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Segment Information | 9 Months Ended
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Sep. 30, 2017
Segment Reporting [Abstract] |
Segment Information | Segment Information Integrated Financial Solutions ("IFS") The IFS segment is focused primarily on serving the North American regional and community bank and savings institution market for transaction and account processing, payment solutions, channel solutions, lending and wealth management solutions, corporate liquidity, digital channels, risk and compliance solutions, and services, capitalizing on the continuing trend to outsource these solutions. IFS’ primary software applications function as the underlying infrastructure of a financial institution's processing environment. These applications include core bank processing software, which banks use to maintain the primary records of their customer accounts, and complementary applications and services that interact directly with the core processing applications. Clients in this segment include regional and community banks, credit unions and commercial lenders, as well as government institutions, merchants and other commercial organizations. This market is primarily served through integrated solutions and characterized by multi-year processing contracts that generate highly recurring revenues. The predictable nature of cash flows generated from this segment provides opportunities for further investments in innovation, product integration, information and security, and compliance in a cost effective manner. The business solutions in this segment included the risk and compliance consulting business through its divestiture on July 31, 2017 (Note 9). Global Financial Solutions ("GFS") The GFS segment is focused on serving the largest global financial institutions and/or international financial institutions with a broad array of capital markets and asset management and insurance solutions, as well as banking and payments solutions. GFS clients include the largest global financial institutions, including those headquartered in the United States, as well as all international financial institutions we serve as clients in more than 130 countries. These institutions face unique business and regulatory challenges and account for the majority of financial institution information technology spend globally. The purchasing patterns of GFS clients vary from those of IFS clients who typically purchase solutions on an outsourced basis. GFS clients purchase our solutions and services in various ways including licensing and managing technology “in-house”, fully outsourced end-to-end solutions, and using consulting and third party service providers. We have long-established relationships with many of these financial institutions that generate significant recurring revenue. GFS clients also include asset managers, buy- and sell-side securities and trading firms, insurers and private equity firms. This segment also includes the Company's consolidated Brazilian Venture (Note 7). The business solutions in this segment included the Capco consulting business through its divestiture on July 31, 2017 (Note 9). Corporate and Other The Corporate and Other segment consists of corporate overhead expense, certain leveraged functions and miscellaneous expenses that are not included in the operating segments as well as certain non-strategic businesses. The business solutions in this segment included the PS&E business through its divestiture on February 1, 2017 (Note 9), commercial services and check authorization. The overhead and leveraged costs relate to marketing, corporate finance and accounting, human resources, legal, and amortization of acquisition-related intangibles and other costs that are not considered when management evaluates revenue-generating segment performance, such as acquisition integration and severance costs. The Corporate and Other segment also includes the impact on revenue for 2017 and 2016 of adjusting SunGard's deferred revenue to fair value. Adjusted EBITDA 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 Topic 280, "Segment Reporting". Adjusted EBITDA is defined as EBITDA (defined as net income (loss) before net interest expense, income tax provision (benefit) and depreciation and amortization, including amortization of purchased intangibles), plus certain non-operating items. The non-operating items affecting the segment profit measure generally include acquisition accounting adjustments, acquisition, integration and severance costs, and restructuring expenses. For consolidated reporting purposes, these costs and adjustments are recorded in the Corporate and Other segment for the periods discussed below. Adjusted EBITDA for the respective segments excludes the foregoing costs and adjustments. Summarized financial information for the Company’s segments is shown in the following tables. As of and for the three months ended September 30, 2017 (in millions):
| IFS |  | GFS |  | Corporate and Other |  | Total
Processing and services revenues | $ | 1,120 |  |  | $ | 997 |  |  | $ | 81 |  |  | $ | 2,198 |
Operating expenses | 744 |  |  | 703 |  |  | 363 |  |  | 1,810 |
Depreciation and amortization from continuing operations | 82 |  |  | 65 |  |  | 16 |  |  | 163 |
Purchase accounting amortization | — |  |  | — |  |  | 185 |  |  | 185 |
EBITDA | 458 |  |  | 359 |  |  | (81 | ) |  | 736 |
Acquisition deferred revenue adjustment | — |  |  | — |  |  | 2 |  |  | 2 |
Acquisition, integration and severance costs | — |  |  | — |  |  | 22 |  |  | 22 |
Adjusted EBITDA | $ | 458 |  |  | $ | 359 |  |  | $ | (57 | ) |  | 760 |
EBITDA |  |  |  |  |  |  | $ | 736 |
Interest expense |  |  |  |  |  |  | 84 |
Depreciation and amortization from continuing operations |  |  |  |  |  |  | 163 |
Purchase accounting amortization |  |  |  |  |  |  | 185 |
Other income (expense) unallocated |  |  |  |  |  |  |  |  |  | (182 | )
Provision for income taxes |  |  |  |  |  |  | 51 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | 10 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 61 |
Capital expenditures (1) | $ | 82 |  |  | $ | 66 |  |  | $ | 4 |  |  | $ | 152 |
Total assets (2) | $ | 10,273 |  |  | $ | 8,386 |  |  | $ | 5,635 |  |  | $ | 24,294 |
Goodwill | $ | 7,662 |  |  | $ | 5,867 |  |  | $ | 170 |  |  | $ | 13,699 |
(1) | Capital expenditures for the three months ended September 30, 2017 include $1 million of capital leases.
As of and for the three months ended September 30, 2016 (in millions):
| IFS |  | GFS |  | Corporate and Other |  | Total
Processing and services revenues | $ | 1,114 |  |  | $ | 1,068 |  |  | $ | 127 |  |  | $ | 2,309 |
Operating expenses | 731 |  |  | 789 |  |  | 391 |  |  | 1,911 |
Depreciation and amortization from continuing operations | 70 |  |  | 64 |  |  | 14 |  |  | 148 |
Purchase accounting amortization | — |  |  | — |  |  | 144 |  |  | 144 |
EBITDA | 453 |  |  | 343 |  |  | (106 | ) |  | 690 |
Acquisition deferred revenue adjustment | — |  |  | — |  |  | 37 |  |  | 37 |
Acquisition, integration and severance costs | — |  |  | — |  |  | 39 |  |  | 39 |
Adjusted EBITDA | $ | 453 |  |  | $ | 343 |  |  | $ | (30 | ) |  | $ | 766 |
EBITDA |  |  |  |  |  |  | $ | 690 |
Interest expense |  |  |  |  |  |  | 98 |
Depreciation and amortization from continuing operations |  |  |  |  |  |  | 148 |
Purchase accounting amortization |  |  |  |  |  |  | 144 |
Other income (expense) unallocated |  |  |  |  |  |  | (6 | )
Provision for income taxes |  |  |  |  |  |  | 103 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | 6 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 185 |
Capital expenditures (1) | $ | 82 |  |  | $ | 79 |  |  | $ | 8 |  |  | $ | 169 |
Total assets (2) | $ | 10,179 |  |  | $ | 9,131 |  |  | $ | 6,820 |  |  | $ | 26,130 |
Goodwill | $ | 7,670 |  |  | $ | 6,443 |  |  | $ | 456 |  |  | $ | 14,569 |
(1) | Capital expenditures for the three months ended September 30, 2016 include $16 million of capital leases.
(2) | Total assets as of September 30, 2016 exclude $4 million related to discontinued operations.
For the nine months ended September 30, 2017 (in millions):
| IFS |  | GFS |  | Corporate and Other |  | Total
Processing and services revenues | $ | 3,430 |  |  | $ | 3,092 |  |  | $ | 272 |  |  | $ | 6,794 |
Operating expenses | 2,298 |  |  | 2,317 |  |  | 1,172 |  |  | 5,787 |
Depreciation and amortization from continuing operations | 237 |  |  | 198 |  |  | 47 |  |  | 482 |
Purchase accounting amortization | — |  |  | — |  |  | 551 |  |  | 551 |
EBITDA | 1,369 |  |  | 973 |  |  | (302 | ) |  | 2,040 |
Acquisition deferred revenue adjustment | — |  |  | — |  |  | 6 |  |  | 6 |
Acquisition, integration and severance costs | — |  |  | — |  |  | 141 |  |  | 141 |
Adjusted EBITDA | $ | 1,369 |  |  | $ | 973 |  |  | $ | (155 | ) |  | 2,187 |
EBITDA |  |  |  |  |  |  | $ | 2,040 |
Interest expense |  |  |  |  |  |  | 267 |
Depreciation and amortization from continuing operations |  |  |  |  |  |  | 482 |
Purchase accounting amortization |  |  |  |  |  |  | 551 |
Other income (expense) unallocated |  |  |  |  |  |  |  |  |  | (123 | )
Provision for income taxes |  |  |  |  |  |  | 262 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | 24 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 331 |
Capital expenditures (1) | $ | 289 |  |  | $ | 224 |  |  | $ | 15 |  |  | $ | 528 |
(1) | Capital expenditures for the nine months ended September 30, 2017 include $80 million of capital leases.
For the nine months ended September 30, 2016 (in millions):
| IFS |  | GFS |  | Corporate and Other |  | Total
Processing and services revenues | $ | 3,379 |  |  | $ | 3,106 |  |  | $ | 310 |  |  | $ | 6,795 |
Operating expenses | 2,256 |  |  | 2,415 |  |  | 1,259 |  |  | 5,930 |
Depreciation and amortization from continuing operations | 201 |  |  | 183 |  |  | 47 |  |  | 431 |
Purchase accounting amortization | 1 |  |  | 6 |  |  | 438 |  |  | 445 |
EBITDA | 1,325 |  |  | 880 |  |  | (464 | ) |  | 1,741 |
Acquisition deferred revenue adjustment | — |  |  | — |  |  | 177 |  |  | 177 |
Acquisition, integration and severance costs | — |  |  | — |  |  | 181 |  |  | 181 |
Adjusted EBITDA | $ | 1,325 |  |  | $ | 880 |  |  | $ | (106 | ) |  | $ | 2,099 |
EBITDA |  |  |  |  |  |  | $ | 1,741 |
Interest expense |  |  |  |  |  |  | 284 |
Depreciation and amortization from continuing operations |  |  |  |  |  |  | 431 |
Purchase accounting amortization |  |  |  |  |  |  | 445 |
Other income (expense) unallocated |  |  |  |  |  |  | (8 | )
Provision for income taxes |  |  |  |  |  |  | 200 |
Net earnings from discontinued operations |  |  |  |  |  |  | 1 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | 13 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 361 |
Capital expenditures (1) | $ | 212 |  |  | $ | 221 |  |  | $ | 31 |  |  | $ | 464 |
(1) | Capital expenditures for the nine months ended September 30, 2016 include $18 million of capital leases.
Clients in Brazil, the United Kingdom, Germany, Canada and India accounted for the majority of the revenues from clients based outside of the U.S. for all periods presented. Long-term assets, excluding goodwill and other intangible assets, located outside of the United States total $515 million and $527 million as of September 30, 2017 and 2016, respectively. These assets are predominantly located in Brazil, India, Germany and the United Kingdom. During the three and nine months ended September 30, 2017 the Company recorded certain costs relating to integration and severance activity primarily from the SunGard acquisition of $22 million and $141 million, respectively. During the three and nine months ended September 30, 2016 the Company recorded transaction and other costs, including integration activity, related to SunGard and other recent acquisitions and other severance costs of $39 million and $181 million. These costs for the 2017 and 2016 periods were recorded in the Corporate and Other segment.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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