GLOBAL PAYMENTS INC
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 31, 2024
GPN$97.40+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001123360-24-000025
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0001123360-24-000036
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 121 current paragraphs.
50 unchanged; 37 reworded; 32 added; 11 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
Strategy and Business Transformation
Current report
Early this year, we launched a holistic review of our business to examine our strategy, operational fitness and ability to deliver sustainable performance. We refreshed our strategy to ensure we are focusing our resources, efforts and investments on the areas of the business that will drive the best opportunities for growth. We then evaluated our organizational structure and operating model and capacity to execute against this strategy. This gave rise to a broad operational transformation agenda to ensure we are poised for success.
Current report
We are streamlining and simplifying our strategy, organization and operating environment through our transformation program to deliver a global, unified operating company. We are aligning the Global Payments brand identity across our assets and solidifying go-to-market activities under a common umbrella. In our Merchant Solutions segment, we are harmonizing products and capabilities and prioritizing small and medium-sized businesses to deliver our full suite of differentiated software and commerce enablement solutions. In our Issuer Solutions segment, we are capitalizing on growth opportunities through our cloud modernization and cross-selling initiatives, while also leveraging the strategic value of this business to extend our capabilities across the payments value chain.
Current report
We have consolidated our technology organizations and teams under common leadership to enhance speed and quality of product development with a customer-centric, product-led mindset. We have also centralized our operations functions to enhance our servicing model and focus on improving the customer journey, leveraging best-in-class technology and providing differentiated service experiences for our clients.
Current report
These strategic, organizational and operational transformation activities have just begun and are expected to continue over the next few years. As we focus on executing and delivering transformation initiatives, we anticipate incremental expenses related to the transformation and potential asset impairment charges through early 2027. We are also undertaking a strategic review of our business portfolio to evaluate potential assets for divestiture to further streamline our business and create value for shareholders.
Current report
We expect our transformation initiatives to generate more than $500 million of annual run-rate operating income benefit by the first half of 2027.
Current report
Key Drivers of our Results of Operations
Current report
Our revenues for both of our segments are dependent upon the volume of payment transactions we process, cardholder accounts on file and other factors (transaction volume). As the majority of our services are priced as a percentage of transaction value or specified fee per unit or transaction, many under multi-year customer arrangements, our revenues generally grow period-over-period in line with the rate of increase in transaction volume.
Current report
Our operating expenses consist primarily of the cost of the technology to provide services to our customers and our people costs to support the operations. Many of those costs do not vary directly with the level of payment transactions we process for our customers, generating operating leverage. As revenues increase, operating income and operating margin (operating income as a percentage of revenues) generally increase.
Current report
We also grow our business through strategic acquisitions of similar businesses. Our revenues increase from the transaction volume from the customers of the acquired businesses. As we integrate the businesses, we also are able to improve operating income and operating margin by generating synergies to lower the cost base of those businesses.
Current report
During the three months ended September 30, 2024, Corporate expenses also reflected employee termination benefits of $56.4 million, costs of $59.2 million associated with our business transformation initiative and charges of $55.8 million for technology assets that will no longer be utilized under a revised technology architecture development strategy.
Current report
During the nine months ended September 30, 2024, Corporate expenses also reflected employee termination benefits of $94.1 million, costs of $59.2 million associated with our the business transformation initiative and charges of $55.8 million for technology assets that will no longer be utilized under a revised technology architecture development strategy.
Current report
Consolidated revenues for each of the three and nine months ended September 30, 2024 increased by 5.1% to $2,601.6 million and $7,590.5 million, respectively, compared to $2,475.7 million and $7,220.6 million, respectively, for the prior year.
Current report
The nine months ended September 30, 2023 included revenues of $182.7 million related to the consumer business divested in April 2023.
Current report
Merchant Solutions Segment. Revenues from our Merchant Solutions segment for the three months ended September 30, 2024 increased by $113.7 million, or 6.0%, to $1,997.7 million, compared to $1,884.0 million for the prior year. Revenues from our Merchant Solutions segment for the nine months ended September 30, 2024 increased by $470.9 million, or 8.8%, to $5,802.8 million, compared to $5,331.9 million for the prior year.
Current report
For the three months ended September 30, 2024, our technology-enabled distribution channel contributed $86.5 million to segment revenue growth. For the nine months ended September 30, 2024, our technology-enabled distribution channel contributed $295.5 million to segment revenue growth. The increase in revenues in our technology-enabled distribution channel was primarily driven by growth in transaction volume within integrated and embedded payments from new customers and incremental cross-selling of services.
Current report
For the three months ended September 30, 2024, our relationship-led distribution channel contributed $27.2 million to segment revenue growth. For the nine months ended September 30, 2024, our relationship-led channel contributed $175.4 million to segment revenue growth. The increase in revenues in our relationship-led distribution channel was primarily driven by an increase in transaction volume, including from recently acquired businesses.
Current report
For the nine months ended September 30, 2024, the net impact of our acquisition and divestiture activities contributed approximately 3.1% growth to Merchant Solutions, with the EVO business acquired in March 2023 contributing approximately 3.6% growth.
Current report
Cost of Service. Cost of service for the three and nine months ended September 30, 2024 was $946.9 million and $2,807.8 million, respectively, compared to $915.5 million and $2,805.2 million, respectively, for the prior year. Cost of service as a percentage of revenues decreased to 36.4% and 37.0%, respectively, for the three and nine months ended September 30, 2024, compared to 37.0% and 38.9%, respectively, for the prior year.
Current report
For the three and nine months ended September 30, 2024, cost of service as a percentage of revenues decreased primarily due to improved operating leverage in the business, partially offset by increases of $10.0 million and $43.7 million, respectively, in amortization and depreciation expenses, primarily related to amortization of acquired intangibles for recent acquisitions. For the nine months ended September 30, 2024, cost of service as a percentage of revenues also decreased as a result of the divestiture of our consumer business, which had a higher cost of service as a percentage of revenues relative to our Merchant Solutions and Issuer Solutions segments. The effect on cost of service as a percentage of revenues of the acquired EVO business was insignificant.
Current report
Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three and nine months ended September 30, 2024 were $1,179.0 million and $3,282.2 million, respectively, compared to $1,002.0 million and $3,058.6 million, respectively, for the prior year. Selling, general and administrative expenses as a percentage of revenues was 45.3% and 43.2%, respectively, for the three and nine months ended September 30, 2024, compared to 40.5% and 42.4%, respectively, for the prior year.
Current report
For the three and nine months ended September 30, 2024, selling, general and administrative expenses as a percentage of revenues increased primarily due to higher corporate expenses. Corporate expenses for the three and nine months ended September 30, 2024 include employee termination benefits of $56.4 million and $94.1 million, respectively, including $15.5 million and $18.2 million, respectively, of share-based compensation expense. Corporate expenses for the three and nine months ended September 30, 2024 also include costs of $59.2 million associated with our business transformation initiatives, primarily for resources to support the initiative, and charges of $55.8 million for technology assets that will no longer be utilized under a revised cloud development strategy. This increase in selling, general and administrative expenses as a percentage of revenues was partially offset by a reduction in acquisition and integration expenses of $29.3 million and $64.0 million for the three and nine months ended September 30, 2024, respectively. For the nine months ended September 30, 2024, our acquisition and divestiture activities had less than 1% effect on selling, general and administrative expenses as a percentage of revenues, both individually and in aggregate.
Current report
Consolidated operating income for the three and nine months ended September 30, 2024 was $475.6 million and $1,500.5 million, respectively, compared to $558.2 million and $1,217.7 million, respectively, for the prior year. Operating margin for the three and nine months ended September 30, 2024 were 18.3% and 19.8%, respectively, compared to 22.5% and 16.9%, respectively, for the prior year.
Current report
•Consolidated operating income decreased $82.6 million and operating margin decreased 4.2% primarily due to the higher costs incurred in connection with business transformation activities and the technology asset charge as described above;
Current report
•Merchant Solutions segment operating income increased $69.7 million due to higher revenues, and operating margin increased 1.5% due to improved operating leverage in the business; and
Current report
•Issuer Solutions segment operating income decreased $7.8 million and operating margin decreased 1.6% due to higher costs, including systems costs to support development activities and compensation costs.
Current report
For the nine months ended September 30, 2024:
Current report
•Consolidated operating income and operating margin reflected the higher costs incurred in connection with business transformation activities and the technology asset charge as described above;
Current report
•Merchant Solutions segment operating income increased $211.9 million due to higher revenues, and operating margin increased 1.0% due to an improved operating leverage in the business; and
Current report
•Issuer Solutions segment operating income increased $30.1 million due to higher revenues and operating margin increased 1.1% due to improved operating leverage.
Current report
As of September 30, 2024, the remaining amount available under our share repurchase program was $1,371.9 million. On October 24, 2024, our board of directors approved an increase to our existing share repurchase program authorization, which raised the total available authorization to $2.5 billion.
Current report
As of September 30, 2024, we had no borrowings outstanding under our commercial paper program.
Removed paragraphs (11)
Previous report
•Merchant Solutions and Issuer Solutions segment operating income and operating margin for the three and six months ended June 30, 2024 increased compared to the prior year primarily due to the favorable effect of increases in revenues, since certain fixed costs do not vary with revenues, and continued expense management.
Previous report
Consolidated revenues for the three and six months ended June 30, 2024 increased by 4.7% and 5.1%, respectively, to $2,568.8 million and $4,989.0 million, respectively, compared to $2,452.5 million and $4,744.9 million, respectively, for the prior year. The increase in revenues was primarily due to an increase in transaction volumes. The change for the three months ended June 30, 2024 included the unfavorable effect on revenues of the consumer business divested in April 2023. For the six months ended June 30, 2024, the effect on revenues from the EVO business acquired in March 2023 was offset by the effect on revenue of the businesses divested in April 2023.
Previous report
Merchant Solutions Segment. Revenues from our Merchant Solutions segment for the three and six months ended June 30, 2024 increased by 7.0% and 10.4%, respectively, to $1,971.0 million and $3,805.1 million, respectively, compared to $1,842.3 million and $3,447.9 million, respectively, for the prior year. The increase in revenues was primarily due to an increase in transaction volumes and growth in subscription and software revenue. The increase in transaction volumes for the six months ended June 30, 2024 also included the effect of the EVO business acquired in March 2023.
Previous report
Cost of Service. Cost of service for the three and six months ended June 30, 2024 was $938.5 million and $1,860.9 million, respectively, compared to $942.0 million and $1,889.7 million, respectively, for the prior year. Cost of service as a percentage of revenues decreased to 36.5% and 37.3%, respectively, for the three and six months ended June 30, 2024, compared to 38.4% and 39.8%, respectively, for the prior year. The decrease in cost of service was primarily due to the elimination of costs related to the businesses divested in 2023. These favorable effects were partially offset by the inclusion of costs for the EVO business, including the related amortization of acquired intangibles. Cost of service included amortization of acquired intangibles of $345.9 million and $344.4 million for the three months ended June 30, 2024 and 2023, respectively. Cost of service included amortization of acquired intangibles of $689.2 million and $645.7 million for the six months ended June 30, 2024 and 2023, respectively. The decrease in cost of service as a percentage of revenues also reflects the favorable effect of the increase in revenues, since certain fixed costs do not vary with revenues.
Previous report
Selling, General and Administrative Expenses. Selling, general and administrative expenses for the three and six months ended June 30, 2024 were $1,057.7 million and $2,103.2 million, respectively, compared to $1,013.5 million and $2,056.6 million, respectively, for the prior year. Selling, general and administrative expenses as a percentage of revenues was 41.2% and 42.2%, respectively, for the three and six months ended June 30, 2024, compared to 41.3% and 43.3%, respectively, for the prior year. Higher variable selling and other costs related to the increase in revenues and the inclusion of costs for the EVO business were partially offset by the elimination of costs related to the businesses divested in 2023 and lower share-based compensation and acquisition and integration expenses in the current year. The decrease in selling, general and administrative expenses as a percentage of revenues also reflects the favorable effect of the increase in revenues, since certain fixed costs do not vary with revenues.
Previous report
Selling, general and administrative expenses included acquisition and integration expenses of $55.7 million and $67.5 million for the three months ended June 30, 2024 and 2023, respectively, and $134.6 million and $169.3 million for the six months ended June 30, 2024 and 2023, respectively. Share-based compensation expense was $43.2 million and $47.1 million for the three months ended June 30, 2024 and 2023, respectively, and $83.4 million and $136.7 million for the six months ended June 30, 2024 and 2023, respectively.
Previous report
Corporate. Corporate expenses for the three and six months ended June 30, 2024 were $210.3 million and $444.6 million, respectively, compared to $204.1 million and $486.8 million, respectively, for the prior year. For the three and six months ended June 30, 2024, corporate expenses were favorably affected by the decrease in acquisition and integration and share-based compensation expenses as described above. Corporate expenses for the three months ended June 30, 2024 also included higher professional services costs as compared to the prior year.
Previous report
Consolidated operating income for the three and six months ended June 30, 2024 was $572.6 million and $1,024.9 million, respectively, compared to $602.7 million and $659.5 million, respectively, for the prior year. Operating margin for the three and six months ended June 30, 2024 was 22.3% and 20.5%, respectively, compared to 24.6% and 13.9%, respectively, for the prior year. Consolidated operating income and operating margin for the three and six months ended June 30, 2024 compared to the prior year included the favorable effects of the increase in revenues, since certain fixed costs do not vary with revenues, prudent expense management and lower acquisition and integration and share-based compensation expenses as described above. These effects were partially offset by higher amortization of acquired intangibles as described above.
Previous report
In our Merchant Solutions segment, operating income and operating margin for the three and six months ended June 30, 2024 increased compared to the prior year primarily due to the favorable effects of the increase in revenues, since certain fixed costs do not vary with revenues, and continued expense management. These favorable effects were partially offset by incremental expenses related to continued investment in products, innovation and our technology environments.
Previous report
In our Issuer Solutions segment, operating income and operating margin for the three and six months ended June 30, 2024 increased compared to the prior year primarily due to the favorable effect of the increase in revenues, since certain fixed costs do not vary with revenues, and continued expense management.
Previous report
As of June 30, 2024, we had net borrowings under our commercial paper program of $431.6 million outstanding with a weighted average annual interest rate of 6.03%.
Reworded paragraphs (37)
Previous wording
We have grown organically, as well as through acquisitions, and continue to invest in new technology solutions, infrastructure to support our growing business and the ongoing consolidation and enhancement of our operating platforms. These investments include new product development and innovation to further enhance and differentiate our suite of technology and cloud-based solutions available to customers, along with migration of certain underlying technology platforms to cloud environments to enhance performance, improve speed to market and drive cost efficiencies. We also continue to execute on integration and other business transformation activities, such as combining business operations, streamlining technology infrastructure, eliminating duplicative corporate and operational support structures and realizing scale efficiencies.
Current wording
We have grown organically, as well as through acquisitions, and continue to invest in new technology solutions, infrastructure to support our growing business and the ongoing consolidation and enhancement of our operating platforms. These investments include new product development and innovation to further enhance and differentiate our suite of technology and solutions available to customers, along with migration of certain underlying technology platforms to cloud environments to enhance performance, improve speed to market and drive cost efficiencies. We also continue to execute on integration and other business transformation activities, such as combining business operations, streamlining technology infrastructure, eliminating duplicative corporate and operational support structures and realizing scale efficiencies.
Previous wording
Highlights related to our financial condition at June 30, 2024, and results of operations for the three and six months then ended, include the following:
Current wording
Highlights related to our financial condition at September 30, 2024, and results of operations for the three and nine months then ended, include the following:
Previous wording
•Consolidated revenues for the three and six months ended June 30, 2024 increased to $2,568.8 million and $4,989.0 million, respectively, compared to $2,452.5 million and $4,744.9 million, respectively, for the prior year. The increase in consolidated revenues was primarily due to an increase in transaction volumes. The change for the three months ended June 30, 2024 included the unfavorable effect on revenues of the consumer business divested in April 2023. For the six months ended June 30, 2024, the effect on revenues from the EVO business acquired in March 2023 was offset by the effect on revenue of the businesses divested in April 2023.
Current wording
•Consolidated revenues for the three and nine months ended September 30, 2024 increased to $2,601.6 million and $7,590.5 million, respectively, compared to $2,475.7 million and $7,220.6 million, respectively, for the prior year. The increase in consolidated revenues was primarily due to growth in transaction volumes. For the nine months ended September 30, 2024, the effect on revenues from the EVO business acquired in March 2023 was offset by the effect on revenues from the divestitures of our gaming and consumer businesses in April 2023.
Previous wording
Segment Operating Income and Operating Margin
Current wording
•Merchant Solutions segment operating income for the three and nine months ended September 30, 2024 and Issuer Solutions segment operating income for the nine months ended September 30, 2024 increased compared to the prior year primarily due to the favorable effect of increases in revenues, as certain fixed costs do not vary with revenues. Merchant Solutions operating income for the nine months ended September 30, 2024 also reflected an increase related to the acquired EVO business, as the same period in 2023 only reflected the acquisition for a portion of the period. Issuer Solutions segment operating income for the three months ended September 30, 2024 decreased compared to the prior year due to slightly higher costs.
Previous wording
•Consolidated operating income for the three and six months ended June 30, 2024 included the favorable effects of the increase in revenues as compared to the prior year and lower share-based compensation and acquisition and integration expenses, partially offset by an increase in amortization of acquired intangibles, primarily related to the acquisition of EVO. Consolidated operating income for the three and six months ended June 30, 2023 included the effects of the gain on the sale of our gaming business and the loss on the sale of our consumer business.
Current wording
•Consolidated operating income for the three and nine months ended September 30, 2024 included the favorable effects of the increase in revenues as compared to the prior year and lower acquisition and integration expenses. These favorable effects were offset by expenses related to business transformation activities, a technology asset charge and an increase in amortization of acquired intangibles, primarily related to the acquisition of EVO. Consolidated operating income for the nine months ended September 30, 2023 included the effects of the gain on the sale of our gaming business and the loss on the sale of our consumer business.
Previous wording
We have sought to reduce our interest rate risk through the issuance of fixed rate debt in place of variable rate debt, including the effect of interest rate swap hedging arrangements to convert a significant portion of the eligible variable rate borrowings under our revolving credit facility to a fixed rate. However, inflationary pressure or interest rate fluctuations could adversely affect our business and financial performance as a result of higher costs and/or lower consumer spending. In addition, continued inflation or a rise in interest rates could have an adverse effect on our future financial results and the recoverability of assets. However, as the future magnitude, duration and effects of these conditions are difficult to predict at this time, we are unable to predict the extent of the potential effect on our financial results.
Current wording
We have sought to reduce our interest rate risk through the issuance of fixed rate debt in place of variable rate debt and through interest rate swap hedging arrangements that convert a significant portion of the eligible variable rate borrowings under our revolving credit facility to a fixed rate. However, inflationary pressure or interest rate fluctuations could adversely affect our business and financial performance as a result of higher costs and/or lower consumer spending. In addition, continued inflation or a rise in interest rates could have an adverse effect on our future financial results and the recoverability of assets. However, as the future magnitude, duration and effects of these conditions are difficult to predict at this time, we are unable to predict the extent of the potential effect on our financial results.
Previous wording
For a further discussion of trends, uncertainties and other factors that could affect our future operating results, see the section entitled “Risk Factors” in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings we make with the SEC.
Current wording
For a further discussion of trends, uncertainties and other factors that could affect our future operating results, see the section entitled “Risk Factors” in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings we make with the SEC, including this Form 10-Q.
Previous wording
We operate in two reportable segments: Merchant Solutions and Issuer Solutions. As described in “Note 3 – Business Dispositions” in the notes to the accompanying unaudited consolidated financial statements, during the second quarter of 2023, we completed the sale of the consumer portion of our Netspend business, which comprised our former Consumer Solutions segment. Our former Consumer Solutions segment is presented below for periods prior to disposition. 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, 2023, incorporated herein by reference, and “Note 15—Segment Information” in the notes to the accompanying unaudited consolidated financial statements.
Current wording
We operate in two reportable segments: Merchant Solutions and Issuer Solutions. As described in “Note 3 – Business Dispositions” in the notes to the accompanying unaudited consolidated financial statements, during the second quarter of 2023, we completed the sale of the consumer portion of our Netspend business, which comprised our former Consumer Solutions segment. Our former Consumer Solutions segment is presented below for periods prior to disposition. 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, 2023, incorporated herein by reference, and “Note 15—Segment Information” in the notes to the accompanying unaudited consolidated financial statements included in Part I, Item 1 — Financial Statements.
Previous wording
The following table sets forth key selected financial data for the three months ended June 30, 2024 and 2023, this data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior-period amount. The income statement data for the three months ended June 30, 2024 and 2023 is derived from the accompanying unaudited consolidated financial statements included in Part I, Item 1 — Financial Statements.
Current wording
The following table sets forth key selected financial data for the three months ended September 30, 2024 and 2023, this data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior-period amount. The income statement data for the three months ended September 30, 2024 and 2023 is derived from the accompanying unaudited consolidated financial statements.
Previous wording
Operating income included acquisition and integration expenses of $55.7 million and $67.5 million for the three months ended June 30, 2024 and 2023, respectively, which were primarily included within Corporate expenses.
Current wording
Operating income included acquisition and integration expenses of $45.8 million and $75.1 million for the three months ended September 30, 2024 and 2023, respectively, which were primarily included within Corporate selling, general and administrative expenses.
Previous wording
The following table sets forth key selected financial data for the six months ended June 30, 2024 and 2023, this data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior-period amount. The income statement data for the six months ended June 30, 2024 and 2023 is derived from the accompanying unaudited consolidated financial statements included in Part I, Item 1 — Financial Statements.
Current wording
The following table sets forth key selected financial data for the nine months ended September 30, 2024 and 2023, this data as a percentage of total revenues and the changes between periods in dollars and as a percentage of the prior-period amount. The income statement data for the nine months ended September 30, 2024 and 2023 is derived from the accompanying unaudited consolidated financial statements.
Previous wording
Operating income included acquisition and integration expenses of $134.6 million and $169.3 million for the six months ended June 30, 2024 and 2023, respectively, which were primarily included within Corporate expenses.
Current wording
Operating income included acquisition and integration expenses of $180.4 million and $244.4 million for the nine months ended September 30, 2024 and 2023, respectively, which were primarily included within Corporate selling, general and administrative expenses.
Previous wording
Issuer Solutions Segment. Revenues from our Issuer Solutions segment for the three and six months ended June 30, 2024 increased by 3.9% and 4.7%, respectively, to $613.5 million and $1,216.2 million, respectively, compared to $590.4 million and $1,161.3 million, respectively, for the prior year. The increase in revenues was primarily due to an increase in transaction volumes.
Current wording
Issuer Solutions Segment. Revenues from our Issuer Solutions segment for the three and nine months ended September 30, 2024 increased by 2.2% and 3.9%, respectively, to $621.1 million and $1,837.4 million, respectively, compared to $607.8 million and $1,769.2 million, respectively, for the prior year. For the three and nine months ended September 30, 2024, the increase in revenues was primarily due to an increase in transaction volume.
Previous wording
Consolidated operating income and operating margin for the three months ended June 30, 2023 included the effects of the $104.1 million gain on the sale of our gaming business. Consolidated operating income for the six months ended June 30, 2023 also included the effects of the $243.2 million net loss on the sale of our consumer business.
Current wording
•Consolidated operating income and operating margin for the nine months ended September 30, 2023 included the effects of the $104.1 million gain on the sale of our gaming business and the $243.2 million net loss on the sale of our consumer business;
Previous wording
Interest and other income for the three and six months ended June 30, 2024 increased to $35.3 million and $71.2 million, respectively, compared to $27.9 million and $39.1 million, respectively, for the prior year, primarily due to interest income associated with the seller financing notes that were issued in connection with the sale of our consumer and gaming businesses in the second quarter of 2023.
Current wording
Interest and other income for the three and nine months ended September 30, 2024 increased to $55.3 million and $126.6 million, respectively, compared to $35.7 million and $74.8 million, respectively, for the prior year. The three and nine months ended September 30, 2024 included a gain of $18.8 million recognized in connection with the release and conversion of a portion of our Visa convertible preferred shares. See "Note 13—Supplemental Balance Sheet Information" in the notes to the accompanying consolidated financial statements for further discussion of this transaction. In addition, the nine months ended September 30, 2024 included an increase of $29.3 million in interest income on the seller financing notes that were issued in connection with the sale of our consumer and gaming businesses in the second quarter of 2023.
Previous wording
Interest and other expense for the three and six months ended June 30, 2024 was $159.2 million and $321.3 million, respectively, compared to $191.4 million and $314.4 million, respectively, for the prior year. For the three months ended June 30, 2024, the decrease in interest and other expense was primarily due to lower average interest rates on outstanding borrowings. For the six months ended June 30, 2024, the increase in interest and other expense was primarily due to an increase in our average outstanding borrowings. In addition, interest and other expense for the three and six months ended June 30, 2023 included a noncash charge of $18.2 million for the estimated future credit losses on the new seller financing notes receivable.
Current wording
Interest and other expense for the three and nine months ended September 30, 2024 was $155.9 million and $477.2 million, respectively, compared to $176.1 million and $490.5 million, respectively, for the prior year. For the three months ended September 30, 2024, the decrease in interest and other expense was primarily due to lower average interest rates on outstanding borrowings. Interest and other expense decreased for the nine month period, as the prior year period ended September 30, 2023 included a noncash charge of $18.2 million for the estimated future credit losses on the seller financing notes receivable.
Previous wording
For the three and six months ended June 30, 2024, our effective income tax rates of 17.3% and 12.5%, respectively, included the favorable effects of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction. In addition, for the six months ended June 30, 2024, our effective income tax rate included the favorable effect of a change in the assessment of the need for a valuation allowance related to certain foreign tax credit carryforwards.
Current wording
For the three and nine months ended September 30, 2024, our effective income tax rates of 15.3% and 13.4%, respectively, included the favorable effects of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction. In addition, for the nine months ended September 30, 2024, our effective income tax rate included the favorable effect of a change in the assessment of the need for a valuation allowance related to certain foreign tax credit carryforwards.
Previous wording
For the three and six months ended June 30, 2023, we reported a tax expense of 39.2% and 36.7%, respectively, of the reported income before taxes. During the three and six months ended June 30, 2023, we recognized a gain on the dispositions of our consumer and gaming businesses for income tax reporting purposes, while a net loss on the dispositions was recognized for financial reporting purposes. These effects were partially offset by the favorable effect on the rate of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction.
Current wording
For the three months ended September 30, 2023, our effective income tax rate was 14.1%. The effective rate included the favorable effects from foreign-derived intangible income deductions, tax credits and foreign interest income not subject to tax. For the nine months ended September 30, 2023, our effective income tax rate was 24.9%. The effective tax rate reflects recognition of a gain on the dispositions of our consumer and gaming businesses for income tax reporting purposes, while a net loss on the dispositions was recognized for financial reporting purposes. This was partially offset by the favorable effect on the rate of foreign interest income not subject to tax, tax credits and the foreign-derived intangible income deduction.
Previous wording
Net income attributable to Global Payments was $374.8 million and $688.1 million, respectively, for the three and six months ended June 30, 2024 compared to $274.1 million and $263.1 million, respectively, for the prior year, reflecting the changes noted above.
Current wording
Net income attributable to Global Payments was $315.1 million and $1,003.2 million, respectively, for the three and nine months ended September 30, 2024 compared to $361.8 million and $624.9 million, respectively, for the prior year, reflecting the changes noted above.
Previous wording
Diluted earnings per share was $1.47 and $2.68, respectively, for the three and six months ended June 30, 2024 compared to $1.05 and $1.00, respectively, for the prior year. Diluted earnings per share for the three and six months ended June 30, 2024 reflects the changes in net income.
Current wording
Diluted earnings per share was $1.24 and $3.92, respectively, for the three and nine months ended September 30, 2024 compared to $1.39 and $2.39, respectively, for the prior year. Diluted earnings per share for the three and nine months ended September 30, 2024 reflects the changes in net income.
Previous wording
Our capital allocation priorities are 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. Our significant contractual cash requirements also include ongoing payments for lease liabilities and contractual obligations related to service arrangements with suppliers for fixed or minimum amounts, which primarily relate to software, technology infrastructure and related services. Commitments under our borrowing arrangements are further described in "Note 6—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." For additional information regarding our other cash commitments and contractual obligations, see "Note 7—Leases" and “Note 19—Commitments and Contingencies” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Our capital allocation priorities are to pay dividends, to repurchase shares of our common stock, to pursue acquisitions that meet our corporate objectives, to make planned capital investments in our business and to pay principal and interest on our outstanding debt. Our significant contractual cash requirements also include ongoing payments for lease liabilities and contractual obligations related to service arrangements with suppliers for fixed or minimum amounts, which primarily relate to software, technology infrastructure and related services. Commitments under our borrowing arrangements are further described in "Note 6—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." For additional information regarding our other cash commitments and contractual obligations, see "Note 7—Leases" and “Note 19—Commitments and Contingencies” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
At June 30, 2024, we had cash and cash equivalents totaling $2,097.2 million. Of this amount, we considered $751.8 million to be available for general purposes, of which $62.9 million is undistributed foreign earnings considered to be indefinitely reinvested outside the United States. The available cash of $751.8 million does not include the following: (i) settlement-related cash balances, (ii) funds held as collateral for merchant losses ("Merchant Reserves") and (iii) certain 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 in their use; however, these funds are generally paid out in satisfaction of settlement processing obligations the following day. Merchant
Current wording
At September 30, 2024, we had cash and cash equivalents totaling $2,941.9 million. Of this amount, we considered $888.4 million to be available for general purposes, of which $64.7 million is undistributed foreign earnings considered to be indefinitely reinvested outside the United States. The available cash of $888.4 million does not include the following: (i) settlement-related cash balances, (ii) funds held as collateral for merchant losses ("Merchant Reserves") and (iii) certain 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 in their use; 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 as a Merchant Reserve strengthens our fiduciary standing with our member sponsors. Funds held for customers, which are not restricted in their use, include amounts collected before the corresponding obligation is due to be settled to or at the direction of our customers.
Previous wording
We also had restricted cash of $190.0 million as of June 30, 2024, representing amounts deposited by customers for prepaid card transactions and funds held as a liquidity reserve. These balances are subject to local regulatory restrictions requiring appropriate segregation and restriction in their use.
Current wording
We also had restricted cash of $197.6 million as of September 30, 2024, representing amounts under legal restriction, amounts deposited by customers for prepaid card transactions and funds held as a liquidity reserve. These balances are subject to local regulatory restrictions requiring appropriate segregation and restriction in their use.
Previous wording
Operating activities provided net cash of $1,153.2 million and $1,164.5 million for the six months ended June 30, 2024 and 2023, respectively, which reflect net income adjusted for noncash items, including depreciation, amortization, the provision for credit losses and charges associated with the net loss on business dispositions, and changes in operating assets and liabilities. The decrease in cash flows from operating activities from the prior year was due to assets and liabilities that are affected primarily by timing of month-end and transaction volume, including changes in settlement processing assets and obligations and accounts payable and other liability balances.
Current wording
Operating activities provided net cash of $2,879.3 million and $1,591.3 million for the nine months ended September 30, 2024 and 2023, respectively, which reflect net income adjusted for noncash items, including depreciation, amortization, the provision for credit losses and charges associated with the net loss on business dispositions, and changes in operating assets and liabilities. The increase in cash flows from operating activities from the prior year was due to assets and liabilities that are affected primarily by timing of month-end and transaction volume, including changes in settlement processing assets and obligations and accounts payable and other liability balances.
Previous wording
We used net cash in investing activities of $697.3 million and $4,001.5 million during the six months ended June 30, 2024 and 2023, respectively. Cash used for investing activities primarily represents cash used to fund acquisitions, net of cash and restricted cash acquired, and capital expenditures. During the six months ended June 30, 2024 and 2023, we used cash of $372.7 million and $4,101.4 million, respectively, for acquisitions. We made capital expenditures of $324.7 million and $331.0 million during the six months ended June 30, 2024 and 2023, respectively. These investments include software and hardware to support the development of new technologies, infrastructure to support our growing business and the consolidation and enhancement of our operating platforms. These investments also include new product development and innovation to further enhance and differentiate our suite of technology and cloud-based solutions available to customers. We expect to continue to make significant capital investments in the business, and we anticipate capital expenditures to grow at a similar rate as our revenue growth during the year ending December 31, 2024. Additionally, investing cash flows for the six months ended June 30, 2023 includes the net effect on cash from the sale of our consumer and gaming businesses and the issuance of a $50 million secured revolving credit facility available from the date of the sale to the purchasers of the consumer business, which was subsequently repaid in the third quarter of 2023.
Current wording
We used net cash in investing activities of $846.6 million and $4,119.7 million during the nine months ended September 30, 2024 and 2023, respectively. Cash used for investing activities primarily represents cash used to fund acquisitions and capital expenditures. During the nine months ended September 30, 2024 and 2023, we used cash of $373.8 million and $4,099.8 million, respectively, for acquisitions. We made capital expenditures of $490.9 million and $500.8 million during the nine months ended September 30, 2024 and 2023, respectively. These investments include software and hardware to support the development of new technologies, infrastructure to support our growing business and the consolidation and enhancement of our operating platforms. These investments also include new product development and innovation to further enhance and differentiate our suite of technology and cloud-based solutions available to customers. We expect to continue to make significant capital investments in the business, and we anticipate capital expenditures to approximate $670.0 million during the year ending December 31, 2024. Investing cash flows for the nine months ended September 30, 2024 includes cash received from the sale of our investments in Visa common shares of $18.1 million. Additionally, investing cash flows for the nine months ended September 30, 2023 includes the net effect on cash from the sale of our consumer and gaming businesses and the initial issuance and subsequent repayment of a $50 million secured revolving credit facility available from the date of the sale to the purchasers of the consumer business.
Previous wording
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 6—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, cash distributions made to our shareholders and cash contributions from and distributions to noncontrolling interests. We used net cash in financing activities of $372.0 million during the six months ended June 30, 2024, and financing activities provided net cash of $2,701.3 million during the six months ended June 30, 2024.
Current wording
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 6—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, cash distributions made to our shareholders and cash contributions from and distributions to noncontrolling interests. We used net cash in financing activities of $1,151.1 million during the nine months ended September 30, 2024, and financing activities provided net cash of $2,458.4 million during the nine months ended September 30, 2023.
Previous wording
Proceeds from long-term debt were $6,289.0 million and $7,359.2 million for the six months ended June 30, 2024 and 2023, respectively. Repayments of long-term debt were $4,430.1 million and $5,673.7 million for the six months ended June 30, 2024 and 2023, 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 senior notes, finance leases and other vendor financing arrangements. During the six months ended June 30, 2024 and 2023, we had net repayments of $936.5 million and net borrowings of $1,841.7 million, respectively, under our commercial paper program. Furthermore, in connection with the issuance of convertible notes in February 2024, we paid $256.3 million to purchase privately negotiated capped call transactions to hedge the potential dilutive effect upon conversion of the notes, or offset our cash obligation if the cash settlement option were to be elected. See section "Long-Term Debt and Lines of Credit" below for further discussion of our recent debt transactions.
Current wording
Proceeds from long-term debt were $7,637.9 million and $8,861.1 million for the nine months ended September 30, 2024 and 2023, respectively. Repayments of long-term debt were $5,803.0 million and $7,628.9 million for the nine months ended September 30, 2024 and 2023, 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 senior notes, finance leases and other vendor financing arrangements. During the nine months ended September 30, 2024 and 2023, we had net repayments of $1,367.9 million and net borrowings of $1,900.0 million, respectively, under our commercial paper program. Furthermore, in connection with the issuance of convertible notes in February 2024, we paid $256.3 million to purchase privately negotiated capped call transactions to hedge the potential dilutive effect upon conversion of the notes, or offset our cash obligation if the cash settlement option were to be elected. See section "Long-Term Debt and Lines of Credit" below for further discussion of our recent debt transactions.
Previous wording
Activity under our settlement lines of credit is affected primarily by timing of month-end and transaction volume. During the six months ended June 30, 2024 and 2023, we had net borrowings of $55.4 million and net repayments of $233.1 million, respectively, under our settlement lines of credit.
Current wording
Activity under our settlement lines of credit is affected primarily by timing of month-end and transaction volume. During the nine months ended September 30, 2024 and 2023, we had net repayments of $184.5 million and $33.3 million, respectively, under our settlement lines of credit.
Previous wording
We repurchase our common stock mainly through open market repurchase plans and, at times, through accelerated share repurchase programs. During the six months ended June 30, 2024 and 2023, we used $900.0 million and $418.3 million, respectively, to repurchase shares of our common stock. The share repurchase activity for the six months ended June 30, 2024 included the repurchase of 1,414,759 shares using a portion of the net proceeds from our offering of 1.500% convertible unsecured senior notes due March 2031 through privately negotiated transactions with purchasers of notes in the offering, or one of their respective affiliates. The purchase price per share of the common stock repurchased in such transactions equaled the closing price of the common stock on February 20, 2024, which was $130.80 per share. As of June 30, 2024, the remaining amount available under our share repurchase program was $1,371.9 million.
Current wording
We repurchase our common stock mainly through open market repurchase plans and, at times, through accelerated share repurchase programs. During the nine months ended September 30, 2024 and 2023, we used $900.0 million and $418.3 million, respectively, to repurchase shares of our common stock. The share repurchase activity for the nine months ended September 30, 2024 included the repurchase of 1,414,759 shares using a portion of the net proceeds from our offering of 1.500% convertible unsecured senior notes due March 2031 through privately negotiated transactions with purchasers of notes in the offering, or one of their respective affiliates. The purchase price per share of the common stock repurchased in such transactions equaled the closing price of the common stock on February 20, 2024, which was $130.80 per share.
Previous wording
We paid dividends to our common shareholders in the amounts of $127.0 million and $130.6 million during the six months ended June 30, 2024 and 2023, respectively. We made distributions to noncontrolling interests in the amount of $10.9 million and $17.3 million during the six months ended June 30, 2024 and 2023, respectively.
Current wording
We paid dividends to our common shareholders in the amounts of $190.5 million and $195.6 million during the nine months ended September 30, 2024 and 2023, respectively. We made distributions to noncontrolling interests in the amount of $29.4 million and $24.3 million during the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
We have $10.8 billion in aggregate principal amount of senior unsecured notes, which mature at various dates ranging from November 2024 to August 2052. Interest on the senior notes is payable annually or semi-annually at various dates. 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.
Current wording
We have $11.7 billion in aggregate principal amount of senior unsecured notes, which mature at various dates ranging from November 2024 to August 2052. Interest on the senior notes is payable annually or semi-annually at various dates. 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.
Previous wording
In connection with the issuance of the notes, we entered into privately negotiated capped call transactions with certain of the initial purchasers of the notes and other financial institutions to cover, subject to customary adjustments, the number of shares of common stock initially underlying the notes. The economic effect of the capped call transactions is to hedge the potential dilutive effect upon the conversion of the notes, or offset our cash obligation if the cash settlement option is elected, for amounts in excess of the principal amount of converted notes subject to a cap. The initial cap price of the capped call transactions is $228.90 per share. The capped call transactions meet the accounting criteria to be reflected in stockholders’ equity and not accounted for as derivatives. The cost of $256.3 million incurred in connection with the capped call transactions was reflected as a reduction to paid-in-capital in our consolidated balance sheet as of June 30, 2024, net of applicable income taxes.
Current wording
In connection with the issuance of the notes, we entered into privately negotiated capped call transactions with certain of the initial purchasers of the notes and other financial institutions to cover, subject to customary adjustments, the number of shares of common stock initially underlying the notes. The economic effect of the capped call transactions is to hedge the potential dilutive effect upon the conversion of the notes, or offset our cash obligation if the cash settlement option is elected, for amounts in excess of the principal amount of converted notes subject to a cap. The initial cap price of the capped call transactions is $228.90 per share. The capped call transactions meet the accounting criteria to be reflected in stockholders’
Previous wording
We may issue standby letters of credit of up to $250.0 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 amounts available to borrow under the revolving credit facility are also determined by a financial leverage covenant. As of June 30, 2024, there were borrowings of $1.5 billion outstanding under the revolving credit facility with an interest rate of 6.80%, and the total available commitments under the revolving credit facility were $3.6 billion.
Current wording
We may issue standby letters of credit of up to $250.0 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 amounts available to borrow under the revolving credit facility are also determined by a financial leverage covenant. As of September 30, 2024, there were borrowings of $1.5 billion outstanding under the revolving credit facility with an interest rate of 6.56%, and the total available commitments under the revolving credit facility were $4.2 billion.
Previous wording
In various markets where we do business, we have specialized lines of credit that 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 June 30, 2024, a total of $79.9 million of cash on deposit was used to determine the available credit.
Current wording
In various markets where we do business, we have specialized lines of credit that 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 September 30, 2024, a total of $75.9 million of cash on deposit was used to determine the available credit.
Previous wording
As of June 30, 2024, we had $1,010.0 million outstanding under these lines of credit with additional capacity to fund settlement of $2,245.0 million. During the three months ended June 30, 2024, the maximum and average outstanding balances under these lines of credit were $1,283.4 million and $506.9 million, respectively. The weighted-average interest rate on these borrowings was 5.82% at June 30, 2024.
Current wording
As of September 30, 2024, we had $788.1 million outstanding under these lines of credit with additional capacity to fund settlement of $2,203.7 million. During the three months ended September 30, 2024, the maximum and average outstanding balances under these lines of credit were $996.4 million and $534.8 million, respectively. The weighted-average interest rate on these borrowings was 5.63% at September 30, 2024.
Previous wording
Some of the statements we use in this report, and in some of the documents we incorporate by reference in this report, contain forward-looking statements concerning our business operations, economic performance and financial condition, including in particular: our business strategy and means to implement the strategy; measures of future results of operations, such as revenues, expenses, operating margins, income tax rates, and earnings per share; other operating metrics such as shares outstanding and capital expenditures; statements we make regarding guidance and projected financial results for the year 2024; the effects of general economic conditions on our business; statements about the benefits of our acquisitions or divestitures, including future financial and operating results and the completion and expected timing of our acquisitions or completion of anticipated benefits or strategic or operational initiatives; our success and timing in developing and introducing new services and expanding our business; and other statements regarding our future financial performance and the company's plans, objectives, expectations and intentions. You can sometimes identify forward-looking statements by our use of the words "believes," "anticipates," "expects," "intends," "plan," "forecast," "guidance" and similar expressions. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Current wording
Some of the statements we use in this report, and in some of the documents we incorporate by reference in this report, contain forward-looking statements concerning our business operations, economic performance and financial condition, including, but not limited to, statements we make regarding our business strategy and means to implement the strategy; measures of future results of operations, such as revenues, expenses, operating margins, income tax rates, and earnings per share; other operating metrics such as shares outstanding and capital expenditures, liquidity, deleveraging plans and capital available for allocation; statements we make regarding guidance and projected financial results for the year 2024; the effects of general economic conditions on our business; statements about the benefits of our acquisitions or divestitures, such as the proposed sale of AdvancedMD, Inc., including future financial and operating results and the successful integration of acquisitions, statements about the completion of anticipated benefits or strategic or operational initiatives; statements regarding our success and timing in developing and introducing new services and expanding our business; and other statements regarding our future financial performance and the company's plans, objectives, expectations and intentions. You can sometimes identify forward-looking statements by our use of the words "believes," "anticipates," "expects," "intends," "plan," "forecast," "guidance" and similar expressions. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Previous wording
Although we believe that the plans and expectations reflected in or suggested by our forward-looking statements are reasonable, those statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, uncertainties and contingencies, many of which are beyond our control, cannot be foreseen and reflect future business decisions. Accordingly, we cannot guarantee that our plans and expectations will be achieved. Our actual revenues, revenue growth rates and margins, and other results of operations could differ materially from those anticipated in our forward-looking statements as a result of many known and unknown factors, many of which are beyond our ability to predict or control. Important factors that may otherwise cause actual events or results to differ materially from those anticipated by such forward-looking statements or historical performance include, among others, the effects of global economic, political, market, health and social events or other conditions; foreign currency exchange, inflation and rising interest rate risks; difficulties, delays and higher than anticipated costs related to integrating the businesses of acquired companies, including with respect to implementing controls to prevent a material security breach of any internal systems or to successfully manage credit and fraud risks in business units; the effect of a security breach or operational failure on our business; 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, develop and hire key personnel; the diversion of management’s attention from ongoing business operations; the continued availability of capital and financing; 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; our ability to meet environmental, social and governance targets, goals and commitments; the potential effects of climate change, including natural disasters; the effects of new or changes in current laws, regulations, credit card association rules or other industry standards on us or our partners and customers, including privacy and cybersecurity laws and regulations; and other events beyond our control, and other factors presented in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings we make with the SEC, which we advise you to review.
Current wording
Although we believe that the plans and expectations reflected in or suggested by our forward-looking statements are reasonable, those statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, uncertainties and contingencies, many of which are beyond our control, cannot be foreseen and reflect future business decisions. Accordingly, we cannot guarantee that our plans and expectations will be achieved. Our actual revenues, revenue growth rates and margins, and other results of operations could differ materially from those anticipated in our forward-looking statements as a result of many known and unknown factors, many of which are beyond our ability to predict or control. Important factors that may otherwise cause actual events or results to differ materially from those anticipated by such forward-looking statements or historical performance include, among others, the effects of global economic, political, market, health and social events or other conditions; foreign currency exchange, inflation and rising interest rate risks; difficulties, delays and higher than anticipated costs related to integrating the businesses of acquired companies, including with respect to implementing controls to prevent a material security breach of any internal systems or to successfully manage credit and fraud risks in business units; our ability to complete the proposed sale of AdvancedMD, Inc. on the proposed terms or on the anticipated timeline, or at all; the effect of a security breach or operational failure on our business; 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, develop and hire key personnel; the diversion of management’s attention from ongoing business operations; the continued availability of capital and financing; 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; our ability to meet environmental, social and governance targets, goals and commitments; the potential effects of climate change, including natural disasters; the effects of new or changes in current laws, regulations, credit card association rules or other industry standards on us or our partners and customers, including privacy and cybersecurity laws and regulations; and other events beyond our control, and other factors presented in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings we make with the SEC, including this Form 10-Q, which we advise you to review.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
For the three months ended September 30, 2024:
Current report — wording carried from elsewhere
equity and not accounted for as derivatives. The cost of $256.3 million incurred in connection with the capped call transactions was reflected as a reduction to paid-in-capital in our consolidated balance sheet as of September 30, 2024, net of applicable income taxes.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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 as a Merchant Reserve strengthens our fiduciary standing with our member sponsors. Funds held for customers, which are not restricted in their use, include amounts collected before the corresponding obligation is due to be settled to or at the direction of our customers.