What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-04 compared with 2020-10-29 · 156 added, 204 removed, 102 unchanged (78% of the section changed)

8 unchanged sentences

("TSYS") (the "Merger").

We continue to execute on merger and integration activities, such as combining business operations, streamlining technology infrastructure, eliminating duplicative corporate and operational support structures and realizing scale efficiencies.

We also continue to invest in software and hardware to support the development of new technologies, infrastructure to support our growing business and continued consolidation and enhancement of our operating platforms.

Highlights related to our financial condition at March 31, 2021 and results of operations for the three months then ended include the following:

• Consolidated revenues for the three months ended March 31, 2021 increased to $1,990.0 million, compared to $1,903.6 million for the prior year, primarily due to an increase in transaction volumes resulting from the easing of COVID-19 restrictions and incremental revenues in our Business and Consumer Solutions segment due to an increase in consumer spending, including additional spending volumes driven by stimulus payments distributed to our customers by the United States government in the first quarter of 2021.

• Consolidated operating income for the three months ended March 31, 2021 increased to $275.3 million, compared to $244.0 million for the prior year.

Operating margin for the three months ended March 31, 2021 increased to 13.8%, compared to 12.8% for the prior year.

The increase in consolidated operating income and operating margin for the three months ended March 31, 2021 is due to the increase in revenues and favorable effects of Merger-related cost synergies and cost-saving actions taken to mitigate the financial effects of the COVID-19 pandemic.

• On February 10, 2021, we entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to repurchase an aggregate of $500 million of our common stock during the ASR program purchase period, which ended on March 31, 2021.

The total number of shares delivered under this ASR program was 2,491,161 shares at an average price of $200.71 per share.

• On February 26, 2021, we issued $1.1 billion aggregate principal amount of 1.200% senior unsecured notes due February 2026.

We used the net proceeds from this offering to fund the redemption in full of the 3.800% senior unsecured notes due April 2021, to repay a portion of the outstanding indebtedness under our revolving credit facility and for general corporate purposes.

COVID-19 Update

In March 2020, the World Health Organization declared the outbreak of the COVID-19 virus a global pandemic.

This outbreak has caused and may continue to cause significant disruptions to businesses and markets worldwide as the virus continues to spread or has a resurgence in certain jurisdictions.

We continue to closely monitor the effects of the COVID-19 pandemic;

however, the effects of the outbreak are still evolving, and the ultimate severity and duration of the pandemic and the implications on future global economic conditions remains uncertain.

We are continuing to operate normally worldwide, and, at this time, we do not anticipate any significant operational effects as a result of the pandemic.

Starting in mid-March, the COVID-19 pandemic began to significantly affect our financial results as governments took actions to encourage social distancing and implemented shelter-in-place directives.

As certain state and local governments in the United States and abroad began to gradually ease restrictions during the summer months, and certain businesses reopened, we saw improvement in our financial results and positive trends throughout the latter half of the second quarter and continuing through the third quarter.

It is possible that certain state or local authorities in the United States or governments abroad may re-impose restrictions and closures in response to a resurgence or another wave of the pandemic through the fall and winter.

We expect that the COVID-19 pandemic will continue to have an adverse effect on our revenues and earnings for the remainder of 2020, although the magnitude, duration and ultimate effects of the COVID-19 pandemic are not possible to predict at this time.

We have implemented cost-saving actions, such as reductions in employee compensation costs and discretionary spending, to help mitigate the financial effects of the COVID-19 pandemic.

We also took actions to preserve our available capital and provide financial flexibility, including temporarily suspending our share repurchase program during the second and third quarters and reducing our planned capital investments in the business, as well as the cost-savings actions previously noted.

As we continue to see the economy slowly recover from the early effects of the pandemic, we continue to expect our capital expenditures for the year to be below our initial expectations.

For a further discussion of trends, uncertainties and other factors that could affect our future operating results related to the effects of the COVID-19 pandemic, see the section entitled "Risk Factors" in Item 1A in this Quarterly Report on Form 10-Q.

Financial Highlights

Highlights related to our financial condition at September 30, 2020 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, 2020 increased to $1,917.8 million and $5,493.4 million, respectively, compared to $1,105.9 million and $2,924.1 million for the prior-year periods primarily due to additional revenues from the acquired operations of TSYS, partially offset by the unfavorable effects of COVID-19 on our revenues.

Revenues from the acquired operations of TSYS were $1,067.2 million and $3,119.2

million for the three and nine months ended September 30, 2020, respectively, and $147.5 million for the three and nine months ended September 30, 2019.

• Consolidated operating income for the three and nine months ended September 30, 2020 increased to $290.4 million and $642.0 million, respectively, compared to $174.0 million and $595.3 million for the prior-year periods due to additional income from the acquired operations of TSYS.

Operating margin for the three and nine months ended September 30, 2020 was 15.1% and 11.7%, respectively, compared to 15.7% and 20.4% for the prior-year periods.

Consolidated operating income and operating margins were negatively affected by the unfavorable effects of COVID-19 on our revenues for the three and nine months ended September 30, 2020, and an increase in acquisition and integration expenses, primarily due to the Merger, for the nine months ended September 30, 2020.

However, we saw improvement in our financial results and positive trends throughout the latter half of the second quarter and continuing through the third quarter as a result of the continued recovery across our markets and reductions in costs due to actions we took in response to the pandemic.

• Net income attributable to Global Payments for the three and nine months ended September 30, 2020 increased to $221.0 million and $401.9 million, respectively, compared to $95.0 million and $327.8 million for the prior-year periods, reflecting the change in operating income and additional equity in income of equity method investments, partially offset by an increase in income tax expense.

• Diluted earnings per share for the three and nine months ended September 30, 2020 was $0.74 and $1.34, respectively, compared to $0.54 and $2.00 for the prior-year periods.

Diluted earnings per share for the three and nine months ended September 30, 2020 reflects the additional income from the acquired operations of TSYS.

Additionally, diluted earnings per share for the three and nine months ended September 30, 2020 reflects an increase in the weighted-average number of shares outstanding as a result of issuing common shares as purchase consideration in the Merger.

Since that time, the global economy has been, and continues to be, affected by COVID-19.

The pandemic has caused and may continue to cause significant disruptions to businesses and markets worldwide as the virus continues to spread or has a resurgence in certain jurisdictions.

The pandemic and measures to prevent its spread affected our financial results during 2020 and continued to affect our financial results in the first quarter of 2021.

Spending and transaction volumes decreased beginning in mid-March 2020, as

governments implemented measures in an effort to contain the virus, including lockdowns, physical distancing, travel restrictions, limitations on public gatherings, work from home and restrictions on nonessential businesses.

We saw improvement in our financial results and positive trends during the latter half of 2020 and into the first quarter of 2021 as certain governments began to gradually ease restrictions and provide economic stimulus and vaccine distribution accelerated, leading to an increase in spending and transaction volumes.

While we continue to see signs of economic recovery, the rate of recovery on a global basis has been affected by the reinstatement of restrictions in certain jurisdictions.

Early actions we took to preserve our available capital and provide financial flexibility in response to the effects of COVID-19 on our business, including the reduction of certain operating expenses, employee compensation costs, other discretionary spending and planned capital expenditures, added to the strength of our financial profile.

While we have discontinued many of these temporary actions, the effects of certain of these actions continue to have a favorable effect on our operating results.

We continue to closely monitor the evolving effects of the COVID-19 pandemic;

however, the implications on future global economic conditions and related effects on our business and financial condition are difficult to predict due to uncertainties around the ultimate severity, scope and duration of the pandemic, the availability and effectiveness of treatments or vaccines and the direction or extent of current or future restrictive actions that may be imposed by governments or public health authorities.

While we expect the COVID-19 pandemic will continue to have an adverse effect on our revenues and earnings in 2021, we do expect a recovery throughout the year.

We expect to continue to make significant capital investments in the business, and we anticipate capital expenditures and other investments in the business during 2021 will return to pre-COVID levels.

However, we continue to monitor the effects of COVID-19 and will adjust our future level of capital investments accordingly.

Results of Operations

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We evaluate performance and allocate resources based on the operating income of each operating segment.

In connection with an organizational realignment implemented after the Merger in the fourth quarter of 2019, the presentation of segment information for the three and nine months ended September 30, 2019 has been recast to align with the segment presentation for the three and nine months ended September 30, 2020.

For further information about our reportable segments, see "Item 1.

Business—Business Segments" within our Annual Report on Form 10-K for the year ended December 31, 2020, incorporated herein by reference, and "Note 10—Segment Information" in the notes to the accompanying unaudited consolidated financial statements.

The following table sets forth key selected financial data for the three months ended September 30, 2020 and 2019, 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, 2020 and 2019 is derived from the accompanying unaudited consolidated financial statements included in Part I, Item 1 - Financial Statements.

The following table sets forth key selected financial data for the three months ended March 31, 2021 and 2020, this data as a percentage of total revenues and the changes between the periods in dollars and as a percentage of the prior-year amount.

The income statement data for the three months ended March 31, 2021 and 2020 is derived from the accompanying unaudited consolidated financial statements included in Part I, Item 1 - Financial Statements.

Three Months Ended

September 30, 2020 % of Revenues (1)

March 31, 2021 % of Revenues (1)

Three Months Ended

September 30, 2019 % of Revenues (1)

$ Change % Change

(dollar amounts in thousands)

Revenues (2) :

Merchant Solutions $ 1,243,961 64.9 % $ 1,004,943 90.9 % $ 239,018 23.8 %

Issuer Solutions 487,409 25.4 % 75,628 6.8 % 411,781 NM

Business and Consumer Solutions 204,106 10.6 % 27,896 2.5 % 176,210 NM

Intersegment eliminations (17,661) (0.9) % (2,526) (0.2) % (15,135) NM

Consolidated revenues $ 1,917,815 100.0 % $ 1,105,941 100.0 % $ 811,874 73.4 %

Consolidated operating expenses (2) :

Cost of service $ 900,921 47.0 % $ 427,720 38.7 % $ 473,201 110.6 %

Selling, general and administrative 726,475 37.9 % 504,184 45.6 % 222,291 44.1 %

Operating expenses $ 1,627,396 84.9 % $ 931,904 84.3 % $ 695,492 74.6 %

Operating income (loss) (2) :

Merchant Solutions $ 344,981 18.0 % $ 318,786 28.8 % $ 26,195 8.2 %

Issuer Solutions 70,800 3.7 % 5,885 0.5 % 64,915 NM

Business and Consumer Solutions 31,052 1.6 % 3,365 0.3 % 27,687 NM

Corporate (3)

(156,414) (8.2) % (153,999) (13.9) % (2,415) (1.6) %

Operating income $ 290,419 15.1 % $ 174,037 15.7 % $ 116,382 66.9 %

Operating margin (2) :

Merchant Solutions 27.7 % 31.7 % (4.0) %

Issuer Solutions 14.5 % NM NM

Business and Consumer Solutions 15.2 % NM NM

NM = not meaningful.

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

(2) Revenues, consolidated operating expenses, operating income (loss) and operating margin reflect the effects of acquired businesses from the respective acquisition dates.

For further discussion of our acquisitions, see "Note 2—Acquisitions" in the notes to the accompanying unaudited consolidated financial statements.

(3) During the three months ended September 30, 2019, operating income for our Merchant Solutions segment reflected the effect of acquisition and integration expenses of $13.9 million.

Operating loss for Corporate included acquisition and integration expenses of $57.6 million and $86.9 million during the three months ended September 30, 2020 and 2019, respectively.

The following table sets forth key selected financial data for the nine months ended September 30, 2020 and 2019, 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, 2020 and 2019 are derived from the accompanying unaudited consolidated financial statements included in Part I, Item 1 - Financial Statements.

Nine Months Ended

September 30, 2020 % of Revenues (1)

Nine Months Ended

September 30, 2019 % of Revenues (1)

March 31, 2020 % of Revenues (1)

$ Change % Change

(dollar amounts in thousands)

Revenues (2) :

Merchant Solutions $ 1,267,872 63.7 % $ 1,215,269 63.8 % $ 52,603 4.3 %

Issuer Solutions 1,461,196 26.6 % 86,122 2.9 % 1,375,074 NM

Business and Consumer Solutions 624,774 11.4 % 27,896 1.0 % 596,878 NM

Intersegment eliminations (53,390) (1.0) % (2,527) (0.1) % (50,863) NM

Issuer Solutions 500,251 25.1 % 503,762 26.5 % (3,511) (0.7) %

Business and Consumer Solutions 243,585 12.2 % 203,946 10.7 % 39,639 19.4 %

Intersegment eliminations (21,701) (1.1) % (19,379) (1.0) % (2,322) 12.0 %

Consolidated revenues $ 1,990,007 100.0 % $ 1,903,598 100.0 % $ 86,409 4.5 %

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Merchant Solutions $ 339,989 17.1 % $ 304,153 16.0 % $ 35,836 11.8 %

Issuer Solutions 188,131 3.4 % 12,920 0.2 % 175,211 NM

Business and Consumer Solutions 110,358 2.0 % 3,365 0.1 % 106,993 NM

Issuer Solutions 68,455 3.4 % 59,304 3.1 % 9,151 15.4 %

Business and Consumer Solutions 61,923 3.1 % 31,112 1.6 % 30,811 99.0 %

Corporate (195,108) (9.8) % (150,590) (7.9) % (44,518) 29.6 %

(480,730) (8.8) % (261,356) (4.8) % (219,374) (83.9) %

Operating income $ 275,259 13.8 % $ 243,979 12.8 % $ 31,280 12.8 %

1 unchanged sentence

Merchant Solutions 26.8 % 25.0 % 1.8 %

Issuer Solutions 12.9 % NM NM

Business and Consumer Solutions 17.7 % NM NM

NM = not meaningful.

Issuer Solutions 13.7 % 11.8 % 1.9 %

Business and Consumer Solutions 25.4 % 15.3 % 10.1 %

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

(2) Revenues, consolidated operating expenses, operating income (loss) and operating margin reflect the effects of acquired businesses from the respective acquisition dates.

For further discussion of our acquisitions, see "Note 2—Acquisitions" in the notes to the accompanying unaudited consolidated financial statements.

(3) During the nine months ended September 30, 2020 and 2019, operating income for our Merchant Solutions segment reflected the effect of acquisition and integration expenses of $5.7 million and $22.3 million, respectively.

Operating loss for Corporate included acquisition and integration expenses of $208.0 million and $98.0 million during the nine months ended September 30, 2020 and 2019, respectively.

Consolidated revenues for the three and nine months ended September 30, 2020 increased by 73.4% and 87.9%, respectively, to $1,917.8 million and $5,493.4 million, compared to $1,105.9 million and $2,924.1 million for the prior-year periods, primarily due to additional revenues from the acquired operations of TSYS.

Revenues from the acquired operations of TSYS were $1,067.2 million and $3,119.2 million for the three and nine months ended September 30, 2020, respectively, compared to $147.5 million for the prior-year periods.

While COVID-19 continued to have unfavorable effects on our revenues as compared to the prior-year periods, we saw improvements throughout the latter half of the second quarter and continuing through the third quarter.

(2) Operating loss for Corporate included acquisition and integration expenses of $90.1 million and $69.7 million during the three months ended March 31, 2021 and 2020, respectively.

Consolidated revenues for the three months ended March 31, 2021 increased by 4.5% to $1,990.0 million, compared to $1,903.6 million for the prior year.

Starting in mid-March 2020, COVID-19 began to have an unfavorable effect on our revenues.

We saw improvements throughout the latter half of 2020 and into the first quarter of 2021.

While revenues continue to be negatively affected by COVID-19, revenues for the three months ended March 31, 2021 increased as compared to the prior year primarily due to an increase in transaction volumes resulting from the easing of COVID-19 restrictions.

In addition, we saw incremental revenues in our Business and Consumer Solutions segment due to an increase in consumer spending, including additional spending volumes driven by individual stimulus payments distributed to our customers by the United States government in the first quarter of 2021.

Merchant Solutions Segmen t.

Revenues from our Merchant Solutions segment for the three and nine months ended September 30, 2020 increased by 23.8% and 23.0%, respectively, to $1,244.0 million and $3,460.8 million, compared to $1,004.9 million and $2,812.6 million for the prior-year periods, primarily due to additional revenues from the acquired operations of TSYS.

We experienced significant revenue declines starting in mid-March related to COVID-19 due to a reduction in consumer spending and closures of certain of our merchant customer businesses throughout North America, Europe and Asia Pacific.

We saw improvement in our financial results beginning in May, and continuing through the third quarter, as state and local governments in the United States and governments abroad began to gradually ease pandemic-related restrictions and consumer spending increased.

Revenues from our Merchant Solutions segment for the three months ended March 31, 2021 increased by 4.3% to $1,267.9 million, compared to $1,215.3 million for the prior year.

Starting in mid-March 2020, COVID-19 began to have an unfavorable effect on our revenues as a result of a reduction in spending and transaction volumes and restrictions on certain of our customer businesses throughout North America, Europe and Asia Pacific.

We saw improvement in our financial results during the latter half of 2020 and into the first quarter of 2021 as state and local governments in the United States and governments abroad began to gradually ease pandemic-related restrictions.

Revenues for the three months ended March 31, 2021 increased as compared to the prior year due to an increase in spending and transaction volumes resulting from the easing of COVID-19 restrictions.

While we continue to see signs of economic recovery, the rate of recovery on a global basis has been affected by the reinstatement of restrictions in certain jurisdictions.

Issuer Solutions Segment.

Revenues from our Issuer Solutions segment for the three and nine months ended September 30, 2020 were $487.4 million and $1,461.2 million, respectively, compared to $75.6 million and $86.1 million for the prior-year periods, primarily reflecting revenues from the acquired operations of TSYS.

Starting in mid-March, we experienced revenue declines as a result of lower transaction volumes, particularly related to the processing of commercial cards as a result of COVID-19.

Revenues from our Issuer Solutions segment for the three months ended March 31, 2021 were $500.3 million, compared to $503.8 million for the prior year.

Starting in mid-March 2020, COVID-19 had an unfavorable effect on our revenues as a result of lower transaction volumes, particularly related to the processing of commercial cards.

However, revenues were affected by lower transaction volumes in the majority of the first quarter of 2021 as compared to the pre-COVID-19 levels in the majority of the first quarter 2020.

While we continue to see signs of economic recovery, the rate of recovery on a global basis has been affected by the reinstatement of restrictions in certain jurisdictions.

Business and Consumer Solutions Segment.

Revenues from our Business and Consumer Solutions segment for the three and nine months ended September 30, 2020 were $204.1 million and $624.8 million, respectively, compared to $27.9 million for the prior-year periods, reflecting revenues from the acquired operations of TSYS.

Our Business and Consumer Solutions segment experienced revenue declines starting in mid-March due to reduced consumer spending as a result of COVID-19;

however, these declines were mitigated by revenues in the second quarter from our customers loading individual stimulus payments and supplementary unemployment insurance distributions resulting from the Coronavirus Aid, Relief and Economic Security Act.

Additionally, we saw improvements in our financial results later in the second quarter, and continuing through the third quarter, from increases in consumer spending as state and local governments in the United States began to gradually ease restrictions.

Revenues from our Business and Consumer Solutions segment for the three months ended March 31, 2021 increased by 19.4% to $243.6 million, compared to $203.9 million for the prior year.

Our Business and Consumer Solutions segment experienced an unfavorable effect on revenues starting in mid-March 2020 due to reduced consumer spending as a result of COVID-19.

We saw improvement in our financial results throughout the latter half of 2020 and into the first quarter of 2021 from increases in consumer spending as state and local governments in the United States began to gradually ease restrictions.

Revenues for the three months ended March 31, 2021 increased as compared to the prior year due to an increase in consumer spending, including additional spending volumes driven by individual stimulus payments distributed to our customers by the United States government in the first quarter of 2021.

Operating Expenses

Cost of Service.

Cost of service for the three and nine months ended September 30, 2020 increased by 110.6% and 163.6%, respectively, to $900.9 million and $2,728.5 million, compared to $427.7 million and $1,035.2 million for the prior-year periods, primarily due to additional costs associated with the acquired operations of TSYS, including the amortization of acquired intangibles.

Cost of service for the three and nine months ended September 30, 2020 reflects amortization of acquired intangibles of $313.4 million and $941.7 million, respectively, compared to $134.5 million and $345.5 million, respectively, for the prior-year periods.

Cost of service as a percentage of revenues increased to 47.0% and 49.7%, respectively, for the three and nine months ended September 30, 2020, compared to 38.7% and 35.4% for the prior-year periods, primarily due to the increase in amortization of acquired intangibles.

Cost of service for the three months ended March 31, 2021 decreased by 0.9%, to $925.2 million, compared to $933.9 million for the prior year.

Cost of service as a percentage of revenues decreased to 46.5% for the three months ended March 31, 2021, compared to 49.1% for the prior year period.

The decrease in cost of service is primarily due to the favorable effects of Merger-related cost synergies and cost-saving actions taken to mitigate the financial effects of the COVID-19 pandemic.

The decrease in cost of service was partially offset by an increase in amortization of acquired intangibles, which were $329.2 million and $314.2 million for the three months ended March 31, 2021 and 2020, respectively.

Cost of service as a percentage of revenues was also affected by the increase in revenues.

Selling, General and Administrative Expenses .

Selling, general and administrative expenses for the three and nine months ended September 30, 2020 increased by 44.1% and 64.1%, respectively, to $726.5 million and $2,122.9 million, compared to

$504.2 million and $1,293.7 million for the prior-year periods.

The increase in selling, general and administrative expenses for the three months ended September 30, 2020 compared to the prior year was primarily due to additional costs associated with the acquired operations of TSYS.

Additionally, selling, general and administrative expenses included acquisition and integration expenses of $59.8 million compared to $90.5 million for the prior year.

The increase in selling, general and administrative expenses for the nine months ended September 30, 2020 compared to the prior year was primarily due to additional costs associated with the acquired operations of TSYS.

Additionally, selling, general and administrative expenses included acquisition and integration expenses of $213.6 million compared to $108.0 million for the prior year.

Selling, general and administrative expenses as a percentage of revenues was 37.9% and 38.6%, respectively, for the three and nine months ended September 30, 2020, compared to 45.6% and 44.2% for the prior year.

Corporate expenses for the three and nine months ended September 30, 2020 increased by $2.4 million and $219.4 million, respectively, to $156.4 million and $480.7 million, compared to $154.0 million and $261.4 million for the prior-year periods, primarily due to additional expenses associated with the acquired operations of TSYS and an increase in acquisition and integration expenses for the nine months ended September 30, 2020.

During the three and nine months ended September 30, 2020, Corporate expenses included acquisition and integration expenses of $57.6 million and $208.0 million, respectively, compared to $86.9 million and $98.0 million, for the prior-year periods.

During the three and nine months ended September 30, 2020, Corporate expenses included charges for employee termination benefits of $8.1 million and $49.8 million, respectively, which included $1.9 million and $6.1 million, respectively, of share-based compensation expense.

We expect to incur additional charges over the next 12 months as Merger–related integration activities continue.

Selling, general and administrative expenses for the three months ended March 31, 2021 increased by 8.8% to $789.5 million, compared to $725.7 million for the prior year.

Selling, general and administrative expenses as a percentage of revenues increased to 39.7%, for the three months ended March 31, 2021, compared to 38.1% for the prior year.

The increase in selling, general and administrative expenses is primarily due to an increase in variable

selling and other costs related to the increase in revenues, along with an increase in acquisition and integration expenses, which were $91.8 million and $71.6 million for the three months ended March 31, 2021 and 2020, respectively.

Corporate expenses for the three months ended March 31, 2021 increased by $44.5 million to $195.1 million, compared to $150.6 million for the prior year, primarily due to an increase in acquisition and integration expenses and higher share-based compensation expense of $20.4 million and $9.3 million, respectively.

During the three months ended March 31, 2021 and 2020, Corporate expenses included acquisition and integration expenses of $90.1 million, and $69.7 million, respectively, primarily due to the Merger.

Certain of these Merger-related integration activities resulted in the recognition of employee termination benefits.

During the three months ended March 31, 2021 and 2020, Corporate expenses included charges for employee termination benefits of $25.2 million and $17.6 million, respectively, which included $0.5 million and $2.6 million, respectively, of share-based compensation expense.

As of March 31, 2021, the cumulative amount of recognized charges for employee termination benefits resulting from Merger-related integration activities was $165.6 million, which included $24.5 million of share-based compensation expense.

We expect to incur additional charges as Merger–related integration activities continue in 2021.

Operating Income and Operating Margin

Consolidated operating income for the three and nine months ended September 30, 2020 was $290.4 million and $642.0 million, respectively, compared to $174.0 million and $595.3 million for the prior-year periods.

Operating margin for the three and nine months ended September 30, 2020 was 15.1% and 11.7%, respectively, compared to 15.7% and 20.4% for the prior-year periods.

Consolidated operating income for the three and nine months ended September 30, 2020 includes income from the acquired operations of TSYS of $165.8 million and $385.1 million, respectively, compared to a loss of $11.1 million for the prior-year periods.

Consolidated operating income for the three and nine months ended September 30, 2020 reflects an increase in amortization of acquired intangibles of $178.9 million and $596.2 million, respectively.

Acquisition and integration expenses decreased by $44.1 million and increased by $93.4 million for the three and nine months ended September 30, 2020, respectively, compared to the prior-year periods.

The unfavorable effects of COVID-19 on our revenues and incremental expenses directly related to COVID-19 also contributed to the decrease in consolidated operating income and operating margin compared to the prior year.

Consolidated operating income for the three months ended March 31, 2021 increased to $275.3 million, compared to $244.0 million for the prior year.

Operating margin for the three months ended March 31, 2021 increased to 13.8%, compared to 12.8% for the prior year.

The increase in consolidated operating income and operating margin for the three months ended March 31, 2021 is partially due to the increase in revenues.

We saw improvement in our financial results and positive trends throughout the latter half of 2020 and into the first quarter of 2021 as a result of the recovery seen across our markets as COVID-19 restrictions eased.

Further, Merger-related cost synergies and cost-saving actions taken to mitigate the financial effects of the COVID-19 pandemic had a favorable effect on operating income and operating margin for the three months ended March 31, 2021.

The increase in consolidated operating income and operating margin for the three months ended March 31, 2021 was partially offset by an increase in amortization of acquired intangibles and acquisition and integration expenses of $15.0 million and $20.0 million, respectively, compared to the prior year.

Segment Operating Income and Operating Margin .

Operating income and operating margin in each of our Merchant Solutions, Issuer Solutions and Business and Consumer Solutions segments increased compared to the prior year.

The increase in operating income and operating margin in our Merchant Solutions and Business and Consumer Solutions segments was partially due to the increase in revenues, including additional spending volumes in our Business and Consumer Solutions segment driven primarily by stimulus payments distributed to our customers by the United States government in the first quarter of 2021.

We saw improvement in our financial results and positive trends throughout the latter half of 2020 and into the first quarter of 2021 as a result of the recovery seen across our geographic markets as COVID-19 restrictions eased.

Further, across all of our segments, Merger-related cost synergies and cost-saving actions taken to mitigate the financial effects of the COVID-19 pandemic had a favorable effect on segment operating income and operating margin for the three months ended March 31, 2021.

Other Income/Expense, Net

Interest and other income for the three and nine months ended September 30, 2020 increased by $18.8 million and $14.9 million, respectively, to $30.0 million and $35.3 million, compared to the prior-year periods, primarily due to a gain of $27.3 million recorded in connection with the partial release and conversion of our Visa convertible preferred shares.

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 for the three and nine months ended September 30, 2020 increased by $13.2 million and $37.6 million, respectively, to $83.0 million and $258.5 million, compared to the prior-year periods, as a result of the increase in our outstanding borrowings.

Interest expense for the three and nine months ended September 30, 2019 included fees and charges of $25.5 million and $28.4 million, respectively, incurred in connection with financing activities related to the Merger.

These fees and charges included fees associated with bridge financing and charges for the write-off of unamortized debt issuance costs related to borrowings under a credit facility extinguished prior to the completion of the Merger.

Interest and other expense for the three months ended March 31, 2021 decreased by $9.5 million, to $83.1 million, compared to the prior year, primarily due to the recognition of a loss during the three months ended March 31, 2020 related to a decline in fair value for an investment held in a strategic partner that was subsequently divested.

Income Tax Expense

Our effective income tax rate for the three months ended September 30, 2020 was 18.0%, and our effective income tax rate for the three months ended September 30, 2019 was a benefit of 18.7%.

The increase in our effective tax rate for the three months ended September 30, 2020 from the prior-year period is primarily due to the effect of the discrete benefits in the prior year related to the Merger, principally the reduction of our U.S.

deferred tax liability resulting from the effects of the Merger on the apportionment of income among states, and the effective settlement of uncertain tax positions.

Our effective income tax rates for the nine months ended September 30, 2020 and 2019 were 14.1% and 10.1%, respectively.

The increase in our effective tax rate for the nine months ended September 30, 2020 from the prior-year period is primarily due to the above noted prior year discrete items, partially offset by an increase in tax credits in the current year.

Our effective income tax rate for the three months ended March 31, 2021 was 10.5%, and our effective income tax rate for the three months ended March 31, 2020 was 10.1%.

Net Income Attributable to Global Payments

Net income attributable to Global Payments increased to $196.7 million for the three months ended March 31, 2021 compared to $143.6 million for the prior year, reflecting the increase in operating income and additional equity in income of equity method investments.

Diluted Earnings per Share

Diluted earnings per share was $0.66 for the three months ended March 31, 2021 compared to $0.48 for the prior year.

Diluted earnings per share for the three months ended March 31, 2021 reflects the increase in net income and a decrease in the weighted-average number of shares outstanding.

Liquidity and Capital Resources

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We believe that our current level of cash and borrowing capacity under our senior unsecured revolving credit facility, together with expected future cash flows from operations, will be sufficient to meet the needs of our existing operations and planned requirements for the foreseeable future.

We have implemented measures to preserve liquidity in future periods, taking into account the potential effects of COVID-19, including the reduction of certain operating expenses, including compensation costs, other discretionary expenses and planned capital expenditures.

We also temporarily suspended repurchases of our common stock during the second and third quarters.

Early actions taken to preserve our available capital and provide financial flexibility in response to the effects of COVID-19 on our business, including the reduction of certain operating expenses, employee compensation costs, other discretionary spending and planned capital expenditures, continue to help mitigate the financial effects of the COVID-19 pandemic.

We regularly evaluate our liquidity and capital position relative to cash requirements, and we may elect to raise additional funds in the future, through the issuance of debt or equity or by other means.

At September 30, 2020, we had cash and cash equivalents totaling $2,220.8 million.

Of this cash and cash equivalent amount, we considered $1,426.1 million to be available for general purposes, of which $29.0 million was undistributed foreign earnings considered to be indefinitely reinvested outside the United States.

The available cash of $1,426.1 million did not include the following:

At March 31, 2021, we had cash and cash equivalents totaling $2,082.4 million.

Of this amount, we considered $1,112.6 million to be available for general purposes, of which $33.0 million is undistributed foreign earnings considered to be indefinitely reinvested outside the United States.

The available cash of $1,112.6 million does not include the following:

(i) settlement-related cash balances, (ii) funds held as collateral for merchant losses ("Merchant Reserves") and (iii) funds held for customers.

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While this cash is not restricted in its use, we believe that designating this cash as a Merchant Reserve strengthens our fiduciary standing with our member sponsors and is in accordance with the guidelines set by the card networks.

Funds held for customers and the corresponding liability that we record in customer deposits include amounts collected prior to remittance on our customers' behalf.

Operating activities provided net cash of $1,544.8 million and $1,349.4 million for the nine months ended September 30, 2020 and 2019, respectively, which reflect net income adjusted for noncash items, including depreciation and amortization and changes in operating assets and liabilities.

Fluctuations in operating assets and liabilities are affected primarily by timing of month-end and transaction volume, especially changes in settlement processing assets and obligations.

Changes in settlement processing assets and obligations increased operating cash flows by $155.4 million during the nine months ended September 30, 2020 and increased operating cash flows by $624.0 million during the nine months ended September 30, 2019.

The increase in cash flows from operating activities from the prior year was primarily due to the increase in earnings after the adjustment for certain noncash items, including amortization of acquired intangibles and depreciation and amortization of property and equipment.

Cash flows from operations during the nine months ended September 30, 2019 also reflect the effect of settlement payments of $48.3 million related to interest rate swaps that we terminated upon the issuance of our senior unsecured notes.

We used net cash in investing activities of $395.0 million and $506.3 million during the nine months ended September 30, 2020 and 2019, respectively, primarily to fund acquisitions and capital expenditures.

During the nine months ended September 30, 2020 and 2019, we used cash of $77.2 million and $334.4 million, respectively, for acquisitions.

We made capital expenditures of $329.4 million and $201.0 million during the nine months ended September 30, 2020 and 2019, respectively.

Funds held for customers and the corresponding liability include amounts collected prior to remittance to or at the direction of our customers.

We also had restricted cash of $119.7 million as of March 31, 2021, representing amounts deposited by customers for prepaid card transactions.

These balances are considered cardholder funds held and are subject to local regulatory restrictions requiring appropriate segregation and restriction in their use.

Operating activities provided net cash of $599.4 million and $436.6 million for the three months ended March 31, 2021 and 2020, respectively, which reflect net income adjusted for noncash items, including depreciation and amortization and changes in operating assets and liabilities.

Fluctuations in operating assets and liabilities are affected primarily by timing of month-end and transaction volume, including changes in settlement processing assets and obligations.

The increase in cash flows from operating

activities from the prior year was primarily due to the increase in earnings after the adjustment for certain noncash items, including amortization of acquired intangibles and depreciation and amortization of property and equipment.

We used net cash in investing activities of $96.9 million and $169.7 million during the three months ended March 31, 2021 and 2020, respectively, primarily to fund acquisitions and capital expenditures.

During the three months ended March 31, 2021 and 2020, we used cash of $11.1 million and $67.2 million, respectively, for acquisitions.

We made capital expenditures of $86.2 million and $104.8 million during the three months ended March 31, 2021 and 2020, respectively.

These investments include software and hardware to support the development of new technologies, infrastructure to support our growing business and continued consolidation and enhancement of our operating platforms.

We will continue to make significant capital investments in the business, but we will do so at a reduced rate from our initial expectations prior to the pandemic.

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 3—Long-Term Debt and Lines of Credit" in the notes to the accompanying unaudited consolidated financial statements and below under "Long-Term Debt and Lines of Credit." Financing activities also include cash flows associated with common stock repurchase programs and share-based compensation programs, as well as cash distributions made to noncontrolling interests and our shareholders.

Cash flows from financing activities used net cash of $594.6 million during the nine months ended September 30, 2020 and provided net cash of $109.9 million during the nine months ended September 30, 2019.

Proceeds from long-term debt were $1,868.2 million and $6,704.8 million for the nine months ended September 30, 2020 and 2019, respectively.

Repayments of long-term debt were $1,829.6 million and $6,097.2 million for the nine months ended September 30, 2020 and 2019, respectively.

We used net cash in financing activities of $369.0 million and $77.5 million during the three months ended March 31, 2021 and 2020, respectively.

Proceeds from long-term debt were $1,987.0 million and $607.0 million for the three months ended March 31, 2021 and 2020, respectively.

Repayments of long-term debt were $1,575.4 million and $111.0 million for the three months ended March 31, 2021 and 2020, respectively.

Proceeds from and repayments of long-term debt consist of borrowings and repayments that we make with available cash, from time-to-time, under our revolving credit facility, as well as scheduled principal repayments we make on our term loans.

On May 15, 2020, we issued $1.0 billion in aggregate principle amount of senior unsecured notes.

We used the net proceeds from this offering to repay a portion of the outstanding indebtedness on our revolving credit facility and for general corporate purposes.

For the nine months ended September 30, 2019, in connection with financing activities associated with the Merger, we received $2,993.9 million of proceeds from the issuance of senior unsecured notes and $2,868.0 million from our senior unsecured credit facility.

We used these proceeds to repay TSYS's unsecured revolving credit facility, to refinance certain of our existing indebtedness, to fund cash payments made in lieu of fractional shares payable in accordance with the terms of the Merger and to pay transaction fees and costs related to the Merger.

On February 26, 2021, we issued $1.1 billion aggregate principal amount of 1.200% senior unsecured notes due February 2026.

Activity under our settlement lines of credit is affected primarily by timing of month-end and transaction volume.

During the nine months ended September 30, 2020 and 2019, we had net repayments of settlement lines of credit of $31.1 million and net borrowings of settlement lines of credit of $144.5 million, respectively.

During the three months ended March 31, 2021, we had net borrowings from settlement lines of credit of $108.5 million.

During the three months ended March 31, 2020, we had net repayments of settlement lines of credit of $78.1 million.

We repurchase our common stock mainly through open market repurchase plans and, at times, through accelerated share repurchase programs.

During the nine months ended September 30, 2020 and 2019, we used $421.2 million and $234.0 million, respectively, to repurchase shares of our common stock.

We temporarily suspended repurchases of our common stock during the second and third quarters.

As of September 30, 2020, we had $880.0 million of share repurchase authority remaining under a share repurchase program authorized by the board of directors.

Additionally, the board of directors increased our share purchase authorization to $1.25 billion on October 28, 2020.

We paid dividends to our common shareholders in the amounts of $175.0 million and $4.7 million during the nine months ended September 30, 2020 and 2019, respectively.

During the nine months ended September 30, 2019, we paid distributions to noncontrolling interest in the amount of $31.6 million, and we funded assumed dividends payable (declared by TSYS's board of directors prior to consummation of the Merger) to former TSYS shareholders in the amount of $23.2 million.

During the three months ended March 31, 2021 and 2020, we used $803.0 million and $421.2 million, respectively, to repurchase shares of our common stock.

As of March 31, 2021, we had $901.0 million of share repurchase authority remaining under our share repurchase program.

On February 10, 2021, we entered into an accelerated share repurchase (“ASR”) agreement with a financial institution to repurchase an aggregate of $500 million of our common stock during the ASR program purchase period, which ended on March 31, 2021.

The total number of shares delivered under this ASR program was 2,491,161 shares at an average price of $200.71 per share.

We paid dividends to our common shareholders in the amounts of $57.6 million and $58.3 million during the three months ended March 31, 2021 and 2020, respectively.

Long-Term Debt and Lines of Credit

Senior Unsecured Notes

We have $7.1 billion in aggregate principal amount of senior unsecured notes, which mature at various dates ranging from April 2021 to August 2049.

We have $7.5 billion in aggregate principal amount of senior unsecured notes, which mature at various dates ranging from June 2023 to August 2049.

Interest on the senior notes is payable semi-annually at various dates.

Each series of the senior notes is redeemable, at our option, in whole or in part, at any time and from time-to-time at the redemption prices set forth in the related indenture.

On May 15, 2020, we issued $1.0 billion in aggregate principal amount of 2.900% senior unsecured notes due May 2030 and received proceeds of $996.7 million.

We incurred debt issuance costs of approximately $8.4 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, 2020.

Interest on the notes is payable semi-annually in arrears on May 15 and November 15 of each year, commencing November 15, 2020.

Each series of the senior notes is

redeemable, at our option, in whole or in part, at any time and from time-to-time at the redemption prices set forth in the related indenture.

On February 26, 2021, we issued $1.1 billion in aggregate principal amount of 1.200% senior unsecured notes due March 2026.

We incurred debt issuance costs of approximately $8.6 million, including underwriting fees, fees for professional services and registration fees, which were capitalized and reflected as a reduction of the related carrying amount of the notes in our consolidated balance sheet at March 31, 2021.

Interest on the notes is payable semi-annually in arrears on March 1 and September 1 of each year, commencing September 1, 2021.

The notes are unsecured and unsubordinated indebtedness and rank equally in right of payment with all of our other outstanding unsecured and unsubordinated indebtedness.

We used the net proceeds from the offering to repay a portion of the outstanding indebtedness on our revolving credit facility and for general corporate purposes.

Senior Unsecured Credit Facilities

We have a term loan credit agreement ("Term Loan Credit Agreement") and a revolving credit agreement ("Unsecured Revolving Credit Agreement") in each case with Bank of America, N.A., as administrative agent, and a syndicate of financial institutions, as lenders and other agents.

The Term Loan Credit Agreement provides for a senior unsecured $2 billion term loan facility.

The Unsecured Revolving Credit Agreement provides for a senior unsecured $3 billion revolving credit facility.

Borrowings under the term loan facility were made in U.S.

dollars and borrowings under the revolving credit facility are available to be made in U.S.

dollars, euros, sterling, Canadian dollars and, subject to specific conditions, certain other currencies at our option.

Borrowings in U.S.

dollars and certain other London Interbank Offered Rate ("LIBOR")-quoted currencies will bear interest, at our option, at a rate equal to either (1) the rate (adjusted for any statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits in the London interbank market, (2) a floating rate of interest set forth on the applicable LIBOR screen page designated by Bank of America, N.A., or (3) the highest of (a) the federal funds effective rate plus 0.5%, (b) the rate of interest as publicly announced by Bank of America, N.A., as its "prime rate" or (c) LIBOR plus 1.0%, in each case, plus an applicable margin.

As of September 30, 2020, borrowings outstanding under the term loan facility were $2.0 billion and there were no borrowings outstanding under the revolving credit facility.

We continue to monitor developments related to the anticipated transition from LIBOR to an alternative benchmark reference rate, such as the Secured Overnight Financing Rate ("SOFR"), beginning January 1, 2022.

Additionally, we maintain contact with our lenders and other stakeholders to evaluate the potential effects of these changes on our future financing activities.

As of September 30, 2020, the interest rate on the term loan facility was 1.52%.

In addition, we are required to pay a quarterly commitment fee with respect to the unused portion of the revolving credit facility at an applicable rate per annum ranging from 0.125% to 0.300% depending on our credit rating.

Beginning on December 31, 2022, and at the end of each quarter thereafter, the Term Loan Facility must be repaid in quarterly installments in the amount of 2.50% of original principal through the maturity date with the remaining principal balance due upon maturity in September 2024.

The revolving credit facility also matures in September 2024.

As of March 31, 2021, borrowings outstanding under the term loan and revolving credit facility were $2.0 billion and $124.0 million, respectively.

We may issue standby letters of credit of up to $250 million in the aggregate under the revolving credit facility.

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The amounts available to borrow under the revolving credit facility are also determined by a financial leverage covenant.

As of September 30, 2020, the total available commitments under the revolving credit facility were $2.1 billion, and there were no outstanding borrowings under the facility.

As of March 31, 2021, the total available commitments under the revolving credit facility were $2.1 billion.

Compliance with Covenants

The senior unsecured term loan and revolving credit facility contain customary conditions to funding, affirmative covenants, negative covenants, financial covenants and events of default.

As of September 30, 2020, financial covenants under the term loan facility required a leverage ratio of 3.50 to 1.00 and an interest coverage ratio of 3.00 to 1.00.

We were in compliance with all applicable covenants as of September 30, 2020.

As of March 31, 2021, financial covenants under the term loan facility required a leverage ratio of 3.50 to 1.00 and an interest coverage ratio of 3.00 to 1.00.

We were in compliance with all applicable covenants as of March 31, 2021.

Settlement Lines of Credit

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Accordingly, the amount of the outstanding lines of credit may exceed the stated credit limit.

As of September 30, 2020, a total of $58.5 million of cash on deposit was used to determine the available credit.

As of September 30, 2020 and December 31, 2019, we had $439.4 million and $463.2 million, respectively, outstanding under these lines of credit with additional capacity to fund settlement of $1,387.3 million as of September 30, 2020.

During the three months ended September 30, 2020, the maximum and average outstanding balances under these lines of credit were $560.7 million and $324.6 million, respectively.

The weighted-average interest rate on these borrowings was 2.05% and 3.16% at September 30, 2020 and December 31, 2019, respectively.

As of March 31, 2021, a total of $53.9 million of cash on deposit was used to determine the available credit.

As of March 31, 2021, we had $459.4 million outstanding under these lines of credit with additional capacity to fund settlement of $1,361.5 million.

During the three months ended March 31, 2021, the maximum and average outstanding balances under these lines of credit were $820.9 million and $466.1 million, respectively.

The weighted-average interest rate on these borrowings was 2.09% at March 31, 2021.

See "Note 3—Long-Term Debt and Lines of Credit" in the notes to the accompanying unaudited consolidated financial statements for further information about our borrowing agreements.

Commitments and Contractual Obligations

During the nine months ended September 30, 2020, our commitments and contractual obligations increased from the amounts disclosed in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations-Commitments and Contractual Obligations" in our Annual Report on Form 10-K for the year ended December 31, 2019.

During the three months ended March 31, 2021, our commitments and contractual obligations increased from the amounts disclosed in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations-Commitments and Contractual Obligations" in our Annual Report on Form 10-K for the year ended December 31, 2020.

The increase primarily relates to the acquisition of software, technology infrastructure and related services.

Additionally, a portion of this amount, $97.6 million, was financed utilizing a two-year vendor financing arrangement.

Our estimated purchase obligations as of September 30, 2020 were $88.7 million during the remainder of 2020, $244.5 million during 2021, $279.2 million during 2022 and 2023, $177.2 million during 2024 and 2025 and $527.4 million thereafter.

Effects of the COVID-19 Pandemic on our Critical Accounting Policies

Because of the effects of the COVID-19 pandemic on our business, we evaluated the potential effects on our financial statements as of September 30, 2020 and for the three and nine months then ended.

However, the future magnitude and duration of the ultimate effect of the COVID-19 pandemic are not possible to predict at this time, and our assessments are therefore subject to material revision.

Goodwill - We considered a variety of factors that might indicate that it is more likely than not that the fair value of any reporting unit is below its carrying amount at September 30, 2020, including general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying amount of the net assets of our reporting units, our share price and other relevant events.

For certain of our reporting units that were acquired in the Merger, we also considered the expected near term impact of the COVID-19 pandemic on revenues and our cost mitigation efforts, as well as longer term performance expectations.

Based on the analyses completed, we believe it is not more likely than not that the carrying amount of any of our reporting units exceeded the fair value as of September 30, 2020.

Our estimated purchase obligations as of March 31, 2021 were $404.5 million during the remainder of 2021, $232.7 million during 2022, $334.0 million during 2023 and 2024, $339.0 million during 2025 and 2026 and $754.0 million thereafter for a total of $2,064.3 million.

Off-Balance Sheet Arrangements

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Forward-Looking Statements

Investors are cautioned that some of the statements we use in this report contain forward-looking statements and are made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements, which are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of and assumptions made by our management, involve risks, uncertainties and assumptions that could significantly affect the financial condition, results of operations, business plans and the future performance of Global Payments.

Actual events or results might differ materially from those expressed or forecasted in these forward-looking statements.

Accordingly, we cannot guarantee that our plans and expectations will be achieved.

Examples of forward-looking statements include, but are not limited to, statements we make regarding the effects of the COVID-19 pandemic on our business, including estimates of the effects of the pandemic on our revenues, financial operating results and liquidity, the effects of actions taken by us in response to the pandemic, the anticipated benefits of the Merger, including our future financial and operating results, the combined company’s plans, objectives, expectations and intentions, our expected financial and operating results, projected future growth of business, or completion of anticipated benefits of strategic initiatives, and other statements that are not historical facts.

Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

In addition to factors previously disclosed in Global Payments’ reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

the effects and duration of global economic, political, market, health and social events or other conditions, including the effects and duration of the COVID-19 pandemic;

regulatory measures or voluntary actions, including social distancing, shelter-in-place orders, operating restrictions on nonessential businesses and similar measures imposed or undertaken in an effort to combat the spread of the COVID-19 pandemic;

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 financial condition, including in particular:

our business strategy and means to implement the strategy;

measures of future results of operations, such as revenues, expenses, operating margins, income tax rates, and earnings per share;

other operating metrics such as shares outstanding and capital expenditures;

the effects of the COVID-19 pandemic on our business;

our success and timing in developing and introducing new services and expanding our business;

and statements about the benefits of our acquisitions, including future financial and operating results, the company’s plans, objectives, expectations and intentions, and the successful integration of our future acquisitions or completion of anticipated benefits and strategic initiatives.

You can sometimes identify forward-looking statements by our use of the words "believes," "anticipates," "expects," "intends," "plan," "forecast," "guidance" and similar expressions.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Although we believe that the plans and expectations reflected in or suggested by our forward-looking statements are reasonable, those statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, uncertainties and contingencies, many of which are beyond our control, cannot be foreseen and reflect future business decisions that are subject to change.

Accordingly, we cannot guarantee you that our plans and expectations will be achieved.

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 as a result of many known and unknown factors, many of which are beyond our ability to predict or control.

Important factors, among others, that may otherwise cause actual events or results to differ materially from those anticipated by such forward-looking statements or historical performance include the timing and severity of the effects of global economic, political, market, health and social events or other conditions, including the timing and severity of the effects of the COVID-19 pandemic;

regulatory measures or voluntary actions, including continued or prolonged social distancing, shelter-in-place orders, operating restrictions on businesses and similar measures imposed or undertaken in an effort to combat the spread of the COVID-19 pandemic;

management’s assumptions and projections used in their estimates of the timing and severity of the effects of the COVID-19 pandemic on our future revenues, results of operations and liquidity;

our ability to meet our liquidity needs in light of the effects of the COVID-19 pandemic;

the outcome of any legal proceedings that may be instituted against Global Payments or its or TSYS’ current or former directors;

difficulties, delays and higher than anticipated costs related to integrating the businesses of Global Payments and TSYS, including with respect to implementing systems to prevent a material security breach of any internal systems or to successfully manage credit and fraud risks in business units;

the outcome of any legal proceedings that may be instituted against the Company or our directors;

difficulties, delays and higher than anticipated costs related to integrating the businesses of Global Payments and TSYS, including with respect to implementing controls to prevent a material security breach of any internal systems or to successfully manage credit and fraud risks in business units;

failing to fully realize anticipated cost savings and other anticipated benefits of the Merger when expected or at all;

business disruptions from the Merger or integration that may harm our business, including current plans and operations;

business disruptions from the Merger integration that may harm our business, including current plans and operations;

failing to comply with the applicable requirements of Visa, Mastercard or other payment networks or card schemes or changes in those requirements;

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the diversion of management’s attention from ongoing business operations;

the continued availability of capital and financing following the Merger;

the continued availability of capital and financing;

the business, economic and political conditions in the markets in which we operate;

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the effects of new or changes in current laws, regulations, credit card association rules or other industry standards, including privacy and cybersecurity laws and regulations;

and events beyond our control, such as acts of terrorism, and other factors included in the “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, and in other documents that we file with the SEC, which are available at http://www.sec.gov.

Any forward-looking statements speak only as of the date of this communication or as of the date they were made, and we undertake no obligation to update forward-looking statements, except as required by law.

and events beyond our control and other factors presented in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2020, which we advise you to review.

These cautionary statements qualify all of our forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements.

Our forward-looking statements speak only as of the date they are made and should not be relied upon as representing our plans and expectations as of any subsequent date.

While we may elect to update or revise forward-looking statements at some time in the future, we specifically disclaim any obligation to publicly release the results of any revisions to our forward-looking statements, except as required by law.

ITEM 3—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-Q

Item 2. Management’s Discussion and Analysis