Condensed Consolidated Financial Statement Details

9 Months Ended

Sep. 30, 2023

Condensed Consolidated Financial Statement Details [Abstract]

Condensed Consolidated Financial Statement Details

Cash and Cash Equivalents

The Company records restricted cash in captions other than Cash and cash equivalents in the consolidated balance sheets. The reconciliation between Cash and cash equivalents in the consolidated balance sheets and Cash, cash equivalents and restricted cash per the consolidated statements of cash flows is as follows (in millions):


	September 30, 2023		December 31, 2022
Cash and cash equivalents on the consolidated balance sheets	$	466	$	456
Merchant float from discontinued operations included in current assets held for sale	2,259		2,625
Cash from discontinued operations included in current assets held for sale	1,356		1,732
Total Cash and cash equivalents and restricted cash per the consolidated statements of cash flows	$	4,081	$	4,813

Settlement Assets

The principal components of the Company's settlement assets on the consolidated balance sheets are as follows (in millions):


	September 30, 2023		December 31, 2022
Settlement assets
Settlement deposits	$	396	$	439
Settlement receivables	209		153
Total Settlement assets	$	605	$	592

Intangible Assets, Software and Property and Equipment

The following table provides details of Intangible assets, Software and Property and equipment as of September 30, 2023, and December 31, 2022 (in millions):


	September 30, 2023						December 31, 2022
	Cost		Accumulated depreciation and amortization		Net		Cost		Accumulated depreciation and amortization		Net
Intangible assets	$	6,434	$	4,487	$	1,947	$	6,474	$	4,006	$	2,468
Software	$	4,308	$	2,226	$	2,082	$	4,341	$	2,286	$	2,055
Property and equipment	$	2,025	$	1,343	$	682	$	1,973	$	1,264	$	709

As of September 30, 2023, Intangible assets, net of amortization, includes $1,840 million of customer relationships and $107 million of trademarks and other intangible assets. Amortization expense with respect to Intangible assets was $170 million and $182 million for the three months and $512 million and $547 million for the nine months ended September 30, 2023 and 2022, respectively.

Depreciation expense for property and equipment was $41 million and $41 million for the three months and $124 million and $142 million for the nine months ended September 30, 2023 and 2022, respectively.

Amortization expense with respect to software was $148 million and $161 million for the three months and $452 million and $491 million for the nine months ended September 30, 2023 and 2022, respectively. The Company recorded $5 million and $14 million, during the three months and $18 million and $66 million during the nine months ended September 30, 2023 and 2022, respectively, of incremental software amortization expense resulting from the Company's platform modernization. Platform modernization includes sunsetting certain technology platforms, which resulted in shortened estimated useful lives and accelerated amortization methods primarily impacting the associated assets over approximately three years, beginning in the third quarter of 2021.

For the three and nine months ended September 30, 2023, this item includes $7 million and $8 million, respectively, of impairment primarily related to the termination of certain internally developed software projects. For the three months ended September 30, 2022, this item includes $17 million of impairments related primarily to certain software rendered obsolete by the Company's Platform modernization initiatives. For the nine months ended September 30, 2022, the Company also recorded impairments of $43 million related primarily to real estate-related assets as a result of office space reductions and $26 million primarily related to a non-strategic business.

Goodwill

Changes in goodwill during the nine months ended September 30, 2023, are summarized below (in millions). Prior-period amounts have been reclassified to conform to the new reportable segment presentation as discussed in Note 11.


			Capital		Corporate
	Banking		Market		And
	Solutions		Solutions		Other		Total
Balance, December 31, 2022	$	12,536	$	4,260	$	20	$	16,816
Foreign currency adjustments	(4)		(1)		—		(5)
Balance, September 30, 2023	$	12,532	$	4,259	$	20	$	16,811

We assess goodwill for impairment on an annual basis during the fourth quarter or more frequently if circumstances indicate potential impairment. We evaluated if events and circumstances as of September 30, 2023, indicated potential impairment of our reporting units.

For our Banking and Capital Markets reporting units, we performed a qualitative assessment by examining factors most likely to affect our reporting units' fair values, including the impact of recent U.S. bank failures. The factors examined involve use of management judgment and included, among others, (1) forecast revenue, growth rates, operating margins, and capital expenditures used to calculate estimated future cash flows, (2) future economic and market conditions and (3) FIS' market

capitalization. Based on our interim impairment assessment as of September 30, 2023, we concluded that it remained more likely than not that the fair value continues to exceed the carrying amount for each of these reporting units; therefore, goodwill was not impaired. Given the substantial excess of fair value over carrying amounts, we believe the likelihood of obtaining materially different results based on a change of assumptions to be low.

Equity Security Investments

The Company holds various equity securities without readily determinable fair values that primarily represent strategic investments made by the Company as well as investments obtained through acquisitions. Such investments totaled $228 million and $312 million at September 30, 2023, and December 31, 2022, respectively, and are included within Other noncurrent assets on the consolidated balance sheets. The Company accounts for these investments at cost, less impairment, and adjusts the carrying values for observable price changes from orderly transactions for identical or similar investments of the same issuer. These adjustments are generally considered Level 2-type fair value measurements. The Company records realized and unrealized gains and losses on these investments as well as impairment losses as Other income (expense), net on the consolidated statements of earnings (loss) and recorded net gains (losses) of $(10) million and $0 million for the three months and $(44) million and $47 million for the nine months ended September 30, 2023 and 2022, respectively, related to these investments.