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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             

Commission file number: 001-16111
gpn-20200930_g1.jpg
GLOBAL PAYMENTS INC.
(Exact name of registrant as specified in charter)
Georgia58-2567903
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
3550 Lenox Road,Atlanta,Georgia30326
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (770) 829-8000
Securities registered pursuant to Section 12(b) of the Act
Title of each classTrading symbolName of exchange on which registered
Common stock, no par valueGPNNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YesNo
The number of shares of the issuer’s common stock, no par value, outstanding as of October 26, 2020 was 299,337,266.


Table of Contents
GLOBAL PAYMENTS INC.
FORM 10-Q
For the quarterly period ended September 30, 2020

TABLE OF CONTENTS
  Page
PART I - FINANCIAL INFORMATION
ITEM 1.
ITEM 2.
ITEM 3.
ITEM 4.
PART II - OTHER INFORMATION
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 6.


2

Table of Contents
PART 1 - FINANCIAL INFORMATION

ITEM 1—FINANCIAL STATEMENTS

GLOBAL PAYMENTS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

Three Months Ended
September 30, 2020September 30, 2019
Revenues$1,917,815 $1,105,941 
Operating expenses:
Cost of service
900,921 427,720 
Selling, general and administrative
726,475 504,184 
 1,627,396 931,904 
Operating income290,419 174,037 
Interest and other income29,983 11,232 
Interest and other expense(82,976)(96,161)
 (52,993)(84,929)
Income before income taxes and equity in income of equity method investments237,426 89,108 
Income tax (expense) benefit(42,834)16,623 
Income before equity in income of equity method investments194,592 105,731 
Equity in income of equity method investments, net of tax35,638  
Net income230,230 105,731 
Net income attributable to noncontrolling interests, net of tax(9,259)(10,687)
Net income attributable to Global Payments$220,971 $95,044 
Earnings per share attributable to Global Payments:
Basic earnings per share $0.74 $0.54 
Diluted earnings per share $0.74 $0.54 
See Notes to Unaudited Consolidated Financial Statements.
3

Table of Contents
GLOBAL PAYMENTS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)

Nine Months Ended
September 30, 2020September 30, 2019
Revenues$5,493,365 $2,924,131 
Operating expenses:
Cost of service
2,728,532 1,035,225 
Selling, general and administrative
2,122,862 1,293,651 
 4,851,394 2,328,876 
Operating income641,971 595,255 
Interest and other income35,277 20,342 
Interest and other expense(258,475)(220,858)
 (223,198)(200,516)
Income before income taxes and equity in income of equity method investments418,773 394,739 
Income tax expense(59,173)(39,765)
Income before equity in income of equity method investments359,600 354,974 
Equity in income of equity method investments, net of tax60,682  
Net income420,282 354,974 
Net income attributable to noncontrolling interests, net of tax(18,406)(27,132)
Net income attributable to Global Payments$401,876 $327,842 
Earnings per share attributable to Global Payments:
Basic earnings per share $1.34 $2.00 
Diluted earnings per share $1.34 $2.00 
See Notes to Unaudited Consolidated Financial Statements.

4

Table of Contents
GLOBAL PAYMENTS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

Three Months Ended
September 30, 2020September 30, 2019
Net income $230,230 $105,731 
Other comprehensive income (loss):
Foreign currency translation adjustments110,809 (67,279)
Income tax benefit related to foreign currency translation adjustments 144 
Net unrealized gains (losses) on hedging activities194 (40,265)
Reclassification of net unrealized losses on hedging activities to interest expense11,133 1,193 
Income tax (expense) benefit related to hedging activities
(2,612)9,289 
Other, net of tax(3,531)37 
Other comprehensive income (loss)115,993 (96,881)
Comprehensive income346,223 8,850 
Comprehensive income attributable to noncontrolling interests(18,010)(1,967)
Comprehensive income attributable to Global Payments$328,213 $6,883 

Nine Months Ended
September 30, 2020September 30, 2019
Net income $420,282 $354,974 
Other comprehensive income (loss):
Foreign currency translation adjustments(10,844)(54,377)
Income tax benefit related to foreign currency translation adjustments1,160 1,695 
Net unrealized losses on hedging activities(53,332)(96,997)
Reclassification of net unrealized losses (gains) on hedging activities to interest expense25,786 (1,530)
Income tax benefit related to hedging activities6,677 23,800 
Other, net of tax(3,288)165 
Other comprehensive loss(33,841)(127,244)
Comprehensive income386,441 227,730 
Comprehensive income attributable to noncontrolling interests(25,898)(17,780)
Comprehensive income attributable to Global Payments$360,543 $209,950 

See Notes to Unaudited Consolidated Financial Statements.


5

Table of Contents
GLOBAL PAYMENTS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
September 30, 2020December 31, 2019
(Unaudited)
ASSETS  
Current assets:  
Cash and cash equivalents$2,220,822 $1,678,273 
Accounts receivable, net822,033 895,232 
Settlement processing assets1,385,308 1,353,778 
Prepaid expenses and other current assets540,487 439,165 
Total current assets4,968,650 4,366,448 
Goodwill23,745,340 23,759,740 
Other intangible assets, net12,251,680 13,154,655 
Property and equipment, net1,526,178 1,382,802 
Deferred income taxes6,822 6,292 
Other noncurrent assets2,051,112 1,810,225 
Total assets$44,549,782 $44,480,162 
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit$439,371 $463,237 
Current portion of long-term debt831,500 35,137 
Accounts payable and accrued liabilities1,696,048 1,822,166 
Settlement processing obligations1,448,335 1,258,806 
Total current liabilities4,415,254 3,579,346 
Long-term debt8,436,962 9,090,364 
Deferred income taxes2,966,020 3,145,641 
Other noncurrent liabilities767,704 609,822 
Total liabilities16,585,940 16,425,173 
Commitments and contingencies
Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued
  
Common stock, no par value; 400,000,000 shares authorized at September 30, 2020 and December 31, 2019; 299,286,847 issued and outstanding at September 30, 2020 and 300,225,590 issued and outstanding at December 31, 2019
  
Paid-in capital25,620,599 25,833,307 
Retained earnings2,476,962 2,333,011 
Accumulated other comprehensive loss(351,904)(310,571)
Total Global Payments shareholders’ equity27,745,657 27,855,747 
Noncontrolling interests218,185 199,242 
Total equity27,963,842 28,054,989 
Total liabilities and equity$44,549,782 $44,480,162 

See Notes to Unaudited Consolidated Financial Statements.
6

Table of Contents
GLOBAL PAYMENTS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30, 2020September 30, 2019
Cash flows from operating activities:
Net income$420,282 $354,974 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment265,738 132,043 
Amortization of acquired intangibles941,654 345,455 
Amortization of capitalized contract costs57,888 47,778 
Share-based compensation expense105,081 55,791 
Provision for operating losses and bad debts98,967 34,877 
Noncash lease expense73,493 29,135 
Deferred income taxes(118,466)(42,990)
Equity in income of equity investments, net of tax(60,682) 
Other, net(13,584)(22,469)
Changes in operating assets and liabilities, net of the effects of business combinations:
Accounts receivable23,352 (80,709)
Settlement processing assets and obligations, net155,385 623,985 
Prepaid expenses and other assets(240,804)(148,421)
Accounts payable and other liabilities(163,544)19,940 
Net cash provided by operating activities1,544,760 1,349,389 
Cash flows from investing activities:
Acquisitions, net of cash acquired(77,180)(334,383)
Capital expenditures(329,413)(201,017)
Other, net11,575 29,112 
Net cash used in investing activities(395,018)(506,288)
Cash flows from financing activities:
Net repayments of settlement lines of credit(31,069)(144,473)
Proceeds from long-term debt1,868,199 6,704,838 
Repayments of long-term debt(1,829,637)(6,097,229)
Payments of debt issuance costs(8,075)(32,637)
Repurchases of common stock(421,162)(233,995)
Proceeds from stock issued under share-based compensation plans51,055 22,008 
Common stock repurchased - share-based compensation plans(41,966)(49,037)
Distributions to noncontrolling interests(6,955)(31,632)
Preacquisition dividends paid to former TSYS shareholders (23,240)
Dividends paid(175,025)(4,727)
Net cash (used in) provided by financing activities(594,635)109,876 
Effect of exchange rate changes on cash(12,558)(36,239)
Increase in cash and cash equivalents542,549 916,738 
Cash and cash equivalents, beginning of the period1,678,273 1,210,878 
Cash and cash equivalents, end of the period$2,220,822 $2,127,616 

See Notes to Unaudited Consolidated Financial Statements.
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GLOBAL PAYMENTS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 (in thousands)

 
Number of Shares
Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive LossTotal Global Payments Shareholders’ EquityNoncontrolling InterestsTotal Equity
Balance at June 30, 2020299,244 $25,570,582 $2,314,423 $(459,146)$27,425,859 $207,130 $27,632,989 
Net income220,971 220,971 9,259 230,230 
Other comprehensive income107,242 107,242 8,751 115,993 
Stock issued under share-based compensation plans50 8,423 8,423 8,423 
Common stock repurchased - share-based compensation plans(7)(682)(682)(682)
Share-based compensation expense42,276 42,276 42,276 
Distributions to noncontrolling interest— (6,955)(6,955)
Cash dividends declared ($0.195 per share)
(58,432)(58,432)(58,432)
Balance at September 30, 2020299,287 $25,620,599 $2,476,962 $(351,904)$27,745,657 $218,185 $27,963,842 
 
Number of Shares
Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Total Global Payments Shareholders’ Equity
Noncontrolling InterestsTotal Equity
Balance at June 30, 2019156,675 $2,126,065 $2,204,445 $(339,906)$3,990,604 $184,512 $4,175,116 
Net income95,044 95,044 10,687 105,731 
Other comprehensive loss(88,161)(88,161)(8,720)(96,881)
Stock issued under share-based compensation plans141 9,057 9,057 9,057 
Common stock repurchased - share-based compensation plans(180)(29,584)(29,584)(29,584)
Share-based compensation expense27,877 27,877 27,877 
Issuance of common stock in connection with a business combination143,909 23,771,389 23,771,389 23,771,389 
Distributions to noncontrolling interest— (5,395)(5,395)
Cash dividends declared ($0.01 per share)
(1,592)(1,592)(1,592)
Balance at September 30, 2019300,545 $25,904,804 $2,297,897 $(428,067)$27,774,634 $181,084 $27,955,718 

See Notes to Unaudited Consolidated Financial Statements.



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GLOBAL PAYMENTS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 (in thousands)

 
Number of Shares
Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive LossTotal Global Payments Shareholders’ EquityNoncontrolling InterestsTotal Equity
Balance at December 31, 2019300,226 $25,833,307 $2,333,011 $(310,571)$27,855,747 $199,242 $28,054,989 
Cumulative effect of adoption of new accounting standard(5,379)(5,379)(5,379)
Net income401,876 401,876 18,406 420,282 
Other comprehensive (loss) income(41,333)(41,333)7,492 (33,841)
Stock issued under share-based compensation plans1,495 51,055 51,055 51,055 
Common stock repurchased - share-based compensation plans(339)(42,403)(42,403)(42,403)
Share-based compensation expense105,081 105,081 105,081 
Distributions to noncontrolling interest— (6,955)(6,955)
Repurchase of common stock(2,095)(326,441)(77,521)(403,962)(403,962)
Dividends paid ($0.585 per share)
(175,025)(175,025)(175,025)
Balance at September 30, 2020299,287 $25,620,599 $2,476,962 $(351,904)$27,745,657 $218,185 $27,963,842 

 
Number of Shares
Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Total Global Payments Shareholders’ Equity
Noncontrolling InterestsTotal Equity
Balance at December 31, 2018157,962 $2,235,167 $2,066,415 $(310,175)$3,991,407 $194,936 $4,186,343 
Net income327,842 327,842 27,132 354,974 
Other comprehensive loss(117,892)(117,892)(9,352)(127,244)
Stock issued under share-based compensation plans750 22,008 22,008 22,008 
Common stock repurchased - share-based compensation plans(268)(41,190)(41,190)(41,190)
Share-based compensation expense55,791 55,791 55,791 
Issuance of common stock in connection with a business combination143,909 23,771,389 23,771,389 23,771,389 
Distributions to noncontrolling interest— (31,632)(31,632)
Repurchase of common stock(1,808)(138,361)(91,633)(229,994)(229,994)
Dividends paid ($0.03 per share)
(4,727)(4,727)(4,727)
Balance at September 30, 2019300,545 $25,904,804 $2,297,897 $(428,067)$27,774,634 $181,084 $27,955,718 

See Notes to Unaudited Consolidated Financial Statements.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE 1—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Business, consolidation and presentation

We are a leading pure play payments technology company delivering innovative software and services to our customers globally. Our technologies, services and employee expertise enable us to provide a broad range of solutions that allow our customers to operate their businesses more efficiently across a variety of channels around the world. We operate in three reportable segments: Merchant Solutions, Issuer Solutions and Business and Consumer Solutions, which are described in "Note 12—Segment Information." Global Payments Inc. and its consolidated subsidiaries are referred to herein collectively as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise.

These unaudited consolidated financial statements include our accounts and those of our majority-owned subsidiaries, and all intercompany balances and transactions have been eliminated in consolidation. These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The consolidated balance sheet as of December 31, 2019 was derived from the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 but does not include all disclosures required by GAAP for annual financial statements.

In the opinion of our management, all known adjustments necessary for a fair presentation of the results of the interim periods have been made. These adjustments consist of normal recurring accruals and estimates that affect the carrying amount of assets and liabilities. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019.

COVID-19 Update

In March 2020, the World Health Organization declared the outbreak of the COVID-19 virus a global pandemic. The pandemic continues to cause major disruptions to businesses and markets worldwide as the virus spreads or has a resurgence in certain jurisdictions. A number of countries as well as many states and cities within the United States have implemented measures in an effort to contain the virus, including physical distancing, travel restrictions, border closures, limitations on public gatherings, work from home and closure of or restrictions on nonessential businesses. The effects of the outbreak are still evolving, and the ultimate severity and duration of the pandemic and the implications on global economic conditions remains uncertain.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates. In particular, the future magnitude, duration and effects of the COVID-19 pandemic are difficult to predict at this time, and the ultimate effect could result in additional charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill and other losses. These unaudited consolidated financial statements reflect the financial statement effects of COVID-19 based upon management’s estimates and assumptions utilizing the most currently available information.

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Recently adopted accounting pronouncements

Accounting Standards Update ("ASU") 2018-15In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (A Consensus of the FASB Emerging Issues Task Force)." ASU 2018-15 provides additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract. The new guidance amends the definition of a hosting arrangement and requires a customer in a hosting arrangement that is a service contract to capitalize certain implementation costs following the internal-use software capitalization criteria within Accounting Standards Codification ("ASC") Subtopic 350-40.

We adopted ASU 2018-15 on January 1, 2020, applying the guidance prospectively to all implementation costs incurred on or after the date of adoption. The adoption of this standard did not have a material effect on our consolidated financial statements. We have historically capitalized implementation costs associated with cloud computing arrangements that are service contracts following the guidance in Subtopic 350-40 and will continue to do so pursuant to the clarifications provided in the new guidance. We amortize capitalized implementation costs to expense on a straight-line basis over the term of the applicable hosting arrangement.
ASU 2016-13 We adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" on January 1, 2020 using the modified retrospective transition method. The adoption of this standard resulted in a cumulative-effect adjustment to decrease retained earnings by $5.4 million, net of tax. The amendments in this update changed how we measure and recognize credit impairment for certain financial instruments measured at amortized cost. Under the current expected credit losses model required by ASU 2016-13, we recognize at asset inception and each subsequent reporting date an estimate of credit losses expected to occur over the remaining life of each pool of financial assets with similar risk characteristics.
We have exposure to credit losses for financial assets such as accounts receivable, certain settlement processing assets, check guarantee claims receivable assets and advances to sales representatives. We utilize a combination of aging or loss-rate methods to develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool. A broad range of information is considered in the estimation process, including historical loss information adjusted for current conditions and expectations of future trends. The estimation process also includes consideration of qualitative and quantitative risk factors associated with the age of asset balances, expected timing of payment, contract terms and conditions, changes in specific customer risk profiles or mix of customers, geographic risk, industry or economic trends and relevant environmental factors.
As of September 30, 2020, the total allowance for credit losses was approximately $36.9 million. Financial assets are presented net of the allowance for credit losses in the consolidated balance sheets. The measurement of the allowance for credit losses is recognized through credit loss expense. Depending on the nature of the underlying asset, credit loss expense is included as a component of cost of service or selling, general and administrative expense in the consolidated statements of income. Write-offs are recorded in the period in which the asset is deemed to be uncollectible. Recoveries are recorded when received as a direct credit to the credit loss expense in the consolidated statements of income. Prior to the adoption of ASU 2016-13, credit losses on these financial instruments were recognized when an occurrence was deemed to be probable.
Recently issued pronouncements not yet adopted

ASU 2019-12In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which is intended to enhance and simplify various aspects of the accounting for income taxes. The amendments in this update remove certain exceptions to the general principles in ASC Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and amends existing guidance to improve consistency in application of the accounting for franchise taxes, enacted changes in tax laws or rates and transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted in any interim period. We are evaluating the effect of ASU 2019-12 on our consolidated financial statements. Based upon the analysis performed to date, we do not believe the adoption of ASU 2019-12 will have a material effect on our consolidated financial statements. 
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ASU 2020-04In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)," which provides optional expedients and exceptions to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference London Inter-bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022 for which an entity has elected certain optional expedients and which are retained through the end of the hedging relationship. The amendments in this update also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. If elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant ASC Topic or Industry Subtopic that contains the guidance that otherwise would be required to be applied. The amendments in this update were effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are evaluating the effect of ASU 2020-04 on our consolidated financial statements.

NOTE 2—ACQUISITIONS

Total System Services, Inc.

On September 18, 2019, we merged with Total System Services, Inc. ("TSYS") (the "Merger"). We accounted for this transaction as a business combination, which generally requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date. The estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed, including a reconciliation to the total purchase consideration, were as follows:
Provisional Amounts at
December 31, 2019
Measurement-Period AdjustmentsFinal Amounts at
September 30, 2020
(in thousands)
Cash and cash equivalents$446,009 $ $446,009 
Accounts receivable442,848 (2,660)440,188 
Identified intangible assets10,980,000 978 10,980,978 
Property and equipment644,084 (978)643,106 
Other assets1,474,825 (2,969)1,471,856 
Accounts payable and accrued liabilities(614,060)(11,899)(625,959)
Debt(3,295,342)4,787 (3,290,555)
Deferred income tax liabilities(2,687,849)52,598 (2,635,251)
Other liabilities(314,415)(173)(314,588)
Total identifiable net assets7,076,100 39,684 7,115,784 
Goodwill17,398,853 (39,684)17,359,169 
Total purchase consideration$24,474,953 $ $24,474,953 

During the nine months ended September 30, 2020, we made measurement-period adjustments, as shown in the table above, that decreased the amount of provisional goodwill by $39.7 million. The decrease in deferred income tax liabilities for the nine months ended September 30, 2020 primarily relates to a refined analysis of the outside bases of partnerships. The effects of the measurement-period adjustments on our consolidated statements of income for the three and nine months ended September 30, 2020 were not material.

As of September 30, 2020, goodwill arising from the acquisition of $17.4 billion was included in our reportable segments as follows: $7.1 billion in the Merchant Solutions segment, $7.9 billion in the Issuer Solutions segment and $2.4 billion in the
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Business and Consumer Solutions segment. Goodwill was attributable to expected growth opportunities, an assembled workforce and potential synergies from combining the acquired business into our existing business. Substantially all of the goodwill from this acquisition is not deductible for income tax purposes.

The following unaudited pro forma information shows the results of our operations for the three and nine months ended September 30, 2019 as if the Merger had occurred on January 1, 2018. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of what would have occurred if the Merger had occurred as of that date. The unaudited pro forma information is also not intended to be a projection of future results due to the integration of TSYS. The unaudited pro forma information reflects the effects of applying our accounting policies and certain pro forma adjustments to the combined historical financial information of Global Payments and TSYS.
Three Months Ended
September 30, 2019
Nine Months Ended
September 30, 2019
ActualPro FormaActualPro Forma
(in thousands)
Total revenues$1,105,941 $1,993,089 $2,924,131 $5,866,522 
Net income attributable to Global Payments$95,044 $219,010 $327,842 $614,317 

For the three and nine months ended September 30, 2020, the acquired operations of TSYS contributed $1,067.2 million and $3,119.2 million, respectively, to our consolidated revenues and $165.8 million and $385.1 million, respectively, to our consolidated operating income.

At September 30, 2020, accounts payable and accrued liabilities in the consolidated balance sheet included obligations totaling $26.3 million for employee termination benefits resulting from Merger-related integration activities. During the three months ended September 30, 2020, we recognized charges for employee termination benefits of $8.1 million, which included $1.9 million of share-based compensation expense. During the nine months ended September 30, 2020, we recognized charges for employee termination benefits of $49.8 million, which included $6.1 million of share-based compensation expense. As of September 30, 2020, the cumulative amount of recognized charges for employee termination benefits resulting from Merger-related integration activities was $106.9 million, which included $23.4 million of share-based compensation expense. These charges are recorded within selling, general and administrative expenses in our consolidated statements of income and included within Corporate expenses for segment reporting purposes. New obligations may arise and related expenses may be incurred as Merger-related integration activities continue over the next 12 months.

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NOTE 3—REVENUES

The following tables present a disaggregation of our revenues from contracts with customers by geography for each of our reportable segments for the three and nine months ended September 30, 2020 and 2019:
Three months ended September 30, 2020
Merchant
Solutions
Issuer
Solutions
Business and
Consumer
Solutions
Intersegment
Eliminations
Total
(in thousands)
Americas$1,039,039 $370,938 $204,106 $(15,097)$1,598,986 
Europe154,262 113,907   268,169 
Asia Pacific50,660 2,564  (2,564)50,660 
$1,243,961 $487,409 $204,106 $(17,661)$1,917,815 

Three months ended September 30, 2019
Merchant
Solutions
Issuer
Solutions
Business and
Consumer
Solutions
Intersegment
Eliminations
Total
(in thousands)
Americas$786,659 $55,091 $27,896 $(2,310)$867,336 
Europe159,592 20,321   179,913 
Asia Pacific58,692 216  (216)58,692 
$1,004,943 $75,628 $27,896 $(2,526)$1,105,941 

Nine Months Ended September 30, 2020
Merchant
Solutions
Issuer
Solutions
Business and
Consumer
Solutions
Intersegment
Eliminations
Total
(in thousands)
Americas$2,926,472 $1,127,832 $624,774 $(47,558)$4,631,520 
Europe392,721 327,532   720,253 
Asia Pacific141,592 5,832  (5,832)141,592 
$3,460,785 $1,461,196 $624,774 $(53,390)$5,493,365 

Nine Months Ended September 30, 2019
Merchant
Solutions
Issuer
Solutions
Business and
Consumer
Solutions
Intersegment
Eliminations
Total
(in thousands)
Americas$2,181,000 $55,092 $27,896 $(2,311)$2,261,677 
Europe452,317 30,814   483,131 
Asia Pacific179,323 216  (216)179,323 
$2,812,640 $86,122 $27,896 $(2,527)$2,924,131 

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The following table presents a disaggregation of our Merchant Solutions segment revenues by distribution channel for the three and nine months ended September 30, 2020 and 2019:
Three Months EndedNine Months Ended
September 30, 2020September 30, 2019September 30, 2020September 30, 2019
(in thousands)
Relationship-led$709,749 $538,112 $1,934,265 $1,499,393 
Technology-enabled534,212 466,831 1,526,520 1,313,247 
$1,243,961 $1,004,943 $3,460,785 $2,812,640 

ASC Topic 606, Revenues from Contracts with Customers ("ASC 606"), requires that we determine for each customer arrangement whether revenue should be recognized at a point in time or over time. For the three and nine months ended September 30, 2020 and 2019, substantially all of our revenues were recognized over time.

Supplemental balance sheet information related to contracts from customers as of September 30, 2020 and December 31, 2019 was as follows:
Balance Sheet LocationSeptember 30, 2020December 31, 2019
(in thousands)
Assets:
Capitalized costs to obtain customer contracts, net
Other noncurrent assets$243,489 $226,945 
Capitalized costs to fulfill customer contracts, net
Other noncurrent assets$72,114 $38,150 
Liabilities:
Contract liabilities, net (current)Accounts payable and accrued liabilities$206,299 $193,405 
Contract liabilities, net (noncurrent)Other noncurrent liabilities$43,714 $35,272 

Net contract assets were not material at September 30, 2020 or at December 31, 2019. Revenue recognized for the three months ended September 30, 2020 and 2019 from contract liability balances at the beginning of each period was $69.7 million and $52.0 million. Revenue recognized for the nine months ended September 30, 2020 and 2019 from contract liability balances at the beginning of each period was $195.3 million and $122.7 million.

ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. The purpose of this disclosure is to provide additional information about the amounts and expected timing of revenue to be recognized from the remaining performance obligations in our existing contracts. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at September 30, 2020. However, as permitted, we have elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Accordingly, the total unsatisfied or partially unsatisfied performance obligations related to processing services is significantly higher than the amounts disclosed in the table below (in thousands):
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Year ending December 31,
2020$251,524 
2021879,620 
2022688,039 
2023479,540 
2024308,718 
2025225,624 
2026 and thereafter456,896 
Total$3,289,960 

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS

As of September 30, 2020 and December 31, 2019, goodwill and other intangible assets consisted of the following:  
September 30, 2020December 31, 2019
(in thousands)
Goodwill$23,745,340 $23,759,740 
Other intangible assets:
Customer-related intangible assets$9,231,143 $9,238,728 
Acquired technologies2,743,679 2,732,218 
Contract-based intangible assets