Redeemable Noncontrolling Interests

12 Months Ended

Dec. 31, 2021

The minority partners in two of the Company’s merchant alliance joint ventures maintain redeemable noncontrolling interests which are presented outside of equity and carried at their estimated redemption values. Each minority partner owns 1% of the equity in the respective joint venture; in addition, each minority partner is entitled to a contractually determined share of the respective entity’s income. The agreements contain redemption features whereby interests held by the minority partner are redeemable either (i) at the option of the holder or (ii) upon the occurrence of an event that is not solely within the Company’s control. The joint ventures may be terminated by either party for convenience any time after September 1, 2021 and December 31, 2024, respectively. In the event of termination for cause, as a result of a change in control, or for convenience after the predetermined date, the Company may be required to purchase the minority partner membership interests at a price equal to the fair market value of the minority interest through a distribution in the form of cash, certain merchant contracts of the joint venture, or a combination thereof to the minority partner. In conjunction with the termination of the joint venture, the minority partner may also exercise an option to purchase certain additional merchant contracts at fair market value. In September 2021, the Company and a joint venture minority partner mutually agreed to terminate one of the Company’s merchant alliance joint ventures effective March 2022. The redeemable noncontrolling interest was adjusted to reflect the estimated redemption value, with such adjustment recorded within additional paid-in capital in the consolidated statement of equity. The joint venture minority partner has notified the Company of its intent to exercise its option to purchase certain additional merchant contracts of the joint venture. The Company anticipates the recognition of a pre-tax gain of approximately $150 million in the first quarter of 2022 upon termination of the joint venture.

The following table presents a summary of the redeemable noncontrolling interests activity during the years ended December 31:



(In millions)	2021		2020
Balance at beginning of year	$	259	$	262

Distributions paid to redeemable noncontrolling interests	(43)		(42)
Share of income	44		39
Adjustment to estimated redemption value	18		—
Balance at end of year	$	278	$	259