GLOBAL PAYMENTS INC 10-Q

ITEM 1—FINANCIAL STATEMENTS GLOBAL PAYMENTS INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended March 31, 2024 March 31, 2023 Revenues $ 2,420,187 $ 2,292,447 Operating expenses: Cost of service 922,390 947,753 Selling, general and administrative 1,045,545 1,043,126 Loss on business disposition — 244,833 1,967,935 2,235,712 Operating income 452,252 56,735 Interest and other income 35,928 11,153 Interest and other expense ( 162,147 ) ( 122,945 ) ( 126,219 ) ( 111,792 ) Income (loss) before income taxes and equity in income of equity method investments 326,033 ( 55,057 ) Income tax expense (benefit) 19,382 ( 31,399 ) Income (loss) before equity in income of equity method investments 306,651 ( 23,658 ) Equity in income of equity method investments, net of tax 16,411 19,238 Net income (loss) 323,062 ( 4,420 ) Net income attributable to noncontrolling interests ( 9,755 ) ( 6,621 ) Net income (loss) attributable to Global Payments $ 313,307 $ ( 11,041 ) Earnings (loss) per share attributable to Global Payments: Basic earnings (loss) per share $ 1.22 $ ( 0.04 ) Diluted earnings (loss) per share $ 1.22 $ ( 0.04 ) See Notes to Unaudited Consolidated Financial Statements. 4 Table of Contents GLOBAL PAYMENTS INC. UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) Three Months Ended March 31, 2024 March 31, 2023 Net income (loss) $ 323,062 $ ( 4,420 ) Other comprehensive income (loss): Foreign currency translation adjustments ( 84,360 ) 37,450 Income tax (expense) benefit related to foreign currency translation adjustments 2,694 ( 187 ) Net unrealized gains (losses) on hedging activities 29,116 ( 48,051 ) Reclassification of net unrealized (gains) losses on hedging activities to interest expense ( 2,662 ) 1,386 Income tax (expense) benefit related to hedging activities ( 6,388 ) 10,950 Other, net of tax — ( 22 ) Other comprehensive income (loss) ( 61,600 ) 1,526 Comprehensive income (loss) 261,462 ( 2,894 ) Comprehensive income (loss) attributable to noncontrolling interests ( 13,332 ) 12,995 Comprehensive income (loss) attributable to Global Payments $ 274,794 $ ( 15,889 ) See Notes to Unaudited Consolidated Financial Statements. 5 Table of Contents GLOBAL PAYMENTS INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) March 31, 2024 December 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 2,167,616 $ 2,088,887 Accounts receivable, net 1,054,193 1,120,078 Settlement processing assets 5,617,576 4,097,417 Prepaid expenses and other current assets 830,548 767,377 Total current assets 9,669,933 8,073,759 Goodwill 26,728,023 26,743,523 Other intangible assets, net 9,797,023 10,168,046 Property and equipment, net 2,200,366 2,190,005 Deferred income taxes 80,241 111,712 Notes receivable 731,429 713,123 Other noncurrent assets 2,567,735 2,570,018 Total assets $ 51,774,750 $ 50,570,186 LIABILITIES AND EQUITY Current liabilities: Settlement lines of credit $ 1,095,901 $ 981,244 Current portion of long-term debt 1,579,357 620,585 Accounts payable and accrued liabilities 2,630,789 2,824,979 Settlement processing obligations 5,209,972 3,698,921 Total current liabilities 10,516,019 8,125,729 Long-term debt 15,565,705 15,692,297 Deferred income taxes 2,062,885 2,242,105 Other noncurrent liabilities 643,996 722,540 Total liabilities 28,788,605 26,782,671 Commitments and contingencies Redeemable noncontrolling interests 143,069 507,965 Equity: Preferred stock, no par value; 5,000,000 shares authorized and none issued — — Common stock, no par value; 400,000,000 shares authorized at March 31, 2024 and December 31, 2023; 255,130,560 issued and outstanding at March 31, 2024 and 260,382,746 issued and outstanding at December 31, 2023 — — Paid-in capital 18,806,396 19,800,953 Retained earnings 3,706,873 3,457,182 Accumulated other comprehensive loss ( 297,438 ) ( 258,925 ) Total Global Payments shareholders’ equity 22,215,831 22,999,210 Nonredeemable noncontrolling interests 627,245 280,340 Total equity 22,843,076 23,279,550 Total liabilities, redeemable noncontrolling interests and equity $ 51,774,750 $ 50,570,186 See Notes to Unaudited Consolidated Financial Statements. 6 Table of Contents GLOBAL PAYMENTS INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2024 March 31, 2023 Cash flows from operating activities: Net income (loss) $ 323,062 $ ( 4,420 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization of property and equipment 117,919 105,983 Amortization of acquired intangibles 343,217 301,267 Amortization of capitalized contract costs 32,883 29,336 Share-based compensation expense 40,117 89,566 Provision for operating losses and credit losses 19,409 29,859 Noncash lease expense 15,397 15,810 Deferred income taxes ( 111,886 ) ( 160,040 ) Equity in income of equity method investments, net of tax ( 16,411 ) ( 19,238 ) Facilities exit charges — 5,164 Loss on business disposition — 244,833 Other, net ( 5,619 ) 10,521 Changes in operating assets and liabilities, net of the effects of business combinations: Accounts receivable 50,934 30,767 Settlement processing assets and obligations, net ( 24,689 ) 248,710 Prepaid expenses and other assets ( 120,774 ) ( 119,479 ) Accounts payable and other liabilities ( 247,242 ) ( 209,113 ) Net cash provided by operating activities 416,317 599,526 Cash flows from investing activities: Business combinations and other acquisitions, net of cash and restricted cash acquired ( 2,557 ) ( 4,046,785 ) Capital expenditures ( 145,441 ) ( 162,195 ) Other, net — 2,187 Net cash used in investing activities ( 147,998 ) ( 4,206,793 ) Cash flows from financing activities: Net borrowings from (repayments of) settlement lines of credit 133,228 ( 281,411 ) Net borrowings from (repayments of) commercial paper notes ( 1,093,043 ) 1,048,620 Proceeds from long-term debt 4,609,000 4,708,140 Repayments of long-term debt ( 2,628,548 ) ( 1,555,954 ) Payments of debt issuance costs ( 29,391 ) ( 11,593 ) Repurchases of common stock ( 800,048 ) ( 202,785 ) Proceeds from stock issued under share-based compensation plans 11,031 6,103 Common stock repurchased - share-based compensation plans ( 41,140 ) ( 28,323 ) Distributions to noncontrolling interests ( 4,748 ) ( 6,218 ) Contributions from noncontrolling interests 89 — Purchase of capped calls related to issuance of convertible notes ( 256,250 ) — Dividends paid ( 63,616 ) ( 65,750 ) Net cash provided by (used in) financing activities ( 163,436 ) 3,610,829 Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 34,035 ) 18,584 Increase in cash, cash equivalents and restricted cash 70,848 22,146 Cash, cash equivalents and restricted cash, beginning of the period 2,256,875 2,215,606 Cash, cash equivalents and restricted cash, end of the period $ 2,327,723 $ 2,237,752 See Notes to Unaudited Consolidated Financial Statements. 7 Table of Contents GLOBAL PAYMENTS INC. UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands, except per share data) 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, 2023 260,383 $ 19,800,953 $ 3,457,182 $ ( 258,925 ) $ 22,999,210 $ 280,340 $ 23,279,550 $ 507,965 Net income 313,307 313,307 7,693 321,000 2,062 Other comprehensive loss ( 38,513 ) ( 38,513 ) ( 15,001 ) ( 53,514 ) ( 8,086 ) Stock issued under share-based compensation plans 1,132 11,031 11,031 11,031 Common stock repurchased - share-based compensation plans ( 322 ) ( 42,663 ) ( 42,663 ) ( 42,663 ) Share-based compensation expense 40,117 40,117 40,117 Repurchases of common stock ( 6,062 ) ( 808,365 ) ( 808,365 ) ( 808,365 ) Distributions to noncontrolling interests — ( 4,748 ) ( 4,748 ) Contributions from noncontrolling interests — 89 89 Reclassification of redeemable noncontrolling interest to nonredeemable noncontrolling interest — 358,872 358,872 ( 358,872 ) Purchase of capped calls related to issuance of convertible notes, net of taxes of $ 61,573 ( 194,677 ) ( 194,677 ) ( 194,677 ) Cash dividends declared ($ 0.25 per common share) ( 63,616 ) ( 63,616 ) ( 63,616 ) Balance at March 31, 2024 255,131 $ 18,806,396 $ 3,706,873 $ ( 297,438 ) $ 22,215,831 $ 627,245 $ 22,843,076 $ 143,069 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 (loss) ( 11,041 ) ( 11,041 ) 6,621 ( 4,420 ) Other comprehensive income (loss) ( 4,848 ) ( 4,848 ) 6,374 1,526 Stock issued under share-based compensation plans 1,014 6,103 6,103 6,103 Common stock repurchased - share-based compensation plans ( 266 ) ( 30,189 ) ( 30,189 ) ( 30,189 ) Share-based compensation expense 89,566 89,566 89,566 Redeemable noncontrolling interests acquired in a business combination — — 556,070 Issuance of share-based awards in connection with a business combination 2,484 2,484 2,484 Repurchases of common stock ( 2,059 ) ( 206,553 ) ( 206,553 ) ( 206,553 ) Distributions to noncontrolling interest — ( 6,218 ) ( 6,218 ) Cash dividends declared ($ 0.25 per common share) ( 65,750 ) ( 65,750 ) ( 65,750 ) Balance at March 31, 2023 261,771 $ 19,839,506 $ 2,654,589 $ ( 410,817 ) $ 22,083,278 $ 243,481 $ 22,326,759 $ 556,070 See Notes to Unaudited Consolidated Financial Statements. 8 Table of Contents NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1— BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business, consolidation and presentation - We are a leading payments technology company delivering innovative software and services to our customers globally. Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world. We operate in two reportable segments: Merchant Solutions and Issuer Solutions. As described in "Note 3—Business Disposition," during the second quarter of 2023, we completed the sale of the consumer portion of our Netspend business, which comprised our former Consumer Solutions segment. Our consolidated financial statements include the results of our former Consumer Solutions segment for periods prior to disposition. See "Note 15—Segment Information" for further information. Global Payments Inc. and its consolidated subsidiaries are referred to herein collectively as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise. These unaudited consolidated financial statements include our accounts and those of our majority-owned subsidiaries, and all intercompany balances and transactions have been eliminated in consolidation. Investments in entities that we do not control are accounted for using the equity or cost method, based on whether or not we have the ability to exercise significant influence over operating and financial policies. These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The consolidated balance sheet as of December 31, 2023 was derived from the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 but does not include all disclosures required by GAAP for annual financial statements. In the opinion of our management, all known adjustments necessary for a fair presentation of the results of the interim periods have been made. These adjustments consist of normal recurring accruals and estimates that affect the carrying amount of assets and liabilities. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. Use of estimates - The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. In particular, uncertainty resulting from global events and other macroeconomic conditions are difficult to predict at this time, and the ultimate effect could result in additional charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill and other losses. These unaudited consolidated financial statements reflect the financial statement effects based upon management’s estimates and assumptions utilizing the most currently available information. SEC Rule Changes - On March 6, 2024, the SEC adopted final rules that require disclosure of certain climate-related information, including disclosures relating to material climate-related risks, targets or goals, risk management and governance activities and greenhouse gas emissions. In addition, the rules require disclosure of certain climate-related financial metrics in the notes to the audited financial statements. The new disclosures are required on a prospective basis and a phased-in compliance period becomes effective for us beginning with our Annual Report on Form 10-K for the year ending December 31, 2025. However, pending the resolution of legal challenges that were subsequently filed against these rules, in April 2024, the SEC stayed the effectiveness of the rules. Therefore, the enforceability of these rules or the timing of their effectiveness is uncertain. Recently issued accounting pronouncements not yet adopted 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. 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. 9 Table of Contents 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. NOTE 2— ACQUISITION EVO Payments, Inc. On March 24, 2023, we acquired all of the outstanding common stock of EVO Payments, Inc. (“EVO”). 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) $ 3,273,951 Cash paid for equity awards attributable to purchase consideration (2) 58,510 Value of replacement awards attributable to purchase consideration (3) 2,484 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) 269,118 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. 10 Table of Contents 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 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): Final Amounts at March 31, 2024 Cash and cash equivalents $ 324,859 Accounts receivable 51,470 Settlement processing assets 134,712 Deferred income tax assets 1,734 Property and equipment 72,100 Identifiable intangible assets 1,478,995 Other assets 148,567 Accounts payable and accrued liabilities ( 289,360 ) Settlement lines of credit ( 7,587 ) Settlement processing obligations ( 163,535 ) Deferred income tax liabilities ( 253,221 ) Other liabilities ( 61,207 ) Total identifiable net assets 1,437,527 Redeemable noncontrolling interests ( 471,119 ) Goodwill 3,303,212 Total purchase consideration $ 4,269,620 During the three months ended March 31, 2024, we made measurement-period adjustments that increased the amount of goodwill by $ 19.9 million, primarily related to deferred income taxes as a result of 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 statement of income for the three months ended March 31, 2024 were not material. Goodwill arising from the acquisition was included in the Merchant Solutions segment 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 $ 1.2 billion of the goodwill from this acquisition will be deductible for income tax purposes. The following table reflects the 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 11 Table of Contents For the three months ended March 31, 2024, and during the period from the acquisition date through March 31, 2023, the acquired operations of EVO contributed less than 10 % to our consolidated revenues and operating income, respectively. 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. NOTE 3— BUSINESS DISPOSITION Consumer Business - On April 26, 2023, we completed the sale of the consumer portion of our Netspend business for approximately $ 1 billion, subject to certain closing adjustments. The consumer business comprised our former Consumer Solutions segment prior to disposition and had been presented as held for sale with certain adjustments to report the disposal group at fair value less costs to sell in our consolidated balance sheet since June 30, 2022. In connection with the sale, we provided $ 675 million of seller financing as described below. We recognized charges within net loss on business disposition in our consolidated statements of income of $ 244.8 million during the three months ended March 31, 2023 to reduce the disposal group to estimated fair value less costs to sell. The loss during the three months ended March 31, 2023 included the effects of incremental negotiated closing adjustments, changes in the estimated fair value of the seller financing and the effects of the final tax structure of the transaction. 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. In connection with the sale of our gaming business in April 2023, 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 of $ 21.5 million on the notes during the three months ended March 31, 2024, as a component of interest and other income in the consolidated statements of income. As of March 31, 2024 and December 31, 2023 , there was an aggregate principal amount of $ 771.2 million and $ 753.5 million, respectively, outstanding on the notes, including PIK, and the notes are presented net of the allowance for credit losses of $ 15.2 million within notes receivable in our consolidated balance sheet. The estimated fair value of the notes receivable was $ 750.4 million an d $ 735.6 million as of March 31, 2024 and December 31, 2023, respectively . 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. 12 Table of Contents NOTE 4— REVENUES The following tables present a disaggregation of our revenues from contracts with customers by geography for each of our reportable segments for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 Merchant Solutions Issuer Solutions Intersegment Eliminations Total (in thousands) Americas $ 1,522,732 $ 458,605 $ ( 6,214 ) $ 1,975,123 Europe 251,051 133,702 — 384,753 Asia Pacific 60,311 10,428 ( 10,428 ) 60,311 $ 1,834,094 $ 602,735 $ ( 16,642 ) $ 2,420,187 Three Months Ended March 31, 2023 Merchant Solutions Issuer Solutions Consumer Solutions Intersegment Eliminations Total (in thousands) Americas $ 1,365,894 $ 443,345 $ 143,709 $ ( 17,321 ) $ 1,935,627 Europe 176,098 117,104 — — 293,202 Asia Pacific 63,618 10,458 — ( 10,458 ) 63,618 $ 1,605,610 $ 570,907 $ 143,709 $ ( 27,779 ) $ 2,292,447 The following table presents a disaggregation of our Merchant Solutions segment revenues by distribution channel for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 March 31, 2023 (in thousands) Relationship-led $ 903,345 $ 795,680 Technology-enabled 930,749 809,930 $ 1,834,094 $ 1,605,610 ASC Topic 606, Revenues from Contracts with Customers ("ASC 606") requires that we determine for each customer arrangement whether revenue should be recognized at a point in time or over time. For the three months ended March 31, 2024 and 2023, substantially all of our revenues were recognized over time. 13 Table of Contents Supplemental balance sheet information related to contracts from customers as of March 31, 2024 and December 31, 2023 was as follows: Balance Sheet Location March 31, 2024 December 31, 2023 (in thousands) Assets: Capitalized costs to obtain customer contracts, net Other noncurrent assets $ 362,863 $ 360,684 Capitalized costs to fulfill customer contracts, net Other noncurrent assets $ 206,109 $ 197,355 Liabilities: Contract liabilities, net (current) Accounts payable and accrued liabilities $ 210,670 $ 229,686 Contract liabilities, net (noncurrent) Other noncurrent liabilities $ 55,058 $ 54,246 Net contract assets were not material at March 31, 2024 or December 31, 2023. Revenue recognized for the three months ended March 31, 2024 and 2023 from contract liability balances at the beginning of each period was $ 92.3 million and $ 83.7 million, respectively. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. The purpose of this disclosure is to provide additional information about the amounts and expected timing of revenue to be recognized from the remaining performance obligations in our existing contracts. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at March 31, 2024. However, as permitted, we have elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Accordingly, the total amount of unsatisfied or partially unsatisfied performance obligations related to processing services is significantly higher than the amounts disclosed in the table below (in thousands): Year Ending December 31, 2024 $ 832,635 2025 961,551 2026 791,597 2027 608,447 2028 333,515 2029 157,722 2030 and thereafter 333,165 Total $ 4,018,632 14 Table of Contents NOTE 5— GOODWILL AND OTHER INTANGIBLE ASSETS As of March 31, 2024 and December 31, 2023, goodwill and other intangible assets consisted of the following: March 31, 2024 December 31, 2023 (in thousands) Goodwill $ 26,728,023 $ 26,743,523 Other intangible assets: Customer-related intangible assets $ 10,626,438 $ 10,653,036 Acquired technologies 3,001,611 3,005,576 Contract-based intangible assets 2,241,063 2,254,273 Trademarks and trade names 1,074,256 1,074,631 16,943,368 16,987,516 Less accumulated amortization: Customer-related intangible assets 4,055,254 3,866,686 Acquired technologies 2,129,982 2,047,330 Contract-based intangible assets 342,006 309,886 Trademarks and trade names 619,103 595,568 7,146,345 6,819,470 $ 9,797,023 $ 10,168,046 The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the three months ended March 31, 2024: Merchant Solutions Issuer Solutions Total (in thousands) Balance at December 31, 2023 $ 17,226,828 $ 9,516,695 $ 26,743,523 Effect of foreign currency translation ( 31,534 ) ( 3,893 ) ( 35,427 ) Measurement period adjustments 19,927 — 19,927 Balance at March 31, 2024 $ 17,215,221 $ 9,512,802 $ 26,728,023 Accumulated impairment losses for goodwill were $ 357.9 million as of March 31, 2024 and December 31, 2023. 15 Table of Contents NOTE 6— LONG-TERM DEBT AND LINES OF CREDIT As of March 31, 2024 and December 31, 2023, long-term debt consisted of the following: March 31, 2024 December 31, 2023 (in thousands) 1.500 % senior notes due November 15, 2024 $ 499,377 $ 499,143 2.650 % senior notes due February 15, 2025 998,535 998,172 1.200 % senior notes due March 1, 2026 1,096,327 1,095,848 4.800 % senior notes due April 1, 2026 772,600 775,425 2.150 % senior notes due January 15, 2027 746,509 746,196 4.950 % senior notes due August 15, 2027 496,689 496,444 4.450 % senior notes due June 1, 2028 468,308 469,406 3.200 % senior notes due August 15, 2029 1,241,534 1,241,169 5.300 % senior notes due August 15, 2029 496,237 496,063 2.900 % senior notes due May 15, 2030 992,830 992,537 2.900 % senior notes due November 15, 2031 743,604 743,394 5.400 % senior notes due August 15, 2032 743,113 742,908 4.150 % senior notes due August 15, 2049 740,947 740,860 5.950 % senior notes due August 15, 2052 738,676 738,576 4.875 % senior notes due March 17, 2031 854,652 873,747 1.000 % convertible notes due August 15, 2029 1,455,560 1,453,493 1.500 % convertible notes due March 1, 2031 1,967,242 — Revolving credit facility 1,598,000 1,570,000 Commercial paper notes 274,954 1,371,639 Finance lease liabilities 20,965 24,525 Other borrowings 198,403 243,337 Total long-term debt 17,145,062 16,312,882 Less current portion 1,579,357 620,585 Long-term debt, excluding current portion $ 15,565,705 $ 15,692,297 The carrying amounts of our senior notes and convertible notes in the table above are presented net of unamortized discount and unamortized debt issuance costs, as applicable. At March 31, 2024, the unamortized discount on senior notes and convertible notes was $ 44.2 million, and unamortized debt issuance costs on senior notes and convertible notes were $ 107.4 million. 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 were $ 78.4 million. The portion of unamortized debt issuance costs related to revolving credit facilities is included in other noncurrent assets. At March 31, 2024 and December 31, 2023, unamortized debt issuance costs on the unsecured revolving credit facility were $ 17.2 million and $ 18.5 million, respectively. 16 Table of Contents At March 31, 2024, future maturities of long-term debt (excluding finance lease liabilities) are as follows by year (in thousands): Year Ending December 31, 2024 $ 565,228 2025 1,049,065 2026 1,885,419 2027 3,157,893 2028 462,962 2029 3,250,128 2030 and thereafter 6,863,884 Total $ 17,234,579 Convertible Notes 1.500 % convertible notes due March 1, 2031 On February 23, 2024, we issued $ 2.0 billion in aggregate principal amount of 1.500 % convertible unsecured senior notes due March 2031 through a private placement. The net proceeds from this offering were approximately $ 1.97 billion reflecting debt issuance costs of $ 33.5 million, 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 March 1 and September 1 of each year, beginning on September 1, 2024, to the holders of record on the preceding February 15 and August 15, respectively. Prior to December 1, 2030, the notes are convertible at the option of the holders only under certain conditions, including: (i) if the last reported sale price of our common stock has been at least 130 % of the conversion price for at least 20 trading days within the last 30 consecutive trading days of the immediately preceding calendar quarter; (ii) for a five business day period following a ten -day consecutive trading period where the trading price of the notes is less than 98 % of the product of the last reported sale price of our common stock and the conversion rate; (iii) if we call any or all of the notes for redemption; or (iv) upon the occurrence of certain corporate events. On or after December 1, 2030, the notes are convertible at the option of the holders at any time until the second scheduled trading day prior to the maturity date. The conversion rate for the notes is initially 6.371 shares of common stock per $1,000 in principal amount of the notes (which is equal to an initial conversion price of approximately $ 156.96 per share), subject to customary 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. We may not redeem the notes prior to March 6, 2028. On or after March 6, 2028, we have the option to redeem all or any portion of the notes for cash if the last reported sale price of our common stock has been at least 130 % of the conversion price for at least 20 trading days within the last 30 consecutive trading day period at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. 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 a portion of their notes for cash at a purchase price equal to 100 % of the principal amount of the notes to be repurchased plus accrued and unpaid interest. 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. 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. In connection with the issuance of the notes, we entered into privately negotiated capped call transactions with certain of the initial purchasers of the notes and other 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 the conversion of the notes, or offset our cash obligation if the cash settlement option is elected, for amounts in excess of the principal amount of converted notes subject to a cap. The initial cap price of the capped call 17 Table of Contents transactions is $ 228.90 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 $ 256.3 million incurred in connection with the capped call transactions was reflected as a reduction to paid-in-capital in our consolidated balance sheet at March 31, 2024, net of applicable income taxes. 1.000 % convertible notes due August 15, 2029 We have $ 1.5 billion in aggregate principal amount of 1.000 % convertible notes due August 2029, which were issued during 2022 in a private placement pursuant to an investment agreement with Silver Lake Partners. Interest on the convertible notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2023, to the holders of record on the preceding February 1 and August 1, respectively. The convertible notes mature on August 15, 2029, subject to earlier conversion or repurchase. The notes, which are currently convertible, are presented within long-term debt in our consolidated balance sheet based on our intent and ability to refinance on a long-term basis should a conversion event occur. Revolving Credit Facility Our revolving credit agreement provides for an unsubordinated unsecured $ 5.75 billion revolving credit facility that matures in August 2027. As of March 31, 2024, there were borrowings of $ 1,598.0 million outstanding under the revolving credit facility with an interest rate of 6.80 %, and the total available commitments under the revolving credit facility were $ 3.4 billion. Commercial Paper We have a $ 2.0 billion commercial paper program under which we may issue senior unsecured commercial paper notes with maturities of up to 397 days from the date of issue. Commercial paper notes are expected to be issued at a discount from par, or they may bear interest, each at commercial paper market rates dictated by market conditions at the time of their issuance. The proceeds from issuances of commercial paper notes will be used primarily for general corporate purposes but may also be used for acquisitions, to pay dividends, for debt refinancing or for other purposes. As of March 31, 2024, we had net borrowings under our comm ercial paper program of $ 275.0 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 6.01 %. The commercial program is backstopped by our revolving credit agreement, in that the amount of commercial paper notes outstanding cannot exceed the undrawn portion of our revolving credit facility. As suc h, we could draw on the revolving credit facility to repay commercial paper notes that cannot be rolled over or refinanced with similar debt . Fair Value of Long-Term Debt As of March 31, 2024, our senior notes had a total carrying amount of $ 11.6 billion and an estimated fair value of $ 11.0 billion. As of March 31, 2024, our 1.500 % convertible notes due March 1, 2031 had a total carrying amount of $ 2.0 billion and an estimated fair value of $ 2.1 billion. The estimated fair values were based on quoted market prices in active markets and are considered to be Level 1 measurements of the valuation hierarchy. As of March 31, 2024, our 1.000 % convertible notes due August 15, 2029 had a total carrying amount of $ 1.5 billion and an estimated fair value of $ 1.7 billion. The estimated fair value of our convertible notes was based on a lattice pricing model and is considered to be a Level 3 measurement of the valuation hierarchy. The fair value of other long-term debt approximated its carrying amount at March 31, 2024. Compliance with Covenants The convertible notes include customary covenants and events of default for convertible notes of this type. 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. 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 18 Table of Contents required ratio of 3.75 to 1.00. As of March 31, 2024, the required leverage ratio was 4.25 to 1.00, and the required interest coverage ratio was 3.00 to 1.00. We were in compliance with all applicable covenants as of March 31, 2024. Interest Expense Interest expense was $ 160.8 million and $ 119.0 million for the three months ended March 31, 2024 and 2023, respectively. NOTE 7— DERIVATIVES AND HEDGING INSTRUMENTS Net Investment Hedge We have designated our aggregate € 800 million Euro-denominated 4.875 % 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 our 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 of $ 7.1 million and $ 18.2 million within foreign currency translation adjustments in other comprehensive income in our consolidated statements of comprehensive income during the three months ended March 31, 2024 and 2023, respectively. Interest Rate Swaps We have interest rate swap agreements with financial institutions to hedge changes in cash flows attributable to interest rate risk on a portion of our variable-rate debt instruments. In the first quarter of 2023, we entered into new interest rate swap agreements with an aggregate notional amount of $ 1.5 billion to convert eligible borrowings under our revolving credit facility from a floating term Secured Overnight Financing Rate to a fixed rate. Net amounts to be received or paid under the swap agreements are reflected as adjustments to interest expense. Since we have designated the interest rate swap agreements as cash flow hedges, unrealized gains or losses resulting from adjusting the swaps to fair value are recognized as components of other comprehensive income. The fair values of our interest rate swaps are 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 are classified within Level 2 of the valuation hierarchy. The table below presents information about our interest rate swaps, designated as cash flow hedges, included in the consolidated balance sheets: Fair Values Derivative Financial Instruments Balance Sheet Location Weighted-Average Fixed Rate of Interest at March 31, 2024 Range of Maturity Dates at March 31, 2024 March 31, 2024 December 31, 2023 (in thousands) Interest rate swaps (Notional of $ 1.5 billion at March 31, 2024) Other noncurrent liabilities 4.26 % April 17, 2027 - August 17, 2027 $ 3,258 $ 28,187 19 Table of Contents The table below presents the effects of our interest rate swaps on the consolidated statements of income and statements of comprehensive income for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 March 31, 2023 (in thousands) Net unrealized gains (losses) recognized in other comprehensive income (loss) $ 29,116 $ ( 48,051 ) Net unrealized gains (losses) reclassified out of other comprehensive income (loss) to interest expense $ 2,662 $ ( 1,386 ) As of March 31, 2024, 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 $ 5.9 million. NOTE 8— INCOME TAX For the three months ended March 31, 2024, our effective income tax rate of 5.9 % differed favorably from the U.S. statutory rate primarily as a result of a change in the assessment of the need for a valuation allowance related to certain foreign tax credit carryforwards, foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction. For the three months ended March 31, 2023, we reported a tax benefit in excess of the U.S. statutory tax rate. The tax benefit included the favorable effect of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction. In addition, the tax benefit on the loss on business disposition was tax effected at the applicable tax rate, whereas the earnings other than this discrete item were tax effected at the lower estimated annual effective tax rate. NOTE 9— REDEEMABLE NONCONTROLLING INTERESTS The portions of equity in our consolidated subsidiaries in 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 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 options have no expiration date. Because the exercise of each of these redemption options is not solely within our control, the redeemable noncontrolling interests are presented in the mezzanine section between total liabilities and shareholders’ equity, as temporary equity, in our consolidated balance sheet as of March 31, 2024. 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. The option held by the minority shareholder in Greece, which is redeemable at a price other than fair value, is considered probable of becoming redeemable on December 8, 2025. In determining the measurement method of redemption price, we have elected to accrete changes in the redemption price over the period from the date of issuance to the earliest redemption date of the instrument using the effective interest method, applied prospectively. We have also elected to recognize the entire amount of any redemption price adjustments in net income attributable to noncontrolling interests in our consolidated statements of income. In addition, we own 66 % of our subsidiary in Poland. The redemption option held by the minority shareholder in Poland expired on January 1, 2024, and the redeemable noncontrolling interest was reclassified to nonredeemable noncontrolling interest in the consolidated balance sheet as of January 1, 2024. 20 Table of Contents NOTE 10— SHAREHOLDERS’ EQUITY We repurchase our common stock mainly through open market repurchase plans and, at times, through accelerated share repurchase ("ASR") programs. During the three months ended March 31, 2024 and 2023, we repurchased and retired 6,061,999 and 2,058,902 shares of our common stock, respectively, at a cost, including commissions and applicable excise taxes, of $ 808.4 million and $ 206.6 million, or $ 133.35 and $ 100.33 per share, respectively. The share repurchase activity for the three months ended March 31, 2024 included the repurchase of 1,414,759 shares using a portion of the net proceeds from our offering of 1.500 % convertible unsecured senior notes due March 2031 through privately negotiated transactions with purchasers of notes in the offering, or one of their respective affiliates. The purchase price per share of the common stock repurchased in such transactions equaled the closing price of the common stock on February 20, 2024, which was $ 130.80 per share. As of March 31, 2024, the remaining amount available under our share repurchase program was $ 1,471.9 million. On April 25, 2024, our board of directors declared a dividend of $ 0.25 per share payable on June 28, 2024 to common shareholders of record as of June 14, 2024. NOTE 11— SHARE-BASED AWARDS AND STOCK OPTIONS The following table summarizes share-based compensation expense and the related income tax benefit recognized for our share-based awards and stock options: Three Months Ended March 31, 2024 March 31, 2023 (in thousands) Share-based compensation expense $ 40,117 $ 89,566 Income tax benefit $ 9,366 $ 9,417 Share-Based Awards The following table summarizes the changes in unvested restricted stock and performance awards for the three months ended March 31, 2024: Shares Weighted-Average Grant-Date Fair Value (in thousands) Unvested at December 31, 2023 2,481 $ 131.41 Granted 1,168 130.71 Vested ( 917 ) 142.99 Forfeited ( 49 ) 117.42 Unvested at March 31, 2024 2,683 $ 127.64 The total fair value of restricted stock and performance awards vested during the three months ended March 31, 2024 and March 31, 2023 was $ 131.1 million and $ 126.5 million, respectively. For restricted stock and performance awards, we recognized compensation expens e of $ 35.6 million and $ 75.2 million during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there was $ 262.6 million of unrecognized compensation expense related to unvested restricted stock and performance awards that we expect to recognize over a weighted-average period of 2.2 years. 21 Table of Contents Stock Options The following table summarizes stock option activity for the three months ended March 31, 2024: Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (years) (in millions) Outstanding at December 31, 2023 921 $ 99.54 5.0 $ 32.1 Granted 154 130.09 Forfeited ( 1 ) 76.91 Exercised ( 169 ) 51.89 Outstanding at March 31, 2024 905 $ 113.67 5.7 $ 23.8 Options vested and exercisable at March 31, 2024 616 $ 111.85 4.0 $ 19.1 We recognized compensation expense for stock options of $ 2.8 million and $ 12.7 million during the three months ended March 31, 2024 and 2023, respectively. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2024 was $ 13.6 million. As of March 31, 2024, we had $ 11.2 million o f unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 2.3 years . The weighted-average grant-date fair value of stock options granted, including replacement awards granted in connection with the EVO acquisition, during the three months ended March 31, 2024 and 2023 was $ 54.42 and $ 47.08 , respectively. Fair value was estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions: Three Months Ended March 31, 2024 March 31, 2023 Risk-free interest rate 4.16 % 3.86 % Expected volatility 45 % 45 % Dividend yield 0.90 % 0.81 % Expected term (years) 5 5 The risk-free interest rate was based on the yield of a zero coupon U.S. Treasury security with a maturity equal to the expected life of the option from the date of the grant. Our assumption on expected volatility was based on our historical volatility. The dividend yield assumption was determined using our average stock price over the preceding year and the annualized amount of our most current quarterly dividend per share. We based our assumptions on the expected term of the options on our analysis of the historical exercise patterns of the options and our assumption on the future exercise pattern of options. NOTE 12— EARNINGS PER SHARE Basic earnings per share ("EPS") was computed by dividing net income (loss) attributable to Global Payments by the weighted-average number of shares outstanding during the period. Earnings available to common shareholders is the same as reported net income (loss) 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 22 Table of Contents our common stock for the period are assumed to have a dilutive effect on EPS. The dilutive share base for the three months ended March 31, 2024 excluded approximately 0.1 million shares related to stock options that would have an antidilutive effect on the computation of diluted earnings per share. Due to a net loss for the three months ended March 31, 2023, no incremental shares were included in the computation of diluted earnings per share because the effect would be antidilutive. Approximately 1.2 million shares related to stock options and share-based awards were therefore excluded from the dilutive share base for the three months ended March 31, 2023. The 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 three months ended March 31, 2024, the convertible notes were not included in the computation of diluted EPS as the effect would have been anti-dilutive. Further, the effect of the related capped call transactions is not included in the computation of diluted EPS as it is always anti-dilutive. The following table sets forth the computation of diluted weighted-average number of shares outstanding for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 March 31, 2023 (in thousands) Basic weighted-average number of shares outstanding 256,926 263,115 Plus: Dilutive effect of stock options and other share-based awards 662 — Diluted weighted-average number of shares outstanding 257,588 263,115 NOTE 13— SUPPLEMENTAL BALANCE SHEET INFORMATION Cash, cash equivalents and restricted cash Cash and cash equivalents include cash on hand and all liquid investments with a maturity of three months or less when purchased. We regularly maintain cash balances with financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit or the equivalent outside the U.S. As of March 31, 2024, approximately 75 % of our total balance of cash and cash equivalents was held within a small group of financial institutions, primarily large money center banks. Although we currently believe that the financial institutions with whom we do business will be able to fulfill their commitments to us, there is no assurance that those institutions will be able to continue to do so. We have not experienced any losses associated with our balances in such accounts for the three months ended March 31, 2024 and 2023. Restricted cash includes amounts that cannot be withdrawn or used for general operating activities under legal or regulatory restrictions. Restricted cash consists of amounts deposited by customers for prepaid card transactions 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. 23 Table of Contents A reconciliation of the amounts of cash and cash equivalents and restricted cash in the consolidated balance sheets to the amount in the consolidated statements of cash flows is as follows: March 31, 2024 December 31, 2023 (in thousands) Cash and cash equivalents $ 2,167,616 $ 2,088,887 Restricted cash 159,414 167,190 Cash included in assets held for sale 693 798 Cash, cash equivalents and restricted cash shown in the statements of cash flows $ 2,327,723 $ 2,256,875 Long-lived assets During the three months ended March 31, 2023, we entered into a new agreement to acquire software, of which $ 48.0 million was financed utilizing a five-year vendor financing arrangement. NOTE 14— ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in the accumulated balances for each component of other comprehensive income (loss) were as follows for the three months ended March 31, 2024 and 2023: Foreign Currency Translation Gains (Losses) Unrealized Gains (Losses) on Hedging Activities Other Accumulated Other Comprehensive Loss (in thousands) Balance at December 31, 2023 $ ( 215,540 ) $ ( 40,859 ) $ ( 2,526 ) $ ( 258,925 ) Other comprehensive income (loss) ( 58,579 ) 20,066 — ( 38,513 ) Balance at March 31, 2024 $ ( 274,119 ) $ ( 20,793 ) $ ( 2,526 ) $ ( 297,438 ) Balance at December 31, 2022 $ ( 380,584 ) $ ( 22,420 ) $ ( 2,965 ) $ ( 405,969 ) Other comprehensive income (loss) 30,889 ( 35,715 ) — ( 4,848 ) Balance at March 31, 2023 $ ( 349,695 ) $ ( 58,135 ) $ ( 2,965 ) $ ( 410,817 ) Other comprehensive income (loss) attributable to noncontrolling interests, which relates only to foreign currency translation, was $( 23.1 ) million and $ 6.4 million for the three months ended March 31, 2024 and 2023, respectively. NOTE 15— SEGMENT INFORMATION We operate in two reportable segments: Merchant Solutions and Issuer Solutions. As described in "Note 3 - Business Disposition," 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 former Consumer Solutions segment is presented below for periods prior to disposition. 24 Table of Contents We evaluate performance and allocate resources based on the operating income of each operating segment. The operating income of each operating segment includes the revenues of the segment less expenses that are directly related to those revenues. Operating overhead, shared costs and share-based compensation costs are included in Corporate. Impairment of goodwill and gains or losses on business dispositions are not included in determining segment operating income. Interest and other income, interest and other expense, income tax expense and equity in income of equity method investments are not allocated to the individual segments. We do not evaluate the performance of or allocate resources to our operating segments using asset data. The accounting policies of the reportable operating segments are the same as those described in our Annual Report on Form 10-K for the year ended December 31, 2023 and our summary of significant accounting policies in "Note 1—Basis of Presentation and Summary of Significant Accounting Policies." Information on segments and reconciliations to consolidated revenues, consolidated operating income and consolidated depreciation and amortization were as follows for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 March 31, 2023 (in thousands) Revenues (1) : Merchant Solutions $ 1,834,094 $ 1,605,610 Issuer Solutions 602,735 570,907 Consumer Solutions — 143,709 Intersegment eliminations ( 16,642 ) ( 27,779 ) Consolidated revenues $ 2,420,187 $ 2,292,447 Operating income (loss) (1) : Merchant Solutions $ 580,438 $ 507,210 Issuer Solutions 106,097 82,810 Consumer Solutions — ( 5,798 ) Corporate ( 234,283 ) ( 282,654 ) Loss on business disposition — ( 244,833 ) Consolidated operating income $ 452,252 $ 56,735 Depreciation and amortization (1) : Merchant Solutions $ 292,333 $ 241,573 Issuer Solutions 163,974 160,853 Corporate 4,829 4,912 Consolidated depreciation and amortization $ 461,136 $ 407,338 (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 Disposition” for further discussion. During the three months ended March 31, 2024 and 2023, operating income included acquisition and integration expenses of $ 78.9 million and $ 101.8 million, respectively, which were primarily included within Corporate expenses. NOTE 16— COMMITMENTS AND CONTINGENCIES Legal Matters We are party to a number of claims and lawsuits incidental to our business. In our opinion, the liabilities, if any, which may ultimately result from the outcome of such matters, individually or in the aggregate, are not expected to have a material adverse effect on our financial position, liquidity, results of operations or cash flows. 25 Table of Contents