SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2019

Information About Profit and Assets

Prior to the completion of the Merger, we operated in three reportable segments: North America, Europe and Asia-Pacific. In the fourth quarter of 2019, as a result of the merger with TSYS, we realigned our executive management and organizational structures. Based on an evaluation performed in accordance with the guidance provided in Accounting Standards Codification Topic 280, Segment Reporting, we determined that our new reportable segments as of December 31, 2019 were: Merchant Solutions,

Issuer Solutions and Business and Consumer Solutions. In connection with the organizational realignment, the legacy Global Payments businesses are included in the Merchant Solutions segment with the exception of a small portion of our European business that is included in the Issuer Solutions segment. Certain operating expenses that prior to the Merger were considered "enterprise-wide" expenses and reported in Corporate are now reflected in the Merchant Solutions segment.

Our payment technology solutions are similar around the world in that we enable our customers to accept card, electronic, check and digital-based payments. Through our Merchant Solutions segment, our offerings include, but are not limited to, authorization services, settlement and funding services, customer support and help-desk functions, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and statements and on-line reporting. In addition, we offer a wide array of enterprise software solutions that streamline business operations to customers in numerous vertical markets. We also provide a variety of value-added services, including analytic and engagement tools, payroll services and reporting that assist our customers with driving demand and operating their businesses more efficiently.

Through our Issuer Solutions segment, we provide solutions that enable financial institutions and retailers to manage their card portfolios, reduce technical complexity and overhead and offer a seamless experience for cardholders on a single platform. In addition, we provide flexible commercial payments and ePayables solutions that support business-to-business payment processes for businesses and governments. We also offer complementary services including account management and servicing, fraud solution services, analytics and business intelligence, cards, statements and correspondence, customer contact solutions and risk management solutions.

Through our Business and Consumer Solutions segment, we provide general purpose reloadable prepaid debit and payroll cards, demand deposit accounts and other financial service solutions to the underbanked and other consumers and businesses in the United States.

We evaluate performance and allocate resources based on the operating income of each operating segment. The operating income of each operating segment includes the revenues of the segment less expenses that are directly related to those revenues. Operating overhead, shared costs and share-based compensation costs are included in Corporate. Interest and other income, interest and other expense, income tax expense and equity in income of equity method investments, net of tax, are not allocated to the individual segments. We do not evaluate the performance of or allocate resources to our operating segments using asset data. The accounting policies of the reportable operating segments are the same as those described in the Summary of Significant Accounting Policies in "Note 1 - Basis of Presentation and Summary of Significant Accounting Policies." The presentation of segment information for the years ended December 31, 2018 and 2017 has been recast to align with the segment presentation for the year ended December 31, 2019.

Information on segments and reconciliations to consolidated revenues, consolidated operating income and consolidated depreciation and amortization are as follows:



	Years Ended December 31,
	2019			2018			2017

	(in thousands)

Revenues ⁽¹⁾⁽²⁾:
Merchant Solutions	$	4,098,580		$	3,345,181		$	3,955,988
Issuer Solutions	604,654			21,185			19,175
Business and Consumer Solutions	227,440			—			—
Segment revenues	4,930,674			3,366,366			3,975,163
Less: intersegment revenues	(18,782		)	—			—
Consolidated revenues	$	4,911,892		$	3,366,366		$	3,975,163

Operating income (loss) ⁽²⁾⁽³⁾:
Merchant Solutions	$	1,148,975		$	940,157		$	771,911
Issuer Solutions	82,172			14,084			12,710
Business and Consumer Solutions	19,473			—			—
Corporate	(459,203		)	(217,186		)	(225,753		)
Consolidated operating income	$	791,417		$	737,055		$	558,868

Depreciation and amortization ⁽²⁾:
Merchant Solutions	$	677,196		$	516,731		$	444,100
Issuer Solutions	157,799			710			647
Business and Consumer Solutions	34,914			—			—
Corporate	8,426			5,372			6,404
Consolidated depreciation and amortization	$	878,335		$	522,813		$	451,151

⁽¹⁾As more fully described in "Note 1—Basis of Presentation and Summary of Significant Accounting Policies" and "Note 3—Revenues" we adopted a new revenue accounting standard on January 1, 2018 that resulted in revenue being presented net of certain fees that we pay to third parties, including payment networks. This change in presentation affected our reported revenues and operating expenses for all periods after the year ended December 31, 2017 by the same amount and had no effect on operating income.

⁽²⁾Revenues, operating income and depreciation and amortization reflect the effects of acquired businesses from the respective dates of acquisition. For further discussion, see "Note 2—Acquisitions."

⁽³⁾ During the year ended December 31, 2019, operating income for our Merchant Solutions segment reflected the effect of acquisition and integration expenses of $56.1 million. Operating loss for Corporate included acquisition and integration expenses of $199.5 million, $56.1 million and $94.6 million, respectively, during the years ended December 31, 2019, 2018 and 2017. Acquisition and integration expenses for 2019 were primarily related to the Merger.

Entity-Wide Information

As a percentage of our total consolidated revenues, revenues from external customers in the United States and the United Kingdom were 72% and 8%, respectively, for the year ended December 31, 2019, 67% and 9%, respectively, for the year ended December 31, 2018, and 66% and 11%, respectively, for the year ended December 31, 2017. Revenues from external customers

are attributed to individual countries based on the location of the customer arrangements. Our results of operations and our financial condition are not significantly reliant upon any single customer.

Long-lived assets, excluding goodwill and other intangible assets, by location as of December 31, 2019 and 2018 were as follows:



	2019		2018

	(in thousands)

United States	$	950,567	$	516,449
Foreign countries	432,235		137,093
	$	1,382,802	$	653,542