FIDELITY NATIONAL INFORMATION SERVICES, INC. The following section discusses management's view of the financial condition and
results of operations of FIS and its consolidated subsidiaries as of
This section should be read in conjunction with the audited Consolidated Financial Statements and related Notes of FIS included elsewhere in this Annual Report. Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See "Forward-Looking Statements" and "Risk Factors" in Item 1A of this Annual Report for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements that could cause future results to differ materially from those reflected in this section.
Business Trends and Conditions
Our revenue is primarily derived from a combination of technology and processing services, payment transaction fees, professional services and software license fees. The majority of our revenue has historically been recurring, and has been provided under multi-year contracts in Banking and Capital Markets that contribute relative stability to our revenue stream. These services, in general, are considered critical to our clients' operations. Although Merchant has a lesser percentage of multi-year contracts, a substantial part of its revenue is recurring. A considerable portion of our recurring revenue is derived from transaction processing fees that fluctuate with the level of accounts and card transactions, among other variable measures, associated with consumer, commercial and capital markets activity. Professional services revenue is typically non-recurring, though recognition often occurs over time rather than at a point in time. Sales of software licenses are typically non-recurring with recognition at a point in time and are less predictable.
We continue to assist financial institutions in migrating to outsourced integrated technology solutions to improve their profitability and address increasing and ongoing regulatory requirements. As a provider of outsourcing solutions, we benefit from multi-year recurring revenue streams, which help moderate the effects of broader year-to-year economic and market changes that otherwise might have a larger impact on our results of operations. We believe our integrated solutions and outsourced services are well-positioned to address this outsourcing trend across the markets we serve.
Over the last four years, we have moved approximately 60% of our server compute
to our FIS cloud located in our strategic data centers and our goal is to
increase that percentage to 73% by the end of 2020 and approximately 80% by the
end of 2021. This allows us to further enhance security for our clients' data
and increases the flexibility and speed with which we can provide services and
solutions to our clients, eventually at lesser cost. Concurrently, we have
continued to consolidate our data centers, closing seven additional data centers
in 2019. Our consolidation has generated a savings for the Company as of
year-end 2019 exceeding
We continue to invest in modernization, innovation and integrated solutions and services in order to meet the demands of the markets we serve and compete with global banks, financial and other technology providers, and emerging technology innovators. We invest both organically and through investment opportunities in companies building complementary technologies in the financial services space. Our internal efforts in research and development activities have related primarily to the modernization of our proprietary core systems in each of our segments, design and development of next generation digital and innovative solutions and development of processing systems and related software applications and risk management platforms. We have increased our investments in these areas in each of the last three years. Our innovation efforts have recently resulted in bringing to market our Modern Banking Platform that is among the first cloud-native core banking solutions. We expect to continue our practice of investing an appropriate level of resources to maintain, enhance and extend the functionality of our proprietary systems and existing software applications, to develop new and innovative software applications and systems to address emerging technology trends in response to the needs of our clients and to enhance the capabilities of our outsourcing infrastructure.
Consumer preference continues to shift from traditional branch banking services
to digital banking solutions, and our clients seek to provide a single
integrated banking experience through their branch, mobile, internet and voice
banking channels. We have been providing our large regional banking customers in
the
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business and commercial banking capabilities. Digital One is integrated into several of the core banking platforms offered by FIS and is also offered to customers of non-FIS core banking systems.
We anticipate consolidation within the banking industry will continue, primarily in the form of merger and acquisition activity among financial institutions, which we believe as a whole is detrimental to the profitability of the financial technology industry. However, consolidation resulting from specific merger and acquisition transactions may be beneficial to our business. When consolidations of financial institutions occur, merger partners often operate systems obtained from competing service providers. The newly formed entity generally makes a determination to migrate its core and payments systems to a single platform. When a financial institution processing client is involved in a consolidation, we may benefit by their expanding the use of our services if such services are chosen to survive the consolidation and support the newly combined entity. Conversely, we may lose revenue if we are providing services to both entities, or if a client of ours is involved in a consolidation and our services are not chosen to survive the consolidation and support the newly combined entity. It is also possible that larger financial institutions resulting from consolidation may have greater leverage in negotiating terms or could decide to perform inhouse some or all of the services that we currently provide or could provide. We seek to mitigate the risks of consolidations by offering other competitive services to take advantage of specific opportunities at the surviving company.
In certain of the international markets in which we do business, we continue to
experience growth on a constant currency basis. Demand for our solutions may
also continue to be driven in developing countries by government-led financial
inclusion policies aiming to reduce the unbanked population and by growth in the
middle classes in these markets driving the need for more sophisticated banking
solutions. The majority of our international revenue is generated by clients in
the
As a result of the Worldpay acquisition, FIS is now a global leader in the
merchant solutions industry, with differentiated solutions throughout the
payments market, including capabilities in global eCommerce,
Following the Worldpay acquisition, we are focused on completing post-merger integration to achieve potential incremental revenue opportunities and expense efficiencies created by the combination of the two companies. We have a history of successfully integrating the operations and technology platforms of acquired companies, including winding down legacy environments and consolidating platforms from other acquisitions into our environment. Based on prior integration experience, we developed integration plans to achieve the potential benefits created by the Worldpay acquisition. As of the end of 2019, our achievement of expense and revenue synergies is ahead of schedule. We continue to see demand for innovative solutions in the payments market that will deliver faster, more convenient payment solutions in mobile channels, internet applications and cards. Our acquisition of Worldpay will help position us to capitalize on this demand. The payment processing industry is adopting new technologies, developing new products and services, evolving new business models and being affected by new market entrants and an evolving regulatory environment. As merchants and financial institutions respond to these changes by seeking services to help them enhance their own offerings to consumers, including the ability to accept card-not-present ("CNP") payments in eCommerce and mobile environments as well as contactless cards and mobile wallets at the point-of-sale, FIS believes that payment processors will seek to develop additional capabilities in order to serve clients' evolving needs. In order to facilitate this expansion, we believe that payment processors will need to enhance their technology platforms so they can deliver these capabilities and differentiate their offerings from other providers.
We believe that these market changes present both an opportunity and a risk for us, and we cannot predict which emerging technologies or solutions will be successful. However, FIS believes that payment processors, like FIS, that have scalable, integrated business models, provide solutions across the payment processing value chain and utilize broad distribution capabilities will be best positioned to enable emerging alternative electronic payment technologies. Further, FIS believes that its depth of capabilities and breadth of distribution will enhance its position as emerging payment technologies are adopted by merchants and other businesses. FIS' ability to partner with non-financial institution enterprises, such as mobile payment providers, internet, retail and social media companies, could create attractive growth opportunities as these new entrants seek to
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become more active participants in the development of alternative electronic payment technologies and to facilitate the convergence of retail, online, mobile and social commerce applications.
Globally, attacks on information technology systems continue to grow in frequency, complexity and sophistication. This is a trend we expect to continue. Such attacks have become a point of focus for individuals, businesses and governmental entities. The objectives of these attacks include, among other things, gaining unauthorized access to systems to facilitate financial fraud, disrupt operations, cause denial of service events, corrupt data, and steal non-public information. These circumstances present both a threat and an opportunity for FIS. As part of our business, we electronically receive, process, store and transmit a wide range of confidential information, including sensitive customer information and personal consumer data. We also operate payment, cash access and prepaid card systems.
FIS remains focused on making strategic investments in information security to protect our clients and our information systems. This includes both capital expenditures and operating expense on hardware, software, personnel and consulting services. We also participate in industry and governmental initiatives to improve information security for our clients. Through the expertise we have gained with this ongoing focus and involvement, we have developed fraud, security, risk management and compliance solutions to target this growth opportunity in the financial services industry.
For 2019, the Worldpay acquisition significantly increased our revenue as well
as our amortization expense for acquired intangibles and our acquisition,
integration and other costs. Also, as described in Note 19 of the Notes to
Consolidated Financial Statements, on
Critical Accounting Policies
The accounting policies described below are those we consider critical in preparing our Consolidated Financial Statements. These policies require management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosures with respect to contingent liabilities and assets at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. Actual amounts could differ from those estimates. See Note 2 of the Notes to Consolidated Financial Statements for a more detailed description of the significant accounting policies that have been followed in preparing our Consolidated Financial Statements.
Revenue Recognition
The Company generates revenue in a number of ways, including from the delivery of account- or transaction-based processing, SaaS, BPaaS, cloud offerings, software licensing, software-related services and professional services. Our contracts frequently contain non-standard terms that require judgment to determine the appropriate impact on revenue recognition. We are frequently a party to multiple concurrent contracts with the same client. These situations require judgment to determine whether the individual contracts should be combined or evaluated separately for purposes of revenue recognition. In making this determination, we consider the timing of negotiating and executing the contracts, whether the different elements of the contracts are negotiated as a package with a single commercial objective, whether the solutions or services promised in the contracts are a single performance obligation, and whether any of the payment terms of the contracts are interrelated. Our individual contracts also frequently include multiple promised solutions or services. At contract inception, we assess the solutions and services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a solution or service (or bundle of solutions or services) that is distinct - i.e., if a solution or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. We must apply judgment in these circumstances in determining whether individual promised solutions or services can be considered distinct or should instead be combined with other promised solutions or services in the contract. We recognize revenue when or as we satisfy a performance obligation by transferring control of a solution or service to a customer. We must use judgment to determine the appropriate measure of progress for performance obligations satisfied over time and the timing of when the customer obtains control for performance obligations satisfied at a point in time. Judgment is also required in estimating and allocating variable consideration to one or more, but not all, performance obligations in a contract, determining the standalone selling prices of each performance obligation, and allocating the transaction price to each distinct performance obligation in a contract.
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Due to the large number, broad nature and average size of individual contracts we are party to, the impact of judgments and assumptions that we apply in recognizing revenue for any single contract is not likely to have a material effect on our consolidated operations or financial position. However, the broader accounting policy assumptions that we apply across similar contracts or classes of clients could significantly influence the timing and amount of revenue recognized in our historical and future results of operations or financial position. Additional information about our revenue recognition policies is included in Note 2 of the Notes to Consolidated Financial Statements.
Software
Software includes the fair value of software acquired in business combinations,
purchased software and capitalized software development costs. Purchased
software is recorded at cost and amortized using the straight-line method over
its estimated useful life, which is generally three to five years. Software
acquired in business combinations is recorded at its fair value and amortized
using straight-line or accelerated methods over its estimated useful life, which
is one to 10 years (see also the Purchase Accounting section below). As of
The capitalization of software development costs is governed by FASB ASC Subtopic 985-20 if the software is to be sold, leased or otherwise marketed, or by FASB ASC Subtopic 350-40 if the software is for internal use. After the technological feasibility of the software has been established (for software to be marketed), or at the beginning of application development (for internal-use software), software development costs, which include primarily salaries and related payroll costs and costs of independent contractors incurred during development, are capitalized. Research and development costs incurred prior to the establishment of technological feasibility (for software to be marketed), or prior to application development (for internal-use software), are expensed as incurred. Evaluating whether technological feasibility has been achieved requires the use of management judgment.
Software development costs are amortized on a product-by-product basis commencing on the date of general release of the solutions (for software to be marketed) or the date placed in service (for internal-use software). Software development costs for software to be marketed are amortized using the greater of (1) the straight-line method over its estimated useful life, which ranges from three to 10 years, or (2) the ratio of current revenue to total anticipated revenue over its useful life.
In determining useful lives, management considers historical results and technological trends that may influence the estimate. Useful lives for all software range from one to 10 years.
We also assess the recorded value of software for impairment on a regular basis
by comparing the carrying value to the estimated future cash flows to be
generated by the underlying software asset (net realizable value analysis for
software to be marketed). There are inherent uncertainties in determining the
expected useful life or cash flows to be generated from software. For the year
ended
Purchase Accounting
We are required to allocate the purchase price of acquired businesses to the assets acquired and liabilities assumed in the transaction at their estimated fair values. The estimates used to determine the fair value of long-lived assets, such as intangible assets and software, are complex and require a significant amount of management judgment. We generally engage third-party valuation specialists to assist us in making fair value determinations. The third-party valuation specialists generally use discounted cash flow models, which require internally-developed assumptions, to determine the acquisition fair value of customer relationship intangible assets and developed technology software assets. Assumptions for customer relationship asset valuations generally include forecasted revenue attributable to existing customer contracts and relationships, estimated annual attrition, forecasted EBITDA margin, and estimated weighted average cost of capital and discount rates. Assumptions for software asset valuations generally include forecasted revenue attributable to the software assets, obsolescence rates, estimated royalty rates and estimated weighted average cost of capital and discount rates.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, we are required to record provisional amounts in the financial statements for the items for which the accounting is incomplete. Adjustments to provisional amounts initially recorded that are identified during the measurement
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period are recognized in the reporting period in which the adjustment amounts are determined. This includes any effect on earnings of changes in depreciation or amortization, or other income effects as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. During the measurement period, we are also required to recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends the sooner of one year from the acquisition date or when we receive the information we were seeking about facts and circumstances that existed as of the acquisition date or learn that more information is not obtainable.
We are also required to estimate the useful lives of intangible assets to determine the amount of acquisition-related intangible asset amortization expense to record in future periods. We periodically review the estimated useful lives assigned to our finite-lived intangible assets to determine whether such estimated useful lives continue to be appropriate. Additionally, we review our indefinite-lived intangible assets to determine if there is any change in circumstances that may indicate the asset's useful life is no longer indefinite.
See Note 3 to the Notes to Consolidated Financial Statements for discussion of the Worldpay acquisition in 2019. We had no significant business combinations during 2018.
When applying the quantitative analysis, we determine the fair value of our reporting units based on a weighted average of multiple valuation techniques, principally a combination of an income approach and a market approach. The income approach calculates a value based upon the present value of estimated future cash flows, while the market approach uses earnings multiples of similarly situated guideline public companies. If the fair value of a reporting unit exceeds the carrying value of the reporting unit's net assets, goodwill is not impaired and further testing is not required.
We assess goodwill for impairment on an annual basis during the fourth quarter or more frequently if circumstances indicate potential impairment. For each of 2019, 2018, and 2017, we began our annual impairment test with the step zero qualitative assessment. In performing the step zero qualitative assessment for each year, examining those factors most likely to affect our valuations, 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. Consequently, we did not perform a step one quantitative assessment for the purpose of our annual impairment test for these years.
Similar to the FASB ASC Subtopic 350-20 guidance for goodwill, FASB ASC Subtopic 350-30 allows an organization to first perform a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset has been impaired. We assess indefinite-lived intangible assets for impairment on an annual basis during the fourth quarter or more frequently if circumstances indicate potential impairment. For each of 2019, 2018 and 2017, we performed a qualitative assessment examining those factors most likely to affect our valuations and concluded that it is more likely than not that our indefinite-lived intangible assets were not impaired. Consequently, we did not perform a quantitative impairment assessment for the purpose of our annual impairment test for these years.
Determining the fair value of a reporting unit or acquired intangible assets
with indefinite lives involves judgment and the use of significant estimates and
assumptions, which include assumptions regarding forecasted revenue growth
rates, operating margins, capital expenditures, tax rates, and other factors
used to calculate estimated future cash flows. In addition, risk-adjusted
discount rates and future economic and market conditions and other assumptions
are applied.
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Company's results of operations and financial position. However, based on the qualitative assessment performed and because there was a substantial excess of fair value over carrying value in our previous third-party valuations performed in 2015 for goodwill and 2016 for indefinite-lived intangible assets, we believe the likelihood of obtaining materially different results based on a change of assumptions is low.
Related Party Transactions
We are a party to certain historical related party agreements as discussed in Note 18 of the Notes to Consolidated Financial Statements.
Factors Affecting Comparability
For information regarding factors affecting comparability, see "Item 6. Selected Financial Data." As a result of the transactions noted in Item 6. Selected Financial Data, our financial position, results of operations, earnings per share and cash flows in the periods covered by the Consolidated Financial Statements may not be directly comparable.
Consolidated Results of Operations
(In millions, except per share amounts)
2019 2018 2017
Revenue $ 10,333 $ 8,423 $ 8,668
Cost of revenue 6,610 5,569 5,794
Gross profit 3,723 2,854 2,874
Selling, general and administrative expenses 2,667 1,301 1,442
Asset impairments 87 95 -
Operating income 969 1,458 1,432
Other income (expense):
Interest income 52 17 22
Interest expense (389 ) (314 ) (359 )
Other income (expense), net (219 ) (57 ) (119 )
Total other income (expense), net (556 ) (354 ) (456 )
Earnings before income taxes and equity method
investment earnings (loss) 413 1,104 976
Provision (benefit) for income taxes 100 208 (321 )
Equity method investment earnings (loss) (10 ) (15 ) (3 )
Net earnings 303 881 1,294
Net (earnings) loss attributable to noncontrolling interest
(5 ) (35 ) (33 )
Net earnings attributable to FIS common
stockholders $ 298 $ 846 $ 1,261
Net earnings per share-basic attributable to FIS
common stockholders $ 0.67 $ 2.58 $ 3.82
Weighted average shares outstanding-basic 445 328 330
Net earnings per share-diluted attributable to FIS common stockholders
$ 0.66 $ 2.55 $ 3.75 Weighted average shares outstanding-diluted 451 332 336
Revenue
Revenue for 2019 increased
Revenue for 2018 decreased
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insurance offerings; and (4) growth in the biller solutions business.
Additionally, 2018 was impacted by a
Cost of Revenue and Gross Profit
Cost of revenue totaled
Selling, General and Administrative Expenses
Selling, general and administrative expenses for 2019 increased
Selling, general and administrative expenses for 2018 decreased
Asset Impairments
During 2019, the Company recorded pre-tax asset impairments totaling
During 2018, as a result of entering into an agreement to unwind the Brazilian
Venture that the Company operated with Banco Bradesco, the Company recorded
pre-tax asset impairments totaling
Operating Income
Operating income totaled
Total Other Income (Expense), Net
Interest expense is typically the primary component of Total other income (expense), net.
The increase of
The decrease of
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Other income (expense), net for 2019 includes a pre-tax charge of approximately
Other income (expense), net for 2018 includes a pre-tax loss of
Other income (expense), net for 2017 includes (1) a pre-tax charge of
Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes from continuing operations totaled
Equity Method Investment Earnings (Loss)
FIS holds a 38% equity interest in Cardinal as further described in Note 19 of
the Notes to Consolidated Financial Statements. As a result, we recorded equity
method investment losses of
Net (Earnings) Loss Attributable to Noncontrolling Interest
Net (earnings) loss attributable to noncontrolling interest for 2018 and 2017
predominantly relates to the joint venture in
Net Earnings Attributable to FIS Common Stockholders
Net earnings attributable to FIS common stockholders totaled
Segment Results of Operations
As a result of the Company's acquisition of Worldpay, the Company reorganized its reportable segments and recast all prior-period segment information presented to align with the new reportable segments. The new segments are Merchant Solutions ("Merchant"), Banking Solutions ("Banking"), and Capital Market Solutions ("Capital Markets"), which are organized based on the markets and clients served aligned with the solutions they provide, as well as the Corporate and Other segment. A description of these segments is included in Note 22 of the Notes to Consolidated Financial Statements.
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Adjusted EBITDA is defined as EBITDA (defined as net earnings (loss) before net interest expense, income tax provision (benefit) and depreciation and amortization) plus certain non-operating items. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to our segments, is presented in conformity with FASB ASC Topic 280, Segment Reporting. The non-operating items affecting the segment profit measure generally include acquisition accounting adjustments; acquisition, integration and certain other costs; and asset impairments. These costs and adjustments are recorded in the Corporate and Other segment for the periods discussed below. Adjusted EBITDA for the respective segments excludes the foregoing costs and adjustments. Financial information, including details of our adjustments to EBITDA, for each of our segments is set forth in Note 22 of the Notes to Consolidated Financial Statements.
Merchant Solutions
2019 2018 2017
(In millions)
Revenue $ 2,013 $ 276 $ 261
Adjusted EBITDA $ 994 $ 59 $ 68 Year ended
Revenue increased
Adjusted EBITDA increased
Year ended
Revenue increased
Adjusted EBITDA decreased
Banking Solutions
2019 2018 2017
(In millions)
Revenue $ 5,873 $ 5,712 $ 5,552
Adjusted EBITDA $ 2,454 $ 2,256 $ 2,101 Year ended
Revenue increased
Adjusted EBITDA increased
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Year ended
Revenue increased
Adjusted EBITDA increased
Capital Market Solutions
2019 2018 2017
(In millions)
Revenue $ 2,447 $ 2,391 $ 2,749
Adjusted EBITDA $ 1,129 $ 1,081 $ 1,080 Year ended
Revenue increased
Adjusted EBITDA increased
Year ended
Revenue decreased
Adjusted EBITDA increased
Corporate and Other
2019 2018 2017
(In millions)
Revenue $ - $ 44 $ 106
Adjusted EBITDA $ (373 ) $ (263 ) $ (265 ) The Corporate and Other segment results consist of selling, general and
administrative expenses and depreciation and intangible asset amortization not
otherwise allocated to the reportable segments. Corporate and Other also
includes operations from non-strategic businesses, including the PS&E business
(which was divested on
Year ended
Revenue decreased
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Adjusted EBITDA decreased
Year ended
Revenue decreased
Adjusted EBITDA increased
Liquidity and Capital Resources
Cash Requirements
Our ongoing cash requirements include operating expenses, income taxes, tax
receivable obligations, mandatory debt service payments, capital expenditures,
stockholder dividends, working capital and timing differences in
settlement-related assets and liabilities, and may include discretionary debt
repayments, share repurchases and business acquisitions. Our principal sources
of funds are cash generated by operations and borrowings, including the capacity
under our Revolving Credit Facility, the
We currently expect to continue to pay quarterly dividends. However, the amount,
declaration and payment of future dividends is at the discretion of our Board of
Directors and depends on, among other things, our investment opportunities,
results of operations, financial condition, cash requirements, future prospects,
and other factors that may be considered relevant by our Board of Directors,
including legal and contractual restrictions. Additionally, the payment of cash
dividends may be limited by covenants in certain debt agreements. A regular
quarterly dividend of
On
Cash Flows from Operations
Cash flows from operations were
Capital Expenditures and Other Investing Activities
Our principal capital expenditures are for software (purchased and internally
developed) and additions to property and equipment. We invested approximately
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continue investing in property and equipment, purchased software and internally developed software to support our core business initiatives. We expect to invest a similar percentage of our 2020 revenue in capital expenditures as in previous years.
In 2019, we used
In 2017, cash flows from investing activities included proceeds from the sale of businesses and investments primarily relating to the sale of PS&E and the Capco consulting and risk and compliance businesses.
Financing
For more information regarding the Company's debt and financing activity, see Note 12 of the Notes to Consolidated Financial Statements.
Contractual Obligations
FIS' long-term contractual obligations generally include its long-term debt,
interest on long-term debt, lease payments on certain of its property and
equipment and payments for certain purchase commitments and other obligations.
The following table summarizes FIS' significant contractual obligations and
commitments as of
Payments Due in
Less than 1-3 3-5 More than
Type of Obligation Total 1 Year Years Years 5 Years
Long-term debt (1) $ 17,516 $ 140 $ 3,299 $ 3,708 $ 10,369
Interest (2) 3,489 312 624 572 1,981
Operating leases 664 151 239 136 138
Purchase commitments (3) 807 355 285 166 1
Obligations under TRA (4) 564 32 267 252 13
Total $ 23,040 $ 990 $ 4,714 $ 4,834 $ 12,502 (1) The principal amounts assume no changes in currency rates for our notes
denominated in Euro and GBP. See Note 12 of the Notes to Consolidated
Financial Statements for more details.
(2) The calculations above assume that (a) applicable margins and commitment fees
remain constant; (b) all floating-rate debt is priced at the rates in effect
as of December 31, 2019 ; (c) no refinancing occurs at debt maturity; (d) only
mandatory debt repayments are made; (e) no new hedging transactions are
effected; and (f) there are no currency effects.
(3) Includes obligations principally related to software, maintenance support,
and telecommunication and network services as well as to third-party
processors to provide gateway authorization and other processing services.
(4) Obligation represents estimated Tax Receivable Agreement ("TRA") payments to
Fifth Third Bank . See Note 16 of the Notes to Consolidated Financial Statements for more details.
Off-Balance Sheet Arrangements
FIS does not have any off-balance sheet arrangements.
Recent Accounting Pronouncements
Recently Adopted Accounting Guidance
In
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In
The new standard is effective for public business entities on
The new standard provides several optional practical expedients in transition and for an entity's ongoing accounting. We elected the "package of practical expedients," which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We also elected the practical expedient not to separate lease and non-lease components. We did not elect the use-of-hindsight practical expedient nor the short-term lease recognition exemption.
The adoption of the new standard resulted in the recognition of operating lease
ROU assets and lease liabilities on the Company's Condensed Consolidated Balance
Sheet of
Recent Accounting Guidance Not Yet Adopted
On
On
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