Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On January 31, 2024, Fidelity National Information Services, Inc. (FIS or the Company) completed its previously announced sale of a 55% of equity interest in its Merchant Solutions business to private equity funds managed by GTCR, pursuant to a purchase and sale agreement entered into on July 5, 2023 (as amended or supplemented through the date hereof) (the Separation). FIS retained a non-controlling 45% ownership interest in a new standalone entity named New Boost Holdco, LLC, a Delaware limited liability Company (Worldpay).
FIS net cash proceeds at closing from the sale were greater than $12 billion, net of estimated closing adjustments, debt restructuring fees, taxes and transaction costs. The purchase price also includes potential consideration of up to $1.0 billion contingent on the returns realized by GTCR exceeding certain thresholds. For purposes of the unaudited pro forma condensed balance sheet, the cash proceeds received by FIS at closing, which are net of estimated closing adjustments and transaction cost funding, have been reflected of approximately $12.8 billion.
The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information.
The unaudited pro forma condensed consolidated financial statements have been derived from the Companys historical consolidated financial statements and give effect to the Separation. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2023 reflects the Companys financial position as if the Separation had occurred on September 30, 2023. The unaudited pro forma condensed consolidated statement of earnings (loss) for the years ended December 31, 2022, 2021 and 2020 reflect the Companys results as if the Separation had occurred as of January 1, 2020. The Company began reporting the results of the Merchant Solutions business in discontinued operations in the third quarter of the fiscal year 2023 and the assets and liabilities of the Merchant Solutions business were reported as held-for-sale as of September 30, 2023. As such, the unaudited pro forma consolidated statement of earnings for the nine months ended September 30, 2023 has not been presented, as the Separation has already been reflected in the Form 10-Q for the nine months ended September 30, 2023.
The unaudited pro forma condensed consolidated financial statements have been prepared based upon the best available information and management estimates and are subject to assumptions and adjustments described in the accompanying notes to these financial statements. They are not necessarily indicative of the Companys actual financial position or results of operations had the Separation occurred as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial statements are provided for illustrative and informational purposes only and are not intended to be indicative of the Companys future results of operations or financial condition. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Companys historical consolidated financial statements and accompanying notes.
FIS has entered into transition services and other agreements with Worldpay associated with the Separation. In addition, certain balance sheet reclassifications between deferred taxes and income taxes payable occurred upon the Separation. The impact of these agreements and reclassifications have not been reflected in the unaudited pro forma condensed consolidated financial statements and could be material. In addition, the unaudited pro forma condensed consolidated financial statements do not reflect any adjustments for synergies or dis-synergies resulting from the transaction or the use of the sale proceeds by FIS.
The Companys 45% equity interest in Worldpay will be recognized initially at fair value and subsequently the Companys portion of earnings, or loss, of Worldpay, will be reported as equity method investment income (loss). The Company has not reflected the equity method investment income (loss) in the unaudited pro forma condensed consolidated statement of earnings as the amount could be materially impacted by the Worldpay purchase price allocation and intangible asset useful life determinations, which have not been completed as of the timing of this filing.
Within the financial statements presented, certain columns and rows may not sum due to rounding.
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2023
(In millions, except per share amounts)
| Historical | Transaction Accounting Adjustments |
Pro Forma | ||||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets: |
||||||||||||||||
| Cash and cash equivalents |
$ | 466 | $ | 12,778 | (b) | $ | 13,244 | |||||||||
| Settlement assets |
605 | | 605 | |||||||||||||
| Trade receivables, net |
1,719 | | 1,719 | |||||||||||||
| Other receivables |
315 | | 315 | |||||||||||||
| Prepaid expenses and other current assets |
546 | | 546 | |||||||||||||
| Current assets held for sale |
8,502 | (8,502 | ) | (a) | | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total current assets |
12,153 | 4,276 | 16,429 | |||||||||||||
| Property and equipment, net |
682 | | 682 | |||||||||||||
| Goodwill |
16,811 | | 16,811 | |||||||||||||
| Intangible assets, net |
1,947 | | 1,947 | |||||||||||||
| Software, net |
2,082 | | 2,082 | |||||||||||||
| Other noncurrent assets |
1,616 | | 1,616 | |||||||||||||
| Deferred contract costs, net |
1,008 | | 1,008 | |||||||||||||
| Equity method investment |
| 4,268 | (c) | 4,268 | ||||||||||||
| Noncurrent assets held for sale |
16,875 | (16,875 | ) | (a) | | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 53,174 | $ | (8,331 | ) | $ | 44,843 | |||||||||
|
|
|
|
|
|
|
|||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||||
| Current liabilities: |
||||||||||||||||
| Accounts payable, accrued and other liabilities |
$ | 1,473 | $ | | $ | 1,473 | ||||||||||
| Settlement payables |
631 | | 631 | |||||||||||||
| Deferred revenue |
739 | | 739 | |||||||||||||
| Short-term borrowings |
4,595 | | 4,595 | |||||||||||||
| Current portion of long-term debt |
1,320 | | 1,320 | |||||||||||||
| Current liabilities held for sale |
7,323 | (7,323 | ) | (a) | | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total current liabilities |
16,081 | (7,323 | ) | 8,758 | ||||||||||||
| Long-term debt, excluding current portion |
12,741 | | (d) | 12,741 | ||||||||||||
| Deferred income taxes |
2,346 | | 2,346 | |||||||||||||
| Other noncurrent liabilities |
1,478 | | 1,478 | |||||||||||||
| Noncurrent liabilities held for sale |
1,044 | (1,044 | ) | (a) | | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
33,690 | (8,367 | ) | 25,323 | ||||||||||||
|
|
|
|
|
|
|
|||||||||||
| Equity: |
||||||||||||||||
| FIS stockholders equity: |
||||||||||||||||
| Common stock |
6 | | 6 | |||||||||||||
| Additional paid in capital |
46,895 | | 46,895 | |||||||||||||
| (Accumulated deficit) retained earnings |
(22,808 | ) | | (22,808 | ) | |||||||||||
| Accumulated other comprehensive earnings (loss) |
(408 | ) | 39 | (a) | (369 | ) | ||||||||||
| Treasury stock, at cost |
(4,208 | ) | | (4,208 | ) | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total FIS stockholders equity |
19,477 | 39 | 19,516 | |||||||||||||
| Noncontrolling interest |
7 | (3 | ) | (a) | 4 | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total equity |
19,484 | 36 | 19,520 | |||||||||||||
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and equity |
$ | 53,174 | $ | (8,331 | ) | $ | 44,843 | |||||||||
|
|
|
|
|
|
|
|||||||||||
Unaudited Pro Forma Condensed Consolidated Statement of Earnings (Loss)
For the Year Ended December 31, 2022
(In millions, except per share amounts)
| Historical | Transaction Accounting Adjustments (a) |
Pro Forma | ||||||||||||||||||
| Revenue |
$ | 14,528 | $ | (4,809 | ) | $ | 9,719 | |||||||||||||
| Cost of revenue |
8,820 | (2,604 | ) | 6,216 | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Gross Profit |
5,708 | (2,205 | ) | 3,503 | ||||||||||||||||
| Selling, general and administrative expenses |
4,118 | (1,936 | ) | 2,182 | ||||||||||||||||
| Asset impairments |
17,709 | (17,606 | ) | 103 | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Operating income (loss) |
(16,119 | ) | 17,337 | 1,218 | ||||||||||||||||
| Other income (expense): |
||||||||||||||||||||
| Interest expense, net |
(275 | ) | (6 | ) | (d | ) | (281 | ) | ||||||||||||
| Other income (expense), net |
63 | (59 | ) | 4 | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total other income (expense), net |
(212 | ) | (65 | ) | (277 | ) | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Earnings (loss) before income taxes |
(16,331 | ) | 17,272 | 941 | ||||||||||||||||
| Provision (benefit) for income taxes |
377 | (52 | ) | 325 | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Net earnings (loss) from continuing operations |
(16,708 | ) | 17,324 | 616 | ||||||||||||||||
| Net (earnings) loss attributable to noncontrolling interest from continuing operations |
(12 | ) | 4 | (8 | ) | |||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Net earnings (loss) attributable to FIS |
$ | (16,720 | ) | $ | 17,328 | $ | 608 | |||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Basic earnings (loss) per common share attributable to FIS |
$ | (27.68 | ) | $ | 1.01 | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Weighted average common shares outstanding - basic |
604 | 604 | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Diluted earnings (loss) per common share attributable to FIS |
$ | (27.68 | ) | $ | 1.00 | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Weighted average common shares outstanding - diluted |
604 | 607 | (e | ) | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
Unaudited Pro Forma Condensed Consolidated Statement of Earnings (Loss)
For the Year Ended December 31, 2021
(In millions, except per share amounts)
| Historical | Transaction Accounting Adjustments (a) |
Pro Forma | ||||||||||
| Revenue |
$ | 13,877 | $ | (4,538 | ) | $ | 9,339 | |||||
| Cost of revenue |
8,682 | (2,692 | ) | 5,990 | ||||||||
|
|
|
|
|
|
|
|||||||
| Gross Profit |
5,195 | (1,846 | ) | 3,349 | ||||||||
| Selling, general and administrative expenses |
3,938 | (1,823 | ) | 2,115 | ||||||||
| Asset impairments |
202 | (8 | ) | 194 | ||||||||
|
|
|
|
|
|
|
|||||||
| Operating income (loss) |
1,055 | (15 | ) | 1,040 | ||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(214 | ) | 2 | (212 | ) | |||||||
| Other income (expense), net |
(52 | ) | (57 | ) | (109 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total other income (expense), net |
(266 | ) | (55 | ) | (321 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Earnings (loss) before income taxes and equity method investment earnings (loss) |
789 | (70 | ) | 719 | ||||||||
| Provision (benefit) for income taxes |
371 | 32 | 403 | |||||||||
| Equity method investment earnings (loss) |
6 | | 6 | |||||||||
|
|
|
|
|
|
|
|||||||
| Net earnings (loss) from continuing operations |
424 | (102 | ) | 322 | ||||||||
| Net (earnings) loss attributable to noncontrolling interest from continuing operations |
(7 | ) | 5 | (2 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Net earnings (loss) attributable to FIS |
$ | 417 | $ | (97 | ) | $ | 320 | |||||
|
|
|
|
|
|
|
|||||||
| Basic earnings per common share attributable to FIS |
$ | 0.68 | $ | 0.52 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - basic |
616 | 616 | ||||||||||
|
|
|
|
|
|||||||||
| Diluted earnings per common share attributable to FIS |
$ | 0.67 | $ | 0.52 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - diluted |
621 | 621 | ||||||||||
|
|
|
|
|
|||||||||
Unaudited Pro Forma Condensed Consolidated Statement of Earnings (Loss)
For the Year Ended December 31, 2020
(In millions, except per share amounts)
| Historical | Transaction Accounting Adjustments (a) |
Pro Forma | ||||||||||
| Revenue |
$ | 12,552 | $ | (3,808 | ) | $ | 8,744 | |||||
| Cost of revenue |
8,348 | (2,667 | ) | 5,681 | ||||||||
|
|
|
|
|
|
|
|||||||
| Gross Profit |
4,204 | (1,141 | ) | 3,063 | ||||||||
| Selling, general and administrative expenses |
3,516 | (1,807 | ) | 1,709 | ||||||||
| Asset impairments |
136 | (19 | ) | 117 | ||||||||
|
|
|
|
|
|
|
|||||||
| Operating income (loss) |
552 | 685 | 1,237 | |||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(334 | ) | 1 | (333 | ) | |||||||
| Other income (expense), net |
48 | (42 | ) | 6 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total other income (expense), net |
(286 | ) | (41 | ) | (327 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Earnings (loss) before income taxes and equity method investment earnings (loss) |
266 | 644 | 910 | |||||||||
| Provision (benefit) for income taxes |
96 | 238 | 334 | |||||||||
| Equity method investment earnings (loss) |
(6 | ) | | (6 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Net earnings (loss) from continuing operations |
164 | 406 | 570 | |||||||||
| Net (earnings) loss attributable to noncontrolling interest from continuing operations |
(6 | ) | 2 | (4 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Net earnings (loss) attributable to FIS |
$ | 158 | $ | 408 | $ | 566 | ||||||
|
|
|
|
|
|
|
|||||||
| Basic earnings per common share attributable to FIS |
$ | 0.26 | $ | 0.91 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - basic |
619 | 619 | ||||||||||
|
|
|
|
|
|||||||||
| Diluted earnings per common share attributable to FIS |
$ | 0.25 | $ | 0.90 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - diluted |
627 | 627 | ||||||||||
|
|
|
|
|
|||||||||
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Transaction Accounting Adjustments:
| (a) | Reflects the removal of the Merchant Solutions business, including the associated assets, liabilities, equity and results of operations for the periods presented consistent with the principles under ASC 205-20, Discontinued Operations. There are certain components of the Merchant Solutions business that are expected to transfer on a delayed basis to Worldpay after the initial closing date of the transaction due to pending regulatory approvals; these unaudited pro forma condensed combined financial statements reflect the deconsolidation of the Merchant Solutions business as a whole. |
| (b) | Represents the cash consideration received at closing from the Separation, net of estimated closing adjustments and transaction cost funding. This amount is preliminary and may change in the future as the closing adjustments are finalized. |
| (c) | Reflects the estimated fair value of the Companys retained 45% non-controlling equity interest in Worldpay. This amount is preliminary and may change in the future as the closing adjustments are finalized. |
| (d) | FIS intends to use proceeds from the transaction to pay down debt and return additional capital to shareholders through existing share repurchase authorization, as well as for general corporate purposes. There is no requirement for FIS to pay down debt as a result of the Separation; therefore, no adjustments have been presented in these unaudited pro forma condensed consolidated financial statements. However, FIS expects that the amount of FIS debt will be significantly reduced in the future. |
| (e) | Given the unaudited pro forma condensed consolidated statement of earnings (loss) for the year ended December 31, 2022 reflects the recast of historical financial information for the removal of the Merchant Solutions business, continuing operations is in an earnings position on a pro forma basis. Diluted earnings per share now includes the dilutive effect of common stock equivalent shares of 3 million. |