UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________

Form 10-Q

_______________________________________________

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

For the quarterly period ended March 31, 2021

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
Floating Rate Senior Notes due 2021	FIS21B	New York Stock Exchange
1.700% Senior Notes due 2022	FIS22B	New York Stock Exchange
0.125% Senior Notes due 2022	FIS22C	New York Stock Exchange
0.750% Senior Notes due 2023	FIS23A	New York Stock Exchange
1.100% Senior Notes due 2024	FIS24A	New York Stock Exchange
0.625% Senior Notes due 2025	FIS25B	New York Stock Exchange
1.500% Senior Notes due 2027	FIS27	New York Stock Exchange
1.000% Senior Notes due 2028	FIS28	New York Stock Exchange
2.250% Senior Notes due 2029	FIS29	New York Stock Exchange
2.000% Senior Notes due 2030	FIS30	New York Stock Exchange
3.360% Senior Notes due 2031	FIS31	New York Stock Exchange
2.950% Senior Notes due 2039	FIS39	New York Stock Exchange

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

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

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

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

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

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

As of May 5, 2021, 620,125,558 shares of the Registrant’s Common Stock were outstanding.

FORM 10-Q

QUARTERLY REPORT

Quarter Ended March 31, 2021

INDEX

	Page
Part I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Earnings (Loss)	3
Condensed Consolidated Statements of Comprehensive Earnings (Loss)	4
Condensed Consolidated Statements of Equity	5
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosure About Market Risks	29
Item 4. Controls and Procedures	31
Part II: OTHER INFORMATION
Item 1A. Risk Factors	31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6. Exhibits	32
Signatures	34

1

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)

	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	1,039	$	1,959
Settlement deposits and merchant float	2,919		3,252
Trade receivables, net of allowance for credit losses of $82 and $82, respectively	3,508		3,314
Settlement receivables	703		662
Other receivables	470		317
Prepaid expenses and other current assets	466		394
Total current assets	9,105		9,898
Property and equipment, net	863		887
Goodwill	53,069		53,268
Intangible assets, net	13,315		13,928
Software, net	3,382		3,370
Other noncurrent assets	1,624		1,574
Deferred contract costs, net	959		917
Total assets	$	82,317	$	83,842
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities:
Accounts payable, accrued and other liabilities	$	2,370	$	2,482
Settlement payables	4,735		4,934
Deferred revenue	964		881
Short-term borrowings	2,537		2,750
Current portion of long-term debt	602		1,314
Total current liabilities	11,208		12,361
Long-term debt, excluding current portion	16,300		15,951
Deferred income taxes	4,115		4,017
Other noncurrent liabilities	1,986		1,967
Deferred revenue	59		59
Total liabilities	33,668		34,355
Redeemable noncontrolling interest	175		174
Equity:
FIS stockholders’ equity:
Preferred stock $0.01 par value; 200 shares authorized, none issued and outstanding at March 31, 2021 and December 31, 2020	—		—
Common stock $0.01 par value, 750 shares authorized, 624 and 621 shares issued as of March 31, 2021 and December 31, 2020, respectively	6		6
Additional paid in capital	46,152		45,947
Retained earnings	2,823		3,440
Accumulated other comprehensive earnings (loss)	124		57
Treasury stock, $0.01 par value, 4 and 1 common shares as of March 31, 2021 and December 31, 2020, respectively, at cost	(645)		(150)
Total FIS stockholders’ equity	48,460		49,300
Noncontrolling interest	14		13
Total equity	48,474		49,313
Total liabilities, redeemable noncontrolling interest and equity	$	82,317	$	83,842

See accompanying notes to unaudited condensed consolidated financial statements.

2

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings (Loss)

(In millions, except per share amounts)

(Unaudited)

	Three months ended March 31,
	2021		2020
Revenue	$	3,223	$	3,078
Cost of revenue	2,118		2,089
Gross profit	1,105		989
Selling, general, and administrative expenses	1,006		881
Operating income	99		108
Other income (expense):
Interest expense, net	(74)		(80)
Other income (expense), net	(493)		(39)
Total other income (expense), net	(567)		(119)
Earnings (loss) before income taxes and equity method investment earnings (loss)	(468)		(11)
Provision (benefit) for income taxes	(97)		(30)
Equity method investment earnings (loss)	1		(1)
Net earnings (loss)	(370)		18
Net (earnings) loss attributable to noncontrolling interest	(3)		(3)
Net earnings (loss) attributable to FIS common stockholders	$	(373)	$	15
Net earnings (loss) per share-basic attributable to FIS common stockholders	$	(0.60)	$	0.02
Weighted average shares outstanding-basic	621		616
Net earnings (loss) per share-diluted attributable to FIS common stockholders	$	(0.60)	$	0.02
Weighted average shares outstanding-diluted	621		625

See accompanying notes to unaudited condensed consolidated financial statements.

3

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Earnings (Loss)

(In millions)

(Unaudited)

	Three months ended March 31,
	2021				2020
Net earnings (loss)			$	(370)			$	18
Other comprehensive earnings (loss), before tax:
Unrealized gain (loss) on derivatives	$	9			$	—
Foreign currency translation adjustments	185				(208)
Other adjustments	—				1
Other comprehensive earnings (loss), before tax	194				(207)
Provision for income tax (expense) benefit related to items of other comprehensive earnings	(127)				(8)
Other comprehensive earnings (loss), net of tax	$	67	67		$	(215)	(215)
Comprehensive earnings (loss)			(303)				(197)
Net (earnings) loss attributable to noncontrolling interest			(3)				(3)
Comprehensive earnings (loss) attributable to FIS common stockholders			$	(306)			$	(200)

See accompanying notes to unaudited condensed consolidated financial statements.

4

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

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

					Amount
					FIS Stockholders
											Accumulated
	Number of shares						Additional				other
	Common		Treasury		Common		paid in		Retained		comprehensive		Treasury		Noncontrolling		Total
	shares		shares		stock		capital		earnings		earnings (loss)		stock		interest (1)		equity
Balances, December 31, 2019	615		—		$	6	$	45,358	$	4,161	$	(33)	$	(52)	$	16	$	49,456
Issuance of restricted stock	—		—		—		(7)		—		—		7		—		—
Exercise of stock options	2		—		—		140		—		—		—		—		140
Treasury shares held for taxes due upon exercise of stock options	—		(1)		—		—		—		—		(46)		—		(46)
Stock-based compensation	—		—		—		56		—		—		—		—		56
Cash dividends declared ($0.35 per share per quarter) and other distributions	—		—		—		—		(218)		—		—		(2)		(220)
Other	—		—		—		1		(6)		—		—		—		(5)
Net earnings	—		—		—		—		15		—		—		1		16
Other comprehensive earnings (loss), net of tax	—		—		—		—		—		(215)		—		—		(215)
Balances, March 31, 2020	$	617	$	(1)	$	6	$	45,548	$	3,952	$	(248)	$	(91)	$	15	$	49,182

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

See accompanying notes to unaudited condensed consolidated financial statements.

5

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

	Three months ended March 31,
	2021		2020
Cash flows from operating activities:
Net earnings (loss)	$	(370)	$	18
Adjustment to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization	953		914
Amortization of debt issue costs	7		8
Loss (gain) on sale of businesses, investments and other	(1)		2
Loss on extinguishment of debt	528		—
Stock-based compensation	157		56
Deferred income taxes	(22)		(108)
Net changes in assets and liabilities, net of effects from acquisitions and foreign currency:
Trade and other receivables	(219)		96
Settlement activity	122		(368)
Prepaid expenses and other assets	(129)		40
Deferred contract costs	(113)		(150)
Deferred revenue	89		86
Accounts payable, accrued liabilities and other liabilities	(166)		(211)
Net cash provided by operating activities	836		383
Cash flows from investing activities:
Additions to property and equipment	(69)		(55)
Additions to software	(229)		(251)
Acquisitions, net of cash acquired	—		(402)
Other investing activities, net	(23)		92
Net cash provided by (used in) investing activities	(321)		(616)
Cash flows from financing activities:
Borrowings	13,858		10,958
Repayment of borrowings and other financing obligations	(14,364)		(10,391)
Debt issuance costs	(74)		—
Proceeds from stock issued under stock-based compensation plans	73		176
Treasury stock activity	(494)		(46)
Dividends paid	(244)		(216)
Other financing activities, net	(136)		(4)
Net cash provided by (used in) financing activities	(1,381)		477
Effect of foreign currency exchange rate changes on cash	(40)		(15)
Net increase (decrease) in cash and cash equivalents	(906)		229
Cash and cash equivalents, beginning of period	4,030		3,211
Cash and cash equivalents, end of period	$	3,124	$	3,440
Supplemental cash flow information:
Cash paid for interest	$	95	$	33
Cash paid for income taxes	$	68	$	65

See accompanying notes to unaudited condensed consolidated financial statements.

6

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

(1)       Basis of Presentation

The unaudited financial information included in this report includes the accounts of FIS and its subsidiaries prepared in accordance with U.S. generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments considered necessary for a fair presentation have been included. This report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

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 2020 consolidated financial statements to conform to the classifications used in 2021. Amounts in tables in the financial statements and accompanying footnotes may not sum due to rounding.

FIS reports its financial performance based on the following segments: Merchant Solutions, Banking Solutions, Capital Market Solutions, and Corporate and Other. The Company regularly assesses its portfolio of assets and reclassified certain non-strategic businesses from the Merchant Solutions, Banking Solutions, and Capital Market Solutions segments into the Corporate and Other segment during the year ended December 31, 2020, and recast all prior-period segment information presented.

(2)       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 recast to conform to the new reportable segment presentation as discussed in Note 11.

7

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

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

For the three months ended March 31, 2020 (in millions):

	Reportable Segments
					Capital
	Merchant		Banking		Market		Corporate
	Solutions		Solutions		Solutions		and Other		Total
Primary Geographical Markets:
North America	$	661	$	1,242	$	373	$	72	$	2,348
All others	274		202		224		30		730
Total	$	935	$	1,444	$	597	$	102	$	3,078
Type of Revenue:
Recurring revenue:
Transaction processing and services	$	911	$	1,078	$	278	$	97	$	2,364
Software maintenance	1		88		121		1		211
Other recurring	21		44		24		—		89
Total recurring	933		1,210		423		98		2,664
Software license	—		19		73		—		92
Professional services	—		143		101		2		246
Other non-recurring fees	2		72		—		2		76
Total	$	935	$	1,444	$	597	$	102	$	3,078

8

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Contract Balances

The Company recognized revenue of $327 million and $338 million during the three months ended March 31, 2021 and 2020, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2021, approximately $21.0 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 32% of the Banking Solutions and Capital Market Solutions segments' remaining performance obligations over the next 12 months, approximately another 22% over the next 13 to 24 months, and the balance thereafter.

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.

(3)       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):

	March 31, 2021		December 31, 2020
Cash and cash equivalents on the consolidated balance sheets	$	1,039	$	1,959
Merchant float restricted cash (in Settlement deposits and merchant float)	2,085		2,071
Total Cash and cash equivalents per the consolidated statements of cash flows	$	3,124	$	4,030

Allowance for Credit Losses

The Company monitors trade receivables, contract assets as well as other receivable balances 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 7.

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

9

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Property and Equipment, Intangible Assets and Computer Software

The following table shows the Company's consolidated financial statement details as of March 31, 2021, and December 31, 2020 (in millions):

	March 31, 2021						December 31, 2020
	Cost		Accumulated depreciation and amortization		Net		Cost		Accumulated depreciation and amortization		Net
Property and equipment	$	2,319	$	1,456	$	863	$	2,292	$	1,405	$	887
Intangible assets	$	19,117	$	5,802	$	13,315	$	19,141	$	5,213	$	13,928
Software	$	5,838	$	2,456	$	3,382	$	5,535	$	2,165	$	3,370

As of March 31, 2021, intangible assets, net of amortization, includes $12,947 million of customer relationships and $368 million of trademarks and other intangible assets. Amortization expense with respect to these intangible assets was $595 million and $598 million for the three months ended March 31, 2021 and 2020, respectively.

Goodwill

Changes in goodwill during the three months ended March 31, 2021, are summarized below (in millions).

					Capital		Corporate
	Merchant		Banking		Market		And
	Solutions		Solutions		Solutions		Other		Total
Balance, December 31, 2020	$	36,267	$	12,279	$	4,702	$	20	$	53,268
Foreign currency adjustments	(164)		(19)		(16)		—		(199)
Balance, March 31, 2021	$	36,103	$	12,260	$	4,686	$	20	$	53,069

We assess goodwill for impairment on an annual basis during the fourth quarter or more frequently if circumstances indicate potential impairment. For 2020, we completed our annual assessment for the Banking Solutions and Capital Market Solutions reporting units with qualitative assessments and concluded that it remained more likely than not that the fair value of each reporting unit continued to exceed its carrying value. For Merchant Solutions, we completed our 2020 annual assessment with a quantitative assessment due to the economic impact of the COVID-19 pandemic on our Merchant Solutions business and its primary operations having been recently acquired as part of the Worldpay acquisition completed on July 31, 2019. As a result of the annual assessment, the fair value of the reporting unit was estimated to be in excess of carrying amount by approximately 4%.

Due to the continued economic impact of the COVID-19 pandemic, we evaluated if events and circumstances as of March 31, 2021, indicated potential impairment. We performed a qualitative assessment by examining factors most likely to affect our reporting units' fair values 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) forecast revenue, growth rates, operating margins, and capital expenditures used to calculate estimated future cash flows, (2) future economic and market conditions and (3) FIS' market capitalization. Based on our interim impairment assessment as of March 31, 2021, we concluded that it remained more likely than not that the fair value continues to exceed the carrying amount for each of our reporting units; therefore, goodwill was not impaired.

However, it 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.

10

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 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. Also in connection with the disposal, and pursuant to the terms of an amendment executed on September 17, 2020, the Company will pay the former Legacy Worldpay owners 90% of the net-of-tax proceeds from the disposal, known as contingent value rights, which is recorded as a liability ("CVR liability") on the consolidated balance sheets.

The Company has elected the fair value option under ASC 825, Financial Instruments ("ASC 825"), for measuring its preferred stock asset and CVR liability. The fair value of the preferred stock was $50 million and $70 million at March 31, 2021, and December 31, 2020, respectively, recorded in Other noncurrent assets on the consolidated balance sheets. The fair value of the CVR liability was $377 million and $401 million at March 31, 2021, and December 31, 2020, respectively, recorded in Other noncurrent liabilities on the consolidated balance sheets. The net change in fair value was $5 million and $(20) million for the three months ended March 31, 2021 and 2020, respectively, recorded in Other income (expense), net on the consolidated statements of earnings (loss).

(4)       Deferred Contract Costs

Origination and fulfillment costs from contracts with customers capitalized as of March 31, 2021, and December 31, 2020, consist of the following (in millions):

	March 31, 2021		December 31, 2020
Contract costs on implementations in progress	$	186	$	245
Contract origination costs on completed implementations, net	540		470
Contract fulfillment costs on completed implementations, net	233		202
Total Deferred contract costs, net	$	959	$	917

Amortization of deferred contract costs on completed implementations was $68 million and $51 million during the three months ended March 31, 2021 and 2020, respectively, and there were no significant impairment losses in relation to the costs capitalized for the periods presented.

11

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(5)       Debt

Long-term debt as of March 31, 2021, and December 31, 2020, consists of the following (in millions):

	March 31, 2021
		Weighted
		Average
	Interest	Interest		March 31,		December 31,
	Rates	Rate	Maturities	2021		2020
Fixed Rate Notes
Senior USD Notes	0.4% - 4.8%	1.9%	2023 - 2048	$	6,909	$	4,938
Senior Euro Notes	0.1% - 3.0%	1.3%	2022 - 2039	7,916		8,891
Senior GBP Notes	1.7% - 3.4%	1.5%	2022 - 2031	1,686		2,526
Senior Euro Floating Rate Notes		0.0%	2021	523		613
Revolving Credit Facility (1)		—%	2026	—		251
Other				(132)		46
Total long-term debt, including current portion				16,902		17,265
Current portion of long-term debt				(602)		(1,314)
Long-term debt, excluding current portion				$	16,300	$	15,951

(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 March 31, 2021, and December 31, 2020, consist of the following (in millions):

	March 31, 2021
	Weighted
	Average
	Interest			March 31,		December 31,
	Rate		Maturities	2021		2020
Euro-commercial paper notes ("ECP Notes")	(0.5)	%	Up to 183 days	$	243	$	861
U.S. commercial paper notes ("USCP Notes")	0.3	%	Up to 397 days	2,129		1,745
Other				165		144
Total Short-term borrowings				$	2,537	$	2,750

As of March 31, 2021, the weighted average interest rate of the Company's outstanding debt was 1.0%, including the impact of interest rate swaps (see Note 6).

The following summarizes the aggregate maturities of our long-term debt, including other financing obligations for certain hardware and software, based on stated contractual maturities, excluding the fair value of the interest rate swaps discussed below and net unamortized non-cash bond premiums and discounts of $(141) million as of March 31, 2021 (in millions):

	Total
2021 remaining period	$	578
2022	1,623
2023	2,234
2024	1,343
2025	739
Thereafter	10,646
Total principal payments	17,163
Debt issuance costs, net of accumulated amortization	(120)
Total long-term debt	$	17,043

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FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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 on March 2, 2026.

Senior Notes

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

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

Revolving Credit Facility

On March 2, 2021, FIS entered into an amendment to the Restated Credit Agreement to amend certain covenant provisions, revise lender commitments for certain counterparties, and extend the scheduled maturity date to March 2, 2026. As of March 31, 2021, the borrowing capacity under the Revolving Credit Facility was $3,126 million (net of $2,372 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

The fair value of the Company's long-term debt is estimated to be approximately $650 million and $1,640 million higher than the carrying value, excluding the fair value of the interest rate swaps and unamortized discounts, as of March 31, 2021, and December 31, 2020, respectively.

(6)       Financial Instruments

Fair Value Hedges

The Company holds interest rate swaps with aggregate notional amounts of $1,604 million, £925 million and €500 million at March 31, 2021, and $1,000 million and €500 million at December 31, 2020, converting the interest rate exposure on certain of the Company's Senior USD Notes, Senior GBP Notes and Senior Euro Notes, as applicable, from fixed to variable. These swaps are designated as fair value hedges for accounting purposes with a net liability fair value of $96 million reflected as a decrease in the long-term debt balance at March 31, 2021, and a net asset fair value of $10 million reflected as an increase in the long-term debt balance at December 31, 2020 (see Note 5).

Net Investment Hedges

The purpose of the Company's net investment hedges, as discussed below, is to reduce the volatility of FIS' net investment value in its Euro- and Pound Sterling-denominated operations due to changes in foreign currency exchange rates.

The Company recorded net investment hedge aggregate gain (loss) for the change in fair value as Foreign currency translation adjustments and related income tax (expense) benefit within Other comprehensive earnings (loss), net of tax, on the consolidated statements of comprehensive earnings (loss) of $321 million and $535 million during the three months ended March 31, 2021 and 2020, respectively. No ineffectiveness has been recorded on the net investment hedges.

13

FIDELITY NATIONAL INFORMATION SERVICES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Foreign Currency-Denominated Debt Designations

The Company designates certain foreign currency-denominated debt as net investment hedges of its investment in Euro- and Pound Sterling-denominated operations. As of March 31, 2021, and December 31, 2020, an aggregate €6,968 million and €7,466 million, respectively, was designated as a net investment hedge of the Company's investment in Euro-denominated operations related to Senior Euro Notes with maturities ranging from 2022 to 2039 and ECP Notes. As of December 31, 2020, an additional €1,000 million was designated as a net investment hedge of the Company's investment in Euro-denominated operations related to the Senior Euro Floating Rate Notes and Senior Euro Notes with a 2021 maturity. As of March 31, 2021, and December 31, 2020, an aggregate £1,203 million and £1,850 million, respectively, was designated as a net investment hedge of the Company's Pound Sterling-denominated operations related to the Senior GBP Notes with maturities ranging from 2022 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 March 31, 2021, and December 31, 2020, aggregate notional amounts of €5,906 million and €4,508 million, respectively, were designated as net investment hedges of the Company's investment in Euro-denominated operations, and aggregate notional amounts of £2,045 million and £565 million, respectively, were designated as net investment hedges of the Company's Pound Sterling-denominated operations. The cross-currency interest rate swap fair values were net liabilities of $206 million and $306 million at March 31, 2021, and December 31, 2020, respectively.

(7)    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, sought 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, Relian