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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________
Form 10-Q
_______________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to

Commission File No. 001-16427
_______________________________________________
Fidelity National Information Services, Inc.
(Exact name of registrant as specified in its charter)
Georgia 37-1490331
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
  
347 Riverside Avenue  
JacksonvilleFlorida 32202
(Address of principal executive offices) (Zip Code)
(904438-6000
(Registrant's telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
TradingName of each exchange
Title of each classSymbol(s)on which registered
Common Stock, par value $0.01 per shareFISNew York Stock Exchange
1.100% Senior Notes due 2024FIS24ANew York Stock Exchange
0.625% Senior Notes due 2025FIS25BNew York Stock Exchange
1.500% Senior Notes due 2027FIS27New York Stock Exchange
1.000% Senior Notes due 2028FIS28New York Stock Exchange
2.250% Senior Notes due 2029FIS29New York Stock Exchange
2.000% Senior Notes due 2030FIS30New York Stock Exchange
3.360% Senior Notes due 2031FIS31New York Stock Exchange
2.950% Senior Notes due 2039FIS39New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No


Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES ☐ NO
As of May 3, 2024, 556,251,447 shares of the Registrant's Common Stock were outstanding.




FORM 10-Q
QUARTERLY REPORT
Quarter Ended March 31, 2024



1


FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
(Unaudited)
March 31, 2024December 31, 2023
ASSETS  
Current assets:  
Cash and cash equivalents$3,329 $440 
Settlement assets585 617 
Trade receivables, net of allowance for credit losses of $39 and $31, respectively
1,685 1,730 
Other receivables321 287 
Receivable from related party153  
Prepaid expenses and other current assets623 603 
Current assets held for sale942 10,111 
Total current assets7,638 13,788 
Property and equipment, net668 695 
Goodwill16,974 16,971 
Intangible assets, net1,682 1,823 
Software, net2,133 2,115 
Equity method investment4,131  
Other noncurrent assets1,521 1,528 
Deferred contract costs, net1,105 1,076 
Noncurrent assets held for sale19 17,109 
Total assets$35,871 $55,105 
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable, accrued and other liabilities$2,036 $1,859 
Settlement payables607 635 
Deferred revenue906 832 
Short-term borrowings 4,760 
Current portion of long-term debt587 1,348 
Current liabilities held for sale894 8,884 
Total current liabilities5,030 18,318 
Long-term debt, excluding current portion10,607 12,970 
Deferred income taxes877 2,179 
Other noncurrent liabilities1,332 1,446 
Noncurrent liabilities held for sale 1,093 
Total liabilities17,846 36,006 
Equity:  
FIS stockholders' equity:  
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding as of March 31, 2024, and December 31, 2023
  
Common stock $0.01 par value, 750 shares authorized, 632 and 631 shares issued as of March 31, 2024, and December 31, 2023, respectively
6 6 
Additional paid in capital46,968 46,935 
(Accumulated deficit) retained earnings(22,347)(22,864)
Accumulated other comprehensive earnings (loss)(432)(260)
Treasury stock, $0.01 par value, 69 and 48 common shares as of March 31, 2024, and December 31, 2023, respectively, at cost
(6,174)(4,724)
Total FIS stockholders' equity18,021 19,093 
Noncontrolling interest4 6 
Total equity18,025 19,099 
Total liabilities and equity$35,871 $55,105 
See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.
2


FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings (Loss)
(In millions, except per share amounts)
(Unaudited)
 Three months ended March 31,
 20242023
Revenue$2,467 $2,397 
Cost of revenue1,552 1,569 
Gross profit915 828 
Selling, general, and administrative expenses573 517 
Asset impairments14  
Other operating (income) expense, net - related party(33) 
Operating income (loss)361 311 
Other income (expense):  
Interest expense, net(77)(142)
Other income (expense), net(154)(36)
Total other income (expense), net(231)(178)
Earnings (loss) before income taxes and equity method investment earnings (loss)130 133 
Provision (benefit) for income taxes26 37 
Equity method investment earnings (loss), net of tax(86) 
Net earnings (loss) from continuing operations18 96 
Earnings (loss) from discontinued operations, net of tax707 45 
Net earnings (loss)725 141 
Net (earnings) loss attributable to noncontrolling interest from continuing operations(1) 
Net (earnings) loss attributable to noncontrolling interest from discontinued operations (1)
Net earnings (loss) attributable to FIS common stockholders$724 $140 
Net earnings (loss) attributable to FIS:
Continuing operations$17 $96 
Discontinued operations707 44 
Total$724 $140 
Basic earnings (loss) per common share attributable to FIS:
Continuing operations$0.03 $0.16 
Discontinued operations1.23 0.07 
Total$1.26 $0.24 
Diluted earnings (loss) per common share attributable to FIS:
Continuing operations$0.03 $0.16 
Discontinued operations1.22 0.07 
Total$1.25 $0.24 
Weighted average common shares outstanding:
Basic576 592 
Diluted578 593 
Amounts in table may not sum or calculate due to rounding.
See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.

3


FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Earnings (Loss)
(In millions)
(Unaudited)

 Three months ended March 31,
 20242023
Net earnings (loss)$725 $141 
Other comprehensive earnings (loss), before tax:
Foreign currency translation adjustments$(136)$257 
Change in fair value of net investment hedges160 (296)
Excluded components of fair value hedges(5) 
Reclassification of foreign currency translation adjustments to net earnings (loss) from discontinued operations(148) 
Share of equity method investment other comprehensive earnings (loss)3  
Other adjustments(6) 
Other comprehensive earnings (loss), before tax(132)(39)
Provision for income tax (expense) benefit related to items of other comprehensive earnings (loss)(40)35 
Other comprehensive earnings (loss), net of tax(172)(4)
Comprehensive earnings (loss)553 137 
Net (earnings) loss attributable to noncontrolling interest(1)(1)
Comprehensive earnings (loss) attributable to FIS common stockholders$552 $136 
See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.






4

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Equity
Three months ended March 31, 2024 and 2023
(In millions, except per share amounts)
(Unaudited)
   Amount
   FIS Stockholders  
      Accumulated   
 Number of shares Additional other   
 CommonTreasuryCommonpaid inRetainedcomprehensiveTreasuryNoncontrollingTotal
 sharessharesstockcapitalearningsearnings (loss)stockinterest (1)equity
Balances, December 31, 2023631 (48)$6 $46,935 $(22,864)$(260)$(4,724)$6 $19,099 
Issuance of restricted stock1 — — — — — — — — 
Exercise of stock options— — — 1 — — — — 1 
Purchases of treasury stock— (21)— — — — (1,432)— (1,432)
Treasury shares held for taxes due upon exercise of stock awards— — — — — — (18)— (18)
Stock-based compensation— — — 32 — — — — 32 
Sale of Worldpay noncontrolling interest— — — — — — — (2)(2)
Cash dividends declared ($0.36 per share per quarter) and other distributions
— — — — (207)— — (1)(208)
Net earnings (loss)— — — — 724 — — 1 725 
Other comprehensive earnings (loss), net of tax— — — — — (172)— — (172)
Balances, March 31, 2024632 (69)$6 $46,968 $(22,347)$(432)$(6,174)$4 $18,025 

   Amount
   FIS Stockholders  
      Accumulated   
 Number of shares Additional other   
 CommonTreasuryCommonpaid inRetainedcomprehensiveTreasuryNoncontrollingTotal
 sharessharesstockcapitalearningsearnings (loss)stockinterest (1)equity
Balances, December 31, 2022630 (39)$6 $46,735 $(14,971)$(360)$(4,192)$8 $27,226 
Issuance of restricted stock1 — — — — — — — — 
Exercise of stock options— — — 40 — — — — 40 
Treasury shares held for taxes due upon exercise of stock awards— — — — — — (14)— (14)
Stock-based compensation— — — 20 — — — — 20 
Cash dividends declared ($0.52 per share per quarter) and other distributions
— — — — (310)— — (2)(312)
Other— — — 7 — — — — 7 
Net earnings (loss)— — — — 140 — — 1 141 
Other comprehensive earnings (loss), net of tax— — — — — (4)— — (4)
Balances, March 31, 2023631 (39)$6 $46,802 $(15,141)$(364)$(4,206)$7 $27,104 

(1)Excludes redeemable noncontrolling interest that is not considered equity.

See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.
5

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows - (Unaudited)
(In millions)

 Three months ended March 31,
 20242023
Cash flows from operating activities: 
Net earnings (loss)$725 $141 
Less earnings (loss) from discontinued operations, net of tax707 45 
Net earnings (loss) from continuing operations18 96 
Adjustment to reconcile net earnings (loss) from continuing operations to net cash provided by operating activities:  
Depreciation and amortization428 447 
Amortization of debt issuance costs6 8 
Asset impairments14  
Loss on extinguishment of debt174  
Loss (gain) on sale of businesses, investments and other14  
Stock-based compensation31 13 
Loss from equity method investment86  
Deferred income taxes(64)(10)
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:  
Trade and other receivables133 125 
Receivable from related party(153) 
Settlement activity12 4 
Prepaid expenses and other assets(116)(163)
Deferred contract costs(115)(102)
Deferred revenue45 58 
Accounts payable, accrued liabilities and other liabilities(307)(185)
Net cash provided by operating activities from continuing operations206 291 
Cash flows from investing activities:  
Additions to property and equipment(27)(39)
Additions to software(175)(154)
Settlement of net investment hedge cross-currency interest rate swaps5 (10)
Net proceeds from sale of businesses and investments12,795  
Cash divested from sale of business(3,137) 
Acquisitions, net of cash acquired(56) 
Other investing activities, net(24)(4)
Net cash provided by (used in) investing activities9,381 (207)
Cash flows from financing activities from continuing operations:  
Borrowings13,441 20,233 
Repayment of borrowings and other financing obligations(21,379)(20,538)
Debt issuance costs (2)
Net proceeds from stock issued under stock-based compensation plans 47 
Treasury stock activity(1,342)(14)
Dividends paid(209)(309)
Purchase of noncontrolling interest (173)
Other financing activities, net43 (1)
Net cash provided by (used in) financing activities from continuing operations(9,446)(757)
Discontinued operations
Net cash provided by (used in) operating activities(241)341 
Net cash provided by (used in) investing activities(39)(86)
Net cash provided by (used in) financing activities(65)(139)
Net cash provided by (used in) discontinued operations(345)116 
Effect of foreign currency exchange rate changes on cash from continuing operations(17)9 
Effect of foreign currency exchange rate changes on cash from discontinued operations(25)77 
Net increase (decrease) in cash, cash equivalents and restricted cash(246)(471)
Cash, cash equivalents and restricted cash, beginning of period4,414 4,813 
Cash, cash equivalents and restricted cash, end of period$4,168 $4,342 
Supplemental cash flow information:  
Cash paid for interest$182 $176 
Cash paid for income taxes$101 $57 
See accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.
6

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Unless stated otherwise or the context otherwise requires, all references to "FIS," "we," "our," "us," the "Company" or the "registrant" are to Fidelity National Information Services, Inc., a Georgia corporation, and its subsidiaries.

(1)     Basis of Presentation

The unaudited financial information included in this report includes the accounts of FIS and its subsidiaries prepared in accordance with U.S. generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The preparation of these consolidated financial statements in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP") and the related rules and regulations of the U.S. Securities and Exchange Commission ("SEC" or "Commission") requires our management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported periods. The inputs into management's critical and significant accounting estimates consider the economic impact of inflation and economic growth rates. These estimates may change as new events occur and additional information is obtained. Future actual results could differ materially from these estimates. To the extent that there are differences between these estimates, judgments and assumptions and actual results, our consolidated financial statements will be affected.

On January 31, 2024, the Company completed the previously announced sale ("the Worldpay Sale") of a 55% equity interest in its Worldpay Merchant Solutions business to private equity funds managed by GTCR, LLC (such funds, the "Buyer"). FIS retains a non-controlling 45% ownership interest in a new standalone joint venture, Worldpay Holdco, LLC ("Worldpay"), following the closing of the Worldpay Sale. FIS' share of the net income (loss) of Worldpay is reported as equity method investment earnings (loss), net of tax. The net cash proceeds received by FIS, net of estimated closing adjustments and transaction costs, are presented as investing cash flows within continuing operations on the consolidated statement of cash flows. See Note 4 for information regarding the the equity method investment earnings (loss), net of tax, for the the period from February 1 through March 31, 2024.

During the third quarter of fiscal year 2023, the Company analyzed quantitative and qualitative factors relevant to the Worldpay Merchant Solutions disposal group in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 205-20 and determined that the accounting criteria to be classified as held for sale were met, when a definitive purchase agreement was signed. Accordingly, the assets and liabilities of the disposal group are presented separately on the consolidated balance sheets for all periods presented. In addition, the disposition represents a strategic shift that will have a major impact on the Company's operations and financial results. As a result, the operating results of the Worldpay Merchant Solutions business prior to the closing of the Worldpay Sale have been reflected as discontinued operations for all periods presented and as such, have been excluded from continuing operations and segment results.

The Worldpay Merchant Solutions business included the former Merchant Solutions segment in addition to a business previously included in the Corporate and Other segment, which have been reflected as discontinued operations for all periods presented. Accordingly, the Company no longer reports the Merchant Solutions segment; it now reports its financial performance based on the following segments: Banking Solutions ("Banking"), Capital Market Solutions ("Capital Markets") and Corporate and Other. As a result of its ongoing portfolio assessments, the Company reclassified certain non-strategic operations from Banking to Corporate and Other during the quarter ended December 31, 2023. The Company recast all prior-period segment information presented to reflect these reclassifications. See Note 13 for more information regarding our segments.

Certain reclassifications have been made in the 2023 consolidated financial statements to conform to the classifications used in 2024. The consolidated statements of cash flows for the three months ended March 31, 2024, are presented on a continuing operations basis, with summarized cash flows from discontinued operations for operating, investing and financing activities shown separately. The consolidated statement of cash flows for the three months ended March 31, 2023, has been reclassified to conform to the 2024 presentation.

Amounts in tables in the financial statements and accompanying footnotes may not sum or calculate due to rounding.

7

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(2)    Summary of Significant Accounting Policies

The Company adopted the following new significant accounting policy during the first quarter of 2024. See our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for a complete summary of our significant accounting policies.

Equity Method Investment

The Company reports its investments in unconsolidated entities over whose operating and financial policies the Company has the ability to exercise significant influence, but not control, under the equity method of accounting. Equity method investments are initially recorded at cost and are included in Equity method investment on the consolidated balance sheet. Under this method of accounting, the Company's pro rata share of the investee's earnings or losses is reported in Equity method investment earnings (loss), net of tax, in the consolidated statement of earnings (loss). The Company also reports its investor-level tax impact relating to equity method investments as a component of Equity method investment earnings (loss) in the consolidated statement of earnings (loss). The Company monitors its investments for other-than-temporary impairment by considering factors such as current economic and market conditions and the operating performance of the investees and records reductions in carrying values when necessary. Equity method investees are considered related parties of the Company.

(3)    Discontinued Operations

Sale of Worldpay Merchant Solutions Business

As discussed in Note 1, the Company completed the Worldpay Sale on January 31, 2024. The results of the Worldpay Merchant Solutions business prior to the completion of the Worldpay Sale have been presented as discontinued operations. The assets and liabilities of our Worldpay Brazil and RealNet subsidiaries, the value of which was included as part of the Worldpay Sale, were not conveyed in the closing and are expected to be transferred as soon as all regulatory approvals have been received. These assets and liabilities continue to be reported as assets held for sale, and their related earnings (loss) are deemed immaterial.

The following table represents a reconciliation of the major components of Earnings (loss) from discontinued operations, net of tax, presented in the consolidated statements of earnings (loss), reflecting activity through January 31, 2024 (the date the Worldpay Sale closed) (in millions). The Company's presentation of earnings (loss) from discontinued operations excludes general corporate overhead costs that were historically allocated to the Worldpay Merchant Solutions business. Additionally, beginning on July 5, 2023, the Company stopped amortization of long-lived assets held for sale in accordance with ASC 360.

 One monthThree months
endedended
January 31, 2024March 31, 2023
Major components of earnings (loss) from discontinued operations before income taxes:
Revenue$403 $1,113 
Cost of revenue(63)(600)
Selling, general, and administrative expenses(155)(487)
Interest income (expense), net1 5 
Other, net(4)24 
Earnings (loss) from discontinued operations related to major components of pretax earnings (loss)182 55 
Loss on sale of disposal group(466) 
Earnings (loss) from discontinued operations(284)55 
Provision (benefit) for income taxes(991)11 
Earnings (loss) from discontinued operations, net of tax attributable to FIS$707 $44 

Loss on sale of disposal group of $466 million reflects the impact of the excess of the carrying value of the disposal group over the estimated fair value less cost to sell. The Company recorded a tax benefit of $991 million primarily from the write-off
8

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

of U.S. deferred tax liabilities that were not transferred in the Worldpay Sale, net of the estimated current U.S. tax cost that the Company expects to incur as a result of the Worldpay Sale and which was recorded based on available data and management determinations as of March 31, 2024. Post-closing selling price adjustments and completion of other purchase agreement provisions in connection with the Worldpay Sale could result in further adjustments to the loss on sale amount and the estimated tax impact.

The following table represents the major classes of assets and liabilities of the disposal group classified as held for sale presented in the consolidated balance sheets as of March 31, 2024, and December 31, 2023 (in millions). Assets held for sale are reported at the lower of their carrying value or fair value less cost to sell and are not depreciated or amortized.
March 31, 2024December 31, 2023
Major classes of assets included in discontinued operations: 
Cash and cash equivalents$47 $1,380 
Settlement assets891 6,727 
Trade receivables, net of allowance for credit losses of $ and $52
3 1,843 
Prepaid expenses and other current assets1 161 
Total current assets942 10,111 
Property and equipment, net 207 
Goodwill17 10,906 
Intangible assets, net 5,971 
Software, net 1,321 
Other noncurrent assets2 613 
Total noncurrent assets19 19,018 
Less valuation allowance (1,909)
Total assets of the disposal group classified as held for sale$961 $27,220 
 
Major classes of liabilities included in discontinued operations: 
Accounts payable, accrued and other liabilities$3 $998 
Settlement payables (1)891 7,821 
Other current liabilities 65 
Total current liabilities894 8,884 
Deferred income taxes 599 
Other noncurrent liabilities 494 
Total noncurrent liabilities 1,093 
Total liabilities of the disposal group classified as held for sale$894 $9,977 

(1)As of March 31, 2024, Settlement payables includes $101 million due to Payrix, a subsidiary of Worldpay, which is a related party.


9

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Settlement Assets

The principal components of the Company's settlement assets of the disposal group are as follows (in millions):

March 31, 2024December 31, 2023
Settlement assets
Settlement deposits$ $56 
Merchant float792 2,594 
Settlement receivables99 4,077 
Total Settlement assets$891 $6,727 

Held-for-sale Disposal Group Measurement

The net assets held for sale as of March 31, 2024, consisting of the net assets of our Worldpay Brazil and RealNet subsidiaries, are recorded at carrying value less cost to sell.

(4)    Equity Method Investment

As discussed in Note 1, the Company completed the Worldpay Sale on January 31, 2024, retaining a non-controlling ownership interest in Worldpay. We account for our remaining minority ownership in Worldpay using the equity method of accounting. As of March 31, 2024, we own 45% of Worldpay. This investment is reflected in Equity method investment on our March 31, 2024, consolidated balance sheet. During the two-month period from February 1 through March 31, 2024, our share of the net income of Worldpay and our investor-level tax impact is reported as Equity method investment earnings (loss), net of tax, in the consolidated statement of earnings (loss).

Summary Worldpay financial information is as follows (in millions):

Two months ended March 31, 2024
Revenue$832 
Gross profit$385 
Earnings (loss) before income taxes$(230)
Net earnings (loss) attributable to Worldpay$(243)
FIS share of net earnings (loss) attributable to Worldpay, net of tax (1)$(86)

(1)This amount is net of $23 million of investor-level tax benefit.

Continuing Involvement with Discontinued Operations and Related-Party Transactions

In connection with the closing of the Worldpay Sale, the Company entered into a limited liability company operating agreement (the "LLCA") with respect to Worldpay, and a registration rights agreement with respect to the Company's retained equity interest in Worldpay. The LLCA provides that FIS has the right to appoint a minority of the board of managers of Worldpay and that FIS has customary consent and consultation rights with respect to certain material actions of Worldpay, in each case, subject to ownership stepdown thresholds. The LLCA contains, among other things, covenants and restrictions relating to other governance, liquidity and tax matters, including non-solicitation and noncompetition covenants, distribution mechanics, preemptive rights and follow-on equity funding commitments of the Buyer, and restrictions on transfer and associated tag-along and drag-along rights. Each of FIS and the Buyer will have the right to require Worldpay to consummate an initial public offering ("IPO") or sale transaction after the fourth anniversary of the closing, subject to certain return hurdles and (in the case of an IPO) public float requirements, which requirements will fall away following the sixth anniversary of the closing.

10

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

We have continuing involvement with Worldpay, primarily through our remaining interest, an employee leasing agreement ("ELA"), a transition services agreement ("TSA"), and various other commercial agreements. Under the terms of the ELA, the Company is leasing certain employees to Worldpay in the United States, China, Colombia and South Korea for up to five months after the closing. The compensation and benefit costs paid by the Company for the leased employees are billed to and reimbursed by Worldpay. Under the terms of the TSA, the Company is procuring certain third-party services on behalf of Worldpay and providing technology infrastructure, risk and security, accounting and various other corporate services to Worldpay for a period of up to 24 months after the closing, subject to a six-month extension, and Worldpay is providing various corporate services to the Company, allowing it to maintain access to certain resources transferred in the Worldpay Sale.

Pass-through costs under the ELA and third-party pass-through costs under the TSA of $115 million and $57 million, respectively, were incurred during the two-month period from February 1 through March 31, 2024, and netted against the equal and offsetting reimbursement amounts due from Worldpay. Additionally, during the two-month period from February 1 through March 31, 2024, net TSA services income of $33 million was recognized in Other operating (income) expense, net - related party, and the corresponding expense was recognized in Selling, general and administrative expense in the consolidated statement of earnings (loss). Income earned during the two-month period from February 1 through March 31, 2024, from various commercial services provided to Worldpay is not considered material to the Company's consolidated financial statements.

For the two-month period from February 1 through March 31, 2024, we collected net cash of $136 million related to the ELA, TSA and commercial agreements with Worldpay. As of March 31, 2024, we recorded a receivable of $153 million in Receivable from related party on the consolidated balance sheet in connection with the ELA, TSA and commercial agreements. Under the ELA, amounts are generally invoiced to Worldpay on the 15th of each month for the preceding and subsequent payroll periods and are payable by wire transfer within 10 days. $48 million included in our related-party receivable as of March 31, 2024, are offset by an equal amount of accrued employee-related liabilities recorded in Accounts payable, accrued and other liabilities on the consolidated balance sheet. Upon termination of the ELA, the amount of the accrued employee-related liabilities as of the date of termination will be assumed by Worldpay in satisfaction of the corresponding receivable. Under the TSA and commercial agreements, amounts are generally invoiced monthly in arrears and are payable by electronic transfer within 30 days of invoice. As of March 31, 2024, we recorded a settlement payable of $101 million in Current assets held for sale on the consolidated balance sheet for amounts to be settled from our RealNet subsidiary to Payrix, a subsidiary of Worldpay. The settlement payable by RealNet to Payrix is generally paid to Payrix's submerchants on behalf of Payrix via ACH within five business days according to payment instructions provided by Payrix. As of March 31, 2024, we also recorded other payables to Worldpay of $43 million in Accounts payable, accrued and other liabilities on the consolidated balance sheet. These amounts are generally payable within 30 days.

(5)       Virtus Acquisition

On January 2, 2020, FIS acquired a majority interest in Virtus Partners ("Virtus"), previously a privately held company that provides high-value managed services and technology to the credit and loan market. The acquisition was accounted for as a business combination. FIS acquired a 70% voting and financial interest in Virtus with 30% interest retained by the founders of Virtus (the "Founders"). The agreement between FIS and the Founders provided FIS with a call option to purchase, and the Founders with a put option requiring FIS to purchase, all of the Founders' retained interest in Virtus at a redemption value determined pursuant to performance goals stated in the agreement, exercisable at any time after two years and three years, respectively, following the acquisition date. In January 2023, the Founders exercised their put option, and as a result, FIS paid the $173 million redemption value, recorded as a financing activity in the consolidated statement of cash flows, and subsequently owns 100% of Virtus.

(6)       Revenue

As a result of our ongoing portfolio assessments, the Company reclassified certain non-strategic operations from Banking to Corporate and Other during the quarter ended December 31, 2023. The Company recast all prior-period segment information presented to reflect these reclassifications.

Disaggregation of Revenue

In the following tables, revenue is disaggregated by primary geographical market and type of revenue. The tables also include a reconciliation of the disaggregated revenue with the Company's reportable segments.
11

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


For the three months ended March 31, 2024 (in millions):
Capital
BankingMarketCorporate
SolutionsSolutionsand OtherTotal
Primary Geographical Markets:
North America$1,431 $445 $41 $1,917 
All others253 261 36 550 
Total$1,684 $706 $77 $2,467 
Type of Revenue:
Recurring revenue:
Transaction processing and services$1,264 $371 $47 $1,682 
Software maintenance91 143  234 
Other recurring64 22 10 96 
Total recurring1,419 536 57 2,012 
Software license50 74  124 
Professional services132 96 1 229 
Other non-recurring fees83  19 102 
Total$1,684 $706 $77 $2,467 

For the three months ended March 31, 2023 (in millions):
Capital
BankingMarketCorporate
SolutionsSolutionsand OtherTotal
Primary Geographical Markets:
North America$1,420 $425 $47 $1,892 
All others226 238 41 505 
Total$1,646 $663 $88 $2,397 
Type of Revenue:
Recurring revenue:
Transaction processing and services$1,225 $342 $67 $1,634 
Software maintenance90 129  219 
Other recurring54 19 10 83 
Total recurring1,369 490 77 1,936 
Software license12 73  85 
Professional services154 100 2 256 
Other non-recurring fees (1)111  9 120 
Total$1,646 $663 $88 $2,397 

(1)    December 31, 2023, was the final deadline for states to complete all benefit issuance under federally funded pandemic relief programs. Accordingly, revenue associated with services the Company provided related to these programs has been classified as Other non-recurring commencing in the
12

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

fourth quarter of 2023, and related prior-period amounts have been reclassified from Transaction processing and services to Other non-recurring for comparability. Revenue associated with services the Company provided related to these programs was $38 million for the three months ended March 31, 2023.

Contract Balances

The Company recognized revenue of $325 million and $314 million during the three months ended March 31, 2024 and 2023, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2024, approximately $22.5 billion of revenue is estimated to be recognized in the future primarily from the Banking Solutions and Capital Market Solutions segments' remaining unfulfilled performance obligations, which are primarily comprised of recurring account- and volume-based processing services. This excludes the amount of anticipated recurring renewals not yet contractually obligated. The Company expects to recognize approximately 31% of the Banking Solutions and Capital Market Solutions segments' remaining performance obligations over the next 12 months, approximately another 23% over the next 13 to 24 months, and the balance thereafter.

(7)       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):

March 31,
2024
December 31,
2023
Cash and cash equivalents on the consolidated balance sheets$3,329 $440 
Merchant float from discontinued operations included in current assets held for sale792 2,594 
Cash from discontinued operations included in current assets held for sale47 1,380 
Total Cash, cash equivalents and restricted cash per the consolidated statements of cash flows$4,168 $4,414 

Settlement Assets

The principal components of the Company's settlement assets on the consolidated balance sheets are as follows (in millions):
March 31,
2024
December 31,
2023
Settlement assets
Settlement deposits$349 $463 
Settlement receivables236 154 
Total Settlement assets$585 $617 

13

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Intangible Assets, Software and Property and Equipment

The following table provides details of Intangible assets, Software and Property and equipment as of March 31, 2024, and December 31, 2023 (in millions):
 March 31, 2024December 31, 2023
 CostAccumulated
depreciation and amortization
NetCostAccumulated
depreciation and amortization
Net
Intangible assets$6,477 $4,795 $1,682 $6,468 $4,645 $1,823 
Software$4,135 $2,002 $2,133 $4,162 $2,047 $2,115 
Property and equipment$2,095 $1,427 $668 $2,074 $1,379 $695 

As of March 31, 2024, Intangible assets, net of amortization, includes $1.6 billion of customer relationships and $82 million of trademarks and other intangible assets. Amortization expense with respect to Intangible assets was $160 million and $171 million for the three months ended March 31, 2024 and 2023, respectively.

Depreciation expense for property and equipment was $44 million and $42 million for the three months ended March 31, 2024 and 2023, respectively.

Amortization expense with respect to software was $142 million and $152 million for the three months ended March 31, 2024 and 2023, respectively

For the three months ended March 31, 2024 and 2023, Software includes $11 million and $0, respectively, of impairment primarily related to the termination of certain internally developed software projects.

Goodwill

Changes in goodwill during the three months ended March 31, 2024, are summarized below (in millions).

CapitalCorporate
BankingMarketAnd
 SolutionsSolutionsOtherTotal
Balance, December 31, 2023$12,588 $4,363 $20 $16,971 
Goodwill attributable to acquisitions5 25  30 
Foreign currency adjustments(11)(16) (27)
Balance, March 31, 2024$12,582 $4,372 $20 $16,974 

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 March 31, 2024, 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. 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 March 31, 2024, 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.


14

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 $199 million and $195 million at March 31, 2024, and December 31, 2023, 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 $(1) million and $(2) million for the three months ended March 31, 2024 and 2023, respectively, related to these investments.

Accounts Payable, Accrued and Other Liabilities

Accounts payable, accrued and other liabilities as of March 31, 2024 and December 31, 2023, consisted of the following (in millions):

 March 31, 2024December 31, 2023
Trade accounts payable$130 $110 
Accrued salaries and incentives311 472 
Accrued benefits and payroll taxes134 106 
Income taxes payables309 17 
Taxes payable, other than income taxes280 301 
Accrued interest payable101 162 
Operating lease liabilities84 85 
Related-party payables43  
Other accrued liabilities644 606 
Total Accounts payable, accrued and other liabilities$2,036 $1,859 

(8)       Deferred Contract Costs

Origination and fulfillment costs from contracts with customers capitalized as of March 31, 2024, and December 31, 2023, consisted of the following (in millions):
March 31, 2024December 31, 2023
Contract costs on implementations in progress$246 $291 
Contract origination costs on completed implementations, net611 542 
Contract fulfillment costs on completed implementations, net248 243 
Total Deferred contract costs, net$1,105 $1,076 

Amortization of deferred contract costs on completed implementations was $83 million and $83 million during the three months ended March 31, 2024 and 2023, respectively.


15

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(9)       Debt

Long-term debt as of March 31, 2024, and December 31, 2023, consisted of the following (in millions):

March 31, 2024
Weighted
Average
InterestInterestMarch 31,December 31,
RatesRate (1)Maturities20242023
Fixed Rate Notes
Senior USD Notes
1.2% - 5.6%
3.7%2025 - 2052$6,381 $8,659 
Senior Euro Notes
0.6% - 3.0%
2.6%2024 - 20394,858 4,968 
Senior GBP Notes
2.3% - 3.4%
9.9%2029 - 2031215 1,178 
Revolving Credit Facility (2)%2026 127 
Financing obligations for certain hardware and software2024 - 202691 96 
Other (3)(351)(710)
Total long-term debt, including current portion11,194 14,318 
Current portion of long-term debt(587)(1,348)
Long-term debt, excluding current portion$10,607 $12,970 
    
(1)The weighted average interest rate includes the impact of the fair value basis adjustments due to interest rate swaps and the impact of cross-currency interest rate swaps designated as fair value hedges and excludes the impact of cross-currency interest rate swaps designated as net investment hedges (see Note 10). The impact of the included fair value basis adjustments and cross-currency interest rate swaps in certain cases results in an effective weighted average interest rate being outside the stated interest rate range on the fixed rate notes.
(2)Interest on the Revolving Credit Facility is generally payable at Secured Overnight Financing Rate ("SOFR") plus a margin of up to 0.428% dependent on tenor, plus an applicable margin of up to 1.625% and an unused commitment fee of up to 0.225%, each based upon the Company's corporate credit ratings. The weighted average interest rate on the Revolving Credit Facility excludes fees.
(3)Other includes the amount of fair value basis adjustments due to interest rate swaps (see further discussion below in Note 10), unamortized debt issuance costs and unamortized non-cash bond discounts.

Short-term borrowings as of March 31, 2024, and December 31, 2023, consisted of the following (in millions):

March 31, 2024
Weighted
Average
InterestMarch 31,December 31,
RateMaturities20242023
Euro-commercial paper notes ("ECP Notes") %
Up to 183 days
$ $2,118 
U.S. commercial paper notes ("USCP Notes") %
Up to 397 days
 2,642 
Total Short-term borrowings$ $4,760 

The Company is a party to interest rate swaps that, prior to de-designation as fair value hedges during the quarter ended September 30, 2023, converted a portion of its fixed-rate debt to variable-rate debt. As a result of the de-designations, the final fair value basis adjustments recorded through the dates of de-designation as a decrease of the long-term debt are subsequently amortized as interest expense using the effective interest method over the remaining periods to maturity of the respective long-term debt. The fair value basis adjustments reflected in Other in the long-term debt table above totaled $(259) million and $(594) million as of March 31, 2024, and December 31, 2023, respectively.

The Company is also party to fixed-for-fixed cross-currency interest rate swaps under which it agrees to receive interest in foreign currency in exchange for paying interest in U.S. dollars. These are designated as fair value hedges.

The Company has also entered into cross-currency interest rate swaps under which it agrees to receive interest in U.S. dollars in exchange for paying interest in a foreign currency. These are designated as net investment hedges. Although these cross-currency interest rate swaps are entered into as net investment hedges of its investments in certain of its non-U.S.
16

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

subsidiaries, and not for the purpose of hedging interest rates, the benefit or cost of such hedges is reflected in interest expense in the consolidated statement of earnings (loss). As of March 31, 2024, the weighted average interest rate of the Company's outstanding debt was 3.8%, including the impact of fair value basis adjustments due to interest rate swaps and cross-currency interest rate swaps designated as fair value hedges but excluding the impact of cross-currency interest rate swaps designated as net investment hedges. Including the impact of the net investment hedge cross-currency interest rate swaps on interest expense, the weighted average interest rate of the Company's outstanding debt was 2.9%.

See Note 10 for further discussion of the Company's interest rate swaps and cross-currency interest rate swaps and related hedge designations.

The following table summarizes the amount of our long-term debt, including financing obligations for certain hardware and software, as of March 31, 2024, based on maturity date.
Total
2024$590 
2025986 
20261,267 
20271,580 
20281,654 
Thereafter5,468 
Total principal payments11,545 
Other debt per the long-term debt table(351)
Total long-term debt, including current portion$11,194 

There are no mandatory principal payments on the Revolving Credit Facility, and any balance outstanding on the Revolving Credit Facility will be due and payable at the Revolving Credit Facility's maturity date, which occurs on March 2, 2026.

Senior Notes

In March 2024, pursuant to cash tender offers, FIS purchased and redeemed an aggregate principal amount of $1.5 billion in Senior USD Notes and an aggregate principal amount of £1.0 billion in Senior GBP Notes, with interest rates ranging from 2.25% to 5.625% and maturities ranging from 2025 to 2052, resulting in a loss on extinguishment of debt of approximately $174 million, recorded in Other income (expense), net on the consolidated statement of earnings (loss), relating to tender discounts and fees; the write-off of unamortized bond discounts, debt issuance costs and fair value basis adjustments; and gains on related derivative instruments. The Company funded the purchase and redemption of the Senior Notes using a portion of the net proceeds from the Worldpay Sale.

On March 1, 2024, FIS repaid an aggregate principal amount of $750 million in Senior USD Notes, on their due date, pursuant to the related indenture.

On May 21, 2023, FIS repaid an aggregate principal amount of €1.3 billion in Senior Euro Notes, on their due date, pursuant to the related indenture.

On March 1, 2023, FIS repaid an aggregate principal amount of $750 million in Senior USD Notes, on their due date, pursuant to the related indenture.

Commercial Paper

During the quarter ended March 31, 2024, the Company repaid its ECP Notes and USCP Notes using a portion of the net proceeds from the Worldpay Sale. The Company continues to maintain its ECP and USCP programs.


17

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Revolving Credit Facility

In March 2024, the Company provided notice to the administrative agent of its Revolving Credit Facility of its desire to reduce the borrowing capacity on its Revolving Credit Facility from $5.5 billion to $4.5 billion, pursuant to the terms thereof. As of March 31, 2024, the borrowing capacity under the Revolving Credit Facility was $4.5 billion.

Fair Value of Debt

The fair value of the Company's long-term debt is estimated to be approximately $994 million and $1,086 million lower than the carrying value, excluding the fair value basis adjustments due to interest rate swaps and unamortized discounts, as of March 31, 2024, and December 31, 2023, respectively.

(10)       Financial Instruments

Fair Value Hedges

The Company held fixed-to variable interest rate swaps with aggregate notional amounts of $1,854 million, £925 million and €500 million at each of March 31, 2024, and December 31, 2023. Prior to the quarter ended September 30, 2023, these swaps were designated as fair value hedges for accounting purposes, converting the interest rate exposure on certain of the Company's Senior USD Notes, Senior GBP Notes and Senior Euro Notes, as applicable, from fixed to variable. While designated as fair value hedges, changes in fair value of these interest rate swaps were recorded as an adjustment to long-term debt. During the quarter ended September 30, 2023, the Company de-designated these swaps as fair value hedges. As a result of the de-designations, the final fair value basis adjustments recorded through the dates of de-designation as a decrease of the long-term debt are subsequently amortized as interest expense using the effective interest method over the remaining periods to maturity of the respective long-term debt. During March 2024, $316 million of unamortized fair value basis adjustments recorded as decrease of the long-term debt tendered was written-off and recorded as part of the loss on extinguishment of debt (see Note 9). At March 31, 2024, the remaining unamortized fair value basis adjustments recorded as a decrease of the long-term debt totaled $259 million, with $19 million amortized as Interest expense for the three months ending March 31, 2024 (see Note 9). At December 31, 2023, the unamortized fair value basis adjustments recorded as a decrease of the long-term debt totaled $594 million.

Concurrently with the de-designations described above, the Company entered into new offsetting variable-to-fixed interest rate swaps with aggregate notional amounts of $1,854 million, £925 million and €500 million. The Company accounts for the de-designated fixed-to-variable and offsetting variable-to-fixed interest rate swaps as economic hedges; as such, effective as of the de-designation dates, changes in interest rates associated with the variable leg of the interest rate swaps do not affect the interest expense recognized, eliminating variable-rate risk on the fixed-to-variable interest rate swaps. The terms of the new interest rate swaps when matched against the terms of the existing fixed-to-variable interest rate swaps result in a net fixed coupon spread payable by the Company. The impact of the go-forward changes in fair values of the new and existing interest rate swaps, including the impact of the coupons, is recorded as Other income (expense), net pursuant to accounting for economic hedges and totaled $4 million for the three months ended March 31, 2024. The coupon payments are recorded within Other investing activities, net on the consolidated statements of cash flows and totaled $22 million cash outflows for the three months ended March 31, 2024. The new and existing interest rate swap fair values totaled assets of $13 million and $12 million and liabilities of $(649) million and $(675) million as of March 31, 2024 and December 31, 2023, respectively.

During the quarter ended September 30, 2023, the Company entered into an aggregate notional amount of €3,375 million fixed-for-fixed cross-currency interest rate swaps to hedge its exposure to foreign currency risk associated with its Senior Euro Notes. During the quarter ended June 30, 2023, the Company entered into an aggregate notional amount of £925 million fixed-for-fixed cross-currency interest rate swaps to hedge its exposure to foreign currency risk associated with its Senior GBP Notes. These swaps are designated as fair value hedges for accounting purposes. During March 2024, the Company partially terminated certain fixed-for-fixed cross-currency interest rate swaps that were hedging foreign currency risk associated with its Senior GBP Notes that were partially tendered (see Note 9). After such partial termination, there remained an aggregate notional amount of approximately £170 million in fixed-for-fixed cross-currency interest rate swaps that hedge the Company's exposure to foreign currency risk associated with its Senior GBP Notes. The fair value of these swaps was a net asset of $28 million and $134 million recorded at March 31, 2024 and December 31, 2023, respectively. Changes in the swap fair values attributable to changes in spot foreign currency exchange rates are recorded in Other income (expense), net and totaled $(87) million for the three months ended March 31, 2024. This amount offset the impact of changes in spot foreign currency exchange rates on the Senior GBP Notes and Senior Euro Notes also recorded to Other income (expense), net during the hedge
18

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

period. Changes in swap fair values attributable to excluded components, such as changes in fair value due to forward foreign currency exchange rates and cross-currency basis spreads, are recorded in Accumulated other comprehensive earnings (loss) ("AOCI") and totaled $68 million for the three months ended March 31, 2024. The amounts recorded in AOCI generally affect net earnings (loss) through Interest expense using the amortization approach. For the three months ended March 31, 2024, $12 million was recognized as Interest expense using the amortization approach. As a result of the partial terminations during March 2024, the Company received $33 million in net proceeds recorded within Other financing activities, net on the consolidated statement of cash flows and recorded a $19 million reduction to the loss on extinguishment of debt due to reclassifying the amount of AOCI related to the partially terminated hedges into earnings (see Note 9).

Net Investment Hedges

The purpose of the Company's net investment hedges, as discussed below, is to reduce the volatility of FIS' net investment value in its Euro- and Pound Sterling-denominated operations due to changes in foreign currency exchange rates. Changes in fair value due to remeasurement of the effective portion are recorded as a component of AOCI for net investment hedges. The amounts included in AOCI for the net investment hedges will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying foreign operations. Any ineffective portion of these hedging instruments impacts net earnings when the ineffectiveness occurs. The Company assesses effectiveness of cross-currency interest rate swap hedging instruments using the spot method. Under this method, the periodic interest settlements are recorded directly in earnings through Interest expense (see Note 9).

The Company recorded net investment hedge aggregate gain (loss) for the change in fair value and related income tax (expense) benefit within Other comprehensive earnings (loss), net of tax, on the consolidated statements of comprehensive earnings (loss) for its designated net investment hedges as follows (in millions). No ineffectiveness has been recorded on the net investment hedges.
Three months ended March 31,
20242023
Foreign currency-denominated debt designations$27 $(117)
Cross-currency interest rate swap designations53 (104)
Total$80 $(221)

Foreign Currency-Denominated Debt Designations

The Company has designated certain foreign currency-denominated debt as net investment hedges of its investment in Euro-denominated operations. An aggregate of €1,115 million of Senior Euro Notes with maturities ranging from 2024 to 2025 was designated as a net investment hedge of the Company's investment in Euro-denominated operations as of both March 31, 2024, and December 31, 2023. An aggregate of €419 million of ECP Notes was also designated as a net investment hedge of the Company's investment in Euro-denominated operations as of December 31, 2023.

The Company held €1,500 million aggregate notional amount of foreign currency forward contracts as of December 31, 2023, to economically hedge its exposure to foreign currency risk associated with ECP Notes that were previously de-designated as net investment hedges. The foreign currency forward contract fair values totaled a net asset of $41 million at December 31, 2023. Upon maturity of the forward contracts on January 31, 2024, the Company received $13 million in net proceeds recorded within Other financing activities, net on the consolidated statement of cash flows. The change in fair value of the foreign currency forward contracts is recorded as Other income (expense), net pursuant to accounting for economic hedges and offsets the impact of the change in spot foreign currency exchange rates on the de-designated ECP Notes, which is also recorded as Other income (expense), net.

19

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Cross-Currency Interest Rate Swap Designations

The Company holds cross-currency interest rate swaps designated as net investment hedges of its investment in Euro- and Pound Sterling-denominated operations. As a result of the Worldpay Sale, the Company terminated its outstanding cross-currency interest rate swaps designated as net investment hedges of its investment in Pound Sterling-denominated operations on January 31, 2024.

As of March 31, 2024, and December 31, 2023, aggregate notional amounts of €6,143 million and €6,143 million, respectively, were designated as net investment hedges of the Company's investment in Euro-denominated operations and aggregate notional amounts of £0 and £2,180 million, respectively, were designated as net investment hedges of the Company's Pound Sterling-denominated operations.

The cross-currency interest rate swap fair values totaled assets of $38 million and $38 million and liabilities of $(116) million and $(240) million at March 31, 2024, and December 31, 2023, respectively.

During the three months ended March 31, 2024 and 2023, the Company (paid) received net proceeds of approximately $5 million and $(10) million, respectively, for the fair values of the cross-currency interest rate swaps as of the settlement dates. The proceeds were recorded within investing activities on the consolidated statements of cash flows.

(11)    Commitments and Contingencies

Securities and Shareholder Matters

On March 6, 2023, a putative class action was filed in the United States District Court for the Middle District of Florida by a shareholder of the Company. The action was consolidated with another action and the consolidated case is now captioned In re Fidelity National Information Services, Inc. Securities Litigation. A lead plaintiff has been appointed, and a consolidated amended complaint was filed on August 2, 2023. The consolidated amended complaint names the Company and certain of its current and former officers as defendants and seeks damages for alleged violations of federal securities laws in connection with our disclosures relating to our former Merchant Solutions segment, including with respect to its valuation, integration, and synergies. Defendants filed a motion to dismiss the consolidated amended complaint with prejudice on September 22, 2023. We intend to vigorously defend this case, but no assurance can be given as to the ultimate outcome.

On April 27, 2023, a shareholder derivative action captioned Portia McCollum, derivatively on behalf of Fidelity National Information Services, Inc. v. Gary Norcross et al., was filed in the same court by a stockholder of the Company. Plaintiff dismissed the suit without prejudice and sent a demand pursuant to Georgia Code § 14-2-742 (the "McCollum Demand"). Another stockholder, City of Hialeah Employees' Retirement System, sent a similar demand (the "Hialeah Demand"), and a third stockholder, City of Southfield Fire and Police Retirement System, also subsequently sent a similar demand (the "Southfield Demand"). The demands claim that FIS officers and directors violated federal securities laws and breached fiduciary duties, including with respect to the valuation, integration, and synergies of our former Merchant Solutions segment, and they demand that the Board investigate and commence legal proceedings against officers and directors in connection with the purported wrongdoing. On August 25, 2023, the Board established a Demand Review Committee to consider the McCollum and Hialeah Demands and any related demands that are received (such as the Southfield Demand), and make recommendations to the Board with respect to the demands. The Demand Review Committee has hired independent counsel. The Board has made no final decision with respect to the demands and has not rejected the demands.

On October 18, 2023, a shareholder derivative action captioned City of Hialeah Employees' Retirement System v. Stephanie L. Ferris et al. was filed in the same court by one of the stockholders that previously had sent a demand. The complaint, which names certain of the Company's current and former officers and directors as defendants (the "Individual Defendants"), seeks to assert claims on behalf of the Company for violations of federal securities laws, breach of fiduciary duty, unjust enrichment, and contribution and indemnification, including with respect to the valuation, integration, and synergies of our former Merchant Solutions segment. On March 29, 2024, the Company and the Individual Defendants filed a motion to stay or dismiss the action without prejudice pending the completion of the Board's consideration of the demands, and the Individual Defendants concurrently filed a separate motion to dismiss.


20

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Brazilian Tax Authorities Claims

In 2004, Proservvi Empreendimentos e Servicos, Ltda., the predecessor to Fidelity National Servicos de Tratamento de Documentos e Informatica Ltda. ("Servicos"), a subsidiary of Fidelity National Participacoes Ltda., our former item processing and remittance services operation in Brazil, acquired certain assets and employees and leased certain facilities from the Transpev Group ("Transpev") in Brazil. Transpev's remaining assets were later acquired by Prosegur, an unrelated third party. When Transpev discontinued its operations after the asset sale to Prosegur, it had unpaid federal taxes and social contributions owing to the Brazilian tax authorities. The Brazilian tax authorities brought a claim against Transpev and, beginning in 2012, brought claims against Prosegur and Servicos on the grounds that Prosegur and Servicos were successors in interest to Transpev. To date, the Brazilian tax authorities have filed 18 claims against Servicos, of which 16 are still active, asserting potential tax liabilities of approximately $13 million. There are potentially 20 additional claims against Transpev/Prosegur for which Servicos is named as a co-defendant or may be named but for which Servicos has not yet been served. These additional claims amount to approximately $32 million, making the total potential exposure for all 36 claims approximately $45 million. We do not believe a liability for these 36 total claims is probable and, therefore, have not recorded a liability for any of these claims.

Indemnifications and Warranties

The Company generally indemnifies its clients, subject to certain limitations and exceptions, against damages and costs resulting from claims of patent, copyright, or trademark infringement associated solely with its customers' use of the Company's solutions. Historically, the Company has not made any material payments under such indemnifications but continues to monitor the conditions that are subject to the indemnifications to identify whether it is probable that a loss has occurred, in which case it would recognize any such losses when they are estimable. In addition, the Company warrants to customers that its software operates substantially in accordance with the software specifications. Historically, no material costs have been incurred related to software warranties, and no accruals for warranty costs have been made.

(12)     Net Earnings (Loss) per Share

The basic weighted average shares and common stock equivalents for the three months ended March 31, 2024 and 2023, were computed using the treasury stock method.

The following table summarizes net earnings and net earnings per share attributable to FIS common stockholders for the three months ended March 31, 2024 and 2023 (in millions, except per share amounts):
 Three months ended March 31,
 20242023
Net earnings (loss) from continuing operations attributable to FIS common stockholders$17 $96 
Net earnings (loss) from discontinued operations attributable to FIS common stockholders707 44 
Net earnings (loss) attributable to FIS common stockholders$724 $140 
Weighted average shares outstanding-basic576 592 
Plus: Common stock equivalent shares2 1 
Weighted average shares outstanding-diluted578 593 
Net earnings (loss) per share-basic from continuing operations attributable to FIS common stockholders$0.03 $0.16 
Net earnings (loss) per share-basic from discontinued operations attributable to FIS common stockholders1.23 0.07 
Net earnings (loss) per share-basic attributable to FIS common stockholders$1.26 $0.24 
Net earnings (loss) per share-diluted from continuing operations attributable to FIS common stockholders$0.03 $0.16 
Net earnings (loss) per share-diluted from discontinued operations attributable to FIS common stockholders1.22 0.07 
Net earnings (loss) per share-diluted attributable to FIS common stockholders$1.25 $0.24 

21

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

During the three months ended March 31, 2024 and 2023, options to purchase approximately 8 million and 9 million shares, respectively, of our common stock were not included in the computation of diluted earnings per share because they were anti-dilutive.

In January 2021, our Board of Directors approved a share repurchase program under which it authorized the Company to repurchase up to 100 million shares of our common stock at management's discretion from time to time on the open market or in privately negotiated transactions and through Rule 10b5-1 plans. The repurchase program has no expiration date and may be suspended for periods, amended or discontinued at any time. Approximately 34 million shares remained available for repurchase as of March 31, 2024.

(13)     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.


22

FIDELITY NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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,
20242023
Acquisition and integration$24 $6 
Enterprise transformation, including Future Forward and platform modernization73 71 
Severance and other termination expenses18 23 
Separation of the Worldpay Merchant Solutions business30  
Incremental stock compensation directly attributable to specific programs11  
Other, including divestiture-related expenses and enterprise cost control and other initiatives2  
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 acquis