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Investments in Unconsolidated Affiliates | 9 Months Ended
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Sep. 30, 2024
Investments in and Advances to Affiliates [Abstract] |
Investments in Unconsolidated Affiliates | Investments in Unconsolidated Affiliates The Company maintains investments in various affiliates that are accounted for as equity method investments, the most significant of which are related to the Company’s merchant alliances. The Company’s share of net income or loss from these investments is reported within loss 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. The Company reviews its equity method investments each reporting period for indications of an other-than-temporary decline in value, including significant changes in business relationships with merchant alliances. A decline in value of an equity method investment determined to be other-than-temporary is recorded as a current-period impairment charge within loss from investments in unconsolidated affiliates in the consolidated statements of income. The estimated fair values of the Company’s investments in unconsolidated merchant alliances assume a continuation beyond the existing contractual term. A renewal of certain of the merchant alliance agreements beyond the current contractual term is not solely within the Company’s control. Merchant Alliances The Company maintains ownership interests in various merchant alliances. A merchant alliance 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 financial institution. A merchant alliance acquires credit and debit card transactions from merchants. The Company provides processing and other services to the alliance and charges fees to the alliance based on contractual pricing (see Note 19). The Company maintains a 40% ownership interest in the Wells Fargo Merchant Services merchant alliance (“WFMS”), which is accounted for as an equity method investment. The Company acquired its ownership, at fair value, in WFMS through its 2019 acquisition of First Data Corporation. In the third quarter of 2024, Wells Fargo Bank, National Association (“Wells Fargo”) provided the Company a notice of non-renewal for WFMS. Upon expiration of the merchant alliance, effective April 1, 2025, the Company expects to receive a cash payment or assets equal to the fair value of its share of WFMS, as determined in accordance with an agreed upon contractual valuation and separation process. The Company recorded a $570 million non-cash impairment as a result of an other-than-temporary decline in the carrying value of its equity method investment in WFMS within loss from investments in unconsolidated affiliates and the related tax benefit within the income tax provision in the consolidated statement of income in the third quarter of 2024. The impairment was based on the Company’s estimate of the fair value of its portion of WFMS, and is subject to further adjustments upon completion of the valuation process agreed to by the Company and Wells Fargo and additional information received throughout the final valuation process. The Company’s estimated fair value of WFMS was determined using an income valuation approach, which required estimates of the discount and tax rates; future expected net cash flows, including customer growth and attrition rates, and indirect expenses of WFMS; and other future events that are judgmental in nature, reflecting the risks inherent in future cash flows. The fair value measurements were primarily based on significant inputs that were not observable in the market and thus represented a Level 3 measurement of the fair value hierarchy as defined in ASC 820, Fair Value Measurements. The Company’s investment in its merchant alliances was $1.3 billion and $1.9 billion at September 30, 2024 and December 31, 2023, respectively, and is reported within investments in unconsolidated affiliates in the consolidated balance sheets. Other Equity Investments The Company also maintains investments, over which it does not have significant influence, in various equity securities without a readily determinable fair value. Such investments totaled $137 million and $156 million at September 30, 2024 and December 31, 2023, respectively, and are primarily included within other long-term assets in the 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. To the extent such events or changes occur, the Company evaluates the fair value compared to its cost basis in the investment. Gains or losses from a sale of these investments or a change in fair value are included within other expense, net in the consolidated statements of income for the period. Adjustments made to the values recorded for certain equity securities and net gains from sales of equity securities were $2 million and $29 million during the three and nine months ended September 30, 2024, respectively, and were not significant during the three and nine months ended September 30, 2023.

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- Definition The entire disclosure for the information summarizing investments in and advances to majority-owned subsidiaries, other controlled companies, and other affiliates. It reflects specified information about ownership, financial results from, and financial position in such entities. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14(Column E)(Footnote 6)(b)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477271/946-320-S99-6 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14(Column E)(Footnote 6)(c)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477271/946-320-S99-6 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14(Column A)(Footnote 1)(b)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477271/946-320-S99-6 + Details
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