gpn-20220331

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 March 31, 2022


☐						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 April 28, 2022 was 281,539,612.

Table of Contents

GLOBAL PAYMENTS INC.

FORM 10-Q

For the quarterly period ended March 31, 2022

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION
ITEM 1.	Unaudited Consolidated Statements of Income for the three months ended March 31, 2022 and 2021	3
	Unaudited Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021	4
	Consolidated Balance Sheets at March 31, 2022 (unaudited) and December 31, 2021	5
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	6
	Unaudited Consolidated Statements of Changes in Equity for the three months ended March 31, 2022 and 2021	7
	Notes to Unaudited Consolidated Financial Statements	8
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	30
PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings	32
ITEM 1A.	Risk Factors	32
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
ITEM 6.	Exhibits	34
	Signatures	35

Table of Contents

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
	March 31, 2022		March 31, 2021

Revenues	$	2,156,254	$	1,990,007
Operating expenses:
Cost of service	957,158		925,246
Selling, general and administrative	823,149		789,502
	1,780,307		1,714,748
Operating income	375,947		275,259

Interest and other income	1,711		4,234
Interest and other expense	(93,283)		(83,141)
	(91,572)		(78,907)
Income before income taxes and equity in income of equity method investments	284,375		196,352
Income tax expense	52,218		20,675
Income before equity in income of equity method investments	232,157		175,677
Equity in income of equity method investments, net of tax	17,479		22,733
Net income	249,636		198,410
Net income attributable to noncontrolling interests, net of tax	(4,903)		(1,729)
Net income attributable to Global Payments	$	244,733	$	196,681

Earnings per share attributable to Global Payments:
Basic earnings per share	$	0.87	$	0.66
Diluted earnings per share	$	0.87	$	0.66

See Notes to Unaudited Consolidated Financial Statements.

Table of Contents

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Three Months Ended
	March 31, 2022		March 31, 2021

Net income	$	249,636	$	198,410
Other comprehensive income (loss):
Foreign currency translation adjustments	(32,960)		(33,567)
Income tax benefit related to foreign currency translation adjustments	670		750
Net unrealized gains on hedging activities	8,934		994
Reclassification of net unrealized losses on hedging activities to interest expense	9,445		10,838
Income tax expense related to hedging activities	(4,456)		(2,864)
Other, net of tax	—		7,775
Other comprehensive loss	(18,367)		(16,074)

Comprehensive income	231,269		182,336
Comprehensive loss attributable to noncontrolling interests	441		4,245
Comprehensive income attributable to Global Payments	$	231,710	$	186,581

See Notes to Unaudited Consolidated Financial Statements.

Table of Contents

GLOBAL PAYMENTS INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	March 31, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,045,277	$	1,979,308
Accounts receivable, net	972,961		946,247
Settlement processing assets	1,450,419		1,143,539
Prepaid expenses and other current assets	683,753		641,891
Total current assets	5,152,410		4,710,985
Goodwill	24,793,799		24,813,274
Other intangible assets, net	11,292,243		11,633,709
Property and equipment, net	1,716,257		1,687,586
Deferred income taxes	22,754		12,117
Other noncurrent assets	2,457,797		2,422,042
Total assets	$	45,435,260	$	45,279,713
LIABILITIES AND EQUITY
Current liabilities:
Settlement lines of credit	$	497,345	$	484,202
Current portion of long-term debt	120,226		78,505
Accounts payable and accrued liabilities	2,550,112		2,542,256
Settlement processing obligations	1,699,491		1,358,051
Total current liabilities	4,867,174		4,463,014
Long-term debt	11,723,798		11,414,809
Deferred income taxes	2,725,980		2,793,427
Other noncurrent liabilities	723,503		739,046
Total liabilities	20,040,455		19,410,296
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 March 31, 2022 and December 31, 2021; 281,434,153 issued and outstanding at March 31, 2022 and 284,750,452 issued and outstanding at December 31, 2021	—		—
Paid-in capital	22,338,086		22,880,261
Retained earnings	3,068,683		2,982,122
Accumulated other comprehensive loss	(247,205)		(234,182)
Total Global Payments shareholders’ equity	25,159,564		25,628,201
Noncontrolling interests	235,241		241,216
Total equity	25,394,805		25,869,417
Total liabilities and equity	$	45,435,260	$	45,279,713

See Notes to Unaudited Consolidated Financial Statements.

Table of Contents

GLOBAL PAYMENTS INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Three Months Ended
	March 31, 2022		March 31, 2021
Cash flows from operating activities:
Net income	$	249,636	$	198,410
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	99,665		96,372
Amortization of acquired intangibles	329,007		329,201
Amortization of capitalized contract costs	25,906		21,050
Share-based compensation expense	38,399		37,165
Provision for operating losses and credit losses	28,523		23,405
Noncash lease expense	21,555		27,066
Deferred income taxes	(80,841)		(56,390)
Equity in income of equity method investments, net of tax	(17,479)		(22,733)
Distribution received on investments	6,022		438
Other, net	6,127		(6,285)
Changes in operating assets and liabilities, net of the effects of business combinations:
Accounts receivable	(34,191)		(37,141)
Settlement processing assets and obligations, net	48,198		21,714
Prepaid expenses and other assets	(115,904)		(33,128)
Accounts payable and other liabilities	25,377		262
Net cash provided by operating activities	630,000		599,406
Cash flows from investing activities:
Business combinations and other acquisitions, net of cash acquired	(4,726)		(11,074)
Capital expenditures	(156,102)		(86,159)
Other, net	5		293
Net cash used in investing activities	(160,823)		(96,940)
Cash flows from financing activities:
Net borrowings from settlement lines of credit	16,497		108,488
Proceeds from long-term debt	1,529,157		1,987,005
Repayments of long-term debt	(1,176,496)		(1,575,435)
Payments of debt issuance costs	(1,706)		(6,819)
Repurchases of common stock	(649,654)		(802,955)
Proceeds from stock issued under share-based compensation plans	7,940		17,705
Common stock repurchased - share-based compensation plans	(26,295)		(39,437)
Distributions to noncontrolling interests	(5,534)		—
Dividends paid	(70,243)		(57,574)
Net cash used in financing activities	(376,334)		(369,022)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(36,147)		(21,141)
Increase in cash, cash equivalents and restricted cash	56,696		112,303
Cash, cash equivalents and restricted cash, beginning of the period	2,123,023		2,089,771

SEC Form 10-Q filed by Global Payments Inc.