Global Payments Reports First Quarter Earnings, Increases Annual Fiscal 2016 Outlook and Declares Two-for-One Stock Split

October 7, 2015

 

ATLANTA--(BUSINESS WIRE)-- Global Payments Inc. (NYSE: GPN) today announced results for its fiscal first quarter ended August 31, 2015.

"We are delighted with our outstanding first quarter results, which represent an excellent start to the 2016 fiscal year and a continuation of exceeding our expectations across our markets," said Jeff Sloan, Chief Executive Officer. "This performance builds on the momentum we have generated as we continue to invest in our strategy to expand distribution and create competitive differentiation through technology by delivering innovative solutions globally."

First Quarter Fiscal 2016 Summary

  • Adjusted net revenue grew 8% to $537.0 million, compared to $495.2 million in the first quarter of fiscal 2015.
  • Cash diluted earnings per share grew 25% to $1.57, compared to $1.26 in the first quarter of fiscal 2015.
  • Cash operating margin expanded to 30.5%, a 150 basis point increase over the first quarter of fiscal 2015.
  • GAAP revenues grew 6% to $748.8 million, compared to $704.9 million in the first quarter of fiscal 2015, and diluted earnings per share were $1.32, compared to $1.10 in the prior year.

Fiscal 2016 Outlook

"As a result of our strong first quarter performance, we are increasing our outlook for annual fiscal 2016 diluted earnings per share on a cash basis to a range of $5.77 to $5.92, reflecting growth of 14% to 17% over fiscal 2015," stated Cameron Bready, Executive Vice President and Chief Financial Officer. "We also now expect annual fiscal 2016 core cash operating margins to expand by as much as 50 basis points on a constant currency basis. We continue to expect adjusted net revenues to range from $2.06 billion to $2.10 billion, or growth of 6% to 8% over fiscal 2015."

Stock Split and Dividend

Global Payments' Board of Directors has declared a two-for-one stock split of the company's common stock to be effected in the form of a stock dividend of one additional share of common stock for each outstanding share of common stock. The stock dividend will be payable on November 2, 2015 to all shareholders of record as of October 21, 2015.

A first quarter dividend of $0.01 per share, after giving effect to the two-for-one stock split, will be payable on November 27, 2015 to shareholders of record as of November 13, 2015.

Conference Call

Global Payments' management will host a conference call today, October 7, 2015 at 8:00 a.m. ET to discuss financial results and business highlights. Callers may access the conference call via the investor relations page of the company's website at www.globalpaymentsinc.com; or callers in North America may dial 877-674-6428 and callers outside North America may dial 970-315-0457. A replay of the call will be archived on the company's website within two hours of the live call.

Non-GAAP Financial Measures

Global Payments supplemented revenues, income and earnings per share information determined in accordance with GAAP by providing income and related earnings per share on a "cash earnings" basis and adjusted net revenue in this earnings release to assist with evaluating performance. In addition to GAAP measures, management uses these non-GAAP measures to focus on the factors the company believes are pertinent to the daily management of our operations.

Reconciliations of the non-GAAP measures to the most directly comparable GAAP measure are included in the schedules to this release.

About Global Payments

Global Payments Inc. (NYSE: GPN) is a leading worldwide provider of payment technology services that delivers innovative solutions driven by customer needs globally. Our technologies, partnerships and employee expertise enable us to provide a broad range of products and services that allow our customers to accept all payment types across a variety of distribution channels in many markets around the world.

Headquartered in Atlanta, Georgia with approximately 4,500 employees worldwide, Global Payments is a Fortune 1000 Company with merchants and partners in 29 countries throughout North America, Europe, the Asia-Pacific region and Brazil. For more information about Global Payments, our Service. Driven. Commerce brand and our technologies, please visit www.globalpaymentsinc.com.

_________________________

This announcement and comments made by Global Payments' management during the conference call may contain certain forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management's expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties. Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include our potential failure to safeguard our data; our ability to maintain Visa and MasterCard registration and financial institution sponsorship; our reliance on financial institutions to provide clearing services in connection with our settlement activities; our potential failure to comply with card network requirements; increased merchant, referral partner or ISO attrition; our ability to increase our share of existing markets and expand into new markets; political, economic and regulatory changes in the foreign countries in which we operate; system interruptions in service; increases in credit card network fees; future performance, integration and conversion of acquired operations; and other risk factors presented in our most recent Annual Report on Form 10-K and any subsequent SEC filings, which we advise you to review. We undertake no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.

SCHEDULE 1

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF INCOME

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

     
    Three Months Ended August 31,
    2015     2014    

%
Change

    (unaudited)      
Revenues   $ 748,796       $ 704,895       6.2   %
                 
Operating expenses:                
Cost of service   272,666       259,839       4.9   %
Selling, general and administrative   338,358       320,658       5.5   %
    611,024       580,497       5.3   %
                 
Operating income   137,772       124,398       10.8   %
                 
Interest and other income   1,142       1,192       (4.2

)

%

Interest and other expense   (13,243 )     (11,010 )     20.3   %
    (12,101 )     (9,818 )     23.3   %
                 
Income before income taxes   125,671       114,580       9.7   %
Provision for income taxes   (32,623 )     (30,146 )     8.2   %
Net income   93,048       84,434       10.2   %
Less: Net income attributable to noncontrolling interests, net of income tax   (6,402 )     (9,068 )     (29.4

)

%

Net income attributable to Global Payments   $ 86,646       $ 75,366       15.0   %
                 
Earnings per share attributable to Global Payments:                
Basic   $ 1.33       $ 1.11       19.8   %
Diluted   $ 1.32       $ 1.10       20.0   %
                 
Weighted average shares outstanding:                
Basic   65,164       68,146        
Diluted   65,573       68,617        
                     

SCHEDULE 2

CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

     
    Three Months Ended August 31,
    2015     2014    

%
Change

                 
Adjusted net revenue   $ 536,953       $ 495,212       8.4   %
                 
Operating expenses:                
Cost of service   231,921       221,033       4.9   %
Selling, general and administrative   141,466       130,802       8.2   %
    373,387       351,835       6.1   %
                 
Operating income   163,566       143,377       14.1   %
                 
Interest and other income   1,142       1,192       (4.2

)

%

Interest and other expense   (13,243 )     (11,010 )     20.3   %
    (12,101 )     (9,818 )     23.3   %
                 
Income before income taxes   151,465       133,559       13.4   %
Provision for income taxes   (41,160 )     (36,894 )     11.6   %
Net income   110,305       96,665       14.1   %
Less: Net income attributable to noncontrolling interests, net of income tax   (7,280 )     (10,303 )     (29.3

)

%

Net income attributable to Global Payments   $ 103,025       $ 86,362       19.3   %
                 
Earnings per share attributable to Global Payments:                
Basic   $ 1.58       $ 1.27       24.4   %
Diluted   $ 1.57       $ 1.26       24.6   %
                 
Weighted average shares outstanding:                
Basic   65,164       68,146        
Diluted   65,573       68,617        
                     

See Schedule 6 for a reconciliation of adjusted net revenue and cash earnings to GAAP.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

SCHEDULE 3

SEGMENT INFORMATION

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(Dollars in thousands)

             
    Three Months Ended August 31,        
    2015   2014   % Change
    GAAP  

Adjusted Net
Revenue and
Cash
Earnings

  GAAP  

Adjusted Net
Revenue and
Cash
Earnings

  GAAP  

Adjusted Net
Revenue and
Cash
Earnings

                         
Revenues:                        
North America   $ 530,857     $ 340,431     $ 504,007     $ 315,276     5.3 %   8.0 %
Europe   168,357     146,940     162,787     141,835     3.4 %   3.6 %
Asia-Pacific   49,582     49,582     38,101     38,101     30.1 %   30.1 %
Total revenues   $ 748,796     $ 536,953     $ 704,895     $ 495,212     6.2 %   8.4 %
                         
Operating income for segments:                        
North America   $ 83,513     $ 96,966     $ 77,937     $ 89,315     7.2 %   8.6 %
Europe   72,733     77,031     67,045     70,310     8.5 %   9.6 %
Asia-Pacific   12,233     13,810     6,557     6,827     86.6 %   102.3 %
Corporate   (30,707 )   (24,241 )   (27,141 )   (23,075 )   13.1 %   5.1 %
                                             
Operating income   $ 137,772     $ 163,566     $ 124,398     $ 143,377     10.8 %   14.1 %
                                             

See Schedule 7 for reconciliation of adjusted net revenue and cash earnings segment information to GAAP.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

SCHEDULE 4

CONSOLIDATED BALANCE SHEETS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except share data)

           
    August 31, 2015     May 31, 2015
    (unaudited)      
ASSETS          
Current assets:          
Cash and cash equivalents   $ 803,309       $ 650,739  
Accounts receivable, net of allowances for doubtful accounts of $398 and $468, respectively   207,949       202,390  
Claims receivable, net of allowances for doubtful accounts of $5,933 and $548, respectively   7,177       548  
Settlement processing assets   1,658,193       2,394,822  
Deferred income taxes   12,179       11,664  
Prepaid expenses and other current assets   58,231       41,416  
Total current assets   2,747,038       3,301,579  
Goodwill   1,603,593       1,491,833  
Other intangible assets, net   686,852       560,136  
Property and equipment, net   368,795       374,143  
Deferred income taxes   30,375       30,578  
Other   36,265       32,846  
Total assets   $ 5,472,918       $ 5,791,115  
           
LIABILITIES AND EQUITY          
Current liabilities:          
Lines of credit   $ 356,675       $ 592,629  
Current portion of long-term debt         61,784  
Accounts payable and accrued liabilities   303,497       312,647  
Settlement processing obligations   1,699,353       2,033,900  
Income taxes payable   30,711       14,228  
Total current liabilities   2,390,236       3,015,188  
Long-term debt   1,932,028       1,678,283  
Deferred income taxes   216,844       214,669  
Other long-term liabilities   16,667       19,422  
Total liabilities   4,555,775       4,927,562  
Commitments and contingencies          
Equity:          
Preferred stock, no par value; 5,000,000 shares authorized and none issued          
Common stock, no par value; 200,000,000 shares authorized; 64,941,393 issued and outstanding at August 31, 2015 and 65,278,838 issued and outstanding at May 31, 2015          
Paid-in capital   138,212       148,742  
Retained earnings   861,212       795,226  
Accumulated other comprehensive loss   (212,727 )     (185,992 )
Total Global Payments shareholders' equity   786,697       757,976  
Noncontrolling interests   130,446       105,577  
Total equity   917,143       863,553  
Total liabilities and equity   $ 5,472,918       $ 5,791,115  
                   

SCHEDULE 5

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

     
    Three Months Ended August 31,
    2015     2014
Cash flows from operating activities:          
Net income   $ 93,048       $ 84,434  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:          
Depreciation and amortization of property and equipment   17,909       16,712  
Amortization of acquired intangibles   20,848       17,854  
Share-based compensation expense   6,467       4,066  
Provision for operating losses and bad debts   4,263       4,308  
Deferred income taxes   3,584       3,705  
Other, net   1,333       (755 )
Changes in operating assets and liabilities, net of the effects of acquisitions:          
Accounts receivable   (7,512 )     7,933  
Claims receivable   (12,261 )     (2,742 )
Settlement processing assets and obligations, net   402,676       (179,462 )
Prepaid expenses and other assets   (18,114 )     1,625  
Accounts payable and other liabilities   (14,801 )     (22,151 )
Income taxes payable   15,952       1,000  
Net cash provided by (used in) operating activities   513,392       (63,473 )
Cash flows from investing activities:          
Business, intangible and other asset acquisitions, net of cash acquired   (241,530 )     (4,773 )
Capital expenditures   (16,858 )     (18,157 )
Principal collections on financing receivables         219  
Net proceeds from sales of investments and business         10,528  
Net cash used in investing activities   (258,388 )     (12,183 )
Cash flows from financing activities:          
Net (payments) borrowings on short-term lines of credit   (236,041 )     212,029  
Proceeds from issuance of long-term debt   2,821,425       390,000  
Principal payments of long-term debt   (2,626,925 )     (363,679 )
Payment of debt issuance costs   (4,934 )      
Repurchase of common stock   (34,296 )     (132,283 )
Proceeds from stock issued under share-based compensation plans   2,513       12,588  
Common stock repurchased - share-based compensation plans   (8,154 )     (15,105 )
Tax benefit from share-based compensation plans   5,760       3,154  
Distributions to noncontrolling interests   (8,158 )     (11,249 )
Dividends paid   (1,305 )     (1,370 )
Net cash (used in) provided by financing activities   (90,115 )     94,085  
Effect of exchange rate changes on cash   (12,319 )     (4,417 )
Increase in cash and cash equivalents   152,570       14,012  
Cash and cash equivalents, beginning of the period   650,739       581,872  
Cash and cash equivalents, end of the period   $ 803,309       $ 595,884  
                   

SCHEDULE 6

RECONCILIATION OF ADJUSTED NET REVENUE AND CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

                     
    Three Months Ended August 31, 2015
    GAAP  

Net Revenue
Adjustment1

 

Cash Earnings
Adjustments2

  Other3  

Adjusted Net
Revenue and
Cash Earnings

Revenues   $ 748,796     $ (211,843 )   $     $     $ 536,953  
                     
Operating expenses:                    
Cost of service   272,666     (21,417 )   (21,398 )   2,070     231,921  
Selling, general and administrative   338,358     (190,426 )   (6,466 )       141,466  
    611,024     (211,843 )   (27,864 )   2,070     373,387  
                     
Operating income   137,772         27,864     (2,070 )   163,566  
                     
Interest and other income   1,142                 1,142  
Interest and other expense   (13,243 )               (13,243 )
    (12,101 )               (12,101 )
Income before income taxes   125,671         27,864     (2,070 )   151,465  
(Provision for) benefit from income taxes   (32,623 )       (8,968 )   431     (41,160 )
Net income   93,048         18,896     (1,639 )   110,305  
Less: Net income attributable to noncontrolling interests, net of income tax   (6,402 )       (878 )       (7,280 )
Net income attributable to Global Payments   $ 86,646     $     $ 18,018     $ (1,639 )   $ 103,025  
Diluted shares   65,573                 65,573  
Diluted earnings per share   $ 1.32     $     $ 0.27     $ (0.02 )   $ 1.57  
                     
                     
    Three Months Ended August 31, 2014
    GAAP  

Net Revenue
Adjustment1

 

Cash Earnings
Adjustments2

  Other3  

Adjusted Net
Revenue and
Cash Earnings

Revenues   $ 704,895     $ (209,683 )   $     $     $ 495,212  
                     
Operating expenses:                    
Cost of service   259,839     (20,952 )   (17,854 )       221,033  
Selling, general and administrative   320,658     (188,731 )   (4,066 )   2,941     130,802  
    580,497     (209,683 )   (21,920 )   2,941     351,835  
                     
Operating income   124,398         21,920     (2,941 )   143,377  
                     
Interest and other income   1,192                 1,192  
Interest and other expense   (11,010 )               (11,010 )
    (9,818 )               (9,818 )
Income before income taxes   114,580         21,920     (2,941 )   133,559  
(Provision for) benefit from income taxes   (30,146 )       (7,336 )   588     (36,894 )
Net income   84,434         14,584     (2,353 )   96,665  
Less: Net income attributable to noncontrolling interests, net of income tax   (9,068 )       (1,235 )       (10,303 )
Net income attributable to Global Payments   $ 75,366     $     $ 13,349     $ (2,353 )   $ 86,362  
Diluted shares   68,617                 68,617  
Diluted earnings per share   $ 1.10     $     $ 0.19     $ (0.03 )   $ 1.26  
                                         

1 Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain wholesale lines of business to reflect economic benefits to the Company.

2 Represents adjustments to exclude acquisition-related amortization expense, share-based compensation expense and the related income tax benefits of each.

3 For the three months ended August 31, 2015, represents recoveries associated with a U.K. vendor outage and the related provision for income taxes. For the three months ended August 31, 2014, represents a gain on sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia and the related provision for income taxes.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

SCHEDULE 7

RECONCILIATION OF ADJUSTED NET REVENUE AND CASH EARNINGS SEGMENT INFORMATION TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

   
  Three Months Ended August 31,
  2015   2014
  GAAP  

Net Revenue
Adjustment1

 

Cash
Earnings
Adjustments2

  Other3  

Adjusted Net
Revenues and
Cash
Earnings

  GAAP  

Net Revenue
Adjustment1

 

Cash
Earnings
Adjustments2

  Other3  

Adjusted Net
Revenues and
Cash
Earnings

                                       
Revenues:                                      
North America $ 530,857     $ (190,426 )   $     $     $ 340,431     $ 504,007     $ (188,731 )   $     $     $ 315,276  
Europe 168,357     (21,417 )           146,940     162,787     (20,952 )           141,835  
Asia-Pacific 49,582                 49,582     38,101                 38,101  
Total revenues $ 748,796     $ (211,843 )   $     $     $ 536,953     $ 704,895     $ (209,683 )   $     $     $ 495,212  
                                       
Operating income for segments:                                      
North America $ 83,513     $     $ 13,453     $     $ 96,966     $ 77,937     $     $ 11,378     $     $ 89,315  
Europe 72,733         6,368     (2,070 )   77,031     67,045         6,206     (2,941 )   70,310  
Asia-Pacific 12,233         1,577         13,810     6,557         270         6,827  
Corporate (30,707 )       6,466         (24,241 )   (27,141 )       4,066         (23,075 )
Operating income $ 137,772     $     $ 27,864     $ (2,070 )   $ 163,566     $ 124,398     $     $ 21,920     $ (2,941 )   $ 143,377  
                                                                               

1 Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain wholesale lines of business to reflect economic benefits to the Company.

2 Represents adjustments to exclude acquisition-related amortization expense and share-based compensation expense.

3 For the three months ended August 31, 2015, represents recoveries associated with a U.K. vendor outage. For the three months ended August 31, 2014, represents a gain on sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

SCHEDULE 8

                 

OUTLOOK SUMMARY

                 

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

                 

(In billions, except per share data)

                 
                   
   

Fiscal 2015
Actual

   

Fiscal 2016
Outlook

    % Change

Revenues:

                 
GAAP Revenues   $ 2.77       $2.87 to $2.95       4% to 6%
Adjustments1   (0.82 )     (0.83 )      
Adjusted Net Revenue   $ 1.95       $2.06 to $2.10       6% to 8%
                   

Earnings Per Share:

                 
GAAP Diluted EPS   $ 4.12       $4.70 to $4.85       14% to 18%

Acquisition-related amortization expense, share-based compensation expense and non-recurring items2

  0.92       1.07       16%
Cash EPS   $ 5.04       $5.77 to $5.92       14% to 17%
                       

1 Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain wholesale lines of business to reflect economic benefits to the Company and, in fiscal 2015, a revenue adjustment for select U.K. customer payments related to a vendor outage.

2 Fiscal 2015 reflects acquisition-related amortization expense of $0.67, share-based compensation expense of $0.19 and non-recurring items of $0.06, including a revenue adjustment for select U.K. customer payments related to a vendor outage and expense adjustments for charges related to employee termination benefits, non-cash losses from the retirement of property and equipment, a transaction-related tax associated with the acquisition of Realex, certain business tax assessments in the U.S. for prior periods, a gain on the sale of our Russia ATM business, reversal of previously recorded interest expense associated with a previously uncertain tax position and the related income tax effects of each.

NON-GAAP FINANCIAL MEASURES

Global Payments supplemented revenues, income and earnings per share information determined in accordance with GAAP by providing income and related earnings per share on a "cash earnings" basis and Adjusted Net Revenue in this earnings release to assist with evaluating performance. In addition to GAAP measures, management uses these non-GAAP measures to focus on the factors we believe are pertinent to the daily management of our operations. Management believes Adjusted Net Revenue more closely reflects the economic benefits to the Company's core business and allows for better comparisons with industry peers. Management uses these non-GAAP metrics, together with other metrics, to set goals for and measure the performance of its business and to determine incentive compensation. Our Adjusted Net Revenue and income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, revenues, income and earnings per share determined in accordance with GAAP. Our measures of Adjusted Net Revenue, income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.

Adjusted Net Revenue excludes gross-up related payments associated with certain wholesale lines of business to reflect economic benefits to the Company. On a GAAP basis, these payments are presented gross in both revenues and operating expenses.

Income and the related earnings per share on a cash earnings basis exclude acquisition-related amortization expense, share-based compensation and certain other items specific to each reporting period as more fully described in the accompanying reconciliations in Schedule 6, Schedule 7 and Schedule 9. The tax rate used in determining the net income impact of cash earnings adjustments is either the jurisdictional statutory rate in effect at the time of the adjustment or the jurisdictional expected annual effective tax rate for the period, depending on the nature and timing of the adjustment.

 

SCHEDULE 9

RECONCILIATION OF ADJUSTED NET REVENUE AND CASH EARNINGS SEGMENT INFORMATION TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

         
         
        Three Months Ended
        August 31, 2014       November 30, 2014
        GAAP    

Net Revenue
Adjustment1

   

Cash
Earnings
Adjustments2

    Other3    

Adjusted
Net
Revenue
and Cash
Earnings

      GAAP    

Net Revenue
Adjustment1

   

Cash
Earnings
Adjustments2

    Other3    

Adjusted
Net
Revenue
and Cash
Earnings

Revenues:                                                                
North America       $ 504,007       $ (188,731 )     $       $       $ 315,276         $ 488,776       $ (183,217 )     $       $       $ 305,559  
Europe       162,787       (20,952 )                 141,835         159,974       (20,409 )                 139,565  
Asia-Pacific       38,101                         38,101         48,541                         48,541  
Total revenues       $ 704,895       $ (209,683 )     $       $       $ 495,212         $ 697,291       $ (203,626 )     $       $       $ 493,665  
                                                                 
Operating income (loss) for segments:                                                                
North America      

 

77,937      

 

     

 

11,378

     

 

     

 

89,315

       

 

74,246      

 

     

 

11,173      

 

     

 

85,419  
Europe       67,045             6,206       (2,941 )     70,310         64,563             5,832             70,395  
Asia-Pacific       6,557             270             6,827         11,880             1,258             13,138  
Corporate       (27,141 )           4,066             (23,075 )       (26,705 )           5,079             (21,626 )
Operating income (loss)       124,398             21,920       (2,941 )     143,377         123,984             23,342             147,326  
                                                                 
Interest and other income       1,192                         1,192         1,282                         1,282  
Interest and other expense       (11,010 )                       (11,010 )       (10,350 )                       (10,350 )
        (9,818 )                       (9,818 )       (9,068 )                       (9,068 )
                                                                 
Income (loss) before income taxes       114,580             21,920       (2,941 )     133,559         114,916             23,342             138,258  

(Provision for) benefit from income taxes

      (30,146 )           (7,336 )     588       (36,894 )       (29,660 )           (7,688 )           (37,348 )
Net income (loss)       84,434             14,584       (2,353 )     96,665         85,256             15,654             100,910  
Less: Net income attributable to noncontrolling interests, net of income tax       (9,068 )           (1,235 )           (10,303 )       (10,475 )           (1,173 )           (11,648 )
Net income (loss) attributable to Global Payments       $ 75,366       $       $ 13,349       $ (2,353 )     $ 86,362         $ 74,781       $       $ 14,481       $       $ 89,262  
                                                                 
Diluted shares       68,617                         68,617         67,737                         67,737  
Diluted earnings (loss) per share       $ 1.10       $       $ 0.19       $ (0.03 )     $ 1.26         $ 1.10       $       $ 0.21       $       $ 1.32  
                                                                                                         
        Three Months Ended
        February 28, 2015       May 31, 2015
        GAAP    

Net Revenue
Adjustment1

   

Cash
Earnings
Adjustments2

    Other3    

Adjusted
Net
Revenue
and Cash
Earnings

      GAAP    

Net Revenue
Adjustment1

   

Cash
Earnings
Adjustments2

    Other3    

Adjusted
Net
Revenue
and Cash
Earnings

Revenues:                                                                
North America       $ 473,063       $ (179,678 )     $       $       $ 293,385         $ 503,044       $ (188,930 )     $       $       $ 314,114  
Europe       138,378       (19,424 )           1,876       120,830         154,827       (21,361 )                 133,466  
Asia-Pacific       53,542                         53,542         48,678                         48,678  
Total revenues       $ 664,983       $ (199,102 )     $       $ 1,876       $ 467,757         $ 706,549       $ (210,291 )     $       $       $ 496,258  
                                                                 
Operating income (loss) for segments:                                                                
North America      

 

66,723      

 

     

 

11,023      

 

     

 

77,746        

 

74,233      

 

     

 

10,967      

 

300      

 

85,500  
Europe       52,710             5,400       1,876       59,986         55,696             5,833       4,548       66,077  
Asia-Pacific       12,192             1,644             13,836         9,068             1,603             10,671  
Corporate       (27,010 )           5,682       1,872       (19,456 )       (35,397 )           5,504       4,837       (25,056 )
Operating income       104,615             23,749       3,748       132,112         103,600             23,907       9,685       137,192  
                                                                 
                                                                 
Interest and other income       1,160                         1,160         1,315                         1,315  
Interest and other expense       (13,429 )                       (13,429 )       (9,647 )                 (3,596 )     (13,243 )
        (12,269 )                       (12,269 )       (8,332 )                 (3,596 )     (11,928 )
                                                                 
Income before income taxes       92,346             23,749       3,748       119,843         95,268             23,907       6,089       125,264  
Provision for income taxes       (23,031 )           (7,782 )     (1,031 )     (31,844 )       (25,158 )           (7,923 )     (2,096 )     (35,177 )
Net income       69,315             15,967       2,717       87,999         70,110             15,984       3,993       90,087  
Less: Net income attributable to noncontrolling interests, net of income tax       (6,747 )           (1,078 )           (7,825 )       (4,785 )           (1,043 )           (5,828 )
Net income attributable to Global Payments       $ 62,568       $       $ 14,889       $ 2,717       $ 80,174         $ 65,325       $       $ 14,941       $ 3,993       $ 84,259  
                                                                 
Diluted shares       67,306                         67,306         66,196                         66,196  
Diluted earnings per share       $ 0.93       $       $ 0.22       $ 0.04       $ 1.19         $ 0.99       $       $ 0.23       $ 0.06       $ 1.27  
                                                                                                         

1Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain wholesale lines of business to reflect economic benefits to the Company.

2Represents adjustments to exclude acquisition-related amortization expense, stock compensation expense and the related income tax benefits of each.

3Represents a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia.

4The revenue adjustment represents select U.K. customer payments related to a vendor outage and the expense adjustment represents certain business tax assessments in the U.S. for prior periods.

5The adjustments represent charges related to employee termination benefits, non-cash losses from the retirement of property and equipment, a transaction-related tax associated with our acquisition of Realex, reversal of previously recorded interest expense associated with a previously uncertain tax position and the related income tax effects of each.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

 

Global Payments Inc.
Investor contact:
Jane Elliott, 770-829-8234
investor.relations@globalpay.com
or
Media contact:
Amy Corn, 770-829-8755
media.relations@globalpay.com

 

Source: Global Payments Inc.

 

 

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