Global Payments Reports Third Quarter Earnings Increases Fiscal 2014 EPS Outlook; Expands Share Repurchase Authorization to $365 Million

ATLANTA, April 3, 2014 /PRNewswire/ -- Global Payments Inc. (NYSE: GPN), one of the largest worldwide providers of payment solutions, today announced results for its fiscal third quarter ended February 28, 2014.

President and CEO Jeff Sloan said, "We are very pleased with our third quarter financial performance driven by strong execution across all of our businesses and expanding operating margins in North America.  As a result we are increasing our full-year expectations for diluted earnings per share on a cash basis.  We are also delighted with our strategic accomplishments this quarter including the recent closing of our PayPros acquisition and the substantial expansion of our financing capacity."

Third Quarter 2014 Summary

  • Revenues grew 7% to $616.5 million, compared to $578.7 million in the third quarter of fiscal 2013.
  • Cash diluted earnings per share grew 10% to $0.96, compared to $0.87 in the third quarter of fiscal 2013.
  • GAAP diluted earnings per share were $0.76, compared to $0.75 in the third quarter of 2013.

2014 Outlook
For the full-year of fiscal 2014, the company maintains its expectations for annual revenue of $2.51 billion to $2.56 billion, or 6% to 8% growth over fiscal 2013.  The company is raising its diluted earnings per share on a cash basis and narrowing its range to $4.06 to $4.11, reflecting growth of 11% to 13% over fiscal 2013.  Annual fiscal 2014 GAAP diluted earnings per share are now expected to be $3.48 to $3.53

Additional Share Repurchase Authorization
David E. Mangum, Senior Executive Vice President and CFO, stated, "We are delighted with the new share repurchase authorization which, combined with the remaining authorization, now totals $365 million.  With the recently increased financing capacity, we have significant capital flexibility to drive organic growth, acquisitions and ongoing share repurchases."

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. 

Conference Call
Global Payments will hold a conference call today, April 3, 2014 at 5:00 p.m. EDT 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 by clicking the "Webcast" button; or callers in North America may dial 1-888-895-3550 and callers outside North America may dial 1-706-758-8809.  The pass code is "GPN."  A replay of the call may be accessed on the Global Payments website through April 17, 2014.

About Global Payments
Global Payments Inc. is one of the largest worldwide providers of payment solutions for merchants, value added resellers, financial institutions, government agencies, multi-national corporations and independent sales organizations located throughout North America, South America, Europe and the Asia-Pacific region.  Global Payments, a Fortune 1000 company, offers a comprehensive line of solutions and services for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management.  Visit www.globalpaymentsinc.com for more information about the company and its services.

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 Annual Report on Form 10-K for the fiscal year ended May 31, 2013 and any subsequent Quarterly Reports on Form 10-Q, 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.


Investor contact:  investor.relations@globalpay.com 

 Media contact: media.relations@globalpay.com

                             Jane Elliott                         

                         770-829-8755

                             770-829-8234                      


 

SCHEDULE 1

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF INCOME

GLOBAL PAYMENTS INC. AND SUBSIDIARIES


(In thousands, except per share data)












Three Months Ended 

February 28,




Nine Months Ended 

February 28,





2014


2013


% Change


2014


2013


% Change



(unaudited)




(unaudited)



Revenues


$     616,452


$      578,746


6.5%


$  1,880,259


$   1,757,571


7.0%

Operating expenses:













Cost of service


232,937


217,465


7.1%


698,852


632,124


10.6%

Sales, general and administrative


286,224


271,696


5.3%


871,825


829,292


5.1%

Processing system intrusion


-


(1,189)


NM


(7,000)


8,311


(184.2%)



519,161


487,972


6.4%


1,563,677


1,469,727


6.4%














Operating income


97,291


90,774


7.2%


316,582


287,844


10.0%

Other income (expense):













Interest and other income


2,944


2,536


16.1%


11,570


6,706


72.5%

Interest and other expense


(16,457)


(7,063)


133.0%


(32,361)


(25,217)


28.3%



(13,513)


(4,527)


198.5%


(20,791)


(18,511)


12.3%














Income before income taxes 


83,778


86,247


(2.9%)


295,791


269,333


9.8%

Provision for income taxes


(23,657)


(23,433)


1.0%


(84,105)


(76,986)


9.2%

Net income


60,121


62,814


(4.3%)


211,686


192,347


10.1%

Less: Net income attributable to noncontrolling

interests, net of income tax


(5,000)


(4,352)


14.9%


(18,025)


(17,027)


5.9%

Net income attributable to Global Payments


$        55,121


$         58,462


(5.7%)


$     193,661


$      175,320


10.5%



























Earnings per share attributable to Global Payments:













    Basic


$            0.77


$             0.75


2.7%


$            2.67


$             2.24


19.2%

    Diluted


$            0.76


$             0.75


1.3%


$            2.65


$             2.23


18.8%














Weighted average shares outstanding:













    Basic


71,835


77,756




72,598


78,364



    Diluted


72,434


78,324




73,152


78,747
















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  
February 28,




Nine Months Ended  
February 28,





2014


2013


% Change


2014


2013


% Change














Revenues


$       616,452


$     578,746


6.5%


$    1,880,259


$  1,757,571


7.0%

Operating expenses:













Cost of service


218,337


200,935


8.7%


654,720


589,872


11.0%

Sales, general and administrative


286,224


271,696


5.3%


866,981


828,492


4.6%



504,561


472,631


6.8%


1,521,701


1,418,364


7.3%



























Operating income


111,891


106,115


5.4%


358,558


339,207


5.7%

Other income (expense):













Interest and other income


2,944


2,536


16.1%


9,447


6,706


40.9%

Interest and other expense


(8,313)


(7,063)


17.7%


(24,217)


(16,834)


43.9%



(5,369)


(4,527)


18.6%


(14,770)


(10,128)


45.8%














Income before income taxes 


106,522


101,588


4.9%


343,788


329,079


4.5%

Provision for income taxes


(30,373)


(27,662)


9.8%


(99,932)


(93,601)


6.8%

Net income


76,149


73,926


3.0%


243,856


235,478


3.6%

Less: Net income attributable to noncontrolling interests, net of income tax


(6,421)


(5,993)


7.1%


(22,220)


(25,164)


(11.7%)

Net income attributable to Global Payments


$         69,728


$       67,933


2.6%


$       221,636


$     210,314


5.4%



























Earnings per share attributable to Global Payments:













    Basic


$              0.97


$            0.87


11.5%


$              3.05


$            2.68


13.8%

    Diluted


$              0.96


$            0.87


10.3%


$              3.03


$            2.67


13.5%














Weighted average shares outstanding:













    Basic


71,835


77,756




72,598


78,364



    Diluted


72,434


78,324




73,152


78,747
















See Schedules 6 and 7 for a reconciliation of cash earnings to GAAP.







 

SCHEDULE 3

SEGMENT INFORMATION

GLOBAL PAYMENTS INC. AND SUBSIDIARIES


(In thousands)




 Three Months Ended February 28, 







2014


2013


 % Change 



 GAAP 


 Cash
Earnings 


 GAAP 


 Cash
Earnings 


 GAAP 


 Cash
Earnings 














Revenues:













United States


$     355,880


$     355,880


$     336,354


$     336,354


5.8%


5.8%

Canada


73,467


73,467


72,218


72,218


1.7%


1.7%

North America merchant services


429,347


429,347


408,572


408,572


5.1%


5.1%














Europe


143,832


143,832


130,750


130,750


10.0%


10.0%

Asia-Pacific


43,273


43,273


39,424


39,424


9.8%


9.8%

International merchant services


187,105


187,105


170,174


170,174


9.9%


9.9%














Total revenues


$     616,452


$     616,452


$     578,746


$     578,746


6.5%


6.5%














Operating income (loss) for segments:













North America merchant services


$       61,695


$       68,823


$       55,478


$       63,210


11.2%


8.9%

International merchant services


58,077


65,549


51,820


60,618


12.1%


8.1%

Corporate1


(22,481)


(22,481)


(16,524)


(17,713)


(36.1%)


(26.9%)

Operating income


$       97,291


$     111,891


$       90,774


$     106,115


7.2%


5.4%





























 Nine Months Ended February 28, 







2014


2013


 % Change 



 GAAP 


Cash
Earnings 


 GAAP 


Cash
Earnings 


 GAAP 


Cash
Earnings 














Revenues:













United States


$ 1,081,506


$ 1,081,506


$ 1,022,250


$ 1,022,250


5.8%


5.8%

Canada


245,379


245,379


233,885


233,885


4.9%


4.9%

North America merchant services


1,326,885


1,326,885


1,256,135


1,256,135


5.6%


5.6%














Europe


433,886


433,886


390,376


390,376


11.1%


11.1%

Asia-Pacific


119,488


119,488


111,060


111,060


7.6%


7.6%

International merchant services


553,374


553,374


501,436


501,436


10.4%


10.4%














Total revenues


$ 1,880,259


$ 1,880,259


$ 1,757,571


$ 1,757,571


7.0%


7.0%














Operating income (loss) for segments:













North America merchant services


$     201,831


$     225,848


$     189,809


$     207,933


6.3%


8.6%

International merchant services


182,085


204,149


162,947


187,819


11.7%


8.7%

Corporate1


(67,334)


(71,439)


(64,912)


(56,545)


(3.7%)


(26.3%)

Operating income


$     316,582


$     358,558


$     287,844


$     339,207


10.0%


5.7%








































1GAAP and cash earnings include incremental security spend for the three and nine months ended February 28, 2014. GAAP earnings for the nine months ended February 28, 2014 include insurance proceeds of ($7M) related to the FY2012 data intrusion.  GAAP earnings for the three and nine months ended February 28, 2013 include a data intrusion (credit)/charge of ($1.2) million and $8.3M, respectively.














See Schedule 8 for reconciliation of cash earnings segment information to GAAP. 








 

SCHEDULE 4

CONSOLIDATED BALANCE SHEETS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES


(In thousands, except share data)




February 28, 2014


May 31, 2013



(unaudited)



Assets





Current assets:





Cash and cash equivalents


$    1,013,560


$       680,470

Accounts receivable, net of allowances for doubtful accounts of $411 and $509, respectively


174,993


189,435

Claims receivable, net


743


1,156

Settlement processing assets


283,414


259,204

Inventory


7,315


11,057

Deferred income taxes


6,282


6,485

Prepaid expenses and other current assets


46,948


66,685

Total current assets


1,533,255


1,214,492






Goodwill


1,064,868


1,044,222

Other intangible assets, net


364,513


400,848

Property and equipment, net


364,725


348,064

Deferred income taxes


103,182


95,178

Other


25,172


22,252






Total assets


$    3,455,715


$    3,125,056






Liabilities and Equity





Current liabilities:





Lines of credit


262,055


$       187,461

Current portion of long-term debt


2,351


72,335

Accounts payable and accrued liabilities


243,212


262,890

Settlement processing obligations


171,563


162,558

Income taxes payable


8,821


18,870

  Total current liabilities


688,002


704,114






Long-term debt


1,252,056


891,134

Deferred income taxes


165,697


170,723

Other long-term liabilities


86,251


72,478

Total liabilities


2,192,006


1,838,449






Equity:





Preferred stock, no par value; 5,000,000 shares authorized and none issued


-


-

Common stock, no par value; 200,000,000 shares authorized; 71,660,707 issued and outstanding




 at February 28, 2014 and 75,426,099 issued and outstanding at May 31, 2013


-


-

Paid-in capital


195,308


202,396

Retained earnings


940,545


958,751

Accumulated other comprehensive loss


(5,745)


(15,062)

      Total Global Payments shareholders' equity


1,130,108


1,146,085

Noncontrolling interests


133,601


140,522

Total equity


1,263,709


1,286,607






Total liabilities and equity


$    3,455,715


$    3,125,056

 

SCHEDULE 5

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES


(In thousands)







Nine Months Ended February 28,






2014


2013









Cash flows from operating activities:





Net income


$         211,686


$      192,347

Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation and amortization of property and equipment


43,645


40,856


Amortization of acquired intangibles


43,553


42,091


Share-based compensation expense


17,269


14,063


Provision for operating losses and bad debts


14,203


16,681


Deferred income taxes


3,103


27,282


Other, net


(1,006)


(3,692)

Changes in operating assets and liabilities, net of the effects of acquisitions:






Accounts receivable


14,442


17,706


Claims receivable


(9,145)


(9,235)


Settlement processing assets and obligations, net


(19,669)


(12,028)


Inventory


3,811


(1,535)


Prepaid expenses and other assets


18,980


(34,898)


Accounts payable and other accrued liabilities


(16,422)


(78,375)


Income taxes payable


(10,049)


(6,496)



Net cash provided by operating activities


314,401


204,767









Cash flows from investing activities:






Business, intangible and other asset acquisitions, net of cash acquired


(2,519)


(433,427)


Capital expenditures


(61,270)


(75,016)


Net decrease in financing receivables


1,997


2,158


Net proceeds from sales of investments and business


3,521


-



Net cash used in investing activities


(58,271)


(506,285)









Cash flows from financing activities:






Net borrowings (payments) on short-term lines of credit


74,594


(48,239)


Proceeds from issuance of long-term debt


2,390,000


1,085,327


Principal payments under long-term debt


(2,099,869)


(439,789)


Acquisition of redeemable noncontrolling interest


-


(242,000)


Payment of debt issuance costs


(5,961)


(3,987)


Repurchase of common stock


(258,562)


(137,653)


Proceeds from stock issued under share-based compensation plans


29,740


9,257


Common stock repurchased - share-based compensation plans


(5,682)


(10,215)


Tax benefit from share-based compensation plans


4,782


1,791


Distributions to noncontrolling interests


(33,744)


(13,656)


Dividends paid


(4,330)


(4,688)




Net cash provided by financing activities


90,968


196,148









Effect of exchange rate changes on cash


(14,008)


7,055









Increase (decrease) in cash and cash equivalents


333,090


(98,315)

Cash and cash equivalents, beginning of period


680,470


781,275

Cash and cash equivalents, end of period


$      1,013,560


$      682,960

 

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 February 28, 2014



GAAP


Processing
System
Intrusion 


Other1


Cash Earnings
Adjustments2


Cash Earnings












Revenues


$       616,452


$                    -


$                  -


$                  -


$       616,452

Operating expenses:











   Cost of service


232,937


-


-


(14,600)


218,337

   Sales, general and administrative


286,224


-


-


-


286,224

   Processing system intrusion


-


-


-


-


-



519,161


-


-


(14,600)


504,561












Operating income


97,291


-


-


14,600


111,891

Other income (expense):











   Interest and other income


2,944


-


-


-


2,944

   Interest and other expense


(16,457)


-


8,144


-


(8,313)



(13,513)


-


8,144


-


(5,369)












Income (loss) before income taxes 


83,778


-


8,144


14,600


106,522

(Provision) benefit  for income taxes


(23,657)


-


(2,180)


(4,536)


(30,373)

Net income (loss)


60,121


-


5,964


10,064


76,149

Less: Net income attributable to noncontrolling

interests, net of income tax


(5,000)


-


-


(1,421)


(6,421)

Net income (loss) attributable to Global Payments


$         55,121


$                    -


$           5,964


$           8,643


$         69,728












Diluted shares


72,434








72,434

Diluted earnings (loss) per share


$             0.76


$                    -


$             0.08


$             0.12


$             0.96

























Three Months Ended February 28, 2013



GAAP


Processing
System
Intrusion


Other


Cash Earnings
Adjustments2


Cash Earnings












Revenues


$       578,746


$                    -


$                  -


$                  -


$       578,746

Operating expenses:











   Cost of service


217,465


-


-


(16,530)


200,935

   Sales, general and administrative


271,696


-


-


-


271,696

   Processing system intrusion


(1,189)


1,189


-


-


-



487,972


1,189


-


(16,530)


472,631












Operating income


90,774


(1,189)


-


16,530


106,115

Other income (expense):











   Interest and other income


2,536


-


-


-


2,536

   Interest and other expense


(7,063)


-


-


-


(7,063)



(4,527)


-


-


-


(4,527)












Income (loss) before income taxes 


86,247


(1,189)


-


16,530


101,588

(Provision) benefit  for income taxes


(23,433)


232


-


(4,461)


(27,662)

Net income (loss)


62,814


(957)


-


12,069


73,926

Less: Net income attributable to noncontrolling interests, net of income tax


(4,352)


-


-


(1,641)


(5,993)

Net income (loss) attributable to Global Payments


$         58,462


$               (957)


$                  -


$         10,428


$         67,933












Diluted shares


78,324








78,324

Diluted earnings (loss) per share


$             0.75


$              (0.01)


$                  -


$             0.13


$             0.87


































1 For the period ended February 28, 2014, represents HSBC's share of GPAP dividends declared and costs associated with the debt refinancing that was completed on February 28, 2014.












2Represents adjustments to cost of service to exclude acquisition intangible amortization expense from net income and the related income tax benefit.























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 February 28, 2014 and 2013 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 excluding amounts related to the processing system intrusion, acquisition intangible amortization, HSBC's share of dividends declared and costs associated with debt refinancing.We exclude these charges 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 YEAR TO DATE CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES


(In thousands, except per share data)




Nine Months Ended February 28, 2014



GAAP


Processing
System Intrusion 1


Other2


Cash Earnings
Adjustments3


Cash Earnings












Revenues


$   1,880,259


$                       -


$                  -


$                  -


$   1,880,259

Operating expenses:











   Cost of service


698,852


-


(579)


(43,553)


654,720

   Sales, general and administrative


871,825


-


(4,844)


-


866,981

   Processing system intrusion


(7,000)


7,000


-


-


-



1,563,677


7,000


(5,423)


(43,553)


1,521,701












Operating income


316,582


(7,000)


5,423


43,553


358,558

Other income (expense):











   Interest and other income


11,570


-


(2,123)


-


9,447

   Interest and other expense


(32,361)


-


8,144


-


(24,217)



(20,791)


-


6,021


-


(14,770)












Income (loss) before income taxes 


295,791


(7,000)


11,444


43,553


343,788

(Provision) benefit  for income taxes


(84,105)


2,393


(4,114)


(14,106)


(99,932)

Net income (loss)


211,686


(4,607)


7,330


29,447


243,856

Less: Net income attributable to noncontrolling

interests, net of income tax


(18,025)


-


-


(4,195)


(22,220)

Net income (loss) attributable to Global Payments


$       193,661


$               (4,607)


$           7,330


$         25,252


$       221,636












Diluted shares


73,152








73,152

Diluted earnings (loss) per share


$             2.65


$                 (0.07)


$             0.10


$             0.35


$             3.03

























Nine Months Ended February 28, 2013



GAAP


Processing
System Intrusion


Other2


Cash Earnings
Adjustments3


Cash Earnings












Revenues


$   1,757,571


$                       -


$                  -


$                  -


$   1,757,571

Operating expenses:











   Cost of service


632,124


-


(161)


(42,091)


589,872

   Sales, general and administrative


829,292


-


(800)


-


828,492

   Processing system intrusion


8,311


(8,311)


-


-


-



1,469,727


(8,311)


(961)


(42,091)


1,418,364












Operating income


287,844


8,311


961


42,091


339,207

Other income (expense):











   Interest and other income


6,706


-


-


-


6,706

   Interest and other expense


(25,217)


-


8,383


-


(16,834)



(18,511)


-


8,383


-


(10,128)












Income (loss) before income taxes 


269,333


8,311


9,344


42,091


329,079

Provision for income taxes


(76,986)


(3,048)


(1,533)


(12,034)


(93,601)

Net income (loss)


192,347


5,263


7,811


30,057


235,478

Less: Net income attributable to noncontrolling interests, net of income tax


(17,027)


-


(3,594)


(4,543)


(25,164)

Net income attributable to Global Payments


$       175,320


$                5,263


$           4,217


$         25,514


$       210,314












Diluted shares


78,747








78,747

Diluted earnings (loss) per share


$             2.23


$                   0.07


$             0.05


$             0.32


$             2.67























1Represents insurance proceeds associated with processing system intrusion charges incurred in FY 2012.












2 For the period ended February 28, 2014, represents one-time charges primarily related to employee termination benefits, resolution of a contract related contingency, a one-time credit related to the gain on the sale of an interest in a business, HSBC's share of dividends declared, and costs associated with debt refinancing.  For the prior period, represents HSBC's share of GPAP dividends declared and one-time charges primarily related to employee termination benefits.












3Represents adjustments to cost of service to exclude acquisition intangible amortization expense from net income and the related income tax benefit.












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 nine months ended February 28, 2014 and 2013 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 excluding amounts related to the processing system intrusion, acquisition intangible amortization, one-time charges related to employee termination benefits and resolution of a contract related contingency, a one-time credit related to the sale of an interest in a business, HSBC's share of GPAP dividends declared, and costs associated with debt refinancing.  In the nine months ended February 2013, we also adjusted the net income attributable to noncontrolling interests to include HSBC's share of GPAP net income.  We exclude these charges 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 February 28,  



2014


2013



 GAAP 


Processing System Intrusion 


Other


Cash Earnings Adjustments3


 Cash Earnings 


 GAAP 


Processing System Intrusion


Other


Cash Earnings Adjustments3


 Cash Earnings 






















Revenues:





















United States


$   355,880


$               -


$               -


$               -


$   355,880


$     336,354


$               -


$               -


$               -


$   336,354

Canada


73,467


-


-


-


73,467


72,218


-


-


-


72,218

  North America merchant services


429,347


-


-


-


429,347


408,572


-


-


-


408,572






















Europe


143,832


-


-


-


143,832


130,750


-


-


-


130,750

Asia-Pacific


43,273


-


-


-


43,273


39,424


-


-


-


39,424

  International merchant services


187,105


-


-


-


187,105


170,174


-


-


-


170,174






















     Total revenues


$   616,452


$               -


$               -


$               -


$   616,452


$     578,746


$               -


$               -


$               -


$   578,746






















Operating income (loss) for segments:





















North America merchant services


$     61,695


$               -


$               -


$        7,128


$     68,823


$       55,478


$               -


$               -


$        7,732


$     63,210

International merchant services


58,077


-


-


7,472


65,549


51,820


-


-


8,798


60,618

Corporate


(22,481)


-


-


-


(22,481)


(16,524)


(1,189)


-


-


(17,713)

     Operating income (loss)


$     97,291


$               -


$               -


$      14,600


$   111,891


$       90,774


$     (1,189)


$               -


$      16,530


$   106,115













































 Nine Months Ended February 28,  



2014


2013



 GAAP 


Processing System Intrusion 1


Other2


Cash Earnings Adjustments3


 Cash Earnings 


 GAAP 


Processing System Intrusion


Other2


Cash Earnings Adjustments3


 Cash Earnings 






















Revenues:





















United States


$1,081,506


$               -


$               -


$               -


$1,081,506


$ 1,022,250


$               -


$               -


$               -


$1,022,250

Canada


245,379


-


-


-


245,379


233,885


-


-


-


233,885

  North America merchant services


1,326,885


-


-


-


1,326,885


1,256,135


-


-


-


1,256,135






















Europe


433,886


-


-


-


433,886


390,376


-


-


-


390,376

Asia-Pacific


119,488


-


-


-


119,488


111,060


-


-


-


111,060

  International merchant services


553,374


-


-


-


553,374


501,436


-


-


-


501,436






















     Total revenues


$1,880,259


$               -


$               -


$               -


$1,880,259


$ 1,757,571


$               -


$               -


$               -


$1,757,571






















Operating income (loss) for segments:





















North America merchant services


$   201,831


$               -


$        2,518


$      21,499


$   225,848


$     189,809


$               -


$           905


$      17,219


$   207,933

International merchant services


182,085


-


10


22,054


204,149


162,947


-


-


24,872


187,819

Corporate


(67,334)


(7,000)


2,895


-


(71,439)


(64,912)


8,311


56


-


(56,545)

     Operating income (loss)


$   316,582


$       (7,000)


$        5,423


$      43,553


$   358,558


$     287,844


$       8,311


$           961


$      42,091


$   339,207











































1Represents insurance proceeds associated with processing system intrusion charges incurred in FY 2012.


































2Represents one-time charges primarily related to employee termination benefits and resolution of a contract related contingency for the period ending February 28, 2014 and the prior year represents one-time charges primarily related to employee termination benefits.
































3Represents acquisition intangible amortization expense.

















 

SCHEDULE 9

OUTLOOK SUMMARY

GLOBAL PAYMENTS INC. AND SUBSIDIARIES


(In millions, except per share data)





Fiscal 2013
Actual


Fiscal 2014
Outlook


% Change
FY13









Revenue Outlook







Total Revenues


$       2,376


$2,510 to $2,560


6% to 8%









EPS Outlook







Cash EPS 


$         3.65


$4.06 to $4.11


11% to 13%

Acquisition-related intangibles assets, non-recurring items and 






    processing system intrusion 1


(0.89)


(0.58)


(35%)

GAAP Diluted EPS 


$         2.76


 $3.48 to $3.53 


26% to 28%

























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 nine months ended February 28, 2014 and 2013 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 excluding amounts related to the processing system intrusion, acquisition intangible amortization, one-time charges related to employee termination benefits and resolution of a contract related contingency, a one-time credit related to the sale of an interest in a business, HSBC's share of GPAP dividends declared, and costs associated with debt refinancing. In the nine months ended February 2013, we also adjusted the net income attributable to noncontrolling interests to include HSBC's share of GPAP net income. We exclude these charges 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.









1  Fiscal 2014 reflects $0.48 of acquisition-related intangibles amortization and $0.10 of one-time charges (refer to Schedule 7, footnote 2 for details).  Acquisition-related intangibles amortization and non-recurring items accounted for $0.57 in fiscal 2013 and processing intrusion costs were $0.32.  Intangible amortization does not include amortization related to the recent March 4, 2014 PayPros acquisition as the allocation of the purchase price has not yet been finalized.

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SOURCE Global Payments Inc.



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