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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 ~~September 30, 2022~~March 31, 2023


☐			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 ~~October~~April 21, ~~2022,~~2023, there were ~~635,028,076~~617,309,915 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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Revenue:	Revenue:									Revenue:
Processing and services (1)	Processing and services (1)	$	3,678	$	3,407	$	10,738	$	9,822	Processing and services (1)	$	3,673	$	3,364
Product	Product	840		756		2,368		2,147		Product	874		774
Total revenue	Total revenue	4,518		4,163		13,106		11,969		Total revenue	4,547		4,138
Expenses:	Expenses:									Expenses:
Cost of processing and services	Cost of processing and services	1,443		1,530		4,381		4,425		Cost of processing and services	1,405		1,436
Cost of product	Cost of product	553		521		1,631		1,500		Cost of product	600		536
Selling, general and administrative	Selling, general and administrative	1,547		1,476		4,560		4,289		Selling, general and administrative	1,604		1,467
Net (gain) loss on sale of business and other assets		120		—		(27)		—
Net loss (gain) on sale of businesses and other assets										Net loss (gain) on sale of businesses and other assets	4		(147)
Total expenses	Total expenses	3,663		3,527		10,545		10,214		Total expenses	3,613		3,292
Operating income	Operating income	855		636		2,561		1,755		Operating income	934		846
Interest expense, net	Interest expense, net	(190)		(172)		(534)		(523)		Interest expense, net	(202)		(168)

Other (expense) income		(13)		14		(83)		36
Income before income taxes and income (loss) from investments in unconsolidated affiliates		652		478		1,944		1,268
Other expense										Other expense	(20)		(4)
Income before income taxes and (loss) income from investments in unconsolidated affiliates										Income before income taxes and (loss) income from investments in unconsolidated affiliates	712		674
Income tax provision	Income tax provision	(147)		(54)		(382)		(300)		Income tax provision	(124)		(98)
Income (loss) from investments in unconsolidated affiliates		(12)		22		222		80
(Loss) income from investments in unconsolidated affiliates										(Loss) income from investments in unconsolidated affiliates	(12)		106
Net income	Net income	493		446		1,784		1,048		Net income	576		682
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	12		18		36		47		Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	13		13
Net income attributable to Fiserv, Inc.	Net income attributable to Fiserv, Inc.	$	481	$	428	$	1,748	$	1,001	Net income attributable to Fiserv, Inc.	$	563	$	669

Net income attributable to Fiserv, Inc. per share – basic	Net income attributable to Fiserv, Inc. per share – basic	$	0.75	$	0.65	$	2.71	$	1.51	Net income attributable to Fiserv, Inc. per share – basic	$	0.90	$	1.03
Net income attributable to Fiserv, Inc. per share – diluted	Net income attributable to Fiserv, Inc. per share – diluted	$	0.75	$	0.64	$	2.68	$	1.49	Net income attributable to Fiserv, Inc. per share – diluted	$	0.89	$	1.02

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	639.6		661.4		645.2		664.6		Basic	626.9		650.8
Diluted	Diluted	645.0		669.7		651.0		674.1		Diluted	631.3		657.2

(1)Includes processing and other fees charged to related party investments accounted for under the equity method of ~~$51~~$46 million and ~~$46~~$51 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $151 million and $160 million for the nine months ended September 30, 2022 and 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
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Net income $ 493 $ 446 $ 1,784 $ 1,048
Other comprehensive loss:
Fair market value adjustment on cash flow hedges, net of income tax benefit (provision) of $2 million, ($1 million), $4 million and ($1 million) (4) 3 (11) 4
Reclassification adjustment for net realized losses (gains) on cash flow hedges included in cost of processing and services, net of income tax (benefit) provision of ($0 million), $1 million, $0 million and $2 million 1 (2) — (6)
Reclassification adjustment for net realized losses on cash flow hedges included in net interest expense, net of income tax benefit of $1 million, $2 million, $4 million and $4 million 3 4 11 12
Unrealized (loss) gain on defined benefit pension plans, net of income tax benefit (provision) of ($0 million), $0 million, $1 million and ($0 million) 1 — (2) 1
Foreign currency translation, net of income tax (see Note 12) (639) (349) (937) (298)
Reclassification adjustment for accumulated foreign currency translation impacts from the sale of a foreign entity included in loss on sale of business, net of income tax benefit of $0 million (see Note 4) 56 — 56 —
Total other comprehensive loss (582) (344) (883) (287)
Comprehensive income (loss) $ (89) $ 102 $ 901 $ 761
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests 12 18 36 47
Less: other comprehensive loss attributable to noncontrolling interests (48) (18) (89) (25)
Comprehensive income (loss) attributable to Fiserv, Inc. $ (53) $ 102 $ 954 $ 739


	Three Months Ended March 31,
	2023		2022
Net income	$	576	$	682
Other comprehensive income:
Fair market value adjustment on cash flow hedges	5		(1)
Reclassification adjustment for net realized losses (gains) on cash flow hedges included in cost of processing and services	1		(1)
Reclassification adjustment for net realized losses on cash flow hedges included in net interest expense	5		5
Tax impacts of cash flow hedges, net	(3)		(1)
Unrealized gain (loss) on defined benefit pension plans	3		(1)
Tax impacts of defined benefit pension plans, net	(1)		—
Foreign currency translation	115		109

Tax impacts of foreign currency translation, net	22		(22)
Total other comprehensive income	147		88
Comprehensive income	$	723	$	770
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	13		13
Less: other comprehensive income (loss) attributable to noncontrolling interests	12		(17)
Comprehensive income attributable to Fiserv, Inc.	$	698	$	774

See accompanying notes to consolidated financial statements.

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Fiserv, Inc.

Consolidated Balance Sheets

(In millions)

(Unaudited)


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	893	$	835	Cash and cash equivalents	$	1,046	$	902
Trade accounts receivable, less allowance for doubtful accounts	Trade accounts receivable, less allowance for doubtful accounts	3,303		2,860		Trade accounts receivable, less allowance for doubtful accounts	3,340		3,585
Prepaid expenses and other current assets	Prepaid expenses and other current assets	1,484		1,523		Prepaid expenses and other current assets	1,762		1,575
Settlement assets	Settlement assets	14,195		13,652		Settlement assets	14,141		21,482

Total current assets	Total current assets	19,875		18,870		Total current assets	20,289		27,544
Property and equipment, net	Property and equipment, net	1,924		1,742		Property and equipment, net	2,002		1,958
Customer relationships, net	Customer relationships, net	8,464		9,991		Customer relationships, net	7,973		8,424
Other intangible assets, net	Other intangible assets, net	3,992		4,018		Other intangible assets, net	4,021		3,991
Goodwill	Goodwill	36,241		36,433		Goodwill	37,017		36,811
Contract costs, net	Contract costs, net	886		811		Contract costs, net	912		905
Investments in unconsolidated affiliates	Investments in unconsolidated affiliates	2,390		2,561		Investments in unconsolidated affiliates	2,362		2,403
Other long-term assets	Other long-term assets	1,868		1,823		Other long-term assets	1,972		1,833
Total assets	Total assets	$	75,640	$	76,249	Total assets	$	76,548	$	83,869
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	3,456	$	3,550	Accounts payable and accrued expenses	$	3,569	$	3,883
Short-term and current maturities of long-term debt	Short-term and current maturities of long-term debt	528		508		Short-term and current maturities of long-term debt	461		468
Contract liabilities	Contract liabilities	545		585		Contract liabilities	692		625
Settlement obligations	Settlement obligations	14,195		13,652		Settlement obligations	14,141		21,482
Total current liabilities	Total current liabilities	18,724		18,295		Total current liabilities	18,863		26,458
Long-term debt	Long-term debt	20,847		20,729		Long-term debt	21,943		20,950
Deferred income taxes	Deferred income taxes	3,766		4,172		Deferred income taxes	3,520		3,602
Long-term contract liabilities	Long-term contract liabilities	216		225		Long-term contract liabilities	273		235
Other long-term liabilities	Other long-term liabilities	944		878		Other long-term liabilities	995		936
Total liabilities	Total liabilities	44,497		44,299		Total liabilities	45,594		52,181
Commitments and Contingencies (see Note 17)	Commitments and Contingencies (see Note 17)					Commitments and Contingencies (see Note 17)
Redeemable Noncontrolling Interests	Redeemable Noncontrolling Interests	161		278		Redeemable Noncontrolling Interests	160		161
Fiserv, Inc. Shareholders’ Equity:	Fiserv, Inc. Shareholders’ Equity:					Fiserv, Inc. Shareholders’ Equity:
Preferred stock, no par value: 25 million shares authorized; none issued	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		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	22,959		22,983		Additional paid-in capital	22,946		23,011
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,539)		(745)		Accumulated other comprehensive loss	(1,054)		(1,189)
Retained earnings	Retained earnings	16,594		14,846		Retained earnings	17,939		17,376
Treasury stock, at cost, 148 million and 134 million shares		(7,696)		(6,140)
Treasury stock, at cost, 165 million and 154 million shares						Treasury stock, at cost, 165 million and 154 million shares	(9,762)		(8,378)
Total Fiserv, Inc. shareholders’ equity	Total Fiserv, Inc. shareholders’ equity	30,326		30,952		Total Fiserv, Inc. shareholders’ equity	30,077		30,828
Noncontrolling interests	Noncontrolling interests	656		720		Noncontrolling interests	717		699
Total equity	Total equity	30,982		31,672		Total equity	30,794		31,527
Total liabilities and equity	Total liabilities and equity	$	75,640	$	76,249	Total liabilities and equity	$	76,548	$	83,869

See accompanying notes to consolidated financial statements.

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Fiserv, Inc.

Consolidated Statements of Cash Flows~~(1)~~

(In millions)

(Unaudited)

Nine Months Ended
September 30,
2022 2021
Cash flows from operating activities:
Net income $ 1,784 $ 1,048
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and other amortization 982 861
Amortization of acquisition-related intangible assets 1,416 1,554
Amortization of financing costs and debt discounts 33 41
Share-based compensation 244 190
Deferred income taxes (402) (266)
Net gain on sale of business and other assets (27) —
Income from investments in unconsolidated affiliates (222) (80)
Distributions from unconsolidated affiliates 58 17
Non-cash impairment charges — 6
Other operating activities (2) (26)
Changes in assets and liabilities, net of effects from acquisitions and dispositions:
Trade accounts receivable (521) (298)
Prepaid expenses and other assets (203) (242)
Contract costs (230) (210)
Accounts payable and other liabilities 105 97
Contract liabilities (30) (1)
Net cash provided by operating activities 2,985 2,691
Cash flows from investing activities:
Capital expenditures, including capitalized software and other intangibles (1,148) (814)
Net proceeds from sale of business and other assets 218 —
Payments for acquisition of businesses, net of cash acquired (682) (495)
Distributions from unconsolidated affiliates 110 91
Purchases of investments (45) (250)
Proceeds from sale of investments 13 503
Net cash used in investing activities (1,534) (965)
Cash flows from financing activities:
Debt proceeds 1,450 5,177
Debt repayments, including debt financing costs (2,945) (6,515)
Net proceeds from commercial paper and short-term borrowings 2,020 1,388
Proceeds from issuance of treasury stock 96 105
Purchases of treasury stock, including employee shares withheld for tax obligations (1,909) (1,768)
Settlement activity, net 114 386
Distributions paid to noncontrolling interests and redeemable noncontrolling interests (30) (41)
Payments of acquisition-related contingent consideration — (36)
Other financing activities 7 (2)
Net cash used in financing activities (1,197) (1,306)
Effect of exchange rate changes on cash and cash equivalents (84) (11)
Net change in cash and cash equivalents 170 409
Cash and cash equivalents, beginning balance 3,205 2,569
Cash and cash equivalents, ending balance $ 3,375 $ 2,978

~~(1)~~ The company revised, for comparable purposes with the current period’s presentation, the consolidated statement of cash flows presentation for the nine months ended September 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.


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income	$	576	$	682
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and other amortization	352		313
Amortization of acquisition-related intangible assets	433		486
Amortization of financing costs and debt discounts	10		11

Share-based compensation	93		61

Deferred income taxes	(87)		(183)
Net loss (gain) on sale of businesses and other assets	4		(147)
Loss (income) from investments in unconsolidated affiliates	12		(106)
Distributions from unconsolidated affiliates	11		19


Other operating activities	(1)		3
Changes in assets and liabilities, net of effects from acquisitions and dispositions:
Trade accounts receivable	255		(60)
Prepaid expenses and other assets	(224)		(130)
Contract costs	(66)		(88)
Accounts payable and other liabilities	(336)		(78)
Contract liabilities	98		32
Net cash provided by operating activities	1,130		815
Cash flows from investing activities:
Capital expenditures, including capitalized software and other intangibles	(339)		(331)
Net proceeds from sale of businesses and other assets	—		175

Distributions from unconsolidated affiliates	34		61
Purchases of investments	(5)		(8)
Proceeds from sale of investments	—		3
Other investing activities	(4)		—
Net cash used in investing activities	(314)		(100)
Cash flows from financing activities:
Debt proceeds	2,071		705
Debt repayments	(424)		(1,086)
Net (repayments of) proceeds from commercial paper and short-term borrowings	(781)		218
Payments of debt financing costs	(15)		—
Proceeds from issuance of treasury stock	29		43
Purchases of treasury stock, including employee shares withheld for tax obligations	(1,530)		(544)

Settlement activity, net	(460)		(400)
Distributions paid to noncontrolling interests and redeemable noncontrolling interests	(8)		(13)

Other financing activities	(31)		—
Net cash used in financing activities	(1,149)		(1,077)
Effect of exchange rate changes on cash and cash equivalents	17		(10)
Net change in cash and cash equivalents	(316)		(372)

Cash and cash equivalents, beginning balance	3,192		3,205
Cash and cash equivalents, ending balance	$	2,876	$	2,833

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 nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 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, ~~2021.~~2022.

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 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 (loss) income ~~(loss)~~ from investments in unconsolidated affiliates and the related tax expense or benefit is reported within the income tax provision in the consolidated statements of income. Significant influence over an affiliate’s operations generally coincides with an ownership interest 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 attributable to noncontrolling interests and redeemable noncontrolling interests. Noncontrolling interests are presented as a component of equity in the consolidated balance 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 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. The Company has determined that there have been no material changes to its estimates and assumptions within its consolidated financial statements to date as a result of the continuing impact of the COVID-19 pandemic. 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 future operational and financial performance remains uncertain and difficult to predict.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and investments with original maturities of 90 days or ~~less. Cash~~less 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.

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The changes in settlement cash and cash equivalents are included in settlement activity, net within cash flows from financing activities in the consolidated statements of cash flows. The following table provides a reconciliation between cash and cash equivalents on the consolidated balance sheets and the consolidated statements of cash flows at:

(In millions) September 30, 2022 December 31, 2021 September 30, 2021
Cash and cash equivalents on the consolidated balance sheets $ 893 $ 835 $ 933
Cash and cash equivalents included in settlement assets 2,475 2,361 2,036
Other restricted cash 7 9 9
Total cash and cash equivalents on the consolidated statements of cash flows $ 3,375 $ 3,205 $ 2,978

The Company revised the consolidated statement of cash flows for the nine months ended September 30, 2021 to reflect settlement cash and 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 nine months ended September 30, 2022 and 2021 of $114 million and $386 million, respectively, have been included in settlement activity, net within cash flows from financing activities.


(In millions)	March 31, 2023		December 31, 2022		March 31, 2022
Cash and cash equivalents on the consolidated balance sheets	$	1,046	$	902	$	863
Cash and cash equivalents included in settlement assets	1,823		2,283		1,961
Other restricted cash	7		7		9
Total cash and cash equivalents on the consolidated statements of cash flows	$	2,876	$	3,192	$	2,833

Allowance for Doubtful Accounts

The Company analyzes the collectability of trade accounts receivable by considering historical bad debts and issued client credits, 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 ~~$47~~$60 million and ~~$55~~$52 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses represent advance payments for goods and services to be consumed in the future, such as maintenance, postage and insurance, and totaled $507 million and $431 million at March 31, 2023 and December 31, 2022, respectively. Other current assets, including Clover Capital cash advances and settlement advance cash payments, totaled $1,255 million and $1,144 million at March 31, 2023 and December 31, 2022, respectively.

The Company offers merchants advance access to capital through its Clover Capital cash advance program. Under this program, merchants sell fixed amounts of their future credit card receivables to the Company in exchange for an up-front purchase price payment. Future credit card receivables purchased by the Company under the Clover Capital program were $175 million and $164 million at March 31, 2023 and December 31, 2022, respectively. The Company maintained a reserve of $8 million and $7 million at March 31, 2023 and December 31, 2022, respectively, based on an estimate of uncollectible amounts.

The Company also offers merchants within its international operations the opportunity to receive settlement advance cash payments for their receivables, including when the cardholders have elected to pay such merchants over time in installments. The Company maintains short-term lines of credit with foreign banks and alliance partners to fund such anticipated settlement activity (see Note 9). These local functional currency arrangements are primarily associated with the Company’s operations in Latin America, the most significant of which are denominated in Argentine peso and Brazilian real. The Company’s outstanding cash advances from card issuers related to this settlement funding activity were $286 million and $264 million at March 31, 2023 and December 31, 2022, respectively.

Settlement Assets and Obligations

Settlement assets and obligations ~~result~~represent intermediary balances arising from ~~timing differences~~the settlement process which involves the transferring of funds between ~~collection~~card issuers, payment networks, processors, merchants and ~~fulfillment of payment transactions~~consumers, and collateral amounts held to manage merchant credit risk, primarily associated with the Company’s merchant acquiring services. As a processor, the Company facilitates the clearing and settlement activity for the merchant and records settlement assets and obligations upon processing a payment transaction. Settlement assets represent cash received or amounts receivable from agents, payment networks, bank partners, merchants or ~~directly from~~direct consumers. Settlement obligations represent amounts payable to merchants and payees.

Certain merchant settlement ~~asset receivables~~assets (included within settlement receivables) that relate to settlement obligations are held by partner banks to which the Company does not have legal ownership, but which the Company has the right to use, ~~the assets~~ to satisfy the related settlement obligations. The Company records settlement obligations for amounts payable to merchants and for outstanding payment instruments issued to payees that have not yet been presented for settlement.

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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~~a 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~~mitigate this risk. 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 loss expense, recognized by the Company within cost of processing and services in the consolidated statements of income, was ~~$18~~$15 million and $8 million for the three months ended September 30, 2022. The aggregate merchant credit loss expense recognized by the Company was not significant for the three months ended September 30, 2021. The Company recognized aggregate merchant credit loss expense of $46 millionMarch 31, 2023 and ~~$31 million for the nine months ended September 30,~~ 2022, ~~and 2021,~~ respectively. The amount of collateral available to the Company was ~~$1.9~~$1.3 billion and ~~$2.2~~$1.5 billion at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The Company maintains an allowance for merchant credit losses that are expected to exceed the amount of merchant collateral. The allowance includes estimated 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, which is recorded within accounts payable and accrued expenses in the consolidated balance sheets, as well as 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 allowance is based primarily

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on the Company’s historical experience of credit losses and other ~~relevant~~ factors such as changes in economic conditions or increases in merchant fraud. The aggregate merchant credit loss allowance was ~~$32~~$33 million and ~~$42~~$29 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, 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 ~~2021~~2022 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 or currency exchange rate ~~environment,~~environments; a shift in strategic initiatives; a deterioration in financial performance or in the ~~economic impact~~success of ~~the COVID-19 pandemic,~~merchant alliances and relationships within a particular reporting unit; or significant changes in the composition of, or assumptions used in, the quantitative test on certain of the Company’s reporting units (such as an increase in risk-adjusted discount rates) could have a future material impact on one or more of the estimates and assumptions used to evaluate goodwill impairment. Additionally, a significant change in a merchant alliance business relationship or operating performance could result in a material goodwill impairment charge. There is no accumulated goodwill impairment for the Company through ~~September 30, 2022.~~March 31, 2023.

Other Equity 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 ~~$141~~$137 million and ~~$113~~$135 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, 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. 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~~expense in the consolidated ~~statement~~statements of income for the period. During the nine months ended September 30, 2021, the Company remeasured its equity interest in Ondot Systems, Inc. (“Ondot”) to fair value upon acquiring a remaining ownership interest, resulting in the recognition of a pre-tax gain of $12 million (see Note 4). Other adjustmentsAdjustments made to the values recorded for certain equity securities and gains and losses from sales of equity securities during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ were not significant.

Foreign Currency

The U.S. dollar is the functional currency of the Company’s U.S.-based businesses and certain foreign-based businesses. Where the functional currency differs from the U.S. dollar, assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rates during the reporting period. Gains and losses from foreign currency translation are recorded as a separate component of accumulated other comprehensive loss. Gains and losses from foreign currency transactions are included in determining net income for the reporting period.

Financial statements of subsidiaries located in highly inflationary economies outside of the U.S. are remeasured into U.S. dollars, and the foreign currency gains and losses from the remeasurement of monetary assets and liabilities are reflected in the

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consolidated statements of income, rather than as foreign currency translation within accumulated other comprehensive loss in the consolidated balance sheets. The remeasurement of monetary assets and liabilities in highly inflationary economies, primarily Argentina, resulted in foreign currency exchange losses of $18 million and $5 million for the three months ended March 31, 2023 and 2022, respectively.

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 fixed-to-fixed cross-currency rate swap contracts and foreign currency-denominated debt as economic hedges of its net investments in such foreign currency-denominated subsidiaries (see Note 12). Accordingly, foreign currency transaction gains or losses on the qualifying net investment hedge instruments are recorded as foreign currency translation, net of tax, within other comprehensive income in the consolidated statements of comprehensive income and will remain in accumulated other comprehensive loss within the consolidated balance sheets until the sale or complete liquidation of the underlying foreign subsidiaries.

Derivatives

Derivatives are entered into for periods consistent with related underlying exposures and are recorded in the consolidated balance sheets as either an asset or liability measured at fair value. If the derivative is designated as a cash flow hedge, changes in the fair value of the derivative are recorded as a component of accumulated other comprehensive loss and recognized in the consolidated statements of income when the hedged item affects earnings. If the derivative is designated as a net investment hedge, changes in the fair value of the derivative, net of tax, are recorded in the foreign currency translation component of other comprehensive ~~loss~~income until the sale or complete liquidation of the underlying net ~~investment is sold, diluted, or liquidated.~~investment. If the derivative is designated as a fair value hedge, changes in the fair value ofor the derivative are recorded in the same line item as the changes in the fair value of the hedged item and recognized in the consolidated statements of income. To the extent a derivative is not designated as a hedge, changes in fair value are recognized in the consolidated statements of income. The Company’s policy is to enter into derivatives with creditworthy institutions and not to enter into such derivatives for speculative purposes.

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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(In millions)	(In millions)	2022		2021		2022		2021		(In millions)	2023		2022
Interest expense	Interest expense	$	(193)	$	(173)	$	(542)	$	(526)	Interest expense	$	(210)	$	(171)
Interest income	Interest income	3		1		8		3		Interest income	8		3
Interest expense, net	Interest expense, net	$	(190)	$	(172)	$	(534)	$	(523)	Interest expense, net	$	(202)	$	(168)

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2. Recent Accounting Pronouncements

In 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 interim periods within those fiscal years. The Company adopted ASU 2022-02 effective January 1, 2023, and the adoption did not have a material impact on the Company’s financial statement disclosures for the three months ended March 31, 2023.

In 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), which clarifies 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 contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with ASC Topic 820. For public entities, ASU 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~~Table of Contents (“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 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, 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 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 2021-05 effective January 1, 2022, with prospective application to leases commencing or modified thereafter, and the adoption did not have a material impact on its consolidated financial statements.

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.

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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 U.S. comprising approximately 13% and 14% of total revenue ~~for each of~~during the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, and the nine months ended September 30, 2022 and 2021.~~respectively.


(In millions)	(In millions)	Reportable Segments										(In millions)	Reportable Segments
Three Months Ended September 30, 2022		Acceptance		Fintech		Payments		Corporate and Other		Total
Three Months Ended March 31, 2023												Three Months Ended March 31, 2023	Acceptance		Fintech		Payments		Corporate and Other		Total

Type of Revenue	Type of Revenue											Type of Revenue
Processing	Processing	$	1,586	$	407	$	1,218	$	6	$	3,217	Processing	$	1,554	$	416	$	1,187	$	6	$	3,163
Hardware, print and card production	Hardware, print and card production	254		9		271		—		534		Hardware, print and card production	246		12		287		—		545
Professional services	Professional services	5		119		74		—		198		Professional services	4		112		80		—		196
Software maintenance	Software maintenance	—		138		7		—		145		Software maintenance	—		137		6		—		143
License and termination fees	License and termination fees	15		36		19		—		70		License and termination fees	10		53		29		—		92
Output Solutions postage	Output Solutions postage	—		—		—		251		251		Output Solutions postage	—		—		—		273		273
Other	Other	18		57		28		—		103		Other	33		62		40		—		135
Total revenue		$	1,878	$	766	$	1,617	$	257	$	4,518

Total Revenue												Total Revenue	$	1,847	$	792	$	1,629	$	279	$	4,547

(In millions) Reportable Segments
Three Months Ended September 30, 2021 Acceptance Fintech Payments Corporate
and Other Total
Type of Revenue
Processing $ 1,446 $ 389 $ 1,132 $ 4 $ 2,971
Hardware, print and card production 232 10 236 — 478
Professional services 12 124 66 — 202
Software maintenance — 139 2 — 141
License and termination fees 12 45 16 — 73
Output Solutions postage — — — 209 209
Other 14 54 19 2 89
Total revenue $ 1,716 $ 761 $ 1,471 $ 215 $ 4,163

(In millions) Reportable Segments
Nine Months Ended September 30, 2022 Acceptance Fintech Payments Corporate
and Other Total
Type of Revenue
Processing $ 4,649 $ 1,210 $ 3,486 $ 18 $ 9,363
Hardware, print and card production 694 28 744 — 1,466
Professional services 15 366 203 — 584
Software maintenance — 415 18 — 433
License and termination fees 43 152 79 — 274
Output Solutions postage — — — 712 712
Other 31 176 67 — 274
Total Revenue $ 5,432 $ 2,347 $ 4,597 $ 730 $ 13,106

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(In millions)	(In millions)	Reportable Segments										(In millions)	Reportable Segments
Nine Months Ended September 30, 2021		Acceptance		Fintech		Payments		Corporate and Other		Total
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022	Acceptance		Fintech		Payments		Corporate and Other		Total

Type of Revenue	Type of Revenue											Type of Revenue
Processing	Processing	$	4,044	$	1,152	$	3,331	$	26	$	8,553	Processing	$	1,403	$	405	$	1,113	$	6	$	2,927
Hardware, print and card production	Hardware, print and card production	636		33		667		—		1,336		Hardware, print and card production	225		9		236		—		470
Professional services	Professional services	30		350		195		—		575		Professional services	5		116		62		—		183
Software maintenance	Software maintenance	—		417		6		—		423		Software maintenance	—		138		6		—		144
License and termination fees	License and termination fees	33		133		43		—		209		License and termination fees	14		48		26		—		88
Output Solutions postage	Output Solutions postage	—		—		—		616		616		Output Solutions postage	—		—		—		239		239
Other	Other	36		166		55		—		257		Other	6		62		19		—		87
Total Revenue	Total Revenue	$	4,779	$	2,251	$	4,297	$	642	$	11,969	Total Revenue	$	1,653	$	778	$	1,462	$	245	$	4,138

Contract Balances

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


(In millions)	(In millions)	September 30, 2022		December 31, 2021		(In millions)	March 31, 2023		December 31, 2022
Contract assets	Contract assets	$	546	$	541	Contract assets	$	595	$	551
Contract liabilities	Contract liabilities	761		810		Contract liabilities	965		860

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

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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 ~~$499~~$223 million of revenue during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 that was included in the contract ~~liability~~liabilities balance at the beginning of the period.

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 were unsatisfied (or partially unsatisfied) at ~~September 30, 2022:~~March 31, 2023:


(In millions)	(In millions)			(In millions)
Year Ending December 31,	Year Ending December 31,			Year Ending December 31,
Remainder of 2022		$	649
2023		2,139
Remainder of 2023				Remainder of 2023	$	1,722
2024	2024	1,694		2024	1,955
2025	2025	1,248		2025	1,526
2026				2026	970
Thereafter	Thereafter	1,778		Thereafter	1,294

The Company applies the optional exemption under ASC Topic 606,Revenue from Contracts with Customers (“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 and Dispositions

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 identifiable assets acquired and liabilities assumed based on the estimated fair values at the date of acquisitions. The results of operations for the following acquired and divested businesses are included in the consolidated results of the Company from the respective dates of acquisition and through the respective dates of disposition. Pro forma information for these acquired businesses is not provided because they did not have a material effect, individually or in the aggregate, on the Company’s consolidated results of operations.

Acquisitions

Acquisition of Merchant One

On December 20, 2022, the Company acquired Merchant One, Inc. (“Merchant One”), an independent sales organization focused on acquiring merchants in the restaurant, retail and e-commerce industries using an innovative mix of direct and digital marketing strategies, for approximately $302 million, net of $1 million of acquired cash. Merchant One is included within the Acceptance segment and enhances the Company’s merchant distribution and sales force channels.

During the three months ended March 31, 2023, the Company identified and recorded measurement period adjustments to the preliminary Merchant One 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 an increase to goodwill of approximately $61 million and a decrease in identifiable intangible assets, including customer relationships. Such measurement period adjustments did not have a material impact on the Company’s consolidated statement of income. The updated preliminary allocation of purchase price resulted in the recognition of identifiable intangible assets of approximately $118 million, goodwill of approximately $179 million and other net assets acquired of approximately $6 million. The allocation of the purchase price is preliminary and is subject to further adjustment, pending additional refinement and final completion of valuations. Goodwill, which is deductible for tax purposes, is primarily attributed to the anticipated value created by expanding the reach of the Clover® cloud-based POS and business management platform, and select value-added services that enable the Company to deliver new and innovative capabilities to Merchant One’s clients.

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


(In millions)	Gross Carrying Amount		Weighted-Average Useful Life
Residual buyouts	83		9 years
Customer relationships	35		10 years
Total	$	118	9 years

Acquisition of Finxact

On April 1, 2022, the Company acquired a remaining ownership interest in Finxact, Inc. (“Finxact”), a developer of cloud-native banking solutions powering digital transformation throughout the financial services sector, for ~~approximately~~ $645 million, net of $27 million of acquired cash. The Company previously held a noncontrolling equity interest in Finxact, which was accounted for 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 ~~approximately~~ $110 million, included within income ~~(loss)~~ from investments in unconsolidated affiliates in the consolidated statement of income during the ~~nine~~three months ended ~~September~~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.

During the three months ended September 30, 2022, the Company identified and recorded measurement period adjustments to the preliminary Finxact 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 of goodwill of approximately $3 million, with offsetting amounts to the change in goodwill primarily attributable to an increase in identifiable intangible assets, including acquired software and technology. Such measurement period adjustments did not have a material impact on the Company’s consolidated statements of income.

The ~~preliminary~~ allocation of purchase price recorded for Finxact iswas finalized in the fourth quarter of 2022 as follows:



(In millions)
Cash	$	27
Other net assets	31
Intangible assets	105
Goodwill	~~668~~670
Total consideration	$	803
Less: ~~fair~~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 six years. The allocation of the purchase price~~

Goodwill, which 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 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 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.~~

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During 2022, the Company identified and recorded measurement period adjustments to the preliminary 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 an increase to goodwill of $62 million, with offsetting amounts to the change in goodwill attributable to a decrease in identifiable intangible assets, including acquired software and technology, of $84 million and deferred tax adjustments of $22 million. Such measurement period adjustments did not have a material impact on the Company’s consolidated statements of income. The allocation of purchase price was finalized in the second quarter of 2022 and resulted in the recognition of identifiable intangible assets of $52 million, goodwill of $266 million and other net assets of $23 million. Goodwill, which is not deductible for tax purposes, is primarily attributed to the anticipated value created by the enhanced strength of the Company’s omnichannel platform to drive increased operational efficiencies for restaurants, enabling operators to deliver seamless and distinct hospitality experiences for their diners.

The amounts allocated to identifiable intangible assets were as follows:



~~(In millions)~~	~~Gross Carrying Amount~~		~~Weighted-Average Useful Life~~
~~Acquired software and technology~~	$	25	~~6 years~~
~~Customer relationships and other~~	27		~~4 years~~
~~Total~~	$	52	~~5 years~~

The results of operations for 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 $207 million, net of $6 million of acquired cash, and including earn-out provisions estimated at a fair value of $30 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 allocation of purchase price was finalized in the fourth quarter of 2021 and resulted in the recognition of identifiable intangible assets of $127 million, goodwill of $79 million and other net assets of $7 million. Goodwill, of which $59 million is 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 were 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 nine months ended September 30,

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~~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.~~

~~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, not 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 were as follows:



(In millions)	Gross Carrying Amount		Weighted-Average Useful Life
Acquired software and technology	$	90	6 years
~~Customer relationships~~Trade name	359		65 years
~~Non-compete agreements and other~~Customer relationships	176		48 years
Total	$	~~142~~105	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 December 29, 2022, the Company acquired OrangeData S.A. (“Yacaré”), an Argentina-based payment service provider that enables customers to transact at merchant locations using QR codes. Yacaré is included within the Acceptance segment and enhances the Company’s instant payment transaction capabilities. On September 1, 2022, the Company acquired NexTable, Inc. (“NexTable”), a provider of cloud-based reservation and table management solutions for restaurants. NexTable is included within the Acceptance segment and expands the Company’s end-to-end restaurant solutions. 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~~POS equipment for merchants. City POS is included within the Acceptance segment and expands ~~the reach of~~ the Company’s merchant services business. The Company acquired these businesses for an aggregate purchase price of ~~approximately $41~~$44 million, including earn-out provisions estimated at a fair value of ~~approximately~~ $6 million (see Note 7). The allocation of purchase price for these acquisitions resulted in the recognition of identifiable intangible assets of ~~approximately $20~~$23 million, goodwill of ~~approximately~~ $22 million and other net assumed liabilities of ~~approximately~~ $1 million. The ~~allocation of~~ purchase price allocations for the CityPOS ~~acquisition was~~and NexTable acquisitions were finalized in the third ~~quarter~~and fourth quarters of ~~2022. Measurement period adjustments did not have a material impact on the consolidated statements of income.~~2022, respectively. The allocation of the purchase price for ~~the NexTable acquisition~~Yacaré is preliminary and is subject to further ~~adjustment, pending additional refinement and final completion of valuations.~~adjustment. Goodwill for these acquisitions, of which ~~approximately~~ $17 million 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 and through enhanced omnichannel capabilities.~~

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primarily attributed to the value created by expanding the reach of the Company’s payment solutions and enhancing omnichannel capabilities.

The amounts allocated to identifiable intangible assets for other acquisitions acquired in 2022 were as follows:



(In millions)	Gross Carrying Amount		Weighted-Average Useful Life
Acquired software and technology	$	912	87 years
Customer relationships	11		10 years
Total	$	2023	9 years

Dispositions

Disposition of Fiserv Costa Rica and Systems Integration Services

On October 17, 2022, the Company sold Fiserv Costa Rica, S.A. and its Systems Integration Services (“SIS”) operations, which provides information technology engineering services in the U.S. and India, to a single buyer, for an aggregate sales price of $49 million. The ~~results~~Company recognized a pre-tax gain of ~~operations for these acquired~~$44 million on the sales, recorded within net gain on sale of businesses ~~are included~~and other assets, with a related tax expense of $8 million recorded within the income tax provision, in the consolidated ~~results~~statement of income for 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 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.year ended December 31, 2022. The Company ~~previously held~~recognized a ~~noncontrolling interest~~pre-tax loss of $3 million, recorded within net loss (gain) on sale of businesses and other assets in ~~NetPay, which was accounted for under~~ the ~~equity method~~three months ended March 31, 2023, associated with final working capital adjustments related to the disposition of Fiserv Costa Rica, S.A. Fiserv Costa Rica, S.A. and ~~approximated acquisition-date fair value. NetPay is included~~SIS were reported primarily 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 AcceptanceFintech segment. ~~On June 14, 2021, the Company acquired Spend Labs Inc. (“SpendLabs”), a mobile-native, cloud-based software provider~~

Disposition 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 $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 estimated at a fair value of $4 million (see Note 7). The allocation of purchase price for these acquisitions resulted in the recognition of identifiable intangible assets totaling $47 million, goodwill of $61 million and net assumed liabilities of $7 million. The purchase price allocation for the Radius8 acquisition was finalized in the third quarter of 2021 and for SpendLabs in the fourth quarter of 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. Goodwill, of which $14 million is deductible for tax purposes, is primarily attributed to synergies, 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.

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



~~(In millions)~~	~~Gross Carrying Amount~~		~~Weighted-Average Useful Life~~
~~Acquired software and technology~~	$	31	~~6 years~~
~~Customer relationships~~	9		~~10 years~~
~~Residual buyouts~~	7		~~5 years~~
~~Total~~	$	47	~~7 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~~Korea Operations

On September 30, 2022, the Company sold its Korea operations, which were reported within the Acceptance segment, for total consideration of $50 million, consisting of $43 million in net cash and an equity interest in the buyer of $7 million. The Company recognized a pre-tax loss of ~~$120~~$127 million on the sale, recorded within net ~~(gain) loss~~gain on sale of ~~business~~businesses and other assets in the consolidated ~~statements~~statement of ~~income.~~income for the year ended December 31, 2022. The loss was comprised of the difference between the consideration received and the net carrying amount of the business, including $40 million of allocated goodwill, $48 million of customer relationship net intangible assets and $56 million of accumulated foreign currency translation losses, which were reclassified from accumulated other comprehensive loss.

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On October 17, 2022, the Company sold Fiserv Costa Rica, S.A. and its Systems Integration Services operations, which provides information technology engineering services in the U.S. and India, to a single buyer. As part of the agreement, the buyer will provide ongoing services and support to the Company. The transaction is not expected to have a material impact on the Company’s consolidated results of operations.

5. Intangible Assets

Identifiable intangible assets consisted of the following:


(In millions)	(In millions)	Gross Carrying Amount		Accumulated Amortization				Net Book Value		(In millions)	Gross Carrying Amount				Accumulated Amortization			Net Book Value
September 30, 2022
March 31, 2023										March 31, 2023	Gross Carrying Amount				Accumulated Amortization			Net Book Value
Customer relationships	Customer relationships	$	14,435			$	5,971						$	8,464			Customer relationships
Acquired software and technology	Acquired software and technology	2,484		1,144				1,340		Acquired software and technology		2,360				1,162				1,198
Trade names	Trade names	628		277				351		Trade names	635				310				325
Purchased software	Purchased software	1,111		534				577		Purchased software	1,109				605			504
Capitalized software and other intangibles	Capitalized software and other intangibles	2,334		610				1,724		Capitalized software and other intangibles	2,847				853			1,994
Total	Total	$	20,992	$	8,536			$	12,456	Total	$	21,595			$	9,601		$	11,994

(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

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(In millions)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
December 31, 2022
Customer relationships	$	14,795	$	6,371	$	8,424
Acquired software and technology	2,510		1,234		1,276
Trade names	633		295		338
Purchased software	1,146		595		551
Capitalized software and other intangibles	2,601		775		1,826
Total	$	21,685	$	9,270	$	12,415

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(In millions)	(In millions)	2022		2021		2022		2021		(In millions)	2023		2022
Amortization expense	Amortization expense	$	608	$	642	$	1,854	$	1,937	Amortization expense	$	595	$	625

6. Investments in Unconsolidated Affiliates

The Company maintains investments in various affiliates that are accounted for as equity method investments, the most significant of which are related to the Company’s merchant alliances. The Company’s share of net income or loss from these investments is reported within (loss) income ~~(loss)~~ from investments in unconsolidated affiliates and the related tax expense or benefit is reported within the income tax provision in the consolidated statements of income.

The Company maintains noncontrolling ownership interests in Sagent M&C, LLC (“Sagent”) and 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 (loss) income ~~(loss)~~ from investments in unconsolidated affiliates, with related tax expense of $19 million recorded through the income tax provision, in the consolidated statement of income during the ~~nine~~three months ended ~~September 30,~~March 31, 2022. The 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 in senior unsecured debt at ~~September 30, 2022~~March 31, 2023 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 no$28 million of aggregate outstanding borrowings on the revolving credit facilities at ~~September 30, 2022.~~March 31, 2023. The Company has guaranteed ~~this amended~~the debt of the

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Lending Joint Ventures and does not anticipate that the Lending Joint Ventures will fail to fulfill their debt ~~obligations. See~~obligations (see Note ~~7 for additional information.~~

The Company previously maintained a noncontrolling interest in Tegra118, LLC (“Tegra118”) which was accounted for under the equity method. In February 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”)7). 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, with related tax expense of $6 million recorded through the income tax provision, in the consolidated statement of income during the nine months ended September 30, 2021. On June 30, 2021, the Company sold its 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 nine months ended September 30, 2021. The Company continues to provide various technical and data center related services under the terms of a pre-existing transition services agreement with InvestCloud.

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 maintains forward exchange contracts, designated as cash flow hedges, to hedge foreign currency exposure. The Company also maintains cross-currency rate swap contracts, designated as net investment hedges, to hedge a portion of its net investment in certain subsidiaries whose functional currencies are the Euro. These 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 12). Contingent consideration related to certain of the Company’s acquisitions (see Note 4) is estimated ~~based on~~using the present value of a probability-weighted assessment approach ~~derived from~~based on 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

March 31,
2023

December 31,
2022

Fair Value

(In millions)

Classification

Fair Value Hierarchy

September 30,
2022

December 31,
2021

Assets

Forward exchange contracts designated as cash flow hedges

Accounts payable and accrued expenses

Level 2

Forward exchange contracts designated as cash flow hedges

Prepaid expenses and other current assets

Level 2

—

Forward exchange contracts designated as cash flow hedges

Other long-term liabilities

Level 2

—

Cross-currency rate swap contracts designated as net investment hedges

Other long-term assets

Level 2

—

Cross-currency rate swap contracts designated as net investment hedges

Other long-term liabilities

Level 2

Liabilities

Forward exchange contracts designated as cash flow hedges

Accounts payable and accrued expenses

Level 2

—

Forward exchange contracts designated as cash flow hedges

Other long-term liabilities

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

Accounts payable and accrued expenses

Level 3

—

Contingent debt guarantee

Other long-term liabilities

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, 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 ~~$18.8~~$20.6 billion and ~~$21.8~~$19.2 billion at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, and the carrying value was ~~$20.5~~$21.6 billion and ~~$20.4~~$20.6 billion at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

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The Company maintains liabilities for its obligations to perform over the term of its debt guarantee arrangements with the Lending Joint Ventures (see Note 6), which are 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 statement of income and within other operating activities in the consolidated statement of cash flows, during the nine months ended September 30, 2022 related to such debt guarantee obligations.million. 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 ~~$43~~$38 million and ~~$10~~$40 million approximates the fair value at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively (Level 3 of the fair value hierarchy). Such guarantees will be amortized in future periods over the contractual term of the debt. The contingent component of the Company’s debt guarantee arrangements represents the current expected credit losses to which the Company is exposed. The amount of the liability is estimated based on certain financial metrics of the 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. The Company recognized $2 million and $3 million during the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $8 million and $9 million during the nine months ended September 30, 2022 and 2021,~~ respectively, within other ~~(expense) income~~expense 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.

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.

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8. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:


(In millions)	(In millions)	September 30, 2022		December 31, 2021		(In millions)	March 31, 2023		December 31, 2022
Trade accounts payable	Trade accounts payable	$	469	$	593	Trade accounts payable	$	425	$	652
Client deposits	Client deposits	839		783		Client deposits	899		871
Accrued compensation and benefits	Accrued compensation and benefits	313		392		Accrued compensation and benefits	229		279
Accrued taxes	Accrued taxes	194		154		Accrued taxes	312		432
Accrued interest	Accrued interest	165		216		Accrued interest	194		216

Accrued payment network fees						Accrued payment network fees	224		219
Operating lease liabilities						Operating lease liabilities	125		124
Accrued professional fees						Accrued professional fees	126		108

Other accrued expenses	Other accrued expenses	1,476		1,412		Other accrued expenses	1,035		982
Total	Total	$	3,456	$	3,550	Total	$	3,569	$	3,883

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9. Debt

The Company’s debt consisted of the following:


(In millions)	(In millions)	September 30, 2022		December 31, 2021		(In millions)	March 31, 2023		December 31, 2022
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	$	257	$	240	Foreign lines of credit	$	221	$	198
Finance lease and other financing obligations	Finance lease and other financing obligations	271		268		Finance lease and other financing obligations	240		270
Total short-term and current maturities of long-term debt	Total short-term and current maturities of long-term debt	$	528	$	508	Total short-term and current maturities of long-term debt	$	461	$	468

Long-term debt:	Long-term debt:					Long-term debt:

3.500% senior notes due October 2022		$	—	$	700

0.375% senior notes due July 2023 (Euro-denominated)	0.375% senior notes due July 2023 (Euro-denominated)	485		566		0.375% senior notes due July 2023 (Euro-denominated)	542		531
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)	569		705		2.250% senior notes due July 2025 (British Pound-denominated)	646		632
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)	485		566		1.125% senior notes due July 2027 (Euro-denominated)	542		531
5.450% senior notes due March 2028						5.450% senior notes due March 2028	900		—
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)	485		566		1.625% senior notes due July 2030 (Euro-denominated)	542		531
3.000% senior notes due July 2031 (British Pound-denominated)	3.000% senior notes due July 2031 (British Pound-denominated)	569		705		3.000% senior notes due July 2031 (British Pound-denominated)	646		632
5.600% senior notes due March 2033						5.600% senior notes due March 2033	900		—
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	2,578		916		U.S. dollar commercial paper notes	1,418		2,329
Euro commercial paper notes	Euro commercial paper notes	1,082		905		Euro commercial paper notes	1,265		1,210
Revolving credit facility	Revolving credit facility	45		97		Revolving credit facility	47		35
Receivable securitized loan		—		500

Term loan facility	Term loan facility	200		200		Term loan facility	200		200
Unamortized discount and deferred financing costs	Unamortized discount and deferred financing costs	(116)		(125)		Unamortized discount and deferred financing costs	(123)		(120)
Finance lease and other financing obligations	Finance lease and other financing obligations	565		528		Finance lease and other financing obligations	518		539
Total long-term debt	Total long-term debt	$	20,847	$	20,729	Total long-term debt	$	21,943	$	20,950

At September 30, 2022, the 0.375% Euro-denominated senior notes due in July 2023 were classified in the consolidated balance sheet as long-term, as the Company has the intent to refinance this debt on a long-term basis and the ability to do so under its revolving credit facility.

In July 2022, the Company 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 aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest. The Company ~~financed~~was in compliance with all financial debt covenants during the ~~redemption~~first three months of ~~these notes using proceeds from the issuance of U.S. dollar commercial paper.~~2023. The Company also repaid $485 million, representing all amounts outstanding on its receivable securitized loan, in July 2022 using proceeds from the issuance of U.S. dollar commercial paper and terminated the underlying receivables financing agreement.

~~In June 2022, the Company entered into~~maintains 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 June 2027 and provides for a maximum

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aggregate principal amount of availability of $6.0 billion. Borrowings under the ~~new~~ credit facility bear interest at a variable rate based on a 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 ~~(4.23%~~(5.940% at ~~September 30, 2022)~~March 31, 2023). ~~The credit facility also requires~~At March 31, 2023, the 0.375% Euro-denominated senior notes due in July 2023 and 3.800% senior notes due in October 2023 were classified in the consolidated balance sheet as long-term, as the Company has the intent to ~~pay~~refinance this debt on a long-term basis and the ability to do so under its revolving credit facility.

The Company maintains certain short-term lines of credit with foreign banks and alliance partners primarily to fund settlement activity associated with operations in Latin America. Weighted-average interest rates under the foreign lines of credit were 40.076% and 30.578% at March 31, 2023 and December 31, 2022, respectively. The Company also maintains a term loan credit agreement with a syndicate of financial institutions. Borrowings under the term loan facility ~~fee~~bear interest at a variable rate based on one-month LIBOR or on a base rate, plus, in each case, a specified margin based on the ~~aggregate commitments~~Company’s long-term debt rating in effect ~~under the agreement~~

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from time to ~~time.~~time, and mature in July 2024. The ~~new credit~~variable interest rate on the term loan facility ~~contains various restrictions~~borrowings was 6.090% and 5.639% at March 31, 2023 and December 31, 2022, respectively.

On March 2, 2023, the Company completed the public offering and issuance of $1.8 billion of senior notes, comprised of $900 million aggregate principal amount of 5.45% senior notes due in March 2028 and $900 million aggregate principal amount of 5.60% senior notes due in March 2033. The indentures governing these senior notes contain covenants that, ~~require the Company to,~~ among other ~~things,~~matters, limit ~~its consolidated indebtedness as of the end of each fiscal quarter to no more than 3.75 times~~(i) the Company’s ~~consolidated net income before interest, taxes, depreciation, amortization, non-cash charges~~ability to consolidate or merge with or into, or convey, transfer or lease all or substantially all of its properties and ~~expenses~~assets to, another person, (ii) the Company’s and certain ~~other adjustments (“EBITDA”) during~~of its subsidiaries’ ability to create or assume liens, and (iii) the ~~period~~Company’s and certain of ~~four fiscal quarters then ended, subject~~its subsidiaries’ ability to ~~certain exceptions.~~engage in sale and leaseback transactions. The Company ~~was~~may, at its option, redeem these senior notes, in ~~compliance with all financial debt covenants during~~whole or in part, at any time and from time to time at the ~~first nine months~~applicable redemption price. Interest on these senior notes are paid semi-annually. The Company used the net proceeds from these senior notes offerings for general corporate purposes, including the repayment of ~~2022.~~U.S. commercial paper notes.

The Company maintains unsecured U.S. dollar and Euro commercial paper programs. From time to time, the Company may issue under these programs U.S. dollar commercial paper 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 ~~$2.6~~$1.4 billion and ~~$916 million~~$2.3 billion at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, with weighted average interest rates of ~~3.369%~~5.242% and ~~0.295%~~4.818%, respectively. Outstanding borrowings under the Euro program were ~~$1.1~~$1.3 billion and ~~$905 million~~$1.2 billion at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, with weighted average interest rates of ~~0.804%~~2.850% and ~~(0.420)%~~1.918%, 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 programs. Outstanding borrowings under the commercial paper programs are classified in the consolidated balance sheets as long-term as the Company has the intent to refinance this commercial paper on a long-term basis through the continued issuance of new commercial paper upon maturity, and the Company also has the ability to refinance such commercial paper under its revolving credit facility.

10. Redeemable Noncontrolling Interests

The minority partner in one of the Company’s existing merchant alliance joint ventures maintains a redeemable noncontrolling interest which is presented outside of equity and carried at its estimated redemption value. The minority partner owns 1% of the equity in the joint venture; in addition, the minority partner is entitled to a contractually determined share of the entity’s income. The agreement contains redemption features whereby the interest held by the minority partner 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 venture may be terminated by either party for convenience any time after December 31, 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 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,~~In 2021, the Company and a joint venture minority partner mutually ~~terminated~~agreed to terminate one of the Company’s merchant alliance joint ventures ~~in which the minority partner held a redeemable noncontrolling interest.~~effective March 2022. In conjunction with ~~this~~the 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 net loss (gain) ~~loss~~ on sale of ~~business~~businesses and other assets, with related tax expense of $9 million recorded through the income tax provision, in the consolidated statement of income during the ~~nine~~three months ended ~~September 30,~~March 31, 2022.

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The following table presents a summary of the redeemable noncontrolling interests activity during the ~~nine~~three months ended ~~September 30:~~March 31:


(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
Balance at beginning of period	Balance at beginning of period	$	278	$	259	Balance at beginning of period	$	161	$	278
Distributions paid to redeemable noncontrolling interests	Distributions paid to redeemable noncontrolling interests	(28)		(32)		Distributions paid to redeemable noncontrolling interests	(8)		(13)
Share of income	Share of income	22		33		Share of income	7		10

Derecognition of redeemable noncontrolling interest	Derecognition of redeemable noncontrolling interest	(111)		—		Derecognition of redeemable noncontrolling interest	—		(111)
Balance at end of period	Balance at end of period	$	161	$	260	Balance at end of period	$	160	$	164

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11. Equity

The following tables provide changes in equity during the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021:~~2022:


																			Fiserv, Inc. Shareholders’ Equity

Three Months Ended March 31, 2023																		Three Months Ended March 31, 2023	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

Balance at December 31, 2022																																			Balance at December 31, 2022	784	154	$	8	$	23,011	$	(1,189)	$	17,376	$	(8,378)	$	699	$	31,527
Net income (1)																		Net income (1)									563				6		569

		Fiserv, Inc. Shareholders’ Equity

Three Months Ended September 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 June 30, 2022		784	141	$	8	$	23,010	$	(1,005)	$	16,113	$	(7,017)	$	700	$	31,809
Net income (1)										481				5		486

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

Other comprehensive loss								(534)						(48)		(582)
Other comprehensive income																		Other comprehensive income							135						12		147

Share-based compensation	Share-based compensation					89										89		Share-based compensation					93										93
Shares issued under stock plans	Shares issued under stock plans		(1)			(140)						71				(69)		Shares issued under stock plans		(2)			(158)						99				(59)
Purchases of treasury stock	Purchases of treasury stock		8									(750)				(750)		Purchases of treasury stock		13									(1,483)				(1,483)

Balance at September 30, 2022		784	148	$	8	$	22,959	$	(1,539)	$	16,594	$	(7,696)	$	656	$	30,982
Balance at March 31, 2023																		Balance at March 31, 2023	784	165	$	8	$	22,946	$	(1,054)	$	17,939	$	(9,762)	$	717	$	30,794

(1)The total net income presented in equity for the three months ended ~~September 30, 2022~~March 31, 2023 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $7 million not included in equity.

~~(2)The total distributions presented in equity for the three months ended September 30, 2022 excludes $7 million in distributions paid to redeemable noncontrolling interests not included in equity.~~


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

Three Months Ended September 30, 2021		Number of Shares		Amount
Three Months Ended March 31, 2022																		Three Months Ended March 31, 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				Total Equity		(In millions)	Common Shares	Treasury Shares	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock				Total Equity
														Noncontrolling Interests																	Noncontrolling Interests
Balance at June 30, 2021		784	123	$	8	$	22,960	$	(323)	$	14,014	$	(4,866)	$	739	$	32,532
Balance at December 31, 2021																		Balance at December 31, 2021	784	134	$	8	$	22,983	$	(745)	$	14,846	$	(6,140)	$	720	$	31,672

Net income (1)	Net income (1)									428				7		435		Net income (1)									669				3		672

Distributions paid to noncontrolling interests (2)														—		—
Other comprehensive loss								(326)						(18)		(344)

Other comprehensive income (loss)																		Other comprehensive income (loss)							105						(17)		88

Share-based compensation	Share-based compensation					63										63		Share-based compensation					61										61
Shares issued under stock plans	Shares issued under stock plans		(2)			(49)						52				3		Shares issued under stock plans		(2)			(94)						79				(15)
Purchases of treasury stock	Purchases of treasury stock		3									(365)				(365)		Purchases of treasury stock		5									(500)				(500)

Balance at September 30, 2021		784	124	$	8	$	22,974	$	(649)	$	14,442	$	(5,179)	$	728	$	32,324
Balance at March 31, 2022																		Balance at March 31, 2022	784	137	$	8	$	22,950	$	(640)	$	15,515	$	(6,561)	$	706	$	31,978

(1)The total net income presented in equity for the three months ended September 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 $11 million not included in equity.

~~(2)~~The total distributions presented in equity for the three months ended September 30, 2021 excludes $12 million in distributions paid to redeemable noncontrolling interests and $8 million in distributions to Bank of America (“BANA”) related to the dissolution of the Company’s Banc of America Merchant Services joint venture (“BAMS”) not included in equity.

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Fiserv, Inc. Shareholders’ Equity
Nine Months Ended
September 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)
1,748 14 1,762
Distributions paid to noncontrolling interests (2)
(2) (2)
Other comprehensive loss (794) (89) (883)
Share-based compensation 244 244
Shares issued under stock plans (4) (268) 194 (74)
Purchases of treasury stock 18 (1,750) (1,750)
Capital contribution from noncontrolling interest 13 13
Balance at September 30, 2022 784 148 $ 8 $ 22,959 $ (1,539) $ 16,594 $ (7,696) $ 656 $ 30,982

~~(1)The total net income presented in equity for the nine months ended September 30,~~March 31, 2022 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of ~~$22~~$10 million not included in equity.

~~(2)The total distributions presented in equity for the nine months ended September 30, 2022 excludes $28 million in distributions paid to redeemable noncontrolling interests not included in equity.~~

Fiserv, Inc. Shareholders’ Equity
Nine Months Ended
September 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)
1,001 14 1,015
Distributions paid to noncontrolling interests (2)
(1) (1)
Other comprehensive loss (262) (25) (287)
Share-based compensation 190 190
Shares issued under stock plans (5) (271) 173 (98)
Purchases of treasury stock 13 (1,565) (1,565)
Retirement of treasury stock (see Note 18) (5) (5) (588) 588 —
Balance at September 30, 2021 784 124 $ 8 $ 22,974 $ (649) $ 14,442 $ (5,179) $ 728 $ 32,324

~~(1)~~The total net income presented in equity for the nine months ended September 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 $33 million not included in equity.

~~(2)The total distributions presented in equity for the nine months ended September 30, 2021 excludes $32 million in distributions paid to redeemable noncontrolling interests and$8 million in distributions to BANA related to the BAMS dissolution not included in equity.~~

2117

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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 September 30, 2022
(In millions) Cash Flow
Hedges Foreign
Currency
Translation Pension Plans Total
Balance at June 30, 2022 $ (107) $ (933) $ 35 $ (1,005)
Other comprehensive income (loss) before reclassifications (4) (591) 1 (594)
Amounts reclassified from accumulated other comprehensive loss 4 56 — 60
Net current-period other comprehensive loss — (535) 1 (534)
Balance at September 30, 2022 $ (107) $ (1,468) $ 36 $ (1,539)


	Three Months Ended March 31, 2023
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2022	$	(103)	$	(1,064)	$	(22)	$	(1,189)
Other comprehensive income before reclassifications	5		125		2		132
Amounts reclassified from accumulated other comprehensive loss	3		—		—		3
Net current-period other comprehensive income	8		125		2		135
Balance at March 31, 2023	$	(95)	$	(939)	$	(20)	$	(1,054)

Three Months Ended September 30, 2021
(In millions) Cash Flow
Hedges Foreign
Currency
Translation Pension Plans Total
Balance at June 30, 2021 $ (116) $ (196) $ (11) $ (323)
Other comprehensive income (loss) before reclassifications 3 (331) — (328)
Amounts reclassified from accumulated other comprehensive loss 2 — — 2
Net current-period other comprehensive income (loss) 5 (331) — (326)
Balance at September 30, 2021 $ (111) $ (527) $ (11) $ (649)

Nine Months Ended September 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 (11) (848) (2) (861)
Amounts reclassified from accumulated other comprehensive loss 11 56 — 67
Net current-period other comprehensive loss — (792) (2) (794)
Balance at September 30, 2022 $ (107) $ (1,468) $ 36 $ (1,539)

Nine Months Ended September 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 (loss) before reclassifications 4 (273) 1 (268)
Amounts reclassified from accumulated other comprehensive loss 6 — — 6
Net current-period other comprehensive income (loss) 10 (273) 1 (262)
Balance at September 30, 2021 $ (111) $ (527) $ (11) $ (649)

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	Three Months Ended March 31, 2022
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2021	$	(107)	$	(676)	$	38	$	(745)
Other comprehensive income (loss) before reclassifications	(1)		104		(1)		102
Amounts reclassified from accumulated other comprehensive loss	3		—		—		3
Net current-period other comprehensive income (loss)	2		104		(1)		105



Balance at March 31, 2022	$	(105)	$	(572)	$	37	$	(640)

Cash Flow Hedges

The Company maintains forward exchange contracts, designated as cash flow hedges, to hedge foreign currency exposure (see Note 7) to the Indian ~~Rupee (see Note 7).~~Rupee. The notional amount of these derivatives was ~~$353~~$356 million and ~~$341~~$346 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. Based on the amounts recorded in accumulated other comprehensive loss at ~~September 30, 2022,~~March 31, 2023, the Company estimates that it will recognize losses of approximately $9$2 million in cost of processing and services during the next twelve months as foreign exchange forward contracts settle.

The Company previously entered into treasury lock agreements (“Treasury Locks”), designated as cash flow hedges 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 loss, net of income taxes, and recorded in accumulated other comprehensive loss that 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 ~~$134~~$127 million and ~~$145~~$130 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. Based on the amounts recorded in accumulated other comprehensive loss at ~~September 30, 2022,~~March 31, 2023, the Company estimates that it will recognize approximately $15 million in net interest expense during the next twelve months related to settled interest rate hedge contracts.

Net Investment Hedges

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 ~~has entered into~~uses its fixed-to-fixed cross-currency rate swap contracts and ~~also uses its~~ foreign currency-denominated debt as economic hedges of its net investments in such foreign currency-denominated subsidiaries. At ~~September 30, 2022,~~March 31, 2023, aggregate notional cross-currency rate swaps of ~~€160~~400 million Euro were designated as net investment hedges to hedge a portion of the Company’s net investment in certain subsidiaries whose functional currency is the Euro. The Company has designated its Euro- and British Pound-denominated senior notes and Euro

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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.

The following table outlines the terms of the Company’s cross-currency rate swap contracts at ~~September 30, 2022:~~March 31, 2023:


Effective Date of Contract	Effective Date of Contract	Maturity Date of Contract	Notional Amount (EUR)		Fixed Rate Paid (EUR)		Fixed Rate Received (USD)		Effective Date of Contract	Maturity Date of Contract	Notional Amount (EUR)		Fixed Rate Paid (EUR)		Fixed Rate Received (USD)
September 1, 2022	September 1, 2022	June 1, 2025	80	million	2.096	%	3.85	%	September 1, 2022	June 1, 2025	80	million	2.096	%	3.85	%
September 15, 2022	September 15, 2022	July 1, 2026	80	million	1.635	%	3.20	%	September 15, 2022	July 1, 2026	80	million	1.635	%	3.20	%
October 6, 2022									October 6, 2022	June 1, 2025	80	million	1.922	%	3.85	%
October 27, 2022									October 27, 2022	July 1, 2026	80	million	1.458	%	3.20	%
November 10, 2022									November 10, 2022	June 1, 2025	80	million	1.816	%	3.85	%

Foreign currency transaction gains or losses on the qualifying net investment hedge instruments are recorded as foreign currency translation within other comprehensive ~~loss~~income 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.

Foreign currency transaction (losses) gains, net of income tax, related to net investment hedges that were recorded in other comprehensive ~~loss~~income in the consolidated statements of comprehensive income ~~(loss)~~ were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(In millions)	(In millions)	2022		2021		2022		2021		(In millions)	2023		2022
Cross-currency rate swap contracts	Cross-currency rate swap contracts	$	2	$	—	$	2	$	—	Cross-currency rate swap contracts	$	(2)	$	—
Foreign currency-denominated debt	Foreign currency-denominated debt	265		71		513		77		Foreign currency-denominated debt	(64)		67

The Company recorded income tax impacts of ~~$89~~$22 million and ~~$172~~$(22) million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, respectively, in other comprehensive ~~loss~~income from the translation of foreign currency-denominated senior notes, commercial paper notes and cross-currency rate swap contracts.

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13. Share-Based Compensation

The Company recognized ~~$89~~$93 million and ~~$63~~$61 million of share-based compensation expense during the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $244 million and $190 million of share-based compensation expense during the nine months ended September 30, 2022 and 2021,~~ respectively. The Company’s share-based compensation awards are typically granted in the first quarter of the year, and may also occur throughout the year in conjunction with acquisitions of businesses. At ~~September 30, 2022,~~March 31, 2023, the total remaining unrecognized compensation cost for ~~unvested stock options,~~ restricted stock units and awards, ~~and~~ performance share units, and unvested stock options, net of estimated forfeitures, of ~~$563~~$669 million is expected to be recognized over a weighted-average period of 2.2 years.

~~A summary~~

Table of ~~stock option activity during the nine months ended September 30, 2022 is as follows:~~Contents

Shares
(In thousands) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In millions)
Stock options outstanding - December 31, 2021 10,229 $ 56.36
Granted — —
Forfeited (156) 110.94
Exercised (2,663) 40.04
Stock options outstanding - September 30, 2022 7,410 $ 61.07 4.05 $ 265
Stock options exercisable - September 30, 2022 6,751 $ 56.07 3.70 $ 265

A summary of restricted stock unit, restricted stock award and performance share unit activity during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 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 and awards - December 31, 2021		5,074	$	101.09	1,392	$	96.32
Units and awards - December 31, 2022								Units and awards - December 31, 2022	5,530	$	96.88	3,243	$	100.93

Granted	Granted	3,407	93.41		2,850	100.86		Granted	2,357	112.97		311	131.38
Forfeited	Forfeited	(568)	100.77		(107)	96.33		Forfeited	(124)	98.77		(3)	101.56
Vested	Vested	(1,929)	99.57		(1,077)	103.13		Vested	(1,824)	98.71		—	—
Units and awards - September 30, 2022		5,984	$	97.18	3,058	$	101.02
Units and awards - March 31, 2023								Units and awards - March 31, 2023	5,939	$	102.66	3,551	$	103.40

A summary of stock option activity during the three months ended March 31, 2023 is as follows:


	Shares (In thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In millions)
Stock options outstanding - December 31, 2022	6,336	$	62.91

Granted	—	—
Forfeited	(20)	112.87
Exercised	(735)	41.16
Stock options outstanding - March 31, 2023	5,581	$	65.59	3.90	$	253
Stock options exercisable - March 31, 2023	5,202	$	62.21	3.65	$	253

~~On April 1, 2022, in conjunction with the acquisition of Finxact (see Note 4), the Company granted 2.4 million restricted stock units with performance vesting provisions to be measured over~~ ~~two~~ ~~and five years, which are presented as performance share units within the table above.~~

14. Income Taxes

The Company’s income tax provision and effective income tax rate were as follows:


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
(In millions)	(In millions)	2022			2021			2022			2021			(In millions)	2023			2022
Income tax provision	Income tax provision	$	147		$	54		$	382		$	300		Income tax provision	$	124		$	98
Effective income tax rate	Effective income tax rate	22.5		%	11.3		%	19.7		%	23.7		%	Effective income tax rate	17.4		%	14.5		%

The income tax provision as a percentage of income before income taxes and (loss) income ~~(loss)~~ from investments in unconsolidated affiliates was ~~22.5%~~17.4% and ~~11.3%~~14.5% for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and was 19.7% and 23.7% for the nine months ended September 30, 2022 and 2021,~~ respectively.

The effective income tax rate for the three months ended ~~September 30, 2021 included discrete tax benefits from subsidiary restructurings~~March 31, 2023 and ~~changes in uncertain tax positions.~~

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~~The effective income tax rate for each of the nine months ended September 30,~~ 2022 ~~and 2021~~ includes discrete tax benefits from subsidiary restructurings and equity compensation related tax benefits. The effective income tax rate for the nine months ended September 30, 2021 also 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%).

The Company’s potential liability for unrecognized tax benefits before interest and penalties was approximately ~~$108~~$95 million at ~~September 30, 2022.~~March 31, 2023. The Company believes it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $5$10 million over the next twelve months as a result of possible closure of tax audits, potential audit settlements, and the lapse of the statutes of ~~limitation~~limitations in various jurisdictions.

As of ~~September 30, 2022,~~March 31, 2023, the Company’s U.S. federal income tax return for 2021 and 2022, and tax returns in certain states and foreign jurisdictions for 2015 through ~~2021,~~2022, remain subject to examination by taxing authorities.

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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 September 30,		Nine Months Ended September 30,			Three Months Ended March 31,
(In millions)	(In millions)	2022	2021	2022	2021	(In millions)	2023	2022
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	639.6	661.4	645.2	664.6	Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - basic	626.9	650.8
Common stock equivalents	Common stock equivalents	5.4	8.3	5.8	9.5	Common stock equivalents	4.4	6.4
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	645.0	669.7	651.0	674.1	Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - diluted	631.3	657.2

For ~~each of~~ the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ stock options for 1.6 million shares were excluded from the calculation of weighted-average outstanding shares - diluted because their impact was anti-dilutive. For the nine months ended September 30, 2022 and 2021, stock options for 1.82.2 million and ~~1.5~~2.0 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:


		Nine Months Ended September 30,					Three Months Ended March 31,
(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
Interest paid	Interest paid	$	563	$	533	Interest paid	$	222	$	178
Income taxes paid	Income taxes paid	596		555		Income taxes paid	291		43
Treasury stock purchases settled after the balance sheet date	Treasury stock purchases settled after the balance sheet date	11		—		Treasury stock purchases settled after the balance sheet date	33		14
Distribution of nonmonetary assets (see Note 10)	Distribution of nonmonetary assets (see Note 10)	111		—		Distribution of nonmonetary assets (see Note 10)	—		111
Software obtained under financing arrangements	Software obtained under financing arrangements	59		143		Software obtained under financing arrangements	8		52
Right-of-use assets obtained in exchange for lease liabilities - operating leases	Right-of-use assets obtained in exchange for lease liabilities - operating leases	109		75		Right-of-use assets obtained in exchange for lease liabilities - operating leases	39		27
Right-of-use assets obtained in exchange for lease liabilities - finance leases	Right-of-use assets obtained in exchange for lease liabilities - finance leases	221		183		Right-of-use assets obtained in exchange for lease liabilities - finance leases	29		16

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. The Company maintained accruals of ~~$24~~$21 million ~~and $32 million~~ at both ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021, respectively,~~2022, related to its various legal proceedings, primarily associated with the Company’s merchant acquiring business 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 $60 million. In the opinion of management, the liabilities,

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if any, which may ultimately result from such 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 ~~$1.6~~$1.5 billion and $1.7 billion at ~~both September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022, 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 businesses that are sold. Payments, net of recoveries, under such indemnification or warranty provisions were not material to the Company’s consolidated financial statements.

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18. Related Party Transactions

Merchant Alliances

~~The~~A portion of the Company’s business is conducted through merchant alliances between the Company ~~maintains ownership interests in various merchant alliances.~~and financial institutions. 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.

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 in, but not control inof, an alliance, the Company uses the equity method 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 ~~$47~~$46 million and ~~$42~~$47 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively and $140 million and $132 million for the nine months ended September 30, 2022 and 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~~contracts with merchants 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~~which governs the Company’s provision of transaction processing services to the alliance. The Company had ~~$55 million and $36~~approximately $43 million of amounts due from unconsolidated merchant alliances included within trade accounts receivable, net in the Company’s consolidated balance sheets at ~~September 30, 2022~~both March 31, 2023 and December 31, ~~2021, respectively.~~2022.

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 accounted for under the equity method. Amounts transacted through these agreements ~~including with InvestCloud through June 2021,~~ totaled $5$1 million and $6$5 million during the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $14 million and $32 million during the nine months ended September 30, 2022 and 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

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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. New Omaha owned less than 5% of the Company’s outstanding shares of common stock as of September 30, 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 solutions include ~~point-of-sale~~ merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; ~~Carat~~SM~~, the Company’s omnichannel commerce ecosystem;~~ Clover®, the Company’s cloud-based ~~point-of-sale~~POS and ~~business management platform;~~integrated commerce operating system for small and ~~Clover Connect,~~mid-sized businesses and independent software vendors; and CaratSM, the Company’s ~~independent software vendor platform.~~integrated operating system for large businesses. 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.

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. 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;~~products, card production and print services. In addition, the 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.

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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, certain transition services revenue associated with various dispositions, and the Company’s Output Solutions postage reimbursements.

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~~Revenue and operating income (loss)~~Operating results 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 September 30, 2022
Three Months Ended March 31, 2023												Three Months Ended March 31, 2023
Processing and services revenue	Processing and services revenue	$	1,603	$	737	$	1,333	$	5	$	3,678	Processing and services revenue	$	1,587	$	751	$	1,329	$	6	$	3,673
Product revenue	Product revenue	275		29		284		252		840		Product revenue	260		41		300		273		874
Total revenue	Total revenue	$	1,878	$	766	$	1,617	$	257	$	4,518	Total revenue	$	1,847	$	792	$	1,629	$	279	$	4,547
Operating income (loss)	Operating income (loss)	$	610	$	261	$	738	$	(754)	$	855	Operating income (loss)	$	562	$	280	$	711	$	(619)	$	934
Three Months Ended September 30, 2021
Processing and services revenue		$	1,458	$	718	$	1,227	$	4	$	3,407
Product revenue		258		43		244		211		756
Total revenue		$	1,716	$	761	$	1,471	$	215	$	4,163
Operating income (loss)		$	552	$	275	$	643	$	(834)	$	636
Nine Months Ended September 30, 2022
Processing and services revenue		$	4,681	$	2,232	$	3,810	$	15	$	10,738
Product revenue		751		115		787		715		2,368
Total revenue		$	5,432	$	2,347	$	4,597	$	730	$	13,106
Operating income (loss)		$	1,673	$	817	$	2,018	$	(1,947)	$	2,561
Nine Months Ended September 30, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
Processing and services revenue	Processing and services revenue	$	4,079	$	2,115	$	3,602	$	26	$	9,822	Processing and services revenue	$	1,410	$	735	$	1,215	$	4	$	3,364
Product revenue	Product revenue	700		136		695		616		2,147		Product revenue	243		43		247		241		774
Total revenue	Total revenue	$	4,779	$	2,251	$	4,297	$	642	$	11,969	Total revenue	$	1,653	$	778	$	1,462	$	245	$	4,138
Operating income (loss)	Operating income (loss)	$	1,463	$	794	$	1,850	$	(2,352)	$	1,755	Operating income (loss)	$	470	$	275	$	618	$	(517)	$	846

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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 may continue to be amplified by the COVID-19 pandemic: the continuing impact of the COVID-19 pandemic on our employees, clients, vendors, supply chain, operations and sales;~~following: 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 success of our merchant alliances, some of which we do not control; the continuing impact of the COVID-19 pandemic on our employees, clients, vendors, supply chain, operations and sales; the impact of a security breach or operational failure on our business including disruptions caused by other participants in the global financial system; losses due to chargebacks, refunds or returns as a result of fraud or 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, rising interest rates, 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~~identified in "Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 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~~products and ~~products~~services 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, ~~2021~~2022 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 nine~~ months ended ~~September 30, 2022~~March 31, 2023 to the comparable period in ~~2021.~~2022.

•Liquidity and capital resources. This section provides an analysis of our cash flows and a discussion of our outstanding debt at ~~September 30, 2022.~~March 31, 2023.

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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, other financial ~~technology companies~~institutions and corporate clients. We provide account processing and

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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”) and business management platform.

We aspire to move money and information in a way that moves the ~~world by delivering~~world. Our purpose is to deliver 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 toand serve merchants of all sizes ~~and types~~ around the world. These solutions include POS merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Clover, our cloud-based POS and integrated commerce operating system for small and mid-sized businesses (“SMBs”) and independent software vendors (“ISVs”); and CaratSM, our ~~omnichannel commerce ecosystem; Clover, our cloud-based POS and business management platform, which includes a marketplace~~integrated operating system for ~~proprietary and third-party business applications; and Clover Connect, our independent software vendor (“ISV”) platform.~~large businesses. 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, 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. 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~~and the ~~world~~public sector 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,~~services; security and fraud protection products; and card production and print services. In addition, the 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 around the world, 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,~~investments; costs associated with acquisition and divestiture ~~activity,~~activity; 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 necessary business assets to execute 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;~~scale that enables competition and operational efficiency; or similar considerations. We expect to divest businesses that are not in line with our market, product or financial strategies. The results of operations for the following acquired and divested businesses are included in our consolidated results from the respective dates of acquisition and through the respective dates of disposition.

~~2022~~ Acquisitions

On December 29, 2022, we acquired OrangeData S.A. (“Yacaré”), an Argentina-based payment service provider that enables customers to transact at merchant locations using QR codes. Yacaré is included within the Acceptance segment and enhances our instant payment transaction capabilities. On December 20, 2022, we acquired Merchant One, Inc. (“Merchant One”), an independent sales organization (“ISO”) focused on acquiring merchants in the restaurant, retail and e-commerce industries using an innovative mix of direct and digital marketing strategies. Merchant One is included within the Acceptance segment and enhances our merchant distribution and sales force channels. On September 1, 2022, we acquired NexTable, Inc.

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(“NexTable”), a provider of cloud-based reservation and table management solutions for restaurants. NexTable is included within the Acceptance segment and expands our end-to-end restaurant solutions.

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On June 1, 2022, we acquired The LR2 Group, LLC (“City POS”), an ~~independent sales organization (“ISO”)~~ISO that promotes payment processing services and facilitates the sale of ~~point-of-sale~~POS equipment for merchants. City POS is included within the 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 the Fintech segment and advances our digital banking strategy, expanding our account processing, digital, and payments solutions. We acquired these businesses in 2022 for an aggregate purchase price of approximately ~~$686~~$994 million, net of ~~$27~~$28 million of acquired cash, and including earn-out provisions estimated at ~~an aggregate~~a fair value of ~~approximately~~ $6 million.

~~2022~~ Dispositions

~~On September 30, 2022, we sold our Korea operations, which were reported in our Acceptance segment.~~ On October 17, 2022, we sold Fiserv Costa Rica, S.A. and our Systems Integration Services (“SIS”) operations, which provides information technology engineering services in the United States (“U.S.”) and India, to a single buyer. ~~As part~~Fiserv Costa Rica, S.A. and SIS were reported primarily within our Fintech segment. On September 30, 2022, we sold our Korea operations, which were reported in our Acceptance segment. We sold these operations in 2022 for total consideration of $99 million and recognized an aggregate net pre-tax loss on the ~~agreement,~~sales of $83 million. During the ~~buyer will provide us~~first quarter of 2023, we recognized a pre-tax loss of $3 million associated with ~~ongoing services and support.~~final working capital adjustments related to the disposition of Fiserv Costa Rica, S.A. These divestitures were the result of a strategic review of our business portfolio.

~~2021 Acquisitions~~

~~On November 22,~~In 2021, we ~~acquired BentoBox CMS, Inc. (“BentoBox”),~~mutually agreed with 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 rangeminority partner to terminate one 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~~alliance joint ventures effective March 2022. In conjunction with such termination, the joint venture minority partner elected to exercise its option to purchase certain additional merchant contracts of the joint venture for ~~merchants and is included within~~$175 million, resulting in 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 mobile and desktop devices for small and mid-sized businesses. On May 4, 2021, we acquired Pineapple Payments Holdings, LLC (“Pineapple Payments”), an 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 providerrecognition of a ~~platform that uses consumer location and other information to drive incremental merchant transactions. Radius8 is included within~~pre-tax gain of $147 million in 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. Ondot is included within the Payments segment and further expands our digital capabilities, enhancing our suitefirst quarter of integrated payments, banking and merchant solutions. We acquired these businesses for an aggregate purchase price of $882 million, net of $43 million of acquired cash, and including earn-out provisions at an aggregate fair value of $34 million. The results of operations for these acquired businesses are included in our consolidated results from the respective dates of acquisition.2022.

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.~~intensify. Business and consumer expectations continue to rise, with a focus on speed, convenience, choice and security. To meet these 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,~~nearly anywhere, through any device, which often requires a merchant acquiring provider to enable and optimize the acceptance of payments. Merchants are demanding simpler, integrated and ~~modern POS~~flexible systems to accept payments and 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~~the 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.

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~~In addition,~~Additionally, there are numerous software-as-a-service (“SaaS”) ~~solutions~~solution providers in the industry, many of which have chosen to integrate merchant acquiring ~~within~~into their software as a way to further monetize their client relationships. ~~SaaS solutions that integrate payments~~Such providers are ~~often~~typically referred to as 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 of all sizes, gives us a solid foundation for growth.

Financial Institutions and Other Financial Technology Providers

Financial ~~service~~services 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 and other financial technology providers 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

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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,~~In addition, the focus on the customer experience, including through mobile and ~~tablet banking, sometimes referred to as “digital channels,” which enable financial institutions to offer their customers an industry-leading digital banking experience.~~

~~The focus on digital channels~~online engagement, 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 and other financial technology providers 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 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, during the past 25 years, the~~The number of financial institutions in the U.S. 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 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.

Recent Market Conditions

~~The~~Global macroeconomic conditions, including rising interest rates, inflation, disruptions in the global supply chain, the effects of the ongoing conflict between Russia and Ukraine, regulations restricting trade or impacting our ability to offer products or services, and the continuing impact of the coronavirus (“COVID-19”) pandemic, ~~has and may continue to impact~~could have a material adverse effect on our ~~employees, clients, vendors, supply chain,~~business, results of operations and ~~sales. Further developments surrounding COVID-19 are uncertain and may impact our future operational and~~ financial ~~performance and remain difficult to predict.~~

~~The effects of the macroeconomic environment, including supply chain shortages, higher inflation and interest rates and other global economic conditions,~~condition. In recent years, we have ~~impacted, and may continue to impact, our business, consumer spending and the economy as a whole. In 2021, we began observing increasing~~observed increased shortages and delays in the global supply chain for components and inputs necessary to our businesses, such as semiconductors, paper and plastic, and we may experience difficulty procuring those components and inputs in the future on a timely basis or at historical prices. ~~In addition to intensified political instability globally, the U.S. and other countries in which we operate are experiencing higher inflation and interest rates and slower growth in 2022.~~ We continue to monitor and actively manage our business in response to these unpredictable geopolitical and market conditions, as they may adversely impact our operations and financial results.

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In addition, our operating results ~~for~~in certain foreign countries in which we operate may be adversely impacted by fluctuations in exchange rates for currencies other than the U.S. dollar, including the Euro, ~~and~~ British pound ~~sterling. In recent months,~~sterling and Argentine peso. The strengthening of the U.S. dollar ~~has strengthened~~ against certain foreign currencies in countries in which we operate ~~which~~would negatively ~~impacts~~impact our revenue and earnings. While the majority of our revenue is earned domestically, we continually monitor the foreign exchange rate environment in an effort to help mitigate these risks.

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,~~U.S., 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, ~~2021,~~2022, 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. For example, we estimate the fair values of assets acquired and liabilities assumed in connection with acquisitions and may record purchase accounting adjustments during the measurement period, which may be up to one year from the acquisition date. Additionally, we review the carrying value of goodwill for impairment by comparing the estimated fair value of our reporting units to their carrying values. Determining the fair value of a reporting unit involves judgement and the use of significant estimates and assumptions, which include assumptions regarding the revenue growth rates and operating margins used to calculate estimated future cash flows, risk-adjusted discount rates and future economic and market conditions. There have been no material changes to our

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critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

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. 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.


		Three Months Ended September 30,													Three Months Ended March 31,
		2022		2021		Percentage of Revenue (1)				Increase (Decrease)					2023		2022		Percentage of Revenue (1)				Increase (Decrease)
(In millions)	(In millions)					2022		2021		$		%		(In millions)					2023		2022		$		%
Revenue:	Revenue:													Revenue:
Processing and services	Processing and services	$	3,678	$	3,407	81.4	%	81.8	%	$	271	8	%	Processing and services	$	3,673	$	3,364	80.8	%	81.3	%	$	309	9	%
Product	Product	840		756		18.6	%	18.2	%	84		11	%	Product	874		774		19.2	%	18.7	%	100		13	%
Total revenue	Total revenue	4,518		4,163		100.0	%	100.0	%	355		9	%	Total revenue	4,547		4,138		100.0	%	100.0	%	409		10	%
Expenses:	Expenses:													Expenses:
Cost of processing and services	Cost of processing and services	1,443		1,530		39.2	%	44.9	%	(87)		(6)	%	Cost of processing and services	1,405		1,436		38.3	%	42.7	%	(31)		(2)	%
Cost of product	Cost of product	553		521		65.8	%	68.9	%	32		6	%	Cost of product	600		536		68.6	%	69.3	%	64		12	%
Sub-total	Sub-total	1,996		2,051		44.2	%	49.3	%	(55)		(3)	%	Sub-total	2,005		1,972		44.1	%	47.7	%	33		2	%
Selling, general and administrative	Selling, general and administrative	1,547		1,476		34.2	%	35.5	%	71		5	%	Selling, general and administrative	1,604		1,467		35.3	%	35.5	%	137		9	%
Net loss on sale of business and other assets		120		—		2.7	%	—	%	120		—	%
Net loss (gain) on sale of businesses and other assets														Net loss (gain) on sale of businesses and other assets	4		(147)		0.1	%	(3.6)	%	151		103	%
Total expenses	Total expenses	3,663		3,527		81.1	%	84.7	%	136		4	%	Total expenses	3,613		3,292		79.5	%	79.6	%	321		10	%
Operating income	Operating income	855		636		18.9	%	15.3	%	219		34	%	Operating income	934		846		20.5	%	20.5	%	88		10	%
Interest expense, net	Interest expense, net	(190)		(172)		(4.2)	%	(4.1)	%	18		10	%	Interest expense, net	(202)		(168)		(4.4)	%	(4.1)	%	34		20	%

Other (expense) income		(13)		14		(0.3)	%	0.3	%	(27)		n/m
Income before income taxes and income (loss) from investments in unconsolidated affiliates		652		478		14.4	%	11.5	%	174		36	%
Other expense														Other expense	(20)		(4)		(0.4)	%	(0.1)	%	16		n/m
Income before income taxes and (loss) income from investments in unconsolidated affiliates														Income before income taxes and (loss) income from investments in unconsolidated affiliates	712		674		15.7	%	16.3	%	38		6	%
Income tax provision	Income tax provision	(147)		(54)		(3.3)	%	(1.3)	%	93		n/m		Income tax provision	(124)		(98)		(2.7)	%	(2.4)	%	26		27	%
Income (loss) from investments in unconsolidated affiliates		(12)		22		(0.3)	%	0.5	%	(34)		n/m
(Loss) income from investments in unconsolidated affiliates														(Loss) income from investments in unconsolidated affiliates	(12)		106		(0.3)	%	2.6	%	(118)		n/m
Net income	Net income	493		446		10.9	%	10.7	%	47		11	%	Net income	576		682		12.7	%	16.5	%	(106)		(16)	%
Less: net income attributable to noncontrolling interests		12		18		0.3	%	0.4	%	(6)		(33)	%
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests														Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	13		13		0.3	%	0.3	%	—		—	%
Net income attributable to Fiserv, Inc.	Net income attributable to Fiserv, Inc.	$	481	$	428	10.6	%	10.3	%	$	53	12	%	Net income attributable to Fiserv, Inc.	$	563	$	669	12.4	%	16.2	%	$	(106)	(16)	%

(1)Percentage of revenue is calculated as the relevant revenue, expense or 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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Nine Months Ended September 30,
2022 2021
Percentage of
Revenue (1)
Increase (Decrease)
(In millions) 2022 2021 $ %
Revenue:
Processing and services $ 10,738 $ 9,822 81.9 % 82.1 % $ 916 9 %
Product 2,368 2,147 18.1 % 17.9 % 221 10 %
Total revenue 13,106 11,969 100.0 % 100.0 % 1,137 9 %
Expenses:
Cost of processing and services 4,381 4,425 40.8 % 45.1 % (44) (1) %
Cost of product 1,631 1,500 68.9 % 69.9 % 131 9 %
Sub-total 6,012 5,925 45.9 % 49.5 % 87 1 %
Selling, general and administrative 4,560 4,289 34.8 % 35.8 % 271 6 %
Net gain on sale of business and other assets (27) — (0.2) % — % (27) n/m
Total expenses 10,545 10,214 80.5 % 85.3 % 331 3 %
Operating income 2,561 1,755 19.5 % 14.7 % 806 46 %
Interest expense, net (534) (523) (4.1) % (4.4) % 11 2 %
Other (expense) income (83) 36 (0.6) % 0.3 % (119) n/m
Income before income taxes and income from investments in unconsolidated affiliates 1,944 1,268 14.8 % 10.6 % 676 53 %
Income tax provision (382) (300) (2.9) % (2.5) % (82) 27 %
Income from investments in unconsolidated affiliates 222 80 1.7 % 0.7 % 142 n/m
Net income 1,784 1,048 13.6 % 8.8 % 736 70 %
Less: net income attributable to noncontrolling interests 36 47 0.3 % 0.4 % (11) (23) %
Net income attributable to Fiserv, Inc. $ 1,748 $ 1,001 13.3 % 8.4 % $ 747 75 %

~~(1)~~Percentage of revenue is calculated as the relevant revenue, expense or 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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Three Months Ended September 30,
(In millions) Acceptance Fintech Payments Corporate
and Other Total
Total revenue:
2022 $ 1,878 $ 766 $ 1,617 $ 257 $ 4,518
2021 1,716 761 1,471 215 4,163
Revenue growth $ 162 $ 5 $ 146 $ 42 $ 355
Revenue growth percentage 9 % 1 % 10 % 9 %
Operating income (loss):
2022 $ 610 $ 261 $ 738 $ (754) $ 855
2021 552 275 643 (834) 636
Operating income growth (decline) $ 58 $ (14) $ 95 $ 80 $ 219
Operating income growth (decline) percentage 11 % (5) % 15 % 34 %
Operating margin:
2022 32.4 % 34.1 % 45.6 % 18.9 %
2021 32.2 % 36.0 % 43.7 % 15.3 %
Operating margin growth (decline) (1)
20 bps (190) bps 190 bps 360 bps


		Nine Months Ended September 30,															Three Months Ended March 31,
(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:
2023																2023	$	1,847		$	792		$	1,629		$	279	$	4,547
2022	2022	$	5,432		$	2,347		$	4,597		$	730	$	13,106		2022	1,653			778			1,462			245		4,138
2021		4,779			2,251			4,297			642		11,969
Revenue growth	Revenue growth	$	653		$	96		$	300		$	88	$	1,137		Revenue growth	$	194		$	14		$	167		$	34	$	409
Revenue growth percentage	Revenue growth percentage	14		%	4		%	7		%			9		%	Revenue growth percentage	12		%	2		%	11		%			10		%
Operating income (loss):	Operating income (loss):															Operating income (loss):
2023																2023	$	562		$	280		$	711		$	(619)	$	934
2022	2022	$	1,673		$	817		$	2,018		$	(1,947)	$	2,561		2022	470			275			618			(517)		846
2021		1,463			794			1,850			(2,352)		1,755
Operating income growth		$	210		$	23		$	168		$	405	$	806
Operating income growth percentage		14		%	3		%	9		%			46		%
Operating income growth (decline)																Operating income growth (decline)	$	92		$	5		$	93		$	(102)	$	88
Operating income growth (decline) percentage																Operating income growth (decline) percentage	20		%	2		%	15		%			10		%
Operating margin:	Operating margin:															Operating margin:
2023																2023	30.5		%	35.4		%	43.6		%			20.5		%
2022	2022	30.8		%	34.8		%	43.9		%			19.5		%	2022	28.4		%	35.4		%	42.3		%			20.5		%
2021		30.6		%	35.3		%	43.1		%			14.7		%
Operating margin growth (decline) (1)	Operating margin growth (decline) (1)	20		bps	(50)		bps	80		bps			480		bps	Operating margin growth (decline) (1)	210		bps	—		bps	130		bps			—		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 ~~$355~~$409 million, or ~~9%, in the third quarter of 2022 and $1,137 million, or 9%~~10%, in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. The revenue increase was driven by product sales, as well as higher processing revenue across all of our business segments, partially offset by a 3% decrease due to foreign currency exchange rate fluctuations.

Revenue in our Acceptance segment increased $194 million, or 12%, in the first quarter of 2023 compared to 2022. The revenue increase was driven by higher merchant acquiring payment and transaction volumes, including on our Clover and Carat operating systems, an increase in processing ~~revenue~~volumes in our international regions and ~~product sales across all~~the expansion of our ~~business segments, and~~merchant relationships through value-added services. This growth was partially offset by a 2%5% decrease ~~in both the third quarter and first nine months of 2022~~ due to foreign currency exchange rate fluctuations.

Revenue in our ~~Acceptance~~Fintech segment increased ~~$162~~$14 million, or 9%2%, in the ~~third~~first quarter of ~~2022~~2023 compared to 2022. The revenue increase was driven by higher revenue in our core account processing businesses.

Revenue in our Payments segment increased $167 million, or 11%, in the first quarter of 2023 compared to 2022. In the first quarter of 2023, our debit processing business contributed 4% to Payments revenue growth primarily driven by an increase in transactions and ~~$653~~new client growth; our Output Solutions business contributed 2%, primarily driven by increased volumes and new client growth; and our credit processing business contributed 1%, primarily driven by an increase in active accounts due to new business onboarding. Favorable pricing and increased volumes also drove revenue growth across our remaining Payments segment businesses.

Revenue at Corporate and Other increased $34 million, or 14%, in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021. The revenue increase was driven by higher global merchant acquiring payment and transaction volumes, including an increase in global accounts and locations.~~

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~~Revenue in our Fintech segment increased $5 million, or 1%, in the third quarter of~~ 2022, and $96 million, or 4%, in the first nine months of 2022 compared to 2021. The revenue increase was primarily driven by higher processing revenue across our Fintech businesses of 2% and 3%, in the third quarter and first nine months of 2022, respectively. The revenue growth in the third quarter of 2022 was partially offset by a 1% decrease in license and termination fee revenue compared to 2021.

Revenue in our Payments segment increased $146 million, or 10%, in the third quarter of 2022 and $300 million, or 7%, in the first nine months of 2022 compared to 2021. In the third quarter and first nine months of 2022, our debit processing business contributed 5% and 4%, respectively, to Payments revenue growth driven by new client wins on our network services; our credit processing business contributed 2% and 1%, respectively, primarily driven by an increase in active accounts; and our Output Solutions business contributed 3% and 2%, respectively, primarily driven by new client growth.

~~Revenue at Corporate and Other increased $42 million, or 20%, in the third quarter of 2022 and $88 million, or 14%, in the first nine months of 2022 compared to 2021,~~ primarily due to increased postage revenue.

Total Expenses

Total expenses increased ~~$136~~$321 million, or ~~4%, in the third quarter of 2022 and $331 million, or 3%~~10%, in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. Total expenses as a percentage of total revenue decreased ~~360~~10 basis points to ~~81.1% in the third quarter of 2022 and 480 basis points to 80.5%~~79.5% in the first ~~nine months~~quarter of ~~2022~~2023 compared to 2021. Total expenses as a percentage of total revenue were favorably impacted in the third quarter and first nine months of 2022 by a $156 million and $368 million, respectively, reduction in acquisition and integration related expense. Total expenses as a percentage of total revenue for the first nine months of 2022 were also favorably impacted by operating leverage accompanying scalable revenue growth, partially offset by increased costs associated with our continued investment in businesses for growth.2022.

Cost of processing and services as a percentage of processing and services revenue decreased to ~~39.2% in the third quarter of 2022 compared to 44.9% in the third quarter of 2021 and to 40.8%~~38.3% in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~45.1%~~42.7% in the first ~~nine months~~quarter of ~~2021.~~2022. Cost of processing and services as a percentage of processing and services revenue was favorably impacted in the ~~third~~first quarter ~~and first nine months~~ of ~~2022 by a reduction in acquisition and integration related expenses of approximately 330 basis points and 240 basis points, respectively, as well as~~2023, primarily due to strong operating leverage accompanying scalable revenue growth and expense management initiatives across our ~~businesses. The favorable impact was partially offset by an increase in severance costs of~~businesses, along with approximately 6050 basis points ~~in the first nine months~~from decreased severance costs.

Table of ~~2022.~~Contents

Cost of product as a percentage of product revenue decreased to ~~65.8% in the third quarter of 2022 compared to 68.9% in the third quarter of 2021 and to 68.9%~~68.6% in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~69.9%~~69.3% in the first ~~nine months~~quarter of ~~2021.~~2022. The cost of product as a percentage of product revenue improved in the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 as a result of revenue mix, including ~~a decrease in lower margin~~increased hardware ~~revenue in the third quarter of 2022.~~revenue.

Selling, general and administrative expenses as a percentage of total revenue decreased to ~~34.2%~~35.3% in the ~~third~~first quarter of ~~2022~~2023 compared to 35.5% in the ~~third~~first quarter of ~~2021 and to 34.8% in the first nine months of 2022 compared to 35.8% in the first nine months of 2021.~~2022. The decrease in selling, general and administrative expenses as a percentage of total revenue in the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 was ~~primarily~~ due to a reduction of approximately 110 basis points in amortization of acquisition-related intangible assets, primarily offset by an increase of approximately ~~100~~70 basis points in ~~both the third quarter~~acquisition and ~~first nine months of 2022.~~integration related expenses.

The $120 million pre-tax loss on sale of business in the third quarter of 2022 resulted from the sale of our Korea operations. This loss was offset in the first nine months of 2022 from the $147 million pre-taxnet gain on sale of businesses and other assets ~~which resulted~~in the first quarter of 2022 included a $147 million pre-tax gain from the sale of certain merchant contracts in conjunction with the mutual termination of one of our merchant alliance joint ventures.

Operating Income and Operating Margin

Total operating income increased ~~$219~~$88 million, or ~~34%, in the third quarter of 2022 and $806 million, or 46%~~10%, in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021. Total~~2022, and total operating margin ~~increased 360 basis points to 18.9% in the third quarter of 2022 and 480 basis points to 19.5% in the first nine months of 2022 compared to 2021.~~was flat at 20.5%. Total operating income and total operating margin benefited from revenue growth in the ~~third~~first quarter ~~and first nine months~~ of ~~2022,~~2023, along with a reduction in amortization of acquisition ~~and integration~~ related ~~expenses.~~intangible assets. Total operating margin in the ~~third~~first quarter ~~and first nine months~~ of 2022 was ~~slightly offset~~favorably impacted by ~~costs associated~~a $147 million pre-tax gain from the sale of certain merchant contracts in conjunction with the termination of one of our ~~continued investments in our businesses for growth as well as increased severance costs.~~merchant alliance joint ventures.

Operating income in our Acceptance segment increased ~~$58~~$92 million, or ~~11%, in the third quarter of 2022 and $210 million, or 14%~~20%, in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. Operating margin increased 20210 basis points to ~~32.4% in the third quarter of 2022 and 20 basis points to 30.8%~~30.5% in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. Operating income and operating margin growth in our Acceptance segment was primarily due to ~~revenue growth in the first nine months of 2022.~~

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operating leverage and expense management initiatives.

Operating income in our Fintech segment ~~decreased $14~~increased $5 million, or ~~5%, in the third quarter of 2022 and increased $23 million, or 3%~~2%, in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021. Operating margin decreased 190 basis points to 34.1% in the third quarter of~~ 2022 and ~~decreased 50 basis points to 34.8%~~operating margin was flat at 35.4%. Fintech segment operating margin was impacted by our continued investments in ~~the first nine months of 2022 compared to 2021. Operating income and margin were unfavorably impacted from a decrease~~Finxact with slight growth in license and termination fee revenue of approximately 100 basis points in the third quarter of 2022 compared to the prior year period. Operating margin in the third quarter and first nine months of 2022 were also reduced by increased costs related to our continuing investment in the business, including an impact of 110 basis points and 70 basis points, respectively, related to the recent acquisition of Finxact.revenue.

Operating income in our Payments segment increased ~~$95~~$93 million, or 15%, in the ~~third~~first quarter of ~~2022 and $168 million, or 9%,~~2023 compared to 2022. Operating margin increased 130 basis points to 43.6% in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021. Operating margin increased 190 basis points to 45.6% in the third quarter of 2022 and 80 basis points to 43.9% in the first nine months of 2022 compared to 2021.~~2022. Payments segment operating income and margin growth in the ~~third~~first quarter ~~and first nine months~~ of ~~2022~~2023 was primarily due to scalable revenue growth from our debit and credit processing businesses ~~along with a reduction in lower margin revenue in our prepaid business.~~and expense management initiatives.

The operating loss in Corporate and Other ~~decreased $80 million in the third quarter of 2022 and $405~~increased $102 million in the first ~~nine months~~quarter of 2023 compared to 2022. The operating loss in the first quarter of 2022 ~~compared to 2021. Corporate and Other~~included a $147 million pre-tax gain from the sale of certain merchant contracts in conjunction with the mutual termination of one of our merchant alliance joint ventures. This unfavorable impact was ~~favorably impacted~~partially offset by ~~approximately $200~~a reduction of $48 million ~~and $480 million reduction~~ in ~~acquisition and integration related costs and~~ amortization of acquisition related intangible assets in the ~~third quarter and~~ first ~~nine months of 2022, respectively. The operating loss in the third~~ quarter of ~~2022 included a $120 million loss on the sale of our Korea operations and $96 million of increased severance costs in the first nine months of 2022.~~2023.

Interest Expense, Net

Interest expense, net increased ~~$18~~$34 million, or ~~10%~~20%, in the ~~third~~first quarter of ~~2022 and $11 million, or 2% in the first nine months of 2022~~2023 compared to ~~2021 primarily~~2022 due to higher interest rates, onas well as higher outstanding ~~borrowings.~~borrowings including our public offering and issuance of $1.8 billion of senior notes in March 2023.

Other ~~(Expense) Income~~Expense

Other expense increased ~~$119~~$16 million in the first ~~nine months~~quarter of ~~2022~~2023 compared to ~~2021.~~2022. 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 debt guarantee arrangements of certain joint ventures. Net foreign currency transaction ~~(losses) gains~~losses were ~~($35 million)~~$24 million and $8$9 million in the first ~~nine months~~quarter of 2023 and 2022, ~~and 2021,~~ respectively. Other expense in the first nine months of 2022 also includes net pre-tax expense of $57 million associated with joint venture debt guarantees. Other income in the first nine 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 the entity.

Income Tax Provision

Income tax provision as a percentage of income before income taxes and (loss) income ~~(loss)~~ from investments in unconsolidated affiliates was ~~22.5%~~17.4% and ~~11.3%~~14.5% in the ~~third~~first quarter of 2023 and 2022, ~~and 2021, respectively, and was 19.7% and 23.7% for the first nine months of 2022 and 2021,~~ respectively. ~~For the three months ended September 30, 2021, the effective tax rate included discrete tax benefits from subsidiary restructurings and changes in uncertain tax positions.~~

The effective income tax rate for ~~each~~the first quarter of ~~the nine months ended September 30,~~2023 and 2022 ~~and 2021~~ includes discrete tax benefits from subsidiary restructurings and equity compensation related tax benefits. The effective income tax rate for the nine months ended September 30, 2021 also 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%).

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

Our share of net (loss) income ~~(loss)~~ from unconsolidated affiliates accounted for using the equity method is reported as (loss) income ~~(loss)~~ from investments in unconsolidated affiliates, and the related tax expense is reported within the income tax provision in the

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consolidated statements of income. ~~Income (loss)~~(Loss) income from investments in unconsolidated affiliates, including acquired intangible asset amortization from valuations in purchase accounting, was ~~($12 million) and $22 million in the third quarter of 2022 and 2021, respectively, and $222~~$(12) million and ~~$80~~$106 million in the first ~~nine months~~quarter of ~~2022~~2023 and ~~2021,~~2022, respectively. Loss from investments in unconsolidated affiliates in the third quarter of 2022 includes our share, or $15 million, of expenses associated with debt refinancing activities at our unconsolidated affiliates. Income from investments in unconsolidated affiliates in the first ~~nine months~~quarter of 2022 ~~includes~~included pre-tax net gains totaling ~~$209~~$91 million ~~primarily~~ related to ~~the acquisition-date fair value remeasurement of our previously held~~certain 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 party. Income from~~investment transactions.

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investments in unconsolidated affiliates in the first nine months of 2021 included a $33 million pre-tax gain resulting from the sale of our remaining ownership interest in 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 Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests and redeemable noncontrolling interests relates to the minority partners’ share of the net income in our consolidated subsidiaries. Net income attributable to noncontrolling interests, including acquired intangible asset amortization from valuations in purchase accounting, was ~~$12 million and $18~~$13 million in both the ~~third~~first quarter of ~~2022~~2023 and ~~2021, respectively, and $36 million and $47 million in the first nine months of 2022 and 2021, respectively.~~2022.

Net Income Per Share – Diluted

Net income attributable to Fiserv, Inc. per share-diluted was ~~$0.75~~$0.89 and ~~$0.64 in the third quarter of 2022 and 2021, respectively, and $2.68 and $1.49~~$1.02 in the first ~~nine months~~quarter of ~~2022~~2023 and ~~2021,~~2022, respectively. Net income attributable to Fiserv, Inc. per share-diluted in the first ~~nine months~~quarter of ~~2021~~2022 included ~~$134~~a $147 million pre-tax gain from the sale of certain ~~discrete tax expenses discussed above, as well as higher acquisition~~merchant contracts in conjunction with the mutual termination of one of our merchant alliance joint ventures and ~~integration~~net gains of $91 million related ~~expenses.~~to certain equity investment transactions.

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 ~~$893 million,~~$1.0 billion, proceeds from the issuance of U.S. dollar and Euro commercial paper, and available capacity under our revolving credit facility of ~~$2.3~~$1.7 billion (net of ~~$3.7~~outstanding borrowings and $4.3 billion of capacity designated for outstanding borrowings under our commercial paper programs, senior notes due in 2023 and letters of credit) at ~~September 30, 2022.~~March 31, 2023.

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

Nine Months Ended
September 30, Increase (Decrease)
(In millions) 2022 2021 $ %
Net income $ 1,784 $ 1,048 $ 736
Depreciation and amortization 2,431 2,456 (25)
Share-based compensation 244 190 54
Deferred income taxes (402) (266) (136)
Net gain on sale of business and other assets (27) — (27)
Income from investments in unconsolidated affiliates (222) (80) (142)
Distributions from unconsolidated affiliates 58 17 41
Non-cash impairment charges — 6 (6)
Net changes in working capital and other (881) (680) (201)
Operating cash flow $ 2,985 $ 2,691 $ 294 11 %
Capital expenditures, including capitalized software and other intangibles $ 1,148 $ 814 $ 334 41 %

~~Our~~ net cash provided by operating activities, or operating cash flow, and capital expenditure amounts for the three months ended March 31, 2023 and 2022, respectively:


	Three Months Ended March 31,				Increase (Decrease)
(In millions)	2023		2022		$		%
Net income	$	576	$	682	$	(106)
Depreciation and amortization	795		810		(15)

Share-based compensation	93		61		32

Deferred income taxes	(87)		(183)		96
Net loss (gain) on sale of businesses and other assets	4		(147)		151

Loss (income) from investments in unconsolidated affiliates	12		(106)		118

Distributions from unconsolidated affiliates	11		19		(8)

Net changes in working capital and other	(274)		(321)		47

Net cash provided by operating activities	$	1,130	$	815	$	315	39	%
Capital expenditures, including capitalized software and other intangibles	$	339	$	331	$	8	2	%

Our operating cash flow was ~~$3.0~~$1.13 billion in the first ~~nine~~three months of ~~2022,~~2023, an increase of ~~11%~~39% compared ~~to $2.7 billion~~with $815 million in the first ~~nine~~three months of ~~2021.~~2022. This increase was primarily attributable to improved operating results, ~~partially offset by higher~~along with favorable fluctuations in working capital, ~~use compared to~~including higher collections of accounts receivable.

We maintain investments in various unconsolidated affiliates that are accounted for as equity method investments. Total distributions from unconsolidated affiliates, including those classified as cash flows from investing activities, were $45 million and $80 million in the ~~prior period, including increased accounts receivable corresponding to revenue growth.~~first three months of 2023 and 2022, respectively.

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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 9%7% and 7%8% of our total revenue for the first ~~nine~~three months of 2023 and 2022, ~~and 2021,~~ respectively.

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Share Repurchases

We repurchased ~~$1.8~~$1.5 billion and ~~$1.6 billion (including the repurchase described below)~~$500 million of our common stock during the first ~~nine~~three months of 2023 and 2022, ~~and 2021,~~ respectively. On February 22, 2023, our board of directors approved an additional repurchase authorization for up to 75.0 million shares of our common stock. As of ~~September 30, 2022,~~March 31, 2023, we had approximately ~~24.5~~78.7 million shares remaining under our current repurchase ~~authorization.~~authorizations. 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.

Acquisitions and Dispositions

Acquisitions

We acquired Yacaré and Merchant One in December 2022, NexTable in September 2022 and City POS in June ~~2022 and~~2022. Additionally, we acquired a remaining ownership interest in Finxact in April 2022, in which we previously held a noncontrolling interest. City POS and the remaining ownership interest in Finxact were acquired during the second quarter of 2022 for an aggregate purchase price of ~~approximately $686~~$671 million, net of $27 million of acquired cash, and NexTable during the third quarter of 2022 for $15 million, including earn-out provisions ~~at an aggregate~~with a fair value of approximately $6 million. Merchant One and Yacaré were acquired in the fourth quarter of 2022 for an aggregate purchase price of approximately $308 million, net of $1 million of acquired cash.

We funded these acquisitions in 2022 by utilizing a combination of available cash and proceeds from the issuance of commercial ~~paper notes.~~

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

Dispositions

~~In September~~We sold Fiserv Costa Rica, S.A and our SIS operations in October 2022 ~~we sold~~for net cash proceeds of $34 million and our Korea operations in September 2022 for ~~$50 million, consisting~~net cash proceeds of $43 million, ~~in net cash and an~~along with a minority noncontrolling equity interest in the buyer of ~~$7 million. In~~the Korea operations. Effective March 2022, we mutually agreed to terminate a merchant alliance joint venture with a minority partner. ~~Upon~~In conjunction with such termination, the joint venture minority partner elected to exercise its option to purchase certain additional merchant contracts of the joint venture ~~we received~~for cash proceeds of $175 ~~million from the sale of certain merchant contracts.~~million. The net proceeds from these dispositions were primarily used to pay down indebtedness and repurchase shares of our common stock.

We previously maintained a noncontrolling interest in Tegra118, LLC (“Tegra118”) which was accounted for under the 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, in June 2021, we sold our entire ownership interest in InvestCloud for $466 million. ~~The net proceeds from the sale were primarily used to pay down~~ ~~outstanding borrowings on our term loan facility.~~

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Indebtedness


(In millions)	(In millions)	September 30, 2022		December 31, 2021		(In millions)	March 31, 2023		December 31, 2022
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	$	257	$	240	Foreign lines of credit	$	221	$	198
Finance lease and other financing obligations	Finance lease and other financing obligations	271		268		Finance lease and other financing obligations	240		270
Total short-term and current maturities of long-term debt	Total short-term and current maturities of long-term debt	$	528	$	508	Total short-term and current maturities of long-term debt	$	461	$	468

Long-term debt:	Long-term debt:					Long-term debt:

3.500% senior notes due October 2022		$	—	$	700

0.375% senior notes due July 2023 (Euro-denominated)	0.375% senior notes due July 2023 (Euro-denominated)	485		566		0.375% senior notes due July 2023 (Euro-denominated)	542		531
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)	569		705		2.250% senior notes due July 2025 (British Pound-denominated)	646		632
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)	485		566		1.125% senior notes due July 2027 (Euro-denominated)	542		531
5.450% senior notes due March 2028						5.450% senior notes due March 2028	900		—
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)	485		566		1.625% senior notes due July 2030 (Euro-denominated)	542		531
3.000% senior notes due July 2031 (British Pound-denominated)	3.000% senior notes due July 2031 (British Pound-denominated)	569		705		3.000% senior notes due July 2031 (British Pound-denominated)	646		632
5.600% senior notes due March 2033						5.600% senior notes due March 2033	900		—
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	2,578		916		U.S. dollar commercial paper notes	1,418		2,329
Euro commercial paper notes	Euro commercial paper notes	1,082		905		Euro commercial paper notes	1,265		1,210
Revolving credit facility	Revolving credit facility	45		97		Revolving credit facility	47		35
Receivable securitized loan		—		500

Term loan facility	Term loan facility	200		200		Term loan facility	200		200
Unamortized discount and deferred financing costs	Unamortized discount and deferred financing costs	(116)		(125)		Unamortized discount and deferred financing costs	(123)		(120)
Finance lease and other financing obligations	Finance lease and other financing obligations	565		528		Finance lease and other financing obligations	518		539
Total long-term debt	Total long-term debt	$	20,847	$	20,729	Total long-term debt	$	21,943	$	20,950

In March 2023, we completed the public offering and issuance of $1.8 billion of senior notes, comprised of $900 million aggregate principal amount of 5.45% senior notes due in March 2028 and $900 million aggregate principal amount of 5.60% senior notes due in March 2033. We used the net proceeds from these senior notes offerings for general corporate purposes, including the repayment of U.S. dollar commercial paper notes.

At ~~September 30, 2022,~~March 31, 2023, our debt consisted primarily of ~~$16.5~~$18.6 billion of fixed-rate senior notes and $~~3.7~~2.7 billion of outstanding borrowings under our commercial paper 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 0.375% Euro-denominated senior notes due in July 2023, 3.800% senior notes due in October 2023, and U.S dollar and Euro commercial paper programs are classified in the consolidated balance sheet as long-term, as we have the intent to refinance these 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 borrowings under our revolving credit facility, as further discussed below.

In July 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. We also repaid $485 million, representing all amounts outstanding on our receivable securitized loan, in July 2022 using proceeds from the issuance of U.S. dollar commercial paper and terminated the underlying receivables financing agreement.

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 existing amended and restated revolving credit facility, which we voluntarily terminated and replaced. The new credit agreement matures in June 2027 and provides for a maximum aggregate principal amount of availability of $6.0 billion.

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

The new revolving credit facility contains various restrictions and covenants that require us, among other things, to limit our consolidated indebtedness as of the end of each fiscal quarter to no more than 3.75 times our 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 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 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 nine months of 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.

Variable Rate Debt

Our variable rate debt consisted of the following at ~~September 30, 2022:~~March 31, 2023:


(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	33.53%	$	257	Foreign lines of credit	n/a	40.08%	$	221
U.S. dollar commercial paper notes	U.S. dollar commercial paper notes	various	3.37%	2,578		U.S. dollar commercial paper notes	various	5.24%	1,418
Euro commercial paper notes	Euro commercial paper notes	various	0.80%	1,082		Euro commercial paper notes	various	2.85%	1,265
Revolving credit facility	Revolving credit facility	June 2027	4.23%	45		Revolving credit facility	June 2027	5.94%	47

Term loan facility	Term loan facility	July 2024	4.31%	200		Term loan facility	July 2024	6.09%	200
Total variable rate debt	Total variable rate debt		4.62%	$	4,162	Total variable rate debt		6.79%	$	3,151

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

Latin America. 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. ~~In August 2022, we increased our U.S. commercial paper program borrowing capacity to $6.0 billion to align with the maximum amount of availability under our revolving credit facility.~~

~~As discussed above, we~~We maintain a revolving credit facility with aggregate commitments available for $6.0 billion of total capacity. Borrowings under the credit facility bear interest at a variable rate based on a 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.

We maintain a term loan credit agreement with a syndicate of financial institutions. Outstanding borrowings under the term loan bear interest at a variable rate based on one-month LIBOR or a base rate, in each case plus a specified margin based on our long-term debt rating in effect from time to time.

Debt Covenants and Compliance

The revolving credit facility contains various restrictions and covenants that require us to, among other things, limit our consolidated indebtedness as of the end of each fiscal quarter to no more than 3.75 times our 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.

During the first three months of 2023, 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.

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Debt Guarantees

We maintain noncontrolling ownership interests in Sagent M&C, LLC (“Sagent”) and defi SOLUTIONS Group, LLC (collectively, the “Lending Joint Ventures”). The Lending Joint Ventures maintain, as amended in April 2022, variable-rate term loan facilities with aggregate outstanding borrowings of $437 million in senior unsecured debt at March 31, 2023 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 $28 million of outstanding borrowings on the revolving credit facilities at March 31, 2023. We have guaranteed the debt of the Lending Joint Ventures and do not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations. We maintained a liability of $38 million at March 31, 2023 for the estimated fair value of our non-contingent obligations to stand ready to perform over the term of the guarantee arrangements. Such guarantees will be amortized in future periods over the contractual term of the debt. In addition, we maintained a contingent liability of $21 million at March 31, 2023, representing the current expected credit losses to which we are exposed. This contingent liability is estimated based on certain financial metrics of the 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. We have not made any payments under the guarantees, nor have we been called upon to do so.

Cash and Cash Equivalents

Investments, exclusive of settlement assets, with original maturities of ~~three months~~90 days or less that are readily convertible to cash are considered to be cash equivalents as reflected within our consolidated balance sheets. ~~At September 30, 2022 and December 31, 2021, we held $893 million and $835 million in~~The table below details our cash and cash equivalents ~~respectively.~~held at March 31, 2023 and December 31, 2022:

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~~The table below details the cash and cash equivalents at:~~


		September 30, 2022						December 31, 2021							March 31, 2023						December 31, 2022
(In millions)	(In millions)	Domestic		International		Total		Domestic		International		Total		(In millions)	Domestic		International		Total		Domestic		International		Total
Available	Available	$	114	$	163	$	277	$	180	$	221	$	401	Available	$	181	$	225	$	406	$	135	$	153	$	288
Unavailable (1)	Unavailable (1)	228		388		616		138		296		434		Unavailable (1)	209		431		640		178		436		614
Total	Total	$	342	$	551	$	893	$	318	$	517	$	835	Total	$	390	$	656	$	1,046	$	313	$	589	$	902

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

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. Our senior management actively monitors certain market risks to which we are exposed, primarily from fluctuations in interest rates and foreign currency exchange rates. In order to limit our exposure to these risks, we may enter into derivative instruments with creditworthy institutions to hedge against changing interest rates and foreign currency rate fluctuations. We currently utilize forward exchange contracts, fixed-to-fixed cross-currency rate swap contracts and other non-derivative hedging instruments to manage risk.

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, ~~2021.~~2022. There were no significant changes to our quantitative and qualitative analyses about market risk during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

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 ~~September 30, 2022.~~March 31, 2023.

Changes in Internal Control Over Financial Reporting

There was no change in internal control over financial reporting that occurred during the three months ended ~~September 30, 2022~~March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

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.

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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 ~~September 30, 2022:~~March 31, 2023:

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)
July 1-31, 2022 4,249,319 $ 94.13 4,249,319 27,853,478
August 1-31, 2022 1,455,000 106.66 1,455,000 26,398,478
September 1-30, 2022 1,905,716 102.22 1,905,716 24,492,762
Total 7,610,035 7,610,035


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)
January 1-31, 2023	2,785,000	$	103.18	2,785,000	14,145,604
February 1-28, 2023	3,089,300	113.55		3,089,300	86,056,304
March 1-31, 2023	7,401,012	112.50		7,401,012	78,655,292
Total	13,275,312			13,275,312

(1)On November 19, 2020 and February 22, 2023, our board of directors authorized the purchase of up to 60.0 million and 75.0 million shares of our common ~~stock. This authorization does~~stock, respectively. These authorizations do 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.

Exhibit Index


Exhibit Number						Exhibit Description





4.1						Twenty-Seventh Supplemental Indenture, dated as of March 2, 2023, between Fiserv, Inc. and U.S. Bank Trust Company, National Association (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Fiserv, Inc. filed March 2, 2023)

4.2						Twenty-Eighth Supplemental Indenture, dated as of March 2, 2023, between Fiserv, Inc. and U.S. Bank Trust Company, National Association (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Fiserv, Inc. filed March 2, 2023)

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)

_______________________

Table of Contents

* 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 nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ (ii) the Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ (iii) the Consolidated Balance Sheets at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, (iv) the Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ and (v) Notes to Consolidated Financial Statements.

Table of Contents

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:

~~October 28, 2022~~April 26, 2023

By:

/s/ Robert W. Hau

Robert W. Hau

Chief Financial Officer

Date:

~~October 28, 2022~~April 26, 2023

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	2924
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4235
Item 4.	Controls and Procedures	4235

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	4236

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4336
Item 6.	Exhibits	4336

	Exhibit Index
	Signatures



	Fiserv, Inc. Shareholders’ Equity

Nine Months Ended September 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)									1,748				14		1,762

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

Other comprehensive loss							(794)						(89)		(883)

Share-based compensation					244										244
Shares issued under stock plans		(4)			(268)						194				(74)
Purchases of treasury stock		18									(1,750)				(1,750)

Capital contribution from noncontrolling interest													13		13
Balance at September 30, 2022	784	148	$	8	$	22,959	$	(1,539)	$	16,594	$	(7,696)	$	656	$	30,982



	Fiserv, Inc. Shareholders’ Equity

Nine Months Ended September 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)									1,001				14		1,015


Distributions paid to noncontrolling interests (2)													(1)		(1)
Other comprehensive loss							(262)						(25)		(287)

Share-based compensation					190										190
Shares issued under stock plans		(5)			(271)						173				(98)
Purchases of treasury stock		13									(1,565)				(1,565)
Retirement of treasury stock (see Note 18)	(5)	(5)			(588)						588				—




Balance at September 30, 2021	784	124	$	8	$	22,974	$	(649)	$	14,442	$	(5,179)	$	728	$	32,324