What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-14 compared with 2023-02-17 · 434 added, 351 removed, 1229 unchanged (39% of the section changed)

47 unchanged sentences

• For a sample of revenue transactions, we tested selected transactions by agreeing the amounts of revenue recognized to source documents and tested the mathematical accuracy of the recorded revenues.

Issuer Solutions Goodwill and Business and Consumer Solutions Goodwill - Refer to Notes 1 and 6 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair values of its reporting units, including the Issuer Solutions reporting unit (as of June 30, 2022 and October 1, 2022) and the former Business and Consumer reporting unit (as of June 30, 2022), to their respective carrying values.

The Company determined the fair values of these reporting units based on a weighted average of multiple valuation techniques, principally a combination of an income approach and a market approach.

The Company utilizes discounted cash flow models to perform its income approach which requires management to make significant assumptions related to discount rates and forecasts of future revenues and cash flows, among others.

Changes in these assumptions could have a significant impact on either the fair values of the reporting units, the amount of any goodwill impairment charge, or both.

The Company recorded a goodwill impairment charge during 2022 of $833.1 million related to its former Business and Consumer reporting unit.

The goodwill balance was $23.3 billion as of December 31, 2022, of which $9.5 billion was allocated to the Issuer Solutions reporting unit.

We identified valuation of goodwill for the Issuer Solutions and the former Business and Consumer Solutions reporting units as a critical audit matter because of the significant judgments made by management to estimate the fair values of these reporting units.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to discount rates and forecasts of future revenues and cash flows.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates and assumptions used in its discounted cash flow models included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those controls related to management’s selection of the discount rates and forecasts of future revenues and cash flows.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and the key assumptions used, including discount rates for which we tested the mathematical accuracy of the calculation, and developed a range of independent estimates and compared those to the discount rate selected by management.

• We evaluated management’s ability to accurately forecast future revenues and cash flows by comparing the forecasts to (1) historical results, (2) projections utilized in the prior year goodwill impairment analysis, and (3) forecasted information included in analyst and industry reports of the Company and companies in its peer group.

• We developed independent expectations of certain revenue streams and compared these to amounts recorded by the Company.

/s/ Deloitte & Touche LLP

40 unchanged sentences

Impairment of goodwill — 833,075 —

Loss on business dispositions 199,094 — —

Net loss on business dispositions 136,744 199,094 —

7,938,033 8,335,364 7,164,886

25 unchanged sentences

Net unrealized gains (losses) on hedging activities ( 19,683 ) 12,915 3,425

Reclassification of net unrealized losses on hedging activities to interest expense 21,327 40,094 36,510

Income tax (expense) benefit related to hedging activities ( 8,172 ) ( 10,466 ) 4,008

Reclassification of net unrealized (gains) losses on hedging activities to interest expense ( 4,609 ) 21,327 40,094

Income tax benefit (expense) related to hedging activities 5,853 ( 8,172 ) ( 10,466 )

Other, net of tax 439 ( 222 ) 3,760

Other comprehensive (loss) income ( 185,088 ) ( 42,282 ) 134,996

Comprehensive (loss) income ( 41,775 ) 945,582 740,096

Other comprehensive income (loss) 197,441 ( 185,088 ) ( 42,282 )

Comprehensive income (loss) 1,226,264 ( 41,775 ) 945,582

Comprehensive income attributable to noncontrolling interests 92,987 18,519 12,123

Comprehensive (loss) income attributable to Global Payments $ ( 60,294 ) $ 933,459 $ 704,873

Comprehensive income (loss) attributable to Global Payments $ 1,133,277 $ ( 60,294 ) $ 933,459

See Notes to Consolidated Financial Statements.

15 unchanged sentences

Noncurrent assets held for sale 327 1,295,799

Notes receivable 713,123 —

Other noncurrent assets 2,569,691 2,343,241

14 unchanged sentences

Commitments and contingencies

Redeemable noncontrolling interests 507,965 —

Preferred stock, no par value;

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Total Global Payments shareholders’ equity 22,999,210 22,303,506

Noncontrolling interests 236,704 241,216

Nonredeemable noncontrolling interests 280,340 236,704

Total equity 23,279,550 22,540,210

Total liabilities and equity $ 44,809,014 $ 45,279,713

Total liabilities, redeemable noncontrolling interests and equity $ 50,570,186 $ 44,809,014

See Notes to Consolidated Financial Statements.

11 unchanged sentences

Share-based compensation expense 208,994 163,261 180,779

Provision for operating losses and bad debts 116,879 90,208 126,712

Provision for operating losses and credit losses 97,103 116,879 90,208

Noncash lease expense 65,307 78,935 107,775

4 unchanged sentences

Impairment of goodwill — 833,075 —

Loss on business dispositions 199,094 — —

Net loss on business dispositions 136,744 199,094 —

Other, net 18,545 993 10,810

6 unchanged sentences

Cash flows from investing activities:

Business combinations and other acquisitions, net of cash acquired ( 65,672 ) ( 1,811,432 ) ( 160,801 )

Restricted cash from business combinations — — 119,372

Business combinations and other acquisitions, net of cash and restricted cash acquired ( 4,225,610 ) ( 65,672 ) ( 1,811,432 )

Capital expenditures ( 658,142 ) ( 615,652 ) ( 493,216 )

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

Issuance of notes receivable ( 50,000 ) — —

Repayment of notes receivable 50,000 — —

Net cash from sales of businesses 479,067 ( 29,755 ) —

Proceeds from sale of investments 42,135 33,046 —

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Cash flows from financing activities:

Net borrowings from (repayments of) settlement lines of credit 285,644 149,528 ( 133,282 )

Net borrowings from settlement lines of credit 220,682 285,644 149,528

Net borrowings from commercial paper notes 1,367,859 — —

Proceeds from long-term debt 10,336,850 9,812,289 7,057,668

5 unchanged sentences

Distributions to noncontrolling interests ( 32,997 ) ( 23,031 ) —

Contributions from noncontrolling interests

Proceeds and contributions from noncontrolling interests

26,205 — 69,987

Payment of contingent consideration in business combination ( 5,222 ) ( 15,726 ) —

1 unchanged sentence

Dividends paid ( 260,431 ) ( 273,955 ) ( 259,726 )

Purchase of subsidiary shares from noncontrolling interest

— — ( 578,196 )

Net cash used in financing activities ( 1,376,701 ) ( 405,365 ) ( 1,546,142 )

Net cash provided by (used in) financing activities 2,141,121 ( 1,376,701 ) ( 405,365 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 12,519 ( 99,219 ) ( 48,382 )

6 unchanged sentences

(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

Shareholders' Equity

Number of Shares Paid-in Capital 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 986,233 986,233 41,104 1,027,337 1,486

Other comprehensive loss ( 171,787 ) ( 171,787 ) ( 13,301 ) ( 185,088 )

Other comprehensive income 147,044 147,044 8,745 155,789 41,652

Stock issued under share-based compensation plans 1,733 60,345 60,345 60,345

1 unchanged sentence

Share-based compensation expense 208,994 208,994 208,994

Redeemable noncontrolling interests acquired in a business combination — — 471,119

Share-based awards granted in connection with a business combination 2,484 2,484 2,484

Repurchases of common stock ( 4,065 ) ( 413,667 ) ( 413,667 ) ( 413,667 )

Distributions to noncontrolling interests — ( 26,705 ) ( 26,705 ) ( 6,292 )

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

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

Sale of subsidiary shares to noncontrolling interest 5,713 5,713 20,492 26,205

Cash dividends declared ($ 1.00 per common share)

1 unchanged sentence

Balance at December 31, 2023 260,383 $ 19,800,953 $ 3,457,182 $ ( 258,925 ) $ 22,999,210 $ 280,340 $ 23,279,550 $ 507,965

Number of Shares Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Global Payments Shareholders’ Equity Noncontrolling Interests Total Equity

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

4 unchanged sentences

Share-based compensation expense 163,261 163,261 163,261

Contributions from noncontrolling interests — 69,987 69,987

Change in ownership attributable to a noncontrolling interest

( 4,524 ) 92 ( 4,432 ) 4,432 —

Repurchases of common stock ( 23,266 ) ( 2,841,534 ) ( 88,280 ) ( 2,929,814 ) ( 2,929,814 )

Distributions to noncontrolling interests

— ( 23,031 ) ( 23,031 )

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 ($ 1.00 per common share)

5 unchanged sentences

(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

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

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

Net income 965,460 965,460 22,404 987,864

Other comprehensive income 120,353 120,353 14,643 134,996

Other comprehensive loss ( 32,001 ) ( 32,001 ) ( 10,281 ) ( 42,282 )

Stock issued under share-based compensation plans 2,085 49,545 49,545 49,545

1 unchanged sentence

Share-based compensation expense 180,779 180,779 180,779

Noncontrolling interest of acquired business — 14,812 14,812

Purchase of subsidiary shares from noncontrolling interest ( 497,737 ) ( 12,055 ) ( 509,792 ) ( 68,404 ) ( 578,196 )

Distributions to noncontrolling interests — ( 26,199 ) ( 26,199 )

Contributions from noncontrolling interests — 69,987 69,987

Change in ownership attributable to a noncontrolling interest ( 4,524 ) 92 ( 4,432 ) 4,432 —

Repurchases of common stock ( 15,169 ) ( 2,219,143 ) ( 294,486 ) ( 2,513,629 ) ( 2,513,629 )

9 unchanged sentences

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

During 2022, as a result of the pending divestiture of our consumer business and changes in how our business is managed, we realigned the businesses previously comprising our Business and Consumer Solutions segment to include the business-to-business ("B2B") 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.

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 18—Segment Information" in the notes to the accompanying consolidated financial statements for additional information about our segments.

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Actual results could differ materially from those estimates.

In particular, uncertainty resulting from the COVID-19 pandemic, 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 consolidated financial statements reflect the financial statement effects based upon management’s estimates and assumptions utilizing the most currently available information.

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

The amendments in this update also include a general principle that permits an entity to consider contract modifications due to reference rate reform to

be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

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

determination.

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

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

ASU 2018-15— In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (A Consensus of the FASB Emerging Issues Task Force)." ASU 2018-15 provides additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract.

The new guidance amended the definition of a hosting arrangement and requires a customer in a hosting arrangement that is a service contract to capitalize certain implementation costs following the internal-use software capitalization criteria within ASC Subtopic 350-40.

We adopted ASU 2018-15 on January 1, 2020, applying the guidance prospectively to all implementation costs incurred on or after the date of adoption.

The adoption of this standard did not have a material effect on our consolidated financial statements.

We have historically capitalized implementation costs associated with cloud computing arrangements that are service contracts following the guidance in Subtopic 350-40 and continue to do so pursuant to the clarifications provided in the new guidance.

We amortize capitalized implementation costs to expense on a straight-line basis over the term of the applicable hosting arrangement.

Our cloud computing arrangements involve services we use to support certain internal corporate functions as well as technology associated with revenue-generating activities.

As of December 31, 2022 and 2021, capitalized implementation costs, net of accumulated amortization, were $ 142.9 million and $ 72.4 million, respectively, and are presented within other noncurrent assets in the consolidated balance sheets.

Amortization expense for the years ended December 31, 2022, 2021 and 2020 was $ 3.1 million, $ 3.0 million and $ 3.1 million, respectively, and is presented in the same line item in the consolidated statements of income as the expense for the associated cloud services arrangement.

ASU 2016-13— We adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments " on January 1, 2020 using the modified retrospective transition method.

The adoption of this standard resulted in a cumulative-effect adjustment to decrease retained earnings by $ 5.4 million, net of tax.

The amendments in this update changed how we measure and recognize credit impairment for certain financial instruments measured at amortized cost.

Under the current expected credit losses model required by ASU 2016-13, we recognize at asset inception and each subsequent reporting date an estimate of credit losses expected to occur over the remaining life of each pool of financial assets with similar risk characteristics.

Revenue recognition — At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service that is distinct.

accordance with ASC 606, we recognize revenue when a customer obtains control of promised services.

In accordance with ASC 606, we recognize revenue when a customer obtains control of promised services.

The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these services.

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In addition, certain implementation services are not considered distinct from the SaaS and are recognized over the expected period of benefit.

Once we determine the performance obligations and the transaction price, including an estimate of any variable consideration, we then allocate the transaction price to each performance obligation in the contract using a relative standalone

selling price method.

We determine standalone selling price based on the price at which the good or service is sold separately.

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The deferred portion of consideration paid to customers is classified within other assets in our consolidated balance sheets.

Other Issuer Solutions customer arrangements provide B2B payment services, consisting of a stand-ready obligation to process financial transactions for which revenue is recognized on a daily basis based on the services that are performed on that day.

Other Issuer Solutions customer arrangements provide business-to-business ("B2B") payment services, consisting of a stand-ready obligation to process financial transactions for which revenue is recognized on a daily basis based on the services that are performed on that day.

Customer contracts may also include subscription based SaaS arrangements that automate key procurement processes and enable virtual cards and integrated payments options, for which revenue is recognized over time on a ratable basis over the contract term beginning on the date that the services are first made available to the customer.

Consumer Solutions.

Consumer Solutions arrangements include a stand-ready performance obligation to provide account access and facilitate purchase transactions.

Revenues principally consist of fees collected from cardholders and fees generated by cardholder activity in connection with the programs that we manage.

Customers are typically charged a fee for each purchase transaction made using their cards, unless the customer is on a monthly or annual service plan, in which case the customer is instead charged a monthly or annual subscription fee, as applicable.

Customers are also charged a monthly maintenance fee after a specified period of inactivity.

We also charge fees associated with additional services offered in connection with our accounts, including the use of overdraft features, a variety of bill payment options, card replacement, foreign exchange and card-to-card transfers of funds initiated through our call centers.

We have determined that we have a right to consideration from a customer in an amount that corresponds directly with our performance completed to date.

As a result, we recognize revenue in the amount to which we have a right to invoice.

Revenues are recognized net of fees charged by the payment networks for services they provide in processing transactions routed through them.

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.

For the periods prior to disposition, our Consumer Solutions arrangements included a stand-ready performance obligation to provide account access and facilitate purchase transactions.

Revenues principally consisted of fees collected from cardholders and fees generated by cardholder activity in connection with the programs that we managed.

Customers were typically charged a fee for each purchase transaction made using their cards, unless the customer was on a monthly or annual service plan, in which case the customer was instead charged a monthly or annual subscription fee, as applicable.

Customers were also charged a monthly maintenance fee after a specified period of inactivity.

We also charged fees associated with additional services offered in connection with our accounts, including the use of overdraft features, a variety of bill payment options, card replacement, foreign exchange and card-to-card transfers of funds initiated through our call centers.

We determined that we had a right to consideration from a customer in an amount that corresponded directly with our performance completed to date.

As a result, we recognized revenue in the amount to which we had a right to invoice.

Revenues were recognized net of fees charged by the payment networks for services they provided in processing transactions routed through them.

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.

6 unchanged sentences

Merchant Reserves serve as collateral to minimize contingent liabilities associated with any losses that may occur under the merchant agreement.

We record a corresponding liability in settlement processing assets and settlement processing obligations in our consolidated balance sheet.

We recognize a corresponding liability in settlement processing assets and settlement processing obligations in our consolidated balance sheets.

While this cash is not restricted in its use, we believe that designating this cash as Merchant Reserves strengthens our fiduciary standing with financial institutions that sponsor us.

1 unchanged sentence

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 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 sheet with a corresponding liability in accounts payable and accrued liabilities.

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.

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 December 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 year ended December 31, 2023, 2022 or 2021 .

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:

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Contract liabilities represent consideration received from customers in excess of revenues recognized.

Contract assets and liabilities are presented net at the individual contract level in the consolidated balance

sheet and are classified as current or noncurrent based on the nature of the underlying contractual rights and obligations.

Allowance for credit losses — We are exposed to credit losses on accounts receivable balances.

Contract assets and liabilities are presented net at the individual contract level in the consolidated balance sheet and are classified as current or noncurrent based on the nature of the underlying contractual rights and obligations.

Allowance for credit losses on accounts receivable — We are exposed to credit losses on accounts receivable balances.

We utilize a combination of aging and loss-rate methods to develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool.

2 unchanged sentences

Accounts receivable is presented net of an allowance for credit losses of $ 19.0 million and $ 21.0 million as of December 31, 2023 and 2022, respectively, including $ 3.3 million presented within assets held for sale in the consolidated balance sheet as of December 31, 2022 as further discussed in "Note 3—Business Dispositions."

The measurement of the allowance for credit losses is recognized through credit loss expense and is included as a component of selling, general and administrative expense in our consolidated statements of income.

The measurement of the allowance for credit losses on accounts receivable is recognized through credit loss expense and is included as a component of selling, general and administrative expense in our consolidated statements of income.

We recognized credit loss expense of $ 23.3 million, $ 15.0 million and $ 12.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Write-offs are recorded in the period in which the asset is deemed to be uncollectible.

Write-offs are recognized in the period in which the asset is deemed to be uncollectible.

Recoveries are recognized when received as a direct credit to the credit loss expense.

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If that net position is an asset, we reflect the net amount in settlement processing assets in our consolidated balance sheet.

If that net position is a liability, we reflect the net amount in settlement

processing obligations in our consolidated balance sheet.

If that net position is a liability, we reflect the net amount in settlement processing obligations in our consolidated balance sheet.

In the direct membership model, offsetting is not applied, and the individual components are presented as an asset or obligation based on the nature of that component.

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The allowance for credit losses on settlement processing assets was $ 9.7 million and $ 2.3 million as of December 31, 2023 and 2022, respectively.

The measurement of the allowance for credit losses is recognized through credit loss expense and is included as a component of cost of service in our consolidated statements of income.

The measurement of the allowance for credit losses on settlement assets is recognized through credit loss expense and is included as a component of cost of service in our consolidated statements of income.

We recognized credit loss expense of $ 19.2 million, $ 13.0 million and $ 3.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Write-offs are recognized in the period in which the asset is deemed to be uncollectible.

are recognized in the period in which the asset is deemed to be uncollectible.

Recoveries are recognized when received as a direct credit to the credit loss expense.

Additionally, when we are not able to collect these amounts from merchants due to merchant fraud, insolvency, bankruptcy or any other reason, we may be liable for the reversed charges.

We record an estimated liability for merchant losses comprised of estimated incurred but not reported losses, which is included in accrued liabilities in our consolidated balance sheet.

We recognize an estimated liability for merchant losses comprised of estimated incurred but not reported losses, which is included in accrued liabilities in our consolidated balance sheet.

The provision for merchant losses is included as a component of cost of service in our consolidated statements of income.

Allowance for credit and operating losses on check guarantee claims receivable assets — The check guarantee portion of our gaming business is exposed to credit losses when we are unable to collect the full amount of a guaranteed check from the checkwriter.

In our check guarantee service offering, we charge our merchants a percentage of the gross amount of the check and guarantee payment of the check to the merchant in the event the check is not honored by the checkwriter's bank.

We have the right to collect the full amount of the check from the checkwriter, but we have not always recovered 100% of the guaranteed checks.

We recognize an allowance for estimated losses on returned checks to reduce the claims receivable balance to the amount expected to be recovered, which is determined based on recent loss history and expected future collection trends.

As of December 31, 2022, check guarantee claims receivable, net of an allowance of $ 3.4 million , are included within the gaming business disposal group presented as held for sale in the consolidated balance sheet, as further discussed in "Note 3—Business Dispositions." As of December 31, 2021, check guarantee claims receivable, net of an allowance of $ 2.5 million, are included in prepaid expenses and other current assets in the consolidated balance sheet.

The provision for check guarantee losses, which was approximately $ 12.3 million , $ 10.2 million and $ 10.1 million for the years ended December 31, 2022, 2021 and 2020, respectively, is included as a component of cost of service in the consolidated statements of income.

Reserve for contract contingencies and processing errors — A significant number of our customer contracts in our Issuer Solutions segment contain service level agreements that can result in performance penalties payable by us if we do not meet contractually required service levels.

We record an accrual for estimated performance penalties and processing errors.

We recognize an accrual for estimated performance penalties and processing errors.

When providing for these accruals, we consider such factors as our history of incurring performance penalties and processing errors, actual contractual penalty charge rates in our contracts, progress towards milestones and known processing errors.

1 unchanged sentence

Depending on the nature of item, transaction processing provisions are either included as a reduction of the transaction price and recognized as a reduction in revenues as the related services are provided to the customer, or recognized as a component of cost of service, in our consolidated statements of income.

Reserve for cardholder losses — Through services offered in our Consumer Solutions segment, we are exposed to losses due to cardholder fraud, payment defaults and other forms of cardholder activity as well as losses due to nonperformance of

third parties who receive cardholder funds for transmittal to the issuing financial institutions.

We establish a reserve for losses we estimate will arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to nondelivery of goods and services.

These reserves are established based upon historical loss and recovery rates and cardholder activity for which specific losses can be identified.

Prior to presentation of the consumer business as held for sale as of December 31, 2022, as further discussed in "Note 3—Business Dispositions," these reserves were included in accrued liabilities in our consolidated balance sheet.

The provision for cardholder losses is included as a component of cost of service in our consolidated statements of income.

Reserve for cardholder losses — Through services offered in our former Consumer Solutions segment, we were exposed to losses due to cardholder fraud, payment defaults and other forms of cardholder activity as well as losses due to nonperformance of third parties who received cardholder funds for transmittal to the issuing financial institutions.

We established a reserve for losses we estimated would arise from processing customer transactions, debit card overdrafts, chargebacks for unauthorized card use and merchant-related chargebacks due to nondelivery of goods and services.

These reserves were established based upon historical loss and recovery rates and cardholder activity for which specific losses could be identified.

Prior to the disposition of our consumer business, the provision for cardholder losses was included as a component of cost of service in our consolidated statements of income.

Property and equipment — Property and equipment are stated at cost less accumulated depreciation and amortization.

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The election of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit.

Factors we consider in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying amount of the net assets of our reporting units, sustained decrease in our share price, and other relevant entity-specific events.

Factors we consider in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying amount of the net assets of our reporting units, our share price, and other relevant entity-specific events.

If we elect to bypass the qualitative assessment or if we determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative test would be required.

The quantitative assessment compares the estimated fair value of the reporting unit to its carrying amount, and recognizes an impairment loss for the amount by which a reporting unit’s carrying amount exceeds its estimated fair value, without exceeding the total amount of goodwill allocated to that reporting unit.

A 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 our former Business and Consumer Solutions reporting units for potential impairment as of June 30, 2022.

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

During the second quarter of 2022, a 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.

Furthermore, 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 our 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.

During 2022, as a result of the pending divestiture of our consumer business and changes in how our business is managed, we realigned the businesses previously comprising our Business and Consumer Solutions segment to include the B2B portion within our Issuer Solutions segment and the consumer portion forming our new Consumer Solutions segment.

In connection with the change in presentation of segment information, the B2B portion of our former Business and Consumer Solutions reporting unit was realigned into the Issuer Solutions reporting unit, including a reallocation of goodwill and accumulated impairment losses based on relative fair value .

The estimated fair value used in the goodwill impairment assessment was considered to be a nonrecurring Level 3 measurement of the valuation hierarchy.

During the third quarter of 2022, as a result of the pending divestiture of our consumer business and changes in how our business is managed, we realigned the businesses previously comprising our former Business and Consumer Solutions segment to include the B2B portion within our Issuer Solutions segment and the consumer portion forming our Consumer Solutions segment.

During the second quarter of 2023, we completed the sale of our consumer business.

In addition, during 2023, we realigned our reporting units based on organizational changes and the acquired operations of EVO.

As of October 1, 2023, our reporting units consisted of the following:

North America Payment Solutions, Integrated Solutions, Vertical Market Software Solutions, Europe Merchant Solutions, Spain Merchant Solutions, Asia-Pacific Merchant Solutions and Issuer Solutions.

As of October 1, 2022, we performed a quantitative assessment of impairment for our North

America Payments Solutions, Integrated Solutions and Issuer Solutions reporting units and a qualitative assessment for all other reporting units.

We determined on the basis of the quantitative assessments of our North America Payments Solutions, Integrated Solutions and Issuer Solutions reporting units that the fair value of each reporting unit was greater than its respective carrying amount, indicating no impairment.

North America Payments Solutions, Vertical Market Software Solutions, Europe Merchant Solutions, Spain Merchant Solutions, Asia-Pacific Merchant Solutions, Latin America Merchant Solutions and Issuer Solutions.

As of October 1, 2023, we performed a quantitative assessment of impairment for our Issuer Solutions, Asia-Pacific Merchant Solutions and Latin America Merchant Solutions reporting units and a qualitative assessment for all other reporting units.

We determined on the basis of the quantitative assessments of our Issuer Solutions, Asia-Pacific Merchant Solutions and Latin America Merchant Solutions reporting units that the fair value of each reporting unit was greater than its respective carrying amount, indicating no impairment.

Additionally, we determined on the basis of the qualitative factors that the fair value of other reporting units was not more likely than not less than the respective carrying amounts.

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The useful lives of acquired technologies are based on an estimate of the period over which we expect to receive economic benefit.

The useful lives of amortizable trademarks and trade names are based on an estimate of the period over which we will earn revenues for the related brands, including contemplation of any future plans to use the trademarks and trade names in the applicable markets.

The useful lives of amortizable trademarks and trade names are based on an estimate of the period over which we will earn revenues for the related assets, including contemplation of any future plans to use the trademarks and trade names in the applicable markets.

We use the straight-line method of amortization for our amortizable acquired technologies, trademarks and trade names and certain contract-based intangible assets.

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We believe that our accelerated method reflects the expected pattern of the benefit to be derived.

Implementation costs incurred in a cloud computing arrangement — We capitalize implementation costs associated with cloud computing arrangements that are service contracts, and we amortize these capitalized implementation costs to expense on a straight-line basis over the term of the applicable hosting arrangement.

Our cloud computing arrangements involve services we use to support certain internal corporate functions as well as technology associated with revenue-generating activities.

As of December 31, 2023 and 2022, capitalized implementation costs, net of accumulated amortization, were $ 206.5 million and $ 142.9 million, respectively, and are presented within other noncurrent assets in the consolidated balance sheets.

Amortization expense for the years ended December 31, 2023, 2022 and 2021 was $ 3.8 million, $ 3.1 million and $ 3.0 million, respectively, and is presented in the same line item in the consolidated statements of income as the expense for the associated cloud services arrangement.

Leases — We evaluate each of our lease and service arrangements at inception to determine if the arrangement is, or contains, a lease and the appropriate classification of each identified lease.

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We have made an accounting policy election to not recognize assets or liabilities for leases with a term of less than 12 months and to account for all components in a lease arrangement as a single combined lease component for all asset classes with the exception of computer equipment, for which we account for lease and nonlease components separately.

Impairment of long-lived assets — We regularly evaluate whether events and circumstances have occurred that indicate the carrying amount of property and equipment, lease right-of-use assets and finite-life intangible assets may not be recoverable.

I mpairment of long-lived assets — We regularly evaluate whether events and circumstances have occurred that indicate the carrying amount of property and equipment, capitalized software, lease right-of-use assets and finite-life intangible assets may not be recoverable.

When factors indicate that these long-lived assets should be evaluated for possible impairment, we assess the potential impairment by determining whether the carrying amount of such long-lived assets will be recovered through the future undiscounted cash flows expected from use of the asset and its eventual disposition.

The evaluation is performed at the asset group level, which is the lowest level of identifiable cash flows.

If the carrying amount of the asset group is determined to be not recoverable, a write-down to fair value is recorded.

If the carrying amount of the asset group is determined to be not recoverable, a write-down to fair value is recognized.

Fair values are determined based on quoted market prices or discounted cash flow analysis as applicable.

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Assets held for sale — We classify an asset or business as a held for sale disposal group if we have committed to a plan to sell the asset or business within one year and are actively marketing the asset or business in its current condition for a price that is reasonable in comparison to its estimated fair value.

Disposal groups held for sale are reported at the lower of carrying

amount or fair value less costs to sell.

Disposal groups held for sale are reported at the lower of carrying amount or fair value less costs to sell.

Long-lived assets classified as held for sale are not subject to depreciation or amortization, and both the assets and any liabilities directly associated with the disposal group are presented net within separate current and noncurrent held for sale line items in our consolidated balance sheet.

Subsequent changes to the estimated selling price of an asset or disposal group held for sale are recorded as gains or losses in our consolidated statement of income and any subsequent gains are limited to the cumulative losses previously recognized.

Subsequent changes to the estimated selling price of an asset or disposal group held for sale are recognized as gains or losses in our consolidated statement of income and any subsequent gains are limited to the cumulative losses previously recognized.

Notes receivable and allowance for credit losses — During 2023, we provided seller financing in connection with the sale of our former consumer and gaming businesses.

We classify notes receivable as held for investment based on the intent and ability to hold for the 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 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.

Notes receivable are presented net of an allowance for credit losses of $ 15.2 million as of December 31, 2023.

We recognized a noncash credit loss of $ 15.2 million for the year ended December 31, 2023, which is included as a component of interest and other expenses in our consolidated statements of income.

Equity method investments — We have certain investments, including a 45 % interest in China UnionPay Data Co., Ltd.

that we account for using the equity method of accounting.

Equity method investments are recorded initially at cost and subsequently adjusted for equity in earnings, cash contributions and distributions, and foreign currency translation adjustments.

Equity method investments are recognized initially at cost and subsequently adjusted for our portion of equity in earnings, cash contributions and distributions, and foreign currency translation adjustments.

As of December 31, 2023 and 2022, we had total equity method investments of $ 989.6 million and $ 957.2 million, respectively, presented within other noncurrent assets in the consolidated balance sheets.

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Therefore, we recognize a liability for the amount that we would have to pay (the "settlement cost") to buy out related commissions in their entirety from vested salespersons, and an estimated amount for unvested salespersons based on their progress towards vesting and the expected percentage that will become vested.

As the liability increases over the first year of the related merchant contract, we record a related asset.

Subsequent changes in the estimated accrued buyout liability due to merchant attrition, same-store sales growth or contraction and changes in profitability are included in the selling, general and administrative expense in the consolidated statements of income.

As the liability increases over the first year of the related merchant contract, we recognize a related asset.

Subsequent changes in the estimated accrued buyout liability due to merchant attrition, same-store sales growth or contraction and changes in profitability are included in selling, general and administrative expense in the consolidated statements of income.

The classification of the accrued buyout liability between current and noncurrent in the consolidated balance sheet is based upon our estimate of the amount of the accrued buyout liability that we reasonably expect to pay over the next 12 months.

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If we determine that the tax position is more likely than not to be sustained, we recognize the largest amount of benefit that is more likely than not to be realized when the tax position is settled.

We present interest and penalties related to unrecognized income tax benefits in interest and selling, general and administrative expenses, respectively, in our consolidated statements of income.

We present interest and penalties related to unrecognized income tax benefits in interest and other expense and selling, general and administrative expenses, respectively, in our consolidated statements of income.

Derivative instruments — We may use interest rate swaps or other derivative instruments to manage a portion of our exposure to the variability in interest rates.

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Fluctuations in the value of these instruments generally are offset by changes in the forecasted cash flows of the underlying exposures being hedged.

is driven by the high degree of effectiveness between the exposure being hedged and the hedging instrument.

Prior to their settlement in 2022, we designated each of our active interest rate swap agreements as a cash flow hedge of interest payments on variable rate borrowings.

See "Note 9 — Long-Term Debt and Lines of Credit" for more information about our interest rate swaps.

This offset is driven by the high degree of effectiveness between the exposure being hedged and the hedging instrument.

We designated each of our active interest rate swap agreements as a cash flow hedge of interest payments on variable rate borrowings.

In addition, we 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 offset the volatility of our net investment in our Euro-denominated operations due to changes in foreign currency exchange rates.

The foreign currency remeasurement gains and losses associated with the Euro-denominated senior notes and our Euro-denominated operations are presented within the same components of other comprehensive income and accumulated comprehensive income.

See "Note 10 — Derivatives and Hedging Instruments" for more information about our derivative instruments.

Fair value measurements — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date.

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Certain of our long-term debt arrangements include variable interest rates.

The carrying amount of long-term debt with variable interest rates, exclusive of debt issuance costs, approximated fair value, which is calculated using Level 2 inputs.

Prior to their settlement, the fair values of our swap agreements 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, and classified within Level 2 of the valuation hierarchy.

See "Note 9 — Long-Term Debt and Lines of Credit" for further information.

The fair value of long-term debt with variable interest rates was determined using Level 2 inputs, and approximated carrying amount, exclusive of debt issuance costs.

The fair values of our swap agreements 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 and classified within Level 2 of the valuation hierarchy.

See "Note 9 — Long-Term Debt and Lines of Credit" and "Note 10 — Derivatives and Hedging Instruments" for further information.

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

See "Note 3 — Business Dispositions" for further information.

We also have investments in equity instruments without readily determinable fair values.

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Any resulting change in carrying amount would be reflected in net income.

Redeemable Noncontrolling Interests — Redeemable noncontrolling interests refers to noncontrolling interests that are redeemable upon the occurrence of an event that is not solely within our control and is reported in the mezzanine section between total liabilities and shareholders' equity, as temporary equity in our consolidated balance sheets.

The redeemable noncontrolling interests for each subsidiary are adjusted each reporting period to the higher of:

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

Certain of our redeemable noncontrolling interests are redeemable at fair value and are considered to be a Level 3 measurement of the valuation hierarchy.

Refer to "Note 16 — Noncontrolling Interests," for further information.

Foreign currencies — We have significant operations in a number of foreign subsidiaries whose functional currency is the local currency.

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When a foreign subsidiary is divested in its entirety, the associated accumulated foreign currency translation gains or losses are reclassified from the separate component of equity into our consolidated statement of income.

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

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

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

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

Diluted EPS is computed by dividing net income attributable to Global Payments by the weighted-average number of shares outstanding during the period, including the effect of share-based awards, 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 years ended December 31, 2022, 2021 and 2020 excluded approximately 700,119 , 234,813 and 124,888 , respectively, shares related to stock options that would have an antidilutive effect on the computation of diluted EPS.

The dilutive share base for the years ended December 31, 2023, 2022 and 2021 excluded approximately 191,353 , 700,119 and 234,813 , respectively, 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 our 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 year ended December 31, 2022, the convertible notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive.

For the years ended December 31, 2023 and 2022, the convertible notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive.

Furthermore, 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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We use a last-in, first-out cost flow assumption to identify the original issue proceeds of the shares repurchased.

Recently issued accounting pronouncement not yet adopted

ASU 2023-07 - In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, " which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, inclusion of all annual disclosures in interim periods and disclosure of the title and position of the chief operating decision maker.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

We are evaluating how the enhanced disclosure requirements of ASU 2023-07 will affect our presentation, and we will include the incremental disclosures upon the effective date.

ASU 2023-09 - In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvement to Income Tax Disclosures," which is intended to enhance the transparency and decision usefulness of income tax information through improvements to income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

The amendments in this update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied on a prospective basis with the option to apply the standard retrospectively.

We are evaluating how the enhanced disclosure requirements of ASU 2023-09 will affect our presentation, and we will include the incremental disclosures upon the effective date.

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.

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 in the first quarter of 2023, subject to 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, which we funded with cash on hand and by drawing on our revolving credit facility.

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

EVO Payments, Inc.

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

EVO is a payment technology and services provider, offering 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 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):

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

(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 award holders.

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 under our revolving credit facility.

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

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

Provisional Amounts at Acquisition Date Measurement-period Adjustments Provisional Amounts at December 31, 2023

(in thousands)

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Accounts receivable 105,680 ( 54,210 ) 51,470

Settlement processing assets 125,061 9,651 134,712

Deferred income tax assets 15,464 1,124 16,588

Property and equipment 83,540 ( 11,518 ) 72,022

Identifiable intangible assets 1,208,400 270,595 1,478,995

Other assets 157,166 ( 9,276 ) 147,890

Accounts payable and accrued liabilities ( 277,800 ) ( 8,897 ) ( 286,697 )

Settlement lines of credit ( 11,371 ) 3,784 ( 7,587 )

Settlement processing obligations ( 199,161 ) 35,626 ( 163,535 )

Deferred income tax liabilities ( 168,098 ) ( 80,558 ) ( 248,656 )

Other liabilities ( 58,089 ) ( 4,518 ) ( 62,607 )

Total identifiable net assets 1,305,651 151,803 1,457,454

Redeemable noncontrolling interests ( 556,070 ) 84,951 ( 471,119 )

Goodwill 3,520,039 ( 236,754 ) 3,283,285

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

As of December 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.

During the year ended December 31, 2023, we made measurement-period adjustments as shown in the table above, and the effects of the measurement-period adjustments on our consolidated statements of income for the year ended December 31, 2023 were not material.

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

We expect that approximately $ 1.1 billion of the goodwill from this acquisition will be deductible for income tax purposes.

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

(in thousands) (years)

Customer-related intangible assets $ 916,000 11

Contract-based intangible assets 470,000 12

Acquired technologies 86,995 7

Trademarks and trade names 6,000 2

Total estimated identifiable intangible assets $ 1,478,995 11

From the acquisition date through December 31, 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.

We accounted for this transaction as a business combination, which generally requires that we recognize 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 (in thousands):

Cash and cash equivalents $ 67,374

Accounts receivable 1,017

Identifiable intangible assets 473,000

Property and equipment 575

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Total purchase consideration $ 933,246

During the year ended December 31, 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 year ended December 31, 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 year ended December 31, 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.

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Other Business Acquisitions

During the year ended December 31, 2021, we completed other business acquisitions that were insignificant, individually and in the aggregate, to the consolidated financial statements for an aggregate purchase price of $ 963 million.

The assets acquired and liabilities assumed were recorded based on the provisional estimated fair values, including intangible assets of $ 438 million and goodwill of $ 514 million.

During the years ended December 31, 2023, 2022 and 2021, we completed other business acquisitions that were insignificant, individually and in the aggregate, to the consolidated financial statements.

During the year ended December 31, 2021, we paid an aggregate purchase price of $ 963 million for such business acquisitions.

The assets acquired and liabilities assumed in the 2021 acquisitions were recognized based on the estimated fair values, including intangible assets of $ 438 million and goodwill of $ 514 million.

See "Note 6 — Goodwill and Other Intangible Assets" for the aggregate allocation of goodwill to the respective segments.

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This method assumes that trademarks and trade names have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them.

This method required us to estimate the future revenues for the related brands, the appropriate royalty rate and the weighted-average cost of capital.

This method required us to estimate the future revenues for the related assets, the appropriate royalty rate and the weighted-average cost of capital.

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.

Gaming Business - 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 sale of $ 106.9 million during the year ended December 31, 2023 presented within net loss on business dispositions in the consolidated statements 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.

As further discussed in "Note 1—Summary of Significant Accounting Policies," we recognized a goodwill impairment charge of $ 833.1 million during the year ended December 31, 2022 related to our former Business and Consumer Solutions reporting unit.

We also recognized charges within net loss on business dispositions in our consolidated statements of income of $ 71.9 million during the year ended December 31, 2022 to reduce the

disposal group to estimated fair value less costs to sell, which related primarily to estimated costs to sell and changes in the estimated fair value of the fixed rate seller financing commitment.

We recognized an incremental loss on business dispositions in our consolidated statement of income of $ 243.6 million during the year ended December 31, 2023, which 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.

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.

There was no outstanding balance on the revolving facility as of December 31, 2023.

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 recognized interest income related to these notes of $ 58.3 million during the year ended December 31, 2023, as a component of interest and other income in the consolidated statement 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 year ended December 31, 2023.

As of December 31, 2023 , there was an aggregate principal am ount of $ 753.5 million ou tstanding on the notes, including PIK, and the notes are presented net of the allowance for credit los ses of $ 15.2 million wi thin notes receivable in our consolidated balance sheet.

The estimated fair value of the notes recei vable was $ 735.6 million as of December 31, 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 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 year ended December 31, 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.

Businesses Held for Sale

Consumer Business.

On July 31, 2022, we entered into a definitive agreement to sell the consumer portion of our Netspend business, which comprises the Consumer Solutions segment, 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 in 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 December 31, 2022.

As further discussed in "Note 1— Summary of Significant Accounting Policies," we recognized a goodwill impairment charge of $ 833.1 million during the year ended December 31, 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 $ 71.9 million during the year ended December 31, 2022, respectively, to reduce the carrying amount of the disposal group to estimated fair value less costs to sell.

The charges relate primarily to estimated costs to sell and changes in the estimated fair value of the fixed rate seller financing commitment through December 31, 2022.

Gaming Business.

On December 6, 2022, we entered into a definitive agreement to sell our gaming business for approximately $ 400 million, which includes $ 32 million of seller financing and is subject to certain closing adjustments.

The transaction is expected to close in the first quarter of 2023 and is subject to customary terms and conditions, including any required regulatory approvals.

The assets and liabilities of our gaming business met the criteria for classification as held for sale in our consolidated balance sheet as of December 31, 2022, and we performed an impairment assessment of the respective assets and determined that no impairment was indicated.

Assets and Liabilities Held for Sale.

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.

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 years ended December 31, 2022, 2021 and 2020 and has been recast to align with the change in the presentation of segment information as further described in “Note 17—Segment Information:”

The following tables present a disaggregation of our revenues from contracts with customers by geography for each of our reportable segments for the years ended December 31, 2023, 2022 and 2021:

Year Ended December 31, 2023

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$ 2,190,005 $ 1,838,809

As of December 31, 2022, approximately $ 75.4 million of property and equipment assets have been classified as assets held for sale in connection with the presentation of the consumer and gaming businesses as held for sale.

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

As a result of actions taken during the years ended December 31, 2022 and 2021 to reduce our facility footprint in certain markets around the world, we recognized charges of $ 7.5 million and $ 9.2 million in selling, general and administrative expenses in our consolidated statement of income, primarily related to certain leasehold improvements, furniture and fixtures and equipment to reduce the carrying amount of each asset group to the estimated fair value.

As a result of actions taken during the years ended December 31, 2023, 2022 and 2021 to reduce our facility footprint in certain markets around the world, we recognized charges of $ 1.6 million, $ 7.5 million and $ 9.2 million, respectively, in selling, general and administrative expenses in our consolidated statement of income, primarily related to certain leasehold improvements, furniture and fixtures and equipment, to reduce the carrying amount of each asset group to the estimated fair value.

NOTE 6— GOODWILL AND OTHER INTANGIBLE ASSETS

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$ 10,168,046 $ 9,658,374

As of December 31, 2022, approximately $ 717.9 million of intangible assets have been classified as assets held for sale in connection with the presentation of the consumer and gaming businesses 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 years ended December 31, 2022, 2021 and 2020 and has been recast to align with the change in the presentation of segment information as further described in “Note 17—Segment Information:”

The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the years ended December 31, 2023, 2022 and 2021:

Merchant Solutions Issuer Solutions Consumer Solutions Total

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Effect of foreign currency translation ( 66,251 ) ( 29,009 ) — ( 95,260 )

Measurement-period adjustments ( 5,860 ) ( 140 ) — ( 6,000 )

Balance at December 31, 2021 14,063,682 9,908,014 841,578 24,813,274

Goodwill acquired 3,296 — — 3,296

Effect of foreign currency translation ( 66,251 ) ( 29,009 ) — ( 95,260 )

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

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

Goodwill acquired 3,283,285 — — 3,283,285

Effect of foreign currency translation 126,835 12,904 — 139,739

Measurement-period adjustments ( 237 ) — — ( 237 )

Balance at December 31, 2023 $ 17,226,828 $ 9,516,695 $ — $ 26,743,523

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

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(2) Reflects a goodwill impairment charge related to our former Business and Consumer Solutions reporting unit.

In connection with the change in presentation of 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.

In connection with the change in presentation of segment information during the year ended December 31, 2022, 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.

See "Note 1— Summary of Significant Accounting Policies" for further discussion.

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Accumulated impairment losses for goodwill as of December 31, 2023 were $ 357.9 million.

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

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.

Customer-related intangible assets, acquired technologies, contract-based intangible assets, and trademarks and trade names acquired during the year ended December 31, 2023 had weighted-average amortization periods of 10.8 years, 6.3 years, 12.0 years, and 2.0 years, respectively.

Customer-related intangible assets, acquired technologies and contract-based intangible assets acquired during the year ended December 31, 2020 had weighted-average amortization periods of 8.9 years, 5.0 years, and 9.8 years, respectively.

Amortization expense of acquired intangibles was $ 1,263.0 million for the year ended

December 31, 2022, $ 1,295.0 million for the year ended December 31, 2021 and $ 1,256.9 million for the year ended December 31, 2020.

Customer-related intangible assets, acquired technologies, contract-based intangible assets, and trademarks and trade names acquired during the year ended December 31, 2021 had weighted-average amortization periods of 11.9 years, 6.0 years, 18.5 years, and 15.0 years, respectively.

Amortization expense of acquired intangibles was $ 1,318.5 million for the year ended December 31, 2023, $ 1,263.0 million for the year ended December 31, 2022 and $ 1,295.0 million for the year ended December 31, 2021.

The estimated amortization expense of acquired intangibles as of December 31, 2023 for the next five years, calculated using the currency exchange rate at the date of acquisition, if applicable, is as follows (in thousands):

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As of December 31, 2023 and 2022, right-of-use assets and lease liabilities consisted of the following:

Balance Sheet Location (2)

December 31, 2022 December 31, 2021

Balance Sheet Location December 31, 2023 December 31, 2022

(in thousands)

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Total lease liabilities $ 517,448 $ 552,223

(1) As of December 31, 2022 and 2021, approximately 73 % and 75 % of our right-of-use assets were located in the United States.

(2) As of December 31, 2022, operating lease assets and liabilities of approximately $ 4.9 million and $ 5.0 million have been classified as assets held for sale in connection with the presentation of the consumer and gaming businesses as held for sale.

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

(1) As of December 31, 2023 and 2022, approximately 70 % and 73 %, respectively, of our right-of-use assets were located in the United States.

The weighted-average remaining lease term for operating and finance leases at December 31, 2023 was 8.4 years and 3.2 years, respectively.

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Total lease payments 572,788 25,872

611,609 33,813

Imputed interest ( 79,865 ) ( 1,347 )

Total lease liabilities $ 492,923 $ 24,525

(1) Total operating lease payments do not include approximately $ 4.3 million for operating leases that had not yet commenced at December 31, 2022.

Operating lease costs in our consolidated statement of income for the year ended December 31, 2023 were $ 101.6 million, including $ 81.6 million in selling, general and administrative expenses and $ 20.0 million in cost of services.

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Lease costs for leases with a term of less than 12 months were not material for the year ended December 31, 2023 .

Operating lease costs in our consolidated statement of income for the year ended December 31, 2021 were $ 195.6 million, including $ 157.4 million in selling, general and administrative expenses and $ 38.2 million in cost of services.

Ope rating lease costs in our consolidated statement of income for the year ended December 31, 2022 were $ 137.8 million, including $ 105.7 million in selling, general and administrative expenses and $ 32.1 million in cost of services.

Total lease costs for the year ended December 31, 2022 include variable lease costs of $ 21.0 million, which are primarily comprised of the cost of property taxes, insurance and maintenance.

Finance lease costs for the year ended December 31, 2021 wer e $ 20.5 million, including $ 18.4 million of amortization on right-of use assets and $ 2.2 million of interest on lease liabilities.

Finance lease costs for the year ended December 31, 2022 were $ 18.1 million, including $ 16.7 million of amortization on right-of use assets and $ 1.4 million of interest on lease liabilities.

Lease costs for leases with a term of less than 12 months were not material for the year ended December 31, 2022 .

Operating lease costs in our consolidated statement of income for the year ended December 31, 2020 were $ 147.0 million, including $ 108.4 million in selling, general and administrative expenses and $ 38.6 million in cost of services.

Operating lease costs in our consolidated statement of income for the year ended December 31, 2021 we re $ 195.6 million, including $ 157.4 million in selling, general and administrative expenses and $ 38.2 million in cost of services.

Total lease costs for the year ended December 31, 2021 include variable lease costs of $ 18.1 million, which are primarily comprised of the cost of property taxes, insurance and maintenance.

F inance lease costs for the year ended December 31, 2020 were $ 16.3 million, including $ 14.6 million of amortization on right-of use assets and $ 1.6 million of interest on lease liabilities.

Finance lease costs for the year ended December 31, 2021 were $ 20.5 million, including $ 18.4 million of amortization on right-of use assets and $ 2.2 million of interest on lease liabilities.

Lease costs for leases with a term of less than 12 months were not material for the year ended December 31, 2021 .

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In conjunction with the actions taken to exit certain leased facilities, we assessed the respective asset groups for impairment by comparing the carrying amount of the assets associated with the leased facilities to the discounted cash flows from estimated sublease payments.

As a result, we recognized charges of $ 22.9 million and $ 42.1 million in selling, general and administrative expenses in our consolidated statement of income for the years ended December 31, 2022 and 2021, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2022, 2021 and 2020 w as $ 120.7 million , $ 123.6 million and $ 117.7 million, respectively, which are included as a component of cash provided by operating activities in the consolidated statement of cash flows.

As a result, we recognized charges of $ 4.4 million, $ 22.9 million and $ 42.1 million in selling, general and administrative expenses in our consolidated statements of income for the years ended December 31, 2023, 2022 and 2021, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2023, 2022 and 2021 was $ 101.7 million, $ 120.7 million and $ 123.6 million, respectively, which are included as a component of cash provided by operating activities in the consolidated statements of cash flows.

Operating lease liabilities arising from obtaining new or modified right-of-use assets, net of reductions resulting from certain lease modifications, were $ 31.2 million, $ 25.8 million and $ 200.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Cash paid for amounts included in the measurement of finance lease liabilities that is included as a component of cash used in financing activities in the consolidated statement of cash flows was $ 21.2 million, $ 22.6 million and $ 11.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Cash paid for amounts included in the measurement of finance lease liabilities that is included as a component of cash used in financing activities in the consolidated statements of cash flows was $ 12.9 million, $ 21.2 million and $ 22.6 million for the years ended December 31,

2023, 2022 and 2021, respectively.

Finance lease liabilities arising from obtaining new or modified right-of-use assets, net of reductions resulting from certain lease modifications, were $ 4.4 million, $ 8.2 million and $ 7.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

In connection with the EVO acquisition completed during the year ended December 31, 2023, we acquired right-of-use assets and assumed lease liabilities for operating leases of $ 41.3 million.

In connection with business dispositions completed during the year ended December 31, 2023, we disposed of right-of-use assets and lease liabilities for operating leases of $ 4.9 million and $ 4.9 million, respectively.

In connection with acquisitions completed during the year ended December 31, 2021, we acquired right-of-use assets and assumed lease liabilities for operating and finance leases of $ 8.8 million and $ 5.8 million, respectively.

During the year ended December 31, 2022, we entered into a new agreement to acquire hardware, software and related services, including 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.

During the years ended December 31, 2023 and 2022, we entered into agreements to acquire hardware, software and related services, including the purchase of certain assets previously leased.

During the year ended December 31, 2023, the reduction in operating and finance lease liabilities arising from the termination of the related right-of-use assets was $ 10.3 million and $ 0.1 million, respectively.

During the year ended December 31, 2022, 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.

NOTE 8 - OTHER ASSETS

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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 connection with the first and second mandatory release assessment, a portion of the Series B and C convertible preferred shares was converted by Visa in September 2020 and July 2022 representing approximately one half and one quarter, respectively, of the original potential conversion rate.

We recognized gains of $ 27.7 million and $ 13.2 million during the years ended December 31, 2020 and 2022, respectively, reported in interest and other income in our consolidated statement of income based on the fair value of the shares received.

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

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 year ended December 31, 2022 based on the fair value of the shares received and subsequently sold.

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

Through the acquisition of EVO in 2023, we obtained Series A and C convertible preferred shares of Visa.

The Series C preferred shares are carried at an assigned value of zero based on the aforementioned factors.

The Series A convertible preferred shares were not restricted and were convertible into a fixed number of Visa Class A common shares.

In November 2023, the Series A convertible preferred shares were converted into a fixed number of Visa Class A common shares and sold for cash proceeds of $ 42.1 million.

Prior to sale, the Visa Class A common shares were presented at fair value in our consolidated balance sheet with changes in fair value recognized in interest and other income in our consolidated statement of income.

NOTE 9— LONG-TERM DEBT AND LINES OF CREDIT

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4.000 % senior notes due June 1, 2023

552,747 559,338

1.500 % senior notes due November 15, 2024

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4.950 % senior notes due August 15, 2027

496,444 495,463

4.450 % senior notes due June 1, 2028

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5.300 % senior notes due August 15, 2029

496,063 495,362

2.900 % senior notes due May 15, 2030

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5.400 % senior notes due August 15, 2032

742,908 742,085

4.150 % senior notes due August 15, 2049

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5.950 % senior notes due August 15, 2052

738,576 738,177

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

Unsecured revolving credit facility — —

1,453,493 1,445,225

Revolving credit facility 1,570,000 —

Commercial paper notes 1,371,639 —

Finance lease liabilities 24,525 32,435

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Long-term debt, excluding current portion $ 15,692,297 $ 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.

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 December 31, 2023, the unamortized discount on senior notes and convertible notes was $ 46.1 million, and unamortized debt issuance costs on senior notes and convertible notes was $ 78.4 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.

At December 31, 2022, the unamortized discount on senior notes and convertible notes was $ 50.8 million, and unamortized debt issuance costs on our 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 December 31, 2022, unamortized debt issuance costs on the unsecured revolving credit facility were $ 23.5 million, and, at December 31, 2021, unamortized debt issuance costs on the unsecured revolving credit facility were $ 9.9 million.

At December 31, 2023 and 2022, unamortized debt issuance costs on the unsecured revolving credit facility were $ 18.5 million and $ 23.5 million, respectively.

The amortization of debt discounts and debt issuance costs is recognized as an increase to interest expense over the terms of the respective debt instruments.

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("TSYS") in September 2019 (the "TSYS Merger").

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

Interest on the senior notes is payable annually or 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 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.

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 were used for general corporate purposes.

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

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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 December 31, 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.

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 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.

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

On November 22, 2021, we issued $ 2.0 billion aggregate principal amount of senior unsecured notes consisting of the following:

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and (iii) $ 750.0 million aggregate principal amount of 2.900 % senior notes due November 2031.

We incurred debt issuance costs of approximately $ 14.4 million, including underwriting fees, fees for professional services and registration fees, which were capitalized and reflected as a reduction of the related carrying amount of the notes in our consolidated balance sheet at December 31, 2022.

Interest on the senior unsecured notes is payable semi-annually in arrears on May 15 and November 15 for the 2024 and 2031 notes and January 15 and July 15 on the 2027 note, commencing May 15, 2022 for the 2024 note and the 2031 note and July 15, 2022 for the 2027 note.

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

unsubordinated indebtedness.

We used the net proceeds from the offering to repay the outstanding indebtedness under our prior credit facility and for general corporate purposes.

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

We incurred debt issuance costs of approximately $ 8.6 million, including underwriting fees, fees for professional services and registration fees, which were capitalized and reflected as a reduction of the related carrying amount of the notes in our consolidated balance sheet at December 31, 2022.

Interest on the notes is payable semi-annually in arrears on March 1 and

September 1 of each year, commencing September 1, 2021.

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

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

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

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

We incurred debt issuance costs of approximately $ 8.4 million, including underwriting fees, fees for professional services and registration fees, which were capitalized and reflected as a reduction of the related carrying amount of the notes in our consolidated balance sheet at December 31, 2022.

We have $ 1.0 billion in aggregate principal amount of 2.900 % senior unsecured notes due May 2030.

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

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

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

On August 14, 2019, we issued $ 3.0 billion aggregate principal amount of senior unsecured notes, consisting of the following:

We issued the senior notes at a total discount of $ 3.3 million and capitalized related debt issuance costs of $ 8.4 million.

We have $ 3.0 billion in aggregate principal amount of senior unsecured notes, consisting of the following:

(i) $ 1.0 billion aggregate principal amount of 2.650 % senior notes due 2025;

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(i) $ 750.0 million aggregate principal amount of 3.800 % senior notes due 2021, which were redeemed in February 2021;

(ii) $ 550.0 million aggregate principal amount of 3.750 % senior notes due 2023;

(iii) $ 550.0 million aggregate principal amount of 4.000 % senior notes due 2023;

(ii) $ 550.0 million aggregate principal amount of 3.750 % senior notes due 2023, which were redeemed in June 2023;

(iii) $ 550.0 million aggregate principal amount of 4.000 % senior notes due 2023, which were redeemed in June 2023;

(iv) $ 750 million aggregate principal amount of 4.800 % senior notes due 2026;

and (v) $ 450 million aggregate principal amount of 4.450 % senior notes due 2028.

For the 3.800 % senior notes due 2021 and the 4.800 % senior notes due 2026, interest is payable semi-annually each April 1 and October 1.

For the 3.750 % senior notes due 2023, the 4.000 % senior notes due 2023 and the 4.450 % senior notes due 2028, interest is payable semi-annually each June 1 and December 1.

For the 4.800 % senior notes due 2026, interest is payable semi-annually each April 1 and October 1.

For the 4.450 % senior notes due 2028, interest is payable semi-annually each June 1 and December 1.

The difference between the acquisition-date fair value and face value of senior notes assumed in the TSYS Merger is recognized over the terms of the respective notes as a reduction of interest expense.

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Convertible Notes

On August 8, 2022, we issued $ 1.5 billion in aggregate principal amount of 1.000 % convertible unsecured senior notes (the "Convertible Notes”) due August 2029 in a private placement pursuant to an investment agreement with Silver Lake Partners.

The net proceeds from this offering were approximately $ 1.44 billion, reflecting an issuance discount of $ 37.5 million and $ 20.4 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 December 31, 2022.

On August 8, 2022, we issued $ 1.5 billion in aggregate principal amount of 1.000 % convertible unsecured senior notes due August 2029 in a private placement pursuant to an investment agreement with Silver Lake Partners.

The net proceeds from this offering were approximately $ 1.44 billion, reflecting an issuance discount of $ 37.5 million and $ 20.4 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.

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 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.

The 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 notes are convertible into cash and shares of our common stock based on a conversion rate of 7.1421 shares of common stock per $1,000 principal amount of the convertible notes (which is equal to a conversion price of approximately $ 140.01 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 $ 229.26 per share.

The notes are not redeemable by us.

If certain corporate events that constitute a fundamental change (as defined in the indenture governing the notes) occur, any holder of the 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 notes) occur, then the conversion rate will in certain circumstances be increased for a specified period of time.

The notes include customary covenants for 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 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 notes.

The economic effect of the capped call transactions is to hedge the potential dilutive effect upon conversion of the 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 had an initial strike price of $ 140.67 per share and a cap price of $ 229.26 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 December 31, 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”).

The cost of $ 302.4 million incurred in connection with the capped call transactions was reflected as a reduction to paid-in-capital in our consolidated balance sheet at December 31, 2022, net of applicable income taxes.

Revolving Credit Facility

On August 19, 2022, we entered into a 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.

We capitalized debt issuance costs of $ 12.3 million in connection with the issuances under the revolving credit facility.

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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 %.

Borrowings under the revolving credit facility will bear interest, at our option, at a rate equal to (i) for 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.

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.

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

As of December 31, 2022, there were no borrowing outstanding under the Revolving Credit Facility, and the total available commitments under the Revolving Credit Facility were $ 2.4 billion.

As of December 31, 2023, there were borrowings of $ 1,570.0 million outstanding under the revolving credit facility with an interest rate of 6.84 %, and the total available commitments under the revolving credit facility were $ 2.8 billion.

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 December 31, 2023 , we had net borrowings under our comm ercial paper program of $ 1,371.6 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 interest rate of 6.06 %.

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 .

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”).

Prior to the revolving credit facility, we were party to a prior 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 provided for a senior unsecured $ 2.0 billion term loan facility and a senior unsecured $ 3.0 billion revolving credit facility.

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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").

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.

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 year ended December 31, 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.

For the year ended December 31, 2022, we recognized expense of $ 17.3 million related to commitment fees associated with the bridge facility, which was presented within interest and other expense in our consolidated statement of income.

Fair Value of Long-Term Debt

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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 December 31, 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.

The required leverage ratio was increased to 4.50 to 1.00 as a result of the acquisition of EVO, and will gradually step-down over eight quarters to the original required ratio of 3.75 to 1.00.

As of December 31, 2023, the required leverage ratio is 4.50 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 December 31, 2023.

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

As of December 31, 2022 and 2021, a total of $ 81.9 million and $ 76.3 million, respectively, of cash on deposit was used to determine the available credit.

As of December 31, 2023, a total of $ 88.5 million of cash on deposit was used to determine the available credit.

As of December 31, 2023, we had $ 981.2 million outstanding under these lines of credit with additional capacity to fund settlement of $ 1,852.5 million.

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The weighted-average interest rate on these borrowings was 5.95 % at December 31, 2023.

Commercial Paper

In January 2023, we established a $ 2.0 billion commercial paper program pursuant to which we may issue senior unsecured commercial paper ("Commercial Paper") with maturities of up to 397 days from the date of issue.

The program is backstopped by our Revolving Credit Agreement, in that the amount of commercial paper outstanding cannot exceed the undrawn portion on the Revolving Credit Facility.

Commercial Paper is expected to be issued at a discount from par, but may also bear interest, each at commercial paper market rates.

The proceeds from issuances of Commercial Paper are expected to be used for general corporate purposes but may also be used for acquisitions, to pay dividends or for debt refinancing or other purposes.

Derivative Instruments

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.

Interest Expense

Interest expense was $ 629.8 million, $ 437.0 million and $ 328.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

NOTE 10— DERIVATIVES AND HEDGING INSTRUMENTS

Net Investment Hedge

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.

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.

Under net investment hedge accounting, 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, partially offsetting the foreign currency translation adjustment for our foreign subsidiaries.

We recognized a loss on the net investment hedge of $ 27.0 million within foreign currency translation adjustments in other comprehensive income in our consolidated statements of comprehensive income during the year ended December 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 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).

Since we had designated the interest rate swap agreements as cash flow hedges, unrealized gains or losses resulting from adjusting the swaps to fair value are recognized 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.

In August 2022, in connection with entry into the revolving credit agreement and repayment of amounts outstanding under our prior credit facility, we terminated and settled our interest rate swap agreements existing at that time.

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 year ended December 31, 2022.

As of December 31, 2021, accounts payable and accrued liabilities included $ 28.8 million related to the interest rate swaps.

In addition, in June 2019, we entered into forward-starting interest rate swap agreements with an aggregate notional amount of $ 1.0 billion.

The forward-starting interest rate swaps, designated as cash flow hedges, were designed to manage the exposure to interest rate volatility in anticipation of the issuance of our senior unsecured notes.

During the period from the commencement of the swaps through the date upon which our senior unsecured notes were issued, the effective portion of the unrealized losses on the swaps was included in other comprehensive loss.

Upon issuance of our senior unsecured notes, we terminated the forward-starting swap agreements and made settlement payments of $ 48.3 million.

The net gain was presented in interest and other expense in our consolidated statement of income for the year ended December 31, 2022.

Upon issuance of our senior unsecured notes in August 2019, we made settlement payments of $ 48.3 million related to the termination of forward-starting interest rate swap agreements designated as cash flow hedges, for which the effective portion of the unrealized losses on the swaps was included in other comprehensive loss.

We have and will continue to reclassify the effective portion of the realized loss from accumulated other comprehensive loss into interest expense over the terms of the related senior notes.

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 December 31, 2023

Ranges of Maturity Dates at December 31, 2023

December 31, 2023 December 31, 2022

(in thousands)

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

Other noncurrent liabilities 4.26 % April 17, 2027 - August 17, 2027 $ 28,187 $ —

The table below presents the effects of our interest rate swaps on the consolidated statements of income and statements of comprehensive income for the years ended December 31, 2023, 2022 and 2021:

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Net unrealized gains (losses) recognized in other comprehensive loss $ ( 19,683 ) $ 12,915 $ 3,425

Net unrealized losses reclassified out of other comprehensive loss to interest expense $ 21,327 $ 40,094 $ 36,510

As of December 31, 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 approximately $ 5.5 million.

Interest Expense

Interest expense was $ 437.0 million, $ 328.0 million and $ 326.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Net unrealized gains (losses) reclassified out of other comprehensive loss to interest expense $ 4,609 $ ( 21,327 ) $ ( 40,094 )

As of December 31, 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 approximately $ 1.9 million.

NOTE 11— ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

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Trade accounts payable 290,437 229,436

Contract liabilities 226,254 227,783

Payment network fees 210,347 187,665

Compensation and benefits 276,441 209,630

Payment network fees 246,102 210,347

Contract liabilities 229,686 226,254

Interest 166,039 128,308

Income taxes 139,825 61,949

Third-party commissions 93,387 95,192

Operating lease liabilities 80,208 103,554

Income taxes payable 61,949 51,818

Operating leases 81,696 80,208

Miscellaneous taxes and withholdings 59,601 42,198

Unclaimed property 31,734 34,744

Audit and legal 28,548 82,108

Third-party processing fees 29,593 25,509

Audit and legal 22,748 28,548

Unclaimed property 22,560 31,734

Current portion of accrued buyout liability (1)

13,719 16,116

Interest rate swap liabilities — 28,777

Other 334,624 288,904

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(1) The noncurrent portion of accrued buyout liability of $ 69.1 million and $ 45.4 million is included in other noncurrent liabilities in the consolidated balance sheets as of December 31, 2023 and 2022, respectively.

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 the TSYS Merger.

During the years ended December 31, 2021 and 2020, we recognized charges for employee termination benefits of $ 43.4 million and $ 83.3 million, respectively, which included $ 1.2 million and $ 6.7 million, respectively, of share-based compensation expense.

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

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

There were no significant charges recognized during the year ended December 31, 2022 and no significant remaining obligations to be paid as of December 31, 2022.

NOTE 12— INCOME TAX

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statutory rate 21.0 % 21.0 % 21.0 %

Goodwill impairment 78.0 — —

Sale of Russian business 12.1 — —

State income taxes, net of federal income tax benefit 9.0 3.4 0.7

Net gain on dispositions and liquidations 4.3 12.1 —

Foreign inclusion, net of foreign tax credits 3.4 8.2 1.0

Foreign income taxes 2.2 1.4 0.3

State income taxes, net of federal income tax benefit 0.9 9.0 3.4

Nondeductible executive compensation 0.9 4.7 1.0

Share-based compensation expense 0.9 2.0 ( 0.2 )

Foreign income taxes 1.4 0.3 0.6

Deemed royalty 0.7 1.2 —

Uncertain tax positions 0.5 ( 0.7 ) ( 0.3 )

Goodwill impairment — 78.0 —

Equity method investment partnership income ( 0.1 ) 0.1 0.9

Valuation allowance ( 0.4 ) ( 0.2 ) ( 1.7 )

Uncertain tax positions ( 0.7 ) ( 0.3 ) 1.1

Foreign-derived intangible income deduction ( 3.8 ) ( 12.4 ) ( 1.9 )

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Foreign net operating loss carryforwards 187,247 129,882

Lease liabilities 106,884 130,328

Credits 144,053 48,930

Financial instruments 91,032 92,477

Credit carryforwards 48,930 49,875

Lease liabilities 89,645 106,884

Accrued expenses 54,478 44,819

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Balance at December 31, 2020 $ ( 132,531 )

Allowance for foreign net operating loss carryforwards ( 63,113 )

Allowance for foreign credit carryforwards ( 2,486 )

Allowance for state credit carryforwards 2,932

Allowance for domestic net operating loss carryforwards 2,178

Allowance for foreign net operating losses 5,804

Allowance for foreign tax credits 12,656

Allowance for state tax credits ( 1,995 )

Allowance for domestic net operating losses 3,807

Balance at December 31, 2021 ( 112,259 )

Allowance for foreign net operating loss carryforwards 5,804

Allowance for foreign credit carryforwards 12,656

Allowance for state credit carryforwards ( 1,995 )

Allowance for domestic net operating loss carryforwards 3,807

Allowance for foreign net operating losses ( 122 )

Allowance for foreign tax credits 60

Allowance for state tax credits 2,282

Allowance for domestic net operating losses ( 4 )

Balance at December 31, 2022 ( 110,043 )

Allowance for foreign net operating loss carryforwards ( 122 )

Allowance for foreign credit carryforwards 60

Allowance for state credit carryforwards 2,282

Allowance for domestic net operating loss carryforwards ( 4 )

Allowance for foreign net operating losses ( 674 )

Allowance for foreign tax credits ( 101,271 )

Allowance for state tax credits 3,079

Allowance for state interest limitation ( 2,335 )

Allowance for domestic net operating losses 195

Balance at December 31, 2023 $ ( 211,049 )

The change in the valuation allowance for the year ended December 31, 2023 is primarily related to anticipatory foreign tax credits and state interest deduction carryforwards recorded in acquisition accounting offset by recognition of state tax credit carryforwards determined more likely than not to be realized.

The decrease in the valuation allowance for the year ended December 31, 2022 is primarily related to the utilization of state tax credit carryforwards.

The decrease in the valuation allowance for the year ended December 31, 2021 is primarily related to the foreign net operating loss carryforwards and the foreign tax credit carryforwards which the Company determined are more likely than not to be realized.

The increase in the valuation allowance related to the foreign net operating loss carryforwards for the year ended December 31, 2020 is due to the addition of a foreign affiliate net operating loss with a related full valuation allowance.

Foreign net operating loss carryforwards of $ 109.4 million will expire between December 31, 2024 and December 31, 2043, if not utilized.

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As of December 31, 2023, the total amount of gross unrecognized income tax benefits that, if recognized, would affect the provision for income taxes is $ 40.9 million.

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 continuing to evaluate 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.

NOTE 13— SHAREHOLDERS’ EQUITY

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Number of shares repurchased and retired 4,065 23,266 15,169

Cost of shares repurchased, including commissions $ 2,929,814 $ 2,513,629 $ 633,948

Cost of shares repurchased, including commissions and applicable excise taxes $ 413,667 $ 2,929,814 $ 2,513,629

Average cost per share $ 101.77 $ 125.93 $ 165.72

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

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

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act into law, which, among other things, implemented a 1% excise tax on share repurchases effective beginning January 1, 2023.

During the year ended December 31, 2023, we reflected excise taxes of $ 3.9 million within equity as part of the cost of common stock repurchased, net of share issuances, during the period.

As of December 31, 2023, the amount available under our share repurchase program was $ 1,090.2 million.

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Restricted Stock

Restricted stock awards vest in approximately equal annual installments on each of the first three anniversaries of the grant date or, in some cases, in one installment on the third anniversary of the grant date, in either case subject to the holder's continued service on each applicable vesting date.

Restricted stock awards vest in approximately equal annual installments, generally on each of the first three or four anniversaries of the grant date or, in some cases, in one installment on the third anniversary of the grant date, in either case subject to the holder's continued service on each applicable vesting date.

Restricted shares cannot be sold or transferred until they have vested.

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Unvested at December 31, 2022 2,145 159.04

Replacement Awards 202 98.44

Granted 1,322 112.81

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For restricted stock and performance units, we recognized compensation expense of $ 186.9 million, $ 151.5 million and $ 167.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Compensation expense for the year ended December 31, 2021 included approximately $ 32.2 million related to the vesting of certain performance-based restricted stock units upon achievement of performance measures during the period.

As of December 31, 2023, there was $ 156.0 million of unrecognized compensation expense related to unvested restricted stock awards and performance units that we expect to recognize over a weighted-average period of 1.7 years.

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Stock options are granted with an exercise price equal to 100 % of fair market value of our common stock on the date of grant and have a term of ten years .

Stock options vest in equal installments on each of the first three anniversaries of the grant date, subject to the holder's continued service on each applicable vesting date.

Stock options vest in equal installments, generally on each of the first three or four anniversaries of the grant date, subject to the holder's continued service on each applicable vesting date.

Our stock option agreements provide for accelerated vesting under certain conditions.

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

Replacement Awards 142 98.44

Granted 233 110.83

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As of December 31, 2023, we had $ 5.7 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 1.8 years.

The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2022, 2021 and 2020 was $ 48.88 , $ 65.99 and $ 54.85 , respectively.

The weighted-average grant-date fair value of stock options granted, including replacement awards granted in connection with the EVO acquisition, during the years ended December 31, 2023, 2022 and 2021 was $ 46.17 , $ 48.88 and $ 65.99 , respectively.

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

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$ 92,987 $ 18,519 $ 12,123

During the year ended December 31, 2023, we received $ 26.2 million from a noncontrolling shareholder in exchange for a 20 % ownership interest in one of our majority-owned subsidiaries in Spain, which resulted in a reallocation between equity attributable to Global Payments and equity attributable to noncontrolling interests.

During the year ended December 31, 2021, Global Payments and noncontrolling shareholders made contributions of $ 209.6 million and $ 70.0 million, respectively, to certain of our majority-owned subsidiaries based on each shareholder's proportionate ownership, primarily to fund acquisitions that closed in the fourth quarter of 2021.

The contributions from the noncontrolling shareholders were recorded as an increase to noncontrolling interests in the consolidated balance sheet.

The contributions from the noncontrolling shareholders were reflected as an increase to noncontrolling interests in the consolidated balance sheet.

In addition, we increased our controlling financial interest in one of our majority-owned subsidiaries from 51 % to 55 %, which resulted in a reallocation between equity attributable to noncontrolling interests and total equity attributable to Global Payments.

During the year ended December 31, 2020, we paid € 493 million ($ 578.2 million equivalent) to increase our controlling financial interest in Comercia Global Payments Entidad de Pago, S.L.

(“Comercia”) from 51 % to 80 %.

We funded the transaction with a combination of available cash and borrowings on our unsecured revolving credit facility.

The transaction resulted in a reduction in equity attributable to noncontrolling interests of approximately $ 68.4 million and a reduction in total equity attributable to Global Payments of approximately $ 509.8 million.

The net effects of the transaction include a reclassification of an accumulated other comprehensive loss related to foreign currency translation of $ 12.1 million from noncontrolling interests to equity attributable to Global Payments.

Redeemable Noncontrolling Interests

Through the acquisition of EVO, the portions of equity in our consolidated subsidiaries in Poland, Greece and Chile that are not attributable, directly or indirectly, to us, are 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 circumstances for our subsidiary in Greece, at a price determined by calculations stipulated in the shareholder agreement.

The option held by the minority shareholder in Poland expired on January 1, 2024 and the redeemable noncontrolling interest in Poland will be reclassified to noncontrolling interest in the consolidated balance sheet as of January 1, 2024.

The other 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 December 31, 2023.

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), capital 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.

Each of the redeemable noncontrolling interests was presented at the respective carrying amount as of December 31, 2023, and no adjustments to estimated redemption price were recognized during the year ended December 31, 2023.

NOTE 17— ACCUMULATED OTHER COMPREHENSIVE LOSS

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Other comprehensive income (loss) ( 68,814 ) 33,053 3,760 ( 32,001 )

Effect of purchase of subsidiary shares from noncontrolling interest ( 12,055 ) — — ( 12,055 )

Effect of change in ownership to a noncontrolling interest 92 — — 92

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

Other comprehensive (loss) income ( 68,814 ) 33,053 3,760 ( 32,001 )

Effect of change in ownership attributable to a noncontrolling interest 92 — — 92

Other comprehensive income (loss) ( 197,635 ) 26,070 ( 222 ) ( 171,787 )

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

Other comprehensive (loss) income ( 197,635 ) 26,070 ( 222 ) ( 171,787 )

Other comprehensive income (loss) 165,044 ( 18,439 ) 439 147,044

Balance at December 31, 2023 $ ( 215,540 ) $ ( 40,859 ) $ ( 2,526 ) $ ( 258,925 )

Other comprehensive (loss) income attributable to noncontrolling interests, which relates only to foreign currency translation, was $( 13.3 ) million, $( 10.3 ) million and $ 14.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was $ 50.4 million, $( 13.3 ) million and $( 10.3 ) million for the years ended December 31, 2023, 2022 and 2021, respectively.

NOTE 18— SEGMENT INFORMATION

Information About Profit and Assets

During 2022, as a result of the pending divestiture of our consumer business and changes in how our business is managed, we have realigned the businesses previously comprising our Business and Consumer Solutions segment to include the B2B 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 years ended December 31, 2021 and 2020 has been recast to align with the segment presentation for the year ended December 31, 2022.

Our payment technology solutions are similar around the world in that we enable our customers to accept card, check and digital-based payments.

Through our Merchant Solutions segment, our offerings include, but are not limited to, authorization, settlement and funding services, customer support, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and on-line reporting.

We operate in two reportable segments:

Merchant Solutions and Issuer Solutions.

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

Our Merchant Solutions payment technology is similar around the world in that we enable our customers to accept card and other digital-based payments.

Through this segment, our offerings include, but are not limited to, authorization, settlement and funding services, customer support, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and on-line reporting.

In addition, we offer a wide array of enterprise software solutions that streamline business operations to customers in numerous vertical markets.

We also provide a variety of value-added solutions and services, including specialty point-of-sale software, analytics and customer engagement, human capital management and payroll and reporting that assist our customers with driving demand and operating their businesses more efficiently.

Through our Issuer Solutions segment, we provide solutions that enable financial institutions and retailers to manage their card portfolios, reduce technical complexity and overhead and offer a seamless experience for cardholders on a single platform.

Through our Issuer Solutions segment, we provide financial institutions and retailers technologies to manage their card portfolios, reduce technical complexity and overhead and offer a seamless experience for cardholders on a single platform.

In addition, we provide flexible commercial payments, accounts payable and electronic payment alternative solutions that support B2B payment processes for businesses and governments.

We also offer complementary services including account management and servicing, fraud solution services, analytics and business intelligence, cards, statements and correspondence, customer contact solutions and risk management solutions.

Additionally, our Issuer Solutions segment provides B2B payment

services and other financial service solutions marketed to corporations, including SaaS offerings that enable accounts payables automation, integrated payments, employer disbursement solutions, and virtual card capabilities.

Through our Consumer Solutions segment, we provide general purpose reloadable prepaid debit and payroll cards, demand deposit accounts and other financial service solutions to the underbanked and other consumers and businesses in the United States.

Additionally, our Issuer Solutions segment provides B2B payment services and other financial service solutions marketed to businesses, including SaaS offerings that automate key procurement processes, provide invoice capture, coding and approval, and enable virtual cards and integrated payments options across a variety of key vertical markets.

Through our former Consumer Solutions segment, we provided general purpose reloadable prepaid debit and payroll cards, demand deposit accounts and other financial service solutions to the underbanked and other consumers and businesses in the United States.

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

21 unchanged sentences

Corporate ( 898,024 ) ( 777,744 ) ( 836,010 )

( 777,744 ) ( 836,010 ) ( 685,069 )

Impairment of goodwill — ( 833,075 ) —

( 833,075 ) — —

Loss on business dispositions (4)

( 199,094 ) — —

Net loss on business dispositions ( 136,744 ) ( 199,094 ) —

Consolidated operating income

7 unchanged sentences

$ 1,776,692 $ 1,662,455 $ 1,691,384

(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) During the years ended December 31, 2022, 2021 and 2020, operating loss for Corporate included acquisition and integration expenses of $ 254.2 million, $ 335.5 million, and $ 313.0 million, respectively.

During the years ended December 31, 2022 and 2021, operating loss for Corporate also included $ 47.1 million and $ 56.8 million, respectively, of other charges related to facilities exit activities.

(3) During the year ended December 31, 2022, consolidated operating income included a $ 833.1 million goodwill impairment charge related to our former Business and Consumer Solutions reporting unit.

See “Note 6—Goodwill and Other Intangible Assets” for further discussion.

(4) During the year ended December 31, 2022, consolidated operating income included a $ 127.2 million loss on the sale of our Merchant Solutions business in Russia and a charge of $ 71.9 million to reduce the carrying amount of the consumer business disposal group to estimated fair value less costs to sell.

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

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

During the years ended December 31, 2023, 2022 and 2021, operating income included acquisition and integration expenses of $ 341.9 million, $ 259.2 million, and $ 340.4 million, respectively, which were primarily included within Corporate expenses.

During the years ended December 31, 2023, 2022 and 2021, operating loss for Corporate also included $ 18.5 million, $ 47.1 million, and $ 56.8 million, respectively, of other charges related to facilities exit activities.

Entity-Wide Information

15 unchanged sentences

Total future minimum payments $ 1,930,583

During the year ended December 31, 2023, we entered into agreements to acquire hardware, software and related services, of which $ 182.2 million was financed utilizing under two to five-year vendor financing arrangements .

Certain of the agreements included the purchase of assets previously leased.

During the year ended December 31, 2022, we entered into new agreements to acquire hardware, software and related services, of which $ 112.0 million was financed utilizing two-year supplier financing arrangements.

1 unchanged sentence

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.

During the year ended December 31, 2020, we entered into a new agreement to acquire software and related services, of which $ 97.6 million was financed utilizing a two-year supplier financing arrangement.

Legal Matters

47 unchanged sentences

December 31, 2023 $ 110,043 $ 104,280 $ 3,274 $ 211,049

Allowance for credit losses - notes receivable

December 31, 2023 $ — $ 15,245 $ — $ 15,245

(1) Included in settlement processing obligations.

(2) In addition to amounts charged to costs and expenses, amounts in this column include additions, as applicable, resulting from business combinations and the adoption of the new credit loss standard as of January 1, 2020.

(3) Includes certain amounts within our consumer and gaming business disposal groups that are presented as held for sale in the consolidated balance sheet as of December 31, 2022.

(2) In addition to amounts charged to costs and expenses, amounts in this column include additions, as applicable, resulting from business combinations.

(3) Includes certain amounts related to our consumer and gaming business disposal groups that were presented as held for sale in the consolidated balance sheet as of December 31, 2022.

During the second quarter of 2023, we completed the sale of our gaming business and the consumer portion of our Netspend business.

The results relating to our consumer and gaming business are included for the periods prior to disposition, and the amounts divested are included in the deductions column above.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data