Global Payments Reports Fiscal 2015 Earnings
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, July 28, 2015 -- 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.

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









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
 
GAAP
 
 Cash Earnings
 
 GAAP
 
 Cash Earnings
 
 GAAP
 
 Cash 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
 
GAAP
 
Cash Earnings
 
GAAP
 
Cash Earnings
 
GAAP
 
Cash 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
 %

1GAAP 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 plans
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
 
GAAP
Cash Earnings Adjustments1
Other2
Cash 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
 
GAAP
Cash Earnings Adjustments1
Other2
Cash 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


1Represents adjustments to exclude acquisition intangible amortization expense and the related income tax benefit.

2For 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
 
GAAP
Processing System Intrusion
Cash Earnings 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
 
GAAP
Processing System Intrusion1
Cash Earnings 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


1Represents insurance proceeds associated with the fiscal 2012 processing system intrusion and the related income tax provision.
 
2Represents adjustments to exclude acquisition intangible amortization expense and the related income tax benefit.

3For 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
 
GAAP
Processing System Intrusion
Cash Earnings Adjustments2
Other3
Cash Earnings
 
GAAP
Processing System Intrusion
Cash Earnings 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
 
GAAP
Processing System Intrusion
Cash Earnings Adjustments2
Other3
Cash Earnings
 
GAAP
Processing System Intrusion1
Cash Earnings 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


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

2Represents adjustments to exclude acquisition intangible amortization expense and the related income tax benefit.

3For 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 Actual
 
Fiscal 2016 Outlook
 
% Change
Revenues:
 
 
 
 
 
 
GAAP Revenues
 
$
2.77

 
$2.87 to $2.95

 
4% to 6%
Adjustments1
 
(0.82
)
 
(0.83)

 
 
Adjusted Net Revenue
 
$
1.95

 
$2.06 to $2.10

 
6% to 8%
 
 
 
 
 
 
 
Earnings Per Share:
 
 
 
 
 
 
GAAP Diluted EPS
 
$
4.12

 
$4.53 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%

1Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain wholesale lines of business to reflect economic benefits to the Company 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
 
GAAP
Net Revenue Adjustment1
Cash Earnings Adjustments2
Other3
Adjusted Net Revenue and 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


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

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

3For 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
 
GAAP
Net Revenue Adjustment1
Cash Earnings Adjustments2
Other3
Adjusted Net Revenue and Cash Earnings
 
GAAP
Net Revenue Adjustment1
Cash Earnings Adjustments2
Other
Adjusted Net Revenue and 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



Schedule 11 continues on the next page.


SCHEDULE 11 (CONTINUED)
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
 
February 28, 2015
 
May 31, 2015
 
GAAP
Net Revenue Adjustment1
Cash Earnings Adjustments2
Other4
Adjusted Net Revenue and Cash Earnings
 
GAAP
Net Revenue Adjustment1
Cash Earnings Adjustments2
Other5
Adjusted Net Revenue and 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


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

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

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

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

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

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