Other Noncurrent Assets and Liabilities

12 Months Ended

Dec. 31, 2021

Other Noncurrent Assets and Liabilities [Abstract]

Other Noncurrent Assets and LiabilitiesOther noncurrent assets as of December 31, 2021 and 2020, consist of the following (in millions):


	2021		2020
Operating lease ROU assets (1)	$	462	$	534
Equity security investments	358		81
Visa Europe and contingent value rights ("CVR") related assets	197		70
Other	1,120		889
Total Other noncurrent assets	$	2,137	$	1,574

Other noncurrent liabilities as of December 31, 2021 and 2020, consist of the following (in millions):


	2021		2020
Operating lease liabilities (1)	$	378	$	453
Tax Receivable Agreement liability (2)	267		447
CVR liability	478		401
Deferred revenue	175		59
Other	617		666
Total Other noncurrent liabilities	$	1,915	$	2,026

(1)See Note 14, Operating Leases

(2)See Note 16, Commitments and Contingencies

Visa Europe and Contingent Value Rights

As part of the Worldpay acquisition, the Company acquired certain assets and liabilities related to the June 2016 Worldpay Group plc (Legacy Worldpay) disposal of its ownership interest in Visa Europe to Visa Inc. As part of the disposal, Legacy Worldpay received proceeds from Visa Inc. in the form of cash ("cash consideration") and convertible preferred stock ("preferred stock"), the value of which may be reduced by losses incurred relating to ongoing interchange-related litigation involving Visa Europe. The preferred stock becomes convertible into Visa Inc. Class A common stock ("common stock") in stages as determined by Visa Inc. in accordance with the relevant transaction documents pertaining to the aforementioned disposal of the Visa Europe ownership interest. The preferred stock becomes fully convertible no later than 2028 (subject to a holdback to cover any pending claims). Also in connection with the disposal and pursuant to the terms of an amendment discussed further below, Legacy Worldpay agreed to pay former Legacy Worldpay owners 90% of the net-of-tax proceeds from the disposal, known as contingent value rights, which is recorded as a liability ("CVR liability") on the consolidated balance sheets.

On September 17, 2020, the Company executed an amendment with the former Legacy Worldpay owners to pay approximately one-third of the cash consideration component of the CVR liability, or $185 million, to the former Legacy Worldpay owners upon amendment execution and to pay the remaining approximately two-thirds of the cash consideration on October 12, 2027, subject to reduction due to losses incurred by Visa Inc. relating to the litigation. The partial payment of the cash consideration was reflected as Other financing activities, net, on the consolidated statement of cash flows for the year ended December 31, 2020.

In the fourth quarter of 2020, Visa Inc. released a portion of the preferred stock that was converted into common stock. The Company sold the common stock for $552 million and paid 90% of the net-of-tax proceeds of $403 million to the former Legacy Worldpay owners. The sale of stock and related payment to the former Legacy Worldpay owners was reflected as Other investing activities, net and Other financing activities, net, respectively on the consolidated statement of cash flows for the year ended December 31, 2020.

The Company has elected the fair value option under ASC 825, Financial Instruments ("ASC 825"), for measuring its preferred stock asset and CVR liability. The fair value of the preferred stock was $197 million and $70 million at December 31, 2021 and 2020, respectively, recorded in Other noncurrent assets on the consolidated balance sheets. The fair value of the CVR liability was $478 million and $401 million at December 31, 2021 and 2020, respectively, recorded in Other noncurrent liabilities on the consolidated balance sheets. Pursuant to ASC 825, the Company remeasures the fair value of the preferred stock and CVR liability each reporting period. The net change in fair value was $53 million, $78 million and $5 million for the years ended December 31, 2021, 2020 and 2019, respectively, recorded in Other income (expense), net on the consolidated statements of earnings.

The estimated fair value of the preferred stock and related component of the CVR liability are determined using Level 3-type measurements. Significant inputs into the valuation of the preferred stock include the Visa Inc. Class A common stock price per share and the conversion ratio, which are observable, as well as the expected timing of future preferred stock releases for conversion into common stock and an estimate of the potential losses that will result from the ongoing litigation involving Visa Europe, which are unobservable. The estimated fair value of the cash consideration component of the CVR liability is determined using Level 3-type measurements, utilizing a discount rate based on the bond yield for the Company's credit rating and remaining payment term as the significant unobservable input.

Equity Security InvestmentsThe Company holds various equity securities without readily determinable fair values that primarily represent strategic investments made through our FIS Impact Ventures program as well as investments obtained through acquisitions. Such investments totaled $358 million and $81 million at December 31, 2021 and 2020, respectively, and are included within Other noncurrent assets on the consolidated balance sheets. The Company accounts for these investments at cost, less impairment, and adjusts the carrying values for observable price changes from orderly transactions for identical or similar investments of the same issuer. These adjustments are generally considered Level 2-type fair value measurements. The Company records gains and losses on these investments, realized and unrealized, as Other income (expense), net on the consolidated statements of earnings (loss) and recorded net gains of $218 million for the year ended December 31, 2021, related to these investments.