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, ~~2022~~2023


☐			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.)


~~601~~347 Riverside Avenue
Jacksonville	Florida	~~32204~~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~~

~~1.700% Senior Notes due 2022~~

~~FIS22B~~

~~New York Stock Exchange~~

~~0.125% Senior Notes due 2022~~

~~FIS22C~~

New York Stock Exchange

0.750% Senior Notes due 2023

FIS23A

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

~~Table of Contents~~

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 ☐

Table of Contents

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~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "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 2, 2022, 610,771,236~~April 28, 2023, 592,436,518 shares of the Registrant’s Common Stock were outstanding.

FORM 10-Q

QUARTERLY REPORT

Quarter Ended March 31, ~~2022~~2023

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,547	$	2,010	Cash and cash equivalents	$	1,871	$	2,188
Settlement assets	Settlement assets	4,062		4,020		Settlement assets	4,425		5,855
Trade receivables, net of allowance for credit losses of $89 and $76, respectively		3,655		3,772
Trade receivables, net of allowance for credit losses of $92 and $75, respectively						Trade receivables, net of allowance for credit losses of $92 and $75, respectively	3,476		3,699
Other receivables	Other receivables	260		355		Other receivables	486		493
Prepaid expenses and other current assets	Prepaid expenses and other current assets	621		551		Prepaid expenses and other current assets	708		583
Total current assets	Total current assets	10,145		10,708		Total current assets	10,966		12,818
Property and equipment, net	Property and equipment, net	901		949		Property and equipment, net	838		862
Goodwill	Goodwill	52,988		53,330		Goodwill	34,424		34,276
Intangible assets, net	Intangible assets, net	10,854		11,539		Intangible assets, net	8,531		8,956
Software, net	Software, net	3,235		3,299		Software, net	3,222		3,238
Other noncurrent assets	Other noncurrent assets	2,132		2,137		Other noncurrent assets	1,988		2,048
Deferred contract costs, net	Deferred contract costs, net	943		969		Deferred contract costs, net	1,109		1,080
Total assets	Total assets	$	81,198	$	82,931	Total assets	$	61,078	$	63,278
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY	LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY					LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable, accrued and other liabilities	Accounts payable, accrued and other liabilities	$	2,690	$	2,864	Accounts payable, accrued and other liabilities	$	2,465	$	2,754
Settlement payables	Settlement payables	5,228		5,295		Settlement payables	5,331		6,752
Deferred revenue	Deferred revenue	847		779		Deferred revenue	825		788
Short-term borrowings	Short-term borrowings	2,682		3,911		Short-term borrowings	3,968		3,797
Current portion of long-term debt	Current portion of long-term debt	2,330		1,617		Current portion of long-term debt	2,139		2,133
Total current liabilities	Total current liabilities	13,777		14,466		Total current liabilities	14,728		16,224
Long-term debt, excluding current portion	Long-term debt, excluding current portion	14,208		14,825		Long-term debt, excluding current portion	13,905		14,207
Deferred income taxes	Deferred income taxes	4,055		4,193		Deferred income taxes	3,494		3,550
Other noncurrent liabilities	Other noncurrent liabilities	1,948		1,915		Other noncurrent liabilities	1,847		1,891
Total liabilities	Total liabilities	33,988		35,399		Total liabilities	33,974		35,872

Redeemable noncontrolling interest	Redeemable noncontrolling interest	174		174		Redeemable noncontrolling interest	—		180
Equity:	Equity:					Equity:
FIS stockholders’ equity:	FIS stockholders’ equity:					FIS stockholders’ equity:
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding as of March 31, 2022, and December 31, 2021		—		—
Common stock $0.01 par value, 750 shares authorized, 628 and 625 shares issued as of March 31, 2022, and December 31, 2021, respectively		6		6
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding as of March 31, 2023, and December 31, 2022						Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding as of March 31, 2023, and December 31, 2022	—		—
Common stock $0.01 par value, 750 shares authorized, 631 and 630 shares issued as of March 31, 2023, and December 31, 2022, respectively						Common stock $0.01 par value, 750 shares authorized, 631 and 630 shares issued as of March 31, 2023, and December 31, 2022, respectively	6		6
Additional paid in capital	Additional paid in capital	46,536		46,466		Additional paid in capital	46,802		46,735
Retained earnings		2,721		2,889
(Accumulated deficit) retained earnings						(Accumulated deficit) retained earnings	(15,141)		(14,971)
Accumulated other comprehensive earnings (loss)	Accumulated other comprehensive earnings (loss)	106		252		Accumulated other comprehensive earnings (loss)	(364)		(360)
Treasury stock, $0.01 par value, 17 and 16 common shares as of March 31, 2022, and December 31, 2021, respectively, at cost		(2,343)		(2,266)
Treasury stock, $0.01 par value, 39 and 39 common shares as of March 31, 2023, and December 31, 2022, respectively, at cost						Treasury stock, $0.01 par value, 39 and 39 common shares as of March 31, 2023, and December 31, 2022, respectively, at cost	(4,206)		(4,192)
Total FIS stockholders’ equity	Total FIS stockholders’ equity	47,026		47,347		Total FIS stockholders’ equity	27,097		27,218
Noncontrolling interest	Noncontrolling interest	10		11		Noncontrolling interest	7		8
Total equity	Total equity	47,036		47,358		Total equity	27,104		27,226
Total liabilities, redeemable noncontrolling interest and equity	Total liabilities, redeemable noncontrolling interest and equity	$	81,198	$	82,931	Total liabilities, redeemable noncontrolling interest and equity	$	61,078	$	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 March 31,				Three months ended March 31,
		2022		2021				2023		2022

Revenue	Revenue	$	3,492	$	3,223		Revenue	$	3,510	$	3,492
Cost of revenue	Cost of revenue	2,242		2,118			Cost of revenue	2,169		2,242
Gross profit	Gross profit	1,250		1,105			Gross profit	1,341		1,250
Selling, general, and administrative expenses	Selling, general, and administrative expenses	1,035		1,006			Selling, general, and administrative expenses	1,004		1,035
Asset impairments	Asset impairments	58		—			Asset impairments	—		58
Operating income	Operating income	157		99			Operating income	337		157
Other income (expense):	Other income (expense):						Other income (expense):
Interest expense, net	Interest expense, net	(43)		(74)			Interest expense, net	(137)		(43)
Other income (expense), net	Other income (expense), net	61		(493)			Other income (expense), net	(11)		61
Total other income (expense), net	Total other income (expense), net	18		(567)			Total other income (expense), net	(148)		18
Earnings (loss) before income taxes and equity method investment earnings (loss)		175		(468)
Earnings before income taxes							Earnings before income taxes	189		175
Provision (benefit) for income taxes	Provision (benefit) for income taxes	54		(97)			Provision (benefit) for income taxes	48		54
Equity method investment earnings (loss)		—		1
Net earnings (loss)		121		(370)
Net earnings							Net earnings	141		121
Net (earnings) loss attributable to noncontrolling interest	Net (earnings) loss attributable to noncontrolling interest	(1)		(3)			Net (earnings) loss attributable to noncontrolling interest	(1)		(1)
Net earnings (loss) attributable to FIS common stockholders		$	120	$	(373)
Net earnings attributable to FIS common stockholders							Net earnings attributable to FIS common stockholders	$	140	$	120

Net earnings (loss) per share-basic attributable to FIS common stockholders		$	0.20	$	(0.60)
Net earnings per share-basic attributable to FIS common stockholders							Net earnings per share-basic attributable to FIS common stockholders	$	0.24	$	0.20
Weighted average shares outstanding-basic	Weighted average shares outstanding-basic	610		621			Weighted average shares outstanding-basic	592		610
Net earnings (loss) per share-diluted attributable to FIS common stockholders		$	0.20	$	(0.60)
Net earnings per share-diluted attributable to FIS common stockholders							Net earnings per share-diluted attributable to FIS common stockholders	$	0.24	$	0.20
Weighted average shares outstanding-diluted	Weighted average shares outstanding-diluted	614		621			Weighted average shares outstanding-diluted	593		614

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 March 31,								Three months ended March 31,
		2022				2021					2023		2022

Net earnings (loss)	Net earnings (loss)			$	121			$	(370)			Net earnings (loss)			$	141			$	121
Other comprehensive earnings (loss), before tax:	Other comprehensive earnings (loss), before tax:											Other comprehensive earnings (loss), before tax:
Unrealized gain (loss) on derivatives		$	—			$	9
Foreign currency translation adjustments	Foreign currency translation adjustments	(144)				185						Foreign currency translation adjustments	$	257			$	(495)
Change in fair value of net investment hedges												Change in fair value of net investment hedges	(296)				351
Other adjustments	Other adjustments	4				—						Other adjustments	—				4
Other comprehensive earnings (loss), before tax	Other comprehensive earnings (loss), before tax	(140)				194						Other comprehensive earnings (loss), before tax	(39)				(140)
Provision for income tax (expense) benefit related to items of other comprehensive earnings		(6)				(127)
Provision for income tax (expense) benefit related to items of other comprehensive earnings (loss)												Provision for income tax (expense) benefit related to items of other comprehensive earnings (loss)	35				(6)
Other comprehensive earnings (loss), net of tax	Other comprehensive earnings (loss), net of tax	$	(146)	(146)		$	67	67				Other comprehensive earnings (loss), net of tax	$	(4)	(4)		$	(146)	(146)
Comprehensive earnings (loss)	Comprehensive earnings (loss)			(25)				(303)				Comprehensive earnings (loss)			137				(25)
Net (earnings) loss attributable to noncontrolling interest	Net (earnings) loss attributable to noncontrolling interest			(1)				(3)				Net (earnings) loss attributable to noncontrolling interest			(1)				(1)
Comprehensive earnings (loss) attributable to FIS common stockholders	Comprehensive earnings (loss) attributable to FIS common stockholders			$	(26)			$	(306)			Comprehensive earnings (loss) attributable to FIS common stockholders			$	136			$	(26)

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 months ended March 31, ~~2022,~~2023 and ~~March 31, 2021~~2022

(In millions, except per share amounts)

(Unaudited)


				Amount																	Amount
				FIS Stockholders																	FIS Stockholders
										Accumulated																	Accumulated
		Number of shares				Additional				other									Number of shares				Additional				other
		Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total			Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
		shares	shares	stock		capital		earnings		earnings (loss)		stock		interest (1)		equity			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
Balances, December 31, 2022																		Balances, December 31, 2022	630	(39)	$	6	$	46,735	$	(14,971)	$	(360)	$	(4,192)	$	8	$	27,226
Issuance of restricted stock	Issuance of restricted stock	3	—	—		5		—		—		—		—		5		Issuance of restricted stock	1	—	—		—		—		—		—		—		—
Exercise of stock options	Exercise of stock options	—	—	—		8		—		—		—		—		8		Exercise of stock options	—	—	—		40		—		—		—		—		40
Treasury shares held for taxes due upon exercise of stock awards	Treasury shares held for taxes due upon exercise of stock awards	—	(1)	—		—		—		—		(77)		—		(77)		Treasury shares held for taxes due upon exercise of stock awards	—	—	—		—		—		—		(14)		—		(14)
Stock-based compensation	Stock-based compensation	—	—	—		57		—		—		—		—		57		Stock-based compensation	—	—	—		20		—		—		—		—		20
Cash dividends declared ($0.47 per share per quarter) and other distributions		—	—	—		—		(288)		—		—		(2)		(290)
Cash dividends declared ($0.52 per share per quarter) and other distributions																		Cash dividends declared ($0.52 per share per quarter) and other distributions	—	—	—		—		(310)		—		—		(2)		(312)
Other																		Other	—	—	—		7		—		—		—		—		7
Net earnings (loss)	Net earnings (loss)	—	—	—		—		120		—		—		1		121		Net earnings (loss)	—	—	—		—		140		—		—		1		141
Other comprehensive earnings (loss), net of tax	Other comprehensive earnings (loss), net of tax	—	—	—		—		—		(146)		—		—		(146)		Other comprehensive earnings (loss), net of tax	—	—	—		—		—		(4)		—		—		(4)
Balances, March 31, 2022		628	(17)	$	6	$	46,536	$	2,721	$	106	$	(2,343)	$	10	$	47,036
Balances, March 31, 2023																		Balances, March 31, 2023	631	(39)	$	6	$	46,802	$	(15,141)	$	(364)	$	(4,206)	$	7	$	27,104

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, 2020 621 (1) $ 6 $ 45,947 $ 3,440 $ 57 $ (150) $ 13 $ 49,313
Issuance of restricted stock 3 — — 1 — — — — 1
Exercise of stock options — — — 47 — — — — 47
Purchases of treasury stock — (3) — — — — (400) — (400)
Treasury shares held for taxes due upon exercise of stock awards — — — — — — (95) — (95)
Stock-based compensation — — — 157 — — — — 157
Cash dividends declared ($0.39 per share per quarter) and other distributions — — — — (244) — — (1) (245)
Net earnings — — — — (373) — — 2 (371)
Other comprehensive earnings (loss), net of tax — — — — — 67 — — 67
Balances, March 31, 2021 $ 624 $ (4) $ 6 $ 46,152 $ 2,823 $ 124 $ (645) $ 14 $ 48,474


			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, Decmber 31, 2021	625	(16)	$	6	$	46,466	$	2,889	$	252	$	(2,266)	$	11	$	47,358
Issuance of restricted stock	3	—	—		5		—		—		—		—		5
Exercise of stock options	—	—	—		8		—		—		—		—		8
Treasury shares held for taxes due upon exercise of stock awards	—	(1)	—		—		—		—		(77)		—		(77)
Stock-based compensation	—	—	—		57		—		—		—		—		57
Cash dividends declared ($0.47 per share per quarter) and other distributions	—	—	—		—		(288)		—		—		(2)		(290)
Net earnings (loss)	—	—	—		—		120		—		—		1		121
Other comprehensive earnings (loss), net of tax	—	—	—		—		—		(146)		—		—		(146)
Balances, March 31, 2022	628	(17)	$	6	$	46,536	$	2,721	$	106	$	(2,343)	$	10	$	47,036

(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)


		Three months ended March 31,					Three months ended March 31,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net earnings (loss)		$	121	$	(370)
Adjustment to reconcile net earnings (loss) to net cash provided by operating activities:
Net earnings						Net earnings	$	141	$	121
Adjustment to reconcile net earnings to net cash provided by operating activities:						Adjustment to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	1,013		953		Depreciation and amortization	895		1,013
Amortization of debt issuance costs	Amortization of debt issuance costs	7		7		Amortization of debt issuance costs	8		7
Asset impairments	Asset impairments	58		—		Asset impairments	—		58
Loss (gain) on sale of businesses, investments and other		—		(1)
Loss on extinguishment of debt		—		528
Stock-based compensation	Stock-based compensation	57		157		Stock-based compensation	20		57
Deferred income taxes	Deferred income taxes	(112)		(22)		Deferred income taxes	(41)		(112)
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:	Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:					Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
Trade and other receivables	Trade and other receivables	62		(219)		Trade and other receivables	214		62
Settlement activity	Settlement activity	(162)		122		Settlement activity	(189)		(162)
Prepaid expenses and other assets	Prepaid expenses and other assets	(152)		(129)		Prepaid expenses and other assets	(153)		(152)
Deferred contract costs	Deferred contract costs	(73)		(113)		Deferred contract costs	(118)		(73)
Deferred revenue	Deferred revenue	55		89		Deferred revenue	61		55
Accounts payable, accrued liabilities and other liabilities	Accounts payable, accrued liabilities and other liabilities	22		(166)		Accounts payable, accrued liabilities and other liabilities	(206)		22
Net cash provided by operating activities	Net cash provided by operating activities	896		836		Net cash provided by operating activities	632		896

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Additions to property and equipment	Additions to property and equipment	(108)		(69)		Additions to property and equipment	(48)		(108)
Additions to software	Additions to software	(304)		(229)		Additions to software	(231)		(304)
Settlement of net investment hedge cross-currency interest rate swaps						Settlement of net investment hedge cross-currency interest rate swaps	(10)		135
Other investing activities, net	Other investing activities, net	122		(23)		Other investing activities, net	(4)		(13)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(290)		(321)		Net cash provided by (used in) investing activities	(293)		(290)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings	Borrowings	15,902		13,858		Borrowings	20,233		15,902
Repayment of borrowings and other financing obligations	Repayment of borrowings and other financing obligations	(16,609)		(14,364)		Repayment of borrowings and other financing obligations	(20,582)		(16,609)
Debt issuance costs	Debt issuance costs	—		(74)		Debt issuance costs	(2)		—
Net proceeds from stock issued under stock-based compensation plans	Net proceeds from stock issued under stock-based compensation plans	33		73		Net proceeds from stock issued under stock-based compensation plans	47		33
Treasury stock activity	Treasury stock activity	(77)		(494)		Treasury stock activity	(14)		(77)
Dividends paid	Dividends paid	(287)		(244)		Dividends paid	(309)		(287)
Payments on tax receivable agreement						Payments on tax receivable agreement	(94)		(46)
Purchase of noncontrolling interest						Purchase of noncontrolling interest	(173)		—
Other financing activities, net	Other financing activities, net	(47)		(136)		Other financing activities, net	(2)		(1)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(1,085)		(1,381)		Net cash provided by (used in) financing activities	(896)		(1,085)

Effect of foreign currency exchange rate changes on cash	Effect of foreign currency exchange rate changes on cash	(103)		(40)		Effect of foreign currency exchange rate changes on cash	86		(103)
Net increase (decrease) in cash, cash equivalents and restricted cash	Net increase (decrease) in cash, cash equivalents and restricted cash	(582)		(906)		Net increase (decrease) in cash, cash equivalents and restricted cash	(471)		(582)
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	4,283		4,030		Cash, cash equivalents and restricted cash, beginning of period	4,813		4,283
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	3,701	$	3,124	Cash, cash equivalents and restricted cash, end of period	$	4,342	$	3,701

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Cash paid for interest	Cash paid for interest	$	75	$	95	Cash paid for interest	$	176	$	75
Cash paid for income taxes	Cash paid for income taxes	$	46	$	68	Cash paid for income taxes	$	57	$	46

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

Table of Contents

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, ~~2021.~~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 ~~the outbreak~~higher rates of ~~the novel coronavirus ("COVID-19")~~inflation and ~~the subsequently declared COVID-19 pandemic ("the pandemic") by the World Health Organization on March 11, 2020. The extent to which the pandemic further affects our results of operations~~slower economic growth. These estimates may change as new events occur and financial position will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and spread of the pandemic and any recurrence or new strain of COVID-19, its severity, the success of vaccines or other actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Accordingly, our futureadditional 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 ~~materially affected by changes in our estimates.~~affected.

Certain reclassifications have been made in the ~~2021~~2022 consolidated financial statements to conform to the classifications used in ~~2022.~~ 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.

FIS reports its financial performance based on the following segments: Banking Solutions, Merchant 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 10 for more information regarding our segments and the related reclassification.

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

(2) Acquisitions

~~Payrix~~Virtus Acquisition

On ~~December 23, 2021,~~January 2, 2020, FIS acquired ~~100% of the equity of Payrix Holdings, LLC, and subsidiaries~~a majority interest in Virtus Partners ("~~Payrix"~~Virtus"), previously a privately held ~~fintech~~ company that ~~specializes in embedding~~provides high-value managed services and ~~monetizing payments in SaaS platforms~~technology to ~~serve~~ the ~~eCommerce needs of small- to medium-sized businesses through a global card-not-present offering.~~credit and loan market. The acquisition was accounted for as a business combination. ~~We recorded~~FIS acquired a ~~provisional allocation~~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 ~~$777~~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 ~~purchase price, primarily paid~~redemption value, recorded as a financing activity in the consolidated statement of cash ~~to tangible~~flows, and ~~identifiable intangible assets acquired and liabilities assumed based on their estimated fair values, consisting primarily~~now owns 100% of $131 million in software assets. We also recorded adjustments to our provisional allocation of the purchase price as of March 31, 2022, resulting in $631 million in total goodwill. Our purchase price allocation is provisional as of March 31, 2022, and we expect to finalize as soon as practicable, but no later than one year from the date of acquisition.Virtus.

(3) 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.

Prior-period amounts have been reclassified to conform to the new reportable segment presentation as discussed in Note 10.

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FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

For the three months ended March 31, ~~2022~~2023 (in millions):


		Reportable Segments
						Capital											Capital
		Merchant		Banking		Market		Corporate					Banking		Merchant		Market		Corporate
		Solutions		Solutions		Solutions		and Other		Total			Solutions		Solutions		Solutions		and Other		Total
Primary Geographical Markets:	Primary Geographical Markets:											Primary Geographical Markets:
North America	North America	$	785	$	1,406	$	386	$	51	$	2,628	North America	$	1,439	$	777	$	425	$	26	$	2,667
All others	All others	327		239		272		26		864		All others	246		328		238		31		843
Total	Total	$	1,112	$	1,645	$	658	$	77	$	3,492	Total	$	1,685	$	1,105	$	663	$	57	$	3,510

Type of Revenue:	Type of Revenue:											Type of Revenue:
Recurring revenue:	Recurring revenue:											Recurring revenue:
Transaction processing and services	Transaction processing and services	$	1,087	$	1,248	$	321	$	70	$	2,726	Transaction processing and services	$	1,299	$	1,081	$	342	$	39	$	2,761
Software maintenance	Software maintenance	1		87		130		—		218		Software maintenance	90		1		129		—		220
Other recurring	Other recurring	22		52		23		—		97		Other recurring	54		20		19		10		103
Total recurring	Total recurring	1,110		1,387		474		70		3,041		Total recurring	1,443		1,102		490		49		3,084

Software license	Software license	1		30		74		—		105		Software license	11		3		73		—		87
Professional services	Professional services	—		142		110		1		253		Professional services	154		—		100		2		256
Other non-recurring fees	Other non-recurring fees	1		86		—		6		93		Other non-recurring fees	77		—		—		6		83
Total	Total	$	1,112	$	1,645	$	658	$	77	$	3,492	Total	$	1,685	$	1,105	$	663	$	57	$	3,510

For the three months ended March 31, ~~2021~~2022 (in millions):
Reportable Segments
Capital
Merchant Banking Market Corporate
Solutions Solutions Solutions and Other Total
Primary Geographical Markets:
North America $ 681 $ 1,311 $ 370 $ 58 $ 2,420
All others 285 229 255 34 803
Total $ 966 $ 1,540 $ 625 $ 92 $ 3,223
Type of Revenue:
Recurring revenue:
Transaction processing and services $ 943 $ 1,164 $ 291 $ 84 $ 2,482
Software maintenance 1 88 127 — 216
Other recurring 20 38 24 3 85
Total recurring 964 1,290 442 87 2,783
Software license 1 24 68 — 93
Professional services — 146 106 1 253
Other non-recurring fees 1 80 9 4 94
Total $ 966 $ 1,540 $ 625 $ 92 $ 3,223



					Capital
	Banking		Merchant		Market		Corporate
	Solutions		Solutions		Solutions		and Other		Total
Primary Geographical Markets:
North America	$	1,418	$	785	$	374	$	51	$	2,628
All others	241		327		253		43		864
Total	$	1,659	$	1,112	$	627	$	94	$	3,492

Type of Revenue:
Recurring revenue:
Transaction processing and services	$	1,255	$	1,087	$	308	$	76	$	2,726
Software maintenance	92		1		125		—		218
Other recurring	51		22		14		10		97
Total recurring	1,398		1,110		447		86		3,041

Software license	31		1		73		—		105
Professional services	144		—		107		2		253
Other non-recurring fees	86		1		—		6		93
Total	$	1,659	$	1,112	$	627	$	94	$	3,492

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FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Contract Balances

The Company recognized revenue of ~~$310~~$318 million and ~~$327~~$310 million during the three months ended March 31, ~~2022~~2023 and ~~2021,~~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 March 31, ~~2022,~~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 ~~21%~~22% over the next 13 to 24 months, and the balance thereafter.

As permitted by ASC 606, Revenue from Contracts with Customers, the Company has elected to exclude from this disclosure an estimate for the Merchant Solutions segment, ~~which is primarily comprised of~~as its contracts ~~with~~either have an original duration of one year or less or contain variable consideration that ~~meet specific criteria. This segment's core~~is allocated entirely to the day of performance under its stand-ready performance obligations ~~consist~~comprised of ~~variable consideration under~~ a ~~stand-ready~~ series of distinct ~~days of service, and revenue from the segment's products and service arrangements are generally billed and recognized as the services are performed.~~daily services. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material.

(4) 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, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Cash and cash equivalents on the consolidated balance sheets	Cash and cash equivalents on the consolidated balance sheets	$	1,547	$	2,010	Cash and cash equivalents on the consolidated balance sheets	$	1,871	$	2,188
Merchant float (in Settlement assets)	Merchant float (in Settlement assets)	2,154		2,273		Merchant float (in Settlement assets)	2,471		2,625
Total Cash and cash equivalents and restricted cash per the consolidated statements of cash flows	Total Cash and cash equivalents and restricted cash per the consolidated statements of cash flows	$	3,701	$	4,283	Total Cash and cash equivalents and restricted cash per the consolidated statements of cash flows	$	4,342	$	4,813

Settlement Assets ~~and Payables~~

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


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Settlement assets	Settlement assets					Settlement assets
Settlement deposits	Settlement deposits	$	527	$	530	Settlement deposits	$	527	$	492
Merchant float	Merchant float	2,154		2,273		Merchant float	2,471		2,625
Settlement receivables	Settlement receivables	1,381		1,217		Settlement receivables	1,427		2,738
Total Settlement assets	Total Settlement assets	$	4,062	$	4,020	Total Settlement assets	$	4,425	$	5,855

Settlement payables		$	5,228	$	5,295

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FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

~~Allowance for Credit Losses~~

~~The Company monitors trade receivable balances~~Intangible Assets, Software and contract assets as well as other receivables and estimates the allowance for lifetime expected credit losses. Estimates of expected credit losses are based on historical collection experience and other factors, including those related to current market conditions and events. The allowance for credit losses is separate from the chargeback liability described in Note 8.

While the COVID-19 pandemic did not result in a significant increase in the Company's expected credit loss allowance recorded as of March 31, 2022, and December 31, 2021, it is reasonably possible that future developments related to the economic impact of the COVID-19 pandemic could have a material impact on management's estimates.

Property and Equipment ~~Intangible Assets and Software~~

The following table provides details of Intangible assets, Software and Property and equipment ~~Intangible assets and Software~~ as of March 31, ~~2022,~~2023, and December 31, ~~2021~~2022 (in millions):


		March 31, 2022						December 31, 2021							March 31, 2023						December 31, 2022
		Cost		Accumulated depreciation and amortization		Net		Cost		Accumulated depreciation and amortization		Net			Cost		Accumulated depreciation and amortization		Net		Cost		Accumulated depreciation and amortization		Net
Property and equipment		$	2,511	$	1,610	$	901	$	2,520	$	1,571	$	949
Intangible assets	Intangible assets	$	18,734	$	7,880	$	10,854	$	18,919	$	7,380	$	11,539	Intangible assets	$	18,362	$	9,831	$	8,531	$	18,260	$	9,304	$	8,956
Software	Software	$	6,384	$	3,149	$	3,235	$	6,195	$	2,896	$	3,299	Software	$	6,635	$	3,413	$	3,222	$	6,607	$	3,369	$	3,238
Property and equipment														Property and equipment	$	2,394	$	1,556	$	838	$	2,381	$	1,519	$	862

As of March 31, ~~2022,~~2023, Intangible assets, net of amortization, includes ~~$10,522~~$8,305 million of customer relationships and ~~$332~~$226 million of trademarks and other intangible assets. Amortization expense with respect to Intangible assets was ~~$557~~$496 million and ~~$595~~$557 million for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

Depreciation expense for property and equipment was $57 million and $73 million for the three months ended March 31, 2023 and 2022, respectively.

Amortization expense with respect to software was $251 million and $287 million for the three months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023 and 2022, the Company recorded $16 million and $62 million, respectively, of incremental software amortization expense ~~driven by~~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.

Impairments

~~During~~For the three months ended March 31, 2022, the Company also recorded $58 million of impairments primarily related to real estate-related assets as a result of office space reductions.

Goodwill

Changes in goodwill during the three months ended March 31, ~~2022,~~2023, are summarized below (in millions). Prior-period amounts have been reclassified to conform to the new reportable segment presentation as discussed in Note 10.
Capital Corporate
Merchant Banking Market And
Solutions Solutions Solutions Other Total
Balance, December 31, 2021 $ 36,403 $ 12,244 $ 4,663 $ 20 $ 53,330
Foreign currency adjustments (323) (7) (23) — (353)
Goodwill attributable to acquisitions 11 — — — 11
Balance, March 31, 2022 $ 36,091 $ 12,237 $ 4,640 $ 20 $ 52,988


					Capital		Corporate
	Banking		Merchant		Market		And
	Solutions		Solutions		Solutions		Other		Total
Balance, December 31, 2022	$	12,536	$	17,460	$	4,260	$	20	$	34,276
Foreign currency adjustments	8		123		17		—		148
Balance, March 31, 2023	$	12,544	$	17,583	$	4,277	$	20	$	34,424

We assess goodwill for impairment on an annual basis during the fourth quarter or more frequently if circumstances indicate potential impairment. ~~Due to the continued economic impact of the COVID-19 pandemic, we~~We evaluated if events and circumstances as of March 31, ~~2022,~~2023, indicated potential impairment of our reporting units. We performed a qualitative assessment by examining factors most likely to affect our reporting units' fair values, ~~and considered~~including the impact ~~to our business from the COVID-19 pandemic.~~of recent U.S. bank failures. The factors examined involve significant use of management judgment and included, among

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~~FIDELITY NATIONAL INFORMATION SERVICES, INC.~~

~~AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

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, ~~2022,~~2023, we concluded that it remained more likely than not that the fair value continues to exceed the carrying amount for each of our reporting units; therefore, goodwill was not impaired.

~~However, it~~It is reasonably possible, however, that ~~future developments related to the~~macroeconomic conditions, including rates of economic ~~impact of the COVID-19 pandemic on our Merchant Solutions business~~growth, inflation and interest, and foreign currency movements, or other ~~macroeconomic conditions~~events could have a material impact on one or more of the estimates and assumptions used to evaluate goodwill impairment and could result in future goodwill impairment.

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FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The total carrying amount of goodwill as of March 31, 2023, and December 31, 2022, is net of accumulated impairment charges of $17.7 billion. Of this amount, $17.6 billion relates to the Merchant Solutions reporting unit which was impaired during the fourth quarter of 2022, and $94 million relates to non-strategic businesses within Corporate and Other which were impaired during the fourth quarter of 2020.

Visa Europe and Contingent Value Rights

As part of the Worldpay acquisition, the Company acquired certain assets and liabilities related to the June 2016 Worldpay Group plc (Legacy Worldpay) disposal of its ownership interest in Visa Europe to Visa Inc. As part of the disposal, Legacy Worldpay received proceeds from Visa Inc. in the form of cash ("cash consideration") and convertible preferred stock ("preferred stock"), the value of which may be reduced by losses incurred relating to ongoing interchange-related litigation involving Visa Europe. The preferred stock becomes convertible into Visa Inc. Class A common stock ("common stock") in stages as determined by Visa Inc. in accordance with the relevant transaction documents pertaining to the aforementioned disposal of the Visa Europe ownership interest. The preferred stock becomes fully convertible no later than 2028 (subject to a holdback to cover any pending claims). Also in connection with the disposal and pursuant to the terms of an amendment executed on September 17, 2020, the Company will pay the former Legacy Worldpay owners 90% of the net-of-tax proceeds from the disposal, known as contingent value rights, which is recorded as a liability ("CVR liability") on the consolidated balance sheets.

The Company has elected the fair value option under ASC 825, Financial Instruments ("ASC 825"), for measuring its preferred stock asset and CVR liability. The fair value of the preferred stock was ~~$213~~$71 million and ~~$197~~$55 million at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively, recorded in Other noncurrent assets on the consolidated balance sheets. The fair value of the CVR liability was ~~$469~~$361 million and ~~$478~~$342 million at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively, recorded in Other noncurrent liabilities on the consolidated balance sheets. Pursuant to ASC 825, the Company remeasures the fair value of the preferred stock and CVR liability each reporting period. The net change in fair value was ~~$25~~$(3) million and $5$25 million for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, recorded in Other income (expense), net on the consolidated statements of earnings (loss).

Equity Security Investments

The Company holds various equity securities without readily determinable fair values that primarily represent strategic investments made ~~through our FIS Impact Ventures program~~by the Company as well as investments obtained through acquisitions. Such investments totaled ~~$409~~$395 million and ~~$358~~$393 million at March 31, ~~2022,~~2023, and December 31, ~~2021,~~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 gains and losses on these investments, realized and unrealized as well as impairment losses, as Other income (expense), net on the consolidated statements of earnings (loss) and recorded net gains of ~~$41~~$(2) million and ~~$15~~$41 million for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, related to these investments.

(5) Deferred Contract Costs

Origination and fulfillment costs from contracts with customers capitalized as of March 31, ~~2022,~~2023, and December 31, ~~2021, consist~~2022, consisted of the following (in millions):


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Contract costs on implementations in progress	Contract costs on implementations in progress	$	173	$	218	Contract costs on implementations in progress	$	216	$	250
Contract origination costs on completed implementations, net	Contract origination costs on completed implementations, net	584		553		Contract origination costs on completed implementations, net	636		579
Contract fulfillment costs on completed implementations, net	Contract fulfillment costs on completed implementations, net	186		198		Contract fulfillment costs on completed implementations, net	257		251
Total Deferred contract costs, net	Total Deferred contract costs, net	$	943	$	969	Total Deferred contract costs, net	$	1,109	$	1,080

Amortization of deferred contract costs on completed implementations was ~~$96~~$91 million and ~~$68~~$96 million during the three months ended March 31, 2023 and 2022, ~~and 2021,~~ respectively.

~~During the three months ended March 31, 2022, the Company recorded $16 million of incremental amortization expense related to deferred contract costs driven by the Company's platform modernization.~~

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The Company recorded $3 million and $16 million during the three months ended March 31, 2023 and 2022, respectively, of incremental amortization expense related to deferred contract costs resulting from the Company's platform modernization.

(6) Debt

Long-term debt as of March 31, ~~2022,~~2023, and December 31, ~~2021, consists~~2022, consisted of the following (in millions):


		March 31, 2022								March 31, 2023
			Weighted								Weighted
			Average								Average
		Interest	Interest		March 31,		December 31,			Interest	Interest		March 31,		December 31,
		Rates	Rate (1)	Maturities	2022		2021			Rates	Rate (1)	Maturities	2023		2022
Fixed Rate Notes	Fixed Rate Notes								Fixed Rate Notes
Senior USD Notes	Senior USD Notes	0.4% - 4.8%	1.9%	2023 - 2048	$	6,909	$	6,909	Senior USD Notes	0.6% - 5.6%	3.9%	2024 - 2052	$	8,659	$	9,409
Senior Euro Notes	Senior Euro Notes	0.1% - 3.0%	1.2%	2022 - 2039	7,502		7,656		Senior Euro Notes	0.6% - 3.0%	1.6%	2023 - 2039	6,256		6,154
Senior GBP Notes	Senior GBP Notes	1.7% - 3.4%	1.6%	2022 - 2031	1,609		1,655		Senior GBP Notes	2.3% - 3.4%	6.6%	2029 - 2031	1,144		1,119
Revolving Credit Facility (2)	Revolving Credit Facility (2)		1.7%	2026	838		325		Revolving Credit Facility (2)		6.0%	2026	556		280
Other (3)					(320)		(103)
Incremental Revolving Credit Facility (3)									Incremental Revolving Credit Facility (3)			2023	—		—
Other (4)									Other (4)				(571)		(622)
Total long-term debt, including current portion	Total long-term debt, including current portion				16,538		16,442		Total long-term debt, including current portion				16,044		16,340
Current portion of long-term debt	Current portion of long-term debt				(2,330)		(1,617)		Current portion of long-term debt				(2,139)		(2,133)
Long-term debt, excluding current portion	Long-term debt, excluding current portion				$	14,208	$	14,825	Long-term debt, excluding current portion				$	13,905	$	14,207

(1)The weighted average interest rate includes the impact of interest rate swaps and excludes the impact of cross-currency interest rate swaps (see Note 7).

(2)Interest on the Revolving Credit Facility is generally payable at LIBOR plus an applicable margin of up to 1.625% plus 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 financing obligations for certain hardware and software, the fair value of interest rate swaps (see Note 7), unamortized non-cash bond discounts and unamortized debt issuance costs.

Short-term borrowings as of March 31, ~~2022,~~2023, and December 31, ~~2021, consist~~2022, consisted of the following (in millions):


		March 31, 2022								March 31, 2023
		Weighted								Weighted
		Average								Average
		Interest			March 31,		December 31,			Interest			March 31,		December 31,
		Rate		Maturities	2022		2021			Rate		Maturities	2023		2022
Euro-commercial paper notes ("ECP Notes")	Euro-commercial paper notes ("ECP Notes")	(0.3)	%	Up to 183 days	$	1,689	$	1,723	Euro-commercial paper notes ("ECP Notes")	3.0	%	Up to 183 days	$	1,924	$	2,054
U.S. commercial paper notes ("USCP Notes")	U.S. commercial paper notes ("USCP Notes")	0.8	%	Up to 397 days	993		2,087		U.S. commercial paper notes ("USCP Notes")	5.4	%	Up to 397 days	2,044		1,701
Other	Other				—		101		Other				—		42
Total Short-term borrowings	Total Short-term borrowings				$	2,682	$	3,911	Total Short-term borrowings				$	3,968	$	3,797

As discussed further in Note 7, the Company is a party to interest rate swaps that convert a portion of its fixed-rate debt to variable-rate debt. These interest rate swaps are designated as fair value hedges of its fixed rate debt. The Company has also entered into cross currency interest rate swaps under which it agrees to pay interest in U.S. dollars in exchange for receiving interest in a foreign currency. 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 March 31, ~~2022,~~2023, the weighted average interest rate of the Company's outstanding debt was ~~1.0%~~3.7%, including the impact of interest rate swaps ~~(see Note 7)~~but excluding the impact of cross-currency interest rate swaps. Including the impact of cross-currency interest rate swaps on interest expense, the weighted average interest rate of the Company's outstanding debt was 3.0%.

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FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 of the interest rate swaps (see Note 7) and net unamortized non-cash bond discounts of ~~$(324)~~$(552) million as of March 31, ~~2022~~2023 (in millions):


		Total			Total
2022 remaining period		$	1,563
2023		2,163
2023 remaining period				2023 remaining period	$	1,392
2024	2024	1,313		2024	1,311
2025	2025	701		2025	1,448
2026	2026	2,094		2026	1,261
2027				2027	2,416
Thereafter	Thereafter	9,125		Thereafter	8,865
Total principal payments	Total principal payments	16,959		Total principal payments	16,693
Debt issuance costs, net of accumulated amortization	Debt issuance costs, net of accumulated amortization	(97)		Debt issuance costs, net of accumulated amortization	(97)
Total long-term debt	Total long-term debt	$	16,862	Total long-term debt	$	16,596

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 ~~its~~each such facility's scheduled maturity date, which ~~occurs~~occur on March 2, ~~2026.~~2026 and December 15, 2023, respectively.

Senior Notes

InOn March ~~2021, pursuant to cash tender offers and make-whole redemptions,~~1, 2023, FIS ~~purchased and redeemed~~repaid an aggregate principal amount of ~~$5.1 billion in Senior Notes, comprised of $3,529~~$750 million in Senior USD Notes, ~~$600 million~~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, ~~$871 million in Senior GBP Notes, and $66 million in Senior Euro Floating Rate Notes, with interest rates ranging from 0.0%~~on their due date, pursuant to ~~5.0% and maturities ranging from 2021 to 2029, resulting in a loss on extinguishment of debt of approximately $528 million, recorded in Other income (expense), net on~~ the ~~consolidated statement of earnings (loss), relating to tender premiums, make-whole amounts, and fees; the write-off of unamortized bond discounts and debt issuance costs; and losses on~~ related ~~derivative instruments. The Company funded the purchase and redemption of the Senior Notes with proceeds on borrowings from the issuance and sale of Senior USD Notes on March 2, 2021.~~indenture.

On ~~March 2, 2021,~~July 13, 2022, FIS completed the issuance and sale of Senior USD Notes with an aggregate principal amount of ~~$5.5~~$2.5 billion with interest rates ranging from ~~0.4%~~4.5% to ~~3.1%~~5.6% and maturities ranging from ~~2023~~2025 to ~~2041 ("new Senior USD Notes").~~2052. The proceeds from the debt issuance were ~~subsequently~~ used ~~to purchase and redeem~~for the ~~Senior Notes discussed above with the remainder used to repay a portion~~repayment of debt under our commercial paper ~~notes. The new Senior USD Notes are subject to customary covenants, including, among others, customary events~~programs in the third quarter of ~~default. The new Senior USD Notes also include redemption provisions at the option of FIS, similar to the other Senior Notes.~~2022.

Revolving Credit ~~Facility~~Facilities

On ~~March 2, 2021,~~February 28, 2023, FIS entered into ~~an amendment to the~~a Incremental Revolving Credit Facility ~~agreement to amend certain covenant provisions, revise lender~~which provides credit commitments ~~for certain counterparties, and extend the~~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 ~~March 2, 2026.~~ 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.

As of March 31, ~~2022,~~2023, the borrowing capacity under the Revolving Credit Facility and Incremental Revolving Credit Facility was ~~$1,980~~$2,976 million (net of ~~$2,682~~$3,968 million of capacity backstopping our commercial paper notes).

Fair Value of Debt

The fair value of the Company's long-term debt is estimated to be approximately ~~$437~~$1,629 million ~~lower than the carrying value~~ and ~~$570~~$1,873 million ~~higher~~lower than the carrying value, excluding the fair value of the interest rate swaps and unamortized discounts, as of March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively.

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(7) 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 March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, 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. These swaps are designated as fair value hedges for accounting purposes with a net liability fair value of ~~$283~~$514 million and ~~$85~~$578 million reflected as a decrease in the long-term debt balance at March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, respectively (see Note 6).

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 ~~as Foreign currency translation adjustments~~ and related income tax (expense) benefit within Other comprehensive earnings (loss), net of tax, on the consolidated statements of comprehensive earnings (loss) ~~of $260 million and $321 million during the three months ended March 31, 2022 and 2021, respectively.~~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,
	2023		2022
Foreign currency-denominated debt designations	$	(117)	$	174
Cross-currency interest rate swap designations	(104)		86
Total	$	(221)	$	260

Foreign Currency-Denominated Debt Designations

The Company designates certain foreign currency-denominated debt as net investment hedges of its investment in Euro- and Pound Sterling-denominated operations. As of March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, an aggregate ~~€8,265~~€7,499 million and ~~€8,275~~€7,646 million, respectively, waswas designated as a net investment hedge of the Company's investment in Euro-denominated operations related to Senior Euro Notes with maturities ranging from ~~2022~~2023 to 2039 and ECP Notes. As of March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, an aggregate ~~£1,140~~£746 million and ~~£1,193~~£726 million, respectively, was designated as a net investment hedge of the Company's Pound Sterling-denominated operations related to the Senior GBP Notes with maturities ranging from ~~2022~~2029 to ~~2031.~~2031 at March 31, 2023.

Cross-Currency Interest Rate Swap Designations

The Company holds cross-currency interest rate swaps and designates them as net investment hedges of its investment in Euro- and Pound Sterling-denominated operations.

As of March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, aggregate notional amounts of ~~€5,906~~€6,343 million and ~~€5,906~~€6,343 million, respectively, were designated as net investment hedges of the Company's investment in Euro-denominated operations, and aggregate notional amounts of ~~£2,386~~£2,580 million and ~~£2,345~~£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 ~~were net~~totaled assets of ~~$245~~$246 million and $336 million and liabilities of $(112) million and $(72) million at March 31, ~~2022,~~2023, and ~~net assets of $258 million at~~ December 31, ~~2021,~~2022, respectively. ~~The~~

During the three months ended March 31, 2023 and 2022, the Company ~~recorded~~(paid) received net ~~cash inflows related to~~proceeds of approximately $(10) million and $135 million, respectively, for the fair ~~value at maturity or termination~~values of the cross-currency interest rate swaps as of the settlement dates. The proceeds were recorded within ~~Other~~ investing activities ~~net,~~ on the consolidated statements of cash ~~flows~~flows. Following the settlement of ~~$135 million during~~ the ~~three months ended March 31, 2022.~~existing cross-currency interest rate swaps, 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.

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(8) Commitments and Contingencies

Securities Litigation

On March 6, 2023, a complaint captioned Palm Bay Police and Firefighters’ Pension Fund v. Fidelity National Information Services, Inc., et al., was filed in the United States District Court for the Middle District of Florida by a shareholder of the Company. This putative class action, which names the Company and certain of its current and former officers as defendants, seeks damages for alleged violations of federal securities laws in connection with our disclosures relating to our Merchant Solutions segment. Plaintiff seeks to represent a class consisting of all persons who purchased the Company’s common stock between February 9, 2021, and February 10, 2023. A second putative class action complaint, making many of the same allegations, was filed on April 28, 2023, seeking damages on behalf of a class consisting of all persons who purchased the Company’s common stock between May 7, 2020, and February 10, 2023. While we believe the cases are without merit, no assurance can be given as to their ultimate outcome. We intend to contest them vigorously.

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 shareholder of the Company. This action, which was purportedly filed on behalf of the Company and names our current and certain of our former directors as defendants, makes claims for alleged breaches of federal securities laws, breaches of fiduciary duty, and corporate waste arising out of the same matters at issue in the Palm Bay Pension Fund matter described above.

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 14 claims against Servicos asserting potential tax liabilities of approximately ~~$11~~$12 million. There are potentially 24 additional claims against Transpev/Prosegur for which Servicos is named

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

as a co-defendant or may be named but for which Servicos has not yet been served. These additional claims amount to approximately ~~$30~~$34 million, making the total potential exposure for all 38 claims approximately ~~$41~~$46 million. We do not believe a liability for these 38 total claims is probable and, therefore, have not recorded a liability for any of these claims.

Tax Receivable Agreement

The Company assumed in the Worldpay acquisition a Tax Receivable Agreement ("TRA") under which the Company agreed to make payments to Fifth Third Bank ("Fifth Third") of 85% of the federal, state, local and foreign income tax benefits realized by the Company as a result of certain tax deductions. In December 2019, the Company entered into a Tax Receivable Purchase Addendum (the "Amendment") that provides written call and put options (collectively "the options") to terminate certain estimated obligations under the TRA in exchange for fixed cash payments.

The remaining TRA obligations not subject to the Amendment are based on the cash savings realized by the Company by comparing the actual income tax liability of the Company to the amount of such taxes the Company would have been required to pay had there been no deductions related to the tax attributes. Under the TRA, in certain specified circumstances, such as certain changes of control, the Company may be required to make payments in excess of such cash savings.

Obligations recorded in our consolidated financial statements pursuant to the TRA are based on estimates of future deductions and future tax rates and, in the case of the obligations subject to the Amendment, reflect management's expectation that the options will be exercised. In January ~~2022,~~2023, the Company exercised its ~~second~~third call option pursuant to the Amendment,

which results in fixed cash payments to Fifth Third of ~~$186~~$138 million. The timing and/or amount of aggregate payments due under the TRA may vary based on a number of factors, including the exercise of options, the amount and timing of taxable income the Company generates in the future and the tax rate then applicable, the use of loss carryforwards and amortizable basis. Each reporting period, the Company evaluates the assumptions underlying the TRA obligations.

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The consolidated balance sheets as of March 31, ~~2022,~~2023, and December 31, ~~2021,~~2022, include a total liability of ~~$405~~$172 million and ~~$451~~$266 million, respectively, relating to the TRA.

Chargeback Liability

Through services offered in our Merchant Solutions segment, 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 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. The economic impact of the COVID-19 pandemic has not resulted in material chargeback losses as of March 31, 2022; however, it is reasonably possible that the Company has incurred or may incur significant losses related to future chargebacks. Due to the unprecedented nature of the pandemic and the numerous current and future uncertainties that may impact any potential chargeback losses, and considering that the Company has no historical experience with similar uncertainties, a reasonable estimate of the possible accrual for future chargeback losses or range of losses cannot be made.

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.

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(9) ~~Stock Compensation Plans~~

On January 1, 2021, the Company established a Qualified Retirement Equity Program that modified our existing stock compensation plans. The modification implemented a new retirement policy that permits retirees that meet certain eligibility criteria to continue vesting in unvested equity awards in accordance with the terms of the respective grant agreements, resulting in accelerated stock compensation expense for those employees meeting the definition of retirement eligible. During the quarter ended March 31, 2021, the Company recorded $104 million in accelerated stock compensation expense included in Selling, general, and administrative expenses in the consolidated statement of earnings to reflect the impact of the modification on unvested equity awards outstanding at January 1, 2021.

~~(10) Related-Party Transactions~~

The Company held a noncontrolling ownership stake in Cardinal Holdings ("Cardinal"), which operated the Capco consulting business, through April 29, 2021, when we sold our ownership stake due to an acquisition transaction of the Capco consulting business by Wipro Ltd. Prior to the sale, the Company recorded the ownership stake in Cardinal as an equity method investment included within Other noncurrent assets on the consolidated balance sheet.

FIS provides ongoing management consulting services and other services to Cardinal. FIS also purchases services and software licenses from Cardinal from time to time. Cardinal was a related party through April 29, 2021. Amounts transacted through these agreements were not significant to the 2021 period presented when Cardinal was a related party.

~~(11)~~ Net Earnings (Loss) per Share

The basic weighted average shares and common stock equivalents for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, were computed using the treasury stock method.

The following table summarizes net earnings ~~(loss)~~ and net earnings ~~(loss)~~ per share attributable to FIS common stockholders for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 (in millions, except per share amounts):
Three months ended March 31,
2022 2021
Net earnings (loss) attributable to FIS common stockholders $ 120 $ (373)
Weighted average shares outstanding-basic 610 621
Plus: Common stock equivalent shares 4 —
Weighted average shares outstanding-diluted 614 621
Net earnings (loss) per share-basic attributable to FIS common stockholders $ 0.20 $ (0.60)
Net earnings (loss) per share-diluted attributable to FIS common stockholders $ 0.20 $ (0.60)


	Three months ended March 31,
	2023		2022
Net earnings attributable to FIS common stockholders	$	140	$	120
Weighted average shares outstanding-basic	592		610
Plus: Common stock equivalent shares	1		4
Weighted average shares outstanding-diluted	593		614
Net earnings per share-basic attributable to FIS common stockholders	$	0.24	$	0.20
Net earnings per share-diluted attributable to FIS common stockholders	$	0.24	$	0.20

~~The~~Options to purchase approximately 9 million and 5 million shares of our common stock, were not included in the computation of diluted ~~net loss~~earnings per share for the three months ended March 31, 2021, did not include the effect of common stock equivalent shares of 5 million because the effect would have been anti-dilutive. The diluted net earnings (loss) per share for the three months ended March 31,2023 and 2022, ~~and 2021, did not include options to purchase approximately 5 million and 1 million shares of our common stock for the three months ended March 31, 2022 and 2021,~~ respectively, because they were anti-dilutive.

In January 2021, our Board of Directors approved a ~~new~~ 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. ~~Under the new share repurchase program, approximately 85~~Approximately 64 million shares ~~remain~~remained available for repurchase as of March 31, ~~2022.~~2023. Our current plan for 2023 is to reorient our use of excess cash flow from share repurchases to debt reduction, in part given our outlook for business trends in 2023.

~~(12)~~(10) Segment Information

~~FIS reports its financial performance based on the following segments: Merchant Solutions, Banking Solutions, Capital Market Solutions and Corporate and Other. Below is a summary of each segment.~~

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FIS reports its financial performance based on the following segments: Banking Solutions, Merchant Solutions, Capital Market Solutions and Corporate and Other. Below is a summary of each segment. 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. Revenue from the reclassified businesses during the quarter ended March 31, 2023, represented less than 1% of consolidated revenue for the period.

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. Banking serves clients in more than 100 countries. 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.

Merchant Solutions ("Merchant")

The Merchant segment is focused on serving merchants of all sizes globally, enabling them to accept, authorize and settle electronic payment transactions. Merchant includes all aspects of payment processing, including value-added services, such as security, fraud prevention, advanced data analytics, foreign currency management and numerous funding options. Merchant serves clients in over 100 countries. Our Merchant clients are highly-diversified, including global enterprises, national retailers and small- to medium-sized businesses. The Merchant segment utilizes broad and varied distribution channels, including direct sales forces and multiple referral partner relationships that provide us with access to new and existing markets.

~~Banking~~On February 13, 2023, we announced plans to spin off our Merchant Solutions ~~("Banking")~~

business as further discussed in Item 2

~~The Banking segment is focused on serving financial institutions~~"Management's Discussion and Analysis of ~~all sizes with core processing software, transaction processing software~~Financial Condition and ~~complementary applications and services, many~~Results of which interact directly with core processing software. We sell these solutions and services 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. Banking serves clients in more than 100 countries. We provide our clients integrated solutions characterized by multi-year processing contracts that generate highly 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.Operations."

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 operate in more than 100 countries and 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 ~~and services~~ 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 ~~integration~~transformation-related expenses, that are not considered when management evaluates revenue-generating segment performance.

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In the Corporate and Other segment, ~~for the three months ended March 31, 2022,~~ the Company recorded acquisition, ~~and~~ integration ~~costs primarily related to the Worldpay acquisition as well as certain~~and other costs ~~including cost associated with~~comprised of the ~~Company's platform modernization totaling $80 million. The Company~~following (in millions):


	Three months ended
	March 31,
	2023		2022

Acquisition and integration	$	9	$	48
Enterprise transformation, including Future forward and platform modernization	76		80
Severance and other termination expenses associated with enterprise cost control initiatives and changes in senior management	28		11
Planned spin-off of the Merchant Solutions business	11		—
Stock-based compensation, primarily from certain performance-based awards	—		24
Other, including divestiture-related expenses, enterprise costs control and other initiatives	3		28
Total acquisition, integration and other costs	$	127	$	190

Amounts in table may not sum due to rounding.

Other costs in Corporate and Other also ~~recorded $58 million of asset impairments primarily for real estate-related assets as a result of office space reductions as well as $52 million of~~included incremental amortization expense associated with shortened estimated useful lives and accelerated amortization methods for certain software and deferred contract cost assets ~~driven by~~resulting from the Company's platform modernization ~~for the three months ended March 31, 2022. For the three months ended March 31, 2021, the Company also recorded $104~~totaling $19 million in accelerated stock compensation expense to reflect the impact of establishing a Qualified Retirement Equity Program that modified unvested equity awards outstanding at January 1, 2021 (see Note 9) as well as costs related to data center consolidation activities totaling $15 million. In addition, the Company recorded incremental costs directly related to COVID-19 of $9and $52 million for the three months ended March 31, ~~2021.~~2023 and 2022, respectively, which is recorded in depreciation and amortization in the statement of operations. Additionally, during the quarter ended March 31, 2022, the Company recorded $58 million of impairments primarily related to real estate-related assets resulting from office space reductions.

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)~~, equity method investment earnings (loss),~~ and depreciation and amortization, and excludes certain costs and other transactions that management deems non-operational in ~~nature.~~nature or that otherwise improve the comparability of operating results across reporting periods by their exclusion. The ~~non-operational~~ 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. ~~Adjusted EBITDA also excludes incremental and direct costs resulting from the COVID-19 pandemic.~~ These costs and adjustments are recorded in the Corporate and Other segment for the periods discussed below. Adjusted EBITDA for the respective segments excludes the foregoing costs and adjustments.

Summarized financial information for the Company's segments is shown in the following tables. The Company does not evaluate performance or allocate resources based on segment asset data; therefore, such information is not presented.

~~For the three months ended March 31, 2022 (in millions):~~
Capital
Merchant Banking Market Corporate
Solutions Solutions Solutions and Other Total
Revenue $ 1,112 $ 1,645 $ 658 $ 77 $ 3,492
Operating expenses (682) (1,099) (439) (1,115) (3,335)
Depreciation and amortization (including purchase accounting amortization) 92 151 89 681 1,013
Acquisition, integration and other costs — — — 190 190
Asset impairments — — — 58 58
Adjusted EBITDA $ 522 $ 697 $ 308 $ (109) $ 1,418
Adjusted EBITDA $ 1,418
Depreciation and amortization (363)
Purchase accounting amortization (650)
Acquisition, integration and other costs (190)
Asset impairments (58)
Interest expense, net (43)
Other income (expense), net 61
(Provision) benefit for income taxes (54)
Net earnings attributable to noncontrolling interest (1)
Net earnings attributable to FIS common stockholders $ 120
Capital expenditures $ 143 $ 158 $ 84 $ 27 $ 412

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For the three months ended March 31, ~~2021~~2023 (in millions):


						Capital											Capital
		Merchant		Banking		Market		Corporate					Banking		Merchant		Market		Corporate
		Solutions		Solutions		Solutions		and Other		Total			Solutions		Solutions		Solutions		and Other		Total
Revenue	Revenue	$	966	$	1,540	$	625	$	92	$	3,223	Revenue	$	1,685	$	1,105	$	663	$	57	$	3,510
Operating expenses	Operating expenses	(603)		(1,018)		(419)		(1,084)		(3,124)		Operating expenses	(1,164)		(720)		(436)		(853)		(3,173)
Depreciation and amortization (including purchase accounting amortization)	Depreciation and amortization (including purchase accounting amortization)	88		145		82		638		953		Depreciation and amortization (including purchase accounting amortization)	155		96		93		551		895
Acquisition, integration and other costs	Acquisition, integration and other costs	—		—		—		256		256		Acquisition, integration and other costs	—		—		—		127		127
Adjusted EBITDA	Adjusted EBITDA	$	451	$	667	$	288	$	(98)	$	1,308	Adjusted EBITDA	$	676	$	481	$	320	$	(118)	$	1,359

Adjusted EBITDA	Adjusted EBITDA									$	1,308	Adjusted EBITDA									$	1,359
Depreciation and amortization	Depreciation and amortization									(279)		Depreciation and amortization									(347)
Purchase accounting amortization	Purchase accounting amortization									(674)		Purchase accounting amortization									(548)
Acquisition, integration and other costs	Acquisition, integration and other costs									(256)		Acquisition, integration and other costs									(127)
Interest expense, net	Interest expense, net									(74)		Interest expense, net									(137)
Other income (expense), net	Other income (expense), net									(493)		Other income (expense), net									(11)
(Provision) benefit for income taxes	(Provision) benefit for income taxes									97		(Provision) benefit for income taxes									(48)
Equity method investment earnings (loss)										1
Net earnings attributable to noncontrolling interest	Net earnings attributable to noncontrolling interest									(3)		Net earnings attributable to noncontrolling interest									(1)
Net earnings attributable to FIS common stockholders	Net earnings attributable to FIS common stockholders									$	(373)	Net earnings attributable to FIS common stockholders									$	140
Capital expenditures	Capital expenditures	$	104	$	106	$	54	$	34	$	298	Capital expenditures	$	98	$	102	$	63	$	16	$	279

For the three months ended March 31, 2022 (in millions):


					Capital
	Banking		Merchant		Market		Corporate
	Solutions		Solutions		Solutions		and Other		Total
Revenue	$	1,659	$	1,112	$	627	$	94	$	3,492
Operating expenses	(1,104)		(682)		(413)		(1,136)		(3,335)
Depreciation and amortization (including purchase accounting amortization)	152		92		86		683		1,013
Acquisition, integration and other costs	—		—		—		190		190
Asset impairments	—		—		—		58		58
Adjusted EBITDA	$	707	$	522	$	300	$	(111)	$	1,418

Adjusted EBITDA									$	1,418
Depreciation and amortization									(363)
Purchase accounting amortization									(650)
Acquisition, integration and other costs									(190)
Asset impairments									(58)
Interest expense, net									(43)
Other income (expense), net									61
(Provision) benefit for income taxes									(54)
Net earnings attributable to noncontrolling interest									(1)
Net earnings attributable to FIS common stockholders									$	120
Capital expenditures	$	160	$	143	$	81	$	28	$	412

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Item 1. Condensed Consolidated Financial Statements (Unaudited) and the Notes thereto included elsewhere in this report. The statements contained in this Form 10-Q or in our other documents or in oral presentations or other management statements that are not purely historical are forward-looking statements within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance or projections, ~~of the Company,~~ projected revenue or expense synergies or dis-synergies, business and market conditions, outlook, accruals and estimates, foreign currency exchange rates, deleveraging plans, expected dividends and share repurchases of the Company and following the proposed spin-off of the Merchant Solutions business, the Company's and the Merchant Solutions business' sales ~~pipeline~~pipelines and anticipated profitability and growth, assumptions and strategies of the Company and the Merchant Solutions business following the proposed spin-off, the anticipated benefits of the spin-off, the expected timing of completion of the spin-off, as well as other statements about our expectations, beliefs, intentions, or strategies regarding the future, or other characterizations of future events or circumstances, are forward-looking statements. ~~In many cases, forward-looking~~These statements ~~can~~may be identified by ~~terminology~~words such as ~~"may,~~"expect," "anticipate," "intend," "plan," "believe," "will," "should," ~~"expect,~~"could," ~~"plan,~~"would," ~~"anticipate,~~"project," ~~"believe," "estimate," "predict," "potential," or~~ "continue," ~~or the negative of these terms~~"likely," and ~~other comparable terminology.~~similar expressions. These statements relate to future events and our future results and involve a number of risks and uncertainties. Forward-looking statements are based on management’s beliefs as well as assumptions made by, and information currently available to, management.

Actual results, performance or achievement could differ materially from those contained in these forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include the following, without limitation:

•the outbreak or recurrence of the novel coronavirus and any related variants ("COVID-19") and measures to reduce its spread, including the impact of governmental or voluntary actions such as business shutdowns and stay-at-home orders in certain geographies;

•the duration, including any recurrence, of the COVID-19 pandemic and its impacts, including reductions in consumer and business spending, and instability of the financial markets in heavily impacted areas across the globe;

•~~the economic and other impacts of COVID-19 on our clients which affect the sales of our solutions and services and the implementation of such solutions;~~

•the risk of losses in the event of defaults by merchants (or other parties) to which we extend credit in our card settlement operations or in respect of any chargeback liability, either of which could adversely impact liquidity and results of operations;

•changes in general economic, business and political conditions, including those resulting from COVID-19 or other pandemics, a recession, intensified international hostilities, acts of terrorism, increased rates of inflation or interest, changes in either or both the ~~U.S.~~United States and international lending, capital and financial markets or currency fluctuations;

•~~the risk that acquired businesses will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated;~~

•~~the risk that cost savings and synergies anticipated to be realized from acquisitions may not be fully realized or may take longer to realize than expected;~~

•~~the risks of doing business internationally;~~

•the effect of legislative initiatives or proposals, statutory changes, governmental or applicable regulations and/or changes in industry requirements, including privacy and cybersecurity laws and regulations;

•the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in, or new laws or regulations affecting, the banking, retail and financial services industries or due to financial failures or other setbacks suffered by firms in those industries;

•changes in the growth rates of the markets for our solutions;

•the amount, declaration and payment of future dividends is at the discretion of our Board of Directors and depends on, among other things, our investment opportunities, results of operations, financial condition, cash requirements, future prospects, ~~the duration and impact of the COVID-19 pandemic,~~ and other factors that may be considered relevant by our Board of Directors, including legal and contractual restrictions;

•the amount and timing of any future share repurchases is subject to, among other things, our share price, our other investment opportunities and cash requirements, our results of operations and financial condition, our future prospects and other factors that may be considered relevant by our Board of Directors and management;

•failures to adapt our solutions to changes in technology or in the marketplace;

•internal or external security breaches of our systems, including those relating to unauthorized access, theft, corruption or loss of personal information and computer viruses and other malware affecting our software or platforms, and the reactions of customers, card associations, government regulators and others to any such events;

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•the risk that implementation of software, including software updates, for customers or at customer locations or employee error in monitoring our software and platforms may result in the corruption or loss of data or customer information, interruption of business operations, outages, exposure to liability claims or loss of customers;

•risks associated with the impact or terms of the previously announced proposed spin-off of the Company’s Merchant Solutions business, including the impact on our businesses, resources, systems, procedures and controls, diversion of management’s attention and the impact on relationships with customers, governmental authorities, suppliers, employees and other business counterparties;

•risks associated with the expected benefits of the proposed spin-off, including the risk that the expected benefits of the proposed spin-off will not be realized within the expected timeframe, in full or at all, and the risk that conditions to the proposed spin-off will not be satisfied and/or that the proposed spin-off will not be completed within the expected timeframe, on the expected terms or at all;

•failure to obtain the expected qualification of the proposed spin-off as a tax-free transaction for U.S. federal income tax purposes, including whether or not an IRS ruling will be obtained;

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•the risk that any consents or approvals required in connection with the proposed spin-off will not be received or obtained within the expected timeframe, on the expected terms or at all;

•risks associated with expected financing transactions undertaken in connection with the proposed spin-off and risks associated with indebtedness incurred in connection with the proposed spin-off, including the potential inability to access or reduced access to the capital markets or increased cost of borrowings, including as a result of a credit rating downgrade;

•the risk that dis-synergy costs, costs of restructuring transactions and other costs incurred in connection with the proposed spin-off will exceed our estimates or otherwise adversely affect our business or operations;

•the reaction of current and potential customers to communications from us or regulators regarding information security, risk management, internal audit or other matters;

•the risk that acquired businesses will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated;

•the risk that cost savings and synergies anticipated to be realized from acquisitions may not be fully realized or may take longer to realize than expected;

•the risks of doing business internationally;

•the risk that policies and resulting actions of the current administration in the U.S. may result in additional regulations and executive orders, as well as additional regulatory and tax costs;

•major bank failures or sustained financial market illiquidity;

•competitive pressures on pricing related to the decreasing number of community banks in the U.S., the development of new disruptive technologies competing with one or more of our solutions, increasing presence of international competitors in the U.S. market and the entry into the market by global banks and global companies with respect to certain competitive solutions, each of which may have the impact of unbundling individual solutions from a comprehensive suite of solutions we provide to many of our customers;

•the failure to innovate in order to keep up with new emerging technologies, which could impact our solutions and our ability to attract new, or retain existing, customers;

•an operational or natural disaster at one of our major operations centers;

•failure to comply with applicable requirements of payment networks or changes in those requirements;

•fraud by merchants or bad actors; and

•other risks detailed elsewhere in the Risk Factors and other sections of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, in our Quarterly Reports on Form 10-Q and in our other filings with the ~~Securities and Exchange Commission.~~SEC.

Other unknown or unpredictable factors also could have a material adverse effect on our business, financial condition, results of operations and prospects. Accordingly, readers should not place undue reliance on ~~our~~these forward-looking statements. These forward-looking statements are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Except as required by applicable law or regulation, we do not undertake (and expressly disclaim) any obligation and do not intend to publicly update or review any of ~~our~~these forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

FIS is a leading provider of technology solutions for financial institutions and businesses of all sizes and across any industry globally. We enable the movement of commerce by unlocking the financial technology that powers the world's economy. Our employees are dedicated to advancing the way the world pays, banks and invests through our trusted innovation, system performance and flexible architecture. We help our clients use technology in innovative ways to solve business-critical challenges and deliver superior experiences for their customers. Headquartered in Jacksonville, Florida, FIS is a member of the Fortune 500® and the Standard & Poor's 500® Index.

We have grown both organically and through acquisitions. Organic growth has been driven by a number of factors, including growth of our customers’ businesses, our internal development of new solutions that enhance our client offerings, and our sales and marketing efforts to expand our customer base and addressable markets. Acquisitions have contributed additional solutions ~~and services~~ that complement or enhance our offerings, diversify our client base, expand our geographic coverage, and provide entry into new and attractive adjacent markets that align with our strategic objectives. We continue to strategically allocate resources to both organic and inorganic growth initiatives to enhance the long-term value of our business.

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FIS reports its financial performance based on the following segments: Banking Solutions ("Banking"), Merchant Solutions ("Merchant"~~), Banking Solutions ("Banking"~~), Capital Market Solutions ("Capital Markets") 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. A description of our segments is included in Note 1210 to the consolidated financial statements. Revenue by segment and the Adjusted EBITDA of our segments are discussed below in Segment Results of Operations. Amounts in tables below may not sum or calculate due to rounding.

Business Trends and Conditions

Our revenue is primarily derived from a combination of technology and processing ~~services,~~solutions, transaction fees, professional services and software license fees. While we are a global company and do business around the world, the majority of our revenue is generated by clients in the U.S. The majority of our international revenue is generated by clients in the U.K., Germany, Australia, ~~Brazil,~~ Canada and ~~India.~~Brazil. In addition, the majority of our revenue has historically been recurring and has been provided under multi-year Banking and Capital Markets contracts that contribute relative stability to our revenue stream. These ~~services,~~solutions, in general, are considered critical to our clients' operations. Although Merchant has a lesser percentage of multi-year contracts, substantially all of our Merchant revenue is recurring, derived from transaction processing fees that fluctuate with the number or value of transactions processed, among other variable measures associated with consumer activity.

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Professional services revenue is typically non-recurring, though recognition often occurs over time rather than at a point in time. Sales of software licenses are typically non-recurring with point-in-time recognition and are less predictable.

The distribution of vaccines against COVID-19 curtailed the impact of the pandemic in 2021 in many of the larger countries in which we do business, but the timing of a complete recovery remains uncertain as new variants of COVID-19 continue to impact consumer spending. In the fourth quarter of 2021, some governmental restrictions were re-imposed based upon a resurgence of variants of COVID-19 in many areas of the U.S. and Europe, the two largest geographic areas for our businesses, are experiencing slower economic growth than in recent years. In 2022, we began to experience lengthening sales cycles in Banking and Capital Markets, particularly across large transactions with a total contract value in excess of $50 million. We also experienced, and continue to experience, higher rates of inflation in these markets, including increasing wage and benefits rates, which ~~resulted~~management believes is in ~~an adverse impact on payment volumes~~part due to inflation and ~~transactions over those anticipated following~~in part due to competitive job markets for the ~~easing~~skilled employees who support our businesses, as well as increasing non-labor-related costs. Given the nature of ~~restrictions in~~our varied businesses, the ~~prior two quarters. These changes in spending affected our business, results~~magnitude of ~~operations~~future effects of slower economic growth, including lengthy sales cycles and ~~financial condition throughout 2021~~inflation, are difficult to predict, although they have had and ~~will likely~~are expected to continue to have an adverse effect on our results of operations. In 2022, the strengthening of the U.S. dollar had a negative impact on our revenue and earnings; however, it has weakened in recent months, tempering the effects. Given the volatility of exchange rates and the mix of currencies involved in both revenues and expenses, the direction and magnitude of future effects of currency fluctuations are uncertain. Rising interest rates had, and may continue to have, a negative impact on our interest expense.

In 2022, we also recorded a goodwill impairment charge of $17.6 billion related to the Merchant Solutions reporting unit. The impairment reflects our intermediate-term expectation of lower growth in the segment, particularly related to the SMB sub-segment. See "Goodwill Impairment" in our Critical Accounting Policies and Note 6 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, for further details. The Merchant segment revenue growth decelerated over the second half of 2022, particularly in the fourth quarter, primarily reflecting a decline in SMB sub-segment revenues, attributable to slower economic growth and competitive pressures. Additionally, our Enterprise sub-segment was negatively impacted in 2022 ~~although~~by a decline in U.K.- derived revenue, principally reflecting softer economic conditions in the ~~magnitude~~region. These trends continued in the first quarter of 2023, and ~~duration~~we anticipate them to continue in the short term. In addition, the war in Ukraine has negatively affected, and as long as it continues is expected to continue to negatively affect, our Merchant business.

As a result of ~~their ultimate effect~~the factors noted above, for the Company as a whole, we expect 2023 revenue growth will be substantially slower than 2022, and we expect to experience margin compression in 2023 as compared to 2022. Over the longer term, we expect improvements in revenue growth and margins in response to improving economic conditions and planned management actions, including our Future Forward program discussed below.

On February 13, 2023, we announced plans to spin off our Merchant Solutions business ("SpinCo"). We may retain a minority interest of up to 19.9% of SpinCo. The planned separation is ~~not possible~~intended to ~~predict.~~create two independent, publicly traded companies with enhanced strategic and operational focus and to enable more tailored capital allocation and investment decisions to unlock growth. While we believe the spin-off will be beneficial to both FIS and, following the spin, SpinCo, and therefore indirectly to our shareholders, it will result in some one-time costs and revenue and expense dis-synergies. The latter are expected to include higher interest expense as a result of replacing lower coupon FIS debt with higher coupon Merchant debt, in part due to expected credit ratings and the current interest rate environment. FIS and SpinCo are expected to maintain a commercial relationship to ensure continuity for clients. We expect the spin-off to be completed by early 2024. The proposed spin-off is subject to customary conditions, including final approval by our Board of Directors, receipt of a tax opinion and a private letter ruling from the Internal Revenue Service, the filing and effectiveness of a Form 10 registration statement with the

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SEC, SpinCo's ability to raise new debt and obtaining of all required regulatory approvals. No assurance can be given that a spin-off will in fact occur, or that it will achieve the anticipated benefits, on our desired timetable or at all. See "Risk Factors—Risks Related to the Planned Spin-Off of our Merchant Business" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

We anticipate that, in connection with the proposed spin-off, SpinCo will incur indebtedness and, immediately prior to the closing of the proposed spin-off, pay a cash dividend to FIS using proceeds of such indebtedness. The amount of any such dividend will depend upon SpinCo’s ability to raise new indebtedness which, in turn, will depend upon its historic and anticipated business, financial performance and liquidity as well as market conditions, credit ratings and other factors, some of which are outside our control. We intend to use the cash distributed to FIS by SpinCo from the dividend to reduce our indebtedness to a level consistent with our current investment grade credit ratings and for general corporate purposes, including paying for costs of the spin-off. We expect that our weighted average interest rate after the spin-off will be higher than it was as of March 31, 2023.

In November 2022, we launched an enterprise-wide efficiency program, Future Forward, with a focus on streamlining operations, accelerating time to market of new solutions and improving profitability and cash flow. We are targeting cash savings from Future Forward of $1.25 billion by year-end 2024, consisting of $600 million of operating expense savings (run rate as of end of 2024), $300 million of capital expense savings (run rate as of end of 2024) and $350 million of cumulative savings by year-end 2024 from the reduction or elimination of acquisition, integration and transformation-related expenses, in each case prior to the effects of the proposed spin-off of the Merchant Solutions business, which we believe will reduce the available savings.

We continue to assist financial institutions in migrating to outsourced integrated technology solutions to improve their profitability and address increasing and ongoing regulatory requirements. As a provider of outsourced solutions, we benefit from multi-year recurring revenue streams, which help moderate the effects of broader year-to-year economic and market changes that otherwise might have a larger impact on our results of operations. We believe our integrated solutions and outsourced services are well-positioned to address this outsourcing trend across the markets we serve.

Over the last five years, we have moved over 80% of our server compute, primarily in North America, to our FIS cloud located in our strategic data centers. This allows us to further enhance security for our clients' data and increases the flexibility and speed with which we can provide solutions and services to our clients, at lesser cost. We have also completed our data center consolidation program in 2021.

Following the successful modernization of our IT infrastructure and consolidation of our data centers, we are now accelerating the modernization of our strategic applications and sunsetting of our redundant platforms. Our multi-year platform modernization initiative is designed to create a componentized, cloud-native set of capabilities that can be consumed by clients as end-to-end business applications or as individual components. Although our platform modernization will result in additional near-term costs, we expect it will result in improvements in our operational efficiencies over time.

We continue to invest in modernization, innovation and integrated solutions ~~and services~~ to meet the demands of the markets we serve and compete with global banks, financial and other technology providers, and emerging technology innovators. We invest both organically and through investment opportunities in companies building complementary technologies in the financial services space. Our internal efforts in research and development activities have related primarily to the modernization of our proprietary core systems in each of our segments, design and development of next-generation digital and innovative solutions and development of processing systems and related software applications and risk management platforms. We expect to continue our practice of investing an appropriate level of resources to maintain, enhance and extend the functionality of our proprietary systems and existing software applications, to develop new and innovative software applications and systems to address emerging technology trends in response to the needs of our clients, and to enhance the capabilities of our outsourcing infrastructure.

In addition, we are investing in the development of new solutions and venture opportunities by establishing FIS Impact Ventures. This group prioritizes development of, and investment in, next-generation technology and innovation.

Since the beginning of the pandemic, the Company has taken several actions related to the health and safety of its employees while maintaining business continuity, including implementing its comprehensive Pandemic Plan. The Pandemic Plan includes site-specific plans as well as travel restrictions, medical response protocols, work-from-home strategies and enhanced cleaning within our locations.

Consumer preference continues to shift from traditional branch banking services to digital banking solutions, and our clients seek to provide a single integrated banking experience through their branch, mobile, internet and voice banking ~~channels. The COVID-19 pandemic has resulted in accelerating digitization of banking and payment services by requiring, in many cases, banks and bank customers to transact through digital~~ channels. We have been providing our large regional banking customers in the U.S. with Digital One, an integrated digital banking platform, and are now adding functionality and offering Digital One to our community bank clients to provide a consistent, omnichannel experience for consumers of banking services across self-service channels like mobile banking and online banking, as well as supporting channels for bank staff operating in bank branches and contact centers. The uniform customer experience extends to support a broad range of financial services including opening new accounts, servicing of existing accounts, money movement, and personal financial management, as well as other consumer, small business and commercial banking capabilities. Digital One is integrated into several of the core banking platforms offered by FIS and is also offered to customers of non-FIS core banking systems.

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~~We anticipate consolidation~~Consolidation within the banking industry ~~will~~has occurred and may continue, primarily in the form of merger and acquisition activity among financial institutions, which we believe would broadly be detrimental to the profitability of the financial technology industry. However, consolidation resulting from specific merger and acquisition transactions may be beneficial to our business. When consolidations of financial institutions occur, merger partners often operate systems obtained from competing service providers. The newly formed entity generally makes a determination to migrate its core and payments systems to a single platform. When a financial institution processing client is involved in a consolidation, we may benefit by their expanding the use of our ~~services~~solutions if such ~~services~~solutions are chosen to survive the consolidation and to support the newly combined entity. Conversely, we may lose revenue if we are providing ~~services~~solutions to both entities, or if a client of ours is involved in a consolidation and our ~~services~~solutions are not chosen ~~to survive the consolidation and~~ to support the newly combined entity. It is also possible that larger

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financial institutions resulting from consolidation may have greater leverage in negotiating terms or could decide to perform in-house some or all of the ~~services~~solutions that we currently provide or could provide. We seek to mitigate the risks of consolidations by offering other competitive ~~services~~solutions to take advantage of specific opportunities at the surviving company.

Recent U.S. bank failures could negatively impact our results to the extent more of our customers become illiquid; however, our current exposure to recent failures is limited, and we may be a long-term beneficiary of the recent disruption. As a leading provider of financial technology services to the top 100 U.S. banks by asset size as well as other global financial institutions, FIS boasts a highly diversified customer base, with no single customer accounting for more than approximately 1% of 2022 total Company revenue. With respect to U.S. financial institutions that closed in March 2023, FIS continues to provide services for these banks and is paid during their transition, and our revenue exposure from potential contract terminations related to these banks is nominal. Further, FIS' core banking customer contracts are generally structured with fees that increase based on the number of active accounts or transactions rather than the amount of deposits. Thus, to the extent account volume increases, we are positioned to benefit from this growth as a leading core banking services provider to large financial institutions.

We continue to see demand in the payments market for innovative solutions that will deliver faster, more convenient payment options in mobile channels, internet applications, in-store cards, and ~~the growing area of cryptocurrencies.~~digital currencies. The payment processing industry is adopting new technologies, developing new solutions, ~~and services,~~ evolving new business models, and being affected by new market entrants and by an evolving regulatory environment. As merchants and financial institutions respond to these changes by seeking ~~services~~solutions to help them enhance their own offerings to consumers, including the ability to accept card-not-present ("CNP") payments in eCommerce and mobile environments as well as contactless cards and mobile wallets at the point of sale, FIS believes that payment processors will seek to develop additional capabilities in order to serve clients' evolving needs. To facilitate this expansion, we believe that payment processors will need to enhance their technology platforms so they can deliver these capabilities and differentiate their offerings from other providers.

We believe that these market changes present both an opportunity and a risk for us, and we cannot predict which emerging technologies or solutions will be successful. However, FIS believes that payment processors, like FIS, that have scalable, integrated business models, provide solutions across the payment processing value chain and utilize broad distribution capabilities will be ~~best positioned~~best-positioned to enable emerging alternative electronic payment ~~technologies.~~technologies in the long term. Further, FIS believes that its depth of capabilities and breadth of distribution will enhance its position as emerging payment technologies are adopted by merchants and other businesses. FIS' ability to partner with non-financial institution enterprises, such as mobile payment providers and internet, retail and social media companies, continues to create attractive growth opportunities as these new entrants seek to become more active participants in the development of alternative electronic payment technologies and to facilitate the convergence of retail, online, mobile and social commerce applications.

Globally, attacks on information technology systems, such as those operated by FIS, continue to grow in frequency, complexity and sophistication. This is a trend we expect to continue. Such attacks have become a point of focus for individuals, businesses and governmental entities. The objectives of these attacks include, among other things, gaining unauthorized access to systems to facilitate financial fraud, disrupt operations, cause denial of service events, corrupt data, and steal non-public information. These circumstances present both a threat and an opportunity for FIS. ~~As part of our business, we electronically receive, process, store~~We maintain significant focus on and ~~transmit a wide range of confidential information, including sensitive customer information and personal consumer data. We also operate payment, cash access and prepaid card systems.~~

~~FIS remains focused on making strategic investments~~investment in information security that is designed to ~~protect~~mitigate threats to our ~~clients~~systems and our information systems. These investments include both capital expenditures and operating expense related to hardware, software, personnel and consulting services. We also participate in industry and governmental initiatives to improve information security for our clients.solutions. Through the expertise we have gained with this ongoing focus and ~~involvement,~~investment, we have developed and offer fraud, security, risk management and compliance solutions to target ~~this~~the growth opportunity in the financial services industry.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021. For discussion regarding the impact of the COVID-19 pandemic on our critical and significant accounting estimates subject to risk and uncertainties, see Notes 1, 4 and 8 to the consolidated financial statements.2022.

~~Related-Party Transactions~~

~~We are a party to certain historical related party agreements as discussed in Note 10 to the consolidated financial statements.~~

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Consolidated Results of Operations - Comparisons of three-month periods ended March 31, ~~2022~~2023 and ~~2021~~2022
Three months ended March 31,
$ %
2022 2021 Change Change
(In millions)
Revenue $ 3,492 $ 3,223 $ 269 8 %
Cost of revenue (2,242) (2,118) (124) 6
Gross profit 1,250 1,105 145 13
Gross profit margin 36 % 34 %
Selling, general and administrative expenses (1,035) (1,006) (29) 3
Asset impairments (58) — (58) NM
Operating income $ 157 $ 99 58 59
Operating margin 4 % 3 %


	Three months ended March 31,
							$		%
	2023			2022			Change		Change
	(In millions)
Revenue	$	3,510		$	3,492		$	18	1	%
Cost of revenue	(2,169)			(2,242)			73		(3)
Gross profit	1,341			1,250			91		7
Gross profit margin	38		%	36		%
Selling, general and administrative expenses	(1,004)			(1,035)			31		(3)
Asset impairments	—			(58)			58		NM
Operating income	$	337		$	157		180		115
Operating margin	10		%	4		%

NM = Not meaningful

Revenue

Revenue for the three months ended March 31, ~~2022,~~2023, increased primarily due to strong recurring revenue growth and professional services in Banking, increased Merchant volumes, and ~~due to onboarding of large new clients~~strong recurring growth in ~~Banking and~~ Capital ~~Markets driving recurring revenue growth.~~Markets. Revenue was negatively impacted by unfavorable foreign currency movements, primarily related to a stronger U.S. Dollar versus the ~~Euro and the~~ British Pound ~~Sterling.~~Sterling and Euro as compared to the prior-year period. See ~~Segment~~"Segment Results of ~~Operations~~Operations" below for more detailed explanation.

Cost of Revenue, Gross Profit and Gross Profit Margin

Cost of revenue for the three months ended March 31, ~~2022, increased primarily~~2023, decreased due to ~~the revenue variances noted above. Gross~~lower intangible asset amortization resulting primarily from foreign currency movements, partially offset by cost inflation, contributing to higher gross profit and gross profit margin for the three months ended March 31, 2022, increased primarily due to revenue growth in the Merchant segment. This increase was partially offset by $78 million of incremental amortization expense associated with shortened estimated useful lives and accelerated amortization methods for certain software and deferred contract cost assets driven by the Company's platform modernization initiatives.margin.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended March 31, ~~2022, increased~~2023, decreased primarily due to ~~higher compensation~~lower acquisition, integration and ~~commission expense due in part to the acquisition of Payrix and staffing related to commencement of large outsourcing arrangements,~~other costs, partially offset by lower stock compensation expense. The 2021 period included accelerated stock compensation expense recorded associated with the establishment of the Qualified Retirement Equity Program that modified our existing stock compensation plans as described in Note 9 to the consolidated financial statements.cost inflation.

Asset Impairments

~~During~~For the three months ended March 31, 2022, ~~asset~~the Company recorded impairments of $58 million related primarily ~~relate~~ to real estate-related assets as a result of office space reductions.

Operating Income and Operating Margin

The change in operating income for the three months ended March 31, ~~2022,~~2023, resulted from the revenue and cost variances noted above. The operating margin for the three months ended March 31, ~~2022, increased primarily due to a positive shift in revenue mix as~~2023, benefited from lower asset impairments and intangible asset amortization compared to the prior-year period. ~~This increase was partially offset by asset impairments discussed above.~~

Total Other Income (Expense), Net


	Three months ended March 31,
					$		%
	2023		2022		Change		Change
Other income (expense):	(In millions)
Interest expense, net	$	(137)	$	(43)	$	(94)	219	%
Other income (expense), net	(11)		61		(72)		NM
Total other income (expense), net	$	(148)	$	18	(166)		NM

NM = Not meaningful

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~~Total~~ The increase in interest expense, net during the three months ended March 31, 2023, was primarily due to higher interest rates on our debt and higher outstanding debt throughout the three months ended March 31, 2023, offset in part by increased interest income.

Other income (expense), net includes the net change in fair value of the CVR-related preferred stock and CVR liability of $(3) million and $25 million for the three months ended March 31, 2023 and 2022, respectively. Other income (expense), net also includes net gains (losses) on equity security investments without readily determinable fair values of $(2) million and $41 million for the three months ended March 31, 2023 and 2022, respectively. See Note 4 to the consolidated financial statements.

Provision (Benefit) for Income ~~(Expense), Net~~Taxes

Three months ended March 31,
$ %
2022 2021 Change Change
Other income (expense): (In millions)
Interest expense, net $ (43) $ (74) $ 31 (42) %
Other income (expense), net 61 (493) 554 NM
Total other income (expense), net $ 18 $ (567) 585 NM


	Three months ended March 31,
							$		%
	2023			2022			Change		Change
	(In millions)
Provision (benefit) for income taxes	$	48		$	54		$	(6)	NM
Effective tax rate	25		%	31		%

NM = Not meaningful

The decrease in ~~interest expense, net is primarily due to lower outstanding debt and lower weighted average interest~~the effective tax rate ~~on the outstanding debt throughout the three months ended March 31, 2022.~~

~~Other income (expense), net~~ for the three months ended March 31, 2022, primarily includes net gains on equity security investments without readily determinable fair values of $41 million (see Note 4 to the consolidated financial statements). For the three months ended March 31, 2021, other income (expense) primarily represents loss on extinguishment of debt of approximately $528 million relating to tender premiums, make-whole amounts, and fees; the write-off of unamortized bond discounts and debt issuance costs; and losses on related derivative instruments. The foregoing loss resulted from the debt refinancing activity we undertook in the first quarter of 2021 (see Note 6 to the consolidated financial statements), which substantially reduces our ongoing interest expense. This loss2023, was ~~partially offset by fair value adjustments on certain non-operating assets and liabilities and foreign currency transaction remeasurement gains.~~

~~Provision (Benefit) for Income Taxes~~

Three months ended March 31,
$ %
2022 2021 Change Change
(In millions)
Provision (benefit) for income taxes $ 54 $ (97) $ 151 NM
Effective tax rate 31 % 21 %

~~NM = Not meaningful~~

~~The increase in the effective tax rate for the 2022 period is~~ primarily due to the ~~difference in~~ratio of book to tax differences to pre-tax ~~earnings relative to income tax provision (benefit).~~earnings.

Segment Results of Operations - Comparisons of three-month periods ended March 31, ~~2022~~2023 and ~~2021~~2022

FIS reports its financial performance based on the following segments: ~~Merchant~~Banking Solutions, ~~Banking~~Merchant Solutions, Capital

Market Solutions, and Corporate and Other.

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),~~ depreciation and amortization, and excludes certain costs and other transactions that management deems non-operational in ~~nature.~~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. For this reason, Adjusted EBITDA, as it relates to our segments, is presented in conformity with FASB ASC Topic 280, Segment Reporting. The ~~non-operational~~ items affecting the segment profit measure generally include purchase price amortization of acquired intangible assets as well as acquisition, integration and certain other costs and asset impairments. ~~Adjusted EBITDA also excludes incremental and direct costs resulting from the COVID-19 pandemic.~~ 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. Financial information, including details of Adjusted EBITDA, for each of our segments is set forth in Note 1210 to the consolidated financial statements.

Banking Solutions


	Three months ended March 31,
							$		%
	2023			2022			Change		Change
	(In millions)
Revenue	$	1,685		$	1,659		$	26	2	%
Adjusted EBITDA	$	676		$	707		(31)		(4)
Adjusted EBITDA margin	40.1		%	42.6		%
Adjusted EBITDA margin basis points change	(250)

Three months ended March 31:

Recurring revenue contributed 3% to growth, primarily due to increased processing volumes. Professional services revenue contributed 1% to growth, and software license and other non-recurring revenue contributed (2%) to growth.

Adjusted EBITDA and adjusted EBITDA margin decreased as the revenue impacts noted above were offset by lower-margin revenue mix and cost inflation.

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Merchant Solutions


		Three months ended March 31,										Three months ended March 31,
								$		%											$		%
		2022			2021			Change		Change					2023			2022			Change		Change
		(In millions)											(In millions)
Revenue	Revenue	$	1,112		$	966		$	146	15	%			Revenue	$	1,105		$	1,112		$	(7)	(1)	%
Adjusted EBITDA	Adjusted EBITDA	$	522		$	451		71		16				Adjusted EBITDA	$	481		$	522		(41)		(8)
Adjusted EBITDA margin	Adjusted EBITDA margin	47.0		%	46.7		%							Adjusted EBITDA margin	43.5		%	47.0		%
Adjusted EBITDA margin basis points change	Adjusted EBITDA margin basis points change	30												Adjusted EBITDA margin basis points change	(350)

Three months ended March 31:

Revenue ~~increased~~decreased primarily due to ~~easing lockdown restrictions and~~foreign currency movements versus the ~~continued global economic recovery from the COVID-19 pandemic, with higher card-present volumes contributing 10% to growth and card-not-present~~prior year. Global eCommerce volumes, including those related to our ~~recent~~ Payrix acquisition, ~~contributing 6%~~contributed 5% to growth, Enterprise volumes contributed (2%) to growth and SMB volumes contributed (1%) to growth. Revenue was negatively impacted by unfavorable foreign currency movements, ~~contributing (1%~~which contributed (3%) to growth primarily related to a stronger U.S. Dollar versus the British Pound ~~Sterling.~~Sterling as compared to the prior-year period.

Adjusted EBITDA ~~increased primarily due to~~and adjusted EBITDA margin decreased as the revenue impacts noted ~~above. Adjusted EBITDA margin increased primarily due to~~above were offset by lower-margin revenue ~~growth in the higher-margin card-not-present channel.~~mix and cost inflation.

~~Banking~~On February 13, 2023, we announced our plans to spin off the Merchant business, with the intention to create a new, publicly traded company. We expect the spin-off to be completed by early 2024. The proposed spin-off is subject to customary conditions, including final approval by our Board of Directors, receipt of a tax opinion and a private letter ruling from the Internal Revenue Service, the filing and effectiveness of a Form 10 registration statement with the SEC SpinCo's ability to raise new debt and obtaining of all required regulatory approvals. No assurance can be given that a spin-off will in fact occur on our desired timetable or at all. See "Business Trends and Conditions" in Item 2 of this Quarterly Report.

Capital Market Solutions


		Three months ended March 31,										Three months ended March 31,
								$		%											$		%
		2022			2021			Change		Change					2023			2022			Change		Change
		(In millions)											(In millions)
Revenue	Revenue	$	1,645		$	1,540		$	105	7	%			Revenue	$	663		$	627		$	36	6	%
Adjusted EBITDA	Adjusted EBITDA	$	697		$	667		30		5				Adjusted EBITDA	$	320		$	300		20		7
Adjusted EBITDA margin	Adjusted EBITDA margin	42.4		%	43.3		%							Adjusted EBITDA margin	48.2		%	47.9		%
Adjusted EBITDA margin basis points change	Adjusted EBITDA margin basis points change	(90)												Adjusted EBITDA margin basis points change	30

Three months ended March 31:

Revenue increased primarily due to recurring revenue contributing ~~7% to growth, primarily driven by the completion of large implementations.~~

Adjusted EBITDA increased primarily due to the revenue impacts noted above. Adjusted EBITDA margin decreased primarily due to wage inflation, reduction in revenue related to pandemic-related programs and recent onboarding of several large outsourcing contracts.

~~Capital Market Solutions~~

Three months ended March 31,
$ %
2022 2021 Change Change
(In millions)
Revenue $ 658 $ 625 $ 33 5 %
Adjusted EBITDA $ 308 $ 288 20 7
Adjusted EBITDA margin 46.8 % 46.2 %
Adjusted EBITDA margin basis points change 60

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~~Three months ended March 31:~~

~~Revenue increased primarily due to recurring revenue contributing 6%~~8% to growth from strong new sales ~~driving outsourced solutions and services.~~momentum. Professional services revenue contributed (1%) to growth. Revenue was also negatively impacted by unfavorable foreign currency movements, contributing (1%) to growth primarily related to a stronger U.S. Dollar versus the British Pound Sterling ~~and~~as compared to the ~~Swedish Krona.~~prior-year period.

Adjusted EBITDA increased primarily due to the revenue impacts noted above. Adjusted EBITDA margin increased primarily due to ~~continued operating leverage.~~strong contribution margins from revenue growth.

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Corporate and Other


		Three months ended March 31,								Three months ended March 31,
						$		%									$		%
		2022		2021		Change		Change					2023		2022		Change		Change
		(In millions)									(In millions)
Revenue	Revenue	$	77	$	92	$	(15)	(16)	%			Revenue	$	57	$	94	$	(37)	(39)	%
Adjusted EBITDA	Adjusted EBITDA	$	(109)	$	(98)	(11)		11				Adjusted EBITDA	$	(118)	$	(111)	(7)		6

The Corporate and Other segment results consist of selling, general and administrative expenses and depreciation and intangible asset amortization not otherwise allocated to the reportable segments. Corporate and Other also includes operations from certain non-strategic businesses.

Three months ended March 31:

Revenue decreased ~~primarily~~ due to divestitures of non-strategic businesses in 2022 as well as client attrition in our non-strategic ~~businesses.~~businesses..

Adjusted EBITDA decreased ~~primarily due to~~as a result of the revenue ~~impact~~impacts noted above ~~as well as~~and higher corporate expenses, which were partially offset by foreign currency movements impacting corporate and infrastructure ~~expense compared~~expenses related to ~~prior year.~~a stronger U.S. Dollar versus the British Pound Sterling and Indian Rupee.

Liquidity and Capital Resources

Cash Requirements

Our ongoing cash requirements include operating expenses, income taxes, tax receivable obligations, mandatory debt service payments, capital expenditures, stockholder dividends, regulatory requirements, working capital and timing differences in settlement-related assets and liabilities and may include discretionary debt repayments, share repurchases and business acquisitions. Our principal sources of funds are cash generated by operations and borrowings, including the capacity under our Revolving Credit Facility, the U.S. commercial paper program and the Euro-commercial paper program discussed in Note 6 to the consolidated financial statements.

As of March 31, ~~2022,~~2023, the Company had ~~$3,527~~$4,847 million of available liquidity, including ~~$1,547~~$1,871 million of cash and cash equivalents and ~~$1,980~~$2,976 million of capacity available under its Revolving Credit Facility and Incremental Credit Facility. Approximately ~~$896~~$1,056 million of cash and cash equivalents is held by our foreign entities, including amounts related to regulatory requirements. The majority of our domestic cash and cash equivalents relates to settlement payables and net deposits-in-transit, which are typically settled within a few business days. Debt outstanding totaled ~~$19.2~~$20.0 billion, with an effective weighted average interest rate of ~~1.0%~~3.0%.

~~The Company remains committed to reaching and maintaining its target leverage while ensuring ample liquidity.~~

We believe that our current level of cash and cash equivalents plus cash flows from operations will be sufficient to fund our operating cash requirements, capital expenditures and mandatory debt service payments for the next 12 months and the foreseeable future.

~~We currently expect to continue to pay quarterly dividends.~~ In January ~~2022,~~2023, the Board of Directors approved a quarterly dividend ~~increase~~ of ~~21% to $0.47~~$0.52 per share beginning with the first quarter of ~~2022.~~2023. A regular quarterly dividend of ~~$0.47~~$0.52 per common share ~~was paid~~is payable on ~~March 25, 2022,~~June 23, 2023, to shareholders of record as of the close of business on ~~March 11, 2022. Consistent~~June 9, 2023. We currently expect to continue to pay quarterly dividends at a target payout ratio consistent with our previously announced capital allocation strategy, we plan to increase our annual dividend approximately 20% per year over the next several years, as compared to approximately 10% per year increases in recent years, to gradually increase our dividend payout ratio beginning with the quarterly dividend payable in March 2022.strategy. However, the amount, declaration and payment of future dividends is at the discretion of the Board of Directors and depends on, among other things, our investment opportunities

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~~(including~~ (including potential mergers and acquisitions), results of operations, financial condition, cash requirements, future prospects, ~~the duration and impact of the COVID-19 pandemic,~~ and other factors, including legal and contractual restrictions, that may be considered relevant by our Board of ~~Directors, including legal and contractual restrictions.~~Directors. Additionally, the payment of cash dividends may be limited by covenants in certain debt agreements. ~~A regular quarterly dividend of $0.47 per common share is payable on June 24, 2022, to shareholders of record as of the close of business on June 10, 2022.~~

In January 2021, our Board of Directors approved a ~~new~~ 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~~ share repurchase program has no expiration date and may be suspended for periods, amended or discontinued at any time. ~~Under the new share repurchase program, approximately 85~~Approximately 64 million shares ~~remain~~remained available for repurchase as of March 31, ~~2022.~~2023. Our current plan for 2023 is to reorient our use of excess cash flow from share repurchases to

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~~We currently expect~~debt reduction, in part given our outlook for business trends in 2023. Although we continue to ~~utilize free cash flow through~~evaluate the ~~end of 2023 primarily~~optimal capital structure for our Merchant business following the proposed spin-off, we intend to ~~return capital~~maintain investment grade debt ratings for FIS. The spin-off will also result in significant one-time costs that we will be required to ~~shareholders. During 2022, we expect to repurchase shares worth approximately $3 billion, primarily during the second half of the year.~~fund.

Cash Flows from Operations

Cash flows from operations were ~~$896~~$632 million and ~~$836~~$896 million for the three-month periods ended March 31, ~~2022~~2023, and ~~2021,~~2022, respectively. Our net cash provided by operating activities consists primarily of net earnings, adjusted to add back depreciation and amortization and other non-cash items. Cash flows from operations ~~increased $60~~decreased $264 million in the ~~2022~~three-month period ended March 31, 2023, primarily due to ~~an increase~~a decrease in ~~operating income~~net earnings after adjusting to add back depreciation and other non-cash items and to working capital ~~timing, partially offset by settlement~~ timing.

Capital Expenditures and Other Investing Activities

Our principal capital expenditures are for software (purchased and internally developed) and additions to property and equipment. We invested approximately ~~$412~~$279 million and ~~$298~~$412 million in capital expenditures (excluding other financing obligations for certain hardware and software) during the three-month periods ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. We expect to continue investing in property and equipment, purchased software and internally developed software to support our business.

During the three-month periods ended March 31, 2023 and 2022, we (paid) received approximately $(10) million and $135 million of net cash reflected as investing activities due to the settlement of existing cross-currency interest rate swaps. See Note 7 to the consolidated financial statements. In January 2023, the Founders of Virtus 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.

Financing

For more information regarding the Company's debt and financing activity, see ~~Note~~"Risk Factors—Risks Related to Our Indebtedness" in Item 1A of our Annual Report on Form 10-K filed on February 27, 2023, and "Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk" in Item 3 as well as Notes 6 and 7 to the consolidated financial statements.

Contractual Obligations

There were no material changes in our contractual obligations through the three months ended March 31, ~~2022,~~2023, in comparison to the table included in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, except as disclosed in Note 6 to the consolidated financial statements.

Recent Accounting Pronouncements

No new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures.

Item 3. Quantitative and Qualitative ~~Disclosure~~Disclosures About Market ~~Risks~~Risk

Market Risk

We are exposed to market risks primarily from changes in interest rates and foreign currency exchange rates. ~~Such risks may be exacerbated by the effects of the COVID-19 pandemic.~~ We periodically use certain derivative financial instruments, including interest rate swaps and foreign currency forward contracts, to manage interest rate and foreign currency risk. We do not use derivatives for trading purposes, to generate income or to engage in speculative activity.

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Interest Rate Risk

In addition to existing cash balances and cash provided by operating activities, we use fixed-rate and variable-rate debt to finance our operations. We are exposed to interest rate risk on these debt obligations and related interest rate swaps.

Our fixed rate senior notes (as included in Note 6 to the consolidated financial statements) represent the majority of our fixed-rate long-term debt obligations as of March 31, ~~2022.~~2023. The carrying value, excluding the fair value of the interest rate swaps described below and unamortized discounts, of our senior notes was ~~$16.0~~$16.1 billion as of March 31, ~~2022.~~2023. The fair value of

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our senior notes was approximately ~~$15.6~~$14.4 billion as of March 31, ~~2022.~~2023. The potential reduction in fair value of the senior notes from a hypothetical 10 percent increase in market interest rates would not be material to the overall fair value of the debt.

Our variable-rate risk principally relates to borrowings under our U.S. commercial paper program, Euro-commercial paper program, Revolving Credit Facility and Incremental Revolving Credit Facility (as ~~included~~described in Note 6 to the consolidated financial statements) and the notional amounts of our interest rate swaps ~~on our fixed-rate long-term debt~~designated as fair value hedges (collectively, "variable-rate debt"). At March 31, ~~2022,~~2023, our weighted-average cost of debt was ~~1.0%~~3.0% with a weighted-average maturity of ~~5.5~~5.6 years; ~~64%~~62% of our debt was fixed rate, and the remaining ~~36%~~38% was variable-rate ~~debt.~~debt, inclusive of fair value adjustments of interest rate swaps. A 100 basis-point increase in the weighted-average interest rate on our variable-rate debt would have increased our annual interest expense by ~~$71~~$81 million. We performed the foregoing sensitivity analysis based solely on the ~~principal amount~~outstanding balance of our variable-rate debt as of March 31, ~~2022.~~2023. This sensitivity analysis does not take into account any changes that occurred in the prior 12 months or that may take place in the next 12 months in the amount of our outstanding debt. Further, this sensitivity analysis assumes the change in interest rates is applicable for an entire year. For comparison purposes, based on ~~principal amounts~~the outstanding balance of our variable-rate debt ~~outstanding~~ as of March 31, ~~2021,~~2022, and calculated in the same manner as set forth above, an increase of 100 basis points in the weighted-average interest rate would have increased our annual interest expense by approximately ~~$64~~$71 million.

As of March 31, ~~2022,~~2023, the following interest rate swaps converting the interest rate exposure on certain of our senior notes from fixed to variable ~~are~~were outstanding (in millions):


			Weighted		Weighted				Weighted		Weighted
Notional Amount by	Notional Amount by		Average		Average		Notional Amount by		Average		Average
Currency	Currency	Maturities	Receive Rate		Pay Rate		Currency	Maturities	Receive Rate		Pay Rate
$	1,854	2029 - 2031	2.74	%	2.04	%	1,854	2029 - 2031	2.74	%	6.48	%
£	925	2029 - 2031	3.00	%	2.47	%	925	2029 - 2031	3.00	%	6.63	%
€	500	2024	1.10	%	0.32	%	500	2024	1.10	%	3.17	%

By entering into the aforementioned swap agreements, we have assumed risks associated with variable interest rates based upon LIBOR, or Daily Compounded SONIA as applicable based on the phase-out of LIBOR rates, or Euribor. Changes in the overall level of interest rates affect the interest expense that we recognize. We designated the interest rate swaps as fair value hedges for accounting purposes as described in Note 7 to the consolidated financial statements. A 100 basis-point increase in the 3-month USD LIBOR rate, Daily Compounded SONIA rate ~~(previously 6-month GBP LIBOR rate),~~ and 3-month Euribor rate, as applicable, for the interest rate swaps outstanding as of March 31, ~~2022~~2023 and ~~2021,~~2022, would increase our annual interest expense by approximately ~~$36~~$35 million and ~~$35~~$36 million, respectively.

Foreign Currency Risk

We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances of foreign subsidiaries, transaction gains and losses associated with intercompany loans with foreign subsidiaries and transactions denominated in currencies other than a location's functional currency. We manage the exposure to these risks through a combination of normal operating activities and the use of foreign currency forward contracts and non-derivative and derivative investment hedges.

Our exposure to foreign currency exchange risks generally arises from our non-U.S. operations, to the extent they are conducted in local currency. Changes in foreign currency exchange rates affect translations of revenue denominated in currencies other than the U.S. Dollar. We generated approximately ~~$703~~$675 million and ~~$641~~$703 million during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, in revenue denominated in currencies other than the U.S. Dollar. The major currencies to which our revenue is exposed are the British Pound Sterling, Euro, Brazilian Real, Australian Dollar and Indian ~~Rupee and Australian Dollar.~~Rupee. A 10% movement in average exchange rates for these currencies (assuming a simultaneous and immediate 10% change in all of such rates for the relevant period) would have resulted in the following increase or decrease in our reported revenue for

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the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 (in millions):


		Three months ended March 31,				Three months ended March 31,
Currency	Currency	2022		2021			Currency	2023		2022
Pound Sterling	Pound Sterling	$	43	$	38		Pound Sterling	$	43	$	43
Euro	Euro	7		10			Euro	8		7
Real	Real	4		3			Real	4		4
Rupee	Rupee	3		3			Rupee	1		3
Australian Dollar	Australian Dollar	3		3			Australian Dollar	3		3
Total increase or decrease	Total increase or decrease	$	60	$	57		Total increase or decrease	$	59	$	60

While our results of operations have been impacted by the effects of currency fluctuations, our international operations' revenue and expenses are generally denominated in local currency, which reduces our economic exposure to foreign exchange risk in those jurisdictions.

Our foreign exchange risk management policy permits the use of derivative instruments, such as forward contracts and options, to reduce volatility in our results of operations and/or cash flows resulting from foreign exchange rate fluctuations. We do not enter into foreign currency derivative instruments for trading purposes or to engage in speculative activity. We do periodically enter into foreign currency forward contracts to hedge foreign currency exposure to intercompany loans and other balance sheet items. The Company also utilizes foreign currency-denominated debt and cross-currency interest rate swaps designated as net investment hedges in order to reduce the volatility of the net investment value of certain of its Euro and Pound Sterling functional subsidiaries (see Note 7 to the consolidated financial statements).

Item 4. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms and (b) accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II: OTHER INFORMATION

Item 1A. Risk Factors

See Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, for a detailed discussion of risk factors affecting the Company. There have been no material changes in the risk factors described therein except for ~~an update to~~ the addition of the new risk factor included below.

~~Global economic, political and other conditions, including business cycles and consumer confidence, as well as geopolitical conflicts, may~~Bank failures or sustained financial market disruptions could adversely affect our ~~clients or trends in consumer spending, which may adversely impact the demand for our services~~business, financial condition and ~~our revenue and profitability.~~results of operations.

~~A significant portion~~We regularly maintain domestic cash deposits in banks that are not subject to insurance protection against loss or exceed the deposit limits. We also maintain cash deposits in foreign banks where we operate, some of ~~our revenue is derived from transaction processing fees.~~which are not insured or are only partially insured. The ~~global transaction processing industries depend heavily upon the overall level~~failure of ~~consumer, business and government spending. Any change in economic factors, including~~ a ~~sustained deterioration in general economic~~bank, or events involving limited liquidity, defaults, non-performance or other adverse conditions ~~or consumer confidence, particularly~~ in the ~~U.S.,~~financial or ~~inflation and increases in interest rates in key countries in~~credit markets impacting financial institutions at which we ~~operate~~maintain balances, or concerns or rumors about such events, may lead to disruptions in access to our bank deposits or otherwise adversely ~~affect consumer spending, consumer debt levels~~impact our liquidity and ~~credit and debit card usage, and as a result, adversely affect~~financial performance. There can be no assurance that our ~~financial performance by reducing~~deposits in excess of the ~~number or average purchase amount of transactions that we service. Supply chain issues globally, including those caused~~insurance limits will be backstopped by the ~~COVID-19 pandemic, can slow down~~U.S. or applicable foreign government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or otherwise in the ~~provision~~event of ~~parts for our products, such as chips in EMV cards, and could adversely~~a failure or liquidity crisis.

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~~impact revenue. In addition,~~Our clients, including those of our clients that are banks, may be similarly adversely affected by any bank failure or other event affecting financial institutions. Any resulting adverse effects to our clients’ liquidity or financial performance could reduce the ~~direct~~demand for our services or affect our allowance for credit losses and ~~indirect effects~~collectability of ~~other current~~trade receivables. A significant change in the liquidity or ~~future geopolitical conflicts~~financial position of our clients could cause unfavorable trends in receivable collections and cash flows and additional allowances for anticipated losses may be required. These additional allowances could materially adversely affect ~~global economic activity and transaction processing volumes.~~

~~When there is a slowdown or downturn in the economy, a drop in stock market levels or trading volumes, or an event that disrupts the financial markets,~~ our business and financial results, particularly with respect to our Capital Markets segment, may suffer for a number of reasons. Customers may react to worsening conditions by reducing their capital expenditures in general or by specifically reducing their information technology spending. In addition, customers may curtail or discontinue trading operations, delay or cancel information technology projects, or seek to lower their costs by renegotiating vendor contracts. Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers to lower cost solutions. Any further protective trade policies or actions taken by the U.S. may also result in other countries reducing, or making more expensive, services permitted to be provided by U.S.-based companies. If any of these circumstances remain in effect for an extended period of time, there could be a material adverse effect on ourfuture financial results.

In addition, instability, liquidity constraints or other distress in the financial markets, including the effects of bank failures, defaults, non-performance or other adverse developments that affect financial institutions, could impair the ability of one or more of the banks participating in our current or any future credit facilities to honor their commitments. This could have an adverse effect on our business if we were not able to replace those commitments or to locate other sources of liquidity on acceptable terms.

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Item 6. Exhibits

Incorporated by Reference

Exhibit

SEC File

Filed/ Furnished

No.

Exhibit Description

Form

Number

Exhibit

Filing Date

Herewith

10.1

Form of Stock Option Grant under Fidelity National Information Services, Inc. amended and restated 2022 Omnibus Incentive Plan for grants made beginning in March 2023. (1)

10.2

Form of Performance Stock Unit Grant under Fidelity National Information Services, Inc. amended and restated 2022 Omnibus Incentive Plan for grants made beginning in March 2023. (1)

10.3

Form of Restricted Stock Unit Grant under Fidelity National Information Services, Inc. amended and restated 2022 Omnibus Incentive Plan for grants made beginning in March 2023. (1)

31.1

Certification of ~~Gary A. Norcross, President and~~Stephanie Ferris, Chief Executive Officer of Fidelity National Information Services, Inc., pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of ~~James W. Woodall,~~Erik Hoag, Corporate Executive Vice President and Chief Financial Officer of Fidelity National Information Services, Inc., pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of ~~Gary A. Norcross, President and and~~Stephanie Ferris, Chief Executive Officer of Fidelity National Information Services, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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32.2

Certification of ~~James W. Woodall,~~Erik Hoag, Corporate Executive Vice President and Chief Financial Officer of Fidelity National Information Services, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

(1) Management contract or compensatory plan or arrangement.

* Filed or furnished herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	FIDELITY NATIONAL INFORMATION SERVICES, INC.
Date: May ~~3, 2022~~2, 2023	By:	/s/ ~~JAMES W. WOODALL~~ Erik Hoag
		~~James W. Woodall~~ Erik Hoag
		Corporate Executive Vice President and Chief Financial Officer ~~(Principal~~ (Principal Financial Officer )


	FIDELITY NATIONAL INFORMATION SERVICES, INC.
Date: May ~~3, 2022~~2, 2023	By:	/s/ ~~THOMAS~~Thomas K. ~~WARREN~~Warren
		Thomas K. Warren
		Chief Accounting Officer (Principal Accounting Officer)

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			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			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3. Quantitative and Qualitative Disclosure About Market Risks			2829
Item 4. Controls and Procedures			3031
Part II: OTHER INFORMATION
Item 1A. Risk Factors			3031
Item 6. Exhibits			32
Signatures			3334