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Segment Information | 3 Months Ended
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Mar. 31, 2020
Segment Reporting [Abstract] |
Segment Information | Segment Information FIS reports its financial performance based on the following segments: Merchant Solutions, Banking Solutions, Capital Market Solutions, and Corporate and Other. As the Company continues to execute on its integration workflows and optimize its portfolio of assets, the Company reclassified certain non-strategic businesses from the Merchant Solutions and Banking Solutions segments into the Corporate and Other segment and recast all prior-period segment information presented. 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 contactless card, mobile wallet, and card-not present payments in eCommerce and mobile environments. 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. 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 procuring 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. 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. During the three months ended March 31, 2020 and 2019, the Company recorded acquisition and integration costs primarily related to the Worldpay acquisition, as well as certain other costs associated with data center consolidation activities totaling $18 million and $8 million for the respective periods. Adjusted EBITDA Adjusted EBITDA is a measure of segment profit or loss that 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 as well as acquisition, integration and certain other costs. 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 three months ended March 31, 2020 (in millions):
|  |  |  |  | Capital |  |  |  |
| Merchant |  | Banking |  | Market |  | Corporate |  |
| Solutions |  | Solutions |  | Solutions |  | and Other |  | Total
Revenue | $ | 935 |  |  | $ | 1,462 |  |  | $ | 631 |  |  | $ | 50 |  |  | $ | 3,078 |
Operating expenses | 597 |  |  | 981 |  |  | 414 |  |  | 978 |  |  | 2,970 |
Depreciation and amortization (including purchase accounting amortization) | 84 |  |  | 133 |  |  | 63 |  |  | 634 |  |  | 914 |
EBITDA | 422 |  |  | 614 |  |  | 280 |  |  | (294) |  |  | 1,022 |
Acquisition, integration and other costs | — |  |  | — |  |  | — |  |  | 225 |  |  | 225 |
Adjusted EBITDA | $ | 422 |  |  | $ | 614 |  |  | $ | 280 |  |  | $ | (69) |  |  | $ | 1,247 |
EBITDA |  |  |  |  |  |  |  |  | $ | 1,022 |
Interest expense, net |  |  |  |  |  |  |  |  | 80 |
Depreciation and amortization |  |  |  |  |  |  |  |  | 230 |
Purchase accounting amortization |  |  |  |  |  |  |  |  | 684 |
Other income (expense) unallocated |  |  |  |  |  |  |  |  |  |  |  |  | (40) |
Provision (benefit) for income taxes |  |  |  |  |  |  |  |  | (30) |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  |  |  | 3 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  |  |  | $ | 15 |
Capital expenditures | $ | 106 |  |  | $ | 137 |  |  | $ | 59 |  |  | $ | 4 |  |  | $ | 306 |
As of and for the three months ended March 31, 2019 (in millions):
|  |  |  |  | Capital |  |  |  |
| Merchant |  | Banking |  | Market |  | Corporate |  |
| Solutions |  | Solutions |  | Solutions |  | and Other |  | Total
Revenue | $ | 50 |  |  | $ | 1,373 |  |  | $ | 572 |  |  | $ | 62 |  |  | $ | 2,057 |
Operating expenses | 43 |  |  | 939 |  |  | 385 |  |  | 375 |  |  | 1,742 |
Depreciation and amortization (including purchase accounting amortization) | 3 |  |  | 124 |  |  | 52 |  |  | 189 |  |  | 368 |
EBITDA | 10 |  |  | 558 |  |  | 239 |  |  | (124) |  |  | 683 |
Acquisition, integration and other costs | — |  |  | — |  |  | — |  |  | 46 |  |  | 46 |
Adjusted EBITDA | $ | 10 |  |  | $ | 558 |  |  | $ | 239 |  |  | $ | (78) |  |  | $ | 729 |
EBITDA |  |  |  |  |  |  |  |  | $ | 683 |
Interest expense, net |  |  |  |  |  |  |  |  | 75 |
Depreciation and amortization |  |  |  |  |  |  |  |  | 195 |
Purchase accounting amortization |  |  |  |  |  |  |  |  | 173 |
Other income (expense) unallocated |  |  |  |  |  |  |  |  |  |  |  | (59) |
Provision (benefit) for income taxes |  |  |  |  |  |  |  |  | 32 |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  |  |  | 1 |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  |  |  | $ | 148 |
Capital expenditures (1) | $ | 2 |  |  | $ | 115 |  |  | $ | 59 |  |  | $ | 3 |  |  | $ | 179 |
(1)Capital expenditures for the three months ended March 31, 2019, include $34 million in other financing obligations for certain hardware and software.

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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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