Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


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

For the quarterly period ended ~~June~~September 30, 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

The New York Stock Exchange

1.125% Senior Notes due 2027

FI27

The New York Stock Exchange

1.625% Senior Notes due 2030

FI30

The New York Stock Exchange

2.250% Senior Notes due 2025

FI25

The New York Stock Exchange

3.000% Senior Notes due 2031

FI31

The New York Stock Exchange

4.500% Senior Notes due 2031

FI31A

The New York Stock Exchange

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 ☐

Table of Contents

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

As of ~~July 21,~~October 20, 2023, there were ~~609,614,903~~600,185,716 shares of common stock, $.01 par value, of the registrant outstanding.

Table of Contents

INDEX

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Fiserv, Inc.

Consolidated Statements of Income

(In millions, except per share data)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Revenue:	Revenue:									Revenue:
Processing and services (1)	Processing and services (1)	$	3,924	$	3,696	$	7,597	$	7,060	Processing and services (1)	$	4,008	$	3,678	$	11,605	$	10,738
Product	Product	832		754		1,706		1,528		Product	865		840		2,571		2,368
Total revenue	Total revenue	4,756		4,450		9,303		8,588		Total revenue	4,873		4,518		14,176		13,106
Expenses:	Expenses:									Expenses:
Cost of processing and services	Cost of processing and services	1,351		1,502		2,756		2,938		Cost of processing and services	1,311		1,443		4,067		4,381
Cost of product	Cost of product	578		542		1,178		1,078		Cost of product	583		553		1,761		1,631
Selling, general and administrative	Selling, general and administrative	1,696		1,546		3,300		3,013		Selling, general and administrative	1,652		1,547		4,952		4,560
Net loss (gain) on sale of businesses and other assets		—		—		4		(147)
Net (gain) loss on sale of businesses and other assets										Net (gain) loss on sale of businesses and other assets	(176)		120		(172)		(27)
Total expenses	Total expenses	3,625		3,590		7,238		6,882		Total expenses	3,370		3,663		10,608		10,545
Operating income	Operating income	1,131		860		2,065		1,706		Operating income	1,503		855		3,568		2,561
Interest expense, net	Interest expense, net	(232)		(176)		(434)		(344)		Interest expense, net	(258)		(190)		(692)		(534)

Other expense, net	Other expense, net	(26)		(66)		(46)		(70)		Other expense, net	(35)		(13)		(81)		(83)
Income before income taxes and (loss) income from investments in unconsolidated affiliates	Income before income taxes and (loss) income from investments in unconsolidated affiliates	873		618		1,585		1,292		Income before income taxes and (loss) income from investments in unconsolidated affiliates	1,210		652		2,795		1,944
Income tax provision	Income tax provision	(181)		(137)		(305)		(235)		Income tax provision	(239)		(147)		(544)		(382)
(Loss) income from investments in unconsolidated affiliates	(Loss) income from investments in unconsolidated affiliates	3		128		(9)		234		(Loss) income from investments in unconsolidated affiliates	(2)		(12)		(11)		222
Net income	Net income	695		609		1,271		1,291		Net income	969		493		2,240		1,784
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	12		11		25		24		Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	17		12		42		36
Net income attributable to Fiserv, Inc.	Net income attributable to Fiserv, Inc.	$	683	$	598	$	1,246	$	1,267	Net income attributable to Fiserv, Inc.	$	952	$	481	$	2,198	$	1,748

Net income attributable to Fiserv, Inc. per share:	Net income attributable to Fiserv, Inc. per share:									Net income attributable to Fiserv, Inc. per share:
Basic	Basic	$	1.11	$	0.93	$	2.01	$	1.95	Basic	$	1.57	$	0.75	$	3.57	$	2.71
Diluted	Diluted	$	1.10	$	0.92	$	1.99	$	1.94	Diluted	$	1.56	$	0.75	$	3.54	$	2.68

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	615.4		645.2		621.2		648.0		Basic	606.2		639.6		616.2		645.2
Diluted	Diluted	619.2		650.8		625.3		654.0		Diluted	610.3		645.0		620.3		651.0

(1)Includes processing and other fees charged to related party investments accounted for under the equity method of $45 million and ~~$50~~$51 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$91~~$136 million and ~~$100~~$151 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively (see Note ~~18)~~19).

See accompanying notes to consolidated financial statements.

Table of Contents

Fiserv, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In millions)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Net income	Net income	$	695	$	609	$	1,271	$	1,291	Net income	$	969	$	493	$	2,240	$	1,784
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Fair market value adjustment on derivatives	Fair market value adjustment on derivatives	4		(8)		9		(9)		Fair market value adjustment on derivatives	5		(6)		14		(15)
Reclassification adjustment for net realized 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 cost of processing and services										Reclassification adjustment for net realized losses on cash flow hedges included in cost of processing and services	4		1		4		—
Reclassification adjustment for net realized losses on cash flow hedges included in net interest expense	Reclassification adjustment for net realized losses on cash flow hedges included in net interest expense	2		5		7		10		Reclassification adjustment for net realized losses on cash flow hedges included in net interest expense	4		4		11		15
Tax impacts of derivatives	Tax impacts of derivatives	(1)		1		(4)		—		Tax impacts of derivatives	(3)		1		(7)		—
Unrealized gain (loss) on defined benefit pension plans	Unrealized gain (loss) on defined benefit pension plans	—		(3)		3		(4)		Unrealized gain (loss) on defined benefit pension plans	—		1		3		(3)
Tax impacts of defined benefit pension plans	Tax impacts of defined benefit pension plans	—		1		(1)		1		Tax impacts of defined benefit pension plans	—		—		(1)		1
Foreign currency translation	Foreign currency translation	135		(324)		250		(215)		Foreign currency translation	(261)		(550)		(11)		(765)

Reclassification adjustment for accumulated foreign currency translation impacts from the sale of foreign entities included in net (gain) loss on sale of businesses and other assets										Reclassification adjustment for accumulated foreign currency translation impacts from the sale of foreign entities included in net (gain) loss on sale of businesses and other assets	10		56		10		56
Tax impacts of foreign currency translation	Tax impacts of foreign currency translation	18		(61)		40		(83)		Tax impacts of foreign currency translation	(42)		(89)		(2)		(172)
Total other comprehensive income (loss)	Total other comprehensive income (loss)	157		(389)		304		(301)		Total other comprehensive income (loss)	(283)		(582)		21		(883)
Comprehensive income		$	852	$	220	$	1,575	$	990
Comprehensive income (loss)										Comprehensive income (loss)	$	686	$	(89)	$	2,261	$	901
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	12		11		25		24		Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	17		12		42		36
Less: other comprehensive income (loss) attributable to noncontrolling interests		3		(24)		15		(41)
Comprehensive income attributable to Fiserv, Inc.		$	837	$	233	$	1,535	$	1,007
Less: other comprehensive loss attributable to noncontrolling interests										Less: other comprehensive loss attributable to noncontrolling interests	(17)		(48)		(2)		(89)
Comprehensive income (loss) attributable to Fiserv, Inc.										Comprehensive income (loss) attributable to Fiserv, Inc.	$	686	$	(53)	$	2,221	$	954

See accompanying notes to consolidated financial statements.

Table of Contents

Fiserv, Inc.

Consolidated Balance Sheets

(In millions)

(Unaudited)


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,082	$	902	Cash and cash equivalents	$	1,349	$	902
Trade accounts receivable, less allowance for doubtful accounts	Trade accounts receivable, less allowance for doubtful accounts	3,465		3,585		Trade accounts receivable, less allowance for doubtful accounts	3,461		3,585
Prepaid expenses and other current assets	Prepaid expenses and other current assets	2,076		1,575		Prepaid expenses and other current assets	1,986		1,575
Settlement assets	Settlement assets	14,821		21,482		Settlement assets	21,785		21,482

Total current assets	Total current assets	21,444		27,544		Total current assets	28,581		27,544
Property and equipment, net	Property and equipment, net	2,023		1,958		Property and equipment, net	2,122		1,958
Customer relationships, net	Customer relationships, net	7,668		8,424		Customer relationships, net	7,300		8,424
Other intangible assets, net	Other intangible assets, net	4,111		3,991		Other intangible assets, net	4,139		3,991
Goodwill	Goodwill	37,109		36,811		Goodwill	36,836		36,811
Contract costs, net	Contract costs, net	920		905		Contract costs, net	921		905
Investments in unconsolidated affiliates	Investments in unconsolidated affiliates	2,316		2,403		Investments in unconsolidated affiliates	2,259		2,403
Other long-term assets	Other long-term assets	2,008		1,833		Other long-term assets	1,996		1,833
Total assets	Total assets	$	77,599	$	83,869	Total assets	$	84,154	$	83,869
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	3,359	$	3,883	Accounts payable and accrued expenses	$	3,590	$	3,883
Short-term and current maturities of long-term debt	Short-term and current maturities of long-term debt	608		468		Short-term and current maturities of long-term debt	649		468
Contract liabilities	Contract liabilities	674		625		Contract liabilities	605		625
Settlement obligations	Settlement obligations	14,821		21,482		Settlement obligations	21,785		21,482

Total current liabilities	Total current liabilities	19,462		26,458		Total current liabilities	26,629		26,458
Long-term debt	Long-term debt	22,595		20,950		Long-term debt	22,657		20,950
Deferred income taxes	Deferred income taxes	3,400		3,602		Deferred income taxes	3,264		3,602
Long-term contract liabilities	Long-term contract liabilities	244		235		Long-term contract liabilities	247		235
Other long-term liabilities	Other long-term liabilities	1,021		936		Other long-term liabilities	971		936
Total liabilities	Total liabilities	46,722		52,181		Total liabilities	53,768		52,181
Commitments and Contingencies (see Note 17)
Commitments and Contingencies (see Note 18)						Commitments and Contingencies (see Note 18)
Redeemable Noncontrolling Interests	Redeemable Noncontrolling Interests	161		161		Redeemable Noncontrolling Interests	161		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	22,988		23,011		Additional paid-in capital	23,056		23,011
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(900)		(1,189)		Accumulated other comprehensive loss	(1,166)		(1,189)
Retained earnings	Retained earnings	18,622		17,376		Retained earnings	19,574		17,376
Treasury stock, at cost, 173 million and 154 million shares, respectively		(10,727)		(8,378)
Treasury stock, at cost, 182 million and 154 million shares, respectively						Treasury stock, at cost, 182 million and 154 million shares, respectively	(11,899)		(8,378)
Total Fiserv, Inc. shareholders’ equity	Total Fiserv, Inc. shareholders’ equity	29,991		30,828		Total Fiserv, Inc. shareholders’ equity	29,573		30,828
Noncontrolling interests	Noncontrolling interests	725		699		Noncontrolling interests	652		699
Total equity	Total equity	30,716		31,527		Total equity	30,225		31,527
Total liabilities and equity	Total liabilities and equity	$	77,599	$	83,869	Total liabilities and equity	$	84,154	$	83,869

See accompanying notes to consolidated financial statements.

Table of Contents

Fiserv, Inc.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2023		2022			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	1,271	$	1,291	Net income	$	2,240	$	1,784
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and other amortization	Depreciation and other amortization	717		642		Depreciation and other amortization	1,093		982
Amortization of acquisition-related intangible assets	Amortization of acquisition-related intangible assets	868		966		Amortization of acquisition-related intangible assets	1,261		1,416
Amortization of financing costs and debt discounts	Amortization of financing costs and debt discounts	20		22		Amortization of financing costs and debt discounts	30		33

Share-based compensation	Share-based compensation	199		155		Share-based compensation	275		244

Deferred income taxes	Deferred income taxes	(186)		(317)		Deferred income taxes	(344)		(402)
Net loss (gain) on sale of businesses and other assets		4		(147)
Net gain on sale of businesses and other assets						Net gain on sale of businesses and other assets	(172)		(27)
Loss (income) from investments in unconsolidated affiliates	Loss (income) from investments in unconsolidated affiliates	9		(234)		Loss (income) from investments in unconsolidated affiliates	11		(222)
Distributions from unconsolidated affiliates	Distributions from unconsolidated affiliates	30		41		Distributions from unconsolidated affiliates	42		58

Other operating activities	Other operating activities	(1)		3		Other operating activities	(2)		(2)
Changes in assets and liabilities, net of effects from acquisitions and dispositions:	Changes in assets and liabilities, net of effects from acquisitions and dispositions:					Changes in assets and liabilities, net of effects from acquisitions and dispositions:
Trade accounts receivable	Trade accounts receivable	131		(363)		Trade accounts receivable	119		(521)
Prepaid expenses and other assets	Prepaid expenses and other assets	(430)		(224)		Prepaid expenses and other assets	(506)		(203)
Contract costs	Contract costs	(116)		(154)		Contract costs	(180)		(230)
Accounts payable and other liabilities	Accounts payable and other liabilities	(573)		111		Accounts payable and other liabilities	(303)		105
Contract liabilities	Contract liabilities	65		13		Contract liabilities	3		(30)
Net cash provided by operating activities	Net cash provided by operating activities	2,008		1,805		Net cash provided by operating activities	3,567		2,985
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures, including capitalized software and other intangibles	Capital expenditures, including capitalized software and other intangibles	(679)		(718)		Capital expenditures, including capitalized software and other intangibles	(1,034)		(1,148)
Net proceeds from sale of businesses and other assets	Net proceeds from sale of businesses and other assets	—		175		Net proceeds from sale of businesses and other assets	232		218
Payments for acquisition of businesses, net of cash acquired	Payments for acquisition of businesses, net of cash acquired	—		(668)		Payments for acquisition of businesses, net of cash acquired	—		(682)
Distributions from unconsolidated affiliates	Distributions from unconsolidated affiliates	79		78		Distributions from unconsolidated affiliates	110		110
Purchases of investments	Purchases of investments	(11)		(30)		Purchases of investments	(15)		(45)
Proceeds from sale of investments	Proceeds from sale of investments	—		3		Proceeds from sale of investments	—		13
Other investing activities	Other investing activities	(2)		—		Other investing activities	(3)		—
Net cash used in investing activities	Net cash used in investing activities	(613)		(1,160)		Net cash used in investing activities	(710)		(1,534)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Debt proceeds	Debt proceeds	3,160		1,191		Debt proceeds	5,188		1,450
Debt repayments	Debt repayments	(978)		(1,610)		Debt repayments	(1,652)		(2,945)
Net (repayments of) proceeds from commercial paper and short-term borrowings	Net (repayments of) proceeds from commercial paper and short-term borrowings	(767)		869		Net (repayments of) proceeds from commercial paper and short-term borrowings	(2,032)		2,020
Payments of debt financing costs	Payments of debt financing costs	(21)		—		Payments of debt financing costs	(38)		—
Proceeds from issuance of treasury stock	Proceeds from issuance of treasury stock	53		72		Proceeds from issuance of treasury stock	68		96
Purchases of treasury stock, including employee shares withheld for tax obligations	Purchases of treasury stock, including employee shares withheld for tax obligations	(2,603)		(1,078)		Purchases of treasury stock, including employee shares withheld for tax obligations	(3,790)		(1,909)

Settlement activity, net	Settlement activity, net	(515)		(189)		Settlement activity, net	(630)		114
Distributions paid to noncontrolling interests and redeemable noncontrolling interests	Distributions paid to noncontrolling interests and redeemable noncontrolling interests	(14)		(22)		Distributions paid to noncontrolling interests and redeemable noncontrolling interests	(22)		(30)
Payment to acquire noncontrolling interest of consolidated subsidiary						Payment to acquire noncontrolling interest of consolidated subsidiary	(56)		—
Payments of acquisition-related contingent consideration	Payments of acquisition-related contingent consideration	(30)		—		Payments of acquisition-related contingent consideration	(33)		—
Other financing activities	Other financing activities	(35)		13		Other financing activities	(39)		7
Net cash used in financing activities	Net cash used in financing activities	(1,750)		(754)		Net cash used in financing activities	(3,036)		(1,197)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	19		(33)		Effect of exchange rate changes on cash and cash equivalents	(8)		(84)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	(336)		(142)		Net change in cash and cash equivalents	(187)		170

Cash and cash equivalents, beginning balance	Cash and cash equivalents, beginning balance	3,192		3,205		Cash and cash equivalents, beginning balance	3,192		3,205
Cash and cash equivalents, ending balance	Cash and cash equivalents, ending balance	$	2,856	$	3,063	Cash and cash equivalents, ending balance	$	3,005	$	3,375

See accompanying notes to consolidated financial statements.

Table of Contents

Fiserv, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 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, 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 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)~~19). 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)~~11).

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.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and investments with original maturities of 90 days or less and are stated at cost in the consolidated balance sheets, which approximates market value. Cash and cash equivalents that were restricted from use due to regulatory or other requirements are included in other long-term assets in the consolidated balance sheets. Cash and cash equivalents held on behalf of merchants and other payees are included in settlement assets in the consolidated balance sheets.

Table of Contents

The 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)	(In millions)	June 30, 2023		December 31, 2022		June 30, 2022		(In millions)	September 30, 2023		December 31, 2022		September 30, 2022
Cash and cash equivalents on the consolidated balance sheets	Cash and cash equivalents on the consolidated balance sheets	$	1,082	$	902	$	883	Cash and cash equivalents on the consolidated balance sheets	$	1,349	$	902	$	893
Cash and cash equivalents included in settlement assets	Cash and cash equivalents included in settlement assets	1,768		2,283		2,172		Cash and cash equivalents included in settlement assets	1,653		2,283		2,475
Other restricted cash	Other restricted cash	6		7		8		Other restricted cash	3		7		7
Total cash and cash equivalents on the consolidated statements of cash flows	Total cash and cash equivalents on the consolidated statements of cash flows	$	2,856	$	3,192	$	3,063	Total cash and cash equivalents on the consolidated statements of cash flows	$	3,005	$	3,192	$	3,375

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 ~~$66~~$83 million and $52 million at ~~June~~September 30, 2023 and December 31, 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 ~~$506~~$459 million and $431 million at ~~June~~September 30, 2023 and December 31, 2022, respectively. Other current assets, including Clover Capital cash advances and settlement advance cash payments, totaled ~~$1,570~~$1,527 million and $1,144 million at ~~June~~September 30, 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 ~~$199~~$241 million and $164 million at ~~June~~September 30, 2023 and December 31, 2022, respectively. The Company maintained a reserve of $8$10 million and $7 million at ~~June~~September 30, 2023 and December 31, 2022, respectively, based on an estimate of uncollectible amounts.

The Company also offers merchants within its international operations advance access to capital by providing them the opportunity to receive settlement cash payments in advance in exchange 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)10). 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 ~~$504~~$508 million and $264 million at ~~June~~September 30, 2023 and December 31, 2022, respectively.

Settlement Assets and Obligations

Settlement assets and obligations represent intermediary balances arising from the settlement process which involves the transferring of funds between card issuers, payment networks, processors, merchants and 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 direct consumers. Settlement obligations represent amounts payable to merchants and payees.

Certain merchant settlement 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, 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.

Table of Contents

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 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 mitigate this risk. Collateral held by the Company, or 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 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 ~~$22~~$25 million and ~~$20~~$18 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$37~~$62 million and ~~$28~~$46 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively.

The Company maintains an allowance for merchant credit losses that are expected to exceed the amount of merchant collateral. The amount of collateral available to the Company was ~~$1.1~~$0.9 billion and $1.5 billion at ~~June~~September 30, 2023 and December 31, 2022, respectively. 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 on the Company’s historical experience of credit losses and other factors such as changes in economic conditions or increases in merchant fraud. The aggregate merchant credit loss allowance was ~~$34~~$35 million and $29 million at ~~June~~September 30, 2023 and December 31, 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 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 environments; a shift in strategic initiatives; a deterioration in financial performance 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 ~~June~~September 30, 2023.

Other Equity Investments

The Company maintains investments, ofover which it does not have significant influence, in various equity securities without a readily determinable fair value. Such investments totaled $138 million and $135 million at ~~June~~September 30, 2023 and December 31, 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, net in the consolidated statements of income for the period. Adjustments made to the values recorded for certain equity securities and gains and losses from sales of equity securities during the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, 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.

Table of Contents

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 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 ~~$32~~$38 million and ~~$12~~$14 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$50~~$88 million and ~~$17~~$31 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively, which is included within other expense, net within the consolidated statements of income.

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. 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 (loss) in the consolidated statements of comprehensive income (loss) 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 income (loss) until the sale or complete liquidation of the underlying net investment. If the derivative is designated as a fair value hedge, changes in the fair value of 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 June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2023		2022		2023		2022		(In millions)	2023		2022		2023		2022
Interest expense	Interest expense	$	(237)	$	(178)	$	(447)	$	(349)	Interest expense	$	(268)	$	(193)	$	(715)	$	(542)
Interest income	Interest income	5		2		13		5		Interest income	10		3		23		8
Interest expense, net	Interest expense, net	$	(232)	$	(176)	$	(434)	$	(344)	Interest expense, net	$	(258)	$	(190)	$	(692)	$	(534)

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 ~~six~~nine months ended ~~June~~September 30, 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

Table of Contents

recognized in earnings and disclosed on the date of adoption. The adoption of ASU 2022-03 is not expected to have a material impact on the Company’s consolidated financial statements or disclosures.

3. Revenue Recognition

The Company generates revenue from the delivery of processing, service and product solutions. Revenue is measured based on consideration specified in a contract with a customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer which may be at a point in time or over time.

Disaggregation of Revenue

The Company’s operations are comprised of the Merchant Acceptance (“Acceptance”) segment, the Financial Technology (“Fintech”) segment and the Payments and Network (“Payments”) segment. Additional information regarding the Company’s business segments is included in Note ~~19.~~20. 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 15% and 14% of total revenue for the three months ended September 30, 2023 and 2022, respectively, and 14% of total revenue for each of the ~~three and six~~nine months ended ~~June~~September 30, 2023 and 2022.


(In millions)	(In millions)	Reportable Segments										(In millions)	Reportable Segments
Type of Revenue	Type of Revenue	Acceptance		Fintech		Payments		Corporate and Other		Total		Type of Revenue	Acceptance		Fintech		Payments		Corporate and Other		Total
Three Months Ended June 30, 2023
Three Months Ended September 30, 2023												Three Months Ended September 30, 2023
Processing	Processing	$	1,772	$	414	$	1,213	$	7	$	3,406	Processing	$	1,796	$	421	$	1,237	$	5	$	3,459
Hardware, print and card production	Hardware, print and card production	241		11		269		—		521		Hardware, print and card production	257		19		258		—		534
Professional services	Professional services	6		117		68		—		191		Professional services	6		119		76		—		201
Software maintenance	Software maintenance	—		138		13		—		151		Software maintenance	—		128		9		—		137
License and termination fees	License and termination fees	11		46		44		—		101		License and termination fees	10		46		72		—		128
Output Solutions postage	Output Solutions postage	—		—		—		255		255		Output Solutions postage	—		—		—		263		263
Other	Other	35		58		38		—		131		Other	37		62		52		—		151
Total Revenue	Total Revenue	$	2,065	$	784	$	1,645	$	262	$	4,756	Total Revenue	$	2,106	$	795	$	1,704	$	268	$	4,873

Three Months Ended June 30, 2022
Three Months Ended September 30, 2022												Three Months Ended September 30, 2022
Processing	Processing	$	1,660	$	398	$	1,155	$	6	$	3,219	Processing	$	1,586	$	407	$	1,218	$	6	$	3,217
Hardware, print and card production	Hardware, print and card production	215		10		237		—		462		Hardware, print and card production	254		9		271		—		534
Professional services	Professional services	5		131		67		—		203		Professional services	5		119		74		—		198
Software maintenance	Software maintenance	—		139		5		—		144		Software maintenance	—		138		7		—		145
License and termination fees	License and termination fees	14		68		34		—		116		License and termination fees	15		36		19		—		70
Output Solutions postage	Output Solutions postage	—		—		—		222		222		Output Solutions postage	—		—		—		251		251
Other	Other	7		57		20		—		84		Other	18		57		28		—		103
Total Revenue	Total Revenue	$	1,901	$	803	$	1,518	$	228	$	4,450	Total Revenue	$	1,878	$	766	$	1,617	$	257	$	4,518

Table of Contents


(In millions)	(In millions)	Reportable Segments										(In millions)	Reportable Segments
Type of Revenue	Type of Revenue	Acceptance		Fintech		Payments		Corporate and Other		Total		Type of Revenue	Acceptance		Fintech		Payments		Corporate and Other		Total
Six Months Ended June 30, 2023
Nine Months Ended September 30, 2023												Nine Months Ended September 30, 2023
Processing	Processing	$	3,326	$	830	$	2,400	$	13	$	6,569	Processing	$	5,122	$	1,251	$	3,637	$	18	$	10,028
Hardware, print and card production	Hardware, print and card production	487		23		556		—		1,066		Hardware, print and card production	744		42		814		—		1,600
Professional services	Professional services	10		229		148		—		387		Professional services	16		348		224		—		588
Software maintenance	Software maintenance	—		275		19		—		294		Software maintenance	—		403		28		—		431
License and termination fees	License and termination fees	21		99		73		—		193		License and termination fees	31		145		145		—		321
Output Solutions postage	Output Solutions postage	—		—		—		528		528		Output Solutions postage	—		—		—		791		791
Other	Other	68		120		78		—		266		Other	105		182		130		—		417
Total Revenue	Total Revenue	$	3,912	$	1,576	$	3,274	$	541	$	9,303	Total Revenue	$	6,018	$	2,371	$	4,978	$	809	$	14,176

Six Months Ended June 30, 2022
Nine Months Ended September 30, 2022												Nine Months Ended September 30, 2022
Processing	Processing	$	3,063	$	803	$	2,268	$	12	$	6,146	Processing	$	4,649	$	1,210	$	3,486	$	18	$	9,363
Hardware, print and card production	Hardware, print and card production	440		19		473		—		932		Hardware, print and card production	694		28		744		—		1,466
Professional services	Professional services	10		247		129		—		386		Professional services	15		366		203		—		584
Software maintenance	Software maintenance	—		277		11		—		288		Software maintenance	—		415		18		—		433
License and termination fees	License and termination fees	28		116		60		—		204		License and termination fees	43		152		79		—		274
Output Solutions postage	Output Solutions postage	—		—		—		461		461		Output Solutions postage	—		—		—		712		712
Other	Other	13		119		39		—		171		Other	31		176		67		—		274
Total Revenue	Total Revenue	$	3,554	$	1,581	$	2,980	$	473	$	8,588	Total Revenue	$	5,432	$	2,347	$	4,597	$	730	$	13,106

Contract Balances

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


(In millions)	(In millions)	June 30, 2023		December 31, 2022		(In millions)	September 30, 2023		December 31, 2022
Contract assets	Contract assets	$	593	$	551	Contract assets	$	602	$	551
Contract liabilities	Contract liabilities	918		860		Contract liabilities	852		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 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 ~~$405~~$539 million of revenue during the ~~six~~nine months ended ~~June~~September 30, 2023 that was included in the contract liabilities balance at the beginning of the period.

Table of Contents

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 ~~June~~September 30, 2023:


(In millions)	(In millions)			(In millions)
Year Ending December 31,	Year Ending December 31,			Year Ending December 31,
Remainder of 2023	Remainder of 2023	$	1,170	Remainder of 2023	$	603
2024	2024	2,104		2024	2,226
2025	2025	1,664		2025	1,744
2026	2026	1,106		2026	1,206
Thereafter	Thereafter	1,500		Thereafter	1,643

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~~sales- 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.

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 $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 ~~six~~nine months ended ~~June~~September 30, 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 $61 million and a corresponding 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 allocation of the purchase price was finalized in the second quarter of 2023 and resulted in the recognition of identifiable intangible assets of $118 million, goodwill of $179 million and other net assets of $6 million. 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.

Table of Contents

The 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 $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 $110 million, included within income from investments in unconsolidated affiliates in the consolidated statement of income during the ~~three~~nine months ended ~~June~~September 30, 2022. Finxact is included within the Fintech segment and advances the Company’s digital banking strategy, expanding its account processing, digital, and payments solutions.

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


(In millions)
Cash	$	27
Other net assets	1
Intangible assets	105
Goodwill	670
Total consideration	$	803
Less: Fair value of previously held equity interest	(131)
Total purchase price	$	672

Goodwill, which is not 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 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
Trade name	9		5 years
Customer relationships	6		8 years
Total	$	105	6 years

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 POS equipment for merchants. City POS is included within the Acceptance segment and expands the Company’s merchant services business. The Company acquired these businesses for an aggregate purchase price of $44 million, including earn-out provisions estimated at a fair value of $6 million (see Note 7)8). The allocation of purchase price for these acquisitions resulted in the recognition of identifiable intangible assets of $23 million, goodwill of $22 million and other net assumed liabilities of $1 million. The purchase price allocations for the CityPOS and NexTable acquisitions were finalized in the third and fourth quarters of 2022, respectively. The purchase price allocation for the Yacaré acquisition was finalized in the second quarter of 2023. Measurement period adjustments did not have a material impact on the Company’s consolidated statements of income. Goodwill for these acquisitions, of which $17 million is deductible for tax purposes, is

Table of Contents

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	$	12	7 years
Customer relationships	11		10 years
Total	$	23	9 years

Dispositions

Disposition of Financial Reconciliation Business

~~In June~~On July 25, 2023, the Company ~~entered into an agreement to sell~~sold its financial reconciliation ~~business. The transaction closed on July 25, 2023,~~business, which was reported within the Fintech segment, for ~~net~~ cash proceeds of ~~approximately $230~~$232 million, subject to ~~customary~~final net working capital adjustments. The ~~corresponding assets~~Company recognized a pre-tax gain of ~~approximately $70~~$177 million ~~consisting primarily~~on the sale, recorded within net (gain) loss on sale of trade accounts receivable, capitalized software and allocated goodwill, and liabilities of approximately $15 million, consisting primarily of contract liabilities, were presented as held for sale within prepaid expensesbusinesses and other ~~current~~ assets, ~~and accounts payable and accrued expenses~~with a related tax expense of $49 million recorded within the income tax provision, in the ~~Company’s~~ consolidated ~~balance sheet at June~~statement of income during the three months ended September 30, 2023. The ~~Company expects to recognize a~~ pre-tax gain ~~on the sale of approximately $160 million. The expected gain is~~was comprised of the difference between the consideration received and the net carrying amount of the business, including ~~accumulated foreign currency translation losses which will be reclassified from accumulated~~$38 million of allocated goodwill and $13 million of other ~~comprehensive loss. The financial reconciliation business was reported within the Company’s Fintech segment.~~net assets, primarily consisting of trade accounts receivable and capitalized software.

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 Company recognized a pre-tax gain of $44 million on the sales, recorded within net ~~gain~~(gain) loss on sale of businesses and other assets, with a related tax expense of $8 million recorded within the income tax provision, in the consolidated statement of income for the year ended December 31, 2022. The Company recognized a pre-tax loss of $3 million, recorded within net (gain) loss ~~(gain)~~ on sale of businesses and other assets induring the ~~six~~nine months ended ~~June~~September 30, 2023, associated with final working capital adjustments related to the disposition of Fiserv Costa Rica, S.A. Fiserv Costa Rica, S.A. and SIS were reported primarily within the Fintech segment.

Disposition of 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 ~~$127~~$120 million on the sale, recorded within net ~~gain~~(gain) loss on sale of businesses and other assets in the consolidated statement of income ~~for~~during the ~~year~~three months ended ~~December 31,~~September 30, 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.

Table of Contents

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
June 30, 2023
September 30, 2023								September 30, 2023
Customer relationships	Customer relationships	$	14,703	$	7,035	$	7,668	Customer relationships	$	14,607	$	7,307	$	7,300
Acquired software and technology	Acquired software and technology	2,365		1,244		1,121		Acquired software and technology	2,354		1,301		1,053
Trade names	Trade names	636		326		310		Trade names	634		339		295
Purchased software	Purchased software	1,223		619		604		Purchased software	1,113		505		608
Capitalized software and other intangibles	Capitalized software and other intangibles	3,008		932		2,076		Capitalized software and other intangibles	3,194		1,011		2,183
Total	Total	$	21,935	$	10,156	$	11,779	Total	$	21,902	$	10,463	$	11,439

December 31, 2022	December 31, 2022							December 31, 2022
Customer relationships	Customer relationships	$	14,795	$	6,371	$	8,424	Customer relationships	$	14,795	$	6,371	$	8,424
Acquired software and technology	Acquired software and technology	2,510		1,234		1,276		Acquired software and technology	2,510		1,234		1,276
Trade names	Trade names	633		295		338		Trade names	633		295		338
Purchased software	Purchased software	1,146		595		551		Purchased software	1,146		595		551
Capitalized software and other intangibles	Capitalized software and other intangibles	2,601		775		1,826		Capitalized software and other intangibles	2,601		775		1,826
Total	Total	$	21,685	$	9,270	$	12,415	Total	$	21,685	$	9,270	$	12,415

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	(In millions)	2023		2022		2023		2022		(In millions)	2023		2022		2023		2022
Amortization expense	Amortization expense	$	614	$	622	$	1,209	$	1,246	Amortization expense	$	579	$	608	$	1,788	$	1,854

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 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 reviews its equity method investments each reporting period for indications of an other-than-temporary deterioration in value. A deterioration in value of an equity method investment determined to be other-than-temporary is recorded as a current-period impairment charge within (loss) income from investments in unconsolidated affiliates in the consolidated statements of income.

The Company maintains noncontrolling ownership interests in Sagent M&C, LLC (“Sagent”) and defi SOLUTIONS Group, LLC (collectively the “Lending Joint Ventures”), which are accounted for under the equity method. In March 2022, 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 net pre-tax gain of $80 million within (loss) income 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 ~~six~~nine months ended ~~June~~September 30, 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 ~~June~~September 30, 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 ~~$33~~$45 million of aggregate outstanding borrowings on the revolving credit facilities at ~~June~~September 30, 2023. The Company has guaranteed the debt of the Lending Joint Ventures and does not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations (see Note 7)8).

Table of Contents

7. Derivatives and Hedging Instruments

In order to limit exposure to risk, the Company maintains derivative instruments with creditworthy institutions to hedge against changing interest rates and foreign currency rate fluctuations. The Company utilizes forward exchange contracts, fixed-to-fixed cross-currency rate swap contracts and other non-derivative hedging instruments to manage such risk. The Company has designated these instruments as cash flow hedges, net investment hedges, or fair value hedges, as further described below. Derivative instruments maintained by the Company are measured on a recurring basis and are recorded at fair value either as an asset or liability in the consolidated balance sheets (see Note 8).

Cash Flow Hedges

The Company maintains forward exchange contracts, designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee. The notional amount of these derivatives was $396 million and $346 million at September 30, 2023 and December 31, 2022, respectively. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2023, the Company estimates that it will recognize gains of approximately $1 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 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 $119 million and $130 million at September 30, 2023 and December 31, 2022, respectively. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 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

At September 30, 2023, aggregate notional fixed-to-fixed cross-currency rate swaps of 400 million Euros and 614 million Singapore Dollars have been designated as net investment hedges to hedge a portion of the Company’s net investment in certain subsidiaries whose functional currencies are the Euro and Singapore Dollar.

The Company has also designated certain of its Euro- and British Pound-denominated senior notes and Euro commercial paper notes as net investment hedges to hedge a portion of its net investment in certain subsidiaries whose functional currencies are the Euro and the British Pound. On May 24, 2023, in conjunction with the public offering and issuance of the 4.500% Euro-denominated senior notes due in May 2031 (see Note 10), the Company elected to designate such notes as a net investment hedge and simultaneously de-designated its existing net investment hedge election on its 0.375% Euro-denominated senior notes due in July 2023. To mitigate foreign currency exchange exposure on the 0.375% Euro-denominated senior notes, the Company entered into a forward exchange contract, not designated as a hedge, with matching critical terms which settled in July 2023 in conjunction with the maturity of the senior notes.

Table of Contents

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Cross-currency rate swap contracts	$	4	$	2	$	(3)	$	2
Foreign currency-denominated debt	123		265		9		513

The Company recorded income tax impacts of $(42) million and $(89) million during the three months ended September 30, 2023 and 2022, respectively, and $(2) million and $(172) million during the nine months ended September 30, 2023 and 2022, respectively, in other comprehensive income (loss) from the translation of foreign currency-denominated senior notes, commercial paper notes and cross-currency rate swap contracts.

Fair Value Hedge

The Company maintains a fixed-to-fixed cross-currency rate swap contract of 525 million notional British Pounds, designated as a fair value hedge, to mitigate the spot foreign exchange rate risk on the principal amount of its British Pound-denominated 2.250% senior notes due in July 2025. Changes in the fair value of the cross-currency rate swap, along with the offsetting changes in the fair value of the senior notes, attributable to fluctuations in the British Pound/U.S. dollar spot rates are recognized in other expense, net within the consolidated statements of income.

8. Fair Value Measurements

The fair values of cash equivalents, trade accounts receivable, other current assets, settlement assets and obligations, accounts payable, and client deposits approximate their respective carrying values due to the short period of time to maturity. ~~The~~Derivative instruments maintained by the Company maintains forward exchange contracts, certain of which are designated as cash flow hedges, to hedge foreign currency exposure. The Company also maintains cross-currency rate swap contracts designated as: (i) net investment hedges, to hedge a portion of its net investment in certain subsidiaries whose functional currencies are the Euro (see Note ~~12) and (ii) a fair value hedge of the spot foreign exchange rate risk on the principal amount of its British Pound-denominated 2.250% senior notes due in July 2025. These derivative instruments~~7) 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. Contingent consideration related to certain of the Company’s acquisitions (see Note 4) is estimated using the present value of a probability-weighted assessment approach 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.

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

Fair Value

(In millions)

Classification

Fair Value Hierarchy

June 30,
2023

December 31,
2022

(In millions)

Classification

Fair Value Hierarchy

September 30,
2023

December 31,
2022

Assets

Forward exchange contract not designated as a hedge

Prepaid expenses and other current assets

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

Prepaid expenses and other current assets

Level 2

—

Forward exchange contracts designated as cash flow hedges

Other long-term assets

Level 2

—

Liabilities

Cross-currency rate swap contract designated as fair value hedge

Other long-term liabilities

Level 2

—

Cross-currency rate swap contract designated as fair value hedge

Other long-term liabilities

Level 2

—

Forward exchange contracts designated as cash flow hedges

Accounts payable and accrued expenses

Level 2

—

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

—

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 liabilities

Level 2

Cross-currency rate swap contracts designated as net investment 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

Other long-term liabilities

Level 3

Contingent debt guarantee

Other long-term liabilities

Level 3

Table of Contents

Debt

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 ~~$21.1~~$20.7 billion and $19.2 billion at ~~June~~September 30, 2023 and December 31, 2022, respectively, and the carrying value was ~~$22.4~~$22.3 billion and $20.6 billion at ~~June~~September 30, 2023 and December 31, 2022, respectively.

Debt Guarantee Arrangements

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 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~~maturities to April 2027. The Company elected to guarantee this incremental indebtedness, resulting in aggregate guarantees of $520 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.

~~Table of Contents~~

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 ~~$36~~$33 million and $40 million approximates the fair value at ~~June~~September 30, 2023 and December 31, 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 $3$2 million for each of the three months ended ~~June~~September 30, 2023 and 2022, and $5$7 million and $6$8 million during the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively, within other expense, net 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.

Other Non-Financial Assets

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.

8.9. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:


(In millions)	(In millions)	June 30, 2023		December 31, 2022		(In millions)	September 30, 2023		December 31, 2022
Trade accounts payable	Trade accounts payable	$	412	$	652	Trade accounts payable	$	441	$	652
Client deposits	Client deposits	898		871		Client deposits	894		871
Accrued compensation and benefits	Accrued compensation and benefits	247		279		Accrued compensation and benefits	287		279
Accrued taxes	Accrued taxes	103		432		Accrued taxes	241		432

Accrued interest	Accrued interest	275		216		Accrued interest	196		216

Accrued payment network fees	Accrued payment network fees	216		219		Accrued payment network fees	226		219
Operating lease liabilities	Operating lease liabilities	118		124		Operating lease liabilities	115		124
Accrued professional fees	Accrued professional fees	116		108		Accrued professional fees	103		108

Other accrued expenses	Other accrued expenses	974		982		Other accrued expenses	1,087		982
Total	Total	$	3,359	$	3,883	Total	$	3,590	$	3,883

1617

Table of Contents

9.10. Debt

The Company’s debt consisted of the following:


(In millions)	(In millions)	June 30, 2023		December 31, 2022		(In millions)	September 30, 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	$	362	$	198	Foreign lines of credit	$	369	$	198
Finance lease and other financing obligations	Finance lease and other financing obligations	246		270		Finance lease and other financing obligations	280		270
Total short-term and current maturities of long-term debt	Total short-term and current maturities of long-term debt	$	608	$	468	Total short-term and current maturities of long-term debt	$	649	$	468

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

0.375% senior notes due July 2023 (Euro-denominated)	0.375% senior notes due July 2023 (Euro-denominated)	$	546	$	531	0.375% senior notes due July 2023 (Euro-denominated)	$	—	$	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)	664		632		2.250% senior notes due July 2025 (British Pound-denominated)	637		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)	546		531		1.125% senior notes due July 2027 (Euro-denominated)	525		531
5.450% senior notes due March 2028	5.450% senior notes due March 2028	900		—		5.450% senior notes due March 2028	900		—
5.375% senior notes due August 2028						5.375% senior notes due August 2028	700		—
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)	546		531		1.625% senior notes due July 2030 (Euro-denominated)	525		531
4.500% senior notes due May 2031 (Euro-denominated)	4.500% senior notes due May 2031 (Euro-denominated)	873		—		4.500% senior notes due May 2031 (Euro-denominated)	840		—
3.000% senior notes due July 2031 (British Pound-denominated)	3.000% senior notes due July 2031 (British Pound-denominated)	664		632		3.000% senior notes due July 2031 (British Pound-denominated)	637		632
5.600% senior notes due March 2033	5.600% senior notes due March 2033	900		—		5.600% senior notes due March 2033	900		—
5.625% senior notes due August 2033						5.625% senior notes due August 2033	1,300		—
4.400% senior notes due July 2049	4.400% senior notes due July 2049	2,000		2,000		4.400% senior notes due July 2049	2,000		2,000
U.S. dollar commercial paper notes	U.S. dollar commercial paper notes	1,292		2,329		U.S. dollar commercial paper notes	—		2,329
Euro commercial paper notes	Euro commercial paper notes	1,285		1,210		Euro commercial paper notes	1,249		1,210
Revolving credit facility	Revolving credit facility	32		35		Revolving credit facility	—		35

Term loan facility	Term loan facility	—		200		Term loan facility	—		200
Unamortized discount and deferred financing costs	Unamortized discount and deferred financing costs	(129)		(120)		Unamortized discount and deferred financing costs	(151)		(120)
Finance lease and other financing obligations	Finance lease and other financing obligations	576		539		Finance lease and other financing obligations	695		539
Total long-term debt	Total long-term debt	$	22,595	$	20,950	Total long-term debt	$	22,657	$	20,950

The Company was in compliance with all financial debt covenants during the ~~six~~nine months ended ~~June~~September 30, 2023.

Senior Notes

On August 21, 2023, the Company completed the public offering and issuance of $2.0 billion of senior notes, comprised of $700 million aggregate principal amount of 5.375% senior notes due in August 2028 and $1.3 billion aggregate principal amount of 5.625% senior notes due in August 2033. Interest on these senior notes is paid semi-annually. The Company used the net proceeds from these senior notes offerings for general corporate purposes, including the repayment of U.S. dollar commercial paper notes, share repurchases and, in October 2023, the repayment of its 3.800% senior notes.

On May 24, 2023, the Company completed the public offering and issuance of 800 million Euros aggregate principal amount of 4.500% senior notes due in May ~~2031 (the “2031 Euro Senior Notes”).~~2031. Interest on these senior notes is paid annually. The Company used the net proceeds from this senior notes offering for general corporate purposes, including the repayment of U.S. dollar commercial paper notes and, in July 2023, the repayment of ~~the~~its 0.375% Euro-denominated senior notes.

Table of Contents

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 5.450% senior notes due in March 2028 and $900 million aggregate principal amount of 5.600% senior notes due in March 2033. Interest on these senior notes is paid semi-annually. The Company used the net proceeds from these senior notes offerings for general corporate purposes, including the repayment of U.S. dollar commercial paper notes.

~~Table of Contents~~

~~denominated senior notes due in July 2023 and has~~ the intent to refinance ~~the 3.800% senior notes due in October 2023~~or has subsequently refinanced this debt on a long-term basis and the ability to do so under its revolving credit facility.

The indentures governing each of these senior notes contain covenants that, among other matters, limit (i) the Company’s ability to consolidate or merge with or into, or convey, transfer or lease all or substantially all of its properties and assets to, another person, (ii) the Company’s and certain of its subsidiaries’ ability to create or assume liens, and (iii) the Company’s and certain of its subsidiaries’ ability to engage in sale and leaseback transactions. The Company may, at its option, redeem these senior notes, in whole or in part, at any time and from time to time at the applicable redemption price.

Commercial Paper

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. There were no outstanding borrowings under the U.S. dollar program at September 30, 2023. Outstanding borrowings under the U.S. dollar program were ~~$1.3 billion and~~ $2.3 billion at ~~June 30, 2023 and~~ December 31, 2022, ~~respectively,~~ with a weighted average interest ~~rates~~rate of ~~5.337% and~~ 4.818%~~, respectively.~~. Outstanding borrowings under the Euro program were ~~$1.3 billion and~~ $1.2 billion at ~~June~~both September 30, 2023 and December 31, 2022, ~~respectively,~~ with weighted average interest rates of ~~3.467%~~3.880% and 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.

Revolving Credit Facility

The Company maintains a senior unsecured multicurrency revolving credit facility, which matures in June 2027 and provides for a maximum aggregate principal amount of availability of $6.0 billion. 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 the Company’s long-term debt rating in effect from time to time ~~(6.190%~~(6.450% at ~~June~~September 30, 2023).

Foreign Lines of Credit

The Company maintains certain short-term lines of credit and other borrowing arrangements with foreign banks and alliance partners primarily to fund settlement activity associated with operations in Latin America. The Company entered into an annually renewable term loan facility, which was fully funded in April 2023, to fund settlement advance cash payments in Brazil. This term loan ~~fully funded in April 2023,~~ has a notional value of 514 million Brazilian real ($~~106~~102 million USD equivalent) at ~~June~~September 30, 2023 that matures in April 2024 and bears interest at a variable Certificado de Depósito Interbancário (CDI) Rate, plus a specified margin of 1.70% per annum. ~~Weighted-average~~

The following table provides a summary of the outstanding borrowings and weighted average interest rates ~~under these facilities were 52.831%~~of the Company’s foreign lines of credit and ~~30.578%~~other borrowing arrangements by country at ~~June~~September 30, 2023 and December 31, ~~2022, respectively.~~2022:


	Outstanding Borrowings (in millions)				Weighted-Average Interest Rate
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Argentina	$	151	$	68	99.417	%	69.791	%
Brazil	119		61		14.978	%	16.254	%
Uruguay	88		34		11.896	%	12.188	%
Other	11		35		—	%	0.994	%
Total	$	369	$	198	48.428	%	30.578	%

Table of Contents

Term Loan Facility

In June 2023, the Company repaid all remaining outstanding borrowings on its existing term loan facility utilizing proceeds from the issuance of U.S. dollar commercial paper notes and operating cash on hand, thereby terminating such facility. Borrowings under the term loan facility accrued 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 Company’s long-term debt rating in effect from time to time. The variable interest rate on the term loan facility borrowings was 5.639% at December 31, 2022.

~~10.~~11. Redeemable Noncontrolling Interests

The minority partner in one of the Company’s existing merchant alliance joint ventures maintains a redeemable noncontrolling 1% interest which is presented outside of equity and carried at its estimated redemption value. The minority partner is entitled to a contractually determined share of the entity’s income, and the joint venture 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 of cash, certain merchant contracts of the joint venture, or a combination thereof. 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.

~~Table of Contents~~

In 2021, the Company and a joint venture minority partner mutually agreed to terminate one of the Company’s merchant alliance joint ventures effective March 2022. In conjunction with 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 (gain) loss ~~(gain)~~ on sale of 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 ~~six~~nine months ended ~~June~~September 30, 2022.

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


(In millions)	(In millions)	2023		2022		(In millions)	2023		2022
Balance at beginning of period	Balance at beginning of period	$	161	$	278	Balance at beginning of period	$	161	$	278
Distributions paid to redeemable noncontrolling interests	Distributions paid to redeemable noncontrolling interests	(13)		(21)		Distributions paid to redeemable noncontrolling interests	(19)		(28)
Share of income	Share of income	13		15		Share of income	19		22

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	$	161	Balance at end of period	$	161	$	161

~~11.~~

Table of Contents

12. Equity

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


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

Three Months Ended June 30, 2023		Number of Shares		Amount
Three Months Ended September 30, 2023																		Three Months Ended September 30, 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		(In millions)	Common Shares	Treasury Shares	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Noncontrolling Interests		Total Equity
																																			(In millions)	Common Shares	Treasury Shares	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock	Noncontrolling Interests	Total Equity
Balance at March 31, 2023		784	165	$	8	$	22,946	$	(1,054)	$	17,939	$	(9,762)	$	717	$	30,794
Balance at June 30, 2023																		Balance at June 30, 2023	784	173	$	8	$	22,988	$	(900)	$	18,622	$	(10,727)	$	725	$	30,716
Net income (1)	Net income (1)									683				6		689		Net income (1)									952				11		963

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

Other comprehensive income								154						3		157
Acquisition of noncontrolling interest of consolidated subsidiary (3)																		Acquisition of noncontrolling interest of consolidated subsidiary (3)					6								(65)		(59)
Other comprehensive loss																		Other comprehensive loss							(266)						(17)		(283)

Share-based compensation	Share-based compensation					106										106		Share-based compensation					76										76
Shares issued under stock plans	Shares issued under stock plans		(1)			(64)						45				(19)		Shares issued under stock plans					(14)						19				5
Purchases of treasury stock	Purchases of treasury stock		9									(1,010)				(1,010)		Purchases of treasury stock		9									(1,191)				(1,191)

Balance at June 30, 2023		784	173	$	8	$	22,988	$	(900)	$	18,622	$	(10,727)	$	725	$	30,716
Balance at September 30, 2023																		Balance at September 30, 2023	784	182	$	8	$	23,056	$	(1,166)	$	19,574	$	(11,899)	$	652	$	30,225

(1)The total net income presented in equity for the three months ended ~~June~~September 30, 2023 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $6 million not included in equity.

(2)The total distributions presented in equity for the three months ended ~~June~~September 30, 2023 excludes $5$6 million in distributions paid to redeemable noncontrolling interests not included in equity.

~~Table of Contents~~(3)The Company acquired the remaining 49% ownership interest in European Merchant Services B.V., a Netherlands-based merchant acceptance business, during the three months ended September 30, 2023. The Company previously held a majority controlling financial interest in this consolidated subsidiary.


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

Three Months Ended June 30, 2022		Number of Shares		Amount
Three Months Ended September 30, 2022																		Three Months Ended September 30, 2022	Number of Shares		Amount
(In millions)	(In millions)	Common Shares	Treasury Shares	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock				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 March 31, 2022		784	137	$	8	$	22,950	$	(640)	$	15,515	$	(6,561)	$	706	$	31,978
Balance at June 30, 2022																		Balance at June 30, 2022	784	141	$	8	$	23,010	$	(1,005)	$	16,113	$	(7,017)	$	700	$	31,809

Net income (1)	Net income (1)									598				6		604		Net income (1)									481				5		486

Distributions paid to noncontrolling interests (2)	Distributions paid to noncontrolling interests (2)													(1)		(1)		Distributions paid to noncontrolling interests (2)													(1)		(1)
Other comprehensive loss	Other comprehensive loss							(365)						(24)		(389)		Other comprehensive loss							(534)						(48)		(582)

Share-based compensation	Share-based compensation					94										94		Share-based compensation					89										89
Shares issued under stock plans	Shares issued under stock plans		(1)			(34)						44				10		Shares issued under stock plans		(1)			(140)						71				(69)
Purchases of treasury stock	Purchases of treasury stock		5									(500)				(500)		Purchases of treasury stock		8									(750)				(750)

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

Balance at September 30, 2022																		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 three months ended ~~June~~September 30, 2022 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of $5$7 million not included in equity.

(2)The total distributions presented in equity for the three months ended ~~June~~September 30, 2022 excludes $8$7 million in distributions paid to redeemable noncontrolling interests not included in equity.

Fiserv, Inc. Shareholders’ Equity
Six Months Ended
June 30, 2023 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, 2022 784 154 $ 8 $ 23,011 $ (1,189) $ 17,376 $ (8,378) $ 699 $ 31,527
Net income (1)
1,246 12 1,258
Distributions paid to noncontrolling interests (2)
(1) (1)
Other comprehensive income 289 15 304
Share-based compensation 199 199
Shares issued under stock plans (3) (222) 144 (78)
Purchases of treasury stock 22 (2,493) (2,493)
Balance at June 30, 2023 784 173 $ 8 $ 22,988 $ (900) $ 18,622 $ (10,727) $ 725 $ 30,716

Table of Contents



	Fiserv, Inc. Shareholders’ Equity

Nine Months Ended September 30, 2023	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, 2022	784	154	$	8	$	23,011	$	(1,189)	$	17,376	$	(8,378)	$	699	$	31,527
Net income (1)									2,198				23		2,221

Distributions paid to noncontrolling interests (2)													(3)		(3)

Acquisition of noncontrolling interest of consolidated subsidiary (3)					6								(65)		(59)
Other comprehensive income (loss)							23						(2)		21

Share-based compensation					275										275
Shares issued under stock plans		(3)			(236)						163				(73)
Purchases of treasury stock		31									(3,684)				(3,684)

Balance at September 30, 2023	784	182	$	8	$	23,056	$	(1,166)	$	19,574	$	(11,899)	$	652	$	30,225

(1)The total net income presented in equity for the ~~six~~nine months ended ~~June~~September 30, 2023 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of ~~$13~~$19 million not included in equity.

(2)The total distributions presented in equity for the ~~six~~nine months ended ~~June~~September 30, 2023 excludes ~~$13~~$19 million in distributions paid to redeemable noncontrolling interests not included in equity.

~~Table of Contents~~(3)The Company acquired the remaining 49% ownership interest in European Merchant Services B.V., a Netherlands-based merchant acceptance business, during the nine months ended September 30, 2023. The Company previously held a majority controlling financial interest in this consolidated subsidiary.


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

Six Months Ended June 30, 2022		Number of Shares		Amount
Nine Months Ended September 30, 2022																		Nine Months Ended September 30, 2022	Number of Shares		Amount
(In millions)	(In millions)	Common Shares	Treasury Shares	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock				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 December 31, 2021	Balance at December 31, 2021	784	134	$	8	$	22,983	$	(745)	$	14,846	$	(6,140)	$	720	$	31,672	Balance at December 31, 2021	784	134	$	8	$	22,983	$	(745)	$	14,846	$	(6,140)	$	720	$	31,672

Net income (1)	Net income (1)									1,267				9		1,276		Net income (1)									1,748				14		1,762

Distributions paid to noncontrolling interests (2)	Distributions paid to noncontrolling interests (2)													(1)		(1)		Distributions paid to noncontrolling interests (2)													(2)		(2)
Other comprehensive loss	Other comprehensive loss							(260)						(41)		(301)		Other comprehensive loss							(794)						(89)		(883)

Share-based compensation	Share-based compensation					155										155		Share-based compensation					244										244
Shares issued under stock plans	Shares issued under stock plans		(3)			(128)						123				(5)		Shares issued under stock plans		(4)			(268)						194				(74)
Purchases of treasury stock	Purchases of treasury stock		10									(1,000)				(1,000)		Purchases of treasury stock		18									(1,750)				(1,750)
Capital contribution from noncontrolling interest	Capital contribution from noncontrolling interest													13		13		Capital contribution from noncontrolling interest													13		13

Balance at June 30, 2022		784	141	$	8	$	23,010	$	(1,005)	$	16,113	$	(7,017)	$	700	$	31,809

Balance at September 30, 2022																		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 ~~six~~nine months ended ~~June~~September 30, 2022 is different than the amount presented in the consolidated statement of income due to the net income attributable to redeemable noncontrolling interests of ~~$15~~$22 million not included in equity.

(2)The total distributions presented in equity for the ~~six~~nine months ended ~~June~~September 30, 2022 excludes ~~$21~~$28 million in distributions paid to redeemable noncontrolling interests not included in equity.

2122

Table of Contents

~~12.~~13. Accumulated Other Comprehensive Loss

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

(In millions) Derivatives Foreign
Currency
Translation Pension Plans Total
Three Months Ended June 30, 2023
Balance at March 31, 2023 $ (95) $ (939) $ (20) $ (1,054)
Other comprehensive income before reclassifications 1 150 — 151
Amounts reclassified from accumulated other comprehensive loss 3 — — 3
Net current-period other comprehensive income 4 150 — 154
Balance at June 30, 2023 $ (91) $ (789) $ (20) $ (900)
Three Months Ended June 30, 2022
Balance at March 31, 2022 $ (105) $ (572) $ 37 $ (640)
Other comprehensive loss before reclassifications (6) (361) (2) (369)
Amounts reclassified from accumulated other comprehensive loss 4 — — 4
Net current-period other comprehensive loss (2) (361) (2) (365)
Balance at June 30, 2022 $ (107) $ (933) $ 35 $ (1,005)
Six Months Ended June 30, 2023
Balance at December 31, 2022 $ (103) $ (1,064) $ (22) $ (1,189)
Other comprehensive income before reclassifications 6 275 2 283
Amounts reclassified from accumulated other comprehensive loss 6 — — 6
Net current-period other comprehensive income 12 275 2 289
Balance at June 30, 2023 $ (91) $ (789) $ (20) $ (900)
Six Months Ended June 30, 2022
Balance at December 31, 2021 $ (107) $ (676) $ 38 $ (745)
Other comprehensive loss before reclassifications (7) (257) (3) (267)
Amounts reclassified from accumulated other comprehensive loss 7 — — 7
Net current-period other comprehensive loss — (257) (3) (260)
Balance at June 30, 2022 $ (107) $ (933) $ 35 $ (1,005)

~~Cash Flow Hedges~~

The Company maintains forward exchange contracts, designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee (see Note 7). The notional amount of these derivatives was $369 million and $346 million at June 30, 2023 and December 31, 2022, respectively. Based on the amounts recorded in accumulated other comprehensive loss at June 30, 2023, the Company estimates that it will recognize gains of approximately $3 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 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 $123 million and $130 million at June 30, 2023 and December 31, 2022, respectively. Based on the

~~Table of Contents~~

amounts recorded in accumulated other comprehensive loss at June 30, 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 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. At June 30, 2023, aggregate notional cross-currency rate swaps of 400 million Euros 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 certain of its Euro- and British Pound-denominated senior notes and Euro commercial paper notes as net investment hedges to hedge a portion of its net investment in certain subsidiaries whose functional currencies are the Euro and the British Pound.

On May 24, 2023, in conjunction with the public offering and issuance of the 2031 Euro Senior Notes (see Note 9), the Company elected to designate such notes as a net investment hedge and simultaneously de-designated its existing net investment hedge election on its 0.375% Euro-denominated senior notes due in July 2023. To mitigate foreign currency exchange exposure on the 0.375% Euro-denominated senior notes, the Company entered into a forward exchange contract with matching critical terms (see Note 7).

~~The following table outlines the terms of the Company’s Euro cross-currency rate swap contracts at June 30, 2023:~~

Effective Date of Contract Maturity Date of Contract Notional Amount (EUR) Fixed Rate Paid (EUR) Fixed Rate Received (USD)
September 1, 2022 June 1, 2025 80 million 2.096 % 3.85 %
September 15, 2022 July 1, 2026 80 million 1.635 % 3.20 %
October 6, 2022 June 1, 2025 80 million 1.922 % 3.85 %
October 27, 2022 July 1, 2026 80 million 1.458 % 3.20 %
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 income (loss) in the consolidated statements of comprehensive income 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 income (loss) in the consolidated statements of comprehensive income were as follows:

Three Months Ended
June 30, Six Months Ended
June 30,
(In millions) 2023 2022 2023 2022
Cross-currency rate swap contracts $ (5) $ — $ (7) $ —
Foreign currency-denominated debt (50) 181 (114) 248

The Company recorded income tax impacts of $18 million and $(61) million during the three months ended June 30, 2023 and 2022, respectively, and $40 million and $(83) million during the six months ended June 30, 2023 and 2022, respectively, in other comprehensive income (loss) from the translation of foreign currency-denominated senior notes, commercial paper notes and cross-currency rate swap contracts.


(In millions)	Derivatives		Foreign Currency Translation		Pension Plans		Total
Three Months Ended September 30, 2023
Balance at June 30, 2023	$	(91)	$	(789)	$	(20)	$	(900)
Other comprehensive income (loss) before reclassifications	5		(286)		—		(281)
Amounts reclassified from accumulated other comprehensive loss	5		10		—		15
Net current-period other comprehensive loss	10		(276)		—		(266)
Balance at September 30, 2023	$	(81)	$	(1,065)	$	(20)	$	(1,166)

Three Months Ended September 30, 2022
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)

Nine Months Ended September 30, 2023
Balance at December 31, 2022	$	(103)	$	(1,064)	$	(22)	$	(1,189)
Other comprehensive income (loss) before reclassifications	11		(11)		2		2
Amounts reclassified from accumulated other comprehensive loss	11		10		—		21
Net current-period other comprehensive income	22		(1)		2		23
Balance at September 30, 2023	$	(81)	$	(1,065)	$	(20)	$	(1,166)

Nine Months Ended September 30, 2022
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)

~~13.~~14. Share-Based Compensation

The Company recognized ~~$106~~$76 million and ~~$94~~$89 million of share-based compensation expense during the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$199~~$275 million and ~~$155~~$244 million of share-based compensation expense during the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, 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 ~~June~~September 30, 2023, the total remaining unrecognized compensation cost for restricted stock units and awards, performance share units, and unvested stock options, net of estimated forfeitures, of ~~$577~~$461 million is expected to be recognized over a weighted-average period of ~~2.0~~1.9 years.

Table of Contents

A summary of restricted stock unit, restricted stock award and performance share unit activity during the ~~six~~nine months ended ~~June~~September 30, 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, 2022	Units and awards - December 31, 2022	5,530	$	96.88	3,243	$	100.93	Units and awards - December 31, 2022	5,530	$	96.88	3,243	$	100.93

Granted	Granted	2,423	112.99		359	129.68		Granted	2,483	113.32		378	131.31
Forfeited	Forfeited	(239)	100.60		(47)	101.00		Forfeited	(328)	101.96		(51)	101.10
Vested	Vested	(1,983)	98.73		(18)	95.29		Vested	(2,101)	99.10		(104)	101.11
Units and awards - June 30, 2023		5,731	$	102.88	3,537	$	103.66
Units and awards - September 30, 2023								Units and awards - September 30, 2023	5,584	$	103.03	3,466	$	103.97

A summary of stock option activity during the ~~six~~nine months ended ~~June~~September 30, 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 (32) 112.83
Exercised (1,903) 44.02
Stock options outstanding - June 30, 2023 4,401 $ 70.72 4.10 $ 244
Stock options exercisable - June 30, 2023 4,046 $ 67.10 3.84 $ 239


	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	(32)	112.83
Exercised	(1,995)	45.08
Stock options outstanding - September 30, 2023	4,309	$	70.80	3.86	$	182
Stock options exercisable - September 30, 2023	4,006	$	67.67	3.65	$	181

~~14.~~15. Income Taxes

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


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	(In millions)	2023			2022			2023			2022			(In millions)	2023			2022			2023			2022
Income tax provision	Income tax provision	$	181		$	137		$	305		$	235		Income tax provision	$	239		$	147		$	544		$	382
Effective income tax rate	Effective income tax rate	20.7		%	22.2		%	19.2		%	18.2		%	Effective income tax rate	19.8		%	22.5		%	19.5		%	19.7		%

The income tax provision as a percentage of income before income taxes and (loss) income from investments in unconsolidated affiliates was ~~20.7%~~19.8% and ~~22.2%~~22.5% for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~19.2%~~19.5% and ~~18.2%~~19.7% for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. For the three months ended September 30, 2023, the effective income tax rate included tax benefits from subsidiary restructurings and the purchase of transferable renewable energy tax credits.

The effective income tax rate for both the nine months ended September 30, 2023 and 2022 included discrete tax benefits from subsidiary restructurings and equity compensation related tax benefits. The effective income tax rate for the nine months ended September 30, 2023 also included tax benefits from the purchase of transferable renewable energy tax credits.

The Company’s potential liability for unrecognized tax benefits before interest and penalties was approximately $84 million at ~~June~~September 30, 2023. The Company believes it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $7 million over the next twelve months as a result of possible closure of tax audits, audit settlements, and the lapse of the statutes of limitations in various jurisdictions.

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

Table of Contents

~~15.~~16. Shares Used in Computing Net Income Per Share Attributable to Fiserv, Inc.

The computation of shares used in calculating basic and diluted net income per share is as follows:


		Three Months Ended June 30,		Six Months Ended June 30,			Three Months Ended September 30,		Nine Months Ended September 30,
(In millions)	(In millions)	2023	2022	2023	2022	(In millions)	2023	2022	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	615.4	645.2	621.2	648.0	Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - basic	606.2	639.6	616.2	645.2
Common stock equivalents	Common stock equivalents	3.8	5.6	4.1	6.0	Common stock equivalents	4.1	5.4	4.1	5.8
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	619.2	650.8	625.3	654.0	Weighted-average common shares outstanding used for the calculation of net income attributable to Fiserv, Inc. per share - diluted	610.3	645.0	620.3	651.0

For the three months ended ~~June~~September 30, 2023 and 2022, stock options for ~~0.9~~0.1 million and ~~2.2~~1.6 million shares, respectively, were excluded from the calculation of weighted-average outstanding shares - diluted because their impact was anti-dilutive. For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, stock options for ~~1.0~~0.9 million and ~~2.1~~1.8 million shares, respectively, were excluded from the calculation of weighted-average outstanding shares - diluted because their impact was anti-dilutive.

~~16.~~17. Cash Flow Information

Supplemental cash flow information consisted of the following:


		Six Months Ended June 30,					Nine Months Ended September 30,
(In millions)	(In millions)	2023		2022		(In millions)	2023		2022
Interest paid	Interest paid	$	369	$	303	Interest paid	$	703	$	563
Income taxes paid	Income taxes paid	882		399		Income taxes paid	966		596
Treasury stock purchases settled after the balance sheet date	Treasury stock purchases settled after the balance sheet date	3		—		Treasury stock purchases settled after the balance sheet date	6		11
Distribution of nonmonetary assets (see Note 10)		—		111
Distribution of nonmonetary assets (see Note 11)						Distribution of nonmonetary assets (see Note 11)	—		111
Software obtained under financing arrangements	Software obtained under financing arrangements	122		61		Software obtained under financing arrangements	175		59
Right-of-use assets obtained in exchange for lease liabilities - operating leases	Right-of-use assets obtained in exchange for lease liabilities - operating leases	59		98		Right-of-use assets obtained in exchange for lease liabilities - operating leases	69		109
Right-of-use assets obtained in exchange for lease liabilities - finance leases	Right-of-use assets obtained in exchange for lease liabilities - finance leases	93		69		Right-of-use assets obtained in exchange for lease liabilities - finance leases	242		221

~~17.~~18. Commitments and Contingencies

Litigation and Legislative Matters

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 ~~$31~~$29 million and $21 million at ~~June~~September 30, 2023 and December 31, 2022, respectively, 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 ~~$80~~$90 million. In the opinion of management, the liabilities, 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.

In June 2023, a Canadian tax law change related to the Goods and Services Tax / Harmonized Sales Tax (GST/HST) treatment of payment card services was enacted. The Company ~~has~~ estimated its exposure related to this multi-year retroactive tax law change and recognized a pre-tax expense of $27 million within selling, general and administrative expenses in the consolidated statement of income during the ~~three and six~~nine months ended ~~June~~September 30, 2023.

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 $1.2 billion and $1.7 billion at ~~June~~September 30, 2023 and December 31, 2022, respectively.

Table of Contents

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 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.

~~18.~~19. Related Party Transactions

Merchant Alliances

A portion of the Company’s business is conducted through merchant alliances between the Company 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 based on contractual pricing.

To the extent the Company maintains a 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 of, 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 ~~$45~~$44 million and ~~$46~~$47 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$91~~$135 million and ~~$93~~$140 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, 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 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, which governs the Company’s provision of transaction processing services to the alliance. The Company had approximately ~~$36~~$42 million and $43 million of amounts due from unconsolidated merchant alliances included within trade accounts receivable, net in the Company’s consolidated balance sheets at ~~June~~September 30, 2023 and December 31, 2022, respectively.

Joint Venture Transition Services Agreements

Pursuant to certain transition services agreements, the Company provides, at fair value, various administration, business process outsourcing, and technical and data center related services for defined periods to certain joint ventures accounted for under the equity method. Amounts transacted through these agreements totaled $1 million and $5 million during the three months ended ~~June~~September 30, 2023 and 2022, respectively, and $2$4 million and $9$14 million during the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively, and were primarily recognized as processing and services revenue in the consolidated statements of income.

Share Repurchase

~~19.~~On August 7, 2023, the Company entered into a stock purchase agreement with ValueAct Capital Master Fund, L.P., an affiliate of which employed a member of the Company’s board of directors, to repurchase 4.1 million shares of the Company’s common stock for $121.98 per share in a privately negotiated transaction for an aggregate purchase price of $500 million. The repurchase was effected pursuant to an existing repurchase authorization for up to 75.0 million shares of the Company’s common stock approved by the Company’s board of directors on February 22, 2023. The share repurchase was completed on August 8, 2023, and the fair value of the repurchased shares of Company common stock was recorded to treasury stock during the three months ended September 30, 2023.

Table of Contents

20. 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 merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Clover®, the Company’s cloud-based POS and integrated commerce operating system for small and mid-sized businesses and independent software vendors; and CaratSM, the Company’s 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~~check 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

~~Table of Contents~~

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 and public sector 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,~~services; security and fraud protection ~~products,~~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 the Company’s other segments.

Corporate and Other supports the reportable segments described above, and consists of amortization of acquisition-related intangible assets, unallocated corporate expenses and other activities that are not considered when management evaluates segment performance, such as gains or losses on sales of businesses, certain assets or ~~investments,~~investments; costs associated with acquisition and divestiture ~~activity,~~activity; certain ~~transition~~ services revenue associated with various ~~dispositions,~~dispositions; and the Company’s Output Solutions postage reimbursements.

Table of Contents

Operating results for each segment were as follows:


		Reportable Segments											Reportable Segments
(In millions)	(In millions)	Acceptance		Fintech		Payments		Corporate and Other		Total		(In millions)	Acceptance		Fintech		Payments		Corporate and Other		Total
Three Months Ended June 30, 2023
Three Months Ended September 30, 2023												Three Months Ended September 30, 2023
Processing and services revenue	Processing and services revenue	$	1,808	$	742	$	1,367	$	7	$	3,924	Processing and services revenue	$	1,832	$	741	$	1,430	$	5	$	4,008
Product revenue	Product revenue	257		42		278		255		832		Product revenue	274		54		274		263		865
Total revenue	Total revenue	$	2,065	$	784	$	1,645	$	262	$	4,756	Total revenue	$	2,106	$	795	$	1,704	$	268	$	4,873
Operating income (loss)	Operating income (loss)	$	718	$	285	$	777	$	(649)	$	1,131	Operating income (loss)	$	757	$	291	$	827	$	(372)	$	1,503

Three Months Ended June 30, 2022
Three Months Ended September 30, 2022												Three Months Ended September 30, 2022
Processing and services revenue	Processing and services revenue	$	1,668	$	760	$	1,262	$	6	$	3,696	Processing and services revenue	$	1,603	$	737	$	1,333	$	5	$	3,678
Product revenue	Product revenue	233		43		256		222		754		Product revenue	275		29		284		252		840
Total revenue	Total revenue	$	1,901	$	803	$	1,518	$	228	$	4,450	Total revenue	$	1,878	$	766	$	1,617	$	257	$	4,518
Operating income (loss)	Operating income (loss)	$	593	$	281	$	662	$	(676)	$	860	Operating income (loss)	$	610	$	261	$	738	$	(754)	$	855

Six Months Ended June 30, 2023
Nine Months Ended September 30, 2023												Nine Months Ended September 30, 2023
Processing and services revenue	Processing and services revenue	$	3,395	$	1,493	$	2,696	$	13	$	7,597	Processing and services revenue	$	5,227	$	2,234	$	4,126	$	18	$	11,605
Product revenue	Product revenue	517		83		578		528		1,706		Product revenue	791		137		852		791		2,571
Total revenue	Total revenue	$	3,912	$	1,576	$	3,274	$	541	$	9,303	Total revenue	$	6,018	$	2,371	$	4,978	$	809	$	14,176
Operating income (loss)	Operating income (loss)	$	1,280	$	565	$	1,488	$	(1,268)	$	2,065	Operating income (loss)	$	2,037	$	856	$	2,315	$	(1,640)	$	3,568

Six Months Ended June 30, 2022
Nine Months Ended September 30, 2022												Nine Months Ended September 30, 2022
Processing and services revenue	Processing and services revenue	$	3,078	$	1,495	$	2,477	$	10	$	7,060	Processing and services revenue	$	4,681	$	2,232	$	3,810	$	15	$	10,738
Product revenue	Product revenue	476		86		503		463		1,528		Product revenue	751		115		787		715		2,368
Total revenue	Total revenue	$	3,554	$	1,581	$	2,980	$	473	$	8,588	Total revenue	$	5,432	$	2,347	$	4,597	$	730	$	13,106
Operating income (loss)	Operating income (loss)	$	1,063	$	556	$	1,280	$	(1,193)	$	1,706	Operating income (loss)	$	1,673	$	817	$	2,018	$	(1,947)	$	2,561

2728

Table of Contents

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, outlook, 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, could cause actual results to differ materially from our current expectations. The factors that may affect our results include, among others, the 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 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; changes in local, regional, national and international economic or political conditions, including those resulting from heightened inflation, rising interest rates, a recession, bank failures, or intensified international hostilities, and the impact they may have on us and our employees, clients, vendors, supply chain, operations and sales; 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 identified in "Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 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 products and 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, 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 ~~six~~nine months ended ~~June~~September 30, 2023 to the comparable period in 2022.

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

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 institutions and corporate clients. We provide account processing and

2829

Table of Contents

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. 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 and serve merchants of all sizes 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 integrated operating system for large businesses. We distribute the products and services in the 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 Fintech segment businesses also provide digital banking, financial and risk management, professional services and consulting, ~~item~~check 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 and public sector clients with the products and services required to process digital payment transactions. This includes card transactions such as debit, credit and prepaid card processing and services; a range of network services; security and fraud protection products; and card production and print services. In addition, the 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 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; costs associated with acquisition and divestiture activity; certain services revenue associated with various dispositions; and our Output Solutions postage reimbursements.

Acquisitions and Dispositions

We frequently review our businesses to ensure we have the necessary 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 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.

Acquisitions of Businesses

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.

2930

Table of Contents

(“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. On June 1, 2022, we acquired The LR2 Group, LLC (“City POS”), an ISO that promotes payment processing services and facilitates the sale of POS equipment for merchants. City POS is included within the Acceptance segment and expands our merchant services business. On April 1, 2022, we acquired athe remaining majority controlling 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 $994 million, net of $28 million of acquired cash, and including earn-out provisions estimated at a fair value of $6 million.

Dispositions of Businesses

~~In June~~On July 25, 2023, we ~~entered into an agreement to sell~~sold our financial reconciliation ~~business. The transaction closed on July 25, 2023,~~business, which was reported within the Fintech segment, for ~~net~~ cash proceeds of ~~approximately $230~~$232 million, subject to ~~customary~~final net working capital adjustments. We ~~expect to recognize~~recognized a pre-tax gain of $177 million on the sale ~~of approximately $160 million. The financial reconciliation business was reported within our Fintech segment.~~during the three months ended September 30, 2023.

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. Fiserv Costa Rica, S.A. and SIS were reported primarily within ~~our~~the Fintech segment. On September 30, 2022, we sold our Korea operations, which were reported ~~in our~~within the Acceptance segment. We sold these operations in 2022 for total consideration of $99 million and recognized an aggregate net pre-tax loss on the sales of ~~$83~~$76 million. During the first ~~six~~nine months of 2023, we recognized a pre-tax loss of $3 million associated with final working capital adjustments related to the disposition of Fiserv Costa Rica, S.A. ~~These divestitures were~~

Other Transactions

On September 25, 2023, we acquired the ~~result of~~remaining 49% ownership interest in European Merchant Services B.V., a ~~strategic review of our~~Netherlands-based merchant acceptance business, ~~portfolio.~~for $56 million. We previously held a majority controlling financial interest in this subsidiary, which continues to be consolidated and reported within the Acceptance segment.

~~In 2021,~~Effective March 2022, we mutually agreed with a minority partner to terminate one of our merchant alliance joint ~~ventures effective March 2022.~~ventures. 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 $175 million, resulting in the recognition of a pre-tax gain of $147 million induring the first ~~six~~nine months of 2022.

Industry Trends

The global payments landscape continues to evolve, with rapidly advancing technologies and a steady expansion of digital payments, e-commerce and real-time payments infrastructure. Because of this growth, competition also continues to 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 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 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 systems to streamline the complexity. Furthermore, merchants can now search, discover, compare, purchase and even install a new system through direct, digital-only experiences. This direct, digital-only channel is a source of new merchant acquisition opportunities, especially with respect to smaller merchants.

Additionally, there are numerous software-as-a-service (“SaaS”) solution providers in the industry, many of which have chosen to integrate merchant acquiring into their software as a way to ~~further monetize their~~generate revenue from existing client relationships. Such providers are 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 financial and non-financial institutions of all sizes, gives us a solid foundation for growth.

Table of Contents

Financial Institutions and Other Financial Technology Providers

Financial 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

~~Table of Contents~~

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 retain customers, generate ~~incremental~~ revenue, comply with regulations and enhance operating efficiency. In addition, the focus on the customer experience, including through mobile and 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.

The number of financial institutions in the U.S. has declined at a relatively steady rate, 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 depending on the level of financial institution merger activity and whether our clients are involved. 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

Global macroeconomic conditions, including rising interest rates, inflation, bank failures, disruptions in the global supply chain, the effects of ~~the ongoing conflict between Russia and Ukraine,~~international hostilities and regulations restricting trade or impacting our ability to offer products or services, could have a material adverse effect on our business, results of operations and financial condition. While recent bank failures ~~have~~ created uncertainty in the global financial markets, they did not have a material impact on our operating results. However, future bank failures could impact our receivable collections and cash flows or affect our ability to find merchant alliance partners. In addition, in recent years, we have 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 may experience difficulty procuring those components and inputs in the future on a timely basis or at historical prices. 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.

In addition, our operating results 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, British pound sterling and Argentine peso. The strengthening of the U.S. dollar against certain foreign currencies in countries in which we operate would negatively impact our revenue and earnings. We also have exposure to risks related to currency devaluation in certain countries, which may negatively impact our international operating results if there is a prolonged devaluation of local currencies relative to the U.S. dollar or if the economic conditions in these countries decline. While the majority of our revenue is earned domestically, we continually monitor the foreign exchange rate environment in an effort to ~~help mitigate~~manage 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 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, 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

Table of Contents

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 identifiable 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,

~~Table of Contents~~

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 critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 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 June 30,													Three Months Ended September 30,
		2023		2022		Percentage of Revenue (1)				Increase (Decrease)					2023		2022		Percentage of Revenue (1)				Increase (Decrease)
(In millions)	(In millions)					2023		2022		$		%		(In millions)					2023		2022		$		%
Revenue:	Revenue:													Revenue:
Processing and services	Processing and services	$	3,924	$	3,696	82.5	%	83.1	%	$	228	6	%	Processing and services	$	4,008	$	3,678	82.2	%	81.4	%	$	330	9	%
Product	Product	832		754		17.5	%	16.9	%	78		10	%	Product	865		840		17.8	%	18.6	%	25		3	%
Total revenue	Total revenue	4,756		4,450		100.0	%	100.0	%	306		7	%	Total revenue	4,873		4,518		100.0	%	100.0	%	355		8	%
Expenses:	Expenses:													Expenses:
Cost of processing and services	Cost of processing and services	1,351		1,502		34.4	%	40.6	%	(151)		(10)	%	Cost of processing and services	1,311		1,443		32.7	%	39.2	%	(132)		(9)	%
Cost of product	Cost of product	578		542		69.5	%	71.9	%	36		7	%	Cost of product	583		553		67.4	%	65.8	%	30		5	%
Sub-total	Sub-total	1,929		2,044		40.6	%	45.9	%	(115)		(6)	%	Sub-total	1,894		1,996		38.9	%	44.2	%	(102)		(5)	%
Selling, general and administrative	Selling, general and administrative	1,696		1,546		35.7	%	34.7	%	150		10	%	Selling, general and administrative	1,652		1,547		33.9	%	34.2	%	105		7	%

Net (gain) loss on sale of businesses and other assets														Net (gain) loss on sale of businesses and other assets	(176)		120		(3.6)	%	2.7	%	(296)		n/m
Total expenses	Total expenses	3,625		3,590		76.2	%	80.7	%	35		1	%	Total expenses	3,370		3,663		69.2	%	81.1	%	(293)		(8)	%
Operating income	Operating income	1,131		860		23.8	%	19.3	%	271		32	%	Operating income	1,503		855		30.8	%	18.9	%	648		76	%
Interest expense, net	Interest expense, net	(232)		(176)		(4.9)	%	(4.0)	%	56		32	%	Interest expense, net	(258)		(190)		(5.3)	%	(4.2)	%	68		36	%

Other expense, net	Other expense, net	(26)		(66)		(0.5)	%	(1.5)	%	(40)		(61)	%	Other expense, net	(35)		(13)		(0.7)	%	(0.3)	%	22		n/m
Income before income taxes and income from investments in unconsolidated affiliates		873		618		18.4	%	13.9	%	255		41	%
Income before income taxes and loss from investments in unconsolidated affiliates														Income before income taxes and loss from investments in unconsolidated affiliates	1,210		652		24.8	%	14.4	%	558		86	%
Income tax provision	Income tax provision	(181)		(137)		(3.8)	%	(3.1)	%	44		32	%	Income tax provision	(239)		(147)		(4.9)	%	(3.3)	%	92		63	%
Income from investments in unconsolidated affiliates		3		128		0.1	%	2.9	%	(125)		(98)	%
Loss from investments in unconsolidated affiliates														Loss from investments in unconsolidated affiliates	(2)		(12)		—	%	(0.3)	%	(10)		(83)	%
Net income	Net income	695		609		14.6	%	13.7	%	86		14	%	Net income	969		493		19.9	%	10.9	%	476		97	%
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	12		11		0.3	%	0.2	%	1		9	%	Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	17		12		0.3	%	0.3	%	5		42	%
Net income attributable to Fiserv, Inc.	Net income attributable to Fiserv, Inc.	$	683	$	598	14.4	%	13.4	%	$	85	14	%	Net income attributable to Fiserv, Inc.	$	952	$	481	19.5	%	10.6	%	$	471	98	%

(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.

3233

Table of Contents


		Six Months Ended June 30,													Nine Months Ended September 30,
		2023		2022		Percentage of Revenue (1)				Increase (Decrease)					2023		2022		Percentage of Revenue (1)				Increase (Decrease)
(In millions)	(In millions)					2023		2022		$		%		(In millions)					2023		2022		$		%
Revenue:	Revenue:													Revenue:
Processing and services	Processing and services	$	7,597	$	7,060	81.7	%	82.2	%	$	537	8	%	Processing and services	$	11,605	$	10,738	81.9	%	81.9	%	$	867	8	%
Product	Product	1,706		1,528		18.3	%	17.8	%	178		12	%	Product	2,571		2,368		18.1	%	18.1	%	203		9	%
Total revenue	Total revenue	9,303		8,588		100.0	%	100.0	%	715		8	%	Total revenue	14,176		13,106		100.0	%	100.0	%	1,070		8	%
Expenses:	Expenses:													Expenses:
Cost of processing and services	Cost of processing and services	2,756		2,938		36.3	%	41.6	%	(182)		(6)	%	Cost of processing and services	4,067		4,381		35.0	%	40.8	%	(314)		(7)	%
Cost of product	Cost of product	1,178		1,078		69.1	%	70.5	%	100		9	%	Cost of product	1,761		1,631		68.5	%	68.9	%	130		8	%
Sub-total	Sub-total	3,934		4,016		42.3	%	46.8	%	(82)		(2)	%	Sub-total	5,828		6,012		41.1	%	45.9	%	(184)		(3)	%
Selling, general and administrative	Selling, general and administrative	3,300		3,013		35.5	%	35.1	%	287		10	%	Selling, general and administrative	4,952		4,560		34.9	%	34.8	%	392		9	%
Net loss (gain) on sale of businesses and other assets		4		(147)		—	%	(1.7)	%	151		n/m
Net gain on sale of businesses and other assets														Net gain on sale of businesses and other assets	(172)		(27)		(1.2)	%	(0.2)	%	(145)		n/m
Total expenses	Total expenses	7,238		6,882		77.8	%	80.1	%	356		5	%	Total expenses	10,608		10,545		74.8	%	80.5	%	63		1	%
Operating income	Operating income	2,065		1,706		22.2	%	19.9	%	359		21	%	Operating income	3,568		2,561		25.2	%	19.5	%	1,007		39	%
Interest expense, net	Interest expense, net	(434)		(344)		(4.7)	%	(4.0)	%	90		26	%	Interest expense, net	(692)		(534)		(4.9)	%	(4.1)	%	158		30	%

Other expense, net	Other expense, net	(46)		(70)		(0.5)	%	(0.8)	%	(24)		(34)	%	Other expense, net	(81)		(83)		(0.6)	%	(0.6)	%	(2)		(2)	%
Income before income taxes and (loss) income from investments in unconsolidated affiliates	Income before income taxes and (loss) income from investments in unconsolidated affiliates	1,585		1,292		17.0	%	15.0	%	293		23	%	Income before income taxes and (loss) income from investments in unconsolidated affiliates	2,795		1,944		19.7	%	14.8	%	851		44	%
Income tax provision	Income tax provision	(305)		(235)		(3.3)	%	(2.7)	%	70		30	%	Income tax provision	(544)		(382)		(3.8)	%	(2.9)	%	162		42	%
(Loss) income from investments in unconsolidated affiliates	(Loss) income from investments in unconsolidated affiliates	(9)		234		(0.1)	%	2.7	%	(243)		n/m		(Loss) income from investments in unconsolidated affiliates	(11)		222		(0.1)	%	1.7	%	(233)		n/m
Net income	Net income	1,271		1,291		13.7	%	15.0	%	(20)		(2)	%	Net income	2,240		1,784		15.8	%	13.6	%	456		26	%
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	25		24		0.3	%	0.3	%	1		4	%	Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests	42		36		0.3	%	0.3	%	6		17	%
Net income attributable to Fiserv, Inc.	Net income attributable to Fiserv, Inc.	$	1,246	$	1,267	13.4	%	14.8	%	$	(21)	(2)	%	Net income attributable to Fiserv, Inc.	$	2,198	$	1,748	15.5	%	13.3	%	$	450	26	%


		Three Months Ended June 30,															Three Months Ended September 30,
(In millions)	(In millions)	Acceptance			Fintech			Payments			Corporate and Other		Total			(In millions)	Acceptance			Fintech			Payments			Corporate and Other		Total
Total revenue:	Total revenue:															Total revenue:
2023	2023	$	2,065		$	784		$	1,645		$	262	$	4,756		2023	$	2,106		$	795		$	1,704		$	268	$	4,873
2022	2022	1,901			803			1,518			228		4,450			2022	1,878			766			1,617			257		4,518
Revenue growth (decline)		$	164		$	(19)		$	127		$	34	$	306
Revenue growth (decline) percentage		9		%	(2)		%	8		%			7		%
Revenue growth																Revenue growth	$	228		$	29		$	87		$	11	$	355
Revenue growth percentage																Revenue growth percentage	12		%	4		%	5		%			8		%
Operating income (loss):	Operating income (loss):															Operating income (loss):
2023	2023	$	718		$	285		$	777		$	(649)	$	1,131		2023	$	757		$	291		$	827		$	(372)	$	1,503
2022	2022	593			281			662			(676)		860			2022	610			261			738			(754)		855
Operating income growth	Operating income growth	$	125		$	4		$	115		$	27	$	271		Operating income growth	$	147		$	30		$	89		$	382	$	648
Operating income growth percentage	Operating income growth percentage	21		%	1		%	17		%			32		%	Operating income growth percentage	24		%	11		%	12		%			76		%
Operating margin:	Operating margin:															Operating margin:
2023	2023	34.7		%	36.3		%	47.3		%			23.8		%	2023	35.9		%	36.7		%	48.5		%			30.8		%
2022	2022	31.2		%	35.0		%	43.6		%			19.3		%	2022	32.4		%	34.1		%	45.6		%			18.9		%
Operating margin growth (1)	Operating margin growth (1)	350		bps	130		bps	370		bps			450		bps	Operating margin growth (1)	350		bps	260		bps	290		bps			1,190		bps

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

3334

Table of Contents


		Six Months Ended June 30,															Nine Months Ended September 30,
(In millions)	(In millions)	Acceptance			Fintech			Payments			Corporate and Other		Total			(In millions)	Acceptance			Fintech			Payments			Corporate and Other		Total
Total revenue:	Total revenue:															Total revenue:
2023	2023	$	3,912		$	1,576		$	3,274		$	541	$	9,303		2023	$	6,018		$	2,371		$	4,978		$	809	$	14,176
2022	2022	3,554			1,581			2,980			473		8,588			2022	5,432			2,347			4,597			730		13,106
Revenue growth (decline)		$	358		$	(5)		$	294		$	68	$	715
Revenue growth																Revenue growth	$	586		$	24		$	381		$	79	$	1,070
Revenue growth percentage	Revenue growth percentage	10		%	—		%	10		%			8		%	Revenue growth percentage	11		%	1		%	8		%			8		%
Operating income (loss):	Operating income (loss):															Operating income (loss):
2023	2023	$	1,280		$	565		$	1,488		$	(1,268)	$	2,065		2023	$	2,037		$	856		$	2,315		$	(1,640)	$	3,568
2022	2022	1,063			556			1,280			(1,193)		1,706			2022	1,673			817			2,018			(1,947)		2,561
Operating income growth (decline)		$	217		$	9		$	208		$	(75)	$	359
Operating income growth																Operating income growth	$	364		$	39		$	297		$	307	$	1,007
Operating income growth percentage	Operating income growth percentage	20		%	2		%	16		%			21		%	Operating income growth percentage	22		%	5		%	15		%			39		%
Operating margin:	Operating margin:															Operating margin:
2023	2023	32.7		%	35.8		%	45.5		%			22.2		%	2023	33.8		%	36.1		%	46.5		%			25.2		%
2022	2022	29.9		%	35.2		%	42.9		%			19.9		%	2022	30.8		%	34.8		%	43.9		%			19.5		%
Operating margin growth (1)	Operating margin growth (1)	280		bps	60		bps	260		bps			230		bps	Operating margin growth (1)	300		bps	130		bps	260		bps			570		bps

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

Operating margin percentages are calculated using actual, unrounded amounts.

Total Revenue

Total revenue increased ~~$306~~$355 million, or 7%8%, in the ~~second~~third quarter of 2023 and ~~$715~~$1,070 million, or 8%, in the first ~~six~~nine months of 2023 compared to 2022. The revenue increase was primarily driven by higher global processing revenue, ~~and product sales across all of our business segments,~~ partially offset by a 4% and 3% decrease due to foreign currency exchange rate fluctuations in ~~both~~ the ~~second~~third quarter and first ~~six~~nine months of ~~2023.~~2023, respectively.

Revenue in our Acceptance segment increased ~~$164~~$228 million, or 9%12%, in the ~~second~~third quarter of 2023 and ~~$358~~$586 million, or ~~10%~~11%, in the first ~~six~~nine months of 2023 compared to 2022. The revenue increase in both the third quarter and first nine months of 2023 was driven by higher global merchant acquiring payment volumes, ~~in the second quarter and first six months of 2023, including in Latin America.~~primarily within our international operations. The revenue increase also includes contributions from our Clover and Carat operating systems and the expansion of our merchant relationships through value-added services. Acceptance segment revenue growth was partially offset by aan 8% and 6% ~~and 5% revenue~~ decrease due to foreign currency exchange rate fluctuations in the ~~second~~third quarter and first ~~six~~nine months of 2023, respectively.

Revenue in our Fintech segment ~~decreased $19~~increased $29 million, or 2%4%, in the ~~second~~third quarter of 2023 and ~~was flat~~$24 million, or 1%, in the first ~~six~~nine months of 2023 compared to 2022. The revenue ~~decrease~~increase was primarily driven by higher processing revenue of 2% in both the third quarter and first nine months of 2023. Additionally, an increase in license revenue contributed 2% to Fintech segment revenue growth in the ~~second~~third quarter of 2023, ~~was primarily driven by~~while a decrease in termination fee ~~revenue. The~~revenue slightly offset growth in the first ~~six~~nine months of ~~2023 included a 2% increase in processing revenue.~~2023.

Revenue in our Payments segment increased ~~$127~~$87 million, or 5%, in the third quarter of 2023 and $381 million, or 8%, in the ~~second quarter of 2023 and $294 million, or 10%, in the~~ first ~~six~~nine months of 2023 compared to 2022. In the ~~second~~third quarter and first ~~six~~nine months of 2023, our debit processing business contributed 2%1% and 3%2%, respectively, to Payments segment revenue growth, primarily driven by an increase in debit ~~transactions; our Output Solutions business~~transactions. Our credit processing businesses contributed 2%1% to Payments segment revenue growth in both the ~~second~~third quarter and first ~~six~~nine months of 2023, primarily driven by ~~increased volumes; and our credit processing business contributed 2% in both the second quarter and first six months of 2023, primarily driven by new business onboarding and~~ an increase in active accounts. ~~The remaining~~Our Zelle® business also contributed 1% to Payments segment revenue growth ~~was spread across our various other~~in both the third quarter and first nine months of 2023, driven by an increase in transactions. Additionally, Payments segment ~~businesses.~~revenue growth includes an increase in termination fee revenue in the third quarter and first nine months of 2023.

Revenue at Corporate and Other increased ~~$34~~$11 million, or ~~15%~~4%, in the ~~second~~third quarter of 2023 and ~~$68~~$79 million, or ~~14%~~11%, in the first ~~six~~nine months of 2023 compared to 2022, primarily due to increased postage revenue.

Total Expenses

Total expenses decreased $293 million, or 8%, in the third quarter of 2023 and increased ~~$35~~$63 million, or 1%, in the ~~second quarter of 2023 and $356 million, or 5%, in the~~ first ~~six~~nine months of 2023 compared to 2022. Total expenses as a percentage of total revenue decreased ~~450~~1,190 basis points to ~~76.2%~~69.2% in the ~~second~~

Table of Contents

third quarter of 2023 and ~~230~~decreased 570 basis points to ~~77.8%~~74.8% in the first ~~six~~nine months of 2023 compared to 2022. Total expenses as a percentage of total revenue were favorably impacted in the ~~second~~third quarter and first ~~six~~nine months of 2023 by a reduction in amortization of acquisition-related intangible assets of approximately 90110 basis points and 100 basis points in the third quarter and first nine months of 2023, respectively. Total expenses as a

~~Table of Contents~~

percentage of total revenue were also favorably impacted by operating leverage and a reduction in severance costs of approximately 6030 basis points and 50 basis points in ~~severance costs in both~~ the ~~second~~third quarter and first ~~six~~nine months of ~~2023.~~2023, respectively. The third quarter of 2023 also includes a $177 million pre-tax gain on the sale of our financial reconciliation business.

Cost of processing and services as a percentage of processing and services revenue decreased to ~~34.4%~~32.7% in the ~~second~~third quarter of 2023 compared to ~~40.6%~~39.2% in the ~~second~~third quarter of 2022 and decreased to ~~36.3%~~35.0% in the first ~~six~~nine months of 2023 compared to ~~41.6%~~40.8% in the first ~~six~~nine months of 2022. Cost of processing and services as a percentage of processing and services revenue was favorably impacted by strong operating leverage accompanying scalable revenue growth ~~along with approximately 50 basis points from decreased severance costs in both the second quarter~~ and ~~first six months of 2023.~~expense management initiatives.

Cost of product as a percentage of product revenue ~~decreased~~increased to ~~69.5%~~67.4% in the ~~second~~third quarter of 2023 compared to ~~71.9%~~65.8% in the ~~second~~third quarter of 2022 and decreased slightly to ~~69.1%~~68.5% in the first ~~six~~nine months of 2023 compared to ~~70.5%~~68.9% in the first ~~six~~nine months of 2022. The cost of product as a percentage of product revenue ~~improved~~ in the ~~second~~third quarter ~~and first six months~~ of 2023 ~~as a result of~~was impacted by revenue mix, including ~~increased~~license fee and hardware revenue.

Selling, general and administrative expenses as a percentage of total revenue ~~increased~~decreased to ~~35.7%~~33.9% in the ~~second~~third quarter of 2023 compared to ~~34.7%~~34.2% in the ~~second~~third quarter of 2022 and increased slightly to ~~35.5%~~34.9% in the first ~~six~~nine months of 2023 compared to ~~35.1%~~34.8% in the first ~~six~~nine months of 2022. ~~The increase in selling,~~Selling, general and administrative expenses as a percentage of total revenue ~~in the second quarter and first six months of 2023 was due to increased personnel costs, including share-based compensation and commission costs, partially offset by~~includes a reduction in amortization of acquisition-related intangible ~~assets.~~assets of approximately 90 basis points in both the third quarter and first nine months of 2023. Selling, general and administrative expenses as a percentage of total revenue also includes a reduction of acquisition and integration related expenses of approximately 50 basis points in the third quarter of 2023. This impact was offset by an increase in personnel costs, including share-based compensation in both the third quarter and first nine months of 2023.

The net gain on sale of businesses and other assets in the third quarter and first ~~six~~nine months of 2023 includes a $177 million pre-tax gain from the sale of our financial reconciliation business. The third quarter of 2022 included a $120 million pre-tax loss from the sale of our Korea operations, offset by 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.~~ventures in the first nine months of 2022.

Operating Income and Operating Margin

Total operating income increased ~~$271~~$648 million, or ~~32%~~76%, in the ~~second~~third quarter of 2023 and increased ~~$359~~$1,007 million, or ~~21%~~39%, in the first ~~six~~nine months of 2023 compared to 2022. Total operating margin increased ~~450~~1,190 basis points to ~~23.8%~~30.8% in the ~~second~~third quarter of 2023 and increased ~~230~~570 basis points to ~~22.2%~~25.2% in the first ~~six~~nine months of 2023 compared to 2022. Total operating income and total operating margin benefited from scalable revenue growth in the ~~second~~third quarter and first ~~six~~nine months of 2023, along with a reduction in amortization of acquisition related intangible ~~assets.~~assets and severance costs. Total operating margin in the third quarter and first ~~six~~nine months of ~~2022~~2023 was also favorably impacted by a ~~$147~~$177 million pre-tax gain from the sale of ~~certain merchant contracts in conjunction with the termination of one of~~ our ~~merchant alliance joint ventures.~~financial reconciliation business.

Operating income in our Acceptance segment increased ~~$125~~$147 million, or ~~21%~~24%, in the ~~second~~third quarter of 2023 and increased ~~$217~~$364 million, or ~~20%~~22%, in the first ~~six~~nine months of 2023 compared to 2022. Operating margin increased 350 basis points to ~~34.7%~~35.9% in the ~~second~~third quarter of 2023 and ~~280~~300 basis points to ~~32.7%~~33.8% in the first ~~six~~nine months of 2023 compared to 2022. Operating income and operating margin growth in our Acceptance segment was primarily due to operating leverage.

Operating income in our Fintech segment increased $4$30 million, or 1%11%, in the ~~second~~third quarter of 2023 and increased $9$39 million, or 2%5%, in the first ~~six~~nine months of 2023 compared to 2022. Operating margin increased ~~130~~260 basis points to ~~36.3%~~36.7% in the ~~second~~third quarter of 2023 and increased 60130 basis points to ~~35.8%~~36.1% in the first ~~six~~nine months of 2023 compared to 2022. Operating income and operating margin growth in our Fintech segment was primarily due to operating leverage and expense management initiatives. Fintech segment operating income and operating margin were also favorably impacted from an increase in license fee revenue in the third quarter of 2023.

Operating income in our Payments segment increased ~~$115~~$89 million, or ~~17%~~12%, in the ~~second~~third quarter of 2023 and increased ~~$208~~$297 million, or ~~16%~~15%, in the first ~~six~~nine months of 2023 compared to 2022. Operating margin increased ~~370~~290 basis points to ~~47.3%~~48.5% in the ~~second~~third quarter of 2023 and increased 260 basis points to ~~45.5%~~46.5% in the first ~~six~~nine months of 2023 compared to 2022. Payments segment operating income and operating margin growth in the ~~second~~third quarter and first ~~six~~nine months of 2023 was primarily due to scalable revenue growth from our debit and credit processing ~~businesses~~businesses. Operating income and ~~productivity.~~operating margin growth in our Payments segment was also favorably impacted by an increase in termination fee revenue in the third quarter and first nine months of 2023.

Table of Contents

The operating loss in Corporate and Other decreased ~~$27~~$382 million in the ~~second~~third quarter of 2023 and ~~increased $75~~decreased $307 million in the first ~~six~~nine months of 2023 compared to 2022. The operating loss in the third quarter and first ~~six~~nine months of 2023 included a $177 million pre-tax gain on the sale of our financial reconciliation business. The operating loss in the third quarter of 2022 included a $120 million pre-tax loss from the sale of our Korea operations, offset by 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.~~ventures in the first nine months of 2022. The operating loss in the third quarter and first nine months of 2023 was also favorably impacted by a reduction of ~~$41~~$54 million and ~~$89~~$143 million in amortization of acquisition related intangible assets, respectively. The operating loss was also favorably impacted by a reduction of $20 million and $82 million in severance costs in the ~~second~~third quarter and first ~~six~~nine months of 2023, respectively.

Interest Expense, Net

Interest expense, net increased ~~$56~~$68 million, or ~~32%~~36%, in the ~~second~~third quarter of 2023 compared to 2022 and ~~increased $90~~$158 million, or ~~26%~~30%, in the first ~~six~~nine months of 2023 compared to 2022 due to ~~higher interest rates on our variable rate debt, as well as~~ our public offering and issuance of $1.8 billion, 800 million Euros and $2.0 billion of higher fixed-rate senior notes in March 2023, ~~800 million Euros of fixed-rate senior notes in~~ May 2023 and August 2023, respectively, as well as increased ~~borrowing~~variable rate borrowings associated with our settlement advance cash program in Latin America.

~~Table of Contents~~

Other Expense, Net

Other expense, net increased $22 million in the third quarter of 2023 compared to 2022 and decreased ~~$24~~$2 million in the first ~~six~~nine months of 2023 compared to 2022. Other expense, net includes 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 increased ~~$48~~$23 million and $55 million in the third quarter and first ~~six~~nine months of 2023, ~~compared to 2022,~~respectively, primarily related to Argentina. Other expense, net in the first ~~six~~nine months of 2022 included net pre-tax expense of ~~$59~~$57 million associated with joint venture debt guarantees.

Income Tax Provision

Income tax provision as a percentage of income before income taxes and (loss) income from investments in unconsolidated affiliates was ~~20.7%~~19.8% and ~~22.2%~~22.5% for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and was ~~19.2%~~19.5% and ~~18.2%~~19.7% for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. For the three months ended September 30, 2023, the effective income tax rate included tax benefits from subsidiary restructurings and the purchase of transferable renewable energy tax credits.

The effective income tax rate for both the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 ~~include~~included discrete tax benefits from subsidiary restructurings and equity compensation related tax benefits. The effective income tax rate for the nine months ended September 30, 2023 also included tax benefits from the purchase of transferable renewable energy tax credits.

(Loss) Income from Investments in Unconsolidated Affiliates

Our share of net (loss) income from unconsolidated affiliates accounted for using the equity method is reported as (loss) income from investments in unconsolidated affiliates, and the related tax expense is reported within the income tax provision in the consolidated statements of income. (Loss) income from investments in unconsolidated affiliates, including acquired intangible asset amortization from valuations in purchase accounting, was $3$(2) million and ~~$128~~$(12) million in the ~~second~~third quarter of 2023 and 2022, respectively, and ~~$(9)~~$(11) million and ~~$234~~$222 million in the first ~~six~~nine months of 2023 and 2022, respectively. Loss from investments in unconsolidated affiliates in the third quarter of 2022 included our share of expenses associated with debt refinancing activities at our unconsolidated affiliates. Income from investments in unconsolidated affiliates in the first ~~six~~nine months of 2022 included pre-tax net gains totaling $209 million, primarily related to the acquisition-date fair value remeasurement of our previously held equity interest in Finxact of $110 million, as well as $80 million resulting from the dilution of our ownership interest in conjunction with the Sagent M&C, LLC transaction with a third 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~~$17 million and ~~$11~~$12 million in the ~~second~~third quarter of 2023 and 2022, respectively, and ~~$25~~$42 million and ~~$24~~$36 million in the first ~~six~~nine months of 2023 and 2022, respectively.

Net Income Per Share – Diluted

Net income attributable to Fiserv, Inc. per share-diluted was ~~$1.10~~$1.56 and ~~$0.92~~$0.75 in the ~~second~~third quarter of 2023 and 2022, respectively, and was ~~$1.99~~$3.54 and ~~$1.94~~$2.68 in the first ~~six~~nine months of 2023 and 2022, respectively. Net income attributable to Fiserv, Inc. per

Table of Contents

share-diluted in the third quarter and first nine months of 2023 includes a $177 million pre-tax gain related to the sale of our financial reconciliation business. Net income attributable to Fiserv, Inc. per share-diluted in the first ~~six~~nine months of 2022 included pre-tax net gains totaling $209 million related 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 and long term using cash flow generated by our operations, along with our cash and cash equivalents of ~~$1.1~~$1.3 billion, proceeds from the issuance of U.S. dollar and Euro commercial paper, and available capacity under our revolving credit facility of ~~$1.8~~$1.7 billion (net of ~~outstanding borrowings and $4.2~~$4.3 billion of capacity designated for outstanding borrowings under our commercial paper programs, senior notes due in 2023 and 2024 and letters of credit) at ~~June~~September 30, 2023.

~~Table of Contents~~

The following table summarizes our net cash provided by operating activities, or operating cash flow, and capital expenditure amounts for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively:


		Six Months Ended June 30,				Increase (Decrease)					Nine Months Ended September 30,				Increase (Decrease)
(In millions)	(In millions)	2023		2022		$		%		(In millions)	2023		2022		$		%
Net income	Net income	$	1,271	$	1,291	$	(20)			Net income	$	2,240	$	1,784	$	456
Depreciation and amortization	Depreciation and amortization	1,605		1,630		(25)				Depreciation and amortization	2,384		2,431		(47)

Share-based compensation	Share-based compensation	199		155		44				Share-based compensation	275		244		31

Deferred income taxes	Deferred income taxes	(186)		(317)		131				Deferred income taxes	(344)		(402)		58
Net loss (gain) on sale of businesses and other assets		4		(147)		151
Net gain on sale of businesses and other assets										Net gain on sale of businesses and other assets	(172)		(27)		(145)

Loss (income) from investments in unconsolidated affiliates	Loss (income) from investments in unconsolidated affiliates	9		(234)		243				Loss (income) from investments in unconsolidated affiliates	11		(222)		233

Distributions from unconsolidated affiliates	Distributions from unconsolidated affiliates	30		41		(11)				Distributions from unconsolidated affiliates	42		58		(16)

Net changes in working capital and other	Net changes in working capital and other	(924)		(614)		(310)				Net changes in working capital and other	(869)		(881)		12

Net cash provided by operating activities	Net cash provided by operating activities	$	2,008	$	1,805	$	203	11	%	Net cash provided by operating activities	$	3,567	$	2,985	$	582	19	%
Capital expenditures, including capitalized software and other intangibles	Capital expenditures, including capitalized software and other intangibles	$	679	$	718	$	(39)	(5)	%	Capital expenditures, including capitalized software and other intangibles	$	1,034	$	1,148	$	(114)	(10)	%

Our operating cash flow was ~~$2.01~~$3.6 billion in the first ~~six~~nine months of 2023, an increase of ~~11%~~19% compared with ~~$1.81~~$3.0 billion in the first ~~six~~nine months of 2022. This increase was ~~primarily~~ attributable to improved ~~operating results, partially offset by higher working capital use compared to the prior period, including increased accounts receivable~~profitability and corresponding ~~to revenue growth, higher income tax payments and timing of vendor payments.~~cash flows.

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 ~~$109~~$152 million and ~~$119~~$168 million in the first ~~six~~nine months of 2023 and 2022, respectively.

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

Share Repurchases

WeOn August 8, 2023, we repurchased ~~$2.5~~4.1 million shares of our common stock for $121.98 per share in a privately negotiated transaction with ValueAct Capital Master Fund, L.P. for an aggregate purchase price of $500 million. Including this transaction, we repurchased $3.7 billion and ~~$1.0~~$1.8 billion of our common stock during the first ~~six~~nine months of 2023 and 2022, 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 ~~June~~September 30, 2023, we had approximately ~~70.1~~60.5 million shares remaining under our current repurchase authorizations. Shares repurchased are generally held for issuance in connection with our equity plans.

Table of Contents

Acquisitions and Dispositions

Acquisitions of Businesses

We acquired Yacaré and Merchant One in December 2022, NexTable in September 2022 and City POS in June 2022. Additionally, we acquired athe remaining majority controlling ownership interest in Finxact in April ~~2022, in which we previously held a noncontrolling interest.~~2022. NexTable, City POS and the remaining ownership interest in Finxact were acquired during the ~~second quarter~~first nine months of 2022 for an aggregate purchase price of ~~$671~~$686 million, net of $27 million of acquired cash, and ~~NexTable during the third quarter of 2022 for $15 million,~~ including earn-out provisions with aan estimated fair value of ~~approximately~~ $6 million. Merchant One and Yacaré were acquired in the fourth quarter of 2022 for an aggregate purchase price of $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. The results of operations for these acquired businesses are included in our consolidated results from the respective dates of acquisition.

Dispositions of Businesses

~~In June 2023, we entered into an agreement to sell~~We sold our financial reconciliation ~~business. The transaction closed on~~business in July ~~25,~~ 2023 for ~~net~~ cash proceeds of ~~approximately $230~~$232 million, subject to ~~customary~~final net working capital adjustments. Net proceeds from the sale were

~~Table of Contents~~

primarily used to pay down indebtedness and repurchase shares of our common stock.

We sold Fiserv Costa Rica, S.A and our SIS operations in October 2022 for net cash proceeds of $34 million and our Korea operations in September 2022 for net cash proceeds of $43 million, along with a minority noncontrolling equity interest in the buyer of the Korea operations. The net proceeds from these dispositions were primarily used to pay down indebtedness and repurchase shares of our common stock.

Other Transactions

In September 2023, we acquired the remaining 49% ownership interest in European Merchant Services B.V., in which we previously held a majority controlling financial interest in this consolidated subsidiary, for $56 million. We funded this transaction by utilizing a combination of available cash and proceeds from the issuance of commercial paper.

Effective March 2022, we mutually agreed to terminate a merchant alliance joint venture with a minority partner. 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 cash proceeds of $175 million. The net proceeds from ~~these dispositions~~this transaction were primarily used to pay down indebtedness and repurchase shares of our common stock.

Table of Contents

Indebtedness


(In millions)	(In millions)	June 30, 2023		December 31, 2022		(In millions)	September 30, 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	$	362	$	198	Foreign lines of credit	$	369	$	198
Finance lease and other financing obligations	Finance lease and other financing obligations	246		270		Finance lease and other financing obligations	280		270
Total short-term and current maturities of long-term debt	Total short-term and current maturities of long-term debt	$	608	$	468	Total short-term and current maturities of long-term debt	$	649	$	468

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

0.375% senior notes due July 2023 (Euro-denominated)	0.375% senior notes due July 2023 (Euro-denominated)	$	546	$	531	0.375% senior notes due July 2023 (Euro-denominated)	$	—	$	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)	664		632		2.250% senior notes due July 2025 (British Pound-denominated)	637		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)	546		531		1.125% senior notes due July 2027 (Euro-denominated)	525		531
5.450% senior notes due March 2028	5.450% senior notes due March 2028	900		—		5.450% senior notes due March 2028	900		—
5.375% senior notes due August 2028						5.375% senior notes due August 2028	700		—
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)	546		531		1.625% senior notes due July 2030 (Euro-denominated)	525		531
4.500% senior notes due May 2031 (Euro-denominated)	4.500% senior notes due May 2031 (Euro-denominated)	873		—		4.500% senior notes due May 2031 (Euro-denominated)	840		—
3.000% senior notes due July 2031 (British Pound-denominated)	3.000% senior notes due July 2031 (British Pound-denominated)	664		632		3.000% senior notes due July 2031 (British Pound-denominated)	637		632
5.600% senior notes due March 2033	5.600% senior notes due March 2033	900		—		5.600% senior notes due March 2033	900		—
5.625% senior notes due August 2033						5.625% senior notes due August 2033	1,300		—
4.400% senior notes due July 2049	4.400% senior notes due July 2049	2,000		2,000		4.400% senior notes due July 2049	2,000		2,000
U.S. dollar commercial paper notes	U.S. dollar commercial paper notes	1,292		2,329		U.S. dollar commercial paper notes	—		2,329
Euro commercial paper notes	Euro commercial paper notes	1,285		1,210		Euro commercial paper notes	1,249		1,210
Revolving credit facility	Revolving credit facility	32		35		Revolving credit facility	—		35

Term loan facility	Term loan facility	—		200		Term loan facility	—		200
Unamortized discount and deferred financing costs	Unamortized discount and deferred financing costs	(129)		(120)		Unamortized discount and deferred financing costs	(151)		(120)
Finance lease and other financing obligations	Finance lease and other financing obligations	576		539		Finance lease and other financing obligations	695		539
Total long-term debt	Total long-term debt	$	22,595	$	20,950	Total long-term debt	$	22,657	$	20,950

In August 2023, we completed the public offering and issuance of $2.0 billion of senior notes, comprised of $700 million aggregate principal amount of 5.375% senior notes due in August 2028 and $1.3 billion aggregate principal amount of 5.625% senior notes due in August 2033. In May 2023, we completed the public offering and issuance of 800 million Euros aggregate principal amount of 4.500% senior notes due in May 2031. 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 5.450% senior notes due in March 2028 and $900 million aggregate principal amount of 5.600% 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, ~~and, in July 2023,~~share repurchases, the repayment of the 0.375% Euro-denominated senior ~~notes.~~notes in July 2023 and the repayment of the 3.800% senior notes in October 2023.

At ~~June~~September 30, 2023, our debt consisted primarily of ~~$19.5~~$20.9 billion of fixed-rate senior notes and ~~$2.6~~$1.2 billion of outstanding borrowings under our Euro commercial paper ~~programs.~~program. Interest on our U.S. dollar-denominated senior notes is paid semi-annually,

~~Table of Contents~~

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 was paid monthly.

Table of Contents

At ~~June~~September 30, 2023, the ~~0.375% Euro-denominated senior notes due in July 2023 and~~ 3.800% senior notes due in October 2023 and 2.750% senior notes due in July 2024 were classified in the consolidated balance sheet as long-term, as we have ~~subsequently refinanced the 0.375% Euro-denominated senior notes due in July 2023 and have~~ the intent to refinance ~~the 3.800% senior notes due in October 2023~~or have subsequently refinanced this debt on a long-term basis and the ability to do so under our revolving credit facility. Outstanding borrowings under the commercial paper programs are also classified in the consolidated balance sheet as long-term, as we have the intent to refinance this commercial paper on a long-term basis through the continued issuance of new commercial paper upon maturity, and also have the ability to refinance such commercial paper under our revolving credit facility.

Variable Rate Debt

Our variable rate debt consisted of the following at ~~June~~September 30, 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	52.83%	$	362	Foreign lines of credit	n/a	48.428%	$	369
U.S. dollar commercial paper notes		various	5.34%	1,292

Euro commercial paper notes	Euro commercial paper notes	various	3.47%	1,285		Euro commercial paper notes	various	3.880%	1,249
Revolving credit facility		June 2027	6.19%	32

Total variable rate debt	Total variable rate debt		10.33%	$	2,971	Total variable rate debt		14.041%	$	1,618

We maintain certain short-term lines of credit and other borrowing arrangements with foreign banks and alliance partners primarily to fund settlement activity associated with ~~our~~ operations in Latin America. We entered into an annually renewable term loan facility, which was fully funded in April 2023, to fund settlement advance cash payments in Brazil. This term loan ~~fully funded in April 2023,~~ has a notional value of 514 million Brazilian real ($~~106~~102 million USD equivalent) at ~~June~~September 30, 2023 that matures in April 2024 and bears interest at a variable Certificado de Depósito Interbancário (CDI) Rate, plus a specified margin of 1.70% per annum.

The following table provides a summary of the outstanding borrowings and weighted average interest rates of our foreign lines of credit and other borrowing arrangements by country at September 30, 2023:


	Outstanding Borrowings (in millions)		Weighted-Average Interest Rate
Argentina	$	151		99.417	%
Brazil	119			14.978	%
Uruguay	88			11.896	%
Other	11			—	%
Total	$	369		48.428	%

We ~~also~~ 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.

We also 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.

In June 2023, we repaid all remaining outstanding borrowings on our ~~existing~~ term loan facility utilizing proceeds from the issuance of U.S. dollar commercial paper notes and operating cash on hand, thereby terminating such facility. Borrowings under the term loan facility accrued 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 Company’s long-term debt rating in effect from time to time.

Debt Covenants and Compliance

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.

Table of Contents

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 during the period of four fiscal quarters then ended, subject to certain exceptions.

~~Table of Contents~~

During the first ~~six~~nine 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.

Debt Guarantees

We maintain noncontrolling ownership interests in Sagent M&C, LLC 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 ~~June~~September 30, 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 ~~$33~~$45 million of outstanding borrowings on the revolving credit facilities at ~~June~~September 30, 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 ~~$36~~$33 million at ~~June~~September 30, 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 ~~June~~September 30, 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 90 days or less that are readily convertible to cash are considered to be cash equivalents as reflected within our consolidated balance sheets. The table below details our cash and cash equivalents held at ~~June~~September 30, 2023 and December 31, 2022:


		June 30, 2023						December 31, 2022							September 30, 2023						December 31, 2022
(In millions)	(In millions)	Domestic		International		Total		Domestic		International		Total		(In millions)	Domestic		International		Total		Domestic		International		Total
Available	Available	$	175	$	266	$	441	$	135	$	153	$	288	Available	$	376	$	344	$	720	$	135	$	153	$	288
Unavailable (1)	Unavailable (1)	211		430		641		178		436		614		Unavailable (1)	193		436		629		178		436		614
Total	Total	$	386	$	696	$	1,082	$	313	$	589	$	902	Total	$	569	$	780	$	1,349	$	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.

Table of Contents

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, inflation, 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.

Our exposure to foreign currency exchange risks generally arises from our non-U.S. operations to the extent they are conducted in local currency. The major currencies to which our operations are exposed are the Argentine Peso, Brazilian Real, British Pound, Canadian Dollar, Euro and Indian Rupee. Changes in the value of underlying monetary assets and liabilities of our non-U.S. dollar-denominated foreign investments and foreign currency transactions in highly inflationary economies, primarily Argentina, may result in foreign currency exchange losses. We also have exposure to risks related to currency devaluation in certain countries, which may negatively impact our international operating results if there is a prolonged devaluation of local currencies relative to the U.S. dollar or if the economic conditions in these countries decline.

Additional information about market risks to which we are exposed is included within Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2022. There were no significant changes to our quantitative and qualitative analyses about market risk during the ~~six~~nine months ended ~~June~~September 30, 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 ~~June~~September 30, 2023.

~~Table of Contents~~

Changes in Internal Control Over Financial Reporting

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

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.

Table of Contents

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, ~~AND~~ USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

The table below sets forth information with respect to purchases made by or on behalf of us or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of shares of our common stock during the three months ended ~~June~~September 30, 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)
April 1-30, 2023 3,022,755 $ 115.79 3,022,755 75,632,537
May 1-31, 2023 3,107,300 117.68 3,107,300 72,525,237
June 1-30, 2023 2,422,158 117.39 2,422,158 70,103,079
Total 8,552,213 8,552,213


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, 2023	2,700,762	$	127.31	2,700,762	67,402,317
August 1-31, 2023	5,525,343	122.31		5,525,343	61,876,974
September 1-30, 2023	1,333,870	120.22		1,333,870	60,543,104
Total	9,559,975			9,559,975

(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, respectively. These authorizations do not expire.

ITEM 5. OTHER INFORMATION

~~During~~(c) Except as set forth below, during the three months ended ~~June~~September 30, 2023, ~~no director~~none of the Company’s directors or Section 16 ~~officer of the Company~~officers adopted or terminated a ~~“Rule~~Rule 10b5-1 ~~trading arrangement”~~Trading Plan or “non-Rule 10b5-1 trading arrangement,” as ~~each term is~~ defined in Item 408(a) of Regulation S-K.

On September 22, 2023, Robert W. Hau, Chief Financial Officer of the Company, adopted a trading arrangement for the sale of securities of the Company’s common stock (a “Rule 10b5-1 Trading Plan”) that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c). Mr. Hau’s Rule 10b5-1 Trading Plan provides for the exercise of up to 188,088 employee stock options and sale of the underlying shares of common stock pursuant to one or more limit orders until January 31, 2024.

On September 18, 2023, Suzan Kereere, Head of Global Business Solutions of the Company, adopted a Rule 10b5-1 Trading Plan that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c). Ms. Kereere’s Rule 10b5-1 Trading Plan provides for the sale of up to 6,534 shares of common stock pursuant to one or more limit orders until October 4, 2024.

ITEM 6. EXHIBITS

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

4144

Table of Contents

Exhibit Index


Exhibit Number						Exhibit Description





4.1						~~Twenty-Ninth~~Thirtieth Supplemental Indenture, dated as of ~~May 24,~~August 21, 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 ~~May 24,~~August 21, 2023)

4.2						~~Agency Agreement,~~Thirty-First Supplemental Indenture, dated as of ~~May 24,~~August 21, 2023, ~~by and among~~between Fiserv, Inc.~~, Elavon Financial Services DAC, UK Branch,~~ 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 ~~May 24, 2023)~~August 21, 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)

_______________________

* Filed with this quarterly report on Form 10-Q are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Income for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, (ii) the Consolidated Statements of Comprehensive Income (Loss) for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, (iii) the Consolidated Balance Sheets at ~~June~~September 30, 2023 and December 31, 2022, (iv) the Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, ~~and~~ (v) Notes to Consolidated Financial ~~Statements.~~Statements, and (vi) the information included in Part II, Item 5(c).

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:

~~July 27,~~October 25, 2023

By:

/s/ Robert W. Hau

Robert W. Hau

Chief Financial Officer

Date:

~~July 27,~~October 25, 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	2829
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4043
Item 4.	Controls and Procedures	4043

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	4143

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds,a nd Issuer Purchases of Equity Securities	4144
Item 5.	Other Information	4144
Item 6.	Exhibits	4144

	Exhibit Index
	Signatures



	Fiserv, Inc. Shareholders’ Equity

Six Months Ended June 30, 2023	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, 2022	784	154	$	8	$	23,011	$	(1,189)	$	17,376	$	(8,378)	$	699	$	31,527
Net income (1)									1,246				12		1,258

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

Other comprehensive income							289						15		304

Share-based compensation					199										199
Shares issued under stock plans		(3)			(222)						144				(78)
Purchases of treasury stock		22									(2,493)				(2,493)

Balance at June 30, 2023	784	173	$	8	$	22,988	$	(900)	$	18,622	$	(10,727)	$	725	$	30,716


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