What changed in this filing

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Item 1. Financial Statements

2023-05-03 compared with 2022-10-31 · 251 added, 404 removed, 397 unchanged (62% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, 2022 September 30, 2021

Revenues $ 2,285,371 $ 2,202,337

Operating expenses:

Cost of service

931,249 944,172

Selling, general and administrative

918,757 858,082

Loss on business dispositions 48,933 —

1,898,939 1,802,254

Operating income 386,432 400,083

Interest and other income 20,393 6,320

Interest and other expense ( 135,184 ) ( 82,187 )

( 114,791 ) ( 75,867 )

Income before income taxes and equity in income of equity method investments 271,641 324,216

Income tax expense 14,255 50,117

Income before equity in income of equity method investments 257,386 274,099

Equity in income of equity method investments, net of tax 42,780 31,364

Net income 300,166 305,463

Net income attributable to noncontrolling interests, net of tax ( 9,712 ) ( 8,727 )

Net income attributable to Global Payments $ 290,454 $ 296,736

Earnings per share attributable to Global Payments:

Basic earnings per share $ 1.06 $ 1.02

Diluted earnings per share $ 1.05 $ 1.01

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, 2022 September 30, 2021

March 31, 2023 March 31, 2022

Revenues $ 2,292,447 $ 2,156,254

4 unchanged sentences

1,043,126 823,149

Impairment of goodwill 833,075 —

Loss on business dispositions 244,833 —

5 unchanged sentences

(Loss) income before income taxes and equity in income of equity method investments ( 55,057 ) 284,375

Income tax expense 119,250 131,600

Income tax (benefit) expense ( 31,399 ) 52,218

(Loss) income before equity in income of equity method investments ( 23,658 ) 232,157

7 unchanged sentences

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

GLOBAL PAYMENTS INC.

2 unchanged sentences

Three Months Ended

September 30, 2022 September 30, 2021

Net income $ 300,166 $ 305,463

March 31, 2023 March 31, 2022

Net (loss) income $ ( 4,420 ) $ 249,636

Other comprehensive income (loss):

1 unchanged sentence

Income tax (expense) benefit related to foreign currency translation adjustments ( 187 ) 670

Net unrealized losses on hedging activities ( 1,070 ) ( 646 )

Net unrealized (losses) gains on hedging activities ( 48,051 ) 8,934

Reclassification of net unrealized losses on hedging activities to interest expense 1,386 9,445

Income tax expense related to hedging activities ( 330 ) ( 2,208 )

Income tax benefit (expense) related to hedging activities 10,950 ( 4,456 )

Other, net of tax ( 22 ) —

Other comprehensive loss ( 248,165 ) ( 74,360 )

Comprehensive income 52,001 231,103

Comprehensive loss (income) attributable to noncontrolling interests 5,130 ( 4,625 )

Comprehensive income attributable to Global Payments $ 57,131 $ 226,478

Nine Months Ended

September 30, 2022 September 30, 2021

Net (loss) income $ ( 115,250 ) $ 770,686

Other comprehensive income (loss) 1,526 ( 18,367 )

Foreign currency translation adjustments ( 493,405 ) ( 80,427 )

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 1,451 5,438

Net unrealized gains (losses) on hedging activities 12,915 ( 62 )

Reclassification of net unrealized losses on hedging activities to interest expense 19,959 30,288

Income tax expense related to hedging activities ( 7,838 ) ( 7,297 )

Other, net of tax — 4,017

Other comprehensive loss ( 403,993 ) ( 48,043 )

Comprehensive (loss) income ( 2,894 ) 231,269

Comprehensive loss (income) attributable to noncontrolling interests 11,111 ( 6,328 )

Comprehensive (income) loss attributable to noncontrolling interests ( 12,995 ) 441

Comprehensive (loss) income attributable to Global Payments $ ( 15,889 ) $ 231,710

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

GLOBAL PAYMENTS INC.

1 unchanged sentence

(in thousands, except share data)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Current assets:

26 unchanged sentences

Commitments and contingencies

Redeemable noncontrolling interests 556,070 —

Preferred stock, no par value;

1 unchanged sentence

Common stock, no par value;

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

270,307,707 issued and outstanding at September 30, 2022 and 284,750,452 issued and outstanding at December 31, 2021

400,000,000 shares authorized at March 31, 2023 and December 31, 2022;

261,770,665 issued and outstanding at March 31, 2023 and 263,081,872 issued and outstanding at December 31, 2022

Paid-in capital 19,839,506 19,978,095

2 unchanged sentences

Total Global Payments shareholders’ equity 22,083,278 22,303,506

Noncontrolling interests 212,376 241,216

Nonredeemable noncontrolling interests 243,481 236,704

Total equity 22,326,759 22,540,210

Total liabilities and equity $ 43,938,749 $ 45,279,713

Total liabilities, redeemable noncontrolling interests and equity $ 48,638,644 $ 44,809,014

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

GLOBAL PAYMENTS INC.

1 unchanged sentence

(in thousands)

Nine Months Ended

September 30, 2022 September 30, 2021

Three Months Ended

March 31, 2023 March 31, 2022

Cash flows from operating activities:

Net (loss) income $ ( 4,420 ) $ 249,636

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

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

Depreciation and amortization of property and equipment 105,983 99,665

7 unchanged sentences

Facilities exit charges 5,164 —

Distribution received on investments 8,212 26,757

Impairment of goodwill 833,075 —

Loss on business dispositions 244,833 —

7 unchanged sentences

Cash flows from investing activities:

Business combinations and other acquisitions, net of cash acquired ( 24,969 ) ( 946,377 )

Business combinations and other acquisitions, net of cash and restricted cash acquired ( 4,046,785 ) ( 4,726 )

Capital expenditures ( 162,195 ) ( 156,102 )

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

Proceeds from sale of investments 31,046 —

Other, net 2,187 5

2 unchanged sentences

Net (repayments of) borrowings from settlement lines of credit ( 281,411 ) 16,497

Net borrowings from commercial paper notes 1,048,620 —

Proceeds from long-term debt 4,708,140 1,529,157

5 unchanged sentences

Distributions to noncontrolling interests ( 6,218 ) ( 5,534 )

Contribution from a noncontrolling interest — 46,320

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

Purchase of capped calls related to issuance of convertible notes ( 302,375 ) —

Dividends paid ( 65,750 ) ( 70,243 )

Net cash used in financing activities ( 804,575 ) ( 310,189 )

Net cash provided by (used in) financing activities 3,610,829 ( 376,334 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 18,584 ( 36,147 )

3 unchanged sentences

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

Net income 290,454 290,454 9,712 300,166

Other comprehensive loss ( 233,323 ) ( 233,323 ) ( 14,842 ) ( 248,165 )

Stock issued under share-based compensation plans 270 10,155 10,155 10,155

Common stock repurchased - share-based compensation plans ( 88 ) ( 11,312 ) ( 11,312 ) ( 11,312 )

Share-based compensation expense 37,052 37,052 37,052

Repurchases of common stock ( 6,907 ) ( 889,739 ) ( 889,739 ) ( 889,739 )

Distributions to noncontrolling interest — ( 3,366 ) ( 3,366 )

Purchase of capped calls related to issuance of convertible notes, net of taxes of $ 72,778

( 229,597 ) ( 229,597 ) ( 229,597 )

Cash dividends declared ($ 0.25 per common share)

( 68,766 ) ( 68,766 ) ( 68,766 )

Balance at September 30, 2022 270,308 $ 20,717,133 $ 2,547,947 $ ( 604,501 ) $ 22,660,579 $ 212,376 $ 22,872,955

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, 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

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

GLOBAL PAYMENTS INC.

4 unchanged sentences

Retained Earnings

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

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

Balance at December 31, 2022 263,082 $ 19,978,095 $ 2,731,380 $ ( 405,969 ) $ 22,303,506 $ 236,704 $ 22,540,210

Net (loss) income ( 11,041 ) ( 11,041 ) 6,621 ( 4,420 )

Other comprehensive loss ( 370,319 ) ( 370,319 ) ( 33,674 ) ( 403,993 )

Other comprehensive income (loss) ( 4,848 ) ( 4,848 ) 6,374 1,526

Stock issued under share-based compensation plans 1,014 6,103 6,103 6,103

1 unchanged sentence

Share-based compensation expense 89,566 89,566 89,566

Issuance of share-based awards in connection with a business combination 2,484 2,484 2,484

Repurchases of common stock ( 2,059 ) ( 206,553 ) ( 206,553 ) ( 206,553 )

Distributions to noncontrolling interest — ( 6,218 ) ( 6,218 )

Purchase of capped calls related to issuance of convertible notes, net of taxes of $ 72,778

( 229,597 ) ( 229,597 ) ( 229,597 )

Cash dividends declared ($ 0.25 per common share)

( 65,750 ) ( 65,750 ) ( 65,750 )

Balance at September 30, 2022 270,308 $ 20,717,133 $ 2,547,947 $ ( 604,501 ) $ 22,660,579 $ 212,376 $ 22,872,955

Balance at March 31, 2023 261,771 $ 19,839,506 $ 2,654,589 $ ( 410,817 ) $ 22,083,278 $ 243,481 $ 22,326,759

Number of Shares

2 unchanged sentences

Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity

Noncontrolling Interests Total Equity

Nonredeemable 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

See Notes to Unaudited Consolidated Financial Statements.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

13 unchanged sentences

Actual results could differ materially from those estimates.

In particular, uncertainty resulting from COVID-19, global events and other macroeconomic conditions 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 particular, uncertainty resulting from global events and other macroeconomic conditions 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.

Recently adopted accounting pronouncements

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.

We elected to early adopt ASU 2021-08 in the third quarter of 2022, with application to any business combinations for which the acquisition date occurs after January 1, 2022.

NOTE 2— ACQUISITIONS

Pending Acquisition of EVO Payments, Inc.

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 paid to EVO shareholders, which equates to an enterprise value of approximately $ 4 billion.

NOTE 2— ACQUISITION

EVO Payments, Inc.

On March 24, 2023, we acquired all of the outstanding common stock of EVO Payments, Inc.

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

The acquisition aligns with 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 EVO's shareholder approval, regulatory approvals and other customary closing conditions.

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.

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 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

(in thousands)

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

Cash paid to EVO shareholders (1)

Cash paid for equity awards attributable to purchase consideration (2)

Value of replacement awards attributable to purchase consideration (3)

Total purchase consideration transferred to EVO shareholders 3,334,945

Repayment of EVO's unsecured revolving credit facility (including accrued interest and fees) 665,557

Payment of certain acquiree transaction costs and other liabilities on behalf of EVO (4)

Total purchase consideration $ 4,269,620

Table of Content s

(1) Holders of EVO common stock, convertible preferred stock and common units received $ 34 for each share of EVO common stock held at the effective time of the transaction.

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

(3) Pursuant to the merger agreement, we granted equity awards for approximately 0.3 million shares of Global Payments common stock to certain EVO equity awards holders.

Each such replacement award is subject to the same terms and conditions (including vesting and exercisability or payment terms) that applied to the corresponding EVO equity award.

We apportioned the fair value of the replacement awards between purchase consideration and amounts to be recognized in periods following the acquisition as share-based compensation expense over the requisite service period of the replacement awards.

(4) Certain acquiree transaction costs and liabilities, including amounts outstanding under EVO’s tax receivable agreement, were required to be repaid by us upon consummation of the acquisition.

The cash portion of the purchase consideration was funded through cash on hand and borrowings from our revolving credit facility.

The provisional estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed as of March 31, 2023, including a reconciliation to the total purchase consideration, were as follows (in thousands):

Cash and cash equivalents $ 324,859

Accounts receivable 105,680

Identifiable intangible assets 473,000

Settlement processing assets 125,061

Deferred income tax assets 15,464

Property and equipment 83,540

Identifiable intangible assets 1,208,400

Other assets 157,166

Accounts payable and accrued liabilities ( 277,800 )

Settlement lines of credit ( 11,371 )

Settlement processing obligations ( 199,161 )

Deferred income tax liabilities ( 168,098 )

1 unchanged sentence

Total identifiable net assets 1,305,651

Redeemable noncontrolling interests ( 556,070 )

Goodwill 3,520,039

Total purchase consideration $ 4,269,620

During the nine months ended September 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 nine months ended September 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 nine months ended September 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.

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:

As of March 31, 2023, we considered these amounts to be provisional because we were still in the process of gathering and reviewing information to support the valuations of the assets acquired, liabilities assumed and related tax positions.

Goodwill arising from the acquisition was included in the Merchant Solutions segment as of March 31, 2023 and was attributable to expected growth opportunities, potential synergies from combining the acquired business into our existing business and an assembled workforce.

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

Due to the timing of the acquisition, we are still in the process of assigning goodwill to our reporting units.

Table of Content s

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

Estimated Fair Value Weighted-Average Estimated Amortization Periods

5 unchanged sentences

Total estimated identifiable intangible assets $ 1,208,400 10

The revenue and earnings of EVO from the acquisition date through March 31, 2023 were not material, nor were the historical revenue and earnings of EVO material for the purpose of presenting pro forma information.

In addition, transaction costs associated with this business combination were not material.

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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 nine months ended September 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

On July 31, 2022, we entered into a definitive agreement to sell our consumer business for $ 1 billion, subject to certain closing adjustments.

In connection with the sale, we will provide seller financing, consisting of a first lien seven-year secured term loan facility in an aggregate principal amount of $ 350 million bearing interest at a fixed annual rate of 9 % and a second lien twenty-five year secured term loan facility in an aggregate principal amount of $ 325 million bearing interest at a fixed annual rate of 13 %.

In addition, we will provide the purchasers a first lien five-year $ 50 million secured revolving facility that will be available from the date of closing of the sale.

The transaction is expected to close prior to the end of the first quarter of 2023 subject to required regulatory approvals and other customary closing conditions.

The assets and liabilities of our consumer business are classified as held for sale and the disposal group is reported at fair value less costs to sell in our consolidated balance sheet as of September 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 nine months ended September 30, 2022 related to our former Business and Consumer Solutions reporting unit, which included the consumer business.

We also recognized charges within loss on business dispositions in our consolidated statement of income of $ 48.9 million and $ 73.9 million during the three and nine months ended September 30, 2022, respectively, to reduce the carrying amount of the disposal group to estimated fair value less costs to sell.

The charge during the three months ended September 30, 2022 relates primarily to a change in the estimated fair value of the fixed rate seller financing.

For the three and nine months ended September 30, 2022, the consumer business contributed $ 23.2 million and $ 67.7 million to the Consumer Solutions segment operating income.

For the three and nine months ended September 30, 2021, the consumer business contributed $ 27.2 million and $ 114.8 million to the Consumer Solutions segment operating income.

The major classes of assets presented as held for sale in the consolidated balance sheet as of September 30, 2022, primarily related to the consumer business, include cash of $ 31.2 million, accounts receivable of $ 10.9 million, other current assets of $ 51.7 million, goodwill of $ 366.4 million, other intangible assets of $ 651.2 million, property and equipment of $ 51.2 million, other noncurrent assets of $ 43.9 million and an asset group valuation allowance of $ 73.9 million.

The major classes of liabilities presented as held for sale in the consolidated balance sheet as of September 30, 2022 include accounts payable and accrued liabilities of $ 75.2 million and other noncurrent liabilities of $ 4.5 million.

Businesses Held for Sale

Consumer Business.

On April 26, 2023, we completed the sale of the consumer portion of our Netspend business, which comprised our Consumer Solutions segment, for approximately $ 1 billion, subject to final closing adjustments.

In connection with the sale, we provided seller financing consisting of a first lien seven-year secured term loan facility in an aggregate principal amount of $ 350 million bearing interest at a fixed annual rate of 9 % and a second lien twenty-five year secured term loan facility in an aggregate principal amount of $ 325 million bearing interest at a fixed annual rate of 13 %.

In addition, we provided the purchasers a first lien five-year $ 50 million secured revolving facility available from the date of closing of the sale.

The assets and liabilities of our consumer business were classified as held for sale and the disposal group was reported at fair value less costs to sell in our consolidated balance sheets as of March 31, 2023 and December 31, 2022.

We recognized a loss on business dispositions in our consolidated statement of income of $ 244.8 million during the three months ended March 31, 2023 to reduce the carrying amount of the disposal group to estimated fair value less costs to sell.

The loss during the three months ended March 31, 2023 included the effects of incremental negotiated closing adjustments, changes in the estimated fair value of the seller financing and the effects of the final tax structure of the transaction.

Gaming Business.

On April 1, 2023 , we completed the sale of our gaming business for approximately $ 400 million, including seller financing consisting of a 7-year unsecured promissory note in an aggregate principal amount of $ 32 million bearing interest at a fixed annual rate of 11 %, and subject to final closing adjustments.

The assets and liabilities of our gaming business were classified as held for sale in our consolidated balance sheets as of March 31, 2023 and December 31, 2022.

We expect to recognize a gain on the sale of approximately $ 100 million in the second quarter of 2023.

Assets and Liabilities Held for Sale.

The major classes of assets presented as held for sale in the consolidated balance sheet as of March 31, 2023 include cash of $ 88.7 million, accounts receivable of $ 16.1 million, other current assets of $ 58.4 million, goodwill of $ 529.5 million, other intangible assets of $ 717.9 million, property and equipment of $ 82.3 million, other noncurrent assets of $ 45.6 million and an asset group valuation allowance of $ 316.7 million.

The major classes of liabilities presented as held for sale in the consolidated balance sheet as of March 31, 2023 include accounts payable and accrued liabilities of $ 101.1 million and other noncurrent liabilities of $ 4.7 million.

The major classes of assets presented as held for sale in the consolidated balance sheet as of December 31, 2022, include cash of $ 70.6 million, accounts receivable of $ 18.4 million, other current assets of $ 42.3 million, goodwill of $ 529.5 million, other intangible assets of $ 717.9 million, property and equipment of $ 82.9 million, other noncurrent assets of $ 44.9 million and an asset group valuation allowance of $ 71.9 million.

The major classes of liabilities presented as held for sale in the consolidated balance sheet as of December 31, 2022 include accounts payable and accrued liabilities of $ 125.9 million and other noncurrent liabilities of $ 4.5 million.

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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 and nine months ended September 30, 2022 and 2021 and has been recast to align with the change in the presentation of segment information as further described in “Note 14-Segment Information:”

Three Months Ended September 30, 2022

Solutions Issuer

Solutions Consumer

Solutions Intersegment

Eliminations Total

(in thousands)

Americas $ 1,349,793 $ 442,200 $ 147,337 $ ( 14,788 ) $ 1,924,542

Europe 183,698 114,296 — — 297,994

Asia Pacific 62,835 9,543 — ( 9,543 ) 62,835

$ 1,596,326 $ 566,039 $ 147,337 $ ( 24,331 ) $ 2,285,371

Three Months Ended September 30, 2021

Solutions Issuer

Solutions Consumer

Solutions Intersegment

Eliminations Total

(in thousands)

Americas $ 1,245,805 $ 415,127 $ 183,591 $ ( 15,748 ) $ 1,828,775

Europe 189,282 123,469 — — 312,751

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

$ 1,495,898 $ 545,486 $ 183,591 $ ( 22,638 ) $ 2,202,337

Nine Months Ended September 30, 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 months ended March 31, 2023 and 2022 and have been recast to align with the change in the presentation of segment information during 2022 as further described in “Note 15 — Segment Information:”

Three Months Ended March 31, 2023

Solutions Issuer

7 unchanged sentences

$ 1,605,610 $ 570,907 $ 143,709 $ ( 27,779 ) $ 2,292,447

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Solutions Issuer

7 unchanged sentences

$ 1,473,019 $ 537,326 $ 169,115 $ ( 23,206 ) $ 2,156,254

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

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

The following table presents a disaggregation of our Merchant Solutions segment revenues by distribution channel for the three months ended March 31, 2023 and 2022:

Three Months Ended

March 31, 2023 March 31, 2022

(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, 2022 and 2021, substantially all of our revenues were recognized over time.

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

Balance Sheet Location September 30, 2022 December 31, 2021

For the three months ended March 31, 2023 and 2022, substantially all of our revenues were recognized over time.

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Supplemental balance sheet information related to contracts from customers as of March 31, 2023 and December 31, 2022 was as follows:

Balance Sheet Location March 31, 2023 December 31, 2022

(in thousands)

5 unchanged sentences

Contract liabilities, net (noncurrent) Other noncurrent liabilities $ 50,180 $ 45,613

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

Revenue recognized for the three months ended September 30, 2022 and 2021 from contract liability balances at the beginning of each period was $ 74.2 million and $ 75.5 million, respectively.

Revenue recognized for the nine months ended September 30, 2022 and 2021 from contract liability balances at the beginning of each period was $ 189.3 million and $ 186.0 million, respectively.

Net contract assets were not material at March 31, 2023 or at December 31, 2022.

Revenue recognized for the three months ended March 31, 2023 and 2022 from contract liability balances at the beginning of each period was $ 83.7 million and $ 84.1 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, 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 March 31, 2023.

However, as permitted, we have elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria.

4 unchanged sentences

Total $ 3,840,929

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NOTE 5— GOODWILL AND OTHER INTANGIBLE ASSETS

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

September 30, 2022 December 31, 2021

As of March 31, 2023 and December 31, 2022, goodwill and other intangible assets consisted of the following:

March 31, 2023 December 31, 2022

(in thousands)

13 unchanged sentences

$ 10,587,887 $ 9,658,374

As of September 30, 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.

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 nine months ended September 30, 2022 and has been recast to align with the change in the presentation of segment information as further described in “Note 14-Segment Information:”

The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the three months ended March 31, 2023:

Solutions Issuer

3 unchanged sentences

Balance at December 31, 2022 $ 13,816,945 $ 9,503,791 $ — $ 23,320,736

Effect of foreign currency translation ( 124,632 ) ( 50,761 ) — ( 175,393 )

Goodwill acquired 3,520,039 — — 3,520,039

Goodwill derecognized in connection with the sale of a business (1)

( 17,719 ) — — ( 17,719 )

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

Reallocation of accumulated impairment losses due to change in reporting units — ( 357,933 ) 357,933 —

Reclassification of goodwill to assets held for sale (2)

— — ( 366,436 ) ( 366,436 )

Effect of foreign currency translation 5,187 4,940 — 10,127

Measurement period adjustments ( 236 ) — — ( 236 )

Balance at September 30, 2022 $ 13,926,292 $ 9,494,739 $ — $ 23,421,031

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

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

(2) Reflects the reclassification of goodwill in connection with the presentation of the consumer business as held for sale.

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

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

In connection with the change in presentation of segment information during the third quarter of 2022 as further described in “Note 14-Segment Information,” accumulated impairment losses associated with our former Business and Consumer Solutions reporting unit were reallocated to our new reporting units based on relative fair value.

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

The future magnitude, duration and effects of these events and conditions 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 September 30, 2022 were $ 833.1 million.

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

NOTE 6— OTHER ASSETS

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.

We assigned the preferred shares received a value of zero based on transfer restrictions, Visa's ability to adjust the conversion rate and the estimation uncertainty associated with those factors.

Based on the outcome of any current or potential litigation involving Visa Europe in the United Kingdom and elsewhere in Europe, the conversion rate of the preferred shares could be adjusted down such that the number of Visa common shares we receive could be as low as zero .

The Series B and C convertible preferred shares become convertible in stages based on developments in the litigation and become fully convertible no later than 2028 (subject to a holdback to cover any then pending claims).

In July 2022, in connection with the second mandatory release assessment, a portion of the Series B and C convertible preferred shares was converted by Visa representing approximately one quarter of the original potential conversion rate.

We recognized a gain of $ 13.2 million reported in interest and other income in our consolidated statement of income for the three and nine months ended September 30, 2022 based on the fair value of the shares received.

The shares were subsequently sold in September 2022.

The remaining Series B and C convertible preferred shares continue to be carried at an assigned value of zero based on the aforementioned factors.

Balance at March 31, 2023 $ 17,341,935 $ 9,508,731 $ — $ 26,850,666

Accumulated impairment losses for goodwill as of March 31, 2023 and December 31, 2022 were $ 833.1 million, of which $ 475.1 million related to the held for sale consumer business.

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NOTE 6— LONG-TERM DEBT AND LINES OF CREDIT

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

September 30, 2022 December 31, 2021

As of March 31, 2023 and December 31, 2022, long-term debt consisted of the following:

March 31, 2023 December 31, 2022

(in thousands)

14 unchanged sentences

4.950 % senior notes due August 15, 2027

495,708 495,463

4.450 % senior notes due June 1, 2028

3 unchanged sentences

5.300 % senior notes due August 15, 2029

495,537 495,362

2.900 % senior notes due May 15, 2030

3 unchanged sentences

5.400 % senior notes due August 15, 2032

742,291 742,085

4.150 % senior notes due August 15, 2049

1 unchanged sentence

5.950 % senior notes due August 15, 2052

738,277 738,177

4.875 % senior notes due March 17, 2031

1.000 % convertible notes due August 15, 2029

Unsecured term loan facility (outstanding under our Prior Credit Facility) — 1,989,793

1,447,292 1,445,225

Revolving credit facility 2,323,000 —

Commercial paper notes 1,048,620 —

Finance lease liabilities 30,871 32,435

3 unchanged sentences

Long-term debt, excluding current portion $ 16,534,074 $ 12,289,248

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

At September 30, 2022, the unamortized discount on senior notes and convertible notes was $ 78.9 million, and unamortized debt issuance costs on senior notes and convertible notes were $ 52.5 million.

At December 31, 2021, the 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 carrying amounts of our senior notes and convertible notes in the table above are presented net of unamortized discount and unamortized debt issuance costs, as applicable.

At March 31, 2023, the unamortized discount on senior notes and convertible notes was $ 51.8 million, and unamortized debt issuance costs on senior notes and convertible notes were $ 89.2 million.

At December 31, 2022, the unamortized discount on senior notes and convertible notes was $ 50.8 million and unamortized debt issuance costs on senior notes and convertible notes were $ 85.4 million.

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

At September 30, 2022, unamortized debt issuance costs on the unsecured revolving credit facility were $ 24.8 million, and at December 31, 2021, unamortized debt issuance costs on the unsecured revolving credit facility were $ 9.9 million.

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

At March 31, 2023 and December 31, 2022, unamortized debt issuance costs on the unsecured revolving credit facility were $ 22.3 million and $ 23.5 million, respectively.

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At March 31, 2023, future maturities of long-term debt (excluding finance lease liabilities) are as follows by year (in thousands):

Year Ending December 31,

5 unchanged sentences

Total $ 17,774,010

We have $ 11.9 billion in aggregate principal amount of senior unsecured notes, as presented in the table above.

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

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

On August 22, 2022, we issued $ 2.5 billion aggregate principal amount of senior unsecured notes consisting of the following:

(i) $ 500.0 million aggregate principal amount of 4.950 % senior notes due August 2027;

(ii) $ 500.0 million aggregate principal amount of 5.300 % senior notes due August 2029;

(iii) $ 750.0 million aggregate principal amount of 5.400 % senior notes due August 2032;

and (iv) $ 750.0 million aggregate principal amount of 5.950 % senior notes due August 2052.

We issued the senior notes at a total discount of $ 5.2 million, and we incurred debt issuance costs of $ 24.8 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, 2022.

Interest on the senior unsecured notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing February 15, 2023.

On March 17, 2023, we issued € 800 million aggregate principal amount of 4.875 % senior unsecured notes due March 2031 and received net proceeds of € 790.6 million, or $ 843.6 million based on the exchange rate on the issuance date.

We issued the senior notes at a discount of $ 2.8 million, and we incurred debt issuance costs of $ 7.2 million, including underwriting fees, professional services fees and registration fees, which were capitalized and reflected as a reduction of the related carrying amount of the notes in our consolidated balance sheet at March 31, 2023.

Interest on the senior unsecured notes is payable annually in arrears on March 17 of each year, commencing March 17, 2024.

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

The net proceeds from the offering have been or will be used to refinance the outstanding indebtedness under our credit facility, to make cash payments and pay transaction fees and expenses in connection with the pending acquisition of EVO, to refinance certain outstanding indebtedness of EVO in connection with the acquisition and for general corporate purposes.

In the event that the EVO acquisition is not consummated, we will be required to redeem the notes due 2027 and 2029 at a redemption price equal to 101 % of the principal amount of the notes due 2027 and 2029 then outstanding plus accrued and unpaid interest, if any.

Convertible 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 1.000 % convertible unsecured senior notes (the "Convertible Notes”) due 2029 in a private placement, and the transaction closed on August 8, 2022.

The net proceeds from this offering were approximately $ 1.45 billion, reflecting an issuance discount of $ 37.5 million and $ 10.4 million of debt issuance costs, which were capitalized and reflected as a reduction of the related carrying amount of the Convertible Notes in our consolidated balance sheet at September 30, 2022.

The Convertible Notes bear interest at a rate of 1.000 % per annum.

Interest on the Convertible Notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2023, to the holders of record on the preceding February 1 and August 1, respectively.

The Convertible Notes mature on August 15, 2029, subject to earlier conversion or repurchase.

The Convertible Notes are convertible at the option of the holder at any time after the date that is 18 months after issuance (or earlier, upon the occurrence of certain corporate events) until the scheduled trading day prior to the maturity date.

The Convertible Notes are convertible into cash and shares of our common stock based on an initial conversion rate of 7.1089 shares of common stock per $1,000 principal amount of the Convertible Notes (which is equal to an initial conversion price of approximately $ 140.67 per share), subject to customary anti-dilution and other adjustments upon the occurrence of certain events.

Upon conversion, the principal amount of, and interest due on, the Convertible Notes are required to be settled in cash and any other amounts may be settled in shares, cash or a combination of shares and cash at our election.

The Convertible Notes are not redeemable by us.

If certain corporate events that constitute a fundamental change (as defined in the indenture governing the Convertible Notes) occur, any holder of the Convertible Notes may require that we repurchase all or any portion of their notes for cash at a purchase price of par plus accrued and unpaid interest to, but excluding, the repurchase date.

In addition, if certain corporate events that constitute a make-whole fundamental change (as defined in the indenture governing the Convertible Notes) occur, then the conversion rate will in certain circumstances be increased for a specified period of time.

The Convertible Notes include customary covenants for convertible notes of this type, as well as customary events of default, which may result in the acceleration of the maturity of the Convertible Notes.

On August 8, 2022, in connection with the issuance of the Convertible Notes, we entered into privately negotiated capped call transactions with certain financial institutions to cover, subject to customary adjustments, the number of shares of common stock initially underlying the Convertible Notes.

The economic effect of the capped call transactions is to hedge the potential dilutive effect upon conversion of the Convertible Notes, or offset our cash obligation if the cash settlement option is elected, up to a cap price determined based on a hedging period that commenced on August 9, 2022 and concluded on August 25, 2022.

The capped call has an initial strike price of $ 140.67 per share and a cap price of $ 229.2605 per share.

The capped call transactions meet the accounting criteria to be reflected in stockholders’ equity and not accounted for as derivatives.

The cost of $ 302.4 million incurred in connection with the capped call transactions was recorded as a reduction to paid-in-capital in our consolidated balance sheet at September 30, 2022, net of applicable income taxes.

New Credit Facility

On August 19, 2022, we entered into a credit agreement (the “Revolving Credit Agreement”) with Bank of America, N.A., as administrative agent, and a syndicate of financial institutions, as lenders and other agents.

The Revolving Credit Agreement provides for an unsubordinated unsecured $ 5.75 billion revolving credit facility (the “Revolving Credit Facility”).

We capitalized debt issuance costs of $ 12.3 million in connection with the issuances under the Revolving Credit Facility.

The Revolving Credit Facility matures in August 2027.

Borrowings under the Revolving Credit Facility may be repaid prior to maturity without premium or penalty, subject to payment of certain customary expenses of lenders and customary notice provisions.

Borrowings under the Revolving Credit Facility will be available to be made in US dollars, euros, sterling, Canadian dollars and, subject to certain conditions, certain other currencies at our option.

Borrowings under the Revolving Credit Facility will bear interest, at our option, at a rate equal to (i) for Secured Overnight Financing Rate ("SOFR") based currencies or certain alternative currencies, a secured overnight financing rate (subject to a 0.00 % floor) plus a 0.10 % credit spread adjustment or an alternative currency term rate (subject to a 0.00 % floor), as applicable, (ii) for US dollar borrowings, a base rate, (iii) for US dollar borrowings, a daily floating secured overnight financing rate (subject to a 0.00 % floor on or after January 1, 2023) plus a 0.10 % credit spread adjustment or (iv) for certain alternative currencies, a daily alternative currency rate (subject to a 0.00 % floor), in each case, plus an applicable margin.

The applicable margin for borrowings under the Revolving Credit Facility will range from 1.125 % to 1.875 % depending on our credit rating and is initially 1.375 %.

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

We may issue standby letters of credit of up to $ 250.0 million in the aggregate under the Revolving Credit Facility.

Outstanding letters of credit under the Revolving Credit Facility reduce the amount of borrowings available to us.

The amounts available to borrow under the Revolving Credit Facility are also determined by a financial leverage covenant.

As of September 30, 2022, there were no borrowing outstanding under the Revolving Credit Facility, and the total available commitments under the Revolving Credit Facility were $ 2.5 billion.

Prior Credit Facility

Prior to the Revolving Credit Facility, we were party to a credit facility agreement with Bank of America, N.A., as administrative agent, and a syndicate of financial institutions, as lenders and other agents (as amended from time to time, the “Prior Credit Facility”).

The Prior Credit Facility provided for a senior unsecured $ 2.0 billion term loan facility and a senior unsecured $ 3.0 billion revolving credit facility.

In August 2022, all borrowings outstanding and other amounts due under the Prior Credit Facility were repaid and the Prior Credit Facility was terminated.

Bridge Facility

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

Upon the execution of permanent financing, including the issuance of our senior unsecured notes and entry into the Revolving Credit Facility described above, the aggregate commitments under the Bridge Facility were reduced to zero and terminated.

For the three and nine months ended September 30, 2022, we recognized expense of $ 17.3 million related to commitment fees associated with the Bridge Facility, which was presented within interest expense in our consolidated statement of income.

The net proceeds from the offering were used for general corporate purposes.

Commercial Paper

In January 2023, we established a $ 2.0 billion commercial paper program under which we may issue senior unsecured commercial paper notes with maturities of up to 397 days from the date of issue.

Commercial paper notes are expected to be issued at a discount from par, or they may bear interest, each at commercial paper market rates dictated by market conditions at the time of their issuance.

The proceeds from issuances of commercial paper notes will be used primarily for general corporate purposes but may also be used for acquisitions, to pay dividends, for debt refinancing or for other purposes.

As of March 31, 2023, we had net borrowings under our commercial paper program of $ 1,048.6 million outstanding, presented within long-term debt in our consolidated balance sheet based on our intent and ability to continually refinance on a long-term basis, with a weighted average annual in terest rate of 5.87 %.

The commercial program is backstopped by our revolving credit agreement, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of our revolving credit facility.

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

Fair Value of Long-Term Debt

As of September 30, 2022, our senior notes had a total carrying amount of $ 11.9 billion and an estimated fair value of $ 10.4 billion.

As of March 31, 2023, our senior notes had a total carrying amount of $ 12.7 billion and an estimated fair value of $ 11.8 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.

As of September 30, 2022, our Convertible Notes had a total carrying amount of $ 1.5 billion and an estimated fair value of $ 1.4 billion.

As of March 31, 2023, our convertible notes had a total carrying amount of $ 1.4 billion and an estimated fair value of $ 1.5 billion.

The estimated fair value of our convertible notes was based on a lattice pricing model and is considered to be a Level 3 measurement of the valuation hierarchy.

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

The fair value of other long-term debt approximated its carrying amount at March 31, 2023.

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Compliance with Covenants

1 unchanged sentence

The revolving credit agreement contains customary affirmative covenants and restrictive covenants, including, among others, financial covenants based on net leverage and interest coverage ratios, and customary events of default.

As of September 30, 2022, financial covenants under the Revolving Credit Agreement required a leverage ratio of 3.75 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, 2022.

Derivative Agreements

We had previously entered into interest rate swap agreements with financial institutions to hedge changes in cash flows attributable to interest rate risk on a portion of our variable-rate debt instruments.

Net amounts to be received or paid under the swap agreements were reflected as adjustments to interest expense.

Since we had designated the interest rate swap agreements as portfolio cash flow hedges, unrealized gains or losses resulting from adjusting the swaps to fair value were recorded as components of other comprehensive income (loss).

The required leverage ratio was increased to 4.50 to 1.00 as a result of the qualifying acquisition of EVO, which will remain in effect for up to eight consecutive quarters with a gradual step-down to 3.75 to 1.00, and the required interest coverage ratio is 3.00 to 1.00.

We were in compliance with all applicable covenants as of March 31, 2023.

Interest Expense

Interest expense was $ 119.0 million and $ 89.3 million for the three months ended March 31, 2023 and 2022, respectively.

NOTE 7— DERIVATIVES AND HEDGING INSTRUMENTS

Net Investment Hedge

We have designated our Euro-denominated senior notes as a hedge of our net investment in our Euro-denominated operations.

The purpose of the net investment hedge is to reduce the volatility of our net investment in our Euro-denominated operations due to changes in foreign currency exchange rates.

Investments in foreign operations with functional currencies other than the reporting currency are subject to foreign currency risk as the assets and liabilities of these subsidiaries are translated into the reporting currency at the period-end rate of exchange with the resulting foreign currency translation adjustment presented as a component of other comprehensive income and included in accumulated comprehensive income within equity in our consolidated balance sheets.

Net investment hedge accounting offers protection from this risk, and the foreign currency remeasurement gains and losses associated with the Euro-denominated senior notes are presented within the same components of other comprehensive income and accumulated comprehensive income.

As of March 31, 2023, an aggregate € 800 million related to our Euro-denominated senior notes due March 2031 was designated as a net investment hedge of our investment in Euro-denominated operations.

We recognized a loss of $ 18.2 million within foreign currency translation adjustments in other comprehensive income in our consolidated statement of comprehensive income during the three months ended March 31, 2023.

Interest Rate Swaps

We have interest rate swap agreements with financial institutions to hedge changes in cash flows attributable to interest rate risk on a portion of our variable-rate debt instruments.

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

Net amounts to be received or paid under the swap agreements are reflected as adjustments to interest expense.

Since we have designated the interest rate swap agreements as cash flow hedges, unrealized gains or losses resulting from adjusting the swaps to fair value are recorded as components of other comprehensive income.

The fair values of our interest rate swaps were determined based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date.

These derivative instruments were classified within Level 2 of the valuation hierarchy.

In August 2022, in connection with entry into the Revolving Credit Agreement and repayment of amounts outstanding under the Prior Credit Facility, we terminated and settled our existing interest rate swap agreements.

The termination resulted in the recognition of a net gain of $ 1.2 million, including the reclassification of $ 0.5 million of accumulated losses from the separate component of equity.

The net gain was presented in interest expense in our consolidated statement of income for the three and nine months ended September 30, 2022.

As of December 30, 2021, accounts payable and accrued liabilities included $ 28.8 million related to the interest rate swaps.

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, 2022 and 2021:

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Table of Content s

The table below presents information about our interest rate swaps, 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, 2023 Range of Maturity Dates at March 31, 2023 March 31, 2023 December 31, 2022

(in thousands)

Interest rate swaps (Notional of $ 1.5 billion at March 31, 2023)

Other noncurrent liabilities 4.26 % April 17, 2027 - August 17, 2027 $ 46,403 $ —

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, 2023 and 2022:

Three Months Ended

March 31, 2023 March 31, 2022

(in thousands)

Net unrealized (losses) gains recognized in other comprehensive income (loss) $ ( 48,051 ) $ 8,934

Net unrealized losses reclassified out of other comprehensive income (loss) to interest expense $ 1,386 $ 9,445

As of September 30, 2022, the amount of net unrealized losses in accumulated other comprehensive loss related to our forward-starting interest rate swaps that is expected to be reclassified into interest expense during the next 12 months was $ 5.5 million.

Interest Expense

Interest expense was $ 132.4 million and $ 82.3 million for the three months ended September 30, 2022 and 2021, respectively, and $ 318.8 million and $ 242.9 million for the nine months ended September 30, 2022 and 2021, respectively.

As of March 31, 2023, 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 $ 0.4 million.

NOTE 8— INCOME TAX

For the three months ended September 30, 2022, our effective income tax rate was 5.2 %, and it differed from the U.S.

statutory rate primarily due to the favorable effects of foreign interest income not subject to tax, tax credits, and the foreign-derived intangible income deduction.

The effective rate also included the favorable effects of adjustments to unrecognized income tax benefits related to certain U.S.

federal income tax positions and remeasurement of state deferred taxes to reflect enacted tax law changes.

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

These effects were partially offset by the same items that favorably affected the rate for the three months ended September 30, 2022.

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 from the U.S.

For the three months ended March 31, 2023, we reported a tax benefit in excess of the U.S.

statutory tax rate.

The tax benefit included the favorable effect of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction.

In addition, the tax benefit on the loss on business dispositions was tax effected at the applicable tax rate, whereas the earnings other than this discrete item were tax effected at the lower estimated annual effective tax rate.

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

Our effective income tax rates for the three months ended March 31, 2022 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.

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.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act (the "IRA") into law.

The IRA, among other things, implements a 15% corporate alternative minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases, which shall take effect in tax years beginning after December 31, 2022.

We are in the process of evaluating the provisions of the IRA, but we do not currently believe the IRA will have a material effect on our reported results, cash flows or financial position when it becomes effective.

We expect to reflect the excise tax within equity as part of the repurchase price of common stock.

government enacted the Inflation Reduction Act into law, which, among other things, implements a 15% corporate alternative minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases effective beginning January 1, 2023.

We do not expect the corporate alternative minimum tax will have a material effect on our reported results, cash flows or financial position.

During the three months ended March 31, 2023, we reflected excise taxes of $ 2.3 million within equity as part of the price of common stock repurchased during the period.

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NOTE 9— REDEEMABLE NONCONTROLLING INTERESTS

Through the acquisition of EVO, we have certain redeemable noncontrolling interests related to the portion of equity in our consolidated subsidiaries in Poland, Chile, and Greece, not attributable, directly or indirectly, to us, that is redeemable upon the occurrence of an event that is not solely within our control.

We own 66 % of our subsidiary in Poland.

Under the shareholders agreement, the holder of the remaining 34 % of the shares has the option to compel us to purchase the shares held by the minority shareholder at a price per share based on the fair value of the shares.

The option expires on January 1, 2024.

We own 50.1 % of our subsidiary in Chile.

Under the shareholders agreement, the holder of the remaining 49.9 % of the shares has the option to compel us to purchase those shares at a price per share based on the fair value of the shares.

The option has no expiration date.

We own 51 % of our subsidiary in Greece.

Under the shareholders agreement, the holder of the remaining 49 % of the shares has the option, under certain limited circumstances, to compel us to purchase those shares at a price set forth in the agreement.

In addition, beginning December 2025, the minority shareholder has the option to compel us to purchase those shares at a price per share based on the fair value of the shares.

The options have no expiration date.

Because the exercise of each of these redemption options is not solely within our control, the redeemable noncontrolling interests are presented in the mezzanine section between total liabilities and shareholders’ equity, as temporary equity, in our consolidated balance sheet as of March 31, 2023.

We adjust the redeemable noncontrolling interests at each balance sheet date to reflect our estimate of the maximum redemption amounts with changes recognized as an adjustment to paid-in capital within equity in our consolidated balance sheets.

Such estimates are based on projected operating performance of each subsidiary, and the key assumptions used in estimating the fair value include, but are not limited to, revenue growth rates and weighted-average cost of capital.

Redeemable noncontrolling interests are carried at fair value on a recurring basis and are classified within Level 3 of the valuation hierarchy.

The estimated fair value of the redeemable noncontrolling interests was $ 556.1 million as of the date of the acquisition of EVO and as of March 31, 2023.

NOTE 10— 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, 2022 and 2021, we repurchased and retired 6,907,090 and 4,232,232 shares of our common stock, respectively, at a cost, including commissions, of $ 889.7 million and $ 740.8 million, or $ 128.82 and $ 175.03 per share, respectively.

During the nine months ended September 30, 2022 and 2021, we repurchased and retired 15,946,279 and 9,689,181 shares of our common stock, respectively, at a cost, including

commissions, of $ 2,139.7 million and $ 1,813.7 million, or $ 134.18 and $ 187.21 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 ASR program purchase period, which ended on March 31, 2021.

As of September 30, 2022, the remaining amount available under our share repurchase program was $ 610.3 million.

On October 27, 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 October 27, 2022, our board of directors declared a dividend of $ 0.25 per share payable on December 30, 2022 to common shareholders of record as of December 16, 2022.

During the three months ended March 31, 2023 and 2022, we repurchased and retired 2,058,902 and 4,515,626 shares of our common stock, respectively, at a cost, including commissions and applicable excise taxes, of $ 206.6 million and $ 649.7 million, or $ 100.33 and $ 143.95 per share, respectively.

As of March 31, 2023, the remaining amount available under our share repurchase program was $ 1,295.7 million.

On April 27, 2023, our board of directors declared a dividend of $ 0.25 per share payable on June 30, 2023 to common shareholders of record as of June 15, 2023.

NOTE 11— SHARE-BASED AWARDS AND STOCK OPTIONS

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

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Three Months Ended

March 31, 2023 March 31, 2022

(in thousands)

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Income tax benefit $ 9,417 $ 9,679

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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, 2022:

The following table summarizes the changes in unvested restricted stock and performance awards for the three months ended March 31, 2023:

Shares Weighted-Average

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Unvested at December 31, 2022 2,145 $ 159.04

Replacement awards 202 98.44

Granted 1,170 113.00

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Forfeited ( 33 ) 151.02

Unvested at September 30, 2022 2,177 $ 159.09

The total fair value of restricted stock and performance awards vested during the nine months ended September 30, 2022 and September 30, 2021 was $ 128.8 million and $ 178.9 million, respectively.

For restricted stock and performance awards, we recognized compensation expens e of $ 34.5 million and $ 62.2 million during the three months ended September 30, 2022 and 2021, respectively, and $ 113.2 million and $ 135.6 million during the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, there was $ 234.0 million of unrecognized compensation expense related to unvested restricted stock and performance awards that we expect to recognize over a weighted-average period of 2.0 years.

Unvested at March 31, 2023 2,731 $ 132.21

The total fair value of restricted stock and performance awards vested during the three months ended March 31, 2023 and March 31, 2022 was $ 126.5 million and $ 93.3 million, respectively.

For restricted stock and performance awards, we recognized compensation expens e of $ 75.2 million and $ 35.1 million during the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, there was $ 265.4 million of unrecognized compensation expense related to unvested restricted stock and performance awards that we expect to recognize over a weighted-average period of 2.3 years.

Stock Options

The following table summarizes stock option activity for the nine months ended September 30, 2022:

The following table summarizes stock option activity for the three months ended March 31, 2023:

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

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Outstanding at December 31, 2022 1,139 $ 111.75 5.4 $ 17.3

Replacement awards 142 98.44

Granted 195 113.12

Forfeited ( 36 ) 162.48

Exercised ( 66 ) 66.87

Outstanding at September 30, 2022 1,224 $ 111.60 5.2 $ 22.6

Options vested and exercisable at September 30, 2022 991 $ 99.67 4.4 $ 22.6

We recognized compensation expense for stock options of $ 1.2 million and $ 1.9 million during the three months ended September 30, 2022 and 2021, respectively, and $ 4.8 million and $ 6.0 million during the nine months ended September 30, 2022 and 2021, respectively.

The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2022 and 2021 was $ 4.2 million and $ 23.4 million, respectively.

As of September 30, 2022, we had $ 8.9 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, 2022 and 2021 was $ 48.88 and $ 65.99 , respectively.

Outstanding at March 31, 2023 1,476 $ 110.65 5.9 $ 20.9

Options vested and exercisable at March 31, 2023 1,019 $ 107.00 4.7 $ 20.9

We recognized compensation expense for stock options of $ 12.7 million and $ 1.8 million during the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, we had $ 4.4 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 2.3 years.

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The weighted-average grant-date fair value of stock options granted, including replacement awards granted in connection with the EVO acquisition, during the three months ended March 31, 2023 and 2022 was $ 47.08 and $ 48.88 , respectively.

Fair value was estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions:

Nine Months Ended

September 30, 2022 September 30, 2021

Three Months Ended

March 31, 2023 March 31, 2022

Risk-free interest rate 3.86 % 1.87 %

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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, convertible notes or other potential

securities 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 September 30, 2022 excluded approximately 467,770 shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share.

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

Approximately 1.9 million shares related to stock options and share-based awards were therefore excluded from the dilutive share base for the nine months ended September 30, 2022.

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.

Due to a net loss for the three months ended March 31, 2023, no incremental shares were included in the computation of diluted earnings per share because the effect would be antidilutive.

Approximately 1.2 million shares related to stock options and share-based awards were therefore excluded from the dilutive share base for the three months ended March 31, 2023.

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.

The effect of the potential shares needed to settle the conversion spread on the convertible notes is included in diluted EPS if the effect is dilutive.

The effect depends on the market share price of our common stock at the time of conversion and would be dilutive if the average market share price of our common stock for the period exceeds the conversion price.

For the three and nine months ended September 30, 2022, the Convertible Notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive.

For the three months ended March 31, 2023, the convertible notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive.

Further, the effect of the related capped call transactions is not included in the computation of diluted EPS as it is always anti-dilutive.

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

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

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The following table sets forth the computation of diluted weighted-average number of shares outstanding for the three months ended March 31, 2023 and 2022:

Three Months Ended

March 31, 2023 March 31, 2022

(in thousands)

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Cash, cash equivalents and restricted cash

Cash and cash equivalents include cash on hand and all liquid investments with a maturity of three months or less when purchased.

We regularly maintain cash balances with financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit or the equivalent outside the U.S.

As of March 31, 2023, approximately 75 % of our total balance of cash and cash equivalents was held within a small group of financial institutions, primarily large money center banks.

Although we currently believe that the financial institutions with whom we do business will be able to fulfill their commitments to us, there is no assurance that those institutions will be able to continue to do so.

We have not experienced any losses associated with our balances in such accounts for the three months ended March 31, 2023.

Restricted cash includes amounts that cannot be withdrawn or used for general operating activities under legal or regulatory restrictions.

Restricted cash consists of amounts deposited by customers for prepaid card transactions at one of our Spain subsidiaries and funds held as a liquidity reserve at our Chilean and Greek subsidiaries that are subject to local regulatory restrictions requiring appropriate segregation and restriction in their use.

Restricted cash is included in prepaid expenses and other current assets in the consolidated balance sheets with a corresponding liability in accounts payable and accrued liabilities.

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

(in thousands)

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Long-lived assets

As a result of actions taken in the third quarter of 2022 to further reduce our facility footprint in certain markets around the world, we recognized charges of $ 27.7 million, primarily related to certain lease right-of-use assets, leasehold improvements, furniture and fixtures and equipment, to reduce the carrying amount of each asset group to estimated fair value.

The charges were presented within selling, general and administrative expenses in our consolidated statement of income for the

three and nine months ended September 30, 2022.

We continue to evaluate our physical footprint and additional charges may be incurred as these facilities exit activities continue in 2022.

During the three months ended September 30, 2022, we entered into a new agreement to acquire hardware, software and related services, of which $ 83.5 million was financed utilizing a two-year vendor financing arrangement.

The agreement included the purchase of certain assets previously leased.

The reduction in operating and finance lease liabilities arising from the termination of the related right-of-use assets was $ 44.2 million and $ 9.7 million, respectively.

Accounts payable and accrued liabilities

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 and nine months ended September 30, 2021, we recognized charges for employee termination benefits of $ 4.7 million and $ 43.0 million, respectively, which included $ 1.2 million of share-based compensation expense for the nine months ended September 30, 2021.

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.

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

During the three months ended March 31, 2023, we entered into a new agreement to acquire software, of which $ 48.0 million was financed utilizing a five-year vendor financing arrangement.

In connection with the completion of the EVO acquisition, we acquired right-of-use assets for operating leases of approximately $ 40.0 million, primarily related to real estate leases, and assumed the associated lease liabilities.

As of March 31,

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2023, maturities of the acquired operating lease liabilities were as follows:

$ 7.5 million in 2023, $ 9.9 million in 2024, $ 8.9 million in 2025, $ 8.0 million in 2026, $ 6.4 million in 2027, $ 3.2 million in 2028 and $ 1.3 million thereafter.

NOTE 14— 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, 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, 2022 $ ( 343,401 ) $ ( 25,034 ) $ ( 2,743 ) $ ( 371,178 )

Other comprehensive (loss) income ( 234,903 ) 1,580 — ( 233,323 )

Balance at September 30, 2022 $ ( 578,304 ) $ ( 23,454 ) $ ( 2,743 ) $ ( 604,501 )

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

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

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

Other comprehensive loss attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 14.8 million and $ 4.1 million for the three months ended September 30, 2022 and 2021, respectively.

The changes in the accumulated balances for each component of other comprehensive income (loss) were as follows for the three months ended March 31, 2023 and 2022:

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

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Balance at December 31, 2022 $ ( 380,584 ) $ ( 22,420 ) $ ( 2,965 ) $ ( 405,969 )

Other comprehensive (loss) income ( 395,355 ) 25,036 — ( 370,319 )

Balance at September 30, 2022 $ ( 578,304 ) $ ( 23,454 ) $ ( 2,743 ) $ ( 604,501 )

Other comprehensive income (loss) 30,889 ( 35,715 ) — ( 4,848 )

Balance at March 31, 2023 $ ( 349,695 ) $ ( 58,135 ) $ ( 2,965 ) $ ( 410,817 )

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

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

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

Other comprehensive loss attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 33.7 million and $ 7.4 million for the nine months ended September 30, 2022 and 2021, respectively.

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

Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 6.4 million and $( 5.3 ) million for the three months ended March 31, 2023 and 2022, respectively.

NOTE 15— SEGMENT INFORMATION

During the third quarter of 2022, as a result of the pending divestiture of our consumer business and changes in how the business is now managed, we have realigned the businesses previously comprising our Business and Consumer Solutions segment to include the business-to-business portion within our Issuer Solutions segment and the consumer portion within our Consumer Solutions segment.

During 2022, as a result of the pending divestiture of the consumer business and changes in how the business is managed, we realigned the businesses previously comprising our Business and Consumer Solutions segment to include the business-to-business portion within our Issuer Solutions segment and the consumer portion forming our new Consumer Solutions segment.

Our three reportable segments now are:

Merchant Solutions, Issuer Solutions and Consumer Solutions.

The presentation of segment information for the three and nine months ended September 30, 2021 has been recast to align with the segment presentation for the three and nine months ended September 30, 2022.

The presentation of segment information for the three months ended March 31, 2022 has been recast to align with the segment presentation for the three months ended March 31, 2023.

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

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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, 2022 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 were as follows for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

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Three Months Ended

March 31, 2023 March 31, 2022

(in thousands)

10 unchanged sentences

( 282,654 ) ( 160,343 )

Impairment of goodwill (3)

— — ( 833,075 ) —

Loss on business dispositions ( 244,833 ) —

( 48,933 ) — ( 201,144 ) —

Consolidated operating income $ 56,735 $ 375,947

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(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—Acquisitions” and “Note 3—Business Dispositions” for further discussion.

(2) Operating loss for Corporate included acquisition and integration expenses of $ 75.3 million and $ 70.7 million for the three months ended September 30, 2022 and 2021, respectively.

Operating loss for Corporate included acquisition and integration expenses of $ 184.8 million and $ 237.7 million for the nine months ended September 30, 2022 and 2021, respectively.

For the three and nine months ended September 30, 2022, operating loss for Corporate also included $ 31.7 million and $ 40.0 million, respectively, of other charges related to facilities exit activities.

(3) For the nine months ended September 30, 2022, consolidated operating income included a $ 833.1 million goodwill impairment charge related to our former Business and Consumer Solutions reporting unit.

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

(4) For the three and nine months ended September 30, 2022, consolidated operating income included charges of $ 48.9 million and $ 73.9 million, respectively, to reduce the carrying amount of the consumer business disposal group to estimated fair value less costs to sell.

During the nine months ended September 30, 2022, consolidated operating income included a $ 127.2 million loss on the sale of our Merchant Solutions business in Russia.

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

(2) Operating loss for Corporate included acquisition and integration expenses of $ 87.8 million and $ 48.2 million for the three months ended March 31, 2023 and 2022, respectively.

NOTE 16— 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.

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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