction of
the Worldpay Merchant Solutions disposal group's carrying value,
recorded in discontinued operations, primarily as a result of the
exclusion from the carrying value of the disposal group of certain
deferred tax liabilities that will continue to be held by FIS after
the disposal, which caused the carrying value to exceed the
estimated fair value of the disposal group.
(5)
This item represents costs that were
previously incurred in support of the Worldpay Merchant Solutions
business but are not directly attributable to it and thus were not
recorded in discontinued operations. The Company expects that it
will be reimbursed for these expenses as part of Transition
Services Agreements with the purchaser or eliminate them post
separation; therefore, the expenses have been adjusted out of
continuing operations and added to discontinued operations.
(6)
The Company stopped recording depreciation
and amortization on the long-lived assets classified as held for
sale beginning July 5, 2023. The amount of depreciation and
amortization that would have been recorded in discontinued
operations had these assets not been classified as held for sale
has been deducted from adjusted net earnings for comparability
purposes.
(7)
Non-operating (income) expense primarily
consists of other income and expense items outside of the Company's
operating activities, including fair value adjustments on certain
non-operating assets and liabilities and foreign currency
transaction remeasurement gains and losses. For the nine months
ended September 30, 2023, this item also includes $32 million of
impairment on an equity security investment which the Company
agreed to sell for less than its carrying value.
(8)
For the three and nine months ended
September 30, 2023, Adjusted net earnings is a gain, while the
corresponding GAAP amount for this period is a loss. As a result,
in calculating Adjusted net earnings per share-diluted for this
period, the weighted average shares outstanding-diluted amount of
approximately 594 million and 594 million used in the calculation
includes approximately 2 million and 2 million shares for the three
and nine months ended September 30, 2023, respectively, that in
accordance with GAAP are excluded from the calculation of the GAAP
Net loss per share-diluted for the periods, due to their
anti-dilutive impact.
FIDELITY NATIONAL INFORMATION SERVICES,
INC. RECAST OF PRIOR PERIODS TO ACCOUNT FOR PENDING SALE
OF WORLDPAY MERCHANT SOLUTIONS BUSINESS
On July 5, 2023, Fidelity National Services, Inc. (“FIS” or the
“Company”) signed a definitive agreement to sell a 55% equity
interest in its Worldpay Merchant Solutions business to private
equity funds managed by GTCR, LLC ("GTCR"). FIS will retain a
non-controlling 45% ownership interest in a new standalone joint
venture. The transaction is expected to close by the first quarter
of 2024, subject to regulatory approvals and other customary
closing conditions. Following the closing of this transaction, FIS'
ownership interest in Worldpay is expected to be reported as equity
method investment earnings.
The planned disposition represents a strategic shift that will
have a major impact on the Company’s operations and financial
results; accordingly, beginning in the third quarter 2023, the
operating results of the Worldpay Merchant Solutions business have
been reflected as discontinued operations in accordance with
generally accepted accounting principles (GAAP) and prior periods
have been recast consistent with this presentation. We have also
recast certain supplemental non-GAAP financial information,
including adjusted EBITDA, adjusted net earnings and adjusted net
earnings per share, and the associated reconciliations of these
non-GAAP measures to related GAAP measures.
We believe these non-GAAP measures help investors better
understand the underlying fundamentals of our business. As further
described below, the non-GAAP earnings measures presented eliminate
items management believes are not indicative of FIS’ operating
performance. For these reasons, management also uses these non-GAAP
measures in its assessment and management of FIS’ performance.
Adjusted EBITDA reflects net earnings (loss) before
interest, other income (expense), taxes, equity method investment
earnings (loss), and depreciation and amortization, and excludes
certain costs and other transactions that management deems
non-operational in nature, or that otherwise improve the
comparability of operating results across reporting periods by
their exclusion. This measure is reported to the chief operating
decision maker for purposes of making decisions about allocating
resources to the segments and assessing their performance. For this
reason, adjusted EBITDA, as it relates to our segments, is
presented in conformity with Accounting Standards Codification 280,
Segment Reporting, and is excluded from the definition of non-GAAP
financial measures under the Securities and Exchange Commission's
Regulation G and Item 10(e) of Regulation S-K.
Adjusted net earnings excludes the impact of certain
costs and other transactions which management deems non-operational
in nature or that otherwise improve the comparability of operating
results across reporting periods by their exclusion. These include,
among others, the impact of acquisition-related purchase accounting
amortization which is recurring.
Adjusted EPS reflects adjusted net earnings, as defined
above, divided by weighted average diluted shares outstanding.
Any non-GAAP measures should be considered in context with the
GAAP financial presentation and should not be considered in
isolation or as a substitute for GAAP measures. Further, FIS’
non-GAAP measures may be calculated differently from similarly
titled measures of other companies.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
RECAST OF PRIOR PERIODS TO
ACCOUNT FOR PENDING SALE OF
WORLDPAY MERCHANT SOLUTIONS
BUSINESS
Exhibit A
Condensed Consolidated Statement of
Earnings (Loss) — Recast and Unaudited for the quarters ended March
31, 2022, June 30, 2022, September 30, 2022, December 31, 2022,
March 31, 2023, and June 30, 2023
Exhibit B
Supplemental GAAP to Non-GAAP
Reconciliations — Recast and Unaudited for the quarters ended March
31, 2022, June 30, 2022, September 30, 2022, December 31, 2022,
March 31, 2023, and June 30, 2023
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS (LOSS) — RECAST AND UNAUDITED
(In millions, except per share
amounts)
Exhibit A
Fiscal year 2022
Fiscal year 2023
Q1
Q2
Q3
Q4
Full Year
Q1
Q2
Revenue
$
2,370
$
2,408
$
2,415
$
2,526
$
9,719
$
2,397
$
2,424
Cost of revenue
1,571
1,541
1,534
1,570
6,216
1,569
1,518
Gross profit
799
867
881
956
3,503
828
906
Selling, general, and administrative
expenses
557
583
480
560
2,182
517
553
Asset impairments
40
30
17
17
103
—
1
Operating income (loss)
202
254
384
379
1,218
311
351
Other income (expense):
Interest expense, net
(43
)
(48
)
(78
)
(112
)
(281
)
(142
)
(160
)
Other income (expense), net
29
6
18
(49
)
4
(36
)
(77
)
Total other income (expense), net
(14
)
(42
)
(60
)
(161
)
(277
)
(178
)
(237
)
Earnings (loss) before income taxes
188
212
324
218
941
133
114
Provision (benefit) for income taxes
67
51
102
107
325
37
29
Net earnings (loss) from continuing
operations
121
161
222
111
616
96
85
Earnings (loss) from discontinued
operations, net of tax
—
119
32
(17,473
)
(17,324
)
45
(6,679
)
Net earnings (loss)
121
280
254
(17,362
)
(16,708
)
141
(6,594
)
Net (earnings) loss attributable to
noncontrolling interest from continuing operations
—
(2
)
(4
)
(2
)
(8
)
—
(1
)
Net (earnings) loss attributable to
noncontrolling interest from discontinued operations
(1
)
(1
)
(1
)
(1
)
(4
)
(1
)
(1
)
Net earnings (loss) attributable to
FIS
$
120
$
277
$
249
$
(17,365
)
$
(16,720
)
$
140
$
(6,596
)
Net earnings (loss) attributable to
FIS:
Continuing operations
$
121
$
159
$
218
$
109
$
608
$
96
$
84
Discontinued operations
(1
)
118
31
(17,474
)
(17,328
)
44
(6,680
)
Total
$
120
$
277
$
249
$
(17,365
)
$
(16,720
)
$
140
$
(6,596
)
Basic earnings (loss) per common share
attributable to FIS:
Continuing operations
$
0.20
$
0.26
$
0.36
$
0.18
$
1.01
$
0.16
$
0.14
Discontinued operations
—
0.19
0.05
(29.47
)
(28.69
)
0.07
(11.28
)
Total
$
0.20
$
0.46
$
0.41
$
(29.28
)
$
(27.68
)
$
0.24
$
(11.14
)
Diluted earnings (loss) per common
share attributable to FIS:
Continuing operations
$
0.20
$
0.26
$
0.36
$
0.18
$
1.01
$
0.16
$
0.14
Discontinued operations
—
0.19
0.05
(29.47
)
(28.69
)
0.07
(11.28
)
Total
$
0.20
$
0.45
$
0.41
$
(29.28
)
$
(27.68
)
$
0.24
$
(11.14
)
Weighted average common shares
outstanding:
Basic
610
608
605
593
604
592
592
Diluted
614
611
607
593
604
593
592
Amounts in table may not sum or calculate
due to rounding.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share
amounts)
Exhibit B
Fiscal year 2022
Fiscal year 2023
Q1
Q2
Q3
Q4
Full Year
Q1
Q2
Net earnings (loss) attributable to FIS
from continuing operations
$
121
$
159
$
218
$
109
$
608
$
96
$
84
Provision (benefit) for income taxes
67
51
102
107
325
37
29
Interest expense, net
43
48
78
112
281
142
160
Other, net
(29
)
(4
)
(14
)
51
4
36
78
Operating income (loss), as reported
202
254
384
379
1,218
311
351
Depreciation and amortization, excluding
purchase accounting amortization
293
282
262
263
1,101
271
264
Non-GAAP adjustments:
Purchase accounting amortization (1)
199
196
193
190
778
176
175
Acquisition, integration and other costs
(2)
128
176
123
154
581
100
113
Asset impairments (3)
40
29
17
17
103
—
1
Indirect Worldpay business support costs
(4)
47
47
43
42
180
42
41
Adjusted EBITDA from continuing
operations
$
909
$
984
$
1,022
$
1,045
$
3,961
$
900
$
945
Net earnings (loss) attributable to FIS
from discontinued operations
$
(1
)
$
118
$
31
$
(17,474
)
$
(17,328
)
$
44
$
(6,680
)
Provision (benefit) for income taxes
(13
)
27
(11
)
46
52
11
43
Interest expense, net
—
(1
)
(2
)
(3
)
(6
)
(5
)
(7
)
Other, net
(31
)
(24
)
60
(60
)
(55
)
(24
)
(23
)
Operating income (loss)
(45
)
120
78
(17,491
)
(17,337
)
26
(6,667
)
Depreciation and amortization, excluding
purchase accounting amortization
70
65
62
64
260
76
74
Non-GAAP adjustments:
Purchase accounting amortization (1)
451
432
415
409
1,707
372
373
Acquisition, integration and other costs
(2)
62
45
41
32
178
27
27
Asset impairments (3)
18
—
—
17,588
17,606
—
6,840
Indirect Worldpay business support costs
(4)
(47
)
(47
)
(43
)
(42
)
(180
)
(42
)
(41
)
Adjusted EBITDA from discontinued
operations
$
509
$
615
$
553
$
560
$
2,234
$
459
$
606
Adjusted EBITDA
$
1,418
$
1,599
$
1,575
$
1,605
$
6,195
$
1,359
$
1,551
Amounts in table may not sum or calculate
due to rounding.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share
amounts)
Exhibit B (continued)
Fiscal year 2022
Fiscal year 2023
Q1
Q2
Q3
Q4
Full Year
Q1
Q2
Earnings (loss) attributable to FIS from
continuing operations
$
121
$
159
$
218
$
109
$
608
$
96
$
84
Non-GAAP adjustments from continuing
operations:
Purchase accounting amortization (1)
199
196
193
190
778
176
175
Acquisition, integration and other costs
(2)
166
205
144
168
681
110
120
Asset impairments (3)
40
29
17
17
103
—
1
Indirect Worldpay business support costs
(4)
47
47
43
42
180
42
41
Non-operating (income) expense (5)
(29
)
(6
)
(18
)
49
(5
)
36
77
(Provision) benefit for income taxes on
non-GAAP adjustments
(25
)
(53
)
16
10
(48
)
(34
)
(44
)
Total non-GAAP adjustments from continuing
operations
398
418
395
476
1,689
330
370
Adjusted net earnings attributable to FIS
from continuing operations
$
519
$
577
$
613
$
585
$
2,297
$
426
$
454
Earnings (loss) attributable to FIS from
discontinued operations, net of tax
$
(1
)
$
118
$
31
$
(17,474
)
$
(17,328
)
$
44
$
(6,680
)
Non-GAAP adjustments from discontinued
operations:
Purchase accounting amortization (1)
451
432
415
409
1,707
372
373
Acquisition, integration and other costs
(2)
76
58
50
38
222
36
33
Asset impairments (3)
18
—
—
17,588
17,606
—
6,840
Indirect Worldpay business support costs
(4)
(47
)
(47
)
(43
)
(42
)
(180
)
(42
)
(41
)
Non-operating (income) expense (5)
(32
)
(24
)
59
(61
)
(58
)
(25
)
(24
)
(Provision) benefit for income taxes on
non-GAAP adjustments
(80
)
(58
)
(71
)
(24
)
(233
)
(44
)
(34
)
Total non-GAAP adjustments from
discontinued operations
386
361
410
17,908
19,064
297
7,147
Adjusted net earnings attributable to FIS
from discontinued operations
$
385
$
479
$
441
$
434
$
1,736
$
341
$
467
Adjusted net earnings attributable to FIS
common stockholders
$
904
$
1,056
$
1,054
$
1,019
$
4,033
$
767
$
921
Amounts in table may not sum or calculate
due to rounding.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share
amounts)
Exhibit B (continued)
Fiscal year 2022
Fiscal year 2023
Q1
Q2
Q3
Q4
Full Year
Q1
Q2
Net earnings (loss) per share-diluted
attributable to FIS from continuing operations
$
0.20
$
0.26
$
0.36
$
0.18
$
1.00
$
0.16
$
0.14
Non-GAAP adjustments from continuing
operations:
Purchase accounting amortization (1)
0.32
0.32
0.32
0.32
1.28
0.30
0.29
Acquisition, integration and other costs
(2)
0.27
0.34
0.24
0.28
1.12
0.19
0.20
Asset impairments (3)
0.07
0.05
0.03
0.03
0.17
—
—
Indirect Worldpay business support costs
(4)
0.08
0.08
0.07
0.07
0.30
0.07
0.07
Non-operating (income) expense (5)
(0.05
)
(0.01
)
(0.03
)
0.08
(0.01
)
0.06
0.13
(Provision) benefit for income taxes on
non-GAAP adjustments
(0.04
)
(0.09
)
0.03
0.02
(0.08
)
(0.06
)
(0.07
)
Adjusted net earnings per share-diluted
attributable to FIS from continuing operations
$
0.85
$
0.94
$
1.01
$
0.98
$
3.78
$
0.72
$
0.76
Earnings (loss) per share-diluted
attributable to FIS from discontinued operations, net of tax
$
—
$
0.19
$
0.05
$
(29.37
)
$
(28.55
)
$
0.07
$
(11.25
)
Non-GAAP adjustments from discontinued
operations:
Purchase accounting amortization (1)
0.73
0.71
0.68
0.69
2.81
0.63
0.63
Acquisition, integration and other costs
(2)
0.12
0.09
0.08
0.06
0.37
0.06
0.06
Asset impairments (3)
0.03
—
—
29.56
29.00
—
11.52
Indirect Worldpay business support costs
(4)
(0.08
)
(0.08
)
(0.07
)
(0.07
)
(0.30
)
(0.07
)
(0.07
)
Non-operating (income) expense (5)
(0.05
)
(0.04
)
0.10
(0.10
)
(0.10
)
(0.04
)
(0.04
)
(Provision) benefit for income taxes on
non-GAAP adjustments
(0.13
)
(0.09
)
(0.12
)
(0.04
)
(0.38
)
(0.07
)
(0.06
)
Adjusted net earnings (loss) per
share-diluted attributable to FIS from discontinued operations
$
0.63
$
0.78
$
0.73
$
0.73
$
2.86
$
0.58
$
0.79
Adjusted net earnings (loss) per
share-diluted attributable to FIS common stockholders
$
1.47
$
1.73
$
1.74
$
1.71
$
6.65
$
1.29
$
1.55
Weighted average shares
outstanding-diluted (6)
614
611
607
595
607
593
594
Amounts in table may not sum or calculate
due to rounding. Full year amount will not equal the sum of the
quarterly adjusted net earnings per share amounts due to the
quarterly variations in weighted average shares
outstanding-diluted.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share
amounts)
Exhibit B (continued)
Notes to Recast and Unaudited
Supplemental GAAP to Non-GAAP Reconciliations for the periods
presented
Following is a description of the nature
of the adjustments:
(1)
This item represents purchase price
amortization expense on all intangible assets acquired through
various Company acquisitions, including customer relationships,
contract value, technology assets, trademarks and trade names.
During the 2022 periods presented, this item also includes
incremental amortization expense associated with shortened
estimated useful lives and accelerated amortization methods for
certain acquired software driven by the Company's platform
modernization. The Company has excluded the impact of purchase
price amortization expense as such amounts can be significantly
impacted by the timing and/or size of acquisitions. Although the
Company excludes these amounts from its non-GAAP expenses, the
Company believes that it is important for investors to understand
that such intangible assets contribute to revenue generation.
Amortization of assets that relate to past acquisitions will recur
in future periods until such assets have been fully amortized. Any
future acquisitions may result in the amortization of future
assets.
(2)
This item represents costs primarily
related to acquisition, integration, enterprise transformation
initiatives, severance and other termination expenses, the planned
separation of the Worldpay Merchant Solutions business, incremental
stock compensation directly attributable to specific programs,
other divestiture-related expenses, and enterprise cost control and
other initiatives.
For purposes of calculating Adjusted net
earnings, this item also includes incremental amortization expense
associated with shortened estimated useful lives and accelerated
amortization methods for certain software and deferred contract
cost assets driven by the Company's platform modernization. The
incremental amortization expenses are included in the Depreciation
and amortization, excluding purchase accounting amortization line
item within the Adjusted EBITDA reconciliation.
(3)
This item represents impairments of
certain software, real estate-related assets, and non-strategic
businesses. It also includes impairment of goodwill. The Company
recorded goodwill impairment charges related to the Merchant
Solutions reporting unit of $17.6 billion in the three months ended
December 31, 2022, and $6.8 billion in the three months ended June
30, 2023.
(4)
This items represents costs that were
previously incurred in support of the Worldpay Merchant Solutions
business but are not directly attributable to it and thus were not
recorded in discontinued operations. The Company expects that it
will be reimbursed for these expenses as part of Transition
Services Agreements with the purchaser or eliminate them post
separation; therefore, the expenses have been adjusted out of
continuing operations and added to discontinued operations.
(5)
Non-operating (income) expense primarily
consists of other income and expense items outside of the Company's
operating activities, including fair value adjustments on certain
non-operating assets and liabilities and foreign currency
transaction remeasurement gains and losses. It also includes
impairment charges related to equity security investments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107409704/en/
Ellyn Raftery, 904.438.6083 Chief Marketing & Communications
Officer FIS Global Marketing & Corporate Communications
Ellyn.Raftery@fisglobal.com
George Mihalos, 904.438.6438 Senior Vice President FIS Investor
Relations Georgios.Mihalos@fisglobal.com
Grafico Azioni Fidelity National Inform... (NYSE:FIS)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Fidelity National Inform... (NYSE:FIS)
Storico
Da Mag 2023 a Mag 2024