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An investment in our common stock involves a high degree of risk.
−Removed: You should consider carefully the following risks and other information contained in this Annual Report on Form 10-K and other SEC filings before you decide whether to buy our common stock.
+Added: You should consider carefully the following risks and other information contained in this Annual Report on Form 10-K and other SEC filings before you decide to buy or sell our common stock.
The risks identified below are not all encompassing but should be considered in establishing an opinion of our future operations.
−Removed: If any of the events or conditions contemplated by the following discussion of risks should occur, our business, financial condition, liquidity, results of operations and/or cash flows could suffer significantly.
+Added: If any of the events or conditions contemplated by the following discussion of risks should occur, our business, financial condition, liquidity, results of operations and cash flows could suffer significantly.
Risks Factors Summary
−Removed: The following is a summary of the principal risks that could materially and adversely affect our business, financial condition, liquidity, results of operations and/or cash flows.
+Added: The following is a summary of the principal risks that could materially and adversely affect our business, financial condition, liquidity, results of operations and cash flows.
Risks Related to Our Business Model and Operations
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• Software and hardware defects, failures, undetected errors and development delays could affect our ability to deliver our services, damage customer relations, expose us to liability and have an adverse effect on our business, financial condition and results of operations.
−Removed: • Our systems or our third-party providers' systems may fail, which could interrupt our service, cause us to lose business, increase our costs and expose us to liability.
+Added: • We depend on relationships with third parties.
+Added: Our systems or our third-party providers' systems may fail, or we may be unable to renew or renegotiate agreements with key suppliers, which could interrupt our service, cause us to lose business, increase our costs and expose us to liability.
• The payments technology industry is highly competitive and highly innovative, and some of our competitors have greater financial and operational resources than we do, which may give them an advantage with respect to the pricing of services offered to customers and the ability to develop new and disruptive technologies.
• In order to remain competitive and to continue to increase our revenues and earnings, we must continually and quickly update our services, a process that could result in higher costs and the loss of revenues, earnings and customers if the new services do not perform as intended or are not accepted in the marketplace.
−Removed: • Our revenues from the sale of services to merchants that accept Visa and Mastercard are dependent upon our continued Visa and Mastercard registrations, financial institution sponsorship and, in some cases, continued membership in certain card networks.
+Added: • Our revenues from the provision of services to merchants that accept Visa and Mastercard are dependent upon our continued Visa and Mastercard registrations, financial institution sponsorship and, in some cases, continued membership in certain card networks.
• We rely on various financial institutions to provide clearing services in connection with our settlement activities.
−Removed: If we are unable to maintain clearing services with these financial institutions and are unable to find a replacement, our business may be adversely affected.
+Added: If we are unable to maintain clearing services with these financial institutions and are unable to find a replacement, our business, financial condition and results of operations may be adversely affected.
• Increased merchant, referral partner, ISO or payment facilitator attrition could cause our financial results to decline.
−Removed: • Our future growth depends in part on the continued expansion within markets in which we already operate, the emergence of new markets, and the continued availability of alliance relationships and strategic acquisition opportunities.
+Added: • Our future growth depends in part on the continued expansion within markets in which we already operate, the emergence of and our entry into new markets and the continued availability of alliance relationships and strategic acquisition and joint venture opportunities.
• There may be a decline in the use of cards and other digital payments as a payment mechanism for consumers or other adverse developments with respect to the card industry in general.
−Removed: • Consolidation among financial institutions or among retail customers, including the merger of our customers with entities that are not our customers or the sale of portfolios by our customers to entities that are not our customers, could affect our financial condition, results of operations and cash flows.
+Added: • Consolidation among financial institutions or among retail customers, including the merger of our customers with entities that are not our customers or the sale of portfolios by our customers to entities that are not our customers, could materially affect our business, financial condition, results of operations and cash flows.
• If we do not renew or renegotiate our agreements on favorable terms with our customers within the Issuer Solutions segment, our business will suffer.
−Removed: The timing of the conversions or deconversions of card portfolios could also affect our revenues and expenses.
+Added: The timing of the conversions or deconversions of card portfolios could also affect the amount and timing of our revenues and expenses.
• We incur chargeback losses when our merchants refuse or cannot reimburse us for chargebacks resolved in favor of their customers.
Any increase in chargebacks not paid by our merchants could adversely affect our business, financial condition, results of operations and cash flows.
−Removed: • Fraud by merchants or others and losses from overdrawn cardholder accounts could have an adverse effect on our financial condition, results of operations and cash flows.
+Added: • Fraud by merchants or others and losses from overdrawn cardholder accounts could have an adverse effect on our business, financial condition, results of operations and cash flows.
• Increases in card network fees may result in the loss of customers and/or a reduction in our earnings.
−Removed: • The integration and conversion of our acquired operations or other future acquisitions, if any, could result in increased operating costs if the anticipated synergies of operating these businesses as one are not achieved, a loss of strategic opportunities if management is distracted by the integration process, and a loss of customers if our service levels drop during or following the integration process.
−Removed: • Our inability to complete certain divestitures or the effects of divesting a business could have a material adverse effect on our business and financial results.
+Added: • The integration and conversion of our acquired operations or other future acquisitions, if any, could result in increased operating costs if the anticipated synergies from the combination are not achieved, a loss of strategic opportunities if management is distracted by the integration process and a loss of customers if our service levels drop during or following the integration process.
+Added: • Our inability to complete certain dispositions or the effects of disposing a business could have a material adverse effect on our business, financial condition and results of operations.
+Added: • We may not realize the anticipated growth benefits and cost savings from, or our business may be disrupted by, our business transformation and reorganization activities.
+Added: Any of the foregoing could adversely affect our business, financial condition and results of operation.
+Added: • Our business may be affected by current and future laws and regulations governing the development, use and deployment of AI technologies, as well as potentially related private litigation.
Legal, Regulatory Compliance and Tax Risks
• Our business is subject to government regulation and oversight.
−Removed: Any new implementation of or changes made to laws, regulations or other industry standards affecting our business in any of the geographic regions in which we operate may require significant development and compliance efforts or have an unfavorable effect on our ability to continue to offer certain services, or on our financial results and our cash flows.
+Added: Any new implementation of or changes made to laws, regulations or other industry standards affecting our business in any of the geographic regions in which we operate may require significant development and compliance efforts or have an unfavorable effect on our ability to continue to offer certain services, which could adversely affect our business, financial condition, results of operations and cash flows.
• New or revised tax regulations, unfavorable resolution of tax contingencies or changes to enacted tax rates could adversely affect our tax expense.
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Financial Risks
−Removed: • We are subject to risks associated with changes in interest rates or currency exchange rates, which could adversely affect our business, financial condition, results of operations and cash flows, and we may not effectively hedge against these risks.
+Added: • We are subject to risks associated with changes in interest rates or currency exchange rates and may not effectively hedge against these risks, which could adversely affect our business, financial condition, results of operations and cash flows.
• A downgrade in the ratings of our debt could restrict our ability to access the debt capital markets and increase our interest costs.
−Removed: • Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business.
+Added: • Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") could have a material adverse effect on our business.
Intellectual Property Risks
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• Our balance sheet includes significant amounts of goodwill and other intangible assets.
−Removed: The impairment of a portion of these assets could negatively affect our business, financial condition and results of operations.
+Added: The impairment of a portion of these assets could adversely affect our business, financial condition and results of operations.
• We may not be able to, or we may decide not to, pay dividends or repurchase shares at a level anticipated by our shareholders, which could reduce shareholder returns.
Risks Related to General Economic Conditions
−Removed: • We are subject to economic and geopolitical risk, health and social events or conditions, the business cycles and credit risk of our customers and the overall level of consumer, business and government spending, which could negatively affect our business, financial condition, results of operations and cash flows.
+Added: • We are subject to economic and geopolitical risk, health and social events or conditions, the business cycles and credit risk of our customers and the overall level of consumer, business and government spending, which could adversely affect our business, financial condition, results of operations and cash flows.
+Added: • Investor and other stakeholder scrutiny related to our sustainability practices, and our disclosed performance and aspirations for these practices, may increase costs and expose us to numerous risks.
General Risk Factors
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and expose us to penalties, fines, liabilities, legal claims and defense costs.
−Removed: In order to provide our services, we process and store sensitive business and personal information, which may include credit and debit card numbers, bank account numbers, social security numbers, driver’s license numbers, names and addresses, and other types of personal information or sensitive business information.
+Added: In order to provide our services, we process and store sensitive business and personal information, which may include credit and debit card numbers, bank account numbers, social security numbers, driver’s license numbers, names and addresses and other types of sensitive personal or business information.
Some of this information is also processed and stored by financial institutions, merchants and other entities, as well as third-party service providers to whom we outsource certain functions, and other agents, such as independent consultants and auditors, which we refer to collectively as our associated third parties.
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To mitigate these risks, we follow a defense-in-depth model for cybersecurity, meaning we proactively seek to employ multiple methods at different layers to defend our systems against intrusion and attack and to protect the data we possess.
−Removed: We have adopted policies and procedures, involving an incident response plan and both the board of directors and management oversight of cybersecurity risks, that we believe are designed to facilitate the identification, assessment and management of those risks including any risks that have the potential to be material.
−Removed: Our information security program establishes technical, physical and administrative controls to maintain the confidentiality, integrity and availability of our information and technical assets.
−Removed: However, we cannot provide any assurance that these cybersecurity risk management processes will be fully complied with or effective and we cannot be certain that these measures or other will always be successful or will always be sufficient to counter, or to rapidly detect, contain, and remediate, all current and emerging technology threats.
−Removed: More particularly, our computer systems and/or our associated third parties’ computer systems have been, and we expect will continue to be, targeted for penetration on a regular basis, and our data protection measures may not prevent unauthorized access.
−Removed: The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, are often difficult to detect and continually evolve and become more sophisticated.
−Removed: Threats to our systems and our associated third parties’ systems can derive from human error, fraud or malice on the part of employees or third parties, including state-sponsored organizations with significant financial and technological resources.
−Removed: In addition, we have experienced and may continue to experience errors, interruptions or delays from computer viruses and other malware or vulnerabilities that could infect our systems or those of our associated third parties.
−Removed: Denial of service, ransomware or other attacks could be launched against us for a variety of purposes, including to interfere with our services or create a diversion for other malicious activities.
−Removed: Our defensive measures may not prevent downtime, unauthorized access or use of sensitive data.
−Removed: We have experienced such incidents in the past, and we cannot guarantee that we will be able to anticipate or detect all attacks or vulnerabilities or implement adequate preventative measures in the future.
−Removed: While we maintain first- and third-party insurance coverage that may cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses.
−Removed: Companies we acquire may require implementation of additional cyber defense methods to align with our standards and, as a result, there may be a period
−Removed: of heightened risk between the acquisition date and the completion of such implementation.
−Removed: Furthermore, certain of our third-party relationships are subject to our vendor management program and are governed by written contracts.
+Added: We have adopted policies and procedures, including an incident response plan and oversight of cybersecurity risks by both the board of directors and management oversight of cybersecurity risks, that we believe are designed to facilitate the identification, assessment and management of those risks, including any risks that have the potential to be material.
+Added: Our information security program includes technical, physical and administrative controls that are designed to maintain the confidentiality, integrity and availability of our information and technical assets.
+Added: However, we cannot provide any assurance that these cybersecurity risk management processes and controls will be fully complied with or effective, and we cannot be certain that these measures or others will always be successful or will always be sufficient to counter, or to rapidly detect, contain and remediate all current and emerging technology threats.
+Added: More particularly, our computer systems and/or our associated third parties’ computer systems have been, and we expect will continue to be, targeted for penetration on a regular basis, and our data protection measures may not prevent, and occasionally have not prevented, unauthorized access.
+Added: The techniques used to obtain unauthorized access, disable or degrade services or sabotage systems change frequently.
+Added: These techniques are often difficult to detect and they continually evolve and may become more sophisticated.
+Added: Threats to our systems and our associated third parties’ systems (such as the use of AI by threat actors in furtherance of cyberattacks) can derive from human error or malicious actions by employees or third parties, including state-sponsored organizations with significant financial and technological resources.
+Added: In addition, we have experienced and may continue to experience system disruptions or delays caused by computer viruses and other malware or vulnerabilities that could infect our systems or those of our associated third parties.
+Added: Denial of service, ransomware or other methods of attacks could be launched against us for a variety of purposes, including to interfere with our services or to create a diversion for other malicious activities.
+Added: Our defensive measures may not prevent downtime, unauthorized access or misuse of sensitive data.
+Added: We have experienced all of the incident types described in this paragraph in the past, and we cannot guarantee that we will be able to detect and prevent all such incidents in the future.
+Added: While we maintain first- and third-party insurance policies that may provide coverage for certain aspects of cybersecurity risks, such insurance coverage may be insufficient to cover all losses resulting from an incident.
+Added: Companies we acquire may also require implementation of additional cyber defense controls or processes to align with our information security program and, as a result, there may be a period of heightened risk between the acquisition date and the completion of such implementation.
+Added: Furthermore, certain of our third-party relationships are subject to our vendor management program and are governed by written contracts that contain requirements relating to information security.
We believe we have designed our risk identification, assessment and management processes and procedures to account for cybersecurity risks associated with our use of third-party service providers.
−Removed: however, we do not control the actions of our associated third parties, and any problems experienced by these third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyberattacks, targeted attacks against our employees and associated third parties and security breaches, could adversely affect our ability to service our customers or otherwise conduct our business.
−Removed: In addition, we impose contractual requirements on our counterparties, including vendors and other third parties, related to the use and security of personal data and other confidential information, along with compliance with applicable privacy and security laws.
−Removed: We cannot provide any assurance that these contractual requirements related to those who have access to this data will be followed or will be adequate to prevent the misuse of this data.
−Removed: We have occasionally received notifications from vendors and other third parties regarding the exposure of or unauthorized access to our data stored on their information systems, and any future misuse or compromise of personal information stored on those systems, or any other failure by a vendor or other third party to abide by our contractual requirements, could expose us to regulatory fines, third-party liability, protracted and costly litigation and, with respect to misuse of the personal information of our customers, lost revenue and reputational harm.
−Removed: Any type of security breach, attack or misuse of data described above or otherwise, whether experienced by us or an associated vendor or other third party, could harm our reputation;
+Added: However, we do not control the actions of our associated third parties, and any disruptions in their services caused by cyberattacks and/or security breaches could adversely affect our ability to service our customers or otherwise conduct our business.
+Added: In addition, we impose contractual requirements on our counterparties, including vendors and other third parties, to comply with applicable privacy and security laws related to the use and security of sensitive or personal information.
+Added: We cannot provide assurances that these contractual requirements will be followed or will be adequate to prevent the misuse of this data.
+Added: We have occasionally received notifications from third parties informing us that our data stored on their systems has been accessed without authorization.
+Added: Any future misuse or compromise of personal information stored on those systems, or any other failure by a vendor, partner or other third party to abide by our contractual requirements, could expose us to regulatory fines, third-party liability, protracted and costly litigation and, with respect to misuse of the personal information of our customers, lost revenue and reputational harm.
+Added: Any type of security breach, cyberattack, unintentional or intentional disclosure of sensitive business and personal information or misuse of data described above or otherwise, whether experienced by us or an associated third party, could harm our reputation;
deter existing and prospective customers from using our services or from making digital payments generally;
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and adversely affect our continued card network registration or membership and financial institution sponsorship.
−Removed: Removal from the networks' lists of Payment Card Industry Data Security Standard compliant service providers could mean that existing customers, sales partners or other third parties could cease using or referring others to our services.
+Added: Removal from the networks' lists of Payment Card Industry Data Security Standard ("PCI DSS") compliant service providers could mean that existing customers, sales partners or other third parties could cease using or referring others to our services.
Also, prospective merchant customers, financial institutions, sales partners or other third parties could choose to terminate negotiations with us, or delay or choose not to consider us for their processing needs.
−Removed: In addition, the card networks could refuse to allow us to process through their networks.
−Removed: Any of the foregoing could adversely affect our business, financial condition or results of operation.
+Added: In addition, as a global company, we are increasingly subject to complex and varied cybersecurity incident reporting requirements across numerous jurisdictions.
+Added: With the often short timeframes required for cyber incident reporting, there is a risk that the Company or its associated third parties will fail to meet the reporting deadlines for any given incident.
+Added: Regardless of where an incident occurs, it may take considerable time for us to investigate and evaluate the full impact of a cybersecurity incident, particularly in the case of a sophisticated attack.
+Added: These factors may inhibit our ability to provide prompt, full and reliable information about the cybersecurity incident to our customers, partners and regulators, as well as to the public.
+Added: If we are unable to comply with reporting requirements, we could be subject to monetary damages, civil and criminal penalties, litigation, investigations and proceedings and damage to our reputation.
+Added: Any of the foregoing could adversely affect our business, financial condition and results of operation.
Software and hardware defects, failures, undetected errors and development delays could affect our ability to deliver our services, damage customer relations, expose us to liability and have an adverse effect on our business, financial condition and results of operations.
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In addition, our insurance may not be adequate to compensate us for all losses or failures that may occur.
−Removed: Our systems or our third-party providers' systems may fail, which could interrupt our service, cause us to lose business, increase our costs and expose us to liability.
+Added: We depend on relationships with third parties.
+Added: Our systems or our third-party providers' systems may fail, or we may be unable to renew or renegotiate agreements with key suppliers, which could interrupt our service, cause us to lose business, increase our costs and expose us to liability.
We depend on the efficient and uninterrupted operation of our computer systems, software, data centers and telecommunications networks, as well as the systems and services of third parties.
−Removed: A system outage or data loss could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Not only could we suffer damage to our reputation in the event of a system outage or data loss, but we could also be liable to third parties.
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unauthorized entry;
−Removed: malicious attack;
+Added: malicious attacks;
hardware failure;
and computer viruses or other defects.
−Removed: We have been and continue to be exposed to defects in our systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures, or other difficulties (including those related to system relocation), which could result in loss of revenues, loss of customers, loss of
−Removed: merchant and cardholder data, harm to our business or reputation, exposure to fraud losses or other liabilities, negative publicity, additional operating and development costs, litigation expenses, fines and other sanctions imposed by card networks or regulators, and/or diversion of technical and other resources.
+Added: We have been and continue to be exposed to defects in our systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures, or other difficulties (including those related to system relocation), which could result in loss of revenues, loss of customers, loss of merchant and cardholder data, harm to our business or reputation, exposure to fraud losses or other liabilities, negative publicity, additional operating and development costs, litigation expenses, fines and other sanctions imposed by card networks or regulators and/or diversion of technical and other resources.
There is also a risk that third-party suppliers of hardware and infrastructure required to support our employee productivity or our suppliers could be affected by supply chain disruptions, such as manufacturing and shipping delays.
An extended supply chain disruption could also affect the delivery of our services.
+Added: Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: In addition, if we are unable to renew or renegotiate our agreements with key suppliers on favorable terms to us or at all, or find alternative third-party providers, our services may be affected.
+Added: Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The payments technology industry is highly competitive and highly innovative, and some of our competitors have greater financial and operational resources than we do, which may give them an advantage with respect to the pricing of services offered to customers and the ability to develop new and disruptive technologies.
We operate in the payments technology industry, which is highly competitive and highly innovative.
−Removed: In this industry, our primary competitors include other independent payment processors, credit card processing firms, third-party card processing software institutions, as well as financial institutions, ISOs, payment facilitators, prepaid programs managers and, potentially, card networks.
+Added: In this industry, our primary competitors include other independent payment processors, credit card processing firms, third-party card processing software institutions, as well as financial institutions, ISOs, payment facilitators and, potentially, card networks.
Some of our current and potential competitors may be larger than we are and have greater financial and operational resources or brand recognition than we have.
Our competitors that are financial institutions or subsidiaries of financial institutions do not incur the costs associated with being sponsored by a direct member for participation in the card networks, as we do in certain jurisdictions, and may be able to settle transactions more quickly for merchants than we can.
−Removed: These financial institutions may also provide payment processing services to merchants at lower margins or at a loss in order to generate banking fees from the merchants.
+Added: These financial institutions may also provide payment processing services to merchants at lower margins or at a loss in order to generate banking fees from such merchants.
It is also possible that larger financial institutions, including some who are customers of ours, could decide to perform in-house some or all of the services that we currently provide or could provide.
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These projects carry the risks associated with any development effort, including cost overruns, delays in delivery and performance problems, which could in turn lead to impairment of long-lived assets associated with projects.
−Removed: In the payments technology markets, these risks are even more acute.
+Added: In the payments technology industry, these risks are even more acute.
Any delay in the delivery of new services or the failure to differentiate our services could render our services less desirable to customers, or possibly even obsolete.
−Removed: Furthermore, as the market for alternative payment processing services evolves, it may develop too rapidly or not rapidly enough for us to recover the costs we have incurred in developing new services targeted at this market.
−Removed: In addition, certain of the services we deliver to the payments technology market are designed to process very complex transactions and deliver reports and other information on those transactions, all at very high volumes and processing speeds.
−Removed: Any failure to deliver an effective, accurate, compliant and secure product or any performance issue that arises with a new product or service could result in significant processing or reporting errors or other losses.
+Added: Furthermore, as the market for alternative payment processing services evolves, it may develop too rapidly or not rapidly enough for us to recover the costs we have incurred in developing new services targeted at this market, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: In addition, certain of the services we deliver to the payments technology industry are designed to process very complex transactions and deliver reports and other information on those transactions, all at very high volumes and processing speeds.
+Added: Any failure to deliver effective, accurate, compliant and secure services or any performance issue that arises with a new service could result in significant processing or reporting errors or other losses.
We rely in part on third parties, including some of our competitors and potential competitors, for the development of and access to new technologies.
If development efforts are required or if promised new services are not delivered timely to our customers or do not perform as anticipated, we could incur higher costs, a loss of revenues and lower earnings and cash flows.
−Removed: Our revenues from the sale of services to merchants that accept Visa and Mastercard are dependent upon our continued Visa and Mastercard registrations, financial institution sponsorship and, in some cases, continued membership in certain card networks.
+Added: Our revenues from the provision of services to merchants that accept Visa and Mastercard are dependent upon our continued Visa and Mastercard registrations, financial institution sponsorship and, in some cases, continued membership in certain card networks.
In order to provide our Visa and Mastercard transaction processing services, we must be either a direct member or registered as a merchant processor or service provider of Visa and Mastercard, respectively.
Registration as a merchant processor or service provider is dependent upon our being sponsored by members of each organization in certain jurisdictions.
−Removed: If our sponsor financial institution in any market should stop providing sponsorship for us, we would need to find another financial institution to provide those services or we would need to attain direct membership with the card networks, either of which could prove to be difficult and expensive.
−Removed: Relatedly, transitioning to a new sponsor financial institution requires technical development work, which takes time.
−Removed: If we were unable to find a replacement financial institution to provide sponsorship or attain direct membership or unable to transition to a new sponsor financial institution in a timely manner, we may no longer be able to provide processing services to affected customers and potential customers in that market, which would negatively affect our revenues, earnings and cash flows.
+Added: If a sponsor financial institution in any of the markets in which we currently, or in the future may, operate should stop providing sponsorship for us, we would need to find another financial institution to provide those services or we would need to attain direct membership with the card networks, either of which could prove to be difficult and expensive.
+Added: Relatedly, transitioning to a new sponsor financial institution requires technical development work, which takes time and investments.
+Added: If we were unable to find a replacement financial institution to provide sponsorship or transition to a new sponsor financial institution in a timely manner or attain direct membership, we may no longer be able to provide processing services to affected and potential customers in that market, which could adversely affect our business, financial condition, results of operations and cash flows.
Furthermore, some agreements with our financial institution sponsors give them substantial discretion in approving certain aspects of our business practices, including our solicitation, application and qualification procedures for merchants and the terms of our agreements with merchants.
Our sponsors' discretionary actions under these agreements could have a material adverse effect on our business, financial condition and results of operations.
−Removed: In connection with direct membership, the rules and regulations of various card associations and networks prescribe certain capital requirements.
+Added: In connection with direct membership, the rules and regulations of various card associations and card networks prescribe certain capital requirements.
Any increase in the capital level required would limit our use of capital for other purposes.
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We rely on various financial institutions to provide clearing services in connection with our settlement activities.
−Removed: If we are unable to maintain clearing services with these financial institutions and are unable to find a replacement, our business may be adversely affected.
+Added: If we are unable to maintain clearing services with these financial institutions and are unable to find a replacement, our business, financial condition and results of operations may be adversely affected.
We rely on various financial institutions to provide clearing services in connection with our settlement activities.
If such financial institutions should stop providing clearing services, we would have to find other financial institutions to provide those services.
−Removed: If we were unable to find a replacement financial institution we may no longer be able to provide processing services to certain customers, which could negatively affect our financial condition, results of operations and cash flows.
+Added: If we were unable to find a replacement financial institution we may no longer be able to provide processing services to certain customers, which could adversely affect our business, financial condition, results of operations and cash flows.
Increased merchant, referral partner, ISO or payment facilitator attrition could cause our financial results to decline.
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Higher than expected attrition could negatively affect our results, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: Our future growth depends in part on the continued expansion within markets in which we already operate, the emergence of new markets, and the continued availability of alliance relationships and strategic acquisition opportunities.
+Added: Our future growth depends in part on the continued expansion within markets in which we already operate, the emergence of and our entry into new markets and the continued availability of alliance relationships and strategic acquisition and joint venture opportunities.
Our future growth and profitability depend upon our continued expansion within the markets in which we currently operate, the further expansion of these markets, the emergence of other markets for payment technology and software solutions and our ability to penetrate these markets.
−Removed: As part of our strategy to achieve this expansion, we look for acquisition opportunities, investments and alliance relationships with other businesses, including referral partners, ISOs and other financial institutions, that will allow us to increase our market penetration, technological capabilities, product offerings and distribution capabilities.
−Removed: We may not be able to successfully identify suitable acquisition, investment and alliance candidates in the future, and if we do, they may not provide us with the value and benefits we anticipate, which may inhibit our growth prospects and adversely affect our business, financial condition and results of operations.
+Added: As part of our strategy to achieve this expansion, we look for acquisition and joint venture opportunities, investments and alliance relationships with other businesses, including referral partners, ISOs and other financial institutions, that will allow us to increase our market penetration, technological capabilities, service offerings and distribution capabilities.
+Added: We may not be able to successfully identify suitable acquisition, joint venture, investment and alliance candidates in the future, and if we do, they may not provide us with the value and benefits we anticipate, which may inhibit our growth prospects and adversely affect our business, financial condition and results of operations.
Our expansion into new markets is also dependent upon our ability to apply our existing technology or to develop new applications to meet the particular service needs of each new market.
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and countries in Europe and the Asia-Pacific region, are considering or have adopted restrictions on foreign investments.
−Removed: Governments may continue to adopt or tighten economic sanctions, tariffs or trade restrictions of this nature, and such restrictions could negatively affect our business and financial results.
−Removed: Furthermore, our future success will depend, in part, upon our ability to manage our expanded business, which could pose substantial challenges for our management, including challenges related to the management and monitoring of new operations and associated costs and complexity.
+Added: Governments may continue to adopt or tighten economic sanctions, tariffs or trade restrictions of this nature, and such restrictions could adversely affect our business, financial condition and results of operations.
+Added: Furthermore, our future success will depend, in part, upon our ability to integrate and manage our expanded business, which could pose substantial challenges for our management team, including challenges related to the management and monitoring of new operations and associated costs and complexity.
We may also face increased scrutiny from governmental authorities if we become a larger business.
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In each case, our business, financial condition, results of operations and cash flows could be adversely affected.
−Removed: Consolidation among financial institutions or among retail customers, including the merger of our customers with entities that are not our customers or the sale of portfolios by our customers to entities that are not our customers, could materially affect our financial condition, results of operations and cash flows.
+Added: Consolidation among financial institutions or among retail customers, including the merger of our customers with entities that are not our customers or the sale of portfolios by our customers to entities that are not our customers, could materially affect our business, financial condition, results of operations and cash flows.
Consolidation among financial institutions, particularly in the area of credit card operations and consolidation in the retail industry, is a risk that could negatively affect our existing customer agreements and future revenues.
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Continued consolidation among financial institutions could increase the bargaining power of our current and future customers and further increase our customer concentration.
−Removed: Consolidation among financial institutions and retail customers and the resulting loss of any significant number of customers by us could have a material adverse effect on our financial condition, results of operations and cash flows.
+Added: Consolidation among financial institutions and retail customers and the resulting loss of any significant number of customers by us could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we do not renew or renegotiate our agreements on favorable terms with our customers within the Issuer Solutions segment, our business will suffer.
−Removed: The timing of the conversions or deconversions of card portfolios could also affect our revenues and expenses.
+Added: The timing of the conversions or deconversions of card portfolios could also affect the amount and timing of our revenues and expenses.
A significant amount of our Issuer Solutions segment revenues is derived from long-term contracts with large financial institutions and other financial service providers.
−Removed: The financial position of these customers and their willingness to pay for our
−Removed: services are affected by general market conditions, competitive pressures and operating margins within their industries.
+Added: The financial position of these customers and their willingness to pay for our services are affected by general market conditions, competitive pressures and operating margins within their industries.
When our long-term contracts near expiration, the renewal or renegotiation of the contract presents our customers with the opportunity to consider other providers, transition all or a portion of the services we provide in-house or seek lower rates for our services.
−Removed: Additionally, as we modernize the technology platform we use to deliver services, some Issuer Solutions customers may not be agreeable to our modernization effort and may choose to end their contracts prematurely, or not renew their contracts as a result.
−Removed: The loss of our contracts with existing customers or renegotiation of contracts at reduced rates or with fewer services could have a material adverse effect on our financial condition, results of operations and cash flows.
−Removed: In addition, the timing of the conversion of card portfolios of new payment processing customers to our processing systems and the deconversion of existing customers to other systems could affect our revenues and expenses.
−Removed: Due to a variety of factors, conversions and deconversions may not occur as scheduled, and this may have a material adverse effect on our financial condition, results of operations and cash flows.
+Added: Additionally, as we modernize the technology platform we use to deliver services, some Issuer Solutions customers may not be agreeable to our modernization efforts and may choose to end their contracts prematurely, or not renew their contracts as a result.
+Added: The loss of our contracts with existing customers or renegotiation of contracts at reduced rates or with fewer services could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: In addition, the timing of the conversion of card portfolios of new payment processing customers to our processing systems and the deconversion of existing customers to other systems could affect the amount and timing of our revenues and expenses.
+Added: Due to a variety of factors, conversions and deconversions may not occur as scheduled, and this may have a material adverse effect on our business, financial condition, results of operations and cash flows.
We incur chargeback losses when our merchants refuse or cannot reimburse us for chargebacks resolved in favor of their customers.
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Notwithstanding our programs and policies for managing credit risk, it is possible that a default on such obligations by one or more of our merchants could have a material adverse effect on our business.
−Removed: Fraud by merchants or others and losses from overdrawn cardholder accounts could have an adverse effect on our financial condition, results of operations and cash flows.
+Added: Fraud by merchants or others and losses from overdrawn cardholder accounts could have an adverse effect on our business, financial condition, results of operations and cash flows.
We have potential liability for fraudulent digital payment transactions or credits initiated by merchants or others.
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It is possible that incidents of fraud could increase in the future.
−Removed: Increases in chargebacks or other liabilities could have a material adverse effect on our financial condition, results of operations and cash flows.
+Added: Increases in chargebacks or other liabilities could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: As of December 31, 2024, our allowance for credit losses increased to $24.7 million from $19.0 million as of December 31, 2023, a 30% increase.
The accompanying consolidated financial statements reflect management’s estimates and assumptions related to allowances for transaction and credit losses utilizing the most currently available information.
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If competitive practices prevent us from passing along the higher fees to our merchant customers in the future, we may have to absorb all or a portion of such increases, thereby reducing our earnings.
−Removed: The integration and conversion of our acquired operations or other future acquisitions, if any, could result in increased operating costs if the anticipated synergies of operating these businesses as one are not achieved, a loss of strategic opportunities if management is distracted by the integration process, and a loss of customers if our service levels drop during or following the integration process.
+Added: The integration and conversion of our acquired operations or other future acquisitions, if any, could result in increased operating costs if the anticipated synergies from the combination are not achieved, a loss of strategic opportunities if management is distracted by the integration process and a loss of customers if our service levels drop during or following the integration process.
The acquisition, integration, and conversion of businesses and the formation or operation of alliances or joint ventures and other partnering arrangements involve a number of risks.
−Removed: Core risks are in the area of valuation (negotiating a fair price for the business based on sometimes limited diligence) and integration and conversion (managing the complex process of integrating
−Removed: the acquired company's people, services, information security and technology and other assets to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition).
−Removed: In addition, international acquisitions and alliances often involve additional or increased risks, including, for example:
+Added: Core risks are in the area of valuation (negotiating a fair price for the business based on, in certain cases, limited diligence) and integration and conversion (managing the complex process of integrating the acquired company's people, services, information security and technology and other assets to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition).
+Added: In addition, international acquisitions, joint ventures and alliances often involve additional or increased risks, including, for example:
managing geographically separated organizations, systems, and facilities;
−Removed: integrating personnel with diverse business backgrounds and organizational cultures;
+Added: integrating personnel with diverse cultural and business backgrounds and organizational cultures;
complying with foreign regulatory requirements;
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and general economic and political conditions.
+Added: See “—Risks Related to General Economic Conditions—We are subject to economic and geopolitical risk, health and social events or conditions, the business cycles and credit risk of our customers and the overall level of consumer, business and government spending, which could adversely affect our business, financial condition, results of operations and cash flows.” for further information about how general economic conditions could adversely affect our business, financial condition, results of operations and cash flows.
If the integration and conversion process does not proceed smoothly, the following factors, among others, could reduce our revenues and earnings, increase our operating costs and result in us not achieving projected synergies:
−Removed: • If we are unable to successfully integrate the benefits plans, duties and responsibilities, and other factors of interest to the management and employees of the acquired business, we could lose employees to our competitors in the region, which could significantly affect our ability to operate the business and complete the integration;
+Added: • If we are unable to successfully integrate the benefits plans, duties and responsibilities, and other factors of interest to the management and employees of the acquired business, we could lose employees to our competitors in the region, which could significantly affect our ability to operate the business effectively and complete the integration;
• If the integration process causes any delays with the delivery of our services, or the quality of those services, we could lose customers to our competitors;
−Removed: • The acquisition may otherwise cause disruption to the acquired company’s business and operations and relationships with financial institution sponsors, customers, merchants, employees and other partners;
−Removed: • The acquisition and the related integration could divert the attention of our management from other strategic matters including possible acquisitions and alliances, planning for new product development or expansion into new markets for payments technology and software solutions;
−Removed: • The costs related to the integration of the acquired company’s business and operations into ours may be greater than anticipated.
−Removed: Our inability to complete certain divestitures or the effects of divesting a business could have a material adverse effect on our business and financial results.
−Removed: From time-to-time, we may divest businesses that do not meet our strategic objectives.
−Removed: We may not be able to complete desired divestitures on terms favorable to us.
+Added: • The acquisition or joint venture may otherwise cause disruption to, as applicable, the acquired company’s or our joint venture partners' business and operations and relationships with financial institution sponsors, customers, merchants, employees and other partners;
+Added: • The acquisition or joint venture and the related integration could divert the attention of our management from other strategic matters;
+Added: • The data security, cybersecurity and operational resilience posture of the acquired entities, joint ventures or companies we invest in or partner with, may not be adequate and may be more susceptible to a system failure, service disruption or cybersecurity incident or attack;
+Added: • The costs related to the integration of the acquired business and operations into ours may be greater than anticipated.
+Added: Our inability to complete certain dispositions or the effects of disposing a business could have a material adverse effect on our business, financial condition and results of operations.
+Added: From time to time, we may dispose of businesses that do not meet our strategic objectives.
+Added: We may not be able to complete planned or desired dispositions on terms favorable to us.
Losses on the sales of, or lost operating income from, those businesses could negatively affect our profitability and margins.
−Removed: Moreover, we have incurred and in the future may incur asset impairment charges related to potential divestitures that reduce our profitability.
−Removed: Our divestiture activities may also present financial, managerial, and operational risks.
+Added: Moreover, we have incurred and in the future may incur asset impairment charges related to potential dispositions that reduce our profitability.
+Added: Our disposition activities may also present financial, managerial, and operational risks.
Those risks include diversion of management attention from our other businesses, difficulties separating personnel and systems, possible need for providing transition services to buyers, adverse effects on existing business relationships with suppliers and customers and indemnities and potential disputes with the buyers.
−Removed: Any of these factors could adversely affect our financial condition and results of operations.
+Added: Any of these factors could adversely affect our business, financial condition and results of operations.
+Added: We may not realize the anticipated growth benefits and cost savings from, or our business may be disrupted by, our business transformation and reorganization activities.
+Added: Any of the foregoing could adversely affect our business, financial condition and results of operation.
+Added: We are streamlining and simplifying our strategy, organization and operating environment through a transformation program to deliver a global unified operating company.
+Added: These transformation activities began in the third quarter of 2024, and are expected to continue over the next few years.
+Added: Our strategic initiatives may not deliver the expected benefits within the anticipated timeframes.
+Added: In addition, these efforts may disrupt our business activities, which could adversely affect our business, financial condition and results of operation.
+Added: Our ability to achieve the anticipated benefits from these actions within the expected timeframe is subject to many estimates and assumptions, some of which are beyond our control.
+Added: If these estimates and assumptions are incorrect, if we experience delays, or if other unforeseen events occur, our business, financial condition and results of operation could be adversely affected.
+Added: Our business may be affected by current and future laws and regulations governing the development, use and deployment of AI technologies, as well as potentially related private litigation.
+Added: Our development and use of AI technology in our operations remains in the early phases.
+Added: While we intend to develop and use AI responsibly and attempt to mitigate ethical and legal issues presented by its use, we may ultimately be unsuccessful in identifying or resolving these issues before they arise.
+Added: AI technologies are complex and rapidly evolving, and the technologies that we develop or use may ultimately be flawed.
+Added: Moreover, AI technology is subject to rapidly evolving domestic and international laws and regulations, which could impose significant costs and obligations on us.
+Added: As a result, our ability to leverage AI could be restricted by significant costs and costly legal requirements, which could adversely affect our business, financial condition and results of operations.
Legal, Regulatory Compliance and Tax Risks
Our business is subject to government regulation and oversight.
−Removed: Any new implementation of or changes made to laws, regulations or other industry standards affecting our business in any of the geographic regions in which we operate may require significant development and compliance efforts or have an unfavorable effect on our ability to continue to offer certain services, or on our financial results and our cash flows.
+Added: Any new implementation of or changes made to laws, regulations or other industry standards affecting our business in any of the geographic regions in which we operate may require significant development and compliance efforts or have an unfavorable effect on our ability to continue to offer certain services, which could adversely affect our business, financial condition, results of operations and cash flows.
As a payments technology company, our business is affected by laws and complex regulations and examinations that affect us and our industry in the countries in which we operate.
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Any such designation would result in increased regulatory burdens on our business, which increases our risk profile and may have an adverse effect on our business, financial condition, results of operations and cash flows.
+Added: Additionally, interchange and/or other processing fees have recently become the subject of newly enacted and/or proposed new legislation that seeks to limit the application of interchange and/or other processing fees to portions of transactions processed via credit or debit.
+Added: Such legislation would add significant complexity to existing systems and processes and/or would require code development and technological changes, the cost of which may not be recouped.
+Added: The inability to apply interchange and/or other processing fees to portions of transactions could negatively affect the economic opportunity associated with such transactions and result in an adverse effect to our business, financial condition, results of operations and cash flows.
Because we directly or indirectly offer or provide financial services to consumers, we are subject to prohibitions against unfair, deceptive, or abusive acts or practices under the Dodd-Frank Act.
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Noncompliance with these regulations could lead to substantial regulatory fines and penalties or damages from private causes of action.
−Removed: The effect of the regulations could be detrimental to our financial condition.
+Added: The effect of such regulations could adversely affect our business, financial condition, results of operations and cash flows.
In addition, we and our sponsor financial institutions are subject to the laws and regulations enforced by the Office of Foreign Assets Control, which prohibit U.S.
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Furthermore, certain of our businesses are regulated as money transmitters or otherwise require licensing in one or more states or jurisdictions, subjecting us to various licensing, supervisory and other requirements.
−Removed: Continuing developments in privacy and data protection regulation globally, combined with the rapid pace of technology innovation, have created risks and operational challenges for many of our business activities as described in "Item 1 - Business." It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data privacy practices or operations model, which could result in potential liability for fines, damages or a need to incur substantial costs to modify our operations.
+Added: Continuing developments in privacy and data protection regulation globally, combined with the rapid pace of technology innovation, have created risks and operational challenges for many of our business activities as described in "Item 1 - Business" of this Annual Report on Form 10-K.
+Added: It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data privacy practices or operations model, which could result in potential fines, damages or a need to incur substantial costs to modify our operations.
Compliance with these laws and regulations can be costly and time consuming, adding a layer of complexity to business practices and innovation.
−Removed: As with other regulatory schemes, our failure to comply could result in public or private enforcement action and accompanying litigation costs, losses, fines and penalties, which could adversely affect our business, financial condition, results of operations and cash flows.
+Added: Our failure to comply could result in public or private enforcement action and accompanying litigation costs, losses, fines and penalties, which could adversely affect our business, financial condition, results of operations and cash flows.
In addition, U.S.
−Removed: banking agencies and the SEC have adopted or proposed enhanced cyber risk management standards that could apply to us and our financial institution clients and that would address cyber risk governance and management, management of internal and external dependencies, and incident response, cyber resilience and situational awareness.
−Removed: Several states and foreign countries also have adopted or proposed new privacy and cybersecurity laws targeting these issues.
−Removed: Legislation and regulations on cybersecurity, data privacy and data localization may compel us to enhance or modify our systems, invest in new systems or alter our business practices or our policies on data governance and privacy.
−Removed: If any of these outcomes were to occur, our operational costs could increase significantly.
−Removed: The rise in the use of generative artificial intelligence has dramatically altered the corporate landscape.
−Removed: Incorporating artificial intelligence, including machine learning technologies, into our businesses presents numerous risks and uncertainties.
−Removed: Furthermore, the global regulatory framework has not kept pace with the rapid developments in the generative artificial intelligence technology field, creating uncertainties regarding compliance with upcoming laws and regulations.
−Removed: Beyond legal considerations in the development and deployment of these models there exists an ethical consideration given the potential risk of generating misleading or harmful content.
−Removed: The unpredictable nature of outputs further amplifies this risk, potentially leading to unintended consequences and biases.
−Removed: Additionally, the absence of clear requirements pertaining to explainability and the data used to train these models, introduces the risk of intellectual property disputes, including the inability to protect or potential infringement claims regarding the artificially generated content.
−Removed: We are exploring opportunities to expand our portfolio with artificial intelligence capabilities to strengthen our market position, amplify our teams' capabilities, and enhance our customers'
−Removed: If we are unsuccessful in doing so, we may have a competitive disadvantage in developing new products and operating our business and our customers may prefer different solutions.
−Removed: Changes to legal rules and regulations, or interpretation or enforcement thereof, even if not directed at us, may require significant efforts to change our systems and services and may require changes to how we price our services to customers, adversely affecting our business.
−Removed: Even an inadvertent failure to comply with laws and regulations, as well as rapidly evolving social expectations of corporate fairness, could damage our business or our reputation.
−Removed: As varying or conflicting regulations come into existence across the jurisdictions in which we operate, we may have difficulty aligning our operations to comply with all applicable laws.
+Added: banking agencies and the SEC have adopted or proposed enhanced cybersecurity risk management rules and/or standards that could apply to us and our financial institution clients and that address cybersecurity risk governance and management, management of internal and external dependencies, and incident response, cyber resilience and situational awareness.
+Added: Several states and foreign countries also have adopted or proposed new privacy and cybersecurity laws covering these issues.
+Added: Legislation and regulations on cybersecurity, data privacy and data localization may compel us to enhance or modify our systems, invest in new systems or alter our business practices or our policies on data governance, security and privacy.
+Added: If any of these laws, rules or standards are applicable to us, our operational costs could increase significantly.
+Added: The rise in the use of generative AI has dramatically altered the corporate landscape.
+Added: Incorporating AI, including machine learning technologies, into our businesses presents numerous risks and uncertainties.
+Added: Furthermore, the global regulatory framework has not kept pace with the rapid developments in generative AI technology which has created uncertainties regarding compliance with applicable laws, rules and regulations.
+Added: Aside from legal considerations regarding the development and deployment of AI technology, ethical considerations also exist given the potential risk of generating misleading or harmful content.
+Added: The unpredictable nature of AI-generated content further amplifies the risk of unintended consequences and biases.
+Added: Additionally, without clear requirements to explain AI-generated content and/or the data used to train AI models, there is a risk of intellectual property disputes, including those involving the protection or infringement of AI-generated content.
+Added: We are exploring opportunities to expand our portfolio with AI capabilities to strengthen our market position, expand our teams' technological capabilities, and enhance our customers' experiences.
+Added: If we are unsuccessful in doing so, we may have a competitive disadvantage in developing new solutions and operating our business, and, as a result, our customers may prefer different solutions.
+Added: See "—Risks Related to Our Business Model and Operations—Our business may be affected by current and future laws and regulations governing the development, use and deployment of AI technologies, as well as potentially related private litigation” for further information about the risks of the use and deployment of AI technologies.
+Added: Changes to laws and regulations, or interpretation or enforcement thereof, even if we are not involved, may adversely affect our business by requiring significant efforts to change our systems and services requiring changes to how we price our services to customers.
+Added: We may have difficulty aligning our operations to comply with varying or conflicting laws, rules and regulations.
+Added: A failure to comply with laws, rules and regulations, even if inadvertent, and social expectations of corporate fairness relating to AI, could damage our business or our reputation.
New or revised tax regulations, unfavorable resolution of tax contingencies or changes to enacted tax rates could adversely affect our tax expense.
Changes in tax laws or their interpretations could result in changes to enacted tax rates and may require complex computations to be performed that were not previously required, significant judgments to be made in interpretation of the new or revised tax regulations and significant estimates in calculations, as well as the preparation and analysis of information not previously relevant or regularly produced.
−Removed: Future changes in enacted tax rates could negatively affect our results of operations.
−Removed: In December 2022, the EU Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development Pillar Two Framework.
−Removed: The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive.
−Removed: A significant number of other countries are expected to implement similar legislation with varying effective dates in the future.
−Removed: We are continuing to evaluate the potential effect on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries;
−Removed: however, we do not expect the directive to have a material effect on our financial condition or results of operations.
+Added: Future changes in enacted tax rates could adversely affect our business, financial condition, results of operations and cash flows.
+Added: In 2024, additional jurisdictions globally enacted local legislation formally adopting the Global Anti-Base Erosion Model Rules ("Pillar Two"), which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development ("OECD") Pillar Two Framework.
+Added: The effective dates are generally January 1, 2024, and January 1, 2025, for different aspects of the rules and vary by jurisdiction.
+Added: Additional jurisdictions are expected to implement the model rules under local law in the future, with varying effective dates.
+Added: We are continuing to evaluate the potential effect on future periods of the Pillar Two implementation, pending legislative adoption by additional individual countries and the ongoing issuance of additional administrative guidance by the OECD.
Our tax returns and positions are subject to review and audit by federal, state, local and international taxing authorities.
−Removed: An unfavorable outcome to a tax audit could result in higher tax expense, thereby negatively affecting our results of operations and cash flows.
−Removed: We have recognized estimated liabilities on the balance sheet for material known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the proper tax treatment of the item.
−Removed: These liabilities reflect what we believe to be reasonable assumptions as to the likely final resolution of each issue if raised by a taxing authority.
−Removed: While we believe that the liabilities are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be finally resolved at a financial amount not significantly more than any related liability on the balance sheet.
+Added: An unfavorable outcome to a tax audit could result in higher tax expense, thereby adversely affecting our business, financial condition, results of operations and cash flows.
+Added: We exercise significant judgment and make estimates that we believe to be reasonable in calculating our worldwide provision for income taxes and other tax liabilities.
+Added: However, relevant tax authorities may disagree with our estimates, interpretations or tax treatment of certain material items.
+Added: Failure to sustain our position in these matters could adversely affect our business, financial condition, results of operations and cash flows.
Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk.
We operate in a rapidly changing industry.
−Removed: Accordingly, our risk management policies and procedures may not be fully effective to identify, monitor and manage our risks.
+Added: Accordingly, our current risk management policies and procedures may not be fully effective in identifying, monitoring and managing our risks.
If our policies and procedures are not fully effective, or if we are not always successful in identifying and mitigating all risks to which we are or may become exposed, we may suffer uninsured liability, harm to our reputation or be subject to litigation or regulatory actions that could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Financial Risks
−Removed: We are subject to risks associated with changes in interest rates or currency exchange rates, which could adversely affect our business, financial condition, results of operations and cash flows, and we may not effectively hedge against these risks.
+Added: We are subject to risks associated with changes in interest rates or currency exchange rates and may not effectively hedge against these risks, which could adversely affect our business, financial condition, results of operations and cash flows.
A portion of our indebtedness bears interest at a variable rate, and we may incur additional variable-rate indebtedness in the future.
−Removed: Elevated interest rates could increase our cost of debt, and reduce our operating cash flows, limit options to refinance existing debt on favorable terms or at all, and could hinder our ability to fund our operations, capital expenditures, acquisitions, share repurchases or dividends.
+Added: Elevated interest rates could increase our cost of debt, and reduce our operating cash flows, limit options to refinance existing debt on favorable terms or at all, and could hinder our ability to fund our operations, capital expenditures, acquisitions or joint ventures, share repurchases or dividends.
We are also subject to risks related to the changes in currency exchange rates as a result of our investments in foreign operations and from revenues generated in currencies other than our reporting currency, the U.S.
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dollars or limit our ability to freely move currency in or out of particular jurisdictions.
−Removed: The occurrence of any of these factors could decrease the value of revenues we receive from our international operations and have a material adverse effect on our business.
+Added: The occurrence of any of these factors could decrease the value of revenues we receive from our international operations and have a material adverse effect on our business, financial condition, results of operations and cash flows.
We may seek to reduce our exposure to fluctuations in interest rates or currency exchange rates through the use of hedging arrangements.
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Additionally, our revolving credit facility includes an increase in interest rates if the ratings for our debt are downgraded.
−Removed: Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business.
+Added: Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business.
Section 404 of the Sarbanes-Oxley Act requires us to evaluate annually the effectiveness of our internal control over financial reporting as of the end of each year and to include a management report assessing the effectiveness of our internal control over financial reporting in our annual report.
−Removed: If we fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting.
+Added: If we fail to maintain the adequacy of our internal controls, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting.
Furthermore, this assessment may be complicated by any acquisitions we have completed or may complete.
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As such, our internal control over financial reporting could be materially affected, or is reasonably likely to be materially affected, by the internal control and procedures of our member sponsors in these markets.
−Removed: While we continue to dedicate resources and management time to ensure that we have effective internal control over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on our ability to timely generate accurate financial statements in conformity with accounting principles generally accepted in the United States, on the market's perception of our business and on our stock price.
+Added: While we continue to dedicate resources and management time to ensure that we have effective internal control over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on our ability to timely generate accurate financial statements in conformity with accounting principles generally accepted in the United States, and, resultingly, on the market's perception of our business and on our stock price.
Intellectual Property Risks
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An adverse determination in any litigation of this type could limit our ability to use the intellectual property subject to these claims and require us to design around a third party’s intellectual property, which may not be possible, or to license alternative technology from another party, which may be costly.
−Removed: In addition, such litigation is often time consuming and expensive to defend and could result in the diversion of the time and attention of our employees.
+Added: In addition, such litigation is often time consuming and expensive to defend and could divert the time and attention of our management and employees from other strategic matters.
Risks Related to Our Capital Structure
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We have a significant amount of indebtedness and may incur other debt in the future.
−Removed: Our level of debt and the covenants to which we agreed could have negative consequences for us, including, among other things, (1) requiring us to dedicate a large portion of our cash flow from operations to servicing and repayment of the debt;
+Added: Our level of debt and the covenants to which we agreed could have negative consequences for us, including, among other things, (1) requiring us to dedicate a large portion of our cash flow from operations to servicing and repayment of such debt;
(2) limiting funds available for strategic initiatives and opportunities, working capital and other general corporate needs;
and (3) limiting our ability to incur certain kinds or amounts of additional indebtedness, which could restrict our flexibility to react to changes in our business, our industry and economic conditions.
−Removed: If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required, among other things, to seek additional financing in the debt or equity markets, refinance or restructure all or a portion of our indebtedness, sell selected assets or reduce or delay planned capital, operating or investment expenditures.
+Added: If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be required, among other things, to seek additional financing in the debt or equity markets, refinance or restructure all or a portion of our existing indebtedness, sell selected assets or reduce or delay planned capital, operating or investment expenditures.
Such measures may not be sufficient to enable us to service our debt, which could result in us defaulting on our obligations.
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We may need to raise additional funds to finance our future capital needs, including developing new services and technologies or to fund future acquisitions or operating needs.
−Removed: If we raise additional funds through the sale of equity securities, these transactions may dilute the value of our outstanding common stock.
+Added: If we raise additional funds through the sale of equity securities, these transactions could dilute the value of our outstanding common stock.
We may also decide to issue securities, including debt securities that have rights, preferences and privileges senior to our common stock.
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Our balance sheet includes significant amounts of goodwill and other intangible assets.
−Removed: The impairment of a portion of these assets could negatively affect our business, financial condition and results of operations.
+Added: The impairment of a portion of these assets could adversely affect our business, financial condition and results of operations.
As a result of our acquisitions, a significant portion of our total assets are intangible assets (including goodwill).
Goodwill and intangible assets, net of amortization, together accounted for approximately 75% of our total assets as of December 31, 2024.
−Removed: We expect to engage in additional acquisition activity from time-to-time, which may result in our recognition of additional intangible assets, including goodwill.
+Added: We expect to engage in additional acquisition or joint venture activity from time to time, which may result in our recognition of additional intangible assets, including goodwill.
We evaluate on a regular basis whether all or a portion of our goodwill and other intangible assets may be impaired.
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We may not be able to, or we may decide not to, pay dividends or repurchase shares at a level anticipated by our shareholders, which could reduce shareholder returns.
−Removed: The extent to which we pay dividends on our common stock and repurchase our common stock in the future is at the discretion of our board of directors and will depend on, among other factors, our results of operations, financial condition, capital requirements and such other factors as our board of directors deems relevant.
+Added: The extent to which we pay dividends on our common stock and repurchase our common stock in the future is at the discretion of our board of directors and will depend on, among other factors, our financial condition, results of operations, capital requirements and such other factors as our board of directors deems relevant.
No assurance can be given that we will be able to or will choose to continue to pay dividends or repurchase shares in the foreseeable future.
Risks Related to General Economic Conditions
−Removed: We are subject to economic and geopolitical risk, health and social events or conditions, the business cycles and credit risk of our customers and the overall level of consumer, business and government spending, which could negatively affect our business, financial condition, results of operations and cash flows.
+Added: We are subject to economic and geopolitical risk, health and social events or conditions, the business cycles and credit risk of our customers and the overall level of consumer, business and government spending, which could adversely affect our business, financial condition, results of operations and cash flows.
The global payments technology industry depends heavily on the overall level of consumer, business and government spending.
−Removed: We are exposed to general economic conditions, including but not limited to, recessions, inflation, rising interest rates, high unemployment, currency fluctuations, and rising energy prices, that affect consumer confidence, discretionary income and changes in consumer purchasing and spending habits.
−Removed: Adverse economic conditions have at times affected and may continue to negatively affect our financial performance by reducing the number or average purchase amount of transactions made using digital payments.
−Removed: A reduction in the amount of consumer spending could result in a decrease in our revenues and profits.
−Removed: If our merchants make fewer sales to consumers using digital payments, or consumers using digital payments spend less per transaction, we will have fewer transactions to process or lower transaction amounts, each of which would contribute to lower revenues.
+Added: We are exposed to general economic conditions, including but not limited to, recessions, inflation, rising interest rates, high unemployment, currency fluctuations, and rising energy prices, that adversely affect consumer confidence, discretionary income and changes in consumer purchasing and spending habits.
+Added: Adverse economic conditions have at times affected, and may continue to adversely affect, our financial performance by reducing the number or average purchase amount of transactions made using digital payments.
+Added: A reduction in the level of consumer spending could result in a decrease in our revenues and profits.
+Added: If our customers make fewer sales to consumers using digital payments, or consumers using digital payments spend less per transaction, we will have fewer transactions to process or lower transaction amounts, each of which would contribute to lower revenues.
+Added: Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers to lower-cost solutions.
Additionally, credit card issuers may reduce credit limits and become more selective in their card issuance practices.
When such conditions arise, we evaluate where we may be able to implement cost-saving measures, including those related to headcount and discretionary expenses.
−Removed: While economic conditions have shown moderate improvement in recent months, any of these developments could have a material adverse effect on our financial condition and results of operations.
Adverse macroeconomic conditions in any of our markets could force merchants, financial institutions or other customers to cease operations or petition for bankruptcy protection, resulting in lower revenue and earnings for us and greater exposure to potential credit losses and future transaction declines.
We also have a certain amount of fixed costs, including rent, debt service, and salaries, which could limit our ability to quickly adjust costs and respond to changes in our business and the economy.
−Removed: Changes in economic conditions could also adversely affect our future revenues and profits and have a materially adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: In most markets, we collect our fees from our merchants on the first day after the monthly billing period, which results in the build-up of substantial receivable from our customers.
−Removed: If a merchant were to go out of business during the billing period, we may be unable to collect such fees, which could negatively affect our business, financial condition, results of operations and cash flows.
−Removed: In addition, our business, growth, financial condition or results of operations could be materially adversely affected by public health emergencies, such as the COVID-19 pandemic, political and economic instability or changes in a country’s or region’s economic conditions, changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise, increased difficulty of conducting business in a country or region due to actual or potential political or military conflict or action by the United States or foreign governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals or entities.
−Removed: Risks associated with heightened geopolitical and economic instability, include among others, reduction in consumer, government or corporate spending, international sanctions, embargoes, heightened inflation and actions taken by central banks to counter inflation, volatility in global financial markets, increased cyber disruptions or attacks, higher supply chain costs and increased tensions between countries in which we may operate, which could result in charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill, and other losses, and could adversely affect our financial condition and results of operations.
+Added: Changes in economic conditions could also adversely affect our future revenues and profits and have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: In most of the markets in which we operate, we collect fees from our merchants on the first day after the monthly billing period, which results in the build-up of substantial receivables from our customers.
+Added: If a merchant were to go out of business during the billing period, we may be unable to collect such fees, which could also adversely affect our business, financial condition, results of operations and cash flows.
+Added: In addition, our business, growth, financial condition or results of operations could be materially adversely affected by public health emergencies, political and economic instability or changes in a country’s or region’s economic conditions, changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise, increased difficulty of conducting business in a country or region due to actual or potential political or military conflict or action by the United States or foreign governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals or entities.
+Added: Risks associated with heightened geopolitical and economic instability, include among others, reduction in consumer, government or corporate spending, international sanctions, embargoes, tariffs, heightened inflation and actions taken by central banks to counter inflation, volatility in global financial markets, increased cyber disruptions or attacks, higher supply chain costs and increased tensions between countries in which we may operate, which could result in charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill, and other losses, and could adversely affect our business, financial condition and results of operations.
+Added: Investor and other stakeholder scrutiny related to our sustainability practices, and our disclosed performance and aspirations for these practices, may increase costs and expose us to numerous risks.
Climate-related events, including extreme weather events and natural disasters and their effects on critical infrastructure in the U.S.
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Government regulators, investors, customers and the general public are increasingly focused on sustainability practices and disclosures, and views on this topic are diverse and rapidly changing.
−Removed: These shifts in investing priorities may result in adverse effects on the trading price of the Company's common stock if investors determine that the Company has not made sufficient progress on sustainability matters.
Furthermore, developing and acting on these initiatives, and collecting, measuring and reporting related information and metrics can be costly, difficult and time consuming, and are subject to evolving reporting standards and/or contractual obligations.
The standards and laws by which sustainability efforts are tracked and measured are in many cases new, have not been harmonized, and continue to evolve.
−Removed: We could also face potential negative sustainability related publicity in traditional media or social media if shareholders or other stakeholders determine that we have not adequately considered or addressed sustainability and governance matters.
−Removed: We have been the recipient of proposals from shareholders to promote their corporate responsibility positions, and we may receive
−Removed: other such proposals in the future.
−Removed: Such proposals may not be in the long-term interests of the Company or our shareholders and may divert management’s attention away from operational matters or create the impression that our practices are inadequate.
+Added: We could also face potential negative publicity if shareholders, customers, partners, government entities or other stakeholders determine that we have not adequately considered or addressed sustainability and governance matters or to the extent we are perceived to have not responded appropriately to their concerns or take positions that are contrary to their views or expectations.
+Added: We have been the recipient of proposals from shareholders to promote their corporate responsibility positions, and we may receive other such proposals in the future.
+Added: Such proposals may not be in our long-term interests or the interests of our shareholders and may divert management’s and our employees' attention away from operational or other strategic matters or create the impression that our practices are inadequate.
General Risk Factors
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In addition, we must develop our personnel to fulfill succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of human capital.
−Removed: However, the market for qualified personnel is extremely competitive, and we may not succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with qualified or effective successors.
−Removed: We cannot be assured that key personnel, including executive officers, will continue to be employed or that we will be able to attract and retain qualified personnel in the future.
−Removed: Failure to retain, develop or attract key personnel could disrupt our operations and adversely affect our business and future success, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: However, the market for qualified personnel is extremely competitive, and we may not succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with qualified or effective successors, including key personnel, such as executive officers.
+Added: Failure to retain, develop or attract key personnel could disrupt our operations and future growth and success, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial condition, results of operations and cash flows.
We are, from time to time, involved in various litigation matters and governmental or regulatory investigations or similar matters arising out of our current or future business.
−Removed: Our insurance or indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation.
−Removed: Litigation could be costly, time-consuming and divert attention of management from daily operational needs.
+Added: Our existing insurance or indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation.
+Added: Litigation could be costly, time-consuming and divert attention of our management and employees from daily operational needs.
Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future litigation or similar matters under various laws.
−Removed: Should the ultimate judgments or settlements in any pending or future litigation or investigation significantly exceed our insurance coverage, such judgments could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: ITEM 1C - CYBERSECURITY
−Removed: Processes for the Identification, Assessment, and Management of Material Risks from Cybersecurity Threats
−Removed: Although Global Payments is unable to eliminate all risks associated with cybersecurity threats and we cannot provide full assurance that our cybersecurity risk management processes will be fully complied with or effective, we have adopted policies and procedures that are designed to facilitate the identification, assessment, and management of those risks, including any such risks that have the potential to be material.
−Removed: We use multiple mechanisms to identify risks associated with cybersecurity threats, including but not limited to the following:
−Removed: • Our information security program describes three levels of risk assessment exercises to be performed or obtained on a periodic basis by the Information Security function, ranging from enterprise-level to system-level risk assessments;
−Removed: • Our Information Security function also includes a threat intelligence team that performs continual threat monitoring activities;
−Removed: • Our Business Technology Services function includes teams that provide architectural review, security advisory, and application testing services in connection with the development of new products, applications, and integrations;
−Removed: • Our Internal Audit function performs annual reviews designed to evaluate selected systems’ compliance with our information security program and/or recognized external control frameworks;
−Removed: • Independent consultants and auditors evaluate selected systems and applications on an annual basis;
−Removed: • All team members are empowered to submit self-identified information security risks for analysis by our internal risk management professionals.
−Removed: Cybersecurity risks identified through any of the foregoing mechanisms and submitted to our governance, risk, and compliance platform are assessed by our internal risk management professionals, in collaboration with appropriate subject-matter experts ("SMEs"), pursuant to standards established by our Enterprise Risk Management ("ERM") organization.
−Removed: Our internal risk management professionals work with the SMEs and other stakeholders to establish remediation plans for identified information security risks and to determine when risk acceptance might be a reasonable and appropriate solution.
−Removed: Issues relating to cybersecurity identified by Internal Audit are reported to the Technology Committee of our board of directors ("Technology Committee").
−Removed: Our ERM organization, under the supervision of the Chief Risk Officer, leads our efforts to consider and assess threats to the Company and the risks that result therefrom, including cybersecurity threats and related risks.
−Removed: With support from Information Security, Legal, and the Privacy Office, ERM conducts periodic evaluations of our information security posture, manages regular meetings with the executive leadership team to discuss risk levels across the company, and maintains and monitors risk tolerances and escalation criteria that drive executive and the board of director communications, as further described in our disclosures related to the board of directors oversight of material risks associated with cybersecurity threats.
−Removed: We manage risks associated with cybersecurity threats first and foremost through our information security program.
−Removed: We have implemented a comprehensive, layered security approach, across our computing environment, that is designed to facilitate the reduction of cybersecurity risk through the establishment of technical, physical and administrative controls oriented towards the maintenance of the confidentiality, integrity and availability of our information and technical assets.
−Removed: The structure of the information security program is informed by the NIST Cybersecurity Framework, and the program includes controls designed to facilitate the compliance of our cardholder data environments with PCI-DSS.
−Removed: The information security program is under the responsibility of the Chief Information Security Officer ("CISO"), while governance and oversight is provided by the Technology Committee as set forth in the Technology Committee Charter.
−Removed: The CISO is responsible for the strategy, execution and administration of the program and reports directly to the Chief Information Officer ("CIO"), while also maintaining reporting lines to the Technology Committee, its chair and the full board of directors.
−Removed: We have also established a Management Risk Committee ("MRC"), composed primarily of executive management, that is responsible for identifying, assessing, prioritizing and monitoring action plans to mitigate key risks.
−Removed: The MRC meets regularly.
−Removed: To encourage alignment on risk identification, assessment, and management objectives throughout all levels of the company, we have implemented a security education and awareness program that is designed to reinforce key behaviors that
−Removed: facilitate risk reduction and inform team members about the material cybersecurity risks facing our organization.
−Removed: We also include periodic training on information security to the board of directors.
−Removed: Identification, Assessment, and Management of Third-Party Cybersecurity Risks
−Removed: We have designed our risk identification, assessment, and management processes and procedures to account for cybersecurity risks associated with our use of third-party service providers.
−Removed: In addition to performing periodic assessments of vendors that include evaluating those vendors for cybersecurity risks, we endeavor to reduce supply chain cybersecurity risks by:
−Removed: (1) seeking to impose contractual requirements on our counterparties related to the use and security of personal data and other confidential information, as well as compliance with applicable privacy and security laws, wherever required by law to do so;
−Removed: and (2) requiring new software integrations and connectivity with vendors to undergo an architectural review process that involves consultation with the information security function and other relevant stakeholders.
−Removed: Moreover, critical vendors receive periodic comprehensive risk assessments conducted by the vendor management office (a team within ERM), in collaboration with Information Security and our Business Resiliency Governance ("BRG") team, that include a focus on the vendor’s cybersecurity practices.
−Removed: Evaluation, Categorization, and Escalation of Cybersecurity Incidents
−Removed: Our information security program includes an incident response plan, which establishes (1) a framework for classifying security incidents according to their severity level, taking into account the nature and scope of the incident;
−Removed: and (2) protocols for the escalation of incidents, including to the attention of the Technology Committee as appropriate.
−Removed: The incident response plan is approved annually by the board of directors.
−Removed: We maintain a Global Security Operations Center ("GSOC"), staffed 24/7, and a Global Critical Incident Management ("GCIM") team, and the roles and responsibilities of the GSOC and GCIM in the incident response context are established by the incident response plan, as well as in associated playbooks and other procedural documentation.
−Removed: On an annual basis, we retain an outside consultant to develop and administer a simulation of a cybersecurity incident designed to test our response capabilities and capacity for effective cross-functional coordination in the wake of an incident and to inform management and the Technology Committee of the results of the exercise.
−Removed: We maintain a business resiliency program, overseen by BRG, that is designed to facilitate our ability to respond, recover and resume services in the event of an incident that causes an operational disruption.
−Removed: Discussion of Material Cybersecurity Risks and Incidents
−Removed: We have not experienced any material cybersecurity incidents in the past calendar years and the expenses we have incurred from cybersecurity incidents during that period were immaterial.
−Removed: We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
−Removed: We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
−Removed: For a full discussion of cybersecurity risks, see the section entitled "Risk Factors" in Item 1A.
−Removed: Board and Management Oversight of Risks Associated with Cybersecurity Threats
−Removed: The Technology Committee provides the board of director-level oversight of our information technology and information security practices and cyber-risk profile and serves as a liaison between our board of directors and the CISO and the Chief Privacy Officer with respect to such matters.
−Removed: The Technology Committee reviews our key initiatives and practices relating to information technology, information security, cybersecurity, disaster recovery, business continuity, data privacy and data governance, and monitors compliance with regulatory requirements and industry standards.
−Removed: The Technology Committee helps to ensure that our strategic business goals are aligned with our technology strategy and infrastructure and that management has adequate support for the Company's internal technology and information security needs.
−Removed: At every regular meeting of the Technology Committee, the CISO provides the Technology Committee with updates and changes to the state, strategy and risks related to the information security program as well as other security news and topics.
−Removed: Further, the Technology Committee and Audit Committee receive quarterly reports from the Chief Risk Officer regarding our risk exposure related to significant information technology and information security practices.
−Removed: The CISO and CIO meet regularly with the chair of the Technology Committee outside of committee meetings.
−Removed: In addition, the board of directors regularly receives information about these topics from the chair of the Technology Committee, the CIO, and management, and the board of directors is apprised directly of incidents as appropriate, pursuant to our incident response plan.
+Added: Should the ultimate judgments or settlements, costs or fines in any pending or future litigation or investigation significantly exceed our insurance coverage, such judgments could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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.