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MarketScreener Homepage  >  Equities  >  Nyse  >  Global Payments Inc.    GPN

GLOBAL PAYMENTS INC.

(GPN)
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GLOBAL PAYMENTS : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

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05/06/2020 | 09:27am EDT
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited consolidated
financial statements and related notes included in Item 1 of Part I of this
Quarterly Report and the Management's Discussion and Analysis of Financial
Condition and Results of Operations and consolidated financial statements
contained in our Annual Report on Form 10-K for the year ended December 31,
2019. This discussion and analysis contains forward-looking statements about our
plans and expectations of what may happen in the future. Forward-looking
statements are based on a number of assumptions and estimates that are
inherently subject to significant risks and uncertainties, and our actual
results could differ materially from the results anticipated by our
forward-looking statements.

Executive Overview


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. On September 18, 2019, we merged with Total System
Services, Inc. ("TSYS") (the "Merger").

Recent developments relating to the outbreak of the coronavirus
pandemic ("COVID-19")
In March 2020, the World Health Organization declared the outbreak of the
COVID-19 virus a global pandemic. This outbreak is causing major disruptions to
businesses and markets worldwide as the virus continues to spread. A number of
countries as well as certain states and cities within the United States have
enacted temporary closures of businesses, issued quarantine or shelter-in-place
orders and taken other restrictive measures in response to COVID-19. We are
closely monitoring the effects of the COVID-19 pandemic. We are currently
operating normally, and, at this time, we do not anticipate any significant
operational effects as a result of the pandemic.

Our first quarter performance in January, February and through the first two
weeks of March exceeded our internal expectations, excluding an immaterial
revenue effect from COVID-19 in our Asia Pacific region. However, starting in
mid-March, the COVID-19 pandemic began to affect our results significantly in
North America and Europe as governments took actions to encourage social
distancing and implement shelter-in-place directives. The deterioration in our
financial results accelerated toward the end of March as the pandemic spread
further and the number of countries and localities adopting restrictive measures
meaningfully increased. We expect that the COVID-19 pandemic will have an
adverse effect on our revenues and financial results for the remainder of 2020,
although the magnitude and duration of the ultimate effects as a result of the
COVID-19 pandemic are not possible to predict at this time. We have taken and
will continue to implement cost-saving actions, such as reductions in employee
compensation costs, business travel and marketing initiatives, to help mitigate
the financial effects of the COVID-19 pandemic.

For a further discussion of trends, uncertainties and other factors that could
affect our continuing operating results related to the effects of the COVID-19
pandemic, see the section entitled "Risk Factors" in Item 1A in this Quarterly
Report on Form 10-Q.

Consolidated Results

Highlights related to our financial condition at March 31, 2020 and results of operations for the three months then ended include the following:

• Consolidated revenue increased to $1,903.6 million, compared to $883.0

million for the prior-year period, primarily due to additional revenues

       from the acquired operations of TSYS.



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• Consolidated operating income increased to $244.0 million, compared to

       $199.5 million for the prior-year period. Operating margin decreased to
       12.8%, compared to 22.6% for the prior-year period, primarily due to an
       increase in acquisition and integration expenses associated with the
       Merger.


• Net income attributable to Global Payments increased to $143.6 million,

compared to $112.3 million for the prior-year period, primarily due to

additional income from the acquired operations of TSYS, partially offset

by increases in acquisition and integration expenses and interest expense.

• Diluted earnings per share decreased to $0.48, compared to $0.71 for the

prior-year period, reflecting the additional earnings from the acquired

       operations of TSYS, as well as an increase in the number of
       weighted-average number of shares outstanding as a result of issuing
       common shares as purchase consideration in the Merger.



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Results of Operations


We operate in three reportable segments: Merchant Solutions, Issuer Solutions
and Business and Consumer Solutions. We evaluate performance and allocate
resources based on the operating income of each operating segment. In connection
with an organizational realignment implemented after the Merger in the fourth
quarter of 2019, the presentation of segment information for the three months
ended March 31, 2019 has been recast to align with the segment presentation for
the three months ended March 31, 2020. For further information about our
reportable segments, see "Item 1. Business-Business Segments" within our Annual
Report on Form 10-K for the year ended December 31, 2019, incorporated herein by
reference, and "Note 11-Segment Information" in the notes to the accompanying
unaudited consolidated financial statements.

The following table sets forth key selected financial data for the three months
ended March 31, 2020 and 2019, this data as a percentage of total revenues and
the changes between the periods in dollars and as a percentage of the prior-year
amount. The income statement data for the three months ended March 31, 2020 and
2019 are derived from the accompanying unaudited consolidated financial
statements included in Part I, Item 1 - Financial Statements.
                         Three Months                          Three Months
                            Ended                                 Ended
                        March 31, 2020    % of Revenues(1)    March 31, 2019    % of Revenues(1)        Change       % Change

                                                            (dollar amounts in thousands)

Revenues(2):
Merchant Solutions      $  1,215,269             63.8  %      $   877,783              99.4  %      $   337,486         38.4 %
Issuer Solutions             503,762             26.5  %            5,256               0.6  %          498,506           NM
Business and Consumer
Solutions                    203,946             10.7  %                -                 -  %          203,946           NM
Segment revenues           1,922,977            101.0  %          883,039             100.0  %        1,039,938        117.8 %
Less: intersegment
revenues                     (19,379 )           (1.0 )%                -                 -  %          (19,379 )         NM
Consolidated revenues   $  1,903,598            100.0  %      $   883,039

100.0 % $ 1,020,559 115.6 %


Consolidated operating
expenses(2):
Cost of service         $    933,871             49.1  %      $   305,230              34.6  %      $   628,641        206.0 %
Selling, general and
administrative               725,748             38.1  %          378,317              42.8  %          347,431         91.8 %
Operating expenses      $  1,659,619             87.2  %      $   683,547              77.4  %      $   976,072        142.8 %

Operating income
(loss)(2):
Merchant Solutions      $    304,153             16.0  %      $   238,129              27.0  %      $    66,024         27.7 %
Issuer Solutions              59,304              3.1  %            3,439               0.4  %           55,865           NM
Business and Consumer
Solutions                     31,112              1.6  %                -                 -  %           31,112           NM
Corporate(3)                (150,590 )           (7.9 )%          (42,076 )            (4.8 )%         (108,514 )      257.9 %
Operating income        $    243,979             12.8  %      $   199,492              22.6  %      $    44,487         22.3 %

Operating margin(2):
Merchant Solutions              25.0 %                               27.1 %                                (2.1 )%
Issuer Solutions                11.8 %                                 NM                                    NM
Business and Consumer
Solutions                       15.3 %                                 NM                                    NM



NM = not meaningful.

(1) Percentage amounts may not sum to the total due to rounding.

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(2) Revenues, consolidated operating expenses, operating income (loss) and operating margin reflect the effects of acquired businesses from the respective acquisition dates. For further discussion of our acquisitions, see "Note 2-Acquisitions" in the notes to the accompanying unaudited consolidated financial statements.


(3) During the three months ended March 31, 2020, operating income for our
Merchant Solutions segment reflected the effect of acquisition and integration
expenses of $2.2 million. Operating loss for Corporate included acquisition and
integration expenses of $69.7 million and $5.3 million, during the three months
ended March 31, 2020 and 2019, respectively.

Revenues


Consolidated revenues for the three months ended March 31, 2020 increased by
115.6% to $1,903.6 million, compared to $883.0 million in the prior-year period,
primarily due to additional revenues of $1,055.0 million from the acquired
operations of TSYS, partially offset by the adverse effect on our revenues
resulting from the COVID-19 pandemic.

Merchant Solutions Segment. Revenues from our Merchant Solutions segment for the
three months ended March 31, 2020 increased by 38.4% to $1,215.3 million,
compared to $877.8 million in the prior-year period, primarily due to additional
revenues from the acquired operations of TSYS. As revenue from the Merchant
Solutions segment is predominantly generated from core merchant acquiring, we
experienced significant revenue declines starting in mid-March due to a
reduction in consumer spending and closures of certain of our merchant customer
businesses, including those who operate restaurants, retail locations, schools
and universities and casinos, as well as the cancellation of events involving
large groups of people throughout North America and Europe.

Issuer Solutions Segment. Revenues from our Issuer Solutions segment for the
three months ended March 31, 2020 was $503.8 million, primarily reflecting
revenues from the acquired operations of TSYS. Starting in mid-March, we
experienced revenue declines as a result of lower transaction volumes,
particularly in our commercial cards due to reduced travel and entertainment
spending.

Business and Consumer Solutions Segment. Revenues from our Business and Consumer
segment for the three months ended March 31, 2020 was $203.9 million, reflecting
revenues from the acquired operations of TSYS. Our Business and Consumer
Solutions segment experienced revenue declines starting in mid-March due to
decreased consumer spending, lower load activity and fewer new funded accounts.
These revenue declines were partially mitigated by positive trends in consumer
adoption of our demand deposit account product.

Operating Expenses


Cost of Service. Cost of service for the three months ended March 31, 2020
increased by 206.0% to $933.9 million, compared to $305.2 million for the
prior-year period, primarily due to additional costs associated with the
acquired operations of TSYS. Cost of service for the three months ended
March 31, 2020 reflects amortization of acquired intangibles of $314.2 million,
compared to $107.5 million for the prior-year period. Cost of service as a
percentage of revenues increased to 49.1% for the three months ended March 31,
2020, compared to 34.6% for the prior-year period, primarily due to the increase
in amortization of acquired intangibles.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the three months ended March 31, 2020 increased by
91.8% to $725.7 million, compared to $378.3 million for the prior-year period.
The increase in selling, general and administrative expenses was primarily due
to additional costs associated with the acquired operations of TSYS, and
included acquisition and integration expenses of $71.6 million, primarily
related to the Merger, compared to $5.3 million for the prior-year period.
Selling, general and administrative expenses as a percentage of revenues was
38.1% for the three months ended March 31, 2020, compared to 42.8% for the
prior-year period.

Corporate. Corporate expenses increased by $108.5 million to $150.6 million for
the three months ended March 31, 2020, compared to $42.1 million for the
prior-year period, primarily due to additional expenses associated with the
acquired operations of TSYS and an increase in acquisition and integration
expenses primarily due to the Merger. During the three months ended March 31,
2020, Corporate expenses included acquisition and integration expenses of $69.7
million, compared to $5.3 million for the prior-year period. Certain of these
Merger-related integration activities resulted in the recognition of employee
termination benefits. During the three months ended March 31, 2020, we
recognized charges of $17.6 million for actions taken, which included $2.6
million of share-based compensation expense. We expect to incur additional
charges as Merger-related integration activities continue in 2020.

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Operating Income and Operating Margin


Consolidated operating income for the three months ended March 31, 2020
increased to $244.0 million, compared to $199.5 million for the prior year due
to additional income from the acquired operations of TSYS of $115.5 million,
partially offset by the increase in acquisition and integration expenses.
Operating margin for the three months ended March 31, 2020 decreased to 12.8%,
compared to 22.6% for the prior-year period. Consolidated operating income for
the three months ended March 31, 2020 reflects an increase in amortization of
acquired intangibles of $206.7 million and an increase in acquisition and
integration expenses of $66.6 million, primarily due to the Merger, compared to
the prior-year period.

Other Income/Expense, Net

Interest and other expense for the three months ended March 31, 2020 increased by $33.6 million to $92.6 million, compared to the prior-year period, as a result of the increase in our outstanding borrowings.

Income Tax Expense


Our effective income tax rates for the three months ended March 31, 2020 and
2019 were 10.1% and 16.8%, respectively. The change in our effective tax rate
for the three months ended March 31, 2020 from the prior-year period reflects
the effect of tax credits and benefits associated with share-based awards.

Liquidity and Capital Resources


In the ordinary course of our business, a significant portion of our liquidity
comes from operating cash flows and borrowings, including the capacity under our
credit facilities. Cash flow from operating activities is used to make planned
capital investments in our business, to pursue acquisitions that meet our
corporate objectives, to pay dividends, to pay principal and interest on our
outstanding debt and to repurchase shares of our common stock. Accumulated cash
balances are invested in high-quality, marketable short-term instruments.

Our capital plan objectives are to support our operational needs and strategic
plan for long-term growth while maintaining a low cost of capital. We use a
combination of bank financing, such as borrowings under our credit facilities
and senior note issuances, for general corporate purposes and to fund
acquisitions. In addition, specialized lines of credit are also used in certain
of our markets to fund merchant settlement prior to receipt of funds from the
card network.

We believe that our current level of cash and borrowing capacity under our
senior unsecured revolving credit facility, together with expected future cash
flows from operations, will be sufficient to meet the needs of our existing
operations and planned requirements for the foreseeable future. We have
implemented measures to manage liquidity in future periods, including the
reductions of planned capital expenditures and repurchases of our common stock.
We regularly evaluate our liquidity and capital position relative to cash
requirements, and we may elect to raise additional funds in the future through
the issuance of debt or equity or by other means.

At March 31, 2020, we had cash and cash equivalents totaling $1,800.1 million.
Of this amount, we considered $1,297.8 million to be available for general
purposes, of which $29.0 million was undistributed foreign earnings considered
to be indefinitely reinvested outside the United States. The available cash of
$1,297.8 million did not include the following: (i) settlement-related cash
balances, (ii) funds held as collateral for merchant losses ("Merchant
Reserves") and (iii) funds held for customers. Settlement-related cash balances
represent funds that we hold when the incoming amount from the card networks
precedes the funding obligation to the merchant. Settlement-related cash
balances are not restricted; however, these funds are generally paid out in
satisfaction of settlement processing obligations the following day. Merchant
Reserves serve as collateral to minimize contingent liabilities associated with
any losses that may occur under the merchant's agreement. While this cash is not
restricted in its use, we believe that designating this cash to collateralize
Merchant Reserves strengthens our fiduciary standing with our member sponsors
and is in accordance with the guidelines set by the card networks. Funds held
for customers and the corresponding liability that we record in customer
deposits include amounts collected prior to remittance on our customers' behalf.


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Operating activities provided net cash of $436.6 million and $229.7 million for
the three months ended March 31, 2020 and 2019, respectively, which reflect net
income adjusted for noncash items, including depreciation and amortization and
changes in operating assets and liabilities. Fluctuations in operating assets
and liabilities are affected primarily by timing of month-end and transaction
volume, especially changes in settlement processing assets and obligations.
Changes in settlement processing assets and obligations increased operating cash
flows by $13.0 million and $118.3 million during the three months ended
March 31, 2020 and 2019, respectively. The increase in cash flows from operating
activities from the prior-year period was primarily due to the increase in
earnings before certain noncash items, including amortization of acquired
intangibles and depreciation and amortization of property and equipment.

We used net cash in investing activities of $169.7 million and $116.3 million
during the three months ended March 31, 2020 and 2019, respectively. Cash used
for investing activities primarily represents cash used to fund acquisitions,
net of cash acquired, and capital expenditures. During the three months ended
March 31, 2020 and 2019, we used cash of $68.2 million and $74.8 million,
respectively, for acquisitions.

We made capital expenditures of $104.8 million and $55.1 million to purchase
property and equipment during the three months ended March 31, 2020 and 2019,
respectively. These investments include software and hardware to support the
development of new technologies, continued consolidation and enhancement of our
operating platforms and infrastructure to support our growing business.
Consistent with our first quarter, we will continue to make significant capital
investments in the business but in light of COVID-19, will do so at a reduced
rate from our initial expectations.

Financing activities include borrowings and repayments made under our various
debt arrangements, as well as borrowings and repayments made under specialized
lines of credit to fund daily settlement activities. Our borrowing arrangements
are further described in "Note 5-Long-Term Debt and Lines of Credit" in the
notes to the accompanying unaudited consolidated financial statements and below
under "Long-Term Debt and Lines of Credit." Financing activities also include
cash flows associated with common stock repurchase programs and share-based
compensation programs, as well as cash distributions made to noncontrolling
interests and our shareholders. We used net cash in financing activities of
$77.5 million and $49.2 million during the three months ended March 31, 2020 and
2019, respectively.

Proceeds from long-term debt were $607.0 million and $344.0 million for the
three months ended March 31, 2020 and 2019, respectively. Repayments of
long-term debt were $111.0 million and $173.1 million for the three months ended
March 31, 2020 and 2019, respectively. Proceeds from and repayments of long-term
debt consist of borrowings and repayments that we make with available cash, from
time-to-time, under our Revolving Credit Facility, as well as scheduled
principal repayments we make on our term loans. Activity under our settlement
lines of credit is affected primarily by timing of month-end and transaction
volume. During the three months ended March 31, 2020 and 2019, we had net
repayments of settlement lines of credit of $78.1 million and $55.4 million,
respectively.

We repurchase our common stock mainly through open market repurchase plans.
During the three months ended March 31, 2020 and 2019, we used $421.2 million
and $156.0 million, respectively, to repurchase shares of our common stock. As
of March 31, 2020, we had $880.0 million of share repurchase authority remaining
under a share repurchase program authorized by the board of directors.

We paid dividends to our common shareholders in the amounts of $58.3 million and $1.6 million during the three months ended March 31, 2020 and 2019, respectively.

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Long-Term Debt and Lines of Credit

Senior Unsecured Credit Facilities


We have a term loan credit agreement ("Term Loan Credit Agreement") and a
revolving credit agreement ("Unsecured Revolving Credit Agreement") in each case
with Bank of America, N.A., as administrative agent, and a syndicate of
financial institutions, as lenders and other agents. The Term Loan Credit
Agreement provides for a senior unsecured $2.0 billion term loan facility. The
Unsecured Revolving Credit Agreement provides for a senior unsecured $3.0
billion revolving credit facility. Borrowings under the term loan facility were
made in U.S. dollars and borrowings under the revolving credit facility are
available to be made in U.S. dollars, euros, sterling, Canadian dollars and,
subject to certain conditions, certain other currencies at our option.
Borrowings in U.S. dollars and certain other London Interbank Offered Rate
("LIBOR")-quoted currencies will bear interest, at our option, at a rate equal
to either (1) the rate (adjusted for any statutory reserve requirements for
eurocurrency liabilities) for eurodollar deposits in the London interbank
market, (2) a floating rate of interest set forth on the applicable LIBOR screen
page designated by Bank of America or (3) the highest of (a) the federal funds
effective rate plus 0.5%, (b) the rate of interest as publicly announced by Bank
of America as its "prime rate" or (c) LIBOR plus 1.0%, in each case, plus an
applicable margin. As of March 31, 2020, borrowings outstanding under the term
loan facility and the revolving credit facility were $2.0 billion and $1.4
billion, respectively.

We continue to monitor developments related to the anticipated transition from
LIBOR to an alternative benchmark reference rate, such as the Secured Overnight
Financing Rate ("SOFR"), beginning January 1, 2022. Additionally, we maintain
contact with our lenders and other stakeholders to evaluate the potential
effects of these changes on our future financing activities.

As of March 31, 2020, the interest rates on the term loan facility and the
revolving credit facility were 2.36% and 2.02%, respectively. In addition, we
are required to pay a quarterly commitment fee with respect to the unused
portion of the revolving credit facility at an applicable rate per annum ranging
from 0.125% to 0.300% depending on our credit rating. Beginning on December 31,
2022, and at the end of each quarter thereafter, the Term Loan Facility must be
repaid in quarterly installments in the amount of 2.50% of original principal
through the maturity date with the remaining principal balance due upon maturity
in September 2024. The revolving credit facility also matures in September 2024.

We may issue standby letters of credit of up to $250 million in the aggregate
under the revolving credit facility. Outstanding letters of credit under the
revolving credit facility reduce the amount of borrowings available to us. The
total available commitments under the revolving credit facility at March 31,
2020 were $1,576.5 million.

Senior Unsecured Notes

We have $3.0 billion in aggregate principal amount of senior unsecured notes,
consisting of the following: (i) $1.0 billion aggregate principal amount of
2.650% senior notes due 2025; (ii) $1.25 billion aggregate principal amount of
3.200% senior notes due 2029; and (iii) $750.0 million aggregate principal
amount of 4.150% senior notes due 2049. Interest on the senior notes is payable
semi-annually in arrears on each February 15 and August 15. Each series of the
senior notes is redeemable, at our option, in whole or in part, at any time and
from time-to-time at the redemption prices set forth in the related indenture.
We have an additional $3.0 billion in aggregate principal amount of senior
unsecured notes consisting of the following: (i) $750 million aggregate
principal amount of 3.800% senior notes due 2021; (ii) $550 million aggregate
principal amount of 3.750% senior notes due 2023; (iii) $550 million aggregate
principal amount of 4.000% senior notes due 2023; (iv) $750 million aggregate
principal amount of 4.800% senior notes due 2026; and (v) $450 million aggregate
principal amount of 4.450% senior notes due 2028. For the 3.800% senior notes
due 2021 and the 4.800% senior notes due 2026, interest is payable semi-annually
each April 1 and October 1. For the 3.750% senior notes due 2023, the 4.000%
senior notes due 2023 and the 4.450% senior notes due 2028, interest is payable
semi-annually each June 1 and December 1.

Compliance with Covenants


The senior unsecured term loan and revolving credit facility contain customary
conditions to funding, affirmative covenants, negative covenants, financial
covenants and events of default. As of March 31, 2020, financial covenants under
the term loan facility required a leverage ratio of 3.50 to 1.00 and an interest
coverage ratio of 3.00 to 1.00. We were in compliance with all applicable
covenants as of March 31, 2020.


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Settlement Lines of Credit


In various markets where we do business, we have specialized lines of credit,
which are restricted for use in funding settlement. The settlement lines of
credit generally have variable interest rates, are subject to annual review and
are denominated in local currency but may, in some cases, facilitate borrowings
in multiple currencies. For certain of our lines of credit, the available credit
is increased by the amount of cash we have on deposit in specific accounts with
the lender. Accordingly, the amount of the outstanding lines of credit may
exceed the stated credit limit. As of March 31, 2020 and December 31, 2019, a
total of $58.0 million and $74.5 million, respectively, of cash on deposit was
used to determine the available credit.

As of March 31, 2020 and December 31, 2019, respectively, we had $375.2 million
and $463.2 million outstanding under these lines of credit with additional
capacity to fund settlement of $1,092.1 million as of March 31, 2020. During the
three months ended March 31, 2020, the maximum and average outstanding balances
under these lines of credit were $679.0 million and $376.4 million,
respectively. The weighted-average interest rate on these borrowings was 1.99%
and 3.16% at March 31, 2020 and December 31, 2019, respectively.

See "Note 5-Long-Term Debt and Lines of Credit" in the notes to the accompanying
unaudited consolidated financial statements for further information about our
borrowing agreements and our lease liabilities.

Commitments and Contractual Obligations


During the three months ended March 31, 2020, our commitments and contractual
obligations increased from the amounts disclosed in "Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Commitments and Contractual Obligations" in our Annual Report on Form
10-K for the year ended December 31, 2019. The increase primarily relates to the
acquisition of software and related services for $293.8 million. We financed
$97.6 million of this amount utilizing a two-year vendor financing arrangement.
As of March 31, 2020, the estimated remaining purchase commitments for this
acquisition are $47.6 million during the remainder of 2020, $64.9 million during
2021, $66.9 million during 2022 and $16.8 million during 2023.

Effects of the COVID-19 Pandemic on our Critical Accounting Policies


Because of the effects of the COVID-19 pandemic on our business beginning in
mid-March, we evaluated the potential effects on our financial statements as of
and for the three months ended March 31, 2020. However, the magnitude and
duration of the ultimate effect of the COVID-19 pandemic are not possible to
predict at this time, and our assessments are therefore subject to material
revision.

Goodwill - We considered a variety of factors that might indicate that it is
more likely than not that the fair value of any reporting unit is below its
carrying amount at March 31, 2020, including general macroeconomic conditions,
industry and market conditions, cost factors, overall financial performance of
our reporting units, events or changes affecting the composition or carrying
amount of the net assets of our reporting units, our share price and other
relevant events. For certain of our reporting units that were recently acquired
in the Merger, we also considered the expected near term impact of the COVID-19
pandemic on revenues and our cost mitigation efforts as well as longer term
performance expectations. Based on the analyses completed, we believe it is not
more likely than not that the carrying amount of any our reporting units
exceeded the fair value as of March 31, 2020.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our financial condition, revenues, results of operations, liquidity, capital expenditures or capital resources.

Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted


From time-to-time, new accounting pronouncements are issued by the Financial
Accounting Standards Board or other standards setting bodies that may affect our
current and/or future financial statements. See "Note 1-Basis of Presentation
and Summary of Significant Accounting Policies" in the notes to the accompanying
unaudited consolidated financial statements for a discussion of recently adopted
accounting pronouncements and recently issued accounting pronouncements not yet
adopted.


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Forward-Looking Statements


Investors are cautioned that some of the statements we use in this report
contain forward-looking statements and are made pursuant to the "safe-harbor"
provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements, which are based on current expectations, estimates
and projections about the industry and markets in which we operate, and beliefs
of and assumptions made by our management, involve risks, uncertainties and
assumptions that could significantly affect the financial condition, results of
operations, business plans and the future performance of Global Payments. Actual
events or results might differ materially from those expressed or forecasted in
these forward-looking statements. Accordingly, we cannot guarantee that our
plans and expectations will be achieved. Such statements may include, but are
not limited to, statements about the effects of the COVID-19 pandemic on our
business, including estimates of the effects of the pandemic on our revenues and
financial operating results, the effects of actions taken by us in response to
the pandemic, statements about the anticipated benefits of the Merger, including
our future financial and operating results, the combined company's plans,
objectives, expectations and intentions, statements about our expected financial
and operating results, projected future growth of business, and other statements
that are not historical facts. Although we believe the expectations reflected in
any forward-looking statements are based on reasonable assumptions, we can give
no assurance that our expectations will be attained, and therefore actual
outcomes and results may differ materially from what is expressed or forecasted
in such forward-looking statements.

In addition to factors previously disclosed in Global Payments' reports filed
with the SEC and those identified elsewhere in this communication, the following
factors, among others, could cause actual results to differ materially from
forward-looking statements or historical performance: the effects and duration
of global economic, political, market, health and social events or other
conditions, including the effects and duration of the COVID-19 pandemic;
regulatory measures or voluntary actions, including social distancing,
shelter-in-place orders, shutdowns of nonessential businesses and similar
measures imposed or undertaken in an effort to combat the spread of the COVID-19
pandemic; management's assumptions and projections used in their estimates of
the timing and severity of the effects of the COVID-19 pandemic on our future
revenues and results of operations; our ability to meet our liquidity needs in
light of the effects of the COVID-19 pandemic; the outcome of any legal
proceedings that may be instituted against Global Payments or its or TSYS'
current or former directors; difficulties, delays and higher than anticipated
costs related to integrating the businesses of Global Payments and TSYS,
including with respect to implementing systems to prevent a material security
breach of any internal systems or to successfully manage credit and fraud risks
in business units; failing to fully realize anticipated cost savings and other
anticipated benefits of the Merger when expected or at all; business disruptions
from the Merger or integration that will harm our business, including current
plans and operations; potential adverse reactions or changes to business
relationships resulting from the Merger, including as it relates to the
businesses' ability to successfully renew existing client contracts on favorable
terms or at all and obtain new clients; failing to comply with the applicable
requirements of Visa, Mastercard or other payment networks or card schemes or
changes in those requirements; the ability to maintain Visa and Mastercard
registration and financial institution sponsorship; the ability to retain and
hire key personnel; the diversion of management's attention from ongoing
business operations; the continued availability of capital and financing
following the Merger; the business, economic and political conditions in the
markets in which we operate; increased competition in the markets in which we
operate and our ability to increase our market share in existing markets and
expand into new markets; our ability to safeguard our data; risks associated
with our indebtedness, foreign currency exchange and interest rate risks; the
effects of new or changes in current laws, regulations, credit card association
rules or other industry standards, including privacy and cybersecurity laws and
regulations; and events beyond our control, such as acts of terrorism, and other
factors included in the "Risk Factors" in our Annual Report on Form 10-K for the
year ended December 31, 2019, and in other documents that we file with the SEC,
which are available at http://www.sec.gov. Any forward-looking statements speak
only as of the date of this communication or as of the date they were made, and
we undertake no obligation to update forward-looking statements, except as
required by law.

© Edgar Online, source Glimpses

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