Global Payments Reports First Quarter Earnings, Increases Annual Fiscal 2016 Outlook and Declares Two-for-One Stock Split

ATLANTA--()--Global Payments Inc. (NYSE: GPN) today announced results for its fiscal first quarter ended August 31, 2015.

“We are delighted with our outstanding first quarter results, which represent an excellent start to the 2016 fiscal year and a continuation of exceeding our expectations across our markets,” said Jeff Sloan, Chief Executive Officer. “This performance builds on the momentum we have generated as we continue to invest in our strategy to expand distribution and create competitive differentiation through technology by delivering innovative solutions globally.”

First Quarter Fiscal 2016 Summary

  • Adjusted net revenue grew 8% to $537.0 million, compared to $495.2 million in the first quarter of fiscal 2015.
  • Cash diluted earnings per share grew 25% to $1.57, compared to $1.26 in the first quarter of fiscal 2015.
  • Cash operating margin expanded to 30.5%, a 150 basis point increase over the first quarter of fiscal 2015.
  • GAAP revenues grew 6% to $748.8 million, compared to $704.9 million in the first quarter of fiscal 2015, and diluted earnings per share were $1.32, compared to $1.10 in the prior year.

Fiscal 2016 Outlook

“As a result of our strong first quarter performance, we are increasing our outlook for annual fiscal 2016 diluted earnings per share on a cash basis to a range of $5.77 to $5.92, reflecting growth of 14% to 17% over fiscal 2015,” stated Cameron Bready, Executive Vice President and Chief Financial Officer. “We also now expect annual fiscal 2016 core cash operating margins to expand by as much as 50 basis points on a constant currency basis. We continue to expect adjusted net revenues to range from $2.06 billion to $2.10 billion, or growth of 6% to 8% over fiscal 2015.”

Stock Split and Dividend

Global Payments’ Board of Directors has declared a two-for-one stock split of the company’s common stock to be effected in the form of a stock dividend of one additional share of common stock for each outstanding share of common stock. The stock dividend will be payable on November 2, 2015 to all shareholders of record as of October 21, 2015.

A first quarter dividend of $0.01 per share, after giving effect to the two-for-one stock split, will be payable on November 27, 2015 to shareholders of record as of November 13, 2015.

Conference Call

Global Payments’ management will host a conference call today, October 7, 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 technologies, partnerships 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 approximately 4,500 employees worldwide, Global Payments is a Fortune 1000 Company with merchants and partners in 29 countries throughout North America, Europe, the Asia-Pacific region and Brazil. For more information about Global Payments, our Service. Driven. Commerce brand and our technologies, please visit www.globalpaymentsinc.com.

_________________________

This announcement and comments made by Global Payments' management during the conference call may contain certain forward-looking statements within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management’s expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties. Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include our potential failure to safeguard our data; our ability to maintain Visa and MasterCard registration and financial institution sponsorship; our reliance on financial institutions to provide clearing services in connection with our settlement activities; our potential failure to comply with card network requirements; increased merchant, referral partner or ISO attrition; our ability to increase our share of existing markets and expand into new markets; political, economic and regulatory changes in the foreign countries in which we operate; system interruptions in service; increases in credit card network fees; future performance, integration and conversion of acquired operations; and other risk factors presented in our most recent Annual Report on Form 10-K and any subsequent SEC filings, which we advise you to review. We undertake no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.

SCHEDULE 1

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF INCOME

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

 
Three Months Ended August 31,
2015     2014    

%
Change

(unaudited)
Revenues $ 748,796 $ 704,895 6.2 %
 
Operating expenses:
Cost of service 272,666 259,839 4.9 %
Selling, general and administrative 338,358   320,658   5.5 %
611,024   580,497   5.3 %
 
Operating income 137,772   124,398   10.8 %
 
Interest and other income 1,142 1,192 (4.2

)

%

Interest and other expense (13,243 ) (11,010 ) 20.3 %
(12,101 ) (9,818 ) 23.3 %
 
Income before income taxes 125,671 114,580 9.7 %
Provision for income taxes (32,623 ) (30,146 ) 8.2 %
Net income 93,048 84,434 10.2 %
Less: Net income attributable to noncontrolling interests, net of income tax (6,402 ) (9,068 ) (29.4

)

%

Net income attributable to Global Payments $ 86,646   $ 75,366   15.0 %
 
Earnings per share attributable to Global Payments:
Basic $ 1.33 $ 1.11 19.8 %
Diluted $ 1.32 $ 1.10 20.0 %
 
Weighted average shares outstanding:
Basic 65,164 68,146
Diluted 65,573 68,617
 

SCHEDULE 2

CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

 
Three Months Ended August 31,
2015     2014    

%
Change

 
Adjusted net revenue $ 536,953 $ 495,212 8.4 %
 
Operating expenses:
Cost of service 231,921 221,033 4.9 %
Selling, general and administrative 141,466   130,802   8.2 %
373,387   351,835   6.1 %
 
Operating income 163,566   143,377   14.1 %
 
Interest and other income 1,142 1,192 (4.2

)

%

Interest and other expense (13,243 ) (11,010 ) 20.3 %
(12,101 ) (9,818 ) 23.3 %
 
Income before income taxes 151,465 133,559 13.4 %
Provision for income taxes (41,160 ) (36,894 ) 11.6 %
Net income 110,305 96,665 14.1 %
Less: Net income attributable to noncontrolling interests, net of income tax (7,280 ) (10,303 ) (29.3

)

%

Net income attributable to Global Payments $ 103,025   $ 86,362   19.3 %
 
Earnings per share attributable to Global Payments:
Basic $ 1.58 $ 1.27 24.4 %
Diluted $ 1.57 $ 1.26 24.6 %
 
Weighted average shares outstanding:
Basic 65,164 68,146
Diluted 65,573 68,617
 

See Schedule 6 for a reconciliation of adjusted net revenue and cash earnings to GAAP.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

SCHEDULE 3

SEGMENT INFORMATION

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(Dollars in thousands)

     
Three Months Ended August 31,
2015   2014 % Change
GAAP  

Adjusted Net
Revenue and
Cash
Earnings

GAAP  

Adjusted Net
Revenue and
Cash
Earnings

GAAP

Adjusted Net
Revenue and
Cash
Earnings

 
Revenues:
North America $ 530,857 $ 340,431 $ 504,007 $ 315,276 5.3 % 8.0 %
Europe 168,357 146,940 162,787 141,835 3.4 % 3.6 %
Asia-Pacific 49,582   49,582   38,101   38,101   30.1 % 30.1 %
Total revenues $ 748,796   $ 536,953   $ 704,895   $ 495,212   6.2 % 8.4 %
 
Operating income for segments:
North America $ 83,513 $ 96,966 $ 77,937 $ 89,315 7.2 % 8.6 %
Europe 72,733 77,031 67,045 70,310 8.5 % 9.6 %
Asia-Pacific 12,233 13,810 6,557 6,827 86.6 % 102.3 %
Corporate (30,707 ) (24,241 ) (27,141 ) (23,075 ) 13.1 % 5.1 %
 
Operating income $ 137,772   $ 163,566   $ 124,398   $ 143,377   10.8 % 14.1 %
 

See Schedule 7 for reconciliation of adjusted net revenue and cash earnings segment information to GAAP.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

SCHEDULE 4

CONSOLIDATED BALANCE SHEETS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except share data)

     
August 31, 2015 May 31, 2015
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 803,309 $ 650,739
Accounts receivable, net of allowances for doubtful accounts of $398 and $468, respectively 207,949 202,390
Claims receivable, net of allowances for doubtful accounts of $5,933 and $548, respectively 7,177 548
Settlement processing assets 1,658,193 2,394,822
Deferred income taxes 12,179 11,664
Prepaid expenses and other current assets 58,231   41,416  
Total current assets 2,747,038 3,301,579
Goodwill 1,603,593 1,491,833
Other intangible assets, net 686,852 560,136
Property and equipment, net 368,795 374,143
Deferred income taxes 30,375 30,578
Other 36,265   32,846  
Total assets $ 5,472,918   $ 5,791,115  
 
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit $ 356,675 $ 592,629
Current portion of long-term debt 61,784
Accounts payable and accrued liabilities 303,497 312,647
Settlement processing obligations 1,699,353 2,033,900
Income taxes payable 30,711   14,228  
Total current liabilities 2,390,236 3,015,188
Long-term debt 1,932,028 1,678,283
Deferred income taxes 216,844 214,669
Other long-term liabilities 16,667   19,422  
Total liabilities 4,555,775   4,927,562  
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; 64,941,393 issued and outstanding at August 31, 2015 and 65,278,838 issued and outstanding at May 31, 2015
Paid-in capital 138,212 148,742
Retained earnings 861,212 795,226
Accumulated other comprehensive loss (212,727 ) (185,992 )
Total Global Payments shareholders’ equity 786,697 757,976
Noncontrolling interests 130,446   105,577  
Total equity 917,143   863,553  
Total liabilities and equity $ 5,472,918   $ 5,791,115  
 

SCHEDULE 5

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 
Three Months Ended August 31,
2015     2014
Cash flows from operating activities:
Net income $ 93,048 $ 84,434
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment 17,909 16,712
Amortization of acquired intangibles 20,848 17,854
Share-based compensation expense 6,467 4,066
Provision for operating losses and bad debts 4,263 4,308
Deferred income taxes 3,584 3,705
Other, net 1,333 (755 )
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable (7,512 ) 7,933
Claims receivable (12,261 ) (2,742 )
Settlement processing assets and obligations, net 402,676 (179,462 )
Prepaid expenses and other assets (18,114 ) 1,625
Accounts payable and other liabilities (14,801 ) (22,151 )
Income taxes payable 15,952   1,000  
Net cash provided by (used in) operating activities 513,392   (63,473 )
Cash flows from investing activities:
Business, intangible and other asset acquisitions, net of cash acquired (241,530 ) (4,773 )
Capital expenditures (16,858 ) (18,157 )
Principal collections on financing receivables 219
Net proceeds from sales of investments and business   10,528  
Net cash used in investing activities (258,388 ) (12,183 )
Cash flows from financing activities:
Net (payments) borrowings on short-term lines of credit (236,041 ) 212,029
Proceeds from issuance of long-term debt 2,821,425 390,000
Principal payments of long-term debt (2,626,925 ) (363,679 )
Payment of debt issuance costs (4,934 )
Repurchase of common stock (34,296 ) (132,283 )
Proceeds from stock issued under share-based compensation plans 2,513 12,588
Common stock repurchased - share-based compensation plans (8,154 ) (15,105 )
Tax benefit from share-based compensation plans 5,760 3,154
Distributions to noncontrolling interests (8,158 ) (11,249 )
Dividends paid (1,305 ) (1,370 )
Net cash (used in) provided by financing activities (90,115 ) 94,085  
Effect of exchange rate changes on cash (12,319 ) (4,417 )
Increase in cash and cash equivalents 152,570 14,012
Cash and cash equivalents, beginning of the period 650,739   581,872  
Cash and cash equivalents, end of the period $ 803,309   $ 595,884  
 

SCHEDULE 6

RECONCILIATION OF ADJUSTED NET REVENUE AND CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

         
Three Months Ended August 31, 2015
GAAP

Net Revenue
Adjustment1

Cash Earnings
Adjustments2

Other3

Adjusted Net
Revenue and
Cash Earnings

Revenues $ 748,796 $ (211,843 ) $ $ $ 536,953
 
Operating expenses:
Cost of service 272,666 (21,417 ) (21,398 ) 2,070 231,921
Selling, general and administrative 338,358   (190,426 ) (6,466 )   141,466  
611,024   (211,843 ) (27,864 ) 2,070   373,387  
 
Operating income 137,772     27,864   (2,070 ) 163,566  
 
Interest and other income 1,142 1,142
Interest and other expense (13,243 )       (13,243 )
(12,101 )       (12,101 )
Income before income taxes 125,671 27,864 (2,070 ) 151,465
(Provision for) benefit from income taxes (32,623 )   (8,968 ) 431   (41,160 )
Net income 93,048 18,896 (1,639 ) 110,305
Less: Net income attributable to noncontrolling interests, net of income tax (6,402 )   (878 )   (7,280 )
Net income attributable to Global Payments $ 86,646   $   $ 18,018   $ (1,639 ) $ 103,025  
Diluted shares 65,573 65,573
Diluted earnings per share $ 1.32   $   $ 0.27   $ (0.02 ) $ 1.57  
 
 
Three Months Ended August 31, 2014
GAAP

Net Revenue
Adjustment1

Cash Earnings
Adjustments2

Other3

Adjusted Net
Revenue and
Cash Earnings

Revenues $ 704,895 $ (209,683 ) $ $ $ 495,212
 
Operating expenses:
Cost of service 259,839 (20,952 ) (17,854 ) 221,033
Selling, general and administrative 320,658   (188,731 ) (4,066 ) 2,941   130,802  
580,497   (209,683 ) (21,920 ) 2,941   351,835  
 
Operating income 124,398     21,920   (2,941 ) 143,377  
 
Interest and other income 1,192 1,192
Interest and other expense (11,010 )       (11,010 )
(9,818 )       (9,818 )
Income before income taxes 114,580 21,920 (2,941 ) 133,559
(Provision for) benefit from income taxes (30,146 )   (7,336 ) 588   (36,894 )
Net income 84,434 14,584 (2,353 ) 96,665
Less: Net income attributable to noncontrolling interests, net of income tax (9,068 )   (1,235 )   (10,303 )
Net income attributable to Global Payments $ 75,366   $   $ 13,349   $ (2,353 ) $ 86,362  
Diluted shares 68,617 68,617
Diluted earnings per share $ 1.10   $   $ 0.19   $ (0.03 ) $ 1.26  
 

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

2 Represents adjustments to exclude acquisition-related amortization expense, share-based compensation expense and the related income tax benefits of each.

3 For the three months ended August 31, 2015, represents recoveries associated with a U.K. vendor outage and the related provision for income taxes. For the three months ended August 31, 2014, represents a gain on sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia and the related provision for income taxes.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

SCHEDULE 7

RECONCILIATION OF ADJUSTED NET REVENUE AND CASH EARNINGS SEGMENT INFORMATION TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

 
Three Months Ended August 31,
2015   2014
GAAP  

Net Revenue
Adjustment1

 

Cash
Earnings
Adjustments2

  Other3  

Adjusted Net
Revenues and
Cash
Earnings

GAAP  

Net Revenue
Adjustment1

 

Cash
Earnings
Adjustments2

  Other3  

Adjusted Net
Revenues and
Cash
Earnings

 
Revenues:
North America $ 530,857 $ (190,426 ) $ $ $ 340,431 $ 504,007 $ (188,731 ) $ $ $ 315,276
Europe 168,357 (21,417 ) 146,940 162,787 (20,952 ) 141,835
Asia-Pacific 49,582         49,582   38,101         38,101  
Total revenues $ 748,796   $ (211,843 ) $   $   $ 536,953   $ 704,895   $ (209,683 ) $   $   $ 495,212  
 
Operating income for segments:
North America $ 83,513 $ $ 13,453 $ $ 96,966 $ 77,937 $ $ 11,378 $ $ 89,315
Europe 72,733 6,368 (2,070 ) 77,031 67,045 6,206 (2,941 ) 70,310
Asia-Pacific 12,233 1,577 13,810 6,557 270 6,827
Corporate (30,707 )   6,466     (24,241 ) (27,141 )   4,066     (23,075 )
Operating income $ 137,772   $   $ 27,864   $ (2,070 ) $ 163,566   $ 124,398   $   $ 21,920   $ (2,941 ) $ 143,377  
 

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

2 Represents adjustments to exclude acquisition-related amortization expense and share-based compensation expense.

3 For the three months ended August 31, 2015, represents recoveries associated with a U.K. vendor outage. For the three months ended August 31, 2014, represents a gain on sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia.

See "Non-GAAP Financial Measures" discussion on Schedule 8.

SCHEDULE 8

         

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 $4.70 to $4.85 14% to 18%

Acquisition-related amortization expense, share-based compensation expense and non-recurring items2

0.92   1.07   16%
Cash EPS $ 5.04   $5.77 to $5.92   14% to 17%
 

1 Represents adjustments to revenues for gross-up related payments (included in operating expenses) associated with certain wholesale lines of business to reflect economic benefits to the Company and, in fiscal 2015, a revenue adjustment for select U.K. customer payments related to a vendor outage.

2 Fiscal 2015 reflects acquisition-related amortization expense 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.

Income and the related earnings per share on a cash earnings basis exclude acquisition-related amortization expense, share-based compensation and certain other items specific to each reporting period as more fully described in the accompanying reconciliations in Schedule 6, Schedule 7 and Schedule 9. 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 9

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

    Other3    

Adjusted
Net
Revenue
and Cash
Earnings

Revenues:                                
North America $ 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  
Total revenues $ 704,895       $ (209,683 )     $       $       $ 495,212   $ 697,291       $ (203,626 )     $       $       $ 493,665  
 
Operating income (loss) for segments:
North America

 

77,937

 

 

11,378

 

 

89,315

 

74,246

 

 

11,173

 

 

85,419
Europe 67,045 6,206 (2,941 ) 70,310 64,563 5,832 70,395
Asia-Pacific 6,557 270 6,827 11,880 1,258 13,138
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 for) benefit from income taxes

(30,146 )           (7,336 )     588       (36,894 ) (29,660 )           (7,688 )           (37,348 )
Net income (loss) 84,434 14,584 (2,353 ) 96,665 85,256 15,654 100,910
Less: Net income attributable to noncontrolling interests, net of income tax (9,068 )           (1,235 )           (10,303 ) (10,475 )           (1,173 )           (11,648 )
Net income (loss) attributable to Global Payments $ 75,366       $       $ 13,349       $ (2,353 )     $ 86,362   $ 74,781       $       $ 14,481       $       $ 89,262  
 
Diluted shares 68,617 68,617 67,737 67,737
Diluted earnings (loss) per share $ 1.10       $       $ 0.19       $ (0.03 )     $ 1.26   $ 1.10       $       $ 0.21       $       $ 1.32  
 
      Three Months Ended
February 28, 2015       May 31, 2015
GAAP    

Net Revenue
Adjustment1

   

Cash
Earnings
Adjustments2

    Other3    

Adjusted
Net
Revenue
and Cash
Earnings

GAAP    

Net Revenue
Adjustment1

   

Cash
Earnings
Adjustments2

    Other3    

Adjusted
Net
Revenue
and Cash
Earnings

Revenues:                                
North America $ 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  
Total revenues $ 664,983       $ (199,102 )     $       $ 1,876       $ 467,757   $ 706,549       $ (210,291 )     $       $       $ 496,258  
 
Operating income (loss) for segments:
North America

 

66,723

 

 

11,023

 

 

77,746

 

74,233

 

 

10,967

 

300

 

85,500
Europe 52,710 5,400 1,876 59,986 55,696 5,833 4,548 66,077
Asia-Pacific 12,192 1,644 13,836 9,068 1,603 10,671
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-related 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 8.

Contacts

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

Contacts

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