UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________

Form 10-Q

_______________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-16427

_______________________________________________

Fidelity National Information Services, Inc.

(Exact name of registrant as specified in its charter)

Georgia		37-1490331
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
601 Riverside Avenue
Jacksonville	Florida	32204
(Address of principal executive offices)		(Zip Code)

(904) 438-6000

(Registrant’s telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:
	Trading	Name of each exchange
Title of each class	Symbol(s)	on which registered
Common Stock, par value $0.01 per share	FIS	New York Stock Exchange
0.400% Senior Notes due 2021	FIS21A	New York Stock Exchange
Floating Rate Senior Notes due 2021	FIS21B	New York Stock Exchange
0.125% Senior Notes due 2021	FIS21C	New York Stock Exchange
1.700% Senior Notes due 2022	FIS22B	New York Stock Exchange
0.125% Senior Notes due 2022	FIS22C	New York Stock Exchange
0.750% Senior Notes due 2023	FIS23A	New York Stock Exchange
1.100% Senior Notes due 2024	FIS24A	New York Stock Exchange
2.602% Senior Notes due 2025	FIS25A	New York Stock Exchange
0.625% Senior Notes due 2025	FIS25B	New York Stock Exchange
1.500% Senior Notes due 2027	FIS27	New York Stock Exchange
1.000% Senior Notes due 2028	FIS28	New York Stock Exchange
2.250% Senior Notes due 2029	FIS29	New York Stock Exchange
2.000% Senior Notes due 2030	FIS30	New York Stock Exchange
3.360% Senior Notes due 2031	FIS31	New York Stock Exchange
2.950% Senior Notes due 2039	FIS39	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES ☐ NO ☒

As of August 3, 2020, 619,603,482 shares of the Registrant’s Common Stock were outstanding.

FORM 10-Q

QUARTERLY REPORT

Quarter Ended June 30, 2020

INDEX

	Page
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Earnings	3
Condensed Consolidated Statements of Comprehensive Earnings	4
Condensed Consolidated Statements of Equity	5
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosure About Market Risks	34
Item 4. Controls and Procedures	35
Part II: OTHER INFORMATION
Item 1A. Risk Factors	36
Item 5. Departure of Officer	36
Item 6. Exhibits	37
Signatures	38

1

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)

	June 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	1,183	$	1,152
Settlement deposits and merchant float	2,697		2,882
Trade receivables, net of allowance for credit losses of $65 and $60 at June 30, 2020 and December 31, 2019, respectively	3,104		3,242
Contract assets	150		124
Settlement receivables	834		647
Other receivables	299		337
Prepaid expenses and other current assets	333		308
Total current assets	8,600		8,692
Property and equipment, net	887		900
Goodwill	51,940		52,242
Intangible assets, net	14,589		15,798
Software, net	3,292		3,204
Other noncurrent assets	2,535		2,303
Deferred contract costs, net	799		667
Total assets	$	82,642	$	83,806
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable, accrued and other liabilities	$	2,063	$	2,374
Settlement payables	4,214		4,228
Deferred revenue	846		817
Short-term borrowings	3,217		2,823
Current portion of long-term debt	1,777		140
Total current liabilities	12,117		10,382
Long-term debt, excluding current portion	14,874		17,229
Deferred income taxes	4,091		4,281
Other noncurrent liabilities	2,287		2,406
Deferred revenue	40		52
Total liabilities	33,409		34,350
Redeemable noncontrolling interest	176		—
Equity:
FIS stockholders’ equity:
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding at June 30, 2020 and December 31, 2019	—		—
Common stock $0.01 par value, 750 shares authorized, 619 and 615 shares issued at June 30, 2020 and December 31, 2019, respectively	6		6
Additional paid in capital	45,736		45,358
Retained earnings	3,753		4,161
Accumulated other comprehensive earnings (loss)	(358)		(33)
Treasury stock, $0.01 par value, 1 common shares as of June 30, 2020 and less than 1 as of December 31, 2019, respectively, at cost	(94)		(52)
Total FIS stockholders’ equity	49,043		49,440
Noncontrolling interest	14		16
Total equity	49,057		49,456
Total liabilities, redeemable noncontrolling interest and equity	$	82,642	$	83,806

See accompanying notes to unaudited condensed consolidated financial statements.

2

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In millions, except per share amounts)

(Unaudited)

	Three months ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Revenue	$	2,962	$	2,112	$	6,039	$	4,169
Cost of revenue	2,046		1,404		4,134		2,785
Gross profit	916		708		1,905		1,384
Selling, general, and administrative expenses	870		317		1,751		678
Operating income	46		391		154		706
Other income (expense):
Interest expense, net	(88)		(72)		(167)		(147)
Other income (expense), net	74		(120)		34		(172)
Total other income (expense), net	(14)		(192)		(133)		(319)
Earnings (loss) before income taxes and equity method investment earnings (loss)	32		199		21		387
Provision (benefit) for income taxes	4		40		(27)		72
Equity method investment earnings (loss)	(7)		(4)		(8)		(11)
Net earnings	21		155		40		304
Net (earnings) loss attributable to noncontrolling interest	(2)		(1)		(5)		(2)
Net earnings attributable to FIS common stockholders	$	19	$	154	$	35	$	302
Net earnings per share-basic attributable to FIS common stockholders	$	0.03	$	0.48	$	0.06	$	0.93
Weighted average shares outstanding-basic	618		324		617		323
Net earnings per share-diluted attributable to FIS common stockholders	$	0.03	$	0.47	$	0.06	$	0.92
Weighted average shares outstanding-diluted	625		327		625		327

See accompanying notes to unaudited condensed consolidated financial statements.

3

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Earnings

(In millions)

(Unaudited)

	Three months ended June 30,								Six months ended June 30,
	2020				2019				2020				2019
Net earnings			$	21			$	155			$	40			$	304
Other comprehensive earnings (loss), before tax:
Unrealized gain (loss) on derivatives	$	—			$	(16)			$	—			$	(16)
Adjustment for (gain) loss reclassified to net earnings	—				(4)				—				(4)
Unrealized gain (loss) on derivatives, net	—				(20)				—				(20)
Foreign currency translation adjustments	(176)				11				(384)				17
Minimum pension liability adjustments	—				—				1				(4)
Other comprehensive earnings (loss), before tax	(176)				(9)				(383)				(7)
Provision for income tax expense (benefit) related to items of other comprehensive earnings	(66)				2				(58)				1
Other comprehensive earnings (loss), net of tax	$	(110)	(110)		$	(11)	(11)		$	(325)	(325)		$	(8)	(8)
Comprehensive earnings (loss)			(89)				144				(285)				296
Net (earnings) loss attributable to noncontrolling interest			(2)				(1)				(5)				(2)
Comprehensive earnings (loss) attributable to FIS common stockholders			$	(91)			$	143			$	(290)			$	294

See accompanying notes to unaudited condensed consolidated financial statements.

4

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

Three and six months ended June 30, 2020

(In millions, except per share amounts)

(Unaudited)

			Amount
			FIS Stockholders
									Accumulated
	Number of shares				Additional				other
	Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
	shares	shares	stock		capital		earnings		earnings (loss)		stock		interest (1)		equity
Balances, March 31, 2020	617	(1)	$	6	$	45,548	$	3,952	$	(248)	$	(91)	$	15	$	49,182
Exercise of stock options	2	—	—		118		—		—		—		—		118
Treasury shares held for taxes due upon exercise of stock options	—	—	—		—		—		—		(3)		—		(3)
Stock-based compensation	—	—	—		69		—		—		—		—		69
Cash dividends declared ($0.35 per share per quarter) and other distributions	—	—	—		—		(218)		—		—		(2)		(220)
Other	—	—	—		1		—		—		—		—		1
Net earnings	—	—	—		—		19		—		—		1		20
Other comprehensive earnings (loss), net of tax	—	—	—		—		—		(110)		—		—		(110)
Balances, June 30, 2020	619	(1)	$	6	$	45,736	$	3,753	$	(358)	$	(94)	$	14	$	49,057

			Amount
			FIS Stockholders
									Accumulated
	Number of shares				Additional				other
	Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
	shares	shares	stock		capital		earnings		earnings (loss)		stock		interest (1)		equity
Balances, December 31, 2019	615	—	$	6	$	45,358	$	4,161	$	(33)	$	(52)	$	16	$	49,456
Issuance of restricted stock	—	—	—		(7)		—		—		7		—		—
Exercise of stock options	4	—	—		258		—		—		—		—		258
Treasury shares held for taxes due upon exercise of stock options	—	(1)	—		—		—		—		(49)		—		(49)
Stock-based compensation	—	—	—		125		—		—		—		—		125
Cash dividends declared ($0.35 per share per quarter) and other distributions	—	—	—		—		(437)		—		—		(4)		(441)
Other	—	—	—		2		(6)		—		—		—		(4)
Net earnings	—	—	—		—		35		—		—		2		37
Other comprehensive earnings (loss), net of tax	—	—	—		—		—		(325)		—		—		(325)
Balances, June 30, 2020	619	(1)	$	6	$	45,736	$	3,753	$	(358)	$	(94)	$	14	$	49,057

(1)Excludes redeemable noncontrolling interest that is not considered equity. See Note 3, Virtus Acquisition, for additional information.

5

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

Three and six months ended June 30, 2019

(In millions, except per share amounts)

(Unaudited)

			Amount
			FIS Stockholders
									Accumulated
	Number of shares				Additional				other
	Common	Treasury	Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
	shares	shares	stock		capital		earnings		earnings (loss)		stock		interest		equity
Balances, March 31, 2019	433	(110)	$	4	$	10,844	$	4,558	$	(427)	$	(5,083)	$	7	$	9,903
Exercise of stock options	—	1	—		19		—		—		16		—		35
Stock-based compensation	—	—	—		24		—		—		—		—		24
Cash dividends declared ($0.35 per share per quarter) and other distributions	—	—	—		—		(113)		—		—		(1)		(114)
Net earnings	—	—	—		—