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Segment Information | 3 Months Ended
--- | ---
Mar. 31, 2024
Segment Reporting [Abstract] |
Segment Information | Segment Information As described in Note 1, effective as of the third quarter of 2023, the Company no longer reports the Merchant Solutions segment; it now reports its financial performance based on the following segments: Banking Solutions, Capital Market Solutions and Corporate and Other. Below is a summary of each segment. Banking Solutions ("Banking") The Banking segment is focused on serving financial institutions of all sizes with core processing software, transaction processing software and complementary applications and services, many of which interact directly with core processing software. We sell these solutions on either a bundled or stand-alone basis. 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. We provide our clients integrated solutions characterized by multi-year processing contracts that generate 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 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 recordkeeping, data and analytics, trading, financing and risk management. Capital Markets clients purchase our solutions 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. Our long-established relationships with many of these financial and commercial institutions generate significant recurring revenue. We have made, and continue to make, investments in modern platforms, advanced technologies, 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 that we plan to wind down or sell. Our other operating income recorded in connection with the TSA is also recorded in Corporate and Other. The overhead and leveraged costs relate to corporate marketing, finance, accounting, human resources, legal, compliance and internal audit functions, as well as other costs, such as acquisition, integration and transformation-related expenses, and amortization of acquisition-related intangibles that are not considered when management evaluates revenue-generating segment performance. In the Corporate and Other segment, the Company recorded acquisition, integration and other costs comprised of the following (in millions):
|  | Three months ended |  |
|  | March 31, |  |
|  | 2024 |  | 2023 |  |  |  |
Acquisition and integration |  | $ | 24 |  |  | $ | 6 |  |  |  |  |
Enterprise transformation, including Future Forward and platform modernization |  | 73 |  |  | 71 |  |  |  |  |
Severance and other termination expenses |  | 18 |  |  | 23 |  |  |  |  |
Separation of the Worldpay Merchant Solutions business |  | 30 |  |  | — |  |  |  |  |
Incremental stock compensation directly attributable to specific programs |  | 11 |  |  | — |  |  |  |  |
Other, including divestiture-related expenses and enterprise cost control and other initiatives |  | 2 |  |  | — |  |  |  |  |
Total acquisition, integration and other costs |  | $ | 158 |  |  | $ | 100 |  |  |  |  |
Amounts in table may not sum due to rounding. Other costs in Corporate and Other also include incremental amortization expense associated with shortened estimated useful lives and accelerated amortization methods for certain software and deferred contract cost assets resulting from the Company's platform modernization, impairment charges described in Note 7 and costs that were previously incurred in support of the Worldpay Merchant Solutions business but are not directly attributable to it and thus were not recorded in discontinued operations. Adjusted EBITDA Adjusted EBITDA is a measure of segment profit or loss that is reported to the chief operating decision maker, the Company's Chief Executive Officer and President, 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 net earnings (loss) before net interest expense, net other income (expense), income tax provision (benefit), equity method investment earnings (loss), and depreciation and amortization, and excludes certain costs and other transactions that management deems non-operational in nature or that otherwise improve the comparability of operating results across reporting periods by their exclusion. 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. The items affecting the segment profit measure generally include the purchase price amortization of acquired intangible assets, as well as 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. For the three months ended March 31, 2024 (in millions):
|  |  | Capital |  |  |  |  |  |
| Banking |  | Market |  | Corporate |  |  |  |
| Solutions |  | Solutions |  | and Other |  | Total |  |
Revenue | $ | 1,684 |  |  | $ | 706 |  |  | $ | 77 |  |  | $ | 2,467 |  |  |
Operating expenses | (1,098) |  |  | (473) |  |  | (535) |  |  | (2,106) |  |  |
Depreciation and amortization (including purchase accounting amortization) | 159 |  |  | 102 |  |  | 167 |  |  | 428 |  |  |
Acquisition, integration and other costs | — |  |  | — |  |  | 158 |  |  | 158 |  |  |
Asset impairments | — |  |  | — |  |  | 14 |  |  | 14 |  |  |
Indirect Worldpay business support costs | — |  |  | — |  |  | 14 |  |  | 14 |  |  |
Adjusted EBITDA | $ | 745 |  |  | $ | 335 |  |  | $ | (105) |  |  | $ | 975 |  |  |
Adjusted EBITDA |  |  |  |  |  |  | $ | 975 |  |  |
Depreciation and amortization |  |  |  |  |  |  | (263) |  |  |
Purchase accounting amortization |  |  |  |  |  |  | (165) |  |  |
Acquisition, integration and other costs |  |  |  |  |  |  | (158) |  |  |
Asset impairments |  |  |  |  |  |  | (14) |  |  |
Indirect Worldpay business support costs |  |  |  |  |  |  | (14) |  |  |
Interest expense, net |  |  |  |  |  |  | (77) |  |  |
Other income (expense), net |  |  |  |  |  |  | (154) |  |  |
(Provision) benefit for income taxes |  |  |  |  |  |  | (26) |  |  |
Equity method investment earnings (loss), net of tax |  |  |  |  |  |  | (86) |  |  |
Net earnings (loss) from discontinued operations, net of tax |  |  |  |  |  |  | 707 |  |  |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | (1) |  |  |
Net earnings (loss) attributable to FIS common stockholders |  |  |  |  |  |  | $ | 724 |  |  |
Capital expenditures | $ | 118 |  |  | $ | 76 |  |  | $ | 8 |  |  | $ | 202 |  |  |
For the three months ended March 31, 2023 (in millions):
|  |  | Capital |  |  |  |  |  |
| Banking |  | Market |  | Corporate |  |  |  |
| Solutions |  | Solutions |  | and Other |  | Total |  |
Revenue | $ | 1,646 |  |  | $ | 663 |  |  | $ | 88 |  |  | $ | 2,397 |  |  |
Operating expenses | (1,129) |  |  | (436) |  |  | (521) |  |  | (2,086) |  |  |
Depreciation and amortization (including purchase accounting amortization) | 154 |  |  | 93 |  |  | 200 |  |  | 447 |  |  |
Acquisition, integration and other costs | — |  |  | — |  |  | 100 |  |  | 100 |  |  |
Indirect Worldpay business support costs | — |  |  | — |  |  | 42 |  |  | 42 |  |  |
Adjusted EBITDA | $ | 671 |  |  | $ | 320 |  |  | $ | (91) |  |  | $ | 900 |  |  |
Adjusted EBITDA |  |  |  |  |  |  | $ | 900 |  |  |
Depreciation and amortization |  |  |  |  |  |  | (271) |  |  |
Purchase accounting amortization |  |  |  |  |  |  | (176) |  |  |
Acquisition, integration and other costs |  |  |  |  |  |  | (100) |  |  |
Indirect Worldpay business support costs |  |  |  |  |  |  | (42) |  |  |
Interest expense, net |  |  |  |  |  |  | (142) |  |  |
Other income (expense), net |  |  |  |  |  |  | (36) |  |  |
(Provision) benefit for income taxes |  |  |  |  |  |  | (37) |  |  |
Net earnings (loss) from discontinued operations, net of tax |  |  |  |  |  |  | 45 |  |  |
Net earnings attributable to noncontrolling interest |  |  |  |  |  |  | (1) |  |  |
Net earnings attributable to FIS common stockholders |  |  |  |  |  |  | $ | 140 |  |  |
Capital expenditures | $ | 98 |  |  | $ | 63 |  |  | $ | 32 |  |  | $ | 193 |  |  |

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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://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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