Global Payments Inc. (NYSE: GPN) today announced results for its fiscal third quarter ended February 28, 2015.

“We are pleased to report strong third quarter financial results, reflecting the success of our strategy to deliver technology-enabled payments solutions across an expansive direct customer base worldwide, while continuing to invest in future growth,” said Chief Executive Officer Jeff Sloan. “Our acquisition of Realex Payments enhances our international ecommerce offerings, extends our foundation for omni-channel capabilities and accelerates growth in our pan-European payments business.”

Third Quarter 2015 Summary

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

2015 Outlook

“We delivered solid revenue growth and meaningful margin expansion in the third quarter despite the significant strengthening of the U.S. dollar, and we are again increasing our full-year margin and cash earnings per share expectations,” stated Cameron Bready, Executive Vice President and Chief Financial Officer. “We are also pleased to announce that we plan to enter into an accelerated share repurchase plan, further demonstrating our ongoing commitment to efficiently return capital to shareholders while investing in our business to increase our future growth potential.”

For the full-year of fiscal 2015, the company is maintaining its expectation for annual revenue of $2.75 billion to $2.80 billion, or 8% to 10% growth over fiscal 2014. The company is raising its outlook for annual fiscal 2015 diluted earnings per share on a cash basis to a range of $4.77 to $4.84, or 16% to 18% growth over fiscal 2014, and annual fiscal 2015 GAAP diluted earnings per share is expected to be in the range of $4.01 to $4.08. Our outlook for cash and GAAP diluted earnings per share reflect the impact of share repurchases executed to date only and do not include any benefit from the announced accelerated share repurchase plan. The company also now expects annual fiscal 2015 core cash operating margins to expand by as much as 60 basis points.

Capital Allocation

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

Conference Call

Global Payments’ management will host a conference call today, April 8, 2015 at 8:00 a.m. ET to discuss financial results and business highlights. Callers may access the conference call via the investor relations page of the company’s website at www.globalpaymentsinc.com; or callers in North America may dial 877-674-6428 and callers outside North America may dial 970-315-0457. A replay of the call will be archived on the company’s website within two hours of the live call.

About Global Payments

Global Payments Inc. (NYSE: GPN) is a leading worldwide provider of payment technology services that delivers innovative solutions driven by customer needs globally. Our partnerships, technologies and employee expertise enable us to provide a broad range of products and services that allow our customers to accept all payment types across a variety of distribution channels in many markets around the world.

Headquartered in Atlanta, Georgia with more than 4,300 employees worldwide, Global Payments is a Fortune 1000 Company with merchants and partners in 29 countries throughout North America, Europe, the Asia-Pacific region and Brazil. For more information about Global Payments, our Service. Driven. Commerce brand and our technologies, please visit www.globalpaymentsinc.com.

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

This announcement and comments made by Global Payments’ management may contain certain forward-looking statements within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management’s expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties. Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include our ability to safeguard our data; increased competition from non-traditional competitors; our ability to update our products and services in a timely manner; potential systems interruptions or failures; software defects or undetected errors; our ability to maintain Visa and MasterCard registration and financial institution sponsorship; our reliance on financial institutions to provide clearing services in connection with our settlement activities; our potential failure to comply with card network requirements; increased attrition of merchants, referral partners or independent sales organizations; our ability to increase our share of existing markets and expand into new markets; unanticipated increases in chargeback liability; increases in credit card network fees; changes in laws, regulations or network rules or interpretations thereof; foreign currency exchange and interest rate risks; political, economic and regulatory changes in the foreign countries in which we operate; future performance, integration and conversion of acquired operations; loss of key personnel; and other risks detailed in our SEC filings, including the most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q. We undertake no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.

 
 
 
 
 
SCHEDULE 1
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
                         
Three Months Ended February 28, Nine Months Ended February 28,
2015 2014 % Change 2015 2014 % Change
(unaudited) (unaudited)
 
Revenues $ 664,983 $ 616,452 7.9 % $ 2,067,169 $ 1,880,259 9.9 %
 
Operating expenses:
Cost of service 250,255 232,937 7.4 % 767,890 698,852 9.9 %
Sales, general and administrative 310,113 286,224 8.3 % 946,282 871,825 8.5 %
Processing system intrusion   —     —   — %   —     (7,000 ) (100.0 )%
  560,368     519,161     1,714,172     1,563,677  
 
Operating income 104,615 97,291 7.5 % 352,997 316,582 11.5 %
 
Other income (expense):
Interest and other income 1,160 2,944 (60.6 )% 3,634 11,570 (68.6 )%
Interest and other expense   (13,429 )   (16,457 ) (18.4 )%   (34,789 )   (32,361 ) 7.5 %
  (12,269 )   (13,513 ) (9.2 )%   (31,155 )   (20,791 ) 49.8 %
 
Income before income taxes 92,346 83,778 10.2 % 321,842 295,791 8.8 %
Provision for income taxes   (23,031 )   (23,657 ) (2.6 )%   (82,837 )   (84,105 ) (1.5 )%
Net income 69,315 60,121 15.3 % 239,005 211,686 12.9 %
Less: Net income attributable to noncontrolling interests, net of income tax   (6,747 )   (5,000 ) 34.9 %   (26,290 )   (18,025 ) 45.9 %
Net income attributable to Global Payments $ 62,568   $ 55,121   13.5 % $ 212,715   $ 193,661   9.8 %
 
 
Earnings per share attributable to Global Payments:
Basic $ 0.94 $ 0.77 21.9 % $ 3.15 $ 2.67 18.2 %
Diluted $ 0.93 $ 0.76 22.2 % $ 3.13 $ 2.65 18.4 %
 
Weighted average shares outstanding:
Basic 66,890 71,835 67,476 72,598
Diluted 67,306 72,434 67,891 73,152
 
 
 
 
 
 
SCHEDULE 2
CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
                         
Three Months Ended February 28, Nine Months Ended February 28,
2015 2014 % Change 2015 2014 % Change
 
Revenues $ 666,859 $ 616,452 8.2 % $ 2,069,045 $ 1,880,259 10.0 %
 
Operating expenses:
Cost of service 232,188 218,337 6.3 % 713,706 654,720 9.0 %
Sales, general and administrative   308,241     286,224   7.7 %   947,351     866,981   9.3 %
  540,429     504,561   7.1 %   1,661,057     1,521,701   9.2 %
 
Operating income 126,430 111,891 13.0 % 407,988 358,558 13.8 %
 
Other income (expense):
Interest and other income 1,160 2,944 (60.6 )% 3,634 9,447 (61.5 )%
Interest and other expense   (13,429 )   (8,313 ) 61.5 %   (34,789 )   (24,217 ) 43.7 %
  (12,269 )   (5,369 ) 128.5 %   (31,155 )   (14,770 ) 110.9 %
 
Income before income taxes 114,161 106,522 7.2 % 376,833 343,788 9.6 %
Provision for income taxes   (29,798 )   (30,373 ) (1.9 )%   (100,748 )   (99,932 ) 0.8 %
Net income 84,363 76,149 10.8 % 276,085 243,856 13.2 %
Less: Net income attributable to noncontrolling interests, net of income tax   (7,825 )   (6,421 ) 21.9 %   (29,776 )   (22,220 ) 34.0 %
Net income attributable to Global Payments $ 76,538   $ 69,728   9.8 % $ 246,309   $ 221,636   11.1 %
 
Earnings per share attributable to Global Payments:
Basic $ 1.14 $ 0.97 17.9 % $ 3.65 $ 3.05 19.6 %
Diluted $ 1.14 $ 0.96 18.1 % $ 3.63 $ 3.03 19.7 %
 
Weighted average shares outstanding:
Basic 66,890 71,835 67,476 72,598
Diluted 67,306 72,434 67,891 73,152
 
See Schedules 6 & 7 for a reconciliation of cash earnings to GAAP.
 
 
 
 
 
 
SCHEDULE 3
SEGMENT INFORMATION
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
                         
Three Months Ended February 28,
2015 2014 % Change
GAAP

Cash

Earnings

GAAP

Cash

Earnings

GAAP

Cash

Earnings

 

Revenues:

United States $ 404,016 $ 404,016 $ 355,880 $ 355,880 13.5 % 13.5 %
Canada   69,047     69,047     73,467     73,467   (6.0 )% (6.0 )%
North America merchant services 473,063 473,063 429,347 429,347 10.2 % 10.2 %
 
Europe 138,378 140,254 143,832 143,832 (3.8 )% (2.5 )%
Asia-Pacific   53,542     53,542     43,273     43,273   23.7 % 23.7 %
International merchant services 191,920 193,796 187,105 187,105 2.6 % 3.6 %
       
Total revenues $ 664,983   $ 666,859   $ 616,452   $ 616,452   7.9 % 8.2 %
 

Operating income (loss) for segments:

North America merchant services $ 66,723 $ 77,746 $ 61,695 $ 68,823 8.1 % 13.0 %
International merchant services 64,902 73,822 58,077 65,549 11.8 % 12.6 %
Corporate   (27,010 )   (25,138 )   (22,481 )   (22,481 ) 20.1 % 11.8 %
Operating income $ 104,615   $ 126,430   $ 97,291   $ 111,891   7.5 % 13.0 %
 
 
 
Nine Months Ended February 28,
2015 2014 % Change
GAAP

Cash

Earnings

GAAP

Cash

Earnings

GAAP

Cash

Earnings

 

Revenues:

United States $ 1,222,841 $ 1,222,841 $ 1,081,506 $ 1,081,506 13.1 % 13.1 %
Canada   243,004     243,004     245,379     245,379   (1.0 )% (1.0 )%
North America merchant services 1,465,845 1,465,845 1,326,885 1,326,885 10.5 % 10.5 %
 
Europe 461,140 463,016 433,886 433,886 6.3 % 6.7 %
Asia-Pacific   140,184     140,184     119,488     119,488   17.3 % 17.3 %
International merchant services 601,324 603,200 553,374 553,374 8.7 % 9.0 %
       
Total revenues $ 2,067,169   $ 2,069,045   $ 1,880,259   $ 1,880,259   9.9 % 10.0 %
 

Operating income (loss) for segments:

North America merchant services $ 218,906 $ 252,480 $ 201,831 $ 225,848 8.5 % 11.8 %
International merchant services 214,947 234,492 182,085 204,149 18.0 % 14.9 %
Corporate1   (80,856 )   (78,984 )   (67,334 )   (71,439 ) 20.1 % 10.6 %
Operating income $ 352,997   $ 407,988   $ 316,582   $ 358,558   11.5 % 13.8 %
 
1 GAAP earnings for the nine months ended February 28, 2014 include insurance proceeds of $7.0 million related to the fiscal 2012 processing system intrusion.
 
See Schedule 8 for reconciliation of cash earnings segment information to GAAP.
 
 
 
 
 
 
SCHEDULE 4
CONSOLIDATED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except share data)
 
      February 28, 2015     May 31, 2014
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 610,148 $ 581,872
Accounts receivable, net of allowances for doubtful accounts of $405 and $401, respectively 170,895 214,574
Claims receivable, net 584 809
Settlement processing assets 744,976 780,917
Inventory 5,587 6,636
Deferred income taxes 11,933 12,963
Prepaid expenses and other current assets 49,027 45,673
Total current assets 1,593,150 1,643,444
Goodwill 1,422,900 1,337,285
Other intangible assets, net 516,083 535,173
Property and equipment, net 355,885 369,753
Deferred income taxes 93,549 101,928
Other 36,753 31,067
Total assets $ 4,018,320 $ 4,018,650
 
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit $ 446,800 $ 440,128
Current portion of long-term debt 62,500 17,677
Accounts payable and accrued liabilities 284,472 290,106
Settlement processing obligations 426,368 451,317
Income taxes payable 22,560 12,390
Total current liabilities 1,242,700 1,211,618
Long-term debt 1,546,000 1,376,002
Deferred income taxes 201,737 209,099
Other long-term liabilities 86,255 89,132
Total liabilities 3,076,692 2,885,851
 
Commitments and contingencies
Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued — —
Common stock, no par value; 200,000,000 shares authorized; 66,457,816 issued and outstanding at February 28, 2015 and 68,845,643 issued and outstanding at May 31, 2014 — —
Paid-in capital 147,344 183,023
Retained earnings 861,955 815,980
Accumulated other comprehensive loss (184,226) (1,776)
Total Global Payments shareholders’ equity 825,073 997,227
Noncontrolling interests 116,555 135,572
Total equity 941,628 1,132,799
Total liabilities and equity $ 4,018,320 $ 4,018,650
 
 
 
 
 
 
SCHEDULE 5
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
         
Nine Months Ended February 28,
2015 2014
Cash flows from operating activities:
Net income $ 239,005 $ 211,686
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment 48,628 43,645
Amortization of acquired intangibles 54,184 43,553
Share-based compensation expense 14,827 17,269
Provision for operating losses and bad debts 10,530 14,203
Deferred income taxes 13,479 3,103
Other, net 469 (1,006 )
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable 32,124 14,442
Claims receivable (7,159 ) (9,145 )
Settlement processing assets and obligations, net (27,948 ) (19,669 )
Inventory (256 ) 3,811
Prepaid expenses and other assets (5,431 ) 18,980
Accounts payable and accrued liabilities (36,044 ) (16,422 )
Income taxes payable   10,677     (10,049 )
Net cash provided by operating activities   347,085     314,401  
Cash flows from investing activities:
Business, intangible and other asset acquisitions, net of cash acquired (232,864 ) (2,519 )
Capital expenditures (56,746 ) (61,270 )
Principal collections on financing receivables 219 1,997
Net proceeds from sales of investments and business   10,597     3,521  
Net cash used in investing activities   (278,794 )   (58,271 )
Cash flows from financing activities:
Net borrowings on short-term lines of credit 44,622 74,594
Proceeds from issuance of long-term debt 1,593,500 2,390,000
Principal payments under long-term debt (1,378,679 ) (2,099,869 )
Payment of debt issuance costs — (5,961 )
Repurchase of common stock (231,844 ) (258,562 )
Proceeds from stock issued under share-based compensation plans 18,867 29,740
Common stock repurchased - share-based compensation plans (16,175 ) (5,682 )
Tax benefit from share-based compensation plans 3,851 4,782
Distributions to noncontrolling interests (19,355 ) (33,744 )
Dividends paid   (4,035 )   (4,330 )
Net cash provided by financing activities   10,752     90,968  
Effect of exchange rate changes on cash   (50,767 )   (14,008 )
Increase in cash and cash equivalents 28,276 333,090
Cash and cash equivalents, beginning of the period   581,872     680,470  
Cash and cash equivalents, end of the period $ 610,148   $ 1,013,560  
 
 
 
 
 
 
SCHEDULE 6
RECONCILIATION OF QUARTERLY CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
                 
Three Months Ended February 28, 2015
GAAP     Other1    

Cash Earnings

Adjustments2

     Cash Earnings
Revenues $ 664,983 $ 1,876 $ — $ 666,859
Operating expenses:
Cost of service 250,255 — (18,067 ) 232,188
Sales, general and administrative   310,113         (1,872 )       —         308,241  
  560,368         (1,872 )       (18,067 )       540,429  
 
Operating income 104,615 3,748 18,067 126,430
 
Other income (expense):
Interest and other income 1,160 — — 1,160
Interest and other expense   (13,429 )       —         —         (13,429 )
  (12,269 )       —         —         (12,269 )
 
Income before income taxes 92,346 3,748 18,067 114,161
Provision for income taxes   (23,031 )       (1,031 )       (5,736 )       (29,798 )
Net income 69,315 2,717 12,331 84,363
Less: Net income attributable to noncontrolling interests, net of income tax   (6,747 )       —         (1,078 )       (7,825 )
Net income attributable to Global Payments $ 62,568       $ 2,717       $ 11,253       $ 76,538  
 
Diluted shares 67,306 67,306
Diluted earnings per share $ 0.93       $ 0.04       $ 0.17       $ 1.14  
 
 
 
Three Months Ended February 28, 2014
GAAP     Other1    

Cash Earnings

Adjustments2

     Cash Earnings
Revenues $ 616,452 $ — $ — $ 616,452
Operating expenses:
Cost of service 232,937 — (14,600 ) 218,337
Sales, general and administrative   286,224         —         —         286,224  
  519,161         —         (14,600 )       504,561  
 
Operating income 97,291 — 14,600 111,891
 
Other income (expense):
Interest and other income 2,944 — — 2,944
Interest and other expense   (16,457 )       8,144         —         (8,313 )
  (13,513 )       8,144         —         (5,369 )
 
Income before income taxes 83,778 8,144 14,600 106,522
Provision for from income taxes   (23,657 )       (2,180 )       (4,536 )       (30,373 )
Net income 60,121 5,964 10,064 76,149
Less: Net income attributable to noncontrolling interests, net of income tax   (5,000 )       —         (1,421 )       (6,421 )
Net income attributable to Global Payments $ 55,121       $ 5,964       $ 8,643       $ 69,728  
 
Diluted shares 72,434 72,434
Diluted earnings per share $ 0.76       $ 0.08       $ 0.12       $ 0.96  
 
1 For the period ended February 28, 2015, the revenue adjustment represents select U.K. customer payments related to a vendor outage and the expense adjustment represents certain business tax assessments in the U.S. for prior periods. For the period ended February 28, 2014, the adjustments represent HSBC's share of GPAP dividends declared and costs associated with the debt refinancing that was completed on February 28, 2014.
 

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

 
 
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the three months ended February 28, 2015 and 2014 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by making the adjustments described above. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, income and earnings per share determined in accordance with GAAP. Our measures of income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.
 
 
 
 
 
 
SCHEDULE 7
RECONCILIATION OF YEAR TO DATE CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
                     
Nine Months Ended February 28, 2015
GAAP    

Processing

System

Intrusion

    Other2    

Cash Earnings

Adjustments3

    

Cash

Earnings

Revenues $ 2,067,169 $ — $ 1,876 $ — $ 2,069,045
Operating expenses:
Cost of service 767,890 — — (54,184 ) 713,706
Sales, general and administrative 946,282 — 1,069 — 947,351
Processing system intrusion   —         —         —         —         —  
  1,714,172         —         1,069         (54,184 )       1,661,057  
Operating income 352,997 — 807 54,184 407,988
Other income (expense):
Interest and other income 3,634 — — — 3,634
Interest and other expense   (34,789 )       —         —         —         (34,789 )
  (31,155 )       —         —         —         (31,155 )
Income before income taxes 321,842 — 807 54,184 376,833
Provision for from income taxes   (82,837 )       —         (443 )       (17,468 )       (100,748 )
Net income 239,005 — 364 36,716 276,085
Less: Net income attributable to noncontrolling interests, net of income tax   (26,290 )       —         —         (3,486 )       (29,776 )
Net income attributable to Global Payments $ 212,715       $ —       $ 364       $ 33,230       $ 246,309  
Diluted shares 67,891 67,891
Diluted earnings per share $ 3.13       $ —       $ 0.01       $ 0.49       $ 3.63  
 
 
 
Nine Months Ended February 28, 2014
GAAP    

Processing

System

Intrusion1

     Other2    

Cash Earnings

Adjustments3

    

Cash

Earnings

Revenues $ 1,880,259 $ — $ — $ — $ 1,880,259
Operating expenses:
Cost of service 698,852 — (579 ) (43,553 ) 654,720
Sales, general and administrative 871,825 — (4,844 ) — 866,981
Processing system intrusion   (7,000 )       7,000         —         —         —  
  1,563,677         7,000         (5,423 )       (43,553 )       1,521,701  
Operating income 316,582 (7,000 ) 5,423 43,553 358,558
Other income (expense):
Interest and other income 11,570 — (2,123 ) — 9,447
Interest and other expense   (32,361 )       —         8,144         —         (24,217 )
  (20,791 )       —         6,021         —         (14,770 )
Income (loss) before income taxes 295,791 (7,000 ) 11,444 43,553 343,788
(Provision for) benefit from income taxes   (84,105 )       2,393         (4,114 )       (14,106 )       (99,932 )
Net income (loss) 211,686 (4,607 ) 7,330 29,447 243,856
Less: Net income attributable to noncontrolling interests, net of income tax   (18,025 )       —         —         (4,195 )       (22,220 )
Net income (loss) attributable to Global Payments $ 193,661       $ (4,607 )     $ 7,330       $ 25,252       $ 221,636  
Diluted shares 73,152 73,152
Diluted earnings (loss) per share $ 2.65       $ (0.07 )     $ 0.10       $ 0.35       $ 3.03  
 
1 Represents insurance proceeds associated with the fiscal 2012 processing system intrusion.
 

2 For the period ended February 28, 2015, the revenue adjustment represents select U.K. customer payments related to a vendor outage and the expense adjustments represent certain business tax assessments in the U.S. for prior periods and a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. For the period ended February 28, 2014, the adjustments represent one-time charges primarily related to employee termination benefits, resolution of a contract related contingency, a one-time credit related to the gain on the sale of an interest in a business, HSBC's share of GPAP dividends declared, and costs associated with the debt refinancing that was completed on February 28, 2014.

 
3 Represents adjustments to cost of service to exclude acquisition intangible amortization expense and the related income tax benefit.
 
 
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the nine months ended February 28, 2015 and 2014 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by making the adjustments described above. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, income and earnings per share determined in accordance with GAAP. Our measures of income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.
 
 
 
 
 
 
SCHEDULE 8
RECONCILIATION OF CASH EARNINGS SEGMENT INFORMATION TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
 
      Three Months Ended February 28,
2015       2014
GAAP     Other    

Cash Earnings

Adjustments3

     Cash Earnings GAAP    

Processing

System

Intrusion

    Other    

Cash Earnings

Adjustments3

     Cash Earnings
                           
Revenues:
United States $ 404,016 $ — $ — $ 404,016 $ 355,880 $ — $ — $ — $ 355,880
Canada   69,047         —         —       69,047     73,467         —         —       —       73,467  
North America merchant services 473,063 — — 473,063 429,347 — — — 429,347
 
Europe 138,378 1,876 — 140,254 143,832 — — — 143,832
Asia-Pacific   53,542         —         —       53,542     43,273         —         —       —       43,273  
International merchant services 191,920 1,876 — 193,796 187,105 — — — 187,105
                                             
Total revenues $ 664,983       $ 1,876       $ —     $ 666,859   $ 616,452       $ —       $ —     $ —     $ 616,452  
 
Operating income (loss) for segments:
North America merchant services $ 66,723 $ — $ 11,023 $ 77,746 $ 61,695 $ — $ — $ 7,128 $ 68,823
International merchant services 64,902 1,876 7,044 73,822 58,077 — — 7,472 65,549
Corporate   (27,010 )       1,872         —       (25,138 )   (22,481 )       —         —       —       (22,481 )
Operating income (loss) $ 104,615       $ 3,748       $ 18,067     $ 126,430   $ 97,291       $ —       $ —     $ 14,600     $ 111,891  
 
 
 
Nine Months Ended February 28,
2015 2014
GAAP     Other2    

Cash Earnings

Adjustments3

     Cash Earnings GAAP    

Processing

System

Intrusion1

    

Other2

    

Cash Earnings

Adjustments3

     Cash Earnings
 
Revenues:
United States $ 1,222,841 $ — $ — $ 1,222,841 $ 1,081,506 $ — $ — $ — $ 1,081,506
Canada   243,004         —         —       243,004     245,379         —         —       —       245,379  
North America merchant services 1,465,845 — — 1,465,845 1,326,885 — — — 1,326,885
 
Europe 461,140 1,876 — 463,016 433,886 — — — 433,886
Asia-Pacific   140,184         —         —       140,184     119,488         —         —       —       119,488  
International merchant services 601,324 1,876 — 603,200 553,374 — — — 553,374
                                             
Total revenues $ 2,067,169       $ 1,876       $ —     $ 2,069,045   $ 1,880,259       $ —       $ —     $ —     $ 1,880,259  
 
Operating income (loss) for segments:
North America merchant services $ 218,906 $ — $ 33,574 $ 252,480 $ 201,831 $ — $ 2,518 $ 21,499 $ 225,848
International merchant services 214,947 (1,065 ) 20,610 234,492 182,085 — 10 22,054 204,149
Corporate   (80,856 )       1,872         —       (78,984 )   (67,334 )       (7,000 )       2,895       —       (71,439 )
Operating income (loss) $ 352,997       $ 807       $ 54,184     $ 407,988   $ 316,582       $ (7,000 )     $ 5,423     $ 43,553     $ 358,558  
 

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

 
2 For the three months ended February 28, 2015, the revenue adjustment represents select U.K. customer payments related to a vendor outage and the expense adjustment represent certain business tax assessments in the U.S. for prior periods. The adjustments for the nine months ended February 28, 2015, include the revenue and business tax adjustments described for the three-month period and a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. For the nine months ended February 28, 2014, the adjustments represent one-time charges primarily related to employee termination benefits and resolution of a contract related contingency.
 
3 Represents acquisition intangible amortization expense.
 
 
 
 
 
 
SCHEDULE 9
OUTLOOK SUMMARY
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In billions, except per share data)
             

Fiscal 2014

Actual

Fiscal 2015

Outlook

% Change

FY14

 

Revenue Outlook

Total Revenues $ 2.55 $2.75 to $2.80

8% to 10

%

 

EPS Outlook

Cash EPS $ 4.12 $4.77 to $4.84

16% to 18

%

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

19% to 21

%

 
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the fiscal years 2015 and 2014 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by making the adjustments described below. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, income and earnings per share determined in accordance with GAAP. Our measures of income and earnings per share on a cash earnings basis reflect management’s judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.
 
 
1 Fiscal 2015 reflects $0.72 of acquisition intangible amortization and $0.04 of non-recurring items, including a revenue adjustment for select U.K. customer payments related to a vendor outage and expense adjustments for certain business tax assessments in the U.S. for prior periods and a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. Fiscal 2014 reflects acquisition intangible amortization of $0.51, a processing system intrusion credit of ($0.07) and non-recurring items of $0.31. Other non-recurring items for fiscal 2014 include acceleration of equity awards and other costs associated with the retirement of our former Chairman and CEO, a credit related to the sale of an interest in our Brazil business and a subsequent charge associated with our retained interest, non-cash losses from the retirement of fixed assets, employee termination benefits, resolution of a contract related contingency, costs associated with debt refinancing and HSBC's share of dividends declared by Global Payments Asia-Pacific.