Cover and table of contents

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 September 30, 2023

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
Jacksonville			Florida						32202
(Address of principal executive offices)									(Zip Code)

(904) 438-6000

(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:
						Trading						Name of each exchange
Title of each class						Symbol(s)						on which registered
Common Stock, par value $0.01 per share						FIS						New York Stock Exchange
1.100% Senior Notes due 2024						FIS24A						New York Stock Exchange
0.625% Senior Notes due 2025						FIS25B						New York Stock Exchange
1.500% Senior Notes due 2027						FIS27						New York Stock Exchange
1.000% Senior Notes due 2028						FIS28						New York Stock Exchange
2.250% Senior Notes due 2029						FIS29						New York Stock Exchange
2.000% Senior Notes due 2030						FIS30						New York Stock Exchange
3.360% Senior Notes due 2031						FIS31						New York Stock Exchange
2.950% Senior Notes due 2039						FIS39						New 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 November 3, 2023, 592,483,601 shares of the Registrant's Common Stock were outstanding.

FORM 10-Q

QUARTERLY REPORT

Quarter Ended September 30, 2023

INDEX

			Page
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets			2
Condensed Consolidated Statements of Earnings (Loss)			3
Condensed Consolidated Statements of Comprehensive Earnings (Loss)			4
Condensed Consolidated Statements of Equity			5
Condensed Consolidated Statements of Cash Flows			7
Notes to Condensed Consolidated Financial Statements			8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3. Quantitative and Qualitative Disclosure About Market Risks			40
Item 4. Controls and Procedures			41
Part II: OTHER INFORMATION
Item 1A. Risk Factors			42
Item 5. Other Information			43
Item 6. Exhibits			43
Signatures			45

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)

			September 30, 2023						December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents			$	466					$	456
Settlement assets			605						592
Trade receivables, net of allowance for credit losses of $35 and $31, respectively			1,719						1,834
Other receivables			315						437
Prepaid expenses and other current assets			546						509
Current assets held for sale			8,502						8,990
Total current assets			12,153						12,818
Property and equipment, net			682						709
Goodwill			16,811						16,816
Intangible assets, net			1,947						2,468
Software, net			2,082						2,055
Other noncurrent assets			1,616						1,705
Deferred contract costs, net			1,008						973
Noncurrent assets held for sale			16,875						25,734
Total assets			$	53,174					$	63,278
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable, accrued and other liabilities			$	1,473					$	1,583
Settlement payables			631						613
Deferred revenue			739						777
Short-term borrowings			4,595						3,755
Current portion of long-term debt			1,320						2,130
Current liabilities held for sale			7,323						7,366
Total current liabilities			16,081						16,224
Long-term debt, excluding current portion			12,741						14,206
Deferred income taxes			2,346						2,689
Other noncurrent liabilities			1,478						1,382
Noncurrent liabilities held for sale			1,044						1,371
Total liabilities			33,690						35,872
Redeemable noncontrolling interest			—						180
Equity:
FIS stockholders' equity:
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding as of September 30, 2023, and December 31, 2022			—						—
Common stock $0.01 par value, 750 shares authorized, 631 and 630 shares issued as of September 30, 2023, and December 31, 2022, respectively			6						6
Additional paid in capital			46,895						46,735
(Accumulated deficit) retained earnings			(22,808)						(14,971)
Accumulated other comprehensive earnings (loss)			(408)						(360)
Treasury stock, $0.01 par value, 39 and 39 common shares as of September 30, 2023, and December 31, 2022, respectively, at cost			(4,208)						(4,192)
Total FIS stockholders' equity			19,477						27,218
Noncontrolling interest			7						8
Total equity			19,484						27,226
Total liabilities, redeemable noncontrolling interest and equity			$	53,174					$	63,278

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

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings (Loss)

(In millions, except per share amounts)

(Unaudited)

			Three months ended September 30,												Nine months ended September 30,
			2023						2022						2023						2022
Revenue			$	2,489					$	2,415					$	7,311					$	7,194
Cost of revenue			1,523						1,534						4,610						4,646
Gross profit			966						881						2,701						2,548
Selling, general, and administrative expenses			484						480						1,557						1,623
Asset impairments			7						17						8						86
Operating income (loss)			475						384						1,136						839
Other income (expense):
Interest expense, net			(162)						(78)						(464)						(169)
Other income (expense), net			22						18						(91)						53
Total other income (expense), net			(140)						(60)						(555)						(116)
Earnings (loss) before income taxes			335						324						581						723
Provision (benefit) for income taxes			74						102						139						218
Net earnings (loss) from continuing operations			261						222						442						505
Earnings (loss) from discontinued operations, net of tax			(708)						32						(7,342)						150
Net earnings (loss)			(447)						254						(6,900)						655
Net (earnings) loss attributable to noncontrolling interest from continuing operations			(1)						(4)						(2)						(6)
Net (earnings) loss attributable to noncontrolling interest from discontinued operations			(1)						(1)						(3)						(3)
Net earnings (loss) attributable to FIS			$	(449)					$	249					$	(6,905)					$	646
Net earnings (loss) attributable to FIS:
Continuing operations			$	260					$	218					$	440					$	499
Discontinued operations			(709)						31						(7,345)						147
Total			$	(449)					$	249					$	(6,905)					$	646
Basic earnings (loss) per common share attributable to FIS:
Continuing operations			$	0.44					$	0.36					$	0.74					$	0.82
Discontinued operations			(1.20)						0.05						(12.41)						0.24
Total			$	(0.76)					$	0.41					$	(11.66)					$	1.06
Diluted earnings (loss) per common share attributable to FIS:
Continuing operations			$	0.44					$	0.36					$	0.74					$	0.82
Discontinued operations			(1.20)						0.05						(12.41)						0.24
Total			$	(0.76)					$	0.41					$	(11.66)					$	1.06
Weighted average common shares outstanding:
Basic			592						605						592						608
Diluted			592						607						592						611

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.

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Earnings (Loss)

(In millions)

(Unaudited)

			Three months ended September 30,												Nine months ended September 30,
			2023						2022						2023						2022
Net earnings (loss)			$	(447)					$	254					$	(6,900)					$	655
Other comprehensive earnings (loss), before tax:
Foreign currency translation adjustments			$	(337)					$	(1,410)					$	102					$	(3,311)
Change in fair value of net investment hedges			208						1,324						(213)						2,852
Excluded components of fair value hedges			84						—						61						—
Other adjustments			2						6						3						11
Other comprehensive earnings (loss), before tax			(43)						(80)						(47)						(448)
Provision for income tax (expense) benefit related to items of other comprehensive earnings (loss)			(34)						(112)						(1)						(196)
Other comprehensive earnings (loss), net of tax			(77)						(192)						(48)						(644)
Comprehensive earnings (loss)			(524)						62						(6,948)						11
Net (earnings) loss attributable to noncontrolling interest			(2)						(5)						(5)						(9)
Comprehensive earnings (loss) attributable to FIS common stockholders			$	(526)					$	57					$	(6,953)					$	2

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

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

Three and nine months ended September 30, 2023

(In millions, except per share amounts)

(Unaudited)

															Amount
															FIS Stockholders
																																	Accumulated
			Number of shares																		Additional												other
			Common						Treasury						Common						paid in						Retained						comprehensive						Treasury						Noncontrolling						Total
			shares						shares						stock						capital						earnings						earnings (loss)						stock						interest (1)						equity
Balances, June 30, 2023			631						(39)						$	6					$	46,846					$	(22,048)					$	(331)					$	(4,207)					$	7					$	20,273
Treasury shares held for taxes due upon exercise of stock awards			—						—						—						—						—						—						(1)						—						(1)
Stock-based compensation			—						—						—						49						—						—						—						—						49
Cash dividends declared ($0.52 per share per quarter) and other distributions			—						—						—						—						(311)						—						—						(2)						(313)
Net earnings (loss)			—						—						—						—						(449)						—						—						2						(447)
Other comprehensive earnings (loss), net of tax			—						—						—						—						—						(77)						—						—						(77)
Balances, September 30, 2023			631						(39)						$	6					$	46,895					$	(22,808)					$	(408)					$	(4,208)					$	7					$	19,484

															Amount
															FIS Stockholders
																																	Accumulated
			Number of shares																		Additional												other
			Common						Treasury						Common						paid in						Retained						comprehensive						Treasury						Noncontrolling						Total
			shares						shares						stock						capital						earnings						earnings (loss)						stock						interest (1)						equity
Balances, December 31, 2022			630						(39)						$	6					$	46,735					$	(14,971)					$	(360)					$	(4,192)					$	8					$	27,226
Issuance of restricted stock			1						—						—						—						—						—						—						—						—
Exercise of stock options			—						—						—						40						—						—						—						—						40
Treasury shares held for taxes due upon exercise of stock awards			—						—						—						—						—						—						(16)						—						(16)
Stock-based compensation			—						—						—						113						—						—						—						—						113
Cash dividends declared ($0.52 per share per quarter) and other distributions			—						—						—						—						(932)						—						—						(6)						(938)
Other			—						—						—						7						—						—						—						—						7
Net earnings (loss)			—						—						—						—						(6,905)						—						—						5						(6,900)
Other comprehensive earnings (loss), net of tax			—						—						—						—						—						(48)						—						—						(48)
Balances, September 30, 2023			631						(39)						$	6					$	46,895					$	(22,808)					$	(408)					$	(4,208)					$	7					$	19,484

**(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.

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

Three and nine months ended September 30, 2022

(In millions, except per share amounts)

(Unaudited)

															Amount
															FIS Stockholders
																																	Accumulated
			Number of shares																		Additional												other
			Common						Treasury						Common						paid in						Retained						comprehensive						Treasury						Noncontrolling						Total
			shares						shares						stock						capital						earnings						earnings (loss)						stock						interest (1)						equity
Balances, June 30, 2022			628						(20)						$	6					$	46,634					$	2,709					$	(200)					$	(2,643)					$	9					$	46,515
Issuance of restricted stock			1						—						—						—						—						—						—						—						—
Exercise of stock options			—						—						—						39						—						—						—						—						39
Purchases of treasury stock			—						(11)						—						—						—						—						(1,021)						—						(1,021)
Treasury shares held for taxes due upon exercise of stock awards			—						—						—						—						—						—						(21)						—						(21)
Stock-based compensation			—						—						—						53						—						—						—						—						53
Cash dividends declared ($0.47 per share per quarter) and other distributions			—						—						—						—						(285)						—						—						(2)						(287)
Net earnings (loss)			—						—						—						—						249						—						—						2						251
Other comprehensive earnings (loss), net of tax			—						—						—						—						—						(192)						—						—						(192)
Balances, September 30, 2022			629						(31)						$	6					$	46,726					$	2,673					$	(392)					$	(3,685)					$	9					$	45,337

															Amount
															FIS Stockholders
																																	Accumulated
			Number of shares																		Additional												other
			Common						Treasury						Common						paid in						Retained						comprehensive						Treasury						Noncontrolling						Total
			shares						shares						stock						capital						earnings						earnings (loss)						stock						interest (1)						equity
Balances, December 31, 2021			625						(16)						$	6					$	46,466					$	2,889					$	252					$	(2,266)					$	11					$	47,358
Issuance of restricted stock			4						—						—						5						—						—						—						—						5
Exercise of stock options			—						—						—						57						—						—						—						—						57
Purchases of treasury stock			—						(14)						—						—						—						—						(1,321)						—						(1,321)
Treasury shares held for taxes due upon exercise of stock awards			—						(1)						—						—						—						—						(98)						—						(98)
Stock-based compensation			—						—						—						198						—						—						—						—						198
Cash dividends declared ($0.47 per share per quarter) and other distributions			—						—						—						—						(862)						—						—						(7)						(869)
Net earnings (loss)			—						—						—						—						646						—						—						5						651
Other comprehensive earnings (loss), net of tax			—						—						—						—						—						(644)						—						—						(644)
Balances, September 30, 2022			629						(31)						$	6					$	46,726					$	2,673					$	(392)					$	(3,685)					$	9					$	45,337

**(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.

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

			Nine months ended September 30,
			2023						2022
Cash flows from operating activities:
Net earnings (loss)			$	(6,900)					$	655
Adjustment to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			2,245						2,920
Amortization of debt issuance costs			22						23
Asset impairments			6,850						104
Loss on assets held for sale			1,549						—
Loss (gain) on sale of businesses, investments and other			31						(13)
Stock-based compensation			116						198
Deferred income taxes			(624)						(519)
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
Trade and other receivables			226						161
Settlement activity			(252)						(38)
Prepaid expenses and other assets			(73)						(250)
Deferred contract costs			(320)						(314)
Deferred revenue			(38)						(59)
Accounts payable, accrued liabilities and other liabilities			(22)						(70)
Net cash provided by operating activities			2,810						2,798
Cash flows from investing activities:
Additions to property and equipment			(108)						(216)
Additions to software			(736)						(867)
Settlement of net investment hedge cross-currency interest rate swaps			(20)						684
Net proceeds from sale of businesses and investments			45						12
Net proceeds from sale of Visa preferred stock			—						269
Other investing activities, net			(37)						(50)
Net cash provided by (used in) investing activities			(856)						(168)
Cash flows from financing activities:
Borrowings			64,461						50,006
Repayment of borrowings and other financing obligations			(65,868)						(49,349)
Debt issuance costs			(2)						(23)
Net proceeds from stock issued under stock-based compensation plans			41						53
Treasury stock activity			(16)						(1,390)
Dividends paid			(926)						(858)
Payments on contingent value rights			—						(186)
Payments on tax receivable agreement			(162)						(138)
Purchase of noncontrolling interest			(173)						—
Other financing activities, net			(13)						(5)
Net cash provided by (used in) financing activities			(2,658)						(1,890)
Effect of foreign currency exchange rate changes on cash			(28)						(782)
Net increase (decrease) in cash, cash equivalents and restricted cash			(732)						(42)
Cash, cash equivalents and restricted cash, beginning of period			4,813						4,283
Cash, cash equivalents and restricted cash, end of period			$	4,081					$	4,241
Supplemental cash flow information:
Cash paid for interest			$	583					$	311
Cash paid for income taxes			$	330					$	664

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

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, 2022.

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 July 5, 2023, FIS signed a definitive agreement to sell a 55% equity interest in its Worldpay Merchant Solutions business to private equity funds managed by GTCR, LLC ("GTCR"). FIS will retain a non-controlling 45% ownership interest in a new standalone joint venture. The transaction is expected to close in the first quarter of 2024, subject to regulatory approvals and other customary closing conditions. Following the closing of this transaction, FIS' ownership interest in Worldpay Merchant Solutions business is expected to be reported as equity method investment earnings.

In accordance with ASC 205-20, the Company analyzed quantitative and qualitative factors relevant to the Worldpay Merchant Solutions disposal group and determined that the accounting criteria to be classified as held for sale were met during the third quarter of fiscal year 2023 when the definitive 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 planned 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 have been reflected as discontinued operations for all periods presented and as such, have been excluded from continuing operations and segment results. The Company's cash flows are presented inclusive of discontinued operations on the consolidated statement of cash flows for all periods presented. Total cash flows from operating, investing and financing activities for discontinued operations are presented in Note 2.

The Worldpay Merchant Solutions business includes the former Merchant Solutions segment in addition to an insignificant non-strategic business previously included in the Corporate and Other segment, which have been recast 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, Capital Market Solutions and Corporate and Other. The Company regularly assesses its portfolio of assets and reclassified certain businesses from Capital Market Solutions to Banking Solutions and to the Corporate and Other segment in the quarter ended March 31, 2023, and recast all prior-period segment information presented. See Note 11 for more information regarding our segments and the related reclassification.

Certain reclassifications have been made in the 2022 consolidated financial statements to conform to the classifications used in 2023. On the consolidated statements of comprehensive earnings, we reclassified the Change in fair value of net investment hedges from Foreign currency translation adjustments into its own classification. On the consolidated statements of cash flows, we reclassified Settlement of net investment hedges cross-currency interest rate swaps from Other investing activities to its own classification and Payments on tax receivable agreement from Other financing activities into its own classification.

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

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

**(2)**Discontinued Operations

Pending Sale of Worldpay Merchant Solutions Business

The following table represents a reconciliation of the major components of discontinued operations, net of tax, presented in the consolidated statements of earnings (loss) (in millions). The Company's presentation of discontinued operations excludes general corporate overhead costs which were historically allocated to the Worldpay Merchant Solutions business.

			Three months ended September 30,												Nine months ended September 30,
			2023						2022						2023						2022
Major components of discontinued operations before income taxes:
Revenue			$	1,201					$	1,189					$	3,636					$	3,620
Cost of revenue			(193)						(613)						(1,462)						(1,978)
Selling, general, and administrative expenses			(520)						(498)						(1,486)						(1,470)
Asset impairments			(4)						—						(6,843)						(18)
Interest income (expense), net			4						2						15						3
Other, net			(30)						(60)						17						(5)
Earnings (loss) from discontinued operations related to major classes of pretax earning (loss)			458						20						(6,123)						152
Loss on assets held for sale			(1,549)						—						(1,549)						—
Earnings (loss) from discontinued operations			(1,091)						20						(7,672)						152
Provision (benefit) for income taxes			(382)						(11)						(327)						5
Earnings (loss) from discontinued operations, net of tax			$	(709)					$	31					$	(7,345)					$	147

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 September 30, 2023, and December 31, 2022 (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.

			September 30, 2023						December 31, 2022
Major classes of assets included in discontinued operations:
Cash and cash equivalents			$	1,356					$	1,732
Settlement assets			5,243						5,264
Trade receivables, net of allowance for credit losses of $60 and $44, respectively			1,753						1,864
Prepaid expenses and other current assets			150						130
Total current assets			8,502						8,990
Property and equipment, net			143						153
Goodwill			10,711						17,460
Intangible assets, net			5,854						6,488
Software, net			1,226						1,183
Other noncurrent assets			490						450
Total noncurrent assets			18,424						25,734
Less valuation allowance			(1,549)						—
Total assets of the disposal group classified as held for sale			$	25,377					$	34,724
Major classes of liabilities included in discontinued operations:
Accounts payable, accrued and other liabilities			$	1,068					$	1,171
Settlement payables			6,210						6,140
Other current liabilities			45						55
Total current liabilities			7,323						7,366
Deferred income taxes			586						861
Other noncurrent liabilities			458						510
Total noncurrent liabilities			1,044						1,371
Total liabilities of the disposal group classified as held for sale			$	8,367					$	8,737

The following table presents cash flows from operating and investing activities for discontinued operations (in millions).

						Nine months ended September 30,
						2023						2022
Cash provided by (used in) operating activities - discontinued operations						$	1,509					$	1,639
Cash provided by (used in) investing activities - discontinued operations (1)						$	(260)					$	(24)
Cash provided by (used in) financing activities - discontinued operations						$	(188)					$	(435)

**(1)**Our capital expenditures from discontinued operations for the nine month periods ended September 30, 2023 and 2022, were $260 million and $292 million, respectively. The nine month period ended September 30, 2022, includes $269 million net proceeds from the sale of Visa preferred stock.

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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):

			September 30, 2023						December 31, 2022
Settlement assets
Settlement deposits			$	86					$	55
Merchant float			2,259						2,625
Settlement receivables			2,898						2,584
Total Settlement assets			$	5,243					$	5,264

Held-for-sale Disposal Group Measurement

In accordance with ASC 360, a held-for-sale disposal group is measured at the lower of its carrying value or fair value less cost to sell. Measuring the disposal group is a two-step process requiring the carrying amount of the disposal group's assets outside the scope of ASC 360, such as goodwill, which is tested for impairment under ASC 350, to be first adjusted by applying other relevant guidance before adjusting the carrying value of the overall disposal group.

The Company evaluated the goodwill of the disposal group for impairment as of September 30, 2023, by performing a quantitative assessment that estimated the fair value of the disposal group using a market approach based on the price at which the Company agreed to sell a majority interest in the Worldpay Merchant Solutions business. As of September 30, 2023, the estimated fair value of the disposal group approximated its carrying value, inclusive of related deferred tax liabilities assigned to the reporting unit for purposes of the goodwill impairment assessment in accordance with ASC 350 but not classified as liabilities held for sale in accordance with ASC 360 because these deferred tax liabilities will not be transferred in the transaction. Based on the assessment, no goodwill impairment was recorded.

The carrying value of the overall disposal group was then assessed by comparing its value, inclusive of cumulative translation adjustment losses and exclusive of deferred tax liabilities not classified as part of the disposal group's assets held for sale, to the estimated fair value less estimated cost to sell. Based on this assessment, the carrying value of the disposal group was reduced by $1.5 billion, primarily as a result of the exclusion of certain deferred tax liabilities that will not be transferred in the transaction. The reduction was recorded as a valuation allowance against the Company's assets held for sale, and the allowance will continue to be updated as the disposal group continues to be remeasured at each subsequent reporting date until the sale has closed.

Asset Impairments

During the second quarter of 2023, the Company recorded a $6.8 billion goodwill impairment because the estimated fair value of the Worldpay Merchant Solutions reporting unit, now reported as assets held for sale, was less than its carrying value. To estimate the fair value of such reporting unit, we used a market approach based on the price, inclusive of estimated selling price adjustments and fair value of contingent consideration, at which the Company had subsequently agreed to sell a majority interest in the Worldpay Merchant Solutions business to GTCR, as discussed in Note 1.

Commitments and Contingencies of the Disposal Group

Chargeback Liability

Through services offered in the Worldpay Merchant Solutions disposal group, the Company is exposed to potential losses from merchant-related chargebacks. A chargeback occurs when a dispute between a cardholder and a merchant, including a claim for non-delivery of the product or service by the merchant, is not resolved in favor of the merchant and the transaction is charged back to the merchant resulting in a refund of the purchase price to the cardholder. If the Company is unable to collect this chargeback amount from the merchant due to closure, bankruptcy or other reasons, the Company bears the loss for the

FIDELITY NATIONAL INFORMATION SERVICES, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

refund paid to the cardholder. The risk of chargebacks is typically greater for those merchants that promise future delivery of goods and services rather than delivering goods or rendering services at the time of payment.

(3) Acquisitions

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 ("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 now owns 100% of Virtus.

(4) Revenue

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.

For the three months ended September 30, 2023 (in millions):

												Capital
						Banking						Market						Corporate
						Solutions						Solutions						and Other						Total
Primary Geographical Markets:
North America						$	1,509					$	413					$	34					$	1,956
All others						247						264						22						533
Total						$	1,756					$	677					$	56					$	2,489
Type of Revenue:
Recurring revenue:
Transaction processing and services						$	1,334					$	349					$	31					$	1,714
Software maintenance						92						135						—						227
Other recurring						67						21						11						99
Total recurring						1,493						505						42						2,040
Software license						47						76						8						131
Professional services						126						96						2						224
Other non-recurring fees						90						—						4						94
Total						$	1,756					$	677					$	56					$	2,489

FIDELITY NATIONAL INFORMATION SERVICES, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the three months ended September 30, 2022 (in millions):

												Capital
						Banking						Market						Corporate
						Solutions						Solutions						and Other						Total
Primary Geographical Markets:
North America						$	1,437					$	389					$	59					$	1,885
All others						266						244						20						530
Total						$	1,703					$	633					$	79					$	2,415
Type of Revenue:
Recurring revenue:
Transaction processing and services						$	1,251					$	324					$	62					$	1,637
Software maintenance						89						123						—						212
Other recurring						55						15						9						79
Total recurring						1,395						462						71						1,928
Software license						69						66						—						135
Professional services						153						104						2						259
Other non-recurring fees						86						1						6						93
Total						$	1,703					$	633					$	79					$	2,415

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AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the nine months ended September 30, 2023 (in millions):

												Capital
						Banking						Market						Corporate
						Solutions						Solutions						and Other						Total
Primary Geographical Markets:
North America						$	4,405					$	1,262					$	92					$	5,759
All others						739						749						64						1,552
Total						$	5,144					$	2,011					$	156					$	7,311
Type of Revenue:
Recurring revenue:
Transaction processing and services						$	3,911					$	1,035					$	95					$	5,041
Software maintenance						273						394						1						668
Other recurring						183						60						31						274
Total recurring						4,367						1,489						127						5,983
Software license						78						228						8						314
Professional services						436						293						7						736
Other non-recurring fees						263						1						14						278
Total						$	5,144					$	2,011					$	156					$	7,311

For the nine months ended September 30, 2022 (in millions):

												Capital
						Banking						Market						Corporate
						Solutions						Solutions						and Other						Total
Primary Geographical Markets:
North America						$	4,293					$	1,138					$	177					$	5,608
All others						746						754						86						1,586
Total						$	5,039					$	1,892					$	263					$	7,194
Type of Revenue:
Recurring revenue:
Transaction processing and services						$	3,759					$	945					$	205					$	4,909
Software maintenance						272						372						2						646
Other recurring						158						43						29						230
Total recurring						4,189						1,360						236						5,785
Software license						122						212						—						334
Professional services						451						316						6						773
Other non-recurring fees						277						4						21						302
Total						$	5,039					$	1,892					$	263					$	7,194

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AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Contract Balances

The Company recognized revenue of $114 million and $119 million during the three months and $612 million and $611 million during the nine months ended September 30, 2023 and 2022, 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 September 30, 2023, 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 30% of the Banking Solutions and Capital Market Solutions segments' remaining performance obligations over the next 12 months, approximately another 22% over the next 13 to 24 months, and the balance thereafter.

(5) Condensed Consolidated Financial Statement Details

Cash and Cash Equivalents

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

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

Settlement Assets

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

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

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 September 30, 2023, and December 31, 2022 (in millions):

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

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

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

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

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

Goodwill

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

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

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

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

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AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

Equity Security Investments

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

(6) Deferred Contract Costs

Origination and fulfillment costs from contracts with customers capitalized as of September 30, 2023, and December 31, 2022, consisted of the following (in millions):

			September 30, 2023						December 31, 2022
Contract costs on implementations in progress			$	230					$	240
Contract origination costs on completed implementations, net			547						516
Contract fulfillment costs on completed implementations, net			231						217
Total Deferred contract costs, net			$	1,008					$	973

Amortization of deferred contract costs on completed implementations was $77 million and $72 million during the three months and $236 million and $244 million during the nine months ended September 30, 2023 and 2022, respectively.

The Company recorded $1 million and $7 million during the three months and $5 million and $31 million during the nine months ended September 30, 2023 and 2022, respectively, of incremental amortization expense related to deferred contract costs resulting from the Company's platform modernization.

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(7) Debt

Long-term debt as of September 30, 2023, and December 31, 2022, consisted of the following (in millions):

						September 30, 2023
												Weighted
												Average
						Interest						Interest												September 30,						December 31,
						Rates						Rate (1)						Maturities						2023						2022
Fixed Rate Notes
Senior USD Notes						0.6% - 5.6%						3.6%						2024 - 2052						$	8,659					$	9,409
Senior Euro Notes						0.6% - 3.0%						2.9%						2024 - 2039						4,759						6,154
Senior GBP Notes						2.3% - 3.4%						7.3%						2029 - 2031						1,129						1,119
Revolving Credit Facility (2)												6.6%						2026						155						280
Incremental Revolving Credit Facility (3)																		2023						—						—
Other (4)																								(641)						(626)
Total long-term debt, including current portion																								14,061						16,336
Current portion of long-term debt																								(1,320)						(2,130)
Long-term debt, excluding current portion																								$	12,741					$	14,206

(1)The weighted average interest rate includes the impact of the fair value basis adjustments due to interest rate swaps and 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 8).

(2)Interest on the Revolving Credit Facility is generally payable at SOFR plus a margin 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)Interest on the Incremental Revolving Credit Facility is generally payable at a rate, at the option of the Company, equal to the Term SOFR Rate plus 0.10% plus a margin of up to 1.625% or equal to the Base Rate plus a margin of up to 0.625%, in either case plus an unused commitment fee of up to 0.225%.

(4)Other includes primarily the fair value basis adjustments due to interest rate swaps (see Note 8), unamortized debt issuance costs and unamortized non-cash bond discounts.

Short-term borrowings as of September 30, 2023, and December 31, 2022, consisted of the following (in millions):

						September 30, 2023
						Weighted
						Average
						Interest												September 30,						December 31,
						Rate						Maturities						2023						2022
Euro-commercial paper notes ("ECP Notes")						4.0		%				Up to 183 days						$	2,196					$	2,054
U.S. commercial paper notes ("USCP Notes")						5.6		%				Up to 397 days						2,399						1,701
Total Short-term borrowings																		$	4,595					$	3,755

The Company is a party to interest rate swaps that, prior to de-designation as fair value hedges, converted a portion of its fixed-rate debt to variable-rate debt. These interest rate swaps were de-designated as fair value hedges of its fixed-rate debt during the quarter ended September 30, 2023.

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. 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. As of September 30, 2023, the weighted average interest rate of the Company's outstanding debt was 4.3%, 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

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 3.5%.

See Note 8 for further discussion of the Company's interest rate swaps and cross-currency interest rate swaps and related hedge designations.

The following summarizes the aggregate maturities of our long-term debt, including other financing obligations for certain hardware and software, based on stated contractual maturities, excluding the fair value basis adjustments due to interest rate swaps (see Note 8) and net unamortized non-cash bond discounts of $(650) million as of September 30, 2023 (in millions):

						Total
2023 remaining period						$	10
2024						1,320
2025						1,435
2026						1,270
2027						1,977
Thereafter						8,785
Total principal payments						14,797
Debt issuance costs, net of accumulated amortization						(86)
Total long-term debt						$	14,711

There are no mandatory principal payments on the Revolving Credit Facility or the Incremental Revolving Credit Facility, and any balance outstanding on the Revolving Credit Facility or the Incremental Revolving Credit Facility will be due and payable at each such facility's scheduled maturity date, which occur on March 2, 2026, and December 15, 2023, respectively.

Senior Notes

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.

On December 3, 2022, FIS repaid an aggregate principal amount of €1.0 billion in Senior Euro Notes, on their due date, pursuant to the related indenture.

On July 13, 2022, FIS completed the issuance and sale of Senior USD Notes with an aggregate principal amount of $2.5 billion with interest rates ranging from 4.5% to 5.6% and maturities ranging from 2025 to 2052. The proceeds from the debt issuance were used for the repayment of debt under our commercial paper programs in the third quarter of 2022.

Revolving Credit Facilities

On February 28, 2023, FIS entered into an Incremental Revolving Credit Facility which provides credit commitments outstanding of $2.0 billion, with a scheduled maturity date of December 15, 2023. The proceeds of any borrowings under the Incremental Revolving Credit Facility will be used to provide ongoing working capital and for other general corporate purposes of the Company and its subsidiaries, including the repayment of certain existing debt of the Company and its subsidiaries and to backstop the Company's commercial paper program. The Incremental Revolving Credit Facility contains customary covenants restricting, among other things, the incurrence of indebtedness, certain restricted payments and use of proceeds as well as to maintain certain financial ratios. FIS intends to amend the Incremental Revolving Credit Facility to extend the maturity date until the earlier of (i) June 15, 2024, and (ii) ten business days after the consummation of the pending Worldpay transaction.

As of September 30, 2023, the borrowing capacity under the Revolving Credit Facility and Incremental Revolving Credit Facility was $2,750 million (net of $4,595 million of capacity backstopping our commercial paper notes).

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Fair Value of Debt

The fair value of the Company's long-term debt is estimated to be approximately $1,845 million and $1,873 million lower than the carrying value, excluding the fair value basis adjustments due to interest rate swaps and unamortized discounts, as of September 30, 2023, and December 31, 2022, respectively.

(8) Financial Instruments

Fair Value Hedges

The Company holds interest rate swaps with aggregate notional amounts of $1,854 million, £925 million and €500 million at each of September 30, 2023, and December 31, 2022. These swaps were previously 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. 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 fair value basis adjustments recorded as a decrease of the long-term debt through the dates of de-designation are 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 of the long-term debt totaled $635 million as of September 30, 2023, with $20 million amortized as Interest expense for the three months ending September 30, 2023 (see Note 7). At December 31, 2022, the fair value basis adjustments recorded as a decrease of the long-term debt totaled $578 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 terms of these new interest rate swaps were effectively matched against the terms of the existing fixed-to-variable interest rate swaps, which results in an offsetting impact of the go-forward changes in fair values of the new and existing interest rate swaps recorded as Other income (expense), net pursuant to accounting for economic hedges. The new and existing interest rate swap fair values totaled assets of $51 million and liabilities of $690 million at September 30, 2023. At December 31, 2022, the fair value of interest rate swaps totaled liabilities of $578 million.

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 with a net liability fair value of $84 million at September 30, 2023. Changes in the swap fair values attributable to changes in spot foreign currency exchange rates are recorded in Other income (expense), net. For the three and nine months ended September 30, 2023, $(165) million and $(144) million, respectively, were recognized in Other income (expense), net offset by changes in spot foreign currency exchange rates on the Senior GBP Notes and Senior Euro Notes. Changes 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). The Company records the impact of the excluded components in earnings through Interest expense using the amortization approach. For the three and nine months ended September 30, 2023, $11 million was recognized in Interest expense using the amortization approach.

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.

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.

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						Three months ended September 30,												Nine months ended September 30,
						2023						2022						2023						2022
Foreign currency-denominated debt designations						$	42					$	457					$	(80)					$	1,123
Cross-currency interest rate swap designations						112						526						(77)						994
Total						$	154					$	983					$	(157)					$	2,117

Foreign Currency-Denominated Debt Designations

The Company has designated certain foreign currency-denominated debt as net investment hedges of its investment in Euro- and Pound Sterling-denominated operations. As of September 30, 2023, and December 31, 2022, an aggregate €1,894 million and €7,646 million, respectively, was designated as a net investment hedge of the Company's investment in Euro-denominated operations related to Senior Euro Notes with maturities ranging from 2024 to 2025 and ECP Notes. As of September 30, 2023, no GBP-denominated debt was designated as a net investment hedge. As of December 31, 2022, an aggregate £726 million was designated as a net investment hedge of the Company's Pound Sterling-denominated operations related to the Senior GBP Notes.

During the quarters ended September 30, 2023, and June 30, 2023, the Company de-designated certain Senior Euro Notes and Senior GBP Notes as net investment hedges due to the new fair value hedges noted above. During the quarter ended September 30, 2023, the Company also de-designated €1,500 million of ECP Notes as a net investment hedge and entered into foreign currency forward contracts with a corresponding €1,500 million aggregate notional amount to hedge its exposure to foreign currency risk associated with ECP Notes that are expected to be paid off with U.S. dollar proceeds received from the sale of a 55% equity interest in its Worldpay Merchant Solutions business during the first quarter of 2024 (see Note 1). 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. The foreign currency forward contract fair values totaled a net liability of $22 million at September 30, 2023.

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 of September 30, 2023, and December 31, 2022, aggregate notional amounts of €6,143 million and €6,343 million, respectively, were designated as net investment hedges of the Company's investment in Euro-denominated operations, and aggregate notional amounts of £2,380 million and £2,580 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 $240 million and $336 million and liabilities of $(56) million and $(72) million at September 30, 2023, and December 31, 2022, respectively.

During the nine months ended September 30, 2023 and 2022, the Company (paid) received net proceeds of approximately $(20) million and $684 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. Following the settlement of the existing cross-currency interest rate swaps during 2022, the Company entered into new cross-currency interest rate swaps at current market terms with similar notional amounts and maturity dates as the settled cross-currency interest rate swaps (see Note 7).

(9) 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

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current and former officers as defendants and seeks damages for alleged violations of federal securities laws in connection with our disclosures relating to our Merchant Solutions segment, including with respect to Worldpay's 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. Another stockholder, City of Hialeah Employees' Retirement System, sent a similar demand. The demands claim that FIS officers and directors violated federal securities laws and breached fiduciary duties, including with respect to Worldpay's valuation, integration, and synergies, 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 demands and make recommendations to the Board with respect to the demands, and 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, 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 Worldpay's valuation, integration, and synergies. The Board has instructed the Company to move to stay or dismiss the action without prejudice pending the completion of the Board's consideration of the demands.

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 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 software applications or services. 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.

(10) Net Earnings (Loss) per Share

The basic weighted average shares and common stock equivalents for the three and nine months ended September 30, 2023 and 2022, were computed using the treasury stock method.

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The following table summarizes net earnings and net earnings per share attributable to FIS common stockholders for the three and nine months ended September 30, 2023 and 2022 (in millions, except per share amounts):

			Three months ended September 30,												Nine months ended September 30,
			2023						2022						2023						2022
Net earnings (loss) from continuing operations attributable to FIS common stockholders			$	260					$	218					$	440					$	499
Net earnings (loss) from discontinued operations attributable to FIS common stockholders			(709)						31						(7,345)						147
Net earnings (loss) attributable to FIS common stockholders			$	(449)					$	249					$	(6,905)					$	646
Weighted average shares outstanding-basic			592						605						592						608
Plus: Common stock equivalent shares			—						2						—						3
Weighted average shares outstanding-diluted			592						607						592						611
Net earnings (loss) per share-basic from continuing operations attributable to FIS common stockholders			$	0.44					$	0.36					$	0.74					$	0.82
Net earnings (loss) per share-basic from discontinued operations attributable to FIS common stockholders			(1.20)						0.05						(12.41)						0.24
Net earnings (loss) per share-basic attributable to FIS common stockholders			$	(0.76)					$	0.41					$	(11.66)					$	1.06
Net earnings (loss) per share-diluted from continuing operations attributable to FIS common stockholders			$	0.44					$	0.36					$	0.74					$	0.82
Net earnings (loss) per share-diluted from discontinued operations attributable to FIS common stockholders			(1.20)						0.05						(12.41)						0.24
Net earnings (loss) per share-diluted attributable to FIS common stockholders			$	(0.76)					$	0.41					$	(11.66)					$	1.06

The diluted net loss per share for the three and nine months ended September 30, 2023, did not include the effect of common stock equivalent shares of 2 million and 2 million, respectively, because the effect would have been anti-dilutive. For the three and nine months ended September 30, 2023, options to purchase approximately 8 million shares of our common stock were not included in the computation of diluted earnings per share because they were anti-dilutive. For the three and nine months ended September 30, 2022, options to purchase approximately 5 million and 4 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 new repurchase program has no expiration date and may be suspended for periods, amended or discontinued at any time. Approximately 64 million shares remained available for repurchase as of September 30, 2023.

(11) 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

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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. The overhead and leveraged costs relate to corporate marketing, corporate finance and accounting, human resources, legal, and amortization of acquisition-related intangibles and other costs, such as acquisition, integration and transformation-related expenses, 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												Nine months ended
						September 30,												September 30,
						2023						2022						2023						2022
Acquisition and integration						$	12					$	14					$	21					$	33
Enterprise transformation, including Future Forward and platform modernization						79						55						223						191
Severance and other termination expenses, including those associated with enterprise cost control initiatives and changes in senior management						6						16						48						52
Pending separation of the Worldpay Merchant Solutions business						5						—						7						—
Stock-based compensation, primarily from certain performance-based awards						9						25						13						79
Other, including divestiture-related expenses and enterprise cost control and other initiatives						2						13						14						72
Total acquisition, integration and other costs						$	113					$	123					$	326					$	427

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, as described in Notes 5 and 6, impairment charges described in Note 5 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 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

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EBITDA is defined as net earnings (loss) before net interest expense, net other income (expense), income tax provision (benefit) 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. 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 September 30, 2023 (in millions):

									Capital
			Banking						Market						Corporate
			Solutions						Solutions						and Other						Total
Revenue			$	1,756					$	677					$	56					$	2,489
Operating expenses			(1,122)						(432)						(460)						(2,014)
Depreciation and amortization (including purchase accounting amortization)			149						87						199						435
Acquisition, integration and other costs			—						—						113						113
Asset impairments			—						—						7						7
Indirect Worldpay business support costs			—						—						40						40
Adjusted EBITDA			$	783					$	332					$	(45)					$	1,070
Adjusted EBITDA																					$	1,070
Depreciation and amortization																					(262)
Purchase accounting amortization																					(173)
Acquisition, integration and other costs																					(113)
Asset impairments																					(7)
Indirect Worldpay business support costs																					(40)
Interest expense, net																					(162)
Other income (expense), net																					22
(Provision) benefit for income taxes																					(74)
Net earnings (loss) from discontinued operations, net of tax																					(708)
Net earnings attributable to noncontrolling interest																					(2)
Net earnings (loss) attributable to FIS common stockholders																					$	(449)
Capital expenditures (1)			$	104					$	63					$	48					$	215

(1) Capital expenditures include $18 million in other financing obligations for certain hardware.

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For the three months ended September 30, 2022 (in millions):

									Capital
			Banking						Market						Corporate
			Solutions						Solutions						and Other						Total
Revenue			$	1,703					$	633					$	79					$	2,415
Operating expenses			(1,113)						(397)						(521)						(2,031)
Depreciation and amortization (including purchase accounting amortization)			148						79						228						455
Acquisition, integration and other costs			—						—						123						123
Asset impairments			—						—						17						17
Indirect Worldpay business support costs			—						—						43						43
Adjusted EBITDA			$	738					$	315					$	(31)					$	1,022
Adjusted EBITDA																					$	1,022
Depreciation and amortization																					(262)
Purchase accounting amortization																					(193)
Acquisition, integration and other costs																					(123)
Asset impairments																					(17)
Indirect Worldpay business support costs																					(43)
Interest expense, net																					(78)
Other income (expense), net																					18
(Provision) benefit for income taxes																					(102)
Net earnings (loss) from discontinued operations, net of tax																					32
Net earnings attributable to noncontrolling interest																					(5)
Net earnings attributable to FIS common stockholders																					$	249
Capital expenditures			$	111					$	60					$	62					$	233

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For the nine months ended September 30, 2023 (in millions):

									Capital
			Banking						Market						Corporate
			Solutions						Solutions						and Other						Total
Revenue			$	5,144					$	2,011					$	156					$	7,311
Operating expenses			(3,419)						(1,291)						(1,465)						(6,175)
Depreciation and amortization (including purchase accounting amortization)			458						268						596						1,322
Acquisition, integration and other costs			—						—						326						326
Asset impairments			—						—						8						8
Indirect Worldpay business support costs			—						—						123						123
Adjusted EBITDA			$	2,183					$	988					$	(256)					$	2,915
Adjusted EBITDA																					$	2,915
Depreciation and amortization																					(798)
Purchase accounting amortization																					(524)
Acquisition, integration and other costs																					(326)
Asset impairments																					(8)
Indirect Worldpay business support costs																					(123)
Interest expense																					(464)
Other income (expense), net																					(91)
(Provision) benefit for income taxes																					(139)
Net earnings (loss) from discontinued operations, net of tax																					(7,342)
Net earnings attributable to noncontrolling interest																					(5)
Net earnings (loss) attributable to FIS common stockholders																					$	(6,905)
Capital expenditures (1)			$	290					$	186					$	108					$	584

(1) Capital expenditures include $38 million in other financing obligations for certain hardware.

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For the nine months ended September 30, 2022 (in millions):

									Capital
			Banking						Market						Corporate
			Solutions						Solutions						and Other						Total
Revenue			$	5,039					$	1,892					$	263					$	7,194
Operating expenses			(3,298)						(1,215)						(1,842)						(6,355)
Depreciation and amortization (including purchase accounting amortization)			451						249						726						1,426
Acquisition, integration and other costs			—						—						427						427
Asset impairments			—						—						86						86
Indirect Worldpay business support costs			—						—						137						137
Adjusted EBITDA			$	2,192					$	926					$	(203)					$	2,915
Adjusted EBITDA																					$	2,915
Depreciation and amortization																					(837)
Purchase accounting amortization																					(589)
Acquisition, integration and other costs																					(427)
Asset impairments																					(86)
Indirect Worldpay business support costs																					(137)
Interest expense, net																					(169)
Other income (expense), net																					53
(Provision) benefit for income taxes																					(218)
Net earnings (loss) from discontinued operations, net of tax																					150
Net earnings attributable to noncontrolling interest																					(9)
Net earnings attributable to FIS common stockholders																					$	646
Capital expenditures			$	389					$	201					$	201					$	791