EX-99.2 3 q32023exhibit992.htm EX-99.2 Document
FIDELITY NATIONAL INFORMATION SERVICES, INC.
RECAST OF PRIOR PERIODS TO ACCOUNT FOR PENDING SALE OF
WORLDPAY MERCHANT SOLUTIONS BUSINESS

Exhibit 99.2
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On July 5, 2023, Fidelity National Services, Inc. (“FIS” or the “Company”) signed a definitive agreement to sell a 55% equity interest in its Worldpay Merchant Solutions business to private equity funds managed by GTCR, LLC ("GTCR"). FIS will retain a non-controlling 45% ownership interest in a new standalone joint venture. The transaction is expected to close by the first quarter of 2024, subject to regulatory approvals and other customary closing conditions. Following the closing of this transaction, FIS' ownership interest in Worldpay is expected to be reported as equity method investment earnings.

The planned disposition represents a strategic shift that will have a major impact on the Company’s operations and financial results; accordingly, beginning in the third quarter 2023, the operating results of the Worldpay Merchant Solutions business have been reflected as discontinued operations in accordance with generally accepted accounting principles (GAAP) and prior periods have been recast consistent with this presentation. We have also recast certain supplemental non-GAAP financial information, including adjusted EBITDA, adjusted net earnings and adjusted net earnings per share, and the associated reconciliations of these non-GAAP measures to related GAAP measures.

We believe these non-GAAP measures help investors better understand the underlying fundamentals of our business. As further described below, the non-GAAP earnings measures presented eliminate items management believes are not indicative of FIS’ operating performance. For these reasons, management also uses these non-GAAP measures in its assessment and management of FIS’ performance.

Adjusted EBITDA reflects net earnings (loss) before interest, other income (expense), taxes, equity method investment earnings (loss), and depreciation and amortization, and excludes certain costs and other transactions that management deems non-operational in nature, or that otherwise improve the comparability of operating results across reporting periods by their exclusion. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, adjusted EBITDA, as it relates to our segments, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's Regulation G and Item 10(e) of Regulation S-K.

Adjusted net earnings excludes the impact of certain costs and other transactions which management deems non-operational in nature or that otherwise improve the comparability of operating results across reporting periods by their exclusion. These include, among others, the impact of acquisition-related purchase accounting amortization which is recurring.

Adjusted EPS reflects adjusted net earnings, as defined above, divided by weighted average diluted shares outstanding.

Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP measures. Further, FIS’ non-GAAP measures may be calculated differently from similarly titled measures of other companies.



FIDELITY NATIONAL INFORMATION SERVICES, INC.
RECAST OF PRIOR PERIODS TO ACCOUNT FOR PENDING SALE OF
WORLDPAY MERCHANT SOLUTIONS BUSINESS


Exhibit A    Condensed Consolidated Statement of Earnings (Loss) — Recast and Unaudited for the quarters ended March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023, and June 30, 2023

Exhibit B    Supplemental GAAP to Non-GAAP Reconciliations — Recast and Unaudited for the quarters ended March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023, and June 30, 2023


FIDELITY NATIONAL INFORMATION SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) — RECAST AND UNAUDITED
(In millions, except per share amounts)
Exhibit A
 Fiscal year 2022Fiscal year 2023
 Q1Q2Q3Q4Full YearQ1Q2
Revenue$2,370 $2,408 $2,415 $2,526 $9,719 $2,397 $2,424 
Cost of revenue1,571 1,541 1,534 1,570 6,216 1,569 1,518 
Gross profit799 867 881 956 3,503 828 906 
Selling, general, and administrative expenses557 583 480 560 2,182 517 553 
Asset impairments40 30 17 17 103 — 1 
Operating income (loss)202 254 384 379 1,218 311 351 
Other income (expense):  
Interest expense, net(43)(48)(78)(112)(281)(142)(160)
Other income (expense), net29 6 18 (49)4 (36)(77)
Total other income (expense), net(14)(42)(60)(161)(277)(178)(237)
Earnings (loss) before income taxes188 212 324 218 941 133 114 
Provision (benefit) for income taxes67 51 102 107 325 37 29 
Net earnings (loss) from continuing operations121 161 222 111 616 96 85 
Earnings (loss) from discontinued operations, net of tax— 119 32 (17,473)(17,324)45 (6,679)
Net earnings (loss)121 280 254 (17,362)(16,708)141 (6,594)
Net (earnings) loss attributable to noncontrolling interest from continuing operations— (2)(4)(2)(8)— (1)
Net (earnings) loss attributable to noncontrolling interest from discontinued operations(1)(1)(1)(1)(4)(1)(1)
Net earnings (loss) attributable to FIS$120 $277 $249 $(17,365)$(16,720)$140 $(6,596)
Net earnings (loss) attributable to FIS:
Continuing operations$121 $159 $218 $109 $608 $96 $84 
Discontinued operations(1)118 31 (17,474)(17,328)44 (6,680)
Total$120 $277 $249 $(17,365)$(16,720)$140 $(6,596)
Basic earnings (loss) per common share attributable to FIS:
Continuing operations$0.20 $0.26 $0.36 $0.18 $1.01 $0.16 $0.14 
Discontinued operations— 0.19 0.05 (29.47)(28.69)0.07 (11.28)
Total$0.20 $0.46 $0.41 $(29.28)$(27.68)$0.24 $(11.14)
Diluted earnings (loss) per common share attributable to FIS:
Continuing operations$0.20 $0.26 $0.36 $0.18 $1.01 $0.16 $0.14 
Discontinued operations— 0.19 0.05 (29.47)(28.69)0.07 (11.28)
Total$0.20 $0.45 $0.41 $(29.28)$(27.68)$0.24 $(11.14)
Weighted average common shares outstanding:
Basic610 608 605 593 604 592 592 
Diluted614 611 607 593 604 593 592 

Amounts in table may not sum or calculate due to rounding.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share amounts)
Exhibit B

Fiscal year 2022Fiscal year 2023
Q1Q2Q3Q4Full YearQ1Q2
Net earnings (loss) attributable to FIS from continuing operations$121 $159 $218 $109 $608 $96 $84 
Provision (benefit) for income taxes6751102107325 3729
Interest expense, net43 48 78 112 281 142 160 
Other, net(29)(4)(14)51 4 36 78 
Operating income (loss), as reported202 254 384 379 1,218 311 351 
Depreciation and amortization, excluding purchase accounting amortization293 282 262 263 1,101 271 264 
Non-GAAP adjustments:
Purchase accounting amortization (1)199 196 193 190 778 176 175 
Acquisition, integration and other costs (2)128 176 123 154 581 100 113 
Asset impairments (3)40 29 17 17 103 — 1 
Indirect Worldpay business support costs (4)47 47 43 42 180 42 41 
Adjusted EBITDA from continuing operations$909 $984 $1,022 $1,045 $3,961 $900 $945 
Net earnings (loss) attributable to FIS from discontinued operations$(1)$118 $31 $(17,474)$(17,328)$44 $(6,680)
Provision (benefit) for income taxes(13)27 (11)46 52 11 43 
Interest expense, net— (1)(2)(3)(6)(5)(7)
Other, net(31)(24)60 (60)(55)(24)(23)
Operating income (loss)(45)120 78 (17,491)(17,337)26 (6,667)
Depreciation and amortization, excluding purchase accounting amortization70 65 62 64 260 76 74 
Non-GAAP adjustments:
Purchase accounting amortization (1)451 432 415 409 1,707 372 373 
Acquisition, integration and other costs (2)62 45 41 32 178 27 27 
Asset impairments (3)18 — — 17,588 17,606 — 6,840 
Indirect Worldpay business support costs (4)(47)(47)(43)(42)(180)(42)(41)
Adjusted EBITDA from discontinued operations$509 $615 $553 $560 $2,234 $459 $606 
Adjusted EBITDA$1,418 $1,599 $1,575 $1,605 $6,195 $1,359 $1,551 

Amounts in table may not sum or calculate due to rounding.


FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share amounts)
Exhibit B (continued)

Fiscal year 2022Fiscal year 2023
Q1Q2Q3Q4Full YearQ1Q2
Earnings (loss) attributable to FIS from continuing operations$121 $159 $218 $109 $608 $96 $84 
Non-GAAP adjustments from continuing operations:
Purchase accounting amortization (1)199  196 193 190 778 176 175 
Acquisition, integration and other costs (2)166 205 144 168 681 110 120 
Asset impairments (3)40 29 17 17 103 — 1 
Indirect Worldpay business support costs (4)47 47 43 42 180 42 41 
Non-operating (income) expense (5)(29)(6)(18)49 (5)36 77 
(Provision) benefit for income taxes on non-GAAP adjustments(25)(53)16 10 (48)(34)(44)
Total non-GAAP adjustments from continuing operations398 418 395 476 1,689 330 370 
Adjusted net earnings attributable to FIS from continuing operations$519 $577 $613 $585 $2,297 $426 $454 
Earnings (loss) attributable to FIS from discontinued operations, net of tax$(1)$118 $31 $(17,474)$(17,328)$44 $(6,680)
Non-GAAP adjustments from discontinued operations:
Purchase accounting amortization (1)451 432 415 409 1,707 372 373 
Acquisition, integration and other costs (2)76 58 50 38 222 36 33 
Asset impairments (3)18 — — 17,588 17,606 — 6,840 
Indirect Worldpay business support costs (4)(47)(47)(43)(42)(180)(42)(41)
Non-operating (income) expense (5)(32)(24)59 (61)(58)(25)(24)
(Provision) benefit for income taxes on non-GAAP adjustments(80)(58)(71)(24)(233)(44)(34)
Total non-GAAP adjustments from discontinued operations386 361 410 17,908 19,064 297 7,147 
Adjusted net earnings attributable to FIS from discontinued operations$385 $479 $441 $434 $1,736 $341 $467 
Adjusted net earnings attributable to FIS common stockholders$904 $1,056 $1,054 $1,019 $4,033 $767 $921 

Amounts in table may not sum or calculate due to rounding.


FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share amounts)
Exhibit B (continued)

Fiscal year 2022Fiscal year 2023
Q1Q2Q3Q4Full YearQ1Q2
Net earnings (loss) per share-diluted attributable to FIS from continuing operations$0.20 $0.26 $0.36 $0.18 $1.00 $0.16 $0.14 
Non-GAAP adjustments from continuing operations:
Purchase accounting amortization (1)0.32 0.32 0.32 0.32 1.28 0.30 0.29 
Acquisition, integration and other costs (2)0.27 0.34 0.24 0.28 1.12 0.19 0.20 
Asset impairments (3)0.07 0.05 0.03 0.03 0.17 — — 
Indirect Worldpay business support costs (4)0.08 0.08 0.07 0.07 0.30 0.07 0.07 
Non-operating (income) expense (5)(0.05)(0.01)(0.03)0.08 (0.01)0.06 0.13 
(Provision) benefit for income taxes on non-GAAP adjustments(0.04)(0.09)0.03 0.02 (0.08)(0.06)(0.07)
Adjusted net earnings per share-diluted attributable to FIS from continuing operations$0.85 $0.94 $1.01 $0.98 $3.78 $0.72 $0.76 
Earnings (loss) per share-diluted attributable to FIS from discontinued operations, net of tax$— $0.19 $0.05 $(29.37)$(28.55)$0.07 $(11.25)
Non-GAAP adjustments from discontinued operations:
Purchase accounting amortization (1)0.73 0.71 0.68 0.69 2.81 0.63 0.63 
Acquisition, integration and other costs (2)0.12 0.09 0.08 0.06 0.37 0.06 0.06 
Asset impairments (3)0.03 — — 29.56 29.00 — 11.52 
Indirect Worldpay business support costs (4)(0.08)(0.08)(0.07)(0.07)(0.30)(0.07)(0.07)
Non-operating (income) expense (5)(0.05)(0.04)0.10 (0.10)(0.10)(0.04)(0.04)
(Provision) benefit for income taxes on non-GAAP adjustments(0.13)(0.09)(0.12)(0.04)(0.38)(0.07)(0.06)
Adjusted net earnings (loss) per share-diluted attributable to FIS from discontinued operations$0.63 $0.78 $0.73 $0.73 $2.86 $0.58 $0.79 
Adjusted net earnings (loss) per share-diluted attributable to FIS common stockholders$1.47 $1.73 $1.74 $1.71 $6.65 $1.29 $1.55 
Weighted average shares outstanding-diluted (6)614 611 607 595 607 593 594 

Amounts in table may not sum or calculate due to rounding. Full year amount will not equal the sum of the quarterly adjusted net earnings per share amounts due to the quarterly variations in weighted average shares outstanding-diluted.

FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share amounts)
Exhibit B (continued)

Notes to Recast and Unaudited Supplemental GAAP to Non-GAAP Reconciliations for the periods presented

Following is a description of the nature of the adjustments:

(1)This item represents purchase price amortization expense on all intangible assets acquired through various Company acquisitions, including customer relationships, contract value, technology assets, trademarks and trade names. During the 2022 periods presented, this item also includes incremental amortization expense associated with shortened estimated useful lives and accelerated amortization methods for certain acquired software driven by the Company's platform modernization. The Company has excluded the impact of purchase price amortization expense as such amounts can be significantly impacted by the timing and/or size of acquisitions. Although the Company excludes these amounts from its non-GAAP expenses, the Company believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of assets that relate to past acquisitions will recur in future periods until such assets have been fully amortized. Any future acquisitions may result in the amortization of future assets.

(2)This item represents costs primarily related to acquisition, integration, enterprise transformation initiatives, severance and other termination expenses, the planned separation of the Worldpay Merchant Solutions business, incremental stock compensation directly attributable to specific programs, other divestiture-related expenses, and enterprise cost control and other initiatives.

For purposes of calculating Adjusted net earnings, this item also includes incremental amortization expense associated with shortened estimated useful lives and accelerated amortization methods for certain software and deferred contract cost assets driven by the Company's platform modernization. The incremental amortization expenses are included in the Depreciation and amortization, excluding purchase accounting amortization line item within the Adjusted EBITDA reconciliation.

(3)This item represents impairments of certain software, real estate-related assets, and non-strategic businesses. It also includes impairment of goodwill. The Company recorded goodwill impairment charges related to the Merchant Solutions reporting unit of $17.6 billion in the three months ended December 31, 2022, and $6.8 billion in the three months ended June 30, 2023.

(4)This items represents costs that were previously incurred in support of the Worldpay Merchant Solutions business but are not directly attributable to it and thus were not recorded in discontinued operations. The Company expects that it will be reimbursed for these expenses as part of Transition Services Agreements with the purchaser or eliminate them post separation; therefore, the expenses have been adjusted out of continuing operations and added to discontinued operations.

(5)Non-operating (income) expense primarily consists of other income and expense items outside of the Company's operating activities, including fair value adjustments on certain non-operating assets and liabilities and foreign currency transaction remeasurement gains and losses. It also includes impairment charges related to equity security investments.



FIDELITY NATIONAL INFORMATION SERVICES, INC.
SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS — RECAST AND UNAUDITED
(In millions, except per share amounts)
Exhibit B (continued)

(6)For the three months ending June 30, 2023, and three months and year ending December 31, 2022, Adjusted net earnings is a gain, while the corresponding GAAP amounts for these periods is a loss. As a result, in calculating Adjusted net earnings per share-diluted for these periods, the weighted average shares outstanding-diluted amount used in the calculation includes shares that in accordance with GAAP are excluded from the calculation of the GAAP Net loss per share-diluted for the periods, due to their anti-dilutive impact.