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What changed in Fiserv's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Fiserv's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+319 added−315 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in Fiserv's 2023 10-K

319 paragraphs added · 315 removed · 244 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

63 edited+14 added−9 removed71 unchanged
Biggest change(“international”) with revenues from domestic and international products and services as a percentage of total revenue as follows for the years ended December 31: (In millions) 2022 2021 2020 Total revenue $ 17,737 $ 16,226 $ 14,852 Domestic 86 % 86 % 87 % International 14 % 14 % 13 % We have grown our business organically and through acquisitions, by signing new clients, expanding the products and services we provide to existing clients, offering new and enhanced products and services developed through innovation and acquisition, and extending our capabilities geographically, all of which have enabled us to deliver a wide range of integrated products and services and created new opportunities for growth.
Biggest changeWe have grown our business organically and through acquisitions by signing new clients, expanding the products and services we provide to existing clients, offering new and enhanced products and services developed through innovation and acquisition, and extending our capabilities geographically, all of which have enabled us to deliver a wide range of products and services and created new opportunities for growth.
We are committed to providing fair pay to our employees regardless of gender, race, ethnicity or any other protected characteristic, and we conduct periodic pay audits to track, measure and evaluate employee compensation. In addition, throughout the year, we celebrate employee contributions and achievements through a peer-based global recognition program that enables recognition and financial rewards.
We are committed to providing fair pay to our employees regardless of gender, race, ethnicity or any other protected characteristic, and we conduct pay audits to track, measure and evaluate employee compensation. In addition, throughout the year, we celebrate employee contributions and achievements through a peer-based global recognition program that enables recognition and financial rewards.
A number of our subsidiaries outside the U.S. are direct members or associate members of Visa and Mastercard for purposes of conducting merchant acquiring. Various subsidiaries are also processor level members of numerous debit and electronic benefits transaction networks or are otherwise subject to various network rules in connection with processing services and other services we provide.
A number of our subsidiaries outside the U.S. are direct members or associate members of Visa and Mastercard for purposes of conducting merchant acquiring. Various subsidiaries are also processor level members of other debit and electronic benefits transaction networks or are otherwise subject to various network rules in connection with processing services and other services we provide.
Account Processing We provide account servicing and management technology products and services to our depository institution clients, as well as a range of integrated, value-added banking products and services. Account processing solutions enable a financial institution to operate systems that process customer deposit and loan accounts, an institution’s general ledger, central information files and other financial information.
Core Account Processing Solutions We provide account servicing and management technology products and services to our depository institution clients, as well as a range of integrated, value-added banking products and services. Account processing solutions enable a financial institution to operate systems that process customer deposit and loan accounts, an institution’s general ledger, central information files and other financial information.
We have adopted a pay-for-performance philosophy that is designed to recognize performance and reward achievement of our strategic business objectives and financial results. Total compensation consists of a competitive base pay and annual incentive opportunity delivered in a mix of cash and equity that is designed to promote retention and reward the attainment of defined performance goals.
We have adopted a pay-for-performance philosophy that is designed to recognize performance and reward achievement of our strategic business objectives and financial results. Total compensation consists of a competitive base pay and annual incentive opportunity typically delivered in a mix of cash and equity that is designed to promote retention and reward the attainment of defined performance goals.
The services in this segment 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 Carat℠, our integrated operating system for large businesses.
The solutions in this segment include 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 Carat ℠ , our integrated operating system for large businesses.
We provide employees with numerous training and development opportunities, including through an e-learning platform specifically geared toward global technology associates; our Leading Women program, designed to accelerate the professional growth of female top talent across each of our global regions; our Leading Fiserv program, designed to develop critical leadership skills for frontline managers; our Vision to Results leadership program, focused on driving enterprise goals; and an online learning platform that provides global access to over 25,000 courses.
We provide employees with numerous training and development opportunities, including through an e-learning platform specifically geared toward global technology associates; our Leading Women program, designed to accelerate the professional growth of female top talent across each of our global regions; our Leading Fiserv program, designed to develop critical leadership skills for frontline managers; our Vision to Results leadership program, focused on driving enterprise goals; and an online learning platform that provides global access to over 15,000 courses.
We also provide marketing services, data analytics and other tools that enable partners to further expand their businesses through local communities, e-commerce channels and specific industry verticals.
We also provide marketing services, data analytics and other tools that enable partners to further expand their businesses in local communities, specific industry verticals, and through e-commerce channels.
If we process payments for a merchant or other client in violation of laws, rules and regulations, we could be subject to enforcement actions and incur losses and liabilities that may impact our business. Anti-Money Laundering, Anti-Bribery, and Sanctions Regulations. We are subject to anti-money laundering laws and regulations, including the Bank Secrecy Act (the “BSA”).
If we process payments for a merchant or other client in violation of laws, rules and regulations, we could be subject to enforcement actions and incur losses and liabilities that may impact our business. Anti-Money Laundering, Anti-Bribery, and Sanctions Regulations. We are subject to anti-money laundering laws and regulations, including the U.S. Bank Secrecy Act (“BSA”).
More information regarding supply chain risks can be found under the heading “Competitive and Business Risks ” in the Risk Factors section of this report and our human capital resources can be found below under the heading “Human Capital.” 6 Table of Contents Intellectual Property We regard our software, transaction processing services and related products as proprietary, and we use a combination of patent, copyright, trademark and trade secret laws, internal security practices, employee confidentiality and assignment agreements, and third-party non-disclosure agreements to protect our intellectual property assets.
More information regarding supply chain risks can be found under the heading “Competitive and Business Risks ” in the Risk Factors section of this report and our human capital resources can be found below under the heading “Human Capital.” Intellectual Property We regard our software, transaction processing services and related products as proprietary, and we use a combination of patent, copyright, trademark and trade secret laws, internal security practices, employee confidentiality and assignment agreements, and third-party non-disclosure agreements to protect our intellectual property assets.
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 (“RSAs”), and referral agreements.
The businesses in our Acceptance segment distribute products and services 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 (“RSAs”), and referral agreements.
We are subject to various U.S. federal, state and foreign laws and regulations governing money transmission and the issuance and sale of payment instruments, including some of our prepaid products. In the U.S., most states license money transmitters and issuers of payment instruments.
Money Transmission and Payment Instrument Licensing and Regulations. We are subject to various U.S. federal, state and foreign laws and regulations governing money transmission and the issuance and sale of payment instruments, including some of our prepaid products. In the U.S., most states license money transmitters and issuers of payment instruments.
By integrating next-generation hardware and software-as-a-service (“SaaS”) applications, Clover has become a leader in enabling omnichannel commerce solutions for SMBs and ISVs, with touchless commerce through QR code-based payments, online ordering solutions, and virtual terminals. We also offer small business owners advance access to capital through our Clover Capital cash advance program.
By integrating next-generation hardware and software-as-a-service (“SaaS”) applications, along with value-added solutions, Clover has become a leader in enabling omnichannel commerce solutions for SMBs and ISVs, with touchless commerce through QR code-based payments, online ordering solutions, and virtual terminals. We also offer small business owners access to capital through our Clover Capital cash advance program.
Most of the products and services we provide are necessary for our clients to operate their businesses and are, therefore, non-discretionary in nature. We serve our global client base by working among our geographic teams across various regions, including the United States and Canada; Europe, Middle East and Africa; Latin America; and Asia Pacific.
Most of the products and services we provide are necessary for our clients to operate their businesses and are, therefore, non-discretionary in nature. We serve our global client base by working among our geographic teams across various regions, including the United States of America (“U.S.”) and Canada; Europe, Middle East and Africa; Latin America; and Asia Pacific.
Existing and potential financial institution and other corporate clients could also develop and use their own in-house systems or custom-designed solutions instead of our products and services. Government Regulation Our operations, and the products and services that we offer, are subject to various U.S. federal, state and local regulation, as well as regulation outside the U.S.
Existing and potential financial institution and other corporate clients could also develop and use their own in-house systems or custom-designed solutions instead of our products and services. 7 Table of Contents Government Regulation Our operations, and the products and services that we offer, are subject to various U.S. federal, state and local regulation, as well as regulation outside the U.S.
Our businesses in those jurisdictions are subject to those data retention obligations. Communications Laws. We are subject to various federal and state laws that govern telephone calls and the issuance of text messages to clients and consumers in the U.S. as well as to regulations that impose requirements on marketing emails sent to U.S residents.
Our businesses in those jurisdictions are subject to those data retention obligations. 9 Table of Contents Communications Laws. We are subject to various federal and state laws that govern telephone calls and the issuance of text messages to clients and consumers in the U.S. as well as to regulations that impose requirements on marketing emails sent to U.S residents.
Privacy and Information Security Regulations. We provide services that are subject to various federal, state and foreign privacy laws and regulations, as well as association and network privacy rules, which govern, among other things, the collection, processing, storage, deletion, use and disclosure of personal information.
Privacy and Cybersecurity Regulations. We provide services that are subject to various federal, state, local and foreign privacy and cybersecurity laws and regulations, as well as association and network privacy and cybersecurity rules, which govern, among other things, the collection, processing, storage, deletion, use and disclosure of personal information.
Our VisionPLUS ® software is used globally as both a processing solution and a licensed software solution that enables some clients to process transactions on their own. We also provide financial institutions with solutions that support the lifecycle of a cardholder, including acquisition, fraud detection, credit risk management, servicing, collections and professional services.
Our VisionPLUS ® software is used outside of the U.S. as both a processing solution and a licensed software solution that enables some clients to process transactions on their own. We also provide financial institutions with solutions that support the lifecycle of a cardholder, including acquisition, fraud detection, credit risk management, servicing, collections and professional services.
The Clover platform includes hardware and software technology necessary to enable SMB merchants 2 Table of Contents to accept payments, process transactions, provide online ordering, maintain an e-commerce presence, and generate consumer loyalty through Clover’s customer engagement tools.
The Clover platform includes hardware and software technology necessary to enable SMB merchants to accept payments, process transactions, provide online ordering, maintain an e-commerce presence, and generate consumer loyalty through Clover’s customer engagement tools.
In the U.S., we are also subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, among other things, caps debit interchange rates for certain card issuers; prohibits debit payment card networks from restricting card issuers from contracting with other payment card networks; prohibits card issuers and payment networks from restricting the ability of merchants to direct the routing of debit card transactions; requires all debit card issuers in the U.S. to participate in at least two unaffiliated debit payment card networks; and generally prohibits network exclusivity arrangements for prepaid card and healthcare debit card issuers.
In the U.S., we are also subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, among other things, and in conjunction with the Federal Reserve Board’s Regulation II, caps debit interchange rates for certain debit and prepaid card issuers; prohibits card issuers and payment networks from restricting the ability of merchants to direct the routing of debit card transactions; requires all debit card issuers in the U.S. to participate in at least two unaffiliated debit payment card networks; prohibits payment card networks from restricting debit and prepaid card issuers from contracting with other payment card networks; and generally prohibits network exclusivity arrangements for debit card and prepaid card issuers.
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 processing and source capture, and other products and services that support numerous types of financial transactions.
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, check processing, and other products and services that support numerous types of financial transactions.
The principal account processing solutions used by our depository institution clients are Cleartouch ® , DNA ® , Precision ® , Premier ® , Signature ® and Portico ® . All of these systems are available in the U.S., and the DNA and Signature platforms are also available globally. In 2022, we acquired Finxact, Inc.
The principal account processing solutions used by our depository institution clients are Finxact, Cleartouch ® , DNA ® , Precision ® , Premier ® , Signature ® and Portico ® . All of these systems are available in the U.S., and the DNA and Signature platforms are also available globally.
Through this integrated operating system, a variety of payment and commerce solutions can be accessed, including payment acceptance, payments optimization, network routing, fraud detection, online electronic benefits transfers and digital payouts.
Through this integrated operating system, numerous payment and commerce solutions can be accessed, including payment acceptance, payments optimization, network routing, fraud detection, online electronic benefits transfers and digital payouts.
The member agencies of the 7 Table of Contents FFIEC include the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Consumer Financial Protection Bureau (“CFPB”), which is empowered to conduct rule-making and supervision related to, and enforcement of, “federal consumer financial laws,” some of which apply to products and services offered by our clients.
The member agencies of the FFIEC include the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Consumer Financial Protection Bureau (“CFPB”), which are empowered to conduct rule-making and supervision related to, and enforcement of, federal consumer financial laws, some of which apply to products and services offered by our clients.
Item 1. Business Overview Fiserv, Inc. is a leading global provider of payments and financial services technology solutions. We are publicly traded on the NASDAQ Global Select Market and part of the S&P 500 Index. We serve clients around the globe, including merchants, banks, credit unions, other financial institutions and corporate clients.
Item 1. Business Overview Fiserv, Inc. is a leading global provider of payments and financial services technology solutions. We are publicly traded on the New York Stock Exchange and part of the S&P 500 Index. We serve clients around the globe, including merchants, banks, credit unions, other financial institutions and corporate clients.
Some of these data protection laws, including in the E.U., India, United Arab Emirates and China, impose requirements regarding data rights and security and either prohibit the international transfer of personal data or restrict such transfers absent lawfully recognized transfer mechanisms. Money Transmission and Payment Instrument Licensing and Regulations.
Some of these data protection laws, including in the E.U., India, United Arab Emirates and China, impose requirements regarding data rights and security and either prohibit the international transfer of personal data or restrict such transfers absent lawfully recognized transfer mechanisms.
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, real-time payments, electronic billing, and security and fraud protection products. Clients of the Payments segment businesses represent a wide range of industries around the world, including merchants, financial institutions and distribution partners in our other segments.
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, including merchants, distribution partners and financial institutions customers in our other segments.
Significantly, we have not increased the cost of health care benefits for our employees in the past two years despite the increased cost of such benefits to the company. Investing in our associates in this way helps us retain top talent and demonstrates our commitment to our employees, our most important asset. Available Information Our website address is www.fiserv.com.
We control the cost of health care benefits for our employees despite the increased cost of such benefits to the company. Investing in our associates in this way helps us retain top talent and demonstrates our commitment to our employees, our most important asset. Available Information Our website address is www.fiserv.com.
There are numerous additional privacy laws and 8 Table of Contents regulations that apply to our businesses around the world which also provide for significant penalties.
There are numerous additional privacy laws and regulations that apply to our businesses around the world which also provide for significant penalties.
Association and Network Rules. We are subject to rules of Mastercard, Visa, INTERAC, PULSE and other payment networks. In order to provide processing services, a number of our subsidiaries are registered with Visa and/or Mastercard as service providers for member institutions.
Association and Network Rules. We are subject to the rules of various payment networks, such as Visa and Mastercard. In order to provide processing services, a number of our subsidiaries are registered with Visa and/or Mastercard as service providers for member institutions.
We continue to focus on our efforts on supporting our community with several initiatives, including: • Investing in small, minority-owned businesses by providing financial support, business expertise, and leading technology solutions, as well as through strategic partnerships and community engagement; and • Strengthening partnerships with organizations focused on human rights, racial equity and social justice, including through work by our ERGs with over 100 community organizations and groups.
We continue to focus on our efforts on supporting our community with several initiatives, including: • Investing in small, diverse-owned businesses by providing financial support, business expertise, and leading technology solutions, as well as through strategic partnerships and community engagement; and 10 Table of Contents • Strengthening partnerships with organizations focused on human rights, racial equity and social justice, including through work by our ERGs with a variety of community organizations and groups.
Digital Solutions Our Digital Solutions business includes Experience Digital (“XD”), our principal consumer and business digital banking platform, which includes our Abiliti℠, Architect ™ , Corillian Online ® and Mobiliti ™ products.
Digital Financial Solutions Our digital financial solutions business includes Experience Digital (“XD”), our principal consumer and business digital banking platform, which includes our Configure ™ , Architect ™ , Corillian Online ® , Mobiliti ™ and Create ™ products.
In addition to assessing engagement, the survey results enable us to gain insight into employee perspectives and issues which we use to enhance processes, set priorities and respond to associate concerns.
In addition to assessing engagement, the survey results enable us to gain insight into employee perspectives and issues which we use to enhance processes, set priorities and respond to associate concerns. In 2023, 92% of our associates participated in our engagement survey.
Diversity and Inclusion We are committed to cultivating a diverse, respectful and inclusive workplace by: • Advancing diversity at all levels in the organization, including increasing the representation of women and minorities in leadership positions, requiring consideration of diverse candidates for our Board of Directors and senior leadership positions, dedicating talent acquisition resources focused on hiring diverse individuals, providing career opportunities to the military community, and deepening relationships with historically black colleges and universities, industry networks, and military and veterans’ organizations that provide access to underrepresented populations; and • Promoting employee awareness through education and participation in diversity and inclusion programs, such as our inclusive leader assessment and coaching program, to develop the competencies necessary to create an inclusive workplace; eight Employee Resource Groups (“ERGs”) with over 6,500 associate members who support each other and mutually elevate professional development; and a host of diversity and inclusion training courses available to all employees.
Diversity and Inclusion We are committed to cultivating a diverse, respectful and inclusive workplace by: • Providing advancement opportunities at all levels in the organization, including giving consideration to diverse candidates for our Board of Directors and senior leadership positions, providing military hiring opportunities, and deepening relationships with historically black colleges and universities, industry networks, military and veterans’ organizations, and organizations that support individuals with disabilities that provide access to underrepresented populations; and • Promoting employee awareness through education and participation in diversity and inclusion programs, such as our inclusive leader assessment and coaching program, to develop the competencies necessary to create an inclusive workplace; eight Employee Resource Groups (“ERGs”) with approximately 8,000 associate members who support each other and mutually elevate professional development; and a host of diversity and inclusion training courses available to all employees.
As of December 31, 2022, we had over 41,000 employees worldwide, approximately 41% of whom were female. In the U.S., approximately 37% of our employees self-identified as racially/ethnically diverse.
As of December 31, 2023, we had over 42,000 employees worldwide, approximately 40% of whom were female. In the U.S., approximately 39% of our employees self-identified as racially/ethnically diverse.
In 2022, we had $17.7 billion in total revenue, $3.7 billion in operating income and $4.6 billion of net cash provided by operating activities. Processing and services revenue, which in 2022 represented 82% of our total revenue, is primarily generated from account- and transaction-based fees under multi-year contracts that generally have high renewal rates.
In 2023, we had $19.1 billion in total revenue, $5.0 billion in operating income and $5.2 billion of net cash provided by operating activities. Processing and services revenue, which in 2023 represented 82% of our total revenue, is primarily generated from account- and transaction-based fees under multi-year contracts that generally have high renewal rates.
In addition to the FTC Act, the FTC is also responsible for overseeing and enforcing the privacy provisions over certain aspects of the GLBA and the Fair Credit Reporting Act (“FCRA”), each of which is applicable to our businesses in certain circumstances.
In addition to the Federal Trade Commission Act, the FTC, along with the CFPB, is responsible for overseeing and enforcing the privacy and information security provisions over certain aspects of GLBA and the Fair Credit Reporting Act (“FCRA”), each of which is applicable to our businesses in certain circumstances.
Our operations are comprised of the Merchant Acceptance (“Acceptance”) segment, the Financial Technology (“Fintech”) segment and the Payments and Network (“Payments”) segment. Our headquarters are located at 255 Fiserv Drive, Brookfield, Wisconsin 53045, and our telephone number is (262) 879-5000. On October 27, 2022, we announced that we plan to relocate our global headquarters location to Milwaukee, Wisconsin in 2023.
Our operations are comprised of the Merchant Acceptance (“Acceptance”) segment, the Financial Technology (“Fintech”) segment and the Payments and Network (“Payments”) segment. Our headquarters are located at 255 Fiserv Drive, Brookfield, Wisconsin 53045, and our telephone number is (262) 879-5000. We are relocating our global headquarters location to Milwaukee, Wisconsin in March 2024.
Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) governs the use and disclosure of protected health information in healthcare treatment, payment and operations by covered entities. We are also subject to the U.S. Federal Trade Commission Act, which empowers the Federal Trade Commission (“FTC”) to prohibit unfair and deceptive privacy practices.
Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which governs the use and disclosure of protected health information in healthcare treatment, payment and operations by covered entities and their business associates. We are also subject to the 8 Table of Contents Federal Trade Commission Act which empowers the U.S.
Employee Engagement We value employee engagement and feedback. Throughout the year, we engage with our employees through events such as lunch-and-learns, quarterly all-hands meetings, town halls, leadership meetings and other forums.
Employee Engagement We value employee engagement and feedback. Throughout the year, we engage with our employees through events such as lunch-and-learns, quarterly all-hands meetings, town halls, leadership meetings and other forums. We encourage managers to meet regularly with their teams and encourage skip-level discussions.
We encourage managers to meet regularly with their teams and encourage skip-level discussions. 10 Table of Contents To assess employee engagement, we periodically collect employee feedback through employee engagement surveys, including annual enterprise-wide surveys and issue-specific surveys. These surveys cover a variety of topics, such as engagement, well-being, client experience, communication, teamwork, manager effectiveness, trust and diversity and inclusion.
To assess employee engagement, we periodically collect employee feedback through employee engagement surveys, including annual enterprise-wide surveys and issue-specific surveys. These surveys cover a variety of topics, such as engagement, well-being, client experience, communication, teamwork, manager effectiveness, trust and diversity and inclusion.
Network and Debit Processing Our network and debit processing business is a leader in electronic funds transfer services and provides a comprehensive payments solution through a variety of products and services.
Debit and Network Processing Our debit and network processing business provides a comprehensive payments solution through a variety of products and services.
Merchants, financial institutions and distribution partners in the Acceptance segment are frequently clients of our other segments. Clover Clover is our cloud-based POS and integrated operating system for SMBs and ISVs designed to enable businesses to maximize operating effectiveness.
Merchants, financial institutions and distribution partners in the Acceptance segment are frequently clients of our other segments. 2 Table of Contents Clover Clover is our cloud-based POS and integrated commerce operating system for SMBs and ISVs designed for business management.
Account holders of the Money Network Electronic Payroll Delivery Service have access to a Money Network Card, Money Network Checks and a robust mobile app to manage their account anytime, anywhere. 5 Table of Contents Our Strategy Our aspiration is to move money and information in a way that moves the world.
Account holders 5 Table of Contents of the Money Network Electronic Payroll Delivery Service have access to a Money Network Card, Money Network Checks and a robust mobile app to manage their account anytime, anywhere.
Our commercial payments solutions provide financial institutions with the infrastructure they need to process, route and settle non-card-based electronic payments, including Automated Clearing House (“ACH”), wire and instant payments, and to efficiently manage associated information flows.
Enterprise Payment Solutions Our enterprise payment solutions products and services enable operating efficiencies and management insight by providing financial institutions with the infrastructure they need to process, route and settle non-card-based electronic payments, including Automated Clearing House (“ACH”), wire and instant payments, and to efficiently manage associated information flows.
In the U.S., we are subject to various federal and state privacy and security laws. The U.S. Gramm-Leach-Bliley Act (“GLBA”) requires financial institutions to explain their information sharing practices to their customers and to safeguard sensitive data. We are subject to the GLBA and have privacy and security obligations to our clients who are regulated by the GLBA. The U.S.
In the U.S., we are subject to various federal and state privacy and cybersecurity laws and regulations. The U.S. Gramm-Leach-Bliley Act (“GLBA”) requires financial institutions to explain their information sharing practices to their customers and to safeguard customer data.
In addition, independent auditors annually review many of our operations to provide internal control evaluations for our clients and their auditors. 9 Table of Contents Human Capital The Talent and Compensation Committee of our Board of Directors assists the Board of Directors in establishing our compensation philosophy and strategy and overseeing our human capital management strategy which includes maintaining a culture committed to attracting, developing and retaining top talent, supporting diversity and inclusion, fostering innovation, and promoting employee engagement, safety and well-being.
Human Capital The Talent and Compensation Committee of our Board of Directors assists the Board of Directors in establishing our compensation philosophy and strategy and overseeing our human capital management strategy which includes maintaining a culture committed to attracting, developing and retaining top talent, supporting diversity and inclusion efforts, fostering innovation, and promoting employee engagement, safety and well-being.
Although many of our clients obtain a majority of their processing requirements from us, our software design allows clients to start with one application and, as needed, add applications and features developed by us or by third parties.
These solutions also include security, report generation and other features that financial institutions need to process transactions for their customers. Although many of our clients obtain a majority of their processing requirements from us, our software design allows clients to start with one application and, as needed, add applications and features developed by us or by third parties.
Internal mobility is our primary approach for filling open positions and fostering career advancement for our employees. In an effort to further encourage internal mobility, we launched a global awareness campaign intended to create a sustainable internal talent pipeline while increasing associate retention, job satisfaction and personal and professional growth opportunities.
Internal mobility is generally our preferred approach for filling open positions and fostering career advancement for our employees. To encourage internal mobility, we maintain a sustainable internal talent pipeline, increasing associate retention, job satisfaction and personal and professional growth opportunities.
Our Digital Efficiency solutions include Nautilus ® (a content management product), Frontier ™ (a reconciliation product) and Prologue ™ Financials, which combines enterprise performance management and financial control offerings to deliver budgeting, planning, financial accounting and automated reconciliation and account certification tools to our clients.
Our decision management solutions include Nautilus®, a content management product, and Prologue ™ Financials, which combines enterprise performance management and financial control offerings to deliver budgeting, planning, financial accounting, and automated reconciliation and account certification tools to our clients. These solutions are further complemented by fraud detection and mitigation through our fraud and financial crime risk management solutions.
Our purpose is to deliver superior value for our clients through leading technology, targeted innovation and excellence in everything we do.
Our Strategy Our aspiration is 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.
In developing our products, we use current software development principles, such as service-oriented architecture, to create efficiencies, and we stress interaction with and responsiveness to the needs of our clients. Resources Our business depends on a variety of resources to operate including products and services provided to us by third parties.
In developing our products, we use current software development principles, such as service-oriented architecture, to create efficiencies, and we stress interaction with and responsiveness to the needs of our clients. In addition, we use our data and artificial intelligence (“AI”) to help us create new products and services and to enhance existing ones.
Our account processing business also provides consulting services, business operations services and related software products that enable the transition of check capture from branch and teller channels to digital self-service deposit channels, including 3 Table of Contents mobile, merchant and ATM. Through the Fiserv ® Clearing Network, we provide check clearing and image exchange services.
Account processing solutions are offered primarily as an outsourced service or can be installed on client-owned computer systems or those hosted by third parties. 3 Table of Contents Our account processing business also provides consulting services, business operations services and related software products that enable the transition of check capture from branch and teller channels to digital self-service deposit channels, including mobile, merchant and ATM.
Because a number of our businesses provide services to regulated financial institutions, we are subject to examination by the U.S. Federal Financial Institutions Examination Council (“FFIEC”). The FFIEC is a formal interagency body empowered to examine significant service providers to financial institutions.
Because a number of our businesses provide services to regulated financial institutions, we are a significant service provider under the Bank Service Company Act and as such we are subject to examination by the U.S.
We have operations and offices located both within the United States (the “U.S.” or “domestic”) and outside of the U.S.
We have operations and offices located both within the U.S. and Canada, and internationally.
To remain competitive, we have expended, and expect to expend in the future, significant resources to develop and update our products and services to assist our clients to meet various compliance obligations.
To remain competitive, we have invested, and expect to continue to invest, significant resources to develop and update our products and services to assist our clients to meet various compliance obligations. In addition, independent auditors annually review many of our operations to provide internal control evaluations for our clients and their auditors.
XD can be highly customized and integrated to multiple products and services, allowing clients to deploy new services quickly and efficiently to increase customer acquisition, engagement and insights. Our Originate℠ suite of products includes SecureNow ™ , Credit Sense℠ and LinkLive and enables digital account opening and loan origination services that support multi-channel strategies for financial institutions.
XD can be highly customized and integrated to multiple products and services, allowing clients to deploy new services quickly and efficiently to increase customer acquisition, engagement and insights.
Payments The businesses in our Payments segment provide financial institutions, corporate clients and the public sector with the products and services required to process digital payment transactions. This includes card transactions such as debit, credit and prepaid card processing and services; a range of network services; security and fraud protection products; and card production and print services.
This includes card transactions such as debit, credit and prepaid card processing and services; a range of network services such as funds access, debit payments, cardless ATM access and surcharge-free ATM networks; security and fraud protection products; and card production and print services.
In 2021, we introduced Credit Choice, a fully managed credit card issuing-as-a-service solution which allows community financial institutions to offer their customers a branded credit card that is fully integrated into their debit solutions without the operational burden of managing their own credit card portfolio. 4 Table of Contents Credit Processing Our credit processing business provides solutions to financial institutions and other issuers of credit, such as group service providers, retailers and consumer finance companies, to enable them to process credit card transactions on behalf of their customers.
These networks are available to all issuers and merchants in the U.S. Credit Processing Our credit processing business provides solutions to financial institutions and other issuers of credit, such as group service providers, retailers and consumer finance companies, to enable them to process credit card transactions on behalf of their customers.
Our debit processing also provides a range of security, risk and fraud management solutions, which incorporate machine-learning-based predictive technology, that help financial institutions securely operate and grow their business by preventing fraud. Our networks’ POS support delivers comprehensive coverage of PIN and PIN-less authentication support at physical and e-commerce merchants domestically.
Our debit processing also provides security, risk and fraud management solutions, which incorporate machine-learning-based predictive technology, that help financial institutions securely operate and grow their business by preventing fraud. CardHub provides our clients’ customers with mobile, customizable card management and alert tools that drive engagement and revenue for card issuers.
These solutions are further complemented by fraud detection and mitigation through our fraud and financial crime risk management solutions. Clients may use our payment platform applications on a licensed or hosted basis, and as an add-on to existing technology or as a stand-alone comprehensive modern payments platform.
Clients may use our payment platform applications on a licensed or hosted basis, and as an add-on to existing legacy technology or as a stand-alone comprehensive modern payments platform. Payments 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.
We have obligations under state laws, such as the California Privacy Rights Act, which gives California consumers more control over the personal information businesses hold about them, as both a “business” and as a “service provider.” In addition, Virginia, Colorado, Utah and Connecticut have passed comprehensive privacy acts that govern the personal data of their residents.
We also have obligations under various state laws, such as the California Consumer Privacy Act, which, among other things, give consumers more control over the personal information businesses hold about them.
Other products and services include image archive with online retrieval, in-clearings, exceptions and returns, statements, and fraud detection. Financial Risk Management Solutions Our Financial Risk Management Solutions products and services deliver operating efficiencies and management insight that enable our clients to protect, manage and grow their businesses.
Through the Fiserv ® Clearing Network, we provide check clearing and image exchange services. Other products and services include image archive with online retrieval, in-clearings, exceptions and returns, statements, and fraud detection. Our deposit liquidity solutions enable our clients to retain, monetize and grow their deposit account base while analyzing customer demand and enabling customer short-term liquidity.
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These solutions also include security, report generation and other features that financial institutions need to process transactions for their customers, as well as to facilitate compliance with applicable regulations.
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Revenue from products and services as a percentage of total revenue were as follows: Year Ended December 31, (In millions) 2023 2022 2021 Total revenue $ 19,093 $ 17,737 $ 16,226 Domestic 85 % 86 % 86 % International (1) 15 % 14 % 14 % (1) Represents revenue in the following international regions: EMEA (Europe, Middle East and Africa), LATAM (Latin America) and APAC (Asia-Pacific).
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(“Finxact”) to enhance our digital banking offerings. Account processing solutions are offered primarily as an outsourced service or can be installed on client-owned computer systems or those hosted by third parties.
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Our enterprise payment solutions business includes our Payments Exchange platform, which provides multiple payment capabilities, including domestic and international wire transfers and real time payments connection to the FedNow Service and RTP Network. Enterprise Payments Platform is a multi-entity, multi-country, multi-currency, multi-clearings, single payments platform processing all payment types, connecting financial institutions to clearings and correspondents wherever they operate.
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Our Deposit Liquidity solutions enable our clients to retain, monetize and grow their deposit account base while analyzing customer demand and providing for customer short-term liquidity.
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PEP+ is another enterprise payment solutions offering, which is a mainframe system that allows financial institutions to automatically receive and originate electronic payments through the ACH network in a straight-through processing manner.
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Originate is designed to be a single point of origination that qualifies users across a wide range of digital opening and lending opportunities. SecureNow delivers real-time cybersecurity defense capability, integrating industry-leading controls into a single product. Credit Sense helps customers instantly access and monitor credit scores and enables digital marketing offers.
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Credit Choice, a fully managed credit card issuing-as-a-service solution, allows community financial institutions to offer their customers a branded credit card that is integrated into their debit solutions without the operational burden of managing their own credit card portfolio. 4 Table of Contents We own and operate the Accel ® , STAR ® and MoneyPass ® networks, which provide access to funds for debit card purchases through any physical and online channel, with or without a PIN/signature; and support transactions at ATMs, with or without a surcharge, including CardFree Cash ℠ .
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LinkLive is a cloud-based multimedia communications solution that includes video communication, online chat and secure messaging, enabling customer engagement and servicing automation. These applications are pre-integrated with our XD platform for rapid deployment to improve digital experiences.
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In addition, CashFlow Central ℠ , an integrated digital payment and cash flow management experience, enables financial institutions to better meet the payments needs of small businesses.
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We own and operate the Accel ® , MoneyPass ® and STAR ® networks, which provide access to funds at the point-of-sale and ATMs using CardFree Cash℠ and chip and traditional magnetic stripe cards.
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Segment Realignment We are effecting changes in our business designed to further enhance operational performance in the delivery of our integrated portfolio of products and solutions to our financial institution clients.
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CardHub provides our clients’ customers with mobile, customizable card management and alert tools that drive engagement and revenue for card issuers.
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As a result, we expect to realign our reportable segments to correspond with these organizational changes, which we expect to be completed effective for the quarter ending March 31, 2024. We continue to allocate resources and assess performance based on the current reportable segment structure.
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We are also subject to examination by the first three of these agencies which refer to themselves as the Federal Banking Agencies when acting together. We also have a subsidiary that engages in trust activities and is subject to regulation, examination and oversight by the Division of Banking of the Colorado Department of Regulatory Agencies.
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We currently use AI in a variety of ways, including to enable higher quality customer service experiences, platform analytics, and fraud mitigation across a number of solutions. 6 Table of Contents Resources Our business depends on a variety of resources to operate including products and services provided to us by third parties.
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We are also subject to the separate security breach notification laws of each of the 50 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks may arise for a number of reasons: we may not be able to find suitable businesses to acquire at affordable valuations or on other acceptable terms; we may face competition for acquisitions from other potential acquirers; we may need to borrow money or sell equity or debt securities to the public to finance acquisitions and the terms of these financings may be adverse to us; changes in accounting, tax, securities or other regulations could increase the difficulty or cost for us to complete acquisitions; we may incur unforeseen obligations or liabilities in connection with acquisitions; we may need to devote unanticipated financial and management resources to an acquired business; we may not realize expected operating efficiencies or product integration benefits from an acquisition; we could enter markets where we have minimal prior experience; and we may experience decreases in earnings as a result of non-cash impairment charges.
Biggest changeIn addition, we may fail to accurately forecast the financial impact of an acquisition or other strategic transaction, including tax and accounting charges; we may incur unforeseen obligations or liabilities in connection with acquisitions; we may need to devote unanticipated financial and management resources to an acquired business; we may not realize expected operating efficiencies or product integration benefits from an acquisition; we could enter markets where we have minimal prior experience; and we may experience decreases in earnings as a result of non-cash impairment charges.
A further weakening in the economy or competition from other retailers could also force some retailers to close, resulting in exposure to potential credit losses and declines in transactions, and reduced earnings on transactions due to a potential shift to large discount merchants. Additionally, credit card issuers may reduce credit limits and become more selective in their card issuance practices.
A weakening in the economy or competition from other retailers could force some retailers to close, resulting in exposure to potential credit losses and declines in transactions, and reduced earnings on transactions due to a potential shift to large discount merchants. Additionally, credit card issuers may reduce credit limits and become more selective in their card issuance practices.
In addition, we are subject to Nacha rules relating to payment transactions processed by us using the ACH network and to various federal and state laws regarding such operations, including laws pertaining to electronic benefits transactions, as well as the Payment Card Industry Data Security Standard enforced by the major card brands.
In addition, we are subject to Nacha rules relating to payment transactions processed by us using the ACH network and to various federal and state laws regarding such operations, including laws pertaining to electronic fund transfer and electronic benefits transactions, as well as the Payment Card Industry Data Security Standard enforced by the major card brands.
Our products and services require sophisticated knowledge of the financial services industry, applicable regulatory and industry requirements, computer systems, and software applications, and if we cannot hire or retain the necessary skilled personnel, we could suffer delays in new product development, experience difficulty complying with applicable requirements or otherwise fail to satisfy our clients’ demands.
Our products and services require sophisticated knowledge of the financial services industry, applicable regulatory and industry requirements, computer systems, 18 Table of Contents and software applications, and if we cannot hire or retain the necessary skilled personnel, we could suffer delays in new product development, experience difficulty complying with applicable requirements or otherwise fail to satisfy our clients’ demands.
Such measures might not be sufficient to enable us to service our debt and meet our other cash requirements. In addition, any such financing, refinancing or sale of assets might not be available at all or on economically favorable terms. 20 Table of Contents An increase in interest rates may negatively impact our operating results and financial condition.
Such measures might not be sufficient to enable us to service our debt and meet our other cash requirements. In addition, any such financing, refinancing or sale of assets might not be available at all or on economically favorable terms. An increase in interest rates may negatively impact our operating results and financial condition.
In the event of operational failures or damage or disruption to our business due to these occurrences, we may not be able to successfully or quickly recover all of our critical business functions, assets and data through our business continuity program.
In the event of operational failures or damage or disruption to our business due to these occurrences, 13 Table of Contents we may not be able to successfully or quickly recover all of our critical business functions, assets and data through our business continuity program.
If we are unsuccessful in developing, marketing and selling products or services that gain market acceptance, or if third parties 11 Table of Contents insufficiently promote or distribute our products and services, it would likely have a material adverse effect on our ability to retain existing clients, to attract new ones and to grow profitably.
If we are unsuccessful in developing, marketing and selling products or services that gain market acceptance, or if third parties insufficiently promote or distribute our products and services, it would likely have a material adverse effect on our ability to retain existing clients, to attract new ones and to grow profitably.
Our balance sheet includes goodwill and intangible assets that represent 59% of our total assets at December 31, 2022. These assets consist primarily of goodwill and identified intangible assets associated with our acquisitions. On at least an annual basis, we assess whether there have been impairments in the carrying value of goodwill.
Our balance sheet includes goodwill and intangible assets that represent 53% of our total assets at December 31, 2023. These assets consist primarily of goodwill and identified intangible assets associated with our acquisitions. On at least an annual basis, we assess whether there have been impairments in the carrying value of goodwill.
A prolonged interruption of our services or network could cause us to experience data loss or a 13 Table of Contents reduction in revenue, and significantly impact our clients’ businesses and the customers they serve.
A prolonged interruption of our services or network could cause us to experience data loss or a reduction in revenue, and significantly impact our clients’ businesses and the customers they serve.
The rules of Nacha and the card 16 Table of Contents networks are set by their respective boards, some of which are our competitors, and the card network rules may be influenced by card issuers, some of which offer competing transaction processing services.
The rules of Nacha and the card networks are set by their respective boards, some of which are our competitors, and the card network rules may be influenced by card issuers, some of which offer competing transaction processing services.
Based on outstanding debt balances and interest rates at December 31, 2022, a 1% increase in variable interest rates would result in an increase to annual interest expense of $40 million. Our results of operations may be adversely affected by changes in foreign currency exchange rates.
Based on outstanding debt balances and interest rates at December 31, 2023, a 1% increase in variable interest rates would result in an increase to annual interest expense of $23 million. Our results of operations may be adversely affected by changes in foreign currency exchange rates.
In addition, participants in the financial services, payments and technology industries may merge, create joint ventures or engage in other business combinations, alliances and consolidations that may strengthen their existing products and services or create new products and services that compete with ours.
In addition, participants in the financial services, payments and technology industries may merge, create joint ventures or engage in other 11 Table of Contents business combinations, alliances and consolidations that may strengthen their existing products and services or create new products and services that compete with ours.
Since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), a number of substantial regulations affecting the supervision and operation of the financial services industry within the U.S. have been adopted, including those that establish the Consumer Financial Protection Bureau (“CFPB”).
Since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a number of substantial regulations affecting the supervision and operation of the financial services industry within the U.S. have been adopted, including those that 16 Table of Contents establish the Consumer Financial Protection Bureau (“CFPB”).
In addition, the process of integrating these acquisitions may disrupt our business and divert our resources. 19 Table of Contents In addition, acquisitions outside of the U.S. often involve additional or increased risks including, for example: • managing geographically separated organizations, systems and facilities; • integrating personnel with diverse business backgrounds and organizational cultures; • complying with non-U.S. regulatory requirements; • fluctuations in currency exchange rates; • enforcement of intellectual property rights in some non-U.S. countries; • difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets; and • general economic and political conditions.
In addition, acquisitions outside of the U.S. often involve additional or increased risks including, for example: • managing geographically separated organizations, systems and facilities; • integrating personnel with diverse business backgrounds and organizational cultures; • complying with non-U.S. regulatory requirements; • fluctuations in currency exchange rates; • enforcement of intellectual property rights in some non-U.S. countries; • difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets; and • general economic and political conditions.
An impairment of a significant portion of goodwill or intangible assets could have a material negative effect on our results of operations. Existing or future leverage may harm our financial condition and results of operations. At December 31, 2022, we had approximately $21.4 billion of debt. We and our subsidiaries may incur additional indebtedness in the future.
An impairment of a significant portion of goodwill or intangible assets could have a material negative effect on our results of operations. Existing or future leverage may harm our financial condition and results of operations. At December 31, 2023, we had approximately $23.1 billion of debt. We and our subsidiaries may incur additional indebtedness in the future.
Certain of our borrowings, including borrowings under our revolving credit facility, term loan, foreign lines of credit and commercial paper programs, are at variable rates of interest. During 2022, interest rates increased significantly and interest rates may continue to increase or remain at higher than recent historical levels in the future.
Certain of our borrowings, including borrowings under our revolving credit facility, term loan, foreign lines of credit and commercial paper programs, are at variable rates of interest. Beginning in 2022, and continuing through mid-2023, interest rates increased significantly and interest rates may continue to increase or remain at higher than recent historical levels in the future.
If the U.S. administration imposes additional tariffs, or if additional tariffs or trade restrictions are implemented by the U.S. or other countries, our hardware devices produced in China could be impacted.
If the U.S. administration imposes additional tariffs, or if additional tariffs or trade restrictions are implemented by the U.S. or 15 Table of Contents other countries, our hardware devices produced in China could be impacted.
From time to time, we utilize foreign currency forward contracts and other hedging instruments to mitigate the market value risks associated with foreign currency-denominated transactions and investments.
From time to time, we utilize foreign currency forward contracts and other hedging instruments to mitigate the market value risks associated with 20 Table of Contents foreign currency-denominated transactions and investments.
If we are unable to successfully manage the risks associated with the international operation and expansion of our business, our results of operations and financial condition could be negatively impacted. Our business has been and may continue to be adversely impacted by U.S. and global market and economic conditions.
If we are unable to successfully manage the risks associated with the international operation and expansion of our business, our results of operations and financial condition could be negatively impacted. Our business is impacted by U.S. and global market and economic conditions.
Merchant contracts may be contributed to the alliance by us and/or the bank or institution. The banks and other institutions generally provide card association sponsorship, clearing and settlement services and typically act as a merchant referral source when the institution has an existing banking or other relationship with such merchant. We provide transaction processing and related functions to the alliance.
The banks and other institutions generally provide card association sponsorship, clearing and settlement services and typically act as a merchant referral source when the institution has an existing banking or other relationship with such merchant. We provide transaction processing and related functions to the alliance.
Our facilities outside of the U.S., and those of our suppliers and vendors, including manufacturing, customer support, software development and technology hosting facilities, are subject to risks, including natural disasters, public health crises, political crises, terrorism, war (such as the war in Ukraine), political instability and other events 14 Table of Contents outside of our or our suppliers’ control.
Our facilities outside of the U.S., and those of our suppliers and vendors, including manufacturing, customer support, software development and technology hosting facilities, are subject to risks, including natural disasters, public health crises, political crises, terrorism, war, political instability and other events outside of our or our suppliers’ control.
Although we believe that we maintain a robust program of information security and controls and that none of the events that we have encountered to date have materially impacted us, we cannot be certain that the security measures and procedures we have in place to detect security incidents and protect sensitive data, including protection against unauthorized access and use by our employees, will be successful or sufficient to counter all current and emerging risks and threats.
Although we believe that we maintain a robust program of information security and controls and that none of the events that we have encountered to date have materially affected us, we cannot be certain that the security measures and procedures we have in place to detect security incidents and protect sensitive data, will be successful or sufficient to counter all current and emerging risks and threats.
In addition, we expect to continue to invest significant resources to maintain and enhance our information security and controls or to investigate and remediate any security vulnerabilities.
In addition, we have invested and expect to continue to invest significant resources to maintain and enhance our information security and controls or to investigate and mitigate security vulnerabilities.
Furthermore, our implementation of new practices and processes designed to comply with changing tax laws and regulations could require us to make substantial changes to our business practices, allocate additional resources, and increase our costs, which could negatively affect our business, results of operations and financial condition. 18 Table of Contents Unfavorable resolution of tax contingencies could adversely affect our results of operations and cash flows from operations.
Furthermore, our implementation of new practices and processes designed to comply with changing tax laws and regulations could require us to make substantial changes to our business practices, allocate additional resources, and increase our costs, which could negatively affect our business, results of operations and financial condition.
At December 31, 2022, we had approximately $4.0 billion in variable rate debt, which includes $200 million on our term loan, $233 million drawn on our revolving credit facility and foreign lines of credit, and an aggregate amount of $3.5 billion outstanding under our U.S. dollar and Euro commercial paper programs.
At December 31, 2023, we had approximately $2.3 billion in variable rate debt, which includes $516 million drawn on our revolving credit facility and foreign lines of credit, and an aggregate amount of $1.7 billion outstanding under our U.S. dollar and Euro commercial paper programs.
These hedging strategies may not, however, eliminate all of the risks related to foreign currency translation, and we may forgo the benefits we would otherwise experience if currency exchange rates were to change in our favor.
These hedging strategies may not, however, eliminate all of the risks related to foreign currency translation, and we may forgo the benefits we would otherwise experience if currency exchange rates were to change in our favor. In addition, we may incur material foreign currency exchange losses due to the remeasurement of monetary assets and liabilities in highly inflationary economies.
Misappropriation of our intellectual property and proprietary rights could impair our competitive position. Our ability to compete depends upon proprietary systems and technology. We actively seek to protect our intellectual property and proprietary rights. Nevertheless, unauthorized parties may attempt to copy aspects of our services or to obtain and use information that we regard as proprietary.
We actively seek to protect our intellectual property and proprietary rights. Nevertheless, unauthorized parties may attempt to copy aspects of our services or to obtain and use information that we regard as proprietary.
In addition, U.S. banking agencies have adopted or proposed enhanced cyber risk management standards that would apply to us and our financial institution clients and that would address cyber risk governance and management, management of internal and external dependencies, and incident response, cyber resilience and situational awareness.
Federal Trade Commission have adopted or proposed enhanced cyber and privacy security standards that apply to us and our financial institution clients and address cyber risk governance and management, management of internal and external dependencies, and incident response, cyber resilience and situational awareness.
From time to time, card associations and debit networks, including the card networks which we own and operate, increase the processing and other fees (including what is commonly called “interchange fees”) that they charge.
Changes in card association and debit network fees or products could increase costs or otherwise limit our operations. From time to time, card associations and debit networks, including the card networks which we own and operate, increase the processing and other fees (including what is commonly called “interchange fees”) that they charge.
Although it is difficult to predict how current or future tariffs on items imported from China or elsewhere will impact our business, the cost of our products manufactured in China and imported into the U.S. or other countries could increase, which in turn could adversely affect the demand for these products and have a material adverse effect on our business and results of operations. 15 Table of Contents Regulatory and Compliance Risks If we or third parties with whom we partner or contract fail to comply with applicable laws and regulations, we could be subject to liability and our business could be harmed.
Although it is difficult to predict how current or future tariffs on items imported from China or elsewhere will impact our business, the cost of our products manufactured in China and imported into the U.S. or other countries could increase, which in turn could adversely affect the demand for these products and have a material adverse effect on our business and results of operations.
Our businesses in those jurisdictions are subject to those data retention obligations. The volume and complexity of the regulations that impact our business, directly or indirectly, will continue to increase our cost of doing business.
The volume and complexity of the regulations that impact our business, directly or indirectly, will continue to increase our cost of doing business.
In addition, certain of our alliance partners are subject to regulation by federal and state authorities and, as a result, could pass through some of those compliance obligations to us.
Changes to applicable financial services laws or regulations could adversely impact our debit network business and other businesses. In addition, certain of our alliance partners are subject to regulation by federal and state authorities and, as a result, could pass through some of those compliance obligations to us.
There is also increased focus on data localization requirements around the world in countries such as the United Arab Emirates, China and India which could impact our business model with respect to our storage and transfer of personal data. Failure to comply with applicable laws in this area could also result in significant fines, penalties and reputational damage.
There is also increased focus on data localization requirements around the world in countries such as the United Arab Emirates, China and India which could impact our business model with respect to our storage and transfer of personal data. In addition, U.S. regulators, including the U.S. Federal Banking Agencies and the U.S.
We may not be able to integrate all aspects of acquired businesses successfully or realize the potential benefits of bringing them together.
We may not be able to integrate all aspects of acquired businesses successfully or realize the potential benefits of bringing them together. In addition, the process of integrating these acquisitions may disrupt our business and divert our resources.
If we or third parties with whom we partner or contract fail to comply with laws and regulations applicable to our business, including state and federal payment, cybersecurity, consumer protection, trade and data privacy laws and regulations, we could be exposed to litigation or regulatory proceedings, our client relationships and reputation could be harmed, and our ability to obtain new clients could be inhibited, which could have a material adverse impact on our business, results of operations and financial condition.
If we or third parties with whom we partner or contract fail to comply with applicable laws and regulations, we could be exposed to litigation or regulatory proceedings, our client relationships and reputation could be harmed, our ability to obtain new clients could be inhibited, we could be required to change the manner in which we conduct our business or suspend or terminate certain services, and we could incur significant fines, penalties, or losses, all of which could have a material adverse impact on our business, results of operations and financial condition.
The CFPB has issued guidance that applies to, and conducts direct examinations of, “supervised banks and nonbanks” as well as “supervised service providers” like us. CFPB rules, examinations and enforcement actions may require us to adjust our activities and may increase our compliance costs. Changes to the Dodd-Frank Act or regulations could adversely impact our debit network business.
The CFPB has issued regulations and guidance under U.S. consumer financial protection laws that apply to, and conducts direct examinations of, “supervised banks and nonbanks” as well as “supervised service providers” like us. CFPB rules, examinations and enforcement actions may require us to adjust our activities and may increase our compliance costs.
Global Market Risks Our business may be adversely affected by geopolitical and other risks associated with operations outside of the U.S. and, as we continue to expand internationally, we may incur higher than anticipated costs and may become more susceptible to these risks.
Although we attempt to limit our potential liability through disclaimers and limitation of liability provisions in our license and client agreements, we cannot be certain that these measures will successfully limit our liability. 14 Table of Contents Global Market Risks Our business may be adversely affected by geopolitical and other risks associated with operations outside of the U.S. and, as we continue to expand internationally, we may incur higher than anticipated costs and may become more susceptible to these risks.
Mergers, consolidations and failures of financial institutions reduce the number of our clients and potential clients, which could adversely affect our revenue. If our clients merge with or are acquired by other entities that are not our clients, or that use fewer of our services, they may discontinue or reduce their use of our services.
If our clients merge with or are acquired by other entities that are not our clients, or that use fewer of our services, they may discontinue or reduce their use of our services.
Our tax returns and positions are subject to review and audit by federal, state, local and international taxing authorities. An unfavorable outcome to a tax audit could result in higher tax expense, thereby negatively impacting our results of operations as well as our cash flows from operations.
Unfavorable resolution of tax contingencies could adversely affect our results of operations and cash flows from operations Our tax returns and positions are subject to review and audit by federal, state, local and international taxing authorities.
If any of these outcomes were to occur, our operational costs could increase significantly. 17 Table of Contents Failure to comply with state and federal antitrust requirements could adversely affect our business. Through our merchant alliances, we hold an ownership interest in several competing merchant acquiring businesses while serving as an electronic processor for those businesses.
Failure to comply with applicable laws in this area could also result in significant fines, penalties and reputational damage. Failure to comply with state and federal antitrust requirements could adversely affect our business. Through our merchant alliances, we hold an ownership interest in several competing merchant acquiring businesses while serving as an electronic processor for those businesses.
Several states also have adopted or proposed new privacy and cybersecurity laws targeting these issues. Legislation and regulations on cybersecurity, data privacy and data localization may compel us to enhance or modify our systems, invest in new systems or alter our business practices or our policies on data governance and privacy.
Legislation and regulations on cybersecurity, data privacy and data localization may compel us to enhance or modify our systems, invest in new systems or alter our business practices or our policies on data governance and privacy. If any of these outcomes were to occur, our operational costs could increase significantly.
Effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which our applications and services are made available.
As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software. Effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which our applications and services are made available.
Our business depends, in part, on our merchant relationships and alliances, and if we are unable to maintain these relationships and alliances, our business may be adversely affected. Under our alliance program, a bank or other institution forms an alliance with us, generally on an exclusive basis, either contractually or through a separate legal entity.
Under our alliance program, a bank or other institution forms an alliance with us, generally on an exclusive basis, either contractually or through a separate legal entity. Merchant contracts may be contributed to the alliance by us and/or the bank or 12 Table of Contents institution.
We have established contingency reserves for known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the proper tax treatment of the item. These reserves reflect what we believe to be reasonable assumptions as to the likely final resolution of each issue if raised by a taxing authority.
These reserves reflect what we believe to be reasonable assumptions as to the likely final resolution of each issue if raised by a taxing authority.
Our ability to respond timely to these changes, including by enhancing our current products and services and developing and introducing new products and services, will significantly affect our future success.
The markets for our products and services are characterized by constant and rapid technological change, evolving industry standards, frequent introduction of new products and services, and increasing client expectations. Our ability to respond timely to these changes, including by enhancing our current products and services and developing and introducing new products and services, will significantly affect our future success.
Any adverse result related to violation of third-party intellectual property rights could materially and adversely harm our business, results of operations and financial condition. Even if intellectual property claims brought against us are without merit, they may result in costly and time-consuming litigation and may require significant attention from our management and key personnel.
Even if intellectual property claims brought against us are without merit, they may result in costly and time-consuming litigation and may require significant attention from our management and key personnel. 17 Table of Contents Misappropriation of our intellectual property and proprietary rights could impair our competitive position. Our ability to compete depends upon proprietary systems and technology.
If we fail to keep pace with technological change, we could lose clients or have trouble attracting new clients, and our ability to grow may be limited. The markets for our products and services are characterized by constant and rapid technological change, evolving industry standards, frequent introduction of new products and services, and increasing client expectations.
If we fail to keep pace with technological change, including as a result of artificial intelligence, we could lose clients or have trouble attracting new clients, and our ability to grow may be limited.
In addition, the various card associations and networks prescribe certain capital requirements. Any increase in the capital level required would further limit our use of capital for other purposes. Consolidations in the banking and financial services industry could adversely affect our revenue by eliminating existing or potential clients and making us more dependent on fewer clients.
Consolidations in the banking and financial services industry could adversely affect our revenue by eliminating existing or potential clients and making us more dependent on fewer clients. Mergers, consolidations and failures of financial institutions reduce the number of our clients and potential clients, which could adversely affect our revenue.
The steps we have taken may not prevent misappropriation of technology. Agreements entered into for that purpose may not be enforceable or provide us with an adequate remedy. It is also possible that others will independently develop the same or similar technology. Further, we use open source software in connection with our solutions.
It is also possible that others will independently develop the same or similar technology. Further, we use open source software in connection with our solutions. Companies that incorporate open source software into their solutions have, from time to time, faced claims challenging the ownership of solutions developed using open source software.
We operate businesses that are subject to credit reporting and debt collection laws and regulations in the U.S. and certain of our subsidiaries are subject to privacy, anti-money laundering, debt collection, and payment institution or electronic money licensing regulations outside the U.S.
Our businesses are subject to state, federal, and foreign laws and regulations, including payment, cybersecurity, consumer protection, money transmission, data privacy, anti-money laundering, economic and trade sanctions, payment institution, electronic money licensing, credit reporting and debt collection laws and regulations.
Together with our vendors and clients, we have been directly impacted by this decision, and our ability to transfer data outside the E.U. may be further impacted by determinations made by regulators in the E.U. We are also subject to U.K. GDPR following the U.K.’s exit from the E.U. Single Market and Customs Union.
E.U. data protection law continuously develops and requires significant changes to our policies and procedures. We are also subject to U.K. GDPR following the U.K.’s exit from the E.U. Single Market and Customs Union.
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The ongoing COVID-19 pandemic has had, and may continue to have, adverse impacts on our business and may amplify many of our other known risks.
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We believe that data, and the insights enabled by data, can be used to create or enhance the products and services that we offer to our clients. As a result, we are using, and expect to continue to expand our use of, artificial intelligence and machine learning.
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The ongoing COVID-19 pandemic and the related government actions taken to prevent the spread of COVID-19 have increased economic uncertainty and financial market volatility and caused a decline in consumer and business confidence, and could further negatively impact the demand for our products and services, including merchant acquiring and payment processing.
Added
However, legislation that would govern the development or use of artificial intelligence is under consideration in the U.S. at the state and local level, as well as abroad. As a result, the ability to use artificial intelligence and machine learning may be constrained by current or future laws, regulatory or self-regulatory requirements.
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Ultimately, the extent of the adverse impact of the COVID-19 pandemic on our business, results of operations, liquidity and financial condition will depend on, among other matters, the duration and intensity of the pandemic; the level of success of global vaccination efforts; governmental and private sector responses to the pandemic and the impact of such responses on us; and the impact of the pandemic on our employees, clients, vendors, supply chain, operations and sales, all of which are uncertain, difficult to predict and may remain prevalent for a significant period of time even after the pandemic subsides.
Added
In addition, the various card associations and networks prescribe certain capital requirements. Any increase in the capital level required would further limit our use of capital for other purposes. Our business depends, in part, on our merchant relationships and alliances, and if we are unable to maintain these relationships and alliances, our business may be adversely affected.
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These and other potential negative impacts relating to the COVID-19 pandemic may also heighten or exacerbate the other risk factors described in this Annual Report on Form 10-K. 12 Table of Contents Changes in card association and debit network fees or products could increase costs or otherwise limit our operations.
Added
Regulatory and Compliance Risks If we or third parties with whom we partner or contract fail to comply with applicable laws and regulations, we could be subject to liability and our business could be harmed.
Removed
Although we attempt to limit our potential liability through disclaimers and limitation of liability provisions in our license and client agreements, we cannot be certain that these measures will successfully limit our liability.
Added
Any adverse result related to violation of third-party intellectual property rights could materially and adversely harm our business, results of operations and financial condition.
Removed
In Europe, we are continuing to assess the implications of the U.K. leaving the E.U. (“Brexit”). We cannot predict the impact that Brexit, including any future trade agreements, divergence in law or currency fluctuations, will have on our business and our clients, and it is possible that it may adversely affect our operations and financial results.
Added
In addition, use of AI tools may result in the release of confidential or proprietary information which could limit our ability to protect, or prevent us from protecting, our intellectual property rights. The steps we have taken may not prevent misappropriation of technology. Agreements entered into for that purpose may not be enforceable or provide us with an adequate remedy.
Removed
Certain of our subsidiaries are licensed as money transmitters and are required, among other matters, to demonstrate and maintain certain levels of net worth and liquidity and to file periodic reports.
Added
An unfavorable outcome to a tax audit could result in higher tax expense, thereby negatively impacting our results of operations as well as our cash flows from operations. We have established contingency reserves for known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the proper tax treatment of the item.
Removed
Our direct-to-consumer payments businesses are subject to state and federal regulations in the U.S., including state money transmission regulations, anti-money laundering regulations, economic and trade sanctions administered by the U.S. Treasury Department’s Office of Foreign Asset Control (“OFAC”) and certain privacy regulations, such as the U.S. Gramm-Leach-Bliley Act.
Added
These risks may arise for a number of reasons: we may not be able to find suitable businesses to acquire at affordable valuations or on other acceptable terms; we may face competition for acquisitions from other potential acquirers; we may need to borrow money or sell equity or debt securities to the public to finance acquisitions and the terms of these financings may be adverse to us; changes in accounting, tax, securities or other regulations could increase the difficulty or cost for us to complete acquisitions; we may discover liabilities, deficiencies, or other claims associated with the companies or assets we acquire that were not identified in advance, which may result in significant unanticipated costs; the effectiveness of our due diligence review and our ability to evaluate the results of such due diligence are dependent upon the accuracy and completeness of statements 19 Table of Contents and disclosures made or actions taken by the companies we acquire or their representatives, as well as the limited amount of time in which acquisitions are executed.
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Our Money Network Financial, LLC subsidiary must meet the requirements of the Financial Crimes Enforcement Network because it is the program manager for various prepaid card programs.
Removed
We are also subject to certain economic and trade sanctions programs, including those that are administered by OFAC, which prohibit or restrict transactions to or from, or dealings with, specified countries, their governments, individuals and entities that are specially-designated nationals of those countries, narcotics traffickers and terrorists or terrorist organizations.
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Similar anti-money laundering, counter terrorist financing and proceeds of crime laws apply to movements of currency and payments through electronic transactions and to dealings with persons specified in lists equivalent to OFAC lists in several other countries and require specific data retention obligations to be observed by intermediaries in the payment process.
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Failure to comply with these laws and regulations, or changes in the regulatory environment, including changing interpretations and the implementation of new, varying or more restrictive laws and regulations by federal, state, local or foreign governments, may result in significant financial penalties, reputational harm, suspension or termination of our ability to provide certain services, or change or restrict the manner in which we currently conduct our business, all of which could have a material adverse impact on our business, results of operations and financial condition.
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E.U. data protection law continuously develops and requires significant changes to our policies and procedures. For example, in 2020, the Court of Justice of the E.U. issued a decision that invalidated the European Commission’s adequacy decision for the E.U.-U.S.
Removed
Privacy Shield Framework and placed additional safeguards necessary for transfers of personal data to the U.S., requiring companies and regulators to conduct case-by-case analyses to determine whether foreign protections concerning government access to transferred data meet E.U. standards.
Removed
Companies that incorporate open source software into their solutions have, from time to time, faced claims challenging the ownership of solutions developed using open source software. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties At December 31, 2022, we owned 19 and leased 141 properties globally. Our real estate strategy includes developing state-of-the art centralized campus environments in strategic locations across the U.S., including in Florida, Georgia, Nebraska, New Jersey and Wisconsin. These locations are used for operational, sales, management and administrative purposes.
Biggest changeItem 2. Properties At December 31, 2023, we owned 18 and leased 117 properties globally. Our real estate strategy includes developing state-of-the art centralized campus environments in strategic locations across the U.S., including in Florida, Georgia, Nebraska, New Jersey and Wisconsin. These locations are used for operational, data center, sales, management and administrative purposes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. 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.
Biggest changeIn 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. 22 Table of Contents
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Item 3. 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.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFoskett joined Fiserv as part of the acquisition of First Data Corporation in 2019, where he served as executive vice president, head of corporate and business development since 2015 and co-head of global financial services since 2018. He joined First Data Corporation in 2014 as head of global, strategic and national accounts. From 2011 to 2014, Mr.
Biggest changeGibbons has served as Head of the Financial Institutions Group since October 2023, and previously served as Co-Head of the Financial Institutions Group since March 2023 and Head of the Europe, Middle East, and Africa (EMEA) region since joining Fiserv in 2019 as a part of the acquisition of First Data Corporation, where he served as Head of the EMEA region since 2018.
Previously, he served as general counsel of First Data Corporation from 2014 to 2019. Before joining First Data, Mr. Rosman was group general counsel of Willis Group Holdings plc, a multinational risk advisor, insurance brokerage and reinsurance brokerage company, from 2012 to 2014 and deputy general counsel from 2009 to 2012. Mr.
Previously, he served as general counsel of First Data Corporation from 2014 to 2019. Before joining First Data Corporation, Mr. Rosman was group general counsel of Willis Group Holdings plc, a multinational risk advisor, insurance brokerage, and reinsurance brokerage company, from 2012 to 2014, and deputy general counsel from 2009 to 2012. Mr.
He served as Chief Operating Officer from 2019 to 2020. Mr. Bisignano joined Fiserv as part of the acquisition of First Data Corporation in 2019, where he served as chief executive officer since 2013 and chairman since 2014.
Bisignano has served as Chairman of the Board since 2022, Chief Executive Officer since 2020 and a director and President since 2019. He served as Chief Operating Officer from 2019 to 2020. Mr. Bisignano joined Fiserv as part of the acquisition of First Data Corporation in 2019, where he served as chief executive officer since 2013 and chairman since 2014.
Rosman also previously served as an assistant United States attorney and as deputy assistant to the president and deputy staff secretary for President William J. Clinton. 22 Table of Contents PART II
Rosman also previously served as an assistant U.S. attorney and as deputy assistant to the president and deputy staff secretary for President William J. Clinton. 24 Table of Contents PART II
Hau served as executive vice president and chief financial officer at TE Connectivity Ltd., a global technology and manufacturing company, from 2012 to 2016.
Mr. Hau has served as Chief Financial Officer since 2016. Before joining Fiserv, Mr. Hau served as executive vice president and chief financial officer at TE Connectivity Ltd., a global technology and manufacturing company, from 2012 to 2016.
Chiarello has served as Chief Operating Officer since 2021 and previously served as Chief Administrative Officer since 2019. Mr. Chiarello joined Fiserv as part of the acquisition of First Data Corporation in 2019, where he served as president since 2013. From 2007 to 2013, he served as chief information officer of JPMorgan Chase & Co., a global financial services firm.
Chiarello has served as Chief Operating Officer since 2021 and previously served as Chief Administrative Officer from 2019 to 2021. Mr. Chiarello joined Fiserv as part of the acquisition of First Data Corporation in 2019, where he served as president since 2013.
Item 4. Mine Safety Disclosures Not applicable. 21 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The names of our executive officers as of February 23, 2023, together with their ages, positions and business experience are described below: Name Age Title Frank J. Bisignano 63 Chairman, President and Chief Executive Officer Guy Chiarello 63 Chief Operating Officer Christopher M.
Item 4. Mine Safety Disclosures Not applicable. 23 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The names of our executive officers as of February 22, 2024, together with their ages, positions and business experience are described below: Name Age Title Frank J.
From 1985 to 2007, Mr. Chiarello served in various technology and leadership roles including chief information officer at Morgan Stanley, a global financial services firm. Mr. Foskett has served as Chief Revenue Officer since 2021 and previously served as Executive Vice President, Global Sales since 2019. Mr.
From 2007 to 2013, he served as chief information officer of JPMorgan Chase & Co., a global financial services firm. From 1985 to 2007, Mr. Chiarello served in various technology and leadership roles including chief information officer at Morgan Stanley, a global financial services firm. Mr.
Kereere held various leadership positions at American Express Company, a global integrated payments company, including head of U.S. national merchant business and head of global network business. Mr. Rosman has served as Chief Administrative Officer and Chief Legal Officer since 2021. Prior to joining Fiserv, Mr. Rosman was general counsel of OneMain Financial, a consumer lender, from 2020 to 2021.
LaClair worked at McKinsey & Company, where she was a strategy consultant and practice manager for the North America operations practice. Mr. Rosman has served as Chief Administrative Officer and Chief Legal Officer since 2021. Before joining Fiserv, Mr. Rosman was general counsel of OneMain Financial, a consumer lender, from 2020 to 2021.
Foskett 65 Chief Revenue Officer Robert W. Hau 57 Chief Financial Officer Suzan Kereere 57 Executive Vice President, Head of Global Business Solutions Adam L. Rosman 57 Chief Administrative Officer and Chief Legal Officer Mr. Bisignano has served as Chairman of the Board since May 2022, Chief Executive Officer since 2020 and a director and President since 2019.
Bisignano 64 Chairman, President and Chief Executive Officer Guy Chiarello 64 Chief Operating Officer John Gibbons 64 Head of Financial Institutions Group Robert W. Hau 58 Chief Financial Officer Jennifer LaClair 52 Head of Global Business Solutions Adam L. Rosman 58 Chief Administrative Officer and Chief Legal Officer Mr.
Removed
Foskett served as managing director, head of North American treasury services and global head of sales for treasury services at JPMorgan Chase & Co., a global financial services firm. From 2009 to 2011, he was managing director, global head of financial institutions at National Australia Bank, an Australian financial institution. From 1991 to 2008, Mr.
Added
Before joining First Data Corporation, Mr. Gibbons led global transaction banking at Deutsche Bank, a global financial services firm, from 2016 to 2018, and served in various leadership roles at JPMorgan Chase & Co., a global financial services firm, from 2011 to 2016, including as regional executive for EMEA and global head of banks and broker dealers for treasury services.
Removed
Foskett was managing director in Citigroup’s Corporate & Investment Bank leading several global businesses. Prior to that, he was employed by Goldman Sachs & Co. and Merrill Lynch & Co. focusing on mergers and acquisitions. Mr. Hau has served as Chief Financial Officer since 2016. Before joining Fiserv, Mr.
Added
Ms. LaClair has served as Head of Global Business Solutions since January 2024 and previously served as Chief Revenue Officer since July 2023. Before joining Fiserv, Ms. LaClair served as chief financial officer of Ally Financial, a digital-only bank and national retail auto lender, from 2017 to 2022. From 2007 to 2017, Ms.
Removed
Ms. Kereere has served as Executive Vice President, Head of Global Business Solutions since December 2021 after joining the company as its Chief Growth Officer in June 2021. Prior to joining Fiserv, Ms.
Added
LaClair held multiple leadership roles at PNC Financial Services, including chief financial officer for all businesses spanning consumer, commercial and corporate banking, mortgage, and asset management, and head of PNC’s business bank, including merchant services. Prior to that, from 2001 to 2007, Ms.
Removed
Kereere held several senior management roles at Visa Inc., a global payments technology company, including global head of merchant sales and acquiring from 2018 to 2021, head of Europe merchant sales and acquiring from 2017 to 2018 and head of the global merchant client group from 2016 to 2017. From 1996 to 2016, Ms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price Information Our common stock is traded on the NASDAQ Global Select Market under the symbol “FISV.” At December 31, 2022, our common stock was held by 1,591 shareholders of record and by a significantly greater number of shareholders who hold shares in nominee or street name accounts with brokers.
Biggest changeAt December 31, 2023, our common stock was held by 1,538 shareholders of record and by a significantly greater number of shareholders who hold shares in nominee or street name accounts with brokers. We have never paid dividends on our common stock and we do not anticipate paying dividends in the foreseeable future.
The following graph compares the cumulative total shareholder return on our common stock for the five years ended December 31, 2022 with the S&P 500 Index and the NASDAQ US Benchmark Transaction Processing Services Index (the “Index”). Prior to September 21, 2020, the Index was known as the NASDAQ US Benchmark Financial Administration Index.
The following graph compares the cumulative total shareholder return on our common stock for the five years ended December 31, 2023 with the S&P 500 Index, the S&P 500 Financials Index and the NASDAQ US Benchmark Transaction Processing Services Index (the “Index”). Prior to September 21, 2020, the Index was known as the NASDAQ US Benchmark Financial Administration Index.
For additional information regarding our expected use of capital, refer to the discussion in this report under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” 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 Securities Exchange Act of 1934) of shares of our common stock during the three months ended December 31, 2022: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1-31, 2022 2,582,723 $ 96.80 2,582,723 21,910,039 November 1-30, 2022 3,030,000 99.94 3,030,000 18,880,039 December 1-31, 2022 1,949,510 101.14 1,949,510 16,930,529 Total 7,562,233 7,562,233 (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.
For additional information regarding our expected use of capital, refer to the discussion in this report under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” 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 Securities Exchange Act of 1934) of shares of our common stock during the three months ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1-31, 2023 3,300,000 $ 113.22 3,300,000 57,243,104 November 1-30, 2023 2,330,468 122.71 2,330,468 54,912,636 December 1-31, 2023 2,933,402 133.08 2,933,402 51,979,234 Total 8,563,870 8,563,870 (1) On February 22, 2023, our board of directors authorized the purchase of up to 75.0 million shares of our common stock.
The Index, as renamed, is identical to the NASDAQ US Benchmark Financial Administration Index prior to its name change on 23 Table of Contents September 21, 2020. The graph assumes that $100 was invested on December 31, 2017 in our common stock and each index and that all dividends were reinvested.
The Index, as renamed, is identical to the NASDAQ US Benchmark Financial Administration Index prior to its name change on September 21, 2020.
Removed
We have never paid dividends on our common stock and we do not anticipate paying dividends in the foreseeable future.
Added
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price Information Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “FI.” On June 7, 2023, we transferred the listing of our common stock to the NYSE from the NASDAQ Global Select Market, where it had previously traded under the symbol “FISV”.
Removed
These authorizations do not expire. In connection with the vesting of restricted stock awards, shares of common stock are delivered to the Company by employees to satisfy tax withholding obligations.
Added
In connection with the transfer of the listing of our common stock to the New York Stock Exchange from the NASDAQ Global Select Market in 2023, we believe the S&P 500 Financials Index is a more appropriate published industry index for comparison purposes going forward as it contains a number of our peers.
Removed
The following table summarizes such purchases of common stock during the three months ended December 31, 2022: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1-31, 2022 — $ — — — November 1-30, 2022 67 (1) 100.99 — — December 1-31, 2022 7 (1) 102.08 — — Total 74 — (1) Shares surrendered to us to satisfy tax withholding obligations in connection with the vesting of restricted stock awards issued to employees.
Added
The graph assumes that $100 was invested on December 31, 2018 in our common stock and each index and that all dividends were reinvested. No cash dividends have been declared on our common stock.
Removed
No cash dividends have been declared on our common stock. The comparisons in the graph are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of our common stock.
Added
The comparisons in the graph are required by the Securities and Exchange Commission and are not intended to forecast or be indicative of possible future performance of our common stock. 25 Table of Contents December 31, 2018 2019 2020 2021 2022 2023 Fiserv, Inc. $ 100 $ 157 $ 155 $ 141 $ 138 $ 181 S&P 500 Index 100 131 156 200 164 207 S&P 500 Financials Index 100 132 130 175 157 176 NASDAQ US Benchmark Transaction Processing Services Index 100 139 187 178 139 169 Item 6. [Reserved]
Removed
December 31, 2017 2018 2019 2020 2021 2022 Fiserv, Inc. $ 100 $ 112 $ 176 $ 174 $ 158 $ 154 S&P 500 Index 100 96 126 149 192 157 NASDAQ US Benchmark Transaction Processing Services Index 100 107 149 199 190 148 Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

103 edited+41 added−38 removed68 unchanged
Biggest change(In millions) Percentage of Revenue (1) Increase (Decrease) Year Ended December 31, 2022 2021 2022 2021 2022 vs. 2021 Revenue: Processing and services $ 14,460 $ 13,307 81.5 % 82.0 % $ 1,153 9 % Product 3,277 2,919 18.5 % 18.0 % 358 12 % Total revenue 17,737 16,226 100.0 % 100.0 % 1,511 9 % Expenses: Cost of processing and services 5,771 6,084 39.9 % 45.7 % (313) (5) % Cost of product 2,221 2,044 67.8 % 70.0 % 177 9 % Sub-total 7,992 8,128 45.1 % 50.1 % (136) (2) % Selling, general and administrative 6,059 5,810 34.2 % 35.8 % 249 4 % Net gain on sale of businesses and other assets (54) — (0.3) % — % 54 n/m Total expenses 13,997 13,938 78.9 % 85.9 % 59 — % Operating income 3,740 2,288 21.1 % 14.1 % 1,452 63 % Interest expense, net (733) (693) (4.1) % (4.3) % 40 6 % Other (expense) income (94) 71 (0.5) % 0.4 % (165) n/m Income before income taxes and income from investments in unconsolidated affiliates 2,913 1,666 16.4 % 10.3 % 1,247 75 % Income tax provision (551) (363) (3.1) % (2.2) % 188 52 % Income from investments in unconsolidated affiliates 220 100 1.2 % 0.6 % 120 120 % Net income 2,582 1,403 14.6 % 8.6 % 1,179 84 % Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests 52 69 0.3 % 0.4 % (17) (25) % Net income attributable to Fiserv, Inc. $ 2,530 $ 1,334 14.3 % 8.2 % $ 1,196 90 % (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.
Biggest changeYear Ended December 31, 2023 2022 Percentage of Revenue (1) Increase (Decrease) (In millions) 2023 2022 $ % Revenue: Processing and services $ 15,630 $ 14,460 81.9 % 81.5 % $ 1,170 8 % Product 3,463 3,277 18.1 % 18.5 % 186 6 % Total revenue 19,093 17,737 100.0 % 100.0 % 1,356 8 % Expenses: Cost of processing and services 5,332 5,771 34.1 % 39.9 % (439) (8) % Cost of product 2,338 2,221 67.5 % 67.8 % 117 5 % Sub-total 7,670 7,992 40.2 % 45.1 % (322) (4) % Selling, general and administrative 6,576 6,059 34.4 % 34.2 % 517 9 % Net gain on sale of businesses and other assets (167) (54) (0.9) % (0.3) % 113 n/m Total expenses 14,079 13,997 73.7 % 78.9 % 82 1 % Operating income 5,014 3,740 26.3 % 21.1 % 1,274 34 % Interest expense, net (976) (733) (5.1) % (4.1) % 243 33 % Other expense, net (140) (94) (0.7) % (0.5) % 46 49 % Income before income taxes and (loss) income from investments in unconsolidated affiliates 3,898 2,913 20.4 % 16.4 % 985 34 % Income tax provision (754) (551) (3.9) % (3.1) % 203 37 % (Loss) income from investments in unconsolidated affiliates (15) 220 (0.1) % 1.2 % (235) n/m Net income 3,129 2,582 16.4 % 14.6 % 547 21 % Less: net income attributable to noncontrolling interests and redeemable noncontrolling interests 61 52 0.3 % 0.3 % 9 17 % Net income attributable to Fiserv, Inc. $ 3,068 $ 2,530 16.1 % 14.3 % $ 538 21 % (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. 34 Table of Contents Year Ended December 31, (In millions) Acceptance Fintech Payments Corporate and Other Total Total revenue: 2023 $ 8,132 $ 3,171 $ 6,696 $ 1,094 $ 19,093 2022 7,292 3,170 6,262 1,013 17,737 Revenue growth $ 840 $ 1 $ 434 $ 81 $ 1,356 Revenue growth percentage 12 % — % 7 % 8 % Operating income (loss): 2023 $ 2,856 $ 1,159 $ 3,189 $ (2,190) $ 5,014 2022 2,321 1,157 2,823 (2,561) 3,740 Operating income growth $ 535 $ 2 $ 366 $ 371 $ 1,274 Operating income growth percentage 23 % — % 13 % 34 % Operating margin: 2023 35.1 % 36.6 % 47.6 % 26.3 % 2022 31.8 % 36.5 % 45.1 % 21.1 % Operating margin growth (1) 330 bps 10 bps 250 bps 520 bps (1) Represents the basis point growth in operating margin.
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 Carat SM , our integrated operating system for large businesses.
These solutions include 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 Carat SM , our integrated operating system for large businesses.
The businesses in our Fintech segment provide financial institutions around the world with 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.
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.
Finxact is included within the Fintech segment and advances our digital banking strategy, expanding our account processing, digital and payments solutions. We acquired these businesses in 2022 for an aggregate purchase price of approximately $994 million, net of $28 million of acquired cash, and including earn-out provisions estimated at a fair value of $6 million.
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.
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.
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 revenue, comply with regulations and enhance operating efficiency.
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 December 31, 2022 and variable-rate revolving credit facilities with an aggregate borrowing capacity of $83 million with a syndicate of banks, which mature in April 2027.
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 December 31, 2023 and variable-rate revolving credit facilities with an aggregate borrowing capacity of $83 million with a syndicate of banks, which mature in April 2027.
The businesses in the Payments segment provide financial institutions, corporate clients and the public sector with the products and services required to process digital payment transactions. This includes card transactions such as debit, credit and prepaid card processing and services; a range of network services, security and fraud protection products; and card production and print services.
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.
The net gain on sale of businesses and other assets in 2022 included a $137 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 and a $44 million pre-tax gain from the sale of Fiserv Costa Rica, S.A. and our SIS operations.
The net gain on sale of businesses and other assets in 2022 of $54 million included a $137 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 and a $44 million pre-tax gain from the sale of Fiserv Costa Rica, S.A. and our SIS operations.
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.
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.
Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of: salaries, wages, commissions and related expenses paid to sales personnel, administrative employees and management; third-party commissions; advertising and promotional costs; certain depreciation and amortization; and other selling and administrative expenses. 31 Table of Contents Financial Results 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.
Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of: salaries, wages, commissions and related expenses paid to sales personnel, administrative employees and management; third-party commissions; advertising and promotional costs; certain depreciation and amortization; and other selling and administrative expenses. 33 Table of Contents Financial Results 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.
We have no accumulated goodwill impairment through December 31, 2022. Additional information regarding our goodwill is included in Note 7 to the consolidated financial statements. We review intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. We review capitalized software development costs for impairment at each reporting date.
We have no accumulated goodwill impairment through December 31, 2023. Additional information regarding our goodwill is included in Note 7 to the consolidated financial statements. We review intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. We review capitalized software development costs for impairment at each reporting date.
This section provides an analysis of our cash flows and a discussion of our outstanding debt and commitments at December 31, 2022. 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.
This section provides an analysis of our cash flows and a discussion of our outstanding debt and commitments at December 31, 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.
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.
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.
Results of Operations Components of Revenue and Expenses The following summary describes the components of revenue and expenses as presented in our consolidated statements of income. Processing and Services Processing and services revenue, which represented 82% of our total revenue in 2022, is primarily generated from account- and transaction-based fees under multi-year contracts.
Results of Operations Components of Revenue and Expenses The following summary describes the components of revenue and expenses as presented in our consolidated statements of income. Processing and Services Processing and services revenue, which represented 82% of our total revenue in 2023, is primarily generated from account- and transaction-based fees under multi-year contracts.
To the extent our judgment changes, the valuation allowances are then adjusted, generally through the provision for income taxes, in the period in which the change in facts and circumstances occurs. Additional information regarding our income taxes is included in Note 17 to the consolidated financial statements.
To the extent our judgment changes, the valuation allowances are then adjusted as appropriate, generally through the provision for income taxes, in the period in which the change in facts and circumstances occurs. Additional information regarding our income taxes is included in Note 17 to the consolidated financial statements.
As of December 31, 2022, we had a corporate credit rating of Baa2 with a stable outlook from Moody’s Investors Service, Inc. (“Moody’s”) and BBB with a stable outlook from Standard & Poor’s Ratings Services (“S&P”) on our senior unsecured debt securities.
As of December 31, 2023, we had a corporate credit rating of Baa2 with a stable outlook from Moody’s Investors Service, Inc. (“Moody’s”) and BBB with a stable outlook from Standard & Poor’s Ratings Services (“S&P”) on our senior unsecured debt securities.
Income from investments in unconsolidated affiliates in 2022 includes pre-tax gains totaling $209 million, primarily related to the acquisition-date fair value remeasurement of our previously held equity interest in Finxact of $110 million, as well as $80 million resulting from the dilution of our ownership interest in conjunction with the Sagent M&C, LLC transaction with a third party.
Income from investments in unconsolidated affiliates in 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.
This section generally discusses information and results pertaining to the years ended December 31, 2022 and 2021. Information and discussion of results pertaining to the year ended December 31, 2020 not included herein can be found in Part II, “Item 7.
This section generally discusses information and results pertaining to the years ended December 31, 2023 and 2022. Information and discussion of results pertaining to the year ended December 31, 2021 not included herein can be found in Part II, “Item 7.
This section contains an analysis of our results of operations presented in the accompanying consolidated statements of income by comparing the results for the year ended December 31, 2022 to the results for the year ended December 31, 2021. • Liquidity and capital resources .
This section contains an analysis of our results of operations presented in the accompanying consolidated statements of income by comparing the results for the year ended December 31, 2023 to the results for the year ended December 31, 2022. • Liquidity and capital resources .
City POS is included within the Acceptance segment and expands the reach of our merchant services business. On April 1, 2022, we acquired a remaining ownership interest in Finxact, Inc. (“Finxact”), a developer of cloud-native banking solutions powering digital transformation throughout the financial services sector.
City POS is included within the Acceptance segment and expands our merchant services business. On April 1, 2022, we acquired the remaining majority controlling ownership interest in Finxact, Inc. (“Finxact”), a developer of cloud-native banking solutions powering digital transformation throughout the financial services sector.
Dispositions 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 Fintech segment.
On October 17, 2022, we sold Fiserv Costa Rica, S.A. and our Systems Integration Services (“SIS”) operations, which provides information technology engineering services in the United States of America (“U.S.”) and India, to a single buyer. Fiserv Costa Rica, S.A. and SIS were reported primarily within the Fintech segment.
This section contains background information on our company and the products and services that we provide, acquisitions and dispositions, our enterprise priorities, and the trends affecting our industry in order to provide context for management’s discussion and analysis of our financial condition and results of operations. 24 Table of Contents • Critical accounting policies and estimates .
This section contains background information on our company and the products and services that we provide, acquisitions and dispositions, our enterprise priorities, and the trends affecting our industry in order to provide context for management’s discussion and analysis of our financial condition and results of operations. • Critical accounting policies and estimates .
Product Product revenue, which represented 18% of our total revenue in 2022, is derived from print and card production sales, as well as software license and hardware (primarily POS devices) sales.
Product Product revenue, which represented 18% of our total revenue in 2023, is derived from print and card production sales, as well as software license and hardware (primarily POS devices) sales.
Further, contract modifications require the identification and evaluation of the performance obligations of the modified contract, including the allocation of revenue to the remaining performance obligations and the period of recognition for each identified performance obligation. Additional information regarding our revenue recognition policies is included in Note 3 to the consolidated financial statements.
Further, contract modifications require the identification and evaluation of the performance obligations of the modified contract, including the allocation of revenue to the remaining performance obligations and the 32 Table of Contents period of recognition for each identified performance obligation. Additional information regarding our revenue recognition policies is included in Note 3 to the consolidated financial statements.
We maintained a liability of $40 million at December 31, 2022 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.
We maintained a liability of $31 million at December 31, 2023 for the estimated fair value of our non-contingent obligations to stand ready to perform over the term of the guarantee arrangements. Such guarantees will be amortized in future periods over the contractual term of the debt.
As of December 31, 2022, we had a commercial paper credit rating of P-2 from Moody’s and A-2 from S&P. The interest rates payable on certain of our senior notes, term loan and commercial paper notes programs are subject to adjustment from time to time if Moody’s or S&P changes the debt rating applicable to the notes.
As of December 31, 2023, we had a commercial paper credit rating of P-2 from Moody’s and A-2 from S&P. The interest rates payable on certain of our senior notes and commercial paper notes programs are subject to adjustment from time to time if Moody’s or S&P changes the debt rating applicable to the notes.
Management's Discussion and Analysis of Financial Condition and Results of Operations ” of our Annual Report on Form 10-K for fiscal year 2021, filed with the Securities and Exchange Commission on February 24, 2022. Our discussion is organized as follows: • Overview .
Management's Discussion and Analysis of Financial Condition and Results of Operations ” of our Annual Report on Form 10-K for fiscal year 2022, filed with the Securities and Exchange Commission on February 23, 2023. Our discussion is organized as follows: • Overview .
The amount of tax benefit recognized reflects the largest benefit that we 30 Table of Contents believe is more likely than not to be realized on settlement with the relevant taxing authority. As additional information becomes available, we evaluate our tax positions and adjust our liability for known tax exposures as appropriate.
The amount of tax benefit recognized reflects the largest benefit that we believe is more likely than not to be realized on settlement with the relevant taxing authority. As additional information becomes available, we evaluate our tax positions and appropriately adjust our liability for known tax exposures.
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 processing and source capture, and other products and services that support numerous types of financial transactions.
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, check processing, and other products and services that support numerous types of financial transactions.
Outstanding borrowings under the term loan bear interest at a variable rate based on one-month LIBOR or a base rate, in each case plus a specified margin based on our long-term debt rating in effect from time to time.
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 our long-term debt rating in effect from time to time.
Risk Factors.” 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.
Quantitative and Qualitative Disclosures About Market Risk.” 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.
(2) The calculations assume that only mandatory debt repayments are made, no additional refinancing or lending occurs, except for our 0.375% Euro-denominated senior notes due in July 2023, 3.800% senior notes due in October 2023, and U.S. dollar and Euro commercial paper notes programs as we have the intent to refinance this debt on a long-term basis through the issuance of new commercial paper notes upon maturity, and we have the ability to do so under our revolving credit facility maturing in June 2027.
(2) The calculations assume that only mandatory debt repayments are made, no additional refinancing or lending occurs, except for our 2.750% senior notes due in July 2024, and U.S. dollar and Euro commercial paper notes programs as we have the intent to refinance this debt on a long-term basis through the issuance of new commercial paper notes upon maturity, and we have the ability to do so under our revolving credit facility maturing in June 2027.
There were no outstanding borrowings on the revolving credit facilities at December 31, 2022. 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.
There were $24 million of outstanding borrowings on the revolving credit facilities at December 31, 2023. We have guaranteed the debt of the Lending Joint Ventures and do not anticipate that the Lending Joint Ventures will fail to fulfill their debt obligations.
We 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 $902 million, proceeds from the issuance of U.S. dollar and Euro commercial paper, and available capacity under our revolving credit facility of $870 million (net of outstanding borrowings and $5.1 billion of capacity designated for outstanding borrowings under our commercial paper programs, senior notes due in 2023 and letters of credit) at December 31, 2022.
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 $1.2 billion, proceeds from the issuance of U.S. dollar and Euro commercial paper, and available capacity under our revolving credit facility of $2.2 billion (net of outstanding revolver borrowings and $3.8 billion of capacity designated for outstanding borrowings under our commercial paper programs, senior notes due in 2024 and letters of credit) at December 31, 2023.
In addition, we maintained a contingent liability of $21 million at December 31, 2022, representing the current expected credit losses to which we are exposed.
In addition, we maintained a contingent liability of $23 million at December 31, 2023, representing the current expected credit losses to which we are exposed.
In addition, since 2021, 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.
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 point-of-sale devices, semiconductors, paper and plastic, and may experience difficulty procuring those components and inputs in the future on a timely basis or at historical prices.
Our most recent annual impairment assessment of our reporting units in the fourth quarter of 2022 determined that our goodwill of $36.8 billion was not impaired as the estimated fair values of the respective reporting units exceeded the carrying values.
Our most recent annual impairment assessment of our reporting units in the fourth quarter of 2023 determined that our goodwill of $37.2 billion was not impaired as the estimated fair values of the respective reporting units exceeded the carrying values.
These services are typically provided under a fixed or declining (tier-based) price per unit based on volume of service; however, pricing for services may also be based on minimum monthly usage fees.
These services are typically provided under a fixed or declining (tier-based) price per unit based on volume of service; however, pricing for services may also be based on minimum monthly usage fees. Fees for our processing and services arrangements are typically billed and paid on a monthly basis.
On September 30, 2022, we sold our Korea operations, which were reported within our Acceptance segment. We sold these operations for total consideration of $99 million and recognized an aggregate net pre-tax loss on the sales of $83 million. These divestitures were the result of a strategic review of our business portfolio.
On September 30, 2022, we sold our Korea operations, which were reported 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 million.
Income from investments in unconsolidated affiliates, including acquired intangible asset amortization from valuations in purchase accounting, was $220 million and $100 million in 2022 and 2021, respectively.
(Loss) income from investments in unconsolidated affiliates, including acquired intangible asset amortization from valuations in purchase accounting, was $(15) million and $220 million in 2023 and 2022, respectively.
As of December 31, 2022, we had approximately 16.9 million shares remaining under our then existing repurchase authorization. On February 22, 2023, our board of directors approved a repurchase authorization for an additional 75.0 million shares. Shares repurchased are generally held for issuance in connection with our equity plans. In 2021, New Omaha Holdings L.P.
On February 22, 2023, our board of directors approved a repurchase authorization for an additional 75.0 million shares. As of December 31, 2023, we had approximately 52.0 million shares remaining under our then existing repurchase authorization. Shares repurchased are generally held for issuance in connection with our equity plans.
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. 25 Table of Contents Acquisitions and Dispositions We frequently review our portfolio to ensure we have the necessary business assets to execute our strategy.
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.
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 expect that financial institutions and other financial technology providers will continue to invest significant capital to process transactions, manage information, maintain regulatory compliance and offer innovative new services to their customers in this rapidly evolving and competitive environmental shift from traditional to digital banking.
Income Taxes The determination of our provision for income taxes requires management’s judgment in the use of estimates and the interpretation and application of complex tax laws, sometimes made more complex by our global footprint. Judgment is also required in assessing the timing and amounts of deductible and taxable items.
Income Taxes The determination of our provision for income taxes requires management’s judgment in the use of estimates and the interpretation and application of complex tax laws, including certain complexities attributed to our global footprint. Judgment is also required in assessing the timing and amounts of deductible and taxable items.
Our long-term priorities are to continue to build high-quality revenue while meeting our financial commitments; deepen client relationships with an emphasis on digital channels and payment solutions; deliver innovation and integration enabling differentiated value for our clients; and generate integration value, including cost and revenue synergies from acquisitions.
Our long-term priorities are to meet our financial commitments; continue to build high-quality revenue; deepen client relationships with an emphasis on digital solutions and value-added services; deliver innovation 28 Table of Contents and integration enabling differentiated value for our clients; and generate integration value, including cost and revenue synergies from acquisitions.
Other (expense) income includes net foreign currency transaction gains and losses, gains or losses from a change in fair value of investments in certain equity securities, and amounts related to debt guarantee arrangements of certain joint ventures. Net foreign currency transaction (losses) gains were $(62) million and $12 million in 2022 and 2021, respectively.
Other Expense, Net Other expense, net increased $46 million in 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.
For software license agreements that are distinct, we recognize software license revenue upon delivery, assuming a contract is deemed to exist. Revenue for arrangements with customers that include significant customization, modification or production of software such that the software is not distinct is typically recognized over time based upon efforts expended, such as labor hours, to measure progress towards completion.
Revenue for arrangements with customers that include significant customization, modification or production of software such that the software is not distinct is typically recognized over time based upon efforts expended, such as labor hours, to measure progress towards completion.
The new revolving credit facility contains various restrictions and covenants that require us to, among other things, limit our consolidated indebtedness as of the end of each fiscal quarter to no more than 3.75 times our consolidated net income before interest, taxes, depreciation, amortization, non-cash charges and expenses and certain other adjustments (“EBITDA”) during the period of four fiscal quarters then ended, subject to certain exceptions.
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. 41 Table of Contents During the year ended December 31, 2023, we were in compliance with all financial debt covenants.
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 On December 29, 2022, we acquired OrangeData S.A.
We expect to divest businesses that are not in line with our market, product or financial 27 Table of Contents 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.
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.
Financial institutions are striving for this single, integrated view of a customer’s activity. 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.
However, for four of our reporting units, with aggregate goodwill of $10.9 billion, the excess of the respective reporting unit’s fair value over carrying value ranged from 7 to 18 percent.
However, for three of our reporting units, with aggregate goodwill of $10.8 billion, the excess of the respective reporting unit’s fair value over carrying value ranged from 16 to 36 percent.
These gains were partially offset by a $127 million pre-tax loss from the sale of our Korea operations. Operating Income and Operating Margin Total operating income increased $1,452 million, or 63%, in 2022 compared to 2021. Total operating margin increased 700 basis points to 21.1% in 2022 compared to 2021.
The gains in 2022 were partially offset by a $127 million pre-tax loss from the sale of our Korea operations. Operating Income and Operating Margin Total operating income increased $1,274 million, or 34%, in 2023 compared to 2022. Total operating margin increased 520 basis points to 26.3% in 2023 compared to 2022.
We may, at our option, redeem the senior notes, in whole or in part, at any time prior to the applicable maturity date.
We may, at our option, redeem the senior notes, in whole or in part, at any time and from time to time, at the applicable redemption price.
The table below details the cash and cash equivalents at December 31: 2022 2021 (In millions) Domestic International Total Domestic International Total Available $ 135 $ 153 $ 288 $ 180 $ 221 $ 401 Unavailable (1) 178 436 614 138 296 434 Total $ 313 $ 589 $ 902 $ 318 $ 517 $ 835 (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.
The table below details our cash and cash equivalents held at: December 31, (In millions) 2023 2022 Available $ 450 $ 288 Unavailable (1) 754 614 Total $ 1,204 $ 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. 42 Table of Contents
In addition, all of our significant accounting policies, including critical accounting policies, are summarized in Note 1 to the accompanying consolidated financial statements. • Results of operations .
Our critical accounting policies are also summarized in Note 1 to the accompanying consolidated financial statements. 26 Table of Contents • Results of operations .
Dispositions We sold Fiserv Costa Rica, S.A. and our SIS operations in October 2022 and our Korea operations in September 2022 for aggregate net cash proceeds of $77 million, along with a minority noncontrolling equity interest in the buyer of the Korea operations. Effective March 2022, we mutually agreed to terminate a merchant alliance joint venture with a minority partner.
We sold Fiserv Costa Rica, S.A. and our SIS operations in October 2022 and our Korea operations in September 2022 for aggregate net cash proceeds of $77 million, along with a minority noncontrolling equity interest in the buyer of the Korea 38 Table of Contents operations.
Total expenses as a percentage of total revenue were favorably impacted in 2022 by a reduction of approximately 390 basis points in acquisition and integration related expense and approximately 90 basis points in amortization of acquisition-related intangible assets.
Total expenses as a percentage of total revenue were favorably impacted in 2023 by a reduction in amortization of acquisition-related intangible assets and severance costs of approximately 100 basis points and 70 basis points, respectively.
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. 27 Table of Contents The number of financial institutions in the United States has declined at a relatively steady rate, primarily as a result of voluntary mergers and acquisitions.
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. 29 Table of Contents Our focus on long-term client relationships and recurring, transaction-oriented products and services has reduced the impact that consolidation in the financial services industry has had on us.
Income from Investments in Unconsolidated Affiliates Our share of net income from affiliates accounted for using the equity method is reported as income from investments in unconsolidated affiliates, and the related tax expense is reported within the income tax provision in the consolidated statements of income.
The effective income tax rate for 2023 also included tax benefits from the purchase of transferable federal tax credits. 36 Table of Contents (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 benefit (expense) is reported within the income tax provision in the consolidated statements of income.
Interest on our U.S. dollar-denominated senior notes is paid semi-annually, while interest on our Euro and British Pound-denominated senior notes is paid annually. Interest on our revolving credit facility and commercial paper notes is generally paid weekly, or more frequently on occasion, and interest on our term loan is paid monthly.
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.
Indebtedness Our debt consisted of the following at December 31: (In millions) 2022 2021 Short-term and current maturities of long-term debt: Foreign lines of credit $ 198 $ 240 Finance lease and other financing obligations 270 268 Total short-term and current maturities of long-term debt $ 468 $ 508 Long-term debt: 3.500% senior notes due October 2022 $ — $ 700 0.375% senior notes due July 2023 (Euro-denominated) 531 566 3.800% senior notes due October 2023 1,000 1,000 2.750% senior notes due July 2024 2,000 2,000 3.850% senior notes due June 2025 900 900 2.250% senior notes due July 2025 (British Pound-denominated) 632 705 3.200% senior notes due July 2026 2,000 2,000 2.250% senior notes due June 2027 1,000 1,000 1.125% senior notes due July 2027 (Euro-denominated) 531 566 4.200% senior notes due October 2028 1,000 1,000 3.500% senior notes due July 2029 3,000 3,000 2.650% senior notes due June 2030 1,000 1,000 1.625% senior notes due July 2030 (Euro-denominated) 531 566 3.000% senior notes due July 2031 (British Pound-denominated) 632 705 4.400% senior notes due July 2049 2,000 2,000 U.S. dollar commercial paper notes 2,329 916 Euro commercial paper notes 1,210 905 Revolving credit facility 35 97 Receivable securitized loan — 500 Term loan facility 200 200 Unamortized discount and deferred financing costs (120) (125) Finance lease and other financing obligations 539 528 Total long-term debt $ 20,950 $ 20,729 At December 31, 2022, our debt consisted primarily of $16.8 billion of fixed-rate senior notes and $3.5 billion of outstanding borrowings under our commercial paper programs.
Indebtedness Our debt consisted of the following at: December 31, (In millions) 2023 2022 Short-term and current maturities of long-term debt: Foreign lines of credit $ 442 $ 198 Finance lease and other financing obligations 313 270 Total short-term and current maturities of long-term debt $ 755 $ 468 Long-term debt: 0.375% senior notes due July 2023 (Euro-denominated) $ — $ 531 3.800% senior notes due October 2023 — 1,000 2.750% senior notes due July 2024 2,000 2,000 3.850% senior notes due June 2025 900 900 2.250% senior notes due July 2025 (British Pound-denominated) 672 632 3.200% senior notes due July 2026 2,000 2,000 2.250% senior notes due June 2027 1,000 1,000 1.125% senior notes due July 2027 (Euro-denominated) 555 531 5.450% senior notes due March 2028 900 — 5.375% senior notes due August 2028 700 — 4.200% senior notes due October 2028 1,000 1,000 3.500% senior notes due July 2029 3,000 3,000 2.650% senior notes due June 2030 1,000 1,000 1.625% senior notes due July 2030 (Euro-denominated) 555 531 4.500% senior notes due May 2031 (Euro-denominated) 889 — 3.000% senior notes due July 2031 (British Pound-denominated) 672 632 5.600% senior notes due March 2033 900 — 5.625% senior notes due August 2033 1,300 — 4.400% senior notes due July 2049 2,000 2,000 U.S. dollar commercial paper notes 418 2,329 Euro commercial paper notes 1,321 1,210 Revolving credit facility 74 35 Term loan facility — 200 Unamortized discount and deferred financing costs (145) (120) Finance lease and other financing obligations 652 539 Total long-term debt $ 22,363 $ 20,950 39 Table of Contents 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.
Cash and Cash Equivalents Investments, exclusive of settlement assets, with original maturities of three months or less that are readily convertible to cash are considered to be cash equivalents as reflected within our consolidated balance sheets. At December 31, 2022 and 2021, we held $902 million and $835 million in cash and cash equivalents, respectively.
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.
Our purpose is to deliver superior value for our clients through leading technology, targeted innovation and excellence in everything we do.
Enterprise Priorities 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.
Operating margin percentages are calculated using actual, unrounded amounts. 32 Table of Contents Total Revenue Total revenue increased $1,511 million, or 9%, in 2022 compared to 2021. The revenue increase was driven by higher processing revenue and product sales across all of our business segments, partially offset by a 2% decrease due to foreign currency exchange rate fluctuations.
Operating margin percentages are calculated using actual, unrounded amounts. Total Revenue Total revenue increased $1,356 million, or 8%, in 2023 compared to 2022. The revenue increase was primarily driven by higher global processing revenue, partially offset by a 3% decrease due to foreign currency exchange rate fluctuations in 2023.
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.
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 this transaction were primarily used to pay down indebtedness and repurchase shares of our common stock.
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.
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.
The following table summarizes our net cash provided by operating activities, or operating cash flow and capital expenditure amounts for the years ended December 31, 2022 and 2021, respectively: Year Ended December 31, Increase (Decrease) (In millions) 2022 2021 $ % Net income $ 2,582 $ 1,403 $ 1,179 Depreciation and amortization 3,212 3,248 (36) Share-based compensation 323 239 84 Deferred income taxes (558) (262) (296) Net gain on sale of businesses and other assets (54) — (54) Income from investments in unconsolidated affiliates (220) (100) (120) Distributions from unconsolidated affiliates 73 34 39 Non-cash impairment charges 14 15 (1) Net changes in working capital and other (754) (543) (211) Net cash provided by operating activities $ 4,618 $ 4,034 $ 584 14 % Capital expenditures, including capitalized software and other intangibles $ 1,479 $ 1,160 $ 319 28 % Our operating cash flow was $4.6 billion in 2022, an increase of 14% compared with $4.0 billion in 2021.
The following table summarizes our net cash provided by operating activities, or operating cash flow, and capital expenditures: Year Ended December 31, Increase (Decrease) (In millions) 2023 2022 $ % Net income $ 3,129 $ 2,582 $ 547 Depreciation and amortization 3,162 3,212 (50) Share-based compensation 342 323 19 Deferred income taxes (511) (558) 47 Net gain on sale of businesses and other assets (167) (54) (113) Loss (income) from investments in unconsolidated affiliates 15 (220) 235 Distributions from unconsolidated affiliates 55 73 (18) Non-cash impairment charges — 14 (14) Net changes in working capital and other (863) (754) (109) Net cash provided by operating activities $ 5,162 $ 4,618 $ 544 12 % Capital expenditures, including capitalized software and other intangibles $ 1,388 $ 1,479 $ (91) (6) % Our operating cash flow was $5.2 billion in 2023, an increase of 12% compared with $4.6 billion in 2022.
Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income. We are also required to estimate the useful lives of intangible assets to determine the amount of acquisition-related intangible asset amortization expense to record in future periods.
Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income.
Recent Market Conditions Global macroeconomic conditions, including fluctuations in foreign currency exchange rates, inflation, disruptions in the global supply chain, the effects of the ongoing conflict between Russia and Ukraine, the continuing impact of the coronavirus (“COVID-19”) pandemic, and regulations restricting trade or that impact our ability to offer products or services, could have a material adverse effect on our business, results of operations and financial condition.
Recent Market Conditions Global macroeconomic conditions, including rising interest rates, inflation, bank failures, disruptions in the global supply chain, changes in consumer spending, the effects of 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.
We acquired these businesses for an aggregate purchase price of approximately $994 million, net of $28 million of acquired cash, and including earn-out provisions estimated at a fair value of $6 million. We funded these acquisitions in 2022 by utilizing a combination of available cash and proceeds from the issuance of commercial paper.
Additionally, we acquired the remaining majority controlling ownership interest in Finxact in April 2022. 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.
In conjunction with such termination, the joint venture minority partner elected to exercise its option to purchase certain merchant contracts of the joint venture for $175 million, resulting in the recognition of a pre-tax gain of $137 million. 26 Table of Contents Enterprise Priorities We aspire to move money and information in a way that moves the world.
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 $137 million during the year ended December 31, 2022.
For discussion of risks related to potential impacts of supply chain, geopolitical and macroeconomic challenges on our business, results of operations and financial condition, see “Item 1A.
For discussion of risks related to potential impacts of supply chain, geopolitical and macroeconomic challenges on our business, results of operations and financial condition, see “Part I. Item 1A. Risk Factors.” For management’s assessment of market risks, including interest rate and foreign currency risks, see “Part II. Item 7A.
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 client relationships.
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 generate revenue from existing client relationships.
Processing and Services Processing and services revenue is generated from account- and transaction-based fees for data processing, merchant transaction processing and acquiring, electronic billing and payment services, electronic funds transfer and debit/credit processing services; consulting and professional services; and software maintenance for ongoing client support.
Contracts with customers are evaluated on a contract-by-contract basis as contracts may include multiple types of goods and services as described below. 31 Table of Contents Processing and Services Processing and services revenue is generated from account- and transaction-based fees for data processing, merchant transaction processing and acquiring, electronic billing and payment services, electronic funds transfer and debit/credit processing services; consulting and professional services; and software maintenance for ongoing client support.
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.
Merchants are demanding simpler, integrated and flexible systems to enable them to serve customers and help manage cash flow and everyday business operations. When combined with the ever-increasing ways a consumer can pay for goods and services, merchants have sought modern end-to-end solutions throughout their growth lifecycle to streamline the complexity.
If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative impairment test.
Examples of qualitative factors that we assess include our share price, our financial performance, market and competitive factors in our industry and other events specific to our reporting units. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative impairment test.
Operating margin increased 130 basis points to 45.1% in 2022 compared to 2021. Payments segment operating income and margin growth in 2022 was primarily due to scalable revenue growth from our debit and credit processing businesses. The operating loss in Corporate and Other decreased $785 million in 2022 compared to 2021.
Operating income in our Payments segment increased $366 million, or 13%, in 2023 compared to 2022. Operating margin increased 250 basis points to 47.6% in 2023 compared to 2022. Payments segment operating income and margin growth in 2023 was primarily due to scalable revenue growth from our debit and credit processing businesses, as well as expense management initiatives in 2023.
Cost of product as a percentage of product revenue decreased to 67.8% in 2022 compared to 70.0% in 2021. The cost of product as a percentage of product revenue improved in 2022 as a result of higher margin revenue growth.
Cost of product as a percentage of product revenue decreased slightly to 67.5% in 2023 compared to 67.8% in 2022.
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.
Total distributions from unconsolidated affiliates, including those classified as cash flows from investing activities, were $191 million and $211 million during 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.
Revenue at Corporate and Other increased $121 million, or 14%, in 2022 compared to 2021, primarily due to increased postage revenue. Total Expenses Total expenses in 2022 were relatively consistent compared to 2021. Total expenses as a percentage of total revenue decreased 700 basis points to 78.9% in 2022 compared to 2021.
Revenue at Corporate and Other increased $81 million, or 8%, in 2023 compared to 2022, primarily due to increased postage revenue from postage rate increases during 2023. Total Expenses Total expenses increased $82 million, or 1%, in 2023 compared to 2022. Total expenses as a percentage of total revenue decreased 520 basis points to 73.7% in 2023 compared to 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA strengthening or weakening of the U.S. dollar relative to the currencies in which our revenue and profits are denominated by 10% would have resulted in a decrease or increase, respectively, in our reported pre-tax income as follows at December 31: ( In millions ) 2022 2021 Argentine Peso $ 5 $ 4 Brazilian Real 5 6 British Pound 1 5 Canadian Dollar 5 4 Euro 7 16 Indian Rupee 5 3 Other — 1 Total increase or decrease $ 28 $ 39 We maintain foreign currency forward exchange contracts, designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee.
Biggest changeA strengthening or weakening of the U.S. dollar, relative to the currencies in which our income is denominated, by 10% would have resulted in a decrease or increase, respectively, in our reported operating income as follows: 43 Table of Contents Year Ended December 31, (In millions) 2023 2022 EMEA (Europe, Middle East and Africa) $ 1 $ 5 APAC (Asia-Pacific) — 1 LATAM (Latin America) 51 9 Total increase or decrease $ 52 $ 15 We maintain foreign currency forward exchange contracts, designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee.
Based on our outstanding debt balances and interest rates at December 31, 2022, a hypothetical 1% increase in market interest rates related to our variable-rate debt would increase annual interest expense by approximately $40 million. This sensitivity analysis assumes the outstanding debt balances at December 31, 2022 and the change in market interest rates is applicable for an entire year.
Based on our outstanding debt balances and interest rates at December 31, 2023, a hypothetical 1% increase in market interest rates related to our variable-rate debt would increase annual interest expense by approximately $23 million. This sensitivity analysis assumes the outstanding debt balances at December 31, 2023 and the change in market interest rates is applicable for an entire year.
We also designated our Euro- and British Pound-denominated senior notes and Euro commercial paper notes as net investment hedges to hedge a portion of our net investment in certain subsidiaries whose functional currencies are the Euro and British Pound. 41 Table of Contents
We also designated certain of our Euro- and British Pound-denominated senior notes and Euro commercial paper notes as net investment hedges to hedge a portion of our net investment in certain subsidiaries whose functional currencies are the Euro and British Pound.
Our variable-rate debt at December 31, 2022 primarily consisted of outstanding U.S. dollar and Euro commercial paper and borrowings on our variable rate term loan and foreign lines of credit.
Our variable-rate debt at December 31, 2023 primarily consisted of outstanding U.S. dollar and Euro commercial paper and borrowings on our variable rate foreign lines of credit.
Our fixed-rate debt at December 31, 2022 primarily consisted of fixed-rate senior notes with a fair value of $15.2 billion, based on matrix pricing which considers readily observable inputs of comparable securities.
Our fixed-rate debt at December 31, 2023 primarily consisted of fixed-rate senior notes with a fair value of $19.3 billion, based on matrix pricing which considers readily observable inputs of comparable securities.
We are exposed to interest rate risk on certain of these debt obligations. We had fixed- and variable-rate debt, excluding finance leases and other financing obligations, with varying maturities for an aggregate carrying amount of $16.8 billion and $4.0 billion, respectively, at December 31, 2022.
We are exposed to interest rate risk on certain of these debt obligations. We had fixed- and variable-rate debt, excluding finance leases and other financing obligations, with varying maturities for an aggregate carrying amount of $20.0 billion and $2.3 billion, respectively, at December 31, 2023.
At December 31, 2022, the notional amount of these derivatives was $346 million, with a fair value of $(8) million. In addition, we maintain fixed-to-fixed cross-currency rate swap contracts to hedge a portion of our net investment in certain subsidiaries whose functional currencies are the Euro.
At December 31, 2023, the notional amount of these derivatives was $443 million, with a fair value of $2 million. In addition, we maintain fixed-to-fixed cross-currency rate swap contracts to hedge a portion of our net investment in certain subsidiaries whose functional currencies are in the Euro and Singapore Dollar.
Approximately 14% of our total revenue was generated outside the U.S in each of 2022 and 2021. The major currencies to which our revenues are exposed are the Argentine Peso, Brazilian Real, British Pound, Canadian Dollar, Euro and Indian Rupee.
Approximately 15% of our total revenue was generated internationally in 2023. The major currencies to which our revenues are exposed are the Argentine Peso, Brazilian Real, British Pound, Euro and Indian Rupee.
The remeasurement of monetary assets and liabilities resulted in foreign currency exchange losses of $52 million and $5 million during the years ended December 31, 2022 and 2021, respectively, primarily related to Argentina. 40 Table of Contents Our exposure to foreign currency exchange risks generally arise from our non-U.S. operations to the extent they are conducted in local currency.
The remeasurement of monetary assets and liabilities of our Argentina subsidiary resulted in net pre-tax foreign currency exchange losses of $164 million and $52 million during the years ended December 31, 2023 and 2022, respectively. Our exposure to foreign currency exchange risks generally arise from our international operations to the extent they are conducted in local currency.
At December 31, 2022, aggregate notional cross-currency rate swaps of 400 million Euro were designated as net investment hedges.
At December 31, 2023, aggregate notional fixed-to-fixed cross-currency rate swaps of 400 million Euros and 751 million Singapore Dollars were designated as net investment hedges.
During the year ended December 31, 2022, the amount of such interest-related income was not material and, therefore, a hypothetical 1% decrease in market interest rates would not have a significant impact on such income. This sensitivity analysis assumes the subscriber fund balances at December 31, 2022 and the change in market interest rates is applicable for an entire year.
This sensitivity analysis uses the average subscriber fund and intermediary settlement cash balances during the year ended December 31, 2023 and assumes the change in market interest rates is applicable for an entire year.
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We also earn interest on intermediary settlement cash balances received from agents, payment networks, bank partners, merchants or direct consumers that we hold on behalf of merchants until the funding becomes due to the merchants or payees. Subscriber funds and intermediary settlement cash balances earning interest averaged $3.4 billion during the year ended December 31, 2023.
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The interest earned on subscriber funds and intermediary settlement cash is recorded as a component of total revenue in the consolidated statements of income. During the year ended December 31, 2023, a hypothetical 1% decrease in market interest rates would decrease the annual interest-related income by approximately $34 million.
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Our risk with regard to interest rate fluctuations is largely mitigated by the offsetting impacts associated with our variable-rate debt and interest earning liquid investments associated with subscriber funds and intermediary settlement cash.
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Additionally, we maintain fixed-to-fixed cross-currency swap contracts, designated as fair value hedges, to mitigate the spot foreign exchange rate risk on the principal amount of certain foreign currency denominated debt. 44 Table of Contents

Other FI 10-K year-over-year comparisons