Segment Information

Integrated Financial Solutions ("IFS")

The IFS segment is focused primarily on serving North American clients for transaction and account processing, payment solutions, channel solutions, lending and wealth and retirement solutions, corporate liquidity, digital channels, risk and compliance solutions, and services, capitalizing on the continuing trend to outsource these solutions. Clients in this segment include regional and community banks, credit unions and commercial lenders, as well as government institutions, merchants and other commercial organizations. 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. 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, 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 12).

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 10). The business solutions in this segment included the Capco consulting business through its divestiture on July 31, 2017 (Note 12).

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 12), commercial services and retail check processing. 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 2018 and 2017 of adjusting SunGard's deferred revenue to fair value.

During the three months ended March 31, 2018 and 2017, the Company recorded certain costs relating to integration and severance activity primarily from the SunGard acquisition of $57 million and $80 million, respectively.

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 March 31, 2018 (in millions):



	IFS		GFS		Corporate and Other			Total
Revenues	$	1,061	$	927	$	78		$	2,066
Operating expenses	695		689		388			1,772
Depreciation and amortization	85		67		17			169
Purchase accounting amortization	—		—		183			183
EBITDA	451		305		(110		)	646
Acquisition deferred revenue adjustment	—		—		2			2
Acquisition, integration and severance costs	—		—		57			57
Adjusted EBITDA	$	451	$	305	$	(51	)	705

EBITDA								$	646
Interest expense, net								72
Depreciation and amortization								169
Purchase accounting amortization								183
Other income (expense) unallocated								2
Provision for income taxes								34
Net earnings attributable to noncontrolling interest								8
Net earnings attributable to FIS common stockholders								$	182
Capital expenditures	$	99	$	71	$	2		$	172
Total assets (1)	$	10,667	$	8,449	$	5,288		$	24,404
Goodwill	$	7,662	$	5,915	$	170		$	13,747


(1)	Total assets as of March 31, 2018 exclude $1 million related to discontinued operations.

As of and for the three months ended March 31, 2017 (in millions):



	IFS		GFS		Corporate and Other			Total
Revenues	$	1,037	$	1,003	$	108		$	2,148
Operating expenses	671		801		430			1,902
Depreciation and amortization	73		63		16			152
Purchase accounting amortization	—		—		180			180
EBITDA	439		265		(126		)	578
Acquisition deferred revenue adjustment	—		—		3			3
Acquisition, integration and severance costs	—		—		80			80
Adjusted EBITDA	$	439	$	265	$	(43	)	$	661

EBITDA								$	578
Interest expense, net								93
Depreciation and amortization								152
Purchase accounting amortization								180
Other income (expense) unallocated								56
Provision for income taxes								74
Net earnings attributable to noncontrolling interest								6
Net earnings attributable to FIS common stockholders								$	129
Capital expenditures (1)	$	126	$	94	$	9		$	229
Total assets (2)	$	10,300	$	9,187	$	5,597		$	25,084
Goodwill	$	7,676	$	6,338	$	170		$	14,184


(1)	Capital expenditures for the three months ended March 31, 2017 include $74 million of capital leases.


(2)	Total assets as of March 31, 2017 exclude $1 million related to discontinued operations.

Clients in Brazil, the United Kingdom, Germany, India, Australia, France and Switzerland accounted for the majority of the revenues from clients based outside of the North America for all periods presented. Long-term assets, excluding goodwill and other intangible assets, located outside of the United States total $577 million and $535 million as of March 31, 2018 and 2017, respectively. These assets are predominantly located in Brazil, India, Germany and the United Kingdom.