Changes in Accounting Policies

The Company adopted Topic 606, Revenue from Contracts with Customers, with a date of initial application of January 1, 2018. As a result, the Company has changed its accounting policy for revenue recognition. As a result of the adoption of Topic 606, these Consolidated Financial Statements and certain disclosures herein have been retrospectively recast. The details of the significant changes and quantitative impact of the changes are disclosed below.

The Company applied Topic 606 retrospectively using certain practical expedients in paragraph 606-10-65-1(f). For completed contracts that have variable consideration, the Company uses the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods. Further, the Company does not disclose the amount of consideration allocated to the remaining performance obligations or an explanation of when the Company expects to recognize that amount as revenue for the 2016 and 2015 reporting periods presented before the date of the initial application. Lastly, the Company did not retrospectively restate contracts modified before the beginning of the earliest reporting period presented but reflects the aggregate effect of all modifications that occurred before the beginning of the earliest period presented.

Principal vs. Agent Considerations

In customer transactions that also involve third parties, the Company determines whether it is responsible for providing the ultimate solution or service as a principal, or whether it is merely arranging for the solution or service to be provided by the third party as an agent. When the Company is acting as a principal in a transaction, the Company recognizes the gross amounts billed as revenue. When the Company is acting as an agent in a transaction, the Company recognizes the net amount retained as revenue. Previously, the Company followed the guidance of Topic 605, which lists eight specific indicators that are determinative in evaluating whether a contract is recorded on a gross or a net basis. Under Topic 606, the determination is based on whether an entity obtains control of goods or services prior to transfer to a customer. The Company determined interchange and third-party network fees associated with certain parts of the payment processing business were significantly impacted by the adoption of Topic 606. Previously, gross accounting applied to certain types of these transactions, depending on the specific facts and circumstances. However, under Topic 606 revenues from these arrangements will be presented on a net basis because the Company has concluded that it is acting as an agent in the transaction.

Software License Rentals

The Company previously recognized revenue for initial license fees only when a contract existed, the fee was fixed or determinable, software delivery had occurred, collection was deemed probable, and vendor specific objective evidence of fair value had been established for any undelivered elements in the arrangement. If those criteria were not met, the initial license revenue was either deferred or recognized over time depending on the specific facts and circumstances. Software license rentals typically include payments that are delayed for a period of time, causing the Company to conclude that some portion of the license fee was not fixed or determinable. In these arrangements, license revenue would be deferred until payments become due and payable. Under Topic 606, the Company’s software licenses are generally considered distinct performance obligations, and revenue allocated to the software license is typically recognized at a point in time upon delivery of the license. Software license revenue is also typically recognized at a point in time upon delivery of the license under Topic 606 even if it is sold in a rental model or with extended payment terms, provided collectability is probable. Accordingly, a larger portion of software license revenue is recognized upfront for such transactions under Topic 606 than under Topic 605.

Term License Early Renewals

The Company previously recognized revenue for term software license renewals upon execution of a license renewal contract, provided all other revenue recognition requirements were met. Under Topic 606, revenue attributable to software term license renewals is now recognized at a later date than it would have been recognized under the previous accounting policy.

Impacts on Financial Statements

The following tables summarize the impacts of Topic 606 adoption on the Company’s consolidated financial statements.

Consolidated Balance Sheet as of December 31, 2017:



	As Previously
	Reported			Adjustments			As Adjusted
ASSETS
Current assets:
Cash and cash equivalents	$	665		$	—		$	665
Settlement deposits	677			—			677
Trade receivables, net	1,650			(26		)	1,624
Contract assets	—			108			108
Settlement receivables	291			—			291
Other receivables	70			—			70
Prepaid expenses and other current assets	253			—			253
Total current assets	3,606			82			3,688
Property and equipment, net	610			—			610
Goodwill	13,730			—			13,730
Intangible assets, net	3,950			(65		)	3,885
Computer software, net	1,728			—			1,728
Deferred contract costs, net	362			(8		)	354
Other noncurrent assets	531			—			531
Total assets	$	24,517		$	9		$	24,526
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,241		$	—		$	1,241
Settlement payables	949			—			949
Deferred revenues	688			88			776
Current portion of long-term debt	1,045			—			1,045
Total current liabilities	3,923			88			4,011
Long-term debt, excluding current portion	7,718			—			7,718
Deferred income taxes	1,508			(40		)	1,468
Deferred revenues	21			85			106
Other long-term liabilities	403			—			403
Total liabilities	13,573			133			13,706
Equity:
FIS stockholders’ equity:
Preferred stock	—			—			—
Common stock	4			—			4
Additional paid in capital	10,534			—			10,534
Retained earnings	4,233			(124		)	4,109
Accumulated other comprehensive earnings	(332		)	—			(332		)
Treasury stock, at cost	(3,604		)	—			(3,604		)
Total FIS stockholders’ equity	10,835			(124		)	10,711
Noncontrolling interest	109			—			109
Total equity	10,944			(124		)	10,820
Total liabilities and equity	$	24,517		$	9		$	24,526

Consolidated Balance Sheet as of December 31, 2016:



	As Previously
	Reported			Adjustments			As Adjusted
ASSETS
Current assets:
Cash and cash equivalents	$	683		$	—		$	683
Settlement deposits	520			—			520
Trade receivables, net	1,639			(89		)	1,550
Contract assets	—			168			168
Settlement receivables	175			—			175
Other receivables	65			—			65
Prepaid expenses and other current assets	236			—			236
Deferred income taxes	101			—			101
Assets held for sale	863			—			863
Total current assets	4,282			79			4,361
Property and equipment, net	626			—			626
Goodwill	14,178			—			14,178
Intangible assets, net	4,664			(74		)	4,590
Computer software, net	1,608			—			1,608
Deferred contract costs, net	310			(10		)	300
Other noncurrent assets	363			—			363
Total assets	$	26,031		$	(5	)	$	26,026
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,146		$	—		$	1,146
Settlement payables	714			—			714
Deferred revenues	680			61			741
Current portion of long-term debt	332			—			332
Liabilities held for sale	279			—			279
Total current liabilities	3,151			61			3,212
Long-term debt, excluding current portion	10,146			—			10,146
Deferred income taxes	2,484			(39		)	2,445
Deferred revenues	19			39			58
Other long-term liabilities	386			—			386
Total liabilities	16,186			61			16,247
Equity:
FIS stockholders’ equity:
Preferred stock	—			—			—
Common stock	4			—			4
Additional paid in capital	10,380			—			10,380
Retained earnings	3,299			(66		)	3,233
Accumulated other comprehensive earnings	(331		)	—			(331		)
Treasury stock, at cost	(3,611		)	—			(3,611		)
Total FIS stockholders’ equity	9,741			(66		)	9,675
Noncontrolling interest	104			—			104
Total equity	9,845			(66		)	9,779
Total liabilities and equity	$	26,031		$	(5	)	$	26,026

Consolidated Statement of Earnings for the year ended December 31, 2017:



	As Previously
	Reported			Adjustments			As Adjusted
Revenues (for related party activity, see note 19)	$	9,123		$	(455	)	$	8,668
Cost of revenues (for related party activity, see note 19)	6,181			(387		)	5,794
Gross profit	2,942			(68		)	2,874
Selling, general, and administrative expenses (for related party activity, see note 19)	1,450			(8		)	1,442
Operating income	1,492			(60		)	1,432
Other income (expense):
Interest income	22			—			22
Interest expense	(359		)	—			(359		)
Other income (expense), net	(119		)	—			(119		)
Total other income (expense)	(456		)	—			(456		)
Earnings from continuing operations before income taxes and equity method investment earnings	1,036			(60		)	976
Provision (benefit) for income taxes	(319		)	(2		)	(321		)
Equity method investment earnings	(3		)	—			(3		)
Earnings from continuing operations, net of tax	1,352			(58		)	1,294
Earnings (loss) from discontinued operations, net of tax	—			—			—
Net earnings	1,352			(58		)	1,294
Net earnings attributable to noncontrolling interest	(33		)	—			(33		)
Net earnings attributable to FIS common stockholders	$	1,319		$	(58	)	$	1,261
Net earnings per share — basic from continuing operations attributable to FIS common stockholders	$	4.00		$	(0.18	)	$	3.82
Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders	—			—			—
Net earnings per share — basic attributable to FIS common stockholders *	$	4.00		$	(0.18	)	$	3.82
Weighted average shares outstanding — basic	330			330			330
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders	$	3.93		$	(0.17	)	$	3.75
Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders	—			—			—
Net earnings per share — diluted attributable to FIS common stockholders *	$	3.93		$	(0.17	)	$	3.75
Weighted average shares outstanding — diluted	336			336			336
Amounts attributable to FIS common stockholders:
Earnings from continuing operations, net of tax	$	1,319		$	(58	)	$	1,261
Earnings (loss) from discontinued operations, net of tax	—			—			—
Net earnings attributable to FIS common stockholders	$	1,319		$	(58	)	$	1,261

* Amounts may not sum due to rounding.

Consolidated Statement of Earnings for the year ended December 31, 2016:



	As Previously
	Reported			Adjustments			As Adjusted
Revenues (for related party activity, see note 19)	$	9,241		$	(410	)	$	8,831
Cost of revenues (for related party activity, see note 19)	6,233			(338		)	5,895
Gross profit	3,008			(72		)	2,936
Selling, general, and administrative expenses (for related party activity, see note 19)	1,710			(3		)	1,707
Operating income	1,298			(69		)	1,229
Other income (expense):
Interest income	20			—			20
Interest expense	(403		)	—			(403		)
Other income (expense), net	(9		)	—			(9		)
Total other income (expense)	(392		)	—			(392		)
Earnings from continuing operations before income taxes and equity method investment earnings	906			(69		)	837
Provision (benefit) for income taxes	317			(26		)	291
Equity method investment earnings	—			—			—
Earnings from continuing operations, net of tax	589			(43		)	546
Earnings (loss) from discontinued operations, net of tax	1			—			1
Net earnings	590			(43		)	547
Net earnings attributable to noncontrolling interest	(22		)	—			(22		)
Net earnings attributable to FIS common stockholders	$	568		$	(43	)	$	525
Net earnings per share — basic from continuing operations attributable to FIS common stockholders	$	1.74		$	(0.13	)	$	1.61
Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders	—			—			—
Net earnings per share — basic attributable to FIS common stockholders *	$	1.74		$	(0.13	)	$	1.61
Weighted average shares outstanding — basic	326			326			326
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders	$	1.72		$	(0.13	)	$	1.59
Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders	—			—			—
Net earnings per share — diluted attributable to FIS common stockholders *	$	1.72		$	(0.13	)	$	1.59
Weighted average shares outstanding — diluted	330			330			330
Amounts attributable to FIS common stockholders:
Earnings from continuing operations, net of tax	$	567		$	(43	)	$	524
Earnings (loss) from discontinued operations, net of tax	1			—			1
Net earnings attributable to FIS common stockholders	$	568		$	(43	)	$	525

* Amounts may not sum due to rounding.

Consolidated Statement of Earnings for the year ended December 31, 2015:



	As Previously
	Reported			Adjustments			As Adjusted
Revenues (for related party activity, see note 19)	$	6,596		$	(336	)	$	6,260
Cost of revenues (for related party activity, see note 19)	4,395			(324		)	4,071
Gross profit	2,201			(12		)	2,189
Selling, general, and administrative expenses (for related party activity, see note 19)	1,102			—			1,102
Operating income	1,099			(12		)	1,087
Other income (expense):
Interest income	16			—			16
Interest expense	(199		)	—			(199		)
Other income (expense), net	121			—			121
Total other income (expense)	(62		)	—			(62		)
Earnings from continuing operations before income taxes and equity method investment earnings	1,037			(12		)	1,025
Provision (benefit) for income taxes	379			(4		)	375
Equity method investment earnings	—			—			—
Earnings from continuing operations, net of tax	658			(8		)	650
Earnings (loss) from discontinued operations, net of tax	(7		)	—			(7		)
Net earnings	651			(8		)	643
Net earnings attributable to noncontrolling interest	(19		)	—			(19		)
Net earnings attributable to FIS common stockholders	$	632		$	(8	)	$	624
Net earnings per share — basic from continuing operations attributable to FIS common stockholders	$	2.24		$	(0.03	)	$	2.21
Net earnings (loss) per share — basic from discontinued operations attributable to FIS common stockholders	(0.03		)	—			(0.03		)
Net earnings per share — basic attributable to FIS common stockholders *	$	2.22		$	(0.03	)	$	2.19
Weighted average shares outstanding — basic	285			285			285
Net earnings per share — diluted from continuing operations attributable to FIS common stockholders	$	2.21		$	(0.03	)	$	2.18
Net earnings (loss) per share — diluted from discontinued operations attributable to FIS common stockholders	(0.03		)	—			(0.03		)
Net earnings per share — diluted attributable to FIS common stockholders *	$	2.19		$	(0.03	)	$	2.16
Weighted average shares outstanding — diluted	289			289			289
Amounts attributable to FIS common stockholders:
Earnings from continuing operations, net of tax	$	639		$	(8	)	$	631
Earnings (loss) from discontinued operations, net of tax	(7		)	—			(7		)
Net earnings attributable to FIS common stockholders	$	632		$	(8	)	$	624

* Amounts may not sum due to rounding.

Consolidated Statement of Comprehensive Earnings for the year ended December 31, 2017:



	As Previously
	Reported						Adjustments					As Adjusted
Net earnings				$	1,352				$	(58	)				$	1,294
Other comprehensive earnings, before tax:
Unrealized gain (loss) on investments and derivatives	$	(28	)				$	—				$	(28	)
Reclassification adjustment for gains (losses) included in net earnings	—						—					—
Unrealized gain (loss) on investments and derivatives, net	(28		)				—					(28		)
Foreign currency translation adjustments	23						—					23
Minimum pension liability adjustments	(8		)				—					(8		)
Other comprehensive earnings (loss), before tax	(13		)				—					(13		)
Provision for income tax expense (benefit) related to items of other comprehensive earnings	(11		)				—					(11		)
Other comprehensive earnings (loss), net of tax	$	(2	)	(2		)	$	—	—			$	(2	)	(2		)
Comprehensive earnings				1,350					(58		)				1,292
Net (earnings) loss attributable to noncontrolling interest				(33		)			—						(33		)
Other comprehensive (earnings) losses attributable to noncontrolling interest				1					—						1
Comprehensive earnings attributable to FIS common stockholders				$	1,318				$	(58	)				$	1,260

Consolidated Statement of Comprehensive Earnings for the year ended December 31, 2016:



	As previously
	Reported						Adjustments					As adjusted
Net earnings				$	590				$	(43	)				$	547
Other comprehensive earnings, before tax:
Unrealized gain (loss) on investments and derivatives	$	(4	)				$	—				$	(4	)
Reclassification adjustment for gains (losses) included in net earnings	9						—					9
Unrealized gain (loss) on investments and derivatives, net	5						—					5
Foreign currency translation adjustments	(7		)				—					(7		)
Minimum pension liability adjustments	(1		)				—					(1		)
Other comprehensive earnings (loss), before tax	(3		)				—					(3		)
Provision for income tax expense (benefit) related to items of other comprehensive earnings	31						—					31
Other comprehensive earnings (loss), net of tax	$	(34	)	(34		)	$	—	—			$	(34	)	(34		)
Comprehensive earnings				556					(43		)				513
Net (earnings) loss attributable to noncontrolling interest				(22		)			—						(22		)
Other comprehensive (earnings) losses attributable to noncontrolling interest				(19		)			—						(19		)
Comprehensive earnings attributable to FIS common stockholders				$	515				$	(43	)				$	472

Consolidated Statement of Comprehensive Earnings for the year ended December 31, 2015:



	As previously
	Reported						Adjustments					As adjusted
Net earnings				$	651				$	(8	)				$	643
Other comprehensive earnings, before tax:
Unrealized gain (loss) on investments and derivatives	$	(17	)				$	—				$	(17	)
Reclassification adjustment for gains (losses) included in net earnings	4						—					4
Unrealized gain (loss) on investments and derivatives, net	(13		)				—					(13		)
Foreign currency translation adjustments	(196		)				—					(196		)
Minimum pension liability adjustments	(1		)				—					(1		)
Other comprehensive earnings (loss), before tax	(210		)				—					(210		)
Provision for income tax expense (benefit) related to items of other comprehensive earnings	(5		)				—					(5		)
Other comprehensive earnings (loss), net of tax	$	(205	)	(205		)	$	—	—			$	(205	)	(205		)
Comprehensive earnings				446					(8		)				438
Net (earnings) loss attributable to noncontrolling interest				(19		)			—						(19		)
Other comprehensive (earnings) losses attributable to noncontrolling interest				32					—						32
Comprehensive earnings attributable to FIS common stockholders				$	459				$	(8	)				$	451

Consolidated Statement of Cash Flows for the year ended December 31, 2017:



	As Previously
	Reported			Adjustments			As Adjusted
Cash flows from operating activities:
Net earnings	$	1,352		$	(58	)	$	1,294
Adjustment to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	1,391			(25		)	1,366
Amortization of debt issue costs	19			—			19
Gain on sale of assets	(62		)	—			(62		)
Loss on extinguishment of debt	196			—			196
Stock-based compensation	107			—			107
Deferred income taxes	(985		)	—			(985		)
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
Trade receivables	(167		)	(65		)	(232		)
Contract assets	—			62			62
Settlement activity	(51		)	—			(51		)
Prepaid expenses and other assets	(2		)	—			(2		)
Deferred contract costs	(166		)	13			(153		)
Deferred revenue	(6		)	73			67
Accounts payable, accrued liabilities, and other liabilities	115			—			115
Net cash provided by operating activities	1,741			—			1,741

Cash flows from investing activities:
Additions to property and equipment	(145		)	—			(145		)
Additions to computer software	(468		)	—			(468		)
Acquisitions, net of cash acquired	—			—			—
Net proceeds from sale of assets	1,307			—			1,307
Other investing activities, net	(4		)	—			(4		)
Net cash provided by (used in) investing activities	690			—			690

Cash flows from financing activities:
Borrowings	9,615			—			9,615
Repayment of borrowings and capital lease obligations	(11,689		)	—			(11,689		)
Debt issuance costs	(13		)	—			(13		)
Excess income tax benefit from exercise of stock options	—			—			—
Proceeds from exercise of stock options	208			—			208
Treasury stock activity	(153		)	—			(153		)
Dividends paid	(385		)	—			(385		)
Distributions to Brazilian Venture partner	(23		)	—			(23		)
Other financing activities, net	(40		)	—			(40		)
Net cash (used in) provided by financing activities	(2,480		)	—			(2,480		)
Effect of foreign currency exchange rate changes on cash	31			—			31
Net increase (decrease) in cash and cash equivalents	(18		)	—			(18		)
Cash and cash equivalents, beginning of year	683			—			683
Cash and cash equivalents, end of year	$	665		$	—		$	665

Supplemental cash flow information:
Cash paid for interest	$	354		$	—		$	354
Cash paid for income taxes	$	545		$	—		$	545

Consolidated Statement of Cash Flows for the year ended December 31, 2016:



	As Previously
	Reported			Adjustments			As Adjusted
Cash flows from operating activities:
Net earnings	$	590		$	(43	)	$	547
Adjustment to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	1,174			(21		)	1,153
Amortization of debt issue costs	19			—			19
Stock-based compensation	137			—			137
Deferred income taxes	(164		)	(26		)	(190		)
Excess income tax benefit from exercise of stock options	(32		)	—			(32		)
Other operating activities, net	(2		)	—			(2		)
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
Trade receivables	57			(15		)	42
Contract assets	—			19			19
Settlement activity	15			—			15
Prepaid expenses and other assets	(8		)	—			(8		)
Deferred contract costs	(138		)	17			(121		)
Deferred revenue	182			69			251
Accounts payable, accrued liabilities, and other liabilities	95			—			95
Net cash provided by operating activities	1,925			—			1,925

Cash flows from investing activities:
Additions to property and equipment	(145		)	—			(145		)
Additions to computer software	(471		)	—			(471		)
Acquisitions, net of cash acquired	—			—			—
Net proceeds from sale of assets	—			—			—
Other investing activities, net	(3		)	—			(3		)
Net cash provided by (used in) investing activities	(619		)	—			(619		)

Cash flows from financing activities:
Borrowings	7,745			—			7,745
Repayment of borrowings and capital lease obligations	(8,749		)	—			(8,749		)
Debt issuance costs	(25		)	—			(25		)
Excess income tax benefit from exercise of stock options	32			—			32
Proceeds from exercise of stock options	112			—			112
Treasury stock activity	(40		)	—			(40		)
Dividends paid	(341		)	—			(341		)
Distributions to Brazilian Venture partner	(20		)	—			(20		)
Other financing activities, net	(23		)	—			(23		)
Net cash (used in) provided by financing activities	(1,309		)	—			(1,309		)
Effect of foreign currency exchange rate changes on cash	4			—			4
Net increase (decrease) in cash and cash equivalents	1			—			1
Cash and cash equivalents, beginning of year	682			—			682
Cash and cash equivalents, end of year	$	683		$	—		$	683

Supplemental cash flow information:
Cash paid for interest	$	351		$	—		$	351
Cash paid for income taxes	$	341		$	—		$	341

Consolidated Statement of Cash Flows for the year ended December 31, 2015:



	As Previously
	Reported			Adjustments			As Adjusted
Cash flows from operating activities:
Net earnings	$	651		$	(8	)	$	643
Adjustment to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	669			(13		)	656
Amortization of debt issue costs	11			—			11
Gain on sale of assets	(149		)	—			(149		)
Stock-based compensation	98			—			98
Deferred income taxes	48			(4		)	44
Excess income tax benefit from exercise of stock options	(29		)	—			(29		)
Other operating activities, net	4			—			4
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
Trade receivables	(103		)	35			(68		)
Contract assets	—			(38		)	(38		)
Settlement activity	5			—			5
Prepaid expenses and other assets	(46		)	—			(46		)
Deferred contract costs	(120		)	13			(107		)
Deferred revenue	63			15			78
Accounts payable, accrued liabilities, and other liabilities	29			—			29
Net cash provided by operating activities	1,131			—			1,131

Cash flows from investing activities:
Additions to property and equipment	(133		)	—			(133		)
Additions to computer software	(282		)	—			(282		)
Acquisitions, net of cash acquired	(1,720		)	—			(1,720		)
Net proceeds from sale of assets	241			—			241
Other investing activities, net	(4		)	—			(4		)
Net cash provided by (used in) investing activities	(1,898		)	—			(1,898		)

Cash flows from financing activities:
Borrowings	13,216			—			13,216
Repayment of borrowings and capital lease obligations	(11,561		)	—			(11,561		)
Debt issuance costs	(37		)	—			(37		)
Excess income tax benefit from exercise of stock options	29			—			29
Proceeds from exercise of stock options	57			—			57
Treasury stock activity	(320		)	—			(320		)
Dividends paid	(305		)	—			(305		)
Distributions to Brazilian Venture partner	(24		)	—			(24		)
Other financing activities, net	(40		)	—			(40		)
Net cash (used in) provided by financing activities	1,015			—			1,015
Effect of foreign currency exchange rate changes on cash	(59		)	—			(59		)
Net increase (decrease) in cash and cash equivalents	189			—			189
Cash and cash equivalents, beginning of year	493			—			493
Cash and cash equivalents, end of year	$	682		$	—		$	682
Supplemental cash flow information:
Cash paid for interest	$	142		$	—		$	142
Cash paid for income taxes	$	355		$	—		$	355