What changed in this filing

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Item 1. Financial Statements

2023-08-01 compared with 2023-05-03 · 350 added, 202 removed, 446 unchanged (55% of the section changed)

4 unchanged sentences

Three Months Ended

March 31, 2023 March 31, 2022

June 30, 2023 June 30, 2022

Revenues $ 2,452,469 $ 2,280,906

4 unchanged sentences

1,013,514 863,179

Loss on business dispositions 244,833 —

Impairment of goodwill — 833,075

(Gain) loss on business dispositions ( 105,738 ) 152,211

1,849,728 2,810,764

Operating income 56,735 375,947

Operating income (loss) 602,741 ( 529,858 )

Interest and other income 27,944 2,956

1 unchanged sentence

( 163,479 ) ( 96,232 )

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

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

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

Income (loss) before income taxes and equity in income of equity method investments 439,262 ( 626,090 )

Income tax expense 172,211 52,776

Income (loss) before equity in income of equity method investments 267,051 ( 678,866 )

Equity in income of equity method investments, net of tax 17,155 13,815

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

Net income (loss) 284,206 ( 665,051 )

Net income attributable to noncontrolling interests, net of tax ( 10,058 ) ( 7,948 )

Net (loss) income attributable to Global Payments $ ( 11,041 ) $ 244,733

(Loss) earnings per share attributable to Global Payments:

Basic (loss) earnings per share $ ( 0.04 ) $ 0.87

Diluted (loss) earnings per share $ ( 0.04 ) $ 0.87

Net income (loss) attributable to Global Payments $ 274,148 $ ( 672,999 )

Earnings (loss) per share attributable to Global Payments:

Basic earnings (loss) per share $ 1.05 $ ( 2.42 )

Diluted earnings (loss) per share $ 1.05 $ ( 2.42 )

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

Six Months Ended

June 30, 2023 June 30, 2022

Revenues $ 4,744,916 $ 4,437,160

Operating expenses:

Cost of service

1,889,705 1,919,457

Selling, general and administrative

2,056,641 1,686,328

Impairment of goodwill — 833,075

Net loss on business dispositions 139,095 152,211

4,085,441 4,591,071

Operating income (loss) 659,475 ( 153,911 )

Interest and other income 39,097 4,667

Interest and other expense ( 314,368 ) ( 192,471 )

( 275,271 ) ( 187,804 )

Income (loss) before income taxes and equity in income of equity method investments 384,204 ( 341,715 )

Income tax expense 140,812 104,994

Income (loss) before equity in income of equity method investments 243,392 ( 446,709 )

Equity in income of equity method investments, net of tax 36,394 31,294

Net income (loss) 279,786 ( 415,415 )

Net income attributable to noncontrolling interests, net of tax ( 16,679 ) ( 12,851 )

Net income (loss) attributable to Global Payments $ 263,107 $ ( 428,266 )

Earnings (loss) per share attributable to Global Payments:

Basic earnings (loss) per share $ 1.00 $ ( 1.53 )

Diluted earnings (loss) per share $ 1.00 $ ( 1.53 )

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

1 unchanged sentence

Three Months Ended

March 31, 2023 March 31, 2022

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

June 30, 2023 June 30, 2022

Net income (loss) $ 284,206 $ ( 665,051 )

Other comprehensive income (loss):

Foreign currency translation adjustments 4,596 ( 210,882 )

Reclassification of accumulated foreign currency translation losses to net loss as a result of the sale of a foreign entity — 62,925

Income tax (expense) benefit related to foreign currency translation adjustments ( 343 ) 963

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

Net unrealized gains on hedging activities 40,078 5,051

Reclassification of net unrealized (gains) losses on hedging activities to interest expense ( 901 ) 7,534

Income tax expense related to hedging activities ( 9,144 ) ( 3,052 )

Other, net of tax ( 22 ) —

Other comprehensive income (loss) 34,264 ( 137,461 )

Comprehensive income (loss) 318,470 ( 802,512 )

Comprehensive income (loss) attributable to noncontrolling interests 11,906 ( 5,540 )

Comprehensive income (loss) attributable to Global Payments $ 306,564 $ ( 796,972 )

Six Months Ended

June 30, 2023 June 30, 2022

Net income (loss) $ 279,786 $ ( 415,415 )

Other comprehensive income (loss):

Foreign currency translation adjustments 42,046 ( 243,843 )

Reclassification of accumulated foreign currency translation losses to net loss as a result of the sale of a foreign entity — 62,925

Income tax (expense) benefit related to foreign currency translation adjustments ( 530 ) 1,634

Net unrealized gains (losses) on hedging activities ( 7,973 ) 13,985

Reclassification of net unrealized losses on hedging activities to interest expense 485 16,979

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

Income tax (expense) benefit related to hedging activities 1,806 ( 7,508 )

Other, net of tax ( 44 ) —

Other comprehensive income (loss) 35,790 ( 155,828 )

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

Comprehensive income (loss) 315,576 ( 571,243 )

Comprehensive income (loss) attributable to noncontrolling interests 24,901 ( 5,981 )

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

Comprehensive income (loss) attributable to Global Payments $ 290,675 $ ( 565,262 )

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

GLOBAL PAYMENTS INC.

1 unchanged sentence

(in thousands, except share data)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Current assets:

10 unchanged sentences

Noncurrent assets held for sale 29 1,295,799

Notes receivable 724,644 —

Other noncurrent assets 2,477,617 2,343,241

18 unchanged sentences

Common stock, no par value;

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

400,000,000 shares authorized at June 30, 2023 and December 31, 2022;

259,962,485 issued and outstanding at June 30, 2023 and 263,081,872 issued and outstanding at December 31, 2022

Paid-in capital 19,686,035 19,978,095

6 unchanged sentences

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

GLOBAL PAYMENTS INC.

1 unchanged sentence

(in thousands)

Three Months Ended

March 31, 2023 March 31, 2022

Six Months Ended

June 30, 2023 June 30, 2022

Cash flows from operating activities:

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

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

Net income (loss) $ 279,786 $ ( 415,415 )

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

Depreciation and amortization of property and equipment 223,753 199,875

6 unchanged sentences

Equity in income of equity method investments, net of tax ( 36,394 ) ( 31,294 )

Facilities exit charges 5,164 —

Loss on business dispositions 244,833 —

Impairment of goodwill — 833,075

Net loss on business dispositions 139,095 152,211

Other, net 1,409 17,573

8 unchanged sentences

Capital expenditures ( 331,002 ) ( 324,027 )

Issuance of notes receivable ( 50,000 ) —

Net cash from sales of businesses 478,695 ( 29,755 )

Other, net 2,186 16

1 unchanged sentence

Cash flows from financing activities:

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

Net borrowings from (repayments of) settlement lines of credit ( 233,075 ) 4,139

Net borrowings from commercial paper notes 1,841,675 —

6 unchanged sentences

Distributions to noncontrolling interests ( 17,255 ) ( 14,363 )

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

Dividends paid ( 130,635 ) ( 139,315 )

1 unchanged sentence

Effect of exchange rate changes on cash, cash equivalents and restricted cash 34,543 ( 114,968 )

Increase in cash, cash equivalents and restricted cash 22,146 56,696

Decrease in cash, cash equivalents and restricted cash ( 101,255 ) ( 23,182 )

Cash, cash equivalents and restricted cash, beginning of the period 2,215,606 2,123,023

1 unchanged sentence

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

GLOBAL PAYMENTS INC.

1 unchanged sentence

(in thousands, except per share data)

Shareholders' Equity

Number of Shares

1 unchanged sentence

Retained Earnings

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

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

Balance at March 31, 2023 261,771 $ 19,839,506 $ 2,654,589 $ ( 410,817 ) $ 22,083,278 $ 243,481 $ 22,326,759 $ 556,070

Net income (loss) 274,148 274,148 10,062 284,210 ( 4 )

Other comprehensive income 32,416 32,416 717 33,133 1,131

Stock issued under share-based compensation plans 259 13,179 13,179 13,179

1 unchanged sentence

Share-based compensation expense 47,135 47,135 47,135

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

Repurchases of common stock ( 2,006 ) ( 207,495 ) ( 207,495 ) ( 207,495 )

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

Distributions to noncontrolling interests — ( 9,766 ) ( 9,766 ) ( 1,271 )

Redeemable noncontrolling interests measurement period adjustment — — ( 56,447 )

Cash dividends declared ($ 0.25 per common share)

( 64,885 ) ( 64,885 ) ( 64,885 )

Balance at June 30, 2023 259,962 $ 19,686,035 $ 2,863,852 $ ( 378,401 ) $ 22,171,486 $ 244,494 $ 22,415,980 $ 499,479

Shareholders' Equity

Number of Shares

Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity

Nonredeemable Noncontrolling Interests Total Equity

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

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

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

Stock issued under share-based compensation plans 125 15,680 15,680 15,680

Common stock repurchased - share-based compensation plans ( 2 ) ( 220 ) ( 220 ) ( 220 )

Share-based compensation expense 47,014 47,014 47,014

Repurchases of common stock ( 4,524 ) ( 599,986 ) ( 352 ) ( 600,338 ) ( 600,338 )

Distributions to noncontrolling interest — ( 8,829 ) ( 8,829 )

Cash dividends declared ($ 0.25 per common share)

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

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

See Notes to Unaudited Consolidated Financial Statements.

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except per share data)

Shareholders' Equity

Number of Shares

1 unchanged sentence

Retained Earnings

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

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

Net income (loss) 263,107 263,107 16,683 279,790 ( 4 )

Other comprehensive income 27,568 27,568 7,091 34,659 1,131

Stock issued under share-based compensation plans 1,273 19,282 19,282 19,282

Common stock repurchased - share-based compensation plans ( 328 ) ( 36,479 ) ( 36,479 ) ( 36,479 )

Share-based compensation expense 136,701 136,701 136,701

Redeemable noncontrolling interests acquired in a business combination — — 556,070

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

Repurchases of common stock ( 4,065 ) ( 414,048 ) ( 414,048 ) ( 414,048 )

Distributions to noncontrolling interests — ( 15,984 ) ( 15,984 ) ( 1,271 )

Redeemable noncontrolling interests measurement period adjustment — — ( 56,447 )

Cash dividends declared ($ 0.50 per share)

( 130,635 ) ( 130,635 ) ( 130,635 )

Balance at June 30, 2023 259,962 $ 19,686,035 $ 2,863,852 $ ( 378,401 ) $ 22,171,486 $ 244,494 $ 22,415,980 $ 499,479

Shareholders' Equity

Number of Shares

Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity

1 unchanged sentence

Balance at December 31, 2021 284,750 $ 22,880,261 $ 2,982,122 $ ( 234,182 ) $ 25,628,201 $ 241,216 $ 25,869,417

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

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

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

6 unchanged sentences

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

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

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

See Notes to Unaudited Consolidated Financial Statements.

Table of Content s

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world.

We operate in three reportable segments:

Merchant Solutions, Issuer Solutions and Consumer Solutions, which are described in "Note 15—Segment Information." Global Payments Inc.

We operate in two reportable segments:

Merchant Solutions and Issuer Solutions.

As described in "Note 3—Business Dispositions," during the second quarter of 2023, we completed the sale of the consumer portion of our Netspend business, which comprised our former Consumer Solutions segment.

Our consolidated financial statements include the results of our former Consumer Solutions segment for periods prior to disposition.

See "Note 15—Segment Information" for further information.

Global Payments Inc.

and its consolidated subsidiaries are referred to herein collectively as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise.

13 unchanged sentences

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

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

6 unchanged sentences

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.

1 unchanged sentence

(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.

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

We apportioned the fair value of the replacement awards between purchase consideration (the portion attributable to pre-acquisition services in relation to the total vesting term of the award) 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):

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

The provisional estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed as of June 30, 2023, including a reconciliation to the total purchase consideration, were as follows:

Provisional Amounts at

Acquisition Date Measurement-period

Adjustments Provisional Amounts at

June 30, 2023

(in thousands)

Cash and cash equivalents $ 324,859 $ — $ 324,859

14 unchanged sentences

Total purchase consideration $ 4,269,620 $ — $ 4,269,620

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.

As of June 30, 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.

We made measurement-period adjustments as shown in the table above, and the effects of the measurement-period adjustments on our consolidated statement of income for the second quarter of 2023 were not material.

Goodwill arising from the acquisition was included in the Merchant Solutions segment as of June 30, 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:

As the amounts are still provisional, we are still in the process of assigning goodwill to our reporting units.

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

Estimated Fair Value Weighted-Average Estimated Amortization Periods

5 unchanged sentences

Total estimated identifiable intangible assets $ 1,569,000 11

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.

From the acquisition date through June 30, 2023, the acquired operations of EVO contributed less than 10 % to our consolidated revenues and operating income.

The historical revenue and earnings of EVO were not material for the purpose of presenting pro forma information.

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

Table of Content s

NOTE 3— BUSINESS DISPOSITIONS

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.

On April 1, 2023, we completed the sale of our gaming business for approximately $ 400 million, subject to certain closing adjustments.

The gaming business was included in our Merchant Solutions segment prior to disposition, and had been presented as held for sale in our consolidated balance sheet since December 31, 2022.

In connection with the sale, we provided $ 32 million of seller financing as described below.

We recognized a gain on the sale of $ 104.1 million during the three and six months ended June 30, 2023, and the sale is subject to certain additional final closing adjustments.

The gain was presented within gain on business dispositions in the consolidated statement of income.

Consumer Business.

On April 26, 2023, we completed the sale of the consumer portion of our Netspend business for approximately $ 1 billion, subject to certain closing adjustments.

The consumer business comprised our former Consumer Solutions segment prior to disposition, and had been presented as held for sale with certain adjustments to report the disposal group at fair value less costs to sell in our consolidated balance sheet since June 30, 2022.

In connection with the sale, we provided $ 675 million of seller financing as described below.

We recognized a gain (loss) on business dispositions in our consolidated statement of income of $ 1.6 million and $( 243.2 ) million during the three and six months ended June 30, 2023, respectively.

The gain (loss) during the three and six months ended June 30, 2023 included the effects of incremental negotiated closing adjustments, changes in the estimated fair value of the seller financing and the effects of the final tax structure of the transaction.

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

We also recognized a charge of $ 25.0 million during the three and six months ended June 30, 2022 to reduce the disposal group to estimated fair value less costs to sell, which was presented within net loss on business dispositions in our consolidated statement of income.

Notes Receivable and Allowance for Credit Losses

In connection with the sale of our consumer business, we provided seller financing consisting of the following:

(1) a first lien seven-year secured term loan facility with an aggregate principal amount of $ 350 million bearing interest at a fixed annual rate of 9.0 %, including 3.5 % payable quarterly in cash and 5.5 % settled quarterly via the issuance of additional paid-in-kind ("PIK") notes with the same terms as the original notes until December 2024, after which interest will be payable quarterly in cash along with quarterly principal payments of $ 4.375 million with the remaining balance due at maturity;

and (2) a second lien twenty-five year secured term loan facility with an aggregate principal amount of $ 325 million bearing interest at a fixed annual rate of 13.0 % PIK due at maturity.

The aggregate fair value of the first and second lien term loans upon the closing of the transaction was $ 653.9 million, calculated using a discounted cash flow approach.

In addition, we provided the purchasers a five-year $ 50 million secured revolving facility available from the date of closing of the sale, bearing interest at a fixed annual rate of 9.0 % payable quarterly in cash.

In connection with the sale of our gaming business, we also provided seller financing consisting of an unsecured promissory note due April 1, 2030 with an aggregate principal amount of $ 32 million bearing interest at a fixed annual rate of 11.0 %.

We classify the notes as held for investment based on the intent and ability to hold for foreseeable future or until maturity or payoff, and the notes are presented at amortized cost within notes receivable in our consolidated balance sheet.

Interest income is recognized using the effective interest method, which includes the accretion of the difference between the fair value at inception and the face value of the notes.

We recognized interest income of $ 14.9 million during the three and six months ended June 30, 2023 as a component of interest and other income in the consolidated statements of income.

The issuance of the notes in connection with the sale transactions was a noncash investing activity in our consolidated statement of cash flows for the six months ended June 30, 2023.

We are exposed to credit losses on the notes.

We utilize a probability-of-default and loss given default method to develop an estimate of current expected credit losses applied at the loan level.

A variety of factors are considered to estimate the expected credit loss, including the probability of default (representing the probability the asset will default within a given time frame), the loss given default (representing the percentage of the asset that is not expected to be collected due to default), leverage ratios, interest rates, market and industry data, and forecasts that affect the collectibility of the reported amount.

The estimation process also includes consideration of qualitative and quantitative risk factors associated with expected timing of payment, industry trends and current and anticipated future economic conditions.

Expected credit losses are estimated over the life of the loans, adjusted for expected prepayments when appropriate.

Upon issuance of the notes in connection with the sales of the two businesses, we recognized an allowance for credit losses and a noncash charge of $ 18.2 million, which is included as a component of interest and other expenses in our consolidated statements of income for the three and six months ended June 30, 2023.

As of June 30, 2023, there was an aggregate principal amount of $ 769.2 million outstanding on the notes, including PIK, and the notes are presented net of the allowance for credit losses of $ 18.2 million within notes receivable in our consolidated balance sheet.

The estimated fair value of the notes receivable was $ 714.4 million as of June 30, 2023.

The estimated fair value of notes receivable was based on a discounted cash flow approach and is considered to be a Level 3 measurement of the valuation hierarchy.

Assets and Liabilities Held for Sale.

The 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.

Table of Content s

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

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

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

Sale of Merchant Solutions Business in Russia.

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

During the three months ended June 30, 2022, we recognized a loss of $ 127.2 million associated with the sale, comprised of the difference between the consideration received and the net carrying amount of the business and the reclassification of $ 63 million of associated accumulated foreign currency translation losses from the separate component of equity.

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

NOTE 4— REVENUES

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

The following tables present a disaggregation of our revenues from contracts with customers by geography for each of our reportable segments for the three and six months ended June 30, 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 June 30, 2023

Solutions Issuer

7 unchanged sentences

$ 1,842,293 $ 590,441 $ 39,031 $ ( 19,296 ) $ 2,452,469

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Solutions Issuer

7 unchanged sentences

$ 1,581,716 $ 559,639 $ 161,629 $ ( 22,078 ) $ 2,280,906

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

Six Months Ended June 30, 2023

Solutions Issuer

Solutions Consumer

Solutions Intersegment

Eliminations Total

(in thousands)

Americas $ 2,865,024 $ 898,364 $ 182,740 $ ( 26,477 ) $ 3,919,651

Europe 455,023 242,386 — — 697,409

Asia Pacific 127,856 20,599 — ( 20,599 ) 127,856

$ 3,447,903 $ 1,161,349 $ 182,740 $ ( 47,076 ) $ 4,744,916

Six Months Ended June 30, 2022

Solutions Issuer

Solutions Consumer

Solutions Intersegment

Eliminations Total

(in thousands)

Americas $ 2,576,851 $ 839,691 $ 330,744 $ ( 28,260 ) $ 3,719,026

Europe 361,505 240,250 — — 601,755

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

$ 3,054,735 $ 1,096,965 $ 330,744 $ ( 45,284 ) $ 4,437,160

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

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(in thousands)

Relationship-led $ 979,574 $ 827,577 $ 1,760,446 $ 1,564,982

2 unchanged sentences

ASC Topic 606, Revenues from Contracts with Customers ("ASC 606") requires that we determine for each customer arrangement whether revenue should be recognized at a point in time or over time.

For the three months ended March 31, 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

For the three and six months ended June 30, 2023 and 2022, substantially all of our revenues were recognized over time.

Supplemental balance sheet information related to contracts from customers as of June 30, 2023 and December 31, 2022 was as follows:

Balance Sheet Location June 30, 2023 December 31, 2022

(in thousands)

5 unchanged sentences

Contract liabilities, net (noncurrent) Other noncurrent liabilities $ 54,295 $ 45,613

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.

Net contract assets were not material at June 30, 2023 or at December 31, 2022.

Revenue recognized for the three months ended June 30, 2023 and 2022 from contract liability balances at the beginning of each period was $ 85.2 million and $ 83.2 million, respectively.

Revenue recognized for the six months ended June 30, 2023 and 2022 from contract liability balances at the beginning of each period was $ 142.9 million and $ 149.8 million, respectively.

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

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

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at March 31, 2023.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at June 30, 2023.

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

Accordingly, the total amount of unsatisfied or partially unsatisfied performance obligations related to processing services is significantly higher than the amounts disclosed in the table below (in thousands):

Accordingly, the total amount

of unsatisfied or partially unsatisfied performance obligations related to processing services is significantly higher than the amounts disclosed in the table below (in thousands):

Year Ending December 31,

2 unchanged sentences

Total $ 3,877,228

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NOTE 5— GOODWILL AND OTHER INTANGIBLE ASSETS

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

March 31, 2023 December 31, 2022

As of June 30, 2023 and December 31, 2022, goodwill and other intangible assets consisted of the following:

June 30, 2023 December 31, 2022

(in thousands)

13 unchanged sentences

$ 10,741,990 $ 9,658,374

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

The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the six months ended June 30, 2023:

Solutions Issuer

Solutions Consumer

Solutions Total

4 unchanged sentences

Measurement period adjustments ( 236 ) — ( 236 )

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.

Table of Content s

Balance at June 30, 2023 $ 16,974,392 $ 9,516,768 $ 26,491,160

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

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

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

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

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

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

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

Based on the quantitative assessment of the former Business and Consumer Solutions reporting unit, including consideration of the consumer business disposal group and the remaining assets of the reporting unit,

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

Accumulated impairment losses for goodwill as of June 30, 2023 were $ 357.9 million.

Accumulated impairment losses for goodwill as of December 31, 2022 were $ 833.1 million, of which $ 475.2 million related to assets held for sale.

NOTE 6— LONG-TERM DEBT AND LINES OF CREDIT

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

March 31, 2023 December 31, 2022

As of June 30, 2023 and December 31, 2022, long-term debt consisted of the following:

June 30, 2023 December 31, 2022

(in thousands)

2 unchanged sentences

4.000 % senior notes due June 1, 2023

551,099 552,747

1.500 % senior notes due November 15, 2024

37 unchanged sentences

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 June 30, 2023, the unamortized discount on senior notes and convertible notes was $ 49.9 million, and unamortized debt issuance costs on senior notes and convertible notes were $ 85.6 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 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.

Table of Content s

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

At June 30, 2023 and December 31, 2022, unamortized debt issuance costs on the unsecured revolving credit facility were $ 21.0 million and $ 23.5 million, respectively.

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

Year Ending December 31,

6 unchanged sentences

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.

1 unchanged sentence

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

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

Commercial Paper

2 unchanged sentences

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 %.

As of June 30, 2023, we had net borrowings under our comm ercial paper program of $ 1,841.7 million outstanding, presented within long-term debt in our consolidated balance sheet based on our intent and ability to continually refinance on a long-term basis, with a weighted average annual interest rate of 5.96 %.

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.

1 unchanged sentence

Fair Value of Long-Term Debt

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.

As of June 30, 2023, our senior notes had a total carrying amount of $ 11.6 billion and an estimated fair value of $ 10.6 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 March 31, 2023, our convertible notes had a total carrying amount of $ 1.4 billion and an estimated fair value of $ 1.5 billion.

As of June 30, 2023, our convertible notes had a total carrying amount of $ 1.4 billion and an estimated fair value of $ 1.4 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 March 31, 2023.

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The fair value of other long-term debt approximated its carrying amount at June 30, 2023.

Compliance with Covenants

2 unchanged sentences

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.

We were in compliance with all applicable covenants as of June 30, 2023.

Interest Expense

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

Interest expense was $ 172.3 million and $ 97.1 million for the three months ended June 30, 2023 and 2022, respectively, and $ 291.3 million and $ 186.4 million for the six months ended June 30, 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.

We have designated our aggregate € 800 million Euro-denominated senior notes due March 2031 as a hedge of our net investment in our Euro-denominated operations.

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

1 unchanged sentence

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.

We recognized a gain (loss) of $ 1.8 million and $( 16.5 ) million within foreign currency translation adjustments in other comprehensive income in our consolidated statement of comprehensive income during the three and six months ended June 30, 2023, respectively.

Interest Rate Swaps

2 unchanged sentences

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.

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.

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

Derivative Financial Instruments Balance Sheet Location Weighted-Average Fixed Rate of Interest at June 30, 2023

Range of Maturity Dates at June 30, 2023

June 30, 2023 December 31, 2022

(in thousands)

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

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

Other noncurrent liabilities 4.26 % April 17, 2027 - August 17, 2027 $ 8,585 $ —

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

The table below presents the effects of our interest rate swaps on the consolidated statements of income and statements of comprehensive income for the three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 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 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.

Net unrealized gains (losses) recognized in other comprehensive income (loss) $ 40,078 $ 5,051 $ ( 7,973 ) $ 13,985

Net unrealized gains (losses) reclassified out of other comprehensive income (loss) to interest expense $ 901 $ ( 7,534 ) $ ( 485 ) $ ( 16,979 )

As of June 30, 2023, the amount of net unrealized gains in accumulated other comprehensive loss related to our interest rate swaps that is expected to be reclassified into interest expense during the next 12 months was $ 9.4 million.

NOTE 8— INCOME TAX

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.

For the three and six months ended June 30, 2023, we reported a tax expense of 39.2 % and 36.7 %, respectively, of the reported income before taxes.

For the three and six months ended June 30, 2023, tax expense was greater than the U.S.

statutory tax rate as a result of a gain on the dispositions of our consumer and gaming businesses for income tax reporting purposes, while a net loss on the dispositions was recognized for financial reporting purposes.

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

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

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

On August 16, 2022, the U.S.

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.

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

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

During the 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.

Table of Content s

During the three and six months ended June 30, 2023, we reflected excise taxes of $ 2.0 million and $ 4.3 million, respectively, within equity as part of the price of common stock repurchased during the periods.

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.

Through the acquisition of EVO, we have certain redeemable noncontrolling interests related to the portion of equity in our consolidated subsidiaries in Poland, Greece, and Chile, 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, 51 % of our subsidiary in Greece and 50.1 % of our subsidiary in Chile.

Under the shareholder agreements, the minority shareholders have the option to compel us to purchase their shares at a price per share based on the fair value of the shares, or under certain limited circumstances, at a price determined as stipulated in the shareholder agreement.

The option held by the minority shareholder in Poland expires on January 1, 2024.

The other options have no expiration date.

The redeemable noncontrolling interest for each subsidiary is reflected at the higher of:

(i) the initial carrying amount, increased or decreased for the noncontrolling interest's share of comprehensive income (loss), c apital contributions and distributions or (ii) the redemption price .

Estimates of redemption price are based on projected operating performance of each subsidiary, including key assumptions - revenue growth rates, current and expected market conditions and weighted-average cost of capital.

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 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.

During the three months ended June 30, 2023 and 2022, we repurchased and retired 2,006,016 and 4,523,563 shares of our common stock, respectively, at a cost, including commissions and applicable excise taxes, of $ 207.5 million and $ 600.3 million, or $ 103.44 and $ 132.64 per share, respectively.

During the six months ended June 30, 2023 and 2022, we repurchased and retired 4,064,918 and 9,039,189 shares of our common stock, respectively, at a cost, including commissions and applicable excise taxes, of $ 414.0 million and $ 1,250.0 million, or $ 101.86 and $ 138.29 per share, respectively.

As of June 30, 2023, the remaining amount available under our share repurchase program was $ 1,090.2 million.

On July 27, 2023, our board of directors declared a dividend of $ 0.25 per share payable on September 29, 2023 to common shareholders of record as of September 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

March 31, 2023 March 31, 2022

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(in thousands)

1 unchanged sentence

Income tax benefit $ 22,474 $ 10,318 $ 31,890 $ 19,997

Table of Content s

Share-Based Awards

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

The following table summarizes the changes in unvested restricted stock and performance awards for the six months ended June 30, 2023:

Shares Weighted-Average

5 unchanged sentences

Forfeited ( 86 ) 136.88

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.

Unvested at June 30, 2023 2,573 $ 131.35

The total fair value of restricted stock and performance awards vested during the six months ended June 30, 2023 and June 30, 2022 was $ 151.1 million and $ 96.4 million, respectively.

For restricted stock and performance awards, we recognized compensation expens e of $ 44.7 million and $ 43.6 million during the three months ended June 30, 2023 and 2022, respectively, and $ 119.9 million and $ 78.7 million during the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, there was $ 222.7 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.

Stock Options

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

The following table summarizes stock option activity for the six months ended June 30, 2023:

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

3 unchanged sentences

Granted 233 110.83

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.

Forfeited ( 36 ) 109.92

Exercised ( 17 ) 52.80

Outstanding at June 30, 2023 1,461 $ 109.07 3.7 $ 19.0

Options vested and exercisable at June 30, 2023 1,155 $ 110.39 2.4 $ 16.5

We recognized compensation expense for stock options of $ 1.1 million and $ 1.8 million during the three months ended June 30, 2023 and 2022, respectively, and $ 13.9 million and $ 3.6 million during the six months ended June 30, 2023 and 2022, respectively.

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2023 and 2022 was $ 0.9 million and $ 3.8 million, respectively.

As of June 30, 2023, we had $ 3.6 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 2.0 y ears.

The weighted-average grant-date fair value of stock options granted, including replacement awards granted in connection with the EVO acquisition, during the six months ended June 30, 2023 and 2022 was $ 46.17 and $ 48.88 , respectively.

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

Three Months Ended

March 31, 2023 March 31, 2022

Six Months Ended

June 30, 2023 June 30, 2022

Risk-free interest rate 3.84 % 1.87 %

12 unchanged sentences

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.

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 dilutive share base for the three and six months ended June 30, 2023 excluded approximately 0.9 million 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 and six months ended June 30, 2022, no incremental shares were included in the computation of diluted earnings per share because the effect would be antidilutive.

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

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

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

For the three 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.

For the three and six months ended June 30, 2023, the convertible notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive.

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

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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

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

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(in thousands)

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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.

As of June 30, 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.

We have not experienced any losses associated with our balances in such accounts for the six months ended June 30, 2023.

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

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

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

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(in thousands)

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Long-lived assets

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.

During the six months ended June 30, 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:

As of June 30, 2023, maturities of the acquired operating lease liabilities were as follows:

$ 4.4 million in 2023, $ 9.3 million in 2024, $ 8.6 million in 2025, $ 7.8 million in 2026, $ 6.3 million in 2027, $ 3.2 million in 2028 and $ 0.8 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 months ended March 31, 2023 and 2022:

The changes in the accumulated balances for each component of other comprehensive income (loss) were as follows for the three and six months ended June 30, 2023 and 2022:

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

(in thousands)

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

Balance at March 31, 2023 $ ( 349,695 ) $ ( 58,135 ) $ ( 2,987 ) $ ( 410,817 )

Other comprehensive income (loss) 2,405 30,033 ( 22 ) 32,416

Balance at June 30, 2023 $ ( 347,290 ) $ ( 28,102 ) $ ( 3,009 ) $ ( 378,401 )

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

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

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

Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 1.8 million and $( 13.5 ) million for the three months ended June 30, 2023 and 2022, respectively.

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

(in thousands)

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

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

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.

Other comprehensive income (loss) 33,294 ( 5,682 ) ( 44 ) 27,568

Balance at June 30, 2023 $ ( 347,290 ) $ ( 28,102 ) $ ( 3,009 ) $ ( 378,401 )

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

Other comprehensive income (loss) ( 160,452 ) 23,456 — ( 136,996 )

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

Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 8.2 million and $( 18.8 ) million for the six months ended June 30, 2023 and 2022, respectively.

NOTE 15— SEGMENT INFORMATION

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

The presentation of segment information for the three months ended June 30, 2022 has been recast to align with the segment presentation for the three months ended June 30, 2023.

As described in "Note 3 - Business Dispositions," during the second quarter of 2023, we completed the sale of the consumer portion of our Netspend business, which comprised of our former Consumer Solutions segment.

Our reportable segments now include:

Merchant Solutions and Issuer Solutions.

Our former Consumer Solutions segment is presented below for periods prior to disposition.

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

1 unchanged sentence

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

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

Impairment of goodwill and

gains or losses on business dispositions are not included in segment operating income.

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

1 unchanged sentence

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."

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Information on segments and reconciliations to consolidated revenues, consolidated operating income and consolidated depreciation and amortization were as follows for the three months ended March 31, 2023 and 2022:

Three Months Ended

March 31, 2023 March 31, 2022

Information on segments and reconciliations to consolidated revenues, consolidated operating income (loss) and consolidated depreciation and amortization were as follows for the three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(in thousands)

10 unchanged sentences

( 204,136 ) ( 179,372 ) ( 486,790 ) ( 339,715 )

Loss on business dispositions ( 244,833 ) —

Consolidated operating income $ 56,735 $ 375,947

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

Net gain (loss) on business dispositions 105,738 ( 152,211 ) ( 139,095 ) ( 152,211 )

Consolidated operating income (loss) $ 602,741 $ ( 529,858 ) $ 659,475 $ ( 153,911 )

Depreciation and amortization :

6 unchanged sentences

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.

(2) Operating loss for Corporate included acquisition and integration expenses of $ 60.2 million and $ 61.4 million for the three months ended June 30, 2023 and 2022, respectively.

Operating loss for Corporate included acquisition and integration expenses of $ 148.0 million and $ 109.5 million for the six months ended June 30, 2023 and 2022, respectively.

NOTE 16— COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

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