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. These markets are primarily served through integrated solutions and characterized by multi-year processing contracts that generate highly recurring revenue. 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 (see Note 16).

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 around the world, and asset managers, buy- and sell-side securities and trading firms, insurers and private equity firms. 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," using consulting and third-party service providers as well as fully outsourced end-to-end solutions. We have long-established relationships with many of these financial institutions that generate significant recurring revenue. The business solutions in this segment included the Capco consulting business through its divestiture on July 31, 2017 and the Company's Brazilian Venture business divested as part of the joint venture unwinding transaction through December 31, 2018 (see Note 16).

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. At the end of 2018, the only business unit remaining in this segment is the Global Commercial Services business, as the non-strategic businesses were divested. In particular, the PS&E business was divested on February 1, 2017 (see Note 16) and the Certegy Check Services business unit in North America was divested on August 31, 2018 (see Note 5). 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 certain other costs. The Corporate and Other segment also includes the impact on revenue for 2018, 2017 and 2016 of adjusting deferred revenue from the SunGard acquisition to fair value.

During 2018 the Company recorded acquisition and integration costs primarily related to the SunGard acquisition and certain other costs including those associated with data center consolidation activities of $156 million. During 2017 and 2016 the Company recorded acquisition and integration costs primarily related to the SunGard acquisition of $178 million and $281 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 FASB ASC Topic 280, Segment Reporting. Adjusted EBITDA is defined as EBITDA (defined as net earnings (loss) before net interest expense, income tax provision (benefit) and depreciation and amortization) plus certain non-operating items. The non-operating items affecting the segment profit measure generally include acquisition accounting adjustments; acquisition, integration and certain other costs; and asset impairments. 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 year ended December 31, 2018 (in millions):



	IFS		GFS		Corporate and Other			Total
Revenue	$	4,401	$	3,718	$	304		$	8,423
Operating expenses	2,788		2,611		1,566			6,965
Depreciation and amortization	349		284		787			1,420
EBITDA	1,962		1,391		(475		)	2,878
Acquisition deferred revenue adjustment	—		—		4			4
Acquisition, integration and other costs	—		—		156			156
Asset impairments	—		—		95			95
Adjusted EBITDA	$	1,962	$	1,391	$	(220	)	$	3,133

EBITDA								$	2,878
Interest expense, net								297
Depreciation and amortization								1,420
Other income (expense) unallocated								(72		)
Provision (benefit) for income taxes								208
Net earnings attributable to noncontrolling interest								35
Net earnings attributable to FIS common stockholders								$	846
Capital expenditures (1)	$	385	$	306	$	22		$	713
Total assets	$	10,940	$	8,123	$	4,707		$	23,770
Goodwill	$	7,648	$	5,770	$	127		$	13,545

(1) Capital expenditures include $91 million in capital leases and other financing obligations.

As of and for the year ended December 31, 2017 (in millions):



	IFS		GFS		Corporate and Other			Total
Revenue	$	4,260	$	4,050	$	358		$	8,668
Operating expenses	2,692		2,990		1,554			7,236
Depreciation and amortization	306		263		798			1,367
EBITDA	1,874		1,323		(398		)	2,799
Acquisition deferred revenue adjustment	—		—		7			7
Acquisition, integration and other costs	—		—		178			178
Adjusted EBITDA	$	1,874	$	1,323	$	(213	)	$	2,984

EBITDA								$	2,799
Interest expense, net								337
Depreciation and amortization								1,367
Other income (expense) unallocated								(122		)
Provision (benefit) for income taxes								(321		)
Net earnings attributable to noncontrolling interest								33
Net earnings attributable to FIS common stockholders								$	1,261
Capital expenditures (1)	$	374	$	301	$	22		$	697
Total assets	$	10,663	$	8,437	$	5,424		$	24,524
Goodwill	$	7,662	$	5,898	$	170		$	13,730

(1) Capital expenditures include $84 million in capital leases and other financing obligations.

As of and for the year ended December 31, 2016 (in millions):



	IFS		GFS		Corporate and Other			Total
Revenue	$	4,178	$	4,183	$	470		$	8,831
Operating expenses	2,649		3,219		1,734			7,602
Depreciation and amortization	263		247		643			1,153
EBITDA	1,792		1,211		(621		)	2,382
Acquisition deferred revenue adjustment	—		—		192			192
Acquisition, integration and other costs	—		—		281			281
Adjusted EBITDA	$	1,792	$	1,211	$	(148	)	2,855

EBITDA								$	2,382
Interest expense, net								383
Depreciation and amortization								1,153
Other income (expense) unallocated								(9		)
Provision (benefit) for income taxes								291
Net earnings (loss) from discontinued operations								1
Net earnings attributable to noncontrolling interest								22
Net earnings attributable to FIS common stockholders								$	525
Capital expenditures (1)	$	294	$	317	$	48		$	659
Total assets	$	10,231	$	9,106	$	6,683		$	26,020
Goodwill	$	7,676	$	6,332	$	170		$	14,178

(1) Capital expenditures include $43 million in capital leases and other financing obligations.

Total assets as of December 31, 2018, 2017 and 2016 exclude $0 million, $2 million and $6 million, respectively, related to discontinued operations.

Clients in Brazil, the United Kingdom, Germany, India and Australia accounted for the majority of the revenue from clients based outside of North America for all periods presented. FIS conducts business in over 130 countries, with no individual country outside of North America accounting for more than 10% of total revenue for the years ended December 31, 2018, 2017 and 2016.

Long-term assets, excluding goodwill and other intangible assets, located outside of the United States totaled $560 million and $559 million as of December 31, 2018 and 2017, respectively. These assets are predominantly located in the United Kingdom, India, Belgium, Germany, France and Brazil.