GPNGlobal Payments

Please revise your discussion to quantify factors to which changes are attributed. For revenues, quantify the increased transaction volume resulting from the EVO acquisition, growth in subscription and software revenues, and offsetting decreases due to the disposition of your Consumer Solutions segment.

Rest of the question

In your revenue discussion, please discuss the extent of the increased revenues due to changes in prices or to changes in the volume or amount of products or services being sold, or to the introduction of new products or services. For cost of service, quantify the impacts of acquisitions, dispositions, and discuss cost of service separately for each reportable segment. Refer to Item 303(b)(2) of Regulation S-K.

The Company advises the Staff that in preparing the disclosure within Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), the Company carefully considers the requirements set forth in Regulation S-K Item 303, as well as the Staff and Commission’s guidance relative to MD&A disclosures.

Rest of the answer

Consistent with such guidance and the disclosure requirements, in order to ensure that all material information necessary for an understanding of changes in results is disclosed, the Company considers both quantitative and qualitative disclosures in drafting the MD&A, while remaining cognizant of avoiding information that could serve to duplicate disclosures.

When describing multiple factors that affected results, the Company primarily utilizes the following disclosure approach:

•listing the factors in order of magnitude, with the largest factor generally appearing first;

•providing quantitative data where material to an understanding of overall financial results or the relevant change in results; and

•providing qualitative discussion of significant factors that drive period-over-period changes, including use of language that provides context for the relative magnitude of the factors.

We acknowledge the Staff’s comment on discussion of the extent of the increased revenues due to changes in prices or to changes in the volume or amount of products or services being sold, or to the introduction of new products or services. Our revenues are substantially transaction volume driven with services priced as a percentage of transaction value or a specified fee per transaction, depending on the payment type or market. We focus our discussion in MD&A on transaction volume because it is the most relevant driver of our overall revenue growth. The effect on revenue of changes in pricing was not significant for either of our segments for the year ended December 31, 2023. In future filings, we would provide additional disclosure to the extent there are other material factors, including significant effects of changes in pricing, causing, or offsetting, changes in results.

We also acknowledge the Staff’s comment on discussion of cost of service separately for each reportable segment. In consideration of the guidance in Item 303(b)(2) of Regulation S-K, we believe it is relevant to discuss the factors affecting our segment results at the revenue and operating income level based on our determination of the segment profit measure utilized by management, which is consistent with the disclosure in “Note 18 - Segment Information.” Such disclosure in MD&A includes discussion of any material cost trends affecting segment operating income. We believe it is relevant to discuss cost of service at the consolidated level, which includes a discussion of material factors, including consideration of material factors relevant to a particular segment. We do not believe that including a separate discussion of cost of service for each segment is necessary for a user to understand the trends in the business.

In light of the Staff’s comment, in future filings, we will supplement our disclosures in MD&A to include the quantification of significant contributing factors where we describe two or more factors relating to a material change in a financial statement line item to the extent such information is both available and appropriate to enhance investors’ understanding of the magnitude and relative impact of each factor. Presented below for illustrative purposes is an excerpt from the MD&A section of the Annual Report on Form 10-K for the year ended December 31, 2023, marked to show an example of the enhanced disclosure approach we intend to take in our future filings (additions to existing language are in bold and deletions are in strikethrough):

Revenues

Consolidated revenues for the year ended December 31, 2023 increased by 7.6% to $9,654.4 million, compared to $8,975.5 million for the prior year. The increase in revenues was primarily due to an increase in transaction volumes, including from the EVO business acquired in 2023 an increase of $397.4 million within our technology-enabled distribution channel. The acquired EVO business accounted for approximately 6% of the revenues in the year ended December 31, 2023, and that contribution was largely offset by a reduction in revenues related to the businesses divested in April 2023.

Merchant Solutions Segment. Revenues from our Merchant Solutions segment for the year ended December 31, 2023 increased by 15.3% to $7,151.8 million, compared to $6,204.9 million for the prior year. The increase in revenues was primarily due to an increase in transaction volumes, including from the EVO business, and an increase of $397.4 million within our technology-enabled distribution channel reflecting growth in subscription and software driven transaction processing volumes revenue. The acquired EVO business contributed approximately 8% of 2023 revenues.

Issuer Solutions Segment. Revenues from our Issuer Solutions segment for the year ended December 31, 2023 increased by 6.8% to $2,398.9 million, compared to $2,245.6 million for the prior year. The increase in revenues was primarily due to an increase in transaction volumes.

Operating Expenses

Cost of Service. Cost of service for the year ended December 31, 2023 was $3,727.5 million, compared to $3,778.6 million for the prior year. Cost of service as a percentage of revenues decreased to 38.6% for the year ended December 31, 2023, compared to 42.1% for the prior year. Compared to the prior year, cost of service for the year ended December 31, 2023 decreased primarily due to continued prudent expense management. and inclusion of costs related to the divested businesses for only a portion of the current year. These favorable effects were partially offset by the inclusion of costs for Costs of the acquired EVO business, including the related amortization of acquired intangibles, accounted for approximately 6% of the 2023 costs, and that effect was largely offset by the reduction of costs related to the divested businesses. Cost of service included amortization of acquired intangibles of $1,318.5 million and $1,263.0 million for the years ended December 31, 2023 and 2022, respectively.

Segment Operating Income and Operating Margin

In our Merchant Solutions segment, operating income and operating margin for the year ended December 31, 2023 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. These favorable effects were partially offset by incremental expenses related to continued investment in products, innovation and our technology environments. In addition, the inclusion of EVO had an unfavorable effect of approximately 270 basis points on the Merchant Solutions operating margin for the year ended December 31, 2023 as compared to the prior year.

In our Issuer Solutions segment, operating income and operating margin for the year ended December 31, 2023 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.

Read in the reply ↗

We note you disaggregate revenue by geography and reportable segment, both of which are required by ASC 280, Segment Reporting, and you disaggregate Merchant Solutions segment revenue by distribution channel ('relationship-led' and 'technology-enabled').

Rest of the question

Please tell us how you considered the requirement of ASC 606-10-50-5 and 55-89 through 55-91 in determining your disclosure of disaggregated revenue from contracts with customers and ASC 280-10-50-40 in disclosing products and services. In closing, we remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.

We determined our disclosure of disaggregated revenue from contracts with customers in accordance with the guidance in ASC 606-10-50-5 and 55-89 through 55-91. Our evaluation considered a combination of factors, including:

•How economic factors affect the nature, amount, timing and uncertainty of revenues and cash flows,

•How information about revenues has been presented for other purposes, including earnings releases, annual reports, investor presentations and information regularly reviewed by the chief operating decision maker, and

•Examples of categories that might be appropriate and

Rest of the answer

relevant to include.

Based on our evaluation of the factors in ASC 606-10-50-1 and 55-89 through 55-91, we determined that disaggregation based on major geographic region across all segments and distribution channels for the Merchant Solutions segment were the most relevant categories, which align with the example categories per ASC 606-10-55-91(b) and (g), respectively. We also determined it was appropriate to include disaggregation based on the timing of transfer of services per the example in ASC 606-10-55-91(f). We disclose that substantially all of our revenues are recognized over time as opposed to point in time. These categories best represent the level at which management and our investors monitor top line revenue performance, and the level at which management differentiates pricing models and go-to-market approaches across the Company.

More specifically, these categories of disaggregation are consistent with the description of our business included in “Item 1 - Business” on page 5 of the Annual Report on Form 10-K for the year ended December 31, 2023. “Item 1 - Business” includes a description of the key geographic regions in which we operate (with North America and Latin America being viewed and managed collectively as the “Americas”), which is in line with the example category under ASC 606-10-55-91(b). Our disclosure of disaggregated revenues in key geographic regions was also determined to be the appropriate level primarily due to the fact that no individual country outside of the United States generated 10% or more of total net revenues.

Further, the description of the Merchant Solutions segment under “Item 1 - Business” on pages 6-7 of the Annual Report on Form 10-K for the year ended December 31, 2023 describes the nature of the business based on the technology-enabled and relationship-led distribution channels, which is in line with the example category under ASC 606-10-55-91(g). We considered that “Item 1 - Business” further describes the payments services solutions offerings within our distribution channels. Those offerings, including integrated solutions, vertical markets software solutions, ecommerce and omnichannel within our technology-enabled distribution channel, are the means by which we market our services in support of the broader distribution channel strategy. The revenues associated with these payments services solutions offerings are primarily affected by the same economic factors as our reported categories of disaggregated revenue, and these payments services solutions offerings do not significantly differ in the nature, amount, timing, and uncertainty of revenues and cash flows. We therefore concluded that these additional service offerings are not categories of revenue to be disaggregated in our presentation.

Further, our organizational structure aligns with and supports our determination of these disaggregated revenue categories in that the information regularly reviewed by our Chief Operating Decision Maker and our segment leaders includes performance at a geographic level, as well as at the distribution channel level across our Merchant Solutions businesses.

We separately evaluated the examples of other potential disaggregation categories, such as type of customer, type of contract or contract duration, and determined that these types of categories are not relevant based either on the nature of our business or how management and other stakeholders view the business, or they do not have significant variations or subsets of revenue that drive different economic effects on revenues or cash flows. We also concluded there was no additional relevant disaggregation for our Issuer Solutions business, as this business is primarily comprised of a comprehensive set of payment solutions provided to a relatively small number of large financial institutions under long-term contracts.

Finally, in evaluation of the additional guidance under ASC 280-10-50-40, we determined that the payments technology solutions we provide to our customers represent one core category of similar service offerings. While our offerings include a variety of underlying payments services and software solutions to meet the specific needs of our customers, as a payments technology service provider, we provide a comprehensive set of service offerings that enable our customers to accept payments and integrate those payments into their broader business model through integrated software solutions. Therefore, whether we are processing individual transactions or providing the related software solutions that enable our customers to integrate and streamline commerce within their businesses, our obligation to the customer is to stand ready to provide continuous access to our payments technology solutions and process the underlying payments transactions. With respect to our payment technology solutions, we view our payment services and software solutions obligations to comprise a series of distinct days of service that are substantially the same and have the same pattern of transfer to the customer, and we measure revenues on a daily basis based on the services that are performed on that day. We also considered the nature and magnitude of our equipment in evaluating whether it represents a separate product for disclosure under this guidance. Equipment represents an ancillary product that is part of the broader primary payments technology solution sold to our customers. The amount of revenue recognized related to equipment has not been material for any period (less than 5% of net revenues), and these equipment sales are included within the “point in time” revenue amount in our disaggregated revenue disclosure. We therefore determined separate disclosure under ASC 280-10-50-40 was not required.

As noted above, management considers the application of ASC 606-10-50-5 and 55-89 through 55-91 to our business on a quarterly basis. Management will continue to review disaggregated revenue and segment disclosures and the requirements of ASC 606 and ASC 280 as required and continue to consider appropriate adjustments to our disclosure of revenue. As our business evolves, and, if appropriate or necessary, we will update our financial statement disclosures at such time.

Read in the reply ↗

We note “net revenue adjustments” primarily consist of adjustments for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. Please tell us the nature of these payments and where they are classified in your statements of income.

The adjustments to revenues for gross-up related payments include the following:

•Monthly residual payments to independent sales organizations or other external partners, representing an ongoing share of the customer profitability for referral of merchant services to us. In these arrangements, we are primarily responsible for the payment processing obligation to the merchant. The residual is considered a payment for marketing and sales services provided by the third party and does not qualify for capitalization as an incremental cost to obtain a contract with a customer under ASC 340-40.

Rest of the answer

The residual is reflected as a component of selling, general and administrative expenses in the consolidated statements of income.

•Payments made for out-of-pocket expenses that are reimbursed by customers in our Issuer Solutions segment. Out-of-pocket reimbursables include items such as postage and other production items (e.g., cards) that are not distinct from the core processing performance obligation provided to the customer. The out-of-pocket expenses are reflected as a component of cost of service in the consolidated statements of income.

Read in the reply ↗

In prepared remarks, you stated Issuer Solutions performance declined compared to the prior year due to a difficult comparison resulting from vendor benefits reflected in that period. Please tell us the nature of these vendor benefits, quantify the amounts for us, and tell us how you account for them.

Rest of the question

Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022, page 42 We note your response to prior comment 1. Regarding results of operations discussion and analysis, you state you primarily list factors in order of magnitude, provide quantitative data where material to an understanding of results, and use qualitative language that provides context for the relative magnitude of factors. While listing factors in order of magnitude and using qualitative language is not objectionable in and of itself, it is an indirect and less useful way to provide needed information to your investors. We believe investors are best served by direct and clear quantification of all material factors driving results. In this regard, we note your intended, revised disclosure continues to either not quantify certain factors at all or to sometimes quantify them in an indirect manner, such as by references to percentages of accounts balances or by stating them in terms of basis points. We believe you should make it easy for investors to obtain quantified impacts of factors, by stating them in absolute dollars. You also state you will quantify significant contributing factors where: (a) you describe two or more factors and (b) to the extent such information is available and appropriate to enhance investors’ understanding of the magnitude of the impact of each factor. It would appear unlikely that you would be able to attribute a change in results to a factor while not having quantification of such factor. In addition, we are not aware of circumstances in which it would not be appropriate to provide quantification to investors of information that is available internally to, and used by, management. Excluding the three sentences that repeat revenue amounts and percentage changes already disclosed in the immediately preceding table on page 41, your original discussion and analysis of revenues in your Form 10-K was limited to three brief sentences, none of which included a single quantification of factors affecting revenue results. For a company with the size and breadth of operations as yours, we do not believe that this brief disclosure adequately discussed and analyzed your results sufficient to provide your investors with the depth of understanding and knowledge necessary to properly evaluate your results. As such, we believe you should revise your disclosure and consider: • relying on tables to present dollar and percentage changes in accounts, rather than including and repeating such information in narrative text form; • using additional tables to list, quantify, and sum all of the material individual factors to which changes in accounts are attributable; • refocusing the narrative text portion of the disclosure on analysis of the underlying business reasons for the individual factors in the tables above; • ensuring that all material factors are quantified and analyzed; and 3. • quantifying the effects of changes in price, volume, and acquisitions/dispositions on revenues and expense categories, where appropriate. Please provide us with a copy of your intended, revised disclosure. 4. With regards to cost of service disclosure, we note that cost of service decreased 1.4% despite a $0.67 billion, or 7.6%, increase in revenue. Your intended revised disclosure attributes your consolidated cost of service expense result to “continued prudent expense management” and two other factors that “largely” offset each other. Please revise to explain the nature of components of your cost of service expenses, such that these costs are able to not vary significantly with changes in business volume. Please also expand to explain your prudent expense management including what specifically that entailed and how it impacted your expenses. 5. You state you do not believe including a separate discussion of cost of service for each segment is necessary for a user to understand trends in the business. While disclosure should address known or reasonably likely trends in results, it should also address material changes from period-to-period in line items and describe the underlying reasons for these material changes in quantitative and qualitative terms. We note operating margins in the Merchant Solutions segment were essentially flat year to year, while operating margins in the Issuer Solutions declined. Based on your description of your business, it appears that different lines of business within and between your segments may have differing significant cost elements (e.g., technology-enabled and relationship-led distribution channels in merchant solutions). We believe you should quantify and discuss the impact of each significant component of costs comprising cost of service that caused it to materially vary (or not vary when expected to). This disclosure should be presented in a manner to allow investors to discern the relative contribution of each of multiple components cited to the total change in cost of service. In addition, the impacts of material variances in components of cost of service that offset each other should be separately disclosed, quantified, and discussed (and not netted). Please also ensure that your disclosure provides appropriate explanation of underlying reasons for changes (for example, in addition to quantifying the impacts of changes in volume and acquisitions and dispositions in absolute amounts, explain the underlying reasons "why" for these changes). Given the potential for differing or offsetting results in your various segments, we encourage you to provide the above disclosures at the segment level (which may make disclosure at the consolidated level not needed). In any event, you should revise to provide discussion and analysis of cost of revenue at the segment level when a change in a segment’s cost of revenue materially impacts the segment’s measure of profit. Please provide us with a copy of your intended, revised disclosure. Notes to Consolidated Financial Statements Note 1 - Basis of Presentation and Summary of Significant Accounting Policies Revenue Recognition, page 65 6. Please tell us where you classify signing incentives paid to customers in your consolidated statements of cash flows. Note 4 - Revenues, page 82 7. We note your response to prior comment 2. We note that you provide information about categories of your revenues in earnings calls and investor presentations. For example, your February 14, 2024, fourth quarter 2023 earnings call contains the following information: • Merchant Solutions segment performance: o Was led by software-centric businesses, which delivered double-digit growth in the quarter. Specifically, Zego, School Solutions, and AdvancedMD delivered double-digit growth in the quarter and point-of-sale businesses again grew roughly 20%. o Double-digit growth in Spain and Central Europe as well as in Poland and Greece. LATAM business benefited from the strong secular payments trends in Mexico and Chile. This performance was partially offset by ongoing weakness in the macro environment in the UK and Canada. o A bullish area with prospects to drive better rates over time is point-of-sale software, with meaningful investments in that area. • Issuer Solutions segment performance: o Core issuer business grew mid-single-digits this quarter, driven by strength in volume-based revenue. This was partially offset by slower growth in managed and output services as you focus the issuer business on more technology enablement. o Issuer transactions grew high single-digits led by commercial card transactions, which increased low double-digits, highlighting ongoing strength in cross-border corporate travel. Your investor presentation of the same date included the following information: • Merchant Solutions: o 20%+ increase in new Integrated sales o ~20% POS growth o Double digit organic growth in LATAM region • Issuer Solutions: o 6% core Issuer growth o 17% growth in MineralTree mid-market channel Please tell us how you considered your provision of this information outside the financial statements, which is presumably used by you and users of your financial statements to evaluate performance, when determining your disaggregated revenue disclosure. Refer to ASC 606-10-55-90.

During the fourth quarter of 2022, we received a price adjustment credit from a vendor in settlement of a dispute related to the quality of prior professional services provided to us. We considered the guidance in ASC 705-20-25-10 to 12 relating to consideration received from a vendor and ASC 450-30 relating to gain contingencies to determine the appropriate accounting treatment for the credit.

Rest of the answer

The retrospective price adjustment was negotiated and received during the fourth quarter of 2022, and we recognized the credit in the period received, resulting in an approximate $7 million reduction against the original costs reflected in selling, general and administrative expenses within the Issuer Solutions segment.

Read in the reply ↗

We note your response to prior comment 3. Your intended, revised disclosure continues to not quantify the effects of changes in price, volume, and acquisitions/dispositions on merchant revenues. You state the net effect of acquisition and divestiture activities in Merchant Solutions contributed approximately 8.6% growth to Merchant Solutions, primarily due to the revenues of the EVO business acquired in March 2023.

Rest of the question

Please quantify for us the effect of the EVO business acquisition on your Merchant Solutions segment revenues in absolute dollars. Please also quantify for us the effect of other non-EVO related changes in transaction volume on Merchant Solutions segment revenues in absolute dollars. You state Issuer Solutions revenue increased primarily due to an increase in 2. transaction volume. Please quantify for us the effect of changes in transaction volume and any other material factors on this revenue category. 3. Please quantify for us the effect of the divestiture of your consumer business on cost of service in absolute dollars, which your intended, revised disclosure describes as being approximately 1.5% of the 3.5% decline in cost of service as a percent of revenue. Please also quantify for us the effect of the EVO acquisition on cost of service. Lastly, tell us and revise to explain whether the $28.4 million decrease in professional services and facilities costs is expected to continue in future periods as part of prudent expense management. 4. Please separately quantify for us the effect of acquired businesses, divested businesses, and changes in corporate expenses on your selling, general and administrative expenses in absolute dollars.

Merchant Solutions revenues grew $946.9 million, or 15.3%. The acquisition of EVO generated $609.0 million of additional revenues in the year ended December 31, 2023 compared to the prior year, and the divestiture of our Gaming business had the effect of reducing revenues by $73.4 million. The two net to the 8.6% disclosed; the effect of Gaming was not a material factor.

The effect of changes in transaction volume other than the effects of the EVO and Gaming businesses on Merchant Solutions revenues in the year ended December 31, 2023 was $439.6 million. Read in the reply ↗

Please expand your discussion to address how the experience of your Lead Independent Director is brought to bear in connection with your board’s role in risk oversight.

We acknowledge the Staff’s comment and will enhance our proxy disclosures in future filings to include how the experience of our Lead Independent Director is brought to bear in connection with our board’s role in risk oversight. Read in the reply ↗

Please expand upon the role that your Lead Independent Director plays in the leadership of the board. For example, please enhance your disclosure to address whether or not your Lead Independent Director may: • represent the board in communications with shareholders and other stakeholders; • require board consideration of, and/or override your CEO on, any risk matters; or • provide input on design of the board itself.

We acknowledge the Staff’s comment and will enhance our proxy disclosures in future filings to include additional information on the role that our Lead Independent Director plays in the leadership of our board. Read in the reply ↗

Please expand upon how your board administers its risk oversight function. For example, please disclose: • the timeframe over which you evaluate risks (e.g., short-term, intermediate-term, or long-term) and how you apply different oversight standards based upon the immediacy of the risk assessed; • whether you consult with outside advisors and experts to anticipate future threats and trends, and how often you

Rest of the question

re-assess your risk environment; • how the board interacts with management to address existing risks and identify significant emerging risks; • whether you have a Chief Compliance Officer and to whom this position reports; and • how your risk oversight process aligns with your disclosure controls and procedures.

will enhance our proxy disclosures in future filings to include additional information on how our board administers its risk oversight function. Read in the reply ↗

We note you disclose Adjusted net revenue plus network fees even though both six month periods ended June 30, 2018 and 2019 are properly presented with the effect of the adoption of Topic 606. It appears that this is an individually tailored revenue recognition and measurement method being substituted for a GAAP measure.

Rest of the question

Please refer to Rule 100(b) of Regulation G and question 100.04 in our Compliance & Disclosure Interpretations on Non-GAAP Measures and advise or otherwise revise your disclosure.

Global Payments Inc. (the "Company") acknowledges receipt of the letter dated July 30, 2019 from the Staff of the Division of Corporate Finance of the Securities and Exchange Commission. In a phone conversation today with Ta Tanisha Meadows of the Staff, Ms. Meadows kindly granted the Company’s request for an extension to August 20, 2019 to respond to the Staff’s comment. Accordingly, the Company plans to respond to the Staff's comment letter on or before that date. The Company greatly appreciates the Staff's cooperation in this regard. Read in the reply ↗

We reviewed your response to the prior comment in our letter dated July 30, 2019 and note your proposed disclosures related to Adjusted net revenue plus network fees. Please revise this measure in future filings to exclude the adjustment for "network fees." The measure does not conform to Question 100.04 of the Non-GAAP Compliance & Disclosure Interpretations.

Rest of the question

The term "revenue" should not be used when discussing this measure on a gross basis.

Global Payments Inc. (the "Company") acknowledges receipt of the letter dated October 1, 2019 from the Staff of the Division of Corporate Finance of the Securities and Exchange Commission. In an email exchange today with Ta Tanisha Meadows of the Staff, Ms. Meadows kindly granted the Company’s request for an extension to November 4, 2019 to respond to the Staff’s comment. Accordingly, the Company plans to respond to the Staff's comment letter on or before that date. The Company greatly appreciates the Staff's cooperation in this regard. Read in the reply ↗

You disclose that certain of your integrated payments solutions arrangements contain multiple elements, such as equipment, perpetual licenses, software-as-a-service, maintenance, installation and training. Please tell us the amount of revenue recognized under these multiple element arrangements for each year presented.

Rest of the question

In addition, please tell us your consideration of disclosing the following information:  The general timing or performance of service for the deliverables within the arrangements;  Performance, cancellation, termination and refund-type provisions; and  The general timing of revenue recognition for significant units of accounting. Please refer to ASC 605-25-50-1 and 50-2.

Our integrated payments solutions arrangements that contain multiple elements relate to certain business units of Heartland Payment Systems, Inc. that we acquired in a business combination on April 22, 2016. The amount of revenue recognized for these multiple-element arrangements for each of the periods presented in the Form 10-K for the Transition Period ended December 31, 2016 were as follows: $72.9 million for the period ended December 31, 2016, $10.1 million for the year ended May 31, 2016 and zero for the years ended May 31, 2015 and 2014.

Rest of the answer

For the periods ended December 31, 2016 and May 31, 2016, these amounts represented approximately 3% and less than 1%, respectively, of consolidated revenue.

Although the amount of revenue associated with these multiple-element arrangements was not material to our consolidated financial statements for any of the periods presented, we provided as supplemental disclosure the nature of these multiple-element arrangements within the Form 10-K for the Transition Period ended December 31, 2016. This supplemental disclosure was provided because these multiple-element arrangements represent a new component of our revenues and the accounting and related disclosures associated with such contracts could change upon the adoption of ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)."

Since the amount of revenue recognized for these arrangements was not material for any of the periods presented, we determined that the additional disclosure items under ASC 605-25-50-1 and 50-2 were not required. In the preparation of future filings, we will continue to assess the disclosure requirements under ASC 605-25-50-1 and 50-2, as well as Topic 606, and consider the need to include additional disclosures to the extent the amount of revenue associated with our multiple-element arrangements becomes more significant.

Should you or any member of your team have any further questions or need any additional information, please contact me at (770) 829-8030.

Read in the reply ↗

We note your disclosure regarding emerging trends in the payment technologies service industry, such as the need to continually develop innovative payment technologies as electronic-based transaction volumes increase and management’s expectation that new markets will develop as a result of industries previously dominated by paper-based transactions migrating to electronic-based settlement solutions.

Rest of the question

In future filings, please include a detailed discussion and analysis in your MD&A section of any known material trends, demands, commitments, events or uncertainties that have had or are reasonably likely to have a material impact on liquidity, capital resources, or results of operations. Please show us what this disclosure will look like. Please refer to Item 303(a) of Regulation S-K and SEC Release No. 34-48960 for guidance.

We acknowledge the Staff’s comment and will, in future filings, enhance our disclosure to describe known trends, demands, commitments, events or uncertainties that have had or are reasonably expected to have a material effect on liquidity, capital resources or results of operations in Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).

Rest of the answer

Specifically, we will enhance our disclosure by providing discussion within MD&A that addresses certain broader matters, such as industry and market trends, anticipated changes in demand and uncertainties, as well as the potential effect we believe those items may have on our liquidity, capital resources or results of operations, if material. The specific disclosure in future filings will vary based on the specific circumstances at the time. To address the specific matters identified above, our disclosure would be similar to the following:

•

The payments industry continues to grow worldwide and as a result, certain large merchant acquirers, including us, have expanded operations globally by pursuing acquisitions and creating alliances and joint ventures. We expect to continue to expand to new markets internationally or increase our scale and improve our competitiveness in existing markets by pursuing further acquisitions and joint ventures in the future.

We believe that electronic payment transactions will continue to grow and that an increasing percentage of these will be facilitated through emerging technologies. As a result, we expect an increasing portion of our future capital investment will be allocated to support the development of new and emerging technologies; however, we do not expect our aggregate capital spending to increase materially as a result of this.

We also believe new markets will continue to develop in areas that have been previously dominated by paper-based transactions. We expect industries such as education, government and healthcare, as well as payment types such as recurring payments and business-to-business payments, to continue to see transactions migrate to electronic-based solutions. We anticipate that the continued development of new services and the emergence of new vertical markets will be a factor in the growth of our business and our revenue grow in the future.

Please tell us why you refer to adjusted operation margin, net income and diluted EPS as “cash” operating margin, cash net income and cash diluted EPS, as it appears each of these measures includes adjustments to eliminate expenses that required or will require cash settlement. Please also tell us how your provision of cash diluted EPS is consistent with Accounting Series Release No. 142 and Question 102.05 of the Staff’s Compliance and Disclosure Interpretations regarding Non-GAAP measures updated May 17, 2016. In this regard, we note the way this measure is named, labeled may suggest to users that it is a liquidity measure.

Response: We respectfully note that we used “cash operating margin,” “cash net income” and “cash diluted EPS” in our Form 8-K filed July 28, 2016 as performance measures. The use of the term “cash” was not to imply these are liquidity measures, but rather it was a term selected simply to distinguish these measures from our GAAP results. We attempted to make this clear through our disclosure regarding “Non-GAAP Financial Measures” in our earnings release and in the schedules to that release, specifically in Schedule 10, where we stated “Global Payments supplements revenues, operating income and earnings per share information determined in accordance with U.S. GAAP by providing operating income, net income and related earnings per share on a cash earnings basis and Adjusted Net Revenue to assist with evaluating our performance.”

In our experience, and we believe the experience of other companies in the payments industry, investors and analysts recognize these measures are used exclusively as financial performance measures. These measures are used by investors and analysts that provide research on our common stock as the primary financial performance measures for our business, and we do not believe that investors or analysts view these as either cash flow or liquidity measures. Management uses these measures, together with other metrics, to set goals and measure performance of the business and to determine incentive compensation. In addition, we believe that these financial performance measures provide useful supplemental information about operating results, enhance the overall understanding of past financial performance and future prospects, increase comparability of our performance from period-to-period and relative to that of our peers, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Finally, we believe that these non-GAAP financial measures could not be viewed as measures of liquidity since they include significant non-cash expenses, such as depreciation, and they include adjustments to eliminate expenses that required or will require cash settlement.

Nonetheless, in response to the Staff’s Compliance and Disclosure Interpretations regarding Non-GAAP measures updated May 17, 2016, we already had plans to change our references to these non-GAAP financial measures from “cash operating margin,” “cash net income” and “cash diluted EPS” to “adjusted operating margin,” “adjusted net income” and “adjusted EPS,” respectively, to avoid any potential confusion as it relates to them being misconstrued as liquidity measures. To maintain the consistency of our financial reporting for the fiscal year ended May 31, 2016, we elected to implement this new naming convention after the start of our new fiscal year with our earnings release for the first quarterly period ended August 31, 2016 and our Current Report on Form 8-K dated October 5, 2016 reflects these revised terms.

Read in the reply ↗

Please tell us why you refer to adjusted operating margin, net income and diluted EPS as “cash” operating margin, cash net income and cash diluted EPS, as it appears each of these measures includes adjustments to eliminate expenses that required or will require cash settlement. Please also tell us how your provision of cash diluted EPS is consistent with Accounting Series Release No.

Rest of the question

142 and Question 102.05 of the Staff’s Compliance and Disclosure Interpretations regarding Non-GAAP measures updated May 17, 2016. In this regard, we note the way this measure is named/labeled may suggest to users that it is a liquidity measure.

Our revised disclosure on page 42, under “Role of Executive Officers”, is set forth below, beginning after the first sentence. We respectfully request that the elements of this revised disclosure be included in our 2017 Definitive Proxy Statement on Schedule 14A, which will be filed in the first quarter of 2017 given our change in fiscal year, rather than in an amended 2016 Definitive Proxy Statement on Schedule 14A.

The FWC report examined market data from our peer group and analyzed compensation for comparable positions for our named executive officers.

Rest of the answer

The Compensation Committee considered the Chief Executive Officer’s recommendations, in conjunction with the counsel of FWC and the market data, in determining the compensation elements for these named executive officers. In considering the FWC report, the Compensation Committee primarily considered and reviewed the median level of compensation within the peer group. In setting actual compensation levels for our NEOs, however, the Compensation Committee did not target any element of compensation at a particular percentile or percentile range of the peer group data. Rather, the Compensation Committee uses this information as one input in its decision-making process. The Compensation Committee determined all aspects of Mr. Sloan’s compensation as Chief Executive Officer in consultation with FWC and consideration of the FWC report. Mr. Sloan did not participate in the Compensation Committee’s determination of his compensation.

Read in the reply ↗

We note that you used the peer group data provided by FWC “for fiscal 2016 benchmarking purposes,” and that you set compensation for the named executive officers’ based on “comparable positions” in the market or a “review of the market data.” As it appears that you use one or more benchmarks to set your compensation, please revise your disclosure to identify these benchmarks and their components.

Rest of the question

Please refer to Item 402(b) of Regulation S-K.

Our revised disclosure on page 44, following the Base Salary table, is set forth below. We respectfully request that the elements of this revised disclosure be included in our 2017 Definitive Proxy Statement on Schedule 14A, which will be filed in the first quarter of 2017 given our change in fiscal year, rather than in an amended 2016 Definitive Proxy Statement on Schedule 14A.

The Compensation Committee determined to increase the salaries of Messrs.

Rest of the answer

Sacchi, Green and Sloan by considering, among other inputs, the market data on comparable positions from our peer group set forth in the FWC report, including but not limited to the median level of compensation for comparable positions. The Compensation Committee also considered its general assessment of the performance of Mr. Sloan, and Mr. Sloan’s assessment of Messrs. Sacchi and Green.

Read in the reply ↗

Please revise your disclosure to explain how it was determined to increase the salaries of Messrs. Sacchi, Green and Sloan by 25%, 25% and 11%, respectively.

Our revised disclosure on page 44, following the Target Bonus Opportunity Table, is set forth below. We respectfully request that the elements of this revised disclosure be included in our 2017 Definitive Proxy Statement on Schedule 14A, which will be filed in the first quarter of 2017 given our change in fiscal year, rather than in an amended 2016 Definitive Proxy Statement on Schedule 14A.

In determining the target bonus opportunities for each named executive officer, the Compensation Committee considered the market data for bonus target opportunity and total compensation opportunity for

Rest of the answer

comparable positions within our peer group, as reflected in the FWC report, the Committee’s general assessment of the Company’s Chief Executive Officer, and the Chief Executive Officer’s assessment and recommendations with respect to the other named executive officers.

Read in the reply ↗

Please revise your disclosure to explain how the target bonus opportunity, expressed as a percentage of base salary, was determined for each named executive officer.

Our revised disclosure on page 46, to be added at the end of first paragraph under Long Term Incentive Plan, is set forth below. We respectfully request that the elements of this revised disclosure be included in our 2017 Definitive Proxy Statement on Schedule 14A, which will be filed in the first quarter of 2017 given our change in fiscal year, rather than in an amended 2016 Definitive Proxy Statement on Schedule 14A.

In determining the LTI awards for each named executive officer, the Compensation Committee considered the market data for LTI awards and total compensation opportunity for

Rest of the answer

comparable positions within our peer group, as reflected in the FWC report, the Committee’s general assessment of the Company’s Chief Executive Officer, and the Chief Executive Officer’s assessment and recommendations with respect to the other named executive officers.

Should you or any member of your team have any further questions or need any additional information, please contact me at (770) 829-8256 or David Sheffield, Chief Accounting Officer, at (770) 829-8030.

Read in the reply ↗

We note that all grants of LTI awards to your named executive officers “are based on target values consistent with the executives’ skills, responsibilities, experience and performance in relation to comparable positions in the marketplace” and that you made target allocations of Performance Units, Stock Options and Time-Based Restricted Stock to your NEOs.

Rest of the question

Please provide further disclosure of how you determined the amount of Performance Units, Stock Options, and Time-Based Restricted Stock granted to your NEOs in fiscal 2016. Please refer to Item 402(b) of Regulation S-K.

No numbered answer found in the reply. Read the reply ↗

We note your responses to comments 4, 5 and 6, and that the increases in salaries, setting of target bonus opportunities and determination of LTI grants were based in part on “assessments” of the named executive officers.

Rest of the question

Please revise your future disclosures to enhance your discussion of the assessments made with respect to each named executive officer and the manner in which such assessments corresponded to the compensation decisions regarding each named executive officer. Please show us what your revised disclosure will look like.

As noted in our letter dated October 12, 2016, our Compensation Committee considered a variety of factors, including assessments of each named executive officer, in determining their salaries, target bonus opportunities and LTI grants. While our Compensation Committee assesses the performance of each named executive officer individually, it follows the same process with respect to each such officer. The Compensation Committee then sets the target compensation levels based on those assessments and the other factors set forth in our prior letter.

Rest of the answer

Set

10 Glenlake Parkway | North Tower | Atlanta, Georgia 30328 | www.globalpaymentsinc.com

Mr. Thompson forth below is our proposed additional disclosure relating to the assessments, which would apply to each named executive officer. We would propose to add the disclosure below to each of the disclosures set forth in our October 12, 2016 letter:

•

The Compensation Committee does not use a specific formula for evaluating the individual performance of each named executive officer. The Compensation Committee makes each assessment taking into consideration the quality and effectiveness of each named executive officer’s leadership and their respective contribution to the Company’s financial and operational success, as well as the totality of the executive’s performance.

Notes to Unaudited Consolidated Financial Statements

Note 5, Other Assets, page 13

With reference to the specific accounting guidance on which you relied, please tell us the basis in GAAP for your accounting for Visa’s acquisition of your membership interests in Visa Europe. In doing so, please tell us:

how the original membership interest in Visa Europe was accounted for and whether the investment had a net book value of zero, and if so, why;

all the factors considered in determining the Series B and C preferred shares received in the exchange have a value of zero; and whether you have determined it’s probable that a loss has been incurred with respect to potential litigation involving Visa Europe and the amount accrued for such loss.

Response:

We obtained our original membership interests in Visa Europe via three wholly-owned European subsidiaries, each of which acquired a single equity share for €10. Obtaining the membership interests enabled us to process and fund transactions through the Visa Europe network without a third-party sponsor financial institution. Our ownership interest in Visa Europe was minor (less than 1%), and we had no ability to control or influence decision making at Visa Europe. We accounted for our interest in Visa Europe under the cost method of accounting under ASC 325-20 because our interest was viewed as an “equity security” as defined in ASC 320-10-20 that lacked a “readily determinable fair value” as defined in ASC 320-10-20. The total carrying amount was equal to the cost of the combined membership interests of €30.

Visa Inc.’s acquisition of Visa Europe resulted in the sale of our entire membership interests in Visa Europe, having qualified as a sale per the requirements of ASC 860-10-40, paragraphs 4 and 5. We recorded the consideration received at fair value in accordance with ASC 325-20-30 paragraphs 2 and 3, recognizing the gain in earnings and establishing a new cost basis for the investment. We determined the estimated fair value of the Series B and C convertible preferred shares (the “Preferred Shares”) received as consideration in accordance with ASC 820-10-35-2. We considered multiple factors in that estimation process. The initial step in estimating the fair value of the Preferred Shares was calculating the value of the Visa Inc. common shares into which the Preferred Shares would convert if converted at the full conversion rate per the arrangement. The Preferred Shares include an embedded guarantee related to the risk of potential adjustments to the common stock conversion rate of the Preferred Shares based on the expected outcome of potential litigation involving Visa Europe in the United Kingdom and elsewhere in Europe. This embedded guarantee was not required to be bifurcated under ASC 815 and was a factor in estimating the fair value of the Preferred Shares. We also considered the restrictions on the transferability of the Preferred Shares in the estimate of fair value as well as the significant uncertainty associated with each of the factors above.

The effect of the potential indemnified losses has been reflected in the estimated fair value of the Preferred Shares. No additional loss amounts from the potential litigation were viewed as probable and, therefore, we have recorded no additional liability for such potential losses in accordance with ASC 450.

*****

Should you or any member of your team have any further questions or need any additional information, please contact me at (770) 829-8256 or David Sheffield, Senior Vice President and Chief Accounting Officer, at (770) 829-8030.

Read in the reply ↗

With reference to the specific accounting guidance on which you relied, please tell us the basis in GAAP for your accounting for Visa’s acquisition of your membership interests in Visa Europe. In doing so, please tell us:  how the original membership interest in Visa Europe was accounted for and whether the investment had a net book value of zero, and if so, why;  all the factors considered in determining the

Rest of the question

Series B and C preferred shares received in the exchange have a value of zero; and  whether you have determined it’s probable that a loss has been incurred with respect to potential litigation involving Visa Europe and the amount accrued for such loss.

No numbered answer found in the reply. Read the reply ↗