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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Wisconsin
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39-1506125
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I. R. S. Employer
Identification No.)
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255 Fiserv Drive
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Brookfield
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WI
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53045
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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FISV
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The NASDAQ Stock Market LLC
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0.375% Senior Notes due 2023
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FISV23
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The NASDAQ Stock Market LLC
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1.125% Senior Notes due 2027
|
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FISV27
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The NASDAQ Stock Market LLC
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1.625% Senior Notes due 2030
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FISV30
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The NASDAQ Stock Market LLC
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2.250% Senior Notes due 2025
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FISV25
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The NASDAQ Stock Market LLC
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3.000% Senior Notes due 2031
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FISV31
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The NASDAQ Stock Market LLC
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
|
☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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Item 1.
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||
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Item 2.
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||
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Item 3.
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Item 4.
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||
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Item 1.
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||
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Item 2.
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Item 6.
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||
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
||||||||||||
|
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2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
Revenue:
|
|
|
|
|
|
|
|
||||||||
|
Processing and services
|
$
|
1,328
|
|
|
$
|
1,207
|
|
|
$
|
2,621
|
|
|
$
|
2,445
|
|
|
Product
|
184
|
|
|
213
|
|
|
393
|
|
|
415
|
|
||||
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Total revenue
|
1,512
|
|
|
1,420
|
|
|
3,014
|
|
|
2,860
|
|
||||
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
|
Cost of processing and services
|
617
|
|
|
560
|
|
|
1,241
|
|
|
1,128
|
|
||||
|
Cost of product
|
168
|
|
|
179
|
|
|
342
|
|
|
370
|
|
||||
|
Selling, general and administrative
|
343
|
|
|
320
|
|
|
684
|
|
|
625
|
|
||||
|
(Gain) loss on sale of business
|
—
|
|
|
3
|
|
|
(10
|
)
|
|
(229
|
)
|
||||
|
Total expenses
|
1,128
|
|
|
1,062
|
|
|
2,257
|
|
|
1,894
|
|
||||
|
Operating income
|
384
|
|
|
358
|
|
|
757
|
|
|
966
|
|
||||
|
Interest expense
|
(64
|
)
|
|
(45
|
)
|
|
(123
|
)
|
|
(90
|
)
|
||||
|
Debt financing activities
|
(37
|
)
|
|
—
|
|
|
(96
|
)
|
|
—
|
|
||||
|
Non-operating income
|
8
|
|
|
3
|
|
|
11
|
|
|
3
|
|
||||
|
Income before income taxes and (loss) income from investments in unconsolidated affiliates
|
291
|
|
|
316
|
|
|
549
|
|
|
879
|
|
||||
|
Income tax provision
|
(60
|
)
|
|
(72
|
)
|
|
(91
|
)
|
|
(212
|
)
|
||||
|
(Loss) income from investments in unconsolidated affiliates
|
(8
|
)
|
|
7
|
|
|
(10
|
)
|
|
7
|
|
||||
|
Net income
|
$
|
223
|
|
|
$
|
251
|
|
|
$
|
448
|
|
|
$
|
674
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income per share – basic
|
$
|
0.57
|
|
|
$
|
0.61
|
|
|
$
|
1.14
|
|
|
$
|
1.64
|
|
|
Net income per share – diluted
|
$
|
0.56
|
|
|
$
|
0.60
|
|
|
$
|
1.12
|
|
|
$
|
1.61
|
|
|
|
|
|
|
|
|
|
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||||||||
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Shares used in computing net income per share:
|
|
|
|
|
|
|
|
||||||||
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Basic
|
392.5
|
|
|
408.4
|
|
|
392.1
|
|
|
410.7
|
|
||||
|
Diluted
|
399.6
|
|
|
416.4
|
|
|
399.4
|
|
|
419.0
|
|
||||
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
Net income
|
$
|
223
|
|
|
$
|
251
|
|
|
$
|
448
|
|
|
$
|
674
|
|
|
Other comprehensive (loss) income:
|
|
|
|
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|
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||||||||
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Fair market value adjustment on cash flow hedges, net of income tax benefit of $36 million, $2 million, $45 million and $2 million
|
(107
|
)
|
|
(4
|
)
|
|
(130
|
)
|
|
(5
|
)
|
||||
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Reclassification adjustment for net realized gains on cash flow hedges included in cost of processing and services, net of income tax benefit of $0 and $1 million
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
||||
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Reclassification adjustment for net realized losses on cash flow hedges included in interest expense, net of income tax provision of $0, $0, $1 million and $1 million
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
|
Foreign currency translation
|
(2
|
)
|
|
(6
|
)
|
|
2
|
|
|
(6
|
)
|
||||
|
Total other comprehensive loss
|
(108
|
)
|
|
(10
|
)
|
|
(126
|
)
|
|
(12
|
)
|
||||
|
Comprehensive income
|
$
|
115
|
|
|
$
|
241
|
|
|
$
|
322
|
|
|
$
|
662
|
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
Assets
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
8,441
|
|
|
$
|
415
|
|
|
Trade accounts receivable, net
|
989
|
|
|
1,049
|
|
||
|
Prepaid expenses and other current assets
|
779
|
|
|
760
|
|
||
|
Total current assets
|
10,209
|
|
|
2,224
|
|
||
|
Property and equipment, net
|
418
|
|
|
398
|
|
||
|
Intangible assets, net
|
2,102
|
|
|
2,143
|
|
||
|
Goodwill
|
5,702
|
|
|
5,702
|
|
||
|
Contract costs, net
|
445
|
|
|
419
|
|
||
|
Other long-term assets
|
764
|
|
|
376
|
|
||
|
Total assets
|
$
|
19,640
|
|
|
$
|
11,262
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
|
Accounts payable and accrued expenses
|
$
|
1,685
|
|
|
$
|
1,626
|
|
|
Current maturities of long-term debt
|
9
|
|
|
4
|
|
||
|
Contract liabilities
|
360
|
|
|
380
|
|
||
|
Total current liabilities
|
2,054
|
|
|
2,010
|
|
||
|
Long-term debt
|
13,747
|
|
|
5,955
|
|
||
|
Deferred income taxes
|
713
|
|
|
745
|
|
||
|
Long-term contract liabilities
|
106
|
|
|
89
|
|
||
|
Other long-term liabilities
|
474
|
|
|
170
|
|
||
|
Total liabilities
|
17,094
|
|
|
8,969
|
|
||
|
Commitments and contingencies
|
|
|
|
||||
|
Shareholders’ equity:
|
|
|
|
||||
|
Preferred stock, no par value: 25.0 million shares authorized; none issued
|
—
|
|
|
—
|
|
||
|
Common stock, $0.01 par value: 1,800.0 million shares authorized; 791.4 million shares issued
|
8
|
|
|
8
|
|
||
|
Additional paid-in capital
|
1,056
|
|
|
1,057
|
|
||
|
Accumulated other comprehensive loss
|
(193
|
)
|
|
(67
|
)
|
||
|
Retained earnings
|
12,083
|
|
|
11,635
|
|
||
|
Treasury stock, at cost, 398.5 million and 398.9 million shares
|
(10,408
|
)
|
|
(10,340
|
)
|
||
|
Total shareholders’ equity
|
2,546
|
|
|
2,293
|
|
||
|
Total liabilities and shareholders’ equity
|
$
|
19,640
|
|
|
$
|
11,262
|
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2019
|
|
2018
|
||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income
|
$
|
448
|
|
|
$
|
674
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities
from continuing operations:
|
|
|
|
||||
|
Depreciation and other amortization
|
202
|
|
|
184
|
|
||
|
Amortization of acquisition-related intangible assets
|
89
|
|
|
80
|
|
||
|
Amortization of financing costs, debt discounts and other
|
105
|
|
|
6
|
|
||
|
Share-based compensation
|
34
|
|
|
36
|
|
||
|
Deferred income taxes
|
12
|
|
|
80
|
|
||
|
Gain on sale of business
|
(10
|
)
|
|
(229
|
)
|
||
|
Loss (income) from investments in unconsolidated affiliates
|
10
|
|
|
(7
|
)
|
||
|
Settlement of interest rate hedge contracts
|
(183
|
)
|
|
—
|
|
||
|
Other operating activities
|
(3
|
)
|
|
2
|
|
||
|
Changes in assets and liabilities, net of effects from acquisitions and dispositions:
|
|
|
|
||||
|
Trade accounts receivable
|
60
|
|
|
(11
|
)
|
||
|
Prepaid expenses and other assets
|
(62
|
)
|
|
(64
|
)
|
||
|
Contract costs
|
(93
|
)
|
|
(76
|
)
|
||
|
Accounts payable and other liabilities
|
(28
|
)
|
|
17
|
|
||
|
Contract liabilities
|
(2
|
)
|
|
(79
|
)
|
||
|
Net cash provided by operating activities from continuing operations
|
579
|
|
|
613
|
|
||
|
Cash flows from investing activities:
|
|
|
|
||||
|
Capital expenditures, including capitalization of software costs
|
(210
|
)
|
|
(169
|
)
|
||
|
Proceeds from sale of business
|
10
|
|
|
419
|
|
||
|
Payments for acquisition of business, including working capital adjustments
|
54
|
|
|
—
|
|
||
|
Distributions from unconsolidated affiliates
|
7
|
|
|
—
|
|
||
|
Purchases of investments
|
(3
|
)
|
|
(2
|
)
|
||
|
Other investing activities
|
6
|
|
|
(12
|
)
|
||
|
Net cash (used in) provided by investing activities from continuing operations
|
(136
|
)
|
|
236
|
|
||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Debt proceeds
|
9,894
|
|
|
1,161
|
|
||
|
Debt repayments
|
(2,018
|
)
|
|
(1,257
|
)
|
||
|
Payments of debt financing, redemption and other costs
|
(164
|
)
|
|
—
|
|
||
|
Proceeds from issuance of treasury stock
|
56
|
|
|
44
|
|
||
|
Purchases of treasury stock, including employee shares withheld for tax obligations
|
(185
|
)
|
|
(824
|
)
|
||
|
Other financing activities
|
—
|
|
|
7
|
|
||
|
Net cash provided by (used in) financing activities from continuing operations
|
7,583
|
|
|
(869
|
)
|
||
|
Net change in cash and cash equivalents from continuing operations
|
8,026
|
|
|
(20
|
)
|
||
|
Net cash flows from discontinued operations
|
—
|
|
|
43
|
|
||
|
Cash and cash equivalents, beginning balance
|
415
|
|
|
325
|
|
||
|
Cash and cash equivalents, ending balance
|
$
|
8,441
|
|
|
$
|
348
|
|
|
Discontinued operations cash flow information:
|
|
|
|
||||
|
Net cash used in operating activities
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
Net cash provided by investing activities
|
—
|
|
|
50
|
|
||
|
Net change in cash and cash equivalents from discontinued operations
|
$
|
—
|
|
|
$
|
43
|
|
|
(In millions)
|
Reportable Segments
|
||||||||||||||
|
Three Months Ended June 30, 2019
|
Payments
|
|
Financial
|
|
Corporate
and Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Major Business
|
|
|
|
|
|
|
|
||||||||
|
Digital Money Movement
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
362
|
|
|
Card and Related Services
|
469
|
|
|
—
|
|
|
—
|
|
|
469
|
|
||||
|
Other
|
86
|
|
|
—
|
|
|
—
|
|
|
86
|
|
||||
|
Total Payments
|
917
|
|
|
—
|
|
|
—
|
|
|
917
|
|
||||
|
Account and Item Processing
|
—
|
|
|
526
|
|
|
—
|
|
|
526
|
|
||||
|
Other
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
||||
|
Total Financial
|
—
|
|
|
604
|
|
|
—
|
|
|
604
|
|
||||
|
Corporate and Other
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||
|
Total Revenue
|
$
|
917
|
|
|
$
|
604
|
|
|
$
|
(9
|
)
|
|
$
|
1,512
|
|
|
(In millions)
|
Reportable Segments
|
||||||||||||||
|
Three Months Ended June 30, 2018
|
Payments
|
|
Financial
|
|
Corporate
and Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Major Business
|
|
|
|
|
|
|
|
||||||||
|
Digital Money Movement
|
$
|
356
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
356
|
|
|
Card and Related Services
|
400
|
|
|
—
|
|
|
—
|
|
|
400
|
|
||||
|
Other
|
81
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||
|
Total Payments
|
837
|
|
|
—
|
|
|
—
|
|
|
837
|
|
||||
|
Account and Item Processing
|
—
|
|
|
530
|
|
|
—
|
|
|
530
|
|
||||
|
Other
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||
|
Total Financial
|
—
|
|
|
590
|
|
|
—
|
|
|
590
|
|
||||
|
Corporate and Other
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||
|
Total Revenue
|
$
|
837
|
|
|
$
|
590
|
|
|
$
|
(7
|
)
|
|
$
|
1,420
|
|
|
(In millions)
|
Reportable Segments
|
||||||||||||||
|
Six Months Ended June 30, 2019
|
Payments
|
|
Financial
|
|
Corporate
and Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Major Business
|
|
|
|
|
|
|
|
||||||||
|
Digital Money Movement
|
$
|
729
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
729
|
|
|
Card and Related Services
|
938
|
|
|
—
|
|
|
—
|
|
|
938
|
|
||||
|
Other
|
164
|
|
|
—
|
|
|
—
|
|
|
164
|
|
||||
|
Total Payments
|
1,831
|
|
|
—
|
|
|
—
|
|
|
1,831
|
|
||||
|
Account and Item Processing
|
—
|
|
|
1,059
|
|
|
—
|
|
|
1,059
|
|
||||
|
Other
|
—
|
|
|
143
|
|
|
—
|
|
|
143
|
|
||||
|
Total Financial
|
—
|
|
|
1,202
|
|
|
—
|
|
|
1,202
|
|
||||
|
Corporate and Other
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
||||
|
Total Revenue
|
$
|
1,831
|
|
|
$
|
1,202
|
|
|
$
|
(19
|
)
|
|
$
|
3,014
|
|
|
(In millions)
|
Reportable Segments
|
||||||||||||||
|
Six Months Ended June 30, 2018
|
Payments
|
|
Financial
|
|
Corporate
and Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Major Business
|
|
|
|
|
|
|
|
||||||||
|
Digital Money Movement
|
$
|
708
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
708
|
|
|
Card and Related Services
|
814
|
|
|
—
|
|
|
—
|
|
|
814
|
|
||||
|
Other
|
157
|
|
|
—
|
|
|
—
|
|
|
157
|
|
||||
|
Total Payments
|
1,679
|
|
|
—
|
|
|
—
|
|
|
1,679
|
|
||||
|
Account and Item Processing
|
—
|
|
|
1,036
|
|
|
—
|
|
|
1,036
|
|
||||
|
Lending Solutions
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
||||
|
Other
|
—
|
|
|
114
|
|
|
—
|
|
|
114
|
|
||||
|
Total Financial
|
—
|
|
|
1,206
|
|
|
—
|
|
|
1,206
|
|
||||
|
Corporate and Other
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
(25
|
)
|
||||
|
Total Revenue
|
$
|
1,679
|
|
|
$
|
1,206
|
|
|
$
|
(25
|
)
|
|
$
|
2,860
|
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
Contract assets
|
$
|
204
|
|
|
$
|
171
|
|
|
Contract liabilities
|
466
|
|
|
469
|
|
||
|
(In millions)
|
Remainder of:
|
|
|
|
|
|
|
|
|
||||||||||
|
June 30, 2019
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||
|
Processing and services
|
$
|
549
|
|
|
$
|
943
|
|
|
$
|
772
|
|
|
$
|
560
|
|
|
$
|
746
|
|
|
Product
|
16
|
|
|
31
|
|
|
22
|
|
|
12
|
|
|
11
|
|
|||||
|
(In millions)
|
Gross Carrying Amount
|
Weighted-Average Useful Life
|
||
|
Customer related intangible assets
|
$
|
350
|
|
15 years
|
|
Trade name
|
3
|
|
8 years
|
|
|
|
$
|
353
|
|
15 years
|
|
|
Six Months Ended
June 30, |
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
Shares Granted
(In thousands) |
|
Weighted-Average Grant Date Fair Value
|
|
Shares Granted
(In thousands) |
|
Weighted-Average Grant Date Fair Value
|
||||||
|
Stock options
|
1,171
|
|
|
$
|
28.43
|
|
|
1,265
|
|
|
$
|
22.43
|
|
|
Restricted stock units
|
371
|
|
|
84.84
|
|
|
501
|
|
|
70.14
|
|
||
|
Performance share units
|
—
|
|
|
—
|
|
|
165
|
|
|
75.39
|
|
||
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
Weighted-average common shares outstanding used for the calculation of net income per share – basic
|
392.5
|
|
|
408.4
|
|
|
392.1
|
|
|
410.7
|
|
|
Common stock equivalents
|
7.1
|
|
|
8.0
|
|
|
7.3
|
|
|
8.3
|
|
|
Weighted-average common shares outstanding used for the calculation of net income per share – diluted
|
399.6
|
|
|
416.4
|
|
|
399.4
|
|
|
419.0
|
|
|
(In millions)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||
|
June 30, 2019
|
|
|
|||||||||
|
Customer related intangible assets
|
$
|
2,642
|
|
|
$
|
1,365
|
|
|
$
|
1,277
|
|
|
Acquired software and technology
|
591
|
|
|
505
|
|
|
86
|
|
|||
|
Trade names
|
120
|
|
|
74
|
|
|
46
|
|
|||
|
Capitalized software development costs
|
893
|
|
|
353
|
|
|
540
|
|
|||
|
Purchased software
|
273
|
|
|
120
|
|
|
153
|
|
|||
|
Total
|
$
|
4,519
|
|
|
$
|
2,417
|
|
|
$
|
2,102
|
|
|
(In millions)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||
|
December 31, 2018
|
|
|
|||||||||
|
Customer related intangible assets
|
$
|
2,642
|
|
|
$
|
1,294
|
|
|
$
|
1,348
|
|
|
Acquired software and technology
|
591
|
|
|
490
|
|
|
101
|
|
|||
|
Trade names
|
120
|
|
|
71
|
|
|
49
|
|
|||
|
Capitalized software development costs
|
810
|
|
|
314
|
|
|
496
|
|
|||
|
Purchased software
|
261
|
|
|
112
|
|
|
149
|
|
|||
|
Total
|
$
|
4,424
|
|
|
$
|
2,281
|
|
|
$
|
2,143
|
|
|
(In millions)
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
Trade accounts payable
|
$
|
107
|
|
|
$
|
127
|
|
|
Client deposits
|
597
|
|
|
564
|
|
||
|
Settlement obligations
|
491
|
|
|
480
|
|
||
|
Accrued compensation and benefits
|
133
|
|
|
199
|
|
||
|
Current operating lease liabilities
|
74
|
|
|
—
|
|
||
|
Other accrued expenses
|
283
|
|
|
256
|
|
||
|
Total
|
$
|
1,685
|
|
|
$
|
1,626
|
|
|
(In millions)
|
|
June 30, 2019
|
||
|
Assets
|
|
|
||
|
Operating lease assets(1)
|
|
$
|
361
|
|
|
Finance lease assets(2)
|
|
24
|
|
|
|
Total lease assets
|
|
$
|
385
|
|
|
|
|
|
||
|
Liabilities
|
|
|
||
|
Current
|
|
|
||
|
Operating lease liabilities(1)
|
|
$
|
74
|
|
|
Finance lease liabilities(2)
|
|
7
|
|
|
|
Noncurrent
|
|
|
||
|
Operating lease liabilities(1)
|
|
327
|
|
|
|
Finance lease liabilities(2)
|
|
11
|
|
|
|
Total lease liabilities
|
|
$
|
419
|
|
|
(In millions)
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
|
Operating lease cost(1)
|
|
$
|
38
|
|
|
$
|
77
|
|
|
Finance lease cost(2)
|
|
|
|
|
||||
|
Amortization of right-of-use assets
|
|
1
|
|
|
2
|
|
||
|
Interest on lease liabilities
|
|
—
|
|
|
—
|
|
||
|
Total lease cost
|
|
$
|
39
|
|
|
$
|
79
|
|
|
(In millions)
|
|
Six Months Ended June 30, 2019
|
||
|
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||
|
Operating cash flows from operating leases
|
|
$
|
53
|
|
|
Operating cash flows from finance leases
|
|
—
|
|
|
|
Financing cash flows from finance leases
|
|
11
|
|
|
|
|
|
|
||
|
Right-of-use assets obtained in exchange for lease liabilities
|
|
|
||
|
Operating leases
|
|
$
|
56
|
|
|
Finance leases
|
|
15
|
|
|
|
|
|
June 30, 2019
|
|
|
Weighted-average remaining lease term
|
|
|
|
|
Operating leases
|
|
6 years
|
|
|
Finance leases
|
|
3 years
|
|
|
Weighted-average discount rate
|
|
|
|
|
Operating leases
|
|
3.5
|
%
|
|
Finance leases
|
|
3.5
|
%
|
|
(In millions)
|
|
||
|
Year ending December 31,
|
|
||
|
2019
|
$
|
94
|
|
|
2020
|
75
|
|
|
|
2021
|
62
|
|
|
|
2022
|
51
|
|
|
|
2023
|
40
|
|
|
|
Thereafter
|
108
|
|
|
|
Total
|
$
|
430
|
|
|
Three Months Ended June 30, 2019
|
|
Number of Shares
|
|
Amount
|
|||||||||||||||||||||||||||
|
(In millions)
|
|
Common Shares
|
|
Treasury Shares
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Total Equity
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at March 31, 2019
|
|
791
|
|
|
399
|
|
|
$
|
8
|
|
|
$
|
1,034
|
|
|
$
|
(85
|
)
|
|
$
|
11,860
|
|
|
$
|
(10,423
|
)
|
|
$
|
2,394
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
223
|
|
|
|
|
223
|
|
|||||||||||||
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(108
|
)
|
|
|
|
|
|
(108
|
)
|
|||||||||||||
|
Share-based compensation
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
15
|
|
|||||||||||||
|
Shares issued under stock plans
|
|
|
|
—
|
|
|
|
|
7
|
|
|
|
|
|
|
15
|
|
|
22
|
|
|||||||||||
|
Purchases of treasury stock
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
||||||||||||
|
Balance at June 30, 2019
|
|
791
|
|
|
399
|
|
|
$
|
8
|
|
|
$
|
1,056
|
|
|
$
|
(193
|
)
|
|
$
|
12,083
|
|
|
$
|
(10,408
|
)
|
|
$
|
2,546
|
|
|
|
Three Months Ended June 30, 2018
|
|
Number of Shares
|
|
Amount
|
|||||||||||||||||||||||||||
|
(In millions)
|
|
Common Shares
|
|
Treasury Shares
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Total Equity
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at March 31, 2018
|
|
791
|
|
|
380
|
|
|
$
|
8
|
|
|
$
|
1,005
|
|
|
$
|
(56
|
)
|
|
$
|
10,871
|
|
|
$
|
(8,857
|
)
|
|
$
|
2,971
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
251
|
|
|
|
|
251
|
|
|||||||||||||
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
(10
|
)
|
|||||||||||||
|
Share-based compensation
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
17
|
|
|||||||||||||
|
Shares issued under stock plans
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
|
|
11
|
|
|
12
|
|
|||||||||||
|
Purchases of treasury stock
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
(391
|
)
|
|
(391
|
)
|
||||||||||||
|
Balance at June 30, 2018
|
|
791
|
|
|
385
|
|
|
$
|
8
|
|
|
$
|
1,023
|
|
|
$
|
(66
|
)
|
|
$
|
11,122
|
|
|
$
|
(9,237
|
)
|
|
$
|
2,850
|
|
|
|
Six Months Ended June 30, 2019
|
|
Number of Shares
|
|
Amount
|
|||||||||||||||||||||||||||
|
(In millions)
|
|
Common Shares
|
|
Treasury Shares
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Total Equity
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at December 31, 2018
|
|
791
|
|
|
399
|
|
|
$
|
8
|
|
|
$
|
1,057
|
|
|
$
|
(67
|
)
|
|
$
|
11,635
|
|
|
$
|
(10,340
|
)
|
|
$
|
2,293
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
448
|
|
|
|
|
448
|
|
|||||||||||||
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(126
|
)
|
|
|
|
|
|
(126
|
)
|
|||||||||||||
|
Share-based compensation
|
|
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
|
34
|
|
|||||||||||||
|
Shares issued under stock plans
|
|
|
|
(2
|
)
|
|
|
|
(35
|
)
|
|
|
|
|
|
52
|
|
|
17
|
|
|||||||||||
|
Purchases of treasury stock
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
(120
|
)
|
|
(120
|
)
|
||||||||||||
|
Balance at June 30, 2019
|
|
791
|
|
|
399
|
|
|
$
|
8
|
|
|
$
|
1,056
|
|
|
$
|
(193
|
)
|
|
$
|
12,083
|
|
|
$
|
(10,408
|
)
|
|
$
|
2,546
|
|
|
|
Six Months Ended June 30, 2018
|
|
Number of Shares
|
|
Amount
|
|||||||||||||||||||||||||||
|
(In millions)
|
|
Common Shares
|
|
Treasury Shares
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Total Equity
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Balance at December 31, 2017
|
|
791
|
|
|
376
|
|
|
$
|
8
|
|
|
$
|
1,031
|
|
|
$
|
(54
|
)
|
|
$
|
10,240
|
|
|
$
|
(8,494
|
)
|
|
$
|
2,731
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
674
|
|
|
|
|
674
|
|
|||||||||||||
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
(12
|
)
|
|||||||||||||
|
Share-based compensation
|
|
|
|
|
|
|
|
36
|
|
|
|
|
|
|
|
|
36
|
|
|||||||||||||
|
Shares issued under stock plans
|
|
|
|
(2
|
)
|
|
|
|
(44
|
)
|
|
|
|
|
|
46
|
|
|
2
|
|
|||||||||||
|
Purchases of treasury stock
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
(789
|
)
|
|
(789
|
)
|
||||||||||||
|
Cumulative-effect adjustment of ASU 2014-09 adoption
|
|
|
|
|
|
|
|
|
|
|
|
208
|
|
|
|
|
208
|
|
|||||||||||||
|
Cumulative-effect adjustment of ASU 2017-12 adoption
|
|
|
|
|
|
|
|
|
|
3
|
|
|
(3
|
)
|
|
|
|
—
|
|
||||||||||||
|
Cumulative-effect adjustment of ASU 2018-02 adoption
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
3
|
|
|
|
|
—
|
|
||||||||||||
|
Balance at June 30, 2018
|
|
791
|
|
|
385
|
|
|
$
|
8
|
|
|
$
|
1,023
|
|
|
$
|
(66
|
)
|
|
$
|
11,122
|
|
|
$
|
(9,237
|
)
|
|
$
|
2,850
|
|
|
|
(In millions)
|
Cash Flow
Hedges
|
|
Foreign
Currency
Translation
|
|
Other
|
|
Total
|
||||||||
|
Balance at December 31, 2018
|
$
|
(16
|
)
|
|
$
|
(49
|
)
|
|
$
|
(2
|
)
|
|
$
|
(67
|
)
|
|
Other comprehensive loss before reclassifications
|
(130
|
)
|
|
2
|
|
|
—
|
|
|
(128
|
)
|
||||
|
Amounts reclassified from accumulated other comprehensive loss
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
|
Net current-period other comprehensive loss
|
(128
|
)
|
|
2
|
|
|
—
|
|
|
(126
|
)
|
||||
|
Balance at June 30, 2019
|
$
|
(144
|
)
|
|
$
|
(47
|
)
|
|
$
|
(2
|
)
|
|
$
|
(193
|
)
|
|
(In millions)
|
Cash Flow
Hedges
|
|
Foreign
Currency
Translation
|
|
Other
|
|
Total
|
||||||||
|
Balance at December 31, 2017
|
$
|
(14
|
)
|
|
$
|
(38
|
)
|
|
$
|
(2
|
)
|
|
$
|
(54
|
)
|
|
Other comprehensive loss before reclassifications
|
(5
|
)
|
|
(6
|
)
|
|
—
|
|
|
(11
|
)
|
||||
|
Amounts reclassified from accumulated other comprehensive loss
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
|
Net current-period other comprehensive loss
|
(6
|
)
|
|
(6
|
)
|
|
—
|
|
|
(12
|
)
|
||||
|
Cumulative-effect adjustment of ASU 2017-12 adoption from retained earnings
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
|
Cumulative-effect adjustment of ASU 2018-02 adoption to retained earnings
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
|
Balance at June 30, 2018
|
$
|
(20
|
)
|
|
$
|
(44
|
)
|
|
$
|
(2
|
)
|
|
$
|
(66
|
)
|
|
|
Six Months Ended
June 30, |
||||||
|
(In millions)
|
2019
|
|
2018
|
||||
|
Interest paid
|
$
|
111
|
|
|
$
|
84
|
|
|
Income taxes paid
|
80
|
|
|
121
|
|
||
|
Treasury stock purchases settled after the balance sheet date
|
—
|
|
|
12
|
|
||
|
(In millions)
|
Payments
|
|
Financial
|
|
Corporate
and Other
|
|
Total
|
||||||||
|
Three Months Ended June 30, 2019
|
|
|
|
|
|
|
|
||||||||
|
Processing and services revenue
|
$
|
744
|
|
|
$
|
570
|
|
|
$
|
14
|
|
|
$
|
1,328
|
|
|
Product revenue
|
173
|
|
|
34
|
|
|
(23
|
)
|
|
184
|
|
||||
|
Total revenue
|
$
|
917
|
|
|
$
|
604
|
|
|
$
|
(9
|
)
|
|
$
|
1,512
|
|
|
Operating income
|
$
|
303
|
|
|
$
|
203
|
|
|
$
|
(122
|
)
|
|
$
|
384
|
|
|
Three Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
|
Processing and services revenue
|
$
|
665
|
|
|
$
|
529
|
|
|
$
|
13
|
|
|
$
|
1,207
|
|
|
Product revenue
|
172
|
|
|
61
|
|
|
(20
|
)
|
|
213
|
|
||||
|
Total revenue
|
$
|
837
|
|
|
$
|
590
|
|
|
$
|
(7
|
)
|
|
$
|
1,420
|
|
|
Operating income
|
$
|
269
|
|
|
$
|
201
|
|
|
$
|
(112
|
)
|
|
$
|
358
|
|
|
Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
||||||||
|
Processing and services revenue
|
$
|
1,470
|
|
|
$
|
1,124
|
|
|
$
|
27
|
|
|
$
|
2,621
|
|
|
Product revenue
|
361
|
|
|
78
|
|
|
(46
|
)
|
|
393
|
|
||||
|
Total revenue
|
$
|
1,831
|
|
|
$
|
1,202
|
|
|
$
|
(19
|
)
|
|
$
|
3,014
|
|
|
Operating income
|
$
|
590
|
|
|
$
|
402
|
|
|
$
|
(235
|
)
|
|
$
|
757
|
|
|
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
||||||||
|
Processing and services revenue
|
$
|
1,318
|
|
|
$
|
1,111
|
|
|
$
|
16
|
|
|
$
|
2,445
|
|
|
Product revenue
|
361
|
|
|
95
|
|
|
(41
|
)
|
|
415
|
|
||||
|
Total revenue
|
$
|
1,679
|
|
|
$
|
1,206
|
|
|
$
|
(25
|
)
|
|
$
|
2,860
|
|
|
Operating income
|
$
|
540
|
|
|
$
|
403
|
|
|
$
|
23
|
|
|
$
|
966
|
|
|
•
|
Overview. This section contains background information on our company and the services and products that we provide, acquisitions and dispositions, our enterprise priorities, and the trends affecting our industry in order to provide context for management’s discussion and analysis of our financial condition and results of operations.
|
|
•
|
Changes in critical accounting policies and estimates. This section contains a discussion of changes since our Annual Report on Form 10-K for the year ended December 31, 2018 in the accounting policies that we believe are important to our financial condition and results of operations and that require judgment and estimates on the part of management in their application.
|
|
•
|
Results of operations. This section contains an analysis of our results of operations presented in the accompanying unaudited consolidated statements of income by comparing the results for the three and six months ended June 30, 2019 to the comparable periods in 2018.
|
|
•
|
Liquidity and capital resources. This section provides an analysis of our cash flows and a discussion of our outstanding debt as of June 30, 2019.
|
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
|
2019
|
|
2018
|
|
Percentage of
Revenue (1)
|
|
Increase (Decrease)
|
|||||||||||||
|
(In millions)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Processing and services
|
$
|
1,328
|
|
|
$
|
1,207
|
|
|
87.8
|
%
|
|
85.0
|
%
|
|
$
|
121
|
|
|
10
|
%
|
|
Product
|
184
|
|
|
213
|
|
|
12.2
|
%
|
|
15.0
|
%
|
|
(29
|
)
|
|
(14
|
)%
|
|||
|
Total revenue
|
1,512
|
|
|
1,420
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
92
|
|
|
6
|
%
|
|||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Cost of processing and services
|
617
|
|
|
560
|
|
|
46.5
|
%
|
|
46.4
|
%
|
|
57
|
|
|
10
|
%
|
|||
|
Cost of product
|
168
|
|
|
179
|
|
|
91.3
|
%
|
|
84.0
|
%
|
|
(11
|
)
|
|
(6
|
)%
|
|||
|
Sub-total
|
785
|
|
|
739
|
|
|
51.9
|
%
|
|
52.0
|
%
|
|
46
|
|
|
6
|
%
|
|||
|
Selling, general and administrative
|
343
|
|
|
320
|
|
|
22.7
|
%
|
|
22.5
|
%
|
|
23
|
|
|
7
|
%
|
|||
|
Loss on sale of business
|
—
|
|
|
3
|
|
|
—
|
|
|
0.2
|
%
|
|
(3
|
)
|
|
n/m
|
|
|||
|
Total expenses
|
1,128
|
|
|
1,062
|
|
|
74.6
|
%
|
|
74.8
|
%
|
|
66
|
|
|
6
|
%
|
|||
|
Operating income
|
384
|
|
|
358
|
|
|
25.4
|
%
|
|
25.2
|
%
|
|
26
|
|
|
7
|
%
|
|||
|
Interest expense
|
(64
|
)
|
|
(45
|
)
|
|
(4.2
|
)%
|
|
(3.2
|
)%
|
|
19
|
|
|
42
|
%
|
|||
|
Debt financing activities
|
(37
|
)
|
|
—
|
|
|
(2.4
|
)%
|
|
—
|
|
|
37
|
|
|
n/m
|
|
|||
|
Non-operating income
|
8
|
|
|
3
|
|
|
0.5
|
%
|
|
0.2
|
%
|
|
5
|
|
|
167
|
%
|
|||
|
Income before income taxes and (loss) income from investments in unconsolidated affiliates
|
$
|
291
|
|
|
$
|
316
|
|
|
19.2
|
%
|
|
22.3
|
%
|
|
$
|
(25
|
)
|
|
(8
|
)%
|
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2019
|
|
2018
|
|
Percentage of
Revenue (1)
|
|
Increase (Decrease)
|
|||||||||||||
|
(In millions)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Processing and services
|
$
|
2,621
|
|
|
$
|
2,445
|
|
|
87.0
|
%
|
|
85.5
|
%
|
|
$
|
176
|
|
|
7
|
%
|
|
Product
|
393
|
|
|
415
|
|
|
13.0
|
%
|
|
14.5
|
%
|
|
(22
|
)
|
|
(5
|
)%
|
|||
|
Total revenue
|
3,014
|
|
|
2,860
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
154
|
|
|
5
|
%
|
|||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Cost of processing and services
|
1,241
|
|
|
1,128
|
|
|
47.3
|
%
|
|
46.1
|
%
|
|
113
|
|
|
10
|
%
|
|||
|
Cost of product
|
342
|
|
|
370
|
|
|
87.0
|
%
|
|
89.2
|
%
|
|
(28
|
)
|
|
(8
|
)%
|
|||
|
Sub-total
|
1,583
|
|
|
1,498
|
|
|
52.5
|
%
|
|
52.4
|
%
|
|
85
|
|
|
6
|
%
|
|||
|
Selling, general and administrative
|
684
|
|
|
625
|
|
|
22.7
|
%
|
|
21.9
|
%
|
|
59
|
|
|
9
|
%
|
|||
|
Gain on sale of business
|
(10
|
)
|
|
(229
|
)
|
|
(0.3
|
)%
|
|
(8.0
|
)%
|
|
(219
|
)
|
|
(96
|
)%
|
|||
|
Total expenses
|
2,257
|
|
|
1,894
|
|
|
74.9
|
%
|
|
66.2
|
%
|
|
363
|
|
|
19
|
%
|
|||
|
Operating income
|
757
|
|
|
966
|
|
|
25.1
|
%
|
|
33.8
|
%
|
|
(209
|
)
|
|
(22
|
)%
|
|||
|
Interest expense
|
(123
|
)
|
|
(90
|
)
|
|
(4.1
|
)%
|
|
(3.1
|
)%
|
|
33
|
|
|
37
|
%
|
|||
|
Debt financing activities
|
(96
|
)
|
|
—
|
|
|
(3.2
|
)%
|
|
—
|
|
|
96
|
|
|
n/m
|
|
|||
|
Non-operating income
|
11
|
|
|
3
|
|
|
0.4
|
%
|
|
0.1
|
%
|
|
8
|
|
|
n/m
|
|
|||
|
Income before income taxes and (loss) income from investments in unconsolidated affiliates
|
$
|
549
|
|
|
$
|
879
|
|
|
18.2
|
%
|
|
30.7
|
%
|
|
$
|
(330
|
)
|
|
(38
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Three Months Ended June 30,
|
|||||||||||||||||
|
(In millions)
|
Payments
|
|
Financial
|
|
Corporate
and Other
|
|
Total
|
|||||||||||
|
Total revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2019
|
$
|
917
|
|
|
|
$
|
604
|
|
|
|
$
|
(9
|
)
|
|
$
|
1,512
|
|
|
|
2018
|
837
|
|
|
|
590
|
|
|
|
(7
|
)
|
|
1,420
|
|
|
||||
|
Revenue growth
|
$
|
80
|
|
|
|
$
|
14
|
|
|
|
$
|
(2
|
)
|
|
$
|
92
|
|
|
|
Revenue growth percentage
|
10
|
%
|
|
|
2
|
%
|
|
|
|
|
6
|
%
|
|
|||||
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2019
|
$
|
303
|
|
|
|
$
|
203
|
|
|
|
$
|
(122
|
)
|
|
$
|
384
|
|
|
|
2018
|
269
|
|
|
|
201
|
|
|
|
(112
|
)
|
|
358
|
|
|
||||
|
Operating income growth
|
$
|
34
|
|
|
|
$
|
2
|
|
|
|
$
|
(10
|
)
|
|
$
|
26
|
|
|
|
Operating income growth percentage
|
13
|
%
|
|
|
1
|
%
|
|
|
|
|
7
|
%
|
|
|||||
|
Operating margin:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2019
|
33.0
|
%
|
|
|
33.7
|
%
|
|
|
|
|
25.4
|
%
|
|
|||||
|
2018
|
32.1
|
%
|
|
|
34.0
|
%
|
|
|
|
|
25.2
|
%
|
|
|||||
|
Operating margin growth (1)
|
90
|
|
bps
|
|
(30
|
)
|
bps
|
|
|
|
20
|
|
bps
|
|||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||
|
(In millions)
|
Payments
|
|
Financial
|
|
Corporate
and Other
|
|
Total
|
|||||||||||
|
Total revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2019
|
$
|
1,831
|
|
|
|
$
|
1,202
|
|
|
|
$
|
(19
|
)
|
|
$
|
3,014
|
|
|
|
2018
|
1,679
|
|
|
|
1,206
|
|
|
|
(25
|
)
|
|
2,860
|
|
|
||||
|
Revenue growth
|
$
|
152
|
|
|
|
$
|
(4
|
)
|
|
|
$
|
6
|
|
|
$
|
154
|
|
|
|
Revenue growth percentage
|
9
|
%
|
|
|
—
|
|
|
|
|
|
5
|
%
|
|
|||||
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2019
|
$
|
590
|
|
|
|
$
|
402
|
|
|
|
$
|
(235
|
)
|
|
$
|
757
|
|
|
|
2018
|
540
|
|
|
|
403
|
|
|
|
23
|
|
|
966
|
|
|
||||
|
Operating income growth
|
$
|
50
|
|
|
|
$
|
(1
|
)
|
|
|
$
|
(258
|
)
|
|
$
|
(209
|
)
|
|
|
Operating income growth percentage
|
9
|
%
|
|
|
—
|
|
|
|
|
|
(22
|
)%
|
|
|||||
|
Operating margin:
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2019
|
32.2
|
%
|
|
|
33.5
|
%
|
|
|
|
|
25.1
|
%
|
|
|||||
|
2018
|
32.2
|
%
|
|
|
33.4
|
%
|
|
|
|
|
33.8
|
%
|
|
|||||
|
Operating margin growth (1)
|
—
|
|
bps
|
|
10
|
|
bps
|
|
|
|
(870
|
)
|
bps
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(1)
|
Represents the basis point growth or decline in operating margin.
|
|
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
(In millions)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
Net income
|
$
|
448
|
|
|
$
|
674
|
|
|
$
|
(226
|
)
|
|
|
|
|
Depreciation and amortization
|
396
|
|
|
270
|
|
|
126
|
|
|
|
||||
|
Share-based compensation
|
34
|
|
|
36
|
|
|
(2
|
)
|
|
|
||||
|
Deferred income taxes
|
12
|
|
|
80
|
|
|
(68
|
)
|
|
|
||||
|
Gain on sale of business
|
(10
|
)
|
|
(229
|
)
|
|
219
|
|
|
|
||||
|
Loss (income) from investments in unconsolidated affiliates
|
10
|
|
|
(7
|
)
|
|
17
|
|
|
|
||||
|
Settlement of interest rate hedge contracts
|
(183
|
)
|
|
—
|
|
|
(183
|
)
|
|
|
||||
|
Net changes in working capital and other
|
(128
|
)
|
|
(211
|
)
|
|
83
|
|
|
|
||||
|
Operating cash flow
|
$
|
579
|
|
|
$
|
613
|
|
|
$
|
(34
|
)
|
|
(6
|
)%
|
|
Capital expenditures
|
$
|
210
|
|
|
$
|
169
|
|
|
$
|
41
|
|
|
24
|
%
|
|
(In millions)
|
June 30,
2019 |
|
December 31, 2018
|
||||
|
Revolving credit facility
|
$
|
—
|
|
|
$
|
1,129
|
|
|
2.7% senior notes due 2020
|
850
|
|
|
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
|
|
||
|
2.75% senior notes due 2024
|
2,000
|
|
|
—
|
|
||
|
3.85% senior notes due 2025
|
900
|
|
|
900
|
|
||
|
3.2% senior notes due 2026
|
2,000
|
|
|
—
|
|
||
|
4.2% senior notes due 2028
|
1,000
|
|
|
1,000
|
|
||
|
3.5% senior notes due 2029
|
3,000
|
|
|
—
|
|
||
|
4.4% senior notes due 2049
|
2,000
|
|
|
—
|
|
||
|
Unamortized discount and unamortized deferred financing costs
|
(113
|
)
|
|
(29
|
)
|
||
|
Other borrowings
|
19
|
|
|
9
|
|
||
|
Total debt (including current maturities)
|
$
|
13,756
|
|
|
$
|
5,959
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
|
|
4.1
|
|
|
|
|
|
|
|
4.2
|
|
|
|
|
|
|
|
4.3
|
|
|
|
|
|
|
|
4.4
|
|
|
|
|
|
|
|
4.5
|
|
|
|
|
|
|
|
4.6
|
|
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
|
4.8
|
|
|
|
|
|
|
|
4.9
|
|
|
|
|
|
|
|
4.10
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document - The XBRL Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
Filed with this quarterly report on Form 10-Q are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income for the three and six months ended June 30, 2019 and 2018, (ii) the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018, (iii) the Consolidated Balance Sheets at June 30, 2019 and December 31, 2018, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018, and (v) Notes to Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
FISERV, INC.
|
||
|
|
|
|
|
|
|
Date:
|
July 26, 2019
|
By:
|
|
/s/ Robert W. Hau
|
|
|
|
|
|
Robert W. Hau
|
|
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
July 26, 2019
|
By:
|
|
/s/ Kenneth F. Best
|
|
|
|
|
|
Kenneth F. Best
|
|
|
|
|
|
Chief Accounting Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Fiserv, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
|
|
Date:
|
July 26, 2019
|
|
By:
|
|
/s/ Jeffery W. Yabuki
|
|
|
|
|
|
|
Jeffery W. Yabuki
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Fiserv, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
|
|
Date:
|
July 26, 2019
|
|
By:
|
|
/s/ Robert W. Hau
|
|
|
|
|
|
|
Robert W. Hau
|
|
|
|
|
|
|
Chief Financial Officer and Treasurer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
By:
|
|
/s/ Jeffery W. Yabuki
|
|
|
|
Jeffery W. Yabuki
|
|
|
|
President and Chief Executive Officer
|
|
|
|
July 26, 2019
|
|
|
|
|
|
By:
|
|
/s/ Robert W. Hau
|
|
|
|
Robert W. Hau
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
July 26, 2019
|