Segment Information

12 Months Ended

Dec. 31, 2019

As a result of the Company's acquisition of Worldpay, the Company reorganized its reportable segments and recast all prior-period segment information presented to align with the new reportable segments. The new segments are Merchant Solutions, Banking Solutions, and Capital Market Solutions, which are organized based on the markets and clients served aligned with the solutions they provide, as well as the Corporate and Other segment. The reorganization primarily consisted of adding a new Merchant Solutions segment, renaming the former Integrated Financial Solutions segment to Banking Solutions and the former Global Financial Solutions segment to Capital Market Solutions, and moving certain of the Company's existing business lines to align with these new segments. Below is a summary of each segment.

Merchant Solutions ("Merchant")

The Merchant segment is focused on serving merchants of all sizes globally, enabling them to accept electronic payments, including credit, debit and prepaid payments originated at a physical point of sale as well as in card-not-present environments such as eCommerce and mobile. Merchant services include all aspects of payment processing, including authorization and settlement, customer service, chargeback and retrieval processing, reporting for electronic payment transactions and network

fee and interchange management. Merchant also includes value-added services, such as security and fraud prevention solutions, advanced data analytics and information management solutions, foreign currency management and numerous funding options. Merchant serves clients in over 140 countries. Our Merchant clients are highly-diversified, including non-discretionary everyday spend categories, such as grocery and pharmacy, and include national retailers, as well as global enterprises and small- to medium-sized businesses. The Merchant segment utilizes broad and varied distribution channels, including direct sales forces and multiple referral partner relationships that provide us with a growing and diverse client base.

Banking Solutions ("Banking")

The Banking segment is focused on serving all sizes of financial institutions for core processing and ancillary applications solutions; digital solutions; fraud, risk management and compliance solutions; electronic funds transfer and network services solutions; payment solutions; wealth and retirement solutions; item processing and output services solutions; and services capitalizing on the continuing trend to outsource these solutions. Clients in this segment include global financial institutions, U.S. regional and community banks, credit unions and commercial lenders, as well as government institutions, and other commercial organizations. Banking serves clients in more than 130 countries. Our applications include core processing software, which clients use to maintain the primary records of their customer accounts, and complementary applications and services that interact directly with the core processing applications. We provide our clients integrated solutions characterized by multi-year processing contracts that generate highly recurring revenue. The predictable nature of cash flows generated from the Banking segment provides opportunities for further investments in innovation, integration, information and security, and compliance in a cost-effective manner. The results in this segment included the Reliance Trust Company of Delaware business through its divestiture on December 31, 2018, the Company's Brazilian Venture business through its divestiture as part of the joint venture unwinding transaction on December 31, 2018 and the risk and compliance consulting business through its divestiture on July 31, 2017 (see Note 19).

Capital Market Solutions ("Capital Markets")

The Capital Markets segment is focused on serving global financial services clients with a broad array of buy- and sell-side solutions. Clients in this segment operate in more than 100 countries and include asset managers, buy-and sell-side securities, brokerage and trading firms, insurers, private equity firms, and other commercial organizations. Our buy- and sell-side solutions include a variety of mission critical applications for record keeping, data and analytics, trading, financing and risk management. Capital Markets 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 and commercial institutions that generate significant recurring revenue. We have made, and continue to make, investments in modern platforms; advanced technologies, such as cloud delivery, open APIs, machine learning and artificial intelligence; and regulatory technology to support our Capital Markets clients. The business solutions in this segment included the Capco consulting business through its divestiture on July 31, 2017 (see Note 19).

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 overhead and leveraged costs relate to corporate marketing, corporate finance and accounting, human resources, legal, and amortization of acquisition-related intangibles and other costs, such as acquisition and integration expenses, that are not considered when management evaluates revenue-generating segment performance. The Corporate and Other segment also includes the impact on revenue for 2018 and 2017 of adjusting deferred revenue to fair value from the SunGard acquisition. Additionally, the Corporate and Other segment also included the Certegy Check Services business unit in North America divested on August 31, 2018 (see Note 6) and the PS&E business divested on February 1, 2017 (see Note 19).

During 2019 the Company recorded acquisition and integration costs primarily related to the Worldpay acquisition and certain other costs associated with data center consolidation activities totaling $704 million. 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 totaling $156 million. During 2017, the Company recorded acquisition and integration costs primarily related to the SunGard acquisition totaling $178 million.

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. 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. The Company does not evaluate performance or allocate resources based on segment asset data; therefore, such information is not presented.

As of and for the year ended December 31, 2019 (in millions):



	Merchant Solutions		Banking Solutions		Capital Market Solutions		Corporate and Other			Total
Revenue	$	2,013	$	5,873	$	2,447	$	—		$	10,333
Operating expenses	1,137		3,942		1,535		2,750			9,364
Depreciation and amortization (including purchase accounting amortization)	118		523		217		1,586			2,444
EBITDA	994		2,454		1,129		(1,164		)	3,413
Acquisition, integration and other costs	—		—		—		704			704
Asset impairments	—		—		—		87			87
Adjusted EBITDA	$	994	$	2,454	$	1,129	$	(373	)	$	4,204

EBITDA										$	3,413
Interest expense, net										337
Depreciation and amortization										809
Purchase accounting amortization										1,635
Other income (expense) unallocated										(229		)
Provision (benefit) for income taxes										100
Net earnings attributable to noncontrolling interest										5
Net earnings attributable to FIS common stockholders										$	298
Capital expenditures (1)	$	144	$	617	$	269	$	13		$	1,043

(1) Capital expenditures include $215 million in other financing obligations for certain hardware and software.

As of and for the year ended December 31, 2018 (in millions):



	Merchant Solutions		Banking Solutions		Capital Market Solutions		Corporate and Other			Total
Revenue	$	276	$	5,712	$	2,391	$	44		$	8,423
Operating expenses	227		3,950		1,468		1,320			6,965
Depreciation and amortization (including purchase accounting amortization)	10		494		158		758			1,420
EBITDA	59		2,256		1,081		(518		)	2,878
Acquisition deferred revenue adjustment	—		—		—		4			4
Acquisition, integration and other costs	—		—		—		156			156
Asset impairments	—		—		—		95			95
Adjusted EBITDA	$	59	$	2,256	$	1,081	$	(263	)	$	3,133

EBITDA										$	2,878
Interest expense, net										297
Depreciation and amortization										688
Purchase accounting amortization										732
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)	$	11	$	485	$	206	$	11		$	713

(1) Capital expenditures include $91 million in other financing obligations for certain hardware and software.

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



	Merchant Solutions		Banking Solutions		Capital Market Solutions		Corporate and Other			Total
Revenue	$	261	$	5,552	$	2,749	$	106		$	8,668
Operating expenses	201		3,884		1,820		1,331			7,236
Depreciation and amortization (including purchase accounting amortization)	8		433		151		775			1,367
EBITDA	68		2,101		1,080		(450		)	2,799
Acquisition deferred revenue adjustment	—		—		—		7			7
Acquisition, integration and other costs	—		—		—		178			178
Adjusted EBITDA	$	68	$	2,101	$	1,080	$	(265	)	2,984

EBITDA										$	2,799
Interest expense, net										337
Depreciation and amortization										636
Purchase accounting amortization										731
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)	$	14	$	475	$	198	$	10		$	697

(1) Capital expenditures include $84 million in other financing obligations for certain hardware and software.

Clients in the United Kingdom, Germany, Brazil, 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 140 countries, with no individual country outside of North America accounting for more than 10% of total revenue for the years ended December 31, 2019, 2018 and 2017.

Long-term assets, excluding goodwill and other intangible assets, located outside of the United States totaled $1,646 million and $560 million as of December 31, 2019 and 2018, respectively. These assets are predominantly located in the United Kingdom, India, France, Belgium, Germany and Brazil.