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Segment Information | 6 Months Ended
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Jun. 30, 2019
Segment Reporting [Abstract] |
Segment Information | 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 Reliance Trust Company of Delaware business through its divestiture on December 31, 2018. 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 Company's Brazilian Venture business divested as part of the joint venture unwinding transaction through December 31, 2018. 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 June 30, 2019, the only business unit remaining in this segment is the Global Commercial Services business, as the non-strategic businesses were divested. In particular, the Certegy Check Services business unit in North America was divested on August 31, 2018. 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 the three and six months ended June 30, 2018 of adjusting deferred revenue from the SunGard acquisition to fair value. During the three and six months ended June 30, 2019, the Company recorded acquisition and integration costs primarily related to the Worldpay transaction, and certain other costs including those associated with data center consolidation activities of $17 million and $25 million, respectively. During the three and six months ended June 30, 2018, the Company recorded acquisition, integration and certain other costs primarily related to the SunGard acquisition of $49 million and $106 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 and acquisition, integration and certain other costs. 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 June 30, 2019 (in millions):
| IFS |  | GFS |  | Corporate and Other |  | Total
Revenue | $ | 1,179 |  |  | $ | 865 |  |  | $ | 68 |  |  | $ | 2,112 |
Operating expenses | 739 |  |  | 636 |  |  | 346 |  |  | 1,721 |
Depreciation and amortization | 95 |  |  | 83 |  |  | 190 |  |  | 368 |
EBITDA | 535 |  |  | 312 |  |  | (88 | ) |  | 759 |
Acquisition, integration and other costs | — |  |  | — |  |  | 35 |  |  | 35 |
Adjusted EBITDA | $ | 535 |  |  | $ | 312 |  |  | $ | (53 | ) |  | $ | 794 |
EBITDA |  |  |  |  |  |  | $ | 759 |
Interest expense, net |  |  |  |  |  |  | 72 |
Depreciation and amortization |  |  |  |  |  |  | 368 |
Other income (expense) unallocated |  |  |  |  |  |  |  |  |  | (124 | )
Provision (benefit) for income taxes |  |  |  |  |  |  | 40 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | 1 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 154 |
Capital expenditures (1) | $ | 73 |  |  | $ | 62 |  |  | $ | 6 |  |  | $ | 141 |
Total assets | $ | 10,824 |  |  | $ | 8,349 |  |  | $ | 13,686 |  |  | $ | 32,859 |
Goodwill | $ | 7,648 |  |  | $ | 5,767 |  |  | $ | 127 |  |  | $ | 13,542 |
(1) | Capital expenditures for the three months ended June 30, 2019 include $1 million in other financing obligations for certain hardware and software.
As of and for the three months ended June 30, 2018 (in millions):
| IFS |  | GFS |  | Corporate and Other |  | Total
Revenue | $ | 1,124 |  |  | $ | 899 |  |  | $ | 83 |  |  | $ | 2,106 |
Operating expenses | 719 |  |  | 655 |  |  | 379 |  |  | 1,753 |
Depreciation and amortization | 87 |  |  | 70 |  |  | 197 |  |  | 354 |
EBITDA | 492 |  |  | 314 |  |  | (99 | ) |  | 707 |
Acquisition deferred revenue adjustment | — |  |  | — |  |  | 1 |  |  | 1 |
Acquisition, integration and other costs | — |  |  | — |  |  | 49 |  |  | 49 |
Adjusted EBITDA | $ | 492 |  |  | $ | 314 |  |  | $ | (49 | ) |  | $ | 757 |
EBITDA |  |  |  |  |  |  | $ | 707 |
Interest expense, net |  |  |  |  |  |  | 73 |
Depreciation and amortization |  |  |  |  |  |  | 354 |
Other income (expense) unallocated |  |  |  |  |  |  | (11 | )
Provision (benefit) for income taxes |  |  |  |  |  |  | 51 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | 6 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 212 |
Capital expenditures | $ | 76 |  |  | $ | 64 |  |  | $ | 4 |  |  | $ | 144 |
Total assets (1) | $ | 10,570 |  |  | $ | 8,118 |  |  | $ | 5,180 |  |  | $ | 23,868 |
Goodwill | $ | 7,662 |  |  | $ | 5,834 |  |  | $ | 170 |  |  | $ | 13,666 |
As of and for the six months ended June 30, 2019 (in millions):
| IFS |  | GFS |  | Corporate and Other |  | Total
Revenue | $ | 2,309 |  |  | $ | 1,728 |  |  | $ | 132 |  |  | $ | 4,169 |
Operating expenses | 1,468 |  |  | 1,271 |  |  | 724 |  |  | 3,463 |
Depreciation and amortization | 192 |  |  | 164 |  |  | 380 |  |  | 736 |
EBITDA | 1,033 |  |  | 621 |  |  | (212 | ) |  | 1,442 |
Acquisition, integration and other costs | — |  |  | — |  |  | 81 |  |  | 81 |
Adjusted EBITDA | $ | 1,033 |  |  | $ | 621 |  |  | $ | (131 | ) |  | $ | 1,523 |
EBITDA |  |  |  |  |  |  | $ | 1,442 |
Interest expense, net |  |  |  |  |  |  | 147 |
Depreciation and amortization |  |  |  |  |  |  | 736 |
Other income (expense) unallocated |  |  |  |  |  |  |  |  |  | (183 | )
Provision (benefit) for income taxes |  |  |  |  |  |  | 72 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | 2 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 302 |
Capital expenditures (1) | $ | 168 |  |  | $ | 142 |  |  | $ | 10 |  |  | $ | 320 |
(1) | Capital expenditures for the six months ended June 30, 2019 include $35 million in other financing obligations for certain hardware and software.
As of and for the six months ended June 30, 2018 (in millions):
| IFS |  | GFS |  | Corporate and Other |  | Total
Revenue | $ | 2,185 |  |  | $ | 1,826 |  |  | $ | 161 |  |  | $ | 4,172 |
Operating expenses | 1,414 |  |  | 1,345 |  |  | 766 |  |  | 3,525 |
Depreciation and amortization | 172 |  |  | 137 |  |  | 397 |  |  | 706 |
EBITDA | 943 |  |  | 618 |  |  | (208 | ) |  | 1,353 |
Acquisition deferred revenue adjustment | — |  |  | — |  |  | 3 |  |  | 3 |
Acquisition, integration and other costs | — |  |  | — |  |  | 106 |  |  | 106 |
Adjusted EBITDA | $ | 943 |  |  | $ | 618 |  |  | $ | (99 | ) |  | $ | 1,462 |
EBITDA |  |  |  |  |  |  | $ | 1,353 |
Interest expense, net |  |  |  |  |  |  | 144 |
Depreciation and amortization |  |  |  |  |  |  | 706 |
Other income (expense) unallocated |  |  |  |  |  |  | (10 | )
Provision (benefit) for income taxes |  |  |  |  |  |  | 85 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | 14 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 394 |
Capital expenditures | $ | 175 |  |  | $ | 135 |  |  | $ | 6 |  |  | $ | 316 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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