Global Payments Reports Second Quarter 2017 Earnings and Increases 2017 Outlook
Announces Agreement to Acquire ACTIVE Network
"We delivered another outstanding quarter highlighted by double digit organic net revenue growth across our markets, building on the momentum of the last several quarters," said
Second Quarter 2017 Summary
- GAAP revenues were
$962.2 million , compared to$842.6 million in the second quarter of 2016; diluted earnings per share were$0.44 compared to$0.42 in the prior year; and operating margin was 13.7% compared to 7.3% in the second quarter of 2016. - Adjusted net revenue grew 18.4% to
$847.9 million , compared to$716.3 million in the second quarter of 2016. - Adjusted earnings per share grew 24% to
$0.94 , compared to$0.76 in the second quarter of 2016. - Adjusted operating margin expanded 130 basis points to 29.2%.
2017 Outlook
"We are delighted with our performance in the second quarter and year-to-date period, which reflects continued strong execution across our businesses and positions us to increase our outlook for 2017 results," stated
Capital Allocation
Global Payments' Board of Directors approved a dividend of
Conference Call
Global Payments' management will host a conference call today,
Non-GAAP Financial Measures
Reconciliations of the non-GAAP measures to the most directly comparable GAAP measure are included in the schedules to this release.
About
Headquartered in
Forward-Looking Statements
This announcement and comments made by
Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include our ability to safeguard our data; increased competition from larger companies and non-traditional competitors, our ability to update our services in a timely manner; our ability to maintain
Additional important factors that could cause actual events or results to differ materially from those anticipated by our forward-looking statements or historical performance associated with the proposed acquisition of
SCHEDULE 1 UNAUDITED GAAP CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) |
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Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
|
|
% |
|
|
% |
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Revenues | $ | 962,240 | $ | 842,644 | 14.2 | % | $ | 1,882,002 | $ | 1,468,904 | 28.1 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Cost of service | 469,149 | 406,873 | 15.3 | % | 925,085 | 655,060 | 41.2 | % | |||||||||||||||||||
Selling, general and administrative | 361,239 | 374,610 | (3.6 | )% | 720,095 | 658,110 | 9.4 | % | |||||||||||||||||||
830,388 | 781,483 | 6.3 | % | 1,645,180 | 1,313,170 | 25.3 | % | ||||||||||||||||||||
Operating income | 131,852 | 61,161 | 115.6 | % | 236,822 | 155,734 | 52.1 | % | |||||||||||||||||||
Interest and other income | 1,832 | 42,565 | (95.7 | )% | 3,439 | 43,847 | (92.2 | )% | |||||||||||||||||||
Interest and other expense | (48,361 | ) | (36,597 | ) | 32.1 | % | (89,658 | ) | (49,672 | ) | 80.5 | % | |||||||||||||||
(46,529 | ) | 5,968 | NM | (86,219 | ) | (5,825 | ) | NM | |||||||||||||||||||
Income before income taxes | 85,323 | 67,129 | 27.1 | % | 150,603 | 149,909 | 0.5 | % | |||||||||||||||||||
(Provision for) benefit from income taxes | (12,880 | ) | 4 | NM | (25,201 | ) | (19,329 | ) | 30.4 | % | |||||||||||||||||
Net income | 72,443 | 67,133 | 7.9 | % | 125,402 | 130,580 | (4.0 | )% | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests, net of income tax | (5,534 | ) | (4,900 | ) | 12.9 | % | (9,679 | ) | (8,436 | ) | 14.7 | % | |||||||||||||||
Net income attributable to |
$ | 66,909 | $ | 62,233 | 7.5 | % | $ | 115,723 | $ | 122,144 | (5.3 | )% | |||||||||||||||
Earnings per share attributable to |
|||||||||||||||||||||||||||
Basic | $ | 0.44 | $ | 0.42 | 4.8 | % | $ | 0.76 | $ | 0.88 | (13.6 | )% | |||||||||||||||
Diluted | $ | 0.44 | $ | 0.42 | 4.8 | % | $ | 0.75 | $ | 0.87 | (13.8 | )% | |||||||||||||||
Weighted-average number of shares outstanding: | |||||||||||||||||||||||||||
Basic | 152,525 | 148,338 | 152,415 | 138,803 | |||||||||||||||||||||||
Diluted | 153,555 | 149,418 | 153,405 | 139,778 | |||||||||||||||||||||||
NM - Not meaningful. |
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SCHEDULE 2 NON-GAAP FINANCIAL MEASURES (UNAUDITED) (In thousands, except per share data) |
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Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
|
|
% Change |
|
|
% Change | ||||||||||||||||||||||
Adjusted net revenue | $ | 847,941 | $ | 716,310 | 18.4 | % | $ | 1,651,820 | $ | 1,195,910 | 38.1 | % | |||||||||||||||
Adjusted operating income | $ | 247,738 | $ | 200,172 | 23.8 | % | $ | 476,487 | $ | 331,808 | 43.6 | % | |||||||||||||||
Adjusted net income | $ | 144,366 | $ | 114,263 | 26.3 | % | $ | 274,402 | $ | 197,811 | 38.7 | % | |||||||||||||||
Adjusted EPS | $ | 0.94 | $ | 0.76 | 23.7 | % | $ | 1.79 | $ | 1.42 | 26.1 | % |
See Schedules 6 and 7 for a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and Schedule 10 for a discussion of non-GAAP financial measures. |
SCHEDULE 3 SEGMENT INFORMATION (UNAUDITED) (In thousands)
|
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Three Months Ended | |||||||||||||||||||||||||||
% Change | |||||||||||||||||||||||||||
GAAP |
Non- |
GAAP |
Non- |
GAAP |
Non- |
||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
$ | 710,965 | $ | 624,413 | $ | 624,120 | $ | 519,011 | 13.9 | % | 20.3 | % | ||||||||||||||||
186,506 | 158,759 | 162,255 | 141,030 | 14.9 | % | 12.6 | % | ||||||||||||||||||||
64,769 | 64,769 | 56,269 | 56,269 | 15.1 | % | 15.1 | % | ||||||||||||||||||||
$ | 962,240 | $ | 847,941 | $ | 842,644 | $ | 716,310 | 14.2 | % | 18.4 | % | ||||||||||||||||
Operating income: | |||||||||||||||||||||||||||
$ | 112,176 | $ | 185,144 | $ | 82,476 | $ | 142,458 | 36.0 | % | 30.0 | % | ||||||||||||||||
65,673 | 72,268 | 52,788 | 66,958 | 24.4 | % | 7.9 | % | ||||||||||||||||||||
17,535 | 19,590 | 11,050 | 15,134 | 58.7 | % | 29.4 | % | ||||||||||||||||||||
Corporate | (63,532 | ) | (29,264 | ) | (85,153 | ) | (24,378 | ) | (25.4 | )% | 20.0 | % | |||||||||||||||
$ | 131,852 | $ | 247,738 | $ | 61,161 | $ | 200,172 | 115.6 | % | 23.8 | % |
Six Months Ended | |||||||||||||||||||||||||||
% Change | |||||||||||||||||||||||||||
GAAP |
Non- |
GAAP |
Non- |
GAAP |
Non- |
||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
$ | 1,398,009 | $ | 1,221,895 | $ | 1,051,980 | $ | 816,969 | 32.9 | % | 49.6 | % | ||||||||||||||||
352,054 | 297,986 | 306,374 | 268,391 | 14.9 | % | 11.0 | % | ||||||||||||||||||||
131,939 | 131,939 | 110,550 | 110,550 | 19.3 | % | 19.3 | % | ||||||||||||||||||||
$ | 1,882,002 | $ | 1,651,820 | $ | 1,468,904 | $ | 1,195,910 | 28.1 | % | 38.1 | % | ||||||||||||||||
Operating income: | |||||||||||||||||||||||||||
$ | 206,259 | $ | 357,521 | $ | 147,665 | $ | 221,105 | 39.7 | % | 61.7 | % | ||||||||||||||||
120,180 | 136,176 | 108,566 | 128,596 | 10.7 | % | 5.9 | % | ||||||||||||||||||||
37,289 | 40,559 | 25,609 | 31,731 | 45.6 | % | 27.8 | % | ||||||||||||||||||||
Corporate | (126,906 | ) | (57,769 | ) | (126,106 | ) | (49,624 | ) | 0.6 | % | 16.4 | % | |||||||||||||||
$ | 236,822 | $ | 476,487 | $ | 155,734 | $ | 331,808 | 52.1 | % | 43.6 | % |
1 See Schedules 8 and 9 for a reconciliation of adjusted net revenue and adjusted operating income by segment to the most comparable GAAP measures and Schedule 10 for a discussion of non-GAAP financial measures. |
SCHEDULE 4 UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) |
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ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,080,576 | $ | 1,162,779 | ||||
Accounts receivable, net of allowances for doubtful accounts of |
283,640 | 275,032 | ||||||
Claims receivable, net of allowances for doubtful accounts of |
4,513 | 8,202 | ||||||
Settlement processing assets | 999,946 | 1,546,854 | ||||||
Prepaid expenses and other current assets | 147,396 | 123,139 | ||||||
Total current assets | 2,516,071 | 3,116,006 | ||||||
4,890,016 | 4,807,594 | |||||||
Other intangible assets, net | 1,927,167 | 2,085,292 | ||||||
Property and equipment, net | 537,879 | 526,370 | ||||||
Deferred income taxes | 16,388 | 15,789 | ||||||
Other noncurrent assets | 149,260 | 113,299 | ||||||
Total assets | $ | 10,036,781 | $ | 10,664,350 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Settlement lines of credit | $ | 318,284 | $ | 392,072 | ||||
Current portion of long-term debt | 86,510 | 177,785 | ||||||
Accounts payable and accrued liabilities | 823,236 | 804,887 | ||||||
Settlement processing obligations | 870,434 | 1,477,212 | ||||||
Total current liabilities | 2,098,464 | 2,851,956 | ||||||
Long-term debt | 4,175,411 | 4,260,827 | ||||||
Deferred income taxes | 617,308 | 676,472 | ||||||
Other noncurrent liabilities | 140,960 | 95,753 | ||||||
Total liabilities | 7,032,143 | 7,885,008 | ||||||
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; 152,556,769 issued and outstanding at |
— | — | ||||||
Paid-in capital | 1,838,889 | 1,816,278 | ||||||
Retained earnings | 1,255,552 | 1,137,230 | ||||||
Accumulated other comprehensive loss | (243,459 | ) | (322,717 | ) | ||||
Total |
2,850,982 | 2,630,791 | ||||||
Noncontrolling interests | 153,656 | 148,551 | ||||||
Total equity | 3,004,638 | 2,779,342 | ||||||
Total liabilities and equity | $ | 10,036,781 | $ | 10,664,350 |
SCHEDULE 5 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) |
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Six Months Ended | |||||||||||||
Cash flows from operating activities: | |||||||||||||
Net income | $ | 125,402 | $ | 130,580 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization of property and equipment | 51,197 | 40,079 | |||||||||||
Amortization of acquired intangibles | 165,117 | 87,675 | |||||||||||
Share-based compensation expense | 21,153 | 17,372 | |||||||||||
Provision for operating losses and bad debts | 25,940 | 16,720 | |||||||||||
Amortization of capitalized customer acquisition costs | 19,681 | 3,352 | |||||||||||
Deferred income taxes | (38,603 | ) | (19,719 | ) | |||||||||
Gain on sale of investments | — | (41,150 | ) | ||||||||||
Other, net | 17,057 | 8,901 | |||||||||||
Changes in operating assets and liabilities, net of the effects of acquisitions: | |||||||||||||
Accounts receivable | (4,901 | ) | 8,907 | ||||||||||
Claims receivable | (11,335 | ) | (10,854 | ) | |||||||||
Settlement processing assets and obligations, net | (63,523 | ) | 14,307 | ||||||||||
Prepaid expenses and other assets | 30,679 | (47,940 | ) | ||||||||||
Capitalized customer acquisition costs | (44,351 | ) | (20,127 | ) | |||||||||
Accounts payable and other liabilities | (25,452 | ) | 61,194 | ||||||||||
Net cash provided by operating activities | 268,061 | 249,297 | |||||||||||
Cash flows from investing activities: | |||||||||||||
Business acquisitions, net of cash acquired | — | (1,826,657 | ) | ||||||||||
Capital expenditures | (89,958 | ) | (62,910 | ) | |||||||||
Proceeds from sale of investments | — | 37,717 | |||||||||||
Proceeds from sales of property and equipment | 37,497 | 57 | |||||||||||
Other, net | (34,242 | ) | (370 | ) | |||||||||
Net cash used in investing activities | (86,703 | ) | (1,852,163 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||
Net payments on settlement lines of credit | (88,490 | ) | (97,652 | ) | |||||||||
Proceeds from long-term debt | 902,324 | 3,047,052 | |||||||||||
Repayments of long-term debt | (1,082,898 | ) | (809,933 | ) | |||||||||
Payment of debt issuance costs | (9,461 | ) | (58,448 | ) | |||||||||
Repurchase of common stock | (5,342 | ) | (82,836 | ) | |||||||||
Proceeds from stock issued under share-based compensation plans | 6,188 | 2,424 | |||||||||||
Common stock repurchased - share-based compensation plans | (418 | ) | (337 | ) | |||||||||
Proceeds from sale of subsidiary shares to noncontrolling interest | — | 16,374 | |||||||||||
Distributions to noncontrolling interests | (9,301 | ) | (4,740 | ) | |||||||||
Dividends paid | (3,551 | ) | (2,837 | ) | |||||||||
Net (used in) provided by financing activities | (290,949 | ) | 2,009,067 | ||||||||||
Effect of exchange rate changes on cash | 27,388 | (5,582 | ) | ||||||||||
(Decrease) increase in cash and cash equivalents | (82,203 | ) | 400,619 | ||||||||||
Cash and cash equivalents, beginning of the period | 1,162,779 | 587,751 | |||||||||||
Cash and cash equivalents, end of the period | $ | 1,080,576 | $ | 988,370 |
SCHEDULE 6 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED) THREE MONTHS ENDED (In thousands, except per share data) |
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Three Months Ended |
|||||||||||||||||||
GAAP |
Net Revenue |
Earnings |
Income |
Non-GAAP | |||||||||||||||
Revenues | $ | 962,240 | $ | (114,299 | ) | $ | — | $ | — | $ | 847,941 | ||||||||
Operating income | $ | 131,852 | $ | — | $ | 115,886 | $ | — | $ | 247,738 | |||||||||
Net income attributable to |
$ | 66,909 | $ | — | $ | 120,884 | $ | (43,427 | ) | $ | 144,366 | ||||||||
Diluted earnings per share attributable to |
$ | 0.44 | $ | 0.94 | |||||||||||||||
Three Months Ended |
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GAAP |
Net Revenue |
Earnings |
Income |
Non-GAAP | |||||||||||||||
Revenues | $ | 842,644 | $ | (126,334 | ) | $ | — | $ | — | $ | 716,310 | ||||||||
Operating income | $ | 61,161 | $ | — | $ | 139,011 | $ | — | $ | 200,172 | |||||||||
Net income attributable to |
$ | 62,233 | $ | — | $ | 96,877 | $ | (44,847 | ) | $ | 114,263 | ||||||||
Diluted earnings per share attributable to |
$ | 0.42 | $ | 0.76 |
1 Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. |
2 Earnings adjustments to operating income for the three months ended |
Earnings adjustments to operating income for the three months ended |
3 Income taxes on adjustments reflect the tax effect of earnings adjustments to income before income taxes. The tax rate used in determining the tax impact of 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. In addition, income taxes on adjustments for the three months ended |
4 Adjusted EPS is calculated by dividing adjusted net income attributable to |
See "Non-GAAP Financial Measures" discussion on Schedule 10. |
SCHEDULE 7 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED) SIX MONTHS ENDED (In thousands, except per share data) |
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Six Months Ended |
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GAAP |
Net Revenue |
Earnings |
Income |
Non-GAAP | |||||||||||||||
Revenues | $ | 1,882,002 | $ | (230,182 | ) | $ | — | $ | — | $ | 1,651,820 | ||||||||
Operating income | $ | 236,822 | $ | — | $ | 239,665 | $ | — | $ | 476,487 | |||||||||
Net income attributable to |
$ | 115,723 | $ | — | $ | 242,876 | $ | (84,197 | ) | $ | 274,402 | ||||||||
Diluted earnings per share attributable to |
$ | 0.75 | $ | 1.79 | |||||||||||||||
Six Months Ended |
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GAAP |
Net Revenue |
Earnings |
Income |
Non-GAAP | |||||||||||||||
Revenues | $ | 1,468,904 | $ | (272,994 | ) | $ | — | $ | — | $ | 1,195,910 | ||||||||
Operating income | $ | 155,734 | $ | — | $ | 176,074 | $ | — | $ | 331,808 | |||||||||
Net income attributable to |
$ | 122,144 | $ | — | $ | 132,874 | $ | (57,207 | ) | $ | 197,811 | ||||||||
Diluted earnings per share attributable to |
$ | 0.87 | $ | 1.42 |
1Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. |
2 Earnings adjustments to operating income for the six months ended |
Earnings adjustments to operating income for the six months ended |
3 Income taxes on adjustments reflect the tax effect of earnings adjustments to income before income taxes. The tax rate used in determining the tax impact of 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. In addition, income taxes on adjustments for the six months ended |
4 Adjusted EPS is calculated by dividing adjusted net income attributable to |
See "Non-GAAP Financial Measures" discussion on Schedule 10. |
SCHEDULE 8 RECONCILIATION OF SEGMENT NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED) THREE MONTHS ENDED (In thousands, except per share data) |
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Three Months Ended |
Three Months Ended |
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GAAP |
Net Revenue |
Earnings |
Non- |
GAAP |
Net Revenue |
Earnings |
Non- |
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Revenues: | |||||||||||||||||||||||||||||||||||||||
$ | 710,965 | $ | (86,552 | ) | $ | — | $ | 624,413 | $ | 624,120 | $ | (105,109 | ) | $ | — | $ | 519,011 | ||||||||||||||||||||||
186,506 | (27,747 | ) | — | 158,759 | 162,255 | (21,225 | ) | — | 141,030 | ||||||||||||||||||||||||||||||
64,769 | — | — | 64,769 | 56,269 | — | — | 56,269 | ||||||||||||||||||||||||||||||||
$ | 962,240 | $ | (114,299 | ) | $ | — | $ | 847,941 | $ | 842,644 | $ | (126,334 | ) | $ | — | $ | 716,310 | ||||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||||||||||||||||
$ | 112,176 | $ | — | $ | 72,968 | $ | 185,144 | $ | 82,476 | $ | — | $ | 59,982 | $ | 142,458 | ||||||||||||||||||||||||
65,673 | — | 6,595 | 72,268 | 52,788 | — | 14,170 | 66,958 | ||||||||||||||||||||||||||||||||
17,535 | — | 2,055 | 19,590 | 11,050 | — | 4,084 | 15,134 | ||||||||||||||||||||||||||||||||
Corporate | (63,532 | ) | — | 34,268 | (29,264 | ) | (85,153 | ) | — | 60,775 | (24,378 | ) | |||||||||||||||||||||||||||
$ | 131,852 | $ | — | $ | 115,886 | $ | 247,738 | $ | 61,161 | $ | — | $ | 139,011 | $ | 200,172 |
1 Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. |
2 Earnings adjustments to operating income for the three months ended |
Earnings adjustments to operating income for the three months ended |
See "Non-GAAP Financial Measures" discussion on Schedule 10. |
SCHEDULE 9 RECONCILIATION OF SEGMENT NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED) SIX MONTHS ENDED (In thousands, except per share data) |
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Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||
GAAP |
Net Revenue |
Earnings |
Non- |
GAAP |
Net Revenue |
Earnings |
Non- |
|||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
$ | 1,398,009 | $ | (176,114 | ) | $ | — | $ | 1,221,895 | $ | 1,051,980 | $ | (235,011 | ) | $ | — | $ | 816,969 | |||||||||||||||
352,054 | (54,068 | ) | — | 297,986 | 306,374 | (37,983 | ) | — | 268,391 | |||||||||||||||||||||||
131,939 | — | — | 131,939 | 110,550 | — | — | 110,550 | |||||||||||||||||||||||||
$ | 1,882,002 | $ | (230,182 | ) | $ | — | $ | 1,651,820 | $ | 1,468,904 | $ | (272,994 | ) | $ | — | $ | 1,195,910 | |||||||||||||||
Operating income: | ||||||||||||||||||||||||||||||||
$ | 206,259 | $ | — | $ | 151,262 | $ | 357,521 | $ | 147,665 | $ | — | $ | 73,440 | $ | 221,105 | |||||||||||||||||
120,180 | — | 15,996 | 136,176 | 108,566 | — | 20,030 | 128,596 | |||||||||||||||||||||||||
37,289 | — | 3,270 | 40,559 | 25,609 | — | 6,122 | 31,731 | |||||||||||||||||||||||||
Corporate | (126,906 | ) | — | 69,137 | (57,769 | ) | (126,106 | ) | — | 76,482 | (49,624 | ) | ||||||||||||||||||||
$ | 236,822 | $ | — | $ | 239,665 | $ | 476,487 | $ | 155,734 | $ | — | $ | 176,074 | $ | 331,808 |
1 Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. |
2 Earnings adjustments to operating income for the six months ended |
Earnings adjustments to operating income for the six months ended |
See "Non-GAAP Financial Measures" discussion on Schedule 10. |
SCHEDULE 10 OUTLOOK SUMMARY (UNAUDITED) (In billions, except per share data) |
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2016 Actual | 2017 Outlook3 | % Change | ||||||||
Revenues: | ||||||||||
GAAP revenue | 14% to 16% | |||||||||
Adjustments1 | (0.53 | ) | (0.43 | ) | ||||||
Adjusted net revenue | 20% to 22% | |||||||||
Earnings Per Share ("EPS"): | ||||||||||
GAAP diluted EPS | 45% to 55% | |||||||||
Acquisition-related amortization expense, share-based compensation expense and other items2 | 1.82 | 1.87 | ||||||||
Adjusted EPS | 21% to 25% |
1 Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain lines of business to reflect economic benefits to the company. |
2 Adjustments to Calendar 2016 GAAP diluted EPS include acquisition related amortization expense of |
3 The 2017 Outlook does not include the effect of the announced acquisition of the communities and sports divisions of |
NON-GAAP FINANCIAL MEASURES |
Adjusted net revenue excludes gross-up related payments associated with certain 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. |
Adjusted operating income, adjusted net income and adjusted EPS 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 Schedules 6, 7, 8 and 9. The tax rate used in determining the net income impact of 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. |
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