Global Payments Reports Third Quarter Earnings
Increases Annual Fiscal 2015 Outlook
Announces Planned $100 Million Accelerated Share Repurchase


ATLANTA, April 8, 2015 -- Global Payments Inc. (NYSE: GPN) today announced results for its fiscal third quarter ended February 28, 2015.
“We are pleased to report strong third quarter financial results, reflecting the success of our strategy to deliver technology-enabled payments solutions across an expansive direct customer base worldwide, while continuing to invest in future growth,” said Chief Executive Officer Jeff Sloan. “Our acquisition of Realex Payments enhances our international ecommerce offerings, extends our foundation for omni-channel capabilities and accelerates growth in our pan-European payments business.”

Third Quarter 2015 Summary
•
Revenues grew 8% to $666.9 million, compared to $616.5 million in the third quarter of fiscal 2014.
•
Cash diluted earnings per share1 grew 19% to $1.14, compared to $0.96 in the third quarter of fiscal 2014.
•
GAAP diluted earnings per share were $0.93, compared to $0.76 in the third quarter of fiscal 2014.

2015 Outlook
“We delivered solid revenue growth and meaningful margin expansion in the third quarter despite the significant strengthening of the U.S. dollar, and we are again increasing our full-year margin and cash earnings per share expectations,” stated Cameron Bready, Executive Vice President and Chief Financial Officer. “We are also pleased to announce that we plan to enter into an accelerated share repurchase plan, further demonstrating our ongoing commitment to efficiently return capital to shareholders while investing in our business to increase our future growth potential.”
For the full-year of fiscal 2015, the company is maintaining its expectation for annual revenue of $2.75 billion to $2.80 billion, or 8% to 10% growth over fiscal 2014. The company is raising its outlook for annual fiscal 2015 diluted earnings per share on a cash basis to a range of $4.77 to $4.84, or 16% to 18% growth over



fiscal 2014, and annual fiscal 2015 GAAP diluted earnings per share is expected to be in the range of $4.01 to $4.08. Our outlook for cash and GAAP diluted earnings per share reflect the impact of share repurchases executed to date only and do not include any benefit from the announced accelerated share repurchase plan. The company also now expects annual fiscal 2015 core cash operating margins to expand by as much as 60 basis points.

Capital Allocation
Global Payments’ Board of Directors approved a fiscal 2015 third quarter dividend of $0.02 per share payable May 29, 2015 to shareholders of record as of May 15, 2015. The company intends to enter into an accelerated share repurchase plan this month to repurchase up to $100 million of the company's common stock. 

Conference Call
Global Payments’ management will host a conference call today, April 8, 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.

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.
_________________________
1See Schedule 2 for cash earnings and Schedules 6, 7 and 8 for reconciliations of cash earnings to GAAP.


This announcement and comments made by Global Payments' management 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 ability to safeguard our data; increased competition from non-traditional competitors; our ability to update our products and services in a timely manner; potential systems interruptions or failures; software defects or undetected errors; 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 attrition of merchants, referral partners or independent sales organizations; our ability to increase our share of existing markets and expand into new markets; unanticipated increases in chargeback liability; increases in credit card network fees; changes in laws, regulations or network rules or interpretations thereof; foreign currency exchange and interest rate risks; political, economic and regulatory changes in the foreign countries in which we operate; future performance, integration and conversion of acquired operations; loss of key personnel; and other risks detailed in our SEC filings,



including the most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. 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    
Amy Corn
770-829-8234
770-829-8755



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,
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
 
(unaudited)
 
 
 
(unaudited)
 
 
Revenues
$
664,983

 
$
616,452

 
7.9
 %
 
$
2,067,169

 
$
1,880,259

 
9.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of service
250,255

 
232,937

 
7.4
 %
 
767,890

 
698,852

 
9.9
 %
Sales, general and administrative
310,113

 
286,224

 
8.3
 %
 
946,282

 
871,825

 
8.5
 %
Processing system intrusion
—

 
—

 
—
 %
 
—

 
(7,000
)
 
(100.0
)%
 
560,368

 
519,161

 
7.9
 %
 
1,714,172

 
1,563,677

 
9.6
 %
 
 
 
 
 

 
 
 
 
 
 
Operating income
104,615

 
97,291

 
7.5
 %
 
352,997

 
316,582

 
11.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
Interest and other income
1,160

 
2,944

 
(60.6
)%
 
3,634

 
11,570

 
(68.6
)%
Interest and other expense
(13,429
)
 
(16,457
)
 
(18.4
)%
 
(34,789
)
 
(32,361
)
 
7.5
 %
 
(12,269
)
 
(13,513
)
 
(9.2
)%
 
(31,155
)
 
(20,791
)
 
49.8
 %
 
 
 
 
 

 
 
 
 
 
 
Income before income taxes
92,346

 
83,778

 
10.2
 %
 
321,842

 
295,791

 
8.8
 %
Provision for income taxes
(23,031
)
 
(23,657
)
 
(2.6
)%
 
(82,837
)
 
(84,105
)
 
(1.5
)%
Net income
69,315

 
60,121

 
15.3
 %
 
239,005

 
211,686

 
12.9
 %
Less: Net income attributable to noncontrolling interests, net of income tax
(6,747
)
 
(5,000
)
 
34.9
 %
 
(26,290
)
 
(18,025
)
 
45.9
 %
Net income attributable to Global Payments
$
62,568

 
$
55,121

 
13.5
 %
 
$
212,715

 
$
193,661

 
9.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share attributable to Global Payments:
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.94

 
$
0.77

 
22.1
 %
 
$
3.15

 
$
2.67

 
18.0
 %
Diluted
$
0.93

 
$
0.76

 
22.4
 %
 
$
3.13

 
$
2.65

 
18.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic
66,890

 
71,835

 
 
 
67,476

 
72,598

 
 
Diluted
67,306

 
72,434

 
 
 
67,891

 
73,152

 
 







4


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,
 
2015
 
2014
 
% Change
 
2015
 
2014
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
666,859

 
$
616,452

 
8.2
 %
 
$
2,069,045

 
$
1,880,259

 
10.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of service
232,188

 
218,337

 
6.3
 %
 
713,706

 
654,720

 
9.0
 %
Sales, general and administrative
308,241

 
286,224

 
7.7
 %
 
947,351

 
866,981

 
9.3
 %
 
540,429

 
504,561

 
7.1
 %
 
1,661,057

 
1,521,701

 
9.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
126,430

 
111,891

 
13.0
 %
 
407,988

 
358,558

 
13.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
Interest and other income
1,160

 
2,944

 
(60.6
)%
 
3,634

 
9,447

 
(61.5
)%
Interest and other expense
(13,429
)
 
(8,313
)
 
61.5
 %
 
(34,789
)
 
(24,217
)
 
43.7
 %
 
(12,269
)
 
(5,369
)
 
128.5
 %
 
(31,155
)
 
(14,770
)
 
110.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
114,161

 
106,522

 
7.2
 %
 
376,833

 
343,788

 
9.6
 %
Provision for income taxes
(29,798
)
 
(30,373
)
 
(1.9
)%
 
(100,748
)
 
(99,932
)
 
0.8
 %
Net income
84,363

 
76,149

 
10.8
 %
 
276,085

 
243,856

 
13.2
 %
Less: Net income attributable to noncontrolling interests, net of income tax
(7,825
)
 
(6,421
)
 
21.9
 %
 
(29,776
)
 
(22,220
)
 
34.0
 %
Net income attributable to Global Payments
$
76,538

 
$
69,728

 
9.8
 %
 
$
246,309

 
$
221,636

 
11.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share attributable to Global Payments:
 
 
 
 
 
 
 
 
 
 
 
Basic
$
1.14

 
$
0.97

 
17.5
 %
 
$
3.65

 
$
3.05

 
19.7
 %
Diluted
$
1.14

 
$
0.96

 
18.8
 %
 
$
3.63

 
$
3.03

 
19.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic
66,890

 
71,835

 
 
 
67,476

 
72,598

 
 
Diluted
67,306

 
72,434

 
 
 
67,891

 
73,152

 
 

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


5


SCHEDULE 3
SEGMENT INFORMATION
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
 
 
Three Months Ended February 28,
 
 
 
 
 
 
2015
 
2014
 
 % Change
 
 
GAAP
 
 Cash Earnings
 
 GAAP
 
 Cash Earnings
 
 GAAP
 
 Cash Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
United States
 
$
404,016

 
$
404,016

 
$
355,880

 
$
355,880

 
13.5
 %
 
13.5
 %
Canada
 
69,047

 
69,047

 
73,467

 
73,467

 
(6.0
)%
 
(6.0
)%
North America merchant services
 
473,063

 
473,063

 
429,347

 
429,347

 
10.2
 %
 
10.2
 %
 
 
 
 
 
 
 
 
 
 

 
 
Europe
 
138,378

 
140,254

 
143,832

 
143,832

 
(3.8
)%
 
(2.5
)%
Asia-Pacific
 
53,542

 
53,542

 
43,273

 
43,273

 
23.7
 %
 
23.7
 %
International merchant services
 
191,920

 
193,796

 
187,105

 
187,105

 
2.6
 %
 
3.6
 %
 
 
 
 
 
 
 
 
 
 

 
 
Total revenues
 
$
664,983

 
$
666,859

 
$
616,452

 
$
616,452

 
7.9
 %
 
8.2
 %
 
 
 
 
 
 
 
 
 
 

 
 
Operating income (loss) for segments:
 
 
 
 
 
 
 
 
 

 
 
North America merchant services
 
$
66,723

 
$
77,746

 
$
61,695

 
$
68,823

 
8.1
 %
 
13.0
 %
International merchant services
 
64,902

 
73,822

 
58,077

 
65,549

 
11.8
 %
 
12.6
 %
Corporate
 
(27,010
)
 
(25,138
)
 
(22,481
)
 
(22,481
)
 
20.1
 %
 
11.8
 %
Operating income
 
$
104,615

 
$
126,430

 
$
97,291

 
$
111,891

 
7.5
 %
 
13.0
 %

 
 
Nine Months Ended February 28,
 
 
 
 
 
 
2015
 
2014
 
 % Change
 
 
GAAP
 
 Cash Earnings
 
 GAAP
 
 Cash Earnings
 
 GAAP
 
 Cash Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
United States
 
$
1,222,841

 
$
1,222,841

 
$
1,081,506

 
$
1,081,506

 
13.1
 %
 
13.1
 %
Canada
 
243,004

 
243,004

 
245,379

 
245,379

 
(1.0
)%
 
(1.0
)%
North America merchant services
 
1,465,845

 
1,465,845

 
1,326,885

 
1,326,885

 
10.5
 %
 
10.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Europe
 
461,140

 
463,016

 
433,886

 
433,886

 
6.3
 %
 
6.7
 %
Asia-Pacific
 
140,184

 
140,184

 
119,488

 
119,488

 
17.3
 %
 
17.3
 %
International merchant services
 
601,324

 
603,200

 
553,374

 
553,374

 
8.7
 %
 
9.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
$
2,067,169

 
$
2,069,045

 
$
1,880,259

 
$
1,880,259

 
9.9
 %
 
10.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss) for segments:
 
 
 
 
 
 
 
 
 
 
 
 
North America merchant services
 
$
218,906

 
$
252,480

 
$
201,831

 
$
225,848

 
8.5
 %
 
11.8
 %
International merchant services
 
214,947

 
234,492

 
182,085

 
204,149

 
18.0
 %
 
14.9
 %
Corporate1
 
(80,856
)
 
(78,984
)
 
(67,334
)
 
(71,439
)
 
20.1
 %
 
10.6
 %
Operating income
 
$
352,997

 
$
407,988

 
$
316,582

 
$
358,558

 
11.5
 %
 
13.8
 %

1 GAAP earnings for the nine months ended February 28, 2014 include insurance proceeds of $7.0 million related to the fiscal 2012 processing system intrusion.

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

6



SCHEDULE 4
CONSOLIDATED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except share data)
 
February 28, 2015
 
May 31, 2014
 
(unaudited)
 
 
ASSETS
 
  
 
Current assets:
 
  
 
Cash and cash equivalents
$
610,148

 
$
581,872

Accounts receivable, net of allowances for doubtful accounts of $405 and $401, respectively
170,895

 
214,574

Claims receivable, net
584

 
809

Settlement processing assets
744,976

 
780,917

Inventory
5,587

 
6,636

Deferred income taxes
11,933

 
12,963

Prepaid expenses and other current assets
49,027

 
45,673

Total current assets
1,593,150

 
1,643,444

Goodwill
1,422,900

 
1,337,285

Other intangible assets, net
516,083

 
535,173

Property and equipment, net
355,885

 
369,753

Deferred income taxes
93,549

 
101,928

Other
36,753

 
31,067

Total assets
$
4,018,320

 
$
4,018,650

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Lines of credit
$
446,800

 
$
440,128

Current portion of long-term debt
62,500

 
17,677

Accounts payable and accrued liabilities
284,472

 
290,106

Settlement processing obligations
426,368

 
451,317

Income taxes payable
22,560

 
12,390

Total current liabilities
1,242,700

 
1,211,618

Long-term debt
1,546,000

 
1,376,002

Deferred income taxes
201,737

 
209,099

Other long-term liabilities
86,255

 
89,132

Total liabilities
3,076,692

 
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; 66,457,816 issued and outstanding at February 28, 2015 and 68,845,643 issued and outstanding at May 31, 2014
—

 
—

Paid-in capital
147,344

 
183,023

Retained earnings
861,955

 
815,980

Accumulated other comprehensive loss
(184,226
)
 
(1,776
)
Total Global Payments shareholders’ equity
825,073

 
997,227

Noncontrolling interests
116,555

 
135,572

Total equity
941,628

 
1,132,799

Total liabilities and equity
$
4,018,320

 
$
4,018,650


7


SCHEDULE 5
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
 
Nine Months Ended February 28,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income
$
239,005

 
$
211,686

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

 
 
Depreciation and amortization of property and equipment
48,628

 
43,645

Amortization of acquired intangibles
54,184

 
43,553

Share-based compensation expense
14,827

 
17,269

Provision for operating losses and bad debts
10,530

 
14,203

Deferred income taxes
13,479

 
3,103

Other, net
469

 
(1,006
)
Changes in operating assets and liabilities, net of the effects of acquisitions:

 

Accounts receivable
32,124

 
14,442

Claims receivable
(7,159
)
 
(9,145
)
Settlement processing assets and obligations, net
(27,948
)
 
(19,669
)
Inventory
(256
)
 
3,811

Prepaid expenses and other assets
(5,431
)
 
18,980

Accounts payable and accrued liabilities
(36,044
)
 
(16,422
)
Income taxes payable
10,677

 
(10,049
)
Net cash provided by operating activities
347,085

 
314,401

Cash flows from investing activities:
 
 
 
Business, intangible and other asset acquisitions, net of cash acquired
(232,864
)
 
(2,519
)
Capital expenditures
(56,746
)
 
(61,270
)
Principal collections on financing receivables
219

 
1,997

    Net proceeds from sales of investments and business
10,597

 
3,521

Net cash used in investing activities
(278,794
)
 
(58,271
)
Cash flows from financing activities:
 
 
 
Net borrowings on short-term lines of credit
44,622

 
74,594

Proceeds from issuance of long-term debt
1,593,500

 
2,390,000

Principal payments under long-term debt
(1,378,679
)
 
(2,099,869
)
Payment of debt issuance costs
—

 
(5,961
)
Repurchase of common stock
(231,844
)
 
(258,562
)
Proceeds from stock issued under share-based compensation plans
18,867

 
29,740

Common stock repurchased - share-based compensation plans
(16,175
)
 
(5,682
)
Tax benefit from share-based compensation plans
3,851

 
4,782

Distributions to noncontrolling interests
(19,355
)
 
(33,744
)
Dividends paid
(4,035
)
 
(4,330
)
Net cash provided by financing activities
10,752

 
90,968

Effect of exchange rate changes on cash
(50,767
)
 
(14,008
)
Increase in cash and cash equivalents
28,276

 
333,090

Cash and cash equivalents, beginning of the period
581,872

 
680,470

Cash and cash equivalents, end of the period
$
610,148

 
$
1,013,560


8


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, 2015
 
 
GAAP
Other1
Cash Earnings Adjustments2
Cash Earnings
Revenues
 
$
664,983

$
1,876

$
—

$
666,859

Operating expenses:
 
 
 
 
 
Cost of service
 
250,255

—

(18,067
)
232,188

Sales, general and administrative
 
310,113

(1,872
)
—

308,241

 
 
560,368

(1,872
)
(18,067
)
540,429

Operating income
 
104,615

3,748

18,067

126,430

Other income (expense):
 
 
 
 
 
Interest and other income
 
1,160

—

—

1,160

Interest and other expense
 
(13,429
)
—

—

(13,429
)
 
 
(12,269
)
—

—

(12,269
)
Income before income taxes
 
92,346

3,748

18,067

114,161

Provision for income taxes
 
(23,031
)
(1,031
)
(5,736
)
(29,798
)
Net income
 
69,315

2,717

12,331

84,363

Less: Net income attributable to noncontrolling interests, net of income tax
 
(6,747
)
—

(1,078
)
(7,825
)
Net income attributable to Global Payments
 
$
62,568

$
2,717

$
11,253

$
76,538

Diluted shares
 
67,306

 
 
67,306

Diluted earnings per share
 
$
0.93

$
0.04

$
0.17

$
1.14

 
 
 
 
 
 
 
 
Three Months Ended February 28, 2014
 
 
GAAP
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

 
 
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 before income taxes
 
83,778

8,144

14,600

106,522

Provision for income taxes
 
(23,657
)
(2,180
)
(4,536
)
(30,373
)
Net income
 
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 attributable to Global Payments
 
$
55,121

$
5,964

$
8,643

$
69,728

Diluted shares
 
72,434

 
 
72,434

Diluted earnings per share
 
$
0.76

$
0.08

$
0.12

$
0.96


1 For the period ended February 28, 2015, 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. For the period ended February 28, 2014, the adjustments represent HSBC's share of GPAP dividends declared and costs associated with the debt refinancing that was completed on February 28, 2014.

2 Represents adjustments to cost of service to exclude acquisition intangible amortization expense 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, 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.

9


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, 2015
 
 
GAAP
Processing System Intrusion
Other2
Cash Earnings Adjustments3
Cash Earnings
Revenues
 
$
2,067,169

$
—

$
1,876

$
—

$
2,069,045

Operating expenses:
 
 
 
 
 
 
Cost of service
 
767,890

—

—

(54,184
)
713,706

Sales, general and administrative
 
946,282

—

1,069

—

947,351

Processing system intrusion
 
—

—

—

—

—

 
 
1,714,172

—

1,069

(54,184
)
1,661,057

Operating income
 
352,997

—

807

54,184

407,988

Other income (expense):
 
 
 
 
 
 
Interest and other income
 
3,634

—

—

—

3,634

Interest and other expense
 
(34,789
)
—

—

—

(34,789
)
 
 
(31,155
)
—

—

—

(31,155
)
Income before income taxes
 
321,842

—

807

54,184

376,833

Provision for income taxes
 
(82,837
)
—

(443
)
(17,468
)
(100,748
)
Net income
 
239,005

—

364

36,716

276,085

Less: Net income attributable to noncontrolling interests, net of income tax
 
(26,290
)
—

—

(3,486
)
(29,776
)
Net income attributable to Global Payments
 
$
212,715

$
—

$
364

$
33,230

$
246,309

Diluted shares
 
67,891

 
 
 
67,891

Diluted earnings per share
 
$
3.13

$
—

$
0.01

$
0.49

$
3.63

 
 
 
 
 
 
 
 
 
Nine Months Ended February 28, 2014
 
 
GAAP
Processing System Intrusion1
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 for) benefit from 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


1 Represents insurance proceeds associated with the fiscal 2012 processing system intrusion.

2 For the period ended February 28, 2015, the revenue adjustment represents select U.K. customer payments related to a vendor outage and the expense adjustments represent certain business tax assessments in the U.S. for prior periods and a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. For the period ended February 28, 2014, the adjustments represent 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 GPAP dividends declared, and costs associated with the debt refinancing that was completed on February 28, 2014.

3 Represents adjustments to cost of service to exclude acquisition intangible amortization expense 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, 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.

10


SCHEDULE 8
RECONCILIATION OF CASH EARNINGS SEGMENT INFORMATION TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
 
Three Months Ended February 28,
 
2015
 
2014
 
GAAP
Other2
Cash Earnings Adjustments3
Cash Earnings
 
GAAP
Processing System Intrusion
Other2
Cash Earnings Adjustments3
Cash Earnings
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
United States
$
404,016

$
—

$
—

$
404,016

 
$
355,880

$
—

$
—

$
—

$
355,880

Canada
69,047

—

—

69,047

 
73,467

—

—

—

73,467

North America merchant services
473,063

—

—

473,063

 
429,347

—

—

—

429,347

 
 
 
 
 
 
 
 
 
 
 
Europe
138,378

1,876

—

140,254

 
143,832

—

—

—

143,832

Asia-Pacific
53,542

—

—

53,542

 
43,273

—

—

—

43,273

International merchant services
191,920

1,876

—

193,796

 
187,105

—

—

—

187,105

 
 


 
 
 
 
 
 
 
 
Total revenues
$
664,983

$
1,876

$
—

$
666,859

 
$
616,452

$
—

$
—

$
—

$
616,452

 
 
 
 
 
 
 
 
 
 
 
Operating income (loss) for segments:
 
 
 
 
 
 
 
 
 
 
North America merchant services
$
66,723

$
—

$
11,023

$
77,746

 
$
61,695

$
—

$
—

$
7,128

$
68,823

International merchant services
64,902

1,876

7,044

73,822

 
58,077

—

—

7,472

65,549

Corporate
(27,010
)
1,872

—

(25,138
)
 
(22,481
)
—

—

—

(22,481
)
Operating income (loss)
$
104,615

$
3,748

$
18,067

$
126,430

 
$
97,291

$
—

$
—

$
14,600

$
111,891

 
Nine Months Ended February 28,
 
2015
 
2014
 
GAAP
Other2
Cash Earnings Adjustments3
Cash Earnings
 
GAAP
Processing System Intrusion1
Other2
Cash Earnings Adjustments3
Cash Earnings
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
United States
$
1,222,841

$
—

$
—

$
1,222,841

 
$
1,081,506

$
—

$
—

$
—

$
1,081,506

Canada
243,004

—

—

243,004

 
245,379

—

—

—

245,379

North America merchant services
1,465,845

—

—

1,465,845

 
1,326,885

—

—

—

1,326,885

 
 
 
 
 
 
 
 
 
 
 
Europe
461,140

1,876

—

463,016

 
433,886

—

—

—

433,886

Asia-Pacific
140,184

—

—

140,184

 
119,488

—

—

—

119,488

International merchant services
601,324

1,876

—

603,200

 
553,374

—

—

—

553,374

 
 
 
 
 
 
 
 
 
 
 
Total revenues
$
2,067,169

$
1,876

$
—

$
2,069,045

 
$
1,880,259

$
—

$
—

$
—

$
1,880,259

 
 
 
 
 
 
 
 
 
 
 
Operating income (loss) for segments:
 
 
 
 
 
 
 
 
 
 
North America merchant services
$
218,906

$
—

$
33,574

$
252,480

 
$
201,831

$
—

$
2,518

$
21,499

$
225,848

International merchant services
214,947

(1,065
)
20,610

234,492

 
182,085

—

10

22,054

204,149

Corporate
(80,856
)
1,872

—

(78,984
)
 
(67,334
)
(7,000
)
2,895

—

(71,439
)
Operating income (loss)
$
352,997

$
807

$
54,184

$
407,988

 
$
316,582

$
(7,000
)
$
5,423

$
43,553

$
358,558


1 Represents insurance proceeds associated with the fiscal 2012 processing system intrusion.

2 For the three months ended February 28, 2015, the revenue adjustment represents select U.K. customer payments related to a vendor outage and the expense adjustment represent certain business tax assessments in the U.S. for prior periods. The adjustments for the nine months ended February 28, 2015, include the revenue and business tax adjustments described for the three-month period and a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. For the nine months ended February 28, 2014, the adjustments represent one-time charges primarily related to employee termination benefits and resolution of a contract related contingency.

3 Represents acquisition intangible amortization expense.

11


SCHEDULE 9
OUTLOOK SUMMARY
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In billions, except per share data)
 
 
Fiscal 2014 Actual
 
Fiscal 2015 Outlook
 
% Change FY14
 
 
 
 
 
 
 
Revenue Outlook
 
 
 
 
 
 
Total Revenues
 
$2.55
 
$2.75 to $2.80

 
8% to 10%

 
 
 
 
 
 
 
EPS Outlook
 
 
 
 
 
 
Cash EPS
 
$4.12
 
$4.77 to $4.84

 
16% to 18%

Acquisition-related intangibles assets, non-recurring items and processing system intrusion1
 
(0.75
)
 
(0.76
)
 
1
%
GAAP Diluted EPS
 
$3.37
 
$4.01 to $4.08

 
19% to 21%


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 fiscal years 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 below. 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.

1 Fiscal 2015 reflects $0.72 of acquisition intangible amortization and $0.04 of non-recurring items, including a revenue adjustment for select U.K. customer payments related to a vendor outage and expense adjustments for certain business tax assessments in the U.S. for prior periods and a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. Fiscal 2014 reflects acquisition intangible amortization of $0.51, a processing system intrusion credit of ($0.07) and non-recurring items of $0.31. Other non-recurring items for fiscal 2014 include 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, non-cash losses from the retirement of fixed assets, employee termination benefits, resolution of a contract related contingency, costs associated with debt refinancing and HSBC's share of dividends declared by Global Payments Asia-Pacific.




12