What changed in this filing

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Item 1. Financial Statements

2022-08-01 compared with 2022-05-02 · 329 added, 128 removed, 393 unchanged (54% of the section changed)

4 unchanged sentences

Three Months Ended

March 31, 2022 March 31, 2021

June 30, 2022 June 30, 2021

Revenues $ 2,280,906 $ 2,137,437

4 unchanged sentences

863,179 838,569

Impairment of goodwill 833,075 —

Loss on business dispositions 152,211 —

2,810,764 1,774,879

Operating income 375,947 275,259

Operating (loss) income ( 529,858 ) 362,558

Interest and other income 2,956 5,455

1 unchanged sentence

( 96,232 ) ( 75,101 )

Income before income taxes and equity in income of equity method investments 284,375 196,352

(Loss) income before income taxes and equity in income of equity method investments ( 626,090 ) 287,457

Income tax expense 52,776 60,808

Income before equity in income of equity method investments 232,157 175,677

(Loss) income before equity in income of equity method investments ( 678,866 ) 226,649

Equity in income of equity method investments, net of tax 13,815 40,164

Net income 249,636 198,410

Net (loss) income ( 665,051 ) 266,813

Net income attributable to noncontrolling interests, net of tax ( 7,948 ) ( 3,223 )

Net income attributable to Global Payments $ 244,733 $ 196,681

Earnings per share attributable to Global Payments:

Basic earnings per share $ 0.87 $ 0.66

Diluted earnings per share $ 0.87 $ 0.66

Net (loss) income attributable to Global Payments $ ( 672,999 ) $ 263,590

(Loss) earnings per share attributable to Global Payments:

Basic (loss) earnings per share $ ( 2.42 ) $ 0.89

Diluted (loss) earnings per share $ ( 2.42 ) $ 0.89

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

Six Months Ended

June 30, 2022 June 30, 2021

Revenues $ 4,437,160 $ 4,127,444

Operating expenses:

Cost of service

1,919,457 1,861,556

Selling, general and administrative

1,686,328 1,628,071

Impairment of goodwill 833,075 —

Loss on business dispositions 152,211 —

4,591,071 3,489,627

Operating (loss) income ( 153,911 ) 637,817

Interest and other income 4,667 9,689

Interest and other expense ( 192,471 ) ( 163,697 )

( 187,804 ) ( 154,008 )

(Loss) income before income taxes and equity in income of equity method investments ( 341,715 ) 483,809

Income tax expense 104,994 81,483

(Loss) income before equity in income of equity method investments ( 446,709 ) 402,326

Equity in income of equity method investments, net of tax 31,294 62,897

Net (loss) income ( 415,415 ) 465,223

Net income attributable to noncontrolling interests, net of tax ( 12,851 ) ( 4,952 )

Net (loss) income attributable to Global Payments $ ( 428,266 ) $ 460,271

(Loss) earnings per share attributable to Global Payments:

Basic (loss) earnings per share $ ( 1.53 ) $ 1.56

Diluted (loss) earnings per share $ ( 1.53 ) $ 1.55

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

1 unchanged sentence

Three Months Ended

March 31, 2022 March 31, 2021

Net income $ 249,636 $ 198,410

June 30, 2022 June 30, 2021

Net (loss) income $ ( 665,051 ) $ 266,813

Other comprehensive income (loss):

Foreign currency translation adjustments ( 210,882 ) 32,671

Reclassification of accumulated foreign currency translation losses to net loss as a result of the sale of a foreign entity

Income tax benefit related to foreign currency translation adjustments 963 4,242

Net unrealized gains (losses) on hedging activities 5,051 ( 410 )

Reclassification of net unrealized losses on hedging activities to interest expense 7,534 9,662

Income tax expense related to hedging activities ( 3,052 ) ( 2,225 )

Other, net of tax — ( 1,549 )

Other comprehensive (loss) income ( 137,461 ) 42,391

Comprehensive (loss) income ( 802,512 ) 309,204

Comprehensive loss (income) attributable to noncontrolling interests 5,540 ( 5,948 )

Comprehensive (loss) income attributable to Global Payments $ ( 796,972 ) $ 303,256

Six Months Ended

June 30, 2022 June 30, 2021

Net (loss) income $ ( 415,415 ) $ 465,223

Other comprehensive income (loss):

Foreign currency translation adjustments ( 243,843 ) ( 895 )

Reclassification of accumulated foreign currency translation losses to net loss as a result of the sale of a foreign entity

Income tax benefit related to foreign currency translation adjustments 1,634 4,991

Net unrealized gains on hedging activities 13,985 584

2 unchanged sentences

Other, net of tax — 6,226

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

Comprehensive income 231,269 182,336

Comprehensive loss attributable to noncontrolling interests 441 4,245

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

Other comprehensive (loss) income ( 155,828 ) 26,317

Comprehensive (loss) income ( 571,243 ) 491,540

Comprehensive loss (income) attributable to noncontrolling interests 5,981 ( 1,703 )

Comprehensive (loss) income attributable to Global Payments $ ( 565,262 ) $ 489,837

See Notes to Unaudited Consolidated Financial Statements.

2 unchanged sentences

(in thousands, except share data)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Current assets:

2 unchanged sentences

Settlement processing assets 1,544,124 1,143,539

Current assets held for sale 65,998 4,779

Prepaid expenses and other current assets 684,393 637,112

4 unchanged sentences

Deferred income taxes 30,564 12,117

Noncurrent assets held for sale 1,087,411 —

Other noncurrent assets 2,382,381 2,422,042

6 unchanged sentences

Settlement processing obligations 1,799,689 1,358,051

Current liabilities held for sale 93,966 —

Total current liabilities 5,981,805 4,463,014

1 unchanged sentence

Deferred income taxes 2,626,096 2,793,427

Noncurrent liabilities held for sale 4,670 —

Other noncurrent liabilities 703,005 739,046

4 unchanged sentences

Common stock, no par value;

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

400,000,000 shares authorized at June 30, 2022 and December 31, 2021;

277,032,813 issued and outstanding at June 30, 2022 and 284,750,452 issued and outstanding at December 31, 2021

Paid-in capital 21,800,574 22,880,261

9 unchanged sentences

(in thousands)

Three Months Ended

March 31, 2022 March 31, 2021

Six Months Ended

June 30, 2022 June 30, 2021

Cash flows from operating activities:

Net income $ 249,636 $ 198,410

Net (loss) income $ ( 415,415 ) $ 465,223

Adjustments to reconcile net income to net cash provided by operating activities:

8 unchanged sentences

Distribution received on investments 8,212 20,305

Impairment of goodwill 833,075 —

Loss on business dispositions 152,211 —

Other, net 9,361 ( 6,340 )

8 unchanged sentences

Capital expenditures ( 324,027 ) ( 219,579 )

Effect on cash from sale of business ( 29,755 ) —

Other, net 16 742

9 unchanged sentences

Distributions to noncontrolling interests ( 14,363 ) —

Payment of contingent consideration in business combination ( 15,726 ) —

Dividends paid ( 139,315 ) ( 114,875 )

1 unchanged sentence

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 114,968 ) ( 5,980 )

Increase in cash, cash equivalents and restricted cash 56,696 112,303

Decrease in cash, cash equivalents and restricted cash ( 23,182 ) ( 150,047 )

Cash, cash equivalents and restricted cash, beginning of the period 2,123,023 2,089,771

8 unchanged sentences

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

Net income 244,733 244,733 4,903 249,636

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

Net (loss) income ( 672,999 ) ( 672,999 ) 7,948 ( 665,051 )

Other comprehensive loss ( 123,973 ) ( 123,973 ) ( 13,488 ) ( 137,461 )

6 unchanged sentences

( 69,073 ) ( 69,073 ) ( 69,073 )

Balance at June 30, 2022 277,033 $ 21,800,574 $ 2,326,259 $ ( 371,178 ) $ 23,755,655 $ 220,872 $ 23,976,527

Number of Shares

Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity

Noncontrolling Interests Total Equity

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

Net income 263,590 263,590 3,223 266,813

Other comprehensive income 39,666 39,666 2,725 42,391

Stock issued under share-based compensation plans 78 11,599 11,599 11,599

Common stock repurchased - share-based compensation plans ( 31 ) ( 8,900 ) ( 8,900 ) ( 8,900 )

Share-based compensation expense 43,325 43,325 43,325

Repurchases of common stock ( 1,502 ) ( 247,584 ) ( 42,393 ) ( 289,977 ) ( 289,977 )

Cash dividends declared ($ 0.195 per common share)

( 57,302 ) ( 57,302 ) ( 57,302 )

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

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

1 unchanged sentence

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

Net (loss) income ( 428,266 ) ( 428,266 ) 12,851 ( 415,415 )

Other comprehensive loss ( 136,996 ) ( 136,996 ) ( 18,832 ) ( 155,828 )

Stock issued under share-based compensation plans 1,518 23,619 23,619 23,619

Common stock repurchased - share-based compensation plans ( 196 ) ( 27,008 ) ( 27,008 ) ( 27,008 )

Share-based compensation expense 85,414 85,414 85,414

Repurchases of common stock ( 9,039 ) ( 1,161,712 ) ( 88,282 ) ( 1,249,994 ) ( 1,249,994 )

Distributions to noncontrolling interest — ( 14,363 ) ( 14,363 )

Cash dividends declared ($ 0.50 per common share)

( 139,315 ) ( 139,315 ) ( 139,315 )

Balance at June 30, 2022 277,033 $ 21,800,574 $ 2,326,259 $ ( 371,178 ) $ 23,755,655 $ 220,872 $ 23,976,527

Number of Shares

Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity

2 unchanged sentences

Net income 460,271 460,271 4,952 465,223

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

Other comprehensive income (loss) 29,566 29,566 ( 3,249 ) 26,317

Stock issued under share-based compensation plans 1,081 29,304 29,304 29,304

4 unchanged sentences

( 114,875 ) ( 114,875 ) ( 114,875 )

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

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

See Notes to Unaudited Consolidated Financial Statements.

14 unchanged sentences

Actual results could differ materially from those estimates.

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.

In particular, the future magnitude, duration and effects of the COVID-19 pandemic and the ongoing 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.

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

11 unchanged sentences

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 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

The final 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:

Final Amounts at June 30, 2022

(in thousands)

10 unchanged sentences

Total purchase consideration $ 933,246

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.

During the six months ended June 30, 2022, we made measurement-period adjustments that decreased the amount of deferred income tax liabilities and provisional goodwill by $ 3.2 million.

The decrease in deferred income tax liabilities for the six months ended June 30, 2022 primarily related to finalizing the evaluation of the differences in the bases of assets and liabilities for financial reporting and tax purposes.

The effects of the measurement-period adjustments on our consolidated statements of income for the three and six months ended June 30, 2022 were not material.

Goodwill of $ 472.0 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 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:

Substantially all of the goodwill is deductible for income tax purposes.

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

Estimated Fair Value Weighted-Average Estimated Amortization Periods

5 unchanged sentences

Total estimated identifiable intangible assets $ 473,000 14

NOTE 3— BUSINESS DISPOSITIONS

Sale of Merchant Solutions Business in Russia

We sold our Merchant Solutions business in Russia effective April 29, 2022 for cash proceeds of $ 9 million.

During the three months ended June 30, 2022, we recognized a loss of $ 127.2 million associated with the sale, comprised of the difference between the consideration received and the net carrying amount of the business and the reclassification of $ 62.9 million of associated accumulated foreign currency translation losses from the separate component of equity.

The loss was presented within loss on business dispositions in our consolidated statement of income.

Consumer Business Disposition

During the first quarter of 2022, we commenced a strategic evaluation of the consumer portion of our Business and Consumer Solutions segment.

As of June 30, 2022, we committed to a plan to sell the business within one year and were actively marketing the business in its current condition for a price that was reasonable in comparison to its estimated fair value.

The assets and liabilities of the consumer business met the criteria for classification as held for sale and are reported at fair value less costs to sell in our consolidated balance sheet as of June 30, 2022.

As further discussed in "Note 5— Goodwill and Other Intangible Assets," we recognized a goodwill impairment charge of $ 833.1 million during the three months ended June 30, 2022 related to the Business and Consumer Solutions reporting unit.

We also recognized a charge of $ 25 million during the three months ended June 30, 2022 to reduce the disposal group to estimated fair value less costs to sell, which is presented within loss on business dispositions in our consolidated statement of income.

On July 31, 2022, we entered into a definitive agreement to sell the consumer business for $ 1 billion.

We will provide up to $ 675 million of seller financing and $ 80 million of future services in connection with the sale.

The transaction is expected to close prior to the end of the first quarter of 2023 and is subject to customary terms and conditions.

For the three and six months ended June 30, 2022, the consumer business contributed $ 21.9 million and $ 44.6 million to the Business and Consumer Solutions segment operating income.

For the three and six months ended June 30, 2021, the consumer business contributed $ 33.9 million and $ 87.6 million to the Business and Consumer Solutions segment operating income.

The major classes of assets presented as held for sale in the consolidated balance sheet as of June 30, 2022, primarily related to the consumer business, include cash of $ 0.7 million, accounts receivable of $ 11.6 million, other current assets of $ 53.6 million, goodwill of $ 366.4 million, other intangible assets of $ 651.2 million, property and equipment of $ 48.9 million, and other noncurrent assets of $ 20.9 million.

The major classes of liabilities presented as held for sale in the consolidated balance sheet as of June 30, 2022 include accounts payable and accrued liabilities of $ 94.0 million, and other noncurrent liabilities of $ 4.7 million.

NOTE 4— 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 months ended March 31, 2022 and 2021:

Three Months Ended March 31, 2022

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 six months ended June 30, 2022 and 2021:

Three Months Ended June 30, 2022

Solutions Issuer

7 unchanged sentences

$ 1,581,716 $ 534,471 $ 187,632 $ ( 22,913 ) $ 2,280,906

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Solutions Issuer

7 unchanged sentences

$ 1,426,755 $ 505,932 $ 227,355 $ ( 22,605 ) $ 2,137,437

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

Six Months Ended June 30, 2022

Solutions Issuer

Solutions Business and

Solutions Intersegment

Eliminations Total

(in thousands)

Americas $ 2,576,851 $ 797,266 $ 374,836 $ ( 29,927 ) $ 3,719,026

Europe 361,505 231,682 8,568 — 601,755

Asia Pacific 116,379 17,024 — ( 17,024 ) 116,379

$ 3,054,735 $ 1,045,972 $ 383,404 $ ( 46,951 ) $ 4,437,160

Six Months Ended June 30, 2021

Solutions Issuer

Solutions Business and

Solutions Intersegment

Eliminations Total

(in thousands)

Americas $ 2,283,440 $ 757,164 $ 465,163 $ ( 33,673 ) $ 3,472,094

Europe 299,578 238,386 5,778 — 543,742

Asia Pacific 111,609 10,633 — ( 10,634 ) 111,608

$ 2,694,627 $ 1,006,183 $ 470,941 $ ( 44,307 ) $ 4,127,444

The following table presents a disaggregation of our Merchant Solutions segment revenues by distribution channel for the three and six months ended June 30, 2022 and 2021:

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

(in thousands)

Relationship-led $ 827,577 $ 778,978 $ 1,564,982 $ 1,445,890

2 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 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

For the three and six months ended June 30, 2022 and 2021, substantially all of our revenues were recognized over time.

Supplemental balance sheet information related to contracts from customers as of June 30, 2022 and December 31, 2021 was as follows:

Balance Sheet Location June 30, 2022 December 31, 2021

(in thousands)

5 unchanged sentences

Contract liabilities, net (noncurrent) Other noncurrent liabilities $ 45,066 $ 44,502

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.

Net contract assets were not material at June 30, 2022 or at December 31, 2021.

Revenue recognized for the three months ended June 30, 2022 and 2021 from contract liability balances at the beginning of each period was $ 83.2 million and $ 85.0 million, respectively.

Revenue recognized for the six months ended June 30, 2022 and 2021 from contract liability balances at the beginning of each period was $ 149.8 million and $ 146.6 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 March 31, 2022.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at June 30, 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 5— GOODWILL AND OTHER INTANGIBLE ASSETS

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

March 31, 2022 December 31, 2021

As of June 30, 2022 and December 31, 2021, goodwill and other intangible assets consisted of the following:

June 30, 2022 December 31, 2021

(in thousands)

13 unchanged sentences

$ 10,272,685 $ 11,633,709

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

Approximately $ 651.2 million of intangible assets have been reclassified to assets held for sale in connection with the presentation of the consumer business as held for sale as of June 30, 2022.

See “Note 3—Business Dispositions” for further discussion.

The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the six months ended June 30, 2022:

Solutions Issuer

3 unchanged sentences

Effect of foreign currency translation ( 62,933 ) ( 27,341 ) ( 1,737 ) ( 92,011 )

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

Reallocation of goodwill among segments (1)

— 407,713 ( 407,713 ) —

Goodwill derecognized in connection with the sale of a business (2)

( 17,719 ) — — ( 17,719 )

Impairment of goodwill — — ( 833,075 ) ( 833,075 )

Reclassification of goodwill to assets held for sale (3)

— — ( 366,436 ) ( 366,436 )

Measurement period adjustments ( 2,957 ) ( 4,581 ) — ( 7,538 )

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

Balance at June 30, 2022 $ 13,980,073 $ 8,330,244 $ 1,186,178 $ 23,496,495

(1) 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.

(2) Reflects goodwill derecognized in connection with the sale of our Merchant Solutions business in Russia.

See “Note 3—Business Dispositions” for further discussion.

(3) Reflects the reclassification of goodwill in connection with the presentation of the consumer business as held for sale as of June 30, 2022.

See “Note 3—Business Dispositions” for further discussion.

We test goodwill for impairment at the reporting unit level annually and more often if an event occurs or circumstances change that indicate the fair value of a reporting unit may be below its carrying amount.

When applying the quantitative assessment, we determine the fair value of our reporting units based on a weighted average of multiple valuation techniques, principally a combination of an income approach and a market approach.

The income approach calculates a value based upon the present value of estimated future cash flows, while the market approach uses earnings multiples of similarly situated guideline public companies.

Determining the fair value of a reporting unit involves judgment and the use of significant estimates and assumptions, which include assumptions regarding the revenue growth rates and operating margins used to calculate estimated future cash flows, risk-adjusted discount rates and future economic and market conditions.

The sustained decline in our share price and recent increases in discount rates, primarily resulting from increased economic uncertainty, indicated a potential decline in fair value and triggered a requirement to evaluate our Issuer Solutions and Business and Consumer Solutions reporting units for potential impairment as of June 30, 2022.

Further, the estimated sales price for the consumer business portion of our Business and Consumer Solutions reporting unit also indicated a potential decline in fair value as of June 30, 2022.

We determined on the basis of the quantitative assessment that the fair value of the Issuer Solutions reporting unit was still greater than its carrying amount as of June 30, 2022, indicating no impairment.

Based on the quantitative assessment of the Business and Consumer Solutions reporting unit, including consideration of the consumer business disposal group and the remaining assets of the reporting unit, we recognized a goodwill impairment charge of $ 833.1 million in our consolidated statement of income for the three and six months ended June 30, 2022.

We continue to closely monitor developments related to COVID-19 and other global events.

The future magnitude, duration and effects of these events are difficult to predict at this time, and it is reasonably possible that future developments could have a negative effect on the estimates and assumptions utilized in our goodwill impairment assessments and could result in material impairment charges in future periods.

Accumulated impairment losses for goodwill as of June 30, 2022 were $ 833.1 million.

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

NOTE 6— LONG-TERM DEBT AND LINES OF CREDIT

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

March 31, 2022 December 31, 2021

As of June 30, 2022 and December 31, 2021, long-term debt consisted of the following:

June 30, 2022 December 31, 2021

(in thousands)

30 unchanged sentences

Long-term debt, excluding current portion $ 10,883,721 $ 11,414,809

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 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.

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

At June 30, 2022, unamortized discount on senior notes was $ 11.0 million, and unamortized debt issuance costs on senior notes and the unsecured term loan facility were $ 54.6 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 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):

At June 30, 2022, unamortized debt issuance costs on the unsecured revolving credit facility were $ 8.1 million, and at December 31, 2021, unamortized debt issuance costs on the unsecured revolving credit facility were $ 9.9 million.

At June 30, 2022, future maturities of long-term debt (excluding finance lease liabilities) are as follows by year (in thousands):

Year Ending December 31,

7 unchanged sentences

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.

As of June 30, 2022, our senior notes had a total carrying amount of $ 9.4 billion and an estimated fair value of $ 8.5 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 March 31, 2022.

The fair value of other long-term debt approximated its carrying amount at June 30, 2022.

Compliance with Covenants

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.

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

As of June 30, 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 June 30, 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 March 31, 2022 Range of Maturity Dates at

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

Derivative Financial Instruments Balance Sheet Location Weighted-Average Fixed Rate of Interest at June 30, 2022 Range of Maturity Dates at

June 30, 2022 June 30, 2022 December 31, 2021

(in thousands)

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

Interest rate swaps (Notional of $ 500 million at June 30, 2022 and $ 0 at December 31, 2021

Prepaid expenses and other current assets 2.51 % December 31, 2022 $ 329 $ —

Interest rate swaps (Notional of $ 750 million at June 30, 2022 and $ 1,250 million at December 31, 2021)

Accounts payable and accrued liabilities 2.88 % December 31, 2022 $ 874 $ 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

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 six months ended June 30, 2022 and 2021:

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

(in thousands)

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

Net unrealized gains (losses) recognized in other comprehensive income (loss) $ 5,051 $ ( 410 ) $ 13,985 $ 584

Net unrealized losses reclassified out of other comprehensive income (loss) to interest expense $ 7,534 $ 9,662 $ 16,979 $ 20,500

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.

As of June 30, 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 $ 5.7 million.

Interest Expense

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

Interest expense was $ 97.1 million and $ 79.0 million for the three months ended June 30, 2022 and 2021, respectively, and $ 186.4 million and $ 160.5 million for the six months ended June 30, 2022 and 2021, respectively.

NOTE 7— INCOME TAX

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 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.

For the three and six months ended June 30, 2022, we incurred income tax expense in spite of reporting a loss before income taxes, primarily due to the unfavorable effects of the goodwill impairment charge and loss on the sale of our Merchant Solutions business in Russia for which no tax benefit was recognized.

These unfavorable effects were partially offset by the favorable effects of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction.

Our effective income tax rates for the three and six months ended June 30, 2021 were 21.2 % and 16.8 %, respectively.

Our effective income tax rates for the three and six months ended June 30, 2021 differed 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, each favorably affecting the effective rate, and the effect of enacted tax law changes in the U.K.

which required a remeasurement of deferred tax balances raising the effective rate.

A change in the assessment of the need for a valuation allowance related to foreign tax credit carryforwards also had a favorable effect on the effective income tax rate for the six months ended June 30, 2021.

NOTE 8— 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 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.

During the three months ended June 30, 2022 and 2021, we repurchased and retired 4,523,563 and 1,501,549 shares of our common stock at a cost, including commissions, of $ 600.3 million and $ 290.0 million, or $ 132.64 and $ 193.12 per share, respectively.

During the six months ended June 30, 2022 and 2021, we repurchased and retired 9,039,189 and 5,456,949 shares of our common stock at a cost, including commissions, of $ 1,250.0 million and $ 1,072.9 million, or $ 138.29 and $ 196.65 per share, respectively.

The activity for the six months ended June 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 June 30, 2022, the remaining amount available under our share repurchase program was $ 1,107.0 million.

On July 28, 2022, our board of directors approved an increase to our existing share repurchase program authorization, which raised the total available authorization to $ 1.5 billion.

On July 28, 2022, our board of directors declared a dividend of $ 0.25 per share payable on September 30, 2022 to common shareholders of record as of September 16, 2022.

NOTE 9— 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

March 31, 2022 March 31, 2021

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

(in thousands)

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Share-Based Awards

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

The following table summarizes the changes in unvested restricted stock and performance awards for the six months ended June 30, 2022:

Shares Weighted-Average

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Forfeited ( 79 ) 162.21

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.

Unvested at June 30, 2022 2,455 $ 160.65

The total fair value of restricted stock and performance awards vested during the six months ended June 30, 2022 and June 30, 2021 was $ 96.4 million and $ 97.2 million, respectively.

For restricted stock and performance awards, we recognized compensation expense of $ 43.6 million and $ 39.9 million during the three months ended June 30, 2022 and 2021, respectively, and $ 78.7 million and $ 73.3 million during the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, there was $ 284.8 million of unrecognized compensation expense related to unvested restricted stock and performance awards that we expect to recognize over a weighted-average period of 2.2 years.

Stock Options

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

The following table summarizes stock option activity for the six months ended June 30, 2022:

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

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Exercised ( 61 ) 69.15

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.

Outstanding at June 30, 2022 1,265 $ 112.76 5.9 $ 24.5

Options vested and exercisable at June 30, 2022 996 $ 99.38 5.1 $ 24.5

We recognized compensation expense for stock options of $ 1.8 million and $ 1.8 million during the three months ended June 30, 2022 and 2021, respectively, and $ 3.6 million and $ 4.2 million during the six months ended June 30, 2022 and 2021, respectively.

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2022 and 2021 was $ 3.8 million and $ 23.1 million, respectively.

As of June 30, 2022, we had $ 12.1 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 2.1 years.

The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 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:

Three Months Ended

March 31, 2022 March 31, 2021

Six Months Ended

June 30, 2022 June 30, 2021

Risk-free interest rate 1.87 % 0.59 %

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NOTE 10— EARNINGS PER SHARE

Basic earnings per share ("EPS") was computed by dividing net income attributable to Global Payments by the weighted-average number of shares outstanding during the period.

Earnings available to common shareholders was the same as reported net income attributable to Global Payments for all periods presented.

Diluted EPS is computed by dividing net income attributable to Global Payments by the weighted-average number of shares outstanding during the period, including the effect of share-based awards that would have a dilutive effect on EPS.

Basic earnings per share ("EPS") was computed by dividing net income (loss) attributable to Global Payments by the weighted-average number of shares outstanding during the period.

Earnings available to common shareholders was the same as reported net income (loss) attributable to Global Payments for all periods presented.

Diluted EPS is computed by dividing net income (loss) attributable to Global Payments by the weighted-average number of shares outstanding during the period, including the effect of share-based awards that would have a dilutive effect on EPS.

All stock options with an exercise price lower than the average market share price of our common stock for the period are assumed to have a dilutive effect on EPS.

The dilutive share base for the three 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

Due to a net loss for the three and six months ended June 30, 2022, no incremental shares are included in the computation of diluted earnings per share because the effect would be antidilutive.

Approximately 2.0 million shares related to stock options and share-based awards were therefore excluded from the dilutive share base for the three and six months ended June 30, 2022.

The dilutive share base for the three and six months ended June 30, 2021 excluded approximately 234,813 shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share.

The following table sets forth the computation of diluted weighted-average number of shares outstanding for the three and six months ended June 30, 2022 and 2021:

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

(in thousands)

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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

June 30, 2022 December 31, 2021

(in thousands)

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Restricted cash included in prepaid expenses and other current assets 165,802 143,715

Cash included in assets held for sale 730 —

Cash, cash equivalents and restricted cash shown in the statement of cash flows $ 2,099,841 $ 2,123,023

Accounts payable and accrued liabilities

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.

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

(the "Merger").

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.

During the three and six months ended June 30, 2021, we recognized charges for employee termination benefits of $ 13.1 million and $ 38.3 million, respectively, which included $ 0.7 million and $ 1.2 million of share-based compensation expense, respectively.

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.

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.

Employee termination benefits from Merger-related integration activities were substantially complete as of December 31, 2021.

There were no significant charges recognized during the three and six months ended June 30, 2022 and no significant remaining obligations to be paid as of June 30, 2022.

NOTE 12— ACCUMULATED OTHER COMPREHENSIVE LOSS

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:

The changes in the accumulated balances for each component of other comprehensive income (loss) were as follows for the three and six months ended June 30, 2022 and 2021:

Foreign Currency Translation Gains (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 )

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

Other comprehensive (loss) income ( 133,506 ) 9,533 — ( 123,973 )

Balance at June 30, 2022 $ ( 343,401 ) $ ( 25,034 ) $ ( 2,743 ) $ ( 371,178 )

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

Other comprehensive income (loss) 34,188 7,027 ( 1,549 ) 39,666

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

Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was $( 13.5 ) million and $ 2.7 million for the three months ended June 30, 2022 and 2021, respectively.

Foreign Currency Translation Gains (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 (loss) income ( 160,452 ) 23,456 — ( 136,996 )

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.

Balance at June 30, 2022 $ ( 343,401 ) $ ( 25,034 ) $ ( 2,743 ) $ ( 371,178 )

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

Other comprehensive income 7,345 15,995 6,226 29,566

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

Other comprehensive loss attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 18.8 million and $ 3.2 million for the six months ended June 30, 2022 and 2021, respectively.

NOTE 13— SEGMENT INFORMATION

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Operating overhead, shared costs and share-based compensation costs are included in Corporate.

Impairment of goodwill and gains or losses on business dispositions are not included in segment operating income.

Interest and other income, interest and other expense, income tax expense and equity in income of equity method investments, net of tax, are not allocated to the individual segments.

We do not evaluate the performance of or allocate resources to our operating segments using asset data.

The accounting policies of the reportable operating segments are the same as those described in our 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.

Information on segments and reconciliations to consolidated revenues, consolidated operating income and consolidated depreciation and amortization was as follows for the three months ended March 31, 2022 and 2021:

Three Months Ended

March 31, 2022 March 31, 2021

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 the planned divestiture of the consumer portion of our Business and Consumer Solutions segment, we anticipate that we will realign the retained business-to-business portion of the Business and Consumer Solutions segment to the Issuer Solutions segment during the third quarter of 2022 to reflect how the business will be managed going forward.

We would begin reporting on the revised basis during the third quarter of 2022 and recast prior periods to reflect the change in segment reporting.

Information on segments and reconciliations to consolidated revenues, consolidated operating income and consolidated depreciation and amortization were as follows for the three and six months ended June 30, 2022 and 2021:

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

(in thousands)

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Corporate (2)

Consolidated operating income $ 375,947 $ 275,259

( 179,372 ) ( 191,824 ) ( 339,715 ) ( 386,933 )

Impairment of goodwill (3)

( 833,075 ) — ( 833,075 ) —

Loss on business dispositions (4)

( 152,211 ) — ( 152,211 ) —

Consolidated operating income (loss) $ ( 529,858 ) $ 362,558 $ ( 153,911 ) $ 637,817

Depreciation and amortization :

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Consolidated depreciation and amortization $ 427,576 $ 422,044 $ 856,248 $ 847,616

(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 $ 48.2 million and $ 90.1 million during the three months ended March 31, 2022 and 2021, respectively.

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

See “Note 2—Acquisition” and “Note 3—Business Dispositions” for further discussion.

(2) Operating loss for Corporate included acquisition and integration expenses of $ 61.4 million and $ 76.8 million during the three months ended June 30, 2022 and 2021, respectively.

Operating loss for Corporate included acquisition and integration expenses of $ 109.5 million and $ 167.0 million during the six months ended June 30, 2022 and 2021, respectively.

(3) During the three and six months ended June 30, 2022, consolidated operating loss included a $ 833.1 million goodwill impairment charge related to the Business and Consumer Solutions reporting unit.

See “Note 5—Goodwill and Other Intangible Assets” for further discussion.

(4) During the three and six months ended June 30, 2022, consolidated operating loss included a $ 127.2 million loss on the sale of our Merchant Solutions business in Russia and a charge for the estimated costs to sell our consumer business.

NOTE 14— COMMITMENTS AND CONTINGENCIES

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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.

NOTE 15— SUBSEQUENT EVENTS

Visa Preferred Shares

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.

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 July 1, 2022, in connection with the second mandatory release assessment, we received notice that a portion of the Series B and C convertible preferred shares will be converted by Visa subject to a review period as required by the terms of the original transaction.

We expect the review period will be completed during the third quarter of 2022, at which time we expect to recognize a gain of $ 13.6 million.

Pending Business Acquisition and Related Bridge Facility

On August 1, 2022, we entered into a merger agreement to acquire all outstanding equity of EVO Payments, Inc.

(“EVO”) for $ 34 per share, or approximately $ 3.4 billion in preliminary estimated cash consideration to be transferred to EVO shareholders, which equates to an enterprise value of approximately $ 4 billion.

EVO is a leading payment technology and services provider, offering an array of innovative, reliable, and secure payment solutions to merchants ranging from small and middle market merchant enterprises to multinational companies and organizations across the Americas and Europe.

The acquisition aligns with our technology-enabled payments strategy, expands our geographic presence and augments our business-to-business software and payment solutions business.

The acquisition is expected to close prior to the end of first quarter of 2023, subject to regulatory and shareholder approvals.

In connection with our entry into the merger agreement, on August 1, 2022, we obtained commitments for a $ 4.3 billion, 364-day senior unsecured bridge facility (the "Bridge Facility").

The Bridge Facility establishes an unsecured capital structure under which we can refinance our Senior Unsecured Credit Facilities in order to pay the cash consideration to acquire all outstanding equity of EVO in accordance with the terms of the merger agreement, refinance certain outstanding indebtedness of EVO in connection with the acquisition and pay related transaction fees and expenses.

We expect to execute permanent financing prior to the closing of the acquisition that will eliminate the need for the Bridge Facility commitments.

Estimated fees associated with the Bridge Facility of $ 17.3 million will be amortized to interest expense through the expected date of termination of the Bridge Facility commitment.

Convertible Senior Notes

On August 1, 2022, we entered into an investment agreement with Silver Lake Partners relating to the issuance of $ 1.5 billion in aggregate principal amount of 1.0 % convertible unsecured senior notes (‘Convertible Notes”) due 2029 in a private placement.

The interest rate of the Convertible Notes is fixed at 1.0 % per annum and is payable semi-annually.

The Convertible Notes are convertible at the option of the holder after 18 months at a 15 % conversion premium.

Upon conversion of the Convertible Notes, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

In connection with the offering of the Convertible Notes, we expect to enter into a convertible note hedge transaction with certain bank counterparties whereby we have the option to purchase shares of our common stock.

In addition, we expect to sell warrants to certain bank counterparties whereby the holders of the warrants have the option to purchase shares of our common stock.

Taken together, the purchase of the convertible note hedges and the sale of warrants are intended to offset the dilutive effect from the conversion of the Convertible Notes.

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