What changed in this filing

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Item 1. Financial Statements

2022-05-02 compared with 2021-11-02 · 133 added, 296 removed, 388 unchanged (53% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, 2021 September 30, 2020

Revenues $ 2,202,337 $ 1,917,815

Operating expenses:

Cost of service

944,172 900,921

Selling, general and administrative

858,082 726,475

1,802,254 1,627,396

Operating income 400,083 290,419

Interest and other income 6,320 29,983

Interest and other expense ( 82,187 ) ( 82,976 )

( 75,867 ) ( 52,993 )

Income before income taxes and equity in income of equity method investments 324,216 237,426

Income tax expense 50,117 42,834

Income before equity in income of equity method investments 274,099 194,592

Equity in income of equity method investments, net of tax 31,364 35,638

Net income 305,463 230,230

Net income attributable to noncontrolling interests, net of tax ( 8,727 ) ( 9,259 )

Net income attributable to Global Payments $ 296,736 $ 220,971

Earnings per share attributable to Global Payments:

Basic earnings per share $ 1.02 $ 0.74

Diluted earnings per share $ 1.01 $ 0.74

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

Nine Months Ended

September 30, 2021 September 30, 2020

March 31, 2022 March 31, 2021

Revenues $ 2,156,254 $ 1,990,007

24 unchanged sentences

Three Months Ended

September 30, 2021 September 30, 2020

March 31, 2022 March 31, 2021

Net income $ 249,636 $ 198,410

2 unchanged sentences

Income tax benefit related to foreign currency translation adjustments 670 750

Net unrealized (losses) gains on hedging activities ( 646 ) 194

Net unrealized gains on hedging activities 8,934 994

Reclassification of net unrealized losses on hedging activities to interest expense 9,445 10,838

1 unchanged sentence

Other, net of tax — 7,775

Other comprehensive (loss) income ( 74,360 ) 115,993

Comprehensive income 231,103 346,223

Comprehensive income attributable to noncontrolling interests ( 4,625 ) ( 18,010 )

Comprehensive income attributable to Global Payments $ 226,478 $ 328,213

Nine Months Ended

September 30, 2021 September 30, 2020

Net income $ 770,686 $ 420,282

Other comprehensive income (loss):

Foreign currency translation adjustments ( 80,427 ) ( 10,844 )

Income tax benefit related to foreign currency translation adjustments 5,438 1,160

Net unrealized losses on hedging activities ( 62 ) ( 53,332 )

Reclassification of net unrealized losses on hedging activities to interest expense 30,288 25,786

Income tax (expense) benefit related to hedging activities

( 7,297 ) 6,677

Other, net of tax 4,017 ( 3,288 )

Other comprehensive loss ( 18,367 ) ( 16,074 )

Comprehensive income 231,269 182,336

Comprehensive income attributable to noncontrolling interests ( 6,328 ) ( 25,898 )

Comprehensive loss attributable to noncontrolling interests 441 4,245

Comprehensive income attributable to Global Payments $ 231,710 $ 186,581

3 unchanged sentences

(in thousands, except share data)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Current assets:

25 unchanged sentences

Common stock, no par value;

400,000,000 shares authorized at September 30, 2021 and December 31, 2020;

290,086,635 issued and outstanding at September 30, 2021 and 298,332,459 issued and outstanding at December 31, 2020

400,000,000 shares authorized at March 31, 2022 and December 31, 2021;

281,434,153 issued and outstanding at March 31, 2022 and 284,750,452 issued and outstanding at December 31, 2021

Paid-in capital 22,338,086 22,880,261

9 unchanged sentences

(in thousands)

Nine Months Ended

September 30, 2021 September 30, 2020

Three Months Ended

March 31, 2022 March 31, 2021

Cash flows from operating activities:

8 unchanged sentences

Deferred income taxes ( 80,841 ) ( 56,390 )

Equity in income of equity investments, net of tax ( 94,261 ) ( 60,682 )

Equity in income of equity method investments, net of tax ( 17,479 ) ( 22,733 )

Distribution received on investments 6,022 438

Other, net 6,127 ( 6,285 )

11 unchanged sentences

Cash flows from financing activities:

Net borrowings from (repayments of) settlement lines of credit 244,858 ( 31,069 )

Net borrowings from settlement lines of credit 16,497 108,488

Proceeds from long-term debt 1,529,157 1,987,005

4 unchanged sentences

Common stock repurchased - share-based compensation plans ( 26,295 ) ( 39,437 )

Contribution from a noncontrolling interest 46,320 —

Distribution to a noncontrolling interest — ( 6,955 )

Distributions to noncontrolling interests ( 5,534 ) —

Dividends paid ( 70,243 ) ( 57,574 )

12 unchanged sentences

Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity Noncontrolling Interests Total Equity

Balance at June 30, 2021 293,703 $ 24,201,763 $ 2,664,707 $ ( 172,707 ) $ 26,693,763 $ 156,377 $ 26,850,140

Net income 296,736 296,736 8,727 305,463

Other comprehensive loss ( 70,258 ) ( 70,258 ) ( 4,102 ) ( 74,360 )

Stock issued under share-based compensation plans 819 9,262 9,262 9,262

Common stock repurchased - share-based compensation plans ( 203 ) ( 34,003 ) ( 34,003 ) ( 34,003 )

Share-based compensation expense 65,611 65,611 65,611

Repurchases of common stock ( 4,232 ) ( 697,833 ) ( 42,924 ) ( 740,757 ) ( 740,757 )

Contribution from a noncontrolling interest — 46,320 46,320

Cash dividends declared ($ 0.25 per common share)

( 73,327 ) ( 73,327 ) ( 73,327 )

Balance at September 30, 2021 290,087 $ 23,544,800 $ 2,845,192 $ ( 242,965 ) $ 26,147,027 $ 207,322 $ 26,354,349

Number of Shares

Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity

Noncontrolling Interests Total Equity

Balance at June 30, 2020 299,244 $ 25,570,582 $ 2,314,423 $ ( 459,146 ) $ 27,425,859 $ 207,130 $ 27,632,989

Net income 220,971 220,971 9,259 230,230

Other comprehensive income 107,242 107,242 8,751 115,993

Stock issued under share-based compensation plans 50 8,423 8,423 8,423

Common stock repurchased - share-based compensation plans ( 7 ) ( 682 ) ( 682 ) ( 682 )

Distribution to a noncontrolling interest ( 6,955 ) ( 6,955 )

Share-based compensation expense 42,276 42,276 42,276

Cash dividends declared ($ 0.195 per common share)

( 58,432 ) ( 58,432 ) ( 58,432 )

Balance at September 30, 2020 299,287 $ 25,620,599 $ 2,476,962 $ ( 351,904 ) $ 27,745,657 $ 218,185 $ 27,963,842

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except per share data)

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, 2021 284,750 $ 22,880,261 $ 2,982,122 $ ( 234,182 ) $ 25,628,201 $ 241,216 $ 25,869,417

5 unchanged sentences

Repurchases of common stock ( 4,516 ) ( 561,725 ) ( 87,929 ) ( 649,654 ) ( 649,654 )

Contribution from a noncontrolling interest — 46,320 46,320

Distributions to noncontrolling interest — ( 5,534 ) ( 5,534 )

Cash dividends declared ($ 0.25 per common share)

( 70,243 ) ( 70,243 ) ( 70,243 )

Balance at September 30, 2021 290,087 $ 23,544,800 $ 2,845,192 $ ( 242,965 ) $ 26,147,027 $ 207,322 $ 26,354,349

Balance at March 31, 2022 281,434 $ 22,338,086 $ 3,068,683 $ ( 247,205 ) $ 25,159,564 $ 235,241 $ 25,394,805

Number of Shares

4 unchanged sentences

Balance at December 31, 2020 298,332 $ 24,963,769 $ 2,570,874 $ ( 202,273 ) $ 27,332,370 $ 154,674 $ 27,487,044

Cumulative effect of adoption of new accounting standard ( 5,379 ) ( 5,379 ) ( 5,379 )

Net income 196,681 196,681 1,729 198,410

Other comprehensive (loss) income ( 41,333 ) ( 41,333 ) 7,492 ( 33,841 )

Other comprehensive loss ( 10,100 ) ( 10,100 ) ( 5,974 ) ( 16,074 )

Stock issued under share-based compensation plans 1,003 17,705 17,705 17,705

1 unchanged sentence

Share-based compensation expense 37,165 37,165 37,165

Distribution to a noncontrolling interest ( 6,955 ) ( 6,955 )

Repurchases of common stock ( 3,955 ) ( 573,787 ) ( 209,169 ) ( 782,956 ) ( 782,956 )

1 unchanged sentence

( 57,574 ) ( 57,574 ) ( 57,574 )

Balance at September 30, 2020 299,287 $ 25,620,599 $ 2,476,962 $ ( 351,904 ) $ 27,745,657 $ 218,185 $ 27,963,842

Balance at March 31, 2021 295,158 $ 24,403,323 $ 2,500,812 $ ( 212,373 ) $ 26,691,762 $ 150,429 $ 26,842,191

See Notes to Unaudited Consolidated Financial Statements.

12 unchanged sentences

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

COVID-19 Update - Since early 2020, the global economy has been, and continues to be, affected by COVID-19.

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

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

Certain government actions to gradually ease restrictions, provide economic stimulus and distribute vaccines have resulted in signs of economic recovery.

However, the effects of the pandemic continue, and its ultimate severity and duration, and the implications on future global economic conditions, remain uncertain.

Use of estimates - The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period.

Actual results could differ materially from those estimates.

In particular, the future magnitude, duration and effects of the COVID-19 pandemic are difficult to predict at this time, and the ultimate effect could result in additional charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill and other losses.

These unaudited consolidated financial statements reflect the financial statement effects of COVID-19 based upon management’s estimates and assumptions utilizing the most currently available information.

Recently adopted accounting pronouncements

Accounting Standards Update ("ASU") 2019-12 — In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, "Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes ," which is intended to enhance and simplify various aspects of the accounting for income taxes.

The amendments in this update remove certain exceptions to the general principles in Accounting Standards Codification ("ASC") Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

ASU 2019-12 also clarifies and amends existing guidance to improve consistency in application of the accounting for franchise taxes, enacted changes in tax laws or rates and transactions that result in a step-up in the tax basis of goodwill.

The adoption of ASU 2019-12 on January 1, 2021 did not have a material effect on our consolidated financial statements.

In particular, the future magnitude, duration and effects of the COVID-19 pandemic and the invasion of Ukraine by Russia are difficult to predict at this time, and the ultimate effect could result in additional charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill and other losses.

In response to the invasion of Ukraine by Russia, economic sanctions were imposed on individuals and entities in Russia, including financial institutions, by governments around the world, including the U.S.

and the European Union.

As of March 31, 2022, we were in compliance with all applicable restrictions and sanctions, and our operations in Russia had not been significantly affected.

As a result of additional sanctions imposed in April 2022 that will affect our ability to continue normal operations in Russia, we sold our merchant business in Russia effective April 29, 2022.

Based on our current estimates, we expect to recognize a charge of approximately $ 130 million during the second quarter of 2022 associated with the sale, including recognition of the associated accumulated foreign currency translation losses.

These unaudited consolidated financial statements reflect the financial statement effects based upon management’s estimates and assumptions utilizing the most currently available information.

Recently issued pronouncements not yet adopted

ASU 2021-08 — In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ." Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with ASC Topic 606, at fair value on the acquisition date.

ASU 2021-08 requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606.

At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC Topic 606 as if it had originated the contracts, which should generally result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements.

Accounting Standards Update ("ASU") 2021-08 — In October 2021, the Financial Accounting Standards Board ("FASB") issued ASU 2021-08, "Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ." Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("Topic 606"), at fair value on the acquisition date.

ASU 2021-08 requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts, which should generally result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements.

This update also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination.

2 unchanged sentences

Adoption during an interim period requires retrospective application to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application.

We are evaluating the effect of ASU 2021-08 on our consolidated financial statements.

ASU 2020-04 — In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting ," which provides optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform.

The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022 for which an entity has elected certain optional expedients and which are retained through the end of the hedging relationship.

The amendments in this update also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

If elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant ASC Topic or Industry Subtopic that contains the guidance that otherwise would be required to be applied.

The amendments in this update were effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022.

A portion of our indebtedness bears interest at a variable rate based on LIBOR.

Furthermore, we have entered into hedging instruments to manage our exposure to fluctuations in the LIBOR benchmark interest rate.

We are evaluating the effect of the discontinuance of LIBOR on our outstanding debt and hedging instruments and the related effect of ASU 2020-04 on our consolidated financial statements.

We are evaluating the potential effects of ASU 2021-08 on our consolidated financial statements.

NOTE 2— ACQUISITION

On June 10, 2021, we acquired Zego, a real estate technology company that provides a comprehensive resident experience management software and digital commerce solutions to property managers, primarily in the United States.

Zego’s real estate software and payments solutions support property managers and residents throughout the real estate lifecycle.

On June 10, 2021, we acquired Zego, a real estate technology company that provides comprehensive resident experience management software and digital commerce solutions to property managers, primarily in the United States, for cash consideration of approximately $ 933 million.

This acquisition aligns with our technology-enabled, software driven strategy and expands our business into a new vertical market.

We paid cash consideration of approximately $ 933 million, which we funded with cash on hand and by drawing on our revolving credit facility.

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

Provisional Amounts at Acquisition Date Measurement-Period Adjustments Provisional Amounts at September 30, 2021

We accounted for this transaction as a business combination, which generally requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date.

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

Provisional Amounts at March 31, 2022

(in thousands)

10 unchanged sentences

Total purchase consideration $ 933,246

This transaction was accounted for as a business combination, which generally requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date.

As of September 30, 2021, we considered these amounts to be provisional because we were still in the process of gathering and reviewing information to support the valuation of assets acquired and liabilities assumed and to evaluate the basis differences for assets and liabilities for financial reporting and tax purposes.

We made measurement-period adjustments, as shown in the table above, that decreased the amount of provisional goodwill by $ 57.1 million.

The effects of the measurement-period adjustments on our consolidated statement of income for the third quarter of 2021 were not material.

As of March 31, 2022, we considered these amounts to be provisional because we were still in the process of gathering and reviewing information to support the valuation of assets acquired and liabilities assumed and to evaluate the differences in the bases of assets and liabilities for financial reporting and tax purposes.

There were no measurement-period adjustments during the three months ended March 31, 2022.

Goodwill of $ 475.1 million arising from the acquisition, included in the Merchant Solutions segment, is attributable to expected growth opportunities, potential synergies from combining our existing businesses and an assembled workforce.

We expect that a portion of the goodwill will be deductible for income tax purposes.

We expect that substantially all of the goodwill will be deductible for income tax purposes.

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

7 unchanged sentences

NOTE 3— REVENUES

The following tables present a disaggregation of our revenues from contracts with customers by geography for each of our reportable segments for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30, 2021

Solutions Issuer

Solutions Business and

Solutions Intersegment

Eliminations Total

(in thousands)

Americas $ 1,245,805 $ 394,893 $ 204,584 $ ( 16,507 ) $ 1,828,775

Europe 189,282 120,383 3,086 — 312,751

Asia Pacific 60,811 6,890 — ( 6,890 ) 60,811

$ 1,495,898 $ 522,166 $ 207,670 $ ( 23,397 ) $ 2,202,337

Three Months Ended September 30, 2020

Solutions Issuer

Solutions Business and

Solutions Intersegment

Eliminations Total

(in thousands)

Americas $ 1,039,039 $ 370,938 $ 204,106 $ ( 15,097 ) $ 1,598,986

Europe 154,262 113,907 — — 268,169

Asia Pacific 50,660 2,564 — ( 2,564 ) 50,660

$ 1,243,961 $ 487,409 $ 204,106 $ ( 17,661 ) $ 1,917,815

Nine Months Ended September 30, 2021

The following tables present a disaggregation of our revenues from contracts with customers by geography for each of our reportable segments for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31, 2022

Solutions Issuer

7 unchanged sentences

$ 1,473,019 $ 511,501 $ 195,772 $ ( 24,038 ) $ 2,156,254

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Solutions Issuer

7 unchanged sentences

$ 1,267,872 $ 500,251 $ 243,585 $ ( 21,701 ) $ 1,990,007

The following table presents a disaggregation of our Merchant Solutions segment revenues by distribution channel for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

The following table presents a disaggregation of our Merchant Solutions segment revenues by distribution channel for the three months ended March 31, 2022 and 2021:

Three Months Ended

March 31, 2022 March 31, 2021

(in thousands)

3 unchanged sentences

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, 2021 and 2020, substantially all of our revenues were recognized over time.

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

Balance Sheet Location September 30, 2021 December 31, 2020

For the three months ended March 31, 2022 and 2021, substantially all of our revenues were recognized over time.

Supplemental balance sheet information related to contracts from customers as of March 31, 2022 and December 31, 2021 was as follows:

Balance Sheet Location March 31, 2022 December 31, 2021

(in thousands)

5 unchanged sentences

Contract liabilities, net (noncurrent) Other noncurrent liabilities $ 45,512 $ 44,502

Net contract assets were not material at September 30, 2021 or at December 31, 2020.

Revenue recognized for the three months ended September 30, 2021 and 2020 from contract liability balances at the beginning of each period was $ 75.5 million and $ 69.7 million, respectively.

Revenue recognized for the nine months ended September 30, 2021 and 2020 from contract liability balances at the beginning of each period was $ 186.0 million and $ 195.3 million, respectively.

Net contract assets were not material at March 31, 2022 or at December 31, 2021.

Revenue recognized for the three months ended March 31, 2022 and 2021 from contract liability balances at the beginning of each period was $ 84.1 million and $ 85.9 million, respectively.

ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations.

The purpose of this disclosure is to provide additional information about the amounts and expected timing of revenue to be recognized from the remaining performance obligations in our existing contracts.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at September 30, 2021.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at March 31, 2022.

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.

5 unchanged sentences

NOTE 4— GOODWILL AND OTHER INTANGIBLE ASSETS

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

September 30, 2021 December 31, 2020

As of March 31, 2022 and December 31, 2021, goodwill and other intangible assets consisted of the following:

March 31, 2022 December 31, 2021

(in thousands)

13 unchanged sentences

$ 11,292,243 $ 11,633,709

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

The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the three months ended March 31, 2022:

Solutions Issuer

2 unchanged sentences

Balance at December 31, 2021 $ 14,063,682 $ 7,954,453 $ 2,795,139 $ 24,813,274

Goodwill acquired 517,240 — — 517,240

Effect of foreign currency translation ( 6,953 ) ( 7,541 ) ( 599 ) ( 15,093 )

Reallocation of goodwill — 407,713 ( 407,713 ) —

Measurement period adjustments — ( 4,382 ) — ( 4,382 )

Balance at September 30, 2021 $ 14,027,163 $ 7,953,358 $ 2,363,754 $ 24,344,275

There were no accumulated impairment losses for goodwill as of September 30, 2021 or December 31, 2020.

NOTE 5 - OTHER ASSETS

Through certain of our subsidiaries in Europe, we were a member and shareholder of Visa Europe Limited ("Visa Europe").

On June 21, 2016, Visa Inc.

("Visa") acquired all of the membership interests in Visa Europe, 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).

On September 24, 2020, in connection with the first mandatory release assessment, a portion of the Series B and C convertible preferred shares was converted by Visa representing approximately half of the original potential conversion rate.

We recognized a gain of $ 27.3 million reported in interest and other income in our consolidated statement of income for the three and nine months ended September 30, 2020 based on the fair value of the shares received.

Balance at March 31, 2022 $ 14,056,729 $ 8,350,243 $ 2,386,827 $ 24,793,799

During the first quarter of 2022, the recently acquired operations of MineralTree were reassigned to the Issuer Solutions segment to reflect how the business will be managed going forward.

As a result of this realignment, $ 407.7 million of goodwill was reallocated from the Business and Consumer Solutions segment to the Issuer Solutions segment.

There were no accumulated impairment losses for goodwill as of March 31, 2022 or December 31, 2021.

NOTE 5— LONG-TERM DEBT AND LINES OF CREDIT

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

September 30, 2021 December 31, 2020

As of March 31, 2022 and December 31, 2021, long-term debt consisted of the following:

March 31, 2022 December 31, 2021

(in thousands)

3.800 % senior notes due April 1, 2021

$ — $ 752,199

3.750 % senior notes due June 1, 2023

2 unchanged sentences

557,690 559,338

1.500 % senior notes due November 15, 2024

497,430 497,185

2.650 % senior notes due February 15, 2025

1 unchanged sentence

1.200 % senior notes due March 1, 2026

1,092,495 1,092,016

4.800 % senior notes due April 1, 2026

795,199 798,024

2.150 % senior notes due January 15, 2027

744,008 743,695

4.450 % senior notes due June 1, 2028

4 unchanged sentences

990,489 990,196

2.900 % senior notes due November 15, 2031

741,926 741,716

4.150 % senior notes due August 15, 2049

8 unchanged sentences

The carrying amounts of our senior notes and term loan in the table above are presented net of unamortized discount and unamortized debt issuance costs, as applicable.

At September 30, 2021, unamortized discount on senior notes was $ 8.7 million, and unamortized debt issuance costs on senior notes and the unsecured term loan facility were $ 49.0 million.

At March 31, 2022, unamortized discount on senior notes was $ 11.4 million, and unamortized debt issuance costs on senior notes and the unsecured term loan facility were $ 57.6 million.

At December 31, 2021, unamortized discount on senior notes was $ 11.7 million and unamortized debt issuance costs on our senior notes and the unsecured term loan facility were $ 60.7 million.

The portion of unamortized debt issuance costs related to revolving credit facilities is included in other noncurrent assets.

At September 30, 2021, unamortized debt issuance costs on the unsecured revolving credit facility were $ 10.8 million, and at December 31, 2020, unamortized debt issuance costs on the unsecured revolving credit facility were $ 13.8 million.

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

At March 31, 2022, unamortized debt issuance costs on the unsecured revolving credit facility were $ 9.0 million, and at December 31, 2021, unamortized debt issuance costs on the unsecured revolving credit facility were $ 9.9 million.

At March 31, 2022, future maturities of long-term debt (excluding finance lease liabilities) are as follows by year (in thousands):

Year Ending December 31,

6 unchanged sentences

Total $ 11,770,173

Senior Unsecured Notes

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 September 30, 2021.

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

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

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

As of September 30, 2021, our senior notes had a total carrying amount of $ 7.5 billion and an estimated fair value of $ 7.9 billion.

Long-Term Debt

As of March 31, 2022, our senior notes had a total carrying amount of $ 9.4 billion and an estimated fair value of $ 9.1 billion.

The estimated fair value of our senior notes was based on quoted market prices in an active market and is considered to be a Level 1 measurement of the valuation hierarchy.

The fair value of other long-term debt approximated its carrying amount at September 30, 2021.

The fair value of other long-term debt approximated its carrying amount at March 31, 2022.

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, 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 September 30, 2021.

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

As of March 31, 2022, 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, 2022.

Derivative Agreements

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

Derivative Financial Instruments Balance Sheet Location Weighted-Average Fixed Rate of Interest at September 30, 2021 Range of Maturity Dates at

September 30, 2021 September 30, 2021 December 31, 2020

Derivative Financial Instruments Balance Sheet Location Weighted-Average Fixed Rate of Interest at March 31, 2022 Range of Maturity Dates at

March 31, 2022 March 31, 2022 December 31, 2021

(in thousands)

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

Accounts payable and accrued liabilities NA NA $ — $ 1,330

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

Other noncurrent liabilities 2.73 % December 31, 2022 $ 40,701 $ 65,490

NA = not applicable.

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

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

Interest rate swaps (Notional of $ 1,250 million at March 31, 2022 and December 31, 2021)

Accounts payable and accrued liabilities 2.73 % December 31, 2022 $ 11,765 $ 28,777

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 months ended March 31, 2022 and 2021:

Three Months Ended

March 31, 2022 March 31, 2021

(in thousands)

Net unrealized (losses) gains recognized in other comprehensive income (loss) $ ( 646 ) $ 194 $ ( 62 ) $ ( 53,332 )

Net unrealized gains recognized in other comprehensive income (loss) $ 8,934 $ 994

Net unrealized losses reclassified out of other comprehensive income (loss) to interest expense $ 9,445 $ 10,838

As of September 30, 2021, the amount of net unrealized losses in accumulated other comprehensive loss related to our interest rate swaps that is expected to be reclassified into interest expense during the next 12 months was $ 38.5 million.

As of March 31, 2022, the amount of net unrealized losses in accumulated other comprehensive loss related to our interest rate swaps that is expected to be reclassified into interest expense during the next 12 months was $ 16.9 million.

Interest Expense

Interest expense was $ 82.3 million and $ 82.1 million for the three months ended September 30, 2021 and 2020, respectively, and $ 242.9 million and $ 244.3 million for the nine months ended September 30, 2021 and 2020, respectively.

Interest expense was $ 89.3 million and $ 81.2 million for the three months ended March 31, 2022 and 2021, respectively.

NOTE 6— INCOME TAX

Our effective income tax rates for the three and nine months ended September 30, 2021 were 15.5 % and 16.3 %, respectively.

Our effective income tax rates for the three and nine months ended September 30, 2021 differed favorably from the U.S.

Our effective income tax rate for the three months ended March 31, 2022 was 18.4 %.

Our effective income tax rate for the three months ended March 31, 2022 differed favorably from the U.S.

statutory rate primarily as a result of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction.

Our effective income tax rate for the nine months ended September 30, 2021 also included the effect of enacted tax law changes in the U.K.

which required a remeasurement of deferred tax balances raising the effective rate, and was favorably affected by a change in the assessment of the need for a valuation allowance related to foreign tax credit carryforwards.

The effective rate for each period includes the effects of applicable state income taxes.

Our effective income tax rates for the three and nine months ended September 30, 2020 were 18.0 % and 14.1 %, respectively.

Our effective income tax rate for the three months ended September 30, 2020 differed from the U.S.

statutory rate primarily due to tax credits, foreign interest income not subject to tax, the foreign-derived intangible income deduction, changes in uncertain tax positions and the tax effect of a U.K.

statutory income tax rate change that took effect during the quarter.

Our effective income tax rate for the nine months ended September 30, 2020 differed from the U.S.

statutory rate primarily due to tax credits, foreign interest income not subject to tax, the foreign-derived intangible income deduction and excess tax benefits of share-based awards.

The effective rate for each period includes the effects of applicable state income taxes.

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

Our effective income tax rate for the three months ended March 31, 2021 differed favorably from the U.S.

statutory rate primarily as a result of a change in the assessment of the need for a valuation allowance related to foreign tax credit carryforwards, foreign interest income not subject to tax, tax credits, the foreign-derived intangible income deduction and excess tax benefits of share-based awards.

NOTE 7— SHAREHOLDERS’ EQUITY

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

During the three months ended September 30, 2021, we repurchased and retired 4,232,232 shares of our common stock at a cost, including commissions, of $ 740.8 million, or $ 175.03 per share.

During the three months ended September 30, 2020, there were no repurchases.

During the nine months ended September 30, 2021 and 2020, we repurchased and retired 9,689,181 and 2,094,731 shares of our common stock at a cost, including commissions, of $ 1,813.7 million and $ 404.0 million, or $ 187.21 per share and $ 192.85 per share, respectively.

The activity for the nine months ended September 30, 2021 included the repurchase of 2,491,161 shares at an average price of $ 200.71 per share under an ASR agreement we entered into on February 10, 2021 with a financial institution to repurchase an aggregate of $ 500 million of our common stock during the A SR program purchase period, which ended on March 31, 2021.

As of September 30, 2021, the remaining amount available under our share repurchase program was $ 949.2 million.

On October 28, 2021, our board of directors declared a dividend of $ 0.25 per share payable on December 30, 2021 to common shareholders of record as of December 16, 2021.

During the three months ended March 31, 2022, we repurchased and retired 4,515,626 shares of our common stock at a cost, including commissions, of $ 649.7 million, or $ 143.95 per share.

During the three months ended March 31, 2021, we repurchased and retired 3,955,400 shares of our common stock at a cost including commissions, of $ 783.0 million, or $ 198.00 per share.

The activity for the three months ended March 31, 2021 included the repurchase of 2,491,161 shares at an average price of $ 200.71 per share under an ASR agreement we entered into on February 10, 2021 with a financial institution to repurchase an aggregate of $ 500 million of our common stock during the A SR program purchase period, which ended on March 31, 2021.

As of March 31, 2022, the remaining amount available under our share repurchase program was $ 1,707.0 million.

On April 28, 2022, our board of directors declared a dividend of $ 0.25 per share payable on June 24, 2022 to common shareholders of record as of June 10, 2022.

NOTE 8— SHARE-BASED AWARDS AND STOCK OPTIONS

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

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

(in thousands) (in thousands)

Three Months Ended

March 31, 2022 March 31, 2021

(in thousands)

Share-based compensation expense $ 38,399 $ 37,165

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Share-Based Awards

The following table summarizes the changes in unvested restricted stock and performance awards for the nine months ended September 30, 2021:

The following table summarizes the changes in unvested restricted stock and performance awards for the three months ended March 31, 2022:

Shares Weighted-Average

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Forfeited ( 22 ) 167.59

Unvested at September 30, 2021 1,731 $ 183.74

The total fair value of restricted stock and performance awards vested during the nine months ended September 30, 2021 and September 30, 2020 was $ 178.9 million and $ 77.9 million, respectively.

For restricted stock and performance awards, we recognized compensation expense of $ 62.2 million and $ 38.9 million during the three months ended September 30, 2021 and 2020, respectively, and $ 135.6 million and $ 94.9 million during the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, there was $ 204.9 million of unrecognized compensation expense related to unvested restricted stock and performance awards that we expect to recognize over a weighted-average period of 2.1 years.

Unvested at March 31, 2022 2,511 $ 160.68

The total fair value of restricted stock and performance awards vested during the three months ended March 31, 2022 and March 31, 2021 was $ 93.3 million and $ 86.1 million, respectively.

For restricted stock and performance awards, we recognized compensation expense of $ 35.1 million and $ 33.5 million during the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, there was $ 333.5 million of unrecognized compensation expense related to unvested restricted stock and performance awards that we expect to recognize over a weighted-average period of 2.4 years.

Stock Options

The following table summarizes stock option activity for the nine months ended September 30, 2021:

The following table summarizes stock option activity for the three months ended March 31, 2022:

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

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Granted 154 136.02

Forfeited ( 1 ) 113.48

Exercised ( 4 ) 16.89

Outstanding at September 30, 2021 1,183 $ 106.98 6.0 $ 69.4

Options vested and exercisable at September 30, 2021 908 $ 86.45 5.3 $ 66.4

We recognized compensation expense for stock options of $ 1.9 million and $ 2.4 million during the three months ended September 30, 2021 and 2020, respectively, and $ 6.0 million and $ 6.5 million for the nine months ended September 30, 2021 and 2020, respectively.

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2021 and 2020 was $ 23.4 million and $ 69.8 million, respectively.

As of September 30, 2021, we had $ 10.1 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 1.9 years.

The weighted-average grant-date fair value of stock options granted during the nine months ended September 30, 2021 and 2020 was $ 65.99 and $ 54.85 , respectively.

Outstanding at March 31, 2022 1,322 $ 111.06 5.9 $ 48.5

Options vested and exercisable at March 31, 2022 1,053 $ 97.96 5.1 $ 48.4

We recognized compensation expense for stock options of $ 1.8 million and $ 2.4 million during the three months ended March 31, 2022 and 2021, respectively.

The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2022 and 2021 was $ 0.6 million and $ 20.6 million, respectively.

As of March 31, 2022, we had $ 14.0 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 2.3 years.

The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2022 and 2021 was $ 48.88 and $ 65.99 , 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, 2021 September 30, 2020

Three Months Ended

March 31, 2022 March 31, 2021

Risk-free interest rate 1.87 % 0.59 %

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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, 2021 excluded approximately 234,813 shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share.

The dilutive share base for the three and nine months ended September 30, 2020 excluded approximately 124,888 shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share.

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

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

The dilutive share base for the three months ended March 31, 2022 excluded approximately 388,355 shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share.

There were no such shares for the three months ended March 31, 2021.

The following table sets forth the computation of diluted weighted-average number of shares outstanding for the three months ended March 31, 2022 and 2021:

Three Months Ended

March 31, 2022 March 31, 2021

(in thousands)

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Cash, cash equivalents and restricted cash

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

September 30, 2021 December 31, 2020

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:

March 31, 2022 December 31, 2021

(in thousands)

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Accounts payable and accrued liabilities

At September 30, 2021 and December 31, 2020, accounts payable and accrued liabilities in the consolidated balance sheet included obligations totaling $ 17.7 million and $ 48.4 million, respectively, for employee termination benefits resulting from integration activities related to our merger with Total System Services, Inc.

At March 31, 2022 and December 31, 2021, accounts payable and accrued liabilities in the consolidated balance sheet included obligations totaling $ 3.6 million and $ 14.5 million, respectively, for employee termination benefits resulting from integration activities related to our merger with Total System Services, Inc.

(the "Merger").

During the three months ended September 30, 2021 and 2020, we recognized charges for employee termination benefits of $ 4.7 million and $ 8.1 million, which included $ 1.9 million of share-based compensation expense for the three months ended September 30, 2020.

During the nine months ended September 30, 2021 and 2020, we recognized charges for employee termination benefits of $ 43.0 million

and $ 49.8 million, which included $ 1.2 million and $ 6.1 million of share-based compensation expense, respectively.

As of September 30, 2021, the cumulative amount of recognized charges for employee termination benefits resulting from Merger-related integration activities was $ 183.4 million, which included $ 25.2 million of share-based compensation expense.

During the three months ended March 31, 2021, we recognized charges for employee termination benefits of $ 25.2 million, which included $ 0.5 million of share-based compensation expense.

These charges are recorded within selling, general and administrative expenses in our consolidated statements of income and included within Corporate expenses for segment reporting purposes.

New obligations may arise and related expenses may be incurred as merger-related integration activities continue in 2021.

Employee termination benefits from Merger-related integration activities were substantially complete as of December 31, 2021, and there were no significant charges recognized during the three months ended March 31, 2022.

Any remaining obligations are expected to be paid within the next 12 months.

NOTE 11— ACCUMULATED OTHER COMPREHENSIVE LOSS

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

The changes in the accumulated balances for each component of other comprehensive income (loss) were as follows for the three months ended March 31, 2022 and 2021:

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

(in thousands)

Balance at June 30, 2021 $ ( 106,882 ) $ ( 65,548 ) $ ( 277 ) $ ( 172,707 )

Other comprehensive income (loss) ( 74,983 ) 6,934 ( 2,209 ) ( 70,258 )

Balance at September 30, 2021 $ ( 181,865 ) $ ( 58,614 ) $ ( 2,486 ) $ ( 242,965 )

Balance at June 30, 2020 $ ( 361,133 ) $ ( 98,903 ) $ 890 $ ( 459,146 )

Other comprehensive income (loss) 102,058 8,715 ( 3,531 ) 107,242

Balance at September 30, 2020 $ ( 259,075 ) $ ( 90,188 ) $ ( 2,641 ) $ ( 351,904 )

Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was a loss of $( 4.1 ) million and income of $ 8.8 million for the three months ended September 30, 2021 and 2020, respectively.

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

(in thousands)

Balance at December 31, 2021 $ ( 182,949 ) $ ( 48,490 ) $ ( 2,743 ) $ ( 234,182 )

Other comprehensive income (loss) ( 67,638 ) 22,929 4,017 ( 40,692 )

Balance at September 30, 2021 $ ( 181,865 ) $ ( 58,614 ) $ ( 2,486 ) $ ( 242,965 )

Other comprehensive (loss) income ( 26,946 ) 13,923 — ( 13,023 )

Balance at March 31, 2022 $ ( 209,895 ) $ ( 34,567 ) $ ( 2,743 ) $ ( 247,205 )

Balance at December 31, 2020 $ ( 114,227 ) $ ( 81,543 ) $ ( 6,503 ) $ ( 202,273 )

Other comprehensive loss ( 17,176 ) ( 20,869 ) ( 3,288 ) ( 41,333 )

Balance at September 30, 2020 $ ( 259,075 ) $ ( 90,188 ) $ ( 2,641 ) $ ( 351,904 )

Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was a loss of $( 7.4 ) million and income of $ 7.5 million for the nine months ended September 30, 2021 and 2020, respectively.

Other comprehensive (loss) income ( 26,843 ) 8,968 7,775 ( 10,100 )

Balance at March 31, 2021 $ ( 141,070 ) $ ( 72,575 ) $ 1,272 $ ( 212,373 )

Other comprehensive loss attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 5.3 million and $ 6.0 million for the three months ended March 31, 2022 and 2021, respectively.

NOTE 12— SEGMENT INFORMATION

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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 Annual Report on Form 10-K for the year ended December 31, 2020 and our summary of significant accounting policies in "Note 1 - Basis of Presentation and Summary of Significant Accounting Policies."

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

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

The accounting policies of the reportable operating segments are the same as those described in our Annual Report on Form 10-K for the year ended December 31, 2021 and our summary of significant accounting policies in "Note 1 - Basis of Presentation and Summary of Significant Accounting Policies." During the first quarter of 2022, the recently acquired operations of MineralTree were reassigned to the Issuer Solutions segment to reflect how the business will be managed going forward.

Three Months Ended

March 31, 2022 March 31, 2021

(in thousands)

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(1) Revenues, operating income and depreciation and amortization reflect the effects of acquired businesses from the respective acquisition dates.

(2) Operating loss for Corporate included acquisition and integration expenses of $ 70.7 million and $ 57.6 million during the three months ended September 30, 2021 and 2020, respectively, and $ 237.7 million and $ 208.0 million during the nine months ended September 30, 2021 and 2020, respectively.

(2) Operating loss for Corporate included acquisition and integration expenses of $ 48.2 million and $ 90.1 million during the three months ended March 31, 2022 and 2021, respectively.

NOTE 13— COMMITMENTS AND CONTINGENCIES

Purchase Obligations

We have contractual obligations related to service arrangements with suppliers for fixed or minimum amounts.

Future minimum payments at September 30, 2021 for purchase obligations were as follows (in thousands):

Year Ending December 31:

2021 $ 182,374

2027 and thereafter 771,046

Total future minimum payments $ 1,893,325

Legal Matters

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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.

On September 23, 2019, a jury in the Superior Court of Dekalb County Georgia, awarded Frontline Processing Corp.

("Frontline") $ 135.2 million in damages, costs and attorney's fees (plus interest) following a trial of a breach of contract dispute between Frontline and Global Payments, wherein Frontline alleged that Global Payments violated provisions of the parties' Referral Agreement and Master Services Agreement.

The Superior Court entered a final judgment on the verdict in favor of Frontline on September 30, 2019.

We appealed the decision to the Georgia Court of Appeals.

On June 30, 2021, a panel of the Georgia Court of Appeals unanimously reversed the judgment, including the entire damages award.

We previously determined that it was not probable that a loss had been incurred under the applicable accounting standard (ASC Topic 450, Contingencies );

therefore, the reversal of the judgment did not affect our consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements