Fis reports third quarter 2022 results
Jacksonville, fla.--(business wire)--fis® (nyse:fis), a global leader in financial services technology, today reported its third quarter 2022 results. “despite deteriorating macroeconomic conditions, fis delivered third quarter revenue and earnings in-line with its prior outlook. we are taking actions to ensure the company is well positioned to drive profitable growth as we continue to face an uncertain macro-environment,” said gary norcross, fis chairman and chief executive officer. “i am excited about the future of fis under the strategic leadership of accomplished executive, stephanie ferris, who will assume the ceo role effective january 1, 2023. i look forward to our continued collaboration as i transition to my new role as fis' executive chairman of the board.” third quarter 2022 on a gaap basis, revenue increased by approximately $100 million, or 3% as compared to the prior-year period, to $3.6 billion. net earnings attributable to common stockholders were $249 million or $0.41 per diluted share. on an organic basis, revenue increased 5% as compared to the prior-year period. adjusted net earnings decreased 1% as compared to the prior-year period to $1.1 billion, and adjusted net earnings per share increased 1% to $1.74 per diluted share. ($ millions, except per share data, unaudited) three months ended september 30, % constant organic 2022 2021 change currency growth revenue $ 3,604 $ 3,507 3% 5% 5% banking solutions 1,680 1,610 4% 6% 6% merchant solutions 1,180 1,161 2% 6% 5% capital market solutions 671 654 3% 6% 6% corporate and other 73 82 (13)% (10)% adjusted ebitda $ 1,575 $ 1,585 (1)% adjusted ebitda margin 43.7 % 45.2 % (150) bps net earnings attributable to fis common stockholders (gaap) $ 249 $ 158 * diluted eps (gaap) $ 0.41 $ 0.26 * adjusted net earnings $ 1,054 $ 1,070 (1)% adjusted eps $ 1.74 $ 1.73 1% * indicates comparison not meaningful operating segment information banking solutions: revenue increased by 4% on a gaap basis, and 6% on an organic basis as compared to the prior-year period to $1.7 billion due to continued strength in recurring revenue and timing of license sales. adjusted ebitda margin contracted by 320 basis points as compared to the prior-year period to 42.9% primarily driven by ongoing cost inflation, a reduction in pandemic-related revenue as compared to the prior-year period, and recent onboarding of several large outsourcing contracts. merchant solutions: revenue increased by 2% on a gaap basis, 5% on an organic basis as compared to the prior-year period to $1.2 billion. adjusted ebitda margin contracted by 430 basis points to 47.4% primarily due to inflationary cost pressures and accelerated investment in e-commerce and payrix sales channels to capitalize on developing secular growth trends. in the quarter, global volume increased 3% on a reported basis and 6% on a constant currency basis, as compared to the prior-year period to $544 billion. us volume increased 5% and transactions increased 2% as compared to the prior-year period. excluding the impact of a large payfac client, global volume increased 4% on a reported basis and 8% on a constant currency basis, us volume increased 7%, and transactions increased 3% as compared to the prior-year period. additional merchant disclosure three months ended september 30, % constant 2022 2021 change currency revenue ($m) $ 1,180 $ 1,161 2% 6% global volume1 ($b) $ 544 $ 530 3% 6% us volume1 ($b) $ 412 $ 392 5% 5% transactions2 (b) 12.2 12.0 2% 2% 1 volume refers to the total dollar value of the transactions processed during the stated period. 2 transaction refers to an instance of buying or selling a good or service in exchange for money. capital market solutions: revenue increased by 3% on a gaap basis and 6% on an organic basis as compared to the prior-year period to $671 million. adjusted ebitda increased by 4% as compared to the prior-year period to $330 million. adjusted ebitda margin expanded by 90 basis points over the prior-year period to 49.3% primarily due to continued expense management and operating leverage. corporate and other: revenue decreased by (13)% as compared to the prior-year period to $73 million due to a divestiture of a non-core business in the third quarter of 2022, as well as client attrition in our non-strategic businesses. adjusted ebitda loss was $36 million, including $58 million of corporate expenses. balance sheet and cash flows as of september 30, 2022, debt outstanding totaled $18.9 billion. third quarter net cash provided by operating activities was $878 million, and free cash flow was $684 million. in the quarter, the company returned $1.3 billion to shareholders through $1,021 million of share repurchases and $284 million of dividends paid. the company remains committed to increasing the annual dividend by 20% or greater until reaching a payout ratio of approximately 35% and continues to view share repurchase as the default use of excess free cash flow. ceo succession the company announced on october 18th that effective january 1, 2023, gary norcross will assume a new full-time role as executive chairman of the fis board of directors and stephanie ferris, president of fis, will assume the role of fis president and chief executive officer (ceo). she has also been appointed to the fis board of directors effective as of october 18th. updates fourth quarter and full-year 2022 guidance the company updated its fourth quarter and full-year 2022 guidance to align with changes in the macroeconomic environment, reduced visibility pertaining to non-recurring revenue streams, incremental costs associated with ongoing inflation, and new sales timing. fourth quarter and full-year 2022 guidance ($ millions, except share data) 4q 2022 fy 2022 revenue $3,656 - $3,706 $14,470 - $14,520 diluted eps (gaap) $0.39 - $0.49 $1.45 - $1.55 adjusted eps (non-gaap) $1.66 - $1.72 $6.60 - $6.66 webcast fis will sponsor a live webcast of its earnings conference call with the investment community beginning at 8:30 a.m. (edt) on thursday, november 3, 2022. to access the webcast, go to the investor relations section of fis’ homepage, www.fisglobal.com. a replay will be available after the conclusion of the live webcast. about fis fis is a leading provider of technology solutions for financial institutions and businesses of all sizes and across any industry globally. we enable the movement of commerce by unlocking the financial technology that powers the world’s economy. our employees are dedicated to advancing the way the world pays, banks and invests through our trusted innovation, system performance and flexible architecture. we help our clients use technology in innovative ways to solve business-critical challenges and deliver superior experiences for their customers. headquartered in jacksonville, florida, fis is a member of the fortune 500® and the standard & poor’s 500® index. to learn more, visit www.fisglobal.com. follow fis on facebook, linkedin and twitter (@fisglobal). fis use of non-gaap financial information generally accepted accounting principles (gaap) is the term used to refer to the standard framework of guidelines for financial accounting in the united states. gaap includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. in addition to reporting financial results in accordance with gaap, we have provided certain non-gaap financial measures. these non-gaap measures include constant currency revenue, organic revenue growth, adjusted ebitda, adjusted ebitda margin, adjusted net earnings, adjusted eps, and free cash flow. these non-gaap measures may be used in this release and/or in the attached supplemental financial information. we believe these non-gaap measures help investors better understand the underlying fundamentals of our business. as further described below, the non-gaap revenue and earnings measures presented eliminate items management believes are not indicative of fis’ operating performance. the constant currency and organic revenue growth measures adjust for the effects of exchange rate fluctuations, while organic revenue growth also adjusts for acquisitions and divestitures and excludes revenue from corporate and other, giving investors further insight into our performance. finally, free cash flow provides further information about the ability of our business to generate cash. for these reasons, management also uses these non-gaap measures in its assessment and management of fis’ performance. constant currency revenue represents reported operating segment revenue excluding the impact of fluctuations in foreign currency exchange rates in the current period. organic revenue growth is constant currency revenue, as defined above, for the current period compared to an adjusted revenue base for the prior period, which is adjusted to add pre-acquisition revenue of acquired businesses for a portion of the prior year matching the portion of the current year for which the business was owned, and subtract pre-divestiture revenue for divested businesses for the portion of the prior year matching the portion of the current year for which the business was not owned, for any acquisitions or divestitures by fis. when referring to organic revenue growth, revenues from our corporate and other segment, which is comprised of revenue from non-strategic businesses, are excluded. adjusted ebitda reflects net earnings 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. it also excludes incremental and direct costs resulting from the covid-19 pandemic. 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 ebitda margin reflects adjusted ebitda, as defined above, divided by revenue. 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. it also excludes the impact of acquisition-related purchase accounting amortization and equity method investment earnings (loss), both of which are recurring. it also excludes incremental and direct costs resulting from the covid-19 pandemic. adjusted eps reflects adjusted net earnings, as defined above, divided by weighted average diluted shares outstanding. free cash flow reflects net cash provided by operating activities, adjusted for the net change in settlement assets and obligations and excluding certain transactions that are closely associated with non-operating activities or are otherwise non-operational in nature and not indicative of future operating cash flows, including incremental and direct costs resulting from the covid-19 pandemic, less capital expenditures excluding capital expenditures related to the company’s new headquarters. free cash flow does not represent our residual cash flow available for discretionary expenditures, since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure. 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. reconciliations of these non-gaap measures to related gaap measures, including footnotes describing the specific adjustments, are provided in the attached schedules and in the investor relations section of the fis website, www.fisglobal.com. forward-looking statements this earnings release and today’s webcast contain “forward-looking statements” within the meaning of the u.s. federal securities laws. statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance or projections of the company, projected revenue or expense synergies, business and market conditions, outlook, foreign currency exchange rates, deleveraging plans, expected dividends and share repurchases, the company’s sales pipeline and anticipated profitability and growth, as well as other statements about our expectations, beliefs, intentions, or strategies regarding the future, or other characterizations of future events or circumstances, are forward-looking statements. these statements relate to future events and our future results and involve a number of risks and uncertainties. forward-looking statements are based on management’s beliefs as well as assumptions made by, and information currently available to, management. actual results, performance or achievement could differ materially from those contained in these forward-looking statements. the risks and uncertainties to which forward-looking statements are subject include the following, without limitation: changes in general economic, business and political conditions, including those resulting from covid-19 or other pandemics, a recession, intensified international hostilities, acts of terrorism, increased rates of inflation or interest, changes in either or both the united states and international lending, capital and financial markets or currency fluctuations; the outbreak or recurrence of the novel coronavirus and any related variants (“covid-19”) and measures to reduce its spread, including the impact of governmental or voluntary actions such as business shutdowns and stay-at-home orders in certain geographies; the duration, including any recurrence, of the covid-19 pandemic and its impacts, including reductions in consumer and business spending, and instability of the financial markets in heavily impacted areas across the globe; the economic and other impacts of covid-19 on our clients which affect the sales of our solutions and services and the implementation of such solutions; the risk of losses in the event of defaults by merchants (or other parties) to which we extend credit in our card settlement operations or in respect of any chargeback liability, either of which could adversely impact liquidity and results of operations; the risk that acquired businesses will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated; the risk that cost savings and synergies anticipated to be realized from acquisitions may not be fully realized or may take longer to realize than expected; the risks of doing business internationally; the effect of legislative initiatives or proposals, statutory changes, governmental or applicable regulations and/or changes in industry requirements, including privacy and cybersecurity laws and regulations; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in, or new laws or regulations affecting, the banking, retail and financial services industries or due to financial failures or other setbacks suffered by firms in those industries; changes in the growth rates of the markets for our solutions; 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, the duration and impact of the covid-19 pandemic, and other factors that may be considered relevant by our board of directors, including legal and contractual restrictions; the amount and timing of any future share repurchases is subject to, among other things, our share price, our other investment opportunities and cash requirements, our results of operations and financial condition, our future prospects and other factors that may be considered relevant by our board of directors and management; failures to adapt our solutions to changes in technology or in the marketplace; internal or external security breaches of our systems, including those relating to unauthorized access, theft, corruption or loss of personal information and computer viruses and other malware affecting our software or platforms, and the reactions of customers, card associations, government regulators and others to any such events; the risk that implementation of software, including software updates, for customers or at customer locations or employee error in monitoring our software and platforms may result in the corruption or loss of data or customer information, interruption of business operations, outages, exposure to liability claims or loss of customers; the reaction of current and potential customers to communications from us or regulators regarding information security, risk management, internal audit or other matters; the risk that policies and resulting actions of the current administration in the u.s. may result in additional regulations and executive orders, as well as additional regulatory and tax costs; competitive pressures on pricing related to the decreasing number of community banks in the u.s., the development of new disruptive technologies competing with one or more of our solutions, increasing presence of international competitors in the u.s. market and the entry into the market by global banks and global companies with respect to certain competitive solutions, each of which may have the impact of unbundling individual solutions from a comprehensive suite of solutions we provide to many of our customers; the failure to innovate in order to keep up with new emerging technologies, which could impact our solutions and our ability to attract new, or retain existing, customers; an operational or natural disaster at one of our major operations centers; failure to comply with applicable requirements of payment networks or changes in those requirements; fraud by merchants or bad actors; and other risks detailed in the “risk factors” and other sections of our annual report on form 10-k for the fiscal year ended december 31, 2021, in our quarterly reports on form 10-q and in our other filings with the securities and exchange commission. other unknown or unpredictable factors also could have a material adverse effect on our business, financial condition, results of operations and prospects. accordingly, readers should not place undue reliance on these forward-looking statements. these forward-looking statements are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. except as required by applicable law or regulation, we do not undertake (and expressly disclaim) any obligation and do not intend to publicly update or review any of these forward-looking statements, whether as a result of new information, future events or otherwise. fidelity national information services, inc. earnings release supplemental financial information november 3, 2022 exhibit a condensed consolidated statements of earnings - unaudited for the three and nine months ended september 30, 2022 and 2021 exhibit b condensed consolidated balance sheets - unaudited as of september 30, 2022, and december 31, 2021 exhibit c condensed consolidated statements of cash flows - unaudited for the nine months ended september 30, 2022 and 2021 exhibit d supplemental non-gaap financial information - unaudited for the three and nine months ended september 30, 2022 and 2021 exhibit e supplemental gaap to non-gaap reconciliations - unaudited for the three and nine months ended september 30, 2022 and 2021 exhibit f supplemental gaap to non-gaap reconciliations on guidance - unaudited for the three months and full year ended december 31, 2022 fidelity national information services, inc. condensed consolidated statements of earnings — unaudited (in millions, except per share amounts) exhibit a three months ended september 30, nine months ended september 30, 2022 2021 2022 2021 revenue $ 3,604 $ 3,507 $ 10,814 $ 10,205 cost of revenue 2,148 2,178 6,624 6,431 gross profit 1,456 1,329 4,190 3,774 selling, general, and administrative expenses 977 989 3,093 2,972 asset impairments 17 202 104 202 operating income 462 138 993 600 other income (expense): interest expense, net (76 ) (46 ) (166 ) (169 ) other income (expense), net (41 ) 110 51 (58 ) total other income (expense), net (117 ) 64 (115 ) (227 ) earnings before income taxes and equity method investment earnings (loss) 345 202 878 373 provision (benefit) for income taxes 91 41 223 246 equity method investment earnings (loss) — — — 6 net earnings 254 161 655 133 net (earnings) loss attributable to noncontrolling interest (5 ) (3 ) (9 ) (7 ) net earnings attributable to fis common stockholders $ 249 $ 158 $ 646 $ 126 net earnings per share-basic attributable to fis common stockholders $ 0.41 $ 0.26 $ 1.06 $ 0.20 weighted average shares outstanding-basic 605 613 608 618 net earnings per share-diluted attributable to fis common stockholders $ 0.41 $ 0.26 $ 1.06 $ 0.20 weighted average shares outstanding-diluted 607 619 611 623 fidelity national information services, inc. condensed consolidated balance sheets — unaudited (in millions, except per share amounts) exhibit b september 30, 2022 december 31, 2021 assets current assets: cash and cash equivalents $ 1,932 $ 2,010 settlement assets 4,359 4,020 trade receivables, net 3,373 3,772 other receivables 293 355 prepaid expenses and other current assets 636 551 total current assets 10,593 10,708 property and equipment, net 839 949 goodwill 51,014 53,330 intangible assets, net 9,200 11,539 software, net 3,131 3,299 other noncurrent assets 2,549 2,137 deferred contract costs, net 991 969 total assets $ 78,317 $ 82,931 liabilities, redeemable noncontrolling interest and equity current liabilities: accounts payable, accrued and other liabilities $ 2,476 $ 2,864 settlement payables 5,076 5,295 deferred revenue 712 779 short-term borrowings 2,422 3,911 current portion of long-term debt 2,985 1,617 total current liabilities 13,671 14,466 long-term debt, excluding current portion 13,509 14,825 deferred income taxes 3,691 4,193 other noncurrent liabilities 1,931 1,915 total liabilities 32,802 35,399 redeemable noncontrolling interest 178 174 equity: fis stockholders’ equity: preferred stock $0.01 par value — — common stock $0.01 par value 6 6 additional paid in capital 46,726 46,466 retained earnings 2,673 2,889 accumulated other comprehensive earnings (loss) (392 ) 252 treasury stock, at cost (3,685 ) (2,266 ) total fis stockholders’ equity 45,328 47,347 noncontrolling interest 9 11 total equity 45,337 47,358 total liabilities, redeemable noncontrolling interest and equity $ 78,317 $ 82,931 fidelity national information services, inc. condensed consolidated statements of cash flows — unaudited (in millions) exhibit c nine months ended september 30, 2022 2021 cash flows from operating activities: net earnings $ 655 $ 133 adjustment to reconcile net earnings to net cash provided by operating activities: depreciation and amortization 2,920 2,981 amortization of debt issuance costs 23 22 asset impairments 104 202 loss (gain) on sale of businesses, investments and other (13 ) (233 ) loss on extinguishment of debt — 528 stock-based compensation 198 320 deferred income taxes (519 ) (35 ) net changes in assets and liabilities, net of effects from acquisitions and foreign currency: trade and other receivables 161 (229 ) settlement activity (38 ) 575 prepaid expenses and other assets (250 ) (350 ) deferred contract costs (314 ) (323 ) deferred revenue (59 ) (12 ) accounts payable, accrued liabilities and other liabilities (70 ) 118 net cash provided by operating activities 2,798 3,697 cash flows from investing activities: additions to property and equipment (216 ) (193 ) additions to software (867 ) (684 ) settlement of net investment hedge cross-currency interest rate swaps 684 (24 ) net proceeds from sale of businesses and investments 12 370 other investing activities, net 219 (66 ) net cash provided by (used in) investing activities (168 ) (597 ) cash flows from financing activities: borrowings 50,006 40,569 repayment of borrowings and other financing obligations (49,349 ) (40,644 ) debt issuance costs (23 ) (74 ) net proceeds from stock issued under stock-based compensation plans 53 87 treasury stock activity (1,390 ) (2,113 ) dividends paid (858 ) (724 ) other financing activities, net (329 ) (138 ) net cash provided by (used in) financing activities (1,890 ) (3,037 ) effect of foreign currency exchange rate changes on cash (782 ) (57 ) net increase (decrease) in cash, cash equivalents and restricted cash (42 ) 6 cash, cash equivalents and restricted cash, beginning of period 4,283 4,030 cash, cash equivalents and restricted cash, end of period $ 4,241 $ 4,036 fidelity national information services, inc. supplemental non-gaap organic revenue growth — unaudited (in millions) exhibit d three months ended september 30, 2022 2021 constant acquisition & currency divestiture adjusted organic revenue fx revenue revenue adjustment base growth banking solutions $ 1,680 $ 21 $ 1,702 $ 1,610 $ — $ 1,610 6 % merchant solutions 1,180 49 1,230 1,161 16 1,176 5 % capital market solutions 671 20 691 654 — 654 6 % corporate and other 73 2 74 82 — 83 n/a total (1) $ 3,604 $ 92 $ 3,696 $ 3,507 $ 16 $ 3,523 5 % nine months ended september 30, 2022 2021 constant acquisition & currency divestiture adjusted organic revenue fx revenue revenue adjustment base growth banking solutions $ 4,988 $ 36 $ 5,024 $ 4,729 $ — $ 4,729 6 % merchant solutions 3,595 96 3,691 3,303 44 3,347 10 % capital market solutions 1,992 38 2,030 1,908 — 1,908 6 % corporate and other 239 5 244 265 — 265 n/a total (1) $ 10,814 $ 175 $ 10,989 $ 10,205 $ 44 $ 10,249 8 % amounts in tables may not sum or calculate due to rounding. (1) total organic growth excludes corporate and other. fidelity national information services, inc. supplemental non-gaap cash flow measures — unaudited (in millions) exhibit d (continued) three months ended nine months ended september 30, 2022 september 30, 2022 net cash provided by operating activities $ 878 $ 2,798 non-gaap adjustments: acquisition, integration and other payments (1) 187 469 settlement activity (67 ) 38 adjusted cash flows from operations 998 3,305 capital expenditures (2) (314 ) (1,029 ) free cash flow $ 684 $ 2,276 three months ended nine months ended september 30, 2021 september 30, 2021 net cash provided by operating activities $ 1,833 $ 3,697 non-gaap adjustments: acquisition, integration and other payments (1) 117 383 settlement activity (565 ) (575 ) adjusted cash flows from operations 1,385 3,505 capital expenditures (2) (238 ) (797 ) free cash flow $ 1,147 $ 2,708 free cash flow reflects adjusted cash flows from operations less capital expenditures (additions to property and equipment and additions to software, excluding capital spend related to the construction of our new headquarters). free cash flow does not represent our residual cash flows available for discretionary expenditures, since we have mandatory debt service requirements and other non-discretionary expenditures that are not deducted from the measure. (1) adjusted cash flows from operations and free cash flow for the three and nine months ended september 30, 2022 and 2021, exclude cash payments for certain acquisition, integration and other costs (see note 2 to exhibit e), net of related tax impact. the related tax impact totaled $19 million and $20 million for the three months and $69 million and $65 million for the nine months ended september 30, 2022 and 2021, respectively. (2) capital expenditures for free cash flow exclude capital spend related to the construction of our new headquarters totaling $17 million and $27 million for the three months and $54 million and $80 million for the nine months ended september 30, 2022 and 2021, respectively. fidelity national information services, inc. supplemental gaap to non-gaap reconciliations — unaudited (in millions, except per share amounts) exhibit e three months ended september 30, nine months ended september 30, 2022 2021 2022 2021 net earnings attributable to fis common stockholders $ 249 $ 158 $ 646 $ 126 provision (benefit) for income taxes 91 41 223 246 interest expense, net 76 46 166 169 other, net 46 (107 ) (42 ) 59 operating income, as reported 462 138 993 600 depreciation and amortization, excluding purchase accounting amortization 324 344 1,035 918 non-gaap adjustments: purchase accounting amortization (1) 608 714 1,885 2,063 acquisition, integration and other costs (2) 164 187 574 629 asset impairments (3) 17 202 104 202 adjusted ebitda $ 1,575 $ 1,585 $ 4,591 $ 4,412 see notes to exhibit e. fidelity national information services, inc. supplemental gaap to non-gaap reconciliations — unaudited (in millions, except per share amounts) exhibit e (continued) three months ended september 30, nine months ended september 30, 2022 2021 2022 2021 earnings before income taxes and equity method investment earnings (loss) $ 345 $ 202 $ 878 $ 373 (provision) benefit for income taxes (91 ) (41 ) (223 ) (246 ) equity method investment earnings (loss) — — — 6 net (earnings) loss attributable to noncontrolling interest (5 ) (3 ) (9 ) (7 ) net earnings attributable to fis common stockholders 249 158 646 126 non-gaap adjustments: purchase accounting amortization (1) 608 714 1,885 2,063 acquisition, integration and other costs (2) 194 247 698 689 asset impairments (3) 17 202 104 202 non-operating (income) expense (4) 41 (110 ) (51 ) 58 equity method investment (earnings) loss (5) — — — (6 ) tax rate change (6) — — — 178 (provision) benefit for income taxes on non-gaap adjustments (55 ) (141 ) (268 ) (423 ) total non-gaap adjustments 805 912 2,368 2,761 adjusted net earnings $ 1,054 $ 1,070 $ 3,014 $ 2,887 net earnings per share-diluted attributable to fis common stockholders $ 0.41 $ 0.26 $ 1.06 $ 0.20 non-gaap adjustments: purchase accounting amortization (1) 1.00 1.15 3.09 3.31 acquisition, integration and other costs (2) 0.32 0.40 1.14 1.11 asset impairments (3) 0.03 0.33 0.17 0.32 non-operating (income) expense (4) 0.07 (0.18 ) (0.08 ) 0.09 equity method investment (earnings) loss (5) — — — (0.01 ) tax rate change (6) — — — 0.29 (provision) benefit for income taxes on non-gaap adjustments (0.09 ) (0.23 ) (0.44 ) (0.68 ) adjusted net earnings per share-diluted attributable to fis common stockholders $ 1.74 $ 1.73 $ 4.94 $ 4.63 weighted average shares outstanding-diluted 607 619 611 623 amounts in table may not sum or calculate due to rounding. see notes to exhibit e. fidelity national information services, inc. supplemental gaap to non-gaap reconciliations — unaudited (in millions, except per share amounts) exhibit e (continued) notes to unaudited - supplemental gaap to non-gaap reconciliations for the three and nine months ended september 30, 2022 and 2021. the adjustments are as follows: (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. this item also includes $9 million and $42 million for the three months and $52 million and $42 million for the nine months ended september 30, 2022 and 2021, respectively, of incremental amortization expense associated with shortened estimated useful lives and accelerated amortization methods for certain acquired software driven by the company's platform modernization. our platform modernization focuses on accelerating the modernization of our strategic applications and sunsetting of our redundant platforms and creating a componentized cloud-native set of capabilities that can be consumed by clients as end-to-end business applications or as individual components. 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 acquisition and integration costs primarily related to the acquisition of worldpay as well as certain other costs, including $60 million and $64 million for the three months and $220 million and $64 million for the nine months ended september 30, 2022 and 2021, respectively, primarily associated with the company's platform modernization described in note (1). these other costs also included severance and other termination expenses associated with enterprise cost control initiatives and changes in senior management totaling $17 million and $2 million for the three months and $60 million and $17 million for the nine months ended september 30, 2022 and 2021, respectively. these other costs also included stock-based compensation expense, primarily resulting from one-time performance-related awards, totaling $30 million and $42 million for the three months and $94 million and $114 million for the nine months ended september 30, 2022 and 2021, respectively. for the nine months ended september 30, 2021, this item also includes $104 million in accelerated stock compensation expense to reflect the impact of establishing a qualified retirement equity program that modified unvested equity awards outstanding at january 1, 2021. for the three and nine months ended september 30, 2021, this item included costs related to data center consolidation activities totaling $4 million and $32 million and incremental costs directly related to covid-19 totaling $14 million and $33 million, respectively. for purposes of calculating adjusted net earnings, this item includes $30 million and $60 million for the three months and $123 million and $60 million for the nine months ended september 30, 2022 and 2021, respectively, of 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 described in note (1). the incremental amortization expenses are included in the depreciation and amortization, excluding purchase accounting amortization line item within the adjusted ebitda reconciliation. (3) for the three months ended september 30, 2022, this item primarily includes impairment of certain software driven by the company's platform initiatives described in note (1). for the nine months ended september 30, 2022, this item also includes impairment of real estate-related assets as a result of office space reductions and $26 million related to the impairment of a non-strategic business. for the three and nine months ended september 30, 2021, this item represents impairment of certain software and deferred contract cost assets driven by the aforementioned company's platform initiatives. (4) 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. this item includes the impact of changes in fair value of certain preferred stock assets and related liabilities owed to former legacy worldpay owners, representing a net change of $14 million and $(3) million for the three months ended and $63 million and $12 million for the nine months ended september 30, 2022 and 2021, respectively. this item also includes net gains on equity security investments without readily determinable fair values of $5 million and $126 million for the three months and $52 million and $214 million for the nine months ended september 30, 2022 and 2021, respectively. for the nine months ended september 30, 2021, this item also includes $225 million related to the gain on the sale of our equity ownership interest in cardinal holdings, lp and a loss on extinguishment of debt of approximately $528 million 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. (5) this item represents our equity method investment earnings or loss and was predominantly due to our equity ownership interest in cardinal holdings, lp, which was sold on april 29, 2021. (6) this item represents the one-time net remeasurement of certain deferred tax liabilities due to the increase in the u.k. corporate statutory tax rate from 19% to 25% effective april 1, 2023, enacted on june 10, 2021. fidelity national information services, inc. supplemental gaap to non-gaap reconciliations on guidance — unaudited (in millions, except per share amounts) exhibit f three months ended year ended december 31, 2022 december 31, 2022 low high low high net earnings per share-diluted attributable to fis common stockholders $ 0.39 $ 0.49 $ 1.45 $ 1.55 estimated adjustments (1) 1.27 1.23 5.15 5.11 adjusted net earnings per share-diluted attributable to fis common stockholders $ 1.66 $ 1.72 $ 6.60 $ 6.66 (1) estimated adjustments include purchase accounting amortization, acquisition, integration and other costs, and other items, net of tax impact.
