UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, ~~2021~~2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission File Number 1-38962

FISERV, INC.

(Exact Name of Registrant as Specified in Its Charter)


Wisconsin						39-1506125
(State or Other Jurisdiction of Incorporation or Organization)						(I. R. S. Employer Identification No.)

255 Fiserv Drive, Brookfield, WI 53045

(Address of Principal Executive Offices and zip code)

(262) 879-5000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

FISV

The NASDAQ Stock Market LLC

0.375% Senior Notes due 2023

FISV23

The NASDAQ Stock Market LLC

1.125% Senior Notes due 2027

FISV27

The NASDAQ Stock Market LLC

1.625% Senior Notes due 2030

FISV30

The NASDAQ Stock Market LLC

2.250% Senior Notes due 2025

FISV25

The NASDAQ Stock Market LLC

3.000% Senior Notes due 2031

FISV31

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July ~~23, 2021,~~22, 2022, there were ~~662,204,715~~639,584,348 shares of common stock, $.01 par value, of the registrant outstanding.

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INDEX

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Fiserv, Inc.

Consolidated Statements of Income

(In millions, except per share data)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenue:	Revenue:									Revenue:
Processing and services (1)	Processing and services (1)	$	3,361	$	2,890	$	6,415	$	5,965	Processing and services (1)	$	3,696	$	3,361	$	7,060	$	6,415
Product	Product	690		575		1,391		1,269		Product	754		690		1,528		1,391
Total revenue	Total revenue	4,051		3,465		7,806		7,234		Total revenue	4,450		4,051		8,588		7,806
Expenses:	Expenses:									Expenses:
Cost of processing and services	Cost of processing and services	1,498		1,466		2,895		3,101		Cost of processing and services	1,502		1,498		2,938		2,895
Cost of product	Cost of product	469		454		979		986		Cost of product	542		469		1,078		979
Selling, general and administrative	Selling, general and administrative	1,440		1,377		2,813		2,781		Selling, general and administrative	1,546		1,440		3,013		2,813
(Gain) loss on sale of business		0		3		0		(428)
Gain on sale of assets										Gain on sale of assets	—		—		(147)		—
Total expenses	Total expenses	3,407		3,300		6,687		6,440		Total expenses	3,590		3,407		6,882		6,687
Operating income	Operating income	644		165		1,119		794		Operating income	860		644		1,706		1,119
Interest expense, net	Interest expense, net	(175)		(174)		(351)		(361)		Interest expense, net	(176)		(175)		(344)		(351)

Other income		1		1		22		21
Income (loss) before income taxes and income (loss) from investments in unconsolidated affiliates		470		(8)		790		454
Income tax (provision) benefit		(228)		27		(246)		(52)
Income (loss) from investments in unconsolidated affiliates		42		(10)		58		(16)
Other (expense) income										Other (expense) income	(66)		1		(70)		22
Income before income taxes and income from investments in unconsolidated affiliates										Income before income taxes and income from investments in unconsolidated affiliates	618		470		1,292		790
Income tax provision										Income tax provision	(137)		(228)		(235)		(246)
Income from investments in unconsolidated affiliates										Income from investments in unconsolidated affiliates	128		42		234		58
Net income	Net income	284		9		602		386		Net income	609		284		1,291		602
Less: net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests		15		7		29		(8)
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests										Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	11		15		24		29
Net income attributable to Fiserv, Inc.	Net income attributable to Fiserv, Inc.	$	269	$	2	$	573	$	394	Net income attributable to Fiserv, Inc.	$	598	$	269	$	1,267	$	573

Net income attributable to Fiserv, Inc. per share – basic	Net income attributable to Fiserv, Inc. per share – basic	$	0.41	$	0	$	0.86	$	0.58	Net income attributable to Fiserv, Inc. per share – basic	$	0.93	$	0.41	$	1.95	$	0.86
Net income attributable to Fiserv, Inc. per share – diluted	Net income attributable to Fiserv, Inc. per share – diluted	$	0.40	$	0	$	0.85	$	0.57	Net income attributable to Fiserv, Inc. per share – diluted	$	0.92	$	0.40	$	1.94	$	0.85

Shares used in computing net income attributable to Fiserv, Inc. per share:	Shares used in computing net income attributable to Fiserv, Inc. per share:									Shares used in computing net income attributable to Fiserv, Inc. per share:
Basic	Basic	663.7		670.0		666.1		674.1		Basic	645.2		663.7		648.0		666.1
Diluted	Diluted	672.7		680.8		676.3		686.0		Diluted	650.8		672.7		654.0		676.3

(1)Includes processing and other fees charged to related party investments accounted for under the equity method of ~~$56~~$50 million and ~~$55~~$56 million for the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$114~~$100 million and ~~$112~~$114 million for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively (see Note 18).

See accompanying notes to consolidated financial statements.

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Fiserv, Inc.

Consolidated Statements of Comprehensive Income ~~(Loss)~~

(In millions)

(Unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
Net income $ 284 $ 9 $ 602 $ 386
Other comprehensive income (loss):
Fair market value adjustment on cash flow hedges, net of income tax (provision) benefit of $0 million, ($1 million), $0 million and $2 million 0 3 1 (5)
Reclassification adjustment for net realized (gains) losses on cash flow hedges included in cost of processing and services, net of income tax benefit (provision) of $0 million, $0 million, $1 million and $0 million (2) 1 (4) 0
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, $2 million and $2 million 4 4 8 8
Unrealized gain on defined benefit pension plans, net of income tax provision of $0 million 0 0 1 0
Foreign currency translation 213 182 51 (456)
Total other comprehensive income (loss) 215 190 57 (453)
Comprehensive income (loss) $ 499 $ 199 $ 659 $ (67)
Less: net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests 15 7 29 (8)
Less: other comprehensive income (loss) attributable to noncontrolling interests 2 23 (7) 11
Comprehensive income (loss) attributable to Fiserv, Inc. $ 482 $ 169 $ 637 $ (70)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	609	$	284	$	1,291	$	602
Other comprehensive income:
Fair market value adjustment on cash flow hedges, net of income tax benefit (provision) of $2 million, $0 million, $2 million and ($0 million)	(6)		—		(7)		1
Reclassification adjustment for net realized gains on cash flow hedges included in cost of processing and services, net of income tax provision of $0 million, $0 million, $0 million and $1 million	—		(2)		(1)		(4)
Reclassification adjustment for net realized losses on cash flow hedges included in net interest expense, net of income tax benefit of $1 million, $1 million, $2 million and $2 million	4		4		8		8
Unrealized (loss) gain on defined benefit pension plans, net of income tax benefit (provision) of $1 million, $0 million, $1 million and ($0 million)	(2)		—		(3)		1
Foreign currency translation, net of income tax (see Note 12)	(385)		213		(298)		51
Total other comprehensive (loss) income	(389)		215		(301)		57
Comprehensive income	$	220	$	499	$	990	$	659
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	11		15		24		29
Less: other comprehensive (loss) income attributable to noncontrolling interests	(24)		2		(41)		(7)
Comprehensive income attributable to Fiserv, Inc.	$	233	$	482	$	1,007	$	637

See accompanying notes to consolidated financial statements.

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Fiserv, Inc.

Consolidated Balance Sheets

(In millions)

(Unaudited)


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	841	$	906	Cash and cash equivalents	$	883	$	835
Trade accounts receivable, less allowance for doubtful accounts	Trade accounts receivable, less allowance for doubtful accounts	2,663		2,482		Trade accounts receivable, less allowance for doubtful accounts	3,194		2,860
Prepaid expenses and other current assets	Prepaid expenses and other current assets	1,278		1,310		Prepaid expenses and other current assets	1,525		1,523
Settlement assets	Settlement assets	12,945		11,521		Settlement assets	14,679		13,652

Total current assets	Total current assets	17,727		16,219		Total current assets	20,281		18,870
Property and equipment, net	Property and equipment, net	1,650		1,628		Property and equipment, net	1,804		1,742
Customer relationships, net	Customer relationships, net	10,845		11,603		Customer relationships, net	9,013		9,991
Other intangible assets, net	Other intangible assets, net	3,866		3,755		Other intangible assets, net	4,003		4,018
Goodwill	Goodwill	36,668		36,322		Goodwill	36,829		36,433
Contract costs, net	Contract costs, net	755		692		Contract costs, net	849		811
Investments in unconsolidated affiliates	Investments in unconsolidated affiliates	2,590		2,756		Investments in unconsolidated affiliates	2,517		2,561
Other long-term assets	Other long-term assets	1,675		1,644		Other long-term assets	1,916		1,823
Total assets	Total assets	$	75,776	$	74,619	Total assets	$	77,212	$	76,249
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	3,364	$	3,186	Accounts payable and accrued expenses	$	3,472	$	3,550
Short-term and current maturities of long-term debt	Short-term and current maturities of long-term debt	418		384		Short-term and current maturities of long-term debt	600		508
Contract liabilities	Contract liabilities	524		546		Contract liabilities	600		585
Settlement obligations	Settlement obligations	12,945		11,521		Settlement obligations	14,679		13,652
Total current liabilities	Total current liabilities	17,251		15,637		Total current liabilities	19,351		18,295
Long-term debt	Long-term debt	20,425		20,300		Long-term debt	20,915		20,729
Deferred income taxes	Deferred income taxes	4,324		4,389		Deferred income taxes	3,797		4,172
Long-term contract liabilities	Long-term contract liabilities	181		187		Long-term contract liabilities	216		225
Other long-term liabilities	Other long-term liabilities	802		777		Other long-term liabilities	963		878
Total liabilities	Total liabilities	42,983		41,290		Total liabilities	45,242		44,299
Commitments and Contingencies (see Note 17)	Commitments and Contingencies (see Note 17)	0		0		Commitments and Contingencies (see Note 17)	0		0
Redeemable Noncontrolling Interests	Redeemable Noncontrolling Interests	261		259		Redeemable Noncontrolling Interests	161		278
Fiserv, Inc. Shareholders’ Equity:	Fiserv, Inc. Shareholders’ Equity:					Fiserv, Inc. Shareholders’ Equity:
Preferred stock, no par value: 25 million shares authorized; NaN issued		0		0
Common stock, $0.01 par value: 1,800 million shares authorized; 784 million and 789 million shares issued, respectively		8		8
Preferred stock, no par value: 25 million shares authorized; none issued						Preferred stock, no par value: 25 million shares authorized; none issued	—		—
Common stock, $0.01 par value: 1,800 million shares authorized; 784 million shares issued						Common stock, $0.01 par value: 1,800 million shares authorized; 784 million shares issued	8		8
Additional paid-in capital	Additional paid-in capital	22,960		23,643		Additional paid-in capital	23,010		22,983
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(323)		(387)		Accumulated other comprehensive loss	(1,005)		(745)
Retained earnings	Retained earnings	14,014		13,441		Retained earnings	16,113		14,846
Treasury stock, at cost, 123 million and 121 million shares		(4,866)		(4,375)
Treasury stock, at cost, 141 million and 134 million shares						Treasury stock, at cost, 141 million and 134 million shares	(7,017)		(6,140)
Total Fiserv, Inc. shareholders’ equity	Total Fiserv, Inc. shareholders’ equity	31,793		32,330		Total Fiserv, Inc. shareholders’ equity	31,109		30,952
Noncontrolling interests	Noncontrolling interests	739		740		Noncontrolling interests	700		720
Total equity	Total equity	32,532		33,070		Total equity	31,809		31,672
Total liabilities and equity	Total liabilities and equity	$	75,776	$	74,619	Total liabilities and equity	$	77,212	$	76,249

See accompanying notes to consolidated financial statements.

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Fiserv, Inc.

Consolidated Statements of Cash Flows(1)

(In millions)

(Unaudited)


		Six Months Ended June 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	602	$	386	Net income	$	1,291	$	602
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and other amortization	Depreciation and other amortization	560		550		Depreciation and other amortization	642		560
Amortization of acquisition-related intangible assets	Amortization of acquisition-related intangible assets	1,050		1,099		Amortization of acquisition-related intangible assets	966		1,050
Amortization of financing costs and debt discounts	Amortization of financing costs and debt discounts	25		24		Amortization of financing costs and debt discounts	22		25

Share-based compensation	Share-based compensation	127		202		Share-based compensation	155		127

Deferred income taxes	Deferred income taxes	(69)		(94)		Deferred income taxes	(317)		(69)
Gain on sale of business		0		(428)
(Income) loss from investments in unconsolidated affiliates		(58)		16
Gain on sale of assets						Gain on sale of assets	(147)		—
Income from investments in unconsolidated affiliates						Income from investments in unconsolidated affiliates	(234)		(58)
Distributions from unconsolidated affiliates	Distributions from unconsolidated affiliates	13		12		Distributions from unconsolidated affiliates	41		13

Non-cash impairment charges	Non-cash impairment charges	5		40		Non-cash impairment charges	—		5
Other operating activities	Other operating activities	(22)		(3)		Other operating activities	3		(22)
Changes in assets and liabilities, net of effects from acquisitions and dispositions:
Changes in assets and liabilities, net of effects from acquisitions:						Changes in assets and liabilities, net of effects from acquisitions:
Trade accounts receivable	Trade accounts receivable	(154)		278		Trade accounts receivable	(363)		(154)
Prepaid expenses and other assets	Prepaid expenses and other assets	(56)		62		Prepaid expenses and other assets	(224)		(56)
Contract costs	Contract costs	(150)		(158)		Contract costs	(154)		(150)
Accounts payable and other liabilities	Accounts payable and other liabilities	171		(54)		Accounts payable and other liabilities	111		171
Contract liabilities	Contract liabilities	(31)		(13)		Contract liabilities	13		(31)
Net cash provided by operating activities	Net cash provided by operating activities	2,013		1,919		Net cash provided by operating activities	1,805		2,013
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures, including capitalized software and other intangibles	Capital expenditures, including capitalized software and other intangibles	(494)		(488)		Capital expenditures, including capitalized software and other intangibles	(718)		(494)
Proceeds from sale of business		0		584
Proceeds from sale of assets						Proceeds from sale of assets	175		—
Payments for acquisition of businesses, net of cash acquired	Payments for acquisition of businesses, net of cash acquired	(493)		(136)		Payments for acquisition of businesses, net of cash acquired	(668)		(493)
Distributions from unconsolidated affiliates	Distributions from unconsolidated affiliates	52		66		Distributions from unconsolidated affiliates	78		52
Purchases of investments	Purchases of investments	(235)		0		Purchases of investments	(30)		(235)
Proceeds from sale of investments	Proceeds from sale of investments	472		0		Proceeds from sale of investments	3		472
Net cash (used in) provided by investing activities		(698)		26
Net cash used in investing activities						Net cash used in investing activities	(1,160)		(698)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Debt proceeds	Debt proceeds	4,343		5,812		Debt proceeds	1,191		4,343
Debt repayments		(5,415)		(6,219)
Debt repayments, including debt financing costs						Debt repayments, including debt financing costs	(1,610)		(5,415)
Net proceeds from (repayments of) commercial paper and short-term borrowings	Net proceeds from (repayments of) commercial paper and short-term borrowings	1,047		(1)		Net proceeds from (repayments of) commercial paper and short-term borrowings	869		1,047
Payments of debt financing costs		0		(16)

Proceeds from issuance of treasury stock	Proceeds from issuance of treasury stock	60		86		Proceeds from issuance of treasury stock	72		60
Purchases of treasury stock, including employee shares withheld for tax obligations	Purchases of treasury stock, including employee shares withheld for tax obligations	(1,361)		(1,574)		Purchases of treasury stock, including employee shares withheld for tax obligations	(1,078)		(1,361)

Settlement activity, net						Settlement activity, net	(189)		166
Distributions paid to noncontrolling interests and redeemable noncontrolling interests	Distributions paid to noncontrolling interests and redeemable noncontrolling interests	(21)		(52)		Distributions paid to noncontrolling interests and redeemable noncontrolling interests	(22)		(21)
Payments of acquisition-related contingent consideration	Payments of acquisition-related contingent consideration	(28)		0		Payments of acquisition-related contingent consideration	—		(28)
Other financing activities	Other financing activities	(2)		5		Other financing activities	13		(2)
Net cash used in financing activities	Net cash used in financing activities	(1,377)		(1,959)		Net cash used in financing activities	(754)		(1,211)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(2)		(12)
Net change in cash, cash equivalents and restricted cash		(64)		(26)
Effect of exchange rate changes on cash and cash equivalents						Effect of exchange rate changes on cash and cash equivalents	(33)		(2)
Net change in cash and cash equivalents						Net change in cash and cash equivalents	(142)		102

Cash, cash equivalents and restricted cash, beginning balance		919		933
Cash, cash equivalents and restricted cash, ending balance		$	855	$	907
Cash and cash equivalents, beginning balance						Cash and cash equivalents, beginning balance	3,205		2,569
Cash and cash equivalents, ending balance						Cash and cash equivalents, ending balance	$	3,063	$	2,671

(1) The company revised, for comparable purposes with the current period’s presentation, the consolidated statement of cash flows presentation for the six months ended June 30, 2021 to include cash and cash equivalents within settlement assets as a component of total cash and cash equivalents. Additional information is included in Note 1.

See accompanying notes to consolidated financial statements.

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Fiserv, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 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, ~~2020.~~2021.

Principles of Consolidation

The consolidated financial statements include the accounts of Fiserv, Inc. and its subsidiaries in which the Company holds a majority controlling financial interest. All intercompany transactions and balances between the Company and its subsidiaries have been eliminated in consolidation. Control is ~~normally~~typically 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 ~~(loss)~~ from investments in unconsolidated affiliates and the related tax expense or benefit is reported within the income tax ~~(provision) benefit~~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%.; however, for partnerships and limited liability companies, an ownership interest of between 3% and 50% or board of director representation may also constitute significant influence.

The Company maintains a majority controlling financial interest in certain entities, mostly related to consolidated merchant alliances (see Note 18). 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 ~~(loss)~~ 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 the consolidated subsidiaries net carrying value.~~sheets. 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 9)10).

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~~

~~Since early 2020, the world has been, and~~ The Company continues to ~~be, impacted by the novel strain of the coronavirus (“COVID-19”) pandemic. The COVID-19 pandemic,~~monitor and various measures imposed by the governments of many countries, states, cities and other geographic regions to prevent its spread, have negatively impacted global economic and market conditions, including levels of consumer and business 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 Company has continued to assess the impact of the COVID-19 pandemic on its consolidated financial statements and has determined that there have been no material changes to date as a result of the ~~significant accounting policies, including~~COVID-19 pandemic on the estimates and assumptions made by ~~management, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.~~management. The Company will continue to monitor developments related to the COVID-19 pandemic; however, the extent to which the COVID-19 pandemic may impact the ~~Company’s~~Company's future operational and financial performance remains uncertain and cannot be predicted. Changing conditions may also affect the estimates and assumptions made by management and may result in an impairment or other 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 subsequentdifficult to ~~June 30, 2021, including those resulting from the impacts of the COVID-19 pandemic, will be reflected in management’s estimates for future periods.~~

~~Table of Contents~~

predict.

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. Cash and cash equivalents held on behalf of merchants and other payees are included in settlement assets in the consolidated balance sheets.

Table of Contents

The following table provides a reconciliation between cash and cash equivalents on the consolidated balance sheets and ~~totaled $14 million and $13 million at~~the consolidated statements of cash flows at:



(In millions)	June 30, 2022		December 31, 2021		June 30, 2021
Cash and cash equivalents on the consolidated balance sheets	$	883	$	835	$	841
Cash and cash equivalents included in settlement assets	2,172		2,361		1,816
Other restricted cash	8		9		14
Total cash and cash equivalents on the consolidated statements of cash flows	$	3,063	$	3,205	$	2,671

The Company revised the consolidated statement of cash flows for the six months ended June 30, 2021 to reflect settlement cash and ~~December 31, 2020, respectively.~~cash equivalents within settlement assets as a component of total cash and cash equivalents on the consolidated statement of cash flows. The changes in settlement cash and cash equivalents for the six months ended June 30, 2022 and 2021 of ($189) million and $166 million, respectively, have been included in settlement activity, net within cash flows from financing activities.

Allowance for Doubtful Accounts

The Company analyzes the collectability of trade accounts receivable by considering historical bad debts, client creditworthiness, current economic trends, changes in client payment terms and collection trends when evaluating the adequacy of the allowance for doubtful accounts. 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 ~~$55~~$47 million and ~~$48~~$55 million at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Settlement Assets and Obligations

Settlement assets and obligations result from timing differences between collection and fulfillment of payment transactions and collateral amounts held to manage merchant credit risk, primarily associated with the Company’s merchant acquiring services. Settlement assets represent cash received or amounts receivable from agents, payment networks, bank partners, merchants or directly from consumers. Settlement obligations represent amounts payable to merchants and payees. Certain merchant settlement ~~assets~~asset receivables that relate to settlement obligations are held by partner banks to which the Company does not have legal ownership but has the right to use the assets to satisfy the related settlement obligations. The Company records ~~corresponding~~ settlement obligations for amounts payable to merchants and for outstanding payment instruments issued to payees that have not yet been presented for settlement.

~~Reserve~~Allowance 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, or funds held by partner banks for the Company’s benefit, is classified within settlement assets and the obligation to repay the collateral is classified within settlement obligations in the consolidated balance sheets. The Company also utilizes a number of systems and procedures to manage merchant credit risk. Despite these efforts, the Company experiences some level of losses due to merchant defaults.

The aggregate merchant credit ~~losses, included~~loss expense, recognized by the Company within cost of processing and services in the consolidated statements of income, ~~incurred by the Company~~ was ~~$11~~$20 million and ~~$24~~$11 million for the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$33~~$28 million and ~~$54~~$33 million for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The amount of collateral ~~held by~~available to the Company was ~~$2.3~~$2.1 billion and ~~$1.2~~$2.2 billion at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The Company maintains ~~reserves~~an allowance for merchant credit losses that are expected to exceed the amount of ~~collateral held.~~merchant collateral. The ~~reserves include an~~allowance includes estimated ~~amount for~~losses from 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”),~~ which is recorded within accounts payable and accrued expenses in the consolidated balance sheets, as well as ~~an allowance~~estimated losses on refunded amounts to cardholders that have not yet been collected from the merchants, which is recorded within prepaid expenses and other current assets in the consolidated balance sheets. The ~~IBNR Reserve~~allowance is based primarily on the Company’s historical experience of credit losses and other

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relevant factors such as changes in economic ~~downturns~~conditions or increases in merchant fraud. The aggregate merchant credit loss ~~reserve~~allowance was ~~$59~~$30 million and $42 million at ~~each of~~ June 30, ~~2021~~2022 and December 31, ~~2020.~~2021, 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, which is one level below the Company’s reportable segments. The Company’s most recent annual impairment assessment of its reporting units in the fourth quarter of ~~2020~~2021 determined that its goodwill was not impaired as the estimated fair values exceeded the carrying values. However, it is reasonably possible that future developments related to the interest rate environment, the economic impact of the COVID-19 pandemic or changes in significant assumptions used in the quantitative test on certain of the Company’s ~~businesses acquired and recorded at fair value through the acquisition of First Data Corporation (“First Data”) in July 2019, such~~reporting units (such as an ~~increased duration and intensity of the pandemic and/or government-imposed shutdowns, prolonged economic downturn or recession, or lack of governmental support for recovery,~~ increase in risk-adjusted discount rates) could have a future

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material impact on one or more of the estimates and assumptions used to evaluate goodwill impairment. There is 0no accumulated goodwill impairment for the Company through June 30, ~~2021.~~2022.

Other Investments

The Company maintains investments, of which it does not have significant influence, in various equity securities without a readily determinable fair value. Such investments totaled ~~$122~~$116 million and ~~$160~~$113 million at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, and are 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. ~~When~~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) income in the consolidated ~~statements~~statement of income for the period. During the six months ended June 30, 2021, the Company remeasured its equity interest in Ondot Systems, Inc. (“Ondot”) to fair value upon acquiring a remaining ownership interest, ~~in January 2021,~~ resulting in the recognition of a pre-tax gain of $12 million (see Note 4). Other adjustments made to the values recorded for ~~these~~certain equity securities and gains and losses from sales of equity securities during the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, 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. Interest expense, net consisted of the following:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	(In millions)	2021		2020		2021		2020		(In millions)	2022		2021		2022		2021
Interest expense	Interest expense	$	176	$	176	$	353	$	365	Interest expense	$	178	$	176	$	349	$	353
Interest income	Interest income	1		2		2		4		Interest income	2		1		5		2
Interest expense, net	Interest expense, net	$	175	$	174	$	351	$	361	Interest expense, net	$	176	$	175	$	344	$	351

2. Recent Accounting Pronouncements

In ~~2020,~~2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ~~2020-01,~~2022-03, ~~Investments -~~Fair Value Measurement (Topic 820): Fair Value Measurement of 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~~Subject to Contractual Sale Restrictions (“ASU ~~2020-01”~~2022-03”), which clarifies ~~certain interactions between~~ the guidance in Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“Topic 820”), when measuring the fair value of an equity security subject to ~~account~~contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for ~~certain~~ equity securities ~~investments under the equity method of accounting, and forward contracts or purchased options~~subject to ~~purchase securities under~~contractual sale restrictions that are measured at fair value in accordance with Topic ~~321, Topic 323 and Topic 815.~~820. For public entities, ASU ~~2020-01~~2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The provisions within ASU 2022-03 are to be applied prospectively with any adjustments from the adoption recognized in earnings and disclosed on the date of adoption. The Company is currently assessing the impact the adoption of ASU 2022-03 will have on its consolidated financial statements and disclosures.

In 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which among other items, requires that entities disclose current period gross write-offs by year of origination for financing receivables and net investments in leases. For public entities, the provisions within ASU 2022-02 are to be applied prospectively and are effective for fiscal years beginning after December 15, 2022, including

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interim periods within those fiscal years. The Company will adopt the additional disclosures, as applicable, for any write-offs reflected in its consolidated financial statements effective for the year ending December 31, 2023.

In 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832) (“ASU 2021-10”), which requires that an entity provide certain disclosures in its annual financial statements about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. ASU 2021-10 is effective for all business entities for annual periods beginning after December 15, 2021 and may be applied either prospectively or retrospectively to the transactions reflected in the financial statements at the date of initial application. The Company will adopt the additional disclosures prospectively, as applicable, to the transactions reflected in its consolidated financial statements for the year ending December 31, 2022.

In 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Generally, this should result in recognition and measurement of contract assets and contract liabilities at carryover value consistent with how they were recognized and measured in the acquiree’s financial statements, providing consistent recognition and enhanced comparability with revenue contracts with customers not acquired in a business combination. Prior to adoption of ASU 2021-08, an acquirer generally recognized contract assets and contract liabilities acquired in a business combination at fair value on the acquisition date. For public entities, ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Entities are required to apply a prospective transition approach upon adoption, unless early adoption occurs in an interim period. The Company adopted ASU 2021-08 effective January 1, 2022, with prospective application to business combinations occurring after adoption.

In 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments (“ASU 2021-05”), which amends the lease classification requirements for lessors with certain leases containing variable payments. A lessor is to classify and account for a lease with variable lease payments that do not depend on an index or a rate as an operating lease if the lease would have been classified as a sales-type lease or a direct financing lease and the lessor would have otherwise recognized a day-one loss. For public entities, ASU 2021-05 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, ~~beginning~~with early adoption permitted. Entities that have adopted ASC Topic 842 prior to the issuance of ASU 2021-05 may apply this update either retrospectively to leases that commenced or were modified on or after ~~December 15, 2020.~~the adoption of ASC Topic 842 or prospectively to leases that commence or are modified on or after the date the entity first applies ASU 2021-05. The Company adopted ASU ~~2020-01~~2021-05 effective January 1, ~~2021,~~2022, with prospective application to leases commencing or modified thereafter, and the adoption did not have a material impact on its consolidated financial statements.

~~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 adopted ASU 2019-12 effective January 1, 2021, and the adoption did not have a material impact on its consolidated financial statements.

~~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.

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The Company adopted ASU 2016-13 effective January 1, 2020 using the required modified retrospective approach, which resulted in a cumulative-effect decrease to beginning retained earnings of $45 million. Financial assets and liabilities held by the Company subject to the “expected credit loss” model prescribed by CECL include trade and other receivables, net investments in leases, settlement assets and other credit exposures such as financial guarantees not accounted for as insurance.

3. 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 Merchant Acceptance (“Acceptance”) segment, the Financial Technology (“Fintech”) segment and the Payments and Network (“Payments”) segment. Additional information regarding the Company’s business segments is included in Note 19. The tables below present the Company’s revenue disaggregated by type of revenue, including a reconciliation with its reportable segments. The majority of the Company’s revenue is earned domestically, with revenue generated outside the ~~United States~~U.S. comprising approximately 14% ~~and 12% of total revenue for the three months ended June 30, 2021 and 2020, respectively, and 13%~~ of total revenue for each of the three months ended June 30, 2022 and 2021, respectively, and 14% and 13% of total revenue for the six months ended June 30, 2022 and 2021, ~~and 2020.~~

(In millions) Reportable Segments
Three Months Ended June 30, 2021 Acceptance Fintech Payments Corporate
and Other Total
Type of Revenue
Processing $ 1,420 $ 385 $ 1,122 $ 10 $ 2,937
Hardware, print and card production 214 12 199 0 425
Professional services 9 115 66 0 190
Software maintenance 0 139 2 0 141
License and termination fees 11 50 14 0 75
Output solutions postage 0 0 0 202 202
Other 12 53 18 (2) 81
Total Revenue $ 1,666 $ 754 $ 1,421 $ 210 $ 4,051

(In millions) Reportable Segments
Three Months Ended June 30, 2020 Acceptance Fintech Payments Corporate
and Other Total
Type of Revenue
Processing $ 1,038 $ 349 $ 1,063 $ 13 $ 2,463
Hardware, print and card production 159 9 160 0 328
Professional services 8 115 58 0 181
Software maintenance 0 141 0 0 141
License and termination fees 6 52 18 0 76
Output solutions postage 0 0 0 198 198
Other 12 48 21 (3) 78
Total Revenue $ 1,223 $ 714 $ 1,320 $ 208 $ 3,465

respectively.

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(In millions)	(In millions)	Reportable Segments										(In millions)	Reportable Segments
Six Months Ended June 30, 2021		Acceptance		Fintech		Payments		Corporate and Other		Total
Three Months Ended June 30, 2022												Three Months Ended June 30, 2022	Acceptance		Fintech		Payments		Corporate and Other		Total

Type of Revenue	Type of Revenue											Type of Revenue
Processing	Processing	$	2,598	$	763	$	2,199	$	22	$	5,582	Processing	$	1,660	$	398	$	1,155	$	6	$	3,219
Hardware, print and card production	Hardware, print and card production	404		23		431��		0		858		Hardware, print and card production	215		10		237		—		462
Professional services	Professional services	18		226		129		0		373		Professional services	5		131		67		—		203
Software maintenance	Software maintenance	0		278		4		0		282		Software maintenance	—		139		5		—		144
License and termination fees	License and termination fees	21		88		27		0		136		License and termination fees	14		68		34		—		116
Output solutions postage	Output solutions postage	0		0		0		407		407		Output solutions postage	—		—		—		222		222
Other	Other	22		112		36		(2)		168		Other	7		57		20		—		84
Total Revenue		$	3,063	$	1,490	$	2,826	$	427	$	7,806
Total revenue												Total revenue	$	1,901	$	803	$	1,518	$	228	$	4,450


(In millions)	(In millions)	Reportable Segments										(In millions)	Reportable Segments
Six Months Ended June 30, 2020		Acceptance		Fintech		Payments		Corporate and Other		Total
Three Months Ended June 30, 2021												Three Months Ended June 30, 2021	Acceptance		Fintech		Payments		Corporate and Other		Total

Type of Revenue	Type of Revenue											Type of Revenue
Processing	Processing	$	2,221	$	700	$	2,153	$	38	$	5,112	Processing	$	1,420	$	385	$	1,122	$	10	$	2,937
Hardware, print and card production	Hardware, print and card production	352		21		352		0		725		Hardware, print and card production	214		12		199		—		425
Professional services	Professional services	11		227		115		1		354		Professional services	9		115		66		—		190
Software maintenance	Software maintenance	0		282		1		2		285		Software maintenance	—		139		2		—		141
License and termination fees	License and termination fees	12		98		40		0		150		License and termination fees	11		50		14		—		75
Output solutions postage	Output solutions postage	0		0		0		433		433		Output solutions postage	—		—		—		202		202
Other	Other	28		104		45		(2)		175		Other	12		53		18		(2)		81
Total Revenue		$	2,624	$	1,432	$	2,706	$	472	$	7,234
Total revenue												Total revenue	$	1,666	$	754	$	1,421	$	210	$	4,051


(In millions)	Reportable Segments
Six Months Ended June 30, 2022	Acceptance		Fintech		Payments		Corporate and Other		Total

Type of Revenue
Processing	$	3,063	$	803	$	2,268	$	12	$	6,146
Hardware, print and card production	440		19		473		—		932
Professional services	10		247		129		—		386
Software maintenance	—		277		11		—		288
License and termination fees	28		116		60		—		204
Output solutions postage	—		—		—		461		461
Other	13		119		39		—		171
Total Revenue	$	3,554	$	1,581	$	2,980	$	473	$	8,588

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(In millions)	Reportable Segments
Six Months Ended June 30, 2021	Acceptance		Fintech		Payments		Corporate and Other		Total

Type of Revenue
Processing	$	2,598	$	763	$	2,199	$	22	$	5,582
Hardware, print and card production	404		23		431		—		858
Professional services	18		226		129		—		373
Software maintenance	—		278		4		—		282
License and termination fees	21		88		27		—		136
Output solutions postage	—		—		—		407		407
Other	22		112		36		(2)		168
Total Revenue	$	3,063	$	1,490	$	2,826	$	427	$	7,806

Contract Balances

The following table provides information about contract assets and contract liabilities from contracts with customers:


(In millions)	(In millions)	June 30, 2021		December 31, 2020		(In millions)	June 30, 2022		December 31, 2021
Contract assets	Contract assets	$	500	$	433	Contract assets	$	543	$	541
Contract liabilities	Contract liabilities	705		733		Contract liabilities	816		810

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 ~~$350~~$371 million of revenue during the six months ended June 30, ~~2021~~2022 that was included in the contract liability balance at the beginning of the period.

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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~~were unsatisfied (or partially unsatisfied) at June 30, ~~2021:~~2022:


(In millions)	(In millions)			(In millions)
Year Ending December 31,	Year Ending December 31,			Year Ending December 31,
Remainder of 2021		$	1,020
2022		1,868
Remainder of 2022				Remainder of 2022	$	1,145
2023	2023	1,565		2023	1,984
2024	2024	1,190		2024	1,597
2025				2025	1,166
Thereafter	Thereafter	2,105		Thereafter	1,623

The Company applies the optional exemption under ~~Accounting Standards Codification (“ASC”) Topic~~ASC 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.

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4. Acquisitions

Acquisitions were accounted for as business combinations using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Purchase price was allocated to the respective assets acquired and ~~Dispositions~~liabilities assumed based on the estimated fair values at the date of acquisitions.

Acquisition of ~~Ondot~~Finxact

On ~~January 22, 2021,~~April 1, 2022, the Company acquired a remaining ownership interest in ~~Ondot,~~Finxact, Inc. (“Finxact”), a developer of cloud-native banking solutions powering digital ~~experience platform provider for~~transformation throughout the financial ~~institutions,~~services sector, for approximately ~~$271~~$645 million, net of ~~$13~~$27 million of acquired cash. The Company previously held a noncontrolling equity interest in ~~Ondot,~~Finxact, which was accounted for ~~at cost.~~under the equity method. The remeasurement of the Company’s previously held equity interest to its acquisition-date fair value resulted in the recognition of a pre-tax gain of ~~$12~~approximately $110 million, included within ~~other~~ income from investments in unconsolidated affiliates during the three and six months ended June 30, 2022. Finxact is included within the Fintech segment and advances the Company’s digital banking strategy, expanding its account processing, digital, and payments solutions.

The preliminary allocation of purchase price for Finxact is as follows:



(In millions)
Cash	$	27
Other net assets	3
Intangible assets	102
Goodwill	671
Total consideration	$	803
Less: fair value of previously held equity interest	(131)
Total purchase price	$	672

Identifiable intangible assets consist primarily of acquired software and technology, with a weighted average useful life of five years. The allocation of the purchase price is preliminary and is subject to further adjustment, pending additional refinement and final completion of valuations. Goodwill, not expected to be deductible for tax purposes, is primarily attributed to the anticipated value created by the combined scale, core platform modernization, and accelerated delivery of enhanced digital banking solutions offered to financial institutions of all sizes.

The results of operations for Finxact are included in the consolidated ~~statements~~results of ~~income during~~the Company from the date of acquisition. Pro forma information for this acquisition is not provided because it did not have a material effect on the Company’s consolidated results of operations.

Acquisition of BentoBox

On November 22, 2021, the Company acquired BentoBox CMS, Inc. (“BentoBox”), a digital marketing and commerce platform that helps restaurants connect with their guests, for $317 million, net of $24 million of acquired cash. BentoBox is included within the Acceptance segment, and further expands the Company’s Clover® dining solutions and commerce and business management capabilities.

During the six months ended June 30, ~~2021. Ondot is included within the Payments segment and further expands the Company’s digital capabilities, enhancing its suite of integrated payments, banking and merchant solutions.~~

~~During the three months ended June 30, 2021,~~2022, the Company identified and recorded measurement period adjustments to the preliminary ~~Ondot~~BentoBox purchase price allocation, including refinements to valuations of acquired intangible assets, 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 ~~a decrease~~an increase to goodwill of ~~$33 million. The~~$62 million, with offsetting amounts to the change in goodwill ~~were primarily related~~attributable to ~~an increase~~a decrease in identifiable intangible assets, including acquired software and technology, of ~~$30 million, customer relationships of $15~~$84 million and deferred ~~income~~ tax ~~liabilities~~adjustments of ~~$12~~$22 million. ~~The Company recorded measurement period adjustments to the intangible assets as a result of additional refinements to valuations, including estimated future cash flows.~~ Such measurement period adjustments did not have a material impact on the Company’s consolidated statements of income.

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The ~~updated preliminary~~ allocation of purchase price ~~recorded for Ondot~~ was ~~as follows:~~



~~(In millions)~~
~~Cash and cash equivalents~~	$	13
~~Receivables and other assets~~	9
~~Intangible assets~~	~~142~~
~~Goodwill~~	~~177~~
~~Payables and other liabilities~~	~~(35)~~
~~Total consideration~~	$	~~306~~
~~Less: Fair value of previously held equity interest~~	~~(22)~~
~~Total purchase price~~	$	~~284~~

~~The allocation~~finalized in the second quarter of 2022 and resulted in the ~~purchase price above remains preliminary~~recognition of identifiable intangible assets of $52 million, goodwill of $266 million and ~~is subject to further adjustment, pending additional refinement and final completion~~other net assets of ~~valuations.~~$23 million. Goodwill, which is not deductible for tax purposes, is primarily attributed to the anticipated value created by the ~~combined scale~~enhanced strength of ~~integrated digital solutions~~the Company’s omnichannel platform to ~~consumers, merchants, acquirers, networks~~drive increased operational efficiencies for restaurants, enabling operators to deliver seamless and ~~card issuers.~~ distinct hospitality experiences for their diners.

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The ~~preliminary~~ amounts allocated to identifiable intangible assets are as follows:



(In millions)	Gross Carrying Amount		Weighted-Average Useful Life
Acquired software and technology	$	9025	6 years
Customer relationships and other	3527		~~10 years~~
~~Non-compete agreements and other~~	17		34 years
Total	$	~~142~~52	75 years

The results of operations for ~~Ondot~~BentoBox are included in the consolidated results of the Company from the date of acquisition. Pro forma information for this acquisition is not provided because it did not have a material effect on the Company’s consolidated results of operations.

Acquisition of Pineapple Payments

On May 4, 2021, the Company acquired Pineapple Payments Holdings, LLC (“Pineapple Payments”), an independent sales organization that provides payment processing, proprietary technology, and payment acceptance solutions for merchants, for ~~approximately $206~~$207 million, net of $6 million of acquired cash, and including earn-out provisions estimated at a fair value of $30 ~~million (see Note 6).~~million. Pineapple Payments is included within the Acceptance segment, and expands the reach of the Company’s payment solutions through its technology- and relationship-led distribution channels.

The ~~preliminary~~ allocation of purchase price was finalized in the fourth quarter of 2021 and resulted in the recognition of identifiable intangible assets ~~consisting primarily~~ of ~~customer relationships~~$127 million, goodwill of $79 million and ~~residual buyout intangible~~other net assets of ~~approximately $81 million, and goodwill of approximately $124~~$7 million. ~~The allocation of the purchase price is preliminary and is subject to further adjustment, pending additional refinement and final completion of valuations.~~ Goodwill, of which ~~approximately $90~~$59 million is ~~expected to be~~ deductible for tax purposes, is primarily attributed to the anticipated value created by the accelerated delivery of new and innovative capabilities to merchant clients.

The amounts allocated to identifiable intangible assets are as follows:



(In millions)	Gross Carrying Amount		Weighted-Average Useful Life
Customer relationships	$	90	17 years
Residual buyouts	20		8 years
Acquired software and technology	6		7 years
Non-compete agreements and other	11		5 years

Total	$	127	14 years

The results of operations for Pineapple Payments are included in the consolidated results of the Company from the date of acquisition. Pro forma information for this acquisition is not provided because it did not have a material effect on the Company’s consolidated results of operations.

Acquisition of Ondot

On January 22, 2021, the Company acquired a remaining ownership interest in Ondot, a digital experience platform provider for financial institutions, for $271 million, net of $13 million of acquired cash and cash equivalents. The Company previously held a noncontrolling equity interest in Ondot, which was accounted for at cost. The remeasurement of the Company’s previously held equity interest to its acquisition-date fair value resulted in the recognition of a pre-tax gain of $12 million, included within other (expense) income in the consolidated statement of income during the six months ended June 30, 2021. Ondot is included within the Payments segment and further expands the Company’s digital capabilities, enhancing its suite of integrated payments, banking and merchant solutions.

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The allocation of purchase price recorded for Ondot was finalized in the third quarter of 2021 as follows:



(In millions)
Cash and cash equivalents	$	13
Receivables and other assets	9
Intangible assets	142
Goodwill	173
Payables and other liabilities	(31)
Total consideration	$	306
Less: fair value of previously held equity interest	(22)
Total purchase price	$	284

Goodwill, 0t deductible for tax purposes, is primarily attributed to the anticipated value created by the combined scale of integrated digital solutions to consumers, merchants, acquirers, networks and card issuers. The amounts allocated to identifiable intangible assets are as follows:



(In millions)	Gross Carrying Amount		Weighted-Average Useful Life
Acquired software and technology	$	90	6 years
Customer relationships	35		6 years
Non-compete agreements and other	17		4 years
Total	$	142	6 years

The results of operations for Ondot are included in the consolidated results of the Company from the date of acquisition. Pro forma information for this acquisition is not provided because it did not have a material effect on the Company’s consolidated results of operations.

Other Acquisitions

On June 1, 2022, the Company acquired The LR2 Group, LLC (“City POS”), an independent sales organization that promotes payment processing services and facilitates the sale of point-of-sale equipment for merchants, for approximately $26 million, and including earn-out provisions estimated at a fair value of approximately $3 million (see Note 7). City POS is included within the Acceptance segment and expands the reach of the Company’s merchant services business. The preliminary allocation of purchase price resulted in the recognition of identifiable intangible assets, consisting of customer relationships, of approximately $10 million, goodwill of approximately $15 million and other net assets of approximately $1 million. The allocation of purchase price is preliminary and subject to further adjustment, pending additional refinement and final completion of valuations. Goodwill, which is expected to be deductible for tax purposes, is primarily attributed to the value created by further expanding the reach of the Company’s payment solutions. The results of operations for City POS are included in the consolidated results of the Company from the date of acquisition. Pro forma information for this acquisition is not provided because it did not have a material effect on the Company’s consolidated results of operations.

On November 15, 2021, the Company acquired a remaining ownership interest in NetPay Solutions Group (“NetPay”), a multi-channel payment service provider offering a range of capabilities around onboarding, customer lifecycle, risk management and settlement to businesses of all sizes. The Company previously held a noncontrolling interest in NetPay, which was accounted for under the equity method and approximated acquisition-date fair value. NetPay is included within the Acceptance segment and further expands the Company’s merchant services business. On October 1, 2021, the Company acquired Integrity Payments, LLC (“AIP”), an independent sales organization that promotes payment processing services for merchants, which is included within the Acceptance segment. On June 14, 2021, the Company acquired Spend Labs Inc. (“SpendLabs”), a mobile-native, cloud-based software provider of commercial card payment solutions. SpendLabs is included within the Payments segment and further expands the Company’s digital capabilities across mobile and desktop devices for small and mid-sized businesses. On March 1, 2021, the Company acquired Radius8, Inc. (“Radius8”), a provider of a platform that uses consumer location and other information to drive incremental merchant transactions. Radius8 is included within the Acceptance segment and enhances the Company’s ability to help merchants increase sales, expand mobile application registration and improve one-to-one target marketing. The Company acquired these businesses for an aggregate purchase price of ~~approximately $49 million.~~$87 million, net of the fair value of the Company’s previously held noncontrolling interest in NetPay of $14 million and including earn-out provisions

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estimated at a fair value of $4 million (see Note 7). The ~~preliminary~~ allocation of purchase price for these acquisitions resulted in the recognition of identifiable intangible assets consisting primarily of acquired software and technology, of approximately $20 million and goodwill of approximately $30 million. The allocation of the purchase price is preliminary and is subject to further adjustment, pending additional refinement and final completion of valuations. Goodwill,

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not expected to be deductible for tax purposes, is primarily attributed to the anticipated value created by advancing digital capabilities to the Company’s clients and the customers they serve. The results of operations for these acquired businesses are included in the consolidated results of the Company from the respective 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.

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 ability to help businesses deliver seamless physical and digital customer experiences. On May 11, 2020, the Company acquired Inlet, LLC (“Inlet”), a provider of secure digital delivery solutions for enterprise and middle-market biller 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 6). The purchase price allocations for these acquisitions resulted in the recognition of identifiable intangible assets totaling ~~$81~~$47 million, goodwill of ~~$90~~$61 million and net assumed liabilities of $4$7 million. The purchase price allocation for the ~~MerchantPro~~Radius8 acquisition was finalized in the third quarter of ~~2020,~~2021 and for ~~the Bypass and Inlet acquisitions~~SpendLabs in the fourth quarter of ~~2020.~~2021. The purchase price allocations for the NetPay and AIP acquisitions were finalized in the first quarter of 2022. Measurement period adjustments did not have a material impact on the consolidated statements of income. ~~The goodwill recognized from these transactions,~~Goodwill, of which ~~$36~~$14 million is deductible for tax purposes, is primarily attributed to synergies, ~~and~~ the anticipated value created by advancing digital capabilities to the Company’s clients, and selling the Company’s products and services to the acquired businesses’ existing client ~~base.~~base.

The amounts allocated to ~~identifiable~~ intangible assets ~~were~~for other acquisitions acquired in 2021 are as follows:



(In millions)	Gross Carrying Amount		Weighted-Average Useful Life
~~Customer relationships~~Acquired software and technology	$	3231	146 years
Customer relationships	9		10 years
Residual buyouts	357		~~9 years~~
~~Acquired software and technology~~	14		85 years
Total	$	8147	117 years

The results of operations for these acquired businesses have been included in the consolidated results of the Company from the respective 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~~

5. Intangible Assets

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 dissolutionIdentifiable intangible assets consisted of the ~~joint venture’s operations,~~following:


(In millions)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
June 30, 2022
Customer relationships	$	14,758	$	5,745	$	9,013
Acquired software and technology	2,501		1,074		1,427
Trade names	631		265		366
Purchased software	1,086		510		576
Capitalized software and other intangibles	2,207		573		1,634
Total	$	21,183	$	8,167	$	13,016


(In millions)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
December 31, 2021
Customer relationships	$	15,103	$	5,112	$	9,991
Acquired software and technology	2,522		901		1,621
Trade names	612		228		384
Purchased software	1,133		479		654
Capitalized software and other intangibles	1,879		520		1,359
Total	$	21,249	$	7,240	$	14,009

Amortization expense associated with the ~~joint venture transferred a proportionate share~~above identifiable intangible assets was as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Amortization expense	$	622	$	653	$	1,246	$	1,295

Table of value, primarily the client contracts, to each party via an agreed upon contractual separation. The remaining activities of the joint venture 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 merchantsContents

6. Investments 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.~~Unconsolidated Affiliates

The Company ~~continues to provide merchant processing and~~maintains investments in various affiliates that are accounted for as equity method investments, the most significant of which are related services to former BAMS clients allocated to BANA, at BAMS pricing, through June 2023. The Company also provides 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~~Company’s merchant alliances. The Company’s share of net income or loss from these investments is reported within income from investments in unconsolidated affiliates and ~~BANA are entitled to certain transition services, at fair value, from each other through June 2023. The business transferred to the Company is included within the Acceptance segment.~~

On February 18, 2020, the Company sold a 60% controlling interest of its Investment Services business, subsequently renamed as Tegra118, LLC (“Tegra118”). The Company received pre-tax proceeds of $584 million, net of related expenses, resulting in a pre-tax gain on the sale of $428 million, with the related tax expense or benefit is reported within the income tax provision in the consolidated statements of ~~$112~~income.

The Company maintains noncontrolling ownership interests in defi SOLUTIONS Group, LLC and Sagent M&C, LLC (collectively the “Lending Joint Ventures”), respectively, which are accounted for under the equity method. In March 2022, Sagent M&C, LLC (“Sagent”) completed a transaction with a third party for the contribution from and the sale by such third party to Sagent of certain intangible and tangible personal property rights, resulting in a dilution of the Company’s ownership interest in Sagent. As a result of the transaction, the Company recognized a pre-tax gain of $80 million within income from investments in unconsolidated affiliates, with related tax expense of $19 million recorded through the income tax provision, in the consolidated ~~statements~~statement of income ~~for~~during the six months ended June 30, ~~2020.~~2022. The ~~pre-tax gain included $176~~Company’s remaining noncontrolling ownership interest in Sagent continues to be accounted for as an equity method investment.

The Lending Joint Ventures maintain, as amended in April 2022, variable-rate term loan facilities with aggregate outstanding borrowings of $437 million ~~related to~~in senior unsecured debt at June 30, 2022 and variable-rate revolving credit facilities with an aggregate borrowing capacity of $83 million with a syndicate of banks, which mature in April 2027. There were 0 outstanding borrowings on the ~~remeasurement~~revolving credit facilities at June 30, 2022. The Company has guaranteed this amended debt of the ~~Company’s 40% retained~~Lending Joint Ventures and does not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations. See Note 7 for additional information.

The Company previously maintained a noncontrolling interest ~~based upon~~in Tegra118, LLC (“Tegra118”) which was accounted for under the ~~enterprise value of the business. The revenues, expenses and cash flows of the Investment Services business were consolidated into the Company’s financial~~

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~~results through the date of the sale transaction, and are reported within Corporate and Other (see Note 19).~~equity method. 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 Tegra118.

On February 2, 2021, Tegra118 completed a merger with a third party, resulting in a dilution of the Company’s ownership interest in the combined new entity, Wealthtech Holdings, LLC, which was subsequently renamed as InvestCloud Holdings, LLC (“InvestCloud”). In connection with the transaction, the Company made an additional capital contribution of $200 million into the combined entity and recognized a pre-tax gain of $28 million within income ~~(loss)~~ from investments in unconsolidated affiliates, ~~in the consolidated statements of income,~~ with related tax expense of $6 million recorded through the income tax provision, in the consolidated statement of income during the six months ended June 30, 2021. On June 30, 2021, the Company sold its ~~entire~~remaining equity method ownership interest in InvestCloud for $466 million, resulting in a pre-tax gain of $33 million recorded within income ~~(loss)~~ from investments in unconsolidated affiliates in the consolidated statements of income, with related tax expense of $8 million recorded through the income tax provision, during the three and six months ended June 30, 2021. The Company ~~will continue~~continues to provide various technical and data center related services under the terms of a pre-existing transition services agreement with ~~InvestCloud, as described above.~~InvestCloud.

~~5. Intangible Assets~~

~~Identifiable intangible assets consisted of the following:~~

(In millions) Gross
Carrying
Amount Accumulated
Amortization Net Book
Value
June 30, 2021
Customer relationships $ 15,373 $ 4,528 $ 10,845
Acquired software and technology 2,673 1,037 1,636
Trade names 622 205 417
Purchased software 1,069 394 675
Capitalized software and other intangibles 1,628 490 1,138
Total $ 21,365 $ 6,654 $ 14,711

(In millions) Gross
Carrying
Amount Accumulated
Amortization Net Book
Value
December 31, 2020
Customer relationships $ 15,271 $ 3,668 $ 11,603
Acquired software and technology 2,562 879 1,683
Trade names 618 172 446
Purchased software 913 207 706
Capitalized software and other intangibles 1,332 412 920
Total $ 20,696 $ 5,338 $ 15,358

~~Amortization expense associated with the above identifiable intangible assets was as follows:~~

Three Months Ended
June 30, Six Months Ended
June 30,
(In millions) 2021 2020 2021 2020
Amortization expense $ 653 $ 664 $ 1,295 $ 1,311

Amortization expense during the three and six months ended June 30, 2020 included $24 million and $34 million, respectively, of accelerated amortization associated with the termination of certain vendor contracts (see Note 13).

6.7. 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 ~~11)~~12). Contingent consideration related to certain of the

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Company’s acquisitions (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.

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Assets and liabilities measured at fair value on a recurring basis consisted of the following:

Fair Value

(In millions)

Classification

Fair Value Hierarchy

June 30,
2021

December 31,
2020

(In millions)

Classification

Fair Value Hierarchy

June 30,
2022

December 31,
2021

Assets

Cash flow hedges

Prepaid expenses and other current assets

Level 2

Cash flow hedges

Prepaid expenses and other current assets

Level 2

—

Liabilities

Cash flow hedges

Accounts payable and accrued expenses

Level 2

—

Contingent consideration

Accounts payable and accrued expenses

Level 3

Contingent consideration

Accounts payable and accrued expenses

Level 3

Contingent consideration

Other long-term liabilities

Level 3

Contingent consideration

Other long-term liabilities

Level 3

Contingent debt guarantee

Other long-term liabilities

Level 3

Contingent debt guarantee

Accounts payable and accrued expenses

Level 3

—

Contingent debt guarantee

Other long-term liabilities

Level 3

—

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 foreign lines of credit, debt associated with the receivables securitization agreement, term loan credit agreement, commercial paper notes and revolving credit facility borrowings 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 ~~$21.8~~$19.7 billion and ~~$22.5~~$21.8 billion at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, and the carrying value was ~~$20.1~~$20.8 billion and ~~$19.9~~$20.4 billion at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

The Company maintains ~~noncontrolling ownership interests in defi SOLUTIONS Group, LLC and Sagent M&C, LLC, respectively, which are accounted~~liabilities for using the equity method of accounting. These joint ventures maintain variable-rate term loan facilities with aggregate outstanding borrowings of $375 million in senior unsecured debt at June 30, 2021 and variable-rate revolving credit facilities with an aggregate borrowing capacity of $45 million with a syndicate of banks, which mature in March 2023. Outstanding borrowings on the revolving credit facilities at June 30, 2021 were $13 million. The Company has guaranteed this debt and does not anticipate that the respective joint ventures will fail to fulfill their debt obligations. The Company maintains a liability for its ~~non-contingent~~ obligations to perform over the term of its debt guarantee arrangements with the ~~guarantees,~~Lending Joint Ventures (see Note 6), which isare reported within accounts payable and accrued expenses, and other long-term liabilities in the consolidated balance sheets. In April 2022, the Lending Joint Ventures amended their respective term loans and revolving credit facilities, increasing aggregate borrowing capacity by $75 million and extending the maturity to April 2027. The Company elected to guarantee this incremental indebtedness, resulting in aggregate guarantees of $520 million and a pre-tax expense of $62 million, recorded within other (expense) income in the consolidated statements of income and within other operating activities in the consolidated statement of cash flows, during the three and six months ended June 30, 2022 related to such debt guarantee obligations. The Company is entitled to receive a defined fee in exchange for its incremental guarantee of this indebtedness. The Company has not made any payments under the guarantees, nor has it been called upon to do so, and does not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations.

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 ~~$14~~$45 million and ~~$18~~$10 million approximates the fair value at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively (Level 3 of the fair value hierarchy). Such guarantees will be amortized in future periods over the contractual term. ~~In addition,~~The contingent component of the Company maintains a contingent liability ($6 million and $8 million at June 30, 2021 and December 31, 2020, respectively, as reported within other long-term liabilities in the consolidated balance sheets), representingCompany’s debt guarantee arrangements represents the current expected credit losses to which the Company is exposed. ~~This contingent~~The amount of the liability is estimated based on certain financial metrics of the ~~respective joint ventures~~Lending Joint Ventures and historical industry data, which is used to develop assumptions of the likelihood the guaranteed parties will default and the level of credit losses in the event a default occurs (Level 3 of the fair value hierarchy). The Company recognized $3 million ~~and $4 million~~ during each of the three months ended June 30, ~~2021~~2022 and ~~2020, respectively,~~2021, and $6 million during each of the six months ended June 30, ~~2021~~2022 and ~~2020, respectively,~~2021, within other (expense) income in its consolidated statements of income related to its release from risk under the non-contingent guarantees as well as a change in the provision of estimated credit losses associated with the indebtedness of the joint ventures. ~~The Company has not made any payments under the guarantees, nor has it been called upon to do so.~~

~~In addition, certain~~Certain of the Company’s non-financial assets are measured at fair value on a non-recurring basis, including property and equipment, lease right-of-use (“ROU”) 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 six months ended June 30, 2021 and 2020, is included in Note 13 to the consolidated financial statements.

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7.8. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:


(In millions)	(In millions)	June 30, 2021		December 31, 2020		(In millions)	June 30, 2022		December 31, 2021
Trade accounts payable	Trade accounts payable	$	479	$	437	Trade accounts payable	$	545	$	593
Client deposits	Client deposits	740		702		Client deposits	824		783
Accrued compensation and benefits	Accrued compensation and benefits	389		419		Accrued compensation and benefits	315		392
Accrued taxes	Accrued taxes	147		130		Accrued taxes	161		154
Accrued interest	Accrued interest	246		220		Accrued interest	241		216
Other accrued expenses	Other accrued expenses	1,363		1,278		Other accrued expenses	1,386		1,412
Total	Total	$	3,364	$	3,186	Total	$	3,472	$	3,550

8.9. Debt

The Company’s debt consisted of the following:


(In millions)	(In millions)	June 30, 2021		December 31, 2020		(In millions)	June 30, 2022		December 31, 2021
Short-term and current maturities of long-term debt:	Short-term and current maturities of long-term debt:					Short-term and current maturities of long-term debt:
Foreign lines of credit	Foreign lines of credit	$	131	$	144	Foreign lines of credit	$	313	$	240
Finance lease and other financing obligations	Finance lease and other financing obligations	287		240		Finance lease and other financing obligations	287		268
Total short-term and current maturities of long-term debt	Total short-term and current maturities of long-term debt	$	418	$	384	Total short-term and current maturities of long-term debt	$	600	$	508

Long-term debt:	Long-term debt:					Long-term debt:
4.750% senior notes due June 2021		$	0	$	400

3.500% senior notes due October 2022	3.500% senior notes due October 2022	700		700		3.500% senior notes due October 2022	$	700	$	700
0.375% senior notes due July 2023 (Euro-denominated)	0.375% senior notes due July 2023 (Euro-denominated)	596		612		0.375% senior notes due July 2023 (Euro-denominated)	526		566
3.800% senior notes due October 2023	3.800% senior notes due October 2023	1,000		1,000		3.800% senior notes due October 2023	1,000		1,000
2.750% senior notes due July 2024	2.750% senior notes due July 2024	2,000		2,000		2.750% senior notes due July 2024	2,000		2,000
3.850% senior notes due June 2025	3.850% senior notes due June 2025	900		900		3.850% senior notes due June 2025	900		900
2.250% senior notes due July 2025 (British Pound-denominated)	2.250% senior notes due July 2025 (British Pound-denominated)	729		709		2.250% senior notes due July 2025 (British Pound-denominated)	640		705
3.200% senior notes due July 2026	3.200% senior notes due July 2026	2,000		2,000		3.200% senior notes due July 2026	2,000		2,000
2.250% senior notes due June 2027	2.250% senior notes due June 2027	1,000		1,000		2.250% senior notes due June 2027	1,000		1,000
1.125% senior notes due July 2027 (Euro-denominated)	1.125% senior notes due July 2027 (Euro-denominated)	596		612		1.125% senior notes due July 2027 (Euro-denominated)	526		566
4.200% senior notes due October 2028	4.200% senior notes due October 2028	1,000		1,000		4.200% senior notes due October 2028	1,000		1,000
3.500% senior notes due July 2029	3.500% senior notes due July 2029	3,000		3,000		3.500% senior notes due July 2029	3,000		3,000
2.650% senior notes due June 2030	2.650% senior notes due June 2030	1,000		1,000		2.650% senior notes due June 2030	1,000		1,000
1.625% senior notes due July 2030 (Euro-denominated)	1.625% senior notes due July 2030 (Euro-denominated)	596		612		1.625% senior notes due July 2030 (Euro-denominated)	526		566
3.000% senior notes due July 2031 (British Pound-denominated)	3.000% senior notes due July 2031 (British Pound-denominated)	729		709		3.000% senior notes due July 2031 (British Pound-denominated)	640		705
4.400% senior notes due July 2049	4.400% senior notes due July 2049	2,000		2,000		4.400% senior notes due July 2049	2,000		2,000
U.S. dollar commercial paper notes						U.S. dollar commercial paper notes	1,248		916
Euro commercial paper notes						Euro commercial paper notes	1,168		905
Revolving credit facility						Revolving credit facility	—		97
Receivable securitized loan	Receivable securitized loan	425		425		Receivable securitized loan	485		500
Term loan facility	Term loan facility	755		1,250		Term loan facility	200		200
Unamortized discount and deferred financing costs	Unamortized discount and deferred financing costs	(141)		(155)		Unamortized discount and deferred financing costs	(115)		(125)
U.S. commercial paper notes		1,060		0
Revolving credit facility		0		22
Finance lease and other financing obligations	Finance lease and other financing obligations	480		504		Finance lease and other financing obligations	471		528
Total long-term debt	Total long-term debt	$	20,425	$	20,300	Total long-term debt	$	20,915	$	20,729

The Company was in compliance with all financial debt covenants during the first six months of ~~2021. The~~2022. At June 30, 2022, the 3.50% senior notes due in October 2022 and the receivable securitized loan due in July 2022 were classified in the consolidated

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balance sheet as long-term, as the Company ~~maintains an~~has the intent to refinance this debt on a long-term basis and the ability to do so under its revolving credit facility, as further discussed below.

In June 2022, the Company entered into a new senior unsecured multicurrency revolving credit facility with substantially the same syndicate of banks that were lenders under its existing amended and restated revolving credit facility, which the Company voluntarily terminated and replaced. The new credit agreement matures in ~~September 2023, with~~June 2027 and provides for a maximum aggregate principal amount of availability of $6.0 billion. Borrowings under the new credit facility bear interest at a variable rate based on the Secured Overnight Financing Rate (“SOFR”) or a base rate in the case of U.S. dollar borrowings, in each case, plus a specified margin based on the Company’s long-term debt rating in effect from time to time. The credit facility also requires the Company to pay a facility fee based on the aggregate commitments ~~available for $3.5 billion of total capacity.~~

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~~In May 2021,~~in effect under the agreement from time to time. The new credit facility contains various restrictions and covenants that require the Company ~~initiated a~~to, among other things, limit its consolidated indebtedness as of the end of each fiscal quarter to no more than 3.75 times the Company’s consolidated net income before interest, taxes, depreciation, amortization, non-cash charges and expenses and certain other adjustments (“EBITDA”) during the period of four fiscal quarters then ended, subject to certain exceptions.

The Company maintains unsecured U.S. ~~unsecured~~dollar and Euro commercial paper ~~notes program,~~programs. From time to time, the ~~proceeds of which are to be used for general corporate purposes. The~~ Company may issue ~~from time to time,~~under these programs U.S. dollar commercial paper ~~notes~~ with maturities of up to 397 days from the date of issuance and Euro commercial paper with maturities of up to 183 days from the date of issuance. Outstanding borrowings under the U.S. dollar program were ~~$1.1~~$1.2 billion and $916 million at June 30, 2022 and December 31, 2021, respectively, with a weighted average interest ~~rate~~rates of ~~0.182%.~~1.984% and 0.295%, respectively. Outstanding borrowings under the Euro program were $1.2 billion and $905 million at June 30, 2022 and December 31, 2021, respectively, with weighted average interest rates of (0.219)% and (0.420)%, respectively. The Company intends to maintain available capacity under its revolving credit facility in an amount at least equal to the aggregate outstanding borrowings under its commercial paper ~~notes program.~~programs. Outstanding borrowings under the commercial paper ~~notes program~~programs are classified in the consolidated balance ~~sheet~~sheets as long-term as the Company has the intent to refinance ~~these notes~~this commercial paper on a long-term basis through the continued issuance of new commercial paper ~~notes~~ upon maturity, and the Company also has the ability to refinance such ~~notes~~commercial paper under its revolving credit facility.

~~During the three months ended June 30, 2021,~~Effective July 1, 2022, the Company ~~used~~redeemed $700 million in aggregate principal amount of its outstanding 3.50% senior notes due in October 2022 at a redemption price equal to 100% of the ~~net~~aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest. The Company financed the redemption of these notes using proceeds from the issuance of U.S. dollar commercial paper notes and from the sale of its remaining ownership interest in InvestCloud (see Note 4) to repay outstanding borrowings under its amended and restated revolving credit facility, to repay its 4.750% senior notes that matured in June 2021, and to pay down outstanding borrowings on its term loan facility.paper.

9.10. Redeemable Noncontrolling Interests

The minority ~~partners~~partner in 21 of the Company’s existing merchant alliance joint ventures ~~maintain~~maintains a redeemable noncontrolling ~~interests~~interest which ~~are~~is presented outside of equity and carried at ~~their~~its estimated redemption ~~values. Each~~value. The minority partner owns 1% of the equity in the ~~respective~~ joint venture; in addition, ~~each~~the minority partner is entitled to a contractually determined share of the ~~respective~~ entity’s income. The ~~agreements contain~~agreement contains redemption features whereby ~~interests~~the interest held by the minority partner ~~are~~is 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 joint ~~ventures~~venture may be terminated by either party for convenience any time after ~~September 1, 2021 and~~ December 31, ~~2024, respectively.~~2024. 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~~interest at a price equal to the fair market value of the minority interest through a distribution in the form of cash, certain merchant contracts of the joint venture, or a combination thereof to the minority partner. In conjunction with the termination of the joint venture, the minority partner may also exercise an option to purchase certain additional merchant contracts at fair market value.

Effective March 2, 2022, the Company and a joint venture minority partner mutually terminated one of the Company’s merchant alliance joint ventures in which the minority partner held a redeemable noncontrolling interest. AtIn conjunction with this termination, the joint venture minority partner elected to exercise its option to purchase certain additional merchant contracts of the joint venture. The Company received proceeds of $175 million from the sale of such merchant contracts of the joint venture, resulting in the recognition of a pre-tax gain of $147 million within gain on sale of assets, with related tax expense of $9 million recorded through the income tax provision, in the consolidated statement of income during the six months ended June 30, ~~2021, redeemable noncontrolling interests had a total estimated redemption value~~2022.

Table of ~~$261 million.~~Contents

The following table presents a summary of the redeemable noncontrolling interests activity during the six months ended June 30:


(In millions)	(In millions)	2021		2020		(In millions)	2022		2021
Balance at beginning of period	Balance at beginning of period	$	259	$	262	Balance at beginning of period	$	278	$	259
Distributions paid to redeemable noncontrolling interests	Distributions paid to redeemable noncontrolling interests	(20)		(22)		Distributions paid to redeemable noncontrolling interests	(21)		(20)
Share of income	Share of income	22		18		Share of income	15		22

Derecognition of redeemable noncontrolling interest						Derecognition of redeemable noncontrolling interest	(111)		—
Balance at end of period	Balance at end of period	$	261	$	258	Balance at end of period	$	161	$	261

~~10.~~11. Equity

The following tables provide changes in equity during the three and six months ended June 30, ~~2021~~2022 and ~~2020:~~2021:


		Fiserv, Inc. Shareholders’ Equity																	Fiserv, Inc. Shareholders’ Equity

Three Months Ended June 30, 2021		Number of Shares		Amount
Three Months Ended June 30, 2022																		Three Months Ended June 30, 2022	Number of Shares		Amount
(In millions)	(In millions)	Common Shares	Treasury Shares	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Noncontrolling Interests		Total Equity		(In millions)	Common Shares	Treasury Shares	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Noncontrolling Interests		Total Equity
																																			(In millions)	Common Shares	Treasury Shares	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock	Noncontrolling Interests	Total Equity
Balance at March 31, 2021		789	123	$	8	$	23,522	$	(536)	$	13,745	$	(4,888)	$	735	$	32,586
Balance at March 31, 2022																		Balance at March 31, 2022	784	137	$	8	$	22,950	$	(640)	$	15,515	$	(6,561)	$	706	$	31,978
Net income (1)	Net income (1)									269				3		272		Net income (1)									598				6		604

Distributions paid to noncontrolling interests (2)	Distributions paid to noncontrolling interests (2)													(1)		(1)		Distributions paid to noncontrolling interests (2)													(1)		(1)

Other comprehensive income								213						2		215

Other comprehensive loss																		Other comprehensive loss							(365)						(24)		(389)

Share-based compensation	Share-based compensation					61										61		Share-based compensation					94										94
Shares issued under stock plans	Shares issued under stock plans		0			(35)						22				(13)		Shares issued under stock plans		(1)			(34)						44				10
Purchases of treasury stock	Purchases of treasury stock		5									(588)				(588)		Purchases of treasury stock		5									(500)				(500)
Retirement of treasury stock (see Note 18)		(5)	(5)			(588)						588				0

Balance at June 30, 2021		784	123	$	8	$	22,960	$	(323)	$	14,014	$	(4,866)	$	739	$	32,532

Capital contribution from noncontrolling interest																		Capital contribution from noncontrolling interest													13		13
Balance at June 30, 2022																		Balance at June 30, 2022	784	141	$	8	$	23,010	$	(1,005)	$	16,113	$	(7,017)	$	700	$	31,809

(1)The total net income presented in equity for the three months ended June 30, 2022 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $5 million not included in equity.

(2)The total distributions presented in equity for the three months ended June 30, 2022 excludes $8 million in distributions paid to redeemable noncontrolling interests not included in equity.



	Fiserv, Inc. Shareholders’ Equity

Three Months Ended June 30, 2021	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
													Noncontrolling Interests
Balance at March 31, 2021	789	123	$	8	$	23,522	$	(536)	$	13,745	$	(4,888)	$	735	$	32,586

Net income (1)									269				3		272


Distributions paid to noncontrolling interests (2)													(1)		(1)
Other comprehensive income							213						2		215

Share-based compensation					61										61
Shares issued under stock plans		—			(35)						22				(13)
Purchases of treasury stock		5									(588)				(588)
Retirement of treasury stock (see Note 18)	(5)	(5)			(588)						588				—

Balance at June 30, 2021	784	123	$	8	$	22,960	$	(323)	$	14,014	$	(4,866)	$	739	$	32,532

1619

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(1)The total net income presented in equity for the three months ended June 30, 2021 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $12 million not included in equity.

(2)The total distributions presented in equity for the three months ended June 30, 2021 excludes $10 million in distributions paid to redeemable noncontrolling interests not included in equity.

Fiserv, Inc. Shareholders’ Equity
Three Months Ended
June 30, 2020 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
Noncontrolling Interests
Balance at March 31, 2020 791 117 $ 8 $ 23,693 $ (811) $ 12,875 $ (3,922) $ 1,444 $ 33,287
Net income (loss) (1)
2 (2) 0
Measurement period adjustments related to First Data acquisition (3)
(4) (4)
Distributions paid to noncontrolling interests (2)
(16) (16)
Other comprehensive income 167 23 190
Share-based compensation 94 94
Shares issued under stock plans (1) (16) 43 27
Purchases of treasury stock 6 (550) (550)
Balance at June 30, 2020 791 122 $ 8 $ 23,771 $ (644) $ 12,877 $ (4,429) $ 1,445 $ 33,028



	Fiserv, Inc. Shareholders’ Equity

Six Months Ended June 30, 2022	Number of Shares		Amount
(In millions)	Common Shares	Treasury Shares	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Noncontrolling Interests		Total Equity

Balance at December 31, 2021	784	134	$	8	$	22,983	$	(745)	$	14,846	$	(6,140)	$	720	$	31,672
Net income (1)									1,267				9		1,276

Distributions paid to noncontrolling interests (2)													(1)		(1)

Other comprehensive loss							(260)						(41)		(301)

Share-based compensation					155										155
Shares issued under stock plans		(3)			(128)						123				(5)
Purchases of treasury stock		10									(1,000)				(1,000)

Capital contribution from noncontrolling interest													13		13
Balance at June 30, 2022	784	141	$	8	$	23,010	$	(1,005)	$	16,113	$	(7,017)	$	700	$	31,809

(1)The total net income presented in equity for the ~~three~~six months ended June 30, ~~2020~~2022 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $9$15 million not included in equity.

(2)The total distributions presented in equity for the ~~three~~six months ended June 30, ~~2020~~2022 excludes ~~$10~~$21 million in distributions paid to redeemable noncontrolling interests not included in equity.

~~(3)~~During the three months ended June 30, 2020, the Company identified and recorded measurement period adjustments to the preliminary purchase price allocation related to the acquisition of First Data. Accordingly, a measurement period adjustment 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. Additional information about measurement period adjustments identified and recorded by the Company related to the First Data acquisition is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Fiserv, Inc. Shareholders’ Equity
Six Months Ended
June 30, 2021 Number of Shares Amount
(In millions) Common Shares Treasury Shares Common Stock Additional
Paid-In
Capital Accumulated
Other
Comprehensive
Loss Retained
Earnings Treasury Stock Noncontrolling Interests Total Equity
Balance at December 31, 2020 789 121 $ 8 $ 23,643 $ (387) $ 13,441 $ (4,375) $ 740 $ 33,070
Net income (1)
573 7 580
Distributions paid to noncontrolling interests (2)
(1) (1)
Other comprehensive income (loss) 64 (7) 57
Share-based compensation 127 127
Shares issued under stock plans (3) (222) 121 (101)
Purchases of treasury stock 10 (1,200) (1,200)
Retirement of treasury stock (see Note 18) (5) (5) (588) 588 0
Balance at June 30, 2021 784 123 $ 8 $ 22,960 $ (323) $ 14,014 $ (4,866) $ 739 $ 32,532

~~Table of Contents~~



	Fiserv, Inc. Shareholders’ Equity

Six Months Ended June 30, 2021	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
													Noncontrolling Interests
Balance at December 31, 2020	789	121	$	8	$	23,643	$	(387)	$	13,441	$	(4,375)	$	740	$	33,070


Net Income (1)									573				7		580


Distributions paid to noncontrolling interests (2)													(1)		(1)
Other comprehensive income (loss)							64						(7)		57

Share-based compensation					127										127
Shares issued under stock plans		(3)			(222)						121				(101)
Purchases of treasury stock		10									(1,200)				(1,200)
Retirement of treasury stock (see Note 18)	(5)	(5)			(588)						588				—




Balance at June 30, 2021	784	123	$	8	$	22,960	$	(323)	$	14,014	$	(4,866)	$	739	$	32,532

(1)The total net income presented in equity for the six months ended June 30, 2021 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $22 million not included in equity.

(2)The total distributions presented in equity for the six months ended June 30, 2021 excludes $20 million in distributions paid to redeemable noncontrolling interests not included in equity.

Fiserv, Inc. Shareholders’ Equity
Six Months Ended
June 30, 2020 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
Noncontrolling Interests
Balance at December 31, 2019 791 112 $ 8 $ 23,741 $ (180) $ 12,528 $ (3,118) $ 1,616 $ 34,595
Net income (loss) (1)
394 (26) 368
Measurement period adjustments related to First Data acquisition (3)
(126) (126)
Distributions paid to noncontrolling interests (2)
(30) (30)
Other comprehensive (loss) income (464) 11 (453)
Share-based compensation 202 202
Shares issued under stock plans (4) (172) 124 (48)
Purchases of treasury stock 14 (1,435) (1,435)
Cumulative-effect adjustment of ASU 2016-13 adoption (45) (45)
Balance at June 30, 2020 791 122 $ 8 $ 23,771 $ (644) $ 12,877 $ (4,429) $ 1,445 $ 33,028

~~(1)~~The total net income presented in equity for the six months ended June 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 $18 million not included in equity.

~~(2)The total distributions presented in equity for the six months ended June 30, 2020 excludes $22 million in distributions paid to redeemable noncontrolling interests not included in equity.~~

~~(3)~~During the six months ended June 30, 2020, the Company identified and recorded measurement period adjustments to the preliminary purchase price allocation related to the acquisition of First Data. Accordingly, a measurement period adjustment 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. Additional information about measurement period adjustments identified and recorded by the Company related to the First Data acquisition is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

~~11.~~

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12. Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component, net of income taxes, consisted of the following:

Three Months Ended June 30, 2021
(In millions) Cash Flow
Hedges Foreign
Currency
Translation Pension Plans Total
Balance at March 31, 2021 $ (118) $ (407) $ (11) $ (536)
Other comprehensive income before reclassifications
0 211 0 211
Amounts reclassified from accumulated other comprehensive loss 2 0 0 2
Net current-period other comprehensive income 2 211 0 213
Balance at June 30, 2021 $ (116) $ (196) $ (11) $ (323)



	Three Months Ended June 30, 2022
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at March 31, 2022	$	(105)	$	(572)	$	37	$	(640)
Other comprehensive loss before reclassifications	(6)		(361)		(2)		(369)
Amounts reclassified from accumulated other comprehensive loss	4		—		—		4
Net current-period other comprehensive loss	(2)		(361)		(2)		(365)
Balance at June 30, 2022	$	(107)	$	(933)	$	35	$	(1,005)

~~Table of Contents~~



	Three Months Ended June 30, 2021
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at March 31, 2021	$	(118)	$	(407)	$	(11)	$	(536)
Other comprehensive income before reclassifications	—		211		—		211
Amounts reclassified from accumulated other comprehensive loss	2		—		—		2
Net current-period other comprehensive income	2		211		—		213



Balance at June 30, 2021	$	(116)	$	(196)	$	(11)	$	(323)

Three Months Ended June 30, 2020
(In millions) Cash Flow
Hedges Foreign
Currency
Translation Pension Plans Total
Balance at March 31, 2020 $ (146) $ (659) $ (6) $ (811)
Other comprehensive income before reclassifications 3 159 0 162
Amounts reclassified from accumulated other comprehensive loss 5 0 0 5
Net current-period other comprehensive income 8 159 0 167
Balance at June 30, 2020 $ (138) $ (500) $ (6) $ (644)



	Six Months Ended June 30, 2022
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2021	$	(107)	$	(676)	$	38	$	(745)
Other comprehensive loss before reclassifications	(7)		(257)		(3)		(267)
Amounts reclassified from accumulated other comprehensive loss	7		—		—		7
Net current-period other comprehensive loss	—		(257)		(3)		(260)
Balance at June 30, 2022	$	(107)	$	(933)	$	35	$	(1,005)

Six Months Ended June 30, 2021
(In millions) Cash Flow
Hedges Foreign
Currency
Translation Pension Plans Total
Balance at December 31, 2020 $ (121) $ (254) $ (12) $ (387)
Other comprehensive income before reclassifications 1 58 1 60
Amounts reclassified from accumulated other comprehensive loss 4 0 0 4
Net current-period other comprehensive income 5 58 1 64
Balance at June 30, 2021 $ (116) $ (196) $ (11) $ (323)

Six Months Ended June 30, 2020
(In millions) Cash Flow
Hedges Foreign
Currency
Translation Pension Plans Total
Balance at December 31, 2019 $ (141) $ (33) $ (6) $ (180)
Other comprehensive loss before reclassifications (5) (467) 0 (472)
Amounts reclassified from accumulated other comprehensive loss 8 0 0 8
Net current-period other comprehensive (loss) income 3 (467) 0 (464)
Balance at June 30, 2020 $ (138) $ (500) $ (6) $ (644)



	Six Months Ended June 30, 2021
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2020	$	(121)	$	(254)	$	(12)	$	(387)


Other comprehensive income before reclassifications	1		58		1		60
Amounts reclassified from accumulated other comprehensive loss	4		—		—		4
Net current-period other comprehensive income	5		58		1		64

Balance at June 30, 2021	$	(116)	$	(196)	$	(11)	$	(323)

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. The notional amount of these derivatives was ~~$273~~$327 million and ~~$259~~$341 million at June 30, 2022 and December 31, 2021, respectively, with the fair value totaling $5$4 million ~~and $9 million is~~ reported primarily within accounts payable and accrued expenses in the consolidated balance sheet at June 30, 2022, and $6 million within prepaid expenses and other current assets ~~in the consolidated balance sheets~~ at ~~June 30, 2021 and~~ December 31, ~~2020, respectively.~~2021. Based on the amounts recorded in accumulated other comprehensive loss at June 30, ~~2021,~~

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2022, the Company estimates that it will recognize ~~gains~~losses of approximately $5$4 million in cost of processing and services during the next twelve months as foreign exchange forward contracts settle.

The Company ~~had~~ previously 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 acquisition and refinancing of certain indebtedness of First Data Corporation (“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~~loss, net of ~~$183 million~~income taxes, and recorded in accumulated other comprehensive loss ~~net of income taxes,~~ that ~~will be~~is being amortized to earnings over the terms of the originally forecasted interest payments. The unamortized balance recorded in accumulated other comprehensive loss related to the Treasury Locks was $137 million and $145 million at June 30, 2022 and December 31, 2021, respectively. Based on the amounts recorded in accumulated other comprehensive loss at June 30, ~~2021,~~2022, the Company estimates that it will recognize approximately ~~$20~~$16 million in net 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

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economic hedge of its net investments in such foreign currency-denominated subsidiaries. The Company has designated its Euro- and British Pound-denominated senior notes and Euro commercial paper 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 ~~(loss)~~ in the consolidated statements of comprehensive income ~~(loss)~~ 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 ~~(loss) gain,~~gains (losses) of $181 million and $248 million, net of income tax provision of ~~$(26)~~$61 million and ~~$(1)~~$83 million, ~~in other comprehensive income (loss)~~ during the three and six months ended June 30, ~~2021~~2022, respectively, and ~~2020, respectively,~~$(26) million and $6 million during the three and ~~$54 million for the~~ six months ended June 30, 2021, ~~and 2020,~~ respectively, in other comprehensive income from the ~~Euro-~~translation of foreign currency-denominated senior notes and ~~British Pound-denominated senior~~commercial paper notes.

~~12.~~13. Share-Based Compensation

The Company recognized ~~$61~~$94 million and ~~$94~~$61 million of share-based compensation expense during the three months ended June 30, 2022 and 2021, respectively, and ~~2020, respectively,~~$155 million and $127 million ~~and $202 million~~ of ~~share based~~share-based compensation expense during the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~Company’s annual grant of~~Company's share-based compensation awards ~~generally occurs~~are typically granted in the first ~~quarter.~~quarter of the year, and may also occur throughout the year in conjunction with acquisitions of businesses. At June 30, ~~2021,~~2022, the total remaining unrecognized compensation cost for unvested stock options, restricted stock units and awards and performance share units, net of estimated forfeitures, of ~~$373~~$636 million is expected to be recognized over a weighted-average period of ~~2.2~~2.4 years. During the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, stock options to purchase ~~2.4~~1.5 million and ~~1.8~~2.4 million shares, respectively, were exercised.

A summary of stock option activity during the six months ended June 30, 2022 is as follows:


		Shares (In thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In millions)			Shares (In thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In millions)
Stock options outstanding - December 31, 2020		14,689	$	50.82
Stock options outstanding - December 31, 2021								Stock options outstanding - December 31, 2021	10,229	$	56.36

Granted	Granted	4	102.69					Granted	—	—
Forfeited	Forfeited	(38)	107.18					Forfeited	(107)	111.90
Exercised	Exercised	(2,387)	33.56					Exercised	(1,481)	40.45
Stock options outstanding - June 30, 2021		12,268	$	54.02	4.45	$	655
Stock options exercisable - June 30, 2021		10,806	$	47.15	3.92	$	646
Stock options outstanding - June 30, 2022								Stock options outstanding - June 30, 2022	8,641	$	58.39	3.93	$	295
Stock options exercisable - June 30, 2022								Stock options exercisable - June 30, 2022	7,890	$	53.29	3.55	$	295

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A summary of restricted stock unit, restricted stock award and performance share unit activity during the six months ended June 30, 2022 is as follows:


		Restricted Stock Units and Awards			Performance Share Units				Restricted Stock Units and Awards			Performance Share Units
		Shares (In thousands)	Weighted-Average Grant Date Fair Value		Shares (In thousands)	Weighted-Average Grant Date Fair Value			Shares (In thousands)	Weighted-Average Grant Date Fair Value		Shares (In thousands)	Weighted-Average Grant Date Fair Value
Units - December 31, 2020		4,797	$	98.29	1,821	$	95.20
Units and awards - December 31, 2021								Units and awards - December 31, 2021	5,074	$	101.09	1,392	$	96.32

Granted	Granted	2,243	104.61		255	108.68		Granted	3,276	93.35		2,751	100.91
Forfeited	Forfeited	(181)	104.24		(74)	98.67		Forfeited	(409)	102.08		(62)	103.45
Vested	Vested	(2,087)	98.99		(223)	79.70		Vested	(1,764)	99.17		—	—
Units - June 30, 2021		4,772	$	100.65	1,779	$	97.23
Units and awards - June 30, 2022								Units and awards - June 30, 2022	6,177	$	97.43	4,081	$	99.40

~~13. Restructuring and Other Charges~~

In connection with the July 2019 acquisition of First Data, the Company continues to implement 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 $6 million and $92 million, primarily reportedOn April 1, 2022, 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 months ended June 30, 2021 and 2020, respectively, and $28 million and $140 million during the six months ended June 30, 2021 and 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.

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~~Employee Termination Costs~~

~~The Company recorded $5 million and $37 million of employee termination costs related to severance and other separation costs for terminated employees in connection~~conjunction with the acquisition of ~~First Data during~~Finxact (see Note 4), the ~~three months ended June 30, 2021 and 2020, respectively, and $18~~Company granted 2.4 million and $77 million during the six months ended June 30, 2021 and 2020, respectively. The following table summarizes the changes in the reserve related to the Company’s employee severance and other separation costs:

Six Months Ended
June 30,
(In millions) 2021 2020
Balance at beginning of period $ 27 $ 14
Severance and other separation costs 18 77
Cash payments (32) (62)
Balance at end of period $ 13 $ 29

~~The employee severance and other separation costs accrual balance of $13 million at June 30, 2021 is expected~~restricted stock units with performance vesting provisions to be ~~paid~~measured over two and five years, which are presented as performance share units within the next twelve months. In addition, the Company recorded share-based compensation costs of $1 million and $15 million during the three months ended June 30, 2021 and 2020, respectively, and $5 million and $23 million during the six months ended June 30, 2021 and 2020, respectively, related to the accelerated vesting of equity awards for terminated employees.

~~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 six months of 2021 and 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).table above.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 $0 million and $5 million, reported in selling, general and administrative expense within the consolidated statements of income during the three and six months ended June 30, 2021, respectively, and $40 million during both the three and six months ended June 30, 2020, respectively, associated with the early exit of these leased facilities.

~~Other Costs~~

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 adjusted the amortization period for these existing lease agreements to coincide with the modified remaining term. Finance lease expense during the three and six months ended June 30, 2020 included $7 million and $45 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 six months ended June 30, 2020 included $24 million and $34 million, respectively, of accelerated amortization associated with the termination of these vendor contracts.

14. Income Taxes

The Company’s income tax ~~(provision) benefit~~provision and effective income tax rate were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	(In millions)	2021			2020			2021			2020			(In millions)	2022			2021			2022			2021
Income tax (provision) benefit		$	(228)		$	27		$	(246)		$	(52)
Income tax provision														Income tax provision	$	137		$	228		$	235		$	246
Effective income tax rate	Effective income tax rate	48.5		%	337.5		%	31.1		%	11.5		%	Effective income tax rate	22.2		%	48.5		%	18.2		%	31.1		%

The income tax ~~(provision) benefit~~provision as a percentage of income ~~(loss)~~ before income taxes and income ~~(loss)~~ from investments in unconsolidated affiliates was ~~48.5%~~22.2% and ~~337.5%~~48.5% for the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and was ~~31.1%~~18.2% and ~~11.5%~~31.1% for the six months ended June ~~30,~~20, 2022 and 2021, ~~and 2020,~~ respectively.

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The effective income tax rate for the three months ended June 30, 2021 ~~includes~~included $134 million of income tax expense attributed to the revaluation of certain net deferred tax liabilities, primarily related to intangible assets and investments in joint ventures recognized at fair value in connection with the acquisition of First Data, reflecting the effect of enacted corporate income tax rate changes in the United Kingdom (tax rate increase from 19% to 25% starting in 2023) and Argentina (tax rate increase from 25% to 35%), partially offset by decreases in uncertain tax positions. For the three months ended June 30, 2020, the income tax benefit of $27 million on an $8 million loss before income taxes and loss from investments in unconsolidated affiliates included equity compensation related tax benefits, changes in uncertain tax positions and other discrete tax items.

The effective income tax rate for each of the six months ended June 30, 2022 and 2021 includes ~~$134 million of income tax expense noted above, partially offset by~~ discrete tax benefits from subsidiary restructurings and equity compensation related tax benefits. The effective income tax rate for the six months ended June 30, ~~2020~~2021 also included ~~$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), partially offset by~~ the impact of ~~equity compensation related~~the revaluation of certain net deferred tax ~~benefits on a lower level of pre-tax income and changes in uncertain tax positions.~~liabilities described above.

The Company’s potential liability for unrecognized tax benefits before interest and penalties was approximately ~~$160~~$110 million at June 30, ~~2021.~~2022. The Company believes it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to ~~$35~~$6 million over the next twelve months as a result of possible closure of ~~federal~~ tax audits, potential audit settlements, ~~with certain states,~~ and the lapse of the statutes of limitation in various jurisdictions.

As of June 30, ~~2021,~~2022, the Company’s U.S. federal income tax ~~returns~~return for ~~2017, 2019 and 2020,~~2021, and tax returns in certain states and foreign jurisdictions for ~~2005~~2013 through ~~2020,~~2021, remain subject to examination by taxing authorities. 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 2010 forward in relation to First Data’s foreign tax filings, none

Table of ~~which are considered significant jurisdictions.~~Contents

15. 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 share is as follows:


		Three Months Ended June 30,		Six Months Ended June 30,			Three Months Ended June 30,		Six Months Ended June 30,
(In millions)	(In millions)	2021	2020	2021	2020	(In millions)	2022	2021	2022	2021
Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - basic	Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - basic	663.7	670.0	666.1	674.1	Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - basic	645.2	663.7	648.0	666.1
Common stock equivalents	Common stock equivalents	9.0	10.8	10.2	11.9	Common stock equivalents	5.6	9.0	6.0	10.2
Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - diluted	Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - diluted	672.7	680.8	676.3	686.0	Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - diluted	650.8	672.7	654.0	676.3

For the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, stock options for ~~1.2~~2.2 million and ~~3.1~~1.2 million shares, respectively, were excluded from the calculation of weighted-average outstanding shares - diluted because their impact was anti-dilutive. For the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, stock options for ~~1.4~~2.1 million and ~~1.8~~1.4 million shares, respectively, were excluded from the calculation of weighted-average outstanding shares - diluted because their impact was anti-dilutive.

16. Cash Flow Information

Supplemental cash flow information consisted of the following:


		Six Months Ended June 30,					Six Months Ended June 30,
(In millions)	(In millions)	2021		2020		(In millions)	2022		2021
Interest paid	Interest paid	$	301	$	320	Interest paid	$	303	$	301
Income taxes paid	Income taxes paid	290		72		Income taxes paid	399		290

Financed software arrangements		68		97
Distribution of nonmonetary assets (see Note 10)						Distribution of nonmonetary assets (see Note 10)	111		—
Software obtained under financing arrangements						Software obtained under financing arrangements	61		68
Right-of-use assets obtained in exchange for lease liabilities - operating leases	Right-of-use assets obtained in exchange for lease liabilities - operating leases	71		0		Right-of-use assets obtained in exchange for lease liabilities - operating leases	98		71
Right-of-use assets obtained in exchange for lease liabilities - finance leases	Right-of-use assets obtained in exchange for lease liabilities - finance leases	95		315		Right-of-use assets obtained in exchange for lease liabilities - finance leases	69		95

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17. 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 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~~accruals of ~~$43~~$24 million and $32 million at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, related to its various legal proceedings, primarily associated with the Company’s merchant acquiring business ~~as described above.~~and certain tax matters. The Company’s estimate of the possible range of exposure for various litigation matters in excess of amounts accrued is $0 million to approximately ~~$65~~$50 million. In the opinion of management, the liabilities, if any, which may ultimately result from such ~~lawsuits~~legal proceedings 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, which are separate and distinct from the settlement payment transactions described in Note 1, 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~~$1.1 billion and ~~$1.7~~$1.6 billion at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 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

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businesses that are sold. Payments, net of recoveries, under such indemnification or warranty provisions were not material to the Company’s consolidated financial statements.

18. Related Party Transactions

Merchant Alliances

The Company maintains ownership interests ~~of significant influence~~ in various merchant ~~alliances and strategic investments in companies in related markets.~~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 primarily based on contractual pricing.

~~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 majority 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 processing and other service fees charged to merchant alliances accounted for under the equity method are recognized in the Company’s consolidated statements of income primarily as processing and services revenue. Such fees totaled ~~$45~~$46 million and ~~$41~~$45 million for the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively and ~~$90~~$93 million and ~~$87~~$90 million for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. 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 financial institution 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 financial institution 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 ~~$34~~$37 million and ~~$37~~$36 million of amounts due from unconsolidated merchant alliances included within trade accounts receivable, net in the consolidated balance sheets at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

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 certain joint ~~ventures.~~ventures accounted for under the equity method. Amounts transacted

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through these agreements, including with InvestCloud through June 2021, totaled ~~$13~~$5 million and ~~$16~~$13 million during the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$26~~$9 million and ~~$27~~$26 million during the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and were primarily recognized as processing and services revenue in the consolidated statements of income.

Share Repurchase

On May 3, 2021, New Omaha Holdings L.P. (“New Omaha”), a shareholder of the Company, completed an underwritten secondary public offering of 23.0 million shares of Fiserv, Inc. common stock (the “offering”). The Company did not sell any shares in, nor did it receive any proceeds from, the offering. New Omaha received all of the net proceeds from the offering. In connection with the offering, the Company repurchased from the underwriters 5.0 million shares of its common stock that were subject to the offering, at a price equal to the price per share paid by the underwriters to New Omaha in the offering (the “share repurchase”). The share repurchase totaled $588 million and was funded with cash on hand. The repurchased shares were cancelled and no longer outstanding following the completion of the share repurchase. Prior to the offering, New Omaha owned approximately 13% of the Company’s outstanding shares of common ~~stock, and following the offering,~~stock. New Omaha owned ~~approximately 9%~~less than 5% of the Company’s outstanding shares of common stock as of June 30, ~~2021.~~2022.

19. Business Segment Information

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 commerce-enabling solutions and serve merchants of all sizes around the world. These ~~services~~solutions include point-of-sale merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; CaratSM, the Company’s omnichannel commerce ~~solution; and~~ecosystem; Clover®, the Company’s cloud-based point-of-sale and business management platform; and Clover® ~~point-of-sale~~ Connect, the Company’s independent software vendor platform. The Company distributes the products and services in the global Acceptance segment businesses through a variety of channels, including direct sales teams, strategic partnerships with agent sales forces, independent software vendors, financial institutions and other strategic partners in the form of joint venture alliances, revenue sharing alliances and referral agreements. Merchants, financial institutions and distribution partners in the Acceptance segment are frequently clients of the Company’s other segments.

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The businesses in the Fintech segment provide financial institutions around the world with the technology solutions they need to run their operations, including products and services that enable financial institutions to process customer deposit and loan accounts and manage an institution’s general ledger and central information files. As a complement to the core account processing functionality, the global Fintech segment businesses also provide digital banking, financial and risk management, professional services and consulting, item processing and source capture, and other products and services that support numerous types of financial transactions. ~~Some~~Certain 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 products and services provided by 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 ~~global~~ 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 described 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 or losses on sales of businesses, certain assets or investments, 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 prior to the Company’s disposal of its controlling financial interest in February 2020 (see Note 4), as well as certain transition services revenue associated with various ~~dispositions.~~

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dispositions, and the Company’s Output Solutions postage reimbursements.

Revenue and operating income (loss) for each reportable segment were as follows:


		Reportable Segments											Reportable Segments
(In millions)	(In millions)	Acceptance		Fintech		Payments		Corporate and Other		Total		(In millions)	Acceptance		Fintech		Payments		Corporate and Other		Total
Three Months Ended June 30, 2022												Three Months Ended June 30, 2022
Processing and services revenue												Processing and services revenue	$	1,668	$	760	$	1,262	$	6	$	3,696
Product revenue												Product revenue	233		43		256		222		754
Total revenue												Total revenue	$	1,901	$	803	$	1,518	$	228	$	4,450
Operating income (loss)												Operating income (loss)	$	593	$	281	$	662	$	(676)	$	860
Three Months Ended June 30, 2021	Three Months Ended June 30, 2021											Three Months Ended June 30, 2021
Processing and services revenue	Processing and services revenue	$	1,432	$	708	$	1,211	$	10	$	3,361	Processing and services revenue	$	1,432	$	708	$	1,211	$	10	$	3,361
Product revenue	Product revenue	234		46		210		200		690		Product revenue	234		46		210		200		690
Total revenue	Total revenue	$	1,666	$	754	$	1,421	$	210	$	4,051	Total revenue	$	1,666	$	754	$	1,421	$	210	$	4,051
Operating income (loss)	Operating income (loss)	$	524	$	273	$	629	$	(782)	$	644	Operating income (loss)	$	524	$	273	$	629	$	(782)	$	644
Three Months Ended June 30, 2020
Six Months Ended June 30, 2022												Six Months Ended June 30, 2022
Processing and services revenue	Processing and services revenue	$	1,049	$	675	$	1,153	$	13	$	2,890	Processing and services revenue	$	3,078	$	1,495	$	2,477	$	10	$	7,060
Product revenue	Product revenue	174		39		167		195		575		Product revenue	476		86		503		463		1,528
Total revenue	Total revenue	$	1,223	$	714	$	1,320	$	208	$	3,465	Total revenue	$	3,554	$	1,581	$	2,980	$	473	$	8,588
Operating income (loss)	Operating income (loss)	$	245	$	252	$	548	$	(880)	$	165	Operating income (loss)	$	1,063	$	556	$	1,280	$	(1,193)	$	1,706
Six Months Ended June 30, 2021	Six Months Ended June 30, 2021											Six Months Ended June 30, 2021
Processing and services revenue	Processing and services revenue	$	2,621	$	1,397	$	2,375	$	22	$	6,415	Processing and services revenue	$	2,621	$	1,397	$	2,375	$	22	$	6,415
Product revenue	Product revenue	442		93		451		405		1,391		Product revenue	442		93		451		405		1,391
Total revenue	Total revenue	$	3,063	$	1,490	$	2,826	$	427	$	7,806	Total revenue	$	3,063	$	1,490	$	2,826	$	427	$	7,806
Operating income (loss)	Operating income (loss)	$	911	$	519	$	1,207	$	(1,518)	$	1,119	Operating income (loss)	$	911	$	519	$	1,207	$	(1,518)	$	1,119
Six Months Ended June 30, 2020
Processing and services revenue		$	2,239	$	1,348	$	2,337	$	41	$	5,965
Product revenue		385		84		369		431		1,269
Total revenue		$	2,624	$	1,432	$	2,706	$	472	$	7,234
Operating income (loss)		$	562	$	456	$	1,113	$	(1,337)	$	794

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This quarterly report contains “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those that express a plan, belief, expectation, estimation, anticipation, intent, contingency, future development or similar expression, and can generally be identified as forward-looking because they include words such as “believes,” “anticipates,” “expects,” “could,” “should,” or words of similar meaning. Statements that describe our future plans, objectives or goals are also forward-looking statements.

The forward-looking statements in this report involve significant risks and uncertainties, and a number of factors, both foreseen and unforeseen, that could cause actual results to differ materially from our current expectations. The factors that may affect our results include, among others, the following, many of which ~~are, and~~ may continue to be amplified by the COVID-19 pandemic: the duration and intensity of the COVID-19 pandemic, including how quickly the global economy recovers from the impact of the pandemic; governmental and private sector responses to the COVID-19 pandemic and the impact of such responses on us; the impact of the COVID-19 pandemic on our employees, clients, vendors, supply chain, operations and sales; the possibility that we may be unable to achieve expected synergies and operating efficiencies from the acquisition of First Data Corporation (“First Data”) within the expected time frames or that the integration of First Data may be more difficult, time-consuming or costly than expected; our ability to compete effectively against new and existing competitors and to continue to introduce competitive new products and services on a timely, cost-effective basis; changes in customer demand for our products and services; the ability of our technology to keep pace with a rapidly evolving marketplace; the ~~successful management~~success of our merchant ~~alliance program~~alliances, some of which ~~involves several alliances~~we do not ~~under our sole~~ control; the impact of a security breach or operational failure on our business including disruptions caused by other participants in the global financial system; the failure of our vendors and merchants to satisfy their obligations; the successful management of credit and fraud risks in our business and merchant alliances; changes in local, regional, national and international economic or political conditions, including those resulting from heightened inflation, a recession, or intensified international hostilities, and the impact they may have on us and our customers; the effect of proposed and enacted legislative and regulatory actions affecting us or the financial services industry as a whole; our ability to comply with government regulations and applicable card association and network rules; the protection and validity of intellectual property rights; the outcome of pending and future litigation and governmental proceedings; our ability to successfully identify, complete and integrate acquisitions, and to realize the anticipated benefits associated with the same; the impact of our strategic initiatives; our ability to attract and retain key personnel; volatility and disruptions in financial markets that may impact our ability to access preferred sources of financing and the terms on which we are able to obtain financing or increase our costs of borrowing; adverse impacts from currency exchange rates or currency controls; changes in corporate tax and interest rates; and other factors included in "Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 and in other documents that we file with the Securities and Exchange Commission, which are available at http://www.sec.gov. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements, which speak only as of the date of this report. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.

Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to our unaudited consolidated financial statements and accompanying notes to help provide an understanding of our financial condition, the changes in our financial condition and our results of operations. Our discussion is organized as follows:

•Overview. This section contains background information on our company and the services and products that we provide, acquisitions and dispositions, 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, ~~2020~~2021 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, ~~2021~~2022 to the comparable ~~periods~~period in ~~2020.~~2021.

•Liquidity and capital resources. This section provides an analysis of our cash flows and a discussion of our outstanding debt at June 30, ~~2021.~~2022.

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Overview

Company Background

We are a leading global provider of payments and financial services technology solutions. We serve clients around the globe, including merchants, banks, credit unions, financial technology companies and corporate clients. We provide account processing and digital banking solutions; card issuer processing and network services; payments; e-commerce; merchant acquiring and processing; and the Clover® cloud-based point-of-sale (“POS”) ~~solution. We serve clients around the globe, including banks, credit unions, other financial institutions, corporate clients~~ and ~~merchants.~~business management platform.

We aspire to move money and information in a way that moves the world by delivering superior value for our clients through leading technology, targeted innovation and excellence in everything we do. We are focused on driving growth and creating value by assembling a high-performing and diverse team, integrating our solutions, delivering operational excellence, allocating capital in a disciplined manner, including share repurchase and merger and acquisition activity, and delivering breakthrough innovation.

Our operations are comprised of the Merchant Acceptance (“Acceptance”) segment, the Financial Technology (“Fintech”) segment and the Payments and Network (“Payments”) segment.

The businesses in our Acceptance segment provide a wide range of commerce-enabling solutions ~~and serve~~to merchants of all sizes and types around the world. These ~~services~~solutions include POS merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; CaratSM, our omnichannel commerce ~~solution; and~~ecosystem; Clover, our cloud-based POS and business management platform, which includes a marketplace for proprietary and third-party business applications; and Clover® ~~POS~~ Connect, our independent software vendor (“ISV”) platform. We distribute the products and services in the global Acceptance segment businesses through a variety of channels, including direct sales teams, strategic partnerships with agent sales forces, ~~independent software vendors,~~ISVs, financial institutions, and other strategic partners in the form of joint venture alliances, revenue sharing alliances, and referral agreements. Merchants, financial institutions and distribution partners in the Acceptance segment are frequently clients of our other segments.

The businesses in our Fintech segment provide financial institutions around the world with the technology solutions they need to run their operations, including products and services that enable financial institutions to process customer deposit and loan accounts and manage an institution's general ledger and central information files. As a complement to the core account processing functionality, the global Fintech segment businesses also provide digital banking, financial and risk management, professional services and consulting, item processing and source capture, and other products and services that support numerous types of financial transactions. ~~Some~~Certain 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 products and services provided by our other segments.

The businesses in our 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; and card production and print services. In addition, the ~~global~~ 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 our other segments.

Corporate and Other supports the reportable segments described above, and consists of amortization of acquisition-related intangible assets, unallocated corporate expenses and other activities that are not considered when we evaluate segment performance, such as gains or losses on sales of businesses, certain assets or investments, costs associated with acquisition and divestiture activity, and our Output Solutions postage reimbursements. Corporate and Other also includes the historical results of our Investment Services business prior to the disposition of our controlling financial interest in February 2020, as well as certain transition services revenue associated with various ~~dispositions.~~dispositions, and our Output Solutions postage reimbursements.

Acquisitions ~~and Dispositions~~

We frequently review our portfolio to ensure we have the ~~right set of businesses~~necessary business assets to execute on our strategy. We expect to acquire businesses when we identify: a compelling strategic need, such as a product, service or technology that helps meet client demand; an opportunity to change industry dynamics; a way to achieve business scale; or similar considerations. We expect to divest businesses that are not in line with our market, product or financial strategies.

2022 Acquisitions

On June 1, 2022, we acquired The LR2 Group, LLC (“City POS”), an independent sales organization (“ISO”) that promotes payment processing services and facilitates the sale of point-of-sale equipment for merchants. City POS is included within our

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Acceptance segment and expands the reach of our merchant services business. On April 1, 2022, we acquired a remaining ownership interest in Finxact, Inc. (“Finxact”), a developer of cloud-native banking solutions powering digital transformation throughout the financial services sector. Finxact is included within our Fintech segment and advances our digital banking strategy, expanding our account processing, digital, and payments solutions. We acquired these businesses for an aggregate purchase price of approximately $671 million, net of $27 million of acquired cash.

2021 Acquisitions

On November 22, 2021, we acquired BentoBox CMS, Inc. (“BentoBox”), a digital marketing and commerce platform that helps restaurants connect with their guests. BentoBox is included within the Acceptance segment and further expands our Clover dining solutions and commerce and business management capabilities. On November 15, 2021, we acquired a remaining ownership interest in NetPay Solutions Group (“NetPay”), a multi-channel payment service provider offering a range of capabilities around onboarding, customer lifecycle, risk management and settlement to businesses of all sizes. NetPay is included within the Acceptance segment and further expands our merchant services business. On October 1, 2021, we acquired Integrity Payments, LLC (“AIP”), an ISO that promotes payment processing services for merchants and is included within the Acceptance segment. On June 14, 2021, we acquired Spend Labs Inc. (“SpendLabs”), a mobile-native, cloud-based software provider of commercial card payment solutions. SpendLabs is included within the Payments segment and further expands our digital capabilities across

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mobile and desktop devices for small and mid-sized businesses. On May 4, 2021, we acquired Pineapple Payments Holdings, LLC (“Pineapple Payments”), an ~~independent sales organization~~ISO that provides payment processing, proprietary technology, and payment acceptance solutions for merchants. Pineapple Payments is included within the Acceptance segment and expands the reach of our payment solutions through its technology- and relationship-led distribution channels. On March 1, 2021, we acquired Radius8, Inc. (“Radius8”), a provider of a platform that uses consumer location and other information to drive incremental merchant transactions. Radius8 is included within the Acceptance segment and enhances our ability to help merchants increase sales, expand mobile application registration and improve one-to-one target marketing. On January 22, 2021, we acquired a remaining ownership interest in Ondot Systems, Inc. (“Ondot”), a digital experience platform provider for financial institutions. ~~We previously held a noncontrolling equity interest in Ondot, which was accounted for at cost.~~ Ondot is included within the Payments segment and further expands our digital capabilities, enhancing our suite of integrated payments, banking and merchant solutions. We acquired these businesses for an aggregate purchase price of approximately ~~$526~~$882 million, net of ~~$19~~$43 million of acquired cash, and including earn-out provisions ~~estimated~~ at an aggregate fair value of ~~$33~~$34 million. The results of operations for these acquired businesses are included in our consolidated results from the respective dates of acquisition.

On March 2, 2020, we 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 our merchant services business. On March 18, 2020, we 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 our ability to help businesses deliver seamless physical and digital customer experiences. On May 11, 2020, we acquired Inlet, LLC (“Inlet”), a provider of secure digital delivery solutions for enterprise and middle-market biller invoices and statements. Inlet is included within the Payments segment and further enhances our digital bill payment strategy. We 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 an aggregate fair value of $45 million. The results of operations for these acquired businesses are included in our consolidated results from the respective dates of acquisition.

~~Dispositions~~

Effective July 1, 2020, we and Bank of America (“BANA”) dissolved the Banc of America Merchant Services joint venture (“BAMS” or the “joint venture”), of which we maintained a 51% controlling ownership interest. Upon dissolution of the joint venture’s 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 consist of supporting the transition of the business to each party and an orderly wind down of remaining BAMS assets and liabilities. The revenues and expenses of the BAMS joint venture were consolidated into our financial results through the date of dissolution. The business transferred to us is included within our Acceptance segment.

We continue to provide merchant processing and related services to former BAMS clients allocated to BANA, at BAMS pricing, through June 2023. We 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 companies are entitled to certain transition services, at fair value, from each other through June 2023.

~~On February 18, 2020, we sold a 60% controlling interest of our Investment Services business, subsequently renamed as Tegra118, LLC (“Tegra118”). We received~~ ~~pre-tax proceeds of $584 million, net of related expenses, resulting in a pre-tax gain on the sale of $428 million, with a related tax expense of $112 million~~. The revenues, expenses and cash flows of the Investment Services business were consolidated into our financial results through the date of the sale transaction, and is reported within Corporate and Other. On February 2, 2021, Tegra118 completed a merger with a third party, resulting in a dilution of our ownership interest in the combined new entity, Wealthtech Holdings, LLC, which was subsequently renamed as InvestCloud Holdings, LLC (“InvestCloud”). In connection with the transaction, we made an additional capital contribution of $200 million into the combined entity and recognized a pre-tax gain of $28 million, with a related tax expense of $6 million. On June 30, 2021, we sold our entire ownership interest in InvestCloud for $466 million, resulting in a pre-tax gain of $33 million, with a related tax expense of $8 million. We will continue to provide various technical and data center related services for defined periods under the terms of a pre-existing transition services agreement.

Industry Trends

The global payments landscape continues to evolve, with rapidly advancing technologies and a steady expansion of digital payments, e-commerce and innovation in real-time payments infrastructure. Because of this growth, competition also continues to evolve. Business and consumer expectations continue to rise, with a focus on convenience and security. To meet these

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expectations, payments companies are focused on modernizing their technology, expanding the use of data and enhancing the customer experience.

Merchants

The rapid growth in and globalization of mobile and e-commerce, driven by consumers’ desire for simpler, more efficient shopping experiences, has created an opportunity for merchants to reach consumers in high-growth online and mobile settings, which often requires a merchant acquiring provider to enable and optimize the acceptance of payments. Merchants are demanding simpler, integrated, and modern POS systems to help manage their everyday business operations. When combined with the ever-increasing ways a consumer can pay for goods and services, merchants have sought modern POS systems to streamline this complexity. Furthermore, merchants can now search, discover, compare, purchase and even install a new POS system through direct, digital-only experiences. This direct, digital-only channel is quickly becoming a source of new merchant acquisition opportunities, especially with respect to smaller merchants.

In addition, there are numerous software-as-a-service (“SaaS”) solutions in the industry, many of which have chosen to integrate merchant acquiring within their software as a way to further monetize their client relationships. SaaS solutions that integrate payments are often referred to as ~~independent software vendors,~~ISVs, and we believe there are thousands of these potential distribution partnership opportunities available to us.

We believe that our merchant acquiring products and solutions create compelling value propositions for merchant clients of all sizes, from small and mid-sized businesses to medium-sized regional businesses to global enterprise merchants, and across all verticals. Furthermore, we believe that our sizable and diverse client base, combined with valued partnerships with merchant acquiring businesses of small, medium and large financial institutions, and non-financial institutions, gives us a solid foundation for growth.

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Financial Institutions

~~The market for products and services offered by financial institutions continues to evolve rapidly. The traditional financial industry and other market entrants~~Financial service providers regularly introduce and implement new payment, deposit, risk management, lending and investment products, and the distinctions among the products and services traditionally offered by different types of financial institutions continue to narrow as they seek to serve the same customers. At the same time, the evolving global regulatory and cybersecurity landscape has continued to create a challenging operating environment for financial institutions. These conditions are driving heightened interest in solutions that help financial institutions win and retain customers, generate incremental revenue, comply with regulations and enhance operating efficiency. Examples of these solutions include electronic payments and delivery methods such as internet, mobile and tablet banking, sometimes referred to as “digital ~~channels.~~channels,” which enable financial institutions to offer their customers an industry-leading digital banking experience.

The focus on digital channels by both financial institutions and their customers, as well as the growing volume and types of payment transactions in the marketplace, continues to elevate the data and transaction processing needs of financial institutions. We expect that financial institutions will continue to invest significant capital and human resources to process transactions, manage information, maintain regulatory compliance and offer innovative new services to their customers in this rapidly evolving and competitive environment. We anticipate that we will benefit over the long term from the trend of financial institutions moving from in-house technology to outsourced solutions as they seek to remain current on technology changes in an evolving marketplace. We believe that economies of scale in developing and maintaining the infrastructure, technology, products, services and networks necessary to be competitive in such an environment are essential to justify these investments, and we anticipate that demand for products that facilitate customer interaction with financial institutions, including ~~electronic transactions through digital~~a unified, seamless customer experience across mobile and online channels, will continue to increase, which we expect to create revenue opportunities for us.

In addition to the trends described above, ~~the financial institutions marketplace has experienced change in composition as well. During~~during the past 25 years, the number of financial institutions in the United States has declined at a relatively steady rate of approximately 3% per year, primarily as a result of voluntary mergers and acquisitions. Rather than reducing the overall market, these consolidations ~~have transferred~~transfer accounts among financial institutions. If a client loss occurs due to merger or acquisition, we typically receive a contract termination fee based on the size of the client and how early in the contract term the contract is terminated. These fees can vary from period to period with the variance depending on the quantum of financial institution merger activity in a given period and whether or not our clients are involved in the activity. Our focus on long-term client relationships and recurring, transaction-oriented products and services has also reduced the impact that consolidation in the financial services industry has had on us. We believe that the integration of our products and services creates a compelling value proposition for our clients by providing, among other things, new sources of revenue and opportunities to reduce their costs. Furthermore, we believe that our sizable and diverse client base, combined with our position as a leading provider of non-discretionary, recurring revenue-based products and services, gives us a solid foundation for growth.

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Recent Market Conditions

Since early 2020, the world has been, and continues to be, impacted by ~~the novel strain of~~ the coronavirus (“COVID-19”) pandemic. The COVID-19 pandemic, and various measures imposed by the governments of many countries, states, cities and other geographic regions to prevent its spread, have negatively impacted, and may continue to negatively impact, global economic and market conditions, including levels of consumer and business spending. ~~Consequently,~~The environment surrounding COVID-19 and countermeasures taken to reduce its spread may impact our ~~operating~~future performance ~~primarily within~~and remains difficult to predict.

Beginning in 2021, we began observing increasing shortages and delays in the global supply chain for components and inputs necessary to our ~~merchant acquiring~~businesses, such as semiconductors, paper and ~~payment-related businesses, which earn transaction-based fees, has been adversely affected,~~plastic, and may experience difficulty procuring those components and inputs in the future on a timely basis or at historical prices. In addition, the impacts of the macroeconomic environment, including supply chain shortages, higher inflation rates, and other global economic conditions, have impacted, and may continue to ~~be adversely affected, by the economic~~ impact, ~~of the COVID-19 pandemic. Such uncertainty remains despite improving trends in global economic activity and market conditions.~~

~~We have taken several actions since the onset of the pandemic to protect the health, safety and well-being of~~ our ~~employees while maintaining~~ business, continuity. These actions include, among others, requiring a majority of our employees to work remotely, eliminating non-essential travel, limiting visitors to our facilities, disinfecting facilities and workspaces extensively and frequently, providing personal protective equipment to associates and requiring employees who are present at our facilities to adhere to a variety of safety protocols. In addition, we have expanded paid time-off for employees impacted by COVID-19, provided increased pay for certain employees involved in critical infrastructure who could not work remotely, and expanded our Fiserv Cares program to benefit employees in need around the world. We recently began a limited reopening of our offices and expect to continue to gradually reopen additional facilities during the second half of 2021 while observing appropriate safety measures.

~~Our operating performance is subject to global economic and market conditions, as well as their impacts on levels of~~ consumer ~~and business spending. As a result of the COVID-19 pandemic~~spending and the ~~related decline in global economic activity, we experienced~~economy as a significant decrease in payments volume and transactions beginning in late March 2020 that negatively impacted our merchant acquiring and payment-related businesses, which earn transaction-based fees, as well as modest declines in other businesses. Merchant acquiring transaction and payment volumes began to partially recover throughout the remainder of 2020 with continued transaction and payment volume growth through the second quarter of 2021. Accordingly, our merchant acquiring and payment-related businesses were less impacted by the COVID-19 pandemic during the first six months of 2021 than they were throughout most of fiscal 2020. While this recent business trend is positive, the uncertainty caused by the pandemic continues to create an economic environment where our future financial results remain difficult to anticipate. We currently expect payments volume and transactions to continue to improve throughout 2021, consistent with consumer and business spending experienced to date.whole.

The extent of the impact of the pandemic on our 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 us; the level of success of global vaccination efforts; and the impact of the pandemic on our employees, clients, supply chain, operations and sales, all of which are uncertain and cannot be predicted.

Changes in Critical Accounting Policies and Estimates

Our consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States, which require management to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenue and expenses. In our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, we identified our critical accounting policies and estimates. We continually evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements, including for recently adopted accounting pronouncements, and base our estimates on historical experience and assumptions that we believe are reasonable in light of current circumstances. Actual amounts and results could differ materially from these estimates. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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Results of Operations

The following table presents certain amounts included in our consolidated statements of income, the relative percentage that those amounts represent to revenue and the change in those amounts from ~~year-to-year.~~year to year. This information should be read together with the unaudited consolidated financial statements and accompanying notes. The unaudited financial results presented below have been affected by acquisitions, dispositions, and foreign currency fluctuations.

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		Three Months Ended June 30,													Three Months Ended June 30,
		2021		2020		Percentage of Revenue (1)				Increase (Decrease)					2022		2021		Percentage of Revenue (1)				Increase (Decrease)
(In millions)	(In millions)					2021		2020		$		%		(In millions)					2022		2021		$		%
Revenue:	Revenue:													Revenue:
Processing and services	Processing and services	$	3,361	$	2,890	83.0	%	83.4	%	$	471	16	%	Processing and services	$	3,696	$	3,361	83.1	%	83.0	%	$	335	10	%
Product	Product	690		575		17.0	%	16.6	%	115		20	%	Product	754		690		16.9	%	17.0	%	64		9	%
Total revenue	Total revenue	4,051		3,465		100.0	%	100.0	%	586		17	%	Total revenue	4,450		4,051		100.0	%	100.0	%	399		10	%
Expenses:	Expenses:													Expenses:
Cost of processing and services	Cost of processing and services	1,498		1,466		44.6	%	50.7	%	32		2	%	Cost of processing and services	1,502		1,498		40.6	%	44.6	%	4		—	%
Cost of product	Cost of product	469		454		68.0	%	79.0	%	15		3	%	Cost of product	542		469		71.9	%	68.0	%	73		16	%
Sub-total	Sub-total	1,967		1,920		48.6	%	55.4	%	47		2	%	Sub-total	2,044		1,967		45.9	%	48.6	%	77		4	%
Selling, general and administrative	Selling, general and administrative	1,440		1,377		35.5	%	39.7	%	63		5	%	Selling, general and administrative	1,546		1,440		34.7	%	35.5	%	106		7	%
Loss on sale of business		—		3		—	%	0.1	%	(3)		n/m

Total expenses	Total expenses	3,407		3,300		84.1	%	95.2	%	107		3	%	Total expenses	3,590		3,407		80.7	%	84.1	%	183		5	%
Operating income	Operating income	644		165		15.9	%	4.7	%	479		290	%	Operating income	860		644		19.3	%	15.9	%	216		34	%
Interest expense, net	Interest expense, net	(175)		(174)		(4.3)	%	(5.0)	%	1		1	%	Interest expense, net	(176)		(175)		(4.0)	%	(4.3)	%	1		1	%

Other income		1		1		—	%	—	%	—		—	%
Income (loss) before income taxes and income (loss) from investments in unconsolidated affiliates		470		(8)		11.6	%	(0.2)	%	478		n/m
Income tax (provision) benefit		(228)		27		(5.6)	%	0.8	%	255		n/m
Income (loss) from investments in unconsolidated affiliates		42		(10)		1.0	%	(0.3)	%	52		n/m
Other (expense) income														Other (expense) income	(66)		1		(1.5)	%	—	%	(67)		n/m
Income before income taxes and income from investments in unconsolidated affiliates														Income before income taxes and income from investments in unconsolidated affiliates	618		470		13.9	%	11.6	%	148		31	%
Income tax provision														Income tax provision	(137)		(228)		(3.1)	%	(5.6)	%	(91)		40	%
Income from investments in unconsolidated affiliates														Income from investments in unconsolidated affiliates	128		42		2.9	%	1.0	%	86		n/m
Net income	Net income	284		9		7.0	%	0.3	%	275		n/m		Net income	609		284		13.7	%	7.0	%	325		114	%
Less: net income attributable to noncontrolling interests	Less: net income attributable to noncontrolling interests	15		7		0.4	%	0.2	%	8		114	%	Less: net income attributable to noncontrolling interests	11		15		0.2	%	0.4	%	(4)		(27)	%
Net income attributable to Fiserv, Inc.	Net income attributable to Fiserv, Inc.	$	269	$	2	6.6	%	0.1	%	$	267	n/m		Net income attributable to Fiserv, Inc.	$	598	$	269	13.4	%	6.6	%	$	329	122	%

(1)Percentage of revenue is calculated as the relevant revenue, expense ~~income~~ or ~~loss~~income amount divided by total revenue, except for cost of processing and services and cost of product amounts, which are divided by the related component of revenue.

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		Six Months Ended June 30,													Six Months Ended June 30,
		2021		2020		Percentage of Revenue (1)				Increase (Decrease)					2022		2021		Percentage of Revenue (1)				Increase (Decrease)
(In millions)	(In millions)					2021		2020		$		%		(In millions)					2022		2021		$		%
Revenue:	Revenue:													Revenue:
Processing and services	Processing and services	$	6,415	$	5,965	82.2	%	82.5	%	$	450	8	%	Processing and services	$	7,060	$	6,415	82.2	%	82.2	%	$	645	10	%
Product	Product	1,391		1,269		17.8	%	17.5	%	122		10	%	Product	1,528		1,391		17.8	%	17.8	%	137		10	%
Total revenue	Total revenue	7,806		7,234		100.0	%	100.0	%	572		8	%	Total revenue	8,588		7,806		100.0	%	100.0	%	782		10	%
Expenses:	Expenses:													Expenses:
Cost of processing and services	Cost of processing and services	2,895		3,101		45.1	%	52.0	%	(206)		(7)	%	Cost of processing and services	2,938		2,895		41.6	%	45.1	%	43		1	%
Cost of product	Cost of product	979		986		70.4	%	77.7	%	(7)		(1)	%	Cost of product	1,078		979		70.5	%	70.4	%	99		10	%
Sub-total	Sub-total	3,874		4,087		49.6	%	56.5	%	(213)		(5)	%	Sub-total	4,016		3,874		46.8	%	49.6	%	142		4	%
Selling, general and administrative	Selling, general and administrative	2,813		2,781		36.0	%	38.4	%	32		1	%	Selling, general and administrative	3,013		2,813		35.1	%	36.0	%	200		7	%
Gain on sale of business		—		(428)		—	%	(5.9)	%	428		n/m
Gain on sale of assets														Gain on sale of assets	(147)		—		(1.7)	%	—	%	(147)		n/m
Total expenses	Total expenses	6,687		6,440		85.7	%	89.0	%	247		4	%	Total expenses	6,882		6,687		80.1	%	85.7	%	195		3	%
Operating income	Operating income	1,119		794		14.3	%	11.0	%	325		41	%	Operating income	1,706		1,119		19.9	%	14.3	%	587		52	%
Interest expense, net	Interest expense, net	(351)		(361)		(4.5)	%	(5.0)	%	10		3	%	Interest expense, net	(344)		(351)		(4.0)	%	(4.5)	%	7		2	%

Other income		22		21		0.3	%	0.3	%	1		5	%
Income before income taxes and income (loss) from investments in unconsolidated affiliates		790		454		10.1	%	6.3	%	336		74	%
Other (expense) income														Other (expense) income	(70)		22		(0.8)	%	0.3	%	(92)		n/m
Income before income taxes and income from investments in unconsolidated affiliates														Income before income taxes and income from investments in unconsolidated affiliates	1,292		790		15.0	%	10.1	%	502		64	%
Income tax provision	Income tax provision	(246)		(52)		(3.2)	%	(0.7)	%	(194)		373	%	Income tax provision	(235)		(246)		(2.7)	%	(3.2)	%	11		(4)	%
Income (loss) from investments in unconsolidated affiliates		58		(16)		0.7	%	(0.2)	%	74		n/m
Income from investments in unconsolidated affiliates														Income from investments in unconsolidated affiliates	234		58		2.7	%	0.7	%	176		n/m
Net income	Net income	602		386		7.7	%	5.3	%	216		56	%	Net income	1,291		602		15.0	%	7.7	%	689		114	%
Less: net income (loss) attributable to noncontrolling interests		29		(8)		0.4	%	(0.1)	%	37		n/m
Less: net income attributable to noncontrolling interests														Less: net income attributable to noncontrolling interests	24		29		0.3	%	0.4	%	(5)		(17)	%
Net income attributable to Fiserv, Inc.	Net income attributable to Fiserv, Inc.	$	573	$	394	7.3	%	5.4	%	$	179	45	%	Net income attributable to Fiserv, Inc.	$	1,267	$	573	14.8	%	7.3	%	$	694	121	%

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	Three Months Ended June 30,
(In millions)	Acceptance				Fintech				Payments				Corporate and Other		Total
Total revenue:
2022	$	1,901			$	803			$	1,518			$	228	$	4,450
2021	1,666				754				1,421				210		4,051
Revenue growth	$	235			$	49			$	97			$	18	$	399
Revenue growth percentage	14		%		6		%		7		%				10		%
Operating income (loss):
2022	$	593			$	281			$	662			$	(676)	$	860
2021	524				273				629				(782)		644
Operating income growth	$	69			$	8			$	33			$	106	$	216
Operating income growth percentage	13		%		3		%		5		%				34		%
Operating margin:
2022	31.2		%		35.0		%		43.6		%				19.3		%
2021	31.4		%		36.2		%		44.3		%				15.9		%
Operating margin (decline) growth (1)	(20)			bps	(120)			bps	(70)			bps			340			bps

Three Months Ended June 30,
(In millions) Acceptance Fintech Payments Corporate
and Other Total
Total revenue:
2021 $ 1,666 $ 754 $ 1,421 $ 210 $ 4,051
2020 1,223 714 1,320 208 3,465
Revenue growth $ 443 $ 40 $ 101 $ 2 $ 586
Revenue growth percentage 36 % 6 % 8 % 17 %
Operating income (loss):
2021 $ 524 $ 273 $ 629 $ (782) $ 644
2020 245 252 548 (880) 165
Operating income growth $ 279 $ 21 $ 81 $ 98 $ 479
Operating income growth percentage 114 % 8 % 15 % 290 %
Operating margin:
2021 31.4 % 36.2 % 44.3 % 15.9 %
2020 20.0 % 35.4 % 41.5 % 4.7 %
Operating margin growth (1)
1,140 bps 80 bps 280 bps 1,120 bps


		Six Months Ended June 30,																			Six Months Ended June 30,
(In millions)	(In millions)	Acceptance				Fintech				Payments				Corporate and Other		Total				(In millions)	Acceptance				Fintech				Payments				Corporate and Other		Total
Total revenue:	Total revenue:																			Total revenue:
2022																				2022	$	3,554			$	1,581			$	2,980			$	473	$	8,588
2021	2021	$	3,063			$	1,490			$	2,826			$	427	$	7,806			2021	3,063				1,490				2,826				427		7,806
2020		2,624				1,432				2,706				472		7,234
Revenue growth	Revenue growth	$	439			$	58			$	120			$	(45)	$	572			Revenue growth	$	491			$	91			$	154			$	46	$	782
Revenue growth percentage	Revenue growth percentage	17		%		4		%		4		%				8		%		Revenue growth percentage	16		%		6		%		5		%				10		%
Operating income (loss):	Operating income (loss):																			Operating income (loss):
2022																				2022	$	1,063			$	556			$	1,280			$	(1,193)	$	1,706
2021	2021	$	911			$	519			$	1,207			$	(1,518)	$	1,119			2021	911				519				1,207				(1,518)		1,119
2020		562				456				1,113				(1,337)		794
Operating income growth	Operating income growth	$	349			$	63			$	94			$	(181)	$	325			Operating income growth	$	152			$	37			$	73			$	325	$	587
Operating income growth percentage	Operating income growth percentage	62		%		14		%		8		%				41		%		Operating income growth percentage	17		%		7		%		6		%				52		%
Operating margin:	Operating margin:																			Operating margin:
2022																				2022	29.9		%		35.2		%		42.9		%				19.9		%
2021	2021	29.7		%		34.9		%		42.7		%				14.3		%		2021	29.7		%		34.9		%		42.7		%				14.3		%
2020		21.4		%		31.9		%		41.2		%				11.0		%
Operating margin growth (1)	Operating margin growth (1)	830			bps	300			bps	150			bps			330			bps	Operating margin growth (1)	20			bps	30			bps	20			bps			560			bps

(1)Represents the basis point growth or decline in operating margin.

Operating margin percentages are calculated using actual, unrounded amounts.

Total Revenue

Total revenue increased ~~$586~~$399 million, or ~~17%~~10%, in the second quarter of ~~2021~~2022 and ~~increased $572~~$782 million, or 8%10%, in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. The revenue increase was ~~primarily due~~driven by higher processing revenue and product sales across all of our business segments.

Revenue in our Acceptance segment increased $235 million, or 14%, in the second quarter of 2022 and $491 million, or 16%, in the first six months of 2022 compared to ~~improved~~2021. The revenue increase was driven by higher global merchant acquiring payment and transaction volumes, including an increase in ~~our merchant acquiring~~global accounts and ~~payment-related~~locations from small and mid-sized businesses ~~which were adversely affected by the economic impact of the COVID-19 pandemic during the last two weeks of March~~to enterprise merchants and throughout the second quarter of 2020. This growth was partially offset by the loss of revenue attributable to dispositions that had revenue of $68 million and $153 million in the second quarter and first six months of 2021, respectively.ISVs.

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Revenue in our ~~Acceptance~~Fintech segment increased ~~$443~~$49 million, or ~~36%~~6%, in the second quarter of ~~2021~~2022 and ~~increased $439~~$91 million, or ~~17%~~6%, in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. The revenue increase was primarily ~~due to improved merchant acquiring payment~~driven by higher processing revenue across our Fintech businesses of 2% and ~~transaction volumes, which were adversely affected~~3%, in the second quarter of 2020 by the economic impact of the COVID-19 pandemic. Revenue increases from volume growth were partially offset by revenue reductions from the dissolution of the BAMS joint venture of 5% in each of the second quarter and first six months of ~~2021.~~2022, respectively, while license and termination fee revenue contributed 2% to segment revenue growth both in the second quarter and first six months of 2022.

Revenue in our ~~Fintech~~Payments segment increased ~~$40~~$97 million, or 6%7%, in the second quarter of ~~2021~~2022 and ~~increased $58~~$154 million, or 4%5%, in the first six months of ~~2021~~2022 compared to ~~2020,~~2021. In both the second quarter and first six months of 2022, our debit processing business contributed 3% to Payments revenue growth and our output solutions business contributed 2%, primarily driven by ~~recurring revenue growth from higher~~new client growth. Our credit processing ~~revenue across our Fintech businesses. Fintech revenue growth was partially offset by~~business contributed 1% in both the second quarter and first six months of ~~2021 from a decline~~2022, primarily driven by an increase in ~~termination fee revenue.~~active accounts.

Revenue ~~in our Payments segment~~at Corporate and Other increased ~~$101~~$18 million, or 8%9%, in the second quarter of ~~2021~~2022 and ~~increased $120~~$46 million, or 4%11%, in the first six months of ~~2021~~2022 compared to ~~2020. Increased transaction volumes drove revenue contributions across multiple Payments segment businesses in~~ 2021, ~~including revenue contributions of 4% and 3% from our debit processing business in the second quarter and first six months of 2021, respectively, and 1% from our Zelle~~® ~~business in each period. In addition, our prepaid solutions business contributed 1% to Payments segment revenue growth in both the second quarter and first six months of 2021, attributable~~primarily due to increased ~~card fulfillment. These increases were partially offset by revenue reductions of 1% and 2% from our bill payment business in the second quarter and first six months of 2021, respectively.~~postage revenue.

~~Revenue at Corporate and Other~~Total Expenses

Total expenses increased $2$183 million, or 1%5%, in the second quarter of ~~2021~~2022 and ~~decreased $45~~$195 million, or ~~10%~~3%, in the first six months of ~~2021~~2022 compared to 2020. Postage revenue declines and the disposition of a 60% controlling interest of our Investment Services business reduced Corporate and Other revenue in the first six months of 2021 by 6% and 4%, respectively.

~~Total Expenses~~

~~Total expenses increased $107 million, or 3%, in the second quarter of 2021 and increased $247 million, or 4%, in the first six months of 2021 compared to 2020.~~2021. Total expenses as a percentage of total revenue decreased ~~1,110~~340 basis points to ~~84.1%~~80.7% in the second quarter of 2022 and ~~decreased 330~~560 basis points to ~~85.7%~~80.1% in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Total expenses as a percentage of total revenue were favorably impacted in ~~2021~~the second quarter and first six months of 2022 by a $109 million and $212 million, respectively, reduction in acquisition and integration related expense. Total expenses as a percentage of total revenue for the first six months of 2022 were also favorably impacted by operating leverage accompanying scalable revenue growth ~~along~~and a $147 million pre-tax gain associated with ~~lower acquisition and integration related expenses~~the sale of ~~$77 million~~certain merchant contracts of a joint venture. The favorable impact was partially offset in the second quarter and ~~$181 million in the~~ first six months of ~~2021, respectively, and lower severance~~2022 by increased costs ~~of $28 million~~associated with our continued investment in ~~the second quarter and $65 million in the first six months of 2021, respectively.~~our businesses for growth.

Cost of processing and services as a percentage of processing and services revenue decreased to 40.6% in the second quarter of 2022 compared to 44.6% in the second quarter of 2021 ~~compared~~and decreased to ~~50.7%~~41.6% in the ~~second quarter~~first six months of ~~2020 and decreased~~2022 compared to 45.1% in the first six months of ~~2021 compared to 52.0% in the first six months of 2020.~~2021. Cost of processing and services as a percentage of processing and services revenue was favorably impacted in the second quarter and first six months of ~~2021 primarily due to~~2022 by a reduction in acquisition and integration related expenses of approximately 230 basis points and 220 basis points, respectively, as well as strong operating leverage across our ~~businesses, along with approximately 90~~businesses. The favorable impact was partially offset by an increase in severance costs of 60 basis points and ~~110~~80 basis points ~~from decreased acquisition and integration related expenses and approximately 30 basis points and 50 basis points from decreased severance costs compared to~~in the second quarter and first six months of ~~2020, respectively.~~2022, as well as an increase in costs associated with our continued investment in the business, in both the second quarter and first six months of 2022.

Cost of product as a percentage of product revenue ~~decreased~~increased to 71.9% in the second quarter of 2022 compared to 68.0% in the second quarter of 2021 ~~compared~~and increased to ~~79.0% in the second quarter of 2020 and decreased to 70.4% in first six months of 2021 compared to 77.7%~~70.5% in the first six months of ~~2020. The~~2022 compared to 70.4% in the first six months of 2021. Compared to the prior year period, the cost of product as a percentage of product revenue ~~improved in~~was generally consistent during the ~~second quarter and~~ first six months of ~~2021~~2022, while the cost of product as a percentage of product revenue during the second quarter of 2022 increased as a result of ~~revenue mix, including~~increased lower margin postage ~~pass-through~~ revenue.

Selling, general and administrative expenses as a percentage of total revenue decreased to 34.7% in the second quarter of 2022 compared to 35.5% in the second quarter of 2021 ~~compared~~and decreased to ~~39.7%~~35.1% in the ~~second quarter~~first six months of ~~2020 and decreased~~2022 compared to 36.0% in the first six months of ~~2021 compared to 38.4% in the first six months of 2020.~~2021. The decrease in selling, general and administrative expenses as a percentage of total revenue in the second quarter and first six months of 2022 was primarily due to ~~strong operating leverage across our businesses, along with~~a reduction in amortization of acquisition-related intangible assets of approximately ~~170~~100 basis points ~~from decreased acquisition and integration related expenses and approximately 40 basis points from decreased severance costs compared to~~in both the second quarter and first six months of ~~2020.~~2022.

The $147 million pre-tax gain on sale of ~~business of $428 million~~assets in the first ~~quarter~~six months of ~~2020~~2022 resulted from the sale of ~~a 60% interest~~certain merchant contracts in conjunction with the mutual termination of one of our ~~Investment Services business in February 2020.~~merchant alliance joint ventures.

Operating Income and Operating Margin

Total operating income increased ~~$479~~$216 million, or ~~290%~~34%, in the second quarter of ~~2021~~2022 and ~~increased $325~~$587 million, or ~~41%~~52%, in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Total operating margin increased ~~1,120~~340 basis points to ~~15.9%~~19.3% in the second

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quarter of ~~2021~~2022 and ~~increased 330~~560 basis points to ~~14.3%~~19.9% in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Total operating income and total operating margin benefited from ~~improved operating leverage accompanying scalable~~ revenue growth in the second quarter and first six months of ~~2021~~2022, along with a reduction in acquisition and integration related expenses. Total operating income and total operating margin were also favorably impacted by a ~~$428~~$147 million pre-tax gain on the sale of certain merchant contracts of a ~~60% interest of our Investment Services business~~joint venture in the first six months of 2022. Total operating margin in the second quarter of ~~2020.~~2022 was slightly offset by costs associated with our continued investments in our businesses for growth and higher costs due to inflation.

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Operating income in our Acceptance segment increased ~~$279~~$69 million, or ~~114%~~13%, in the second quarter of ~~2021~~2022 and ~~increased $349~~$152 million, or ~~62%~~17%, in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Operating margin ~~increased 1,140 basis points to 31.4% in the second quarter of 2021 and increased 830 basis points to 29.7% in the first six months of 2021 compared to 2020. Acceptance operating margin growth~~was relatively consistent in both the second quarter and first six months of ~~2021~~2022 compared to 2021. Acceptance segment operating income growth in the first six months of 2022 was primarily due to ~~scalable~~ revenue ~~growth as discussed above.~~growth.

Operating income in our Fintech segment increased ~~$21~~$8 million, or 8%3%, in the second quarter of ~~2021~~2022 and ~~increased $63~~$37 million, or ~~14%~~7%, in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Operating margin ~~increased 80~~decreased 120 basis points to ~~36.2%~~35.0% in the second quarter of ~~2021~~2022 and increased ~~300~~30 basis points to ~~34.9%~~35.2% in the first six months of ~~2021~~2022 compared to ~~2020. Fintech segment operating~~2021. Operating income and margin ~~improvement~~were favorably impacted from an increase in ~~the second quarter of 2021 was driven by~~license and termination fee revenue ~~growth as discussed above. Operating margin improvement~~ in the first six months of ~~2021 also reflects~~2022. Operating margin in the second quarter of 2022 was reduced by increased costs related to our continuing investment in the business, including an impact of ~~expense management initiatives across the segment, including lower personnel costs of approximately 100~~90 basis points ~~and additional expense reductions attributable~~related to ~~lower travel and marketing expenses~~the recent acquisition of ~~approximately 60 basis points.~~Finxact.

Operating income in our Payments segment increased ~~$81~~$33 million, or ~~15%~~5%, in the second quarter of ~~2021~~2022 and ~~increased $94~~$73 million, or 8%6%, in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Operating margin ~~increased 280~~decreased 70 basis points to ~~44.3%~~43.6% in the second quarter of ~~2021~~2022 and increased ~~150~~20 basis points to ~~42.7%~~42.9% in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Payments segment operating margin ~~growth~~ in ~~both~~ the second quarter was primarily reduced by an increase in the lower margin output solutions business and higher costs due to inflation. Payments segment operating income and margin growth in the first six months of ~~2021~~2022 was primarily ~~attributable~~due to scalable revenue growth ~~as discussed above.~~from our debit processing business.

The operating loss in Corporate and Other decreased ~~$98~~$106 million in the second quarter of ~~2021~~2022 and ~~increased $181~~$325 million in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Corporate and Other was favorably impacted ~~in 2021~~ by a reduction ofin acquisition and integration related ~~costs of $77~~expenses and a $147 million in the second quarter and $181 million in the first six months of 2021 and lower severance costs of $28 million in the second quarter and $65 million in the first six months of 2021 compared to 2020. Corporate and Other was favorably impacted in the first six months of 2021 by a $428 millionpre-tax gain onassociated with the sale of certain merchant contracts of a ~~60% interest of our Investment Services business.~~joint venture.

Interest Expense, Net

Interest expense, net was relatively consistent in the second quarter of ~~2021 compared to 2020,~~2022 and decreased ~~$10~~$7 million, or 3%2%, in the first six months of ~~2021~~2022 compared to ~~2020~~2021 primarily due to ~~lower outstanding~~lower-rate commercial paper borrowings.

Other (Expense) Income

Other ~~income was relatively consistent through~~(expense) increased $92 million in the first six months of ~~2021~~2022 compared to ~~2020.~~2021. Other (expense) income includes net foreign currency transaction gains and losses, gains or losses from a change in fair value of investments in certain equity securities, and amounts related to ~~the release of risk under our non-contingent~~debt guarantee arrangements ~~and changes in the provision of estimated credit losses associated with indebtedness~~ of certain joint ventures. ~~Other income includes net~~Net foreign currency transaction (losses) gains ~~of $1~~were ($18) million and ~~$11~~$1 million in the first six months of 2022 and 2021, ~~and 2020, respectively, as well as $12 million~~respectively. Other (expense) in the first six months of 2022 also included net pre-tax expense of $59 million associated with joint venture debt guarantees. Other income in the first six months of 2021 included $12 million related to a pre-tax gain on the remeasurement of a previously held investment in Ondot to fair value upon acquiring the remaining ownership interest in ~~that~~the entity.

Income Tax Provision

Income tax ~~(provision) benefit~~provision as a percentage of income ~~(loss)~~ before income taxes and income ~~(loss)~~ from investments in unconsolidated affiliates was 22.2% and 48.5% in the second quarter of 2022 and ~~337.5%~~2021, respectively, and was 18.2% and 31.1% for the first six months of 2022 and 2021, respectively. For the three months ended June 30, 2021, ~~and 2020, respectively, and was 31.1% and 11.5% for~~ the ~~first six months of 2021 and 2020, respectively. The~~ effective ~~income~~ tax rate ~~for the three months ended June 30, 2021 includes~~included $134 million of income tax expense attributed to the revaluation of certain net deferred tax liabilities, primarily related to intangible assets and investments in joint ventures recognized at fair value in connection with the acquisition of First Data, reflecting the effect of enacted corporate income tax rate changes in the United Kingdom (tax rate increase from 19% to 25% starting in 2023) and Argentina (tax rate increase from 25% to 35%), partially offset by decreases in uncertain tax positions. For the three months ended June 30, 2020, the income tax benefit of $27 million on an $8 million loss before income taxes and loss from investments in unconsolidated affiliates included equity compensation related tax benefits, changes in uncertain tax positions and other discrete tax items. .

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~~2020,~~ 2021 also included ~~$112 million of income tax expense associated with the $428 million gain on the sale of a 60% interest of our Investment Services business, partially offset by~~ the impact of ~~equity compensation related~~the revaluation of certain net deferred tax ~~benefits on a lower level of pre-tax income and changes in uncertain tax positions.~~liabilities described above.

Income ~~(Loss)~~ from Investments in Unconsolidated Affiliates

Our share of net income ~~or loss~~ from affiliates accounted for using the equity method ~~of accounting~~ is reported as income ~~(loss)~~ from investments in unconsolidated affiliates and the related tax expense ~~or benefit~~ is reported within the income tax ~~(provision) benefit~~provision in the consolidated statements of income. Income ~~(loss)~~ from investments in unconsolidated affiliates, including acquired intangible asset amortization from valuations in purchase accounting, was ~~$42~~$128 million and ~~$(10)~~$42 million in the second quarter of ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$58~~$234 million and ~~$(16)~~$58 million in the first six months of ~~2021~~2022 and ~~2020,~~2021, respectively. Income from investments in unconsolidated affiliates ~~for~~in the ~~three~~first six months ~~ended June 30,~~of 2022 includes pre-tax gains totaling $209 million primarily related to the acquisition-date fair value remeasurement of our previously held equity interest in Finxact of $110 million, as well as $80 million resulting from the dilution of our ownership interest in conjunction with the Sagent, M&C, LLC transaction with a third

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party. Income from investments in unconsolidated affiliates in the first six months of 2021 included a $33 million pre-tax gain resulting from the sale of our remaining ownership interest in ~~InvestCloud. Income from investments in unconsolidated affiliates for the first six months of 2021 also included~~InvestCloud, as well as a $28 million pre-tax gain resulting from the dilution of our ownership interest in connection with the Tegra118 merger with a third party.

Net Income ~~(Loss)~~ Attributable to Noncontrolling Interests

Net income ~~(loss)~~ attributable to noncontrolling interests and redeemable noncontrolling interests relates to the ~~ownership interest~~minority partners’ share of ~~our consolidated alliance partners~~the net income in our consolidated ~~results.~~subsidiaries. Net income ~~(loss)~~ attributable to noncontrolling interests, including acquired intangible asset amortization from valuations in purchase accounting, was ~~$15~~$11 million and $7$15 million in the second quarter of ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$29~~$24 million and ~~$(8)~~$29 million in the first six months of ~~2021~~2022 and ~~2020,~~2021, respectively.

Net Income Per Share – Diluted

Net income attributable to Fiserv, Inc. per share-diluted was ~~$0.40~~$0.92 and ~~$0.00~~$0.40 in the second quarter of ~~2021~~2022 and ~~2020,~~2021, respectively, and was ~~$0.85~~$1.94 and ~~$0.57~~$0.85 in the first six months of 2022 and 2021, ~~and 2020,~~ respectively. Net income attributable to Fiserv, Inc. per share-diluted in the first six months of 2022 includes a $110 million pre-tax gain from the acquisition-date fair value remeasurement of our previously held equity interest in Finxact. Net income attributable to Fiserv, Inc. per share-diluted in the first six months of 2021 included $134 million of certain discrete tax items related to the revaluation of deferred taxes due to a change in the respective statutory tax rates in the United Kingdom and Argentina. Net income attributable to Fiserv, Inc. per share-diluted in the first six months of 2020 included a gain from the sale of a 60% interest of our Investment Services business, along with higher merger and integration costs associated with the acquisition of First Data.expenses discussed above.

Liquidity and Capital Resources

General

Our primary liquidity needs in the ordinary course of business are to: (i) fund normal operating expenses; (ii) meet the interest and principal requirements of our outstanding indebtedness, including finance leases; and (iii) fund capital expenditures and operating lease payments. We believe these needs will be satisfied in both the short term and the long term using cash flow generated by our operations, along with our cash and cash equivalents of ~~$841~~$883 million, proceeds from the issuance of U.S. dollar and Euro commercial paper, ~~notes,~~ and available capacity (as further discussed within the Indebtedness section below) under our revolving credit facility of ~~$2.4~~$3.6 billion (net of ~~$1.1~~$2.4 billion of capacity designated for outstanding borrowings under our commercial paper ~~notes program)~~programs and letters of credit) at June 30, ~~2021.~~

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2022.

The following table summarizes our operating cash flow and capital expenditure amounts for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively:


		Six Months Ended June 30,				Increase (Decrease)					Six Months Ended June 30,				Increase (Decrease)
(In millions)	(In millions)	2021		2020		$		%		(In millions)	2022		2021		$		%
Net income	Net income	$	602	$	386	$	216			Net income	$	1,291	$	602	$	689
Depreciation and amortization	Depreciation and amortization	1,635		1,673		(38)				Depreciation and amortization	1,630		1,635		(5)

Share-based compensation	Share-based compensation	127		202		(75)				Share-based compensation	155		127		28

Deferred income taxes	Deferred income taxes	(69)		(94)		25				Deferred income taxes	(317)		(69)		(248)
Gain on sale of business		—		(428)		428
Gain on sale of assets										Gain on sale of assets	(147)		—		(147)

(Income) loss from investments in unconsolidated affiliates		(58)		16		(74)
Income from investments in unconsolidated affiliates										Income from investments in unconsolidated affiliates	(234)		(58)		(176)

Distributions from unconsolidated affiliates	Distributions from unconsolidated affiliates	13		12		1				Distributions from unconsolidated affiliates	41		13		28
Non-cash impairment charges	Non-cash impairment charges	5		40		(35)				Non-cash impairment charges	—		5		(5)
Net changes in working capital and other	Net changes in working capital and other	(242)		112		(354)				Net changes in working capital and other	(614)		(242)		(372)

Operating cash flow	Operating cash flow	$	2,013	$	1,919	$	94	5	%	Operating cash flow	$	1,805	$	2,013	$	(208)	(10)	%
Capital expenditures, including capitalized software and other intangibles	Capital expenditures, including capitalized software and other intangibles	$	494	$	488	$	6	1	%	Capital expenditures, including capitalized software and other intangibles	$	718	$	494	$	224	45	%

Our net cash provided by operating activities, or operating cash flow, was $1.8 billion in the first six months of 2022, a decrease of 10% compared with $2.0 billion in the first six months of ~~2021, an increase of 5% compared with $1.9 billion in the first six months of 2020.~~2021. This ~~increase~~decrease was primarily attributable to ~~improved operating results~~higher working capital use compared to the prior period, ~~partially offset by unfavorable fluctuations in working capital,~~ including increased accounts receivable corresponding to revenue ~~growth.~~growth, partially offset by improved operating results.

Our current policy is to use our operating cash flow primarily to fund capital expenditures, share repurchases, acquisitions and to repay debt rather than to pay dividends. Our capital expenditures were approximately 6%8% and 7%6% of our total revenue for the first six months of 2022 and 2021, ~~and 2020,~~ respectively.

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Share Repurchases

We repurchased $1.0 billion and $1.2 billion (including the repurchase described below) of our common stock during the first six months of 2022 and 2021, respectively. As of June 30, 2022, we had approximately 32.1 million shares remaining under our current repurchase authorization. Shares repurchased are generally held for issuance in connection with our equity plans.

In May 2021, New Omaha Holdings L.P. (“New Omaha”), a shareholder of ours, completed an underwritten secondary public offering of 23.0 million shares of our common stock (the “offering”). We repurchased from the underwriters 5.0 million shares of our common stock that were subject to the offering. The share repurchase totaled $588 million and was funded with cash on hand. The repurchased shares were cancelled and no longer outstanding following the completion of the share repurchase.

Including the repurchase described above, we purchased $1.2 billion and $1.4 billion of our common stock during the first six months of 2021 and 2020, respectively. As of June 30, 2021, we had approximately 55.5 million shares remaining under our current repurchase authorization. Shares repurchased are generally held for issuance in connection with our equity plans.

Acquisitions and Dispositions

Acquisitions

In June 2022, we acquired City POS and, in April 2022, we acquired a remaining ownership interest in Finxact. We acquired these businesses for an aggregate purchase price of approximately $671 million, net of $27 million of acquired cash. We funded these acquisitions by utilizing a combination of available cash and commercial paper notes.

In November 2021 we acquired BentoBox, in October 2021 we acquired AIP, in June 2021 we acquired SpendLabs, in May 2021 we acquired Pineapple Payments, and in March 2021 we acquired Radius8. Additionally, in November 2021, we acquired a remaining ownership interest in NetPay, and in January 2021, we acquired a remaining ownership interest in Ondot, in which we previously held a noncontrolling equity ~~interest.~~interests. We acquired these businesses for an aggregate purchase price of ~~approximately $526~~$882 million, net of ~~$19~~$43 million of acquired cash, and including earn-out provisions ~~estimated~~ at an aggregate fair value of ~~$33~~$34 million. We funded these acquisitions by utilizing a combination of available cash, commercial paper notes and existing availability under our revolving credit facility. The results of operations for these acquired businesses are included in our consolidated results from the respective dates of acquisition.

In May 2020, we acquired Inlet and, in March 2020, we acquired MerchantPro and Bypass. We 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. We funded these acquisitions by utilizing a combination of available cash and existing availability under our revolving credit facility. The results of operations for these acquired businesses are included in our consolidated results from the respective dates of acquisition.

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Dispositions

~~Effective July 2020,~~In March 2022, we ~~and BANA dissolved the BAMS~~mutually agreed to terminate a merchant alliance joint venture ~~of which we maintained~~with a ~~51% controlling ownership interest.~~minority partner. Upon dissolution of the joint venture’s 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 activitiestermination of the joint venture, consist of supporting the transition of the business to each party and an orderly wind down of remaining BAMS assets and liabilities. The revenues and expenses of the BAMS joint venture were consolidated into our financial results through the date of dissolution. The business transferred to us is included within our Acceptance segment.

~~In February 2020,~~ we ~~sold a 60% controlling interest of our Investment Services business, subsequently renamed as Tegra118. We~~ received ~~pre-tax~~ proceeds of ~~$584~~$175 million~~, net of related expenses, resulting in a pre-tax gain on~~ from the sale of ~~$428 million, with~~certain merchant contracts.

We previously maintained a noncontrolling interest in Tegra118, LLC (“Tegra118”) which was accounted for under the ~~related tax expense of $112 million~~. The revenues, expenses and cash flows of the Investment Services business were consolidated into our financial results through the date of the sale transaction. The net proceeds from the sale were primarily used to repurchase shares of our common stock.equity method. In February 2021, Tegra118 completed a merger with a third party, resulting in a dilution of our ownership interest in the combined new entity, Wealthtech Holdings, LLC, which was subsequently renamed as InvestCloud. In connection with the transaction, we made an additional capital contribution, funded under our revolving credit facility, of $200 million into the combined entity and, ~~recognized a pre-tax gain of $28 million, with a related tax expense of $6 million. In~~in June 2021, we sold our entire ownership interest in InvestCloud for $466 ~~million, resulting in a pre-tax gain of $33 million, with a related tax expense of $8~~ million. The net proceeds from the sale were primarily used to pay down ~~the~~ outstanding borrowings on our term loan facility.

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Indebtedness


(In millions)	(In millions)	June 30, 2021		December 31, 2020		(In millions)	June 30, 2022		December 31, 2021
Short-term and current maturities of long-term debt:	Short-term and current maturities of long-term debt:					Short-term and current maturities of long-term debt:
Foreign lines of credit	Foreign lines of credit	$	131	$	144	Foreign lines of credit	$	313	$	240
Finance lease and other financing obligations	Finance lease and other financing obligations	287		240		Finance lease and other financing obligations	287		268
Total short-term and current maturities of long-term debt	Total short-term and current maturities of long-term debt	$	418	$	384	Total short-term and current maturities of long-term debt	$	600	$	508

Long-term debt:	Long-term debt:					Long-term debt:
4.750% senior notes due June 2021		$	—	$	400

3.500% senior notes due October 2022	3.500% senior notes due October 2022	700		700		3.500% senior notes due October 2022	$	700	$	700
0.375% senior notes due July 2023 (Euro-denominated)	0.375% senior notes due July 2023 (Euro-denominated)	596		612		0.375% senior notes due July 2023 (Euro-denominated)	526		566
3.800% senior notes due October 2023	3.800% senior notes due October 2023	1,000		1,000		3.800% senior notes due October 2023	1,000		1,000
2.750% senior notes due July 2024	2.750% senior notes due July 2024	2,000		2,000		2.750% senior notes due July 2024	2,000		2,000
3.850% senior notes due June 2025	3.850% senior notes due June 2025	900		900		3.850% senior notes due June 2025	900		900
2.250% senior notes due July 2025 (British Pound-denominated)	2.250% senior notes due July 2025 (British Pound-denominated)	729		709		2.250% senior notes due July 2025 (British Pound-denominated)	640		705
3.200% senior notes due July 2026	3.200% senior notes due July 2026	2,000		2,000		3.200% senior notes due July 2026	2,000		2,000
2.250% senior notes due June 2027	2.250% senior notes due June 2027	1,000		1,000		2.250% senior notes due June 2027	1,000		1,000
1.125% senior notes due July 2027 (Euro-denominated)	1.125% senior notes due July 2027 (Euro-denominated)	596		612		1.125% senior notes due July 2027 (Euro-denominated)	526		566
4.200% senior notes due October 2028	4.200% senior notes due October 2028	1,000		1,000		4.200% senior notes due October 2028	1,000		1,000
3.500% senior notes due July 2029	3.500% senior notes due July 2029	3,000		3,000		3.500% senior notes due July 2029	3,000		3,000
2.650% senior notes due June 2030	2.650% senior notes due June 2030	1,000		1,000		2.650% senior notes due June 2030	1,000		1,000
1.625% senior notes due July 2030 (Euro-denominated)	1.625% senior notes due July 2030 (Euro-denominated)	596		612		1.625% senior notes due July 2030 (Euro-denominated)	526		566
3.000% senior notes due July 2031 (British Pound-denominated)	3.000% senior notes due July 2031 (British Pound-denominated)	729		709		3.000% senior notes due July 2031 (British Pound-denominated)	640		705
4.400% senior notes due July 2049	4.400% senior notes due July 2049	2,000		2,000		4.400% senior notes due July 2049	2,000		2,000
U.S. dollar commercial paper notes						U.S. dollar commercial paper notes	1,248		916
Euro commercial paper notes						Euro commercial paper notes	1,168		905
Revolving credit facility						Revolving credit facility	—		97
Receivable securitized loan	Receivable securitized loan	425		425		Receivable securitized loan	485		500
Term loan facility	Term loan facility	755		1,250		Term loan facility	200		200
Unamortized discount and deferred financing costs	Unamortized discount and deferred financing costs	(141)		(155)		Unamortized discount and deferred financing costs	(115)		(125)
U.S. commercial paper notes		1,060		—
Revolving credit facility		—		22
Finance lease and other financing obligations	Finance lease and other financing obligations	480		504		Finance lease and other financing obligations	471		528
Total long-term debt	Total long-term debt	$	20,425	$	20,300	Total long-term debt	$	20,915	$	20,729

At June 30, ~~2021,~~2022, our debt consisted primarily of ~~$17.8~~$17.5 billion of fixed-rate senior notes and $~~1.1~~2.4 billion of outstanding borrowings under our ~~U.S.~~ commercial paper ~~notes program, and $755 million of variable rate term loan.~~programs. Interest on our U.S. dollar-denominated senior notes is paid semi-annually, while interest on our Euro and British Pound-denominated senior notes is paid annually. Interest on our revolving credit facility and commercial paper notes is generally paid weekly, or more frequently on occasion, and interest on our term loan is paid monthly. Outstanding borrowings under our 3.50% senior notes due in October 2022, the receivable securitized loan, which matures in July 2022, and U.S dollar and Euro commercial paper ~~notes program~~programs are classified in the consolidated balance sheet as long-term, as we have the intent to refinance these ~~notes~~borrowings on a long-term basis through the continued issuance of new commercial paper notes upon maturity, and we also have the ability to refinance such ~~notes under our revolving credit facility. We used the net proceeds from the issuance of commercial paper notes to repay outstanding~~ borrowings under our revolving credit facility, ~~to repay~~as further discussed below.

In June 2022, we entered into a new senior unsecured multicurrency revolving credit facility with substantially the same syndicate of banks that were lenders under our ~~4.750% senior notes that matured~~existing amended and restated revolving credit facility, which we voluntarily terminated and replaced. The new credit agreement matures in June ~~2021,~~2027 and provides for ~~other general corporate purposes.~~a maximum aggregate principal amount of availability of $6.0 billion.

The indentures governing our senior notes contain covenants that, among other matters, limit (i) our ability to consolidate or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to, another person, (ii) our and certain of our subsidiaries’ ability to create or assume liens, and (iii) our and certain of our subsidiaries’ ability to engage in sale

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and leaseback transactions. We may, at our option, redeem the senior notes, in whole or ~~from time to time~~ in part, at any time prior to the applicable maturity date.

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The new revolving credit facility ~~and term loan facility contain~~contains various restrictions and covenants that require us, among other things, to ~~(i)~~ limit our consolidated indebtedness as of the end of each fiscal quarter to no more than ~~three and one-half~~3.75 times our consolidated net ~~earnings~~income before interest, taxes, depreciation, amortization, non-cash charges and expenses and certain other adjustments (“EBITDA”) during the period of four fiscal quarters then ended, subject to certain exceptions.

The term loan facility contains various restrictions and covenants that require us to, among other things, (i) limit our consolidated indebtedness as of the end of each fiscal quarter to no more than 3.5 times our EBITDA during the period of four fiscal quarters then ended, subject to certain exceptions, and (ii) maintain EBITDA of at least ~~three~~3.0 times our consolidated interest expense as of the end of each fiscal quarter for the period of four fiscal quarters then ended.

During the first six months of ~~2021,~~2022, we were in compliance with all financial debt covenants. Our ability to meet future debt covenant requirements will depend on our continued ability to generate earnings and cash flows. We expect to remain in compliance with all terms and conditions associated with our outstanding debt, including financial debt covenants.

Effective July 1, 2022, we redeemed $700 million in aggregate principal amount of our outstanding 3.50% senior notes due in October 2022 at a redemption price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest. We financed the redemption of these notes using proceeds from the issuance of U.S. dollar commercial paper.

Variable Rate Debt

Our variable rate debt consisted of the following at June 30, ~~2021:~~2022:


(In millions)	(In millions)	Maturity	Weighted-Average Interest Rate	Outstanding Borrowings		(In millions)	Maturity	Weighted-Average Interest Rate	Outstanding Borrowings
Foreign lines of credit	Foreign lines of credit	n/a	30.27%	131		Foreign lines of credit	n/a	30.81%	$	313
U.S. dollar commercial paper notes						U.S. dollar commercial paper notes	various	1.98%	1,248
Euro commercial paper notes						Euro commercial paper notes	various	(0.22%)	1,168

Receivable securitized loan	Receivable securitized loan	July 2022	0.95%	425		Receivable securitized loan	July 2022	2.64%	485
Term loan facility	Term loan facility	July 2024	1.33%	$	755	Term loan facility	July 2024	2.89%	200
U.S. commercial paper program		various	0.18%	1,060
Revolving credit facility		September 2023	—%	—
Total variable rate debt	Total variable rate debt			$	2,371	Total variable rate debt			$	3,414

We maintain ~~certain~~ short-term lines of credit with foreign banks and alliance partners primarily to fund settlement activity. These arrangements are primarily associated with our international operations and are in various functional currencies, the most significant of which is the Argentine peso.

We maintain U.S. dollar and Euro unsecured commercial paper programs with various maturities generally ranging from one day to four months. Outstanding borrowings under our commercial paper programs bear interest based on the prevailing rates at the time of issuance.

As discussed above, we maintain a ~~consolidated wholly-owned subsidiary,~~ revolving credit facility with aggregate commitments available for $6.0 billion of total capacity. U.S. dollar borrowings under the credit facility bear interest at a variable rate based on the Secured Overnight Financing Rate (SOFR) or a base rate in the case of U.S. dollar borrowings, in each case plus a specified margin based on our long-term debt rating in effect from time to time. We are required to pay a facility fee based on the aggregate commitments in effect under the credit agreement from time to time.

First Data Receivables, LLC (“FDR”)~~. FDR~~, a consolidated wholly-owned subsidiary, is a party to certain receivables financing arrangements, including an agreement (“Receivables Financing Agreement”) with certain financial institutions and other persons from time to time party thereto as lenders and group ~~agents, pursuant~~agents. Pursuant to ~~which~~the Receivables Financing Agreement, certain of our wholly-owned subsidiaries have agreed to transfer and contribute receivables to FDR, and FDR ~~in turn~~ may ~~obtain borrowings from the financial institutions and other lender parties to the Receivables Financing Agreement~~borrow funds secured by liens on those receivables. FDR’s assets are not available to satisfy the obligations of any other of our entities or affiliates, and FDR’s creditors would be entitled, upon its liquidation, to be satisfied out of FDR’s assets prior to any assets or value in FDR becoming available to us. FDR held ~~$1.1~~$1.2 billion in receivables as part of the securitization program, and utilized the receivables as collateral in borrowings of ~~$425~~$485 million at June 30, ~~2021.~~2022. Outstanding borrowings bear interest at a variable rate based on one-month LIBOR plus a specified margin. At June 30, ~~2021,~~2022, the collateral capacity under the Receivables Financing Agreement was ~~$840~~$900 million, and the maximum borrowing capacity was $500 million. On July 25, 2022, Fiserv

~~Beginning in May 2021, we have maintained a U.S. unsecured~~

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repaid all amounts outstanding under this facility with proceeds from its commercial paper ~~notes~~ program and terminated the Receivables Financing Agreement.

We maintain a term loan credit agreement with ~~various maturities ranging from one to three weeks.~~a syndicate of financial institutions. Outstanding borrowings under the ~~commercial paper notes bear interest based on the prevailing rates at the time of issuance.~~

~~We maintain an amended and restated revolving credit facility with aggregate commitments available for $3.5 billion of total capacity. Outstanding borrowings under the revolving credit facility and~~ term loan bear interest at a variable rate based on one-month LIBOR or a base rate, ~~plus,~~ in each case plus a specified margin based on our long-term debt rating in effect from time to time. ~~There are no significant commitment fees and no compensating balance requirements on the revolving credit facility.~~

Cash and Cash Equivalents

Investments, ~~(other than those included in~~exclusive of settlement ~~assets)~~assets, with original maturities of three months or less that are readily convertible to cash are considered to be cash ~~equivalents.~~equivalents as reflected within our consolidated balance sheets. At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, we held ~~$841~~$883 million and ~~$906~~$835 million in cash and cash equivalents, respectively.

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The table below details the cash and cash equivalents at:


		June 30, 2021						December 31, 2020							June 30, 2022						December 31, 2021
(In millions)	(In millions)	Domestic		International		Total		Domestic		International		Total		(In millions)	Domestic		International		Total		Domestic		International		Total
Available	Available	$	261	$	188	$	449	$	337	$	177	$	514	Available	$	222	$	150	$	372	$	180	$	221	$	401
Unavailable (1)	Unavailable (1)	52		340		392		57		335		392		Unavailable (1)	169		342		511		138		296		434
Total	Total	$	313	$	528	$	841	$	394	$	512	$	906	Total	$	391	$	492	$	883	$	318	$	517	$	835

(1)Represents cash held ~~primarily~~ by our joint ventures that is not available to fund operations outside of those entities unless the board of directors ~~for said entities~~of the relevant entity declares a dividend, as well as cash held by ~~certain~~ other entities that are subject to foreign exchange controls in certain countries or regulatory capital requirements.

~~Impact of COVID-19 Pandemic~~

The COVID-19 pandemic has created significant uncertainty as to general global economic and market conditions. We believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business. However, as the impact of the pandemic on the economy and our operations further evolves, we will continue to assess our liquidity needs. The ability to continue to service debt and meet lease and other obligations as they come due is dependent on our continued ability to generate earnings and cash flows. A lack of continued recovery or further deterioration in economic and market conditions could materially affect our future access to our sources of liquidity, particularly our cash flows from operations.

We engage in regular communication with the banks that participate in our revolving credit facility. During these communications, none of the banks have indicated that they may be unable to perform on their commitments. We periodically review our banking and financing relationships, considering the stability of the institutions, pricing we receive on services, and other aspects of the relationships. Based on these communications and our monitoring activities, we believe the likelihood of one of our banks not performing on its commitment is remote. We maintain a U.S. commercial paper notes program to access funding for general corporate purposes at favorable rates and to provide a source of liquidity. As of June 30, 2021, we had a commercial paper credit rating of P-2 from Moody’s Investors Service, Inc. (“Moody’s”) and A-2 from Standard & Poor’s Rating Services (“S&P). Any downgrade to our commercial paper credit ratings or instability in the commercial paper markets may adversely impact our ability to access funding through our commercial paper notes program and require us to rely more heavily on more expensive financing arrangements, including our revolving credit facility. In addition, the long-term debt markets have historically provided us with a source of liquidity. Although we do not currently anticipate an inability to obtain financing from long-term debt markets in the future, the COVID-19 pandemic could make financing more difficult and/or expensive to obtain. Our ability to access the long-term debt markets on favorable interest rates and other terms also depends on the ratings assigned by the credit rating agencies to our indebtedness. As of June 30, 2021, we had a corporate credit rating of Baa2 with a stable outlook from Moody’s and BBB with a stable outlook from S&P. In the event that the ratings of our outstanding long-term debt securities were substantially lowered or withdrawn for any reason, or if the ratings assigned to any new issue of long-term debt securities were significantly lower than those noted above, particularly if we no longer had investment grade ratings, our ability to access the debt markets could be adversely affected and our interest expense could increase under the terms of certain of our long-term debt securities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk refers to the risk that a change in the level of one or more market prices, interest rates, currency exchange rates, indices, correlations or other market factors, such as liquidity, will result in losses for a certain financial instrument or group of financial instruments. We are exposed to certain market risks, primarily from fluctuations in interest rates and foreign currency exchange rates. Our senior management actively monitors these risks.

Additional information about market risks to which we are exposed, including discussion of risks and potential risks of the COVID-19 pandemic on our business, is included within Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. There were no significant changes to our quantitative and qualitative analyses about market risk during the six months ended June 30, ~~2021.~~

2022.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), our management, with the participation of our chief executive officer and chief financial officer, evaluated the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of June 30, ~~2021.~~2022.

Changes in Internal Control Over Financial Reporting

During the three months ended June 30, 2022, we implemented SAP S/4HANA, an Enterprise Resource Planning (“ERP”) platform, for our businesses in North America and certain non-U.S. locations to further integrate and upgrade our ERP financial reporting system. In connection with this implementation, we have made enhancements to our processes and procedures which have resulted in changes to our internal control over financial reporting to align with the upgraded system functionality. There ~~was~~were no ~~change~~other changes in internal control over financial reporting that occurred during the three months ended June 30, ~~2021~~2022 that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

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ITEM 1. LEGAL PROCEEDINGS

In the normal course of business, we or our subsidiaries are named as defendants in lawsuits in which claims are asserted against us. 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 our consolidated financial statements.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below sets forth information with respect to purchases made by or on behalf of us or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of shares of our common stock during the three months ended June 30, ~~2021:~~2022:

Period Total Number of
Shares Purchased Average Price
Paid per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (1)
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs (1)
April 1-30, 2021 — $ — — 60,488,000
May 1-31, 2021 5,000,000 117.70 5,000,000 55,488,000
June 1-30, 2021 — — — 55,488,000
Total 5,000,000 5,000,000


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
April 1-30, 2022	1,690,000	$	100.64	1,690,000	35,515,100
May 1-31, 2022	2,240,000	96.61		2,240,000	33,275,100
June 1-30, 2022	1,172,303	96.83		1,172,303	32,102,797
Total	5,102,303			5,102,303

(1)On ~~August 8, 2018 and~~ November 19, 2020, our board of directors authorized the purchase of up to ~~30.0 million and~~ 60.0 million shares of our common ~~stock, respectively. These authorizations do~~stock. This authorization does not expire.

ITEM 6. EXHIBITS

The exhibits listed in the accompanying exhibit index are filed as part of this Quarterly Report on Form 10-Q.

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Exhibit Index


Exhibit Number						Exhibit Description





~~3.1~~10.1						~~Amended~~Non-Employee Director Compensation Schedule*

10.2						Credit Agreement, dated as of June 16, 2022, among Fiserv, Inc., JPMorgan Chase Bank, N.A., as administrative agent, and ~~Restated By-laws~~the financial institutions party thereto (1)

31.1						Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1						Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**						Inline 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**						Inline XBRL Taxonomy Extension Schema Document

101.CAL**						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE**						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

_______________________

* This exhibit is a management contract or compensatory plan or arrangement.

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** Filed with this quarterly report on Form 10-Q are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Income for the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, (ii) the Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, (iii) the Consolidated Balance Sheets at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, and (v) Notes to Consolidated Financial Statements.

(1)

~~(1)~~ Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on ~~November 2, 2020,~~June 21, 2022, and ~~included~~incorporated herein ~~solely to provide an updated hyperlink to the appropriate prior filing.~~by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FISERV, INC.

Date:

July ~~28, 2021~~27, 2022

By:

/s/ Robert W. Hau

Robert W. Hau

Chief Financial Officer

Date:

July ~~28, 2021~~27, 2022

By:

/s/ Kenneth F. Best

Kenneth F. Best

Chief Accounting Officer


		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Income	1
	Consolidated Statements of Comprehensive Income ~~(Loss)~~	2
	Consolidated Balance Sheets	3
	Consolidated Statements of Cash Flows	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2627
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4140
Item 4.	Controls and Procedures	4240

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	4241

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4241
Item 6.	Exhibits	4241

	Exhibit Index
	Signatures



	Fiserv, Inc. Shareholders’ Equity

Three Months Ended June 30, 2020	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
													Noncontrolling Interests
Balance at March 31, 2020	791	117	$	8	$	23,693	$	(811)	$	12,875	$	(3,922)	$	1,444	$	33,287

Net income (loss) (1)									2				(2)		0
Measurement period adjustments related to First Data acquisition (3)													(4)		(4)
Distributions paid to noncontrolling interests (2)													(16)		(16)
Other comprehensive income							167						23		190

Share-based compensation					94										94
Shares issued under stock plans		(1)			(16)						43				27
Purchases of treasury stock		6									(550)				(550)

Balance at June 30, 2020	791	122	$	8	$	23,771	$	(644)	$	12,877	$	(4,429)	$	1,445	$	33,028



	Fiserv, Inc. Shareholders’ Equity

Six Months Ended June 30, 2020	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
													Noncontrolling Interests
Balance at December 31, 2019	791	112	$	8	$	23,741	$	(180)	$	12,528	$	(3,118)	$	1,616	$	34,595


Net income (loss) (1)									394				(26)		368
Measurement period adjustments related to First Data acquisition (3)													(126)		(126)

Distributions paid to noncontrolling interests (2)													(30)		(30)
Other comprehensive (loss) income							(464)						11		(453)

Share-based compensation					202										202
Shares issued under stock plans		(4)			(172)						124				(48)
Purchases of treasury stock		14									(1,435)				(1,435)



Cumulative-effect adjustment of ASU 2016-13 adoption									(45)						(45)
Balance at June 30, 2020	791	122	$	8	$	23,771	$	(644)	$	12,877	$	(4,429)	$	1,445	$	33,028