SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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



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

Commission file number: 001-16111



Georgia						58-2567903
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Registrant’s telephone number, including area code: (770) 829-8000

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

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒☑No ☐

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

Large accelerated filer ☒

☑

Accelerated filer

☐

Non-accelerated filer ~~☐ (Do not check if a smaller reporting company)~~

☐

Smaller reporting company

☐

Emerging growth company

☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ~~☐ No ☒~~

☐

☑

The number of shares of the issuer’s common stock, no par value, outstanding as of ~~November 2, 2017~~July 28, 2021 was ~~159,142,431.~~293,748,093.

GLOBAL PAYMENTS INC.

For the quarterly period ended ~~September~~June 30, ~~2017~~2021

PART 1I - FINANCIAL INFORMATION

ITEM 1—FINANCIAL STATEMENTS

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

See Notes to Unaudited Consolidated Financial Statements.

Table of Contents

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


	Six Months Ended
	June 30, 2021		June 30, 2020

Revenues	$	4,127,444	$	3,575,550
Operating expenses:
Cost of service	1,861,556		1,827,611
Selling, general and administrative	1,628,071		1,396,386
	3,489,627		3,223,997
Operating income	637,817		351,553

Interest and other income	9,689		5,293
Interest and other expense	(163,697)		(175,499)
	(154,008)		(170,206)
Income before income taxes and equity in income of equity method investments	483,809		181,347
Income tax expense	81,483		16,338
Income before equity in income of equity method investments	402,326		165,009
Equity in income of equity method investments, net of tax	62,897		25,041
Net income	465,223		190,050
Net income attributable to noncontrolling interests, net of tax	(4,952)		(9,147)
Net income attributable to Global Payments	$	460,271	$	180,903

Earnings per share attributable to Global Payments:
Basic earnings per share	$	1.56	$	0.60
Diluted earnings per share	$	1.55	$	0.60

Nine Months Ended
September 30, 2017 September 30, 2016

Revenues $ 2,920,910
$ 2,420,789
Operating expenses:
Cost of service 1,418,969
1,125,041
Selling, general and administrative 1,092,648
1,019,626
2,511,617
2,144,667
Operating income 409,293
276,122

Interest and other income 5,787
45,312
Interest and other expense (130,422 ) (95,280 )
(124,635 ) (49,968 )
Income before income taxes 284,658
226,154
Provision for income taxes (40,893 ) (33,350 )
Net income 243,765
192,804
Less: Net income attributable to noncontrolling interests, net of income tax (17,302 ) (15,150 )
Net income attributable to Global Payments $ 226,463
$ 177,654

Earnings per share attributable to Global Payments:
Basic earnings per share $ 1.48
$ 1.24
Diluted earnings per share $ 1.47
$ 1.23

See Notes to Unaudited Consolidated Financial Statements.

Table of Contents

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Three Months Ended
	June 30, 2021		June 30, 2020

Net income	$	266,813	$	39,444
Other comprehensive income (loss):
Foreign currency translation adjustments	32,671		82,458
Income tax benefit related to foreign currency translation adjustments	4,242		154
Net unrealized losses on hedging activities	(410)		(5,630)
Reclassification of net unrealized losses on hedging activities to interest expense	9,662		9,982
Income tax expense related to hedging activities	(2,225)		(1,057)
Other, net of tax	(1,549)		122
Other comprehensive income	42,391		86,029

Comprehensive income	309,204		125,473
Comprehensive income attributable to noncontrolling interests	(5,948)		(7,508)
Comprehensive income attributable to Global Payments	$	303,256	$	117,965

Three Months Ended
September 30, 2017 September 30, 2016

Net income $ 118,362
$ 62,224
Other comprehensive income:
Foreign currency translation adjustments 42,417
1,694
Unrealized gains on hedging activities 341
3,429
Reclassification of unrealized losses on hedging activities to net income 1,172
1,853
Income tax provision related to hedging activities (670 ) (1,951 )
Other 18
23
Other comprehensive income, net of tax 43,278
5,048

Comprehensive income 161,640
67,272
Less: comprehensive income attributable to noncontrolling interests (9,950 ) (5,902 )
Comprehensive income attributable to Global Payments $ 151,690
$ 61,370


	Six Months Ended
	June 30, 2021		June 30, 2020

Net income	$	465,223	$	190,050
Other comprehensive income (loss):
Foreign currency translation adjustments	(895)		(121,653)
Income tax benefit related to foreign currency translation adjustments	4,991		1,160
Net unrealized gains (losses) on hedging activities	584		(53,526)
Reclassification of net unrealized losses on hedging activities to interest expense	20,500		14,653
Income tax (expense) benefit related to hedging activities	(5,089)		9,289
Other, net of tax	6,226		243
Other comprehensive income (loss)	26,317		(149,834)

Comprehensive income	491,540		40,216
Comprehensive income attributable to noncontrolling interests	(1,703)		(7,888)
Comprehensive income attributable to Global Payments	$	489,837	$	32,328

Nine Months Ended
September 30, 2017 September 30, 2016

Net income $ 243,765
$ 192,804
Other comprehensive income (loss):
Foreign currency translation adjustments 133,921
(9,259 )
Income tax benefit related to foreign currency translation adjustments —
5,816
Unrealized losses on hedging activities (2,214 ) (12,665 )
Reclassification of unrealized losses on hedging activities to net income 4,667
5,733
Income tax (provision) benefit related to hedging activities (919 ) 2,618
Other (196 ) (803 )
Other comprehensive income (loss), net of tax 135,259
(8,560 )

Comprehensive income 379,024
184,244
Less: comprehensive income attributable to noncontrolling interests (32,352 ) (18,926 )
Comprehensive income attributable to Global Payments $ 346,672
$ 165,318

See Notes to Unaudited Consolidated Financial Statements.

Table of Contents

GLOBAL PAYMENTS INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	June 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,799,549	$	1,945,868
Accounts receivable, net	878,431		794,172
Settlement processing assets	1,548,743		1,230,853
Prepaid expenses and other current assets	673,154		621,467
Total current assets	4,899,877		4,592,360
Goodwill	24,422,012		23,871,451
Other intangible assets, net	11,815,103		12,015,883
Property and equipment, net	1,642,283		1,578,532
Deferred income taxes	8,094		7,627
Other noncurrent assets	2,362,304		2,135,692
Total assets	$	45,149,673	$	44,201,545
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit	$	487,538	$	358,698
Current portion of long-term debt	52,611		827,357
Accounts payable and accrued liabilities	2,184,201		2,061,384
Settlement processing obligations	1,655,278		1,301,652
Total current liabilities	4,379,628		4,549,091
Long-term debt	10,216,979		8,466,407
Deferred income taxes	2,873,676		2,948,390
Other noncurrent liabilities	829,250		750,613
Total liabilities	18,299,533		16,714,501
Commitments and contingencies	0		0
Equity:
Preferred stock, 0 par value; 5,000,000 shares authorized and NaN issued	0		0
Common stock, 0 par value; 400,000,000 shares authorized at June 30, 2021 and December 31, 2020; 293,702,910 issued and outstanding at June 30, 2021 and 298,332,459 issued and outstanding at December 31, 2020	0		0
Paid-in capital	24,201,763		24,963,769
Retained earnings	2,664,707		2,570,874
Accumulated other comprehensive loss	(172,707)		(202,273)
Total Global Payments shareholders’ equity	26,693,763		27,332,370
Noncontrolling interests	156,377		154,674
Total equity	26,850,140		27,487,044
Total liabilities and equity	$	45,149,673	$	44,201,545

September 30, 2017 December 31, 2016
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,186,050
   $ 1,162,779
Accounts receivable, net of allowances for doubtful accounts of $1,423 and $1,092, respectively 296,366
   275,032
Settlement processing assets 1,847,232
   1,546,854
Prepaid expenses and other current assets 220,649
   131,341
Total current assets 3,550,297
   3,116,006
Goodwill 5,616,414
   4,807,594
Other intangible assets, net 2,328,709
   2,085,292
Property and equipment, net 577,188
   526,370
Deferred income taxes 16,736
15,789
Other noncurrent assets 192,205
   113,299
Total assets $ 12,281,549
   $ 10,664,350
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit $ 487,513
$ 392,072
Current portion of long-term debt 93,408
177,785
Accounts payable and accrued liabilities 992,363
   804,887
Settlement processing obligations 1,550,627
1,477,212
Total current liabilities 3,123,911
   2,851,956
Long-term debt 4,677,910
4,260,827
Deferred income taxes 632,648
   676,472
Other noncurrent liabilities 152,127
   95,753
Total liabilities 8,586,596
   7,885,008
Commitments and contingencies



Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued —
   —
Common stock, no par value; 200,000,000 shares authorized; 158,762,894 issued and outstanding at September 30, 2017 and 152,185,616 issued and outstanding at December 31, 2016 —
   —
Paid-in capital 2,376,331
   1,816,278
Retained earnings 1,357,526
   1,137,230
Accumulated other comprehensive loss (202,508 )    (322,717 )
Total Global Payments shareholders’ equity 3,531,349
   2,630,791
Noncontrolling interests 163,604
148,551
Total equity 3,694,953
2,779,342
Total liabilities and equity $ 12,281,549
   $ 10,664,350

See Notes to Unaudited Consolidated Financial Statements.

Table of Contents

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Nine Months Ended							Six Months Ended
	September 30, 2017			September 30, 2016				June 30, 2021		June 30, 2020
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	243,765		$	192,804		Net income	$	465,223	$	190,050
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	80,868			62,964			Depreciation and amortization of property and equipment	193,574		172,229
Amortization of acquired intangibles	249,095			173,345			Amortization of acquired intangibles	654,042		628,264
Amortization of capitalized contract costs							Amortization of capitalized contract costs	43,975		38,070
Share-based compensation expense	30,771			26,060			Share-based compensation expense	80,490		62,805
Provision for operating losses and bad debts	37,203			26,069
Amortization of capitalized customer acquisition costs	32,863			9,337
Provision for operating losses and credit losses							Provision for operating losses and credit losses	50,802		66,921
Noncash lease expense							Noncash lease expense	54,533		47,770
Deferred income taxes	(51,093		)	(30,504		)	Deferred income taxes	(91,177)		(96,458)
Gain on sale of investments	—			(41,150		)
Equity in income of equity investments, net of tax							Equity in income of equity investments, net of tax	(62,897)		(25,041)
Other, net	34,190			26,790			Other, net	13,965		10,823
Changes in operating assets and liabilities, net of the effects of acquisitions:
Changes in operating assets and liabilities, net of the effects of business combinations:							Changes in operating assets and liabilities, net of the effects of business combinations:
Accounts receivable	(6,070		)	14,216			Accounts receivable	(91,580)		56,186
Settlement processing assets and obligations, net	(232,713		)	(109		)	Settlement processing assets and obligations, net	25,312		136,453
Prepaid expenses and other assets	(12,605		)	(27,474		)	Prepaid expenses and other assets	(151,353)		(97,653)
Capitalized customer acquisition costs	(65,697		)	(45,425		)
Accounts payable and other liabilities	19,546			(19,491		)	Accounts payable and other liabilities	(75,268)		(230,130)
Net cash provided by operating activities	360,123			367,432			Net cash provided by operating activities	1,109,641		960,289
Cash flows from investing activities:							Cash flows from investing activities:
Business acquisitions, net of cash acquired	(563,009		)	(1,825,975		)
Business combinations and other acquisitions, net of cash acquired							Business combinations and other acquisitions, net of cash acquired	(943,108)		(74,095)
Capital expenditures	(136,612		)	(102,442		)	Capital expenditures	(219,579)		(208,384)
Proceeds from sale of investments	—			37,783
Proceeds from sales of property and equipment	37,520			—
Other, net	(48,056		)	(1,409		)	Other, net	742		12,188
Net cash used in investing activities	(710,157		)	(1,892,043		)	Net cash used in investing activities	(1,161,945)		(270,291)
Cash flows from financing activities:							Cash flows from financing activities:
Net proceeds from (repayments of) settlement lines of credit	77,397			(952		)
Net borrowings from (repayments of) settlement lines of credit							Net borrowings from (repayments of) settlement lines of credit	134,245		(25,546)
Proceeds from long-term debt	1,713,324			3,263,045			Proceeds from long-term debt	2,820,988		1,867,008
Repayments of long-term debt	(1,386,721		)	(1,110,258		)	Repayments of long-term debt	(1,830,258)		(1,809,199)
Payment of debt issuance costs	(9,520		)	(58,448		)
Repurchase of common stock	(32,811		)	(130,314		)
Payments of debt issuance costs							Payments of debt issuance costs	(8,569)		(8,006)
Repurchases of common stock							Repurchases of common stock	(1,072,934)		(421,162)
Proceeds from stock issued under share-based compensation plans	7,068			5,614			Proceeds from stock issued under share-based compensation plans	29,304		42,632
Common stock repurchased - share-based compensation plans	(21,171		)	(15,622		)	Common stock repurchased - share-based compensation plans	(49,664)		(39,226)
Proceeds from sale of subsidiary shares to noncontrolling interest	—			16,374
Distributions to noncontrolling interests	(9,301		)	(10,216		)
Dividends paid	(5,141		)	(4,376		)	Dividends paid	(114,875)		(116,591)
Net cash provided by financing activities	333,124			1,954,847
Effect of exchange rate changes on cash	40,181			(7,142		)
Increase in cash and cash equivalents	23,271			423,094
Cash and cash equivalents, beginning of the period	1,162,779			587,751
Cash and cash equivalents, end of the period	$	1,186,050		$	1,010,845
Net cash used in financing activities							Net cash used in financing activities	(91,763)		(510,090)
Effect of exchange rate changes on cash, cash equivalents and restricted cash							Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5,980)		(32,556)
(Decrease) increase in cash, cash equivalents and restricted cash							(Decrease) increase in cash, cash equivalents and restricted cash	(150,047)		147,352
Cash, cash equivalents and restricted cash, beginning of the period							Cash, cash equivalents and restricted cash, beginning of the period	2,089,771		1,678,273
Cash, cash equivalents and restricted cash, end of the period							Cash, cash equivalents and restricted cash, end of the period	$	1,939,724	$	1,825,625

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance at March 31, 2021	295,158	$	24,403,323	$	2,500,812	$	(212,373)	$	26,691,762	$	150,429	$	26,842,191
Net income				263,590				263,590		3,223		266,813
Other comprehensive income						39,666		39,666		2,725		42,391
Stock issued under share-based compensation plans	78	11,599						11,599				11,599
Common stock repurchased - share-based compensation plans	(31)	(8,900)						(8,900)				(8,900)
Share-based compensation expense		43,325						43,325				43,325
Repurchases of common stock	(1,502)	(247,584)		(42,393)				(289,977)				(289,977)
Cash dividends declared ($0.195 per common share)				(57,302)				(57,302)				(57,302)
Balance at June 30, 2021	293,703	$	24,201,763	$	2,664,707	$	(172,707)	$	26,693,763	$	156,377	$	26,850,140

Number of Shares

Paid-in Capital

Retained Earnings
Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity Noncontrolling Interests Total Equity
Balance at December 31, 2016 152,186
$ 1,816,278
$ 1,137,230
$ (322,717 ) $ 2,630,791
$ 148,551
$ 2,779,342
Net income 226,463
226,463
17,302
243,765
Other comprehensive income, net of tax 120,209
120,209
15,050
135,259
Stock issued under share-based compensation plans 851
7,068
7,068
7,068
Common stock repurchased - share-based compensation plans (256 ) (24,078 )

(24,078 ) (24,078 )
Share-based compensation expense 30,771
30,771
30,771
Issuance of common stock in connection with a business combination 6,358
572,079
572,079
572,079
Dissolution of a subsidiary 7,998
7,998
(7,998 ) —
Distributions to noncontrolling interest —
(9,301 ) (9,301 )
Repurchase of common stock (376 ) (25,787 ) (9,024 ) (34,811 ) (34,811 )
Dividends paid ($0.03133 per share) (5,141 ) (5,141 ) (5,141 )
Balance at September 30, 2017 158,763
$ 2,376,331
$ 1,357,526
$ (202,508 ) $ 3,531,349
$ 163,604
$ 3,694,953

Number of Shares

Paid-in Capital

Retained Earnings
Accumulated Other Comprehensive Loss
Total Global Payments Shareholders’ Equity
Noncontrolling Interests Total Equity
Balance at December 31, 2015 129,274
$ 133,345
$ 943,879
$ (247,190 ) $ 830,034
$ 112,176
$ 942,210
Net income 177,654
177,654
15,150
192,804
Other comprehensive income (loss), net of tax (12,336 ) (12,336 ) 3,776
(8,560 )
Stock issued under share-based compensation plans 761
5,614

5,614
5,614
Common stock repurchased - share-based compensation plans (258 ) (19,850 )

(19,850 )

(19,850 )
Tax benefit from employee share-based compensation plans 13,896
13,896
13,896
Share-based compensation expense 26,060
26,060
26,060
Issuance of common stock in connection with a business combination 25,644
1,879,458
1,879,458
1,879,458
Purchase of subsidiary shares from noncontrolling interest —
42,027
42,027
Contribution of subsidiary shares to noncontrolling interest related to a business combination (820 ) (820 ) (3,925 ) (4,745 )
Distributions to noncontrolling interest —
(10,216 ) (10,216 )
Repurchase of common stock (1,816 ) (127,816 ) (2,498 ) (130,314 ) (130,314 )
Dividends paid ($0.03 per share) (4,376 ) (4,376 ) (4,376 )
Balance at September 30, 2016 153,605
$ 1,909,887
$ 1,114,659
$ (259,526 ) $ 2,765,020
$ 158,988
$ 2,924,008

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

See Notes to Unaudited Consolidated Financial Statements.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business, consolidation and presentation— - We are a leading ~~worldwide provider of payment~~payments technology ~~services~~company delivering innovative ~~solutions~~software and services to our customers globally. Our technologies, services and ~~employee~~team member expertise ~~enable~~allow us to provide a broad range of ~~services~~solutions that ~~allow~~enable our customers to ~~accept various payment types. We distribute our services~~operate their businesses more efficiently across a variety of channels ~~to customers in 30 countries throughout North America, Europe,~~around the ~~Asia-Pacific region and Brazil and~~world. We operate in ~~three~~3 reportable segments: ~~North America, Europe~~Merchant Solutions, Issuer Solutions and ~~Asia-Pacific.~~

~~We were incorporated~~Business and Consumer Solutions, which are described in ~~Georgia as Global Payments Inc. in~~ ~~2000~~ ~~and spun-off from our former parent company in~~ ~~2001. Including our time as part of our former parent company, we have been in the payment technology services business since~~ ~~1967~~."Note 12—Segment Information." Global Payments Inc. and its consolidated subsidiaries are referred to herein collectively as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise.

These unaudited consolidated financial statements include our accounts and those of our majority-owned subsidiaries, and all intercompany balances and transactions have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission ~~(the "SEC"~~("SEC"). The consolidated balance sheet as of December 31, ~~2016~~2020 was derived from the audited financial statements included in our ~~Transition~~Annual Report on Form 10-K for the ~~seven months~~year ended December 31, ~~2016~~2020 but does not include all disclosures required by GAAP for annual financial statements. As a result of the change in our fiscal year end from May 31 to December 31, we presented our interim financial information for the three and nine months ended September 30, 2016 on the basis of the new fiscal year for comparative purposes.

In the opinion of our management, all known adjustments necessary for a fair presentation of the results of the interim periods have been made. These adjustments consist of normal recurring accruals and estimates that affect the carrying amount of assets and liabilities. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our ~~Transition~~Annual Report on Form 10-K for the ~~seven months~~year ended December 31, ~~2016.~~2020.

COVID-19 Update - Since early 2020, the global economy has been, and continues to be, affected by COVID-19. The pandemic has caused and may continue to cause significant disruptions to businesses and markets worldwide as the virus spreads or has a resurgence in certain jurisdictions. Measures have been implemented by governments worldwide in an effort to contain the virus, including lockdowns, physical distancing, travel restrictions, limitations on public gatherings, work from home and restrictions on nonessential businesses. Certain government actions to gradually ease restrictions, provide economic stimulus and distribute vaccines have resulted in signs of economic recovery. However, the effects of the pandemic continue, and its ultimate severity and duration, and the implications on future global economic conditions, remain uncertain.

Use of estimates— - The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. In particular, the future magnitude, duration and effects of the COVID-19 pandemic are difficult to predict at this time, and the ultimate effect could result in additional charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill and other losses. These unaudited consolidated financial statements reflect the financial statement effects of COVID-19 based upon management’s estimates and assumptions utilizing the most currently available information.

Recently ~~Adopted~~ adopted accounting pronouncements

Accounting ~~Pronouncements~~

Standards Update ("ASU") 2019-12 —In ~~March 2016,~~December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting ~~Standards Update ("ASU") 2016-09, "Compensation - Stock Compensation (Topic 718):~~ ~~Improvements~~for Income Taxes," which is intended to ~~Employee Share-Based Payment Accounting.~~"enhance and simplify various aspects of the accounting for income taxes. The amendments in this update ~~changed how companies account~~remove certain exceptions to the general principles in Accounting Standards Codification ("ASC") Topic 740 related to the approach for ~~certain aspects~~intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of ~~share-based payments~~deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and amends existing guidance to ~~employees. We adopted the various amendments~~improve consistency in ASU 2016-09 in our unaudited consolidated financial statements effective January 1, 2017 with no material effect at the date of adoption. On a prospective basis, as required, we recognize the income tax effectsapplication of the ~~excess benefits~~accounting for franchise taxes, enacted changes in tax laws or ~~deduction deficiencies of share-based awards~~rates and transactions that result in a step-up in the ~~statement~~tax basis of income when the awards vest or are settled. Previously, these amounts were recorded as an adjustment to additional paid-in capital. In addition, these excess tax benefits or deduction deficiencies from share-based compensation plans, which were previously presented as a financing activity in our consolidated statement of cash flows, are now presented as an operating activity using a retrospective transition method for all periods presented. Finally, we have elected to account for forfeitures of share-based awards with service conditions as they occur.

~~In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230):~~ ~~Classification of Certain Cash Receipts and Cash Payments~~," which makes clarifications to how cash receipts and cash payments in certain transactions are presented and classified in the statement of cash flows. We adopted ASU 2016-15 on a retrospective basis effective January 1, 2017 with no effect on our unaudited consolidated statements of cash flows for any period presented.

~~In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350):~~ ~~Simplifying the Test for Goodwill Impairment." The ASU eliminates Step 2 from the goodwill impairment test. In computing the implied fair value of~~

goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We adopted ASU 2017-04 on a prospective basis effective January 1, 2017.goodwill. The adoption of ~~this standard had no effect on our unaudited consolidated financial statements.~~

~~Recently Issued Pronouncements Not Yet Adopted~~

~~Accounting Standard Codification (~~"~~ASC~~"~~) 606 - New Revenue Standard~~

~~In May 2014, the FASB issued~~ ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP and permits the use of either the retrospective or modified retrospective transition method. The update requires significant additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU 2014-09, as amended by ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): ~~Deferral of the Effective Date~~," is effective for years beginning after December 15, 2017, including interim periods, with early adoption permitted for years beginning after December 15, 2016. Since the issuance of ASU 2014-09, the FASB has issued additional interpretive guidance, including new accounting standards updates, that clarifies certain points of the standard and modifies certain requirements.

We have performed a review of the requirements of the new revenue standard and are monitoring the activity of the FASB and the transition resource group as it relates to specific interpretive guidance. We have established a cross-functional implementation team to assess the effects of the new revenue standard in a multi-phase approach. In the first phase, we analyzed customer contracts for our most significant contract categories, applied the five-step model of the new standard to each contract category and compared the results to our current accounting practices. We are nearing completion of the second phase, which includes quantifying the potential effects, assessing additional contract categories and principal agent considerations, revising accounting policies and considering the effects on related disclosures and/or internal control over financial reporting. The third phase, which will complete our adoption and implementation of the new revenue standard, includes activities such as implementing parallel accounting and reporting for areas affected by the new standard, quantifying the cumulative effect adjustment (including tax effects), evaluating and testing modified and newly implemented internal controls and revising financial statement disclosures.

The new standard could change the amount and timing of revenue and expenses to be recognized under certain of our arrangement types. In addition, it could increase the administrative burden on our operations to properly account for customer contracts and provide the more expansive required disclosures. More judgment and estimates may be required within the process of applying the requirements of the new standard than are required under existing GAAP, such as identifying performance obligations in contracts, estimating the amount of variable consideration to include in transaction price, allocating transaction price to each separate performance obligation and estimating expected customer lives. We have not completed our assessment or quantified the effect the new guidance will have on our consolidated financial statements, related disclosures and/or our internal control over financial reporting. This will occur during the third and final phase of our implementation as discussed in the previous paragraph. Our preliminary view is that we expect the amount and timing of revenue to be recognized under ASU 2014-09 for our most significant contract category, core payment services, will be similar to the amount and timing of revenue recognized under our current accounting practices. However, we are still evaluating principal agent considerations for certain amounts that we pay to third parties and currently recognize as a component of operating expense, which could result in such amounts being recorded as a reduction of revenue under ASU 2014-09. This change would not affect operating income. We also expect to be required to capitalize additional costs to obtain contracts with customers, and, in some cases, may be required to amortize these costs and costs that we currently capitalize (such as capitalized customer acquisition costs) over a longer time period. Finally, we expect disclosures about our revenues and related customer acquisition costs will be more extensive.

~~We plan to adopt ASU 2014-09, as well as other clarifications and technical guidance issued by the FASB related to this new revenue standard,~~2019-12 on January 1, 2018. We will likely apply the modified retrospective transition method, which would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the standard to contracts that are2021 did not ~~completed at the~~

date of initial application. Under this method, we would not restate the prior financial statements presented, therefore the new standard requires us to provide additional disclosures of the amount by which each financial statement line item is affected in the current reporting period during 2018, as compared to the guidance that was in effect before the change, and an explanation of the reasons for significant changes, if any.

~~Other Accounting Standards Updates~~

~~In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815):~~ ~~Targeted Improvements to Accounting for Hedging Activities.~~" The ASU expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. In addition, the amendments in this update modify disclosure requirements for presentation of hedging activities. Those modifications include a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges and eliminate the requirement to disclose the ineffective portion of the change in fair value of hedging instruments, if any. The ASU will become effective for us on January 1, 2019. Early application is permitted for all hedging relationships that exist at the date of adoption. We are evaluating the effect of ASU 2017-12 on our consolidated financial statements.

~~In January 2017, the FASB issued ASU 2017-01, "Business Combinations (Topic 805):~~ ~~Clarifying the Definition of a Business~~." The ASU clarifies the definition of a business, which affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The new standard is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses, with the expectation that fewer will qualify as acquisitions (or disposals) of businesses. The ASU will become effective for us on January 1, 2018. These amendments will be applied prospectively from the date of adoption. The effect of ASU 2017-01 will be dependent upon the nature of future acquisitions or dispositions that we make, if any.

~~In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740):~~ ~~Intra-Entity Transfers of Assets Other Than Inventory~~." The amendments in this update state that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory, such as intellectual property and property and equipment, when the transfer occurs. The amendments in this update will become effective for us on January 1, 2018. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect that the adoption of ASU 2016-16 will have a material effect on our consolidated financial ~~statements and related disclosures.~~statements.

Recently issued pronouncements not yet adopted

ASU 2020-04 — In ~~June 2016,~~March 2020, the FASB issued ASU ~~2016-13, "Financial Instruments - Credit Losses~~2020-04, "Reference Rate Reform (Topic ~~326)~~848): ~~Measurement~~Facilitation of ~~Credit Losses~~the Effects of Reference Rate Reform on Financial ~~instruments~~.Reporting," which provides optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update ~~change how companies measure~~apply only to contracts, hedging relationships, and ~~recognize credit impairment for many financial assets. The new expected credit loss model will require companies to immediately recognize an estimate of credit losses~~other transactions that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to ~~occur over~~be discontinued because of reference rate reform. The expedients and exceptions provided by the ~~remaining life~~amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022 for which an entity has elected certain optional expedients and which are retained through the end of the ~~financial assets (including trade receivables)~~hedging relationship. The amendments in this update also include a general principle that ~~are~~permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. If elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant ASC Topic or Industry Subtopic that contains the guidance that otherwise would be required to be applied. The amendments in this update were effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. A portion of our indebtedness bears interest at a variable rate based on LIBOR. Furthermore, we have entered into hedging instruments to manage our exposure to fluctuations in the scope of the update. The update also made amendments to the current impairment model for held-to-maturity and available-for-sale debt securities and certain guarantees. The guidance will become effective for us on January 1, 2020. Early adoption is permitted for periods beginning on or after January 1, 2019.LIBOR benchmark interest rate. We are evaluating the effect of the discontinuance of LIBOR on our outstanding debt and hedging instruments and the related effect of ASU ~~2016-13~~2020-04 on our consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02, "Leases." The amendments in this update require lessees~~

NOTE 2—ACQUISITION

On June 10, 2021, we acquired Zego, a real estate technology company that provides a comprehensive resident experience management software and digital commerce solutions to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases. In addition, several new disclosures will be required. Although early adoption is permitted, we expect to adopt ASU 2016-02 when it becomes effective for us on January 1, 2019. Adoption will require a modified retrospective transition where the lessees are required to recognize and measure leases at the beginning of the earliest period presented. In September 2017, the FASB issued ASU 2017-13, "Revenue Recognition" (Topic 605), "Revenue from Contracts with Customers" (Topic 606), "Leases" (Topic 840), and "Leases" (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02. We have not completed our evaluation of the effect of ASU 2016-02 or ASU 2017-13 on our consolidated financial statements; however, we expect to recognize right of use assets and liabilities for our operating leasesproperty managers, primarily in the ~~balance sheet upon adoption.~~

~~In January 2016,~~United States. Zego’s real estate software and payments solutions support property managers and residents throughout the ~~FASB issued ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10):~~ ~~Recognition~~real estate lifecycle. This acquisition aligns with our technology-enabled, software driven strategy and ~~Measurement of Financial Assets and Financial Liabilities~~." The amendments in this update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The amendments in this update supersede the guidance to classify equity securities with readily determinable fair valuesexpands our business into different categories (that is, trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures and limited liability

companies) to be measured at fair value with changes in the fair value recognized through earnings. Equity investments that are accounted for under the equity method of accounting or result in consolidation of an investee are not included within the scope of this update. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments also require enhanced disclosures about those investments. The guidance will become effective for us on January 1, 2018. We do not expect that the adoption of ASU 2016-01 will have a ~~material effect on our consolidated financial statements and related disclosures.~~

~~NOTE 2—ACQUISITIONS~~

~~On September 1, 2017, we acquired the communities and sports divisions of Athlaction Topco, LLC ("ACTIVE Network") in a cash-and-stock transaction with Vista Equity Partners.~~new vertical market. We paid ~~the sellers~~cash consideration of ~~$600~~approximately $933 million, ~~in cash,~~ which we funded ~~primarily~~with cash on hand and by drawing on our revolving credit facility, and 6,357,509 shares of our common stock having an estimated fair value of approximately $572 million. The acquisition-date fair value of common stock issued to the sellers was determined based on the share price of our common stock as of the acquisition date and the effect of certain transfer restrictions.facility.

This transaction was accounted for as a business combination, which generally requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date. ~~The accounting~~Due to the timing of the acquisition, the accounting for this acquisition was not complete as of ~~September~~June 30, ~~2017.~~2021. The fair values of the assets acquired and the liabilities assumed have been determined provisionally and are subject to adjustment as we obtain additional information. In particular, additional time is needed to refine and review the results of the valuation of assets and liabilities and to evaluate the basis differences for assets and liabilities for financial reporting and tax purposes.

The provisional estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed, including a reconciliation to the total purchase consideration, are as follows (in thousands):

Cash and cash equivalents $ 42,866
Property and equipment 22,889
Identified intangible assets 471,120
Other assets 80,485
Deferred income taxes (26,757 )
Other liabilities (123,047 )
Total identifiable net assets 467,556
Goodwill 704,020
Total purchase consideration $ 1,171,576


Cash and cash equivalents	$	67,374
Accounts receivable	1,033
Identifiable intangible assets	410,443
Property and equipment	3,634
Other assets	9,141
Accounts payable and accrued liabilities	(65,753)
Deferred income tax liabilities	(10,709)
Other liabilities	(8,268)
Total identifiable net assets	406,895
Goodwill	525,929
Total purchase consideration	$	932,824

ACTIVE Network delivers cloud-based, mission critical enterprise software, including payment technology solutions, to event organizers in the communities and health and fitness verticals. This acquisition aligns with our technology-enabled, software driven strategy and adds an enterprise software business operating in two new vertical markets that we believe offer attractive growth fundamentals. Goodwill of ~~$704.0~~$525.9 million arising from the acquisition, included in the ~~North America~~Merchant Solutions operating segment, ~~was~~is attributable to expected growth opportunities, potential synergies from combining our existing businesses and an assembled workforce. We expect that ~~approximately 80%~~a portion of the goodwill will be deductible for income tax purposes.

We are still evaluating information to separately identify and value the intangible assets acquired. We expect such assets to primarily include ~~primarily~~ customer-related intangible assets and acquired technology as well as other identifiable intangible assets that are similar to those we have identified in previous acquisitions. We estimate the amortization periods for the more significant intangible assets to be in a range of 57 to 1514 years.

~~We merged~~NOTE 3—REVENUES

The following tables present a disaggregation of our revenues from contracts with ~~Heartland Payment Systems, Inc. ("Heartland") in a cash-and-stock transaction on April 22, 2016~~customers by geography for ~~total purchase consideration~~each of ~~$3.9 billion.~~ our reportable segments for the three and six months ended June 30, 2021 and 2020:

The following table ~~summarizes~~presents a disaggregation of our Merchant Solutions segment revenues by distribution channel for the ~~components~~three and six months ended June 30, 2021 and 2020:

ASC Topic 606, Revenues from Contracts with Customers ("ASC 606"), requires that we determine for each customer arrangement whether revenue should be recognized at a point in time or over time. For the three and six months ended June 30, 2021 and 2020, substantially all of our revenues were recognized over time.

Supplemental balance sheet information related to contracts from customers as of June 30, 2021 and December 31, 2020 was as follows:

Net contract assets were not material at June 30, 2021 or at December 31, 2020. Revenue recognized for the three months ended June 30, 2021 and 2020 from contract liability balances at the beginning of each period was $85.0 million and $86.7 million, respectively. Revenue recognized for the six months ended June 30, 2021 and 2020 from contract liability balances at the beginning of each period was $146.6 million and $159.9 million, respectively.

ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. The purpose of this disclosure is to provide additional information about the amounts and expected timing of revenue to be recognized from the remaining performance obligations in our existing contracts. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at June 30, 2021. However, as permitted, we have elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration ~~transferred on April 22, 2016~~that meets specified criteria. Accordingly, the total amount of unsatisfied or partially unsatisfied performance obligations related to processing services is significantly higher than the amounts disclosed in the table below (in thousands):

This transaction was accounted for as a business combination, which requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date. The estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed previously determined as of December 31, 2016 and as subsequently revised, including a reconciliation to the total purchase consideration, are as follows:

December 31, 2016 Measurement-Period Adjustments Final

(in thousands)

Cash and cash equivalents $ 304,747
$ —
$ 304,747
Accounts receivable 70,385
—
70,385
Prepaid expenses and other assets 103,090
(5,131 ) 97,959
Identified intangible assets 1,639,040
—
1,639,040
Property and equipment 106,583
—
106,583
Debt (437,933 ) —
(437,933 )
Accounts payable and accrued liabilities (457,763 ) (65 ) (457,828 )
Settlement processing obligations (36,578 ) (3,727 ) (40,305 )
Deferred income taxes (518,794 ) 18,907
(499,887 )
Other liabilities (64,938 ) (33,495 ) (98,433 )
Total identifiable net assets 707,839
(23,511 ) 684,328
Goodwill 3,214,981
23,511
3,238,492
Total purchase consideration $ 3,922,820
$ —
$ 3,922,820

~~The measurement-period adjustments were the result of continued refinement of certain estimates, particularly regarding certain tax positions and deferred income taxes.~~

Goodwill of $3.2 billion arising from the merger, included in the North America segment, was attributable to expected growth opportunities, potential synergies from combining our existing businesses and an assembled workforce, and is not deductible for income tax purposes. During the nine months ended September 30, 2016, we incurred transaction costs in connection with the merger of $24.7 million, which are recorded in selling, general and administrative expenses in the consolidated statements of income.

~~The following reflects the estimated fair values of the identified intangible assets and the respective weighted-average estimated amortization periods:~~

Estimated Fair Values Weighted-Average Estimated Amortization Periods

(in thousands) (years)

Customer-related intangible assets $ 977,400
15
Acquired technology 457,000
5
Trademarks and trade names 176,000
7
Covenants-not-to-compete 28,640
1
Total estimated acquired intangible assets $ 1,639,040
11

~~NOTE 3—SETTLEMENT PROCESSING ASSETS AND OBLIGATIONS~~

~~As of September 30, 2017 and December 31, 2016, settlement processing assets and obligations consisted of the following:~~

September 30, 2017 December 31, 2016

(in thousands)

Settlement processing assets:
Interchange reimbursement $ 288,923
$ 150,612
Receivable from members 14,483
71,590
Receivable from networks 1,546,821
1,325,029
Exception items 9,570
6,450
Merchant reserves (12,565 ) (6,827 )
$ 1,847,232
$ 1,546,854

Settlement processing obligations:
Interchange reimbursement $ 74,970
$ 199,202
Liability to members (20,340 ) (177,979 )
Liability to merchants (1,472,221 ) (1,358,271 )
Exception items 11,018
21,194
Merchant reserves (140,327 ) (158,419 )
Reserve for operating losses and sales allowances (3,727 ) (2,939 )
$ (1,550,627 ) $ (1,477,212 )

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS

As of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, goodwill and other intangible assets consisted of the following:

The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2021:


	Merchant Solutions		Issuer Solutions		Business and Consumer Solutions		Total

	(in thousands)
Balance at December 31, 2020	$	13,548,690	$	7,957,616	$	2,365,145	$	23,871,451
Goodwill acquired	563,232		0		0		563,232
Effect of foreign currency translation	(9,669)		2,907		(707)		(7,469)
Measurement period adjustments	(5,202)		0		0		(5,202)
Balance at June 30, 2021	$	14,097,051	$	7,960,523	$	2,364,438	$	24,422,012

North America Europe Asia-Pacific Total

(in thousands)

Balance at December 31, 2016 $ 4,083,252
$ 455,300
$ 269,042
$ 4,807,594
Goodwill acquired 704,020
—
—
704,020
Effect of foreign currency translation 5,559
50,515
18,185
74,259
Measurement-period adjustments 23,511
—
7,030
30,541
Balance at September 30, 2017 $ 4,816,342
$ 505,815
$ 294,257
$ 5,616,414

There ~~was no~~were 0 accumulated impairment ~~loss~~losses for goodwill as of ~~September~~June 30, ~~2017~~2021 or December 31, ~~2016.~~2020.

NOTE 5—~~OTHER ASSETS~~

Through certain of our subsidiaries in Europe, we were a member and shareholder of Visa Europe Limited ("Visa Europe"). On June 21, 2016, Visa Inc. ("Visa") acquired all of the membership interests in Visa Europe, including ours, upon which we recorded a gain of $41.2 million included in interest and other income in our consolidated statements of income for the nine months ended September 30, 2016. We received up-front consideration comprised of €33.5 million ($37.7 million equivalent at June 21, 2016) in cash and Series B and C convertible preferred shares whose initial conversion rate equates to Visa common shares valued at $22.9 million as of June 21, 2016. However, the preferred shares were assigned a value of zero based on transfer restrictions, Visa's ability to adjust the conversion rate, and the estimation uncertainty associated with those factors. Based on the outcome of potential litigation involving Visa Europe in the United Kingdom and elsewhere in Europe, the conversion rate of the preferred shares could be adjusted down such that the number of Visa common shares we ultimately receive could be as low as zero, and approximately €25.6 million ($28.8 million equivalent at June 21, 2016) of the up-front cash consideration could be refundable. On the third anniversary of the closing of the acquisition by Visa, we will also receive €3.1 million ($3.5 million equivalent at June 21, 2016) of deferred consideration (plus compounded interest at a rate of 4.0% per annum).

~~NOTE 6—~~LONG-TERM DEBT AND LINES OF CREDIT

As of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, long-term debt consisted of the following:


	June 30, 2021		December 31, 2020

	(in thousands)

3.800% senior notes due April 1, 2021	$	0	$	752,199
3.750% senior notes due June 1, 2023	559,722		562,258
4.000% senior notes due June 1, 2023	562,634		565,930
2.650% senior notes due February 15, 2025	993,954		993,110
1.200% senior notes due March 1, 2026	1,091,057		0
4.800% senior notes due April 1, 2026	803,674		809,324
4.450% senior notes due June 1, 2028	480,391		482,588
3.200% senior notes due August 15, 2029	1,237,215		1,236,424
2.900% senior notes due May 15, 2030	989,611		989,025
4.150% senior notes due August 15, 2049	739,967		739,789
Unsecured term loan facility	1,987,785		1,985,776
Unsecured revolving credit facility	717,000		36,000
Finance lease liabilities	72,539		75,989
Other borrowings	34,041		65,352
Total long-term debt	10,269,590		9,293,764
Less current portion	52,611		827,357
Long-term debt, excluding current portion	$	10,216,979	$	8,466,407

September 30, 2017 December 31, 2016

(in thousands)

Corporate credit facility:
Term loans (face amounts of $3,956,497 and $3,728,857 at September 30, 2017 and December 31, 2016, respectively, less unamortized debt issuance costs of $40,180 and $46,282 at September 30, 2017 and December 31, 2016, respectively) $ 3,916,317
$ 3,682,575
Revolving Credit Facility 855,000
756,000
Capital lease obligations 1
37
Total long-term debt 4,771,318
4,438,612
Less current portion of corporate credit facility (face amounts of $102,129 and $187,274 at September 30, 2017 and December 31, 2016, respectively, less unamortized debt issuance costs of $8,722 and $9,526 at September 30, 2017 and December 31, 2016, respectively) and current portion of capital lease obligations of $1 and $37 at September 30, 2017 and December 31, 2016, respectively 93,408
177,785
Long-term debt, excluding current portion $ 4,677,910
$ 4,260,827

~~Maturity requirements~~The carrying amounts of our senior notes and term loan in the table above are presented net of unamortized discount and unamortized debt issuance costs, as applicable. At June 30, 2021, unamortized discount on ~~long-term~~senior notes was $9.0 million, and unamortized debt ~~as of September 30, 2017 by year are as follows (in thousands):~~

Years ending December 31,
2017 $ 23,821
2018 108,979
2019 141,912
2020 161,144
2021 180,376
2022 3,111,391
2023 and thereafter 1,083,875
Total $ 4,811,498

We are party to a credit facility agreement with Bank of America, N.A., as administrative agent, and a syndicate of financial institutions as lenders and other agents (as amended from time to time, the "Credit Facility Agreement"). On May 2, 2017, we entered into the Fourth Amendment to the Credit Facility Agreement (the "Fourth Amendment"), which increased the total financing capacity available under the Credit Facility Agreement to $5.2 billion; however, the aggregate outstanding debt under the Credit Facility Agreement did not change as we repaid certain outstanding amounts under the Term A Loan, the Term A-2 Loanissuance costs on senior notes and the Revolving Credit Facility (each as defined below) in connection with the Fourth Amendment. As of September 30, 2017, the Credit Facility Agreement provided for secured financing comprised of (i) a $1.5 billion term loan (the "Term A Loan"), (ii) a $1.3 billion term loan (the "Term A-2 Loan"), (iii) a $1.2 billionunsecured term loan facility ~~(the "Term B-2 Loan")~~were $51.4 million. At December 31, 2020, unamortized discount on senior notes was $8.5 million, and ~~(iv) a $1.25 billion revolving credit facility (the "Revolving Credit Facility"). Substantially all of the assets of~~unamortized debt issuance costs on our ~~domestic subsidiaries are pledged as collateral under the Credit Facility Agreement.~~

The Credit Facility Agreement provides for an interest rate, at our election, of either London Interbank Offered Rate ("LIBOR") or a base rate, in each case plus a leverage-based margin. As of September 30, 2017, the interest rates on the Term A Loan, the Term A-2 Loansenior notes and the ~~Term B-2 Loan~~unsecured term loan facility were ~~2.99%, 2.95% and 3.23%, respectively.~~

repaid in quarterly installments of $1.7 million through June 2018, increasing to quarterly installments of $8.6 million through March 2022, with the remaining balance due upon maturity in May 2022. The Term B-2 Loan principal must be repaid in quarterly installments in the amount of 0.25% of principal through March 2023, with the remaining principal balance due upon maturity in April 2023.

The Credit Facility Agreement allows us to issue standby letters of credit of up to $100 million in the aggregate under the Revolving Credit Facility. Outstanding letters of credit under the Revolving Credit Facility reduce the amount of borrowings available to us. Borrowings available to us under the Revolving Credit Facility are further limited by the covenants described below under "Compliance with Covenants." The total available commitments under the Revolving Credit Facility at September 30, 2017 and December 31, 2016 were $383.1 million and $446.3 million, respectively. As of September 30, 2017, the interest rate on the Revolving Credit Facility was 2.95%. In addition, we are required to pay a quarterly commitment fee on the unused portion of the Revolving Credit Facility at an applicable rate per annum ranging from 0.20% to 0.30% depending on our leverage ratio.

$47.4 million. The portion of ~~deferred~~unamortized debt issuance costs related to ~~the Revolving Credit Facility~~revolving credit facilities is included in other noncurrent ~~assets, and the portion of deferred~~assets. At June 30, 2021, unamortized debt issuance costs ~~related to~~on the ~~term loans is reported~~unsecured revolving credit facility were $11.7 million, and, at December 31, 2020, unamortized debt issuance costs on the unsecured revolving credit facility were $13.8 million.

At June 30, 2021, future maturities of long-term debt (excluding finance lease liabilities) are as follows by year (in thousands):

Senior Unsecured Notes

~~Settlement Lines of Credit~~

~~In various markets where we do business, we have lines of credit, which are restricted for use in funding settlement. The settlement lines of credit generally have variable interest rates, are subject~~3.800% senior unsecured notes due April 2021, to annual review and are denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. For certain of our settlement lines of credit, the available credit is increased by the amount of cash we have on deposit in specific accounts with the lender. Accordingly, the amountrepay a portion of the outstanding ~~line of~~indebtedness under our revolving credit ~~may exceed the stated credit limit. As of September 30, 2017~~facility and ~~December 31, 2016, a total of $55.5 million and $51.0 million, respectively, of cash on deposit was used to determine the available credit.~~for general corporate purposes.

As of ~~September~~June 30, ~~2017~~2021, our senior notes had a total carrying amount of $7.5 billion and ~~December 31, 2016, respectively, we had $487.5 million~~an estimated fair value of $7.9 billion. The estimated fair value of our senior notes was based on quoted market prices in an active market and ~~$392.1 million outstanding under these lines~~is considered to be a Level 1 measurement of ~~credit with additional capacity~~the valuation hierarchy. The fair value of ~~$669.9 million as of September~~other long-term debt approximated its carrying amount at June 30, 2017 to fund settlement. The weighted-average interest rate on these borrowings was 2.11% and 1.90% at September 30, 2017 and December 31, 2016, respectively. During the three months ended September 30, 2017, the maximum and average outstanding balances under these lines of credit were $627.3 million and $334.2 million, respectively.2021.

Compliance with Covenants

The ~~Credit Facility Agreement contains~~senior unsecured term loan and revolving credit facility contain customary conditions to funding, affirmative ~~and restrictive~~ covenants, ~~including, among others,~~negative covenants, financial covenants ~~based on our leverage~~ and ~~fixed charge coverage ratios, as defined in the agreement.~~events of default. As of ~~September~~June 30, ~~2017,~~2021, financial covenants under the ~~Credit Facility Agreement~~term loan facility required a leverage ratio ~~no greater than: (i) 4.50~~of 3.50 to 1.00 as of the end of any fiscal quarter ending during the period from July 1, 2017 through June 30, 2018; (ii) 4.25 to 1.00 as of the end of any fiscal quarter ending during the period from July 1, 2018 through June 30, 2019; and ~~(iii) 4.00 to 1.00 as of the end of any fiscal quarter ending thereafter. The fixed charge~~an interest coverage ratio ~~is required~~of 3.00 to ~~be no less than 2.25 to~~ 1.00.

The Credit Facility Agreement and settlement lines of credit also include various other covenants that are customary in such borrowings. The Credit Facility Agreement includes covenants, subject in each case to exceptions and qualifications, that may restrict certain payments, including in certain circumstances, the payment of cash dividends in excess of our current rate of $0.01 per share per quarter.

The Credit Facility Agreement also includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. We were in compliance with all applicable covenants as of ~~and for the nine months ended September~~June 30, ~~2017.~~2021.

~~Interest Rate Swap~~Derivative Agreements

We have interest rate swap agreements with financial institutions to hedge changes in cash flows attributable to interest rate risk on a portion of our variable-rate debt instruments. Net amounts to be received or paid under the swap agreements are reflected

as adjustments to interest expense. Since we have designated the interest rate swap agreements as portfolio cash flow hedges, unrealized gains or losses resulting from adjusting the swaps to fair value are recorded as components of other comprehensive income except for any ineffective portion of the change in fair value, which would be immediately recorded in interest expense. During the three and nine months ended September 30, 2017 and 2016, there was no ineffectiveness.(loss). The fair values of ~~the~~our interest rate swaps were determined based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date. These derivative instruments were classified within Level 2 of the valuation hierarchy.

The table below presents ~~the fair values of~~information about our derivative financial instruments, designated as cash flow hedges, included in the consolidated balance sheets:

Fair Values

Derivative Financial Instruments

Balance Sheet Location

Weighted-Average Fixed Rate of Interest at June 30, 2021

Range of Maturity Dates at
June 30, 2021

June 30, 2021

December 31, 2020

(in thousands)

Interest rate swaps (Notional of $300 million at December 31, 2020)

Accounts payable and accrued liabilities

1,330

Interest rate swaps (Notional of $1,250 million at June 30, 2021 and December 31, 2020)

Other noncurrent liabilities

2.73%

December 31, 2022

48,474

65,490

NA = not applicable.

The table below presents the effects of our interest rate swaps on the consolidated statements of income and statements of comprehensive income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016:~~2020:

Three Months Ended Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016

(in thousands)

Amount of gain (loss) recognized in other comprehensive income $ 341
$ 3,429
$ (2,214 ) $ (12,665 )
Amount reclassified out of other comprehensive income to interest expense $ 1,172
$ 1,853
$ 4,667
$ 5,733

As of ~~September~~June 30, ~~2017,~~2021, the amount of net unrealized losses in accumulated other comprehensive loss related to our interest rate swaps that is expected to be reclassified into interest expense during the next 12 months was ~~approximately $1.7~~$38.4 million.

Interest expense was ~~$41.8~~$79.0 million and ~~$44.6~~$81.1 million for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, respectively, and ~~$130.3~~$160.5 million and ~~$95.6~~$162.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, respectively.

NOTE 7—6—INCOME TAX

Our effective income tax rates ~~were 11.7% and 18.4%~~ for the three and six months ended ~~September~~June 30, ~~2017~~2021 were 21.2% and ~~September 30, 2016,~~16.8%, respectively. Our effective income tax ~~rates were 14.4% and 14.7%~~rate for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017 and September 30, 2016, respectively. Our effective income tax rates differ~~2021 differed from the U.S. statutory rate primarily ~~due to income generated in international jurisdictions with lower tax rates. In addition,~~ as a result of ~~adopting ASU 2016-09~~foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction, each favorably affecting the effective rate, and the effect of enacted tax law changes in the U.K. which required a remeasurement of deferred tax balances raising the effective rate. A change in the assessment of the need for a valuation allowance related to foreign tax credit carryforwards also had a favorable effect on ~~January 1, 2017, as described in "Note 1— Basis of Presentation and Summary of Significant Accounting Policies," we recognize~~ the effective income tax ~~effects of~~rate for the ~~excess benefits or deficiencies of share-based awards in the statement of income when share-based awards vest or are settled, which contributed to lower~~six months ended June 30, 2021.

Our effective income tax rates ~~in the current year periods. During the nine~~for three and six months ended ~~September~~June 30, ~~2016, we recorded an~~2020 were 3.0% and 9.0%, respectively. Our effective income tax ~~benefit of $12.7 million~~ ~~associated with~~rate for the ~~elimination of certain net deferred tax liabilities associated with undistributed earnings~~three and six months ended June 30, 2020 differed from ~~Canada~~the U.S. statutory rate primarily as a result of ~~management's plans to reinvest these earnings outside the United States indefinitely.~~

~~We conduct business globally and file income~~ tax ~~returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course~~credits, excess tax benefits of ~~business, we are subject to examination by taxing authorities around the world, including, without limitation, the United States~~share-based awards and the ~~United Kingdom. We are no longer subject~~foreign-derived intangible income deduction. The prior year effective tax rates were unusually low due to ~~state~~the effects of permanent differences on the lower income ~~tax examinations for years ended on or~~ before ~~May 31, 2008, U.S. federal~~ income ~~tax examinations for fiscal years prior to 2013 and U.K. federal income tax examinations for years ended on or before May 31, 2013.~~taxes.

NOTE 8—7—SHAREHOLDERS’ EQUITY

We ~~make repurchases of~~repurchase our common stock mainly through ~~the use of~~ open market ~~purchases~~repurchase plans and, at times, through accelerated share repurchase ("ASR") programs. ~~As of September 30, 2017, we were authorized to repurchase up to $264.9 million of our common stock.~~ During the three ~~and nine~~ months ended ~~September~~June 30, ~~2017, respectively, through open market repurchase plans,~~2021, we repurchased and retired ~~311,593 and 376,309~~1,501,549 shares of our common stock at a cost, including commissions, of ~~$29.0 million and $34.8~~$290.0 million, or ~~an average cost of $93.09 and $92.51~~$193.12 per ~~share, including commissions.~~

share. During the three ~~and nine~~ months ended ~~September~~June 30, ~~2016, respectively, through open market repurchase plans,~~2020, there were 0 repurchases. During the six months ended June 30, 2021 and 2020, we repurchased and retired ~~484,256~~5,456,949 and ~~1,142,415~~2,094,731 shares of our common stock at a cost, including commissions, of ~~$35.5~~$1,072.9 million and ~~$80.3~~$404.0 million, or $196.65 per share and $192.85 per share, respectively. The activity for the six months ended June 30, 2021 included the repurchase of a total of 2,491,161 shares at an average ~~cost~~price of ~~$73.25 and $70.29~~$200.71 per share ~~including commissions. In addition~~under an ASR program. On February 10, 2021, we entered into an ASR agreement with a financial institution to ~~shares repurchased through open market~~ repurchase ~~plans, we repurchased 673,212 shares~~an aggregate of $500 million of our common ~~stock at~~stock. In exchange for an up-front payment of $500 million, the financial institution committed to deliver a ~~cost~~number of ~~$50.0 million, or an average cost~~shares during the ASR program purchase period, which ended on March 31, 2021.

As of ~~$74.27 per share, including commissions, through an accelerated~~June 30, 2021, the remaining amount available under our share repurchase program ~~during~~was $611.0 million. On July 29, 2021, our board of directors approved an increase to our existing share repurchase program authorization, which raised the ~~nine months ended~~total available authorization to $1.5 billion.

On July 29, 2021, our board of directors declared a dividend of $0.25 per share payable on September ~~30, 2016.~~24, 2021 to common shareholders of record as of September 10, 2021.

NOTE 9—8—SHARE-BASED AWARDS AND STOCK OPTIONS

The following table summarizes share-based compensation expense and the related income tax benefit recognized for our share-based awards and stock options:

The following table summarizes the changes in unvested ~~share-based~~restricted stock and performance awards for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2021:

The total fair value of ~~share-based~~restricted stock and performance awards vested during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September~~June 30, ~~2016~~2020 was ~~$27.6~~$97.2 million and ~~$22.2~~$76.0 million, respectively.

For ~~these share-based~~restricted stock and performance awards, we recognized compensation expense of ~~$8.6~~$39.9 million and ~~$8.0~~$30.8 million during the three months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, respectively, and ~~$27.7~~$73.3 million and ~~$24.3~~$56.0 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, respectively. As of ~~September~~June 30, ~~2017,~~2021, there was ~~$53.2~~$254.1 million of unrecognized compensation expense related to unvested ~~share-based~~restricted stock and performance awards that we expect to recognize over a weighted-average period of ~~2.1~~2.2 years. ~~Our share-based award plans provide for accelerated vesting under certain conditions.~~

Stock options are granted with an exercise price equal to 100% of fair market value of our common stock on the date of grant and have a term of ten years. Stock options granted before the year ended May 31, 2015 vest in equal installments on each of the first four anniversaries of the grant date. Stock options granted during the year ended May 31, 2015 and thereafter vest in equal installments on each of the first three anniversaries of the grant date. During the nine months ended September 30, 2017 and September 30, 2016, we granted stock options to purchase 123,958 and 72,733 shares of our common stock. Our stock option plans provide for accelerated vesting under certain conditions.

The following table summarizes ~~changes in~~ stock option activity for the ~~nine~~six months ended ~~September~~June 30, ~~2017:~~2021:

Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value
(in thousands) (years) (in millions)

Outstanding at December 31, 2016 759
$37.51 6.0 $24.5
Granted 124
79.45
Exercised (156 ) 23.56
Outstanding at September 30, 2017 727
$47.67 6.6 $34.4

Options vested and exercisable at September 30, 2017 505
$36.49 5.6 $29.6

We recognized compensation expense for stock options of ~~$0.7~~$1.8 million and ~~$0.5~~$2.2 million during the three months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, respectively, and ~~$2.0~~$4.2 million and ~~$1.2~~$4.1 million ~~during~~for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, respectively. The aggregate intrinsic value of stock options exercised during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016~~2020 was ~~$9.9~~$23.1 million and ~~$10.6~~$66.5 million, respectively. As of ~~September~~June 30,

~~2017,~~ 2021, we had ~~$4.0~~$11.9 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of ~~2.0~~2.1 years.

The weighted-average grant-date fair value of ~~each~~ stock ~~option~~options granted during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and 2020 was ~~$23.68.~~$65.99 and $54.85, respectively. Fair value was estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions:


	Six Months Ended
	June 30, 2021	June 30, 2020

Risk-free interest rate	0.59%	1.24%
Expected volatility	40%	30%
Dividend yield	0.44%	0.39%
Expected term (years)	5	5



	~~Nine Months Ended~~
	~~September 30, 2017~~
~~Risk-free interest rate~~	~~1.99%~~
~~Expected volatility~~	~~30%~~
~~Dividend yield~~	~~0.06%~~
~~Expected term (years)~~	5

The risk-free interest rate iswas based on the yield of a zero coupon U.S. Treasury security with a maturity equal to the expected life of the option from the date of the grant. Our assumption on expected volatility iswas based on our historical volatility. The dividend yield assumption ~~is calculated~~was determined using our average stock price over the preceding year and the annualized amount of our most current quarterly dividend per share. We based our assumptions on the expected term of the options on our analysis of the historical exercise patterns of the options and our assumption on the future exercise pattern of options.

NOTE ~~10—~~9—EARNINGS PER SHARE

Basic earnings per share is("EPS") was computed by dividing net income attributable to Global Payments by the weighted-average number of shares outstanding during the period. Earnings available to common shareholders iswas the same as reported net income attributable to Global Payments for all periods presented.

Diluted ~~earnings per share~~EPS is computed by dividing net income attributable to Global Payments by the weighted-average number of shares outstanding during the period, including the effect of share-based awards that would have a dilutive effect on ~~earnings per share.~~EPS. All stock options with an exercise price lower than the average market share price of our common stock for the period are assumed to have a dilutive effect on EPS. The dilutive share base for the three and six months ended June 30, 2021 excluded approximately 234,813 shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share. The dilutive share base for the three and six months ended June 30, 2020 excluded approximately 124,888 shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share.

The following table sets forth the computation of diluted weighted-average number of shares outstanding for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September~~2020:


	Three Months Ended		Six Months Ended
	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020

	(in thousands)

Basic weighted-average number of shares outstanding	294,914	299,140	295,665	299,264
Plus: Dilutive effect of stock options and other share-based awards	1,225	1,106	1,236	1,277
Diluted weighted-average number of shares outstanding	296,139	300,246	296,901	300,541

NOTE 10 - SUPPLEMENTAL BALANCE SHEET INFORMATION

Cash, cash equivalents and restricted cash

A reconciliation of cash, cash equivalents and restricted cash in the consolidated statements of cash flows as of June 30, ~~2016:~~2021 and December 31, 2020 to the amounts in the consolidated balance sheets is as follows:


	June 30, 2021		December 31, 2020

	(in thousands)
Cash and cash equivalents	$	1,799,549	$	1,945,868
Restricted cash included in prepaid expenses and other current assets	140,175		143,903
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$	1,939,724	$	2,089,771

Accounts payable and accrued liabilities

At June 30, 2021 and December 31, 2020, accounts payable and accrued liabilities in the consolidated balance sheet included obligations totaling $17.4 million and $48.4 million, respectively, for employee termination benefits resulting from merger-related integration activities. During the three months ended June 30, 2021 and 2020, we recognized charges for employee termination benefits of $13.1 million and $24.1 million, which included $0.7 million and $1.7 million of share-based compensation expense, respectively. During the six months ended June 30, 2021 and 2020, we recognized charges for employee termination benefits of $38.3 million and $41.7 million, which included $1.2 million and $4.2 million of share-based compensation expense, respectively. As of June 30, 2021, the cumulative amount of recognized charges for employee termination benefits resulting from merger-related integration activities was $178.7 million, which included $25.2 million of share-based compensation expense. These charges are recorded within selling, general and administrative expenses in our consolidated statements of income and included within Corporate expenses for segment reporting purposes. New obligations may arise and related expenses may be incurred as merger-related integration activities continue in 2021.

Three Months Ended Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016

(in thousands)

Basic weighted-average number of shares outstanding 154,560
153,668
153,138
143,794
Plus: Dilutive effect of stock options and other share-based awards 842
862
941
937
Diluted weighted-average number of shares outstanding 155,402
154,530
154,079
144,731

Table of Contents

NOTE 11—ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in the accumulated balances for each component of other comprehensive ~~loss, net of tax,~~income (loss) were as follows for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016:~~2020:


	Foreign Currency Translation Gains (Losses)		Unrealized Gains (Losses) on Hedging Activities		Other		Accumulated Other Comprehensive Loss

	(in thousands)

Balance at March 31, 2021	$	(141,070)	$	(72,575)	$	1,272	$	(212,373)
Other comprehensive income (loss)	34,188		7,027		(1,549)		39,666
Balance at June 30, 2021	$	(106,882)	$	(65,548)	$	(277)	$	(172,707)

Balance at March 31, 2020	$	(438,350)	$	(102,198)	$	768	$	(539,780)
Other comprehensive income	77,217		3,295		122		80,634
Balance at June 30, 2020	$	(361,133)	$	(98,903)	$	890	$	(459,146)

Foreign Currency Translation Unrealized Gains (Losses) on Hedging Activities Other Accumulated Other Comprehensive Loss

(in thousands)

Balance at June 30, 2016 $ (249,374 ) $ (11,377 ) $ (4,634 ) $ (265,385 )
Other comprehensive income, net of tax 2,505
3,331
23
5,859
Balance at September 30, 2016 $ (246,869 ) $ (8,046 ) $ (4,611 ) $ (259,526 )

Balance at June 30, 2017 $ (239,669 ) $ 51
$ (3,841 ) $ (243,459 )
Other comprehensive income, net of tax 40,090
843
18
40,951
Balance at September 30, 2017 $ (199,579 ) $ 894
$ (3,823 ) $ (202,508 )

Other comprehensive income ~~(loss)~~ attributable to noncontrolling ~~interest,~~interests, which relates only to foreign currency translation, was ~~approximately $2.3~~$2.7 million and ~~$(0.8)~~$5.4 million for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, respectively.

Foreign Currency Translation Unrealized Gains (Losses) on Hedging Activities Other Accumulated Other Comprehensive Loss

(in thousands)

Balance at December 31, 2015 $ (239,650 ) $ (3,732 ) $ (3,808 ) $ (247,190 )
Other comprehensive loss, net of tax (7,219 ) (4,314 ) (803 ) (12,336 )
Balance at September 30, 2016 $ (246,869 ) $ (8,046 ) $ (4,611 ) $ (259,526 )

Balance at December 31, 2016 $ (318,450 ) $ (640 ) $ (3,627 ) $ (322,717 )
Other comprehensive income (loss), net of tax 118,871
1,534
(196 ) 120,209
Balance at September 30, 2017 $ (199,579 ) $ 894
$ (3,823 ) $ (202,508 )


	Foreign Currency Translation Gains (Losses)		Unrealized Gains (Losses) on Hedging Activities		Other		Accumulated Other Comprehensive Loss

	(in thousands)

Balance at December 31, 2020	$	(114,227)	$	(81,543)	$	(6,503)	$	(202,273)
Other comprehensive income	7,345		15,995		6,226		29,566
Balance at June 30, 2021	$	(106,882)	$	(65,548)	$	(277)	$	(172,707)

Balance at December 31, 2019	$	(241,899)	$	(69,319)	$	647	$	(310,571)
Other comprehensive (loss) income	(119,234)		(29,584)		243		(148,575)
Balance at June 30, 2020	$	(361,133)	$	(98,903)	$	890	$	(459,146)

Other comprehensive ~~income~~loss attributable to noncontrolling ~~interest,~~interests, which relates only to foreign currency translation, was ~~approximately $15.1~~$3.2 million and ~~$3.8~~$1.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, respectively.

NOTE 12—SEGMENT INFORMATION

We operate in 3 reportable segments: Merchant Solutions, Issuer Solutions and Business and Consumer Solutions. We evaluate performance and allocate resources based on the operating income of each operating segment. The operating income of each operating segment includes the revenues of the segment less expenses that are directly related to those revenues. Operating overhead, shared costs and ~~certain~~share-based compensation costs are included in ~~Corporate in the following table.~~Corporate. Interest and other income, interest and other expense, income tax expense and ~~provision for~~equity in income ~~taxes~~of equity method investments, net of tax, are not allocated to the individual segments. We do not evaluate the performance of or allocate resources to our operating segments using asset data. The accounting policies of the reportable operating segments are the same as those described in our ~~Transition~~Annual Report on Form 10-K for the ~~seven months~~year ended December 31, ~~2016~~2020 and our summary of significant accounting policies in "Note 1— - Basis of Presentation and Summary of Significant Accounting Policies."

Table of Contents

Information on segments and reconciliations to consolidated revenues, ~~and~~ consolidated operating income ~~are~~and consolidated depreciation and amortization was as follows for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016:~~2020:


	Three Months Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020

	(in thousands)

Revenues:(1)
Merchant Solutions	$	1,426,755	$	1,001,555	$	2,694,627	$	2,216,824
Issuer Solutions	505,932		470,025		1,006,183		973,787
Business and Consumer Solutions	227,355		216,722		470,941		420,668
Intersegment eliminations	(22,605)		(16,350)		(44,307)		(35,729)
Consolidated revenues	$	2,137,437	$	1,671,952	$	4,127,444	$	3,575,550

Operating income (loss)(1)(2):
Merchant Solutions	$	437,293	$	175,078	$	777,283	$	479,231
Issuer Solutions	74,806		58,027		143,262		117,331
Business and Consumer Solutions	42,283		48,195		104,205		79,307
Corporate	(191,824)		(173,726)		(386,933)		(324,316)
Consolidated operating income	$	362,558	$	107,574	$	637,817	$	351,553

Depreciation and amortization:(1)
Merchant Solutions	$	248,503	$	236,840	$	499,099	$	469,862
Issuer Solutions	145,691		136,254		290,300		272,991
Business and Consumer Solutions	21,938		24,114		43,858		47,755
Corporate	5,912��		5,467		14,359		9,885
Consolidated depreciation and amortization	$	422,044	$	402,675	$	847,616	$	800,493

Three Months Ended Nine Months Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016

(in thousands)

Revenues⁽¹⁾:

North America $ 764,902
$ 718,977
$ 2,162,911
$ 1,770,957
Europe 205,203
173,246
557,258
479,620
Asia-Pacific 68,802
59,662
200,741
170,212
Consolidated revenues $ 1,038,907
$ 951,885
$ 2,920,910
$ 2,420,789

Operating income (loss)⁽¹⁾:

North America $ 138,345
$ 110,983
$ 344,604
$ 258,648
Europe 76,214
63,727
196,394
172,293
Asia-Pacific 20,032
14,657
57,321
40,266
Corporate⁽²⁾
(62,120 ) (68,978 ) (189,026 ) (195,085 )
Consolidated operating income $ 172,471
$ 120,389
$ 409,293
$ 276,122

Depreciation and amortization⁽¹⁾:

North America $ 95,056
$ 91,790
$ 277,219
$ 189,585
Europe 11,863
11,019
34,926
30,780
Asia-Pacific 4,484
4,450
12,068
12,204
Corporate 2,246
1,296
5,750
3,740
Consolidated depreciation and amortization $ 113,649
$ 108,555
$ 329,963
$ 236,309

⁽¹⁾Revenues, operating income and depreciation and amortization reflect the ~~effect~~effects of acquired businesses from the respective ~~dates of acquisition.~~acquisition dates. For further discussion of our acquisitions, see "Note 2—2—Acquisitions."

⁽²⁾ ~~During the three and nine months ended September 30, 2017, respectively, operating~~ Operating loss for Corporate included acquisition and integration expenses of ~~$21.5~~$76.8 million and ~~$69.5 million. During~~$80.7 million during the three ~~and nine~~ months ended ~~September~~June 30, ~~2016, respectively, operating~~2021 and 2020, respectively. Operating loss for Corporate included acquisition and integration expenses of ~~$34.0~~$167.0 million and ~~$93.0 million.~~$150.4 million during the six months ended June 30, 2021 and 2020, respectively.

NOTE 13—COMMITMENTS AND CONTINGENCIES

~~Leases~~Purchase Obligations

We have contractual obligations related to service arrangements with suppliers for fixed or minimum amounts. Future minimum payments at June 30, 2021 for purchase obligations were as follows (in thousands):

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Year Ending December 31:
2021	$	285,278
2022	237,176
2023	181,545
2024	123,801
2025	151,300
2026	184,376
2027 and thereafter	754,025
Total future minimum payments	$	1,917,501

Legal Matters

We are party to a number of claims and lawsuits incidental to our business. In ~~May 2017, we received $37.5 million~~our opinion, the liabilities, if any, which may ultimately result from the ~~sale~~outcome of such matters, individually or in the aggregate, are not expected to have a material adverse effect on our ~~operating facility~~financial position, liquidity, results of operations or cash flows.

On September 23, 2019, a jury in ~~Jeffersonville, Indiana, which we acquired as part~~the Superior Court of Dekalb County Georgia, awarded Frontline Processing Corp. ("Frontline") $135.2 million in damages, costs and attorney's fees (plus interest) following a trial of a breach of contract dispute between Frontline and Global Payments, wherein Frontline alleged that Global Payments violated provisions of the ~~Heartland merger,~~parties' Referral Agreement and ~~simultaneously leased the property back for an initial term of 20 years, followed by four optional renewal terms of 5 years.~~Master Services Agreement. The ~~arrangement met the criteria to be treated as~~Superior Court entered a ~~sale for accounting purposes, and as a result, we derecognized the associated property. There was no resulting gain or loss~~final judgment on the ~~sale because~~verdict in favor of Frontline on September 30, 2019. We appealed the ~~proceeds received were equal~~decision to the ~~carrying amount~~Georgia Court of Appeals. On June 30, 2021, a panel of the ~~property.~~Georgia Court of Appeals unanimously reversed the judgment, including the entire damages award. We ~~are~~ previously determined that it was not probable that a loss had been incurred under the applicable accounting ~~for~~standard (ASC Topic 450, Contingencies); therefore, the ~~lease as an operating lease.~~reversal of the judgment did not affect our consolidated financial statements.

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ITEM 2—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1 of Part 1I of this Quarterly Report and the Management’s Discussion and Analysis of Financial Condition and Results of Operations and consolidated financial statements contained in our ~~Transition~~Annual Report on Form 10-K for the ~~seven months~~year ended December 31, ~~2016.~~2020. This discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our actual results could differ materially from the results anticipated by our forward-looking statements. ~~See "Forward-Looking Statements" below for additional information.~~

Executive Overview

We are a leading ~~worldwide provider of payment~~payments technology ~~services~~company delivering innovative ~~solutions~~software and services to our customers globally. Our technologies, services and ~~employee~~team member expertise ~~enable~~allow us to provide a broad range of ~~services~~solutions that ~~allow~~enable our customers to ~~accept various payment types. We distribute our services~~operate their businesses more efficiently across a variety of channels around the world.

On September 18, 2019, we merged with Total System Services, Inc. ("TSYS") (the "Merger"). We continue to ~~customers~~execute on merger and integration activities, such as combining business operations, streamlining technology infrastructure, eliminating duplicative corporate and operational support structures and realizing scale efficiencies. We also continue to invest in software and hardware to support the development of new technologies, infrastructure to support our growing business and the continued consolidation and enhancement of our operating platforms.

Highlights related to our financial condition at June 30, ~~countries~~2021 and results of operations for the three and six months then ended include the following:

•Consolidated revenues for the three and six months ended June 30, 2021 increased to $2,137.4 million and $4,127.4 million, respectively, compared to $1,672.0 million and $3,575.6 million, respectively, for the prior year. The increase in consolidated revenues is primarily due to an increase in transaction volumes as compared to the reduced transaction levels in the prior year driven by the effects of COVID-19. We also saw sequential improvement from the first quarter of 2021 driven largely by the increase in transaction volumes from the continued easing of COVID-19 restrictions.

•Consolidated operating income for the three and six months ended June 30, 2021 increased to $362.6 million and $637.8 million, respectively, compared to $107.6 million and $351.6 million, respectively, for the prior year. Operating margin for the three and six months ended June 30, 2021 increased to 17.0% and 15.5%, respectively, compared to 6.4% and 9.8%, respectively, for the prior year. The increase in consolidated operating income and operating margin for the three and six months ended June 30, 2021 is primarily due to the increase in revenues and favorable effects of Merger-related cost synergies.

•On June 10, 2021, we acquired Zego, a real estate technology company that provides a comprehensive resident experience management software and digital commerce solutions to property managers, primarily in the United States. This acquisition aligns with our technology-enabled, software driven strategy and expands our business into a new vertical market. We paid cash consideration of approximately $933 million, which we funded with cash on hand and by drawing on our revolving credit facility.

•On February 26, 2021, we issued $1.1 billion aggregate principal amount of 1.200% senior unsecured notes due February 2026. We used the net proceeds from this offering to fund the redemption in full of the 3.800% senior unsecured notes due April 2021, to repay a portion of the outstanding indebtedness under our revolving credit facility and for general corporate purposes.

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COVID-19 Update

In March 2020, the World Health Organization declared the outbreak of the COVID-19 virus a global pandemic. Since that time, the global economy has been, and continues to be, affected by COVID-19. The pandemic has caused and may continue to cause significant disruptions to businesses and markets worldwide as the virus spreads or has a resurgence in certain jurisdictions. Beginning in mid-March 2020, our financial results were affected by decreased spending and transaction volumes, as governments implemented measures in an effort to contain the virus, including lockdowns, physical distancing, travel restrictions, limitations on public gatherings, work from home and restrictions on nonessential businesses. We saw improvement in our financial results and positive trends during the latter half of 2020 and into the first half of 2021 as certain governments began to gradually ease restrictions and provide economic stimulus and vaccine distribution accelerated, leading to an increase in spending and transaction volumes. While we continue to see signs of economic recovery, which has positively affected our financial results in 2021 as compared to the prior year, the rate of recovery on a global basis has been and may continue to be affected by additional developments related to COVID-19.

Early actions we took to preserve our available capital and provide financial flexibility in response to the effects of COVID-19 on our business, including the temporary reduction of certain operating expenses, employee compensation costs, other discretionary spending and planned capital expenditures, added to the strength of our financial profile. We continue to closely monitor the COVID-19 pandemic; however, the implications on future global economic conditions and related effects on our business and financial condition are difficult to predict due to continuing uncertainties around the ultimate severity, scope and duration of the pandemic, the availability and effectiveness of treatments or vaccines, resurgence risk as new virus variants are identified and the direction or extent of current or future restrictive actions that may be imposed by governments or public health authorities. While the COVID-19 pandemic may continue to have an adverse effect on our revenues and earnings in 2021, we currently expect a continued recovery throughout ~~North America, Europe,~~ the ~~Asia-Pacific region~~year. We expect to continue to make significant capital investments in the business, and ~~Brazil~~we anticipate capital expenditures and other investments in the business during 2021 will return to pre-COVID-19 levels.

For a further discussion of trends, uncertainties and other factors that could affect our future operating results related to the effects of the COVID-19 pandemic, see the section entitled "Risk Factors" in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2020.

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Results of Operations

We operate in three reportable segments: ~~North America, Europe~~Merchant Solutions, Issuer Solutions and ~~Asia-Pacific.~~

Business and Consumer Solutions. We ~~merged with Heartland Payments Systems, Inc. ("Heartland") in a cash-and-stock transaction~~evaluate performance and allocate resources based on ~~April 22, 2016~~the operating income of each operating segment. For further information about our reportable segments, see "Item 1. Business—Business Segments" within our Annual Report on Form 10-K for ~~total purchase consideration of $3.9 billion. See~~the year ended December 31, 2020, incorporated herein by reference, and "Note ~~2—Acquisitions"~~12—Segment Information" in the notes to the accompanying unaudited consolidated financial ~~statements for further discussion of our merger with Heartland.~~statements.

On September 1, 2017, we acquired the communities and sports divisions of Athlaction Topco, LLC ("ACTIVE Network") in a cash-and-stock transaction with Vista Equity Partners. We paid the sellers consideration of $600 million in cash, which we funded primarily by drawing on our Revolving Credit Facility (as defined in "Liquidity and Capital Resources - Long-Term Debt and Lines of Credit" below), and 6,357,509 shares of our common stock having an estimated fair value of approximately $572 million.

~~Highlights related to our financial condition and results of operations for the three and nine months ended September 30, 2017 are provided below:~~

Consolidated revenues increased by 9.1% and 20.7% to $1,038.9 million and $2,920.9 million, respectively, for the three and nine months ended September 30, 2017, compared to $951.9 million and $2,420.8 million, respectively, for the prior-year periods. The increase for the three month-period was primarily due to organic growth across our operating segments and the increase for the nine month-period was primarily due to our merger with Heartland.

Consolidated operating income was $172.5 million and $409.3 million, respectively, for the three and nine months ended September 30, 2017 compared to $120.4 million and $276.1 million, respectively, for the prior-year periods. Our operating margin for the three and nine months ended September 30, 2017 was 16.6% and 14.0%, respectively, compared to 12.6% and 11.4%, respectively, for the prior-year periods. The contribution of the revenue growth was partially offset by an increase in depreciation and amortization expense of $5.1 million and $93.7 million, respectively.

Net income attributable to Global Payments was $110.7 million and $226.5 million, respectively, for the three and nine months ended September 30, 2017 compared to $55.5 million and $177.7 million, respectively, for the prior-year periods. The nine months ended September 30, 2016 included a gain of $41.2 million from the sale of all of our membership interests in Visa Europe Limited ("Visa Europe") to Visa Inc. ("Visa").

~~Diluted earnings per share was $0.71 and $1.47, respectively, for the three and nine months ended September 30, 2017 compared to $0.36 and $1.23, respectively, for the prior-year periods.~~

~~Emerging Trends~~

We believe that electronic payment transactions will continue to grow and that an increasing percentage of these will be facilitated through emerging technologies. As a result, we expect an increasing portion of our future capital investment will be

allocated to support the development of new and emerging technologies; however, we do not expect our aggregate capital spending to increase materially from our current level of spending as a result of this.

We also believe new markets will continue to develop in areas that have been previously dominated by paper-based transactions. We expect industries such as education, government and healthcare, as well as payment types such as recurring payments and business-to-business payments, to continue to see transactions migrate to electronic-based solutions. We anticipate that the continued development of new services and the emergence of new vertical markets will be a factor in the growth of our business and our revenue in the future.

The payments industry continues to grow worldwide and as a result, certain large payment technology companies, including us, have expanded operations globally by pursuing acquisitions and creating alliances and joint ventures. We expect to continue to expand into new markets internationally or increase our scale and improve our competitiveness in existing markets by pursuing further acquisitions and joint ventures.

~~Results of Operations~~

The following table sets forth key selected financial data for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, this data as a percentage of total revenues and the changes between the periods in dollars and as a percentage of the prior-year amount. The income statement data for the three months ended ~~September~~June 30, ~~2016 are~~2021 and 2020 is derived from ~~our~~the accompanying unaudited consolidated financial statements ~~for that period.~~included in Part I, Item 1 - Financial Statements.


	Three Months Ended June 30, 2021			% of Revenues(1)		Three Months Ended June 30, 2020			% of Revenues(1)		$ Change			% Change

	(dollar amounts in thousands)

Revenues:
Merchant Solutions	$	1,426,755		66.8	%	$	1,001,555		59.9	%	$	425,200		42.5	%
Issuer Solutions	505,932			23.7	%	470,025			28.1	%	35,907			7.6	%
Business and Consumer Solutions	227,355			10.6	%	216,722			13.0	%	10,633			4.9	%
Intersegment eliminations	(22,605)			(1.1)	%	(16,350)			(1.0)	%	(6,255)			38.3	%
Consolidated revenues	$	2,137,437		100.0	%	$	1,671,952		100.0	%	$	465,485		27.8	%

Consolidated operating expenses:
Cost of service	$	936,310		43.8	%	$	893,740		53.5	%	$	42,570		4.8	%
Selling, general and administrative	838,569			39.2	%	670,638			40.1	%	167,931			25.0	%
Operating expenses	$	1,774,879		83.0	%	$	1,564,378		93.6	%	$	210,501		13.5	%

Operating income (loss)(2)(3):
Merchant Solutions	$	437,293		20.5	%	$	175,078		10.5	%	$	262,215		149.8	%
Issuer Solutions	74,806			3.5	%	58,027			3.5	%	16,779			28.9	%
Business and Consumer Solutions	42,283			2.0	%	48,195			2.9	%	(5,912)			(12.3)	%
Corporate	(191,824)			(9.0)	%	(173,726)			(10.4)	%	(18,098)			10.4	%
Operating income	$	362,558		17.0	%	$	107,574		6.4	%	$	254,984		237.0	%

Operating margin:
Merchant Solutions	30.6		%			17.5		%			13.1		%
Issuer Solutions	14.8		%			12.3		%			2.5		%
Business and Consumer Solutions	18.6		%			22.2		%			(3.6)		%

Three Months Ended September 30, 2017
% of Revenue⁽¹⁾
Three Months Ended September 30, 2016
% of Revenue⁽¹⁾
Change % Change

(dollar amounts in thousands)

Revenues⁽²⁾:

North America $ 764,902
73.6 % $ 718,977
75.5 % $ 45,925
6.4 %
Europe 205,203
19.8 % 173,246
18.2 % 31,957
18.4 %
Asia-Pacific 68,802
6.6 % 59,662
6.3 % 9,140
15.3 %
Total revenues $ 1,038,907
100.0 % $ 951,885
100.0 % $ 87,022
9.1 %

Consolidated operating expenses:

Cost of service $ 493,883
47.5 % $ 469,980
49.4 % $ 23,903
5.1 %
Selling, general and administrative 372,553
35.9 % 361,516
38.0 % 11,037
3.1 %
Operating expenses $ 866,436
83.4 % $ 831,496
87.4 % $ 34,940
4.2 %

Operating income (loss):

North America $ 138,345

$ 110,983
$ 27,362
24.7 %
Europe 76,214
63,727
12,487
19.6 %
Asia-Pacific 20,032
14,657
5,375
36.7 %
Corporate⁽²⁾
(62,120 ) (68,978 ) 6,858
(9.9 )%
Operating income $ 172,471
16.6 % $ 120,389
12.6 % $ 52,082
43.3 %

Operating margin:

North America 18.1 % 15.4 %
2.7 %
Europe 37.1 % 36.8 % 0.3 %
Asia-Pacific 29.1 % 24.6 %
4.5 %

⁽¹⁾Percentage amounts may not sum to the total due to rounding.

(2) Revenues, operating income and depreciation and amortization reflect the effects of acquired businesses from the respective acquisition dates. For further discussion of our acquisitions, see "Note 2—Acquisitions."

⁽²⁾ O~~perating~~

(3) Operating loss for Corporate included acquisition and integration expenses of ~~$21.5~~$76.8 million and ~~$34.0~~$80.7 million during the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, respectively. ~~These expenses are included primarily in selling, general and administrative expenses in the unaudited consolidated statements~~

Table of ~~income.~~Contents

The following table sets forth key selected financial data for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, this data as a percentage of total revenues and the changes between the periods in dollars and as a percentage of the prior-year amount. The income statement data for the ~~nine~~six months ended ~~September~~June 30, ~~2016 are~~2021 and 2020 is derived from ~~our~~the accompanying unaudited consolidated financial statements ~~for that period.~~included in Part I, Item 1 - Financial Statements.

Nine Months Ended September 30, 2017
% of Revenue⁽¹⁾
Nine Months Ended September 30, 2016
% of Revenue⁽¹⁾
Change % Change

(dollar amounts in thousands)

Revenues⁽²⁾:

North America $ 2,162,911
74.0 % $ 1,770,957
73.2 % $ 391,954
22.1 %
Europe 557,258
19.1 % 479,620
19.8 % 77,638
16.2 %
Asia-Pacific 200,741
6.9 % 170,212
7.0 % 30,529
17.9 %
Total revenues $ 2,920,910
100.0 % $ 2,420,789
100.0 % $ 500,121
20.7 %

Consolidated operating expenses⁽²⁾:

Cost of service $ 1,418,969
48.6 % $ 1,125,041
46.5 % $ 293,928
26.1 %
Selling, general and administrative 1,092,648
37.4 % 1,019,626
42.1 % 73,022
7.2 %
Operating expenses $ 2,511,617
86.0 % $ 2,144,667
88.6 % $ 366,950
17.1 %

Operating income (loss)⁽²⁾:

North America $ 344,604
$ 258,648
$ 85,956
33.2 %
Europe 196,394
172,293
24,101
14.0 %
Asia-Pacific 57,321
40,266
17,055
42.4 %
Corporate⁽³⁾
(189,026 ) (195,085 ) 6,059
(3.1 )%
Operating income $ 409,293
14.0 % $ 276,122
11.4 % $ 133,171
48.2 %

Operating margin⁽²⁾:

North America 15.9 % 14.6 % 1.3 %
Europe 35.2 % 35.9 % (0.7 )%
Asia-Pacific 28.6 % 23.7 % 4.9 %


	Six Months Ended June 30, 2021			% of Revenues(1)		Six Months Ended June 30, 2020			% of Revenues(1)		$ Change			% Change

	(dollar amounts in thousands)

Revenues:
Merchant Solutions	$	2,694,627		65.3	%	$	2,216,824		62.0	%	$	477,803		21.6	%
Issuer Solutions	1,006,183			24.4	%	973,787			27.2	%	32,396			3.3	%
Business and Consumer Solutions	470,941			11.4	%	420,668			11.8	%	50,273			12.0	%
Intersegment eliminations	(44,307)			(1.1)	%	(35,729)			(1.0)	%	(8,578)			24.0	%
Consolidated revenues	$	4,127,444		100.0	%	$	3,575,550		100.0	%	$	551,894		15.4	%

Consolidated operating expenses:
Cost of service	$	1,861,556		45.1	%	$	1,827,611		51.1	%	$	33,945		1.9	%
Selling, general and administrative	1,628,071			39.4	%	1,396,386			39.1	%	231,685			16.6	%
Operating expenses	$	3,489,627		84.5	%	$	3,223,997		90.2	%	$	265,630		8.2	%

Operating income (loss)(2)(3):
Merchant Solutions	$	777,283		18.8	%	$	479,231		13.4	%	$	298,052		62.2	%
Issuer Solutions	143,262			3.5	%	117,331			3.3	%	25,931			22.1	%
Business and Consumer Solutions	104,205			2.5	%	79,307			2.2	%	24,898			31.4	%
Corporate	(386,933)			(9.4)	%	(324,316)			(9.1)	%	(62,617)			19.3	%
Operating income	$	637,817		15.5	%	$	351,553		9.8	%	$	286,264		81.4	%

Operating margin:
Merchant Solutions	28.8		%			21.6		%			7.2		%
Issuer Solutions	14.2		%			12.0		%			2.2		%
Business and Consumer Solutions	22.1		%			18.9		%			3.2		%

(1) Percentage amounts may not sum to the total due to rounding.

⁽²⁾Revenues, ~~operating expenses,~~ operating income and ~~operating margin~~depreciation and amortization reflect the ~~effect~~effects of acquired businesses from the respective ~~dates of acquisition.~~acquisition dates. For further discussion of our acquisitions, see "Note 2—~~Acquisitions" in the notes to the accompanying unaudited consolidated financial statements.~~2—Acquisitions."

⁽³⁾ O~~perating~~Operating loss for Corporate included acquisition and integration expenses of ~~$69.5~~$167.0 million and ~~$93.0~~$150.4 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, respectively. ~~These expenses are included primarily in selling, general and administrative expenses in the unaudited consolidated statements~~

Table of ~~income.~~Contents

Revenues

~~For~~Consolidated revenues for the three and six months ended ~~September~~June 30, ~~2017, revenues~~2021 increased by ~~$87.0~~27.8% and 15.4%, respectively, to $2,137.4 million ~~or 9.1%,~~and $4,127.4 million, respectively, compared to $1,672.0 million and $3,575.6 million, respectively, for the prior year. Starting in mid-March 2020, COVID-19 began to have an unfavorable effect on transaction volumes, which had an unfavorable effect on our revenues for the three and six months ended June 30, 2020. We saw improvements throughout the latter half of 2020 and into the first half of 2021, and revenues for the three and six months ended June 30, 2021 increased as compared to the prior year primarily due to ~~$1,038.9 million, reflecting organic growth~~an increase in ~~each~~transaction volumes resulting from the continued easing of COVID-19 restrictions. While we continue to see signs of economic recovery, which has positively affected our ~~operating segments and the favorable effect of currency fluctuations of $9.1 million. For the nine months ended September 30, 2017, revenues increased by $500.1 million, or 20.7%,~~financial results in 2021 as compared to the prior year, the rate of recovery on a global basis has been and may continue to ~~$2,920.9 million, due primarily~~be affected by additional developments related to COVID-19.

Merchant Solutions Segment. Revenues from our ~~merger with Heartland, despite the unfavorable effect of currency fluctuations of $13.1 million.~~

~~North America Segment. For~~Merchant Solutions segment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021 increased by 42.5% and 21.6%, respectively, to $1,426.8 million and $2,694.6 million, respectively, compared to $1,001.6 million and $2,216.8 million, respectively, for the prior year. Starting in mid-March 2020, COVID-19 began to have an unfavorable effect on our revenues ~~from~~as a result of a reduction in transaction volumes and restrictions on certain of our customer businesses throughout North America, ~~segment~~Europe and Asia Pacific. We saw improvement in our financial results during the latter half of 2020 and into the first half of 2021 as certain governments began to gradually ease pandemic-related restrictions and consumer and business spending increased ~~by $45.9 million~~as a result of government stimulus payments. Revenues for the three and ~~$392.0 million, or 6.4% and 22.1%, respectively,~~six months ended June 30, 2021 increased as compared to the prior year due to ~~$764.9 million and $2,162.9 million, respectively. The~~an increase in transaction volumes as compared to the reduced transaction levels in the prior year driven by the effects of COVID-19. We also saw sequential improvement from the first quarter of 2021, driven by the increase in transaction volumes from the continued easing of COVID-19 restrictions.

Issuer Solutions Segment. Revenues from our Issuer Solutions segment for the three and six months ended ~~September~~June 30, ~~2017~~2021 increased by 7.6% and 3.3%, respectively, to $505.9 million and $1,006.2 million, respectively, compared to $470.0 million and $973.8 million, respectively, for the prior year. Starting in mid-March 2020, COVID-19 began to have an unfavorable effect on our revenues as a result of lower transaction volumes, particularly related to the processing of commercial cards. We saw improvement in our financial results during the latter half of 2020 and into the first half of 2021 as certain governments began to gradually ease pandemic-related restrictions. The increase in revenues for the three and six months ended June 30, 2021 was primarily due to ~~organic growth~~an increase in transaction volumes as compared to the reduced transaction levels in the prior year driven by the effects of COVID-19.

Business and ~~the increase~~Consumer Solutions Segment. Revenues from our Business and Consumer Solutions segment for ~~the nine months ended September 30, 2017 was primarily due to our merger with Heartland.~~

~~Europe Segment.~~ ~~For~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, revenues from our Europe segment~~2021 increased by ~~$32.0~~4.9% and 12.0%, respectively, to $227.4 million and ~~$77.6~~$470.9 million, ~~or 18.4% and 16.2%,~~ respectively, compared to $216.7 million and $420.7 million, respectively, for the prior ~~year, to $205.2 million~~year. Our Business and ~~$557.3 million, respectively, primarily~~Consumer Solutions segment experienced an unfavorable effect on revenues starting in mid-March 2020 due to ~~organic growth. During~~reduced consumer spending as a result of COVID-19. This unfavorable effect on our revenues for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020 was partially mitigated by revenues in the second quarter of 2020 from individual stimulus payments and supplementary unemployment insurance distributions to our ~~Europe segment included~~customers resulting from the Coronavirus Aid, Relief and Economic Security Act. We saw improvement in our financial results throughout the latter half of 2020 and into the first half of 2021 from increases in consumer spending as state and local governments in the United States began to gradually ease restrictions. Increases in consumer spending also had a favorable effect ~~from currency fluctuations of $5.6 million and an unfavorable effect from currency fluctuations of $15.1 million, respectively.~~

~~Asia-Pacific Segment.~~ ~~For~~on revenues during the ~~three and nine~~six months ended ~~September~~June 30, ~~2017, revenues from~~2021, including additional spending volumes driven by individual stimulus payments distributed to our ~~Asia-Pacific segment increased~~customers by ~~$9.1 million~~the United States government primarily during the first quarter and ~~$30.5 million, or 15.3% and 17.9%, respectively, compared to~~continuing into the ~~prior year, to $68.8 million and $200.7 million, respectively, primarily due to organic growth.~~early portion of the second quarter of 2021.

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Operating Expenses

Cost of Service. ~~For~~Cost of service for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, cost of service~~2021 increased by ~~$23.9~~4.8% and 1.9%, respectively, to $936.3 million and ~~$293.9~~$1,861.6 million, ~~or 5.1% and 26.1%,~~ respectively, compared to $893.7 million and $1,827.6 million, respectively, for the prior year. Cost of service as a percentage of revenues decreased to 43.8% and 45.1% for the three and six months ended June 30, 2021, respectively, compared to 53.5% and 51.1%, respectively, for the prior year ~~to $493.9 million and $1,419.0 million, respectively.~~period. The increase in cost of service ~~was driven~~is primarily ~~by an increase in the~~due to higher variable costs associated with ~~our revenue growth, including during~~ the ~~nine months ended September 30, 2017, the incremental expenses associated with the merger with and integration~~increase in revenues. The increase in costs of ~~Heartland as well as additional intangible asset~~service also reflects an increase in amortization of ~~$75.8~~acquired intangibles, which were $324.8 million ~~from recently acquired businesses. As a percentage of revenues, cost of service decreased to 47.5%~~and $314.0 million for the three months ended ~~September~~June 30, ~~2017 from 49.4%~~2021 and 2020, respectively, and $654.0 million and $628.3 million for the ~~prior year. As a percentage of revenues, cost of service increased to 48.6% for the nine~~six months ended ~~September~~June 30, ~~2017 from 46.5% for the prior year.~~2021 and 2020, respectively. The decrease in cost of service as a percentage of ~~revenue for the three months ended September 30, 2017 was~~revenues is primarily due to ~~a decrease~~the favorable effects of the increase in ~~Heartland customer-related intangible asset amortization, which is calculated using an accelerated method.~~revenues and Merger-related cost synergies.

Selling, General and Administrative ~~Expenses.~~ ~~For the three and nine months ended September 30, 2017, selling,~~Expenses. Selling, general and administrative expenses increased by $11.0 million and $73.0 million, or 3.1% and 7.2%, respectively, compared to the prior year, to $372.6 million and $1,092.6 million, respectively. As a percentage of revenues, selling, general and administrative expenses decreased to 35.9% and 37.4% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 from 38.0%~~2021 increased by 25.0% and ~~42.1%~~16.6%, respectively, to $838.6 million and $1,628.1 million, respectively, compared to $670.6 million and $1,396.4 million, respectively, for the prior year.

During the three and nine months ended September 30, 2017, the increase in selling, general and administrative expenses was primarily due to additional costs to support the growth of our business, including during the nine months ended September 30, 2017 incremental acquisition and integration expenses. The decrease in selling, Selling, general and administrative expenses as a percentage of revenues ~~was due~~were 39.2% and 39.4% for the three and six months ended June 30, 2021, respectively, compared to ~~synergies achieved~~40.1% and 39.1%, respectively, for the prior year. The increase in selling, general and administrative expenses ~~from~~is primarily due to an increase in variable selling and other costs related to the ~~merger with Heartland, as well as the decrease~~increase in revenues. Selling, general and administrative expenses included acquisition and integration expenses ~~during~~of $78.3 million and $82.2 million for the three months ended June 30, 2021 and 2020, respectively and $170.1 million and $153.8 million for the six months ended June 30, 2021 and 2020, respectively.

Corporate. Corporate expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2021 increased by $18.1 million and $62.6 million, respectively, to $191.8 million and $386.9 million, respectively, compared to $173.7 million and $324.3 million, respectively, for the prior year. The increase for the three and six months ended June 30, 2021 is primarily due to higher employee compensation expense, including higher share-based compensation expense of $8.3 million and $17.7 million, respectively. Employee compensation costs were lower in the prior year as a result of certain temporary cost-saving actions taken to help mitigate the financial effects of the COVID-19 pandemic. The increase for the six months ended June 30, 2021 also included higher acquisition and integration expenses of $16.6 million. During the three and six months ended June 30, 2021, Corporate expenses included acquisition and integration expenses of $76.8 million and $167.0 million, respectively, compared to $80.7 million and $150.4 million, respectively, for the prior year. Certain of these Merger-related integration activities resulted in the recognition of employee termination benefits. During the three months ended June 30, 2021 and 2020, Corporate expenses included charges for employee termination benefits of $13.1 million and $24.1 million, respectively, which included $0.7 million and $1.7 million, respectively, of share-based compensation expense. During the six months ended June 30, 2021 and 2020, Corporate expenses included charges for employee termination benefits of $38.3 million and $41.7 million, respectively, which included $1.2 million and $4.2 million, respectively, of share-based compensation expense. As of June 30, 2021, the cumulative amount of recognized charges for employee termination benefits resulting from Merger-related integration activities was $178.7 million, which included $25.2 million of share-based compensation expense. We expect to incur additional charges as Merger–related integration activities continue in 2021.

Operating Income and Operating Margin

~~North America Segment. Operating~~Consolidated operating income ~~in our North America segment increased by 24.7% and 33.2% to $138.3 million and $344.6 million, respectively,~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 increased to $362.6 million and $637.8 million, respectively, compared to $107.6 million and $351.6 million, respectively, for the prior year. Operating margin ~~increased by 2.7 and 1.3 percentage points~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, respectively.~~2021 increased to 17.0% and 15.5%, respectively, compared to 6.4% and 9.8%, respectively, for the prior year. The increase in consolidated operating income ~~was primarily due to revenue growth in our U.S. business, which during~~and operating margin for the ~~nine~~three and six months ended ~~September~~June 30,

~~2017 was partially offset by additional intangible asset amortization associated with acquired businesses. The increase in operating margin during the three months ended September 30, 2017~~ 2021 was primarily due to the ~~decrease~~increases in ~~intangible asset amortization expense from~~revenues. The unfavorable effects of COVID-19 on our revenues and incremental expenses directly related to COVID-19 contributed to the ~~merger with Heartland~~lower consolidated operating income and operating margin in the prior year. We saw improvement in our financial results and positive trends throughout the latter half of 2020 and into the first half of 2021 as a ~~percentage~~result of ~~revenue.~~

~~Europe Segment. Operating~~the recovery seen across our markets as COVID-19 restrictions eased. Further, Merger-related cost synergies had a favorable effect on operating income ~~in our Europe segment increased by 19.6%~~ and ~~14.0% to $76.2 million and $196.4 million, respectively,~~operating margin for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021. The increase in consolidated operating income and operating margin for the three and six months ended June 30, 2021 was partially offset by an increase in amortization of acquired intangibles of $10.8 million and $25.8 million, respectively, and an increase in employee compensation expense compared to the prior year, ~~despite~~as a result of certain temporary

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cost-saving actions taken in the ~~effect~~prior year to help mitigate the financial effects of ~~unfavorable currency fluctuations of $11.3 million~~the COVID-19 pandemic. Operating income and operating margin for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~ ~~The~~2021 also reflects an increase in acquisition and integration expenses of $16.6 million compared to the prior year.

Segment Operating Income and Operating Margin. Operating income and operating ~~income~~margin in our Merchant Solutions and Issuer Solutions segments for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~ ~~was primarily due to revenue growth.~~

~~Asia-Pacific Segment. Operating income~~2021, and in our ~~Asia-Pacific~~Business and Consumer Solutions segment ~~increased by 36.7% and 42.4% to $20.0 million and $57.3 million, respectively,~~ for the ~~three and nine~~six months ended ~~September~~June 30, ~~2017~~2021, increased compared to the prior ~~year. Operating margin~~year due to the increase in revenues. We saw improvement in our financial results and positive trends throughout the latter half of 2020 and into the first half of 2021 as a result of the recovery seen across our geographic markets as COVID-19 restrictions eased and consumer and business spending increased ~~by 4.5 and 4.9 percentage points, respectively, for the three and nine months ended September 30, 2017. The increase in~~as a result of government stimulus payments. Further, across all of our segments, Merger-related cost synergies had a favorable effect on segment operating income and operating margin ~~was due to organic revenue growth.~~

~~Corporate.~~ ~~Corporate expenses decreased by 9.9% and 3.1% to $62.1 million and $189.0 million, respectively,~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021. In our Business and Consumer Solutions segment, operating income and operating margin for the three and six months ended June 30, 2020 included the favorable effect from our customers loading individual stimulus payments and supplementary unemployment insurance distributions during the second quarter of 2020, as well as lower costs associated with certain temporary cost-saving actions that were taken to help mitigate the financial effects of the COVID-19 pandemic. Spending volumes driven by additional stimulus payments distributed by the United States government in early 2021 also had a favorable effect on operating income and operating margin, primarily in the first quarter of 2021.

Other Income/Expense, Net

Interest and other expense for the three and six months ended June 30, 2021 decreased by $2.3 million and $11.8 million, respectively, compared to the prior year, to $80.6 million and $163.7 million, respectively, primarily due to the recognition of a ~~decrease in acquisition and integration expenses.~~

~~Other Income/Expense, Net~~

~~Interest and other income decreased $39.5 million for~~loss during the ~~nine~~six months ended ~~September~~June 30, ~~2017 compared~~2020 related to ~~the prior year, which included~~ a ~~gain of $41.2 million~~decline in ~~connection with our sale of all of the membership interests~~fair value for an investment held in ~~Visa Europe. See "Note 5—Other Assets" in the notes to the accompanying unaudited consolidated financial statements for further discussion of this transaction.~~a strategic partner that was subsequently divested.

Interest and other expense decreased $4.8 million for the three months ended September 30, 2017 compared to the prior year, and increased $35.1 million for the nine months ended September 30, 2017 compared to the prior year. The outstanding borrowings on our long-term debt facilities increased significantly in April 2016 as a result of incremental borrowings we made to fund a portion of the total consideration for our merger with Heartland. Since then, we have made principal repayments that have lowered our average outstanding borrowings, and we have lowered the leverage-based margins we pay on interest rates through refinancing activities that we completed in October 2016 and May 2017. The savings we realized during the three months ended September 30, 2017 compared to the prior year were partially offset by increases in LIBOR during the intervening time frame.Income Tax Expense

~~Provision for Income Taxes~~

Our effective income tax rates were 11.7% and 18.4% for the three months ended September 30, 2017 and September 30, 2016, respectively, and 14.4% and 14.7% for the nine months ended September 30, 2017 and September 30, 2016, respectively. The effective income tax rates for the three ~~and nine~~ months ended ~~September~~June 30, ~~2017 included~~2021 and 2020 were 21.2% and 3.0%, respectively, and our effective income tax rates for the ~~effect of excess tax benefits associated with share-based awards that vested during the periods.~~six months ended June 30, 2021 and 2020 were 16.8% and 9.0%, respectively. The increase in our effective ~~income~~ tax rate for the ~~nine~~three and six months ended ~~September~~June 30, ~~2016 included~~2021 from the prior year is primarily due to the effect of ~~eliminating certain net~~higher income before income taxes as compared to the prior year and the effect of enacted tax law changes in the U.K. which required a remeasurement of deferred tax ~~liabilities associated~~balances during the three months ended June 30, 2021. The prior year effective tax rates were unusually low due to the effects of permanent differences on the lower income before income taxes, which drove a reduction in the estimated annual effective tax rate in the second quarter since the amounts of certain of our permanent differences do not vary with ~~undistributed~~income before income taxes.

Net Income Attributable to Global Payments

Net income attributable to Global Payments increased to $263.6 million and $460.3 million for the three and six months ended June 30, 2021, respectively, compared to $37.3 million and $180.9 million, respectively, for the prior year, reflecting the increase in operating income and additional equity in income of equity method investments. Equity in income of equity method investments increased primarily due to increases in transaction volumes and appreciation in fair market value of investments held at certain investees.

Diluted Earnings per Share

Diluted earnings ~~from Canada, as~~per share was $0.89 and $1.55 for the three and six months ended June 30, 2021, respectively, compared to $0.12 and $0.60, respectively, for the prior year. Diluted earnings per share for the three and six months ended June 30, 2021 reflects the increase in net income and a ~~result~~decrease in the weighted-average number of ~~management's plans to reinvest these earnings outside the United States indefinitely.~~shares outstanding.

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Liquidity and Capital Resources

In the ordinary course of our business, a significant portion of our liquidity comes from operating cash ~~flows.~~flows and borrowings, including the capacity under our credit facilities. Cash flow from ~~operations~~operating activities is used to make planned capital investments in our business, to pursue acquisitions that meet our corporate objectives, to pay dividends, to pay principal and interest on our outstanding debt and to repurchase shares of our common stock. Accumulated cash balances are invested in high-quality, marketable short-term instruments.

Our capital plan objectives are to support our operational needs and strategic plan for long-term growth while maintaining a low cost of capital. We use ~~our~~a combination of bank financing, such as borrowings under our ~~Revolving Credit Facility~~credit facilities, and ~~our term loans,~~senior note issuances for general corporate purposes and to fund acquisitions. In addition, specialized lines of credit are also used in certain of our markets to fund merchant settlement prior to receipt of funds from the card ~~network.~~networks.

We believe that our current level of cash and borrowing capacity under our senior unsecured revolving credit facility, together with expected future cash flows from operations, will be sufficient to meet the needs of our existing operations and planned requirements for the foreseeable future. Early actions taken to preserve our available capital and provide financial flexibility in response to the effects of COVID-19 on our business, including the temporary reduction of certain operating expenses, employee compensation costs, other discretionary spending and planned capital expenditures, added to the strength of our financial profile. We regularly evaluate our liquidity and capital position relative to cash requirements, and we may elect to raise additional funds in the future, ~~either~~ through the issuance of debt or equity or ~~otherwise.~~by other means.

At ~~September~~June 30, ~~2017,~~2021, we had cash and cash equivalents totaling ~~$1,186.1~~$1,799.5 million. Of this amount, we ~~consider $560.7~~considered $970.3 million to be available for general purposes, of which $33.3 million is undistributed foreign earnings considered to be indefinitely reinvested outside the United States. The available cash of $970.3 million does not include the following: ~~(1)~~(i) settlement-related cash balances, ~~(2)~~(ii) funds held as collateral for merchant losses ("Merchant Reserves") and ~~(3)~~(iii) funds held for customers. Settlement-related cash balances represent funds that we hold when the incoming amount from the card networks precedes the funding obligation to the merchant. Settlement-related cash balances are not restricted; however, these funds are generally paid out in satisfaction of settlement processing obligations the following day. Merchant Reserves serve as collateral to minimize contingent liabilities associated with any losses that may occur under the ~~merchant~~merchant's agreement. While this cash is not restricted in its use, we believe that designating this cash ~~to collateralize~~as a Merchant ~~Reserves~~Reserve strengthens our fiduciary standing with our member sponsors and is in accordance with the guidelines set by the card networks. Funds held for customers and the corresponding liability ~~that we record in customer deposits~~ include amounts collected prior to remittance onto or at the direction of our ~~customers' behalf.~~customers.

~~Our available~~We also had restricted cash ~~balance at September~~of $140.2 million as of June 30, ~~2017 included $500.1 million of cash held~~2021, representing amounts deposited by ~~foreign subsidiaries whose earnings~~customers for prepaid card transactions. These balances are considered ~~indefinitely reinvested outside the United States. These cash balances reflect our capital investments~~cardholder funds held and are subject to local regulatory restrictions requiring appropriate segregation and restriction in ~~these subsidiaries and the accumulation of cash flows generated by~~ their operations, net of cash flows used to service debt locally and fund acquisitions outside of the United States. We believe that we are able to maintain a sufficient level of liquidity for our domestic operations and commitments without repatriation of the earnings of these foreign subsidiaries. If we were to repatriate some or all of the cash held by such foreign subsidiaries, we do not believe that the associated income tax liabilities would have a significant effect on our liquidity.use.

Operating activities provided net cash of ~~$360.1~~$1,109.6 million and ~~$367.4~~$960.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016, respectively.~~2020, respectively, which reflect net income adjusted for noncash items, including depreciation and amortization and changes in operating assets and liabilities. Fluctuations in operating assets and liabilities are affected primarily by timing of month-end and transaction volume, including changes in settlement processing assets and obligations. The ~~decrease~~increase in cash flows from operating activities ~~of $7.3 million~~from the prior year was primarily due to the ~~improvement~~increase in ~~our~~ earnings ~~before non-cash expenses, such as~~after the adjustment for certain noncash items, including amortization of acquired intangibles ~~offset by a decrease in the change in~~and depreciation and amortization of property and equipment.

We used net settlement processing assets of $232.6 million and other working capital accounts. Fluctuations in settlement processing assets and obligations are largely due to timing of month-end and settlement transaction volume.

~~Net~~ cash ~~used~~ in investing activities ~~was $710.2~~of $1,161.9 million and ~~$1,892.0~~$270.3 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016, respectively.~~2020, respectively, primarily to fund acquisitions and capital expenditures. During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021 and 2020, we ~~paid $600~~used cash of $943.1 million ~~of cash as a portion of the consideration~~and $74.1 million, respectively, for ~~the acquisition of ACTIVE Network. During the nine months ended September 30, 2016, we paid Heartland shareholders $2,043.4 million of cash as a portion of the consideration for the merger.~~

acquisitions. We made capital expenditures of ~~$136.6~~$219.6 million and ~~$102.4~~$208.4 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, respectively. ~~During~~These investments include software and hardware to support the ~~year ending December 31, 2017, we expect capital expenditures for property~~development of new technologies, infrastructure to support our growing business and ~~equipment, including internal-use capitalized software development costs, to approximate $180 million.~~

~~During~~ the ~~nine months ended September 30, 2017, we completed a sale-leaseback~~continued consolidation and enhancement of our operating platforms. We expect to continue to make significant capital investments in the business, and we anticipate capital expenditures and other investments in the business during 2021 will return to pre-COVID-19 levels.

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Financing activities include borrowings and repayments under our various debt arrangements, as well as borrowings and repayments made under specialized lines of credit to fund daily settlement activities. Our borrowing arrangements are further described in "Note 5—Long-Term Debt and Lines of Credit" in the notes to the accompanying unaudited consolidated financial statements and below under "Long-Term Debt and Lines of Credit." Financing activities also include cash flows associated with common stock repurchase programs and share-based compensation programs, as well as cash distributions made to noncontrolling interests and our shareholders. We used net cash in financing activities of $91.8 million and $510.1 million during the six months ended June 30, 2021 and 2020, respectively.

Proceeds from long-term debt were $2,821.0 million and $1,867.0 million for the six months ended June 30, 2021 and 2020, respectively. Repayments of long-term debt were $1,830.3 million and $1,809.2 million for the six months ended June 30, 2021 and 2020, respectively. Proceeds from and repayments of long-term debt consist of borrowings and repayments that we make with available cash, from time-to-time, under our revolving credit facility, as well as scheduled principal repayments we make on our term loans. On February 26, 2021, we issued $1.1 billion aggregate principal amount of 1.200% senior unsecured notes due February 2026. We used the net proceeds from this offering to fund the redemption in ~~Jeffersonville, Indiana~~full of the 3.800% senior unsecured notes due April 2021, to repay a portion of the outstanding indebtedness under our revolving credit facility and ~~received cash~~for general corporate purposes. On May 15, 2020, we issued $1.0 billion aggregate principle senior unsecured notes. We used the net proceeds from this offering to repay a portion of ~~$37.5~~the outstanding indebtedness on our revolving credit facility and for general corporate purposes.

Activity under our settlement lines of credit is affected primarily by timing of month-end and transaction volume. During the six months ended June 30, 2021, we had net borrowings from settlement lines of credit of $134.2 million. During the ~~nine~~six months ended ~~September~~June 30, ~~2016, we received cash of $37.8 million from the sale of our membership interests in Visa Europe.~~

Net cash provided by financing activities was $333.1 million and $1,954.8 million during the nine months ended September 30, 2017 and September 30, 2016, respectively. The changes in each period were primarily due to financing activities associated with our corporate credit facility. During the nine months ended September 30, 2017, we amended our corporate credit facility and subsequently borrowed an additional $600 million under our Revolving Credit Facility primarily to fund the cash portion of the consideration for the acquisition of ACTIVE Network. After repayments made during the nine months ended September 30, 2017,2020, we had net ~~proceeds from long-term debt~~repayments of ~~$326.6~~settlement lines of credit of $25.5 million. ~~During the nine months ended September 30, 2016, we increased our long-term debt by $2,152.8 million, primarily to fund our merger with Heartland.~~

~~As of September 30, 2017, we have approximately $264.9 million of share~~We repurchase ~~authority remaining under a program authorized by the board of directors, announced on January 5, 2017, to repurchase shares of our common stock. We make repurchases of~~ our common stock mainly through ~~the use of~~ open market ~~purchases~~repurchase plans and, at times, through accelerated share repurchase ("ASR") programs. ~~The manner, timing and amount of any purchases are determined by our management based on an evaluation of market conditions, stock price and other factors.~~ During the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~September 30, 2016,~~2020, we used ~~cash of $32.8~~$1,072.9 million and ~~$130.3~~$421.2 million, respectively, to repurchase shares of our common stock. The activity for the six months ended June 30, 2021 included repurchase of a total of 2,491,161 shares at an average price of $200.71 per share under an ASR program. On February 10, 2021, we entered into an ASR agreement with a financial institution to repurchase an aggregate of $500 million of our common stock during the ASR program purchase period, which ended on March 31, 2021.

As of June 30, 2021, we had $611.0 million of share repurchase authority remaining under our share repurchase program. On July 29, 2021, our board of directors approved an increase to our existing share repurchase program authorization, which raised the total available authorization to $1.5 billion.

We ~~believe that~~paid dividends to our ~~current level~~common shareholders in the amounts of ~~cash~~$114.9 million and ~~borrowing capacity under our long-term debt~~$116.6 million during the six months ended June 30, 2021 and ~~lines of credit described below, together with future cash flows from operations will be sufficient to meet the needs of our existing operations and planned requirements for the foreseeable future.~~2020, respectively.

Long-Term Debt and Lines of Credit

Senior Unsecured Notes

We have $7.5 billion in aggregate principal amount of senior unsecured notes, which mature at various dates ranging from June 2023 to August 2049. Interest on the senior notes is payable semi-annually at various dates. Each series of the senior notes is redeemable, at our option, in whole or in part, at any time and from time-to-time at the redemption prices set forth in the related indenture.

On February 26, 2021, we issued $1.1 billion in aggregate principal amount of 1.200% senior unsecured notes due March 2026. We incurred debt issuance costs of approximately $8.6 million, including underwriting fees, fees for professional services and registration fees, which were capitalized and reflected as a reduction of the related carrying amount of the notes in our consolidated balance sheet at June 30, 2021. Interest on the notes is payable semi-annually in arrears on March 1 and September 1 of each year, commencing September 1, 2021. The notes are ~~party~~unsecured and unsubordinated indebtedness and rank equally in right of payment with all of our other outstanding unsecured and unsubordinated indebtedness. We used the net proceeds from this offering to fund the redemption in full of the 3.800% senior unsecured notes due April 2021, to repay a ~~credit facility agreement with Bank~~portion of ~~America, N.A., as administrative agent, and a syndicate of financial institutions, as lenders and other agents (as amended from time to time,~~ the ~~"Credit Facility Agreement"). The Credit Facility Agreement was most recently amended on May 2, 2017 (the "Fourth Amendment") and, as amended, provides for (i) a $1.25 billion~~outstanding indebtedness under our revolving credit facility ~~(the "Revolving~~and for general corporate purposes.

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Senior Unsecured Credit ~~Facility"); (ii) a $1.5 billion~~Facilities

As of June 30, 2021, borrowings outstanding under the term loan ~~(the "Term A Loan"); (iii) a $1.3 billion term loan (the "Term A-2 Loan");~~ and ~~(iv) a $1.2 billion term loan~~revolving credit facility which replaced the Term B Loan (the "Term B-2 Loan"). The Fourth Amendment increased the total financing capacity under the Credit Facility Agreement on May 2, 2017 from $4.9 billion to $5.2 billion, although the outstanding debt under the Credit Facility Agreement did not change as we repaid certain outstanding amounts under the Term A Loan, the Term A-2 Loan and the Revolving Credit Facility in connection with the Fourth Amendment. Substantially all of the assets of our domestic subsidiaries are pledged as collateral under the Credit Facility Agreement.

~~The Credit Facility Agreement provides for an interest rate, at our election, of either London Interbank Offered Rate ("LIBOR") or a base rate, in each case plus a leverage-based margin as~~ were fully disclosed in our Current Report on Form 8-K filed on May 4, 2017. As of September 30, 2017, the interest rates on the Term A Loan, the Term A-2 Loan and the Term B-2 Loan were 2.99%, 2.95% and 3.23%, respectively, and the interest rate on the Revolving Credit Facility was 2.95%. The Credit Facility Agreement also provides for a commitment fee with respect to borrowings under the Revolving Credit Facility at an applicable rate per annum ranging from 0.20% to 0.30% depending on our leverage ratio. As of September 30, 2017, the aggregate outstanding balance on the term loans was $4.0$2.0 billion and ~~the outstanding balance on the Revolving Credit Facility was $855.0 million.~~$717.0 million, respectively.

The Term A Loan and the Term A-2 Loan mature, and the Revolving Credit Facility Agreement expires, on May 2, 2022. The Term B-2 Loan matures on April 22, 2023. The Term A Loan principal must be repaid in quarterly installments in the amount of 1.25% of principal through June 2019, increasing to 1.875% of principal through June 2021, and increasing to 2.50% of principal through March 2022, with the remaining principal balance due upon maturity in May 2022. The Term A-2 Loan principal must be repaid in quarterly installments of $1.7 million through June 2018, increasing to quarterly installments of $8.6 million through March 2022, with the remaining balance due upon maturity in May 2022. The Term B-2 Loan principal must be repaid in quarterly installments in the amount of 0.25% of principal through March 2023, with the remaining principal balance due upon maturity in April 2023.

~~The Credit Facility Agreement allows us to~~We may issue standby letters of credit of up to ~~$100~~$250 million in the aggregate under the ~~Revolving Credit Facility.~~revolving credit facility. Outstanding letters of credit under the ~~Revolving Credit Facility~~revolving credit facility reduce the amount of borrowings available to us. ~~Borrowings~~The amounts available to usborrow under the ~~Revolving Credit Facility~~revolving credit facility are ~~further limited~~also determined by a financial leverage covenant. As of June 30, 2021, the ~~covenants described below under "Compliance with Covenants." The~~ total available commitments under the ~~Revolving Credit Facility at September~~revolving credit facility were $2.3 billion.

Compliance with Covenants

The senior unsecured term loan and revolving credit facility contain customary conditions to funding, affirmative covenants, negative covenants, financial covenants and events of default. As of June 30, ~~2017~~2021, financial covenants under the term loan facility required a leverage ratio of 3.50 to 1.00 and an interest coverage ratio of 3.00 to 1.00. We were ~~$383.1 million.~~in compliance with all applicable covenants as of June 30, 2021.

Settlement Lines of Credit

In various markets where we do business, we have specialized lines of credit, ~~which~~that are restricted for use in funding settlement. The settlement lines of credit generally have variable interest rates, are subject to annual review and are denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. For certain of our lines of credit, the available credit is increased by the amount of cash we have on deposit in specific accounts with the lender. Accordingly, the amount of the outstanding ~~line~~lines of credit may exceed the stated credit limit. As of ~~September~~June 30, ~~2017 and December 31, 2016,~~2021, a total of ~~$55.5~~$57.3 million ~~and $51.0 million, respectively,~~ of cash on deposit was used to determine the available credit.

As of ~~September~~June 30, ~~2017 and December 31, 2016, respectively,~~2021, we had $487.5 ~~million and $392.1~~ million outstanding under these lines of credit with additional capacity ~~of $669.9 million as of September 30, 2017~~ to fund ~~settlement.~~settlement of $1,393.9 million. During the six months ended June 30, 2021, the maximum and average outstanding balances under these lines of credit were $813.8 million and $482.7 million, respectively. The weighted-average interest rate on these borrowings was ~~2.11% and 1.90%~~2.05% at ~~September 30, 2017 and December 31, 2016, respectively.~~

~~Compliance with Covenants~~

The Credit Facility Agreement contains customary affirmative and restrictive covenants, including, among others, financial covenants based on our leverage and fixed charge coverage ratios as defined in the agreement. As of September 30, 2017, financial covenants under the Credit Facility Agreement required a leverage ratio no greater than: (i) 4.50 to 1.00 as of the end of any fiscal quarter ending during the period from July 1, 2017 through June 30, 2018; (ii) 4.25 to 1.00 as of the end of any fiscal quarter ending during the period from July 1, 2018 through June 30, 2019; and (iii) 4.00 to 1.00 as of the end of any fiscal quarter ending thereafter. The fixed charge coverage ratio is required to be no less than 2.25 to 1.00.2021.

The Credit Facility Agreement and settlement lines of credit also include various other covenants that are customary in such borrowings. The Credit Facility Agreement includes covenants, subject in each case to exceptions and qualifications that may restrict certain payments, including, in certain circumstances, repurchasing our common stock and paying cash dividends in excess of our current rate of $0.01 per share per quarter.

See "Note 6—5—Long-Term Debt and Lines of Credit" in the notes to the accompanying unaudited consolidated financial statements for further ~~discussion of~~information about our borrowing ~~arrangements.~~agreements.

~~Off-Balance Sheet Arrangements~~Commitments and Contractual Obligations

We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interest, derivative instruments, or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or otherDuring the six months ended June 30, 2021, our commitments and contractual obligations ~~under a variable interest~~increased from the amounts disclosed in ~~an unconsolidated entity that provides us with financing, liquidity, market, or credit risk support other than the guarantee services described in Item~~"Item 7 ~~"Management’s~~- Management's Discussion and Analysis of Financial Condition and Results of ~~Operations - Critical Accounting Policies"~~Operations-Commitments and Contractual Obligations" in our ~~Transition~~Annual Report on Form 10-K for the ~~seven months~~year ended December 31, ~~2016.~~

~~Commitments and Contractual Obligations~~

~~As a result of the Fourth Amendment, the repayment schedules for our term loans and Revolving Credit Facility were extended. See "Note 6—Long-Term Debt and Lines of Credit" in the notes~~2020. The increase primarily relates to the accompanying unaudited consolidated financial statements for updated repayment requirements by year as of September 30, 2017. In addition, during the three months ended September 30, 2017, we borrowed an additional $600 million under our Revolving Credit Facility to fund a portion of the consideration for the acquisition of ~~ACTIVE Network.~~software, technology infrastructure and related services. Our estimated purchase obligations as of June 30, 2021 were $285.3 million during the remainder of 2021, $237.2 million during 2022, $305.3 million during 2023 and 2024, $335.7 million during 2025 and 2026 and $754.0 million thereafter for a total of $1,917.5 million.

~~As a result of the sale-leaseback of our operating facility in Jeffersonville, Indiana, we~~Off-Balance Sheet Arrangements

We have not entered into ~~an operating lease with escalating future minimum payments totaling $55.5 million at September 30, 2017. See "Note 13—Commitments and Contingencies" in the notes~~any off-balance sheet arrangements that have, or are reasonably likely to ~~the accompanying unaudited consolidated~~have, a material effect on our financial ~~statements for further discussion about the sale-leaseback transaction.~~condition, revenues, results of operations, liquidity, capital expenditures or capital resources.

~~Critical Accounting Policies~~

Our unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which often require the judgment of management in the selection and application of certain accounting principles and methods. We discuss our critical accounting policies in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Transition Report on Form 10-K for the seven months ended December 31, 2016.

During the first quarter of 2017, we revised our reporting unit structure within our North America segment to reflect changes made in connection with the integration of Heartland. Under the revised reporting unit structure, we operate two reporting units in our North America segment: (i) Payments and (ii) Integrated Solutions and Vertical Markets. We reassigned the goodwill previously

allocated to North America merchant services and Heartland to the two new reporting units using a relative fair value approach. As a result of the change in reporting units, we performed goodwill impairment tests immediately before and after this change in reporting units and determined that there was no impairment.

Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

From ~~time to time,~~time-to-time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standards setting bodies that may affect our current and/or future financial statements. See "Note 1—Basis of Presentation and Summary of Significant Accounting Policies" in the notes to the accompanying unaudited consolidated financial statements for a discussion of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.

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Forward-Looking Statements

~~Investors are cautioned that some~~Some of the statements we use in this report, and in some of the documents we incorporate by reference in this report, contain forward-looking statements concerning our business operations, economic performance and ~~are made pursuant~~financial condition, including in particular: our business strategy and means to implement the ~~"safe-harbor" provisions~~strategy; measures of future results of operations, such as revenues, expenses, operating margins, income tax rates, and earnings per share; other operating metrics such as shares outstanding and capital expenditures; the effects of the COVID-19 pandemic on our business; our success and timing in developing and introducing new services and expanding our business; and statements about the benefits of our acquisitions, including future financial and operating results, the company’s plans, objectives, expectations and intentions, and the successful integration of our future acquisitions or completion of anticipated benefits and strategic initiatives. You can sometimes identify forward-looking statements by our use of the words "believes," "anticipates," "expects," "intends," "plan," "forecast," "guidance" and similar expressions. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. ~~These~~

Although we believe that the plans and expectations reflected in or suggested by our forward-looking statements ~~involve~~are reasonable, those statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, ~~and~~ uncertainties and ~~depend upon~~contingencies, many of which are beyond our control, cannot be foreseen and reflect future ~~events or conditions. Actual events or results might differ materially from those expressed or forecasted in these forward-looking statements.~~business decisions that are subject to change. Accordingly, we cannot guarantee you that our plans and expectations will be achieved. ~~Such~~Our actual revenues, revenue growth rates and margins, other results of operations and shareholder values could differ materially from those anticipated in our forward-looking statements ~~may include, but~~as a result of many known and unknown factors, many of which are ~~not limited~~beyond our ability to statements about the benefits of our merger with Heartland and the acquisition of ACTIVE Network, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts.

predict or control. Important factors, among others, that may otherwise cause actual events or results to differ materially from those anticipated by such forward-looking statements or historical performance include the effects of global economic, political, market, health and social events or other conditions, including the effects and duration of the COVID-19 pandemic and containment taken in response; management’s assumptions and projections used in their estimates of the timing and severity of the effects of the COVID-19 pandemic on our future revenues, results of operations and liquidity; our ability to ~~safeguard~~meet our ~~data; increased competition~~liquidity needs in light of the effects of the COVID-19 pandemic or otherwise; the outcome of any legal proceedings that may be instituted against the Company or our directors; difficulties, delays and higher than anticipated costs related to integrating the businesses of Global Payments and TSYS, including with respect to implementing controls to prevent a material security breach of any internal systems or to successfully manage credit and fraud risks in business units; failing to fully realize anticipated cost savings and other anticipated benefits of the Merger when expected or at all; business disruptions from ~~larger companies~~the Merger integration that may harm our business, including current plans and ~~non-traditional competitors, our ability~~operations; failing to ~~update our services~~comply with the applicable requirements of Visa, Mastercard or other payment networks or card schemes or changes in ~~a timely manner; our~~those requirements; the ability to maintain Visa and ~~MasterCard~~Mastercard registration and financial institution sponsorship; ~~our reliance on financial institutions~~the ability to ~~provide clearing services~~retain and hire key personnel; the diversion of management’s attention from ongoing business operations; the continued availability of capital and financing; increased competition in connection with our settlement activities; our potential failure to comply with card network requirements; potential systems interruptions or failures; software defects or undetected errors; increased attrition of merchants, referral partners or independent sales organizations;the markets in which we operate and our ability to increase our market share ofin existing markets and expand into new markets; a decline in the use of cards for payment generally; unanticipated increases in chargeback liability; increases in credit card network fees; change in laws, regulations or network rules or interpretations thereof;our ability to safeguard our data; risks associated with our indebtedness, foreign currency exchange and interest rate risks; ~~political, economic and regulatory~~the effects of new or changes in ~~the foreign countries in which we operate; future performance, integration~~current laws, regulations, credit card association rules or other industry standards, including privacy and ~~conversion of acquired operations; including without limitation difficulties~~cybersecurity laws and ~~delays in integrating the Heartland~~regulations; and ~~ACTIVE Network businesses or fully realizing cost savings~~events beyond our control and other benefits of the acquisitions at all or within the expected time period; fully realizing anticipated annual interest expense savings from refinancing our corporate debt facilities; our loss of key personnel and other risk factors presented in ~~Item 1-~~"Item 1A - Risk ~~Factors~~Factors" of our ~~Transition~~Annual Report on Form 10-K for the ~~seven months~~year ended December 31, ~~2016 and any subsequent SEC filings,~~2020, which we advise you to review. These cautionary statements qualify all of our forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements.

Our forward-looking statements speak only as of the date they are made and should not be relied upon as representing our plans and expectations as of any subsequent date. ~~We undertake no~~While we may elect to update or revise forward-looking statements at some time in the future, we specifically disclaim any obligation to ~~revise~~publicly release the results of any ~~of these~~revisions to our forward-looking statements, ~~to reflect future circumstances or the occurrence of unanticipated events.~~except as required by law.

ITEM 3—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Interest Rate Risk~~

We are exposed to market risk related to changes in interest rates on our long-term debt and cash investments. We invest our excess cash in securities that we believe are highly liquid and marketable in the short term. These investments earnFor a ~~floating rate of interest and are not held for trading or other speculative purposes.~~

We have term loans and a Revolving Credit Facility that we use for general corporate purposes, as well as various lines of credit that we use to fund settlement in certain of our markets. Interest rates on these debt instruments and settlement lines of credit are based on market rates and fluctuate accordingly. As of September 30, 2017, $5.3 billion was outstanding under these variable-rate debt arrangements and settlement lines of credit.

The interest earned on our cash investments and the interest paid on our debt are based on variable interest rates; therefore, the exposure of our net income to a change in interest rates is partially mitigated as an increase in rates would increase both interest

income and interest expense, and a reduction in rates would decrease both interest income and interest expense. Under our current policies, we may selectively use derivative instruments, such as interest rate swaps or forward rate agreements, to manage all or a portion of our exposure to interest rate changes. We have interest rate swaps that reduce a portiondiscussion of our exposure to market ~~interest rate~~ risk, refer to Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," contained in our Annual Report on ~~our LIBOR-based debt as discussed in "Note 6~~—~~Long-Term Debt and Lines~~Form 10-K for the year ended December 31, 2020.

Table of ~~Credit" in the notes to our accompanying unaudited consolidated financial statements.~~Contents

Based on balances outstanding under variable-rate debt agreements and cash investment balances at September 30, 2017, a hypothetical increase of 50 basis points in applicable interest rates as of September 30, 2017 would increase our annual interest expense by approximately $20.0 million and increase our annual interest income by approximately $3.5 million.

~~Foreign Currency Exchange Rate Risk~~

A substantial amount of our operations are conducted in foreign currencies. Consequently, a portion of our revenues and expenses may be affected by fluctuations in foreign currency exchange rates. We are also affected by fluctuations in exchange rates on assets and liabilities related to our foreign operations. We have not historically hedged our translation risk on foreign currency exposure, but we may do so in the future.

ITEM 4—CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of ~~September~~June 30, ~~2017,~~2021, management carried out, under the supervision and with the participation of our principal executive officer and principal financial officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of ~~September~~June 30, ~~2017,~~2021, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and are designed to ensure that information required to be disclosed in those reports is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

In April 2016, we completed our merger with Heartland, which is being integrated into our North America segment. As part of our ongoing integration activities, we are continuing to apply our controls and procedures to the Heartland business and to augment our company-wide controls to reflect the risks inherent in an acquisition of this magnitude.

In September 2017, we completed the acquisition of ACTIVE Network. In accordance with our integration efforts, we plan to incorporate ACTIVE Network's operations into our internal control over financial reporting program within the time period provided by the applicable SEC rules and regulations. The assets, excluding goodwill, of ACTIVE Network constituted approximately 4% of our total consolidated assets as of September 30, 2017. Revenues and operating income of ACTIVE Network for the three and nine months ended September 30, 2017 were not material to our consolidated financial statements.

~~Otherwise, there~~There were no changes in our internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2017~~2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1—LEGAL PROCEEDINGS

We are party to a number of claims and lawsuits incidental to our business. In our opinion, the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, are not expected to have a material adverse effect on our financial position, liquidity, results of operations or cash flows. See "Note 13—Commitments and Contingencies" in the notes to the accompanying unaudited consolidated financial statements for information about certain legal matters.

~~ITEM 1A - RISK FACTORS~~

There have been no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors” of our Transition Report on Form 10-K for the seven months ended December 31, 2016, other than the risk factors set forth in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017.

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

~~(a) Unregistered Sales of Equity Securities and Use of Proceeds~~

As disclosed previously, in connection with the Company’s acquisition of ACTIVE Network, we issued 6,357,509 shares of the Company’s common stock having an estimated fair value of approximately $572 million. The Company relied on the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) thereof and rules and regulations of the SEC promulgated thereunder. Each of the sellers who received the Company’s common stock in the acquisition is an “accredited investor” as defined in Regulation D promulgated by the SEC under the Securities Act.

Information about the shares of our common stock that we repurchased during the quarter ended ~~September~~June 30, ~~2017~~2021 is set forth below:

Period
Total Number of
Shares Purchased ⁽¹⁾
Approximate Average Price Paid per Share Total Number of
Shares Purchased as Part of
Publicly Announced
Plans or Programs
Maximum
Number (or
Approximate
Dollar Value) of
Shares that May Yet Be Purchased Under
the Plans or
Programs ⁽²⁾
(in millions)
July 2017 75,894
89.16
75,894

August 2017 156,581
94.24
156,581

September 2017 79,118
94.57
79,118

Total 311,593
311,593
$ 264.9


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2)
					(in millions)
April 1-30, 2021	—	$	—	—	$	—
May 1-31, 2021	358,770	195.11		358,770	—
June 1-30, 2021	1,142,779	192.49		1,142,779	—
Total	1,501,549	$	193.12	1,501,549	$	611.0


⁽¹⁾	Our board of directors has authorized us to repurchase shares of our common stock through any combination of Rule 10b5-1 open-market repurchase plans, accelerated share repurchase plans, discretionary open-market purchases or privately negotiated transactions.

⁽²⁾

As of September 30, 2017, the approximate dollar value of shares that may yet be purchased under our share repurchase program was $264.9 million remaining available under the board’s authorization announced on January 5, 2017. The authorizations by the board of directors do not expire, but could be revoked at any time. In addition, we are not required by any of the board’s authorizations or otherwise to complete any repurchases by any specific time or at all.

(1)Our board of directors has authorized us to repurchase shares of our common stock through any combination of Rule 10b5-1 open-market repurchase plans, accelerated share repurchase ("ASR") plans, discretionary open-market purchases or privately negotiated transactions. During the quarter ended ~~September~~June 30, ~~2017,~~2021, pursuant to our employee incentive plans, we withheld ~~247,345~~30,708 shares, at an average price per share of ~~$94.50~~$197.25, in order to satisfy employees' tax withholding and payment obligations in connection with the vesting of awards of restricted ~~stock, which~~stock.

(2)As of June 30, 2021, we ~~withheld~~had $611.0 million of share repurchase authority remaining under our share repurchase program. The board authorization does not expire, but could be revoked at ~~fair market value on~~any time. In addition, we are not required by the ~~vesting date.~~board’s authorization or otherwise to complete any repurchases by any specific time or at all.

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ITEM 6—EXHIBITS

List of Exhibits



~~2.1~~3.1		~~Stock Purchase~~Third Amended and ~~Merger Agreement, dated as~~Restated Articles of ~~August 2, 2017, by and among Athlaction Topco, LLC, the Vista Blocker Sellers (as defined therein), Vista Equity Partners Management, LLC, as Sellers’ Representative,~~Incorporation of Global Payments Inc.~~, Athens Merger Sub, LLC and the Vista AIVs and Vista GPs (as defined therein and solely for the limited purposes set forth therein)~~, incorporated by reference to Exhibit ~~2.1~~4.1 to Global Payment Inc.’s Post-Effective Amendment No. 1 on Form S-8 to the ~~Company’s~~Registration Statement on Form S-4 filed on September 18, 2019.
3.2		Articles of Amendment to the Third Amended and Restated Articles of Incorporation of Global Payments Inc., incorporated by reference to Exhibit 3.1 to Global Payments Inc.'s Current Report on Form 8-K filed on ~~August 8, 2017. ++~~May 1, 2020.
~~2.2~~3.3		~~Amendment No. 1 to the Stock Purchase~~Tenth Amended and ~~Merger Agreement, dated as~~Restated Bylaws of ~~August 31, 2017, by and among~~ Global Payments Inc., ~~Athlaction Topco, LLC, Vista Equity Partners Management, LLC, as Sellers’ Representative, and VEP Global Aggregator, LLC,~~ incorporated by reference to Exhibit ~~2.2.~~3.2 to ~~the Company’s~~Global Payment Inc.’s Current Report on Form 8-K filed on ~~September 6, 2017. ++~~May 1, 2020.
~~3.1~~31.1*		~~Second Amended and Restated Articles of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed July 25, 2013.~~
~~3.2~~	~~Eighth Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 4, 2017.~~
~~10.1~~	Stockholders’ Agreement, dated as of August 31, 2017, by and among Global Payments Inc., VEPF IV AIV VII-A, L.P., VEP Global Aggregator, LLC, VEPF III AIV VI, L.P., VEPF IV AIV VII, L.P., VFF I AIV IV, L.P., Vista Equity Partners Fund III GP, LLC, Vista Equity Partners Fund IV GP, LLC, Vista Foundation Fund I GP, LLC, Todd Tyler, Ronald Tanner and certain other signatories thereto, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 6, 2017.
31.1*	Certification of the Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002.
31.2*		Certification of the Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*		The following financial information from the Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2017,~~2021, formatted in Inline XBRL (eXtensible Business Reporting Language) and filed electronically herewith: (i) the Unaudited Consolidated Statements of Income; (ii) the Unaudited Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Unaudited Consolidated Statements of Cash Flows; (v) the Unaudited Consolidated Statements of Changes in Equity; and (vi) the Notes to Unaudited Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

______________________



*		Filed herewith.
++	Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K and Global Payments Inc. agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule and/or exhibit upon request.

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SIGNATURES

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



	Global Payments Inc.
			(Registrant)

Date: ~~November 8, 2017~~August 2, 2021			/s/ ~~Cameron~~Paul M. ~~Bready~~Todd
		~~Cameron~~	Paul M. ~~Bready~~Todd
			Senior Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)


Securities registered pursuant to Section 12(b) of the Act
Title of each class	Trading symbol	Name of exchange on which registered
Common stock, no par value	GPN	New York Stock Exchange



				Page
PART I - FINANCIAL INFORMATION
ITEM 1.			Unaudited Consolidated Statements of Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	3
			Unaudited Consolidated Statements of Comprehensive Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	5
			Consolidated Balance Sheets at ~~September 30, 2017~~June 3 0 , 2021 (unaudited) and December 31, ~~2016~~2020	6
			Unaudited Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	7
			Unaudited Consolidated Statements of Changes in Equity for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	8
			Notes to Unaudited Consolidated Financial Statements	910
ITEM 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations	2425
ITEM 3.			Quantitative and Qualitative Disclosures About Market Risk	3235
ITEM 4.			Controls and Procedures	3336
PART II - OTHER INFORMATION
ITEM 1.			Legal Proceedings	3437
ITEM ~~1A.~~2.			~~Risk Factors~~	34
~~ITEM 2.~~	Unregistered Sales of Equity Securities and Use of Proceeds	3437
ITEM 6.			Exhibits	3538
			Signatures	3639


	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance at March 31, 2020	299,010	$	25,525,184	$	2,335,407	$	(539,780)	$	27,320,811	$	199,622	$	27,520,433
Net income				37,331				37,331		2,113		39,444
Other comprehensive income						80,634		80,634		5,395		86,029
Stock issued under share-based compensation plans	257	14,349						14,349				14,349
Common stock repurchased - share-based compensation plans	(23)	(3,934)						(3,934)				(3,934)
Share-based compensation expense		34,983						34,983				34,983
Cash dividends declared ($0.195 per common share)				(58,315)				(58,315)				(58,315)
Balance at June 30, 2020	299,244	$	25,570,582	$	2,314,423	$	(459,146)	$	27,425,859	$	207,130	$	27,632,989


	Three Months Ended June 30, 2021
	Merchant Solutions		Issuer Solutions		Business and Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	1,202,970	$	379,121	$	224,529	$	(16,768)	$	1,789,852
Europe	166,644		120,974		2,826		0		290,444
Asia Pacific	57,141		5,837		0		(5,837)		57,141
	$	1,426,755	$	505,932	$	227,355	$	(22,605)	$	2,137,437


	Balance Sheet Location	June 30, 2021		December 31, 2020

		(in thousands)

Assets:
Capitalized costs to obtain customer contracts, net	Other noncurrent assets	$	270,143	$	253,780
Capitalized costs to fulfill customer contracts, net	Other noncurrent assets	99,640		81,371

Liabilities:
Contract liabilities, net (current)	Accounts payable and accrued liabilities	216,331		217,938
Contract liabilities, net (noncurrent)	Other noncurrent liabilities	49,610		52,944



	September 30, 2017			December 31, 2016
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,186,050		$	1,162,779
Accounts receivable, net of allowances for doubtful accounts of $1,423 and $1,092, respectively	296,366			275,032
Settlement processing assets	1,847,232			1,546,854
Prepaid expenses and other current assets	220,649			131,341
Total current assets	3,550,297			3,116,006
Goodwill	5,616,414			4,807,594
Other intangible assets, net	2,328,709			2,085,292
Property and equipment, net	577,188			526,370
Deferred income taxes	16,736			15,789
Other noncurrent assets	192,205			113,299
Total assets	$	12,281,549		$	10,664,350
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit	$	487,513		$	392,072
Current portion of long-term debt	93,408			177,785
Accounts payable and accrued liabilities	992,363			804,887
Settlement processing obligations	1,550,627			1,477,212
Total current liabilities	3,123,911			2,851,956
Long-term debt	4,677,910			4,260,827
Deferred income taxes	632,648			676,472
Other noncurrent liabilities	152,127			95,753
Total liabilities	8,586,596			7,885,008
Commitments and contingencies
Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued	—			—
Common stock, no par value; 200,000,000 shares authorized; 158,762,894 issued and outstanding at September 30, 2017 and 152,185,616 issued and outstanding at December 31, 2016	—			—
Paid-in capital	2,376,331			1,816,278
Retained earnings	1,357,526			1,137,230
Accumulated other comprehensive loss	(202,508		)	(322,717		)
Total Global Payments shareholders’ equity	3,531,349			2,630,791
Noncontrolling interests	163,604			148,551
Total equity	3,694,953			2,779,342
Total liabilities and equity	$	12,281,549		$	10,664,350



Cash and cash equivalents	$	42,866
Property and equipment	22,889
Identified intangible assets	471,120
Other assets	80,485
Deferred income taxes	(26,757		)
Other liabilities	(123,047		)
Total identifiable net assets	467,556
Goodwill	704,020
Total purchase consideration	$	1,171,576


	Three Months Ended June 30, 2020
	Merchant Solutions		Issuer Solutions		Business and Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	862,927	$	363,140	$	216,722	$	(14,728)	$	1,428,061
Europe	102,460		105,263		0		0		207,723
Asia Pacific	36,168		1,622		0		(1,622)		36,168
	$	1,001,555	$	470,025	$	216,722	$	(16,350)	$	1,671,952


	Six Months Ended June 30, 2021
	Merchant Solutions		Issuer Solutions		Business and Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	2,283,440	$	757,164	$	465,163	$	(33,673)	$	3,472,094
Europe	299,578		238,386		5,778		0		543,742
Asia Pacific	111,609		10,633		0		(10,634)		111,608
	$	2,694,627	$	1,006,183	$	470,941	$	(44,307)	$	4,127,444


	Six Months Ended June 30, 2020
	Merchant Solutions		Issuer Solutions		Business and Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	1,887,433	$	756,893	$	420,668	$	(32,461)	$	3,032,533
Europe	238,459		213,626		0		0		452,085
Asia Pacific	90,932		3,268		0		(3,268)		90,932
	$	2,216,824	$	973,787	$	420,668	$	(35,729)	$	3,575,550



Cash consideration paid to Heartland stockholders	$	2,043,362
Fair value of Global Payments common stock issued to Heartland stockholders	1,879,458
Total purchase consideration	$	3,922,820


Year Ending December 31,

2021	$	502,058
2022	845,561
2023	627,756
2024	450,703
2025	354,058
2026	280,326
2027 and thereafter	446,815
Total	$	3,507,277



	December 31, 2016			Measurement-Period Adjustments			Final

	(in thousands)

Cash and cash equivalents	$	304,747		$	—		$	304,747
Accounts receivable	70,385			—			70,385
Prepaid expenses and other assets	103,090			(5,131		)	97,959
Identified intangible assets	1,639,040			—			1,639,040
Property and equipment	106,583			—			106,583
Debt	(437,933		)	—			(437,933		)
Accounts payable and accrued liabilities	(457,763		)	(65		)	(457,828		)
Settlement processing obligations	(36,578		)	(3,727		)	(40,305		)
Deferred income taxes	(518,794		)	18,907			(499,887		)
Other liabilities	(64,938		)	(33,495		)	(98,433		)
Total identifiable net assets	707,839			(23,511		)	684,328
Goodwill	3,214,981			23,511			3,238,492
Total purchase consideration	$	3,922,820		$	—		$	3,922,820



	Estimated Fair Values		Weighted-Average Estimated Amortization Periods

	(in thousands)		(years)

Customer-related intangible assets	$	977,400	15
Acquired technology	457,000		5
Trademarks and trade names	176,000		7
Covenants-not-to-compete	28,640		1
Total estimated acquired intangible assets	$	1,639,040	11



	North America		Europe		Asia-Pacific		Total

	(in thousands)

Balance at December 31, 2016	$	4,083,252	$	455,300	$	269,042	$	4,807,594
Goodwill acquired	704,020		—		—		704,020
Effect of foreign currency translation	5,559		50,515		18,185		74,259
Measurement-period adjustments	23,511		—		7,030		30,541
Balance at September 30, 2017	$	4,816,342	$	505,815	$	294,257	$	5,616,414



Years ending December 31,
2017	$	23,821
2018	108,979
2019	141,912
2020	161,144
2021	180,376
2022	3,111,391
2023 and thereafter	1,083,875
Total	$	4,811,498


Year Ending December 31,

2021	$	25,638
2022	58,403
2023	1,300,000
2024	2,467,000
2025	1,000,000
2026	1,850,000
2027 and thereafter	3,450,000
Total	$	10,151,041


	Shares	Weighted-Average Grant-Date Fair Value

	(in thousands)

Unvested at December 31, 2020	1,546	$176.71
Granted	853	197.96
Vested	(663)	146.58
Forfeited	(46)	184.69
Unvested at June 30, 2021	1,690	$184.16


	Options	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value

	(in thousands)		(years)	(in millions)

Outstanding at December 31, 2020	1,253	$93.66	6.3	$152.6
Granted	112	196.06
Forfeited	(1)	113.48
Exercised	(180)	69.67
Outstanding at June 30, 2021	1,184	$106.82	6.3	$98.2

Options vested and exercisable at June 30, 2021	908	$86.25	5.6	$92.6



	Foreign Currency Translation			Unrealized Gains (Losses) on Hedging Activities			Other			Accumulated Other Comprehensive Loss

	(in thousands)

Balance at June 30, 2016	$	(249,374	)	$	(11,377	)	$	(4,634	)	$	(265,385	)
Other comprehensive income, net of tax	2,505			3,331			23			5,859
Balance at September 30, 2016	$	(246,869	)	$	(8,046	)	$	(4,611	)	$	(259,526	)

Balance at June 30, 2017	$	(239,669	)	$	51		$	(3,841	)	$	(243,459	)
Other comprehensive income, net of tax	40,090			843			18			40,951
Balance at September 30, 2017	$	(199,579	)	$	894		$	(3,823	)	$	(202,508	)



	Three Months Ended September 30, 2017			% of Revenue⁽¹⁾		Three Months Ended September 30, 2016			% of Revenue⁽¹⁾		Change			% Change

	(dollar amounts in thousands)

Revenues⁽²⁾:
North America	$	764,902		73.6	%	$	718,977		75.5	%	$	45,925		6.4	%
Europe	205,203			19.8	%	173,246			18.2	%	31,957			18.4	%
Asia-Pacific	68,802			6.6	%	59,662			6.3	%	9,140			15.3	%
Total revenues	$	1,038,907		100.0	%	$	951,885		100.0	%	$	87,022		9.1	%

Consolidated operating expenses:
Cost of service	$	493,883		47.5	%	$	469,980		49.4	%	$	23,903		5.1	%
Selling, general and administrative	372,553			35.9	%	361,516			38.0	%	11,037			3.1	%
Operating expenses	$	866,436		83.4	%	$	831,496		87.4	%	$	34,940		4.2	%

Operating income (loss):
North America	$	138,345				$	110,983				$	27,362		24.7	%
Europe	76,214					63,727					12,487			19.6	%
Asia-Pacific	20,032					14,657					5,375			36.7	%
Corporate⁽²⁾	(62,120		)			(68,978		)			6,858			(9.9	)%
Operating income	$	172,471		16.6	%	$	120,389		12.6	%	$	52,082		43.3	%

Operating margin:
North America	18.1		%			15.4		%			2.7		%
Europe	37.1		%			36.8		%			0.3		%
Asia-Pacific	29.1		%			24.6		%			4.5		%



	Nine Months Ended September 30, 2017			% of Revenue⁽¹⁾		Nine Months Ended September 30, 2016			% of Revenue⁽¹⁾		Change			% Change

	(dollar amounts in thousands)

Revenues⁽²⁾:
North America	$	2,162,911		74.0	%	$	1,770,957		73.2	%	$	391,954		22.1	%
Europe	557,258			19.1	%	479,620			19.8	%	77,638			16.2	%
Asia-Pacific	200,741			6.9	%	170,212			7.0	%	30,529			17.9	%
Total revenues	$	2,920,910		100.0	%	$	2,420,789		100.0	%	$	500,121		20.7	%

Consolidated operating expenses⁽²⁾:
Cost of service	$	1,418,969		48.6	%	$	1,125,041		46.5	%	$	293,928		26.1	%
Selling, general and administrative	1,092,648			37.4	%	1,019,626			42.1	%	73,022			7.2	%
Operating expenses	$	2,511,617		86.0	%	$	2,144,667		88.6	%	$	366,950		17.1	%

Operating income (loss)⁽²⁾:
North America	$	344,604				$	258,648				$	85,956		33.2	%
Europe	196,394					172,293					24,101			14.0	%
Asia-Pacific	57,321					40,266					17,055			42.4	%
Corporate⁽³⁾	(189,026		)			(195,085		)			6,059			(3.1	)%
Operating income	$	409,293		14.0	%	$	276,122		11.4	%	$	133,171		48.2	%

Operating margin⁽²⁾:
North America	15.9		%			14.6		%			1.3		%
Europe	35.2		%			35.9		%			(0.7		)%
Asia-Pacific	28.6		%			23.7		%			4.9		%



Period	Total Number of Shares Purchased ⁽¹⁾	Approximate Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs ⁽²⁾
				(in millions)
July 2017	75,894	89.16	75,894
August 2017	156,581	94.24	156,581
September 2017	79,118	94.57	79,118
Total	311,593		311,593	$	264.9