GLOBAL PAYMENTS INC. 
By ATLANTA, Jan. 8, 2014 /PRNewswire/ -- Global Payments Inc. (NYSE: GPN) today announced results for its fiscal second quarter ended November 30, 2013.
(Logo: http://photos.prnewswire.com/prnh/20010221/ATW031LOGO )
President and CEO Jeff Sloan said, "We are pleased with our results for the quarter driven by strong business performance across all regions, and we now expect double digit cash earnings per share growth for our full-year. We are making substantial progress on our growth initiatives globally, and we remain focused on being the partner of choice."
Second Quarter 2014 Summary
-- Revenues grew 8% to $634.1 million, compared to $588.5 million in the
second quarter of fiscal 2013.
-- Cash diluted earnings per share grew 15% to $1.07, compared to $0.93 in
the second quarter of fiscal 2013.
-- GAAP diluted earnings per share were $1.02, compared to $0.89 in the
second quarter of 2013.
2014 Outlook
"We are raising our full-year expectations for diluted earnings per share on a cash basis by five cents to a range of $4.03 to $4.10, or growth of 10% to 12% over fiscal 2013," said David E. Mangum, Senior Executive Vice President and CFO.
Annual fiscal 2014 GAAP diluted earnings per share are now expected to be $3.45 to $3.52.
The company maintains its expectations for annual revenue of $2.51 billion to $2.56 billion, or 6% to 8% growth over fiscal 2013.
Conference Call
Global Payments will hold a conference call today, January 8, 2014 at 5:00 p.m. EST to discuss financial results and business highlights. Callers may access the conference call via the investor relations page of the company's website at www.globalpaymentsinc.com by clicking the "Webcast" button; or callers in North America may dial 1-888-895-3550 and callers outside North America may dial 1-706-758-8809. The pass code is "GPN." A replay of the call may be accessed through the Global Payments website through January 22, 2014.
About Global Payments
Global Payments Inc. (NYSE: GPN) is a leading provider of electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout North America, South America, Europe and the Asia-Pacific region. Global Payments, a Fortune 1000 company, offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management. Visit www.globalpaymentsinc.com for more information about the company and its services.
This announcement and comments made by Global Payments' management during the conference call may contain certain forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management's expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties. Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following: the effect on our results of operations of continued security enhancements to our processing system; foreign currency risks which become increasingly relevant as we expand internationally; the effect of current domestic and worldwide economic conditions, future performance and integration of acquisitions, and other risks detailed in our SEC filings, including the most recently filed Form 10-K. 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 Six Months Ended
November 30, November 30,
------------ ------------
2013 2012 % Change 2013 2012 % Change
---- ---- -------- ---- ---- --------
(unaudited) (unaudited)
Revenues $634,122 $588,538 7.7% $1,263,807 $1,178,825 7.2%
Operating expenses:
Cost of service 235,170 210,268 11.8% 465,915 414,659 12.4%
Sales, general and administrative 294,045 276,177 6.5% 585,601 557,596 5.0%
Processing system intrusion (7,000) (14,489) (51.7%) (7,000) 9,500 (173.7%)
522,215 471,956 10.6% 1,044,516 981,755 6.4%
------- ------- --------- -------
Operating income 111,907 116,582 (4.0%) 219,291 197,070 11.3%
Other income (expense):
Interest and other income 5,288 2,187 141.8% 8,626 4,170 106.9%
Interest and other expense (8,025) (14,609) (45.1%) (15,904) (18,154) (12.4%)
------ ------- ------- -------
(2,737) (12,422) (78.0%) (7,278) (13,984) (48.0%)
------ ------- ------ -------
Income before income taxes 109,170 104,160 4.8% 212,013 183,086 15.8%
Provision for income taxes (29,313) (28,789) 1.8% (60,448) (53,553) 12.9%
------- ------- ------- -------
Net income 79,857 75,371 6.0% 151,565 129,533 17.0%
Less: Net income attributable to noncontrolling interests, net of income tax (5,960) (5,188) 14.9% (13,025) (12,675) 2.8%
------ ------ ------- -------
Net income attributable to Global Payments $73,897 $70,183 5.3% $138,540 $116,858 18.6%
======= ======= ======== ========
Earnings per share attributable to Global Payments:
Basic $1.02 $0.89 14.6% $1.90 $1.49 27.5%
Diluted $1.02 $0.89 14.6% $1.88 $1.48 27.0%
Weighted average shares outstanding:
Basic 72,174 78,751 72,974 78,669
Diluted 72,706 79,144 73,504 79,062
SCHEDULE 2
CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended Six Months Ended
November 30, November 30,
------------ ------------
2013 2012 % Change 2013 2012 % Change
---- ---- -------- ---- ---- --------
Revenues $634,122 $588,538 7.7% $1,263,807 $1,178,825 7.2%
Operating expenses:
Cost of service 220,610 195,932 12.6% 436,383 388,937 12.2%
Sales, general and administrative 290,697 276,177 5.3% 580,757 556,796 4.3%
511,307 472,109 8.3% 1,017,140 945,733 7.6%
------- ------- --------- -------
Operating income 122,815 116,429 5.5% 246,667 233,092 5.8%
Other income (expense):
Interest and other income 3,165 2,187 44.7% 6,503 4,170 55.9%
Interest and other expense (8,025) (6,226) 28.9% (15,904) (9,771) 62.8%
------ ------ ------- ------
(4,860) (4,039) 20.3% (9,401) (5,601) 67.8%
------ ------ ------ ------
Income before income taxes 117,955 112,390 5.0% 237,266 227,491 4.3%
Provision for income taxes (32,873) (29,385) 11.9% (69,559) (65,938) 5.5%
------- ------- ------- -------
Net income 85,082 83,005 2.5% 167,707 161,553 3.8%
Less: Net income attributable to noncontrolling interests, net
of income tax (7,197) (9,419) (23.6%) (15,633) (19,171) (18.5%)
Net income attributable to Global Payments $77,885 $73,586 5.8% $152,074 $142,382 6.8%
======= ======= ======== ========
Earnings per share attributable to Global Payments:
Basic $1.08 $0.93 16.1% $2.08 $1.81 14.9%
Diluted $1.07 $0.93 15.1% $2.07 $1.80 15.0%
Weighted average shares outstanding:
Basic 72,174 78,751 72,974 78,669
Diluted 72,706 79,144 73,504 79,062
See Schedules 6 and 7 for a reconciliation of cash earnings to GAAP.
SCHEDULE 3
SEGMENT INFORMATION
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended November 30,
-------------------------------
2013 2012 % Change
---- ---- --------
GAAP Cash Earnings GAAP Cash Earnings GAAP Cash Earnings
---- ------------- ---- ------------- ---- -------------
Revenues:
United States $361,793 $361,793 $339,998 $339,998 6.4% 6.4%
Canada 85,240 85,240 80,770 80,770 5.5% 5.5%
------ ------ ------ ------
North America merchant services 447,033 447,033 420,768 420,768 6.2% 6.2%
Europe 146,866 146,866 131,161 131,161 12.0% 12.0%
Asia-Pacific 40,223 40,223 36,609 36,609 9.9% 9.9%
------ ------ ------ ------
International merchant services 187,089 187,089 167,770 167,770 11.5% 11.5%
Total revenues $634,122 $634,122 $588,538 $588,538 7.7% 7.7%
======== ======== ======== ========
Operating income (loss) for segments:
North America merchant services $70,437 $77,621 $67,114 $73,280 5.0% 5.9%
International merchant services 62,467 69,843 53,987 62,157 15.7% 12.4%
Corporate(1) (20,997) (24,649) (4,519) (19,008) (364.6%) (29.7%)
Operating income $111,907 $122,815 $116,582 $116,429 (4.0%) 5.5%
======== ======== ======== ========
Six Months Ended November 30,
-----------------------------
2013 2012 % Change
---- ---- --------
GAAP Cash Earnings GAAP Cash Earnings GAAP Cash Earnings
---- ------------- ---- ------------- ---- -------------
Revenues:
United States $725,626 $725,626 $685,896 $685,896 5.8% 5.8%
Canada 171,912 171,912 161,667 161,667 6.3% 6.3%
------- ------- ------- -------
North America merchant services 897,538 897,538 847,563 847,563 5.9% 5.9%
Europe 290,054 290,054 259,626 259,626 11.7% 11.7%
Asia-Pacific 76,215 76,215 71,636 71,636 6.4% 6.4%
------ ------ ------ ------
International merchant services 366,269 366,269 331,262 331,262 10.6% 10.6%
Total revenues $1,263,807 $1,263,807 $1,178,825 $1,178,825 7.2% 7.2%
========== ========== ========== ==========
Operating income (loss) for segments:
North America merchant services $140,136 $157,025 $134,331 $144,723 4.3% 8.5%
International merchant services 124,008 138,600 111,127 127,201 11.6% 9.0%
Corporate(1) (44,853) (48,958) (48,388) (38,832) 7.3% (26.1%)
Operating income $219,291 $246,667 $197,070 $233,092 11.3% 5.8%
======== ======== ======== ========
(1)GAAP and cash earnings include incremental security spend for the three and six months ended November 30, 2013. GAAP earnings for the three and six months ended November 30, 2013 include insurance proceeds
of ($7M) related to the FY2012 data intrusion. GAAP earnings for the three and six months ended November 30, 2012 include a data intrusion (credit)/charge of ($14.5) million and $9.5M, respectively.
See Schedule 8 for reconciliation of cash earnings segment information to GAAP.
SCHEDULE 4
CONSOLIDATED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except share data)
November 30, 2013 May 31, 2013
----------------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $1,096,833 $680,470
Accounts receivable, net of allowances for doubtful accounts of $353 and $509, respectively 195,788 189,435
Claims receivable, net 662 1,156
Settlement processing assets 688,003 259,204
Inventory 8,886 11,057
Deferred income taxes 6,459 6,485
Prepaid expenses and other current assets 61,677 66,685
Total current assets 2,058,308 1,214,492
Goodwill 1,063,310 1,044,222
Other intangible assets, net 379,350 400,848
Property and equipment, net 357,880 348,064
Deferred income taxes 100,332 95,178
Other 22,384 22,252
------ ------
Total assets $3,981,564 $3,125,056
========== ==========
Liabilities and Equity
Current liabilities:
Lines of credit $446,508 $187,461
Current portion of long-term debt 72,351 72,335
Accounts payable and accrued liabilities 235,361 262,890
Settlement processing obligations 798,671 162,558
Income taxes payable 20,114 18,870
Total current liabilities 1,573,005 704,114
Long-term debt 922,545 891,134
Deferred income taxes 172,988 170,723
Other long-term liabilities 81,342 72,478
Total liabilities 2,749,880 1,838,449
--------- ---------
Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued - -
Common stock, no par value; 200,000,000 shares authorized; 71,908,829 issued and outstanding
at November 30, 2013 and 75,426,099 issued and outstanding at May 31, 2013 - -
Paid-in capital 188,281 202,396
Retained earnings 896,597 958,751
Accumulated other comprehensive income (loss) 2,235 (15,062)
Total Global Payments shareholders' equity 1,087,113 1,146,085
Noncontrolling interest 144,571 140,522
Total equity 1,231,684 1,286,607
--------- ---------
Total liabilities and equity $3,981,564 $3,125,056
========== ==========
SCHEDULE 5
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Six Months Ended
November 30,
-----------------
2013 2012
---- ----
Cash flows from operating activities:
Net income $151,565 $129,533
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment 28,439 26,494
Amortization of acquired intangibles 28,953 25,561
Share-based compensation expense 11,965 9,178
Provision for operating losses and bad debts 10,249 11,970
Deferred income taxes 6,073 30,055
Other, net (4,345) (2,231)
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable (6,353) 721
Claims receivable (6,567) (6,600)
Settlement processing assets and obligations, net 204,307 (11,671)
Inventory 2,237 (4,297)
Prepaid expenses and other assets 5,761 (11,204)
Accounts payable and other accrued liabilities (21,845) (67,869)
Income taxes payable 1,244 (4,847)
Net cash provided by operating activities 411,683 124,793
------- -------
Cash flows from investing activities:
Business, intangible and other asset acquisitions, net of cash acquired (2,324) (409,731)
Capital expenditures (41,178) (54,393)
Net decrease in financing receivables 1,328 1,485
Net proceeds from sales of investment and business 3,102 -
Net cash used in investing activities (39,072) (462,639)
------- --------
Cash flows from financing activities:
Net borrowings (payments) on short-term lines of credit 259,047 (2,992)
Proceeds from issuance of long-term debt 810,000 910,327
Principal payments under long-term debt (779,380) (343,133)
Payment of debt issuance costs - (3,987)
Repurchase of common stock (250,183) (12,653)
Proceeds from stock issued under share-based compensation plans 27,366 7,080
Common stock repurchased - share-based compensation plans (5,260) (10,224)
Tax benefit from share-based compensation plans 4,415 1,791
Distribution to noncontrolling interests (15,593) (5,740)
Dividends paid (2,894) (3,153)
Net cash provided by financing activities 47,518 537,316
------ -------
Effect of exchange rate changes on cash (3,766) 17,516
------ ------
Increase in cash and cash equivalents 416,363 216,986
Cash and cash equivalents, beginning of period 680,470 781,275
------- -------
Cash and cash equivalents, end of period $1,096,833 $998,261
========== ========
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 November 30, 2013
------------------------------------
GAAP Processing System Intrusion(1) Other(2) Cash Earnings
Adjustments(3) Cash Earnings
---- ----------------------------- ------- -------------- -------------
Revenues $634,122 $ - $ - $ - $634,122
Operating expenses:
Cost of service 235,170 - - (14,560) 220,610
Sales, general and administrative 294,045 - (3,348) - 290,697
Processing system intrusion (7,000) 7,000 - - -
522,215 7,000 (3,348) (14,560) 511,307
------- ----- ------ ------- -------
Operating income 111,907 (7,000) 3,348 14,560 122,815
Other income (expense):
Interest and other income 5,288 - (2,123) - 3,165
Interest and other expense (8,025) - - - (8,025)
--- --- --- ------
(2,737) - (2,123) - (4,860)
------ --- ------ --- ------
Income (loss) before income taxes 109,170 (7,000) 1,225 14,560 117,955
(Provision) benefit for income taxes (29,313) 2,393 (1,145) (4,808) (32,873)
------- ----- ------ ------ -------
Net income (loss) 79,857 (4,607) 80 9,752 85,082
Less: Net income attributable to noncontrolling interests, net of income tax (5,960) - - (1,237) (7,197)
------ --- --- ------ ------
Net income (loss) attributable to Global Payments $73,897 $(4,607) $80 $8,515 $77,885
======= ======= === ====== =======
Diluted shares 72,706 72,706
Diluted earnings (loss) per share $1.02 $(0.07) $0.00 $0.12 $1.07
===== ====== ===== ===== =====
Three Months Ended November 30, 2012
------------------------------------
GAAP Processing System Intrusion Other(2) Cash Earnings
Adjustments(3) Cash Earnings
---- --------------------------- ------- -------------- -------------
Revenues $588,538 $ - $ - $ - $588,538
Operating expenses:
Cost of service 210,268 - - (14,336) 195,932
Sales, general and administrative 276,177 - - - 276,177
Processing system intrusion (14,489) 14,489 - - -
471,956 14,489 - (14,336) 472,109
------- ------ --- ------- -------
Operating income 116,582 (14,489) - 14,336 116,429
Other income (expense):
Interest and other income 2,187 - - - 2,187
Interest and other expense (14,609) - 8,383 - (6,226)
--- ----- --- ------
(12,422) - 8,383 - (4,039)
------- --- ----- --- ------
Income (loss) before income taxes 104,160 (14,489) 8,383 14,336 112,390
(Provision) benefit for income taxes (28,789) 5,000 (1,383) (4,213) (29,385)
------- ----- ------ ------ -------
Net income (loss) 75,371 (9,489) 7,000 10,123 83,005
Less: Net income attributable to noncontrolling interests, net of income tax (5,188) - (2,853) (1,378) (9,419)
------ --- ------ ------ ------
Net income (loss) attributable to Global Payments $70,183 $(9,489) $4,147 $8,745 $73,586
======= ======= ====== ====== =======
Diluted shares 79,144 79,144
Diluted earnings (loss) per share $0.89 $(0.12) $0.05 $0.11 $0.93
===== ====== ===== ===== =====
(1)Represents insurance proceeds associated with processing system intrusion charges incurred in FY 2012.
2 For the period ended November 30, 2013, represents one-time charges primarily related to employee termination benefits and a one-time credit related to the gain on the sale of an interest in a business. For the prior period,
represents HSBC's share of GPAP dividends declared and the net income attributable to our Asia-Pacific redeemable noncontrolling interest.
(3)Represents adjustments to cost of service to exclude acquisition intangible amortization expense from net income and the related income tax benefit.
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the three months ended November 30, 2013 and 2012 on
a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by excluding amounts related to the processing system intrusion, acquisition
intangible amortization, one-time charges related to employee termination benefits, and a one-time credit related to the gain on the sale of an interest in a business. In November 2012, we also adjusted the net income
attributable to noncontrolling interests to include HSBC's share of second quarter 2013 GPAP net income and for HSBC's share of GPAP dividends. We exclude these charges in order to more clearly focus on the factors we believe are
pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, income and earnings per share determined in
accordance with GAAP. Our measures of income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.
SCHEDULE 7
RECONCILIATION OF YEAR TO DATE CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Six Months Ended November 30, 2013
----------------------------------
GAAP Processing System Intrusion (1) Other(2) Cash Earnings
Adjustments(3) Cash Earnings
---- ------------------------------ ------- -------------- -------------
Revenues $1,263,807 $ - $ - $ - $1,263,807
Operating expenses:
Cost of service 465,915 - (579) (28,953) 436,383
Sales, general and administrative 585,601 - (4,844) - 580,757
Processing system intrusion (7,000) 7,000 - - -
1,044,516 7,000 (5,423) (28,953) 1,017,140
--------- ----- ------ ------- ---------
Operating income 219,291 (7,000) 5,423 28,953 246,667
Other income (expense):
Interest and other income 8,626 - (2,123) - 6,503
Interest and other expense (15,904) - - - (15,904)
--- --- --- -------
(7,278) - (2,123) - (9,401)
------ --- ------ --- ------
Income (loss) before income taxes 212,013 (7,000) 3,300 28,953 237,266
(Provision) benefit for income taxes (60,448) 2,393 (1,934) (9,570) (69,559)
------- ----- ------ ------ -------
Net income (loss) 151,565 (4,607) 1,366 19,383 167,707
Less: Net income attributable to noncontrolling interests, net of income tax (13,025) - - (2,608) (15,633)
------- --- --- ------ -------
Net income (loss) attributable to Global Payments $138,540 $(4,607) $1,366 $16,775 $152,074
======== ======= ====== ======= ========
Diluted shares 73,504 73,504
Diluted earnings (loss) per share $1.88 $(0.07) $0.02 $0.24 $2.07
===== ====== ===== ===== =====
Six Months Ended November 30, 2012
----------------------------------
GAAP Processing System Intrusion Other(2) Cash Earnings
Adjustments(3) Cash Earnings
---- --------------------------- ------- -------------- -------------
Revenues $1,178,825 $ - $ - $ - $1,178,825
Operating expenses:
Cost of service 414,659 - (161) (25,561) 388,937
Sales, general and administrative 557,596 - (800) - 556,796
Processing system intrusion 9,500 (9,500) - - -
981,755 (9,500) (961) (25,561) 945,733
------- ------ ---- ------- -------
Operating income 197,070 9,500 961 25,561 233,092
Other income (expense):
Interest and other income 4,170 - - - 4,170
Interest and other expense (18,154) - 8,383 - (9,771)
--- ----- --- ------
(13,984) - 8,383 - (5,601)
------- --- ----- --- ------
Income (loss) before income taxes 183,086 9,500 9,344 25,561 227,491
(Provision) benefit for income taxes (53,553) (3,279) (1,533) (7,573) (65,938)
------- ------ ------ ------ -------
Net income (loss) 129,533 6,221 7,811 17,988 161,553
Less: Net income attributable to noncontrolling interests, net of income tax (12,675) - (3,594) (2,902) (19,171)
------- --- ------ ------ -------
Net income (loss) attributable to Global Payments $116,858 $6,221 $4,217 $15,086 $142,382
======== ====== ====== ======= ========
Diluted shares 79,062 79,062
Diluted earnings (loss) per share $1.48 $0.08 $0.05 $0.19 $1.80
===== ===== ===== ===== =====
(1)Represents insurance proceeds associated with processing system intrusion charges incurred in FY 2012.
2 For the period ended November 30, 2013, represents one-time charges primarily related to employee termination benefits and resolution of a contract related contingency, and a one-time credit related to the gain on the sale of an
interest in a business. For the prior period, represents HSBC's share of GPAP dividends declared and the net income attributable to our Asia-Pacific redeemable noncontrolling interest.
(3)Represents adjustments to cost of service to exclude acquisition intangible amortization expense from net income and the related income tax benefit.
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the six months ended November 30, 2013 and 2012 on a
"cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by excluding amounts related to the processing system intrusion, acquisition
intangible amortization, one-time charges related to employee termination benefits and resolution of a contract related contingency, and a one-time credit related to the sale of an interest in a business. In the six months ended
November 2012, we also adjusted the net income attributable to noncontrolling interests to include HSBC's share of second quarter 2013 GPAP net income and for HSBC's share of GPAP dividends declared. We exclude these charges in
order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a
substitute for, income and earnings per share determined in accordance with GAAP. Our measures of income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to
similarly titled measures reported by other companies.
SCHEDULE 8
RECONCILIATION OF CASH EARNINGS SEGMENT INFORMATION TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended November 30,
-------------------------------
2013 2012
---- ----
GAAP Processing System Other(2) Cash Earnings Cash Earnings GAAP Processing System Other(2) Cash Earnings
Intrusion (1) Adjustments(3) Intrusion Adjustments(3) Cash Earnings
---- ------------------ ------- -------------- ------------- ---- ------------------ ------- -------------- -------------
Revenues:
United States $361,793 $ - $ - $ - $361,793 $339,998 $ - $ - $ - $339,998
Canada 85,240 - - - 85,240 80,770 - - - 80,770
------ --- --- --- ------ ------ --- --- --- ------
North America merchant services 447,033 - - - 447,033 420,768 - - - 420,768
Europe 146,866 - - - 146,866 131,161 - - - 131,161
Asia-Pacific 40,223 - - - 40,223 36,609 - - - 36,609
------ --- --- --- ------ ------ --- --- --- ------
International merchant services 187,089 - - - 187,089 167,770 - - - 167,770
Total revenues $634,122 $ - $ - $ - $634,122 $588,538 $ - $ - $ - $588,538
======== ================= ================= ================= ======== ======== ================= ================= ================= ========
Operating income (loss) for segments:
North America merchant services $70,437 $ - $ - $7,184 $77,621 $67,114 $ - $ - $6,166 $73,280
International merchant services 62,467 - - 7,376 69,843 53,987 - - 8,170 62,157
Corporate (20,997) (7,000) 3,348 - (24,649) (4,519) (14,489) - - (19,008)
Operating income (loss) $111,907 $(7,000) $3,348 $14,560 $122,815 $116,582 $(14,489) $ - $14,336 $116,429
======== ======= ====== ======= ======== ======== ======== ================= ======= ========
Six Months Ended November 30,
-----------------------------
2013 2012
---- ----
GAAP Processing System Other(2) Cash Earnings Cash Earnings GAAP Processing System Other(2) Cash Earnings
Intrusion (1) Adjustments(3) Intrusion Adjustments(3) Cash Earnings
---- ------------------ ------- -------------- ------------- ---- ------------------ ------- -------------- -------------
Revenues:
United States $725,626 $ - $ - $ - $725,626 $685,896 $ - $ - $ - $685,896
Canada 171,912 - - - 171,912 161,667 - - - 161,667
------- --- --- --- ------- ------- --- --- --- -------
North America merchant services 897,538 - - - 897,538 847,563 - - - 847,563
Europe 290,054 - - - 290,054 259,626 - - - 259,626
Asia-Pacific 76,215 - - - 76,215 71,636 - - - 71,636
------ --- --- --- ------ ------ --- --- --- ------
International merchant services 366,269 - - - 366,269 331,262 - - - 331,262
Total revenues $1,263,807 $ - $ - $ - $1,263,807 $1,178,825 $ - $ - $ - $1,178,825
========== ================= ================= ================= ========== ========== ================= ================= ================= ==========
Operating income (loss) for segments:
North America merchant services $140,136 $ - $2,518 $14,371 $157,025 $134,331 $ - $905 $9,487 $144,723
International merchant services 124,008 - 10 14,582 138,600 111,127 - - 16,074 127,201
Corporate (44,853) (7,000) 2,895 - (48,958) (48,388) 9,500 56 - (38,832)
Operating income (loss) $219,291 $(7,000) $5,423 $28,953 $246,667 $197,070 $9,500 $961 $25,561 $233,092
======== ======= ====== ======= ======== ======== ====== ==== ======= ========
(1)Represents insurance proceeds associated with processing system intrusion charges incurred in FY 2012.
(2)Represents one-time charges primarily related to employee termination benefits and resolution of a contract related contingency for the period ending November 30, 2013 and the prior year
represents one-time charges primarily related to employee termination benefits.
(3)Represents acquisition intangible amortization expense.
SCHEDULE 9
OUTLOOK SUMMARY
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In millions, except per share data)
Fiscal 2013
Actual Fiscal 2014 Outlook % Change FY13
------------ ------------------- -------------
Revenue
Outlook
-------
Total
Revenues $2,376 $2,510 to $2,560 6% to 8%
EPS
Outlook
--------
Cash
EPS $3.65 $4.03 to $4.10 10% to 12%
Acquisition-
related
intangibles
assets,
non-
recurring
items
and
processing
system
intrusion(1) (0.89) (0.58) (35%)
----- ----- ----
GAAP
Diluted
EPS $2.76 $3.45 to $3.52 25% to 28%
===== ============== =========
We supplemented our reporting of income and the related
earnings per share information determined in accordance
with GAAP by reporting income and the related earnings
per share on a "cash earnings" basis in this earnings
release as a measure to help evaluate performance. We
calculated income and earnings per share on a cash
basis by excluding costs related to the processing
system intrusion, acquisition intangible amortization
and one-time charges related to employee termination
benefits and certain contract settlement and related
costs. We exclude these charges in order to more
(1) Fiscal 2014 reflects $0.48 of acquisition-related
intangibles and $0.10 of non-recurring items.
Acquisition-related intangibles accounted and non-
recurring items accounted for $0.57 in fiscal 2013 and
processing intrusion costs were $0.32.
SOURCE Global Payments Inc.
