Fis reports second quarter 2022 results
Jacksonville, fla.--(business wire)--fis® (nyse:fis), a global leader in financial services technology, today reported its second quarter 2022 results. “i’m very pleased with the strong financial results we delivered this quarter,” said gary norcross, fis chairman and chief executive officer. “these results are a testament to the value we bring to our clients by executing our business strategy, investing for growth and bringing innovative and end-to-end offerings to market. in an uncertain macro environment, the durability of our financial model is also a significant advantage for fis. we reduced our leverage to 2.9 times, and our robust free cash flow allowed us to return approximately $600 million in capital to shareholders during the second quarter through share repurchase and dividends.” second quarter 2022 on a gaap basis, revenue increased by approximately $240 million, or 7% as compared to the prior-year period, to $3.7 billion. net earnings attributable to common stockholders were $277 million or $0.45 per diluted share. on an organic basis, revenue increased 8% as compared to the prior-year period when excluding the impact of changes in foreign currency exchange rates and inorganic contribution from acquisitions and divestitures. on a constant currency basis, revenue increased 9%. adjusted net earnings increased 5% as compared to the prior-year period to $1.1 billion, and adjusted net earnings per share increased 7% to $1.73 per diluted share. ($ millions, except per share data, unaudited) three months ended june 30, % constant organic 2022 2021 change currency growth revenue $ 3,719 $ 3,475 7% 9% 8% merchant solutions 1,302 1,177 11% 14% 12% banking solutions 1,663 1,578 5% 6% 6% capital market solutions 663 630 5% 7% 7% corporate and other 91 90 1% 3% adjusted ebitda $ 1,599 $ 1,520 5% adjusted ebitda margin 43.0 % 43.7 % (70) bps net earnings attributable to fis common stockholders (gaap) $ 277 $ 341 * diluted eps (gaap) $ 0.45 $ 0.55 * adjusted net earnings $ 1,056 $ 1,004 5% adjusted eps $ 1.73 $ 1.61 7% * indicates comparison not meaningful operating segment information banking solutions: revenue increased by 5% on a gaap basis, and 6% on an organic basis, as compared to the prior-year period to $1.7 billion, primarily due to ramping large client wins contributing to 7% recurring revenue growth. adjusted ebitda margin contracted by 130 basis points as compared to the prior-year period to 44.3%, primarily due to difficult comparisons created by the high contribution margins associated with term fees and pandemic-related revenue in the prior-year period as well as ongoing wage inflation. capital market solutions: revenue increased by 5% on a gaap basis and 7% on an organic basis as compared to the prior-year period to $663 million, primarily due to strong new sales momentum contributing to 10% recurring revenue growth. adjusted ebitda increased by 9% as compared to the prior-year period to $317 million. adjusted ebitda margin expanded by 140 basis points over the prior-year period to 47.8%, primarily due to focused expense management and continued operating leverage. merchant solutions: revenue increased by 11% on a gaap basis, 14% on a constant currency basis and 12% on an organic basis as compared to the prior-year period to $1.3 billion, including approximately one percentage point of headwind due to the russia/ukraine conflict. adjusted ebitda margin contracted by 280 basis points to 47.1%, primarily due to high contribution margins associated with e-commerce revenue affected by the russia/ukraine conflict, investment in geographic expansion to support our global ecommerce business, and accelerated investment in e-commerce and payrix sales channels to capitalize on developing secular growth trends. corporate and other: second quarter revenue increased by 1% as compared to the prior-year period to $91 million, including the continuing wind down of non-strategic businesses. adjusted ebitda loss was $69 million, including $89 million of corporate expenses. balance sheet and cash flows as of june 30, 2022, debt outstanding totaled $18.5 billion. second quarter net cash provided by operating activities was $1,024 million, and free cash flow was $806 million. on july 13, fis issued $2.5 billion of u.s. dollar senior notes at a weighted average interest rate of 4.95%. the company used the net proceeds from the senior notes offering to repay debt under its commercial paper programs. having reached its targeted leverage of 2.9 times debt to ebitda, fis resumed share repurchase under its existing 100 million share authorization. in addition to repurchasing approximately $300 million in shares, fis also paid a total of $287 million in dividends during the second quarter. fis continues to expect to primarily utilize free cash flow through the end of 2023 to return capital to shareholders through continued share repurchase and dividends. departure of officer the company announced that james “woody” woodall will step down from his position as corporate executive vice president and chief financial officer, effective november 4, 2022, after over 14 years of distinguished service with the company. the company also announced the promotion of its deputy chief financial officer, erik hoag, to succeed mr. woodall as corporate executive vice president and chief financial officer, effective november 4, 2022. to ensure a smooth transition of the chief financial officer responsibilities, woodall will remain with the company through a transitionary period as chief financial officer emeritus. updates full-year 2022 guidance based on macro factors and divestitures the company updated its full-year 2022 guidance to reflect changing macroeconomic factors including the impact of foreign exchange rates and increased interest rates. additionally, the company successfully announced the signing of two non-strategic divestitures. these factors are the primary drivers for the revision to the company’s full-year 2022 guidance. third quarter and full-year 2022 gaap guidance ($ millions, except share data) q3 2022 fy 2022 revenue $3,580 - $3,635 $14,615 - $14,700 diluted eps $0.40 - $0.50 $1.75 - $2.05 third quarter and full-year 2022 non-gaap guidance ($ millions, except share data) q3 2022 fy 2022 revenue (gaap) $3,580 - $3,635 $14,615 - $14,700 adjusted eps $1.74 - $1.78 $7.00 - $7.10 webcast fis will sponsor a live webcast of its earnings conference call with the investment community beginning at 8:30 a.m. (edt) thursday, august 4, 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. as described below, our adjusted ebitda and adjusted net earnings measures also exclude incremental and direct costs resulting from the covid-19 pandemic. management believes that this adjustment may help investors understand the longer-term fundamentals of our underlying business. 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, the removal of which improves comparability of operating results across reporting periods. 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, the removal of which improves comparability of operating results across reporting periods. 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: 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; 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, changes in either or both the united states and international lending, capital and financial markets or currency fluctuations; 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 august 4, 2022 exhibit a condensed consolidated statements of earnings - unaudited for the three and six months ended june 30, 2022 and 2021 exhibit b condensed consolidated balance sheets - unaudited as of june 30, 2022, and december 31, 2021 exhibit c condensed consolidated statements of cash flows - unaudited for the six months ended june 30, 2022 and 2021 exhibit d supplemental non-gaap financial information - unaudited for the three and six months ended june 30, 2022 and 2021 exhibit e supplemental gaap to non-gaap reconciliations - unaudited for the three and six months ended june 30, 2022 and 2021 exhibit f supplemental gaap to non-gaap reconciliations on guidance - unaudited for the three months ended september 30, 2022, 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 june 30, six months ended june 30, 2022 2021 2022 2021 revenue $ 3,719 $ 3,475 $ 7,210 $ 6,699 cost of revenue 2,234 2,135 4,475 4,253 gross profit 1,485 1,340 2,735 2,446 selling, general, and administrative expenses 1,082 977 2,117 1,983 asset impairments 29 — 87 — operating income 374 363 531 463 other income (expense): interest expense, net (47 ) (48 ) (90 ) (122 ) other income (expense), net 30 324 92 (170 ) total other income (expense), net (17 ) 276 2 (292 ) earnings (loss) before income taxes and equity method investment earnings (loss) 357 639 533 171 provision (benefit) for income taxes 77 302 132 205 equity method investment earnings (loss) — 5 — 6 net earnings (loss) 280 342 401 (28 ) net (earnings) loss attributable to noncontrolling interest (3 ) (1 ) (4 ) (4 ) net earnings (loss) attributable to fis common stockholders $ 277 $ 341 $ 397 $ (32 ) net earnings (loss) per share-basic attributable to fis common stockholders $ 0.46 $ 0.55 $ 0.65 $ (0.05 ) weighted average shares outstanding-basic 608 619 609 620 net earnings (loss) per share-diluted attributable to fis common stockholders $ 0.45 $ 0.55 $ 0.65 $ (0.05 ) weighted average shares outstanding-diluted 611 624 612 620 fidelity national information services, inc. condensed consolidated balance sheets — unaudited (in millions, except per share amounts) exhibit b june 30, 2022 december 31, 2021 assets current assets: cash and cash equivalents $ 1,688 $ 2,010 settlement assets 4,334 4,020 trade receivables, net 3,520 3,772 other receivables 251 355 prepaid expenses and other current assets 913 551 total current assets 10,706 10,708 property and equipment, net 881 949 goodwill 52,004 53,330 intangible assets, net 10,018 11,539 software, net 3,176 3,299 other noncurrent assets 1,876 2,137 deferred contract costs, net 959 969 total assets $ 79,620 $ 82,931 liabilities, redeemable noncontrolling interest and equity current liabilities: accounts payable, accrued and other liabilities $ 2,856 $ 2,864 settlement payables 5,154 5,295 deferred revenue 728 779 short-term borrowings 3,642 3,911 current portion of long-term debt 3,148 1,617 total current liabilities 15,528 14,466 long-term debt, excluding current portion 11,755 14,825 deferred income taxes 3,786 4,193 other noncurrent liabilities 1,861 1,915 total liabilities 32,930 35,399 redeemable noncontrolling interest 175 174 equity: fis stockholders’ equity: preferred stock $0.01 par value — — common stock $0.01 par value 6 6 additional paid in capital 46,634 46,466 retained earnings 2,709 2,889 accumulated other comprehensive earnings (loss) (200 ) 252 treasury stock, at cost (2,643 ) (2,266 ) total fis stockholders’ equity 46,506 47,347 noncontrolling interest 9 11 total equity 46,515 47,358 total liabilities, redeemable noncontrolling interest and equity $ 79,620 $ 82,931 fidelity national information services, inc. condensed consolidated statements of cash flows — unaudited (in millions) exhibit c six months ended june 30, 2022 2021 cash flows from operating activities: net earnings (loss) $ 401 $ (28 ) adjustment to reconcile net earnings (loss) to net cash provided by operating activities: depreciation and amortization 1,988 1,924 amortization of debt issuance costs 15 15 asset impairments 87 — loss (gain) on sale of businesses, investments and other (5 ) (230 ) loss on extinguishment of debt — 528 stock-based compensation 145 241 deferred income taxes (386 ) 87 net changes in assets and liabilities, net of effects from acquisitions and foreign currency: trade and other receivables 114 (171 ) settlement activity (106 ) 10 prepaid expenses and other assets (250 ) (308 ) deferred contract costs (190 ) (212 ) deferred revenue (30 ) 35 accounts payable, accrued liabilities and other liabilities 137 (27 ) net cash provided by operating activities 1,920 1,864 cash flows from investing activities: additions to property and equipment (173 ) (143 ) additions to software (579 ) (470 ) settlement of net investment hedge cross-currency interest rate swaps 645 (17 ) net proceeds from sale of businesses and investments — 367 other investing activities, net (22 ) (60 ) net cash provided by (used in) investing activities (129 ) (323 ) cash flows from financing activities: borrowings 30,789 26,969 repayment of borrowings and other financing obligations (31,358 ) (27,696 ) debt issuance costs — (74 ) net proceeds from stock issued under stock-based compensation plans 15 76 treasury stock activity (378 ) (908 ) dividends paid (574 ) (486 ) other financing activities, net (96 ) (136 ) net cash provided by (used in) financing activities (1,602 ) (2,255 ) effect of foreign currency exchange rate changes on cash (392 ) (31 ) net increase (decrease) in cash, cash equivalents and restricted cash (203 ) (745 ) cash, cash equivalents and restricted cash, beginning of period 4,283 4,030 cash, cash equivalents and restricted cash, end of period $ 4,080 $ 3,285 fidelity national information services, inc. supplemental non-gaap organic revenue growth — unaudited (in millions) exhibit d three months ended june 30, 2022 2021 constant acquisition & currency divestiture adjusted organic revenue fx revenue revenue adjustment base growth merchant solutions $ 1,302 $ 35 $ 1,337 $ 1,177 $ 16 $ 1,193 12 % banking solutions 1,663 10 1,673 1,578 — 1,578 6 % capital market solutions 663 13 676 630 — 630 7 % corporate and other 91 2 92 90 — 90 n/a total (1) $ 3,719 $ 60 $ 3,779 $ 3,475 $ 16 $ 3,491 8 % six months ended june 30, 2022 2021 constant acquisition & currency divestiture adjusted organic revenue fx revenue revenue adjustment base growth merchant solutions $ 2,414 $ 47 $ 2,461 $ 2,143 $ 28 $ 2,171 13 % banking solutions 3,308 15 3,323 3,119 — 3,119 7 % capital market solutions 1,321 18 1,339 1,255 — 1,255 7 % corporate and other 167 3 170 182 — 182 n/a total (1) $ 7,210 $ 82 $ 7,293 $ 6,699 $ 28 6,727 9 % 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 six months ended june 30, 2022 june 30, 2022 net cash provided by operating activities $ 1,024 $ 1,920 non-gaap adjustments: acquisition, integration and other payments (1) 145 282 settlement activity (56 ) 106 adjusted cash flows from operations 1,113 2,308 capital expenditures (2) (307 ) (715 ) free cash flow $ 806 $ 1,593 three months ended six months ended june 30, 2021 june 30, 2021 net cash provided by operating activities $ 1,028 $ 1,864 non-gaap adjustments: acquisition, integration and other payments (1) 149 267 settlement activity 112 (10 ) adjusted cash flows from operations 1,289 2,121 capital expenditures (2) (284 ) (560 ) free cash flow $ 1,005 $ 1,561 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 six months ended june 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 $26 million and $25 million for the three months and $50 million and $45 million for the six months ended june 30, 2022 and 2021, respectively. (2) capital expenditures for free cash flow exclude capital spend related to the construction of our new headquarters totaling $33 million and $30 million for the three months and $37 million and $53 million for the six months ended june 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 june 30, six months ended june 30, 2022 2021 2022 2021 net earnings (loss) attributable to fis common stockholders $ 277 $ 341 $ 397 $ (32 ) provision (benefit) for income taxes 77 302 132 205 interest expense, net 47 48 90 122 other, net (27 ) (328 ) (88 ) 168 operating income, as reported 374 363 531 463 depreciation and amortization, excluding purchase accounting amortization 347 297 710 575 non-gaap adjustments: purchase accounting amortization (1) 628 675 1,278 1,349 acquisition, integration and other costs (2) 221 185 410 440 asset impairments (3) 29 — 87 — adjusted ebitda $ 1,599 $ 1,520 $ 3,016 $ 2,827 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 june 30, six months ended june 30, 2022 2021 2022 2021 earnings (loss) before income taxes and equity method investment earnings (loss) $ 357 $ 639 $ 533 $ 171 (provision) benefit for income taxes (77 ) (302 ) (132 ) (205 ) equity method investment earnings (loss) — 5 — 6 net (earnings) loss attributable to noncontrolling interest (3 ) (1 ) (4 ) (4 ) net earnings (loss) attributable to fis common stockholders 277 341 397 (32 ) non-gaap adjustments: purchase accounting amortization (1) 628 675 1,278 1,349 acquisition, integration and other costs (2) 263 185 504 440 asset impairments (3) 29 — 87 — non-operating (income) expense (4) (30 ) (324 ) (92 ) 170 equity method investment (earnings) loss (5) — (5 ) — (6 ) tax rate change (6) — 178 — 178 (provision) benefit for income taxes on non-gaap adjustments (111 ) (46 ) (214 ) (282 ) total non-gaap adjustments 779 663 1,563 1,849 adjusted net earnings $ 1,056 $ 1,004 $ 1,960 $ 1,817 net earnings (loss) per share-diluted attributable to fis common stockholders $ 0.45 $ 0.55 $ 0.65 $ (0.05 ) non-gaap adjustments: purchase accounting amortization (1) 1.03 1.08 2.09 2.16 acquisition, integration and other costs (2) 0.43 0.30 0.82 0.70 asset impairments (3) 0.05 — 0.14 — non-operating (income) expense (4) (0.05 ) (0.52 ) (0.15 ) 0.27 equity method investment (earnings) loss (5) — (0.01 ) — (0.01 ) tax rate change (6) — 0.29 — 0.28 (provision) benefit for income taxes on non-gaap adjustments (0.18 ) (0.07 ) (0.35 ) (0.45 ) adjusted net earnings per share-diluted attributable to fis common stockholders $ 1.73 $ 1.61 $ 3.20 $ 2.91 weighted average shares outstanding-diluted (7) 611 624 612 625 amounts in table may not sum or calculate due to rounding. 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 six months ended june 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. for the three and six months ended june 30, 2022, this item also includes $17 million and $43 million, 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 $80 million for the three months and $160 million for the six months ended june 30, 2022, respectively, primarily associated with the company's platform modernization described in note (1). for the six months ended june 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, as well as $12 million and $28 million related to data center consolidation activities for the three and six months ended june 30, 2021, respectively. the company also recorded charges directly related to covid-19 of $10 million for the three months and $19 million for the six months ended june 30, 2021. for purposes of calculating adjusted net earnings, this item includes $42 million and $94 million of incremental amortization expense for the three and six months ended june 30, 2022, respectively, 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 and six months ended june 30, 2022, this item includes $26 million related to impairment of a non-strategic business. for the six months ended june 30, 2022, this item also includes impairment of real estate-related assets as a result of office space reductions. (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. for the three and six months ended june 30, 2022, this item includes net gains on equity security investments without readily determinable fair values of $6 million and $47 million, respectively. for the three and six months ended june 30, 2021, this item also includes $225 million related to the gain on the sale of our equity ownership interest in cardinal holdings, lp. in addition, for the six months ended june 30, 2021, this item includes 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. (7) for the six months ended june 30, 2021, adjusted net earnings is a gain, while the corresponding gaap amount for the period is a loss. as a result, in calculating adjusted net earnings per share-diluted for this period, the weighted average shares outstanding-diluted amount of approximately 625 million shares used in the calculation includes approximately 5 million shares that in accordance with gaap are excluded from the calculation of the gaap net loss per share-diluted for the period, due to their anti-dilutive impact. 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 september 30, 2022 december 31, 2022 low high low high net earnings per share-diluted attributable to fis common stockholders $ 0.40 $ 0.50 $ 1.75 $ 2.05 estimated adjustments (1) 1.34 1.28 5.25 5.05 adjusted net earnings per share-diluted attributable to fis common stockholders $ 1.74 $ 1.78 $ 7.00 $ 7.10 (1) estimated adjustments include purchase accounting amortization, acquisition, integration and other costs, and other items, net of tax impact.
