Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 28, 2020 | |
Document Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-16427 | |
Entity Registrant Name | Fidelity National Information Services, Inc. | |
Entity Incorporation, State or Country Code | GA | |
Entity Tax Identification Number | 37-1490331 | |
Entity Address, Street Name | 601 Riverside Avenue | |
Entity Address, City | Jacksonville | |
Entity Address, State | FL | |
Entity Address, Postal Zip Code | 32204 | |
City Area Code | 904 | |
Local Phone Number | 438-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 620,508,824 | |
Entity Central Index Key | 0001136893 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock, par value $0.01 per share | ||
Document Information | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | FIS | |
Security Exchange Name | NYSE | |
0.400% Senior Notes due 2021 | ||
Document Information | ||
Title of 12(b) Security | 0.400% Senior Notes due 2021 | |
Trading Symbol | FIS21A | |
Security Exchange Name | NYSE | |
Floating Rate Senior Notes due 2021 | ||
Document Information | ||
Title of 12(b) Security | Floating Rate Senior Notes due 2021 | |
Trading Symbol | FIS21B | |
Security Exchange Name | NYSE | |
0.125% Senior Notes due 2021 | ||
Document Information | ||
Title of 12(b) Security | 0.125% Senior Notes due 2021 | |
Trading Symbol | FIS21C | |
Security Exchange Name | NYSE | |
1.700% Senior Notes due 2022 | ||
Document Information | ||
Title of 12(b) Security | 1.700% Senior Notes due 2022 | |
Trading Symbol | FIS22B | |
Security Exchange Name | NYSE | |
0.125% Senior Notes due 2022 | ||
Document Information | ||
Title of 12(b) Security | 0.125% Senior Notes due 2022 | |
Trading Symbol | FIS22C | |
Security Exchange Name | NYSE | |
0.750% Senior Notes due 2023 | ||
Document Information | ||
Title of 12(b) Security | 0.750% Senior Notes due 2023 | |
Trading Symbol | FIS23A | |
Security Exchange Name | NYSE | |
1.100% Senior Notes due 2024 | ||
Document Information | ||
Title of 12(b) Security | 1.100% Senior Notes due 2024 | |
Trading Symbol | FIS24A | |
Security Exchange Name | NYSE | |
2.602% Senior Notes due 2025 | ||
Document Information | ||
Title of 12(b) Security | 2.602% Senior Notes due 2025 | |
Trading Symbol | FIS25A | |
Security Exchange Name | NYSE | |
0.625% Senior Notes due 2025 | ||
Document Information | ||
Title of 12(b) Security | 0.625% Senior Notes due 2025 | |
Trading Symbol | FIS25B | |
Security Exchange Name | NYSE | |
1.500% Senior Notes due 2027 | ||
Document Information | ||
Title of 12(b) Security | 1.500% Senior Notes due 2027 | |
Trading Symbol | FIS27 | |
Security Exchange Name | NYSE | |
1.000% Senior Notes due 2028 | ||
Document Information | ||
Title of 12(b) Security | 1.000% Senior Notes due 2028 | |
Trading Symbol | FIS28 | |
Security Exchange Name | NYSE | |
2.250% Senior Notes due 2029 | ||
Document Information | ||
Title of 12(b) Security | 2.250% Senior Notes due 2029 | |
Trading Symbol | FIS29 | |
Security Exchange Name | NYSE | |
2.000% Senior Notes due 2030 | ||
Document Information | ||
Title of 12(b) Security | 2.000% Senior Notes due 2030 | |
Trading Symbol | FIS30 | |
Security Exchange Name | NYSE | |
3.360% Senior Notes due 2031 | ||
Document Information | ||
Title of 12(b) Security | 3.360% Senior Notes due 2031 | |
Trading Symbol | FIS31 | |
Security Exchange Name | NYSE | |
2.950% Senior Notes due 2039 | ||
Document Information | ||
Title of 12(b) Security | 2.950% Senior Notes due 2039 | |
Trading Symbol | FIS39 | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,826 | $ 1,152 |
Settlement deposits and merchant float | 2,840 | 2,882 |
Trade receivables, net of allowance for credit losses of $66 and $60 at September 30, 2020 and December 31, 2019, respectively | 3,146 | 3,242 |
Contract assets | 164 | 124 |
Settlement receivables | 774 | 647 |
Other receivables | 361 | 337 |
Prepaid expenses and other current assets | 823 | 308 |
Total current assets | 9,934 | 8,692 |
Property and equipment, net | 914 | 900 |
Goodwill | 52,567 | 52,242 |
Intangible assets, net | 14,224 | 15,798 |
Software, net | 3,301 | 3,204 |
Other noncurrent assets | 1,404 | 2,303 |
Deferred contract costs, net | 851 | 667 |
Total assets | 83,195 | 83,806 |
Current liabilities: | ||
Accounts payable, accrued and other liabilities | 2,586 | 2,374 |
Settlement payables | 4,438 | 4,228 |
Deferred revenue | 775 | 817 |
Short-term borrowings | 3,144 | 2,823 |
Current portion of long-term debt | 1,832 | 140 |
Total current liabilities | 12,775 | 10,382 |
Long-term debt, excluding current portion | 15,213 | 17,229 |
Deferred income taxes | 4,172 | 4,281 |
Other noncurrent liabilities | 1,768 | 2,406 |
Deferred revenue | 46 | 52 |
Total liabilities | 33,974 | 34,350 |
Redeemable noncontrolling interest | 176 | 0 |
FIS stockholders’ equity: | ||
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding at September 30, 2020 and December 31, 2019 | 0 | 0 |
Common stock $0.01 par value, 750 shares authorized, 621 and 615 shares issued at September 30, 2020 and December 31, 2019, respectively | 6 | 6 |
Additional paid in capital | 45,821 | 45,358 |
Retained earnings | 3,556 | 4,161 |
Accumulated other comprehensive earnings (loss) | (212) | (33) |
Treasury stock, $0.01 par value, 1 common shares as of September 30, 2020 and less than 1 as of December 31, 2019, respectively, at cost | (140) | (52) |
Total FIS stockholders’ equity | 49,031 | 49,440 |
Noncontrolling interest | 14 | 16 |
Total equity | 49,045 | 49,456 |
Total liabilities, redeemable noncontrolling interest and equity | $ 83,195 | $ 83,806 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Trade receivables, allowance for credit loss, current | $ 66 | $ 60 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 621,000,000 | 615,000,000 |
Treasury stock (2019 less than) (in shares) | 1,000,000 | 1,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 3,197 | $ 2,822 | $ 9,236 | $ 6,991 |
Cost of revenue | 2,104 | 1,838 | 6,238 | 4,623 |
Gross profit | 1,093 | 984 | 2,998 | 2,368 |
Selling, general, and administrative expenses | 862 | 757 | 2,613 | 1,435 |
Asset impairments | 0 | 87 | 0 | 87 |
Operating income | 231 | 140 | 385 | 846 |
Other income (expense): | ||||
Interest expense, net | (84) | (95) | (252) | (242) |
Other income (expense), net | (4) | 164 | 31 | (8) |
Total other income (expense), net | (88) | 69 | (221) | (250) |
Earnings (loss) before income taxes and equity method investment earnings (loss) | 143 | 209 | 164 | 596 |
Provision (benefit) for income taxes | 121 | 48 | 94 | 119 |
Equity method investment earnings (loss) | 0 | (5) | (9) | (18) |
Net earnings | 22 | 156 | 61 | 459 |
Net (earnings) loss attributable to noncontrolling interest | (2) | (2) | (7) | (3) |
Net earnings attributable to FIS common stockholders | $ 20 | $ 154 | $ 54 | $ 456 |
Net earnings per share — basic attributable to FIS common stockholders (in dollars per share) | $ 0.03 | $ 0.30 | $ 0.09 | $ 1.18 |
Weighted average shares outstanding — basic (in shares) | 620 | 516 | 618 | 388 |
Net earnings per share — diluted attributable to FIS common stockholders (in dollars per share) | $ 0.03 | $ 0.29 | $ 0.09 | $ 1.15 |
Weighted average shares outstanding — diluted (in shares) | 627 | 524 | 626 | 396 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 22 | $ 156 | $ 61 | $ 459 |
Other comprehensive earnings (loss), before tax: | ||||
Unrealized gain (loss) on derivatives | 0 | 0 | 0 | (16) |
Adjustment for (gain) loss reclassified to net earnings | 0 | 1 | 0 | (3) |
Unrealized gain (loss) on derivatives, net | 0 | 1 | 0 | (19) |
Foreign currency translation adjustments | 78 | 81 | (306) | 98 |
Minimum pension liability adjustments | 1 | 0 | 2 | (4) |
Other comprehensive earnings (loss), before tax | 79 | 82 | (304) | 75 |
Provision for income tax (expense) benefit related to items of other comprehensive earnings | 67 | (35) | 125 | (36) |
Other comprehensive earnings (loss), net of tax | 146 | 47 | (179) | 39 |
Comprehensive earnings (loss) | 168 | 203 | (118) | 498 |
Net (earnings) loss attributable to noncontrolling interest | (2) | (2) | (7) | (3) |
Comprehensive earnings (loss) attributable to FIS common stockholders | $ 166 | $ 201 | $ (125) | $ 495 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Equity - USD ($) shares in Millions, $ in Millions | Total | Common stock | Treasury stock | Additional paid in capital | Retained earnings | Accumulated other comprehensive earnings (loss) | Noncontrolling interest | |
Beginning balance (in shares) at Dec. 31, 2018 | 433 | 106 | ||||||
Beginning balance at Dec. 31, 2018 | $ 10,222 | $ 4 | $ (4,687) | $ 10,800 | $ 4,528 | $ (430) | $ 7 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Worldpay acquisition (in shares) | 109 | 180 | ||||||
Worldpay acquisition | $ 39,095 | $ 2 | 5,042 | 34,040 | 11 | |||
Issuance of restricted stock | 2 | $ 2 | ||||||
Exercise of stock options (in shares) | 1 | 1 | ||||||
Exercise of stock options | 132 | $ 46 | 86 | |||||
Treasury shares held for taxes due upon exercise of stock options | (25) | $ (24) | (1) | |||||
Purchases of treasury stock (in shares) | (4) | |||||||
Purchases of treasury stock | (399) | $ (400) | (1) | |||||
Stock-based compensation | 138 | 138 | ||||||
Cash dividends declared ($0.35 per share per quarter) and other distributions | (446) | (441) | (5) | |||||
Other | (5) | (5) | ||||||
Net earnings | 459 | 456 | 3 | |||||
Other comprehensive earnings (loss), net of tax | 39 | 39 | ||||||
Ending balance (in shares) at Sep. 30, 2019 | 615 | 0 | ||||||
Ending balance at Sep. 30, 2019 | 49,212 | $ 6 | $ (21) | 45,063 | 4,538 | (391) | 17 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 1 | |||||||
Beginning balance (in shares) at Jun. 30, 2019 | 433 | 109 | ||||||
Beginning balance at Jun. 30, 2019 | $ 9,992 | $ 4 | $ (5,067) | 10,887 | 4,599 | (438) | 7 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Worldpay acquisition (in shares) | 109 | 180 | ||||||
Worldpay acquisition | $ 39,095 | $ 2 | 5,042 | 34,040 | 11 | |||
Issuance of restricted stock | 2 | $ 2 | ||||||
Exercise of stock options (in shares) | 1 | 0 | ||||||
Exercise of stock options | 45 | $ 3 | 42 | |||||
Treasury shares held for taxes due upon exercise of stock options | (2) | $ (1) | (1) | |||||
Stock-based compensation | 95 | 95 | ||||||
Cash dividends declared ($0.35 per share per quarter) and other distributions | (218) | (215) | (3) | |||||
Net earnings | 156 | 154 | 2 | |||||
Other comprehensive earnings (loss), net of tax | 47 | 47 | ||||||
Ending balance (in shares) at Sep. 30, 2019 | 615 | 0 | ||||||
Ending balance at Sep. 30, 2019 | 49,212 | $ 6 | $ (21) | 45,063 | 4,538 | (391) | 17 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 1 | |||||||
Beginning balance (in shares) at Dec. 31, 2019 | 615 | 0 | ||||||
Beginning balance at Dec. 31, 2019 | 49,456 | $ 6 | $ (52) | 45,358 | 4,161 | (33) | 16 | [1] |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of restricted stock | 0 | $ 7 | (7) | |||||
Exercise of stock options (in shares) | 4 | |||||||
Exercise of stock options | 293 | 293 | ||||||
Treasury shares held for taxes due upon exercise of stock options (in shares) | (1) | |||||||
Treasury shares held for taxes due upon exercise of stock options | (102) | $ (95) | ||||||
Stock-based compensation | 182 | 182 | ||||||
Cash dividends declared ($0.35 per share per quarter) and other distributions | (658) | (653) | (5) | [1] | ||||
Other | (4) | 2 | (6) | |||||
Net earnings | 57 | 54 | 3 | [1] | ||||
Other comprehensive earnings (loss), net of tax | (179) | (179) | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 621 | 1 | ||||||
Ending balance at Sep. 30, 2020 | 49,045 | $ 6 | $ (140) | 45,821 | 3,556 | (212) | 14 | [1] |
Increase (Decrease) in Stockholders' Equity | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 2 | |||||||
Beginning balance (in shares) at Jun. 30, 2020 | 619 | 1 | ||||||
Beginning balance at Jun. 30, 2020 | 49,057 | $ 6 | $ (94) | 45,736 | 3,753 | (358) | 14 | [1] |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of restricted stock | 0 | |||||||
Exercise of stock options (in shares) | 0 | |||||||
Exercise of stock options | 35 | 35 | ||||||
Treasury shares held for taxes due upon exercise of stock options | (53) | $ (46) | ||||||
Stock-based compensation | 57 | 57 | ||||||
Cash dividends declared ($0.35 per share per quarter) and other distributions | (218) | (217) | (1) | [1] | ||||
Other | 0 | 0 | ||||||
Net earnings | 21 | 20 | 1 | [1] | ||||
Other comprehensive earnings (loss), net of tax | 146 | 146 | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 621 | 1 | ||||||
Ending balance at Sep. 30, 2020 | $ 49,045 | $ 6 | $ (140) | $ 45,821 | $ 3,556 | $ (212) | $ 14 | [1] |
Increase (Decrease) in Stockholders' Equity | ||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 2 | |||||||
[1] | Excludes redeemable noncontrolling interest that is not considered equity. See Note 3, Virtus Acquisition, for additional information. |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends paid per share (in dollars per share) | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net earnings | $ 61 | $ 459 |
Adjustment to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 2,760 | 1,488 |
Amortization of debt issue costs | 24 | 17 |
Acquisition-related financing foreign exchange | 0 | (112) |
Asset impairments | 0 | 87 |
Loss (gain) on sale of businesses, investments and other | 3 | 18 |
Stock-based compensation | 182 | 138 |
Deferred income taxes | (24) | (75) |
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency: | ||
Trade and other receivables | 78 | 12 |
Contract assets | (41) | (14) |
Settlement activity | 594 | 165 |
Prepaid expenses and other assets | (128) | (2) |
Deferred contract costs | (354) | (258) |
Deferred revenue | (50) | (51) |
Accounts payable, accrued liabilities and other liabilities | (81) | (131) |
Net cash provided by operating activities | 3,024 | 1,741 |
Cash flows from investing activities: | ||
Additions to property and equipment | (186) | (135) |
Additions to software | (652) | (409) |
Acquisitions, net of cash acquired | (469) | (6,629) |
Net proceeds from sale of businesses and investments | 0 | 49 |
Other investing activities, net | 92 | (43) |
Net cash provided by (used in) investing activities | (1,215) | (7,167) |
Cash flows from financing activities: | ||
Borrowings | 37,125 | 25,425 |
Repayment of borrowings and other financing obligations | (37,646) | (15,997) |
Debt issuance costs | 0 | (71) |
Proceeds from stock issued under stock-based compensation plans | 302 | 136 |
Treasury stock activity | (102) | (422) |
Dividends paid | (650) | (441) |
Other financing activities, net | (222) | (39) |
Net cash provided by (used in) financing activities | (1,193) | 8,591 |
Effect of foreign currency exchange rate changes on cash | 8 | (38) |
Net increase (decrease) in cash and cash equivalents | 624 | 3,127 |
Cash and cash equivalents, beginning of period | 3,211 | 703 |
Cash and cash equivalents, end of period | 3,835 | 3,830 |
Supplemental cash flow information: | ||
Cash paid for interest | 305 | 208 |
Cash paid for income taxes | $ 163 | $ 273 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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, 2019. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 of the novel coronavirus ("COVID-19") 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 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, its severity, the 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 future results could be materially affected by changes in our estimates. Certain reclassifications have been made in the 2019 consolidated financial statements to conform to the classifications used in 2020. Amounts in tables in the financial statements and accompanying footnotes may not sum due to rounding. On July 31, 2019, FIS completed the acquisition of Worldpay, and Worldpay's results of operations and financial position are included in the consolidated financial statements from and after the date of acquisition. See Note 3 for additional discussion. FIS reports its financial performance based on the following segments: Merchant Solutions, Banking Solutions, Capital Market Solutions, and Corporate and Other. As FIS continues to execute on its integration workflows and optimize its portfolio of assets, it reclassified certain non-strategic businesses from the Merchant Solutions and Banking Solutions segments into the Corporate and Other segment in the quarter ended March 31, 2020, and recast all prior-period segment information presented. These operations represented less than 2% of third quarter and year-to-date 2020 revenue. See Note 12 for a summary of each segment. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Change in Accounting Policy The Company adopted FASB Accounting Standards Codification ("ASC") Topic 326, Financial Instruments - Credit Losses ("Topic 326"), with an adoption date of January 1, 2020. As a result, the Company changed its accounting policy for allowance for credit losses. The accounting policy pursuant to Topic 326 for credit losses is disclosed below. The adoption of Topic 326 resulted in an immaterial cumulative effect adjustment recorded in retained earnings as of January 1, 2020. Allowance for Credit Losses The Company monitors trade receivable balances including 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 9. While the COVID-19 pandemic did not result in a significant increase in the Company's expected credit loss allowance recorded as of September 30, 2020, 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. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Worldpay Acquisition On July 31, 2019, FIS completed the acquisition of Worldpay by acquiring 100 percent of Worldpay's equity. The Worldpay acquisition brought an integrated technology platform with a comprehensive suite of products and services serving merchants and financial institutions and provided FIS with enhanced global payment capabilities, robust risk and fraud solutions and advanced data analytics. The total purchase price was as follows (in millions): Cash consideration $ 3,423 Value of FIS share consideration 38,635 Pay-off of Worldpay long-term debt not contractually assumed 5,738 Value of outstanding converted equity awards attributed to services already rendered 449 Total purchase price $ 48,245 The acquisition was accounted for as a business combination under FASB ASC Topic 805, Business Combinations ("Topic 805"). We recorded an allocation of the purchase price to Worldpay tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of July 31, 2019. The amounts for intangible assets were based on third-party valuations performed. Goodwill was recorded as the residual amount by which the purchase price exceeded the fair value of the net assets acquired. Goodwill consists primarily of expected synergies of combining operations, the acquired workforce, and growth opportunities, none of which qualify as separately identifiable intangible assets. The Company completed its assessment of the fair value of assets acquired and liabilities assumed within the one-year period from the date of acquisition. The Company recorded measurement period adjustments due to additional information received primarily related to contingencies and income taxes, resulting in a decrease in the value assigned to goodwill. There was no material impact on earnings as a result of the measurement period adjustments recorded. The final purchase price allocation is as follows (in millions): Cash acquired $ 305 Settlement deposits and merchant float (1) 2,444 Trade receivables 1,594 Goodwill 38,057 Intangible assets 13,682 Computer software 1,297 Other noncurrent assets (2) 1,641 Accounts payable, accrued and other liabilities (1,021) Settlement payables (3,167) Deferred income taxes (2,860) Long-term debt, subsequently repaid (1,805) Other liabilities and noncontrolling interest (3) (1,922) Total purchase price $ 48,245 (1) Includes $1,693 million of merchant float. (2) Includes $534 million of other restricted cash. (3) Includes $542 million of noncurrent tax receivable agreement liability (see Note 9) and $875 million contingent value rights liability (see Note 5). The gross contractual amount of trade receivables acquired was approximately $1,646 million. The difference between that total and the amount reflected above represents our best estimate at the acquisition date of the contractual cash flows not expected to be collected. This difference was derived using Worldpay's historical bad debts, sales allowances and collection trends. Intangible assets primarily consist of software, customer relationship assets and trademarks with weighted average estimated useful lives of seven years, ten years and five years, respectively, and fair value amounts assigned of $1,297 million, $13,272 million and $410 million, respectively. See Note 9 for acquired contingencies resulting from the Worldpay acquisition. Unaudited Supplemental Pro Forma Results Giving Effect to the Worldpay Acquisition Worldpay's revenues and pre-tax loss of $734 million and $162 million, respectively, which include the impact of purchase accounting adjustments, are included in the consolidated statements of earnings for the period from July 31, 2019, through September 30, 2019. Pursuant to ASC 805, unaudited supplemental pro forma results of operations for the three and nine months ended September 30, 2019, assuming the acquisition had occurred as of January 1, 2018, are presented below (in millions, except per share amounts): September 30, 2019 Three months ended Nine months ended Revenue $ 3,154 $ 9,380 Net earnings (loss) attributable to FIS common stockholders $ 215 $ 348 Net earnings (loss) per share-basic attributable to FIS common stockholders $ 0.35 $ 0.57 Net earnings (loss) per share-diluted attributable to FIS common stockholders $ 0.35 $ 0.56 The unaudited pro forma results include certain pro forma adjustments to revenue and net earnings that were directly attributable to the acquisition, assuming the acquisition had occurred on January 1, 2018, including the following: • additional amortization expense that would have been recognized relating to the acquired intangible assets; • adjustment to interest expense to reflect the removal of Worldpay debt and the addition of borrowings of FIS in conjunction with the acquisition; and • a reduction in expenses for the three and nine months ended September 30, 2019, of $149 million and $210 million, respectively, for acquisition-related transaction costs and other one-time non-recurring costs. Virtus Acquisition On January 2, 2020, FIS acquired a majority interest in Virtus Partners ("Virtus"), previously a privately held company that provides high-value managed services and technology to the credit and loan market. FIS acquired a 70% voting and financial interest in Virtus with 30% interest retained by the founders of Virtus ("Founders"). The acquisition was accounted for as a business combination under Topic 805. We recorded a provisional allocation of the $404 million cash purchase price and the $173 million fair value of redeemable noncontrolling interest to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values, consisting primarily of $254 million in customer relationships and $51 million in software assets. We also recorded $245 million in goodwill for the residual amount by which the purchase price exceeded the provisional fair value of the net assets acquired. Our purchase price allocation is provisional as of September 30, 2020, and we expect to finalize as soon as practicable, but no later than one year from the acquisition date. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 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 12. For the three months ended September 30, 2020 (in millions): Reportable Segments Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Primary Geographical Markets: North America $ 747 $ 1,281 $ 382 $ 35 $ 2,445 All others 270 226 244 12 752 Total $ 1,017 $ 1,507 $ 626 $ 47 $ 3,197 Type of Revenue: Recurring revenue: Transaction processing and services $ 996 $ 1,146 $ 305 $ 41 $ 2,488 Software maintenance 1 88 124 — 213 Other recurring 19 45 25 — 89 Total recurring 1,016 1,279 454 41 2,790 Software license — 15 64 — 79 Professional services — 153 108 1 262 Other non-recurring fees 1 60 — 5 66 Total $ 1,017 $ 1,507 $ 626 $ 47 $ 3,197 For the three months ended September 30, 2019 (in millions): Reportable Segments Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Primary Geographical Markets: North America $ 501 $ 1,216 $ 378 $ 48 $ 2,143 All others 204 227 233 15 679 Total $ 705 $ 1,443 $ 611 $ 63 $ 2,822 Type of Revenue: Recurring revenue: Transaction processing and services $ 690 $ 1,052 $ 278 $ 57 $ 2,077 Software maintenance 1 91 121 — 213 Other recurring 11 44 27 — 82 Total recurring 702 1,187 426 57 2,372 Software license 1 53 82 — 136 Professional services — 147 103 1 251 Other non-recurring fees 2 56 — 5 63 Total $ 705 $ 1,443 $ 611 $ 63 $ 2,822 For the nine months ended September 30, 2020 (in millions): Reportable Segments Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Primary Geographical Markets: North America $ 2,011 $ 3,789 $ 1,176 $ 110 $ 7,086 All others 753 658 710 29 2,150 Total $ 2,764 $ 4,447 $ 1,886 $ 139 $ 9,236 Type of Revenue: Recurring revenue: Transaction processing and services $ 2,697 $ 3,334 $ 922 $ 125 $ 7,078 Software maintenance 2 263 368 1 634 Other recurring 58 131 75 — 264 Total recurring 2,757 3,728 1,365 126 7,976 Software license 2 48 206 — 256 Professional services 1 441 314 3 759 Other non-recurring fees 4 230 1 10 245 Total $ 2,764 $ 4,447 $ 1,886 $ 139 $ 9,236 For the nine months ended September 30, 2019 (in millions): Reportable Segments Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Primary Geographical Markets: North America $ 648 $ 3,472 $ 1,112 $ 143 $ 5,375 All others 204 701 666 45 1,616 Total $ 852 $ 4,173 $ 1,778 $ 188 $ 6,991 Type of Revenue: Recurring revenue: Transaction processing and services $ 829 $ 3,030 $ 824 $ 169 $ 4,852 Software maintenance 1 271 361 — 633 Other recurring 12 133 80 — 225 Total recurring 842 3,434 1,265 169 5,710 Software license 7 112 214 — 333 Professional services — 439 299 4 742 Other non-recurring fees 3 188 — 15 206 Total $ 852 $ 4,173 $ 1,778 $ 188 $ 6,991 Contract Balances The Company recognized revenue of $216 million and $128 million during the three months and $660 million and $636 million during the nine months ended September 30, 2020 and 2019, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods. Transaction Price Allocated to the Remaining Performance Obligations As of September 30, 2020, approximately $21 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 35% of the Banking Solutions and Capital Market Solutions segments' remaining performance obligations over the next 12 months, approximately another 20% 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 contracts with an original duration of one year or less or variable consideration that meet specific criteria. This segment's core performance obligations consist 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. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. |
Condensed Consolidated Financia
Condensed Consolidated Financial Statement Details | 9 Months Ended |
Sep. 30, 2020 | |
Condensed Consolidated Financial Statement Details [Abstract] | |
Condensed Consolidated Financial Statement Details | Condensed Consolidated Financial Statement Details Cash and Cash Equivalents The Company includes restricted cash in the Cash and cash equivalents balance reported in the consolidated statements of cash flows. The reconciliation between Cash and cash equivalents in the consolidated balance sheets and the consolidated statements of cash flows is as follows (in millions): September 30, December 31, Cash and cash equivalents on the consolidated balance sheets $ 1,826 $ 1,152 Merchant float restricted cash (in Settlement deposits and merchant float) 2,009 1,519 Other restricted cash (in Other noncurrent assets) (1) — 540 Total Cash and cash equivalents per the consolidated statements of cash flows $ 3,835 $ 3,211 (1) See Visa Europe and Contingent Value Rights discussion below. Property and Equipment, Intangible Assets and Computer Software The following table shows the Company's consolidated financial statement details as of September 30, 2020, and December 31, 2019 (in millions): September 30, 2020 December 31, 2019 Cost Accumulated Net Cost Accumulated Net Property and equipment $ 2,366 $ 1,452 $ 914 $ 2,177 $ 1,277 $ 900 Intangible assets $ 18,791 $ 4,567 $ 14,224 $ 18,564 $ 2,766 $ 15,798 Software $ 5,308 $ 2,007 $ 3,301 $ 4,820 $ 1,616 $ 3,204 As of September 30, 2020, intangible assets, net of amortization, includes $13,840 million of customer relationships and other amortizable intangible assets, $341 million of finite-lived trademarks, as well as $43 million of non-amortizable indefinite-lived trademarks. Amortization expense with respect to these intangible assets was $602 million and $481 million for the three months and $1,794 million and $794 million for the nine months ended September 30, 2020 and 2019, respectively. Goodwill Changes in goodwill during the nine months ended September 30, 2020, are summarized below (in millions). Prior-period amounts have been reclassified to conform to the new reportable segment presentation as discussed in Note 12. Capital Corporate Merchant Banking Market And Solutions Solutions Solutions Other Total Balance, December 31, 2019 $ 35,543 $ 12,225 $ 4,382 $ 92 $ 52,242 Goodwill attributable to acquisitions (11) 57 245 — 291 Foreign currency adjustments 16 (21) 39 — 34 Balance, September 30, 2020 $ 35,548 $ 12,261 $ 4,666 $ 92 $ 52,567 We assess goodwill for impairment on an annual basis during the fourth quarter or more frequently if circumstances indicate potential impairment. We concluded as a result of our fourth quarter 2019 step zero annual impairment tests that it remained more likely than not that the fair value of each of our reporting units continued to exceed their carrying amounts. Due to the economic impact of the COVID-19 pandemic, we evaluated if events and circumstances as of September 30, 2020, indicated potential impairment. We performed a qualitative assessment by examining factors most likely to affect our valuations and considered the impact to our business from the COVID-19 pandemic. The factors examined involve significant use of management judgment and included, among others, (1) forecasted 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 September 30, 2020, we concluded that it remained more likely than not that the fair value of each of our reporting units continued to exceed their carrying amounts; therefore, goodwill was not impaired. However, it is reasonably possible that future developments related to the economic impact of the COVID-19 pandemic on our Merchant Solutions business, such as an extended duration of the pandemic and/or government-imposed shutdowns, prolonged economic downturn or recession, or lack of governmental support for recovery, 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. 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 litigation"). The preferred stock becomes convertible into Visa Inc. Class A common stock ("common stock") in stages based on developments in the litigation and becomes fully convertible no later than 2028 (subject to a holdback to cover any pending claims). Also in connection with the disposal, Legacy Worldpay agreed to pay 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, and agreed to segregate the cash consideration to be paid as part of the CVR liability, which was recorded as restricted cash. On September 17, 2020, the Company executed an amendment ("the amendment") with the former Legacy Worldpay owners to pay approximately one-third of the cash consideration component of the CVR liability, or $185 million, to the former Legacy Worldpay owners upon amendment execution, and to pay the remaining, approximately two-thirds of the cash consideration on October 12, 2027, subject to reduction due to losses incurred by Visa Inc. relating to the litigation. The partial payment of the cash consideration was recorded as a reduction of the CVR liability and reflected as Other financing activities, net, on the consolidated statement of cash flows for the nine months ended September 30, 2020. The amendment also removed the segregated cash requirement resulting in no restricted cash recorded at September 30, 2020, as compared to $540 million recorded at December 31, 2019, reflected in Other noncurrent assets on the consolidated balance sheet. Additionally, as Visa Inc. releases preferred stock for conversion into common stock, over time and subject to any losses incurred by Visa Inc. relating to the litigation, 90% of the net-of-tax proceeds from the sale of the common stock will be paid to the former Legacy Worldpay owners in accordance with the amendment. A payment was made in the fourth quarter of 2020 related to Visa Inc.'s release of preferred stock in September 2020. The Company has elected the fair value option under ASC 825, Financial Instruments ("ASC 825"), for measuring its preferred stock asset and related CVR liability. The estimated fair value of the preferred stock and related component of the CVR liability are determined using Level 3-type measurements. Significant inputs into the valuation of the preferred stock include the Visa Inc. Class A common stock price per share and the conversion ratio, which are observable, as well as the expected timing of future preferred stock releases for conversion into common stock and an estimate of the potential losses that will result from the ongoing litigation involving Visa Europe, which are unobservable. The fair value of the preferred stock was $593 million at September 30, 2020, with $540 million recorded as Prepaid expenses and other current assets for the preferred stock that has been released to date and $53 million recorded as Other noncurrent assets for the remaining preferred stock. The fair value of the preferred stock was $400 million at December 31, 2019, recorded in Other noncurrent assets. The Company also records the cash consideration component of the CVR liability at fair value under ASC 825. As a result of the amendment, the estimated fair value of the cash consideration component of the CVR liability is determined using Level 3-type measurements, including a discount rate based on the bond yield for the Company's credit rating and remaining payment term as the significant unobservable input. The fair value of the CVR liability was $779 million at September 30, 2020, with $394 million recorded as Accounts payable, accrued and other liabilities for the preferred stock that has been released to date and $385 million recorded as Other noncurrent liabilities for the remaining preferred stock and cash consideration components. The fair value of the CVR liability was $838 million at December 31, 2019, recorded in Other noncurrent liabilities on the consolidated balance sheet. |
Deferred Contract Costs
Deferred Contract Costs | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Contract Costs | Deferred Contract Costs Origination and fulfillment costs from contracts with customers capitalized as of September 30, 2020, and December 31, 2019, consist of the following (in millions): September 30, 2020 December 31, 2019 Contract costs on implementations in progress $ 187 $ 138 Contract origination costs on completed implementations, net 472 352 Contract fulfillment costs on completed implementations, net 192 177 Total Deferred contract costs, net $ 851 $ 667 Amortization of deferred contract costs on completed implementations was $56 million and $48 million during the three months and $162 million and $136 million during the nine months ended September 30, 2020 and 2019, respectively, and there were no significant impairment losses in relation to the costs capitalized for the periods presented. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt as of September 30, 2020, and December 31, 2019, consists of the following (in millions): September 30, 2020 Weighted Average Interest Interest September 30, December 31, Rates Rate Maturities 2020 2019 Fixed Rate Notes Senior USD Notes 3.0% - 5.0% 3.8% 2023 - 2048 $ 4,938 $ 4,938 Senior Euro Notes 0.1% - 3.0% 1.0% 2021 - 2039 9,086 8,694 Senior GBP Notes 1.7% - 3.4% 2.7% 2022 - 2031 2,380 2,440 Senior Euro Floating Rate Notes 0.0% 2021 586 561 Revolving Credit Facility (1) —% 2023 — 600 Other 55 136 Total long-term debt, including current portion 17,045 17,369 Current portion of long-term debt (1,832) (140) Long-term debt, excluding current portion $ 15,213 $ 17,229 (1) 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. Short-term borrowings as of September 30, 2020, and December 31, 2019, consists of the following (in millions): September 30, 2020 Weighted Average Interest September 30, December 31, Rate Maturities 2020 2019 Euro-commercial paper notes ("ECP Notes") (0.1) % Up to 183 days $ 3,097 $ 2,523 U.S. commercial paper notes ("USCP Notes") — % Up to 397 days — 200 Other 47 100 Total Short-term borrowings $ 3,144 $ 2,823 As of September 30, 2020, the weighted-average interest rate of the Company's outstanding debt was 1.6%, including the impact of interest rate swaps (see Note 8). 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 swap discussed below and net unamortized non-cash bond premiums and discounts of $24 million, as of September 30, 2020 (in millions): Total 2020 remaining period $ 19 2021 1,834 2022 1,595 2023 2,189 2024 993 Thereafter 10,534 Total principal payments 17,164 Debt issuance costs, net of accumulated amortization (95) Total long-term debt $ 17,069 There are no mandatory principal payments on the Revolving Credit Facility, and any balance outstanding on the Revolving Credit Facility will be due and payable at its scheduled maturity date, which occurs at September 21, 2023. Revolving Credit Facility As of September 30, 2020, the borrowing capacity remaining under the Revolving Credit Facility was $2,401 million (net of $3,097 million of capacity backstopping our commercial paper notes and $2 million in outstanding letters of credit issued under the Revolving Credit Facility). Fair Value of Debt |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments Fair Value Hedge The Company holds an interest rate swap with a €500 million notional value converting the interest rate exposure on the Company's Senior Euro Notes due 2024 from fixed to variable. This swap is designated as a fair value hedge for accounting purposes with an asset fair value of $15 million and $10 million at September 30, 2020, and December 31, 2019, respectively, reflected as an increase in the hedged debt balance (see Note 7). 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), net of tax, for the change in fair value as Foreign currency translation adjustments, within Other comprehensive earnings (loss), net of tax on the consolidated statements of comprehensive earnings of $(597) million and $185 million during the three months and $(263) million and $198 million, during the nine months ended September 30, 2020 and 2019, respectively. No ineffectiveness has been recorded on the net investment hedges. 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 September 30, 2020, an aggregate €10,904 million wa s designated as a net investment hedge of the Company's investment in Euro-denominated operations related to the Senior Euro Floating Rate Notes, Senior Euro Notes with maturities ranging from 2021 to 2039 and ECP Notes, and an aggregate £1,850 million 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 to 2031. 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 September 30, 2020, an aggregate notional amount of €2,006 million was designated as a net investment hedge of the Company's investment in Euro-denominated operations, and an aggregate notional amount of £556 million was designated as a net investment hedge of the Company's Pound Sterling-denominated operations. The fair value of the cross-currency interest rate swaps was a net $76 million and $167 million liability at September 30, 2020, and December 31, 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Reliance Trust Claims Reliance Trust Company ("Reliance"), the Company's subsidiary, is a defendant in a class action arising out of its provision of services as the discretionary trustee for a 401(k) Plan (the "Plan") for one of its customers. On behalf of the Plan participants, plaintiffs in the action, which was filed in December 2015, seek damages and attorneys' fees, as well as equitable relief, against Reliance and the Plan's sponsor and record-keeper for alleged breaches of fiduciary duty under the Employee Retirement Income Security Act of 1974 ("ERISA"). At a non-jury trial conducted in March 2020, Reliance vigorously defended the action and contended that no breaches of fiduciary duty or prohibited transactions occurred and that Plan participants suffered no damages. At trial, Plaintiffs claimed damages of approximately $127 million against all defendants. On October 12, 2020, Reliance and plaintiffs entered into a settlement agreement, which is subject to final court approval, to settle all allegations and claims asserted in the action for $39.8 million without equitable relief. On October 14, 2020, the Court preliminarily approved the settlement agreement. In the settlement agreement, Reliance admitted no wrongdoing or liability with respect to any of the allegations or claims and maintains that the Plan was managed, operated, and administered during its tenure as the Plan's discretionary trustee in full compliance with ERISA and applicable regulations. Upon final court approval, all allegations and claims will be settled and released with prejudice. The Company recorded a liability for the agreed settlement amount of $39.8 million and a corresponding loss in Other income (expense), net on the consolidated statement of earnings for the three and nine months ended September 30, 2020. 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 million. There are potentially 24 additional claims against Transpev/Prosegur for which Servicos is named as a co-defendant or may be named, but for which Servicos has not yet been served. These additional claims amount to approximately $34 million making the total potential exposure for all 38 claims approximately $45 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. Acquired Contingencies - Worldpay 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 2020, the Company exercised its first call option pursuant to the Amendment, which results in fixed cash payments to Fifth Third of $42 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. The consolidated balance sheet as of September 30, 2020, includes a total liability of $543 million relating to the TRA. The following table summarizes our estimated payment obligation timing under the TRA as of September 30, 2020 (in millions): Payments Due in Type of Obligation Total 2020 Remaining Period 1-3 Years 3-5 Years More than 5 Years Obligations under TRA $ 543 $ 11 $ 267 $ 252 $ 13 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 September 30, 2020; 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. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party TransactionsThe Company holds a noncontrolling ownership stake in Cardinal Holdings ("Cardinal"), which operates the Capco consulting business. FIS' ownership stake in Cardinal at September 30, 2020, and December 31, 2019, was 37%. The ownership stake in Cardinal is recorded as an equity method investment included within Other noncurrent assets on the consolidated balance sheets. The carrying value of this equity method investment at September 30, 2020, and December 31, 2019, was $134 million and $142 million, respectively. FIS provides ongoing management consulting services and other services to Cardinal. Amounts transacted through these agreements were not significant to the 2020 and 2019 periods presented. |
Net Earnings per Share
Net Earnings per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Earnings per Share | Net Earnings per Share The basic weighted average shares and common stock equivalents for the three and nine months ended September 30, 2020 and 2019, were computed using the treasury stock method. The following table summarizes net earnings and net earnings per share attributable to FIS common stockholders for the three and nine months ended September 30, 2020 and 2019 (in millions, except per share amounts): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net earnings attributable to FIS common stockholders $ 20 $ 154 $ 54 $ 456 Weighted average shares outstanding — basic 620 516 618 388 Plus: Common stock equivalent shares 7 8 8 8 Weighted average shares outstanding — diluted 627 524 626 396 Net earnings per share-basic attributable to FIS common stockholders $ 0.03 $ 0.30 $ 0.09 $ 1.18 Net earnings per share-diluted attributable to FIS common stockholders $ 0.03 $ 0.29 $ 0.09 $ 1.15 Options to purchase less than 1 million shares of our common stock for the three months and approximately 2 million and 1 million shares for the nine months ended September 30, 2020 and 2019, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive. On July 20, 2017, our Board of Directors approved a plan authorizing repurchases of up to $4.0 billion of our outstanding common stock in the open market at prevailing market prices or in privately negotiated transactions through December 31, 2020. This share repurchase authorization replaced any existing share repurchase authorization. Approximately $2.3 billion of plan capacity remained available for repurchases as of September 30, 2020. Management temporarily suspended share repurchases as a result of the Worldpay transaction to accelerate debt repayment. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information FIS reports its financial performance based on the following segments: Merchant Solutions, Banking Solutions, Capital Market Solutions, and Corporate and Other. As the Company continues to execute on its integration workflows and optimize its portfolio of assets, the Company reclassified certain non-strategic businesses from the Merchant Solutions and Banking Solutions segments into the Corporate and Other segment in the quarter ended March 31, 2020, and recast all prior-period segment information presented. Below is a summary of each segment. Merchant Solutions ("Merchant") The Merchant segment is focused on serving merchants of all sizes globally, enabling them to accept electronic payments, including credit, debit and prepaid payments originated at a physical point of sale, as well as contactless card, mobile wallet, and card-not present payments in eCommerce and mobile environments. Merchant services include all aspects of payment processing, including authorization and settlement, customer service, chargeback and retrieval processing, reporting for electronic payment transactions and network fee and interchange management. Merchant also includes value-added services, such as security and fraud prevention solutions, advanced data analytics and information management solutions, foreign currency management and numerous funding options. Merchant serves clients in over 140 countries. Our Merchant clients are highly-diversified, including non-discretionary everyday spend categories, such as grocery and pharmacy, and include national retailers as well as global enterprises 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 a growing and diverse client base. Banking Solutions ("Banking") The Banking segment is focused on serving all sizes of financial institutions for core processing and ancillary applications solutions; digital solutions; fraud, risk management and compliance solutions; electronic funds transfer and network services solutions; payment solutions; wealth and retirement solutions; item processing and output services solutions and services capitalizing on the continuing trend to outsource these solutions. 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 130 countries. Our applications include core processing software, which clients use to maintain the primary records of their customer accounts, and complementary applications and services that interact directly with the core processing applications. 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. 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, such as cloud delivery, 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. 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 and integration expenses, that are not considered when management evaluates revenue-generating segment performance. The Company recorded acquisition and integration costs primarily related to the Worldpay acquisition, as well as certain other costs associated with data center consolidation activities totaling $20 million and $25 million for the three months ended and $60 million and $50 million for the nine months ended September 30, 2020 and 2019, respectively, and incremental charges directly related to COVID-19 of $41 million and $56 million for the three and nine months ended September 30, 2020, respectively. 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 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 certain non-operating items. The non-operating items affecting the segment profit measure generally include purchase accounting adjustments as well as acquisition, integration and certain other costs. These costs and adjustments are recorded in the Corporate and Other segment for the periods discussed below. Adjusted EBITDA for the respective segments excludes the foregoing costs and adjustments. Summarized financial information for the Company's segments is shown in the following tables. The Company does not evaluate performance or allocate resources based on segment asset data; therefore, such information is not presented. For the three months ended September 30, 2020 (in millions): Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 1,017 $ 1,507 $ 626 $ 47 $ 3,197 Operating expenses (604) (986) (411) (965) (2,966) Depreciation and amortization (including purchase accounting amortization) 74 132 71 654 931 Acquisition, integration and other costs — — — 195 195 Adjusted EBITDA $ 487 $ 653 $ 286 $ (69) $ 1,357 Adjusted EBITDA $ 1,357 Depreciation and amortization (238) Purchase accounting amortization (693) Acquisition, integration and other costs (195) Interest expense, net (84) Other income (expense), net (4) (Provision) benefit for income taxes (121) Equity method investment earnings (loss) — Net earnings attributable to noncontrolling interest (2) Net earnings attributable to FIS common stockholders $ 20 Capital expenditures $ 92 $ 130 $ 61 $ 10 $ 293 (1) Capital expenditures for the three months ended September 30, 2020, include $21 million in other financing obligations for certain hardware and software. For the three months ended September 30, 2019 (in millions): Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 705 $ 1,443 $ 611 $ 63 $ 2,822 Operating expenses (383) (943) (388) (968) (2,682) Depreciation and amortization (including purchase accounting amortization) 43 127 57 525 752 Acquisition, integration and other costs — — — 213 213 Asset impairments — — — 87 87 Adjusted EBITDA $ 365 $ 627 $ 280 $ (80) $ 1,192 Adjusted EBITDA $ 1,192 Depreciation and amortization (206) Purchase accounting amortization (546) Acquisition, integration and other costs (213) Asset impairments (87) Interest expense, net (95) Other income (expense), net 164 (Provision) benefit for income taxes (48) Equity method investment earnings (loss) (5) Net earnings attributable to noncontrolling interest (2) Net earnings attributable to FIS common stockholders $ 154 Capital expenditures (1) $ 47 $ 156 $ 59 $ 21 $ 283 (1) Capital expenditures for the three months ended September 30, 2019, include $24 million in other financing obligations for certain hardware and software. For the nine months ended September 30, 2020 (in millions): Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 2,764 $ 4,447 $ 1,886 $ 139 $ 9,236 Operating expenses (1,747) (2,963) (1,236) (2,905) (8,851) Depreciation and amortization (including purchase accounting amortization) 224 392 203 1,941 2,760 Acquisition, integration and other costs — — — 616 616 Adjusted EBITDA $ 1,241 $ 1,876 $ 853 $ (209) $ 3,761 Adjusted EBITDA $ 3,761 Depreciation and amortization (705) Purchase accounting amortization (2,055) Acquisition, integration and other costs (616) Interest expense (252) Other income (expense), net 31 (Provision) benefit for income taxes (94) Equity method investment earnings (loss) (9) Net earnings attributable to noncontrolling interest (7) Net earnings attributable to FIS common stockholders $ 54 Capital expenditures $ 272 $ 383 $ 165 $ 39 $ 859 (1) Capital expenditures for the nine months ended September 30, 2020, include $21 million in other financing obligations for certain hardware and software. For the nine months ended September 30, 2019 (in millions): Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 852 $ 4,173 $ 1,778 $ 188 $ 6,991 Operating expenses (503) (2,810) (1,149) (1,683) (6,145) Depreciation and amortization (including purchase accounting amortization) 48 375 161 904 1,488 Acquisition, integration and other costs — — — 293 293 Asset impairments 87 87 Adjusted EBITDA $ 397 $ 1,738 $ 790 $ (211) $ 2,714 Adjusted EBITDA $ 2,714 Depreciation and amortization (594) Purchase accounting amortization (894) Acquisition, integration and other costs (293) Asset impairments (87) Interest expense, net (242) Other income (expense), net (8) (Provision) benefit for income taxes (119) Equity method investment earnings (loss) (18) Net earnings attributable to noncontrolling interest (3) Net earnings attributable to FIS common stockholders $ 456 Capital expenditures (1) $ 50 $ 358 $ 167 $ 28 $ 603 (1) Capital expenditures for the nine months ended September 30, 2019, include $59 million in other financing obligations for certain hardware and software. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
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, 2019. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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 of the novel coronavirus ("COVID-19") 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 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, its severity, the 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 future results could be materially affected by changes in our estimates. |
Segments | FIS reports its financial performance based on the following segments: Merchant Solutions, Banking Solutions, Capital Market Solutions, and Corporate and Other. As FIS continues to execute on its integration workflows and optimize its portfolio of assets, it reclassified certain non-strategic businesses from the Merchant Solutions and Banking Solutions segments into the Corporate and Other segment in the quarter ended March 31, 2020, and recast all prior-period segment information presented. These operations represented less than 2% of third quarter and year-to-date 2020 revenue. |
Change in Accounting Policy | The Company adopted FASB Accounting Standards Codification ("ASC") Topic 326, Financial Instruments - Credit Losses ("Topic 326"), with an adoption date of January 1, 2020. As a result, the Company changed its accounting policy for allowance for credit losses. The accounting policy pursuant to Topic 326 for credit losses is disclosed below. The adoption of Topic 326 resulted in an immaterial cumulative effect adjustment recorded in retained earnings as of January 1, 2020. |
Allowance for Credit Losses | Allowance for Credit Losses The Company monitors trade receivable balances including 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 9. While the COVID-19 pandemic did not result in a significant increase in the Company's expected credit loss allowance recorded as of September 30, 2020, 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. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of business acquisitions, by acquisition | The total purchase price was as follows (in millions): Cash consideration $ 3,423 Value of FIS share consideration 38,635 Pay-off of Worldpay long-term debt not contractually assumed 5,738 Value of outstanding converted equity awards attributed to services already rendered 449 Total purchase price $ 48,245 |
Schedule of recognized identified assets acquired and liabilities assumed | The final purchase price allocation is as follows (in millions): Cash acquired $ 305 Settlement deposits and merchant float (1) 2,444 Trade receivables 1,594 Goodwill 38,057 Intangible assets 13,682 Computer software 1,297 Other noncurrent assets (2) 1,641 Accounts payable, accrued and other liabilities (1,021) Settlement payables (3,167) Deferred income taxes (2,860) Long-term debt, subsequently repaid (1,805) Other liabilities and noncontrolling interest (3) (1,922) Total purchase price $ 48,245 (1) Includes $1,693 million of merchant float. (2) Includes $534 million of other restricted cash. (3) Includes $542 million of noncurrent tax receivable agreement liability (see Note 9) and $875 million contingent value rights liability (see Note 5). |
Schedule of pro forma information for acquisition | Pursuant to ASC 805, unaudited supplemental pro forma results of operations for the three and nine months ended September 30, 2019, assuming the acquisition had occurred as of January 1, 2018, are presented below (in millions, except per share amounts): September 30, 2019 Three months ended Nine months ended Revenue $ 3,154 $ 9,380 Net earnings (loss) attributable to FIS common stockholders $ 215 $ 348 Net earnings (loss) per share-basic attributable to FIS common stockholders $ 0.35 $ 0.57 Net earnings (loss) per share-diluted attributable to FIS common stockholders $ 0.35 $ 0.56 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | For the three months ended September 30, 2020 (in millions): Reportable Segments Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Primary Geographical Markets: North America $ 747 $ 1,281 $ 382 $ 35 $ 2,445 All others 270 226 244 12 752 Total $ 1,017 $ 1,507 $ 626 $ 47 $ 3,197 Type of Revenue: Recurring revenue: Transaction processing and services $ 996 $ 1,146 $ 305 $ 41 $ 2,488 Software maintenance 1 88 124 — 213 Other recurring 19 45 25 — 89 Total recurring 1,016 1,279 454 41 2,790 Software license — 15 64 — 79 Professional services — 153 108 1 262 Other non-recurring fees 1 60 — 5 66 Total $ 1,017 $ 1,507 $ 626 $ 47 $ 3,197 For the three months ended September 30, 2019 (in millions): Reportable Segments Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Primary Geographical Markets: North America $ 501 $ 1,216 $ 378 $ 48 $ 2,143 All others 204 227 233 15 679 Total $ 705 $ 1,443 $ 611 $ 63 $ 2,822 Type of Revenue: Recurring revenue: Transaction processing and services $ 690 $ 1,052 $ 278 $ 57 $ 2,077 Software maintenance 1 91 121 — 213 Other recurring 11 44 27 — 82 Total recurring 702 1,187 426 57 2,372 Software license 1 53 82 — 136 Professional services — 147 103 1 251 Other non-recurring fees 2 56 — 5 63 Total $ 705 $ 1,443 $ 611 $ 63 $ 2,822 For the nine months ended September 30, 2020 (in millions): Reportable Segments Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Primary Geographical Markets: North America $ 2,011 $ 3,789 $ 1,176 $ 110 $ 7,086 All others 753 658 710 29 2,150 Total $ 2,764 $ 4,447 $ 1,886 $ 139 $ 9,236 Type of Revenue: Recurring revenue: Transaction processing and services $ 2,697 $ 3,334 $ 922 $ 125 $ 7,078 Software maintenance 2 263 368 1 634 Other recurring 58 131 75 — 264 Total recurring 2,757 3,728 1,365 126 7,976 Software license 2 48 206 — 256 Professional services 1 441 314 3 759 Other non-recurring fees 4 230 1 10 245 Total $ 2,764 $ 4,447 $ 1,886 $ 139 $ 9,236 For the nine months ended September 30, 2019 (in millions): Reportable Segments Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Primary Geographical Markets: North America $ 648 $ 3,472 $ 1,112 $ 143 $ 5,375 All others 204 701 666 45 1,616 Total $ 852 $ 4,173 $ 1,778 $ 188 $ 6,991 Type of Revenue: Recurring revenue: Transaction processing and services $ 829 $ 3,030 $ 824 $ 169 $ 4,852 Software maintenance 1 271 361 — 633 Other recurring 12 133 80 — 225 Total recurring 842 3,434 1,265 169 5,710 Software license 7 112 214 — 333 Professional services — 439 299 4 742 Other non-recurring fees 3 188 — 15 206 Total $ 852 $ 4,173 $ 1,778 $ 188 $ 6,991 |
Condensed Consolidated Financ_2
Condensed Consolidated Financial Statement Details (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Condensed Consolidated Financial Statement Details [Abstract] | |
Restricted cash and cash equivalents | The reconciliation between Cash and cash equivalents in the consolidated balance sheets and the consolidated statements of cash flows is as follows (in millions): September 30, December 31, Cash and cash equivalents on the consolidated balance sheets $ 1,826 $ 1,152 Merchant float restricted cash (in Settlement deposits and merchant float) 2,009 1,519 Other restricted cash (in Other noncurrent assets) (1) — 540 Total Cash and cash equivalents per the consolidated statements of cash flows $ 3,835 $ 3,211 (1) See Visa Europe and Contingent Value Rights discussion below. |
Cash and cash equivalents | The reconciliation between Cash and cash equivalents in the consolidated balance sheets and the consolidated statements of cash flows is as follows (in millions): September 30, December 31, Cash and cash equivalents on the consolidated balance sheets $ 1,826 $ 1,152 Merchant float restricted cash (in Settlement deposits and merchant float) 2,009 1,519 Other restricted cash (in Other noncurrent assets) (1) — 540 Total Cash and cash equivalents per the consolidated statements of cash flows $ 3,835 $ 3,211 (1) See Visa Europe and Contingent Value Rights discussion below. |
Condensed consolidated financial statement details | The following table shows the Company's consolidated financial statement details as of September 30, 2020, and December 31, 2019 (in millions): September 30, 2020 December 31, 2019 Cost Accumulated Net Cost Accumulated Net Property and equipment $ 2,366 $ 1,452 $ 914 $ 2,177 $ 1,277 $ 900 Intangible assets $ 18,791 $ 4,567 $ 14,224 $ 18,564 $ 2,766 $ 15,798 Software $ 5,308 $ 2,007 $ 3,301 $ 4,820 $ 1,616 $ 3,204 |
Goodwill rollforward | Changes in goodwill during the nine months ended September 30, 2020, are summarized below (in millions). Prior-period amounts have been reclassified to conform to the new reportable segment presentation as discussed in Note 12. Capital Corporate Merchant Banking Market And Solutions Solutions Solutions Other Total Balance, December 31, 2019 $ 35,543 $ 12,225 $ 4,382 $ 92 $ 52,242 Goodwill attributable to acquisitions (11) 57 245 — 291 Foreign currency adjustments 16 (21) 39 — 34 Balance, September 30, 2020 $ 35,548 $ 12,261 $ 4,666 $ 92 $ 52,567 |
Deferred Contract Costs (Tables
Deferred Contract Costs (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Contract Cost Detail | Origination and fulfillment costs from contracts with customers capitalized as of September 30, 2020, and December 31, 2019, consist of the following (in millions): September 30, 2020 December 31, 2019 Contract costs on implementations in progress $ 187 $ 138 Contract origination costs on completed implementations, net 472 352 Contract fulfillment costs on completed implementations, net 192 177 Total Deferred contract costs, net $ 851 $ 667 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt as of September 30, 2020, and December 31, 2019, consists of the following (in millions): September 30, 2020 Weighted Average Interest Interest September 30, December 31, Rates Rate Maturities 2020 2019 Fixed Rate Notes Senior USD Notes 3.0% - 5.0% 3.8% 2023 - 2048 $ 4,938 $ 4,938 Senior Euro Notes 0.1% - 3.0% 1.0% 2021 - 2039 9,086 8,694 Senior GBP Notes 1.7% - 3.4% 2.7% 2022 - 2031 2,380 2,440 Senior Euro Floating Rate Notes 0.0% 2021 586 561 Revolving Credit Facility (1) —% 2023 — 600 Other 55 136 Total long-term debt, including current portion 17,045 17,369 Current portion of long-term debt (1,832) (140) Long-term debt, excluding current portion $ 15,213 $ 17,229 |
Short-term debt | Short-term borrowings as of September 30, 2020, and December 31, 2019, consists of the following (in millions): September 30, 2020 Weighted Average Interest September 30, December 31, Rate Maturities 2020 2019 Euro-commercial paper notes ("ECP Notes") (0.1) % Up to 183 days $ 3,097 $ 2,523 U.S. commercial paper notes ("USCP Notes") — % Up to 397 days — 200 Other 47 100 Total Short-term borrowings $ 3,144 $ 2,823 |
Principal maturities of long-term debt | 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 swap discussed below and net unamortized non-cash bond premiums and discounts of $24 million, as of September 30, 2020 (in millions): Total 2020 remaining period $ 19 2021 1,834 2022 1,595 2023 2,189 2024 993 Thereafter 10,534 Total principal payments 17,164 Debt issuance costs, net of accumulated amortization (95) Total long-term debt $ 17,069 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of estimated payment obligation Ttiming | The following table summarizes our estimated payment obligation timing under the TRA as of September 30, 2020 (in millions): Payments Due in Type of Obligation Total 2020 Remaining Period 1-3 Years 3-5 Years More than 5 Years Obligations under TRA $ 543 $ 11 $ 267 $ 252 $ 13 |
Net Earnings per Share (Tables)
Net Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per share attributable to FIS common stockholders | The following table summarizes net earnings and net earnings per share attributable to FIS common stockholders for the three and nine months ended September 30, 2020 and 2019 (in millions, except per share amounts): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Net earnings attributable to FIS common stockholders $ 20 $ 154 $ 54 $ 456 Weighted average shares outstanding — basic 620 516 618 388 Plus: Common stock equivalent shares 7 8 8 8 Weighted average shares outstanding — diluted 627 524 626 396 Net earnings per share-basic attributable to FIS common stockholders $ 0.03 $ 0.30 $ 0.09 $ 1.18 Net earnings per share-diluted attributable to FIS common stockholders $ 0.03 $ 0.29 $ 0.09 $ 1.15 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment information | Summarized financial information for the Company's segments is shown in the following tables. The Company does not evaluate performance or allocate resources based on segment asset data; therefore, such information is not presented. For the three months ended September 30, 2020 (in millions): Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 1,017 $ 1,507 $ 626 $ 47 $ 3,197 Operating expenses (604) (986) (411) (965) (2,966) Depreciation and amortization (including purchase accounting amortization) 74 132 71 654 931 Acquisition, integration and other costs — — — 195 195 Adjusted EBITDA $ 487 $ 653 $ 286 $ (69) $ 1,357 Adjusted EBITDA $ 1,357 Depreciation and amortization (238) Purchase accounting amortization (693) Acquisition, integration and other costs (195) Interest expense, net (84) Other income (expense), net (4) (Provision) benefit for income taxes (121) Equity method investment earnings (loss) — Net earnings attributable to noncontrolling interest (2) Net earnings attributable to FIS common stockholders $ 20 Capital expenditures $ 92 $ 130 $ 61 $ 10 $ 293 (1) Capital expenditures for the three months ended September 30, 2020, include $21 million in other financing obligations for certain hardware and software. For the three months ended September 30, 2019 (in millions): Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 705 $ 1,443 $ 611 $ 63 $ 2,822 Operating expenses (383) (943) (388) (968) (2,682) Depreciation and amortization (including purchase accounting amortization) 43 127 57 525 752 Acquisition, integration and other costs — — — 213 213 Asset impairments — — — 87 87 Adjusted EBITDA $ 365 $ 627 $ 280 $ (80) $ 1,192 Adjusted EBITDA $ 1,192 Depreciation and amortization (206) Purchase accounting amortization (546) Acquisition, integration and other costs (213) Asset impairments (87) Interest expense, net (95) Other income (expense), net 164 (Provision) benefit for income taxes (48) Equity method investment earnings (loss) (5) Net earnings attributable to noncontrolling interest (2) Net earnings attributable to FIS common stockholders $ 154 Capital expenditures (1) $ 47 $ 156 $ 59 $ 21 $ 283 (1) Capital expenditures for the three months ended September 30, 2019, include $24 million in other financing obligations for certain hardware and software. For the nine months ended September 30, 2020 (in millions): Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 2,764 $ 4,447 $ 1,886 $ 139 $ 9,236 Operating expenses (1,747) (2,963) (1,236) (2,905) (8,851) Depreciation and amortization (including purchase accounting amortization) 224 392 203 1,941 2,760 Acquisition, integration and other costs — — — 616 616 Adjusted EBITDA $ 1,241 $ 1,876 $ 853 $ (209) $ 3,761 Adjusted EBITDA $ 3,761 Depreciation and amortization (705) Purchase accounting amortization (2,055) Acquisition, integration and other costs (616) Interest expense (252) Other income (expense), net 31 (Provision) benefit for income taxes (94) Equity method investment earnings (loss) (9) Net earnings attributable to noncontrolling interest (7) Net earnings attributable to FIS common stockholders $ 54 Capital expenditures $ 272 $ 383 $ 165 $ 39 $ 859 (1) Capital expenditures for the nine months ended September 30, 2020, include $21 million in other financing obligations for certain hardware and software. For the nine months ended September 30, 2019 (in millions): Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 852 $ 4,173 $ 1,778 $ 188 $ 6,991 Operating expenses (503) (2,810) (1,149) (1,683) (6,145) Depreciation and amortization (including purchase accounting amortization) 48 375 161 904 1,488 Acquisition, integration and other costs — — — 293 293 Asset impairments 87 87 Adjusted EBITDA $ 397 $ 1,738 $ 790 $ (211) $ 2,714 Adjusted EBITDA $ 2,714 Depreciation and amortization (594) Purchase accounting amortization (894) Acquisition, integration and other costs (293) Asset impairments (87) Interest expense, net (242) Other income (expense), net (8) (Provision) benefit for income taxes (119) Equity method investment earnings (loss) (18) Net earnings attributable to noncontrolling interest (3) Net earnings attributable to FIS common stockholders $ 456 Capital expenditures (1) $ 50 $ 358 $ 167 $ 28 $ 603 (1) Capital expenditures for the nine months ended September 30, 2019, include $59 million in other financing obligations for certain hardware and software. |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2020 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Percent of revenue subject to segment reclassification of certain non-strategic businesses (less than) | 2.00% | 2.00% |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | Jan. 02, 2020 | Jul. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Business Acquisition | |||||||
Goodwill | $ 52,567 | $ 52,242 | |||||
Virtus | |||||||
Business Acquisition | |||||||
Ownership interest retained by founders | 30.00% | ||||||
Worldpay | |||||||
Business Acquisition | |||||||
Percentage of voting interests acquired | 100.00% | ||||||
Gross contractual amount of trade and other receivables required | $ 1,646 | ||||||
Revenue of acquiree since acquisition | $ 734 | ||||||
Pre-tax loss of acquiree since acquisition | $ (162) | ||||||
Cash consideration | 3,423 | ||||||
Intangible assets | 13,682 | ||||||
Goodwill | $ 38,057 | ||||||
Worldpay | Acquisition-related Costs | |||||||
Business Acquisition | |||||||
Reduction of cost of revenue | $ 149 | $ 210 | |||||
Virtus | |||||||
Business Acquisition | |||||||
Percentage of voting interests acquired | 70.00% | ||||||
Cash consideration | $ 404 | ||||||
Fair value of redeemable noncontrolling interest | 173 | ||||||
Goodwill | $ 245 | ||||||
Redeemable noncontrolling interest, call option exercise period | 2 years | ||||||
Redeemable noncontrolling interest, put option exercise period | 3 years | ||||||
Computer software, intangible asset | Worldpay | |||||||
Business Acquisition | |||||||
Weighted average useful life | 7 years | ||||||
Finite-lived intangible assets acquired | $ 1,297 | ||||||
Computer software, intangible asset | Virtus | |||||||
Business Acquisition | |||||||
Intangible assets | $ 51 | ||||||
Customer relationships | Worldpay | |||||||
Business Acquisition | |||||||
Weighted average useful life | 10 years | ||||||
Finite-lived intangible assets acquired | $ 13,272 | ||||||
Customer relationships | Virtus | |||||||
Business Acquisition | |||||||
Intangible assets | $ 254 | ||||||
Trademarks | Worldpay | |||||||
Business Acquisition | |||||||
Weighted average useful life | 5 years | ||||||
Finite-lived intangible assets acquired | $ 410 |
Acquisitions - Worldplay Purcha
Acquisitions - Worldplay Purchase Price (Details) - Worldpay $ in Millions | Jul. 31, 2019USD ($) |
Business Acquisition | |
Cash consideration | $ 3,423 |
Value of FIS share consideration | 38,635 |
Pay-off of Worldpay long-term debt not contractually assumed | 5,738 |
Value of outstanding converted equity awards attributed to services already rendered | 449 |
Total purchase price | $ 48,245 |
Acquisitions - Worldplay Purc_2
Acquisitions - Worldplay Purchase Price Allocation (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Jul. 31, 2019 |
Business Acquisition | |||
Goodwill | $ 52,567 | $ 52,242 | |
Worldpay | |||
Business Acquisition | |||
Cash acquired | $ 305 | ||
Settlement deposits and merchant float | 2,444 | ||
Trade receivables | 1,594 | ||
Goodwill | 38,057 | ||
Intangible assets | 13,682 | ||
Computer software | 1,297 | ||
Other noncurrent assets | 1,641 | ||
Accounts payable, accrued and other liabilities | (1,021) | ||
Settlement payables | (3,167) | ||
Deferred income taxes | (2,860) | ||
Long-term debt, subsequently repaid | (1,805) | ||
Other liabilities and noncontrolling interest | (1,922) | ||
Total purchase price | 48,245 | ||
Merchant float | 1,693 | ||
Restricted cash | 534 | ||
Tax receivable agreement liability | 542 | ||
Contingent value rights | $ 875 |
Acquisitions - Worldplay Pro Fo
Acquisitions - Worldplay Pro Forma Information (Details) - Worldpay - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Business Acquisition | ||
Revenue | $ 3,154 | $ 9,380 |
Net earnings attributable to FIS common stockholders | $ 215 | $ 348 |
Net earnings (loss) per share-basic attributable to FIS common stockholders (in dollars per share) | $ 0.35 | $ 0.57 |
Net earnings (loss) per share-basic attributable to FIS common stockholders (in dollars per share) | $ 0.35 | $ 0.56 |
Revenue - Disaggregate Revenue
Revenue - Disaggregate Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue | ||||
Revenue | $ 3,197 | $ 2,822 | $ 9,236 | $ 6,991 |
Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 2,790 | 2,372 | 7,976 | 5,710 |
Transaction processing and services | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 2,488 | 2,077 | 7,078 | 4,852 |
Software maintenance | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 213 | 213 | 634 | 633 |
Other recurring | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 89 | 82 | 264 | 225 |
Software license | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 79 | 136 | 256 | 333 |
Professional services | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 262 | 251 | 759 | 742 |
Other non-recurring fees | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 66 | 63 | 245 | 206 |
North America | ||||
Disaggregation of Revenue | ||||
Revenue | 2,445 | 2,143 | 7,086 | 5,375 |
All others | ||||
Disaggregation of Revenue | ||||
Revenue | 752 | 679 | 2,150 | 1,616 |
Corporate and other | ||||
Disaggregation of Revenue | ||||
Revenue | 47 | 63 | 139 | 188 |
Corporate and other | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 41 | 57 | 126 | 169 |
Corporate and other | Transaction processing and services | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 41 | 57 | 125 | 169 |
Corporate and other | Software maintenance | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 0 | 0 | 1 | 0 |
Corporate and other | Other recurring | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 0 | 0 | 0 | 0 |
Corporate and other | Software license | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 0 | 0 | 0 | 0 |
Corporate and other | Professional services | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 1 | 1 | 3 | 4 |
Corporate and other | Other non-recurring fees | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 5 | 5 | 10 | 15 |
Corporate and other | North America | ||||
Disaggregation of Revenue | ||||
Revenue | 35 | 48 | 110 | 143 |
Corporate and other | All others | ||||
Disaggregation of Revenue | ||||
Revenue | 12 | 15 | 29 | 45 |
Operating segments | Merchant solutions | ||||
Disaggregation of Revenue | ||||
Revenue | 1,017 | 705 | 2,764 | 852 |
Operating segments | Merchant solutions | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 1,016 | 702 | 2,757 | 842 |
Operating segments | Merchant solutions | Transaction processing and services | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 996 | 690 | 2,697 | 829 |
Operating segments | Merchant solutions | Software maintenance | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 1 | 1 | 2 | 1 |
Operating segments | Merchant solutions | Other recurring | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 19 | 11 | 58 | 12 |
Operating segments | Merchant solutions | Software license | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 0 | 1 | 2 | 7 |
Operating segments | Merchant solutions | Professional services | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 0 | 0 | 1 | 0 |
Operating segments | Merchant solutions | Other non-recurring fees | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 1 | 2 | 4 | 3 |
Operating segments | Merchant solutions | North America | ||||
Disaggregation of Revenue | ||||
Revenue | 747 | 501 | 2,011 | 648 |
Operating segments | Merchant solutions | All others | ||||
Disaggregation of Revenue | ||||
Revenue | 270 | 204 | 753 | 204 |
Operating segments | Banking solutions | ||||
Disaggregation of Revenue | ||||
Revenue | 1,507 | 1,443 | 4,447 | 4,173 |
Operating segments | Banking solutions | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 1,279 | 1,187 | 3,728 | 3,434 |
Operating segments | Banking solutions | Transaction processing and services | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 1,146 | 1,052 | 3,334 | 3,030 |
Operating segments | Banking solutions | Software maintenance | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 88 | 91 | 263 | 271 |
Operating segments | Banking solutions | Other recurring | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 45 | 44 | 131 | 133 |
Operating segments | Banking solutions | Software license | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 15 | 53 | 48 | 112 |
Operating segments | Banking solutions | Professional services | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 153 | 147 | 441 | 439 |
Operating segments | Banking solutions | Other non-recurring fees | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 60 | 56 | 230 | 188 |
Operating segments | Banking solutions | North America | ||||
Disaggregation of Revenue | ||||
Revenue | 1,281 | 1,216 | 3,789 | 3,472 |
Operating segments | Banking solutions | All others | ||||
Disaggregation of Revenue | ||||
Revenue | 226 | 227 | 658 | 701 |
Operating segments | Capital market solutions | ||||
Disaggregation of Revenue | ||||
Revenue | 626 | 611 | 1,886 | 1,778 |
Operating segments | Capital market solutions | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 454 | 426 | 1,365 | 1,265 |
Operating segments | Capital market solutions | Transaction processing and services | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 305 | 278 | 922 | 824 |
Operating segments | Capital market solutions | Software maintenance | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 124 | 121 | 368 | 361 |
Operating segments | Capital market solutions | Other recurring | Recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 25 | 27 | 75 | 80 |
Operating segments | Capital market solutions | Software license | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 64 | 82 | 206 | 214 |
Operating segments | Capital market solutions | Professional services | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 108 | 103 | 314 | 299 |
Operating segments | Capital market solutions | Other non-recurring fees | Non-recurring | ||||
Disaggregation of Revenue | ||||
Revenue | 0 | 0 | 1 | 0 |
Operating segments | Capital market solutions | North America | ||||
Disaggregation of Revenue | ||||
Revenue | 382 | 378 | 1,176 | 1,112 |
Operating segments | Capital market solutions | All others | ||||
Disaggregation of Revenue | ||||
Revenue | $ 244 | $ 233 | $ 710 | $ 666 |
Revenue - (Narrative) (Details)
Revenue - (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||||
Revenue from contract liability | $ 216 | $ 128 | $ 660 | $ 636 |
Remaining revenue recognition | $ 21,000 | $ 21,000 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | ||||
Remaining performance obligation, percentage | 35.00% | 35.00% | ||
Performance obligations expected to be satisfied, expected timing | 12 months | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | ||||
Remaining performance obligation, percentage | 20.00% | 20.00% | ||
Performance obligations expected to be satisfied, expected timing | 24 months | 24 months |
Condensed Consolidated Financ_3
Condensed Consolidated Financial Statement Details - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Financial Statement Details [Abstract] | ||||
Cash and cash equivalents on the consolidated balance sheets | $ 1,826 | $ 1,152 | ||
Merchant float restricted cash (in Settlement deposits and merchant float) | 2,009 | 1,519 | ||
Other restricted cash (in Other noncurrent assets) (1) | 0 | 540 | ||
Total Cash and cash equivalents per the consolidated statements of cash flows | $ 3,835 | $ 3,211 | $ 3,830 | $ 703 |
Condensed Consolidated Financ_4
Condensed Consolidated Financial Statement Details - Summary of Net Assets (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Condensed Consolidated Financial Statement Details [Abstract] | ||
Property and equipment, cost | $ 2,366 | $ 2,177 |
Property and equipment, accumulated depreciation and amortization | 1,452 | 1,277 |
Property and equipment, net | 914 | 900 |
Intangible assets, cost | 18,791 | 18,564 |
Intangible assets, accumulated depreciation and amortization | 4,567 | 2,766 |
Intangible assets, net | 14,224 | 15,798 |
Computer software, cost | 5,308 | 4,820 |
Computer software, accumulated depreciation and amortization | 2,007 | 1,616 |
Computer software, net | $ 3,301 | $ 3,204 |
Condensed Consolidated Financ_5
Condensed Consolidated Financial Statement Details - Narrative (Details) - USD ($) | Sep. 17, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Property, Plant and Equipment | ||||||
Finite-lived intangible assets, net | $ 13,840,000,000 | $ 13,840,000,000 | ||||
Amortization expense of intangible assets | 602,000,000 | $ 481,000,000 | 1,794,000,000 | $ 794,000,000 | ||
Contingent value rights, fair value | 779,000,000 | 779,000,000 | $ 838,000,000 | |||
Accounts Payable and Accrued Liabilities | ||||||
Property, Plant and Equipment | ||||||
Contingent value rights, fair value | 394,000,000 | 394,000,000 | ||||
Other Noncurrent Liabilities | ||||||
Property, Plant and Equipment | ||||||
Contingent value rights, fair value | 385,000,000 | 385,000,000 | ||||
Other nonoperating income (expense) | ||||||
Property, Plant and Equipment | ||||||
Contingent value rights at fair value, increase | 48,000,000 | 74,000,000 | ||||
Visa Europe to Visa, Inc. | ||||||
Property, Plant and Equipment | ||||||
Restricted cash | $ 0 | $ 0 | 540,000,000 | |||
Former Legacy Worldpay Owners | ||||||
Property, Plant and Equipment | ||||||
Contingent value rights, payment tranche one | $ 185,000,000 | |||||
Visa Europe to Visa, Inc. | ||||||
Property, Plant and Equipment | ||||||
Percentage of disposal proceeds due to counterparty, net of tax (percent) | 90.00% | 90.00% | ||||
Contingent value rights | $ 593,000,000 | $ 593,000,000 | $ 400,000,000 | |||
Visa Europe to Visa, Inc. | Prepaid Expenses and Other Current Assets | ||||||
Property, Plant and Equipment | ||||||
Contingent value rights | 540,000,000 | 540,000,000 | ||||
Visa Europe to Visa, Inc. | Other Noncurrent Assets | ||||||
Property, Plant and Equipment | ||||||
Contingent value rights | 53,000,000 | 53,000,000 | ||||
Trademarks | ||||||
Property, Plant and Equipment | ||||||
Indefinite-lived intangible assets | 43,000,000 | 43,000,000 | ||||
Trademarks | ||||||
Property, Plant and Equipment | ||||||
Finite-lived intangible assets, net | $ 341,000,000 | $ 341,000,000 |
Condensed Consolidated Financ_6
Condensed Consolidated Financial Statement Details - Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill | |
Beginning balance | $ 52,242 |
Goodwill attributable to acquisition | 291 |
Foreign currency adjustments | 34 |
Ending balance | 52,567 |
Corporate and other | |
Goodwill | |
Beginning balance | 92 |
Goodwill attributable to acquisition | 0 |
Foreign currency adjustments | 0 |
Ending balance | 92 |
Operating segments | Merchant solutions | |
Goodwill | |
Beginning balance | 35,543 |
Goodwill attributable to acquisition | (11) |
Foreign currency adjustments | 16 |
Ending balance | 35,548 |
Operating segments | Banking solutions | |
Goodwill | |
Beginning balance | 12,225 |
Goodwill attributable to acquisition | 57 |
Foreign currency adjustments | (21) |
Ending balance | 12,261 |
Operating segments | Capital market solutions | |
Goodwill | |
Beginning balance | 4,382 |
Goodwill attributable to acquisition | 245 |
Foreign currency adjustments | 39 |
Ending balance | $ 4,666 |
Deferred Contract Costs (Detail
Deferred Contract Costs (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Capitalized Contract Cost | ||
Total Deferred contract costs, net | $ 851 | $ 667 |
Contract costs on implementations in progress | ||
Capitalized Contract Cost | ||
Total Deferred contract costs, net | 187 | 138 |
Contract origination costs on completed implementations, net | ||
Capitalized Contract Cost | ||
Total Deferred contract costs, net | 472 | 352 |
Contract fulfillment costs on completed implementations, net | ||
Capitalized Contract Cost | ||
Total Deferred contract costs, net | $ 192 | $ 177 |
Deferred Contract Costs - (Narr
Deferred Contract Costs - (Narratives) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Amortization of contract costs | $ 56,000,000 | $ 48,000,000 | $ 162,000,000 | $ 136,000,000 |
Deferred contract costs impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Debt - (Schedule of Long-Term D
Debt - (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Long-Term Debt | ||
Other | $ 55 | $ 136 |
Total long-term debt | 17,045 | 17,369 |
Current portion of long-term debt | (1,832) | (140) |
Long-term debt, excluding current portion | $ 15,213 | 17,229 |
Revolving credit facility | ||
Long-Term Debt | ||
Unused commitment fee | 0.225% | |
Revolving credit facility | One month LIBOR | Maximum | ||
Long-Term Debt | ||
Applicable margin | 1.625% | |
Revolving credit facility | ||
Long-Term Debt | ||
Weighted average interest rate | 0.00% | |
Revolving credit facility | $ 0 | 600 |
Senior notes | Senior USD Notes | ||
Long-Term Debt | ||
Weighted average interest rate | 3.80% | |
Senior notes | $ 4,938 | 4,938 |
Senior notes | Senior USD Notes | Minimum | ||
Long-Term Debt | ||
Debt instrument, stated percentage | 3.00% | |
Senior notes | Senior USD Notes | Maximum | ||
Long-Term Debt | ||
Debt instrument, stated percentage | 5.00% | |
Senior notes | Senior Euro Notes | ||
Long-Term Debt | ||
Weighted average interest rate | 1.00% | |
Senior notes | $ 9,086 | 8,694 |
Senior notes | Senior Euro Notes | Minimum | ||
Long-Term Debt | ||
Debt instrument, stated percentage | 0.10% | |
Senior notes | Senior Euro Notes | Maximum | ||
Long-Term Debt | ||
Debt instrument, stated percentage | 3.00% | |
Senior notes | Senior GBP Notes | ||
Long-Term Debt | ||
Weighted average interest rate | 2.70% | |
Senior notes | $ 2,380 | 2,440 |
Senior notes | Senior GBP Notes | Minimum | ||
Long-Term Debt | ||
Debt instrument, stated percentage | 1.70% | |
Senior notes | Senior GBP Notes | Maximum | ||
Long-Term Debt | ||
Debt instrument, stated percentage | 3.40% | |
Senior notes | Senior Euro Floating Rate Notes | ||
Long-Term Debt | ||
Weighted average interest rate | 0.00% | |
Senior notes | $ 586 | $ 561 |
Debt - Short-term Debt (Details
Debt - Short-term Debt (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Short-term Debt | ||
Other | $ 47 | $ 100 |
Total Short-term borrowings | $ 3,144 | 2,823 |
Euro-commercial paper notes ("ECP Notes") | Commercial paper | FIS credit agreements | ||
Short-term Debt | ||
Short term debt, weighted average interest rate | (0.10%) | |
Maturities | 183 days | |
Commercial paper | $ 3,097 | 2,523 |
U.S. commercial paper notes ("USCP Notes") | Commercial paper | FIS credit agreements | ||
Short-term Debt | ||
Short term debt, weighted average interest rate | 0.00% | |
Maturities | 397 days | |
Commercial paper | $ 0 | $ 200 |
Debt - (Narrative) (Details)
Debt - (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument | ||
Debt, weighted average interest rate | 1.60% | |
Fair value aggregate difference | $ 1,422 | $ 900 |
FIS credit agreements | ||
Debt Instrument | ||
Unamortized discount (premium), net | 24 | |
Revolving credit facility | ||
Debt Instrument | ||
Borrowing capacity remaining | 2,401 | |
Line of credit facility, capacity backstopped | 3,097 | |
Credit facility outstanding amount | 0 | $ 600 |
Letter of credit | ||
Debt Instrument | ||
Credit facility outstanding amount | $ 2 |
Debt - (Principal Maturities of
Debt - (Principal Maturities of Long-Term Debt) (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Principal maturities of long-term debt | ||
Total long-term debt | $ 17,045 | $ 17,369 |
FIS credit agreements | ||
Principal maturities of long-term debt | ||
2020 remaining period | 19 | |
2021 | 1,834 | |
2022 | 1,595 | |
2023 | 2,189 | |
2024 | 993 | |
Thereafter | 10,534 | |
Total principal payments | 17,164 | |
Debt issuance costs, net of accumulated amortization | (95) | |
Total long-term debt | $ 17,069 |
Financial Instruments - (Narrat
Financial Instruments - (Narratives) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020EUR (€) | Sep. 30, 2020USD ($) | Sep. 30, 2020GBP (£) | Dec. 31, 2019USD ($) | |
Net investment hedges | Floating rate notes, may 2021 euro notes, 2023 euro notes, 2027 euro notes, 2030 euro notes, 2039 euro notes, and ECP notes | Senior notes | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||||||
Notional amount | € | € 10,904,000,000 | |||||||
Net investment hedges | Sterling senior notes due 2022 to 2031 | Senior notes | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||||||
Notional amount | £ | £ 1,850,000,000 | |||||||
Interest rate swap | Fair value hedging | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||||||
Notional amount | € | 500,000,000 | |||||||
Interest rate swap | Fair value hedging | 1.1% Euro senior notes due July 2024 | Senior notes | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||||||
Derivative asset fair value | $ 15 | $ 10 | ||||||
Interest rate swap | Net investment hedges | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||||||
Derivative asset fair value | $ (76) | |||||||
Derivative asset fair value, gross liability | $ (167) | |||||||
Currency forward contract | Net investment hedges | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||||||
Gain (loss) for the change in fair value on derivative used in net investment hedge, after tax, recorded in other comprehensive earnings loss | $ (597) | $ 185 | $ (263) | $ 198 | ||||
Currency swap | Net investment hedges | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives | ||||||||
Notional amount | € 2,006,000,000 | £ 556,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - (Narrative) (Details) $ in Millions | Oct. 12, 2020USD ($) | Sep. 30, 2020USD ($)claim | Jan. 31, 2020USD ($) | Sep. 30, 2020USD ($)claim |
Loss Contingencies | ||||
Tax receivable agreement commitment (percent) | 85.00% | 85.00% | ||
Payments from the exercise of call options | $ 42 | |||
Tax receivable agreement obligations | $ 543 | $ 543 | ||
Pending litigation | Potential tax liability | Secretariat of the federal revenue bureau of brazil | ||||
Loss Contingencies | ||||
Loss contingency, value of damages sought | $ 11 | |||
Loss contingency, number of claims pending | claim | 14 | 14 | ||
Loss contingency, number of potential new claims filed | claim | 24 | 24 | ||
Loss contingency, potential additional claims amount sought | $ 34 | $ 34 | ||
Loss contingency, number of total pending and potential pending claims | claim | 38 | 38 | ||
Pending litigation | Potential tax liability | Secretariat of the federal revenue bureau of brazil | Maximum | ||||
Loss Contingencies | ||||
Loss contingency, estimate of possible loss | $ 45 | $ 45 | ||
Reliance trust claims | Pending litigation | ||||
Loss Contingencies | ||||
Loss contingency, value of damages sought | $ 127 | |||
Reliance trust claims | Settled Litigation | Subsequent Event | ||||
Loss Contingencies | ||||
Litigation Settlement, Amount Awarded to Other Party | $ 39.8 | |||
Loss Contingency Accrual | $ 39.8 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Commitments (Details) - Obligations under TRA $ in Millions | Sep. 30, 2020USD ($) |
Other Commitments | |
Total | $ 543 |
2020 Remaining Period | 11 |
1-3 Years | 267 |
3-5 Years | 252 |
More than 5 Years | $ 13 |
Related-Party Transactions - (N
Related-Party Transactions - (Narrative) (Details) - Cardinal holdings - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Related Party Transaction | ||
Ownership percentage | 37.00% | 37.00% |
Equity method investment | $ 134 | $ 142 |
Net Earnings per Share - (Summa
Net Earnings per Share - (Summary of Earnings per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to FIS common stockholders | $ 20 | $ 154 | $ 54 | $ 456 |
Weighted average shares outstanding — basic (in shares) | 620 | 516 | 618 | 388 |
Plus: Common stock equivalent shares (in shares) | 7 | 8 | 8 | 8 |
Weighted average shares outstanding — diluted (in shares) | 627 | 524 | 626 | 396 |
Net earnings per share — basic attributable to FIS common stockholders (in dollars per share) | $ 0.03 | $ 0.30 | $ 0.09 | $ 1.18 |
Net earnings per share — diluted attributable to FIS common stockholders (in dollars per share) | $ 0.03 | $ 0.29 | $ 0.09 | $ 1.15 |
Net Earnings per Share - (Narra
Net Earnings per Share - (Narrative) (Details) - USD ($) shares in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 20, 2017 | |
Earnings Per Share [Abstract] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1 | 1 | 2 | 1 | |
Stock repurchase program authorized amount | $ 4,000,000,000 | ||||
Stock repurchase program, authorized amount remaining | $ 2,300,000,000 | $ 2,300,000,000 |
Segment Information - (Narrativ
Segment Information - (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)country | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)country | Sep. 30, 2019USD ($) | |
COVID-19 Pandemic | ||||
Segment Reporting Information | ||||
Incremental charges | $ | $ 41 | $ 56 | ||
Worldpay | ||||
Segment Reporting Information | ||||
Data center consolidation costs | $ | $ 20 | $ 25 | $ 60 | $ 50 |
Merchant solutions | Minimum | ||||
Segment Reporting Information | ||||
Number of countries we operate in (more than) | 140 | 140 | ||
Banking solutions | Minimum | ||||
Segment Reporting Information | ||||
Number of countries we operate in (more than) | 130 | 130 | ||
Capital market solutions | Minimum | ||||
Segment Reporting Information | ||||
Number of countries we operate in (more than) | 100 | 100 |
Segment Information - (Summariz
Segment Information - (Summarized Financial Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Information | ||||
Revenue | $ 3,197 | $ 2,822 | $ 9,236 | $ 6,991 |
Operating expenses | (2,966) | (2,682) | (8,851) | (6,145) |
Depreciation and amortization (including purchase accounting amortization) | 931 | 752 | 2,760 | 1,488 |
Acquisition, integration and other costs | (195) | (213) | (616) | (293) |
Asset impairments | 0 | (87) | 0 | (87) |
Adjusted EBITDA | 1,357 | 1,192 | 3,761 | 2,714 |
Interest expense, net | (84) | (95) | (252) | (242) |
Other income (expense), net | (4) | 164 | 31 | (8) |
(Provision) benefit for income taxes | (121) | (48) | (94) | (119) |
Net earnings attributable to noncontrolling interest | (2) | (2) | (7) | (3) |
Net earnings attributable to FIS common stockholders | 20 | 154 | 54 | 456 |
Capital expenditures | 293 | 283 | 859 | 603 |
Capital lease obligations | 21 | 24 | 21 | 59 |
Merchant solutions | ||||
Segment Information | ||||
Capital expenditures | 92 | 47 | 272 | 50 |
Banking solutions | ||||
Segment Information | ||||
Capital expenditures | 130 | 156 | 383 | 358 |
Capital market solutions | ||||
Segment Information | ||||
Capital expenditures | 61 | 59 | 165 | 167 |
Corporate and other | ||||
Segment Information | ||||
Revenue | 47 | 63 | 139 | 188 |
Operating expenses | (965) | (968) | (2,905) | (1,683) |
Depreciation and amortization (including purchase accounting amortization) | 654 | 525 | 1,941 | 904 |
Acquisition, integration and other costs | (195) | (213) | (616) | (293) |
Asset impairments | (87) | (87) | ||
Adjusted EBITDA | (69) | (80) | (209) | (211) |
Capital expenditures | 10 | 21 | 39 | 28 |
Operating segments | Merchant solutions | ||||
Segment Information | ||||
Revenue | 1,017 | 705 | 2,764 | 852 |
Operating expenses | (604) | (383) | (1,747) | (503) |
Depreciation and amortization (including purchase accounting amortization) | 74 | 43 | 224 | 48 |
Acquisition, integration and other costs | 0 | 0 | 0 | 0 |
Asset impairments | 0 | |||
Adjusted EBITDA | 487 | 365 | 1,241 | 397 |
Operating segments | Banking solutions | ||||
Segment Information | ||||
Revenue | 1,507 | 1,443 | 4,447 | 4,173 |
Operating expenses | (986) | (943) | (2,963) | (2,810) |
Depreciation and amortization (including purchase accounting amortization) | 132 | 127 | 392 | 375 |
Acquisition, integration and other costs | 0 | 0 | 0 | 0 |
Asset impairments | 0 | |||
Adjusted EBITDA | 653 | 627 | 1,876 | 1,738 |
Operating segments | Capital market solutions | ||||
Segment Information | ||||
Revenue | 626 | 611 | 1,886 | 1,778 |
Operating expenses | (411) | (388) | (1,236) | (1,149) |
Depreciation and amortization (including purchase accounting amortization) | 71 | 57 | 203 | 161 |
Acquisition, integration and other costs | 0 | 0 | 0 | 0 |
Asset impairments | 0 | |||
Adjusted EBITDA | 286 | 280 | 853 | 790 |
Segment reconciling items | ||||
Segment Information | ||||
Acquisition, integration and other costs | (195) | (213) | (616) | (293) |
Asset impairments | (87) | (87) | ||
Depreciation and amortization | (238) | (206) | (705) | (594) |
Purchase accounting amortization | (693) | (546) | (2,055) | (894) |
Interest expense, net | (84) | (95) | (252) | (242) |
Other income (expense), net | (4) | 164 | 31 | (8) |
(Provision) benefit for income taxes | $ (121) | $ (119) | $ (94) | $ (48) |