- Fourth quarter GAAP Diluted Earnings Per Share for continuing
operations of $0.11 and Adjusted EPS of $0.94
- Including discontinued operations, fourth quarter GAAP Diluted
Earnings Per Share of $0.42 and Adjusted EPS of $1.67
- Full-year 2023 GAAP Diluted Earnings Per Share for continuing
operations of $0.85 and Adjusted EPS of $3.37
- Including discontinued operations, full-year 2023 GAAP Diluted
(Loss) Per Share of $(11.26) and Adjusted EPS of $6.17
- Outperformed Future Forward expectations in 2023; raising
Future Forward operational expense savings goal in 2024
- Announces increase to previously communicated share repurchase
goal; increasing goal to repurchase at least $4.0 billion of shares
by year end 2024, up from previous goal of at least $3.5 billion,
including $510 million of shares repurchased in 4Q 2023
- Announces first quarter and full-year 2024 outlook including
accelerated revenue growth, expanding adjusted EBITDA margins, and
year-over-year adjusted EPS growth
FIS® (NYSE:FIS), a global leader in financial services
technology, today reported its fourth quarter and full-year 2023
results.
“Our 2023 results and our 2024 outlook reflect the continued
positive momentum of the business as we delivered on our financial
commitments for the fourth consecutive quarter and successfully
closed the Worldpay transaction,” said FIS CEO and President
Stephanie Ferris. “I am pleased with our outperformance on our
Future Forward expectations, and to announce that we are once again
increasing our share repurchase goal by $500 million reflecting our
confidence in the strength of the business and our ongoing
commitment to returning capital to shareholders. As we turn the
page to the next chapter of FIS, I look forward to providing you
with a comprehensive deep-dive into FIS' corporate strategy at our
upcoming Investor Day in New York City on May 7th.”
Financial Reporting Considerations for
Completed 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 was completed on January 31, 2024.
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 was classified
as discontinued operations as of the third quarter of 2023.
Beginning in the first quarter of 2024, FIS' 45% ownership of
the Worldpay Merchant Solutions business will be reported under the
"Equity method investment earnings (loss)" line of the income
statement (EMI).
Capital Allocation
Update
The Company remains committed to shareholder returns and is
increasing its goal to repurchase at least $4.0 billion of shares
by year end 2024, up from the previous goal of at least $3.5
billion, inclusive of $510 million of shares repurchased in the
fourth quarter of 2023. Additionally, the Company continues to
target a dividend payout ratio of 35% of adjusted net earnings,
excluding equity method investment earnings (loss) (EMI).
On February 25, 2024, FIS' Board of Directors approved a regular
quarterly dividend of $0.36 per common share. The dividend is
payable on March 22, 2024, to shareholders of record as of close of
business on March 8, 2024.
Fourth Quarter 2023 Financial
Results
On a GAAP basis, excluding $1.2 billion of revenue classified as
discontinued operations, revenue decreased 1% as compared to the
prior year period to approximately $2.5 billion. GAAP net earnings
attributable to common stockholders from continuing operations were
$64 million or $0.11 per diluted share. Including discontinued
operations, GAAP net earnings attributable to common stockholders
were $251 million or $0.42 per diluted share.
On an adjusted basis, revenue was flat as compared to the
prior-year period driven by 7% adjusted recurring revenue growth,
offset by a 16% decline in adjusted non-recurring revenue. Adjusted
EBITDA margin expanded by 70 basis points (bps) over the prior-year
period to 42.1% primarily driven by cost efficiencies. Adjusted net
earnings for continuing operations were approximately $558 million,
and adjusted EPS decreased by 4% as compared to the prior-year
period to $0.94 per diluted share primarily due to a $0.07 headwind
associated with higher interest costs. Including discontinued
operations, adjusted net earnings were approximately $985 million
and adjusted EPS decreased 2% as compared to the prior-year period
to $1.67 per diluted share primarily due to a $0.05 headwind
associated with higher interest costs.
($ millions, except per share data,
unaudited)
Three Months Ended December
31,
%
Adjusted
Continuing
Operations
2023
2022
Change
Growth
Banking Solutions Revenue
1,692
1,694
0%
0%
Capital Market Solutions Revenue
755
739
2%
1%
Operating Segment Total Revenue
$
2,447
$
2,433
1%
0%
Corporate and Other Revenue
63
93
(32)%
-
Consolidated FIS Revenue
$
2,510
$
2,526
(1)%
-
Adjusted EBITDA
$
1,057
$
1,045
1%
Adjusted EBITDA Margin
42.1
%
41.4
%
70 bps
Net Earnings (GAAP)
$
64
$
109
(41)%
Diluted Earnings Per Common Share
(GAAP)
$
0.11
$
0.18
(39)%
Adjusted Net Earnings
$
558
$
585
(5)%
Adjusted EPS
$
0.94
$
0.98
(4)%
($ millions, except per share data,
unaudited)
Three Months Ended December
31,
%
Adjusted
Total FIS
(Including Discontinued Operations)
2023
2022
Change
Growth
Net Earnings (Loss) (GAAP)
$
251
$
(17,365)
*
Diluted Earnings (Loss) Per Common Share
(GAAP)
$
0.42
$
(29.28)
*
Adjusted Net Earnings
$
985
$
1,019
(3)%
Adjusted EPS
$
1.67
$
1.71
(2)%
*Indicates comparison not meaningful
Full-Year 2023 Financial
Results
On a GAAP basis, excluding $4.9 billion of revenue classified as
discontinued operations, revenue increased 1% as compared to the
prior year to approximately $9.8 billion. GAAP net earnings
attributable to common stockholders from continuing operations were
$503 million or $0.85 per diluted share. Including discontinued
operations, GAAP net earnings (loss) attributable to common
stockholders were $(6,654) million or $(11.26) per diluted share,
including a $6.8 billion non-cash goodwill impairment charge
recorded in the year related to the Merchant Solutions reporting
unit.
On an adjusted basis, revenue increased 3% as compared to the
prior year driven by 5% adjusted recurring revenue growth,
partially offset by a 4% decline in adjusted non-recurring revenue.
Adjusted EBITDA margin contracted by 40 basis points (bps) over the
prior year to 40.4% as cost efficiencies were more than offset by a
lower contribution from higher margin non-recurring revenue.
Adjusted net earnings for continuing operations were approximately
$2.0 billion, and adjusted EPS decreased by 11% as compared to the
prior year to $3.37 per diluted share primarily due to a $0.49
headwind associated with higher interest costs. Including
discontinued operations, adjusted net earnings were approximately
$3.7 billion and adjusted EPS decreased 7% as compared to the prior
year to $6.17 per diluted share primarily due to a $0.46 headwind
associated with higher interest costs.
($ millions, except per share data,
unaudited)
Twelve Months Ended December
31,
%
Adjusted
Continuing
Operations
2023
2022
Change
Growth
Banking Solutions Revenue
6,733
6,624
2%
2%
Capital Market Solutions Revenue
2,766
2,631
5%
5%
Operating Segment Total Revenue
$
9,499
$
9,255
3%
3%
Corporate and Other Revenue
322
464
(31)%
-
Consolidated FIS Revenue
$
9,821
$
9,719
1%
-
Adjusted EBITDA
$
3,972
$
3,961
0%
Adjusted EBITDA Margin
40.4
%
40.8
%
(40) bps
Net Earnings (GAAP)
$
503
$
608
(17)%
Diluted Earnings Per Common Share
(GAAP)
$
0.85
$
1.01
(16)%
Adjusted Net Earnings
$
1,999
$
2,297
(13)%
Adjusted EPS
$
3.37
$
3.78
(11)%
($ millions, except per share data,
unaudited)
Twelve Months Ended December
31,
%
Adjusted
Total FIS
(Including Discontinued Operations)
2023
2022
Change
Growth
Net Earnings (Loss) (GAAP)
$
(6,654)
$
(16,720)
*
Diluted Earnings (Loss) Per Common Share
(GAAP)
$
(11.26)
$
(27.68)
*
Adjusted Net Earnings
$
3,655
$
4,033
(9)%
Adjusted EPS
$
6.17
$
6.65
(7)%
*Indicates comparison not meaningful
Segment Information
- Banking Solutions: Fourth quarter revenue was flat on a
GAAP basis and an adjusted basis as compared to the prior-year
period at $1.7 billion reflecting adjusted recurring revenue growth
of 7%, offset by a 22% decrease in adjusted non-recurring revenue.
Adjusted EBITDA margin expanded by 270 basis points as compared to
the prior-year period to 44.2% primarily driven by cost
efficiencies. Full-year revenue increased by 2% on a GAAP basis and
2% on an adjusted basis as compared to the prior year to $6.7
billion reflecting adjusted recurring revenue growth of 4%,
partially offset by a 6% decrease in adjusted non-recurring
revenue. Adjusted EBITDA margin was flat as compared to the prior
year at 43.5% with Future Forward cost efficiencies being offset by
a lower contribution from higher margin non-recurring revenue.
- Capital Market Solutions: Fourth quarter revenue
increased by 2% on a GAAP basis and 1% on an adjusted basis as
compared to the prior-year period to $755 million primarily due to
adjusted recurring revenue growth of 7%, partially offset by a 10%
decline in adjusted non-recurring revenue. Adjusted EBITDA margin
contracted by 250 basis points over the prior-year period to 53.2%
primarily due to lower contribution from higher margin
non-recurring revenue. Full-year revenue increased by 5% on a GAAP
basis and 5% on an adjusted basis as compared to the prior year to
$2.8 billion primarily due to adjusted recurring revenue growth of
9%, partially offset by a 7% decline in adjusted professional
services revenue. Adjusted EBITDA margin contracted by 60 basis
points over the prior year to 50.3% primarily due to revenue
mix.
- Corporate and Other: Fourth quarter revenue
decreased by 32% as compared to the prior-year period to $63
million primarily due to the divestitures of non-strategic
businesses. Adjusted EBITDA loss was $92 million, including $101
million of corporate expenses. Full-year revenue decreased by 31%
as compared to the prior year to $322 million. Adjusted EBITDA loss
was $345 million, including $410 million of corporate expenses. As
a result of our ongoing portfolio assessments, the Company
reclassified certain non-strategic operations from Banking
Solutions to Corporate and Other in the quarter ended December 31,
2023, and recast all prior-period segment information presented.
Revenue during the year ended December 31, 2023, from the
operations reclassified during the fourth quarter of 2023
represented approximately 1% of consolidated revenue for the year
ended December 31, 2023.
Discontinued Operations (Worldpay
Merchant Solutions)
Fourth quarter revenue increased by 3% on a GAAP basis and 2% on
an adjusted basis as compared to the prior-year period to $1.2
billion. Adjusted EBITDA decreased 1% to $556 million. Adjusted
EBITDA margin contracted by 160 basis points as compared to the
prior-year period to 45.5% primarily due to revenue mix.
Full-year revenue increased by 1% on a GAAP basis and 1% on an
adjusted basis as compared to the prior year to $4.9 billion.
Adjusted EBITDA decreased 2% to $2.2 billion. Adjusted EBITDA
margin contracted by 160 basis points as compared to the prior year
to 44.9% primarily due to revenue mix.
Balance Sheet and Cash Flows (Total
Company, Including Discontinued Operations)
As of December 31, 2023, debt outstanding totaled $19.1 billion.
Fourth quarter net cash provided by operating activities was $1.5
billion, and free cash flow was approximately $1.1 billion. In the
quarter, the Company returned $815 million of capital to
shareholders through $510 million of share repurchases and $305
million of dividends paid.
For the year, net cash provided by operating activities was $4.3
billion, and free cash flow was approximately $3.6 billion. For the
year, the Company returned $1.7 billion of capital to shareholders
through $510 million of share repurchases and $1.2 billion of
dividends paid.
Future Forward
Outperformance
As of December 31, 2023, on a continuing operations basis, the
Company outperformed its expectations and achieved annualized
run-rate Future Forward cash savings of over $550 million exiting
the quarter, including over $370 million of operational expense
savings and approximately $180 million of capital expense savings.
The Company is increasing its target for operational expense
savings and is reiterating its target for total cash savings
exiting 2024 of $1.0 billion, of which over 75 percent represents
run-rate cash savings.
First Quarter and Full-Year 2024
Outlook
The Company is introducing first quarter and full-year outlook
and, for the full-year, is projecting accelerated revenue growth,
expanding adjusted EBITDA margins and year-over-year adjusted EPS
growth. The adjusted EPS outlook reflects 2 months of EMI
contribution for the first quarter and 11 months of EMI
contribution for the full-year.
Beginning in the first quarter of 2024, FIS' 45% ownership of
the Worldpay Merchant Solutions business will be reported under the
"Equity method investment earnings (loss)" line of the income
statement (EMI).
($ millions, except share data)
1Q 2024
FY 2024
Revenue
$2,430 - $2,455
$10,100 - $10,150
Adjusted EBITDA (Non-GAAP)1
$955 - $970
$4,100 - $4,140
Adjusted EPS (Non-GAAP)1
$0.94 - $0.97
$4.66 - $4.76
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. (EST) on
Monday, February 26, 2024. 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 global provider of financial services
technology solutions for financial institutions, businesses and
developers. We improve the digital transformation of our financial
economy, advancing the way the world pays, banks and invests. We
provide the confidence made possible when reliability meets
innovation, helping our clients run, grow and protect their
business. Headquartered in Jacksonville, Florida, FIS is a member
of the Fortune 500® and the Standard & Poor’s 500® Index. FIS
is incorporated under the laws of the State of Georgia as Fidelity
National Information Services, Inc., and our stock is traded under
the trading symbol "FIS" on the New York Stock Exchange.
To learn more, visit www.fisglobal.com. Follow FIS on Facebook,
LinkedIn and X (@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,
adjusted 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 revenue and
adjusted revenue growth measures adjust for the effects of exchange
rate fluctuations and exclude discontinued operations, while
adjusted revenue growth also excludes revenue from Corporate and
Other, 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 segment
revenue excluding the impact of fluctuations in foreign currency
exchange rates in the current period.
Adjusted revenue growth reflects the percentage change in
constant currency revenue for the current period as compared to the
prior period. When referring to adjusted revenue growth, revenue
from our Corporate and Other segment is 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, 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.
Forward-looking statements include 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 sale of a majority stake in
the Merchant Solutions business or any agreements or arrangements
entered into in connection with such transaction, the expected
financial and operational results of the Company, and expectations
regarding the Company’s business or organization after the
separation of Worldpay. Forward-looking 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 or expanded 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 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 or that costs may be greater than
anticipated;
- 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 to us;
- 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;
- risks associated with the expected benefits and costs of the
separation of the Worldpay Merchant Solutions business, including
the risk that the expected benefits of the transaction or any
contingent purchase price will not be realized within the expected
timeframe, in full or at all, or that dis-synergies may be greater
than anticipated;
- the risk that the costs of restructuring transactions and other
costs incurred in connection with the separation of the Worldpay
business will exceed our estimates or otherwise adversely affect
our business or operations;
- the impact of the separation of Worldpay on our businesses,
including the impact on relationships with customers, governmental
authorities, suppliers, employees and other business
counterparties;
- the risk that the earnings from our minority stake in the
Worldpay business will be less than we anticipate;
- 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 bad actors; and
- other risks detailed 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, in our
current reports on Form 8-K 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
February 26, 2024
Exhibit A
Condensed Consolidated Statements of
Earnings (Loss) - Unaudited for the three months and years ended
December 31, 2023 and 2022
Exhibit B
Condensed Consolidated Balance Sheets -
Unaudited as of December 31, 2023 and 2022
Exhibit C
Condensed Consolidated Statements of Cash
Flows - Unaudited for the years ended December 31, 2023 and
2022
Exhibit D
Supplemental Non-GAAP Adjusted Revenue
Growth - Unaudited for the three months and years ended December
31, 2023 and 2022
Exhibit E
Supplemental Disaggregation of Revenue -
Recast and Unaudited for the three months and years ended December
31, 2023 and 2022
Exhibit F
Supplemental Non-GAAP Financial
Information - Recast and Unaudited for the three months and years
ended December 31, 2023 and 2022
Exhibit G
Supplement Non-GAAP Cash Flow Measures -
Unaudited for the three months and years ended December 31, 2023
and 2022
Exhibit H
Supplemental GAAP to Non-GAAP
Reconciliations - Unaudited for the three months and years ended
December 31, 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
Years ended
December 31,
December 31,
2023
2022
2023
2022
Revenue
$
2,510
$
2,526
$
9,821
$
9,719
Cost of revenue
1,535
1,570
6,145
6,216
Gross profit
975
956
3,676
3,503
Selling, general and administrative
expenses
539
560
2,096
2,182
Asset impairments
105
17
113
103
Operating income (loss)
331
379
1,467
1,218
Other income (expense):
Interest expense, net
(158
)
(112
)
(621
)
(281
)
Other income (expense), net
(91
)
(49
)
(183
)
4
Total other income (expense), net
(249
)
(161
)
(804
)
(277
)
Earnings (loss) before income taxes
82
218
663
941
Provision (benefit) for income taxes
17
107
157
325
Net earnings (loss) from continuing
operations
65
111
506
616
Earnings (loss) from discontinued
operations, net of tax
188
(17,473
)
(7,153
)
(17,324
)
Net earnings (loss)
253
(17,362
)
(6,647
)
(16,708
)
Net (earnings) loss attributable to
noncontrolling interest from continuing operations
(1
)
(2
)
(3
)
(8
)
Net (earnings) loss attributable to
noncontrolling interest from discontinued operations
(1
)
(1
)
(4
)
(4
)
Net earnings (loss) attributable to FIS
common stockholders
$
251
$
(17,365
)
$
(6,654
)
$
(16,720
)
Net earnings (loss) attributable to
FIS:
Continuing operations
$
64
$
109
$
503
$
608
Discontinued operations
187
$
(17,474
)
(7,157
)
(17,328
)
Total
$
251
$
(17,365
)
$
(6,654
)
$
(16,720
)
Basic earnings (loss) per common share
attributable to FIS:
Continuing operations
$
0.11
$
0.18
$
0.85
$
1.01
Discontinued operations
0.32
$
(29.47
)
$
(12.11
)
$
(28.69
)
Total
$
0.43
$
(29.28
)
$
(11.26
)
$
(27.68
)
Diluted earnings (loss) per common
share attributable to FIS:
Continuing operations
$
0.11
$
0.18
$
0.85
$
1.01
Discontinued operations
0.32
$
(29.47
)
$
(12.11
)
$
(28.69
)
Total
$
0.42
$
(29.28
)
$
(11.26
)
$
(27.68
)
Weighted average common shares
outstanding:
Basic
589
593
591
604
Diluted
591
593
591
604
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
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
440
$
456
Settlement assets
617
592
Trade receivables, net
1,730
1,834
Other receivables
287
437
Prepaid expenses and other current
assets
603
509
Current assets held for sale
10,111
8,990
Total current assets
13,788
12,818
Property and equipment, net
695
709
Goodwill
16,971
16,816
Intangible assets, net
1,823
2,468
Software, net
2,115
2,055
Other noncurrent assets
1,528
1,675
Deferred contract costs, net
1,076
973
Noncurrent assets held for sale
17,109
25,764
Total assets
$
55,105
$
63,278
LIABILITIES, REDEEMABLE
NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable, accrued and other
liabilities
$
1,859
$
1,583
Settlement payables
635
613
Deferred revenue
832
777
Short-term borrowings
4,760
3,755
Current portion of long-term debt
1,348
2,130
Current liabilities held for sale
8,884
7,366
Total current liabilities
18,318
16,224
Long-term debt, excluding current
portion
12,970
14,206
Deferred income taxes
2,179
2,689
Other noncurrent liabilities
1,446
1,382
Noncurrent liabilities held for sale
1,093
1,371
Total liabilities
36,006
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
46,935
46,735
(Accumulated deficit) retained
earnings
(22,864
)
(14,971
)
Accumulated other comprehensive earnings
(loss)
(260
)
(360
)
Treasury stock, at cost
(4,724
)
(4,192
)
Total FIS stockholders’ equity
19,093
27,218
Noncontrolling interest
6
8
Total equity
19,099
27,226
Total liabilities, redeemable
noncontrolling interest and equity
$
55,105
$
63,278
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS — UNAUDITED
(In millions)
Exhibit C
Years ended December 31,
2023
2022
Cash flows from operating
activities:
Net earnings (loss)
$
(6,647
)
$
(16,708
)
Adjustments to reconcile net earnings
(loss) to net cash provided by operating activities:
Depreciation and amortization
2,675
3,846
Amortization of debt issuance costs
29
31
Asset impairments
6,957
17,709
Loss on assets held for sale
1,909
—
Loss (gain) on sale of businesses,
investments and other
97
(53
)
Stock-based compensation
154
215
Deferred income taxes
(705
)
(544
)
Net changes in assets and liabilities, net
of effects from acquisitions and foreign currency:
Trade and other receivables
124
(155
)
Settlement activity
151
287
Prepaid expenses and other assets
(198
)
(319
)
Deferred contract costs
(480
)
(479
)
Deferred revenue
32
21
Accounts payable, accrued liabilities and
other liabilities
237
88
Net cash provided by operating
activities
4,335
3,939
Cash flows from investing
activities:
Additions to property and equipment
(142
)
(268
)
Additions to software
(980
)
(1,122
)
Settlement of net investment hedge
cross-currency interest rate swaps
(20
)
726
Acquisitions, net of cash acquired
(202
)
—
Net proceeds from sale of businesses and
investments
45
50
Proceeds from the sale of Visa preferred
stock
—
269
Other investing activities, net
(53
)
(28
)
Net cash provided by (used in) investing
activities
(1,352
)
(373
)
Cash flows from financing
activities:
Borrowings
93,119
75,335
Repayment of borrowings and other
financing obligations
(94,513
)
(74,410
)
Debt issuance costs
(3
)
(23
)
Net proceeds from stock issued under
stock-based compensation plans
41
57
Treasury stock activity
(522
)
(1,938
)
Dividends paid
(1,231
)
(1,138
)
Payments on contingent value rights
—
(245
)
Payments on tax receivable agreement
(197
)
(185
)
Purchase of noncontrolling interest
(173
)
—
Other financing activities, net
(14
)
(26
)
Net cash provided by (used in) financing
activities
(3,493
)
(2,573
)
Effect of foreign currency exchange rate
changes on cash
111
(463
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(399
)
530
Cash, cash equivalents and restricted
cash, beginning of year
4,813
4,283
Cash, cash equivalents and restricted
cash, end of year
$
4,414
$
4,813
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP ADJUSTED
REVENUE GROWTH — UNAUDITED
(In millions)
Exhibit D
Three months ended December
31,
2023
2022
Constant
Currency
Adjusted
Revenue
FX
Revenue
Revenue
Growth (1)
Banking Solutions
$
1,692
$
(5
)
$
1,687
$
1,694
—
%
Capital Market Solutions
755
(6
)
748
739
1
%
Operating segment total
2,447
(11
)
2,435
2,433
—
%
Corporate and Other
63
(2
)
62
93
Consolidated FIS
$
2,510
$
(13
)
$
2,497
$
2,526
Years ended December 31,
2023
2022
Constant
Currency
Adjusted
Revenue
FX
Revenue
Revenue
Growth (1)
Banking Solutions
$
6,733
$
—
$
6,733
$
6,624
2
%
Capital Market Solutions
2,766
1
2,767
2,631
5
%
Operating segment total
9,499
1
9,500
9,255
3
%
Corporate and Other
322
(4
)
318
464
Consolidated FIS
$
9,821
$
(3
)
$
9,818
$
9,719
Amounts in table may not sum or calculate
due to rounding.
(1)
Adjusted growth excludes Corporate and
Other.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL DISAGGREGATION OF
REVENUE — RECAST AND UNAUDITED
(In millions)
Exhibit E
In the following tables, revenue is
disaggregated by primary geographical market and type of revenue.
The tables also include a reconciliation of the disaggregated
revenue with the Company's reportable segments.
For the three months ended December 31,
2023 (in millions):
Banking
Solutions
Capital Market
Solutions
Corporate and Other
Total
Primary Geographical Markets:
North America
$
1,434
$
450
$
26
$
1,910
All others
258
305
37
600
Total
$
1,692
$
755
$
63
$
2,510
Type of Revenue:
Recurring revenue:
Transaction processing and services
(1)
$
1,267
$
346
$
49
$
1,662
Software maintenance
91
137
—
228
Other recurring
65
22
10
97
Total recurring
1,423
505
59
1,987
Software license
54
141
—
195
Professional services
126
98
3
227
Other non-recurring (1)
89
11
1
101
Total
$
1,692
$
755
$
63
$
2,510
For the three months ended December 31,
2022 (in millions):
Banking
Solutions
Capital Market
Solutions
Corporate and Other
Total
Primary Geographical Markets:
North America
$
1,469
$
428
$
51
$
1,948
All others
225
311
42
578
Total
$
1,694
$
739
$
93
$
2,526
Type of Revenue:
Recurring revenue:
Transaction processing and services
(1)
$
1,191
$
327
$
75
$
1,593
Software maintenance
86
126
—
212
Other recurring
53
15
9
77
Total recurring
1,330
468
84
1,882
Software license
37
166
—
203
Professional services
181
103
2
286
Other non-recurring (1)
146
2
7
155
Total
$
1,694
$
739
$
93
$
2,526
(1)
December 31, 2023, was the final deadline
for states to complete all benefit issuance under federally funded
pandemic relief programs. Accordingly, revenue associated with
services the Company provided related to these programs has been
classified as Other non-recurring commencing in the fourth quarter
of 2023, and related prior-period amounts have been reclassified
from Transaction processing and services to Other non-recurring for
comparability.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL DISAGGREGATION OF
REVENUE — RECAST AND UNAUDITED
(In millions)
Exhibit E (continued)
For the year ended December 31, 2023 (in
millions):
Banking
Solutions
Capital Market
Solutions
Corporate and Other
Total
Primary Geographical Markets:
North America
$
5,802
$
1,712
$
167
$
7,681
All others
931
1,054
155
2,140
Total
$
6,733
$
2,766
$
322
$
9,821
Type of Revenue:
Recurring revenue:
Transaction processing and services
(1)
$
4,960
$
1,381
$
239
$
6,580
Software maintenance
364
531
2
897
Other recurring
248
81
41
370
Total recurring
5,572
1,993
282
7,847
Software license
131
369
8
508
Professional services
562
391
9
962
Other non-recurring (1)
468
13
23
504
Total
$
6,733
$
2,766
$
322
$
9,821
For the year ended December 31, 2022 (in
millions):
Banking
Solutions
Capital Market
Solutions
Corporate and Other
Total
Primary Geographical Markets:
North America
$
5,709
$
1,566
$
284
$
7,559
All others
915
1,065
180
2,160
Total
$
6,624
$
2,631
$
464
$
9,719
Type of Revenue:
Recurring revenue:
Transaction processing and services
(1)
$
4,785
$
1,274
$
384
$
6,443
Software maintenance
358
498
2
858
Other recurring
210
58
38
306
Total recurring
5,353
1,830
424
7,607
Software license
160
377
—
537
Professional services
632
419
8
1,059
Other non-recurring (1)
479
5
32
516
Total
$
6,624
$
2,631
$
464
$
9,719
(1)
December 31, 2023, was the final deadline
for states to complete all benefit issuance under federally funded
pandemic relief programs. Accordingly, revenue associated with
services the Company provided related to these programs has been
classified as Other non-recurring commencing in the fourth quarter
of 2023, and related prior-period amounts have been reclassified
from Transaction processing and services to Other non-recurring for
comparability.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP
FINANCIAL INFORMATION — RECAST AND UNAUDITED
(In millions)
Exhibit F
As a result of our ongoing portfolio
assessments, the Company reclassified certain non-strategic
operations from Banking Solutions to Corporate and Other during the
fourth quarter of 2023. Revenue during the year ended December 31,
2023, from the operations reclassified during the fourth quarter of
2023 represented approximately 1% of consolidated revenue for the
year ended December 31, 2023. The following table recasts 2023
quarterly and full-year 2022 revenue to reflect the impact of these
reclassifications.
Fiscal year 2023
Fiscal year
2022
Reclassified revenue base (1)
Q1
Q2
Q3
Q4
Full Year
Full Year
Banking Solutions
$
1,646
$
1,666
$
1,730
$
1,692
$
6,733
$
6,624
Capital Market Solutions
663
672
677
755
2,766
2,631
Operating segment total
2,309
2,338
2,407
2,447
9,499
9,255
Corporate and Other
88
86
83
63
322
464
Consolidated FIS
$
2,397
$
2,424
$
2,489
$
2,510
$
9,821
$
9,719
Banking Solutions adjusted revenue
growth (2)
2
%
2
%
4
%
—
%
2
%
5
%
Capital Market Solutions adjusted
revenue growth (3)
7
%
7
%
6
%
1
%
5
%
8
%
Consolidated FIS adjusted revenue
growth (4)
3
%
3
%
4
%
—
%
3
%
6
%
Amounts in table may not sum or calculate
due to rounding.
(1)
The reclassified revenue base amounts
reflect reported revenue as adjusted for the effects of the
resegmentation that occurred during the fourth quarter. Amounts are
not adjusted for foreign currency and thus are not presented on a
constant currency basis relative to fiscal year 2022.
(2)
Banking Solutions adjusted growth rates
reflect the resegmentation that occurred during the fourth quarter
and are calculated on a constant-currency revenue basis. The impact
of fluctuations in foreign currency exchange rates is substantially
the same as previously reported in our prior-period earnings
releases.
(3)
Capital Markets Solutions adjusted growth
rates are calculated on a constant-currency revenue basis. The
impact of fluctuations in foreign currency exchange rates is the
same as previously reported in our prior-period earnings
releases.
(4)
Consolidated FIS adjusted revenue growth
is calculated on a constant currency basis and excludes revenue
from our Corporate and Other segment, which is comprised of revenue
from non-strategic businesses.
The following table recasts 2023 quarterly
and full-year 2022 adjusted EBITDA to reflect the impact of the
reclassifications that occurred during the fourth quarter of
2023.
Fiscal year 2023
Fiscal year
2022
Adjusted EBITDA base
Q1
Q2
Q3
Q4
Full Year
Full Year
Banking Solutions
$
671
$
723
$
786
$
747
$
2,928
$
2,882
Capital Market Solutions
320
337
331
402
1,390
1,338
Operating segment total
$
991
$
1,060
$
1,118
$
1,149
$
4,318
$
4,220
Corporate and Other
(90
)
(116
)
(48
)
(92
)
(345
)
(259
)
Consolidated FIS
$
900
$
945
$
1,070
$
1,057
$
3,972
$
3,961
Amounts in table may not sum or calculate
due to rounding.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP
FINANCIAL INFORMATION — RECAST AND UNAUDITED
(In millions)
Exhibit F (continued)
During the quarter ended December 31,
2023, the Company reclassified revenue associated with federally
funded pandemic relief programs from recurring to non-recurring
based on the publicly announced termination of benefits under these
programs. The following tables reflect the impact on adjusted
revenue growth rates (see Note 1) of our previously reported
Banking Solutions recurring and non-recurring revenue as a result
of these reclassifications and of the reclassifications of
non-strategic operations described above.
Fiscal year 2023
Fiscal year
2022
Banking Solutions adjusted revenue
growth
Q1
Q2
Q3
Q4
Full Year
Full Year
Banking Solutions adjusted recurring
revenue growth
Adjusted recurring revenue growth prior to
reclassifications (1)
3.6
%
2.6
%
6.6
%
3.2
%
4.0
%
5.4
%
Impact from reclassification of
non-strategic operations
0.0
%
0.3
%
1.0
%
1.4
%
0.7
%
(0.9
)%
Impact from reclassification of amounts
associated with federally funded pandemic relief programs
(0.3
)%
(0.2
)%
(4.1
)%
2.1
%
(0.6
)%
1.2
%
Banking Solutions adjusted recurring
revenue growth
3.3
%
2.7
%
3.5
%
6.7
%
4.1
%
5.8
%
Banking Solutions adjusted
non-recurring revenue growth
Adjusted non-recurring revenue growth
prior to reclassifications (1)
(23.5
)%
(10.1
)%
(11.1
)%
(13.6
)%
(14.2
)%
8.1
%
Impact from reclassification of
non-strategic operations
(3.0
)%
(2.6
)%
1.3
%
2.3
%
(0.3
)%
(1.3
)%
Impact from reclassification of amounts
associated with federally funded pandemic relief programs
9.4
%
3.1
%
33.6
%
(11.0
)%
8.6
%
(10.0
)%
Banking Solutions adjusted
non-recurring revenue growth
(17.1
)%
(9.5
)%
23.8
%
(22.3
)%
(5.9
)%
(3.2
)%
Amounts in table may not sum or calculate
due to rounding.
(1)
Recurring and non-recurring revenue growth
were previously reported as organic revenue growth, but there were
no acquisitions or dispositions that affected the organic revenue
growth base. As such, adjusted revenue growth amounts presented on
these rows are equivalent to the previously reported organic
revenue growth amounts.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL NON-GAAP CASH
FLOW MEASURES — UNAUDITED
(In millions)
Exhibit G
Three months ended
Year ended
December 31, 2023
December 31, 2023
Net cash provided by operating
activities
$
1,526
$
4,335
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
210
494
Settlement activity
(404
)
(151
)
Adjusted cash flows from operations
1,332
4,678
Capital expenditures
(278
)
(1,122
)
Free cash flow
$
1,054
$
3,556
Three months ended
Year ended
December 31, 2022
December 31, 2022
Net cash provided by operating
activities
$
1,140
$
3,939
Non-GAAP adjustments:
Acquisition, integration and other
payments (1)
106
573
Settlement activity
(325
)
(287
)
Adjusted cash flows from operations
921
4,225
Capital expenditures (2)
(278
)
(1,306
)
Free cash flow
$
643
$
2,919
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 months and years ended December 31,
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 $34 million and
$17 million for the three months and $80 million and $85 million
for years ended December 31, 2023 and 2022, respectively.
(2)
Capital expenditures for free cash flow
exclude capital spend related to the construction of our new
headquarters totaling $30 million and $85 million for the three
months and year ended December 31, 2022, respectively.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit H
Three months ended December
31,
Years ended December 31,
2023
2022
2023
2022
Net earnings (loss) attributable to FIS
from continuing operations
$
64
$
109
$
503
$
608
Provision (benefit) for income taxes
17
107
157
325
Interest expense, net
158
112
621
281
Other, net
92
51
186
4
Operating income (loss), as reported
331
379
1,467
1,218
Depreciation and amortization, excluding
purchase accounting amortization
249
263
1,047
1,101
Non-GAAP adjustments:
Purchase accounting amortization (1)
172
190
696
778
Acquisition, integration and other costs
(2)
156
154
482
581
Asset impairments (3)
105
17
113
103
Indirect Worldpay business support costs
(5)
44
42
167
180
Adjusted EBITDA from continuing
operations
$
1,057
$
1,045
$
3,972
$
3,961
Net earnings (loss) attributable to FIS
from discontinued operations
$
187
$
(17,474
)
$
(7,157
)
$
(17,328
)
Provision (benefit) for income taxes
28
46
(299
)
52
Interest expense, net
(13
)
(3
)
(28
)
(6
)
Other, net
(46
)
(60
)
(64
)
(55
)
Operating income (loss)
156
(17,491
)
(7,548
)
(17,337
)
Depreciation and amortization, excluding
purchase accounting amortization
9
64
169
260
Non-GAAP adjustments:
Purchase accounting amortization (1)
—
409
762
1,707
Acquisition, integration and other costs
(2)
74
32
213
178
Asset impairments (3)
1
17,588
6,844
17,606
Loss on assets held for sale (4)
360
—
1,909
—
Indirect Worldpay business support costs
(5)
(44
)
(42
)
(167
)
(180
)
Adjusted EBITDA from discontinued
operations
$
556
$
560
$
2,182
$
2,234
Adjusted EBITDA
$
1,613
$
1,605
$
6,154
$
6,195
See notes to Exhibit H.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit H (continued)
Three months ended December
31,
Years ended December 31,
2023
2022
2023
2022
Earnings (loss) attributable to FIS from
continuing operations
$
64
$
109
$
503
$
608
Non-GAAP adjustments from continuing
operations:
Purchase accounting amortization (1)
172
190
696
778
Acquisition, integration and other costs
(2)
156
168
505
681
Asset impairments (3)
105
17
113
103
Indirect Worldpay business support costs
(5)
44
42
167
180
Non-operating (income) expense (7)
91
49
183
(5
)
(Provision) benefit for income taxes on
non-GAAP adjustments
(74
)
10
(168
)
(48
)
Total non-GAAP adjustments from continuing
operations
494
476
1,496
1,689
Adjusted net earnings attributable to FIS
from continuing operations
$
558
$
585
$
1,999
$
2,297
Earnings (loss) attributable to FIS from
discontinued operations, net of tax
$
187
$
(17,474
)
$
(7,157
)
$
(17,328
)
Non-GAAP adjustments from discontinued
operations:
Purchase accounting amortization (1)
—
409
762
1,707
Acquisition, integration and other costs
(2)
74
38
229
222
Asset impairments (3)
1
17,588
6,844
17,606
Loss on assets held for sale (4)
360
—
1,909
—
Indirect Worldpay business support costs
(5)
(44
)
(42
)
(167
)
(180
)
Amortization on long-lived assets held for
sale (6)
(63
)
—
(126
)
—
Non-operating (income) expense (7)
(47
)
(61
)
(68
)
(58
)
(Provision) benefit for income taxes on
non-GAAP adjustments
(41
)
(24
)
(570
)
(233
)
Total non-GAAP adjustments from
discontinued operations
240
17,908
8,813
19,064
Adjusted net earnings attributable to FIS
from discontinued operations
$
427
$
434
$
1,656
$
1,736
Adjusted net earnings attributable to FIS
common stockholders
$
985
$
1,019
$
3,655
$
4,033
Amounts in table may not sum or calculate
due to rounding.
See notes to Exhibit H.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit H (continued)
Three months ended December
31,
Years ended December 31,
2023
2022
2023
2022
Net earnings (loss) per share-diluted
attributable to FIS from continuing operations
$
0.11
$
0.18
$
0.85
$
1.00
Non-GAAP adjustments from continuing
operations:
Purchase accounting amortization (1)
0.29
0.32
1.17
1.28
Acquisition, integration and other costs
(2)
0.26
0.28
0.85
1.12
Asset impairments (3)
0.18
0.03
0.19
0.17
Indirect Worldpay business support costs
(5)
0.07
0.07
0.28
0.30
Non-operating (income) expense (7)
0.15
0.08
0.31
(0.01
)
(Provision) benefit for income taxes on
non-GAAP adjustments
(0.13
)
0.02
(0.28
)
(0.08
)
Adjusted net earnings (loss) per
share-diluted attributable to FIS from continuing operations
$
0.94
$
0.98
$
3.37
$
3.78
Net earnings (loss) per share-diluted
attributable to FIS from discontinued operation
$
0.32
$
(29.37
)
$
(12.07
)
$
(28.55
)
Non-GAAP adjustments from discontinued
operations:
Purchase accounting amortization (1)
—
0.69
1.28
2.81
Acquisition, integration and other costs
(2)
0.13
0.06
0.39
0.37
Asset impairments (3)
—
29.56
11.54
29.00
Loss on assets held for sale (4)
0.61
—
3.22
—
Indirect Worldpay business support costs
(5)
(0.07
)
(0.07
)
(0.28
)
(0.30
)
Amortization on long-lived assets held for
sale (6)
(0.11
)
—
(0.21
)
—
Non-operating (income) expense (7)
(0.08
)
(0.10
)
(0.11
)
(0.10
)
(Provision) benefit for income taxes on
non-GAAP adjustments
(0.07
)
(0.04
)
(0.96
)
(0.38
)
Adjusted net earnings (loss) per
share-diluted attributable to FIS from discontinued operations
$
0.72
$
0.73
$
2.79
$
2.86
Adjusted net earnings (loss) per
share-diluted attributable to FIS
$
1.67
$
1.71
$
6.17
$
6.65
Weighted average shares
outstanding-diluted (8)
591
595
593
607
See notes to Exhibit H.
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
Exhibit H (continued)
Notes to Unaudited - Supplemental GAAP
to Non-GAAP Reconciliations for the three months and years ended
December 31, 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 $1 million and $53 million for the three months
and year ended December 31, 2022, respectively, 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:
Three months ended
Years ended
December 31,
December 31,
2023
2022
2023
2022
Continuing operations:
Acquisition and integration
$
27
$
17
$
48
$
50
Enterprise transformation, including
Future Forward and platform modernization
89
88
312
279
Severance and other termination
expenses
22
37
70
89
Pending separation of the Worldpay
Merchant Solutions business
10
—
17
—
Incremental stock compensation directly
attributable to specific programs
2
4
15
83
Other, including divestiture-related
expenses and enterprise cost control and other initiatives
6
8
20
80
Subtotal
156
154
482
581
Accelerated amortization (a)
—
14
23
100
Total from continuing operations
$
156
$
168
$
505
$
681
Discontinued operations:
Acquisition and integration
$
6
$
19
$
17
$
100
Enterprise transformation, including
Future Forward and platform modernization
7
5
23
34
Severance and other termination
expenses
3
5
13
13
Pending separation of the Worldpay
Merchant Solutions business
56
—
153
—
Incremental stock compensation directly
attributable to specific programs
—
—
6
15
Other, including divestiture-related
expenses and enterprise cost control and other initiatives
2
3
1
16
Subtotal
74
32
213
178
Accelerated amortization (a)
—
6
16
44
Total from discontinued operations
$
74
$
38
$
229
$
222
Total consolidated
$
230
$
206
$
734
$
903
FIDELITY NATIONAL INFORMATION
SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP
RECONCILIATIONS — UNAUDITED
(In millions, except per share
amounts)
(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 months and year ended December 31, 2023, this item
includes impairments primarily related to the termination of
certain internally developed software projects. For the year ended
December 31, 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 and year
ended December 31, 2022, this item primarily represents a $17.6
billion impairment of goodwill related to the Merchant Solutions
reporting unit due its estimated fair value being less than its
carrying value based on slowing growth projections for the
business, a sustained decline in our share price and the effects of
changing market dynamics affecting our SMB portfolio. For the year
ended December 31, 2022, this item also includes impairments
related to real estate assets, a non-strategic business and certain
software assets.
(4)
For the three months and year ended December 31, 2023, this item
includes a $0.4 billion and $1.9 billion, respectively, 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 consists of various income and
expense items outside of the Company's operating activities,
including foreign currency transaction remeasurement gains and
losses; realized and unrealized gains and losses on equity security
investments as well as impairment losses on these investments; and
fair value adjustments on certain non-operating assets and
liabilities, including certain derivatives.
(8)
For the three months ended December 31, 2022, and for the years
ended December 31, 2023 and 2022, Adjusted net earnings is a gain,
while the corresponding GAAP amount for these periods is a loss. As
a result, in calculating adjusted net earnings per share-diluted
for the three months ended December 31, 2022, the weighted average
shares outstanding-diluted of approximately 595 million used in the
calculation includes approximately 2 million shares that in
accordance with GAAP are excluded from the calculation of the GAAP
Net loss per share-diluted due to their anti-dilutive impact. For
the years ended December 31, 2023 and 2022, the weighted average
shares outstanding-diluted of approximately 593 million and 607
million, respectively, used in the calculation includes
approximately 2 million and 3 million shares, respectively, that
are excluded from the calculation of the GAAP Net loss per
share-diluted, due to their anti-dilutive impact.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240226656438/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
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