Full-Year Fiscal 2015 Revenue Increased 9% and Cash Earnings Per Share Increased 18%

Establishes Fiscal 2016 Growth Targets of High Single Digits for Adjusted Net Revenue and Double Digits for Cash Earnings Per Share

Raises Share Repurchase Authorization to $400 Million

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

"We are delighted with our strong fourth quarter performance, representing the culmination of a terrific year of execution worldwide. Revenue growth, operating margin and cash earnings per share all exceeded our expectations for fiscal 2015," said Jeff Sloan, Chief Executive Officer. "We expect continued positive momentum in fiscal 2016. Strategically, we have completed the pivot toward direct distribution across our businesses. Financially, we remain committed to continuing our track record of accelerating growth globally. The successful execution of our strategies enables us to raise our expectations for adjusted net revenue growth, operating margin and cash earnings per share growth for the next three to five years."

Full-Year Fiscal 2015 Summary

• Reported revenues grew 9% to $2.78 billion, compared to $2.55 billion in fiscal 2014.
• Cash diluted earnings per share grew 18% to $4.85, compared to $4.12 in the prior fiscal year.
• GAAP diluted earnings per share were $4.12, compared to $3.37 in the prior fiscal year.

Fourth Quarter Fiscal 2015 Summary

• Reported revenues grew 5% to $706.5 million, compared to $674.0 million in the fourth quarter of fiscal 2014.
• Cash diluted earnings per share grew 12% to $1.22, compared to $1.09 in the fourth quarter of fiscal 2014.
• GAAP diluted earnings per share were $0.99, compared to $0.72 in the fourth quarter of fiscal 2014.

Fiscal 2016 Outlook

"We are pleased to introduce a new adjusted net revenue disclosure that better aligns our reporting with how we manage and measure our performance internally," stated Cameron Bready, Executive Vice President and Chief Financial Officer. "We are also modifying our reporting convention for cash earnings to exclude expenses associated with share-based compensation. Going forward, we intend to guide and report based on these metrics, which we believe will provide for improved comparability with our peers."

For fiscal 2016, the company expects annual adjusted net revenue of $2.06 billion to $2.10 billion, or 6% to 8% growth over fiscal 2015 adjusted net revenue. The company also expects annual diluted cash earnings per share of $5.60 to $5.78, representing growth of 11% to 15% over fiscal 2015. Annual fiscal 2016 GAAP revenue is expected to be $2.87 billion to $2.95 billion or 4% to 6% growth over fiscal 2015.

Capital Allocation

Global Payments' Board of Directors expanded its share repurchase authorization by an incremental $300 million, bringing its total current authorization to $403 million. Under the company's new authorization, Global Payments may repurchase shares in the open market or as otherwise may be determined by the company, subject to market conditions, business opportunities and other factors. The company has no obligation to repurchase shares under this program. This authorization has no expiration date and may be suspended or terminated at any time. Repurchased shares will be retired but will be available for future issuance.

Global Payments' Board of Directors approved a quarterly dividend of $0.02 per share payable August 28, 2015 to shareholders of record as of August 14, 2015.

Conference Call

Global Payments' management will host a conference call today, July 28, 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 partnerships, technologies 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 more than 4,300 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
GAAP CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
			Three Months Ended May 31,															Year Ended May 31,
													%															%
			2015					2014					Change					2015					2014					Change
Revenues			$	706,549				$	673,977				4.8	%				$	2,773,718				$	2,554,236				8.6	%
Operating expenses:
Cost of service				254,217					253,373				0.3	%					1,022,107					952,225				7.3	%
Selling, general and administrative				348,732					331,687				5.1	%					1,295,014					1,203,512				7.6	%
Processing system intrusion				—					—				NM						—					(7,000	)			NM
				602,949					585,060				3.1	%					2,317,121					2,148,737				7.8	%
Operating income				103,600					88,917				16.5	%					456,597					405,499				12.6	%
Interest and other income				1,315					2,093				(37.2	)%					4,949					13,663				(63.8	)%
Interest and other expense				(9,647	)				(9,451	)			2.1	%					(44,436	)				(41,812	)			6.3	%
				(8,332	)				(7,358	)			13.2	%					(39,487	)				(28,149	)			40.3	%
Income before income taxes				95,268					81,559				16.8	%					417,110					377,350				10.5	%
Provision for income taxes				(25,158	)				(23,293	)			8.0	%					(107,995	)				(107,398	)			0.6	%
Net income				70,110					58,266				20.3	%					309,115					269,952				14.5	%
Less: Net income attributable to noncontrolling interests, net of income tax				(4,785	)				(6,641	)			(27.9	)%					(31,075	)				(24,666	)			26.0	%
Net income attributable to Global Payments			$	65,325				$	51,625				26.5	%				$	278,040				$	245,286				13.4	%
Earnings per share attributable to Global Payments:
Basic			$	0.99				$	0.73				35.6	%				$	4.15				$	3.40				22.1	%
Diluted			$	0.99				$	0.72				37.5	%				$	4.12				$	3.37				22.3	%
Weighted average shares outstanding:
Basic				65,744					70,707										67,036					72,119
Diluted				66,196					71,322										67,461					72,688
NM - Not meaningful

SCHEDULE 2
CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
			Three Months Ended May 31,															Year Ended May 31,
													%															%
			2015					2014					Change					2015					2014					Change
Revenues			$	706,549				$	673,977				4.8	%				$	2,775,594				$	2,554,236				8.7	%
Operating expenses:
Cost of service				235,814					234,856				0.4	%					949,520					889,576				6.7	%
Selling, general and administrative				339,047					317,085				6.9	%					1,286,398					1,184,066				8.6	%
				574,861					551,941				4.2	%					2,235,918					2,073,642				7.8	%
Operating income				131,688					122,036				7.9	%					539,676					480,594				12.3	%
Interest and other income				1,315					2,093				(37.2	)%					4,949					11,540				(57.1	)%
Interest and other expense				(13,243	)				(8,110	)			63.3	%					(48,032	)				(32,327	)			48.6	%
				(11,928	)				(6,017	)			98.2	%					(43,083	)				(20,787	)			107.3	%
Income before income taxes				119,760					116,019				3.2	%					496,593					459,807				8.0	%
Provision for income taxes				(32,935	)				(30,249	)			8.9	%					(133,683	)				(130,181	)			2.7	%
Net income				86,825					85,770				1.2	%					362,910					329,626				10.1	%
Less: Net income attributable to noncontrolling interests, net of income tax				(5,828	)				(8,075	)			(27.8	)%					(35,604	)				(30,295	)			17.5	%
Net income attributable to Global Payments			$	80,997				$	77,695				4.2	%				$	327,306				$	299,331				9.3	%
Earnings per share attributable to Global Payments:
Basic			$	1.23				$	1.10				11.8	%				$	4.88				$	4.15				17.6	%
Diluted			$	1.22				$	1.09				11.9	%				$	4.85				$	4.12				17.7	%
Weighted average shares outstanding:
Basic				65,744					70,707										67,036					72,119
Diluted				66,196					71,322										67,461					72,688
See Schedules 6 & 7 for a reconciliation of cash earnings to GAAP.

SCHEDULE 3
SEGMENT INFORMATION
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
			Three Months Ended May 31,
			2015										2014										% Change
								Cash										Cash									Cash
			GAAP					Earnings					GAAP					Earnings					GAAP				Earnings
Revenues:
United States			$	433,030				$	433,030				$	407,153				$	407,153				6.4	%			6.4	%
Canada				70,014					70,014					74,954					74,954				(6.6	)%			(6.6	)%
North America merchant services				503,044					503,044					482,107					482,107				4.3	%			4.3	%
Europe				154,827					154,827					153,577					153,577				0.8	%			0.8	%
Asia-Pacific				48,678					48,678					38,293					38,293				27.1	%			27.1	%
International merchant services				203,505					203,505					191,870					191,870				6.1	%			6.1	%
Total revenues			$	706,549				$	706,549				$	673,977				$	673,977				4.8	%			4.8	%
Operating income (loss) for segments:
North America merchant services			$	74,233				$	85,500				$	70,420				$	82,722				5.4	%			3.4	%
International merchant services				64,764					76,748					58,094					66,402				11.5	%			15.6	%
Corporate				(35,397	)				(30,560	)				(39,597	)				(27,088	)			(10.6	)%			12.8	%
Operating income			$	103,600				$	131,688				$	88,917				$	122,036				16.5	%			7.9	%
			Year Ended May 31,
			2015										2014										% Change
								Cash										Cash									Cash
			GAAP					Earnings					GAAP					Earnings					GAAP				Earnings
Revenues:
United States			$	1,655,872				$	1,655,872				$	1,488,659				$	1,488,659				11.2	%			11.2	%
Canada				313,018					313,018					320,333					320,333				(2.3	)%			(2.3	)%
North America merchant services				1,968,890					1,968,890					1,808,992					1,808,992				8.8	%			8.8	%
Europe				615,966					617,842					587,463					587,463				4.9	%			5.2	%
Asia-Pacific				188,862					188,862					157,781					157,781				19.7	%			19.7	%
International merchant services				804,828					806,704					745,244					745,244				8.0	%			8.2	%
Total revenues			$	2,773,718				$	2,775,594				$	2,554,236				$	2,554,236				8.6	%			8.7	%
Operating income (loss) for segments:
North America merchant services			$	293,139				$	337,980				$	272,251				$	308,570				7.7	%			9.5	%
International merchant services				279,711					311,240					240,179					270,551				16.5	%			15.0	%
Corporate1				(116,253	)				(109,544	)				(106,931	)				(98,527	)			8.7	%			11.2	%
Operating income			$	456,597				$	539,676				$	405,499				$	480,594				12.6	%			12.3	%

1		GAAP operating income for the year ended May 31, 2014 includes a credit for insurance proceeds of $7.0 million related to the fiscal 2012 processing system intrusion.
		See Schedule 8 for a reconciliation of cash earnings segment information to GAAP.

SCHEDULE 4
CONSOLIDATED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except share data)
		May 31, 2015					May 31, 2014
ASSETS
Current assets:
Cash and cash equivalents		$	650,739				$	581,872
Accounts receivable, net of allowances for doubtful accounts of $468 and $401, respectively			202,390					214,574
Claims receivable, net			548					809
Settlement processing assets			2,394,822					780,917
Inventory			5,228					6,636
Deferred income taxes			11,664					12,963
Prepaid expenses and other current assets			36,904					45,673
Total current assets			3,302,295					1,643,444
Goodwill			1,491,833					1,337,285
Other intangible assets, net			560,136					535,173
Property and equipment, net			374,143					369,753
Deferred income taxes			30,578					101,928
Other			34,563					31,067
Total assets		$	5,793,548				$	4,018,650
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit		$	592,629				$	440,128
Current portion of long-term debt			62,500					17,677
Accounts payable and accrued liabilities			312,647					290,106
Settlement processing obligations			2,033,900					451,317
Income taxes payable			14,228					12,390
Total current liabilities			3,015,904					1,211,618
Long-term debt			1,680,000					1,376,002
Deferred income taxes			214,669					209,099
Other noncurrent liabilities			19,422					89,132
Total liabilities			4,929,995					2,885,851
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; 65,278,838 issued and outstanding at May 31, 2015 and 68,845,643 issued and outstanding at May 31, 2014			—					—
Paid-in capital			148,742					183,023
Retained earnings			795,226					815,980
Accumulated other comprehensive loss			(185,992	)				(1,776	)
Total Global Payments shareholders' equity			757,976					997,227
Noncontrolling interests			105,577					135,572
Total equity			863,553					1,132,799
Total liabilities and equity		$	5,793,548				$	4,018,650

SCHEDULE 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
			Year Ended May 31,
			2015					2014
Cash flows from operating activities:
Net income			$	309,115				$	269,952
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment				64,918					60,124
Amortization of acquired intangibles				72,587					61,945
Share-based compensation expense				21,056					29,793
Provision for operating losses and bad debts				14,506					20,574
Deferred income taxes				81,079					(1,799	)
Other, net				3,073					(1,484	)
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable				1,248					(18,539	)
Claims receivable				(9,317	)				(11,569	)
Settlement processing assets and obligations, net				(78,794	)				(241,431	)
Inventory				127					4,793
Prepaid expenses and other assets				14,616					18,995
Accounts payable and other liabilities				(72,802	)				9,224
Income taxes payable				3,289					(6,480	)
Net cash provided by operating activities				424,701					194,098
Cash flows from investing activities:
Business, intangible and other asset acquisitions, net of cash acquired				(359,187	)				(426,524	)
Capital expenditures				(92,550	)				(81,411	)
Principal collections on financing receivables				219					2,658
Net proceeds from sales of investments and business				10,597					3,607
Net cash used in investing activities				(440,921	)				(501,670	)
Cash flows from financing activities:
Net borrowings on short-term lines of credit				198,884					252,667
Proceeds from issuance of long-term debt				2,496,842					2,690,000
Principal repayments of long-term debt				(2,148,907	)				(2,260,597	)
Payment of debt issuance costs				—					(5,961	)
Repurchase of common stock				(372,387	)				(447,307	)
Proceeds from stock issued under share-based compensation plans				22,550					31,727
Common stock repurchased - share-based compensation plans				(15,690	)				(5,681	)
Tax benefit from share-based compensation				5,176					6,475
Distributions to noncontrolling interests				(39,753	)				(36,670	)
Dividends paid				(5,340	)				(5,757	)
Net cash provided by financing activities				141,375					218,896
Effect of exchange rate changes on cash				(56,288	)				(9,922	)
Increase (decrease) in cash and cash equivalents				68,867					(98,598	)
Cash and cash equivalents, beginning of the period				581,872					680,470
Cash and cash equivalents, end of the period			$	650,739				$	581,872

SCHEDULE 6
RECONCILIATION OF QUARTERLY CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
			Three Months Ended May 31, 2015
							Cash Earnings								Cash
			GAAP				Adjustments1				Other2				Earnings
Revenues			$	706,549			$	—			$	—			$	706,549
Operating expenses:
Cost of service				254,217				(18,403	)			—				235,814
Selling, general and administrative				348,732				—				(9,685	)			339,047
				602,949				(18,403	)			(9,685	)			574,861
Operating income				103,600				18,403				9,685				131,688
Interest and other income				1,315				—				—				1,315
Interest and other expense				(9,647	)			—				(3,596	)			(13,243	)
				(8,332	)			—				(3,596	)			(11,928	)
Income before income taxes				95,268				18,403				6,089				119,760
Provision for income taxes				(25,158	)			(5,681	)			(2,096	)			(32,935	)
Net income				70,110				12,722				3,993				86,825
Less: Net income attributable to noncontrolling interests, net of income tax				(4,785	)			(1,043	)			—				(5,828	)
Net income attributable to Global Payments			$	65,325			$	11,679			$	3,993			$	80,997
Diluted shares				66,196												66,196
Diluted earnings per share			$	0.99			$	0.18			$	0.06			$	1.22
			Three Months Ended May 31, 2014
							Cash Earnings								Cash
			GAAP				Adjustments1				Other2				Earnings
Revenues			$	673,977			$	—			$	—			$	673,977
Operating expenses:
Cost of service				253,373				(18,392	)			(125	)			234,856
Selling, general and administrative				331,687				—				(14,602	)			317,085
				585,060				(18,392	)			(14,727	)			551,941
Operating income				88,917				18,392				14,727				122,036
Interest and other income				2,093				—				—				2,093
Interest and other expense				(9,451	)			—				1,341				(8,110	)
				(7,358	)			—				1,341				(6,017	)
Income before income taxes				81,559				18,392				16,068				116,019
Provision for income taxes				(23,293	)			(5,719	)			(1,237	)			(30,249	)
Net income				58,266				12,673				14,831				85,770
Less: Net income attributable to noncontrolling interests, net of income tax				(6,641	)			(1,434	)			—				(8,075	)
Net income attributable to Global Payments			$	51,625			$	11,239			$	14,831			$	77,695
Diluted shares				71,322												71,322
Diluted earnings per share			$	0.72			$	0.16			$	0.21			$	1.09

1 Represents adjustments to exclude acquisition intangible amortization expense and the related income tax benefit.
2 For the three months ended May 31, 2015, the 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. For the three months ended May 31, 2014, the adjustments represent acceleration of equity awards and other costs associated with the retirement of our former Chairman and CEO, a charge associated with our retained interest in Brazil, an adjustment to the costs associated with the debt refinancing we completed in February 2014, non-cash losses from the retirement of property and equipment, charges related to employee termination benefits and the related income tax effects of each.
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the three months ended May 31, 2015 and 2014 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by making the adjustments described above. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, income and earnings per share determined in accordance with GAAP. Our measures of 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.

SCHEDULE 7
RECONCILIATION OF ANNUAL CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
			Year Ended May 31, 2015
							Processing
							System				Cash Earnings
			GAAP				Intrusion				Adjustments2				Other3				Cash Earnings
Revenues			$	2,773,718			$	—			$	—			$	1,876			$		2,775,594
Operating expenses:
Cost of service				1,022,107				—				(72,587	)			—					949,520
Selling, general and administrative				1,295,014				—				—				(8,616	)				1,286,398
Processing system intrusion				—				—				—				—					—
				2,317,121				—				(72,587	)			(8,616	)				2,235,918
Operating income				456,597				—				72,587				10,492					539,676
Interest and other income				4,949				—				—				—					4,949
Interest and other expense				(44,436	)			—				—				(3,596	)				(48,032	)
				(39,487	)			—				—				(3,596	)				(43,083	)
Income before income taxes				417,110				—				72,587				6,896					496,593
Provision for income taxes				(107,995	)			—				(23,149	)			(2,539	)				(133,683	)
Net income				309,115				—				49,438				4,357					362,910
Less: Net income attributable to noncontrolling interests, net of income tax				(31,075	)							(4,529	)			—					(35,604	)
Net income attributable to Global Payments			$	278,040			$	—			$	44,909			$	4,357			$		327,306
Diluted shares				67,461																	67,461
Diluted earnings per share			$	4.12			$	—			$	0.67			$	0.06			$		4.85
			Year Ended May 31, 2014
							Processing
							System				Cash Earnings
			GAAP				Intrusion1				Adjustments2				Other3				Cash Earnings
Revenues			$	2,554,236			$	—			$	—			$	—			$		2,554,236
Operating expenses:
Cost of service				952,225				—				(61,945	)			(704	)				889,576
Selling, general and administrative				1,203,512				—				—				(19,446	)				1,184,066
Processing system intrusion				(7,000	)			7,000				—				—					—
				2,148,737				7,000				(61,945	)			(20,150	)				2,073,642
Operating income (loss)				405,499				(7,000	)			61,945				20,150					480,594
Interest and other income				13,663				—				—				(2,123	)				11,540
Interest and other expense				(41,812	)			—				—				9,485					(32,327	)
				(28,149	)			—				—				7,362					(20,787	)
Income (loss) before income taxes				377,350				(7,000	)			61,945				27,512					459,807
(Provision for) benefit from income taxes				(107,398	)			2,393				(19,825	)			(5,351	)				(130,181	)
Net income (loss)				269,952				(4,607	)			42,120				22,161					329,626
Less: Net income attributable to noncontrolling interests, net of income tax				(24,666	)			—				(5,629	)			—					(30,295	)
Net income (loss) attributable to Global Payments			$	245,286			$	(4,607	)		$	36,491			$	22,161			$		299,331
Diluted shares				72,688																	72,688
Diluted earnings (loss) per share			$	3.37			$	(0.06	)		$	0.50			$	0.30			$		4.12

1 Represents insurance proceeds associated with the fiscal 2012 processing system intrusion and the related income tax provision.
2 Represents adjustments to exclude acquisition intangible amortization expense and the related income tax benefit.
3 For the year ended May 31, 2015, the revenue adjustment represents select U.K. customer payments related to a vendor outage and the expense adjustments represent 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. For the year ended May 31, 2014, the adjustments represent acceleration of equity awards and other costs associated with the retirement of our former Chairman and CEO, a credit related to the sale of an interest in our Brazil business and a subsequent charge associated with our retained interest, costs associated with the debt refinancing we completed in February 2014, non-cash losses from the retirement of property and equipment, charges related to employee termination benefits, HSBC's share of dividends declared and the related income tax effects of each.
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the years ended May 31, 2015 and 2014 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by making the adjustments described above. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, income and earnings per share determined in accordance with GAAP. Our measures of 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.

SCHEDULE 8
RECONCILIATION OF CASH EARNINGS SEGMENT INFORMATION TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
			Three Months Ended May 31,
			2015																		2014
							Processing																		Processing
							System			Cash Earnings															System				Cash Earnings
			GAAP				Intrusion			Adjustments2			Other3			Cash Earnings					GAAP				Intrusion				Adjustments2			Other3			Cash Earnings
Revenues:
United States			$	433,030			$	—		$	—		$	—		$	433,030				$	407,153			$	—			$	—		$	—		$	407,153
Canada				70,014				—			—			—			70,014					74,954				—				—			—			74,954
North America merchant services				503,044							—			—			503,044					482,107				—				—			—			482,107
Europe				154,827				—			—			—			154,827					153,577				—				—			—			153,577
Asia-Pacific				48,678				—			—			—			48,678					38,293				—				—			—			38,293
International merchant services				203,505				—			—			—			203,505					191,870				—				—			—			191,870
Total revenues			$	706,549			$	—		$	—		$	—		$	706,549				$	673,977			$	—			$	—		$	—		$	673,977
Operating income (loss) for segments:
North America merchant services			$	74,233			$	—		$	10,967		$	300		$	85,500				$	70,420			$	—			$	10,874		$	1,428		$	82,722
International merchant services				64,764				—			7,436			4,548			76,748					58,094				—				7,518			790			66,402
Corporate				(35,397	)			—			—			4,837			(30,560	)				(39,597	)			—				—			12,509			(27,088	)
Operating income			$	103,600			$	—		$	18,403		$	9,685		$	131,688				$	88,917			$	—			$	18,392		$	14,727		$	122,036
			Year Ended May 31,
			2015																		2014
							Processing																		Processing
							System			Cash Earnings						Cash									System				Cash Earnings
			GAAP				Intrusion			Adjustments2			Other3			Earnings					GAAP				Intrusion1				Adjustments2			Other3			Cash Earnings
Revenues:
United States			$	1,655,872			$	—		$	—		$	—		$	1,655,872				$	1,488,659			$	—			$	—		$	—		$	1,488,659
Canada				313,018				—			—			—			313,018					320,333				—				—			—			320,333
North America merchant services				1,968,890				—			—			—			1,968,890					1,808,992				—				—			—			1,808,992
Europe				615,966				—			—			1,876			617,842					587,463				—				—			—			587,463
Asia-Pacific				188,862				—			—			—			188,862					157,781				—				—			—			157,781
International merchant services				804,828				—			—			1,876			806,704					745,244				—				—			—			745,244
Total revenues			$	2,773,718			$	—		$	—		$	1,876		$	2,775,594				$	2,554,236			$	—			$	—		$	—		$	2,554,236
Operating income (loss) for segments:
North America merchant services			$	293,139			$	—		$	44,541		$	300		$	337,980				$	272,251			$	—			$	32,374		$	3,945		$	308,570
International merchant services				279,711				—			28,046			3,483			311,240					240,179				—				29,571			801			270,551
Corporate				(116,253	)			—			—			6,709			(109,544	)				(106,931	)			(7,000	)			—			15,404			(98,527	)
Operating income (loss)			$	456,597			$	—		$	72,587		$	10,492		$	539,676				$	405,499			$	(7,000	)		$	61,945		$	20,150		$	480,594

1 Represents insurance proceeds associated with the fiscal 2012 processing system intrusion.
2 Represents adjustments to exclude acquisition intangible amortization expense and the related income tax benefit.
3 For the three months ended May 31, 2015, the adjustments represent charges related to employee termination benefits, non-cash losses from the retirement of property and equipment and a transaction-related tax associated with our acquisition of Realex. For the three months ended May 31, 2014 the adjustments represent acceleration of equity awards and other costs associated with the retirement of our former Chairman and CEO, non-cash losses from the retirement of property and equipment, and charges related to employee termination benefits and certain contract settlement and related costs. The adjustments for the year ended May 31, 2015, include the revenue and acquisition-related tax adjustments described for the three-month period, charges related to employee termination benefits, non-cash losses from the retirement of property and equipment and a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. For the year ended May 31, 2014, the adjustments represent acceleration of equity awards and other costs associated with the retirement of our former Chairman and CEO, non-cash losses from the retirement of property and equipment, and charges related to employee termination benefits and resolution of a contract related contingency.
We supplemented our reporting of operating income information determined in accordance with GAAP by reporting operating income for the three months and the years ended May 31, 2015 and 2014 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated operating income on a cash basis by making the adjustments described above. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our operating income reported on a cash earnings basis should be considered in addition to, and not as a substitute for, operating income determined in accordance with GAAP. Our measure of operating income on a cash earnings basis reflects management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.

SCHEDULE 9
OUTLOOK SUMMARY
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In billions, except per share data)
			Fiscal 2015			Fiscal 2016
			Actual			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			$4.53 to $4.71			10% to 14%
Acquisition-related intangibles assets, share-based compensation expense and non-recurring items2			0.92			1.07			16%
Cash EPS			$ 5.04			$5.60 to $5.78			11% to 15%

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 intangible amortization 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.

In fiscal 2015, income and the related earnings per share on a cash earnings basis exclude the amortization expense of acquired intangibles and certain other items specific to each reporting period as more fully described in the accompanying reconciliations. Beginning in fiscal 2016, we modified our cash earnings measures to also exclude share-based compensation. The accompanying reconciliations in Schedule 6, Schedule 7 and Schedule 8 show the cash earnings measures calculated without the impact of excluding share-based compensation. The reconciliations in this Schedule 9 and in the accompanying Schedule 10 and Schedule 11 show Adjusted Net Revenue and the modified cash earnings measures which exclude share-based compensation. We expect to discuss financial results using Adjusted Net Revenue and the modified cash earnings convention in future periods. 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 10
RECONCILIATION OF ADJUSTED NET REVENUE AND CASH EARNINGS SEGMENT INFORMATION TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
			For the Year Ended May 31, 2015
																			Adjusted Net
							Net Revenue				Cash Earnings								Revenue and
			GAAP				Adjustment1				Adjustments2				Other3				Cash Earnings
Revenues:
United States			$	1,655,872			$	(740,556	)		$	—			$	—			$	915,316
Canada				313,018				—				—				—				313,018
North America merchant services				1,968,890				(740,556	)			—				—				1,228,334
Europe				615,966				(82,146	)			—				1,876				535,696
Asia-Pacific				188,862				—				—				—				188,862
International merchant services				804,828				(82,146	)			—				1,876				724,558
Total revenues			$	2,773,718			$	(822,702	)		$	—			$	1,876			$	1,952,892
Operating income (loss) for segments:
North America merchant services			$	293,139			$	—			$	44,541			$	300			$	337,980
International merchant services				279,711				—				28,046				3,483				311,240
Corporate				(116,253	)			—				20,331				6,709				(89,213	)
Operating income				456,597				—				92,918				10,492				560,007
Interest and other income				4,949				—				—				—				4,949
Interest and other expense				(44,436	)			—				—				(3,596	)			(48,032	)
				(39,487	)			—				—				(3,596	)			(43,083	)
Income before income taxes				417,110				—				92,918				6,896				516,924
Provision for income taxes				(107,995	)			—				(30,729	)			(2,539	)			(141,263	)
Net income				309,115				—				62,189				4,357				375,661
Less: Net income attributable to noncontrolling interests, net of income tax				(31,075	)			—				(4,529	)			—				(35,604	)
Net income attributable to Global Payments			$	278,040			$	—			$	57,660			$	4,357			$	340,057
Diluted shares				67,461																67,461
Diluted earnings per share			$	4.12			$	—			$	0.86			$	0.06			$	5.04

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 intangible amortization expense, stock compensation expense and the related income tax benefits of each.

3 For the year ended May 31, 2015, the revenue adjustment represents select U.K. customer payments related to a vendor outage and the expense adjustments represent 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.

See "Non-GAAP Financial Measures" discussion on Schedule 9.

SCHEDULE 11
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
																		Adjusted Net																					Adjusted Net
						Net Revenue				Cash Earnings								Revenue and									Net Revenue				Cash Earnings								Revenue and
		GAAP				Adjustment1				Adjustments2				Other3				Cash Earnings					GAAP				Adjustment1				Adjustments2				Other				Cash Earnings
Revenues:
United States		$	414,042			$	(188,731	)		$	—			$	—			$	225,311				$	404,784			$	(183,217	)		$	—			$	—			$	221,567
Canada			89,965				—				—				—				89,965					83,992				—				—				—				83,992
North America merchant services			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
International merchant services			200,888				(20,952	)			—				—				179,936					208,515				(20,409	)			—				—				188,106
Total revenues		$	704,895			$	(209,683	)		$	—			$	—			$	495,212				$	697,291			$	(203,626	)		$	—			$	—			$	493,665
Operating income (loss) for segments:
North America merchant services		$	77,937			$	—			$	11,378			$	—			$	89,315				$	74,246			$	—			$	11,173			$	—			$	85,419
International merchant services			73,602				—				6,476				(2,941	)			77,137					76,443				—				7,090				—				83,533
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) benefit for 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
																		Adjusted Net																					Adjusted Net
						Net Revenue				Cash Earnings								Revenue and									Net Revenue				Cash Earnings								Revenue and
		GAAP				Adjustment1				Adjustments2				Other4				Cash Earnings					GAAP				Adjustment1				Adjustments2				Other5				Cash Earnings
Revenues:
United States		$	404,016			$	(179,678	)		$	—			$	—			$	224,338				$	433,030			$	(188,930	)		$	—			$	—			$	244,100
Canada			69,047				—				—				—				69,047					70,014				—				—				—				70,014
North America merchant services			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
International merchant services			191,920				(19,424	)			—				1,876				174,372					203,505				(21,361	)			—				—				182,144
Total revenues		$	664,983			$	(199,102	)		$	—			$	1,876			$	467,757				$	706,549			$	(210,291	)		$	—			$	—			$	496,258
Operating income (loss) for segments:
North America merchant services		$	66,723			$	—			$	11,023			$	—			$	77,746				$	74,233			$	—			$	10,967			$	300			$	85,500
International merchant services			64,902				—				7,044				1,876				73,822					64,764				—				7,436				4,548				76,748
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

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 intangible amortization expense, stock compensation expense and the related income tax benefits of each.
3 Represents a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia.
4 The 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.
5 The 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 9.

 

View source version on businesswire.com: http://www.businesswire.com/news/home/20150728005850/en/

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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