gpn-20210930

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, 2021


☐						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

GLOBAL PAYMENTS INC.

(Exact name of registrant as specified in charter)


Georgia						58-2567903
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3550 Lenox Road, Atlanta, Georgia

30326

(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 class	Trading symbol	Name of exchange on which registered
Common stock, no par value	GPN	New 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).

Yes

☐

☑

The number of shares of the issuer’s common stock, no par value, outstanding as of October 29, 2021 was 290,151,001.

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GLOBAL PAYMENTS INC.

FORM 10-Q

For the quarterly period ended September 30, 2021

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION
ITEM 1.	Unaudited Consolidated Statements of Income for the three and nine months ended September 30, 2021 and 2020	3
	Unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020	5
	Consolidated Balance Sheets at September 30, 2021 (unaudited) and December 31, 2020	6
	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	7
	Unaudited Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2021 and 2020	8
	Notes to Unaudited Consolidated Financial Statements	10
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	36
ITEM 4.	Controls and Procedures	36
PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings	37
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
ITEM 6.	Exhibits	38
	Signatures	39

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PART I - 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, 2021		September 30, 2020

Revenues	$	2,202,337	$	1,917,815
Operating expenses:
Cost of service	944,172		900,921
Selling, general and administrative	858,082		726,475
	1,802,254		1,627,396
Operating income	400,083		290,419

Interest and other income	6,320		29,983
Interest and other expense	(82,187)		(82,976)
	(75,867)		(52,993)
Income before income taxes and equity in income of equity method investments	324,216		237,426
Income tax expense	50,117		42,834
Income before equity in income of equity method investments	274,099		194,592
Equity in income of equity method investments, net of tax	31,364		35,638
Net income	305,463		230,230
Net income attributable to noncontrolling interests, net of tax	(8,727)		(9,259)
Net income attributable to Global Payments	$	296,736	$	220,971

Earnings per share attributable to Global Payments:
Basic earnings per share	$	1.02	$	0.74
Diluted earnings per share	$	1.01	$	0.74

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


	Nine Months Ended
	September 30, 2021		September 30, 2020

Revenues	$	6,329,781	$	5,493,365
Operating expenses:
Cost of service	2,805,728		2,728,532
Selling, general and administrative	2,486,153		2,122,862
	5,291,881		4,851,394
Operating income	1,037,900		641,971

Interest and other income	16,009		35,277
Interest and other expense	(245,884)		(258,475)
	(229,875)		(223,198)
Income before income taxes and equity in income of equity method investments	808,025		418,773
Income tax expense	131,600		59,173
Income before equity in income of equity method investments	676,425		359,600
Equity in income of equity method investments, net of tax	94,261		60,682
Net income	770,686		420,282
Net income attributable to noncontrolling interests, net of tax	(13,679)		(18,406)
Net income attributable to Global Payments	$	757,007	$	401,876

Earnings per share attributable to Global Payments:
Basic earnings per share	$	2.57	$	1.34
Diluted earnings per share	$	2.56	$	1.34

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Three Months Ended
	September 30, 2021		September 30, 2020

Net income	$	305,463	$	230,230
Other comprehensive income (loss):
Foreign currency translation adjustments	(79,532)		110,809
Income tax benefit related to foreign currency translation adjustments	447		—
Net unrealized (losses) gains on hedging activities	(646)		194
Reclassification of net unrealized losses on hedging activities to interest expense	9,788		11,133
Income tax expense related to hedging activities	(2,208)		(2,612)
Other, net of tax	(2,209)		(3,531)
Other comprehensive (loss) income	(74,360)		115,993

Comprehensive income	231,103		346,223
Comprehensive income attributable to noncontrolling interests	(4,625)		(18,010)
Comprehensive income attributable to Global Payments	$	226,478	$	328,213


	Nine Months Ended
	September 30, 2021		September 30, 2020

Net income	$	770,686	$	420,282
Other comprehensive income (loss):
Foreign currency translation adjustments	(80,427)		(10,844)
Income tax benefit related to foreign currency translation adjustments	5,438		1,160
Net unrealized losses on hedging activities	(62)		(53,332)
Reclassification of net unrealized losses on hedging activities to interest expense	30,288		25,786
Income tax (expense) benefit related to hedging activities	(7,297)		6,677
Other, net of tax	4,017		(3,288)
Other comprehensive loss	(48,043)		(33,841)

Comprehensive income	722,643		386,441
Comprehensive income attributable to noncontrolling interests	(6,328)		(25,898)
Comprehensive income attributable to Global Payments	$	716,315	$	360,543

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	September 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,347,732	$	1,945,868
Accounts receivable, net	904,142		794,172
Settlement processing assets	1,912,421		1,230,853
Prepaid expenses and other current assets	628,042		621,467
Total current assets	5,792,337		4,592,360
Goodwill	24,344,275		23,871,451
Other intangible assets, net	11,529,826		12,015,883
Property and equipment, net	1,667,287		1,578,532
Deferred income taxes	8,480		7,627
Other noncurrent assets	2,412,270		2,135,692
Total assets	$	45,754,475	$	44,201,545
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit	$	588,347	$	358,698
Current portion of long-term debt	39,148		827,357
Accounts payable and accrued liabilities	2,387,972		2,061,384
Settlement processing obligations	2,018,840		1,301,652
Total current liabilities	5,034,307		4,549,091
Long-term debt	10,709,791		8,466,407
Deferred income taxes	2,831,349		2,948,390
Other noncurrent liabilities	824,679		750,613
Total liabilities	19,400,126		16,714,501
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, 2021 and December 31, 2020; 290,086,635 issued and outstanding at September 30, 2021 and 298,332,459 issued and outstanding at December 31, 2020	—		—
Paid-in capital	23,544,800		24,963,769
Retained earnings	2,845,192		2,570,874
Accumulated other comprehensive loss	(242,965)		(202,273)
Total Global Payments shareholders’ equity	26,147,027		27,332,370
Noncontrolling interests	207,322		154,674
Total equity	26,354,349		27,487,044
Total liabilities and equity	$	45,754,475	$	44,201,545

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Nine Months Ended
	September 30, 2021		September 30, 2020
Cash flows from operating activities:
Net income	$	770,686	$	420,282
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	292,230		265,738
Amortization of acquired intangibles	973,948		941,654
Amortization of capitalized contract costs	68,112		57,888
Share-based compensation expense	146,097		105,081
Provision for operating losses and credit losses	73,286		98,967
Noncash lease expense	80,371		73,493
Deferred income taxes	(136,004)		(118,466)
Equity in income of equity investments, net of tax	(94,261)		(60,682)
Other, net	19,967		(13,584)
Changes in operating assets and liabilities, net of the effects of business combinations:
Accounts receivable	(123,370)		23,352
Settlement processing assets and obligations, net	28,242		155,385
Prepaid expenses and other assets	(185,973)		(240,804)
Accounts payable and other liabilities	114,279		(163,544)
Net cash provided by operating activities	2,027,610		1,544,760
Cash flows from investing activities:
Business combinations and other acquisitions, net of cash acquired	(946,377)		(77,180)
Capital expenditures	(350,745)		(329,413)
Other, net	1,248		11,575
Net cash used in investing activities	(1,295,874)		(395,018)
Cash flows from financing activities:
Net borrowings from (repayments of) settlement lines of credit	244,858		(31,069)
Proceeds from long-term debt	3,909,988		1,868,199
Repayments of long-term debt	(2,434,805)		(1,829,637)
Payments of debt issuance costs	(8,569)		(8,075)
Repurchases of common stock	(1,833,689)		(421,162)
Proceeds from stock issued under share-based compensation plans	38,570		51,055
Common stock repurchased - share-based compensation plans	(84,659)		(41,966)
Contribution from a noncontrolling interest	46,320		—
Distribution to a noncontrolling interest	—		(6,955)
Dividends paid	(188,203)		(175,025)
Net cash used in financing activities	(310,189)		(594,635)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(42,704)		(12,558)
Increase in cash, cash equivalents and restricted cash	378,843		542,549
Cash, cash equivalents and restricted cash, beginning of the period	2,089,771		1,678,273
Cash, cash equivalents and restricted cash, end of the period	$	2,468,614	$	2,220,822

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except per share data)


	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance at June 30, 2021	293,703	$	24,201,763	$	2,664,707	$	(172,707)	$	26,693,763	$	156,377	$	26,850,140
Net income				296,736				296,736		8,727		305,463
Other comprehensive loss						(70,258)		(70,258)		(4,102)		(74,360)
Stock issued under share-based compensation plans	819	9,262						9,262				9,262
Common stock repurchased - share-based compensation plans	(203)	(34,003)						(34,003)				(34,003)
Share-based compensation expense		65,611						65,611				65,611
Repurchases of common stock	(4,232)	(697,833)		(42,924)				(740,757)				(740,757)
Contribution from a noncontrolling interest								—		46,320		46,320
Cash dividends declared ($0.25 per common share)				(73,327)				(73,327)				(73,327)
Balance at September 30, 2021	290,087	$	23,544,800	$	2,845,192	$	(242,965)	$	26,147,027	$	207,322	$	26,354,349


	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance at June 30, 2020	299,244	$	25,570,582	$	2,314,423	$	(459,146)	$	27,425,859	$	207,130	$	27,632,989
Net income				220,971				220,971		9,259		230,230
Other comprehensive income						107,242		107,242		8,751		115,993
Stock issued under share-based compensation plans	50	8,423						8,423				8,423
Common stock repurchased - share-based compensation plans	(7)	(682)						(682)				(682)
Distribution to a noncontrolling interest										(6,955)		(6,955)
Share-based compensation expense		42,276						42,276				42,276
Cash dividends declared ($0.195 per common share)				(58,432)				(58,432)				(58,432)
Balance at September 30, 2020	299,287	$	25,620,599	$	2,476,962	$	(351,904)	$	27,745,657	$	218,185	$	27,963,842

See Notes to Unaudited Consolidated Financial Statements.

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GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except per share data)


	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2020	298,332	$	24,963,769	$	2,570,874	$	(202,273)	$	27,332,370	$	154,674	$	27,487,044
Net income				757,007				757,007		13,679		770,686
Other comprehensive loss						(40,692)		(40,692)		(7,351)		(48,043)
Stock issued under share-based compensation plans	1,900	38,570						38,570				38,570
Common stock repurchased - share-based compensation plans	(456)	(84,432)						(84,432)				(84,432)
Share-based compensation expense		146,097						146,097				146,097
Repurchases of common stock	(9,689)	(1,519,204)		(294,486)				(1,813,690)				(1,813,690)
Contribution from a noncontrolling interest								—		46,320		46,320
Cash dividends declared ($0.64 per common share)				(188,203)				(188,203)				(188,203)
Balance at September 30, 2021	290,087	$	23,544,800	$	2,845,192	$	(242,965)	$	26,147,027	$	207,322	$	26,354,349


	Number of Shares	Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Global Payments Shareholders’ Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2019	300,226	$	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 income				401,876				401,876		18,406		420,282
Other comprehensive (loss) income						(41,333)		(41,333)		7,492		(33,841)
Stock issued under share-based compensation plans	1,495	51,055						51,055				51,055
Common stock repurchased - share-based compensation plans	(339)	(42,403)						(42,403)				(42,403)
Share-based compensation expense		105,081						105,081				105,081
Distribution to a noncontrolling interest										(6,955)		(6,955)
Repurchases of common stock	(2,095)	(326,441)		(77,521)				(403,962)				(403,962)
Cash dividends declared ($0.585 per common share)				(175,025)				(175,025)				(175,025)
Balance at September 30, 2020	299,287	$	25,620,599	$	2,476,962	$	(351,904)	$	27,745,657	$	218,185	$	27,963,842

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 payments technology company delivering innovative software and services to our customers globally. Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world. We operate in three reportable segments: Merchant Solutions, Issuer Solutions and Business and Consumer Solutions, which are described in "Note 13—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, 2020 was derived from the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 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, 2020.

COVID-19 Update - Since early 2020, the global economy has been, and continues to be, affected by COVID-19. The pandemic has caused and may continue to cause significant disruptions to businesses and markets worldwide as the virus spreads or has a resurgence in certain jurisdictions. Measures have been implemented by governments worldwide in an effort to contain the virus, including lockdowns, physical distancing, travel restrictions, limitations on public gatherings, work from home and restrictions on nonessential businesses. Certain government actions to gradually ease restrictions, provide economic stimulus and distribute vaccines have resulted in signs of economic recovery. However, the effects of the pandemic continue, and its ultimate severity and duration, and the implications on future global economic conditions, remain 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.

Recently adopted accounting pronouncements

Accounting Standards Update ("ASU") 2019-12 — In December 2019, the Financial Accounting Standards Board ("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 Accounting Standards Codification ("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. The adoption of ASU 2019-12 on January 1, 2021 did not have a material effect on our consolidated financial statements.

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Recently issued pronouncements not yet adopted

ASU 2021-08— In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with ASC Topic 606, at fair value on the acquisition date. ASU 2021-08 requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC Topic 606 as if it had originated the contracts, which should generally result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements. This update also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. Adoption during an interim period requires retrospective application to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application. We are evaluating the effect of ASU 2021-08 on our consolidated financial statements.

ASU 2020-04 — In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," 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. A portion of our indebtedness bears interest at a variable rate based on LIBOR. Furthermore, we have entered into hedging instruments to manage our exposure to fluctuations in the LIBOR benchmark interest rate. We are evaluating the effect of the discontinuance of LIBOR on our outstanding debt and hedging instruments and the related effect of ASU 2020-04 on our consolidated financial statements.

NOTE 2—ACQUISITION

On June 10, 2021, we acquired Zego, a real estate technology company that provides a comprehensive resident experience management software and digital commerce solutions to property managers, primarily in the United States. Zego’s real estate software and payments solutions support property managers and residents throughout the real estate lifecycle. This acquisition aligns with our technology-enabled, software driven strategy and expands our business into a new vertical market. We paid cash consideration of approximately $933 million, which we funded with cash on hand and by drawing on our revolving credit facility.

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


	Provisional Amounts at Acquisition Date		Measurement-Period Adjustments		Provisional Amounts at September 30, 2021
	(in thousands)
Cash and cash equivalents	$	67,374	$	—	$	67,374
Accounts receivable	1,033		(16)		1,017
Identifiable intangible assets	410,443		62,557		473,000
Property and equipment	3,634		(3,059)		575
Other assets	9,141		—		9,141
Accounts payable and accrued liabilities	(65,753)		(496)		(66,249)
Deferred income tax liabilities	(10,709)		(1,451)		(12,160)
Other liabilities	(8,268)		—		(8,268)
Total identifiable net assets	406,895		57,535		464,430
Goodwill	525,929		(57,113)		468,816
Total purchase consideration	$	932,824	$	422	$	933,246

This transaction was accounted for as a business combination, which generally requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date. As of September 30, 2021, we considered these amounts to be provisional because we were still in the process of gathering and reviewing information to support the valuation of assets acquired and liabilities assumed and to evaluate the basis differences for assets and liabilities for financial reporting and tax purposes. We made measurement-period adjustments, as shown in the table above, that decreased the amount of provisional goodwill by $57.1 million. The effects of the measurement-period adjustments on our consolidated statement of income for the third quarter of 2021 were not material.

Goodwill of $468.8 million arising from the acquisition, included in the Merchant Solutions segment, is attributable to expected growth opportunities, potential synergies from combining our existing businesses and an assembled workforce. We expect that a portion of the goodwill will be deductible for income tax purposes.

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


	Estimated Fair Value		Weighted-Average Estimated Amortization Periods
	(in thousands)		(years)
Customer-related intangible assets	$	208,000	13
Contract-based intangible assets	119,000		20
Acquired technologies	124,000		6
Trademarks and trade names	22,000		15
Total estimated identifiable intangible assets	$	473,000	14

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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, 2021 and 2020:


	Three Months Ended September 30, 2021
	Merchant Solutions		Issuer Solutions		Business and Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	1,245,805	$	394,893	$	204,584	$	(16,507)	$	1,828,775
Europe	189,282		120,383		3,086		—		312,751
Asia Pacific	60,811		6,890		—		(6,890)		60,811
	$	1,495,898	$	522,166	$	207,670	$	(23,397)	$	2,202,337


	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
Europe	154,262		113,907		—		—		268,169
Asia Pacific	50,660		2,564		—		(2,564)		50,660
	$	1,243,961	$	487,409	$	204,106	$	(17,661)	$	1,917,815


	Nine Months Ended September 30, 2021
	Merchant Solutions		Issuer Solutions		Business and Consumer Solutions		Intersegment Eliminations		Total

	(in thousands)

Americas	$	3,529,245	$	1,152,057	$	669,747	$	(50,180)	$	5,300,869
Europe	488,860		358,769		8,864		—		856,493
Asia Pacific	172,419		17,523		—		(17,523)		172,419
	$	4,190,524	$	1,528,349	$	678,611	$	(67,703)	$	6,329,781


	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
Europe	392,721		327,532		—		—		720,253
Asia Pacific	141,592		5,832		—		(5,832)		141,592
	$	3,460,785	$	1,461,196	$	624,774	$	(53,390)	$	5,493,365

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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, 2021 and 2020:


	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020

	(in thousands)

Relationship-led	$	799,948	$	709,749	$	2,245,839	$	1,934,265
Technology-enabled	695,950		534,212		1,944,685		1,526,520
	$	1,495,898	$	1,243,961	$	4,190,524	$	3,460,785

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, 2021 and 2020, substantially all of our revenues were recognized over time.

Supplemental balance sheet information related to contracts from customers as of September 30, 2021 and December 31, 2020 was as follows:


	Balance Sheet Location	September 30, 2021		December 31, 2020

		(in thousands)

Assets:
Capitalized costs to obtain customer contracts, net	Other noncurrent assets	$	278,565	$	253,780
Capitalized costs to fulfill customer contracts, net	Other noncurrent assets	106,236		81,371

Liabilities:
Contract liabilities, net (current)	Accounts payable and accrued liabilities	218,585		217,938
Contract liabilities, net (noncurrent)	Other noncurrent liabilities	46,290		52,944

Net contract assets were not material at September 30, 2021 or at December 31, 2020. Revenue recognized for the three months ended September 30, 2021 and 2020 from contract liability balances at the beginning of each period was $75.5 million and $69.7 million, respectively. Revenue recognized for the nine months ended September 30, 2021 and 2020 from contract liability balances at the beginning of each period was $186.0 million and $195.3 million, respectively.

ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. The purpose of this disclosure is to provide additional information about the amounts and expected timing of revenue to be recognized from the remaining performance obligations in our existing contracts. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at September 30, 2021. However, as permitted, we have elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Accordingly, the total amount of unsatisfied or partially unsatisfied performance obligations related to processing services is significantly higher than the amounts disclosed in the table below (in thousands):

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Year Ending December 31,

2021	$	256,447
2022	908,834
2023	694,952
2024	522,068
2025	410,883
2026	321,754
2027 and thereafter	518,598
Total	$	3,633,538

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS

As of September 30, 2021 and December 31, 2020, goodwill and other intangible assets consisted of the following:


	September 30, 2021		December 31, 2020

	(in thousands)

Goodwill	$	24,344,275	$	23,871,451
Other intangible assets:
Customer-related intangible assets	$	9,475,914	$	9,275,093
Acquired technologies	2,918,284		2,795,991
Contract-based intangible assets	2,108,556		1,981,260
Trademarks and trade names	1,261,241		1,239,925
	15,763,995		15,292,269
Less accumulated amortization:
Customer-related intangible assets	2,418,357		1,914,214
Acquired technologies	1,266,883		960,281
Contract-based intangible assets	165,837		120,631
Trademarks and trade names	383,092		281,260
	4,234,169		3,276,386
	$	11,529,826	$	12,015,883

The following table sets forth the changes by reportable segment in the carrying amount of goodwill for the nine months ended September 30, 2021:


	Merchant Solutions		Issuer Solutions		Business and Consumer Solutions		Total

	(in thousands)
Balance at December 31, 2020	$	13,548,690	$	7,957,616	$	2,365,145	$	23,871,451
Goodwill acquired	517,240		—		—		517,240
Effect of foreign currency translation	(33,565)		(4,258)		(1,251)		(39,074)
Measurement period adjustments	(5,202)