Investment in Affiliates

12 Months Ended

Dec. 31, 2015

Equity Method Investments and Joint Ventures [Abstract]

Segment results include the Company’s proportionate share of income from affiliates, which consist of unconsolidated investments accounted for under the equity method of accounting. The most significant of these affiliates are related to the Company’s merchant bank alliance program.

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. The 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 primarily based on contractual pricing. These fees have been separately identified on the face of the consolidated statements of operations.

As of December 31, 2015, there were nine affiliates accounted for under the equity method of accounting, comprised of five merchant alliances and four strategic investments in companies in related markets.

The Wells Fargo alliance met the Significant Subsidiary test provided in Regulations S-X Rule 1-02 (w) in that the Company's equity earnings of this alliance exceeded 20% of the Company's consolidated income from continuing operations before income taxes for the year ended December 31, 2014.

A summary of financial information for the merchant alliances and other affiliates accounted for under the equity method of accounting is presented below.



	As of December 31,
(in millions)	2015		2014
Total current assets	$	3,002	$	2,812
Total long-term assets	55		53
Total assets	$	3,057	$	2,865

Total current liabilities	$	2,925	$	2,742
Total long-term liabilities	16		17
Total liabilities	$	2,941	$	2,759

The primary components of assets and liabilities are settlement-related accounts similar to those described in note 11 "Settlement Assets and Obligations" of these consolidated financial statements.



	Year ended December 31,
(in millions)	2015		2014		2013
Net operating revenues	$	1,424	$	1,357	$	1,369
Operating expenses	666		638		675
Operating income	$	758	$	719	$	694
Net income	$	744	$	696	$	664
FDC equity earnings	239		220		188

The formation of a merchant alliance accounted for under the equity method of accounting generally involves the Company and/or a financial institution contributing merchant contracts to the alliance and a cash payment from one owner to the other to achieve the desired ownership percentages. The asset amounts reflected above are owned by the alliances and other equity method investees and do not include any of such payments made by the Company. The amount by which the total of the Company’s investments in affiliates exceeded its proportionate share of the investees’ net assets was approximately $1.0 billion and $1.1 billion as of December 31, 2015 and 2014, respectively.

The non-goodwill portion of this amount is considered an identifiable intangible asset that is amortized. The estimated future amortization expense for these intangible assets as of December 31, 2015 is as follows:



Year ended December 31, (in millions)	Amount
2016	$	50
2017	44
2018	29
2019	4
2020	—
Thereafter	—

These amounts assume that these alliances continue as they currently exist. Much of the difference between the Company's proportionate share of the investees’ net income and the Company's equity earnings noted above relates to this amortization.