Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 23, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-38962 | |
Entity Registrant Name | FISERV, INC. | |
Entity Incorporation, State or Country Code | WI | |
Entity Tax Identification Number | 39-1506125 | |
Entity Address, Address Line One | 255 Fiserv Drive | |
Entity Address, City or Town | Brookfield, | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53045 | |
City Area Code | 262 | |
Local Phone Number | 879-5000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 670,437,918 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000798354 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock, par value $0.01 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | FISV | |
Security Exchange Name | NASDAQ | |
0.375% Senior Notes due 2023 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 0.375% Senior Notes due 2023 | |
Trading Symbol | FISV23 | |
Security Exchange Name | NASDAQ | |
1.125% Senior Notes due 2027 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 1.125% Senior Notes due 2027 | |
Trading Symbol | FISV27 | |
Security Exchange Name | NASDAQ | |
1.625% Senior Notes due 2030 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 1.625% Senior Notes due 2030 | |
Trading Symbol | FISV30 | |
Security Exchange Name | NASDAQ | |
2.250% Senior Notes due 2025 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 2.250% Senior Notes due 2025 | |
Trading Symbol | FISV25 | |
Security Exchange Name | NASDAQ | |
3.000% Senior Notes due 2031 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 3.000% Senior Notes due 2031 | |
Trading Symbol | FISV31 | |
Security Exchange Name | NASDAQ |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Revenue | $ 3,786 | $ 3,128 | $ 11,020 | $ 6,142 | |
Selling, general and administrative | 1,412 | 1,137 | 4,193 | 1,821 | |
Gain on sale of businesses | (36) | 0 | (464) | (10) | |
Total expenses | 3,244 | 2,754 | 9,684 | 5,011 | |
Operating income | 542 | 374 | 1,336 | 1,131 | |
Interest expense, net | (174) | (164) | (535) | (279) | |
Debt financing activities | 0 | 49 | 0 | (47) | |
Other income (expense) | 13 | (3) | 34 | 0 | |
Income before income taxes and income from investments in unconsolidated affiliates | 381 | 256 | 835 | 805 | |
Income tax provision | (124) | (53) | (176) | (144) | |
Income from investments in unconsolidated affiliates | 19 | 22 | 3 | 12 | |
Net income | 276 | 225 | 662 | 673 | |
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests | 12 | 27 | 4 | 27 | |
Net income attributable to Fiserv, Inc. | $ 264 | $ 198 | $ 658 | $ 646 | |
Net income attributable to Fiserv, Inc. per share – basic (in dollars per share) | $ 0.39 | $ 0.34 | $ 0.98 | $ 1.42 | |
Net income attributable to Fiserv, Inc. per share – diluted (in dollars per share) | $ 0.39 | $ 0.33 | $ 0.96 | $ 1.39 | |
Shares used in computing net income attributable to Fiserv, Inc. per share: | |||||
Basic (in shares) | 669.8 | 584.8 | 672.6 | 456.3 | |
Diluted (in shares) | 680.3 | 596.9 | 684.1 | 465.2 | |
Processing and services | |||||
Revenue | [1] | $ 3,153 | $ 2,608 | $ 9,118 | $ 5,229 |
Cost of goods sold and services | 1,387 | 1,204 | 4,488 | 2,445 | |
Product | |||||
Revenue | 633 | 520 | 1,902 | 913 | |
Cost of goods sold and services | $ 481 | $ 413 | $ 1,467 | $ 755 | |
[1] | Includes processing and other fees charged to related party investments accounted for under the equity method of $62 million and $40 million for the three months ended September 30, 2020 and 2019, respectively, and $174 million and $58 million for the nine months ended September 30, 2020 and 2019, respectively (see Note 21). |
Consolidated Statements of In_2
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Related Party Fees | Equity investments | ||||
Processing, administrative, and other fees | $ 62 | $ 40 | $ 174 | $ 58 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 276 | $ 225 | $ 662 | $ 673 |
Other comprehensive (loss) income: | ||||
Fair market value adjustment on cash flow hedges, net of income tax (provision) benefit of ($2 million), $1 million, $0 million and $46 million | 6 | (4) | 1 | (134) |
Reclassification adjustment for net realized losses on cash flow hedges included in net interest expense, net of income tax provision of $1 million, $1 million, $4 million and $2 million | 4 | 4 | 12 | 6 |
Foreign currency translation | (180) | (186) | (636) | (184) |
Total other comprehensive loss | (170) | (186) | (623) | (312) |
Comprehensive income | 106 | 39 | 39 | 361 |
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests | 12 | 27 | 4 | 27 |
Less: other comprehensive income attributable to noncontrolling interests | 17 | 0 | 28 | 0 |
Comprehensive income attributable to Fiserv, Inc. | $ 77 | $ 12 | $ 7 | $ 334 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Fair market value adjustment on cash flow hedges, net of income tax (provision) benefit of ($2 million), $1 million, $0 million and $46 million | $ (2) | $ 1 | $ 0 | $ 46 |
Income tax provision on reclassification adjustment for net realized gain on cash flow hedges included in net interest expense | $ 1 | $ 1 | $ 4 | $ 2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 937 | $ 893 |
Trade accounts receivable, less allowance for doubtful accounts | 2,323 | 2,782 |
Prepaid expenses and other current assets | 1,362 | 1,503 |
Settlement assets | 9,403 | 11,868 |
Total current assets | 14,025 | 17,046 |
Property and equipment, net | 1,630 | 1,606 |
Intangible assets, net | 15,649 | 17,642 |
Goodwill | 35,908 | 36,038 |
Contract costs, net | 647 | 533 |
Investments in unconsolidated affiliates | 2,772 | 2,720 |
Other long-term assets | 1,741 | 1,954 |
Total assets | 72,372 | 77,539 |
Liabilities and Equity | ||
Accounts payable and accrued expenses | 3,044 | 3,080 |
Short-term and current maturities of long-term debt | 365 | 287 |
Contract liabilities | 451 | 492 |
Settlement obligations | 9,403 | 11,868 |
Total current liabilities | 13,263 | 15,727 |
Long-term debt | 20,894 | 21,612 |
Deferred income taxes | 4,532 | 4,247 |
Long-term contract liabilities | 170 | 155 |
Other long-term liabilities | 824 | 941 |
Total liabilities | 39,683 | 42,682 |
Commitments and Contingencies (see Note 20) | ||
Redeemable Noncontrolling Interests | 260 | 262 |
Fiserv, Inc. Shareholders’ Equity: | ||
Preferred stock, no par value: 25.0 million shares authorized; none issued | 0 | 0 |
Preferred stock, no par value: 25.0 million shares authorized; none issued | 8 | 8 |
Additional paid-in capital | 23,771 | 23,741 |
Accumulated other comprehensive loss | (831) | (180) |
Retained earnings | 13,141 | 12,528 |
Treasury stock, at cost, 121.1 million and 111.5 million shares | (4,397) | (3,118) |
Total Fiserv, Inc. shareholders’ equity | 31,692 | 32,979 |
Noncontrolling interests | 737 | 1,616 |
Total equity | 32,429 | 34,595 |
Total liabilities and equity | 72,372 | 77,539 |
Customer relationships, net | ||
Assets | ||
Intangible assets, net | 11,907 | 14,042 |
Other intangible assets, net | ||
Assets | ||
Intangible assets, net | $ 3,742 | $ 3,600 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Fiserv, Inc. Shareholders’ Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,800,000,000 | 1,800,000,000 |
Common stock, shares issued (in shares) | 791,400,000 | 791,400,000 |
Treasury stock (in shares) | 121,100,000 | 111,500,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 662 | $ 673 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and other amortization | 833 | 386 |
Amortization of acquisition-related intangible assets | 1,603 | 476 |
Amortization of financing costs, debt discounts and other | 36 | 116 |
Net foreign currency gain on financing activities | 0 | (50) |
Share-based compensation | 286 | 121 |
Deferred income taxes | (125) | 26 |
Gain on sale of businesses | (464) | (10) |
Income from investments in unconsolidated affiliates | (3) | (12) |
Distributions from unconsolidated affiliates | 12 | 6 |
Settlement of interest rate hedge contracts | 0 | (183) |
Non-cash impairment charge | 44 | 0 |
Other operating activities | (4) | (3) |
Changes in assets and liabilities, net of effects from acquisitions and dispositions: | ||
Trade accounts receivable | 460 | 151 |
Prepaid expenses and other assets | (150) | (41) |
Contract costs | (229) | (141) |
Accounts payable and other liabilities | 34 | 117 |
Contract liabilities | (34) | (15) |
Net cash provided by operating activities | 2,961 | 1,617 |
Cash flows from investing activities: | ||
Capital expenditures, including capitalized software and other intangibles | (689) | (431) |
Proceeds from sale of businesses | 578 | 39 |
Payments for acquisition of businesses, net of cash acquired and including working capital adjustments | (137) | (16,004) |
Distributions from unconsolidated affiliates | 94 | 85 |
Purchases of investments | 0 | (4) |
Other investing activities | 0 | 6 |
Net cash used in investing activities | (154) | (16,309) |
Cash flows from financing activities: | ||
Debt proceeds | 8,125 | 18,855 |
Debt repayments | (9,307) | (3,051) |
Short-term borrowings, net | (28) | 0 |
Payments of debt financing, redemption and other costs | (16) | (247) |
Proceeds from issuance of treasury stock | 108 | 116 |
Purchases of treasury stock, including employee shares withheld for tax obligations | (1,612) | (271) |
Distributions paid to noncontrolling interests and redeemable noncontrolling interests | (61) | (46) |
Other financing activities | 6 | (5) |
Net cash (used in) provided by financing activities | (2,785) | 15,351 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4) | (4) |
Net change in cash, cash equivalents and restricted cash | 18 | 655 |
Cash, cash equivalents and restricted cash, beginning balance | 933 | 415 |
Cash, cash equivalents and restricted cash, ending balance | $ 951 | $ 1,070 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements for the three and nine months ended September 30, 2020 and 2019 are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial statements have been included. Such adjustments consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and accompanying notes are presented as permitted by Form 10-Q and do not contain certain information included in the annual consolidated financial statements and accompanying notes of Fiserv, Inc. (the “Company”). These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. On July 29, 2019, the Company acquired First Data Corporation (“First Data”) by acquiring 100% of the First Data stock that was issued and outstanding as of the date of acquisition for a total purchase price of $46.5 billion (see Note 4). First Data provides a wide-range of solutions to merchants, including retail point-of sale (“POS”) merchant transaction processing and acquiring, e-commerce services, mobile payment services and the cloud-based Clover ® point-of-sale operating system, as well as technology solutions for bank and non-bank issuers. The consolidated financial statements include the financial results of First Data from the date of acquisition. Segment Realignment Effective in the first quarter of 2020, the Company realigned its reportable segments to correspond with changes to its operating model to reflect its new management structure and organizational responsibilities (“Segment Realignment”) following the acquisition of First Data. The Company’s new reportable segments are: Merchant Acceptance (“Acceptance”), Financial Technology (“Fintech”) and Payments and Network (“Payments”). Segment results for the three and nine months ended September 30, 2019 have been restated to reflect the Segment Realignment. See Note 22 for additional information. Principles of Consolidation The consolidated financial statements include the accounts of Fiserv, Inc. and its subsidiaries in which the Company holds a controlling financial interest. Control is normally established when ownership and voting interests in an entity are greater than 50%. Investments in which the Company has significant influence but not control are accounted for using the equity method of accounting, for which the Company’s share of net income or loss is reported within income from investments in unconsolidated affiliates and the related tax expense or benefit is reported within the income tax provision in the consolidated statements of income. Significant influence over an affiliate’s operations generally coincides with an ownership interest in an entity of between 20% and 50%. All intercompany transactions and balances have been eliminated in consolidation. The Company maintains majority controlling interests in certain entities, mostly related to consolidated merchant alliances (see Notes 4 and 21). Noncontrolling interests represent the minority shareholders’ share of the net income or loss and equity in consolidated subsidiaries. The Company’s noncontrolling interests presented in the consolidated statements of income include net income attributable to noncontrolling interests and redeemable noncontrolling interests. Noncontrolling interests are presented as a component of equity in the consolidated balance sheets and reflect the minority shareholders’ share of acquired fair value in the consolidated subsidiaries, along with their proportionate share of the earnings or losses of the subsidiaries, net of dividends or distributions. Noncontrolling interests that are redeemable upon the occurrence of an event that is not solely within the Company’s control are presented outside of equity and are carried at their estimated redemption value if it exceeds the initial carrying value of the redeemable interest (see Note 12). Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Risks and Uncertainties In December 2019, a novel strain of coronavirus (“COVID-19”) was identified and has since continued to spread and negatively impact the economy of the United States and other countries around the world. In March 2020, the World Health Organization recognized the COVID-19 outbreak as a pandemic. In response to the COVID-19 pandemic, the governments of many countries, states, cities and other geographic regions have taken actions to prevent the spread of COVID-19, such as imposing travel restrictions and bans, quarantines, social distancing guidelines, shelter-in-place or lock-down orders and other similar limitations. Accordingly, the COVID-19 pandemic has adversely impacted global economic activity and has contributed to significant volatility in financial markets during 2020. Global economic and market conditions impact levels of consumer spending. Consequently, the Company’s operating performance, primarily within its merchant acquiring and payment-related businesses, which earn transaction-based fees, has been adversely affected, and may continue to be adversely affected, by the economic impact of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company’s future operational and financial performance will depend on, among other matters, the duration and intensity of the pandemic; governmental and private sector responses to the pandemic and the impact of such responses on the Company; and the impact of the pandemic on the Company’s employees, clients, vendors, operations and sales, all of which are uncertain and cannot be predicted. These changing conditions may also affect the estimates and assumptions made by management. Such estimates and assumptions affect, among other things, the valuations of the Company’s long-lived assets, definite-lived intangible assets and equity method investments; the Company’s deferred tax assets and related valuation allowances; the estimate of current expected credit losses; and certain pension plan assumptions. To the extent economic and market conditions do not continue to improve or deteriorate, the COVID-19 pandemic and the related economic and market decline may also impact the assumptions used in the Company’s annual impairment assessment of goodwill during the fourth quarter of 2020. Changes in any assumptions used may result in a goodwill impairment charge that, if incurred, could have a material adverse impact on the Company’s results of operations, total assets and total equity in the period recognized. Events and changes in circumstances arising subsequent to September 30, 2020, including those resulting from the impacts of the COVID-19 pandemic, will be reflected in management’s estimates for future periods. Cash and Cash Equivalents Cash and cash equivalents consist of cash and investments with original maturities of 90 days or less. Cash and cash equivalents are stated at cost in the consolidated balance sheets, which approximates market value. Cash and cash equivalents that were restricted from use due to regulatory or other requirements are included in other long-term assets in the consolidated balance sheets and totaled $14 million and $40 million at September 30, 2020 and December 31, 2019, respectively. Allowance for Doubtful Accounts The Company analyzes the collectability of trade accounts receivable by considering historical bad debts, client creditworthiness, current economic conditions, expectations of near term economic trends, changes in client payment terms and collection trends when evaluating the adequacy of the allowance for doubtful accounts for expected credit losses. Any change in the assumptions used in analyzing a specific account receivable may result in an additional allowance for doubtful accounts being recognized in the period in which the change occurs. The allowance for doubtful accounts was $47 million and $39 million at September 30, 2020 and December 31, 2019, respectively. Reserve for Merchant Credit Losses With respect to the Company’s merchant acquiring business, the Company’s merchant customers have the legal obligation to refund any charges properly reversed by the cardholder. However, in the event the Company is not able to collect the refunded amounts from the merchants, the Company may be liable for the reversed charges. The Company’s risk in this area primarily relates to situations where the cardholder has purchased goods or services to be delivered in the future. The Company requires cash deposits, guarantees, letters of credit or other types of collateral from certain merchants to minimize this obligation. Collateral held by the Company is classified within settlement assets and the obligation to repay the collateral is classified within settlement obligations in the Company’s consolidated balance sheets. The Company also utilizes a number of systems and procedures to manage merchant risk. Despite these efforts, the Company experiences some level of losses due to merchant defaults. The aggregate merchant credit losses, included within cost of processing and services in the consolidated statements of income, incurred by the Company was $35 million and $89 million for the three and nine months ended September 30, 2020, respectively, and $17 million for both the three and nine months ended September 30, 2019. The amount of collateral held by the Company was $982 million and $510 million at September 30, 2020 and December 31, 2019, respectively. The Company maintains reserves for merchant credit losses that are expected to exceed the amount of collateral held. The reserves include an estimated amount for anticipated chargebacks and fraud events that have been incurred on merchants’ payment transactions that have been processed but not yet reported to the Company (“IBNR Reserve”), as well as an allowance on refunded amounts to cardholders that have not yet been collected from the merchants. The IBNR Reserve, which is recorded within accounts payable and accrued expenses in the consolidated balance sheets, is based primarily on the Company’s historical experience of credit losses and other relevant factors such as economic downturns or increases in merchant fraud. The aggregate merchant credit loss reserves were $63 million and $34 million at September 30, 2020 and December 31, 2019, respectively. Goodwill Goodwill represents the excess of purchase price over the fair value of identifiable assets acquired and liabilities assumed in a business combination. The Company evaluates goodwill for impairment on an annual basis, or more frequently if circumstances indicate possible impairment. Goodwill is tested for impairment at a reporting unit level, determined to be at an operating segment level or one level below. When assessing goodwill for impairment, the Company considers (i) the amount of excess fair value over the carrying value of each reporting unit, (ii) the period of time since a reporting unit’s last quantitative test, (iii) the extent a reorganization or disposition changes the composition of one or more of the reporting units and (iv) other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, the Company assesses numerous factors to determine whether it is more likely than not that the fair value of its reporting units are less than their respective carrying values. Examples of qualitative factors that the Company assesses include its share price, its financial performance, market and competitive factors in its industry and other events specific to its reporting units. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a quantitative impairment test by comparing reporting unit carrying values to estimated fair values. The Company performed its annual assessment of its reporting units’ goodwill in the fourth quarter of 2019 and no impairment was identified. In connection with the Segment Realignment described above, certain of the Company’s reporting units have changed in composition in which goodwill was allocated to such reporting units using a relative fair value approach. Accordingly, the Company performed an interim goodwill impairment assessment in the first quarter of 2020 for those reporting units impacted by the Segment Realignment, and determined that its goodwill was not impaired based on an assessment of various qualitative factors as described above. There is no accumulated goodwill impairment for the Company through September 30, 2020. See Note 7 for additional information. Other Investments The Company maintains investments in various equity securities without a readily determinable fair value. Such investments totaled $165 million and $167 million at September 30, 2020 and December 31, 2019, respectively, and are included within other long-term assets in the Company’s consolidated balance sheets. The Company reviews these investments each reporting period to determine whether an impairment or observable price change for the investment has occurred. When such events or changes occur, the Company evaluates the fair value compared to its cost basis in the investment. Gains or losses from a change in fair value are included within other income (expense) in the consolidated statements of income for the period. Adjustments made to the values recorded for these equity securities during the three and nine months ended September 30, 2020 and 2019 were not significant. Interest Expense, Net Interest expense, net consists of interest expense primarily associated with the Company’s outstanding borrowings and finance lease obligations, as well as interest income primarily associated with the Company’s investment securities. The Company recognized $176 million and $187 million of interest expense and $2 million and $23 million of interest income during the three months ended September 30, 2020 and 2019, respectively. The Company recognized $541 million and $309 million of interest expense and $6 million and $30 million of interest income for the nine months ended September 30, 2020 and 2019, respectively. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract within the requirements under Accounting Standards Codification (“ASC”) 350 for capitalizing implementation costs incurred to develop or obtain internal-use software. For public entities, ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance. The Company adopted ASU 2018-15 effective January 1, 2020 using a prospective approach, and the adoption did not have a material impact on its consolidated financial statements. In 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which removes, modifies, and adds certain disclosure requirements of ASC Topic 820, Fair Value Measurement . ASU 2018-13 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019 with the additional disclosures required to be applied prospectively and the modified and removed disclosures required to be applied retrospectively to all periods presented. The Company adopted ASU 2018-13 effective January 1, 2020, and the adoption did not have a material impact on its disclosures. In 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13” or “CECL”), which prescribes an impairment model for most financial instruments based on expected losses rather than incurred losses. Under this model, an estimate of expected credit losses over the contractual life of the instrument is to be recorded as of the end of a reporting period as an allowance to offset the amortized cost basis, resulting in a net presentation of the amount expected to be collected on the financial instrument. For public entities, ASU 2016-13 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019. For most instruments, entities must apply the standard using a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2016-13 Recently Issued Accounting Pronouncements In 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (“ASU 2020-01”), which clarifies certain interactions between the guidance to account for certain equity securities, investments under the equity method of accounting, and forward contracts or purchased options to purchase securities under Topic 321, Topic 323 and Topic 815. For public entities, ASU 2020-01 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2020. The Company does not currently expect the adoption to have a material impact on its consolidated financial statements or disclosures. In 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which introduces a number of amendments that are designed to simplify the application of accounting for income taxes. Such amendments include removing certain exceptions for intraperiod tax allocation, interim reporting when a year-to-date loss exceeds the anticipated loss, reflecting the effect of an enacted change in tax laws or rates in the annual effective tax rate and recognition of deferred taxes related to outside basis differences for ownership changes in investments. ASU 2019-12 also provides clarification related to when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. In addition, ASU 2019-12 provides guidance on the recognition of a franchise tax (or similar tax) that is partially based on income as an income-based tax and accounting for any incremental amount incurred as a non-income-based tax. For public entities, ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company plans to adopt ASU 2019-12 effective January 1, 2021, and does not expect the adoption to have a material impact on its consolidated financial statements. In 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”), which removes, clarifies and adds certain disclosure requirements of ASC Topic 715, Compensation - Retirement Benefits . ASU 2018-14 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. Entities must apply the disclosure updates retrospectively. The Company does not currently expect the adoption to have a material impact on its disclosures. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company generates revenue from the delivery of processing, service and product solutions. Revenue is measured based on consideration specified in a contract with a customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer which may be at a point in time or over time. Disaggregation of Revenue The Company’s operations are comprised of the Acceptance segment, the Fintech segment and the Payments segment. Additional information regarding the Company’s business segments is included in Note 22. The tables below present the Company’s revenue disaggregated by type of revenue, including a reconciliation with its reportable segments. The Company’s disaggregation of revenue for the three and nine months ended September 30, 2019 have been restated to reflect the Segment Realignment. The majority of the Company’s revenue is earned domestically, with revenue generated outside the United States comprising approximately 14% of total revenue for both the three months ended September 30, 2020 and 2019, and 13% and 10% of total revenue for the nine months ended September 30, 2020 and 2019, respectively. (In millions) Reportable Segments Three Months Ended September 30, 2020 Acceptance Fintech Payments Corporate Total Type of Revenue Processing $ 1,245 $ 364 $ 1,112 $ 9 $ 2,730 Hardware, print and card production 179 12 176 — 367 Professional services 9 120 59 — 188 Software maintenance — 141 1 — 142 License and termination fees 7 41 21 — 69 Output solutions postage — — — 207 207 Other 14 49 18 2 83 Total Revenue $ 1,454 $ 727 $ 1,387 $ 218 $ 3,786 (In millions) Reportable Segments Three Months Ended September 30, 2019 Acceptance Fintech Payments Corporate Total Type of Revenue Processing $ 861 $ 346 $ 911 $ 40 $ 2,158 Hardware, print and card production 133 10 142 — 285 Professional services 3 126 56 3 188 Software maintenance — 144 1 3 148 License and termination fees 4 61 16 1 82 Output solutions postage — — — 180 180 Other 11 48 27 1 87 Total Revenue $ 1,012 $ 735 $ 1,153 $ 228 $ 3,128 (In millions) Reportable Segments Nine Months Ended September 30, 2020 Acceptance Fintech Payments Corporate Total Type of Revenue Processing $ 3,466 $ 1,064 $ 3,265 $ 47 $ 7,842 Hardware, print and card production 531 33 528 — 1,092 Professional services 20 347 174 1 542 Software maintenance — 423 2 2 427 License and termination fees 19 139 61 — 219 Output solutions postage — — — 640 640 Other 42 153 63 — 258 Total Revenue $ 4,078 $ 2,159 $ 4,093 $ 690 $ 11,020 (In millions) Reportable Segments Nine Months Ended September 30, 2019 Acceptance Fintech Payments Corporate Total Type of Revenue Processing $ 861 $ 1,030 $ 1,938 $ 129 $ 3,958 Hardware, print and card production 133 33 292 — 458 Professional services 3 364 105 7 479 Software maintenance — 430 2 11 443 License and termination fees 4 181 47 1 233 Output solutions postage — — — 324 324 Other 11 153 82 1 247 Total Revenue $ 1,012 $ 2,191 $ 2,466 $ 473 $ 6,142 Contract Balances The following table provides information about contract assets and contract liabilities from contracts with customers: (In millions) September 30, 2020 December 31, 2019 Contract assets $ 383 $ 382 Contract liabilities 621 647 Contract assets, reported within other long-term assets in the consolidated balance sheets, primarily result from revenue being recognized where payment is contingent upon the transfer of services to a customer over the contractual period. Contract liabilities primarily relate to advance consideration received from customers (deferred revenue) for which transfer of control occurs, and therefore revenue is recognized, as services are provided. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period. The Company recognized $424 million of revenue during the nine months ended September 30, 2020 that was included in the contract liability balance at the beginning of the period. Transaction Price Allocated to Remaining Performance Obligations The following table includes estimated processing, services and product revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at September 30, 2020: (In millions) Year ending December 31, Remainder of 2020 $ 544 2021 1,839 2022 1,442 2023 1,129 Thereafter 2,093 The Company applies the optional exemption under ASC Topic 606 (“ASC 606”) and does not disclose information about remaining performance obligations for account- and transaction-based processing fees that qualify for recognition under the as-invoiced practical expedient. These multi-year contracts contain variable consideration for stand-ready performance obligations for which the exact quantity and mix of transactions to be processed are contingent upon the customer’s request. The Company also applies the optional exemptions under ASC 606 and does not disclose information for variable consideration that is a sales-based or usage-based royalty promised in exchange for a license of intellectual property or that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service in a series. The amounts disclosed above as remaining performance obligations consist primarily of fixed or monthly minimum processing fees and maintenance fees under contracts with an original expected duration of greater than one year. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions Acquisition of First Data On July 29, 2019, the Company completed the acquisition of First Data, a global leader in commerce-enabling technology and solutions for merchants, financial institutions and card issuers, by acquiring 100% of the First Data stock that was issued and outstanding as of the date of acquisition. The acquisition increases the Company’s footprint as a global payments and financial technology provider by expanding the portfolio of services provided to financial institutions, corporate and merchant clients, and consumers. As a result of the acquisition, First Data stockholders received 286 million shares of common stock of Fiserv, Inc., at an exchange ratio of 0.303 shares of Fiserv, Inc. for each share of First Data common stock, with cash paid in lieu of fractional shares. The Company also converted 15 million outstanding First Data equity awards into corresponding equity awards relating to common stock of Fiserv, Inc. in accordance with the exchange ratio. In addition, concurrent with the closing of the acquisition, the Company made a cash payment of $16.4 billion to repay existing First Data debt. The Company funded the transaction-related expenses and the repayment of First Data debt through a combination of available cash on-hand and proceeds from debt issuances. The total purchase price paid for First Data is as follows: (In millions) Fair value of stock exchanged for shares of Fiserv, Inc. (1) $ 29,293 Repayment of First Data debt 16,414 Fair value of vested portion of First Data stock awards exchanged for Fiserv, Inc. awards (2) 768 Total purchase price $ 46,475 (1) The fair value of the 286 million shares of the Company’s common stock issued as of the acquisition date was determined based on a per share price of $102.30, which was the closing price of the Company’s common stock on July 26, 2019, the last trading day before the acquisition closed the morning of July 29, 2019. This includes a nominal amount of cash paid in lieu of fractional shares. (2) Represents the portion of the fair value of the replacement awards related to services provided prior to the acquisition. The remaining portion of the fair value is associated with future service and will be recognized as expense over the future service period. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”). The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is deductible for tax purposes. Goodwill is primarily attributed to synergies from future expected economic benefits, including enhanced revenue growth from expanded capabilities and geographic presence as well as substantial cost savings from duplicative overhead, streamlined operations and enhanced operational efficiency. The assets and liabilities of First Data have been measured at estimated fair value as of the acquisition date. During the current year through the measurement period ended July 29, 2020, the Company identified and recorded measurement period adjustments to the preliminary purchase price allocation, which were the result of additional analysis performed and information identified based on facts and circumstances that existed as of the acquisition date. These measurement period adjustments resulted in an increase to goodwill of $304 million. The offsetting amounts to the change in goodwill were primarily related to customer relationship intangible assets, noncontrolling interests, property and equipment, payables and accrued expenses including legal contingency reserves, and deferred income taxes. The Company recorded a measurement period adjustment of $155 million to reduce the fair value of customer relationship intangible assets as a result of refinements to attrition rates. A measurement period adjustment of $126 million was recorded to reduce the fair value of noncontrolling interests based on changes to the fair value of the underlying customer relationship intangible assets and the incorporation of additional facts and circumstances that existed as of the acquisition date. A measurement period adjustment of $25 million was recorded to reduce the fair value of property and equipment to the estimated fair value of certain real property acquired. Measurement period adjustments were recorded to increase payables and accrued expenses by $37 million, reduce investments in unconsolidated affiliates by $23 million, and increase other long-term liabilities by $21 million. In addition, the Company recorded $178 million to increase recognized deferred tax liabilities related to measurement period adjustments. Such measurement period adjustments did not have a material impact on the consolidated statements of income. The allocation of purchase price recorded for First Data was finalized in the third quarter of 2020 as follows: (In millions) Assets acquired (1) Cash and cash equivalents $ 310 Trade accounts receivable 1,747 Prepaid expenses and other current assets 1,047 Settlement assets 10,398 Property and equipment 1,156 Customer relationships 13,458 Other intangible assets 2,814 Goodwill 30,811 Investments in unconsolidated affiliates 2,676 Other long-term assets 1,191 Total assets acquired $ 65,608 Liabilities assumed (1) Accounts payable and accrued expenses $ 1,613 Short-term and current maturities of long-term debt (2) 243 Contract liabilities 71 Settlement obligations 10,398 Deferred income taxes 3,671 Long-term contract liabilities 16 Long-term debt and other long-term liabilities (3) 1,261 Total liabilities assumed $ 17,273 Net assets acquired $ 48,335 Redeemable noncontrolling interests 252 Noncontrolling interests 1,608 Total purchase price $ 46,475 (1) In connection with the acquisition of First Data, the Company acquired two businesses which it intended to sell and subsequently sold in October 2019. Therefore, such businesses were classified as held for sale and were included within prepaid expenses and other current assets and accounts payable and accrued expenses in the above allocation of purchase price. (2) Includes foreign lines of credit, current portion of finance lease obligations and other financing obligations. (3) Includes the receivable securitized loan and the long-term portion of finance lease obligations. The fair values of the assets acquired and liabilities assumed were determined using the income and cost approaches. In many cases, the determination of the fair values required estimates about discount rates, growth and attrition rates, future expected cash flows and other future events that are judgmental. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement of the fair value hierarchy as defined in ASC 820, Fair Value Measurements . Intangible assets consisting of customer relationships, technology and trade names were valued using the multi-period excess earnings method (“MEEM”), or the relief from royalty (“RFR”) method, both are forms of the income approach. A cost and market approach was applied, as appropriate, for property and equipment, including land. • Customer relationship intangible assets were valued using the MEEM method. The significant assumptions used include the estimated annual net cash flows (including appropriate revenue and profit attributable to the asset, retention rate, applicable tax rate, and contributory asset charges, among other factors), the discount rate, reflecting the risks inherent in the future cash flow stream, an assessment of the asset’s life cycle, and the tax amortization benefit, among other factors. • Technology and trade name intangible assets were valued using the RFR method. The significant assumptions used include the estimated annual net cash flows (including appropriate revenue attributable to the asset, applicable tax rate, royalty rate, and other factors such as technology related obsolescence rates), the discount rate, reflecting the risks inherent in the future cash flow stream, and the tax amortization benefit, among other factors. • The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, was used, as appropriate, for property and equipment. The cost to replace a given asset reflects the estimated reproduction or replacement cost for the property, less an allowance for loss in value due to depreciation. • The market approach, which estimates value by leveraging comparable land sale data/listings and qualitatively comparing them to the in-scope properties, was used to value the land. • An income approach was applied to derive fair value for both consolidated investments with a noncontrolling interest and equity method investments accounted for under the equity method of accounting. The significant assumptions used include the estimated annual cash flows, the discount rate, the long-term growth rate and operating margin, among other factors. The Company believes that the information provided a reasonable basis for estimating the fair values of the acquired assets and assumed liabilities. The amounts allocated to intangible assets are as follows: (In millions) Gross Carrying Amount Weighted-Average Useful Life Customer relationships $ 13,458 15 years Acquired software and technology 2,324 7 years Trade names 490 9 years Total $ 16,272 14 years The Company incurred transaction expenses of approximately $47 million and $172 million for the three and nine months ended September 30, 2019, respectively. Approximately $45 million and $74 million o f these expenses were included in selling, general and administrative expenses a nd $2 million and $98 million in debt financing activities within the Company’s consolidated statements of income for the three and nine months ended September 30, 2019 , respectively. The following unaudited supplemental pro forma combined financial information presents the Company’s results of operations for the nine months ended September 30, 2019 as if the acquisition of First Data had occurred on January 1, 2019. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the Company’s operating results that may have actually occurred had the acquisition of First Data been completed on January 1, 2019. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may be associated with the acquisition, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of First Data. (In millions, except for per share data) Nine Months Ended September 30, 2019 Total revenue $ 11,730 Net income 463 Net income attributable to Fiserv, Inc. 400 Net income per share attributable to Fiserv, Inc.: Basic $ 0.59 Diluted $ 0.58 The unaudited pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the acquisition had occurred on January 1, 2019 to give effect to certain events the Company believes to be directly attributable to the acquisition. These pro forma adjustments primarily include: • a net increase in amortization expense that would have been recognized due to acquired intangible assets; • an adjustment to interest expense to reflect (i) the additional borrowings of the Company in conjunction with the acquisition and (ii) the repayment of First Data’s historical debt in conjunction with the acquisition; • a reduction in operating revenues due to the elimination of deferred revenues assigned no value at the acquisition date; • an adjustment to stock compensation expense to reflect the cost of the replacement awards as if they had been issued on January 1, 2019 ; and • the related income tax effects of the adjustments noted above. Other Acquisitions On March 2, 2020, the Company acquired MerchantPro Express LLC (“MerchantPro”), an independent sales organization that provides processing services, point-of-sale equipment and merchant cash advances to businesses across the United States. MerchantPro is included within the Acceptance segment and further expands the Company’s merchant services business. On March 18, 2020, the Company acquired Bypass Mobile, LLC (“Bypass”), an independent software vendor and innovator in enterprise point-of-sale systems for sports and entertainment venues, food service management providers and national restaurant chains. Bypass is included within the Acceptance segment and further enhances the Company’s omni-commerce capabilities, enabling enterprise businesses to deliver a seamless customer experience that spans physical and digital channels. On May 11, 2020, the Company acquired Inlet, LLC (“Inlet”), a provider of secure digital delivery solutions for enterprise and middle-market billers’ invoices and statements. Inlet is included within the Payments segment and further enhances the Company’s digital bill payment strategy. The Company acquired these businesses for an aggregate purchase price of $167 million, net of $2 million of acquired cash, and including earn-out provisions estimated at a fair value of $45 million (see Note 8). The preliminary purchase price allocations for these acquisitions resulted in software and customer intangible assets totaling approximately $56 million, residual buyout intangible assets of approximately $35 million, goodwill of approximately $82 million, and net assumed liabilities of approximately $6 million. The purchase price allocation for the MerchantPro acquisition was finalized in the third quarter of 2020. Measurement period adjustments did not have a material impact on the consolidated statements of income. The purchase price allocation for the Bypass and Inlet acquisitions are based on preliminary valuations and subject to final adjustment. The goodwill recognized from these transactions is primarily attributed to synergies and the anticipated value created by selling the Company’s products and services to the acquired businesses’ existing client base. Approximately $35 million of goodwill is expected to be deductible for tax purposes. The results of operations for these acquired businesses have been included in the accompanying consolidated statements of income from the dates of acquisition. Pro forma information for these acquisitions is not provided because they did not have a material effect on the Company’s consolidated results of operations. Dispositions Effective July 1, 2020, the Company and Bank of America (“BANA”) dissolved the Banc of America Merchant Services joint venture (“BAMS” or the “joint venture”), of which the Company maintained a 51% controlling ownership interest. Upon the dissolution of the operations, the joint venture transferred a proportionate share of value, primarily the client contracts, to each party via an agreed upon contractual separation. The remaining activities of the joint venture will consist of supporting the transition of the business to each party and an orderly wind down of remaining BAMS assets and liabilities. Pursuant to the separation agreement, the joint venture retains the responsibility for certain contingencies that may arise from pre-dissolution activities, including potential credit losses for specified merchants in excess of established reserves and certain legal claims and contingencies. The Company may be obligated to fund a proportionate share of any such losses as incurred. The transfer of value to BANA was accounted for at fair value as a non pro rata distribution of nonmonetary assets, resulting in the recognition of a pre-tax gain of $36 million, with a related tax expense of $13 million. The pre-tax gain included the revaluation of client contracts allocated to BANA to a fair value of $700 million, as well as an estimated $24 million for certain additional consideration due from the Company to BANA in connection with the dissolution. The pre-tax net gain is recorded within gain on sale of businesses and the tax expense is recorded within the income tax provision in the consolidated statements of income. Noncontrolling interests of the Company have been reduced by $726 million and the Company’s additional paid-in capital was reduced by $36 million to account for the wind down of the joint venture and the transfer of a proportionate share of the joint venture’s fair value to BANA (see Note 13). The transfer of value to the Company was accounted for at carryover basis as the Company maintains control of such assets. The business transferred to the Company will continue to be operated and managed within the Company’s Acceptance segment. The fair value of the client contracts upon dissolution of the joint venture was determined using the MEEM method, a form of the income approach. The determination of the fair values required estimates about discount rates, growth and attrition rates, future expected cash flows and other future events that are judgmental in nature. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement of the fair value hierarchy as defined in ASC 820, Fair Value Measurements . The significant assumptions used include the estimated annual net cash flows (including appropriate revenue and profit attributable to the asset, retention rate, applicable tax rate, and contributory asset charges, among other factors), the discount rate, reflecting the risks inherent in the future cash flow stream, an assessment of the asset’s life cycle, and the tax amortization benefit, among other factors. Additionally, the Company will continue to provide merchant processing and related services to former BAMS clients allocated to BANA, at BAMS pricing, through June 2023. The Company will also provide processing and other support services to new BANA merchant clients pursuant to a five-year non-exclusive agreement which, after June 2023, will also apply to the former BAMS clients allocated to BANA. In addition, both the Company and BANA are entitled to certain transition services, at fair value, from each other through June 2023. On February 18, 2020, the Company completed the sale of a 60% controlling interest of its Investment Services business, which is reported within Corporate and Other following the Segment Realignment. The Company received pre-tax proceeds of $578 million, net of related expenses, resulting in a pre-tax gain on the sale of $428 million, with the related tax expense of $112 million recorded through the income tax provision, in the consolidated statements of income. The pre-tax gain included $176 million related to the remeasurement of the Company’s 40% retained interest based upon the enterprise value of the business. The Company’s remaining 40% ownership interest of the Investment Services business is accounted for as an equity method investment, with the Company’s share of net loss reported within income from investments in unconsolidated affiliates and the related tax benefit reported within the income tax provision in the consolidated statements of income. The Company’s investment in the Investment Services business was $178 million at September 30, 2020 and is reported within other long-term assets in the consolidated balance sheet. The revenues, expenses and cash flows of the Investment Services business were consolidated into the Company’s financial results through the date of the sale transaction. In conjunction with the sale transaction, the Company also entered into transition services agreements to provide, at fair value, various administration, business process outsourcing, technical and data center related services for defined periods to the Investment Services business (see Note 21). |
Settlement Assets and Obligatio
Settlement Assets and Obligations | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Settlement Assets and Obligations | Settlement Assets and Obligations Settlement assets and obligations represent intermediary balances arising from the settlement process which involves the transferring of funds between card issuers, payment networks, merchants and consumers. The Company records settlement assets and obligations upon processing a payment transaction. Settlement assets represent amounts receivable from agents and from payment networks for submitted merchant transactions, and funds received by the Company in advance of paying to the merchant or payee. Settlement obligations represent the unpaid amounts that are due to merchants or payees for their payment transactions. The principal components of the Company’s settlement assets and obligations were as follows: (In millions) September 30, 2020 December 31, 2019 Settlement assets Cash and cash equivalents $ 1,386 $ 1,656 Receivables 8,017 10,212 Total settlement assets $ 9,403 $ 11,868 Settlement obligations Payment instruments outstanding $ 391 $ 345 Card settlements due to merchants 9,012 11,523 Total settlement obligations $ 9,403 $ 11,868 The changes in settlement assets and obligations are presented on a net basis within operating activities in the consolidated statements of cash flows. However, because the changes in the settlement assets balance exactly offset changes in settlement obligations, the activity nets to zero. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Identifiable intangible assets consisted of the following: (In millions) Gross Accumulated Net Book September 30, 2020 Customer relationships $ 15,124 $ 3,217 $ 11,907 Acquired software and technology 2,555 802 1,753 Trade names 616 154 462 Capitalized software and other intangibles 1,236 400 836 Purchased software 930 239 691 Total $ 20,461 $ 4,812 $ 15,649 (In millions) Gross Accumulated Net Book December 31, 2019 Customer relationships $ 16,187 $ 2,145 $ 14,042 Acquired software and technology 2,607 639 1,968 Trade names 620 105 515 Capitalized software and other intangibles 942 332 610 Purchased software 680 173 507 Total $ 21,036 $ 3,394 $ 17,642 Amortization expense associated with the above identifiable intangible assets was as follows: Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Amortization expense $ 623 $ 459 $ 1,934 $ 650 Amortization expense during the three and nine months ended September 30, 2020 includes $18 million and $53 million, respectively, of accelerated amortization associated with the termination of certain vendor contracts (see Note 16). The Company estimates that annual amortization expense with respect to intangible assets recorded at September 30, 2020 will be as follows: (In millions) Year ending December 31, Remainder of 2020 $ 621 2021 2,432 2022 2,244 2023 1,979 2024 1,531 Thereafter 6,842 Total $ 15,649 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The changes in goodwill during the nine months ended September 30, 2020 were as follows: Reportable Segments (In millions) Acceptance Fintech Payments Total Goodwill - December 31, 2019 (1) $ 21,189 $ 2,104 $ 12,745 $ 36,038 Acquisitions and valuation adjustments 325 — 60 385 Foreign currency translation (438) — (77) (515) Goodwill - September 30, 2020 $ 21,076 $ 2,104 $ 12,728 $ 35,908 (1) Amounts have been restated to reflect the Segment Realignment effective in the first quarter of 2020 (see Note 22). |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair values of cash equivalents, trade accounts receivable, settlement assets and obligations, accounts payable, and client deposits approximate their respective carrying values due to the short period of time to maturity. The Company’s derivative instruments are measured on a recurring basis based on foreign currency spot rates and forwards quoted by banks and foreign currency dealers and are marked-to-market each period (see Note 14). The Company’s net contingent consideration liability, primarily related to the March 2020 acquisitions of MerchantPro and Bypass (see Note 4), is estimated based on the present value of a probability-weighted assessment approach derived from the likelihood of achieving the earn-out criteria. The fair value of the Company’s contingent liability for current expected credit losses associated with its debt guarantees, as further described below, is estimated based on assumptions of future risk of default and the corresponding level of credit losses at the time of default. Assets and liabilities measured at fair value on a recurring basis consisted of the following: Fair Value (In millions) Classification Fair Value Hierarchy September 30, December 31, Assets Cash flow hedges Prepaid expenses and other current assets Level 2 $ 5 $ 4 Liabilities Contingent consideration Accounts payable and accrued expenses Level 3 34 — Contingent consideration Other long-term liabilities Level 3 17 1 Contingent debt guarantee Other long-term liabilities Level 3 10 — The Company’s senior notes are recorded at amortized cost but measured at fair value for disclosure purposes. The estimated fair value of senior notes was based on matrix pricing which considers readily observable inputs of comparable securities (Level 2 of the fair value hierarchy). The carrying value of the Company’s term loan credit agreement, revolving credit facility borrowings and debt associated with the receivables securitization agreement approximates fair value as these instruments have variable interest rates and the Company has not experienced any change to its credit ratings (Level 2 of the fair value hierarchy). The estimated fair value of total debt, excluding finance leases and other financing obligations, was $22.8 billion and $22.6 billion at September 30, 2020 and December 31, 2019, respectively, and the carrying value was $20.5 billion and $21.5 billion at September 30, 2020 and December 31, 2019, respectively. The Company maintains an ownership interest in defi SOLUTIONS Group, LLC and Sagent M&C, LLC, respectively, which were subsidiaries of the Company that owned its Lending Solutions business (collectively, the “Lending Joint Ventures”). The Lending Joint Ventures maintain variable-rate term loan facilities with aggregate outstanding borrowings of $390 million in senior unsecured debt and variable-rate revolving credit facilities with an aggregate borrowing capacity of $45 million with a syndicate of banks, which mature in March 2023. The Company has guaranteed this debt of the Lending Joint Ventures and does not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations. Outstanding borrowings on the revolving credit facilities at September 30, 2020 were $5 million. The Company maintains a liability for its non-contingent obligations to perform over the term of the guarantees, which is reported primarily within other long-term liabilities in the consolidated balance sheets. The non-contingent component of the Company’s debt guarantee arrangements is recorded at amortized cost but measured at fair value for disclosure purposes. The carrying value of the Company’s non-contingent liability of $20 million and $26 million approximates the fair value at September 30, 2020 and December 31, 2019, respectively (Level 3 of the fair value hierarchy). Such guarantees will be amortized in future periods over the contractual term. In addition, the Company has recorded, in conjunction with the adoption of CECL In addition, certain of the Company’s non-financial assets are measured at fair value on a non-recurring basis, including property and equipment, operating lease assets, equity securities without a readily determinable fair value, goodwill and other intangible assets, and are subject to fair value adjustment in certain circumstances. Additional information about fair value adjustments recorded on a non-recurring basis during the three and nine months ended September 30, 2020 is included in Note 16 to the consolidated financial statements. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases Company as Lessee The Company primarily leases office space, land, data centers and equipment from third parties. The Company’s leases have remaining lease terms ranging from one Components of Lease Cost Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Operating lease cost (1) $ 60 $ 64 $ 183 $ 141 Finance lease cost (2) Amortization of right-of-use assets 48 16 137 18 Interest on lease liabilities 7 3 16 3 Total lease cost $ 115 $ 83 $ 336 $ 162 (1) Operating lease expense is included within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the right-of-use (“ROU”) asset, in the consolidated statements of income. Operating lease cost includes approximately $8 million and $14 million of variable lease costs for the three months ended September 30, 2020 and 2019, respectively, and $27 million and $42 million for the nine months ended September 30, 2020 and 2019, respectively. (2) Finance lease expense is recorded as depreciation and amortization expense within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, and interest expense, net in the consolidated statements of income. Finance lease expense during the three and nine months ended September 30, 2020 includes $17 million and $62 million, respectively, of accelerated amortization associated with the termination of certain vendor contracts (see Note 16). Supplemental Cash Flow Information Nine Months Ended (In millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 116 $ 94 Operating cash flows from finance leases 16 3 Financing cash flows from finance leases 161 17 Right-of-use assets obtained in exchange for lease liabilities: (1) Operating leases $ 2 $ 459 Finance leases 331 288 (1) Amounts in 2019 include the right-of-use assets and lease liabilities obtained through the acquisition of First Data. Company as Lessor In connection with the acquisition of First Data, the Company owns certain POS terminal equipment which it leases to merchants. The terms of the leases typically range from two Components of Lease Income Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Sales-type leases: Selling profit (1) $ 8 $ 8 $ 34 $ 8 Interest income (1) 20 15 57 15 Operating lease income (2) 21 14 69 14 (1) Selling profit includes $26 million and $78 million recorded within product revenue with a corresponding charge of $18 million and $44 million recorded within cost of product in the consolidated statements of income for the three and nine months ended September 30, 2020, respectively. Selling profit includes $21 million recorded within product revenue with a corresponding charge of $13 million recorded within cost of product in the consolidated statements of income for the both the three and nine months ended September 30, 2019. Interest income is included within product revenue in the consolidated statements of income. (2) Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statements of income for the three and nine months ended September 30, 2020 and 2019. Lease Payment Receivables Portfolio The Company accounts for lease payment receivables in connection with POS terminal equipment as a single portfolio. The Company recognizes an allowance for expected credit losses on lease payment receivables at the commencement date of the lease by considering the vintage, geography and internal credit risk ratings of such lease. The internal credit risk ratings are established based on lessee specific risk factors, such as FICO score, number of years the lessee has been in business and the nature of the lessee’s industry, which are considered indicators of the likelihood a lessee may default in the future. The established reserve for estimated credit losses on lease payment receivables upon adoption of ASU 2016-13 The Company determines delinquency status on lease payment receivables based on the number of calendar days past due. The Company considers lease payments that are 90 days or less past due as performing. Lease payments that are greater than 90 days past due are placed on non-accrual status in which interest income is no longer recognized. Lease payment receivables are fully written off in the period they become delinquent greater than 180 days past due. The amortized cost balance of net investment leases at September 30, 2020 was $233 million. Le ase payment receivables that were determined to be on non-accrual status were nominal at each of September 30, 2020 and December 31, 2019. |
Leases | Leases Company as Lessee The Company primarily leases office space, land, data centers and equipment from third parties. The Company’s leases have remaining lease terms ranging from one Components of Lease Cost Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Operating lease cost (1) $ 60 $ 64 $ 183 $ 141 Finance lease cost (2) Amortization of right-of-use assets 48 16 137 18 Interest on lease liabilities 7 3 16 3 Total lease cost $ 115 $ 83 $ 336 $ 162 (1) Operating lease expense is included within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the right-of-use (“ROU”) asset, in the consolidated statements of income. Operating lease cost includes approximately $8 million and $14 million of variable lease costs for the three months ended September 30, 2020 and 2019, respectively, and $27 million and $42 million for the nine months ended September 30, 2020 and 2019, respectively. (2) Finance lease expense is recorded as depreciation and amortization expense within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, and interest expense, net in the consolidated statements of income. Finance lease expense during the three and nine months ended September 30, 2020 includes $17 million and $62 million, respectively, of accelerated amortization associated with the termination of certain vendor contracts (see Note 16). Supplemental Cash Flow Information Nine Months Ended (In millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 116 $ 94 Operating cash flows from finance leases 16 3 Financing cash flows from finance leases 161 17 Right-of-use assets obtained in exchange for lease liabilities: (1) Operating leases $ 2 $ 459 Finance leases 331 288 (1) Amounts in 2019 include the right-of-use assets and lease liabilities obtained through the acquisition of First Data. Company as Lessor In connection with the acquisition of First Data, the Company owns certain POS terminal equipment which it leases to merchants. The terms of the leases typically range from two Components of Lease Income Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Sales-type leases: Selling profit (1) $ 8 $ 8 $ 34 $ 8 Interest income (1) 20 15 57 15 Operating lease income (2) 21 14 69 14 (1) Selling profit includes $26 million and $78 million recorded within product revenue with a corresponding charge of $18 million and $44 million recorded within cost of product in the consolidated statements of income for the three and nine months ended September 30, 2020, respectively. Selling profit includes $21 million recorded within product revenue with a corresponding charge of $13 million recorded within cost of product in the consolidated statements of income for the both the three and nine months ended September 30, 2019. Interest income is included within product revenue in the consolidated statements of income. (2) Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statements of income for the three and nine months ended September 30, 2020 and 2019. Lease Payment Receivables Portfolio The Company accounts for lease payment receivables in connection with POS terminal equipment as a single portfolio. The Company recognizes an allowance for expected credit losses on lease payment receivables at the commencement date of the lease by considering the vintage, geography and internal credit risk ratings of such lease. The internal credit risk ratings are established based on lessee specific risk factors, such as FICO score, number of years the lessee has been in business and the nature of the lessee’s industry, which are considered indicators of the likelihood a lessee may default in the future. The established reserve for estimated credit losses on lease payment receivables upon adoption of ASU 2016-13 The Company determines delinquency status on lease payment receivables based on the number of calendar days past due. The Company considers lease payments that are 90 days or less past due as performing. Lease payments that are greater than 90 days past due are placed on non-accrual status in which interest income is no longer recognized. Lease payment receivables are fully written off in the period they become delinquent greater than 180 days past due. The amortized cost balance of net investment leases at September 30, 2020 was $233 million. Le ase payment receivables that were determined to be on non-accrual status were nominal at each of September 30, 2020 and December 31, 2019. |
Leases | Leases Company as Lessee The Company primarily leases office space, land, data centers and equipment from third parties. The Company’s leases have remaining lease terms ranging from one Components of Lease Cost Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Operating lease cost (1) $ 60 $ 64 $ 183 $ 141 Finance lease cost (2) Amortization of right-of-use assets 48 16 137 18 Interest on lease liabilities 7 3 16 3 Total lease cost $ 115 $ 83 $ 336 $ 162 (1) Operating lease expense is included within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the right-of-use (“ROU”) asset, in the consolidated statements of income. Operating lease cost includes approximately $8 million and $14 million of variable lease costs for the three months ended September 30, 2020 and 2019, respectively, and $27 million and $42 million for the nine months ended September 30, 2020 and 2019, respectively. (2) Finance lease expense is recorded as depreciation and amortization expense within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, and interest expense, net in the consolidated statements of income. Finance lease expense during the three and nine months ended September 30, 2020 includes $17 million and $62 million, respectively, of accelerated amortization associated with the termination of certain vendor contracts (see Note 16). Supplemental Cash Flow Information Nine Months Ended (In millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 116 $ 94 Operating cash flows from finance leases 16 3 Financing cash flows from finance leases 161 17 Right-of-use assets obtained in exchange for lease liabilities: (1) Operating leases $ 2 $ 459 Finance leases 331 288 (1) Amounts in 2019 include the right-of-use assets and lease liabilities obtained through the acquisition of First Data. Company as Lessor In connection with the acquisition of First Data, the Company owns certain POS terminal equipment which it leases to merchants. The terms of the leases typically range from two Components of Lease Income Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Sales-type leases: Selling profit (1) $ 8 $ 8 $ 34 $ 8 Interest income (1) 20 15 57 15 Operating lease income (2) 21 14 69 14 (1) Selling profit includes $26 million and $78 million recorded within product revenue with a corresponding charge of $18 million and $44 million recorded within cost of product in the consolidated statements of income for the three and nine months ended September 30, 2020, respectively. Selling profit includes $21 million recorded within product revenue with a corresponding charge of $13 million recorded within cost of product in the consolidated statements of income for the both the three and nine months ended September 30, 2019. Interest income is included within product revenue in the consolidated statements of income. (2) Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statements of income for the three and nine months ended September 30, 2020 and 2019. Lease Payment Receivables Portfolio The Company accounts for lease payment receivables in connection with POS terminal equipment as a single portfolio. The Company recognizes an allowance for expected credit losses on lease payment receivables at the commencement date of the lease by considering the vintage, geography and internal credit risk ratings of such lease. The internal credit risk ratings are established based on lessee specific risk factors, such as FICO score, number of years the lessee has been in business and the nature of the lessee’s industry, which are considered indicators of the likelihood a lessee may default in the future. The established reserve for estimated credit losses on lease payment receivables upon adoption of ASU 2016-13 The Company determines delinquency status on lease payment receivables based on the number of calendar days past due. The Company considers lease payments that are 90 days or less past due as performing. Lease payments that are greater than 90 days past due are placed on non-accrual status in which interest income is no longer recognized. Lease payment receivables are fully written off in the period they become delinquent greater than 180 days past due. The amortized cost balance of net investment leases at September 30, 2020 was $233 million. Le ase payment receivables that were determined to be on non-accrual status were nominal at each of September 30, 2020 and December 31, 2019. |
Leases | Leases Company as Lessee The Company primarily leases office space, land, data centers and equipment from third parties. The Company’s leases have remaining lease terms ranging from one Components of Lease Cost Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Operating lease cost (1) $ 60 $ 64 $ 183 $ 141 Finance lease cost (2) Amortization of right-of-use assets 48 16 137 18 Interest on lease liabilities 7 3 16 3 Total lease cost $ 115 $ 83 $ 336 $ 162 (1) Operating lease expense is included within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the right-of-use (“ROU”) asset, in the consolidated statements of income. Operating lease cost includes approximately $8 million and $14 million of variable lease costs for the three months ended September 30, 2020 and 2019, respectively, and $27 million and $42 million for the nine months ended September 30, 2020 and 2019, respectively. (2) Finance lease expense is recorded as depreciation and amortization expense within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, and interest expense, net in the consolidated statements of income. Finance lease expense during the three and nine months ended September 30, 2020 includes $17 million and $62 million, respectively, of accelerated amortization associated with the termination of certain vendor contracts (see Note 16). Supplemental Cash Flow Information Nine Months Ended (In millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 116 $ 94 Operating cash flows from finance leases 16 3 Financing cash flows from finance leases 161 17 Right-of-use assets obtained in exchange for lease liabilities: (1) Operating leases $ 2 $ 459 Finance leases 331 288 (1) Amounts in 2019 include the right-of-use assets and lease liabilities obtained through the acquisition of First Data. Company as Lessor In connection with the acquisition of First Data, the Company owns certain POS terminal equipment which it leases to merchants. The terms of the leases typically range from two Components of Lease Income Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Sales-type leases: Selling profit (1) $ 8 $ 8 $ 34 $ 8 Interest income (1) 20 15 57 15 Operating lease income (2) 21 14 69 14 (1) Selling profit includes $26 million and $78 million recorded within product revenue with a corresponding charge of $18 million and $44 million recorded within cost of product in the consolidated statements of income for the three and nine months ended September 30, 2020, respectively. Selling profit includes $21 million recorded within product revenue with a corresponding charge of $13 million recorded within cost of product in the consolidated statements of income for the both the three and nine months ended September 30, 2019. Interest income is included within product revenue in the consolidated statements of income. (2) Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statements of income for the three and nine months ended September 30, 2020 and 2019. Lease Payment Receivables Portfolio The Company accounts for lease payment receivables in connection with POS terminal equipment as a single portfolio. The Company recognizes an allowance for expected credit losses on lease payment receivables at the commencement date of the lease by considering the vintage, geography and internal credit risk ratings of such lease. The internal credit risk ratings are established based on lessee specific risk factors, such as FICO score, number of years the lessee has been in business and the nature of the lessee’s industry, which are considered indicators of the likelihood a lessee may default in the future. The established reserve for estimated credit losses on lease payment receivables upon adoption of ASU 2016-13 The Company determines delinquency status on lease payment receivables based on the number of calendar days past due. The Company considers lease payments that are 90 days or less past due as performing. Lease payments that are greater than 90 days past due are placed on non-accrual status in which interest income is no longer recognized. Lease payment receivables are fully written off in the period they become delinquent greater than 180 days past due. The amortized cost balance of net investment leases at September 30, 2020 was $233 million. Le ase payment receivables that were determined to be on non-accrual status were nominal at each of September 30, 2020 and December 31, 2019. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following: (In millions) September 30, 2020 December 31, 2019 Trade accounts payable $ 373 $ 392 Client deposits 689 650 Accrued compensation and benefits 377 378 Accrued taxes 93 137 Accrued interest 182 224 Other accrued expenses 1,330 1,299 Total $ 3,044 $ 3,080 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s debt consisted of the following: (In millions) September 30, 2020 December 31, 2019 Short-term and current maturities of long-term debt: Lines of credit $ 121 $ 150 Finance lease and other financing obligations 244 137 Total short-term and current maturities of long-term debt $ 365 $ 287 Long-term debt: 2.7% senior notes due 2020 $ — $ 850 4.75% senior notes due 2021 400 400 3.5% senior notes due 2022 700 700 3.8% senior notes due 2023 1,000 1,000 0.375% senior notes due 2023 584 559 2.75% senior notes due 2024 2,000 2,000 3.85% senior notes due 2025 900 900 2.25% senior notes due 2025 676 687 3.2% senior notes due 2026 2,000 2,000 1.125% senior notes due 2027 584 559 2.25% senior notes due 2027 1,000 — 4.2% senior notes due 2028 1,000 1,000 3.5% senior notes due 2029 3,000 3,000 1.625% senior notes due 2030 584 559 2.65% senior notes due 2030 1,000 — 3.0% senior notes due 2031 676 687 4.4% senior notes due 2049 2,000 2,000 Receivable securitized loan 500 500 Term loan facility 1,750 3,950 Unamortized discount and deferred financing costs (161) (160) Revolving credit facility 219 174 Finance lease and other financing obligations 482 247 Total long-term debt $ 20,894 $ 21,612 The Company was in compliance with all financial debt covenants during the first nine months of 2020. Annual maturities of the Company’s total debt were as follows at September 30, 2020: (In millions) Year ending December 31, Remainder of 2020 $ 282 2021 177 2022 1,346 2023 2,334 2024 3,843 Thereafter 13,438 Total principal payments 21,420 Unamortized discount and deferred financing costs (161) Total debt $ 21,259 On May 13, 2020, the Company completed an offering of $2.0 billion of senior notes comprised of $1.0 billion aggregate principal amount of 2.25% senior notes due in June 2027 and $1.0 billion aggregate principal amount of 2.65% senior notes due in June 2030. The senior notes pay interest semi-annually on June 1 and December 1, commencing on December 1, 2020. The indentures governing the senior notes contain covenants that, among other matters, limit (i) the Company’s ability to consolidate or merge with or into, or convey, transfer or lease all or substantially all of its properties and assets to, another person, (ii) the Company’s and certain of its subsidiaries’ ability to create or assume liens, and (iii) the Company’s and certain of its subsidiaries’ ability to engage in sale and leaseback transactions. The Company may, at its option, redeem the senior notes, in whole or from time to time in part, at any time prior to the applicable maturity date. The Company used the net proceeds from these senior notes offerings to repay the outstanding principal balance of $850 million under its 2.7% senior notes due in June 2020 and outstanding borrowings under its amended and restated revolving credit facility totaling $1.1 billion. T he Company maintains an amended and restated revolving credit facility, which matures in September 2023, with aggregate commitments available for $3.5 billion of total capacity. At September 30, 2020, the 4.75% senior notes due in June 2021 were classified in the consolidated balance sheet as long-term and within the debt maturity schedule above as maturing in September 2023, the date that the Company’s revolving credit facility expires, as the Company has the intent to refinance this debt on a long-term basis and the ability to do so under its revolving credit facility. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests The Company maintains two redeemable noncontrolling interests which are presented outside of equity and carried at their estimated redemption values. Each minority partner owns 1% of the equity in the joint venture; in addition, each minority partner is entitled to a contractually determined share of the entity’s income. The agreements contain redemption features whereby interests held by the minority partner are redeemable either (i) at the option of the holder or (ii) upon the occurrence of an event that is not solely within the Company’s control. The minority interests have a total estimated redemption value of $260 million, which may be terminated by either party for convenience any time after September 1, 2021 and December 31, 2024, respectively. In the event of termination for cause, as a result of a change in control, or for convenience after the predetermined date, the Company may be required to purchase the minority partner membership interests at a price equal to the fair market value of the minority interest. The following table presents a summary of the redeemable noncontrolling interests activity during the nine months ended September 30, 2020: (In millions) Balance at December 31, 2019 $ 262 Distributions paid to redeemable noncontrolling interests (31) Share of income 29 Balance at September 30, 2020 $ 260 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | Equity The following tables provide changes in equity during the three and nine months ended September 30, 2020 and 2019. Fiserv, Inc. Shareholders’ Equity Three Months Ended Number of Shares Amount (In millions) Common Shares Treasury Shares Common Stock Additional Accumulated Retained Treasury Stock Noncontrolling Interests Total Equity Balance at June 30, 2020 791 122 $ 8 $ 23,771 $ (644) $ 12,877 $ (4,429) $ 1,445 $ 33,028 Net income (1) 264 1 265 Net adjustment to noncontrolling interests from dissolution (see Note 4) (36) (726) (762) Other comprehensive income (loss) (187) 17 (170) Share-based compensation 84 84 Shares issued under stock plans (1) (48) 32 (16) Balance at September 30, 2020 791 121 $ 8 $ 23,771 $ (831) $ 13,141 $ (4,397) $ 737 $ 32,429 (1) The total net income presented in equity for the three months ended September 30, 2020 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $11 million not included in equity. Fiserv, Inc. Shareholders’ Equity Three Months Ended Number of Shares Amount (In millions) Common Shares Treasury Shares Common Stock Additional Accumulated Retained Treasury Stock Total Equity Noncontrolling Interests Balance at June 30, 2019 791 399 $ 8 $ 1,056 $ (193) $ 12,083 $ (10,408) $ — $ 2,546 Shares issued to acquire First Data (see Note 4) (286) 22,582 7,478 1,119 31,179 Distributions paid to noncontrolling interests (51) (51) Net income (1) 198 23 221 Other comprehensive loss (186) (186) Share-based compensation 87 87 Shares issued under stock plans (2) (57) 57 — Purchases of treasury stock — (36) (36) Balance at September 30, 2019 791 111 $ 8 $ 23,668 $ (379) $ 12,281 $ (2,909) $ 1,091 $ 33,760 (1) The total net income presented in equity for the three months ended September 30, 2019 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $4 million not included in equity. Fiserv, Inc. Shareholders’ Equity Nine Months Ended Number of Shares Amount (In millions) Common Shares Treasury Shares Common Stock Additional Accumulated Retained Treasury Stock Noncontrolling Interests Total Equity Balance at December 31, 2019 791 112 $ 8 $ 23,741 $ (180) $ 12,528 $ (3,118) $ 1,616 $ 34,595 Net income (loss) (1) 658 (25) 633 Measurement period adjustments related to First Data acquisition (see Note 4) (126) (126) Distributions paid to noncontrolling interests (2) (30) (30) Net adjustment to noncontrolling interests from dissolution (see Note 4) (36) (726) (762) Other comprehensive (loss) income (651) 28 (623) Share-based compensation 286 286 Shares issued under stock plans (5) (220) 156 (64) Purchases of treasury stock 14 (1,435) (1,435) Cumulative-effect adjustment of ASU 2016-13 (45) (45) Balance at September 30, 2020 791 121 $ 8 $ 23,771 $ (831) $ 13,141 $ (4,397) $ 737 $ 32,429 (1) The total net income presented in equity for the nine months ended September 30, 2020 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $29 million not included in equity. (2) The total distributions presented in equity for the nine months ended September 30, 2020 excludes $31 million in distributions paid to redeemable noncontrolling interests not included in equity. Fiserv, Inc. Shareholders’ Equity Nine Months Ended Number of Shares Amount (In millions) Common Shares Treasury Shares Common Stock Additional Accumulated Retained Treasury Stock Total Equity Noncontrolling Interests Balance at December 31, 2018 791 399 $ 8 $ 1,057 $ (67) $ 11,635 $ (10,340) $ — $ 2,293 Shares issued to acquire First Data (See Note 4) (286) 22,582 7,478 1,119 31,179 Distributions paid to noncontrolling interests (51) (51) Net income (1) 646 23 669 Other comprehensive loss (312) (312) Share-based compensation 121 121 Shares issued under stock plans (4) (92) 109 17 Purchases of treasury stock 2 (156) (156) Balance at September 30, 2019 791 111 $ 8 $ 23,668 $ (379) $ 12,281 $ (2,909) $ 1,091 $ 33,760 (1) The total net income presented in equity for the nine months ended September 30, 2019 is different than the amount presented in the consolidated statement of income due to net income attributable to the redeemable noncontrolling interests of $4 million not included in equity. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component, net of income taxes, consisted of the following: Three Months Ended September 30, 2020 (In millions) Cash Flow Foreign Pension Plans Total Balance at June 30, 2020 $ (138) $ (500) $ (6) $ (644) Other comprehensive income (loss) before reclassifications 6 (197) — (191) Amounts reclassified from accumulated other comprehensive loss 4 — — 4 Net current-period other comprehensive income (loss) 10 (197) — (187) Balance at September 30, 2020 $ (128) $ (697) $ (6) $ (831) Three Months Ended September 30, 2019 (In millions) Cash Flow Foreign Pension Plans Total Balance at June 30, 2019 $ (144) $ (47) $ (2) $ (193) Other comprehensive loss before reclassifications (4) (186) — (190) Amounts reclassified from accumulated other comprehensive loss 4 — — 4 Net current-period other comprehensive loss — (186) — (186) Balance at September 30, 2019 $ (144) $ (233) $ (2) $ (379) Nine Months Ended September 30, 2020 (In millions) Cash Flow Foreign Pension Plans Total Balance at December 31, 2019 $ (141) $ (33) $ (6) $ (180) Other comprehensive income (loss) before reclassifications 1 (664) — (663) Amounts reclassified from accumulated other comprehensive loss 12 — — 12 Net current-period other comprehensive income (loss) 13 (664) — (651) Balance at September 30, 2020 $ (128) $ (697) $ (6) $ (831) Nine Months Ended September 30, 2019 (In millions) Cash Flow Foreign Pension Plans Total Balance at December 31, 2018 $ (16) $ (49) $ (2) $ (67) Other comprehensive loss before reclassifications (134) (184) — (318) Amounts reclassified from accumulated other comprehensive loss 6 — — 6 Net current-period other comprehensive loss (128) (184) — (312) Balance at September 30, 2019 $ (144) $ (233) $ (2) $ (379) The Company has entered into forward exchange contracts, which have been designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee. At September 30, 2020, the notional amount of these derivatives was $206 million and the fair value totaling $5 million is reported primarily within prepaid expenses and other current assets in the Company’s consolidated balance sheet. At December 31, 2019, the notional amount of these derivatives was $178 million and the fair value totaling $4 million is reported primarily within prepaid expenses and other current assets in the Company’s consolidated balance sheet. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2020, the Company estimates that it will recognize gains of approximately $4 million in cost of processing and services during the next twelve months as foreign exchange forward contracts settle. In March 2019, the Company entered into treasury lock agreements (“Treasury Locks”), designated as cash flow hedges, in the aggregate notional amount of $5.0 billion to manage exposure to fluctuations in benchmark interest rates in anticipation of the issuance of fixed rate debt in connection with the refinancing of certain indebtedness of First Data and its subsidiaries. In June 2019, concurrent with the issuance of U.S dollar-denominated senior notes, the Treasury Locks were settled resulting in a payment, included in cash flows from operating activities, of $183 million recorded in accumulated other comprehensive loss, net of income taxes, that will be amortized to earnings over the terms of the originally forecasted interest payments. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2020, the Company estimates that it will recognize approximately $21 million in interest expense, net during the next twelve months related to settled interest rate hedge contracts. To reduce exposure to changes in the value of the Company’s net investments in certain of its foreign currency-denominated subsidiaries due to changes in foreign currency exchange rates, the Company uses its foreign currency-denominated debt as an economic hedge of its net investments in such foreign currency-denominated subsidiaries. In conjunction with the acquisition of First Data, the Company designated its Euro- and British Pound-denominated senior notes as net investment hedges to hedge a portion of its net investment in certain subsidiaries whose functional currencies are the Euro and the British Pound. Accordingly, foreign currency transaction gains or losses on the qualifying net investment hedge instruments are recorded as foreign currency translation within other comprehensive (loss) income in the consolidated statements of comprehensive income and will remain in accumulated other comprehensive loss in the consolidated balance sheets until the sale or complete liquidation of the underlying foreign subsidiaries. The Company recorded a foreign currency translation gain (loss), net of tax, of $(92) million and $(38) million in other comprehensive (loss) income during the three and nine months ended September 30, 2020, respectively, and $28 million during both the three and nine months ended September 30, 2019 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company recognized $84 million and $87 million of share-based compensation expense during the three months ended September 30, 2020 and 2019, respectively, and $286 million and $121 million of share-based compensation expense during the nine months ended September 30, 2020 and 2019, respectively. The Company’s annual grant of share-based awards generally occurs in the first quarter. At September 30, 2020, the total remaining unrecognized compensation cost for unvested stock options, restricted stock units and awards and performance share units and awards, net of estimated forfeitures, of $343 million is expected to be recognized over a weighted-average period of 2.0 years. During the nine months ended September 30, 2020 and 2019, stock options to purchase 2.2 million and 3.3 million shares, respectively, were exercised. A summary of stock option activity is as follows: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In millions) Stock options outstanding - December 31, 2019 15,989 $ 42.83 Granted 1,503 112.87 Forfeited (158) 92.47 Exercised (2,195) 34.31 Stock options outstanding - September 30, 2020 15,139 $ 50.51 4.82 $ 810 Stock options exercisable - September 30, 2020 12,438 $ 40.82 4.00 $ 774 A summary of restricted stock unit and performance share unit activity is as follows: Restricted Stock Units Performance Share Units Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Units - December 31, 2019 6,869 $ 93.80 2,328 $ 94.61 Granted 1,336 111.71 — — Forfeited (220) 92.28 (28) 90.44 Vested (3,227) 95.84 (479) 92.62 Units - September 30, 2020 4,758 $ 97.46 1,821 $ 95.20 A summary of restricted stock award activity is as follows: Restricted Stock Awards Shares Weighted-Average Grant Date Fair Value Awards - December 31, 2019 48 $ 102.30 Granted — — Forfeited — — Vested — — Awards - September 30, 2020 48 $ 102.30 |
Restructuring and Other Charges
Restructuring and Other Charges | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Restructuring and Other Charges In connection with the acquisition of First Data, the Company continues to implement certain integration plans focused on reducing the Company’s overall cost structure, including reducing vendor spend and eliminating duplicate costs. The Company recorded restructuring charges related to certain of these integration activities of $41 million and $181 million, primarily reported in cost of processing and services and selling, general and administrative expenses within the consolidated statements of income, based upon committed actions during the three and nine months ended September 30, 2020, respectively. The Company continues to evaluate operating efficiencies and anticipates incurring additional costs in connection with these activities but is unable to estimate those amounts at this time as such plans are not yet finalized. Employee Termination Costs The Company recorded $28 million and $105 million of employee termination costs related to severance and other separation costs for terminated employees in connection with the acquisition of First Data during the three and nine months ended September 30, 2020, respectively. The following table summarizes the changes in the reserve related to the Company’s employee severance and other separation costs during the nine months ended September 30, 2020: (In millions) Balance at December 31, 2019 $ 14 Severance and other separation costs 105 Non-cash adjustments (6) Cash payments (88) Balance at September 30, 2020 $ 25 The employee severance and other separation costs accrual balance of $25 million at September 30, 2020 is expected to be paid within the next twelve months. In addition, the Company recorded share-based compensation costs of $9 million and $32 million during the three and nine months ended September 30, 2020, respectively, related to the accelerated vesting of equity awards for terminated employees. The Company expects to incur additional employee termination costs as a result of finalizing and executing further integration activities in 2020. Facility Exit Costs The Company has identified certain leased facilities that have been or will be exited in the future as part of the Company’s efforts to reduce facility costs. During the first nine months of 2020, the Company permanently vacated certain of these leased facilities in advance of the non-cancellable lease terms. In conjunction with the exit of these leased facilities, the Company assessed the respective operating lease ROU assets for impairment by comparing the carrying values of the ROU assets to the discounted cash flows from estimated sublease payments (Level 3 of the fair value hierarchy). In addition, the Company assessed certain property and equipment associated with the leased facilities for impairment. As a result, the Company recorded non-cash impairment charges of $4 million and $44 million, reported in selling, general and administrative expense within the consolidated statements of income during the three and nine months ended September 30, 2020, respectively, associated with the early exit of these leased facilities. Other Costs During the first quarter of 2020, in connection with initiatives to reduce the Company’s overall cost structure following the acquisition of First Data, the Company terminated certain of its existing lease agreements to upgrade and consolidate its computing infrastructure. The Company upgraded or replaced certain leased hardware under separate, new lease agreements, resulting in the early termination and disposal of existing hardware under the current lease agreements. As such, the Company has adjusted the amortization period for these existing lease agreements to coincide with the modified remaining term. Finance lease expense during the three and nine months ended September 30, 2020 includes $17 million and $62 million, respectively, of accelerated amortization associated with the termination of these vendor contracts. In addition, the Company executed similar terminations to certain of its existing software financing agreements. Amortization expense during the three and nine months ended September 30, 2020 includes $18 million and $53 million, respectively, of accelerated amortization associated with the termination of these vendor contracts. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax provision and effective income tax rate were as follows: Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Income tax provision $ 124 $ 53 $ 176 $ 144 Effective income tax rate 32.5 % 20.7 % 21.1 % 17.9 % The income tax provision as a percentage of income before income taxes and income from investments in unconsolidated affiliates was 32.5% and 20.7% for the three months ended September 30, 2020 and 2019, respectively, and was 21.1% and 17.9% for the nine months ended September 30, 2020 and 2019, respectively. The effective tax rate for the three months ended September 30, 2020 includes $32 million of income tax expense related to the revaluation of certain net deferred tax liabilities as a result of an increase in the United Kingdom corporate income tax rate from 17% to 19% in the quarter. The effective income tax rate for the nine months ended September 30, 2020 also includes $112 million of income tax expense associated with the $428 million gain on the sale of a 60% interest of the Company’s Investment Services business (see Note 4). The effective income tax rate in the nine months ended September 30, 2019 included discrete tax benefits due to a loss from subsidiary restructuring. The Company’s potential liability for unrecognized tax benefits before interest and penalties was approximately $185 million at September 30, 2020. The Company believes it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $66 million over the next twelve months as a result of possible closure of federal tax audits, potential settlements with certain states and foreign countries, and the lapse of the statutes of limitations in various state and foreign jurisdictions. As of September 30, 2020, the Company’s U.S. federal income tax returns for 2016 through 2019, and tax returns in certain states and foreign jurisdictions for 2005 through 2019, remain subject to examination by taxing authorities. In connection with the acquisition of First Data, the Company is subject to income tax examination from 2008 forward in relation to First Data’s U.S. federal income tax return. State and local examinations are substantially complete through 2010 in relation to First Data’s state and local tax filings. Foreign jurisdictions generally remain subject to examination by their respective authorities from 2007 forward, none of which are considered significant jurisdictions. |
Shares Used in Computing Net In
Shares Used in Computing Net Income Per Share Attributable to Fiserv, Inc. | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Shares Used in Computing Net Income Per Share Attributable to Fiserv, Inc. | Shares Used in Computing Net Income Per Share Attributable to Fiserv, Inc. The computation of shares used in calculating basic and diluted net income per common share is as follows: Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - basic 669.8 584.8 672.6 456.3 Common stock equivalents 10.5 12.1 11.5 8.9 Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - diluted 680.3 596.9 684.1 465.2 For the three months ended September 30, 2020 and 2019, stock options for 2.6 million and 1.2 million shares, respectively, were excluded from the calculation of weighted-average outstanding shares - diluted because their impact was anti-dilutive. For the nine months ended September 30, 2020 and 2019, stock options for 2.0 million and 1.1 million shares, respectively, were excluded from the calculation of weighted-average outstanding shares - diluted because their impact was anti-dilutive. |
Cash Flow Information
Cash Flow Information | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow Information | Cash Flow Information Supplemental cash flow information consisted of the following: Nine Months Ended (In millions) 2020 2019 Interest paid $ 548 $ 149 Income taxes paid 143 155 Treasury stock purchases settled after the balance sheet date — 10 Distribution of nonmonetary assets (see Notes 4 and 13) 726 — Financed software arrangements 130 — |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation In the normal course of business, the Company or its subsidiaries are named as defendants in lawsuits in which claims are asserted against the Company. In addition, the Company assumed certain legal proceedings in connection with the acquisition of First Data (see Note 4) primarily associated with its merchant business including claims related to alleged processing errors and a tax matter. In the second quarter of 2020, the Company resolved a matter with the Federal Trade Commission related to a U.S.-based wholesale independent sales organization resulting in a payment of $40 million, for which the Company previously had accrued. The Company maintained reserves of $27 million and $43 million at September 30, 2020 and December 31, 2019, respectively, related to its various legal proceedings, primarily associated with the Company’s merchant business as described above. The Company’s estimate of the possible range of exposure for various litigation matters in excess of amounts accrued is approximately $0 million to $60 million. In the opinion of management, the liabilities, if any, which may ultimately result from such lawsuits are not expected to have a material adverse effect on the Company’s consolidated financial statements. Electronic Payments Transactions In connection with the Company’s processing of electronic payments transactions, funds received from subscribers are invested from the time the Company collects the funds until payments are made to the applicable recipients. These subscriber funds are invested in short-term, highly liquid investments. Subscriber funds, which are not included in the Company’s consolidated balance sheets, can fluctuate significantly based on consumer bill payment and debit card activity and totaled approximately $1.0 billion and $2.0 billion at September 30, 2020 and December 31, 2019, respectively. Indemnifications and Warranties The Company may indemnify its clients from certain costs resulting from claims of patent, copyright or trademark infringement associated with its clients’ use of the Company’s products or services. The Company may also warrant to clients that its products and services will operate substantially in accordance with identified specifications. From time to time, in connection with sales of businesses, the Company agrees to indemnify the buyers of such businesses for liabilities associated with the businesses that are sold. Payments, net of recoveries, under such indemnification or warranty provisions were not material to the Company’s consolidated results of operations or financial position. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Merchant Alliances The Company maintains various ownership interests in merchant alliances and strategic investments in companies in related markets. At September 30, 2020, the Company had 16 affiliates, the most significant of which are related to the Company’s merchant bank alliance affiliates. A merchant alliance, as it pertains to investments accounted for under the equity method, is an agreement between the Company and a financial institution that combines the processing capabilities and management expertise of the Company with the visibility and distribution channel of the bank. A merchant alliance acquires credit and debit card transactions from merchants. A significant portion of the Company’s business is conducted through merchant alliances between the Company and financial institutions. To the extent the Company maintains a controlling financial interest in an alliance, the alliance’s financial statements are consolidated with those of the Company and the related processing fees are treated as an intercompany transaction and eliminated in consolidation. To the extent the Company has significant influence but not control in an alliance, the Company uses the equity method of accounting to account for its investment in the alliance. As a result, the Company’s consolidated revenues include processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method. Such fees totaled $47 million and $134 million for the three and nine months ended September 30, 2020, respectively, and $31 million for both the three and nine months ended September 30, 2019. No directors or officers of the Company have ownership interests in any of the alliances. The formation of each of these alliances generally involves the Company and the bank contributing contractual merchant relationships to the alliance and a cash payment from one owner to the other to achieve the desired ownership percentage for each. The Company and the bank enter into a long-term processing service agreement as part of the negotiation process. This agreement governs the Company’s provision of transaction processing services to the alliance. The Company had $36 million and $35 million of amounts due from unconsolidated merchant alliances included within trade accounts receivable, net in the Company’s consolidated balance sheets at September 30, 2020 and December 31, 2019, respectively. Effective July 1, 2020, the Company and Bank of America dissolved their BAMS joint venture, of which the Company maintained a 51% controlling ownership interest. Upon the dissolution of the operations, the joint venture transferred a proportionate share of value, primarily the client contracts, to each party via an agreed upon contractual separation. The revenues and expenses of the BAMS joint venture were consolidated into the Company’s financial results through the date of dissolution. See Note 4 for additional information. Joint Venture Transition Services Agreements Pursuant to certain transition services agreements, the Company provides, at fair value, various administration, business process outsourcing, and technical and data center related services for defined periods to the Lending Joint Ventures and Investment Services business (see Notes 4 and 8). Amounts transacted through these agreements totaled $16 million and $9 million during the three months ended September 30, 2020 and 2019, respectively, and $43 million and $27 million for the nine months ended September 30, 2020 and 2019, respectively, and were primarily recognized as processing and services revenue in the Company’s consolidated statements of income. |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information Following the Segment Realignment (see Note 1), the Company’s operations are comprised of the Acceptance segment, the Fintech segment and the Payments segment. The businesses in the Acceptance segment provide a wide range of products and services to merchants around the world, including point-of-sale merchant acquiring and e-commerce services, mobile payment services, security and fraud protection products, and the Company’s cloud-based Clover POS platform, which includes a marketplace for proprietary and third-party business applications. The products and services in the global Acceptance businesses are distributed through a variety of channels, including through direct sales teams, strategic partnerships with indirect non-bank sales forces, independent software vendors, and bank and non-bank partners in the form of joint venture alliances, revenue sharing alliances and referral agreements. Many merchants, financial institutions and distribution partners within the Acceptance segment are also customers of the Company’s other segments. The businesses in the Fintech segment provide financial institutions around the world with the technology solutions they need to run their operations, including an institution’s general ledger and central information files and products and services that enable financial institutions to process customer deposit and loan accounts. As a complement to the core account processing functionality, the businesses in the global Fintech segment also provide digital banking, financial and risk management, cash management, professional services and consulting, item processing and source capture, and other products and services that support numerous types of financial transactions. In addition, some of the businesses in the Fintech segment provide products or services to corporate clients to facilitate the management of financial processes and transactions. Many of the products and services offered in the Fintech segment are integrated with solutions from the Company’s other segments. The businesses in the Payments segment provide financial institutions and corporate clients around the world with the products and services required to process digital payment transactions. This includes card transactions such as debit, credit and prepaid card processing and services, a range of network services, security and fraud protection products, card production and print services. In addition, the Payments segment businesses offer non-card digital payment software and services, including bill payment, account-to-account transfers, person-to-person payments, electronic billing, and security and fraud protection products. Clients of the global Payments segment businesses reflect a wide range of industries, including merchants, distribution partners and financial institution customers in the Company’s other segments. Corporate and Other supports the reportable segments above, and consists of amortization of acquisition-related intangible assets, unallocated corporate expenses and other activities that are not considered when management evaluates segment performance, such as gains on sales of businesses, costs associated with acquisition and divestiture activity, and the Company’s Output Solutions postage reimbursements. Corporate and Other also includes the historical results of the Company’s Investment Services business, of which the Company sold a 60% controlling interest in February 2020 (see Note 4), as well as certain transition services revenue associated with various dispositions. Operating results for each segment are presented below and include the results of First Data from July 29, 2019, the date of acquisition. Segment results for the three and nine months ended September 30, 2019 have been restated to reflect the Segment Realignment. (In millions) Acceptance Fintech Payments Corporate Total Three Months Ended September 30, 2020 Processing and services revenue $ 1,256 $ 684 $ 1,203 $ 10 $ 3,153 Product revenue 198 43 184 208 633 Total revenue $ 1,454 $ 727 $ 1,387 $ 218 $ 3,786 Operating income (loss) $ 423 $ 265 $ 599 $ (745) $ 542 Three Months Ended September 30, 2019 Processing and services revenue $ 867 $ 692 $ 1,002 $ 47 $ 2,608 Product revenue 145 43 151 181 520 Total revenue $ 1,012 $ 735 $ 1,153 $ 228 $ 3,128 Operating income (loss) $ 296 $ 223 $ 476 $ (621) $ 374 Nine Months Ended September 30, 2020 Processing and services revenue $ 3,495 $ 2,032 $ 3,540 $ 51 $ 9,118 Product revenue 583 127 553 639 1,902 Total revenue $ 4,078 $ 2,159 $ 4,093 $ 690 $ 11,020 Operating income (loss) $ 985 $ 721 $ 1,712 $ (2,082) $ 1,336 Nine Months Ended September 30, 2019 Processing and services revenue $ 867 $ 2,054 $ 2,160 $ 148 $ 5,229 Product revenue 145 137 306 325 913 Total revenue $ 1,012 $ 2,191 $ 2,466 $ 473 $ 6,142 Operating income (loss) $ 296 $ 647 $ 1,038 $ (850) $ 1,131 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements for the three and nine months ended September 30, 2020 and 2019 are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial statements have been included. Such adjustments consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and accompanying notes are presented as permitted by Form 10-Q and do not contain certain information included in the annual consolidated financial statements and accompanying notes of Fiserv, Inc. (the “Company”). These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Segment Realignment | Segment Realignment Effective in the first quarter of 2020, the Company realigned its reportable segments to correspond with changes to its operating model to reflect its new management structure and organizational responsibilities (“Segment Realignment”) following the acquisition of First Data. The Company’s new reportable segments are: Merchant Acceptance (“Acceptance”), Financial Technology (“Fintech”) and Payments and Network (“Payments”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Fiserv, Inc. and its subsidiaries in which the Company holds a controlling financial interest. Control is normally established when ownership and voting interests in an entity are greater than 50%. Investments in which the Company has significant influence but not control are accounted for using the equity method of accounting, for which the Company’s share of net income or loss is reported within income from investments in unconsolidated affiliates and the related tax expense or benefit is reported within the income tax provision in the consolidated statements of income. Significant influence over an affiliate’s operations generally coincides with an ownership interest in an entity of between 20% and 50%. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S.”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and investments with original maturities of 90 days or less. Cash and cash equivalents are stated at cost in the consolidated balance sheets, which approximates market value. Cash and cash equivalents that were restricted from use due to regulatory or other requirements are included in other long-term assets in the consolidated balance sheets |
Allowance for Doubtful Accounts | Allowance for Doubtful AccountsThe Company analyzes the collectability of trade accounts receivable by considering historical bad debts, client creditworthiness, current economic conditions, expectations of near term economic trends, changes in client payment terms and collection trends when evaluating the adequacy of the allowance for doubtful accounts for expected credit losses. Any change in the assumptions used in analyzing a specific account receivable may result in an additional allowance for doubtful accounts being recognized in the period in which the change occurs. |
Reserve for Merchant Credit Losses | Reserve for Merchant Credit Losses With respect to the Company’s merchant acquiring business, the Company’s merchant customers have the legal obligation to refund any charges properly reversed by the cardholder. However, in the event the Company is not able to collect the refunded amounts from the merchants, the Company may be liable for the reversed charges. The Company’s risk in this area primarily relates to situations where the cardholder has purchased goods or services to be delivered in the future. The Company requires cash deposits, guarantees, letters of credit or other types of collateral from certain merchants to minimize this obligation. Collateral held by the Company is classified within settlement assets and the obligation to repay the collateral is classified within settlement obligations in the Company’s consolidated balance sheets. The Company also utilizes a number of systems and procedures to manage merchant risk. Despite these efforts, the Company experiences some level of losses due to merchant defaults. The aggregate merchant credit losses, included within cost of processing and services in the consolidated statements of income, incurred by the Company was $35 million and $89 million for the three and nine months ended September 30, 2020, respectively, and $17 million for both the three and nine months ended September 30, 2019. The amount of collateral held by the Company was $982 million and $510 million at September 30, 2020 and December 31, 2019, respectively. The Company maintains reserves for merchant credit losses that are expected to exceed the amount of collateral held. The reserves include an estimated amount for anticipated chargebacks and fraud events that have been incurred on merchants’ payment transactions that have been processed but not yet reported to the Company (“IBNR Reserve”), as well as an allowance on refunded amounts to cardholders that have not yet been collected from the merchants. The IBNR Reserve, which is recorded within accounts payable |
Goodwill | Goodwill Goodwill represents the excess of purchase price over the fair value of identifiable assets acquired and liabilities assumed in a business combination. The Company evaluates goodwill for impairment on an annual basis, or more frequently if circumstances indicate possible impairment. Goodwill is tested for impairment at a reporting unit level, determined to be at an operating segment level or one level below. When assessing goodwill for impairment, the Company considers (i) the amount of excess fair value over the carrying value of each reporting unit, (ii) the period of time since a reporting unit’s last quantitative test, (iii) the extent a reorganization or disposition changes the composition of one or more of the reporting units and (iv) other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, the Company assesses numerous factors to determine whether it is more likely than not that the fair value of its reporting units are less than their respective carrying values. Examples of qualitative factors that the Company assesses include its share price, its financial performance, market and competitive factors in its industry and other events specific to its reporting units. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a quantitative impairment test by comparing reporting unit carrying values to estimated fair values. |
Other Investments | Other Investments The Company maintains investments in various equity securities without a readily determinable fair value. Such investments totaled $165 million and $167 million at September 30, 2020 and December 31, 2019, respectively, and are included within other long-term assets in the Company’s consolidated balance sheets. The Company reviews these investments each reporting period to determine whether an impairment or observable price change for the investment has occurred. When such events or changes occur, the Company evaluates the fair value compared to its cost basis in the investment. Gains or losses from a change in fair value are included within other income (expense) in the consolidated statements of income for the period. Adjustments made to the values recorded for these equity securities during the three and nine months ended September 30, 2020 and 2019 were not significant. |
Interest Expense, Net | Interest Expense, NetInterest expense, net consists of interest expense primarily associated with the Company’s outstanding borrowings and finance lease obligations, as well as interest income primarily associated with the Company’s investment securities. |
Recently Adopted And Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract within the requirements under Accounting Standards Codification (“ASC”) 350 for capitalizing implementation costs incurred to develop or obtain internal-use software. For public entities, ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance. The Company adopted ASU 2018-15 effective January 1, 2020 using a prospective approach, and the adoption did not have a material impact on its consolidated financial statements. In 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which removes, modifies, and adds certain disclosure requirements of ASC Topic 820, Fair Value Measurement . ASU 2018-13 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019 with the additional disclosures required to be applied prospectively and the modified and removed disclosures required to be applied retrospectively to all periods presented. The Company adopted ASU 2018-13 effective January 1, 2020, and the adoption did not have a material impact on its disclosures. In 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13” or “CECL”), which prescribes an impairment model for most financial instruments based on expected losses rather than incurred losses. Under this model, an estimate of expected credit losses over the contractual life of the instrument is to be recorded as of the end of a reporting period as an allowance to offset the amortized cost basis, resulting in a net presentation of the amount expected to be collected on the financial instrument. For public entities, ASU 2016-13 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2019. For most instruments, entities must apply the standard using a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2016-13 Recently Issued Accounting Pronouncements In 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (“ASU 2020-01”), which clarifies certain interactions between the guidance to account for certain equity securities, investments under the equity method of accounting, and forward contracts or purchased options to purchase securities under Topic 321, Topic 323 and Topic 815. For public entities, ASU 2020-01 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2020. The Company does not currently expect the adoption to have a material impact on its consolidated financial statements or disclosures. In 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which introduces a number of amendments that are designed to simplify the application of accounting for income taxes. Such amendments include removing certain exceptions for intraperiod tax allocation, interim reporting when a year-to-date loss exceeds the anticipated loss, reflecting the effect of an enacted change in tax laws or rates in the annual effective tax rate and recognition of deferred taxes related to outside basis differences for ownership changes in investments. ASU 2019-12 also provides clarification related to when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. In addition, ASU 2019-12 provides guidance on the recognition of a franchise tax (or similar tax) that is partially based on income as an income-based tax and accounting for any incremental amount incurred as a non-income-based tax. For public entities, ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company plans to adopt ASU 2019-12 effective January 1, 2021, and does not expect the adoption to have a material impact on its consolidated financial statements. In 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU 2018-14”), which removes, clarifies and adds certain disclosure requirements of ASC Topic 715, Compensation - Retirement Benefits . ASU 2018-14 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. Entities must apply the disclosure updates retrospectively. The Company does not currently expect the adoption to have a material impact on its disclosures. |
Revenue from Contract with Customer | The Company generates revenue from the delivery of processing, service and product solutions. Revenue is measured based on consideration specified in a contract with a customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer which may be at a point in time or over time.Contract assets, reported within other long-term assets in the consolidated balance sheets, primarily result from revenue being recognized where payment is contingent upon the transfer of services to a customer over the contractual period. Contract liabilities primarily relate to advance consideration received from customers (deferred revenue) for which transfer of control occurs, and therefore revenue is recognized, as services are provided. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.The Company applies the optional exemption under ASC Topic 606 (“ASC 606”) and does not disclose information about remaining performance obligations for account- and transaction-based processing fees that qualify for recognition under the as-invoiced practical expedient. These multi-year contracts contain variable consideration for stand-ready performance obligations for which the exact quantity and mix of transactions to be processed are contingent upon the customer’s request. The Company also applies the optional exemptions under ASC 606 and does not disclose information for variable consideration that is a sales-based or usage-based royalty promised in exchange for a license of intellectual property or that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service in a series. The amounts disclosed above as remaining performance obligations consist primarily of fixed or monthly minimum processing fees and maintenance fees under contracts with an original expected duration of greater than one year. |
Acquisitions | The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”). The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is deductible for tax purposes. Goodwill is primarily attributed to synergies from future expected economic benefits, including enhanced revenue growth from expanded capabilities and geographic presence as well as substantial cost savings from duplicative overhead, streamlined operations and enhanced operational efficiency. |
Fair Value Measurements | The fair values of cash equivalents, trade accounts receivable, settlement assets and obligations, accounts payable, and client deposits approximate their respective carrying values due to the short period of time to maturity. The Company’s derivative instruments are measured on a recurring basis based on foreign currency spot rates and forwards quoted by banks and foreign currency dealers and are marked-to-market each period (see Note 14). |
Company as Lessee | Company as LesseeThe Company primarily leases office space, land, data centers and equipment from third parties. The Company’s leases have remaining lease terms ranging from one |
Company as Lessor | Company as Lessor In connection with the acquisition of First Data, the Company owns certain POS terminal equipment which it leases to merchants. The terms of the leases typically range from two |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The tables below present the Company’s revenue disaggregated by type of revenue, including a reconciliation with its reportable segments. The Company’s disaggregation of revenue for the three and nine months ended September 30, 2019 have been restated to reflect the Segment Realignment. The majority of the Company’s revenue is earned domestically, with revenue generated outside the United States comprising approximately 14% of total revenue for both the three months ended September 30, 2020 and 2019, and 13% and 10% of total revenue for the nine months ended September 30, 2020 and 2019, respectively. (In millions) Reportable Segments Three Months Ended September 30, 2020 Acceptance Fintech Payments Corporate Total Type of Revenue Processing $ 1,245 $ 364 $ 1,112 $ 9 $ 2,730 Hardware, print and card production 179 12 176 — 367 Professional services 9 120 59 — 188 Software maintenance — 141 1 — 142 License and termination fees 7 41 21 — 69 Output solutions postage — — — 207 207 Other 14 49 18 2 83 Total Revenue $ 1,454 $ 727 $ 1,387 $ 218 $ 3,786 (In millions) Reportable Segments Three Months Ended September 30, 2019 Acceptance Fintech Payments Corporate Total Type of Revenue Processing $ 861 $ 346 $ 911 $ 40 $ 2,158 Hardware, print and card production 133 10 142 — 285 Professional services 3 126 56 3 188 Software maintenance — 144 1 3 148 License and termination fees 4 61 16 1 82 Output solutions postage — — — 180 180 Other 11 48 27 1 87 Total Revenue $ 1,012 $ 735 $ 1,153 $ 228 $ 3,128 (In millions) Reportable Segments Nine Months Ended September 30, 2020 Acceptance Fintech Payments Corporate Total Type of Revenue Processing $ 3,466 $ 1,064 $ 3,265 $ 47 $ 7,842 Hardware, print and card production 531 33 528 — 1,092 Professional services 20 347 174 1 542 Software maintenance — 423 2 2 427 License and termination fees 19 139 61 — 219 Output solutions postage — — — 640 640 Other 42 153 63 — 258 Total Revenue $ 4,078 $ 2,159 $ 4,093 $ 690 $ 11,020 (In millions) Reportable Segments Nine Months Ended September 30, 2019 Acceptance Fintech Payments Corporate Total Type of Revenue Processing $ 861 $ 1,030 $ 1,938 $ 129 $ 3,958 Hardware, print and card production 133 33 292 — 458 Professional services 3 364 105 7 479 Software maintenance — 430 2 11 443 License and termination fees 4 181 47 1 233 Output solutions postage — — — 324 324 Other 11 153 82 1 247 Total Revenue $ 1,012 $ 2,191 $ 2,466 $ 473 $ 6,142 |
Contract with customer, asset and liabilities | The following table provides information about contract assets and contract liabilities from contracts with customers: (In millions) September 30, 2020 December 31, 2019 Contract assets $ 383 $ 382 Contract liabilities 621 647 |
Schedule of remaining performance obligations | The following table includes estimated processing, services and product revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at September 30, 2020: (In millions) Year ending December 31, Remainder of 2020 $ 544 2021 1,839 2022 1,442 2023 1,129 Thereafter 2,093 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of total purchase price paid | The total purchase price paid for First Data is as follows: (In millions) Fair value of stock exchanged for shares of Fiserv, Inc. (1) $ 29,293 Repayment of First Data debt 16,414 Fair value of vested portion of First Data stock awards exchanged for Fiserv, Inc. awards (2) 768 Total purchase price $ 46,475 (1) The fair value of the 286 million shares of the Company’s common stock issued as of the acquisition date was determined based on a per share price of $102.30, which was the closing price of the Company’s common stock on July 26, 2019, the last trading day before the acquisition closed the morning of July 29, 2019. This includes a nominal amount of cash paid in lieu of fractional shares. (2) Represents the portion of the fair value of the replacement awards related to services provided prior to the acquisition. The remaining portion of the fair value is associated with future service and will be recognized as expense over the future service period. |
Schedule of purchase price allocation | The allocation of purchase price recorded for First Data was finalized in the third quarter of 2020 as follows: (In millions) Assets acquired (1) Cash and cash equivalents $ 310 Trade accounts receivable 1,747 Prepaid expenses and other current assets 1,047 Settlement assets 10,398 Property and equipment 1,156 Customer relationships 13,458 Other intangible assets 2,814 Goodwill 30,811 Investments in unconsolidated affiliates 2,676 Other long-term assets 1,191 Total assets acquired $ 65,608 Liabilities assumed (1) Accounts payable and accrued expenses $ 1,613 Short-term and current maturities of long-term debt (2) 243 Contract liabilities 71 Settlement obligations 10,398 Deferred income taxes 3,671 Long-term contract liabilities 16 Long-term debt and other long-term liabilities (3) 1,261 Total liabilities assumed $ 17,273 Net assets acquired $ 48,335 Redeemable noncontrolling interests 252 Noncontrolling interests 1,608 Total purchase price $ 46,475 (1) In connection with the acquisition of First Data, the Company acquired two businesses which it intended to sell and subsequently sold in October 2019. Therefore, such businesses were classified as held for sale and were included within prepaid expenses and other current assets and accounts payable and accrued expenses in the above allocation of purchase price. (2) Includes foreign lines of credit, current portion of finance lease obligations and other financing obligations. (3) Includes the receivable securitized loan and the long-term portion of finance lease obligations. |
Schedule of gross carrying amount and weighted-average useful life allocated to intangible assets | The amounts allocated to intangible assets are as follows: (In millions) Gross Carrying Amount Weighted-Average Useful Life Customer relationships $ 13,458 15 years Acquired software and technology 2,324 7 years Trade names 490 9 years Total $ 16,272 14 years |
Schedule of pro forma combined financial information | The following unaudited supplemental pro forma combined financial information presents the Company’s results of operations for the nine months ended September 30, 2019 as if the acquisition of First Data had occurred on January 1, 2019. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the Company’s operating results that may have actually occurred had the acquisition of First Data been completed on January 1, 2019. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may be associated with the acquisition, or any estimated costs that have been or will be incurred by the Company to integrate the assets and operations of First Data. (In millions, except for per share data) Nine Months Ended September 30, 2019 Total revenue $ 11,730 Net income 463 Net income attributable to Fiserv, Inc. 400 Net income per share attributable to Fiserv, Inc.: Basic $ 0.59 Diluted $ 0.58 |
Settlement Assets and Obligat_2
Settlement Assets and Obligations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of settlement assets and obligations | The principal components of the Company’s settlement assets and obligations were as follows: (In millions) September 30, 2020 December 31, 2019 Settlement assets Cash and cash equivalents $ 1,386 $ 1,656 Receivables 8,017 10,212 Total settlement assets $ 9,403 $ 11,868 Settlement obligations Payment instruments outstanding $ 391 $ 345 Card settlements due to merchants 9,012 11,523 Total settlement obligations $ 9,403 $ 11,868 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets by class | Identifiable intangible assets consisted of the following: (In millions) Gross Accumulated Net Book September 30, 2020 Customer relationships $ 15,124 $ 3,217 $ 11,907 Acquired software and technology 2,555 802 1,753 Trade names 616 154 462 Capitalized software and other intangibles 1,236 400 836 Purchased software 930 239 691 Total $ 20,461 $ 4,812 $ 15,649 (In millions) Gross Accumulated Net Book December 31, 2019 Customer relationships $ 16,187 $ 2,145 $ 14,042 Acquired software and technology 2,607 639 1,968 Trade names 620 105 515 Capitalized software and other intangibles 942 332 610 Purchased software 680 173 507 Total $ 21,036 $ 3,394 $ 17,642 |
Schedule of amortization expense of intangible assets | Amortization expense associated with the above identifiable intangible assets was as follows: Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Amortization expense $ 623 $ 459 $ 1,934 $ 650 |
Schedule of estimated annual amortization expense of intangible assets | The Company estimates that annual amortization expense with respect to intangible assets recorded at September 30, 2020 will be as follows: (In millions) Year ending December 31, Remainder of 2020 $ 621 2021 2,432 2022 2,244 2023 1,979 2024 1,531 Thereafter 6,842 Total $ 15,649 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in goodwill during the nine months ended September 30, 2020 were as follows: Reportable Segments (In millions) Acceptance Fintech Payments Total Goodwill - December 31, 2019 (1) $ 21,189 $ 2,104 $ 12,745 $ 36,038 Acquisitions and valuation adjustments 325 — 60 385 Foreign currency translation (438) — (77) (515) Goodwill - September 30, 2020 $ 21,076 $ 2,104 $ 12,728 $ 35,908 (1) Amounts have been restated to reflect the Segment Realignment effective in the first quarter of 2020 (see Note 22). |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets and liabilities measured on recurring basis | Assets and liabilities measured at fair value on a recurring basis consisted of the following: Fair Value (In millions) Classification Fair Value Hierarchy September 30, December 31, Assets Cash flow hedges Prepaid expenses and other current assets Level 2 $ 5 $ 4 Liabilities Contingent consideration Accounts payable and accrued expenses Level 3 34 — Contingent consideration Other long-term liabilities Level 3 17 1 Contingent debt guarantee Other long-term liabilities Level 3 10 — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of cost, supplemental cash flow and other information related to leases | Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Operating lease cost (1) $ 60 $ 64 $ 183 $ 141 Finance lease cost (2) Amortization of right-of-use assets 48 16 137 18 Interest on lease liabilities 7 3 16 3 Total lease cost $ 115 $ 83 $ 336 $ 162 (1) Operating lease expense is included within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the right-of-use (“ROU”) asset, in the consolidated statements of income. Operating lease cost includes approximately $8 million and $14 million of variable lease costs for the three months ended September 30, 2020 and 2019, respectively, and $27 million and $42 million for the nine months ended September 30, 2020 and 2019, respectively. (2) Finance lease expense is recorded as depreciation and amortization expense within cost of processing and services, cost of product and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, and interest expense, net in the consolidated statements of income. Finance lease expense during the three and nine months ended September 30, 2020 includes $17 million and $62 million, respectively, of accelerated amortization associated with the termination of certain vendor contracts (see Note 16). Supplemental Cash Flow Information Nine Months Ended (In millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 116 $ 94 Operating cash flows from finance leases 16 3 Financing cash flows from finance leases 161 17 Right-of-use assets obtained in exchange for lease liabilities: (1) Operating leases $ 2 $ 459 Finance leases 331 288 (1) Amounts in 2019 include the right-of-use assets and lease liabilities obtained through the acquisition of First Data. |
Schedule of components of lease income | Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Sales-type leases: Selling profit (1) $ 8 $ 8 $ 34 $ 8 Interest income (1) 20 15 57 15 Operating lease income (2) 21 14 69 14 (1) Selling profit includes $26 million and $78 million recorded within product revenue with a corresponding charge of $18 million and $44 million recorded within cost of product in the consolidated statements of income for the three and nine months ended September 30, 2020, respectively. Selling profit includes $21 million recorded within product revenue with a corresponding charge of $13 million recorded within cost of product in the consolidated statements of income for the both the three and nine months ended September 30, 2019. Interest income is included within product revenue in the consolidated statements of income. (2) Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statements of income for the three and nine months ended September 30, 2020 and 2019. |
Schedule of components of lease income | Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Sales-type leases: Selling profit (1) $ 8 $ 8 $ 34 $ 8 Interest income (1) 20 15 57 15 Operating lease income (2) 21 14 69 14 (1) Selling profit includes $26 million and $78 million recorded within product revenue with a corresponding charge of $18 million and $44 million recorded within cost of product in the consolidated statements of income for the three and nine months ended September 30, 2020, respectively. Selling profit includes $21 million recorded within product revenue with a corresponding charge of $13 million recorded within cost of product in the consolidated statements of income for the both the three and nine months ended September 30, 2019. Interest income is included within product revenue in the consolidated statements of income. (2) Operating lease income includes a nominal amount of variable lease income and is included within product revenue in the consolidated statements of income for the three and nine months ended September 30, 2020 and 2019. |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following: (In millions) September 30, 2020 December 31, 2019 Trade accounts payable $ 373 $ 392 Client deposits 689 650 Accrued compensation and benefits 377 378 Accrued taxes 93 137 Accrued interest 182 224 Other accrued expenses 1,330 1,299 Total $ 3,044 $ 3,080 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt, net of discounts and debt issuance costs | The Company’s debt consisted of the following: (In millions) September 30, 2020 December 31, 2019 Short-term and current maturities of long-term debt: Lines of credit $ 121 $ 150 Finance lease and other financing obligations 244 137 Total short-term and current maturities of long-term debt $ 365 $ 287 Long-term debt: 2.7% senior notes due 2020 $ — $ 850 4.75% senior notes due 2021 400 400 3.5% senior notes due 2022 700 700 3.8% senior notes due 2023 1,000 1,000 0.375% senior notes due 2023 584 559 2.75% senior notes due 2024 2,000 2,000 3.85% senior notes due 2025 900 900 2.25% senior notes due 2025 676 687 3.2% senior notes due 2026 2,000 2,000 1.125% senior notes due 2027 584 559 2.25% senior notes due 2027 1,000 — 4.2% senior notes due 2028 1,000 1,000 3.5% senior notes due 2029 3,000 3,000 1.625% senior notes due 2030 584 559 2.65% senior notes due 2030 1,000 — 3.0% senior notes due 2031 676 687 4.4% senior notes due 2049 2,000 2,000 Receivable securitized loan 500 500 Term loan facility 1,750 3,950 Unamortized discount and deferred financing costs (161) (160) Revolving credit facility 219 174 Finance lease and other financing obligations 482 247 Total long-term debt $ 20,894 $ 21,612 |
Schedule of annual maturities of total debt | Annual maturities of the Company’s total debt were as follows at September 30, 2020: (In millions) Year ending December 31, Remainder of 2020 $ 282 2021 177 2022 1,346 2023 2,334 2024 3,843 Thereafter 13,438 Total principal payments 21,420 Unamortized discount and deferred financing costs (161) Total debt $ 21,259 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of redeemable noncontrolling interests activity | The following table presents a summary of the redeemable noncontrolling interests activity during the nine months ended September 30, 2020: (In millions) Balance at December 31, 2019 $ 262 Distributions paid to redeemable noncontrolling interests (31) Share of income 29 Balance at September 30, 2020 $ 260 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of stockholders equity | The following tables provide changes in equity during the three and nine months ended September 30, 2020 and 2019. Fiserv, Inc. Shareholders’ Equity Three Months Ended Number of Shares Amount (In millions) Common Shares Treasury Shares Common Stock Additional Accumulated Retained Treasury Stock Noncontrolling Interests Total Equity Balance at June 30, 2020 791 122 $ 8 $ 23,771 $ (644) $ 12,877 $ (4,429) $ 1,445 $ 33,028 Net income (1) 264 1 265 Net adjustment to noncontrolling interests from dissolution (see Note 4) (36) (726) (762) Other comprehensive income (loss) (187) 17 (170) Share-based compensation 84 84 Shares issued under stock plans (1) (48) 32 (16) Balance at September 30, 2020 791 121 $ 8 $ 23,771 $ (831) $ 13,141 $ (4,397) $ 737 $ 32,429 (1) The total net income presented in equity for the three months ended September 30, 2020 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $11 million not included in equity. Fiserv, Inc. Shareholders’ Equity Three Months Ended Number of Shares Amount (In millions) Common Shares Treasury Shares Common Stock Additional Accumulated Retained Treasury Stock Total Equity Noncontrolling Interests Balance at June 30, 2019 791 399 $ 8 $ 1,056 $ (193) $ 12,083 $ (10,408) $ — $ 2,546 Shares issued to acquire First Data (see Note 4) (286) 22,582 7,478 1,119 31,179 Distributions paid to noncontrolling interests (51) (51) Net income (1) 198 23 221 Other comprehensive loss (186) (186) Share-based compensation 87 87 Shares issued under stock plans (2) (57) 57 — Purchases of treasury stock — (36) (36) Balance at September 30, 2019 791 111 $ 8 $ 23,668 $ (379) $ 12,281 $ (2,909) $ 1,091 $ 33,760 (1) The total net income presented in equity for the three months ended September 30, 2019 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $4 million not included in equity. Fiserv, Inc. Shareholders’ Equity Nine Months Ended Number of Shares Amount (In millions) Common Shares Treasury Shares Common Stock Additional Accumulated Retained Treasury Stock Noncontrolling Interests Total Equity Balance at December 31, 2019 791 112 $ 8 $ 23,741 $ (180) $ 12,528 $ (3,118) $ 1,616 $ 34,595 Net income (loss) (1) 658 (25) 633 Measurement period adjustments related to First Data acquisition (see Note 4) (126) (126) Distributions paid to noncontrolling interests (2) (30) (30) Net adjustment to noncontrolling interests from dissolution (see Note 4) (36) (726) (762) Other comprehensive (loss) income (651) 28 (623) Share-based compensation 286 286 Shares issued under stock plans (5) (220) 156 (64) Purchases of treasury stock 14 (1,435) (1,435) Cumulative-effect adjustment of ASU 2016-13 (45) (45) Balance at September 30, 2020 791 121 $ 8 $ 23,771 $ (831) $ 13,141 $ (4,397) $ 737 $ 32,429 (1) The total net income presented in equity for the nine months ended September 30, 2020 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $29 million not included in equity. (2) The total distributions presented in equity for the nine months ended September 30, 2020 excludes $31 million in distributions paid to redeemable noncontrolling interests not included in equity. Fiserv, Inc. Shareholders’ Equity Nine Months Ended Number of Shares Amount (In millions) Common Shares Treasury Shares Common Stock Additional Accumulated Retained Treasury Stock Total Equity Noncontrolling Interests Balance at December 31, 2018 791 399 $ 8 $ 1,057 $ (67) $ 11,635 $ (10,340) $ — $ 2,293 Shares issued to acquire First Data (See Note 4) (286) 22,582 7,478 1,119 31,179 Distributions paid to noncontrolling interests (51) (51) Net income (1) 646 23 669 Other comprehensive loss (312) (312) Share-based compensation 121 121 Shares issued under stock plans (4) (92) 109 17 Purchases of treasury stock 2 (156) (156) Balance at September 30, 2019 791 111 $ 8 $ 23,668 $ (379) $ 12,281 $ (2,909) $ 1,091 $ 33,760 (1) The total net income presented in equity for the nine months ended September 30, 2019 is different than the amount presented in the consolidated statement of income due to net income attributable to the redeemable noncontrolling interests of $4 million not included in equity. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Changes in accumulated other comprehensive loss by component, net of income taxes | Changes in accumulated other comprehensive loss by component, net of income taxes, consisted of the following: Three Months Ended September 30, 2020 (In millions) Cash Flow Foreign Pension Plans Total Balance at June 30, 2020 $ (138) $ (500) $ (6) $ (644) Other comprehensive income (loss) before reclassifications 6 (197) — (191) Amounts reclassified from accumulated other comprehensive loss 4 — — 4 Net current-period other comprehensive income (loss) 10 (197) — (187) Balance at September 30, 2020 $ (128) $ (697) $ (6) $ (831) Three Months Ended September 30, 2019 (In millions) Cash Flow Foreign Pension Plans Total Balance at June 30, 2019 $ (144) $ (47) $ (2) $ (193) Other comprehensive loss before reclassifications (4) (186) — (190) Amounts reclassified from accumulated other comprehensive loss 4 — — 4 Net current-period other comprehensive loss — (186) — (186) Balance at September 30, 2019 $ (144) $ (233) $ (2) $ (379) Nine Months Ended September 30, 2020 (In millions) Cash Flow Foreign Pension Plans Total Balance at December 31, 2019 $ (141) $ (33) $ (6) $ (180) Other comprehensive income (loss) before reclassifications 1 (664) — (663) Amounts reclassified from accumulated other comprehensive loss 12 — — 12 Net current-period other comprehensive income (loss) 13 (664) — (651) Balance at September 30, 2020 $ (128) $ (697) $ (6) $ (831) Nine Months Ended September 30, 2019 (In millions) Cash Flow Foreign Pension Plans Total Balance at December 31, 2018 $ (16) $ (49) $ (2) $ (67) Other comprehensive loss before reclassifications (134) (184) — (318) Amounts reclassified from accumulated other comprehensive loss 6 — — 6 Net current-period other comprehensive loss (128) (184) — (312) Balance at September 30, 2019 $ (144) $ (233) $ (2) $ (379) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock option activity | A summary of stock option activity is as follows: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In millions) Stock options outstanding - December 31, 2019 15,989 $ 42.83 Granted 1,503 112.87 Forfeited (158) 92.47 Exercised (2,195) 34.31 Stock options outstanding - September 30, 2020 15,139 $ 50.51 4.82 $ 810 Stock options exercisable - September 30, 2020 12,438 $ 40.82 4.00 $ 774 |
Summary of restricted stock and performance activity | A summary of restricted stock unit and performance share unit activity is as follows: Restricted Stock Units Performance Share Units Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Units - December 31, 2019 6,869 $ 93.80 2,328 $ 94.61 Granted 1,336 111.71 — — Forfeited (220) 92.28 (28) 90.44 Vested (3,227) 95.84 (479) 92.62 Units - September 30, 2020 4,758 $ 97.46 1,821 $ 95.20 A summary of restricted stock award activity is as follows: Restricted Stock Awards Shares Weighted-Average Grant Date Fair Value Awards - December 31, 2019 48 $ 102.30 Granted — — Forfeited — — Vested — — Awards - September 30, 2020 48 $ 102.30 |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of changes in reserves | The following table summarizes the changes in the reserve related to the Company’s employee severance and other separation costs during the nine months ended September 30, 2020: (In millions) Balance at December 31, 2019 $ 14 Severance and other separation costs 105 Non-cash adjustments (6) Cash payments (88) Balance at September 30, 2020 $ 25 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision and effective income tax rate | The Company’s income tax provision and effective income tax rate were as follows: Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Income tax provision $ 124 $ 53 $ 176 $ 144 Effective income tax rate 32.5 % 20.7 % 21.1 % 17.9 % |
Shares Used in Computing Net _2
Shares Used in Computing Net Income Per Share Attributable to Fiserv, Inc. (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computation of shares used in calculating basic and diluted net income per common share | The computation of shares used in calculating basic and diluted net income per common share is as follows: Three Months Ended Nine Months Ended (In millions) 2020 2019 2020 2019 Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - basic 669.8 584.8 672.6 456.3 Common stock equivalents 10.5 12.1 11.5 8.9 Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - diluted 680.3 596.9 684.1 465.2 |
Cash Flow Information (Tables)
Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow information | Supplemental cash flow information consisted of the following: Nine Months Ended (In millions) 2020 2019 Interest paid $ 548 $ 149 Income taxes paid 143 155 Treasury stock purchases settled after the balance sheet date — 10 Distribution of nonmonetary assets (see Notes 4 and 13) 726 — Financed software arrangements 130 — |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Operating results for each segment are presented below and include the results of First Data from July 29, 2019, the date of acquisition. Segment results for the three and nine months ended September 30, 2019 have been restated to reflect the Segment Realignment. (In millions) Acceptance Fintech Payments Corporate Total Three Months Ended September 30, 2020 Processing and services revenue $ 1,256 $ 684 $ 1,203 $ 10 $ 3,153 Product revenue 198 43 184 208 633 Total revenue $ 1,454 $ 727 $ 1,387 $ 218 $ 3,786 Operating income (loss) $ 423 $ 265 $ 599 $ (745) $ 542 Three Months Ended September 30, 2019 Processing and services revenue $ 867 $ 692 $ 1,002 $ 47 $ 2,608 Product revenue 145 43 151 181 520 Total revenue $ 1,012 $ 735 $ 1,153 $ 228 $ 3,128 Operating income (loss) $ 296 $ 223 $ 476 $ (621) $ 374 Nine Months Ended September 30, 2020 Processing and services revenue $ 3,495 $ 2,032 $ 3,540 $ 51 $ 9,118 Product revenue 583 127 553 639 1,902 Total revenue $ 4,078 $ 2,159 $ 4,093 $ 690 $ 11,020 Operating income (loss) $ 985 $ 721 $ 1,712 $ (2,082) $ 1,336 Nine Months Ended September 30, 2019 Processing and services revenue $ 867 $ 2,054 $ 2,160 $ 148 $ 5,229 Product revenue 145 137 306 325 913 Total revenue $ 1,012 $ 2,191 $ 2,466 $ 473 $ 6,142 Operating income (loss) $ 296 $ 647 $ 1,038 $ (850) $ 1,131 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) | Jul. 29, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Business Acquisition [Line Items] | ||||||
Restricted cash and cash equivalents | $ 14,000,000 | $ 40,000,000 | $ 14,000,000 | |||
Allowance for doubtful accounts | 47,000,000 | 39,000,000 | 47,000,000 | |||
Goodwill impairment | 0 | |||||
Accumulated impairment loss | 0 | 0 | ||||
Equity securities without a readily determinable fair value | 165,000,000 | 167,000,000 | 165,000,000 | |||
Interest expense | 176,000,000 | $ 187,000,000 | 541,000,000 | $ 309,000,000 | ||
Interest income | 2,000,000 | 23,000,000 | 6,000,000 | 30,000,000 | ||
First Data | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of business acquired | 100.00% | |||||
Total purchase price for acquisition | $ 46,475,000,000 | |||||
Merchant credit losses | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate merchant credit losses incurred | 35,000,000 | $ 17,000,000 | 89,000,000 | $ 17,000,000 | ||
Collateral held | 982,000,000 | 510,000,000 | 982,000,000 | |||
Loss contingency accrual | $ 63,000,000 | $ 34,000,000 | $ 63,000,000 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jan. 01, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | |||||
Cumulative-effect decrease to beginning retained earnings | $ (32,429) | $ (34,595) | $ (33,028) | $ (33,760) | $ (2,546) | $ (2,293) | |
Cumulative Effect, Period of Adoption, Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative-effect decrease to beginning retained earnings | 45 | ||||||
Retained Earnings | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative-effect decrease to beginning retained earnings | $ (13,141) | (12,528) | $ (12,877) | $ (12,281) | $ (12,083) | $ (11,635) | |
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative-effect decrease to beginning retained earnings | $ 45 | $ 45 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 3,786 | $ 3,128 | $ 11,020 | $ 6,142 |
Operating segments | Acceptance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,454 | 1,012 | 4,078 | 1,012 |
Operating segments | Fintech | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 727 | 735 | 2,159 | 2,191 |
Operating segments | Payments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,387 | 1,153 | 4,093 | 2,466 |
Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 218 | $ 228 | $ 690 | $ 473 |
Geographic Concentration Risk | Non-US | Sales Revenue, Net | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of concentration risk | 14.00% | 14.00% | 13.00% | 10.00% |
Processing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 2,730 | $ 2,158 | $ 7,842 | $ 3,958 |
Processing | Operating segments | Acceptance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,245 | 861 | 3,466 | 861 |
Processing | Operating segments | Fintech | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 364 | 346 | 1,064 | 1,030 |
Processing | Operating segments | Payments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,112 | 911 | 3,265 | 1,938 |
Processing | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9 | 40 | 47 | 129 |
Hardware, print and card production | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 367 | 285 | 1,092 | 458 |
Hardware, print and card production | Operating segments | Acceptance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 179 | 133 | 531 | 133 |
Hardware, print and card production | Operating segments | Fintech | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 12 | 10 | 33 | 33 |
Hardware, print and card production | Operating segments | Payments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 176 | 142 | 528 | 292 |
Hardware, print and card production | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 188 | 188 | 542 | 479 |
Professional services | Operating segments | Acceptance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9 | 3 | 20 | 3 |
Professional services | Operating segments | Fintech | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 120 | 126 | 347 | 364 |
Professional services | Operating segments | Payments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 59 | 56 | 174 | 105 |
Professional services | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 3 | 1 | 7 |
Software maintenance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 142 | 148 | 427 | 443 |
Software maintenance | Operating segments | Acceptance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Software maintenance | Operating segments | Fintech | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 141 | 144 | 423 | 430 |
Software maintenance | Operating segments | Payments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1 | 1 | 2 | 2 |
Software maintenance | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 3 | 2 | 11 |
License and termination fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 69 | 82 | 219 | 233 |
License and termination fees | Operating segments | Acceptance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7 | 4 | 19 | 4 |
License and termination fees | Operating segments | Fintech | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 41 | 61 | 139 | 181 |
License and termination fees | Operating segments | Payments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 21 | 16 | 61 | 47 |
License and termination fees | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 1 | 0 | 1 |
Output solutions postage | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 207 | 180 | 640 | 324 |
Output solutions postage | Operating segments | Acceptance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Output solutions postage | Operating segments | Fintech | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Output solutions postage | Operating segments | Payments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Output solutions postage | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 207 | 180 | 640 | 324 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 83 | 87 | 258 | 247 |
Other | Operating segments | Acceptance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 14 | 11 | 42 | 11 |
Other | Operating segments | Fintech | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 49 | 48 | 153 | 153 |
Other | Operating segments | Payments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 18 | 27 | 63 | 82 |
Other | Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 2 | $ 1 | $ 0 | $ 1 |
Revenue Recognition - Contract
Revenue Recognition - Contract with Customer, Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 383 | $ 382 |
Contract liabilities | $ 621 | $ 647 |
Revenue Recognition - Revenue R
Revenue Recognition - Revenue Recognized (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognized which was included in the contract liability balance | $ 424 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation (Details) $ in Millions | Sep. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 544 |
Performance obligations expected to be satisfied, expected timing | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 1,839 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 1,442 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 1,129 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 2,093 |
Performance obligations expected to be satisfied, expected timing |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Narrative (Details) - USD ($) $ in Millions | Feb. 18, 2020 | Jul. 29, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 29, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 35,908 | $ 35,908 | $ 36,038 | ||||||
Tax expense | 124 | $ 53 | 176 | $ 144 | |||||
Net adjustment to noncontrolling interests from dissolution | 762 | 762 | |||||||
Tax expense | 112 | ||||||||
Investment | 2,772 | 2,772 | $ 2,720 | ||||||
Additional Paid-In Capital | |||||||||
Business Acquisition [Line Items] | |||||||||
Net adjustment to noncontrolling interests from dissolution | 36 | 36 | |||||||
Banc of America Merchant Services | Corporate joint venture | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of interest in joint venture | 51.00% | ||||||||
Banc of America Merchant Services Joint Venture | |||||||||
Business Acquisition [Line Items] | |||||||||
Noncontrolling interest, period increase (decrease) | $ 726 | ||||||||
Banc of America Merchant Services Joint Venture | Bank Of America | |||||||||
Business Acquisition [Line Items] | |||||||||
Processing and other support services agreement, term (in years) | 5 years | ||||||||
Banc of America Merchant Services Joint Venture | Corporate joint venture | Bank Of America | |||||||||
Business Acquisition [Line Items] | |||||||||
Pre-tax gain | $ 36 | ||||||||
Tax expense | 13 | ||||||||
Revaluation/Remeasurement gain | 700 | ||||||||
Additional consideration gain | 24 | ||||||||
Investment Services Business | |||||||||
Business Acquisition [Line Items] | |||||||||
Controlling interest sold (as a percent) | 60.00% | ||||||||
Percentage of interest owned in affiliate | 40.00% | ||||||||
Investment | 178 | 178 | |||||||
Disposal Group, Disposed of by Sale | |||||||||
Business Acquisition [Line Items] | |||||||||
Revaluation/Remeasurement gain | $ 176 | ||||||||
Consideration from sale of business | 578 | ||||||||
Tax expense | $ 112 | ||||||||
Disposal Group, Disposed of by Sale | Investment Services Business | |||||||||
Business Acquisition [Line Items] | |||||||||
Controlling interest sold (as a percent) | 60.00% | ||||||||
Pre-tax gain on sale | $ 428 | ||||||||
First Data | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of business acquired | 100.00% | ||||||||
Entity shares issued per acquiree share (in shares) | 0.303 | ||||||||
Repayment of First Data debt | $ 16,414 | ||||||||
Increase in goodwill | $ 304 | ||||||||
Measurement period adjustments, reduction in intangible assets | 155 | ||||||||
Measurement period adjustments, reduction in noncontrolling interests | 126 | ||||||||
Measurement period adjustments, reduction in property and equipment | 25 | ||||||||
Measurement period adjustments, increase in accounts payable and accrued expenses | 37 | ||||||||
Measurement period adjustments, reduction in investments in unconsolidated affiliates | 23 | ||||||||
Measurement period adjustments, increase in other long-term liabilities | 21 | ||||||||
Measurement period adjustments, increase in deferred tax liabilities | $ 178 | ||||||||
Transaction expenses incurred | 47 | 172 | |||||||
Payments for acquisitions of businesses | 46,475 | ||||||||
Goodwill | $ 30,811 | ||||||||
First Data | Common Shares | |||||||||
Business Acquisition [Line Items] | |||||||||
Shares issued to acquire First Data (in shares) | 286,000,000 | ||||||||
First Data | Equity Awards | |||||||||
Business Acquisition [Line Items] | |||||||||
Shares issued to acquire First Data (in shares) | 15,000,000 | ||||||||
First Data | Selling, General and Administrative Expenses | |||||||||
Business Acquisition [Line Items] | |||||||||
Transaction expenses incurred | 45 | 74 | |||||||
First Data | Debt Financing Activities | |||||||||
Business Acquisition [Line Items] | |||||||||
Transaction expenses incurred | $ 2 | $ 98 | |||||||
Other Acquisitions | |||||||||
Business Acquisition [Line Items] | |||||||||
Goodwill, expected tax deductible amount | 35 | 35 | |||||||
Payments for acquisitions of businesses | 167 | ||||||||
Acquired cash | 2 | ||||||||
Earn-out provisions estimated value | 45 | 45 | |||||||
Goodwill | 82 | 82 | |||||||
Net assumed liabilities | 6 | 6 | |||||||
Other Acquisitions | Software And Customer Intangible Assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | 56 | 56 | |||||||
Other Acquisitions | Residual Buyout Intangible Assets | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | $ 35 | $ 35 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Total Purchase Price Paid (Details) - First Data - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Jul. 29, 2019 | Jul. 26, 2019 |
Business Acquisition [Line Items] | ||
Repayment of First Data debt | $ 16,414 | |
Total purchase price | 46,475 | |
Share price of shares issued for acquisition (in dollars per share) | $ 102.30 | |
Common Shares | ||
Business Acquisition [Line Items] | ||
Fair value of exchanges | $ 29,293 | |
Shares issued to acquire First Data (in shares) | 286 | |
Equity Awards | ||
Business Acquisition [Line Items] | ||
Fair value of exchanges | $ 768 | |
Shares issued to acquire First Data (in shares) | 15 |
Acquisitions and Dispositions_3
Acquisitions and Dispositions - Purchase Price Allocation (Details) $ in Millions | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jul. 29, 2019USD ($)entity |
Business Acquisition [Line Items] | |||
Goodwill | $ 35,908 | $ 36,038 | |
Number of entities to dispose | entity | 2 | ||
First Data | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 310 | ||
Trade accounts receivable | 1,747 | ||
Prepaid expenses and other current assets | 1,047 | ||
Settlement assets | 10,398 | ||
Property and equipment | 1,156 | ||
Finite-lived intangibles assets | 16,272 | ||
Goodwill | 30,811 | ||
Investments in unconsolidated affiliates | 2,676 | ||
Other long-term assets | 1,191 | ||
Total assets acquired | 65,608 | ||
Accounts payable and accrued expenses | 1,613 | ||
Short-term and current maturities of long-term debt | 243 | ||
Contract liabilities | 71 | ||
Settlement obligations | 10,398 | ||
Deferred income taxes | 3,671 | ||
Long-term contract liabilities | 16 | ||
Long-term debt and other long-term liabilities | 1,261 | ||
Total liabilities assumed | 17,273 | ||
Net assets acquired | 48,335 | ||
Redeemable noncontrolling interests | 252 | ||
Noncontrolling interests | 1,608 | ||
Total purchase price | 46,475 | ||
Customer relationships | First Data | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles assets | 13,458 | ||
Other intangible assets | First Data | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles assets | $ 2,814 |
Acquisitions and Dispositions_4
Acquisitions and Dispositions - Gross Carrying Amount and Weighted-Average Useful Life Allocated to Intangible Assets (Details) - First Data $ in Millions | Jul. 29, 2019USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 16,272 |
Weighted-Average Useful Life | 14 years |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 13,458 |
Weighted-Average Useful Life | 15 years |
Acquired software and technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 2,324 |
Weighted-Average Useful Life | 7 years |
Trade names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 490 |
Weighted-Average Useful Life | 9 years |
Acquisitions and Dispositions_5
Acquisitions and Dispositions - Pro Forma Combined Financial Information (Details) - First Data $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)$ / shares | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Total revenue | $ 11,730 |
Net income | 463 |
Net income attributable to Fiserv, Inc. | $ 400 |
Net income per share attributable to Fiserv, Inc., Basic (in dollars per share) | $ / shares | $ 0.59 |
Net income per share attributable to Fiserv, Inc., Diluted (in dollars per share) | $ / shares | $ 0.58 |
Settlement Assets and Obligat_3
Settlement Assets and Obligations (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Cash and cash equivalents | $ 1,386 | $ 1,656 |
Receivables | 8,017 | 10,212 |
Total settlement assets | 9,403 | 11,868 |
Payment instruments outstanding | 391 | 345 |
Card settlements due to merchants | 9,012 | 11,523 |
Total settlement obligations | $ 9,403 | $ 11,868 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets by Class (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 20,461 | $ 21,036 |
Accumulated Amortization | 4,812 | 3,394 |
Net Book Value | 15,649 | 17,642 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,124 | 16,187 |
Accumulated Amortization | 3,217 | 2,145 |
Net Book Value | 11,907 | 14,042 |
Acquired software and technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,555 | 2,607 |
Accumulated Amortization | 802 | 639 |
Net Book Value | 1,753 | 1,968 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 616 | 620 |
Accumulated Amortization | 154 | 105 |
Net Book Value | 462 | 515 |
Capitalized software and other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,236 | 942 |
Accumulated Amortization | 400 | 332 |
Net Book Value | 836 | 610 |
Purchased software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 930 | 680 |
Accumulated Amortization | 239 | 173 |
Net Book Value | $ 691 | $ 507 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of amortization expense of intangible assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 623 | $ 459 | $ 1,934 | $ 650 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accelerated amortization expense | $ 18 | $ 53 |
Intangible Assets - Schedule _3
Intangible Assets - Schedule of estimated annual amortization expense of intangible assets (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2020 | $ 621 | |
2021 | 2,432 | |
2022 | 2,244 | |
2023 | 1,979 | |
2024 | 1,531 | |
Thereafter | 6,842 | |
Net Book Value | $ 15,649 | $ 17,642 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill [Line Items] | |
Goodwill, beginning balance | $ 36,038 |
Acquisitions and valuation adjustments | 385 |
Foreign currency translation | (515) |
Goodwill, ending balance | 35,908 |
Acceptance | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 21,189 |
Acquisitions and valuation adjustments | 325 |
Foreign currency translation | (438) |
Goodwill, ending balance | 21,076 |
Fintech | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 2,104 |
Acquisitions and valuation adjustments | 0 |
Foreign currency translation | 0 |
Goodwill, ending balance | 2,104 |
Payments | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 12,745 |
Acquisitions and valuation adjustments | 60 |
Foreign currency translation | (77) |
Goodwill, ending balance | $ 12,728 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value On a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash flow hedges, assets | $ 5 | $ 4 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 34 | 0 |
Contingent consideration | 17 | 1 |
Contingent debt guarantee | $ 10 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Carrying value | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
Total debt | $ 20,500,000,000 | $ 20,500,000,000 | $ 21,500,000,000 | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | |||
Fair Value, Inputs, Level 2 | Fair value | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
Total debt | 22,800,000,000 | $ 22,800,000,000 | $ 22,600,000,000 | ||
Line of Credit | Revolving credit facility | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
Maximum borrowing capacity | 3,500,000,000 | 3,500,000,000 | |||
Lending Joint Ventures | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
Other (expense) income | 4,000,000 | $ 2,000,000 | 10,000,000 | $ 5,000,000 | |
Variable-Rate Term Loan Facilities Due March 2023 | Line of Credit | Term loan facility | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
Maximum borrowing capacity | 390,000,000 | 390,000,000 | |||
Outstanding borrowings | 5,000,000 | 5,000,000 | |||
Variable-Rate Revolving Credit Facilities Due March 2023 | Line of Credit | Revolving credit facility | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
Maximum borrowing capacity | 45,000,000 | 45,000,000 | |||
Financial Guarantee | Lending Joint Ventures | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
Carrying value of non-contingent liability | 20,000,000 | 20,000,000 | $ 26,000,000 | ||
Cumulative Effect, Period of Adoption, Adjustment | Fair Value, Inputs, Level 3 | |||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||||
Contingent liability | $ 10,000,000 | $ 10,000,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Net investment leases | $ 233 | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lessee lease term | 1 year | ||
Lessor lease term | 2 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lessee lease term | 18 years | ||
Lessor lease term | 5 years | ||
Cumulative Effect, Period of Adoption, Adjustment | |||
Lessee, Lease, Description [Line Items] | |||
Reserve for estimated credit losses on lease payment receivables | $ 60 | $ 56 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 60 | $ 64 | $ 183 | $ 141 |
Finance lease cost | ||||
Amortization of right-of-use assets | 48 | 16 | 137 | 18 |
Interest on lease liabilities | 7 | 3 | 16 | 3 |
Lease, cost | 115 | 83 | 336 | 162 |
Variable lease cost included within operating lease cost | 8 | $ 14 | 27 | $ 42 |
Accelerated amortization expense included within finance lease expense | $ 17 | $ 62 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 116 | $ 94 |
Operating cash flows from finance leases | 16 | 3 |
Financing cash flows from finance leases | 161 | 17 |
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating leases | 2 | 459 |
Finance leases | $ 331 | $ 288 |
Leases - Components of Lease In
Leases - Components of Lease Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Lessor, Lease, Description [Line Items] | ||||
Selling profit (charge) | $ 8 | $ 8 | $ 34 | $ 8 |
Interest income | 20 | 15 | 57 | 15 |
Operating lease income | 21 | 14 | $ 69 | 14 |
Sales-type Lease, Income, Comprehensive Income [Extensible List] | us-gaap:Revenues | |||
Product revenue | ||||
Lessor, Lease, Description [Line Items] | ||||
Selling profit (charge) | 26 | 21 | $ 78 | 21 |
Cost of product | ||||
Lessor, Lease, Description [Line Items] | ||||
Selling profit (charge) | $ 18 | $ 13 | $ 44 | $ 13 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 373 | $ 392 |
Client deposits | 689 | 650 |
Accrued compensation and benefits | 377 | 378 |
Accrued taxes | 93 | 137 |
Accrued interest | 182 | 224 |
Other accrued expenses | 1,330 | 1,299 |
Total | $ 3,044 | $ 3,080 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | May 13, 2020 | Dec. 31, 2019 |
Short-term debt and current maturities of long-term debt: | |||
Short-term debt and current maturities of long-term debt | $ 365 | $ 287 | |
Finance lease and other financing obligations | 244 | 137 | |
Long-term debt: | |||
Unamortized discount and unamortized deferred financing costs | (161) | (160) | |
Finance lease and other financing obligations | 482 | 247 | |
Total long-term debt | 20,894 | 21,612 | |
Line of Credit | Term loan facility | |||
Long-term debt: | |||
Long-term debt | 1,750 | 3,950 | |
Line of Credit | Revolving credit facility | |||
Long-term debt: | |||
Long-term debt | $ 219 | 174 | |
Senior Notes | 2.7% senior notes due 2020 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.70% | ||
Long-term debt: | |||
Long-term debt | $ 0 | 850 | |
Senior Notes | 4.75% senior notes due 2021 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.75% | ||
Long-term debt: | |||
Long-term debt | $ 400 | 400 | |
Senior Notes | 3.5% senior notes due 2022 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3.50% | ||
Long-term debt: | |||
Long-term debt | $ 700 | 700 | |
Senior Notes | 3.8% senior notes due 2023 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3.80% | ||
Long-term debt: | |||
Long-term debt | $ 1,000 | 1,000 | |
Senior Notes | 0.375% senior notes due 2023 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 0.375% | ||
Long-term debt: | |||
Long-term debt | $ 584 | 559 | |
Senior Notes | 2.75% senior notes due 2024 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.75% | ||
Long-term debt: | |||
Long-term debt | $ 2,000 | 2,000 | |
Senior Notes | 3.85% senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3.85% | ||
Long-term debt: | |||
Long-term debt | $ 900 | 900 | |
Senior Notes | 2.25% senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.25% | ||
Long-term debt: | |||
Long-term debt | $ 676 | 687 | |
Senior Notes | 3.2% senior notes due 2026 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3.20% | ||
Long-term debt: | |||
Long-term debt | $ 2,000 | 2,000 | |
Senior Notes | 1.125% senior notes due 2027 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 1.125% | ||
Long-term debt: | |||
Long-term debt | $ 584 | 559 | |
Senior Notes | 2.25% senior notes due 2027 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.25% | 2.25% | |
Long-term debt: | |||
Long-term debt | $ 1,000 | 0 | |
Senior Notes | 4.2% senior notes due 2028 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.20% | ||
Long-term debt: | |||
Long-term debt | $ 1,000 | 1,000 | |
Senior Notes | 3.5% senior notes due 2029 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3.50% | ||
Long-term debt: | |||
Long-term debt | $ 3,000 | 3,000 | |
Senior Notes | 1.625% senior notes due 2030 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 1.625% | ||
Long-term debt: | |||
Long-term debt | $ 584 | 559 | |
Senior Notes | 2.65% senior notes due 2030 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.65% | 2.65% | |
Long-term debt: | |||
Long-term debt | $ 1,000 | 0 | |
Senior Notes | 3.0% senior notes due 2031 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3.00% | ||
Long-term debt: | |||
Long-term debt | $ 676 | 687 | |
Senior Notes | 4.4% senior notes due 2049 | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.40% | ||
Long-term debt: | |||
Long-term debt | $ 2,000 | 2,000 | |
Receivable securitized loan | |||
Long-term debt: | |||
Long-term debt | 500 | 500 | |
Line of Credit | |||
Short-term debt and current maturities of long-term debt: | |||
Short-term debt and current maturities of long-term debt | $ 121 | $ 150 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2020 | May 13, 2020 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 2,000,000,000 | ||
Senior Notes | 2.25% senior notes due 2027 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 1,000,000,000 | ||
Debt instrument, interest rate | 2.25% | 2.25% | |
Senior Notes | 2.65% senior notes due 2030 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 1,000,000,000 | ||
Debt instrument, interest rate | 2.65% | 2.65% | |
Senior Notes | 2.7% senior notes due 2020 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 2.70% | ||
Repaid debt | $ 850,000,000 | ||
Senior Notes | 4.75% senior notes due 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 4.75% | ||
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Repaid debt | $ 1,100,000,000 | ||
Revolving credit facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 3,500,000,000 |
Debt - Annual Maturities of Tot
Debt - Annual Maturities of Total Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Remainder of 2020 | $ 282 | |
2021 | 177 | |
2022 | 1,346 | |
2023 | 2,334 | |
2024 | 3,843 | |
Thereafter | 13,438 | |
Total principal payments | 21,420 | |
Unamortized discount and deferred financing costs | (161) | $ (160) |
Total debt | $ 21,259 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests - Narrative (Details) $ in Millions | Sep. 30, 2020USD ($)noncontrolling_interest |
Noncontrolling Interest [Line Items] | |
Redemption value | $ | $ 260 |
First Data Joint Venture | |
Noncontrolling Interest [Line Items] | |
Ownership percentage by noncontrolling owner | 1.00% |
First Data | |
Noncontrolling Interest [Line Items] | |
Number of redeemable noncontrolling interests | noncontrolling_interest | 2 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests - Redeemable Noncontrolling Interest Activity (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Balance at December 31, 2019 | $ 262 |
Distributions paid to redeemable noncontrolling interests | (31) |
Share of income | 29 |
Balance at September 30, 2020 | $ 260 |
Equity (Details)
Equity (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Class of Stock [Line Items] | |||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | us-gaap:AccountingStandardsUpdate201613Member | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period | $ 33,028 | $ 2,546 | $ 34,595 | $ 2,293 | $ 2,293 |
Net income (loss) | 265 | 221 | 633 | 669 | |
Net adjustment to noncontrolling interests from dissolution | (762) | (762) | |||
Measurement period adjustments related to First Data Acquisition | (126) | ||||
Shares issued to acquire First Data | 31,179 | 31,179 | |||
Distributions paid to noncontrolling interests | (51) | (30) | (51) | ||
Other comprehensive income (loss) | (170) | (186) | (623) | (312) | |
Share-based compensation | 84 | 87 | 286 | 121 | |
Shares issued under stock plans | (16) | 0 | (64) | 17 | |
Purchases of treasury stock | (36) | (1,435) | (156) | ||
Balance at end of period | 32,429 | 33,760 | 32,429 | 33,760 | $ 34,595 |
Net income attributable to redeemable noncontrolling interest | $ 11 | $ 4 | 29 | $ 4 | |
Distributions paid to redeemable noncontrolling interests | $ 31 | ||||
Common Shares | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period (in shares) | 791 | 791 | 791 | 791 | 791 |
Balance at beginning of period | $ 8 | $ 8 | $ 8 | $ 8 | $ 8 |
Balance at end of period (in shares) | 791 | 791 | 791 | 791 | 791 |
Balance at end of period | $ 8 | $ 8 | $ 8 | $ 8 | $ 8 |
Treasury Stock | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period (in shares) | 122 | 399 | 112 | 399 | 399 |
Balance at beginning of period | $ (4,429) | $ (10,408) | $ (3,118) | $ (10,340) | $ (10,340) |
Shares issued to acquire First Data (in shares) | (286) | (286) | |||
Shares issued to acquire First Data | $ 7,478 | $ 7,478 | |||
Shares issued under stock plans (in shares) | (1) | (2) | (5) | (4) | |
Shares issued under stock plans | $ 32 | $ 57 | $ 156 | $ 109 | |
Purchases of treasury stock (in shares) | 0 | 14 | 2 | ||
Purchases of treasury stock | $ (36) | $ (1,435) | $ (156) | ||
Balance at end of period (in shares) | 121 | 111 | 121 | 111 | 112 |
Balance at end of period | $ (4,397) | $ (2,909) | $ (4,397) | $ (2,909) | $ (3,118) |
Additional Paid-In Capital | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period | 23,771 | 1,056 | 23,741 | 1,057 | 1,057 |
Net adjustment to noncontrolling interests from dissolution | (36) | (36) | |||
Shares issued to acquire First Data | 22,582 | 22,582 | |||
Share-based compensation | 84 | 87 | 286 | 121 | |
Shares issued under stock plans | (48) | (57) | (220) | (92) | |
Balance at end of period | 23,771 | 23,668 | 23,771 | 23,668 | 23,741 |
Accumulated Other Comprehensive Loss | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period | (644) | (193) | (180) | (67) | (67) |
Other comprehensive income (loss) | (187) | (186) | (651) | (312) | |
Balance at end of period | (831) | (379) | (831) | (379) | (180) |
Retained Earnings | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period | 12,877 | 12,083 | 12,528 | 11,635 | 11,635 |
Net income (loss) | 264 | 198 | 658 | 646 | |
Balance at end of period | 13,141 | 12,281 | 13,141 | 12,281 | 12,528 |
Noncontrolling Interests | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period | 1,445 | 0 | 1,616 | 0 | 0 |
Net income (loss) | 1 | 23 | (25) | 23 | |
Net adjustment to noncontrolling interests from dissolution | (726) | (726) | |||
Measurement period adjustments related to First Data Acquisition | (126) | ||||
Shares issued to acquire First Data | 1,119 | 1,119 | |||
Distributions paid to noncontrolling interests | (51) | (30) | (51) | ||
Other comprehensive income (loss) | 17 | 28 | |||
Balance at end of period | $ 737 | $ 1,091 | 737 | $ 1,091 | 1,616 |
Cumulative Effect, Period of Adoption, Adjustment | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period | (45) | ||||
Balance at end of period | (45) | ||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance at beginning of period | $ (45) | ||||
Balance at end of period | $ (45) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 33,028 | $ 2,546 | $ 34,595 | $ 2,293 |
Total other comprehensive loss | (170) | (186) | (623) | (312) |
Balance at end of period | 32,429 | 33,760 | 32,429 | 33,760 |
Total | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (644) | (193) | (180) | (67) |
Other comprehensive income (loss) before reclassifications | (191) | (190) | (663) | (318) |
Amounts reclassified from accumulated other comprehensive loss | 4 | 4 | 12 | 6 |
Total other comprehensive loss | (187) | (186) | (651) | (312) |
Balance at end of period | (831) | (379) | (831) | (379) |
Cash Flow Hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (138) | (144) | (141) | (16) |
Other comprehensive income (loss) before reclassifications | 6 | (4) | 1 | (134) |
Amounts reclassified from accumulated other comprehensive loss | 4 | 4 | 12 | 6 |
Total other comprehensive loss | 10 | 0 | 13 | (128) |
Balance at end of period | (128) | (144) | (128) | (144) |
Foreign Currency Translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (500) | (47) | (33) | (49) |
Other comprehensive income (loss) before reclassifications | (197) | (186) | (664) | (184) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Total other comprehensive loss | (197) | (186) | (664) | (184) |
Balance at end of period | (697) | (233) | (697) | (233) |
Pension Plans | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (6) | (2) | (6) | (2) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Total other comprehensive loss | 0 | 0 | 0 | 0 |
Balance at end of period | $ (6) | $ (2) | $ (6) | $ (2) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Estimate of gains related to foreign currency exchange contracts during the next 12 months | $ 4 | $ 4 | |||||
Payment from settlement of cash flow hedges, recorded in AOCL, net of tax | $ 183 | 6 | $ (4) | 1 | $ (134) | ||
Estimated interest expense related to settled interest rate hedge contracts during the next twelve months | 21 | 21 | |||||
Foreign currency translation adjustment | (92) | $ 28 | (38) | $ 28 | |||
Foreign currency forward exchange contracts | Indian Rupee | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Notional amount of derivatives | 206 | 206 | $ 178 | ||||
Total fair value of cash flow hedge derivatives | $ 5 | $ 5 | $ 4 | ||||
Treasury Lock | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Derivative liability, notional amount | $ 5,000 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 84 | $ 87 | $ 286 | $ 121 |
Unrecognized compensation cost | $ 343 | $ 343 | ||
Weighted-average period unrecognized compensation cost will be recognized | 2 years | |||
Share-based awards, stock options, exercised (in shares) | 2,195 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based awards, stock options, exercised (in shares) | 2,200 | 3,300 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Shares | |
Stock options outstanding - balance at beginning of period (in shares) | shares | 15,989 |
Granted (in shares) | shares | 1,503 |
Forfeited (in shares) | shares | (158) |
Exercised (in shares) | shares | (2,195) |
Stock options outstanding - balance at end of period (in shares) | shares | 15,139 |
Stock options exercisable (in shares) | shares | 12,438 |
Weighted-Average Exercise Price | |
Stock options outstanding - balance at beginning of period (in dollars per shares) | $ / shares | $ 42.83 |
Granted (in dollars per share) | $ / shares | 112.87 |
Forfeited (in dollars per share) | $ / shares | 92.47 |
Exercised (in dollars per share) | $ / shares | 34.31 |
Stock options outstanding - balance at end of period (in dollars per shares) | $ / shares | 50.51 |
Stock options exercisable (in dollars per share) | $ / shares | $ 40.82 |
Weighted-Average Remaining Contractual Term (Years) | |
Stock options outstanding - September 30, 2020 | 4 years 9 months 25 days |
Stock options exercisable - September 30, 2020 | 4 years |
Aggregate Intrinsic Value (In millions) | |
Stock options outstanding - September 30, 2020 | $ | $ 810 |
Stock options exercisable - September 30, 2020 | $ | $ 774 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Restricted Stock and Performance Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Restricted Stock Units | |
Shares | |
Balance at beginning of period (in shares) | shares | 6,869 |
Granted (in shares) | shares | 1,336 |
Forfeited (in shares) | shares | (220) |
Vested (in shares) | shares | (3,227) |
Balance at end of period (in shares) | shares | 4,758 |
Weighted-Average Grant Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 93.80 |
Granted (in dollars per share) | $ / shares | 111.71 |
Forfeited (in dollars per share) | $ / shares | 92.28 |
Vested (in dollars per share) | $ / shares | 95.84 |
Balance at end of period (in dollars per share) | $ / shares | $ 97.46 |
Performance Share Units | |
Shares | |
Balance at beginning of period (in shares) | shares | 2,328 |
Granted (in shares) | shares | 0 |
Forfeited (in shares) | shares | (28) |
Vested (in shares) | shares | (479) |
Balance at end of period (in shares) | shares | 1,821 |
Weighted-Average Grant Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 94.61 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 90.44 |
Vested (in dollars per share) | $ / shares | 92.62 |
Balance at end of period (in dollars per share) | $ / shares | $ 95.20 |
Restricted Stock Awards | |
Shares | |
Balance at beginning of period (in shares) | shares | 48 |
Granted (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Balance at end of period (in shares) | shares | 48 |
Weighted-Average Grant Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 102.30 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Balance at end of period (in dollars per share) | $ / shares | $ 102.30 |
Restructuring and Other Charg_3
Restructuring and Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Integration activities charges | $ 41 | $ 181 | |
Non-cash impairment charge | 4 | 44 | |
Accelerated amortization expense included within finance lease expense | 17 | 62 | |
Accelerated amortization expense | 18 | 53 | |
Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance and other separation costs | 28 | 105 | |
Employee severance and other separation costs accrual | 25 | 25 | $ 14 |
Share-based compensation costs | $ 9 | $ 32 |
Restructuring and Other Charg_4
Restructuring and Other Charges - Schedule of Changes in Reserve (Details) - Employee Severance - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | $ 14 | |
Severance and other separation costs | $ 28 | 105 |
Non-cash adjustments | (6) | |
Cash payments | (88) | |
Restructuring reserve, ending balance | $ 25 | $ 25 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision and Effective Income Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 124 | $ 53 | $ 176 | $ 144 |
Effective income tax rate | 32.50% | 20.70% | 21.10% | 17.90% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | Feb. 18, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Schedule of Equity Method Investments [Line Items] | |||||
Effective income tax rate | 32.50% | 20.70% | 21.10% | 17.90% | |
Income tax expense, revaluation of net deferred tax liabilities | $ 32 | ||||
Tax expense | $ 112 | ||||
Unrecognized tax benefits | 185 | 185 | |||
Decrease in unrecognized tax benefits reasonably possible | $ 66 | $ 66 | |||
Investment Services Business | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Controlling interest sold (as a percent) | 60.00% | ||||
Disposal Group, Disposed of by Sale | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Tax expense | $ 112 | ||||
Disposal Group, Disposed of by Sale | Investment Services Business | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Pre-tax gain on sale | $ 428 | ||||
Controlling interest sold (as a percent) | 60.00% |
Shares Used in Computing Net _3
Shares Used in Computing Net Income Per Share Attributable to Fiserv, Inc. - Schedule of Weighted-Average Number of Shares (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share – basic (in shares) | 669.8 | 584.8 | 672.6 | 456.3 |
Common stock equivalents (in shares) | 10.5 | 12.1 | 11.5 | 8.9 |
Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share – diluted (in shares) | 680.3 | 596.9 | 684.1 | 465.2 |
Shares Used in Computing Net _4
Shares Used in Computing Net Income Per Share Attributable to Fiserv, Inc. - Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Stock options excluded from the calculation of diluted weighted-average outstanding shares because their impact was anti-dilutive (in shares) | 2.6 | 1.2 | 2 | 1.1 |
Cash Flow Information (Details)
Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 548 | $ 149 |
Income taxes paid | 143 | 155 |
Treasury stock purchases settled after the balance sheet date | 0 | 10 |
Distribution of nonmonetary assets | 726 | 0 |
Financed software arrangements | $ 130 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Loss Contingencies [Line Items] | |||
Subscriber funds | $ 1,000 | $ 2,000 | |
First Data | First Data Subsidiary Merchant Matters | |||
Loss Contingencies [Line Items] | |||
Payment for legal settlement | $ 40 | ||
Loss contingency accrual | 27 | $ 43 | |
Minimum | First Data | First Data Subsidiary Merchant Matters | |||
Loss Contingencies [Line Items] | |||
Estimated range of exposure | 0 | ||
Maximum | First Data | First Data Subsidiary Merchant Matters | |||
Loss Contingencies [Line Items] | |||
Estimated range of exposure | $ 60 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($)affiliate | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)affiliate | Sep. 30, 2019USD ($) | Jun. 30, 2020 | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | ||||||
Number of affiliates | affiliate | 16 | 16 | ||||
Equity investments | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts due from unconsolidated merchant alliances | $ 36 | $ 36 | $ 35 | |||
Corporate joint venture | Banc of America Merchant Services | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of interest in joint venture | 51.00% | |||||
Related Party Fees | Equity investments | ||||||
Related Party Transaction [Line Items] | ||||||
Processing, administrative, and other fees | 62 | $ 40 | 174 | $ 58 | ||
Merchant Alliances | Related Party Fees | Equity investments | ||||||
Related Party Transaction [Line Items] | ||||||
Processing, administrative, and other fees | 47 | 31 | 134 | 31 | ||
Lending Solutions Business and Investment Services Business | Related Party Fees | Affiliated entities | ||||||
Related Party Transaction [Line Items] | ||||||
Processing, administrative, and other fees | $ 16 | $ 9 | $ 43 | $ 27 |
Business Segment Information -
Business Segment Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Millions | Feb. 18, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||||
Revenue | $ 3,786 | $ 3,128 | $ 11,020 | $ 6,142 | ||
Operating income (loss) | 542 | 374 | 1,336 | 1,131 | ||
Corporate and Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 218 | 228 | 690 | 473 | ||
Operating income (loss) | (745) | (621) | (2,082) | (850) | ||
Acceptance | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 1,454 | 1,012 | 4,078 | 1,012 | ||
Operating income (loss) | 423 | 296 | 985 | 296 | ||
Fintech | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 727 | 735 | 2,159 | 2,191 | ||
Operating income (loss) | 265 | 223 | 721 | 647 | ||
Payments | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 1,387 | 1,153 | 4,093 | 2,466 | ||
Operating income (loss) | 599 | 476 | 1,712 | 1,038 | ||
Processing and services revenue | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | [1] | 3,153 | 2,608 | 9,118 | 5,229 | |
Processing and services revenue | Corporate and Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 10 | 47 | 51 | 148 | ||
Processing and services revenue | Acceptance | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 1,256 | 867 | 3,495 | 867 | ||
Processing and services revenue | Fintech | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 684 | 692 | 2,032 | 2,054 | ||
Processing and services revenue | Payments | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 1,203 | 1,002 | 3,540 | 2,160 | ||
Product revenue | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 633 | 520 | 1,902 | 913 | ||
Product revenue | Corporate and Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 208 | 181 | 639 | 325 | ||
Product revenue | Acceptance | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 198 | 145 | 583 | 145 | ||
Product revenue | Fintech | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 43 | 43 | 127 | 137 | ||
Product revenue | Payments | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | $ 184 | $ 151 | $ 553 | $ 306 | ||
Investment Services Business | ||||||
Segment Reporting Information [Line Items] | ||||||
Controlling interest sold (as a percent) | 60.00% | |||||
[1] | Includes processing and other fees charged to related party investments accounted for under the equity method of $62 million and $40 million for the three months ended September 30, 2020 and 2019, respectively, and $174 million and $58 million for the nine months ended September 30, 2020 and 2019, respectively (see Note 21). |