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


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
4.875% Senior Notes due 2031	GPN31A	New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically ~~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~~October 26, 2023 was ~~159,142,431.~~260,388,546.

GLOBAL PAYMENTS INC.

For the quarterly period ended September 30, ~~2017~~2023

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)


	Nine Months Ended
	September 30, 2023		September 30, 2022

Revenues	$	7,220,607	$	6,722,531
Operating expenses:
Cost of service	2,805,237		2,850,706
Selling, general and administrative	3,058,605		2,605,085
Impairment of goodwill	—		833,075
Net loss on business dispositions	139,095		201,144
	6,002,937		6,490,010
Operating income	1,217,670		232,521

Interest and other income	74,830		25,060
Interest and other expense	(490,463)		(327,655)
	(415,633)		(302,595)
Income (loss) before income taxes and equity in income of equity method investments	802,037		(70,074)
Income tax expense	199,748		119,250
Income (loss) before equity in income of equity method investments	602,289		(189,324)
Equity in income of equity method investments, net of tax	54,101		74,074
Net income (loss)	656,390		(115,250)
Net income attributable to noncontrolling interests, net of tax	(31,454)		(22,563)
Net income (loss) attributable to Global Payments	$	624,936	$	(137,813)

Earnings (loss) per share attributable to Global Payments:
Basic earnings (loss) per share	$	2.40	$	(0.49)
Diluted earnings (loss) per share	$	2.39	$	(0.49)

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
	September 30, 2023		September 30, 2022

Net income	$	376,605	$	300,166
Other comprehensive income (loss):
Foreign currency translation adjustments	(125,254)		(249,562)
Income tax benefit (expense) related to foreign currency translation adjustments	890		(183)
Net unrealized gains (losses) on hedging activities	22,993		(1,070)
Reclassification of net unrealized (gains) losses on hedging activities to interest expense	(2,375)		2,980
Income tax expense related to hedging activities	(4,954)		(330)
Other, net of tax	(22)		—
Other comprehensive loss	(108,722)		(248,165)

Comprehensive income	267,883		52,001
Comprehensive loss attributable to noncontrolling interests	(1,410)		(5,130)
Comprehensive income attributable to Global Payments	$	269,293	$	57,131

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


	Nine Months Ended
	September 30, 2023		September 30, 2022

Net income (loss)	$	656,390	$	(115,250)
Other comprehensive income (loss):
Foreign currency translation adjustments	(83,208)		(493,405)
Reclassification of accumulated foreign currency translation losses to net loss as a result of the sale of a foreign entity	—		62,925
Income tax benefit related to foreign currency translation adjustments	360		1,451
Net unrealized gains on hedging activities	15,020		12,915
Reclassification of net unrealized (gains) losses on hedging activities to interest expense	(1,890)		19,959
Income tax expense related to hedging activities	(3,148)		(7,838)
Other, net of tax	(66)		—
Other comprehensive income (loss)	(72,932)		(403,993)

Comprehensive income (loss)	583,458		(519,243)
Comprehensive income (loss) attributable to noncontrolling interests	23,491		(11,111)
Comprehensive income (loss) attributable to Global Payments	$	559,967	$	(508,132)

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)


	September 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,941,777	$	1,997,566
Accounts receivable, net	1,077,944		998,332
Settlement processing assets	2,966,176		2,519,114
Current assets held for sale	6,898		138,815
Prepaid expenses and other current assets	787,551		660,321
Total current assets	6,780,346		6,314,148
Goodwill	26,517,777		23,320,736
Other intangible assets, net	10,259,055		9,658,374
Property and equipment, net	2,118,014		1,838,809
Deferred income taxes	76,384		37,907
Noncurrent assets held for sale	26		1,295,799
Notes receivable	692,188		—
Other noncurrent assets	2,480,815		2,343,241
Total assets	$	48,924,605	$	44,809,014
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit	$	710,401	$	747,111
Current portion of long-term debt	80,098		1,169,330
Accounts payable and accrued liabilities	2,570,489		2,442,560
Settlement processing obligations	2,860,373		2,413,799
Current liabilities held for sale	1,352		125,891
Total current liabilities	6,222,713		6,898,691
Long-term debt	16,570,841		12,289,248
Deferred income taxes	2,300,193		2,428,412
Noncurrent liabilities held for sale	152		4,478
Other noncurrent liabilities	672,753		647,975
Total liabilities	25,766,652		22,268,804
Commitments and contingencies
Redeemable noncontrolling interests	473,132		—
Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued	—		—
Common stock, no par value; 400,000,000 shares authorized at September 30, 2023 and December 31, 2022; 260,359,506 issued and outstanding at September 30, 2023 and 263,081,872 issued and outstanding at December 31, 2022	—		—
Paid-in capital	19,751,734		19,978,095
Retained earnings	3,160,705		2,731,380
Accumulated other comprehensive loss	(470,938)		(405,969)
Total Global Payments shareholders’ equity	22,441,501		22,303,506
Nonredeemable noncontrolling interests	243,320		236,704
Total equity	22,684,821		22,540,210
Total liabilities, redeemable noncontrolling interests and equity	$	48,924,605	$	44,809,014

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							Nine Months Ended
	September 30, 2017			September 30, 2016				September 30, 2023		September 30, 2022
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	243,765		$	192,804
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)							Net income (loss)	$	656,390	$	(115,250)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:							Adjustments to reconcile net income (loss) 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	342,025		299,348
Amortization of acquired intangibles	249,095			173,345			Amortization of acquired intangibles	986,026		962,413
Amortization of capitalized contract costs							Amortization of capitalized contract costs	90,463		81,052
Share-based compensation expense	30,771			26,060			Share-based compensation expense	173,325		122,465
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	84,154		87,071
Noncash lease expense							Noncash lease expense	49,805		63,211
Deferred income taxes	(51,093		)	(30,504		)	Deferred income taxes	(407,767)		(281,376)
Gain on sale of investments	—			(41,150		)
Equity in income of equity method investments, net of tax							Equity in income of equity method investments, net of tax	(54,101)		(74,074)
Facilities exit charges							Facilities exit charges	5,164		27,662
Impairment of goodwill							Impairment of goodwill	—		833,075
Net loss on business dispositions							Net loss on business dispositions	139,095		201,144
Other, net	34,190			26,790			Other, net	2,438		4,939
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	(51,490)		(107,908)
Settlement processing assets and obligations, net	(232,713		)	(109		)	Settlement processing assets and obligations, net	(29,857)		(117,989)
Prepaid expenses and other assets	(12,605		)	(27,474		)	Prepaid expenses and other assets	(266,923)		(224,529)
Capitalized customer acquisition costs	(65,697		)	(45,425		)
Accounts payable and other liabilities	19,546			(19,491		)	Accounts payable and other liabilities	(127,456)		(226,746)
Net cash provided by operating activities	360,123			367,432			Net cash provided by operating activities	1,591,291		1,534,508
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 and restricted cash acquired							Business combinations and other acquisitions, net of cash and restricted cash acquired	(4,099,766)		(24,969)
Capital expenditures	(136,612		)	(102,442		)	Capital expenditures	(500,795)		(463,357)
Issuance of notes receivable							Issuance of notes receivable	(50,000)		—
Repayment of notes receivable							Repayment of notes receivable	50,000		—
Net cash from sales of businesses							Net cash from sales of businesses	478,695		(29,755)
Proceeds from sale of investments	—			37,783			Proceeds from sale of investments	—		31,046
Proceeds from sales of property and equipment	37,520			—
Other, net	(48,056		)	(1,409		)	Other, net	2,187		101
Net cash used in investing activities	(710,157		)	(1,892,043		)	Net cash used in investing activities	(4,119,679)		(486,934)
Cash flows from financing activities:							Cash flows from financing activities:
Net proceeds from (repayments of) settlement lines of credit	77,397			(952		)
Net repayments of settlement lines of credit							Net repayments of settlement lines of credit	(33,328)		(2,770)
Net borrowings from commercial paper notes							Net borrowings from commercial paper notes	1,896,513		—
Proceeds from long-term debt	1,713,324			3,263,045			Proceeds from long-term debt	8,861,129		9,124,449
Repayments of long-term debt	(1,386,721		)	(1,110,258		)	Repayments of long-term debt	(7,628,854)		(7,193,661)
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	(12,735)		(44,360)
Repurchases of common stock							Repurchases of common stock	(418,271)		(2,139,731)
Proceeds from stock issued under share-based compensation plans	7,068			5,614			Proceeds from stock issued under share-based compensation plans	51,085		33,776
Common stock repurchased - share-based compensation plans	(21,171		)	(15,622		)	Common stock repurchased - share-based compensation plans	(37,236)		(38,366)
Proceeds from sale of subsidiary shares to noncontrolling interest	—			16,374
Distributions to noncontrolling interests	(9,301		)	(10,216		)	Distributions to noncontrolling interests	(24,315)		(17,729)
Payment of contingent consideration in business combination							Payment of contingent consideration in business combination	—		(15,726)
Purchase of capped calls related to issuance of convertible notes							Purchase of capped calls related to issuance of convertible notes	—		(302,375)
Dividends paid	(5,141		)	(4,376		)	Dividends paid	(195,611)		(208,082)
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 provided by (used in) financing activities							Net cash provided by (used in) financing activities	2,458,377		(804,575)
Effect of exchange rate changes on cash, cash equivalents and restricted cash							Effect of exchange rate changes on cash, cash equivalents and restricted cash	(35,730)		(208,529)
Increase (decrease) in cash, cash equivalents and restricted cash							Increase (decrease) in cash, cash equivalents and restricted cash	(105,741)		34,470
Cash, cash equivalents and restricted cash, beginning of the period							Cash, cash equivalents and restricted cash, beginning of the period	2,215,606		2,123,023
Cash, cash equivalents and restricted cash, end of the period							Cash, cash equivalents and restricted cash, end of the period	$	2,109,865	$	2,157,493

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


	Shareholders' Equity
	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Nonredeemable Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at June 30, 2023	259,962	$	19,686,035	$	2,863,852	$	(378,401)	$	22,171,486	$	244,494	$	22,415,980	$	499,479
Net income				361,830				361,830		13,015		374,845		1,760
Other comprehensive loss						(92,537)		(92,537)		(8,767)		(101,304)		(7,418)
Stock issued under share-based compensation plans	424	31,803						31,803				31,803
Common stock repurchased - share-based compensation plans	(26)	(3,031)						(3,031)				(3,031)
Share-based compensation expense		36,624						36,624				36,624
Excise tax on net share repurchases		303						303				303
Distributions to noncontrolling interests								—		(5,422)		(5,422)		(1,638)
Redeemable noncontrolling interests measurement period adjustment								—				—		(19,051)
Cash dividends declared ($0.25 per common share)				(64,977)				(64,977)				(64,977)
Balance at September 30, 2023	260,360	$	19,751,734	$	3,160,705	$	(470,938)	$	22,441,501	$	243,320	$	22,684,821	$	473,132

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


	Shareholders' Equity
	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Nonredeemable Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at December 31, 2022	263,082	$	19,978,095	$	2,731,380	$	(405,969)	$	22,303,506	$	236,704	$	22,540,210	$	—
Net income				624,936				624,936		29,698		654,634		1,756
Other comprehensive loss						(64,969)		(64,969)		(1,676)		(66,645)		(6,287)
Stock issued under share-based compensation plans	1,697	51,085						51,085				51,085
Common stock repurchased - share-based compensation plans	(354)	(39,510)						(39,510)				(39,510)
Share-based compensation expense		173,325						173,325				173,325
Redeemable noncontrolling interests acquired in a business combination								—				—		556,070
Issuance of share-based awards in connection with a business combination		2,484						2,484				2,484
Repurchases of common stock	(4,065)	(413,745)						(413,745)				(413,745)
Distributions to noncontrolling interests								—		(21,406)		(21,406)		(2,909)
Redeemable noncontrolling interests measurement period adjustment								—				—		(75,498)
Cash dividends declared ($0.75 per share)				(195,611)				(195,611)				(195,611)
Balance at September 30, 2023	260,360	$	19,751,734	$	3,160,705	$	(470,938)	$	22,441,501	$	243,320	$	22,684,821	$	473,132

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~~two reportable segments: ~~North America, Europe~~Merchant Solutions and ~~Asia-Pacific.~~

~~We were incorporated~~Issuer Solutions. As described in ~~Georgia as Global Payments Inc. in~~ ~~2000~~ ~~and spun-off from~~"Note 3—Business Dispositions," during the second quarter of 2023, we completed the sale of the consumer portion of our Netspend business, which comprised our former ~~parent company in~~ ~~2001. Including our time as part~~Consumer Solutions segment. Our consolidated financial statements include the results of our former ~~parent company, we have been in the payment technology services business since~~ ~~1967~~.Consumer Solutions segment for periods prior to disposition. See "Note 15—Segment Information" for further 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~~2022 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~~2022 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.~~2022.

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.

~~Recently Adopted Accounting Pronouncements~~

In ~~March 2016,~~particular, uncertainty resulting from global events and other macroeconomic conditions are difficult to predict at this time, and the ~~Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, "Compensation - Stock Compensation (Topic 718):~~ ~~Improvements~~ultimate effect could result in additional charges related to ~~Employee Share-Based Payment Accounting." The amendments in this update changed how companies account for certain aspects~~the recoverability of ~~share-based payments to employees. We adopted the various amendments in ASU 2016-09 in our~~assets, including financial assets, long-lived assets and goodwill and other losses. These unaudited consolidated financial statements ~~effective January 1, 2017~~reflect the financial statement effects based upon management’s estimates and assumptions utilizing the most currently available information.

NOTE 2—ACQUISITION

On March 24, 2023, we acquired all of the outstanding common stock of EVO Payments, Inc. (“EVO”). EVO is a leading payment technology and services provider, offering an array of payment solutions to merchants ranging from small and middle market enterprises to multinational companies and organizations across the Americas and Europe. The acquisition aligns with ~~no material effect~~our technology-enabled payments strategy, expands our geographic presence in attractive markets and augments our business-to-business software and payment solutions business.

Total purchase consideration was $4.3 billion, which consisted of the following (in thousands):


Cash paid to EVO shareholders (1)	$	3,273,951
Cash paid for equity awards attributable to purchase consideration (2)	58,510
Value of replacement awards attributable to purchase consideration (3)	2,484
Total purchase consideration transferred to EVO shareholders	3,334,945
Repayment of EVO's unsecured revolving credit facility (including accrued interest and fees)	665,557
Payment of certain acquiree transaction costs and other liabilities on behalf of EVO (4)	269,118
Total purchase consideration	$	4,269,620

(1) Holders of EVO common stock, convertible preferred stock and common units received $34 for each share of EVO common stock held at the ~~date of adoption. On a prospective basis, as required, we recognize the income tax effects~~effective time of the ~~excess benefits or deduction deficiencies~~transaction.

(2) Pursuant to the merger agreement, we cash settled vested options and certain unvested equity awards of ~~share-based~~EVO equity award holders.

(3) Pursuant to the merger agreement, we granted equity awards infor approximately 0.3 million shares of Global Payments common stock to certain EVO equity award holders. Each such replacement award is subject to the ~~statement of income when~~same terms and conditions (including vesting and exercisability) that applied to 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.~~corresponding EVO equity award. 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 determiningapportioned the fair value of ~~assets acquired and liabilities assumed~~the replacement awards between purchase consideration (the portion attributable to pre-acquisition services 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 exceedrelation to the total amount of goodwill allocated to that reporting unit. We adopted ASU 2017-04 on a prospective basis effective January 1, 2017. 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~~vesting term 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 standardaward) 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~~amounts to be recognized ~~under certain of our arrangement types. In addition, it could increase~~in periods following the ~~administrative burden on our operations to properly account for customer contracts and provide~~acquisition as share-based compensation expense over the ~~more expansive required disclosures. More judgment and estimates may be required within the process of applying the requirements~~requisite service period of the ~~new standard than are~~replacement awards.

(4) Certain acquiree transaction costs and liabilities, including amounts outstanding under EVO’s tax receivable agreement, were 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~~repaid by the FASB related to this new revenue standard, 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 are 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~~upon consummation 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~~acquisition.

~~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~~purchase consideration was funded through cash 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~~hand 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.

~~In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326):~~ ~~Measurement of Credit Losses on Financial instruments~~." The amendments in this update change how companies measure 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 expected to occur over the remaining life of the financial assets (including trade receivables) that are 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. We are evaluating the effect of ASU 2016-13 on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases." The amendments in this update require lessees 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 leases in the balance sheet upon adoption.

~~In January 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10):~~ ~~Recognition 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 values 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~~borrowings 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. We paid the sellers consideration of $600 million in cash, which we funded primarily 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 requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date. The accounting for this acquisition was not complete as of September 30, 2017. 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~~were as ~~follows (in thousands):~~follows:

~~ACTIVE Network delivers cloud-based, mission critical enterprise software, including payment technology solutions,~~As of September 30, 2023, we considered these amounts to ~~event organizers~~be provisional because we were still in the ~~communities~~process of gathering and ~~health~~reviewing information to support the valuations of the assets acquired, liabilities assumed and ~~fitness verticals. This acquisition aligns with~~related tax positions. We made measurement-period adjustments as shown in the table above, and the effects of the measurement-period adjustments on our ~~technology-enabled, software driven strategy~~consolidated statements of income for the three and ~~adds an enterprise software business operating in two new vertical markets that we believe offer attractive growth fundamentals.~~ nine months ended September 30, 2023 were not material.

Goodwill ~~of $704.0 million~~ arising from the acquisition was included in the ~~North America operating~~Merchant Solutions segment as of September 30, 2023 and was attributable to expected growth opportunities, potential synergies from combining the acquired business into our existing ~~businesses~~business and an assembled workforce. We expect that ~~approximately 80%~~a portion of the goodwill from this acquisition will be deductible for income tax purposes.

We As the amounts are still ~~evaluating information~~provisional, we are still in the process of assigning goodwill to separately identify and value the intangible assets acquired. We expect such assets to 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 rangeour reporting units.

~~We merged with Heartland Payment Systems, Inc. ("Heartland") in a cash-and-stock transaction on April 22, 2016 for total purchase consideration of $3.9 billion.~~ The following table ~~summarizes~~reflects the ~~components of the consideration transferred on April 22, 2016 (in thousands):~~

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

~~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~~provisional estimated acquisition-date fair values of the identified intangible assets of EVO and their respective weighted-average estimated amortization periods:


	Estimated Fair Value		Weighted-Average Estimated Amortization Periods
	(in thousands)		(years)
Customer-related intangible assets	$	920,000	10
Contract-based intangible assets	487,000		12
Acquired technologies	86,995		7
Trademarks and trade names	6,000		2
Total estimated identifiable intangible assets	$	1,499,995	11

From the acquisition date through September 30, 2023, the acquired operations of EVO contributed less than 10% to our consolidated revenues and operating income. The historical revenue and earnings of EVO were not material for the purpose of presenting pro forma information. In addition, transaction costs associated with this business combination were not material.

NOTE 3—BUSINESS DISPOSITIONS

Gaming Business - On April 1, 2023, we completed the sale of our gaming business for approximately $400 million, subject to certain closing adjustments. The gaming business was included in our Merchant Solutions segment prior to disposition, and had been presented as held for sale in our consolidated balance sheet since December 31, 2022. In connection with the sale, we provided $32 million of seller financing as described below. We recognized a gain on the sale of $104.1 million during the nine months ended September 30, 2023, and the sale is subject to certain additional final closing adjustments. The gain was presented within net loss on business dispositions in the consolidated statements of income.

Consumer Business- On April 26, 2023, we completed the sale of the consumer portion of our Netspend business for approximately $1 billion, subject to certain closing adjustments. The consumer business comprised our former Consumer Solutions segment prior to disposition, and had been presented as held for sale with certain adjustments to report the disposal group at fair value less costs to sell in our consolidated balance sheet since June 30, 2022. In connection with the sale, we provided $675 million of seller financing as described below. We recognized a loss on business dispositions in our consolidated statement of income of $243.2 million during the nine months ended September 30, 2023, and the sale is subject to certain additional final closing adjustments. The loss during the nine months ended September 30, 2023 included the effects of incremental negotiated closing adjustments, changes in the estimated fair value of the seller financing and the effects of the final tax structure of the transaction. As further discussed in "Note 5— Goodwill and Other Intangible Assets," we recognized a goodwill impairment charge of $833.1 million during the nine months ended September 30, 2022 related to our former Business and Consumer Solutions reporting unit. We also recognized charges of $48.9 million and $73.9 million during the three and nine months ended September 30, 2022, respectively, to reduce the disposal group to estimated fair value less costs to sell, which was presented within net loss on business dispositions in our consolidated statements of income. The charge recognized during the three months ended September 30, 2022 related primarily to a change in the estimated fair value of the fixed rate seller financing.

Notes Receivable and Allowance for Credit Losses

In connection with the sale of our consumer business, we provided seller financing consisting of the following: (1) a first lien seven-year secured term loan facility with an aggregate principal amount of $350 million bearing interest at a fixed annual rate of 9.0%, including 3.5% payable quarterly in cash and 5.5% settled quarterly via the issuance of additional paid-in-kind ("PIK") notes with the same terms as the original notes until December 2024, after which interest will be payable quarterly in cash along with quarterly principal payments of $4.375 million with the remaining balance due at maturity; and (2) a second lien twenty-five year secured term loan facility with an aggregate principal amount of $325 million bearing interest at a fixed annual rate of 13.0% PIK due at maturity. The aggregate fair value of the first and second lien term loans upon the closing of the transaction was $653.9 million, calculated using a discounted cash flow approach. In addition, we provided the purchasers a five-year $50 million secured revolving facility available from the date of closing of the sale, bearing interest at a fixed annual rate of 9.0% payable quarterly in cash. There was no outstanding balance on the revolving facility as of September 30, 2023. In connection with the sale of our gaming business, we also provided seller financing consisting of an unsecured promissory note due April 1, 2030 with an aggregate principal amount of $32 million bearing interest at a fixed annual rate of 11.0%.

We classify the notes as held for investment based on the intent and ability to hold for the foreseeable future or until maturity or payoff, and the notes are presented at amortized cost within notes receivable in our consolidated balance sheet. Interest income is recognized using the effective interest method, which includes the accretion of the difference between the fair value at inception and the face value of the notes. We recognized interest income of $21.4 million and $37.1 million during the three and nine months ended September 30, 2023, respectively, as a component of interest and other income in the consolidated statements of income. The issuance of the notes in connection with the sale transactions was a noncash investing activity in our consolidated statement of cash flows for the nine months ended September 30, 2023.

We are exposed to credit losses on the notes. We utilize a probability-of-default and loss given default method to develop an estimate of current expected credit losses applied at the loan level. A variety of factors are considered to estimate the expected credit loss, including the probability of default (representing the probability the asset will default within a given time frame), the loss given default (representing the percentage of the asset that is not expected to be collected due to default), leverage ratios, interest rates, market and industry data, and forecasts that affect the collectibility of the reported amount. The estimation process also includes consideration of qualitative and quantitative risk factors associated with expected timing of payment, industry trends and current and anticipated future economic conditions. Expected credit losses are estimated over the life of the loans, adjusted for expected prepayments when appropriate. We recognized a noncash credit loss expense of $18.2 million for the nine months ended September 30, 2023, which is included as a component of interest and other expenses in our consolidated statements of income.

As of September 30, 2023, there was an aggregate principal amount of $736.1 million outstanding on the notes, including PIK, and the notes are presented net of the allowance for credit losses of $18.2 million within notes receivable in our consolidated balance sheet. The estimated fair value of the notes receivable was $692.0 million as of September 30, 2023. The estimated fair value of notes receivable was based on a discounted cash flow approach and is considered to be a Level 3 measurement of the valuation hierarchy.

Assets and Liabilities Held for Sale- The assets and liabilities of our consumer and gaming businesses were classified as held for sale in our consolidated balance sheets as of December 31, 2022. The major classes of assets ~~acquired and liabilities assumed previously determined~~presented as held for sale in the consolidated balance sheet as of December 31, ~~2016~~2022 included cash of $70.6 million, accounts receivable of $18.4 million, other current assets of $42.3 million, goodwill of $529.5 million, other intangible assets of $717.9 million, property and equipment of $82.9 million, other noncurrent assets of $44.9 million and an asset group valuation allowance of $71.9 million. The major classes of liabilities presented 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~~held for sale in the ~~North America segment, was attributable to expected growth opportunities, potential synergies from combining~~consolidated balance sheet as of December 31, 2022 included accounts payable and accrued liabilities of $125.9 million and other noncurrent liabilities of $4.5 million.

Sale of Merchant Solutions Business in Russia- We sold our ~~existing businesses and an assembled workforce, and is not deductible~~Merchant Solutions business in Russia effective April 29, 2022 for ~~income tax purposes.~~cash proceeds of $9 million. During the nine months ended September 30, ~~2016,~~2022, we ~~incurred transaction costs in connection~~recognized a loss of $127.2 million associated with the ~~merger~~sale, comprised of ~~$24.7~~the difference between the consideration received and the net carrying amount of the business and the reclassification of $62.9 million ~~which are recorded~~of associated accumulated foreign currency translation losses from the separate component of equity. The loss was presented within net loss on business dispositions in ~~selling, general and administrative expenses in the~~our consolidated ~~statements~~statement of income.

The following ~~reflects~~tables present a disaggregation of our revenues from contracts with customers by geography for each of our reportable segments for the ~~estimated fair values~~three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30, 2023
	Merchant Solutions		Issuer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	1,524,575	$	465,263	$	(5,237)	$	1,984,601
Europe	295,787		131,659		—		427,446
Asia Pacific	63,644		10,926		(10,926)		63,644
	$	1,884,006	$	607,848	$	(16,163)	$	2,475,691


	Nine Months Ended September 30, 2023
	Merchant Solutions		Issuer Solutions		Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	4,389,598	$	1,363,627	$	182,740	$	(31,713)	$	5,904,252
Europe	750,810		374,044		—		—		1,124,854
Asia Pacific	191,501		31,525		—		(31,525)		191,501
	$	5,331,909	$	1,769,196	$	182,740	$	(63,238)	$	7,220,607

Table of ~~the identified intangible assets and the respective weighted-average estimated amortization periods:~~

Contents

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
The following table presents a disaggregation of our Merchant Solutions segment revenues by distribution channel for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022

	(in thousands)

Relationship-led	$	1,003,647	$	821,005	$	2,775,372	$	2,397,787
Technology-enabled	880,359		775,321		2,556,537		2,253,274
	$	1,884,006	$	1,596,326	$	5,331,909	$	4,651,061

~~NOTE 3—SETTLEMENT PROCESSING ASSETS AND OBLIGATIONS~~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 nine months ended September 30, 2023 and 2022, substantially all of our revenues were recognized over time.

AsSupplemental balance sheet information related to contracts from customers as of September 30, ~~2017~~2023 and December 31, ~~2016, settlement processing~~2022 was as follows:


	Balance Sheet Location	September 30, 2023		December 31, 2022

		(in thousands)

Assets:
Capitalized costs to obtain customer contracts, net	Other noncurrent assets	$	346,161	$	329,785
Capitalized costs to fulfill customer contracts, net	Other noncurrent assets	$	187,539	$	152,520

Liabilities:
Contract liabilities, net (current)	Accounts payable and accrued liabilities	$	232,159	$	226,254
Contract liabilities, net (noncurrent)	Other noncurrent liabilities	$	52,934	$	45,613

Net contract assets were not material at September 30, 2023 or at December 31, 2022. Revenue recognized for the three months ended September 30, 2023 and ~~obligations consisted~~2022 from contract liability balances at the beginning of each period was $85.2 million and $74.2 million, respectively. Revenue recognized for the nine months ended September 30, 2023 and 2022 from contract liability balances at the beginning of each period was $181.3 million and $189.3 million, respectively.

ASC 606 requires disclosure of the ~~following:~~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 September 30, 2023. 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 that meets specified criteria. Accordingly, the total

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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 )
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):


Year Ending December 31,

2023	$	274,536
2024	996,975
2025	816,344
2026	645,185
2027	486,215
2028	230,285
2029 and thereafter	320,891
Total	$	3,770,431

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NOTE 4—5—GOODWILL AND OTHER INTANGIBLE ASSETS

As of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, goodwill and other intangible assets consisted of the following:


	September 30, 2023		December 31, 2022

	(in thousands)

Goodwill	$	26,517,777	$	23,320,736
Other intangible assets:
Customer-related intangible assets	$	10,399,671	$	9,524,922
Acquired technologies	3,021,433		2,863,731
Contract-based intangible assets	2,219,376		1,741,321
Trademarks and trade names	1,073,623		1,067,745
	16,714,103		15,197,719
Less accumulated amortization:
Customer-related intangible assets	3,650,173		3,155,838
Acquired technologies	1,958,515		1,692,762
Contract-based intangible assets	275,007		197,478
Trademarks and trade names	571,353		493,267
	6,455,048		5,539,345
	$	10,259,055	$	9,658,374

September 30, 2017 December 31, 2016

(in thousands)

Goodwill $ 5,616,414
$ 4,807,594
Other intangible assets:
Customer-related intangible assets $ 2,119,873
$ 1,864,731
Acquired technologies 804,485
547,151
Trademarks and trade names 190,021
188,311
Contract-based intangible assets 162,107
157,882
3,276,486
2,758,075
Less accumulated amortization:
Customer-related intangible assets 635,574
487,729
Acquired technologies 179,006
89,633
Trademarks and trade names 44,586
24,142
Contract-based intangible assets 88,611
71,279
947,777
672,783
$ 2,328,709
$ 2,085,292

The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the nine months ended September 30, ~~2017:~~2023:


	Merchant Solutions		Issuer Solutions		Total

	(in thousands)
Balance at December 31, 2022	$	13,816,945	$	9,503,791	$	23,320,736
Goodwill acquired	3,231,320		—		3,231,320
Effect of foreign currency translation	(35,206)		1,163		(34,043)
Measurement period adjustments	(236)		—		(236)
Balance at September 30, 2023	$	17,012,823	$	9,504,954	$	26,517,777

We test goodwill for impairment at the reporting unit level annually and more often if an event occurs or circumstances change that indicate the fair value of a reporting unit may be below its carrying amount. When applying the quantitative assessment, we determine the fair value of our reporting units based on a weighted average of multiple valuation techniques, principally a combination of an income approach and a market approach. The income approach calculates a value based upon the present value of estimated future cash flows, while the market approach uses earnings multiples of similarly situated guideline public companies. Determining the fair value of a reporting unit involves judgment and the use of significant estimates and assumptions, which include assumptions regarding the revenue growth rates and operating margins used to calculate estimated future cash flows, risk-adjusted discount rates and future economic and market conditions.

During the second quarter of 2022, the sustained decline in our share price and recent increases in discount rates, primarily resulting from increased economic uncertainty, indicated a potential decline in fair value and triggered a requirement to evaluate our Issuer Solutions and former Business and Consumer Solutions reporting units for potential impairment as of June 30, 2022. Further, the estimated sales price for the consumer business portion of our former Business and Consumer Solutions reporting unit also indicated a potential decline in fair value as of June 30, 2022. We determined on the basis of the quantitative assessment that the fair value of the Issuer Solutions reporting unit was still greater than its carrying amount as of June 30, 2022, indicating no impairment. Based on the quantitative assessment of the former Business and Consumer Solutions reporting unit, including consideration of the consumer business disposal group and the remaining assets of the reporting unit,

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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
we recognized a goodwill impairment charge of $833.1 million in our consolidated statement of income for the three months ended June 30, 2022.

~~There was no accumulated~~Accumulated impairment ~~loss~~losses for goodwill as of September 30, ~~2017 or~~2023 were $357.9 million. Accumulated impairment losses for goodwill as of December 31, ~~2016.~~2022 were $833.1 million, of which $475.2 million related to assets held for sale.

~~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 30, ~~2017~~2023 and December 31, ~~2016,~~2022, long-term debt consisted of the following:


	September 30, 2023		December 31, 2022

	(in thousands)

3.750% senior notes due June 1, 2023	$	—	$	552,113
4.000% senior notes due June 1, 2023	—		552,747
1.500% senior notes due November 15, 2024	498,898		498,164
2.650% senior notes due February 15, 2025	997,750		996,485
1.200% senior notes due March 1, 2026	1,095,369		1,093,932
4.800% senior notes due April 1, 2026	778,249		786,724
2.150% senior notes due January 15, 2027	745,884		744,945
4.950% senior notes due August 15, 2027	496,199		495,463
4.450% senior notes due June 1, 2028	470,505		473,800
3.200% senior notes due August 15, 2029	1,240,774		1,239,588
5.300% senior notes due August 15, 2029	495,887		495,362
2.900% senior notes due May 15, 2030	992,245		991,367
2.900% senior notes due November 15, 2031	743,184		742,555
5.400% senior notes due August 15, 2032	742,702		742,085
4.150% senior notes due August 15, 2049	740,771		740,503
5.950% senior notes due August 15, 2052	738,476		738,177
4.875% senior notes due March 17, 2031	836,551		—
1.000% convertible notes due August 15, 2029	1,451,426		1,445,225
Revolving credit facility	1,545,000		—
Commercial paper notes	1,899,955		—
Finance lease liabilities	23,970		32,435
Other borrowings	117,144		96,908
Total long-term debt	16,650,939		13,458,578
Less current portion	80,098		1,169,330
Long-term debt, excluding current portion	$	16,570,841	$	12,289,248

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 on long-term~~The carrying amounts of our senior notes and convertible notes in the table above are presented net of unamortized discount and unamortized debt issuance costs, as ofapplicable. At 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.~~2023, the unamortized discount on senior notes and convertible notes was $47.9 million, ~~as administrative agent,~~ and ~~a syndicate of financial institutions as lenders~~unamortized debt issuance costs on senior notes and ~~other agents (as amended from time to time, the "Credit Facility Agreement")~~convertible notes were $81.8 million. 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 Loan 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 billion term loan facility, (the "Term B-2 Loan") and (iv) a $1.25 billion revolving credit facility (the "Revolving Credit Facility"). 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 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.

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 andAt December 31, ~~2016 were $383.1~~2022, the unamortized discount on senior notes and convertible notes was $50.8 million and ~~$446.3 million, respectively. As of September 30, 2017, the interest rate~~unamortized debt issuance costs 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.

senior notes and convertible notes were $85.4 million. The portion of ~~deferred~~unamortized debt issuance costs related to ~~the Revolving Credit Facility~~revolving credit facilities is included in other noncurrent ~~assets,~~assets. At September 30, 2023 and ~~the portion of deferred~~December 31, 2022, unamortized debt issuance costs on the unsecured revolving credit facility were $19.7 million and $23.5 million, respectively.

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At September 30, 2023, future maturities of long-term debt (excluding finance lease liabilities) are as follows by year (in thousands):


Year Ending December 31,

2023	$	14,244
2024	559,014
2025	1,014,437
2026	1,865,222
2027	4,709,181
2028	450,000
2029 and thereafter	8,095,808
Total	$	16,707,906

Senior Notes

On March 17, 2023, we issued €800 million aggregate principal amount of 4.875% senior unsecured notes due March 2031 and received net proceeds of €790.6 million, or $843.6 million based on the exchange rate on the issuance date. We issued the senior notes at a discount of $2.8 million, and we incurred debt issuance costs of $7.2 million, including underwriting fees, professional services fees 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 September 30, 2023. Interest on the senior unsecured notes is payable annually in arrears on March 17 of each year, commencing March 17, 2024. The notes are unsecured and unsubordinated indebtedness and rank equally in right of payment with all of our other outstanding unsecured and unsubordinated indebtedness. The net proceeds from the offering were used for general corporate purposes.

During the nine months ended September 30, 2023, we used borrowings under the revolving credit facility to fund the ~~term loans~~redemption in full of the 3.750% and 4.000% senior unsecured notes that were due June 1, 2023.

Commercial Paper

In January 2023, we established a $2.0 billion commercial paper program under which we may issue senior unsecured commercial paper notes with maturities of up to 397 days from the date of issue. Commercial paper notes are expected to be issued at a discount from par, or they may bear interest, each at commercial paper market rates dictated by market conditions at the time of their issuance. The proceeds from issuances of commercial paper notes will be used primarily for general corporate purposes but may also be used for acquisitions, to pay dividends, for debt refinancing or for other purposes.

As of September 30, 2023, we had net borrowings under our commercial paper program of $1,900.0 million outstanding, presented within long-term debt in our consolidated balance sheet based on our intent and ability to continually refinance on a long-term basis, with a weighted average annual interest rate of 6.07%. The commercial program is ~~reported~~backstopped by our revolving credit agreement, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of our revolving credit facility. As such, we could draw on the revolving credit facility to repay commercial paper notes that cannot be rolled over or refinanced with similar debt.

Prior Year Debt Refinancing Activities

On August 8, 2022, we issued $1.5 billion in aggregate principal amount of 1.000% convertible unsecured senior notes due 2029 in a private placement pursuant to an investment agreement with Silver Lake Partners. In connection with the issuance of the convertible notes, we entered into privately negotiated capped call transactions with certain financial institutions to hedge the potential dilutive effect upon conversion of the convertible notes or offset our cash obligation if the cash settlement option were to be elected. The capped call transactions meet the accounting criteria to be reflected in stockholders’ equity and not accounted for as derivatives. The cost of $302.4 million incurred in connection with the capped call transactions was recorded as a reduction to paid-in-capital, net of applicable income taxes.

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On August 1, 2022, in connection with our entry into the ~~carrying amount~~EVO merger agreement, we obtained commitments for a $4.3 billion, 364-day senior unsecured bridge facility. Upon the execution of permanent financing in August 2022, including the ~~term loans. Debt~~ issuance ~~costs are amortized as an adjustment~~of our senior unsecured notes and entry into a new revolving credit facility, the aggregate commitments under the bridge facility were reduced to zero and terminated. For the three and nine months ended September 30, 2022, we recognized expense of $17.3 million related to commitment fees associated with the bridge facility, which was presented within interest expense ~~over the terms~~in our consolidated statement of ~~the respective facilities.~~income.

~~Settlement Lines~~Fair Value of ~~Credit~~Long-Term Debt

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 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 amount of the outstanding line of credit may exceed the stated credit limit. As of September 30, ~~2017 and December 31, 2016,~~2023, our senior notes had a total carrying amount of ~~$55.5 million~~$11.6 billion and ~~$51.0 million, respectively,~~an estimated fair value of ~~cash~~$10.4 billion. The estimated fair value of our senior notes was based on ~~deposit was used~~quoted market prices in an active market and is considered to ~~determine~~be a Level 1 measurement of the ~~available credit.~~valuation hierarchy.

As of September 30, ~~2017~~2023, our convertible notes had a total carrying amount of $1.5 billion and ~~December 31, 2016, respectively, we had $487.5 million~~an estimated fair value of $1.5 billion. The estimated fair value of our convertible notes was based on a lattice pricing model and ~~$392.1 million outstanding under these lines~~is considered to be a Level 3 measurement of ~~credit with additional capacity~~the valuation hierarchy.

The fair value of ~~$669.9 million as of September 30, 2017 to fund settlement. The weighted-average interest rate on these borrowings was 2.11% and 1.90%~~other long-term debt approximated its carrying amount 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.2023.

Compliance with Covenants

The ~~Credit Facility Agreement~~convertible notes include customary covenants and events of default for convertible notes of this type. The revolving credit agreement contains customary affirmative covenants and restrictive covenants, including, among others, financial covenants based on ~~our~~net leverage and ~~fixed charge~~interest coverage ratios, ~~as defined in the agreement. As~~and customary events of ~~September 30, 2017, financial covenants under the Credit Facility Agreement~~default. The required a leverage ratio ~~no greater than: (i)~~was increased to 4.50 to 1.00 as a result of the ~~end~~qualifying acquisition of ~~any fiscal quarter ending during the period from July 1, 2017 through June 30, 2018; (ii) 4.25~~EVO, which will remain in effect for up to eight consecutive quarters with a gradual step-down to 3.75 to 1.00, ~~as of~~and 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~~required interest coverage ratio is ~~required~~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 September 30, 2023.

Interest Expense

Interest expense was $173.3 millionand $132.4 million for the three months ended September 30, 2023 and 2022, respectively, and $464.6 million and $318.8 million for the nine months ended September 30, ~~2017.~~2023 and 2022, respectively.

NOTE 7—DERIVATIVES AND HEDGING INSTRUMENTS

Net Investment Hedge

We have designated our aggregate €800 million Euro-denominated senior notes due March 2031 as a hedge of our net investment in our Euro-denominated operations. The purpose of the net investment hedge is to reduce the volatility of our net investment in our Euro-denominated operations due to changes in foreign currency exchange rates.

Investments in foreign operations with functional currencies other than the reporting currency are subject to foreign currency risk as the assets and liabilities of these subsidiaries are translated into the reporting currency at the period-end rate of exchange with the resulting foreign currency translation adjustment presented as a component of other comprehensive income and included in accumulated comprehensive income within equity in our consolidated balance sheets. Net investment hedge accounting offers protection from this risk, and the foreign currency remeasurement gains and losses associated with the Euro-denominated senior notes are presented within the same components of other comprehensive income and accumulated comprehensive income.

We recognized a gain of $26.8 million and $10.3 million within foreign currency translation adjustments in other comprehensive income in our consolidated statements of comprehensive income during the three and nine months ended September 30, 2023, respectively.

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Interest Rate ~~Swap Agreements~~Swaps

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. In the first quarter of 2023, we entered into new interest rate swap agreements with an aggregate notional amount of $1.5 billion to convert eligible borrowings under our revolving credit facility from a floating term Secured Overnight Financing Rate to a fixed rate. 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.income. 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.

In August 2022, in connection with entry into the revolving credit agreement and repayment of amounts outstanding under our prior credit facility, we terminated and settled our interest rate swap agreements existing at that time. The termination resulted in the recognition of a net gain of $1.2 million, including the reclassification of $0.5 million of accumulated losses from the separate component of equity. The net gain was presented in interest expense in our consolidated statements of income for the three and nine months ended September 30, 2022.

The table below presents ~~the fair values of~~information about our ~~derivative financial instruments~~interest rate swaps, 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 September 30, 2023

Range of Maturity Dates at September 30, 2023

September 30, 2023

December 31, 2022

(in thousands)

Interest rate swaps (Notional of $1.5 billion at September 30, 2023)

Other current assets

4.26

April 17, 2027 - August 17, 2027

10,646

—

Derivative Financial Instruments Balance Sheet Location Weighted-Average Fixed Rate of Interest at September 30, 2017 Range of Maturity Dates September 30, 2017 December 31, 2016
(in thousands)

Interest rate swaps (Notional of $1,000 million at September 30, 2017, $250 million at December 31, 2016) Other assets 1.49% February 28, 2019 - July 31, 2020 $ 2,923
$ 2,147
Interest rate swaps (Notional of $300 million at September 30, 2017, $750 million at December 31, 2016) Accounts payable and accrued liabilities 1.91% March 31, 2021 $ 1,495
$ 3,175

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 months ended September 30, ~~2017~~2023 and ~~2016:~~2022:


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022

	(in thousands)

Net unrealized gains (losses) recognized in other comprehensive income (loss)	$	22,993	$	(1,070)	$	15,020	$	12,915
Net unrealized gains (losses) reclassified out of other comprehensive income (loss) to interest expense	$	2,375	$	(2,980)	$	1,890	$	(19,959)

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 30, ~~2017,~~2023, the amount of net unrealized gains 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~~$10.6 million.

~~Interest Expense~~

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~~Interest expense was $41.8 million and $44.6 million for~~NOTE 8—INCOME TAX

For the three months ended September 30, ~~2017~~2023, our effective income tax rate of 14.1% was lower than the U.S. statutory rate primarily due to the favorable effects of foreign-derived intangible income deductions, tax credits and ~~2016, respectively, and $130.3 million and $95.6 million for~~foreign interest income not subject to tax. For the nine months ended September 30, ~~2017 and 2016, respectively.~~

~~NOTE 7—INCOME TAX~~

~~Our~~2023, our effective income tax ~~rates were 11.7%~~rate of 24.9% was higher than the U.S. statutory rate primarily as a result of a gain on the dispositions of our consumer and ~~18.4%~~gaming businesses for income tax reporting purposes, while a net loss on the dispositions was recognized for financial reporting purposes, which was partially offset by the favorable effect on the rate of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction.

For the three months ended September 30, ~~2017 and September 30, 2016, respectively. Our~~2022, our effective income tax ~~rates were 14.4% and 14.7% for the nine months ended September 30, 2017 and September 30, 2016, respectively. Our effective income tax rates differ~~rate of 5.2% differed from the U.S. statutory rate primarily due to the favorable effects of foreign interest income ~~generated in international jurisdictions with lower~~not subject to tax, ~~rates. In addition, as a result~~tax credits, and the foreign-derived intangible income deduction. The effective rate also included the favorable effects of ~~adopting ASU 2016-09 on January 1, 2017, as described in "Note 1— Basis of Presentation and Summary of Significant Accounting Policies," we recognize the~~adjustments to unrecognized income tax benefits related to certain U.S. federal income tax positions and remeasurement of state deferred taxes to reflect enacted tax law changes. For the nine months ended September 30, 2022, we incurred income tax expense in spite of reporting a loss before income taxes primarily due to the unfavorable effects of the ~~excess benefits~~goodwill impairment charge and loss on the sale of our Merchant Solutions business in Russia for which no tax benefit was recognized. These effects were partially offset by the same items that favorably affected the rate for the three months ended September 30, 2022.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act into law, which, among other things, implemented a 15% corporate alternative minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases effective beginning January 1, 2023. We do not expect the corporate alternative minimum tax will have a material effect on our reported results, cash flows or ~~deficiencies of share-based awards in the statement of income when share-based awards vest or are settled, which contributed to lower effective income tax rates in the current year periods.~~financial position. During the nine months ended September 30, ~~2016,~~2023, we ~~recorded~~reflected excise taxes of $4.0 million within equity as part of the cost of common stock repurchased, net of share issuances, during the period.

NOTE 9—REDEEMABLE NONCONTROLLING INTERESTS

Through the acquisition of EVO, the portions of equity in our consolidated subsidiaries in Poland, Greece, and Chile that are not attributable, directly or indirectly, to us, are redeemable upon the occurrence of an ~~income tax benefit of $12.7 million~~ associated with the elimination of certain net deferred tax liabilities associated with undistributed earnings from Canada as a result of management's plans to reinvest these earnings outside the United States indefinitely.event that is not solely within our control.

We ~~conduct business globally~~own 66% of our subsidiary in Poland, 51% of our subsidiary in Greece and ~~file income tax returns~~50.1% of our subsidiary in Chile. Under the shareholder agreements, the minority shareholders have the option to compel us to purchase their shares at a price per share based on the fair value of the shares, or under certain circumstances for our subsidiary in Greece, at a price determined by calculations stipulated in the ~~U.S. federal jurisdiction~~shareholder agreement. The option held by the minority shareholder in Poland expires on January 1, 2024. The other options have no expiration date.

Because the exercise of each of these redemption options is not solely within our control, the redeemable noncontrolling interests are presented in the mezzanine section between total liabilities and ~~various state~~shareholders’ equity, as temporary equity, in our consolidated balance sheet as of September 30, 2023. The redeemable noncontrolling interest for each subsidiary is reflected at the higher of: (i) the initial carrying amount, increased or decreased for the noncontrolling interest's share of comprehensive income (loss), capital contributions and ~~foreign jurisdictions. In~~distributions or (ii) the ~~normal course~~redemption price. Estimates of ~~business, we~~redemption price are ~~subject~~based on projected operating performance of each subsidiary, including key assumptions - revenue growth rates, current and expected market conditions and weighted-average cost of capital. Each of the redeemable noncontrolling interests was presented at the respective carrying amount as of September 30, 2023, and no adjustments to ~~examination by taxing authorities around~~estimated redemption price were recognized during the ~~world, including, without limitation, the United States~~three and ~~the United Kingdom. We are no longer subject to state income tax examinations for years~~nine months 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.~~September 30, 2023.

Table of Contents

NOTE 8—10—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~~During the nine months ended September 30, ~~2017,~~2023, we ~~were authorized to repurchase up to $264.9 million~~repurchased and retired 4,064,918 shares of our common ~~stock.~~stock at a cost, including commissions and applicable excise taxes, of $413.7 million, or $101.79 per share. During the three and nine months ended September 30, ~~2017, respectively, through open market repurchase plans,~~2022, we repurchased and retired ~~311,593~~6,907,090 and ~~376,309~~15,946,279 shares of our common stock, respectively, at a cost, including commissions and applicable excise taxes, of ~~$29.0~~$889.7 million and ~~$34.8~~$2,139.7 million, or ~~an average cost of $93.09~~$128.82 and ~~$92.51~~$134.18 per share, ~~including commissions.~~

~~During the three and nine months ended~~respectively. As of September 30, ~~2016, respectively, through open market repurchase plans, we repurchased and retired 484,256 and 1,142,415 shares of~~2023, the remaining amount available under our common stock at a cost of $35.5 million and $80.3 million, or an average cost of $73.25 and $70.29 per share, including commissions. In addition to shares repurchased through open market repurchase plans, we repurchased 673,212 shares of our common stock at a cost of $50.0 million, or an average cost of $74.27 per share, including commissions, through an accelerated share repurchase program ~~during the nine months ended September 30, 2016.~~was $1,090.2 million.

On October 26, 2023, our board of directors declared a dividend of $0.25 per share payable on December 29, 2023 to common shareholders of record as of December 15, 2023.

NOTE 9—11—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:


	Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016			September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022

	(in thousands)									(in thousands)

Share-based compensation expense	$	9,617	$	8,688	$	30,771	$	26,060	Share-based compensation expense	$	36,624	$	37,052	$	173,325	$	122,465
Income tax benefit	$	3,523	$	2,968	$	10,788	$	8,679	Income tax benefit	$	7,488	$	10,318	$	39,378	$	26,816

The following table summarizes the changes in unvested ~~share-based~~restricted stock and performance awards for the nine months ended September 30, ~~2017:~~2023:


	Shares	Weighted-Average Grant-Date Fair Value

	(in thousands)

Unvested at December 31, 2022	2,145	$159.04
Replacement awards	202	98.44
Granted	1,311	112.83
Vested	(1,006)	158.95
Forfeited	(119)	130.88
Unvested at September 30, 2023	2,533	$131.27

The total fair value of ~~share-based~~restricted stock and performance awards vested during the nine months ended September 30, ~~2017~~2023 and September 30, ~~2016~~2022 was ~~$27.6~~$159.9 million and ~~$22.2~~$128.8 million, respectively.

For ~~these share-based~~restricted stock and performance awards, we recognized compensation ~~expense~~expense of $~~8.6~~33.7 million and ~~$8.0~~$34.5 million during the three months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, respectively, and ~~$27.7~~$153.6 million and ~~$24.3~~$113.2 million during the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, respectively. As of September 30, ~~2017,~~2023, there was ~~$53.2~~$190.6 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~~1.9 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 months ended September 30, ~~2017:~~2023:


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

	(in thousands)		(years)	(in millions)

Outstanding at December 31, 2022	1,139	$111.75	5.4	$17.3
Replacement awards	142	98.44
Granted	233	110.83
Forfeited	(297)	155.49
Exercised	(280)	89.98
Outstanding at September 30, 2023	937	$99.09	5.2	$24.3

Options vested and exercisable at September 30, 2023	654	$96.03	3.8	$19.7

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~~$1.7 million and ~~$0.5~~$1.2 million during the three months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, respectively, and ~~$2.0~~$15.5 million and ~~$1.2~~$4.8 million during the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016~~2022 was ~~$9.9~~$8.7 million and ~~$10.6~~$4.2 million, respectively. As of September 30,

~~2017,~~ 2023, we had ~~$4.0~~$7.1 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of ~~2.0 years.~~1.9 years.

The weighted-average grant-date fair value of ~~each~~ stock ~~option~~options granted, including replacement awards granted in connection with the EVO acquisition, during the nine months ended September 30, ~~2017~~2023 and 2022 was ~~$23.68.~~$46.17 and $48.88, respectively. Fair value was estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions:


	Nine Months Ended
	September 30, 2023	September 30, 2022

Risk-free interest rate	3.84%	1.87%
Expected volatility	45%	40%
Dividend yield	0.81%	0.56%
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—~~12—EARNINGS PER SHARE

Basic earnings per share is("EPS") was computed by dividing net income (loss) 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 (loss) attributable to Global Payments for all periods presented.

Diluted ~~earnings per share~~EPS is computed by dividing net income (loss) attributable to Global Payments by the weighted-average number of shares outstanding during the period, including the effect of share-based awards, convertible notes or other potential securities 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 nine months ended September 30, 2023 excluded approximately 0.2 million 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 months ended September 30, 2022 excluded approximately 467,770 shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share. Due to a net loss for the nine months ended September 30, 2022, no incremental shares were included in the computation of diluted earnings per share because the effect would be antidilutive. Approximately 1.9 million shares related to stock options and share-based awards were therefore excluded from the diluted share base for the nine months ended September 30, 2022.

The effect of the potential shares needed to settle the conversion spread on the convertible notes is included in diluted EPS if the effect is dilutive. The effect depends on the market share price of our common stock at the time of conversion and would be dilutive if the average market share price of our common stock for the period exceeds the conversion price. For the three and nine months ended September 30, 2023, the convertible notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive. Further, the effect of the related capped call transactions is not included in the computation of diluted EPS as it is always anti-dilutive.

The following table sets forth the computation of diluted weighted-average number of shares outstanding for the three and nine months ended September 30, ~~2017~~2023 and 2022:


	Three Months Ended		Nine Months Ended
	September 30, 2023	September 30, 2022	September 30, 2023	September 30, 2022

	(in thousands)

Basic weighted-average number of shares outstanding	260,232	275,030	260,890	278,411
Plus: Dilutive effect of stock options and other share-based awards	703	405	520	—
Diluted weighted-average number of shares outstanding	260,935	275,435	261,410	278,411

NOTE 13 - SUPPLEMENTAL BALANCE SHEET INFORMATION

Cash, cash equivalents and restricted cash

Cash and cash equivalents include cash on hand and all liquid investments with a maturity of three months or less when purchased. We regularly maintain cash balances with financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit or the equivalent outside the U.S. As of September 30, ~~2016:~~2023, approximately 75% of our total balance of cash and cash equivalents was held within a small group of financial institutions, primarily large money center banks. Although we currently believe that the financial institutions with whom we do business will be able to fulfill their commitments to us, there is no assurance that those institutions will be able to continue to do so. We have not experienced any losses associated with our balances in such accounts for the nine months ended September 30, 2023.

Restricted cash includes amounts that cannot be withdrawn or used for general operating activities under legal or regulatory restrictions. Restricted cash consists of amounts deposited by customers for prepaid card transactions and funds held as a liquidity reserve that are subject to local regulatory restrictions requiring appropriate segregation and restriction in their use. Restricted cash is included in prepaid expenses and other current assets in the consolidated balance sheets with a corresponding liability in accounts payable and accrued liabilities.

A reconciliation of the amounts of cash and cash equivalents and restricted cash in the consolidated balance sheets to the amount in the consolidated statements of cash flows is as follows:


	September 30, 2023		December 31, 2022

	(in thousands)
Cash and cash equivalents	$	1,941,777	$	1,997,566
Restricted cash included in prepaid expenses and other current assets	166,870		147,422
Cash included in assets held for sale	1,218		70,618
Cash, cash equivalents and restricted cash shown in the statements of cash flows	$	2,109,865	$	2,215,606

During the three and nine months ended September 30, 2023, we entered into agreements to acquire hardware, software and related services, of which $19.6 million and $67.6 million, respectively, was financed utilizing under four to five-year vendor financing arrangements. Certain of the agreements included the purchase of assets previously leased.

During the three months ended September 30, 2022, we entered into an agreement to acquire hardware, software and related services, of which $83.5 million was financed utilizing a two-year vendor financing arrangement. The agreement included the purchase of certain assets previously leased. The reduction in operating and finance lease liabilities arising from the termination of the related right-of-use assets was $44.2 million and $9.7 million, respectively.

In connection with the completion of the EVO acquisition during the nine months ended September 30, 2023, we acquired right-of-use assets for operating leases of approximately $40.0 million, primarily related to real estate leases, and assumed the associated lease liabilities. As of September 30, 2023, maturities of the acquired operating lease liabilities were as follows: $2.0 million in 2023, $8.8 million in 2024, $8.1 million in 2025, $7.5 million in 2026, $6.2 million in 2027, $3.2 million in 2028 and $0.8 million thereafter.

As a result of actions taken in the third quarter of 2022 to reduce our facility footprint in certain markets around the world, we recognized charges of $27.7 million, primarily related to certain lease right-of-use assets, leasehold improvements, furniture and fixtures and equipment, to reduce the carrying amount of each asset group to estimated fair value. The charges were presented within selling, general and administrative expenses in our consolidated statements of income for the three and nine months ended September 30, 2022.

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
Visa preferred shares

Through certain of our subsidiaries in Europe, we were a member and shareholder of Visa Europe Limited ("Visa Europe"). In June 2016, Visa Inc. ("Visa") acquired all of the membership interests in Visa Europe, and we received consideration in the form of cash and Series B and C convertible preferred shares of Visa. We assigned the preferred shares received 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 any current or 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 receive could be as low as zero.

The Series B and C convertible preferred shares become convertible in stages based on developments in the litigation and become fully convertible no later than 2028 (subject to a holdback to cover any then pending claims). In July 2022, in connection with the second mandatory release assessment, a portion of the Series B and C convertible preferred shares was converted by Visa representing approximately one quarter of the original potential conversion rate. We recognized a gain of $13.2 million reported in interest and other income in our consolidated statements of income for the three and nine months ended September 30, 2022 based on the fair value of the shares received and subsequently sold. The remaining Series B and C convertible preferred shares continue to be carried at an assigned value of zero based on the aforementioned factors.

Through the acquisition of EVO in 2023, we obtained Series A and C convertible preferred shares of Visa. The Series C preferred shares are carried at an assigned value of zero based on the aforementioned factors. The Series A convertible preferred shares are not restricted and are convertible into a fixed number of Visa Class A common shares. The Series A convertible preferred shares are presented at a fair value of $39.7 million in other current assets in our consolidated balance sheet as of September 30, 2023. The fair value of the Visa Series A convertible preferred shares is determined using a market approach based on the quoted market price of Visa Class A common stock into which the Series A preferred shares are convertible, and as a result is classified as Level 2 of the fair value hierarchy.

NOTE ~~11—~~14—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 months ended September 30, ~~2017~~2023 and ~~September 30, 2016:~~2022:


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

	(in thousands)

Balance at June 30, 2023	$	(347,290)	$	(28,102)	$	(3,009)	$	(378,401)
Other comprehensive income (loss)	(108,179)		15,664		(22)		(92,537)
Balance at September 30, 2023	$	(455,469)	$	(12,438)	$	(3,031)	$	(470,938)

Balance at June 30, 2022	$	(343,401)	$	(25,034)	$	(2,743)	$	(371,178)
Other comprehensive income (loss)	(234,903)		1,580		—		(233,323)
Balance at September 30, 2022	$	(578,304)	$	(23,454)	$	(2,743)	$	(604,501)

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)~~loss attributable to noncontrolling ~~interest,~~interests, which relates only to foreign currency translation, was ~~approximately $2.3~~$16.2 million and ~~$(0.8)~~$14.8 million for the three months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, 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, 2022	$	(380,584)	$	(22,420)	$	(2,965)	$	(405,969)
Other comprehensive income (loss)	(74,885)		9,982		(66)		(64,969)
Balance at September 30, 2023	$	(455,469)	$	(12,438)	$	(3,031)	$	(470,938)

Balance at December 31, 2021	$	(182,949)	$	(48,490)	$	(2,743)	$	(234,182)
Other comprehensive income (loss)	(395,355)		25,036		—		(370,319)
Balance at September 30, 2022	$	(578,304)	$	(23,454)	$	(2,743)	$	(604,501)

Other comprehensive ~~income~~loss attributable to noncontrolling ~~interest,~~interests, which relates only to foreign currency translation, was ~~approximately $15.1~~$8.0 million and ~~$3.8~~$33.7 million for the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, respectively.

NOTE ~~12—~~15—SEGMENT INFORMATION

We operate in two reportable segments: Merchant Solutions and Issuer Solutions. As described in "Note 3 - Business Dispositions," during the second quarter of 2023, we completed the sale of the consumer portion of our Netspend business, which comprised of our former Consumer Solutions segment. Our former Consumer Solutions segment is presented below for periods prior to disposition.

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~~Corporate. Impairment of goodwill and gains or losses on business dispositions are not included in ~~the following table.~~segment operating income. 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~~2022 and our summary of significant accounting policies in "Note 1—1—Basis of Presentation and Summary of Significant Accounting Policies."

Information on segments and reconciliations to consolidated revenues, ~~and~~ consolidated operating income ~~are~~(loss) and consolidated depreciation and amortization were as follows for the three and nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016:~~2022:


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022

	(in thousands)

Revenues(1):
Merchant Solutions	$	1,884,006	$	1,596,326	$	5,331,909	$	4,651,061
Issuer Solutions	607,848		566,039		1,769,196		1,663,008
Consumer Solutions	—		147,337		182,740		478,082
Intersegment eliminations	(16,163)		(24,331)		(63,238)		(69,620)
Consolidated revenues	$	2,475,691	$	2,285,371	$	7,220,607	$	6,722,531

Operating income (loss)(1):
Merchant Solutions	$	637,864	$	550,684	$	1,748,622	$	1,530,573
Issuer Solutions	113,877		97,548		292,388		244,190
Consumer Solutions	—		23,175		(3,908)		67,735
Corporate(2)	(193,545)		(236,042)		(680,337)		(575,758)
Impairment of goodwill	—		—		—		(833,075)
Net loss on business dispositions	—		(48,933)		(139,095)		(201,144)
Consolidated operating income	$	558,196	$	386,432	$	1,217,670	$	232,521

Depreciation and amortization(1):
Merchant Solutions	$	291,260	$	243,300	$	827,891	$	742,153
Issuer Solutions	161,786		156,936		484,560		467,287
Consumer Solutions	—		—		—		35,776
Corporate	5,578		5,266		15,600		16,545
Consolidated depreciation and amortization	$	458,624	$	405,502	$	1,328,051	$	1,261,761

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 acquisition dates and the effects of ~~acquisition. For~~divested businesses through the respective disposal dates. See “Note 2—Acquisition” and “Note 3—Business Dispositions” for further ~~discussion, see "Note 2~~—~~Acquisitions."~~discussion.

⁽²⁾ Operating loss for Corporate included acquisition and integration expenses of $74.4 million and $75.3 million for the three months ended September 30, 2023 and 2022, respectively. Operating loss for Corporate included acquisition and integration expenses of $222.4 million and $184.8 million for the nine months ended September 30, 2023 and 2022, respectively. During the three and nine months ended September 30, ~~2017, respectively,~~2022, operating loss for Corporate also included ~~acquisition and integration expenses of $21.5~~$31.7 million and ~~$69.5 million. During~~$40.0 million, respectively, of other charges related to facilities exit activities, while facilities exit actions resulted in charges during the three and nine months ended September 30, ~~2016, respectively, operating loss for Corporate included acquisition and integration expenses~~2023 of ~~$34.0~~$3.7 million and ~~$93.0 million.~~$15.0 million, respectively.

NOTE ~~13—~~16—COMMITMENTS AND CONTINGENCIES

~~Leases~~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 in Jeffersonville, Indiana, which we acquired as part~~financial position, liquidity, results of ~~the Heartland merger, and simultaneously leased the property back for an initial term~~operations or cash flows.

Table of 20 years, followed by four optional renewal terms of 5 years. The arrangement met the criteria to be treated as a sale for accounting purposes, and as a result, we derecognized the associated property. There was no resulting gain or loss on the sale because the proceeds received were equal to the carrying amount of the property. We are ~~accounting for the lease as an operating lease.~~Contents

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.~~2022. 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.

We have grown organically, as well as through acquisitions, and continue to invest in new technology solutions and innovation, infrastructure to support our growing business and the ongoing consolidation and enhancement of our operating platforms. These investments include new product development and innovation to further enhance and differentiate our suite of technology and cloud-based solutions available to customers, ~~in 30 countries throughout North America, Europe, the Asia-Pacific region~~along with migration of certain underlying technology platforms to cloud environments to enhance performance, improve speed to market and ~~Brazil~~drive cost efficiencies. We also continue to execute on integration and ~~operate in three reportable segments: North America, Europe~~other activities, such as combining business operations, streamlining technology infrastructure, eliminating duplicative corporate and ~~Asia-Pacific.~~operational support structures and realizing scale efficiencies.

We ~~merged with Heartland~~have furthered our business strategy through several recent key transactions, including the following:

•On March 24, 2023, we acquired all of the outstanding common stock of EVO Payments, ~~Systems,~~ Inc. ("~~Heartland"~~EVO") ~~in a cash-and-stock transaction on April 22, 2016~~ for total purchase consideration of ~~$3.9~~$4.3 billion. ~~See "Note 2—Acquisitions"~~EVO is a leading payment technology and services provider, offering an array of payment solutions to merchants ranging from small and middle market enterprises to multinational companies and organizations across the Americas and Europe. The cash portion of the purchase consideration was funded through cash on hand and borrowings from our revolving credit facility.

•On April 26, 2023, we completed the sale of the consumer portion of our Netspend business for approximately $1 billion, subject to certain closing adjustments. In connection with the sale, we provided $675 million of seller financing and a five-year $50 million secured revolving facility available from the date of closing of the sale. We recognized a loss on business dispositions in our consolidated statement of income of $243.2 million during the nine months ended September 30, 2023 related to this sale.

•On April 1, 2023, we completed the sale of our gaming business for approximately $400.0 million, subject to certain closing adjustments. In connection with the sale, we provided $32 million of seller financing. We recognized a gain of $104.1 million during the nine months ended September 30, 2023 in connection with the sale.

•Our capital allocation priorities were supported by the issuance of Euro-denominated senior notes and the launch of a commercial paper program during the first quarter of 2023.

◦On March 17, 2023, we issued €800 million aggregate principal amount of 4.875% senior unsecured notes due March 2031 and received net proceeds of €790.6 million, or $843.6 million based on the exchange rate on the issuance date. The net proceeds from the offering were used for general corporate purposes.

◦In January 2023, we established a $2.0 billion commercial paper program under which we may issue senior unsecured commercial paper notes with maturities of up to 397 days from the date of issue. The program is backstopped by our revolving credit agreement, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion on the revolving credit facility. The proceeds from issuances of commercial paper notes will be used for acquisitions, to pay dividends, for debt refinancing or for other general corporate purposes.

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Highlights related to our financial condition at September 30, 2023 and results of operations for the three and nine months then ended include the following:

•Consolidated revenues for the three and nine months ended September 30, 2023 increased to $2,475.7 million and $7,220.6 million, respectively, compared to $2,285.4 million and $6,722.5 million, respectively, for the prior year. The increase in consolidated revenues was primarily due to an increase in transaction volumes, including from the recently acquired EVO business, partially offset by the effects on revenue of the divested businesses.

•Merchant Solutions and Issuer Solutions segment operating income for the three and nine months ended September 30, 2023 increased compared to the prior year primarily due to the favorable effects of the increase in revenues, since certain fixed costs do not vary with revenues, and continued prudent expense management.

•Consolidated operating income for the three and nine months ended September 30, 2023 included the favorable effects of the increase in revenues as compared to the prior year and prudent expense management, partially offset by an increase in acquisition and integration expenses and amortization of acquired intangibles, primarily related to the acquisition of EVO. Consolidated operating income for the nine months ended September 30, 2023 also included the effects of the loss on the sale of the consumer business, which was partially offset by the gain on the sale of the gaming business as described above.

Risks Related to Macroeconomic Conditions

We are exposed to general economic conditions, including currency fluctuations, inflation, rising interest rates and health and social events or other conditions that affect the overall level of consumer, business and government spending, which could negatively affect our financial performance.

Certain of our operations are conducted in foreign currencies. Consequently, a portion of our revenues and expenses has been and may continue to be affected by fluctuations in foreign currency exchange rates. A continued strengthening of the U.S. dollar or other significant fluctuations in foreign currency exchange rates could result in an adverse effect on our future financial results; however, we are unable to predict the extent of the potential effect on our financial results.

We have reduced our interest rate risk through issuance of fixed rate debt in place of variable rate debt, including the effect of interest rate swap hedging arrangements to convert a significant portion of the eligible variable rate borrowings under our revolving credit facility to a fixed rate. However, inflationary pressure or interest rate fluctuations could adversely affect our business and financial performance as a result of higher costs and/or lower consumer spending. In addition, continued inflation or a rise in interest rates could result in an adverse effect on our future financial results and the recoverability of assets. However, as the future magnitude, duration and effects of these conditions are difficult to predict at this time, we are unable to predict the extent of the potential effect on our financial results.

In addition, failures of several financial institutions in the first quarter of 2023, including Silicon Valley Bank and Credit Suisse, have created uncertainty in the global financial markets and a greater focus on the potential failure of other banks in the future. Although we do not have exposure to and did not experience losses as a result of these failures, we regularly maintain cash balances with financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit or the equivalent outside the U.S. A disruption in financial markets could impair our banking partners, which could affect our ability to access our cash or cash equivalents, our ability to provide settlement services or our customers' ability to access their existing cash to fulfill their payment obligations to us. The occurrence of these events could negatively affect our business, financial condition and results of operations.

For a further discussion of trends, uncertainties and other factors that could affect our future operating results, see the section entitled “Risk Factors” in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent filings we make with the SEC.

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Results of Operations

We operate in two reportable segments: Merchant Solutions and Issuer Solutions. As described in “Note 3 – Business Dispositions” in the notes to the accompanying unaudited consolidated financial statements, ~~for further discussion~~during the second quarter of ~~our merger with Heartland.~~

~~On September 1, 2017,~~2023, 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 fromcompleted 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 increasingconsumer portion of our ~~future capital investment will be~~

~~allocated~~Netspend business, which comprised our former Consumer Solutions segment. Our former Consumer Solutions segment is presented below for periods prior to ~~support~~disposition. For further information about our reportable segments, see “Item 1. Business—Business Segments” within our Annual Report on Form 10-K for the ~~development of new~~year ended December 31, 2022, incorporated herein by reference, 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“Note 15—Segment Information” in the ~~growth of our business and our revenue in~~notes to the ~~future.~~accompanying unaudited consolidated financial statements.

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 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, 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 30, ~~2016 are~~2023 and 2022 is derived from ~~our~~the accompanying unaudited consolidated financial statements ~~for that period.~~included in Part I, Item 1 — Financial Statements.


	Three Months Ended September 30, 2023			% of Revenues(1)		Three Months Ended September 30, 2022			% of Revenues(1)		$ Change			% Change

	(dollar amounts in thousands)

Revenues(2):
Merchant Solutions	$	1,884,006		76.1	%	$	1,596,326		69.8	%	$	287,680		18.0	%
Issuer Solutions	607,848			24.6	%	566,039			24.8	%	41,809			7.4	%
Consumer Solutions	—			—	%	147,337			6.4	%	(147,337)			NM
Intersegment eliminations	(16,163)			(0.7)	%	(24,331)			(1.1)	%	8,168			(33.6)	%
Consolidated revenues	$	2,475,691		100.0	%	$	2,285,371		100.0	%	$	190,320		8.3	%

Consolidated operating expenses(2):
Cost of service	$	915,531		37.0	%	$	931,249		40.7	%	$	(15,718)		(1.7)	%
Selling, general and administrative	1,001,964			40.5	%	918,757			40.2	%	83,207			9.1	%
Loss on business dispositions	—			—	%	48,933			2.1	%	(48,933)			NM
Operating expenses	$	1,917,495		77.5	%	$	1,898,939		83.1	%	$	18,556		1.0	%

Operating income (loss)(2):
Merchant Solutions	$	637,864		25.8	%	$	550,684		24.1	%	$	87,180		15.8	%
Issuer Solutions	113,877			4.6	%	97,548			4.3	%	16,329			16.7	%
Consumer Solutions	—			—	%	23,175			1.0	%	(23,175)			NM
Corporate(3)	(193,545)			(7.8)	%	(236,042)			(10.3)	%	42,497			(18.0)	%
Loss on business dispositions	—			—	%	(48,933)			(2.1)	%	48,933			NM
Operating income	$	558,196		22.5	%	$	386,432		16.9	%	$	171,764		44.4	%

Operating margin(2):
Merchant Solutions	33.9		%			34.5		%			(0.6)		%
Issuer Solutions	18.7		%			17.2		%			1.5		%
Consumer Solutions	NM					15.7		%			NM

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 %

^{NM = Not meaningful}

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

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⁽²⁾ O~~perating~~ Revenues, consolidated operating expenses, operating income and operating margin reflect the effects of acquired businesses from the respective acquisition dates and the effects of divested businesses through the respective disposal dates. See “Note 2—Acquisition” and “Note 3—Business Dispositions” for further discussion.

(3) Operating loss for Corporate included acquisition and integration expenses of ~~$21.5~~$74.4 million and ~~$34.0~~$75.3 million ~~during~~for the three months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively. ~~These expenses are~~During the three months ended September 30, 2023 and 2022, operating loss for Corporate also included ~~primarily in selling, general~~$3.7 million and ~~administrative expenses in the unaudited consolidated statements~~$31.7 million, respectively, of ~~income.~~other charges related to facilities exit activities.

The following table sets forth key selected financial data for the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, 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 months ended September 30, ~~2016 are~~2023 and 2022 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, 2023			% of Revenues(1)		Nine Months Ended September 30, 2022			% of Revenues(1)		$ Change			% Change

	(dollar amounts in thousands)

Revenues(2):
Merchant Solutions	$	5,331,909		73.8	%	$	4,651,061		69.2	%	$	680,848		14.6	%
Issuer Solutions	1,769,196			24.5	%	1,663,008			24.7	%	106,188			6.4	%
Consumer Solutions	182,740			2.5	%	478,082			7.1	%	(295,342)			(61.8)	%
Intersegment eliminations	(63,238)			(0.9)	%	(69,620)			(1.0)	%	6,382			(9.2)	%
Consolidated revenues	$	7,220,607		100.0	%	$	6,722,531		100.0	%	$	498,076		7.4	%

Consolidated operating expenses(2):
Cost of service	$	2,805,237		38.9	%	$	2,850,706		42.4	%	$	(45,469)		(1.6)	%
Selling, general and administrative	3,058,605			42.4	%	2,605,085			38.8	%	453,520			17.4	%
Impairment of goodwill	—			—	%	833,075			12.4	%	(833,075)			NM
Net loss on business dispositions	139,095			1.9	%	201,144			3.0	%	(62,049)			(30.8)	%
Operating expenses	$	6,002,937		83.1	%	$	6,490,010		96.5	%	$	(487,073)		(7.5)	%

Operating income (loss)(2):
Merchant Solutions	$	1,748,622		24.2	%	$	1,530,573		22.8	%	$	218,049		14.2	%
Issuer Solutions	292,388			4.0	%	244,190			3.6	%	48,198			19.7	%
Consumer Solutions	(3,908)			(0.1)	%	67,735			1.0	%	(71,643)			NM
Corporate(3)	(680,337)			(9.4)	%	(575,758)			(8.6)	%	(104,579)			18.2	%
Impairment of goodwill	—			—	%	(833,075)			(12.4)	%	833,075			NM
Net loss on business dispositions	(139,095)			(1.9)	%	(201,144)			(3.0)	%	62,049			(30.8)	%
Operating income	$	1,217,670		16.9	%	$	232,521		3.5	%	$	985,149		423.7	%

Operating margin(2):
Merchant Solutions	32.8		%			32.9		%			(0.1)		%
Issuer Solutions	16.5		%			14.7		%			1.8		%
Consumer Solutions	(2.1)		%			14.2		%			(16.3)		%

NM = Not meaningful

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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 %

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

⁽²⁾Revenues, consolidated operating expenses, operating income and operating margin reflect the ~~effect~~effects of acquired businesses from the respective acquisition dates and the effects of ~~acquisition. For~~divested businesses through the respective disposal dates. See “Note 2—Acquisition” and “Note 3—Business Dispositions” for further ~~discussion, see "Note 2~~—~~Acquisitions" in the notes to the accompanying unaudited consolidated financial statements.~~discussion.

⁽³⁾ O~~perating~~ Operating loss for Corporate included acquisition and integration expenses of ~~$69.5~~$222.4 million and ~~$93.0~~$184.8 million during the nine months ended September 30, 2017 and 2016, respectively. These expenses are included primarily in selling, general and administrative expenses in the unaudited consolidated statements of income.

~~Revenues~~

For the three months ended September 30, 2017, revenues increased by $87.0 million, or 9.1%, compared to the prior year, to $1,038.9 million, reflecting organic growth in each of 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%, compared to the prior year, to $2,920.9 million, due primarily to our merger with Heartland, despite the unfavorable effect of currency fluctuations of $13.1 million.

~~North America Segment~~. For the three and nine months ended September 30, 2017, revenues from our North America segment increased by $45.9 million and $392.0 million, or 6.4% and 22.1%, respectively, compared to the prior year, to $764.9 million and $2,162.9 million, respectively. The increase for the three months ended September 30, 2017 was primarily due to organic growth and the increase for the nine months ended September 30, ~~2017 was primarily due to our merger with Heartland.~~

~~Europe Segment.~~ ~~For the three~~2023 and nine months ended September 30, 2017, revenues from our Europe segment increased by $32.0 million and $77.6 million, or 18.4% and 16.2%, respectively, compared to the prior year, to $205.2 million and $557.3 million, respectively, primarily due to organic growth.2022, respectively. During the three and nine months ended September 30, 2017, revenues from our Europe segment included 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 the three and nine months ended September 30, 2017, revenues from our Asia-Pacific segment increased by $9.1 million and $30.5 million, or 15.3% and 17.9%, respectively, compared to the prior year, to $68.8 million and $200.7 million, respectively, primarily due to organic growth.

~~Operating Expenses~~

~~Cost of Service.~~ For the three and nine months ended September 30, 2017, cost of service increased by $23.9 million and $293.9 million, or 5.1% and 26.1%, respectively, compared to the prior year, to $493.9 million and $1,419.0 million, respectively. The increase in cost of service was driven primarily by an increase in the variable costs associated with our revenue growth, including during the nine months ended September 30, ~~2017, the incremental expenses associated with the merger with~~2023 and ~~integration of Heartland as well as additional intangible asset amortization of $75.8 million from recently acquired businesses. As a percentage of revenues, cost of service decreased to 47.5%~~2022, operating loss for the three months ended September 30, 2017 from 49.4% for the prior year. As a percentage of revenues, cost of service increased to 48.6% for the nine months ended September 30, 2017 from 46.5% for the prior year. The decrease in cost of service as a percentage of revenue for the three months ended September 30, 2017 was due to a decrease in Heartland customer-related intangible asset amortization, which is calculated using an accelerated method.

~~Selling, General and Administrative Expenses.~~ ~~For the three and nine months ended September 30, 2017, selling, general and administrative expenses increased by $11.0~~Corporate also included $15.0 million and ~~$73.0~~$40.0 million, ~~or 3.1% and 7.2%,~~ respectively, ~~compared~~of other charges related to ~~the prior year, to $372.6 million and $1,092.6 million, respectively. As a percentage of~~facilities exit activities.

Revenues

Consolidated revenues ~~selling, general and administrative expenses decreased to 35.9% and 37.4%~~ for the three and nine months ended September 30, ~~2017 from 38.0%~~2023 increased by 8.3% and ~~42.1%~~7.4%, respectively, to $2,475.7 million and $7,220.6 million, respectively, compared to $2,285.4 million and $6,722.5 million, respectively, for the prior year. The increase in revenues was primarily due to an increase in transaction volumes, including from the recently acquired EVO business.

~~During~~Merchant Solutions Segment. Revenues from our Merchant Solutions segment for the three and nine months ended September 30, ~~2017,~~2023 increased by 18.0% and 14.6%, respectively, to $1,884.0 million and $5,331.9 million, respectively, compared to $1,596.3 million and $4,651.1 million, respectively, for the prior year. The increase in ~~selling, general and administrative expenses~~revenues was primarily due to ~~additional~~an increase in transaction volumes, including from the recently acquired EVO business, and growth in subscription and software revenue.

Issuer Solutions Segment. Revenues from our Issuer Solutions segment for the three and nine months ended September 30, 2023 increased by 7.4% and 6.4%, respectively, to $607.8 million and $1,769.2 million, respectively, compared to $566.0 million and $1,663.0 million, respectively, for the prior year. The increase in revenues was primarily due to an increase in transaction volumes.

Operating Expenses

Cost of Service. Cost of service for the three and nine months ended September 30, 2023 was $915.5 million and $2,805.2 million, respectively, compared to $931.2 million and $2,850.7 million, respectively, for the prior year. Cost of service as a percentage of revenues was 37.0% and 38.9%, respectively, for the three and nine months ended September 30, 2023 compared to 40.7% and 42.4%, respectively, for the prior year. Compared to the prior year, cost of service for the three and nine months ended September 30, 2023 decreased primarily due to prudent expense management and inclusion of costs related to ~~support~~ the ~~growth~~divested businesses for only a portion of ~~our~~the current year. These favorable effects were partially offset by the inclusion of costs for the recently acquired EVO business, including ~~during~~the related amortization of acquired intangibles. Cost of service included amortization of acquired intangibles of $340.4 million and $306.0 million for the three months ended September 30, 2023 and 2022, respectively, and $986.0 million and $962.4 million for the nine months ended September 30, ~~2017 incremental acquisition~~2023 and ~~integration expenses. The decrease in selling,~~2022, respectively.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three and nine months ended September 30, 2023 increased by 9.1% and 17.4%, respectively, to $1,002.0 million and $3,058.6 million, respectively, compared to $918.8 million and $2,605.1 million, respectively, for the prior year. Selling, general and administrative expenses as a percentage of revenues was ~~due~~40.5% and 42.4% for the three and nine months ended September 30, 2023, respectively, compared to ~~synergies achieved~~40.2% and 38.8%, respectively, for the prior year. The increase in selling, general and administrative expenses ~~from~~for the ~~merger with Heartland,~~three and nine months ended September 30, 2023 compared to the prior year was primarily due to increases in variable selling and other costs related to the increase in revenues, as well as the ~~decrease in~~effects of higher acquisition and integration expenses, related primarily to the acquisition of EVO, and higher compensation and benefits costs, including an increase for the nine month period in share-based compensation expense for retirement eligible executives and our previous CEO, whose departure was announced on May 1, 2023. This increase was partially offset by lower facilities exit charges in the current year and prudent expense management.

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Selling, general and administrative expenses included acquisition and integration expenses of $75.1 million and $73.3 million for the three months ended September 30, 2023 and 2022, respectively, and $244.0 million and $186.2 million for the nine months ended September 30, 2023 and 2022, respectively. Share-based compensation expense was $36.6 million and $37.1 million for the three months ended September 30, 2023 and 2022, respectively, and $173.3 million and $122.5 million for the nine months ended September 30, 2023 and 2022, respectively. In addition, actions taken to exit certain leased facilities resulted in charges of $31.7 million and $40.0 million during the three and nine months ended September 30, ~~2017.~~2022, respectively, primarily to reduce the carrying amount of the affected asset groups to estimated fair value, while facilities exit actions resulted in charges during the three and nine months ended September 30, 2023 of $3.7 million and $15.0 million, respectively.

Corporate. Corporate expenses for the three and nine months ended September 30, 2023 were $193.5 million and $680.3 million, respectively, compared to $236.0 million and $575.8 million, respectively, for the prior year. The decrease for the three months ended September 30, 2023 compared to the prior year was primarily due to lower charges related to facilities exit activities in the current year as described above and prudent expense management. The increase for the nine months ended September 30, 2023 compared to the prior year was primarily due to the increase in acquisition and integration and compensation expenses as described above, partially offset by lower charges related to facilities exit activities in the current year. Corporate expenses included acquisition and integration expenses of $74.4 million and $222.4 million for the three and nine months ended September 30, 2023, respectively, compared to $75.3 million and $184.8 million for the three and nine months ended September 30, 2022, respectively.

Operating Income and Operating Margin

~~North America Segment~~.Consolidated operating income for the three and nine months ended September 30, 2023 was $558.2 million and $1,217.7 million, respectively, compared to $386.4 million and $232.5 million, respectively, for the prior year. Operating margin for the three and nine months ended September 30, 2023 was 22.5% and 16.9%, respectively, compared to 16.9% and 3.5% for the three and nine months ended September 30, 2022, respectively. The increase in consolidated operating income and operating margin for the three and nine months ended September 30, 2023 compared to the prior year included the favorable effects of the increase in revenues, since certain fixed costs do not vary with revenues, and prudent expense management. These effects were partially offset by higher acquisition and integration expenses, amortization of acquired intangibles and compensation expenses as described above. In addition, the increase in consolidated operating income and operating margin for the three months ended September 30, 2023 included the favorable effect of lower corporate expenses as described above. Consolidated operating income for the nine months ended September 30, 2023 also included the effects of the $104.1 million gain on sale of the gaming business and the net loss of $243.2 million on the consumer business disposition to reduce the carrying amount of the consumer disposal group to estimated fair value less costs to sell, including the effects of incremental negotiated closing adjustments, changes in the estimated fair value of the seller financing and the effects of the final tax structure of the transaction.

Consolidated operating income and operating margin for the nine months ended September 30, 2022 included the effects of the $127.2 million loss on the sale of our Merchant Solutions business in Russia and the $833.1 million goodwill impairment charge related to our former Business and Consumer Solutions reporting unit. We also recognized charges within loss on the business dispositions in our consolidated statements of income of $48.9 million and $73.9 million during the three and nine months ended September 30, 2022, respectively, to reduce the disposal group to estimated fair value less costs to sell. Operating income for the three and nine months ended September 30, 2022 also included the unfavorable effect of a charge in the third quarter of 2022 related to facilities exit activities as described above.

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Segment Operating Income and Operating Margin

In our Merchant Solutions segment, operating income for the three and nine months ended September 30, 2023 increased compared to the prior year primarily due to the favorable effects of the increase in revenues, since certain fixed costs do not vary with revenues, and continued prudent expense management. These favorable effects were partially offset by incremental expenses related to continued investment in new products, innovation and our technology environments. In addition, the inclusion of recently acquired EVO had an unfavorable effect on the Merchant Solutions operating margin for the three and nine months ended September 30, 2023 as compared to the prior year.

In our Issuer Solutions segment, operating income and operating margin for the three and nine months ended September 30, 2023 increased compared to the prior year primarily due to the favorable effect of the increase in revenues, since certain fixed costs do not vary with revenues, and continued prudent expense management.

Other Income/Expense, Net

Interest and other income for the three and nine months ended September 30, 2023 increased to $35.7 million and $74.8 million, respectively, compared to $20.4 million and $25.1 million, respectively, for the prior year, primarily due to the interest income associated with the new seller financing notes receivable. We recognized interest income of $21.4 million and $37.1 million during the three and nine months ended September 30, 2023, respectively. Other income for the three and nine months ended September 30, 2022 included a gain of $13.2 million recognized in connection with the release and conversion of a portion of our Visa convertible preferred shares. See "Note 13—Supplemental Balance Sheet Information" in the notes to the accompanying consolidated financial statements for further discussion of this transaction.

Interest and other expense for the three and nine months ended September 30, 2023 increased to $176.1 million and $490.5 million, respectively, compared to $135.2 million and $327.7 million, respectively, for the prior year as a result of the increase in our ~~North America segment increased~~average outstanding borrowings and higher average interest rates on outstanding borrowings. In addition, during the nine months ended September 30, 2023, we incurred a noncash charge of $18.2 million for the estimated future credit losses on the new seller financing notes receivable. Interest expense for the three and nine months ended September 30, 2022 included fees and charges incurred in connection with financing activities that occurred during the third quarter of 2022, including $17.3 million related to commitment fees associated with bridge financing.

Income Tax Expense

For the three months ended September 30, 2023, our effective income tax rate was 14.1%. The effective rate included the favorable effects from foreign-derived intangible income deductions, tax credits and foreign interest income not subject to tax. For the nine months ended September 30, 2023, our effective income tax rate was 24.9%. The effective tax rate reflects recognition of a gain on the dispositions of our consumer and gaming businesses for income tax reporting purposes, while a net loss on the dispositions was recognized for financial reporting purposes. This was partially offset by ~~24.7%~~the favorable effect on the rate of foreign interest income not subject to tax, tax credits and ~~33.2%~~the foreign-derived intangible income deduction.

For the three months ended September 30, 2022, our effective income tax rate was 5.2%. The low effective rate was primarily due to ~~$138.3~~the favorable effects of foreign interest income not subject to tax, adjustments to unrecognized income tax benefits related to certain U.S. federal income tax positions and remeasurement of state deferred taxes to reflect enacted tax law changes. For the nine months ended September 30, 2022, we incurred income tax expense in spite of reporting a loss before income taxes primarily due to the unfavorable effects of the goodwill impairment charge and the loss on the sale of our Merchant Solutions business in Russia, for which no tax benefit was recognized.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act into law, which, among other things, implemented a 15% corporate alternative minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases effective beginning January 1, 2023. We do not expect the corporate alternative minimum tax will have a material effect on our reported results, cash flows or financial position. During the nine months ended September 30, 2023, we reflected excise taxes of $4.0 million within equity as part of the cost of common stock repurchased, net of share issuances, during the period.

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Net Income (Loss) Attributable to Global Payments

Net income attributable to Global Payments was $361.8 million and ~~$344.6~~$624.9 million, respectively, for the three and nine months ended September 30, ~~2017~~2023 compared to net income (loss) of $290.5 million and $(137.8) million, respectively, for the prior ~~year. Operating margin increased by 2.7 and 1.3 percentage points~~year, reflecting the changes in operating income noted above along with changes in equity in income of equity method investments. Equity in income of equity method investments for the three and nine months ended September 30, ~~2017, respectively. The increase in operating income~~2022 included a $17.9 million gain on the sale of an equity method investment.

Diluted Earnings (Loss) per Share

Diluted earnings per share was ~~primarily due to revenue growth in our U.S. business, which during the nine months ended September 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 was primarily due to the decrease in intangible asset amortization expense from the merger with Heartland as a percentage of revenue.

~~Europe Segment. Operating income in our Europe segment increased by 19.6%~~$1.39 and ~~14.0% to $76.2 million and $196.4 million,~~$2.39, respectively, for the three and nine months ended September 30, ~~2017~~2023 compared to diluted earnings (loss) per share of $1.05 and $(0.49), respectively, for the prior ~~year, despite the effect of unfavorable currency fluctuations of $11.3 million for the nine months ended September 30, 2017.~~ ~~The increase in operating income~~year. Diluted earnings per share for the three and nine months ended September 30, ~~2017~~ ~~was primarily due to revenue growth.~~2023 reflects the changes in net income.

~~Asia-Pacific Segment~~. Operating income in our Asia-Pacific segment increased by 36.7% and 42.4% to $20.0 million and $57.3 million, respectively, for the three and nine months ended September 30, 2017 compared to the prior year. Operating margin increased by 4.5 and 4.9 percentage points, respectively, for the three and nine months ended September 30, 2017. The increase in 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 months ended September 30, 2017 compared to the prior year, primarily due to a decrease in acquisition and integration expenses.

~~Other Income/Expense, Net~~

Interest and other income decreased $39.5 million for the nine months ended September 30, 2017 compared to the prior year, which included a gain of $41.2 million in connection with our sale of all of the membership interests in Visa Europe. See "Note 5—Other Assets" in the notes to the accompanying unaudited consolidated financial statements for further discussion of this transaction.

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.

~~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 30, 2017 included the effect of excess tax benefits associated with share-based awards that vested during the periods. The effective income tax rate for the nine months ended September 30, 2016 included the effect of eliminating certain net deferred tax liabilities associated with undistributed earnings from Canada, as a result of management's plans to reinvest these earnings outside the United States indefinitely.

Liquidity and Capital Resources

We have numerous sources of capital, including cash on hand and cash flows generated from operations as well as various sources of financing. In the ordinary course of our business, a significant portion of our liquidity comes from operating cash ~~flows. Cash flow from operations is used~~flows and borrowings, including the capacity under our revolving credit facility.

Our capital allocation priorities are 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~~Our significant contractual cash ~~balances~~requirements also include ongoing payments for lease liabilities and contractual obligations related to service arrangements with suppliers for fixed or minimum amounts, which primarily relate to software, technology infrastructure and related services. Commitments under our borrowing arrangements are ~~invested~~further described in ~~high-quality, marketable short-term instruments.~~"Note 6—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." For additional information regarding our other cash commitments and contractual obligations, see "Note 7—Leases" and “Note 18—Commitments and Contingencies” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Our capital plan objectives are to support our operational needs and strategic plan for long-term growth while ~~maintaining a low~~optimizing our cost of ~~capital. We~~capital and financial position. To supplement cash from operating activities, we use ~~our~~a combination of bank financing, such as borrowings under our ~~Revolving Credit Facility~~credit facilities, commercial paper program and ~~our term loans,~~senior note issuances, for general corporate purposes and to fund acquisitions. ~~In addition,~~Our commercial paper program, established during the first quarter of 2023, provides a cost effective means of satisfying our short-term liquidity needs and is backstopped by our revolving credit agreement, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of our revolving credit facility. Finally, 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 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. Accumulated cash balances are invested in high-quality, marketable short-term instruments. We believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity requirements associated with our operations for the near and long term.

At September 30, ~~2017,~~2023, we had cash and cash equivalents totaling ~~$1,186.1~~$1,941.8 million. Of this amount, we ~~consider $560.7~~considered $692.7 million to be available for general purposes, of which $61.6 million is undistributed foreign earnings considered to be indefinitely reinvested outside the United States. The available cash of $692.7 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;~~restricted in their use; 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

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standing with our member ~~sponsors and is in accordance with the guidelines set by the card networks.~~sponsors. Funds held for customers, ~~and the corresponding liability that we record~~which are not restricted in ~~customer deposits~~their use, include amounts collected ~~prior~~before the corresponding obligation is due to ~~remittance on~~be settled to or at the direction of our ~~customers' behalf.~~customers.

~~Our available~~We also had restricted cash ~~balance at~~of $166.9 million as of September 30, ~~2017 included $500.1 million of cash~~2023, representing amounts deposited by customers for prepaid card transactions and funds held ~~by foreign subsidiaries whose earnings~~as a liquidity reserve. These balances are ~~considered indefinitely reinvested outside the United States. These cash balances reflect our capital investments~~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~~$1,591.3 million and ~~$367.4~~$1,534.5 million for the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016, respectively.~~2022, respectively, which reflect net income adjusted for noncash items, including depreciation, amortization and the provision for credit losses, charges associated with the net loss on business dispositions and facility exit charges, and changes in operating assets and liabilities. The ~~decrease~~increase in cash flows from operating activities ~~of $7.3 million~~from the prior year was ~~primarily~~ due to ~~the improvement~~fluctuations in ~~our earnings before non-cash expenses, such as amortization~~operating results and related assets and liabilities that are affected primarily by timing of ~~acquired intangibles, offset by a decrease in the change in net settlement processing assets of $232.6 million~~month-end and ~~other working capital accounts. Fluctuations~~transaction volume, including changes in settlement processing assets and obligations ~~are largely due to timing of month-end~~ and ~~settlement transaction volume.~~accounts payable and other liability balances.

~~Net~~We used net cash ~~used~~ in investing activities ~~was $710.2~~of $4,119.7 million and ~~$1,892.0~~$486.9 million during the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, respectively. Cash used for investing activities primarily represents cash used to fund acquisitions, net of cash and restricted cash acquired, and capital expenditures. During the nine months ended September 30, ~~2017,~~2023 and 2022, we ~~paid $600~~used cash of $4,099.8 million ~~of cash as a portion of the consideration~~and $25.0 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~~$500.8 million and ~~$102.4~~$463.4 million during the nine months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, respectively. ~~During~~These investments include software and hardware to support the development of new technologies, infrastructure to support our growing business and the consolidation and enhancement of our operating platforms. These investments also include new product development and innovation to further enhance and differentiate our suite of technology and cloud-based solutions available to customers. We expect to continue to make significant capital investments in the business, and we anticipate capital expenditures to approximate $630 million during the year ending December 31, ~~2017, we expect capital expenditures~~2023. Additionally, investing cash flows for ~~property 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~~2023 includes the net effect on cash from the sale of our ~~operating~~consumer and gaming businesses and the issuance and subsequent repayment of a $50 million secured revolving credit facility ~~in Jeffersonville, Indiana and received~~available from the date of the sale to the purchasers of the consumer business. Investing cash ~~of $37.5 million. During~~flows for the nine months ended September 30, ~~2016, we received~~2022 includes the net effect on cash ~~of $37.8 million~~ from the sale of our ~~membership interests~~Merchant Solutions business in Russia and cash received from the sale of investments in Visa ~~Europe.~~

~~Net cash provided by financing activities was $333.1~~common shares of $13.2 million and ~~$1,954.8~~equity method investments of $17.9 million.

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 6—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, cash distributions made to our shareholders and cash contributions from and distributions to noncontrolling interests. Financing activities provided net cash of $2,458.4 million during the nine months ended September 30, ~~2017~~2023, and we used net cash in financing activities of $804.6 million during the nine months ended September 30, ~~2016,~~2022.

Proceeds from long-term debt were $8,861.1 million and $9,124.4 million for the nine months ended September 30, 2023 and 2022, respectively. ~~The changes in each period~~Repayments of long-term debt were ~~primarily due to~~$7,628.9 million and $7,193.7 million for the nine months ended September 30, 2023 and 2022, 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, finance leases and other vendor financing ~~activities associated with our corporate credit facility.~~arrangements. During the nine months ended September 30, ~~2017,~~2023, we ~~amended our corporate credit facility and subsequently borrowed an additional $600~~also had net borrowings of $1,900.0 million under our ~~Revolving Credit Facility~~commercial paper program. See section "Long-Term Debt and Lines of Credit" below for further discussion of our recent debt transactions.

Activity under our settlement lines of credit is affected primarily ~~to fund the cash portion~~by timing of ~~the consideration for the acquisition of ACTIVE Network. After repayments made during the nine months ended September 30, 2017, we had net proceeds from long-term debt of $326.6 million.~~month-end and transaction volume. During the nine months ended September 30, ~~2016,~~2023 and 2022, we ~~increased our long-term debt by $2,152.8~~had net repayments of settlement lines of credit of $33.3 million ~~primarily to fund our merger with Heartland.~~and $2.8 million, respectively.

~~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 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 months ended September 30, ~~2017~~2023 and ~~September 30, 2016,~~2022, we used ~~cash of $32.8~~$413.7 million and ~~$130.3~~$2,139.7 million, respectively, to repurchase shares of our common stock. As of September 30, 2023, the remaining amount available under our share repurchase program was $1,090.2 million.

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We ~~believe that~~paid dividends to our ~~current level~~common shareholders in the amounts of ~~cash~~$195.6 million and ~~borrowing capacity under our long-term debt~~$208.1 million during the nine months ended September 30, 2023 and ~~lines~~2022, respectively. We made distributions to noncontrolling interests in the amount of ~~credit described below, together with future cash flows from operations will be sufficient to meet~~$24.3 million and $17.7 million during the ~~needs of our existing operations~~nine months ended September 30, 2023 and ~~planned requirements for the foreseeable future.~~2022, respectively.

Long-Term Debt and Lines of Credit

Senior Notes

We have $10.8 billion in aggregate principal amount of senior unsecured notes, which mature at various dates ranging from November 2024 to August 2052. Interest on the senior notes is payable annually or 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 March 17, 2023, we issued €800 million aggregate principal amount of 4.875% senior unsecured notes due March 2031 and received net proceeds of €790.6 million, or $843.6 million based on the exchange rate on the issuance date. We issued the senior notes at a discount of $2.8 million, and we incurred debt issuance costs of $7.2 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 September 30, 2023. Interest on the senior unsecured notes is payable annually in arrears on March 17 of each year, commencing March 17, 2024. The notes are ~~party to a~~unsecured and unsubordinated indebtedness and rank equally in right of payment with all of our other outstanding unsecured and unsubordinated indebtedness. The net proceeds from the offering were used for general corporate purposes.

During the nine months ended September 30, 2023, we used borrowings under the revolving credit facility to fund the redemption in full of the 3.750% and 4.000% senior unsecured notes due June 1, 2023.

Convertible Notes

We have $1.5 billion in aggregate principal amount of 1.000% convertible notes due 2029, which were issued during 2022 in a private placement pursuant to an investment agreement with Silver Lake Partners.

The convertible notes bear interest at a rate of 1.000% per annum. Interest on the convertible notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2023, to the holders of record on the preceding February 1 and August 1, respectively. The convertible notes mature on August 15, 2029, subject to earlier conversion or repurchase.

Revolving Credit Facility

Our revolving credit 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"). The Credit Facility Agreement was most recently amended on May 2, 2017 (the "Fourth Amendment") and, as amended,~~ provides for ~~(i) a $1.25~~an unsubordinated unsecured $5.75 billion revolving credit facility (the "Revolving Credit Facility"); (ii) a $1.5 billion 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 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 Facilitythat matures in ~~connection with the Fourth Amendment. Substantially all of the assets of our domestic subsidiaries are pledged as collateral under the Credit Facility Agreement.~~August 2027.

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 billion, and the outstanding balance on the Revolving Credit Facility was $855.0 million.

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~~$250.0 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 September 30, 2023, there were borrowings of $1,545.0 million outstanding under the ~~covenants described below under "Compliance with Covenants." The~~revolving credit facility, and the total available commitments under the ~~Revolving Credit Facility~~revolving credit facility were $2.3 billion.

Commercial Paper

In January 2023, we established a $2.0 billion commercial paper program under which we may issue senior unsecured commercial paper notes with maturities of up to 397 days from the date of issue. The program is backstopped by our revolving credit agreement, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of our revolving

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credit facility. As such, we could draw on the revolving credit facility to repay commercial paper notes that cannot be rolled over or refinanced with similar debt.

Commercial paper notes are expected to be issued at a discount from par, or they may bear interest, each at commercial paper market rates dictated by market conditions at the time of their issuance. The proceeds from issuances of commercial paper notes will be used primarily for general corporate purposes but may also be used for acquisitions, to pay dividends, for debt refinancing or for other purposes.

As of September 30, ~~2017~~2023, we had borrowings under our commercial paper program of $1,900.0 million outstanding with a weighted average annual interest rate of 6.07%.

Compliance with Covenants

The convertible notes include customary covenants and events of default for convertible notes of this type. The revolving credit agreement contains customary affirmative covenants and restrictive covenants, including, among others, financial covenants based on net leverage and interest coverage ratios, and customary events of default. The required leverage ratio was increased to 4.50 to 1.00 as a result of the qualifying acquisition of EVO, which will remain in effect for up to eight consecutive quarters with a gradual step-down to 3.75 to 1.00, and the required interest coverage ratio is 3.00 to 1.00. We were ~~$383.1 million.~~in compliance with all applicable covenants as of September 30, 2023.

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 30, ~~2017 and December 31, 2016,~~2023, a total of ~~$55.5~~$86.3 million ~~and $51.0 million, respectively,~~ of cash on deposit was used to determine the available credit.

As of September 30, ~~2017 and December 31, 2016, respectively,~~2023, we had ~~$487.5 million and $392.1~~$707.8 million outstanding under these lines of credit with additional capacity to fund settlement of ~~$669.9 million as of~~$1.7 billion. During the three months ended September 30, ~~2017 to fund settlement.~~2023, the maximum and average outstanding balances under these lines of credit were $1,035.1 million and $537.8 million, respectively. The weighted-average interest rate on these borrowings was ~~2.11% and 1.90%~~5.97% at September 30, ~~2017 and December 31, 2016, respectively.~~2023.

~~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.

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—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~~

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 usUpdate to material continuing risks, contingent liabilities, or other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market, or credit risk support other than the guarantee services described in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting ~~Policies"~~Estimates

Redeemable noncontrolling interests - Redeemable noncontrolling interests in our ~~Transition Report on Form 10-K~~subsidiaries in Poland, Greece, and Chile relate to the portion of equity in each of those subsidiaries not attributable, directly or indirectly, to us, which is redeemable upon the occurrence of an event that is not solely within our control. The redeemable noncontrolling interest for each subsidiary is reflected at the higher of: (i) the initial carrying amount, increased or decreased for the ~~seven months ended December 31, 2016.~~

~~Commitments~~noncontrolling interest's share of comprehensive income (loss), capital contributions and ~~Contractual Obligations~~

~~As a result~~distributions or (ii) the redemption price. Estimates of ~~the Fourth Amendment, the repayment schedules for our term loans~~redemption price are based on projected operating performance of each subsidiary, including key assumptions - revenue growth rates, current and ~~Revolving Credit Facility were extended. See "Note 6—Long-Term Debt~~expected market conditions and ~~Lines~~weighted-average cost of ~~Credit" in the notes~~capital. Refer 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.

As a result of the sale-leaseback of our operating facility in Jeffersonville, Indiana, we entered into an operating lease with escalating future minimum payments totaling $55.5 million at September 30, 2017. See "Note 13—Commitments and Contingencies"“Note 9—Redeemable Noncontrolling Interests” in the notes to the accompanying unaudited consolidated financial statements for further ~~discussion about the sale-leaseback transaction.~~information.

~~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~~There were no new recently adopted accounting pronouncements ~~and~~during the period or recently issued accounting pronouncements not yet ~~adopted.~~adopted as of September 30, 2023.

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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 capital expenditures; the effects of economic conditions on our business; statements about the benefits of our acquisitions or divestitures, including future financial and operating results, the company’s plans, objectives, expectations and intentions, and the successful integration of our acquisitions or completion of anticipated benefits or strategic initiatives; and our success and timing in developing and introducing new services and expanding our business. 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 ~~our ability~~the effects of global economic, political, market, health and social events or other conditions; foreign currency exchange, continuing inflation and rising interest rate risks; difficulties, delays and higher than anticipated costs related to ~~safeguard our data; increased competition from larger~~integrating the businesses of acquired companies, including with respect to implementing controls to prevent a material security breach of any internal systems or to successfully manage credit and ~~non-traditional competitors, our ability~~fraud risks in business units; the effect of a security breach or operational failure on the Company's business; 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, develop 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~~our ability to safeguard our data; risks associated with our indebtedness; our ability to meet environmental, social and governance targets, goals and commitments; the potential effects of climate change, including natural disasters; the effects of new or changes in ~~the use of cards for payment generally; unanticipated increases in chargeback liability; increases in~~current laws, regulations, credit card ~~network fees; change in laws, regulations or network~~association rules or ~~interpretations thereof; foreign currency exchange~~other industry standards on us or our partners and ~~interest rate risks; political, economic~~customers, including privacy and ~~regulatory changes in the foreign countries in which we operate; future performance, integration~~cybersecurity laws and ~~conversion of acquired operations; including without limitation difficulties and delays in integrating the Heartland and ACTIVE Network businesses or fully realizing cost savings~~regulations; and other ~~benefits of the acquisitions at all or within the expected time period; fully realizing anticipated annual interest expense savings from refinancing~~events beyond our ~~corporate debt facilities; our loss of key personnel~~control, 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~~2022 and ~~any~~ subsequent filings we make with the SEC, ~~filings,~~ 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 revisions to our forward-looking statements, except as required by law.

Table of ~~these statements to reflect future circumstances or the occurrence of unanticipated events.~~Contents

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 risk, refer to Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

With respect to foreign currency exchange rate risk, during the nine months ended September 30, 2023, we designated our Euro-denominated senior notes of €800 million as a hedge of our net investment in our Euro-denominated operations. The purpose of the net investment hedge is to offset the volatility of our net investment in our Euro-denominated operations due to changes in foreign currency exchange rates.

With respect to interest rate risk, onin March 2023, we entered into interest rate swap agreements with an aggregate notional amount of $1.5 billion to convert eligible borrowings under our ~~LIBOR-based debt as discussed~~revolving credit facility from a floating term Secured Overnight Financing Rate to a fixed rate, which reduces our exposure to fluctuations in interest rates.

See "Note 6—~~Long-Term Debt~~7—Derivatives and ~~Lines of Credit"~~Hedging Instruments" in the notes to ~~our~~the accompanying unaudited consolidated financial ~~statements.~~statements for further information about our hedging arrangements.

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 30, ~~2017,~~2023, 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 30, ~~2017,~~2023, 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~~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.~~EVO on March 24, 2023. In accordance with our integration efforts, we plan to incorporate ~~ACTIVE Network's~~EVO'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,~~regulations of ~~ACTIVE Network constituted approximately 4%~~the U.S. Securities and Exchange Commission.

Table 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.Contents

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

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 16—Commitments and Contingencies" in the notes to the accompanying unaudited consolidated financial statements for information about certain legal matters.

ITEM ~~1A -~~ 1A—RISK FACTORS

~~There have been no material changes from the~~For a discussion of our risk factors, ~~set forth in~~see Part I, Item ~~1A,~~1A. “Risk Factors” of our ~~Transition~~Annual Report on Form 10-K for the ~~seven months~~year ended December 31, ~~2016, other than the risk factors set forth in~~2022 and Part II, Item 1A1A. “Risk Factors” of our Quarterly Report on Form 10-Q for the ~~quarterly period~~quarter ended ~~June 30, 2017.~~March 31, 2023.

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

~~(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 30, ~~2017~~2023 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, including commission		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 1-31, 2023	3,799	$	101.37	—	$	—
August 1-31, 2023	9,283	123.16		—	—
September 1-30, 2023	12,687	118.47		—	—
Total	25,769	$	105.87	—	$	1,090.2


⁽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 plans, discretionary open-market purchases or privately negotiated transactions. During the quarter ended September 30, ~~2017,~~2023, pursuant to our employee incentive plans, we withheld ~~247,345~~25,769 shares, at an average price per share of ~~$94.50~~$117.64, 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 September 30, 2023, the remaining amount available under our share repurchase program was $1,090.2 million. The authorizations by our board of directors do not expire but could be revoked at any time. In addition, we ~~withheld~~are not required by the board’s authorization or otherwise to complete any repurchases by any specific time or at ~~fair market value on~~all.

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ITEM 5—OTHER INFORMATION

During the ~~vesting date.~~quarter ended September 30, 2023, none of our directors or officers notified us that they adopted, modified or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement as defined in Item 408(a) of Regulation S-K.

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ITEM 6—EXHIBITS

List of Exhibits



2.1		~~Stock Purchase~~Agreement and Plan of Merger, ~~Agreement,~~ dated as of August ~~2, 2017,~~1, 2022, by and among ~~Athlaction Topco, LLC, the Vista Blocker Sellers (as defined therein)~~EVO Payments, Inc., ~~Vista Equity Partners Management, LLC, as Sellers’ Representative,~~ Global Payments Inc.~~, Athens~~ and Falcon Merger Sub ~~LLC and the Vista AIVs and Vista GPs (as defined therein and solely for the limited purposes set forth therein)~~Inc., incorporated by reference to Exhibit 2.1 to ~~the Company’s~~Global Payments Inc.’s Current Report on Form 8-K filed on August ~~8, 2017. ++~~2, 2022.†
~~2.2~~3.1		~~Amendment No. 1 to the Stock Purchase~~Third Amended and ~~Merger Agreement, dated as~~Restated Articles of ~~August 31, 2017, by and among~~Incorporation of 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.~~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 ~~September 6, 2017. ++~~May 1, 2020.
~~3.1~~3.3		~~Second~~Twelfth Amended and Restated ~~Articles~~Bylaws of ~~Incorporation of the Company,~~Global Payments Inc., 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~~Payment 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’s Current Report on Form 8-K filed on ~~September 6, 2017.~~February 1, 2023.
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.
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 30, ~~2017,~~2023, 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.~~Statements; and (vii) the information included in Part II, Item 5(c). 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~~Pursuant to Item 601(b)(2) of Regulation S-K, ~~and Global Payments Inc.~~certain schedules have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted schedule 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~~October 31, 2023			/s/ ~~Cameron M. Bready~~Joshua J. Whipple
		~~Cameron M. Bready~~	Joshua J. Whipple
			Senior Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)



		Page
PART I - FINANCIAL INFORMATION
ITEM 1.	Unaudited Consolidated Statements of Income for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022	34
	Unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022	56
	Consolidated Balance Sheets at September 30, ~~2017~~2023 (unaudited) and December 31, ~~2016~~2022	67
	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2017~~2023 and ~~2016~~2022	78
	Unaudited Consolidated Statements of Changes in Equity for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022	89
	Notes to Unaudited Consolidated Financial Statements	911
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2433
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3245
ITEM 4.	Controls and Procedures	3345
PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings	3446
ITEM 1A.	Risk Factors	3446
ITEM 2.	Unregistered Sales of Equity Securities ~~and~~ , Use of ~~Proceeds~~Proceed s and Issuer Purchases of Equity Securities	3446
ITEM 6.5.	~~Exhibits~~Other Information	3547
ITEM 6.	~~Signatures~~Exhibits	3648
	Signatures	49


	Shareholders' Equity
	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Nonredeemable Noncontrolling Interests		Total Equity
Balance at June 30, 2022	277,033	$	21,800,574	$	2,326,259	$	(371,178)	$	23,755,655	$	220,872	$	23,976,527
Net income				290,454				290,454		9,712		300,166
Other comprehensive loss						(233,323)		(233,323)		(14,842)		(248,165)
Stock issued under share-based compensation plans	270	10,155						10,155				10,155
Common stock repurchased - share-based compensation plans	(88)	(11,312)						(11,312)				(11,312)
Share-based compensation expense		37,052						37,052				37,052
Repurchases of common stock	(6,907)	(889,739)						(889,739)				(889,739)
Distributions to noncontrolling interest								—		(3,366)		(3,366)
Purchase of capped calls related to issuance of convertible notes, net of taxes of $72,778		(229,597)						(229,597)				(229,597)
Cash dividends declared ($0.25 per common share)				(68,766)				(68,766)				(68,766)
Balance at September 30, 2022	270,308	$	20,717,133	$	2,547,947	$	(604,501)	$	22,660,579	$	212,376	$	22,872,955


					Provisional Amounts at Acquisition Date		Measurement-period Adjustments		Provisional Amounts at September 30, 2023

					(in thousands)
Cash and cash equivalents	$	42,866		Cash and cash equivalents	$	324,859	$	—	$	324,859
Accounts receivable				Accounts receivable	105,680		(54,210)		51,470
Settlement processing assets				Settlement processing assets	125,061		18,108		143,169
Deferred income tax assets				Deferred income tax assets	15,464		(319)		15,145
Property and equipment	22,889			Property and equipment	83,540		(4,807)		78,733
Identified intangible assets	471,120
Identifiable intangible assets				Identifiable intangible assets	1,208,400		291,595		1,499,995
Other assets	80,485			Other assets	157,166		(5,106)		152,060
Deferred income taxes	(26,757		)
Accounts payable and accrued liabilities				Accounts payable and accrued liabilities	(277,800)		(5,788)		(283,588)
Settlement lines of credit				Settlement lines of credit	(11,371)		3,784		(7,587)
Settlement processing obligations				Settlement processing obligations	(199,161)		35,626		(163,535)
Deferred income tax liabilities				Deferred income tax liabilities	(168,098)		(62,719)		(230,817)
Other liabilities	(123,047		)	Other liabilities	(58,089)		(2,943)		(61,032)
Total identifiable net assets	467,556			Total identifiable net assets	1,305,651		213,221		1,518,872
Redeemable noncontrolling interests				Redeemable noncontrolling interests	(556,070)		75,498		(480,572)
Goodwill	704,020			Goodwill	3,520,039		(288,719)		3,231,320
Total purchase consideration	$	1,171,576		Total purchase consideration	$	4,269,620	$	—	$	4,269,620



	Shares		Weighted-Average Grant-Date Fair Value
	(in thousands)

Unvested at December 31, 2016	1,263			$49.55
Granted	611		71.77
Vested	(685	)	40.35
Forfeited	(71	)	60.36
Unvested at September 30, 2017	1,118			$66.74



	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 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



	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


	Three Months Ended September 30, 2022
	Merchant Solutions		Issuer Solutions		Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	1,349,793	$	442,200	$	147,337	$	(14,788)	$	1,924,542
Europe	183,698		114,296		—		—		297,994
Asia Pacific	62,835		9,543		—		(9,543)		62,835
	$	1,596,326	$	566,039	$	147,337	$	(24,331)	$	2,285,371


	Nine Months Ended September 30, 2022
	Merchant Solutions		Issuer Solutions		Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	3,926,645	$	1,281,894	$	478,082	$	(43,052)	$	5,643,569
Europe	545,203		354,546		—		—		899,749
Asia Pacific	179,213		26,568		—		(26,568)		179,213
	$	4,651,061	$	1,663,008	$	478,082	$	(69,620)	$	6,722,531



	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



	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