[November 08, 2017] |
|
Global Payments Reports Third Quarter 2017 Earnings and Increases 2017 Outlook
Global Payments Inc. (NYSE: GPN) today announced results for the
third quarter ended September 30, 2017.
"We delivered another quarter of double digit organic adjusted net
revenue growth, underscoring the ongoing successful execution of our
technology enabled, software driven strategy," said Jeff Sloan, Chief
Executive Officer. "Our integrated and vertical markets and ecommerce
and omnichannel solutions businesses, which now comprise 40% of our
adjusted net revenue, provide further opportunities for sustained share
gains. Additionally, we are delighted with the pace of revenue
cross-sell efforts around the world from our recent acquisitions, which
positions us well for future growth."
Third Quarter 2017 Summary
-
GAAP revenues were $1,038.9 million, compared to $951.9 million in the
third quarter of 2016; diluted earnings per share were $0.71 compared
to $0.36 in the prior year; and operating margin was 16.6% compared to
12.6% in the third quarter of 2016.
-
Adjusted net revenue grew 12% to $930.4 million, compared to $828.4
million in the third quarter of 2016.
-
Adjusted earnings per share grew 29% to $1.15, compared to $0.89 in
the third quarter of 2016.
-
Adjusted operating margin expanded 110 basis points to 31.3%.
2017 Outlook
"We are very pleased with our performance in the third quarter and
year-to-date period, again delivering results in excess of our targets
for the business," stated Cameron Bready, Senior Executive Vice
President and Chief Financial Officer. "As a result of this strong
performance and to reflect the impacts of the ACTIVE Network
transaction, we are increasing our outlook for 2017. We now expect
adjusted net revenue to range from $3.505 billion to $3.53 billion, or
growth of 23% to 24% over 2016 and adjusted earnings per share to be in
a range of $3.94 to $4.02, reflecting growth of 24% to 26% over 2016. We
continue to expect adjusted operating margin to expand by as much as 120
basis points."
Capital Allocation
Global Payments' Board of Directors approved a dividend of $0.01 per
share payable December 29, 2017 to shareholders of record as of December
15, 2017.
Conference Call
Global Payments' management will host a conference call today, November
8, 2017 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 those
measures on an adjusted basis 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 more than 10,000 employees
worldwide, Global Payments is a member of the S&P 500 with customers and
partners in 30 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.
Forward-Looking Statements
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, 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
larger companies and non-traditional competitors, our ability to update
our services in a timely manner; 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; potential systems interruptions
or failures; software defects or undetected errors; increased attrition
of merchants, referral partners or independent sales organizations; our
ability to increase our share of existing markets and expand into new
markets; a decline in the use of cards for payment generally;
unanticipated increases in chargeback liability; increases in credit
card network fees; change 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; including without limitation
difficulties and delays in integrating the Heartland or ACTIVE Network
businesses or fully realizing cost savings and other benefits of the
acquisitions at all or within the expected time period; fully realizing
anticipated annual interest expense savings from refinancing our
corporate debt facilities; our loss of key personnel and other risk
factors presented in Item 1- Risk Factors of our Transition Report on
Form 10-K for the seven months ended December 31, 2016 and any
subsequent SEC filings, which we advise you to review. Our
forward-looking statements speak only as of the date they are made and
should not be relied upon as representing our plans and expectations as
of any subsequent date. 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
|
|
|
Nine Months Ended
|
|
|
|
|
September 30
|
|
|
September 30
|
|
|
|
|
2017
|
|
|
2016
|
|
|
% Change
|
|
|
2017
|
|
|
2016
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
$
|
1,038,907
|
|
|
|
$
|
951,885
|
|
|
|
9.1
|
%
|
|
|
$
|
2,920,910
|
|
|
|
$
|
2,420,789
|
|
|
|
20.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service
|
|
|
|
493,883
|
|
|
|
469,980
|
|
|
|
5.1
|
%
|
|
|
1,418,969
|
|
|
|
1,125,041
|
|
|
|
26.1
|
%
|
Selling, general and administrative
|
|
|
|
372,553
|
|
|
|
361,516
|
|
|
|
3.1
|
%
|
|
|
1,092,648
|
|
|
|
1,019,626
|
|
|
|
7.2
|
%
|
|
|
|
|
866,436
|
|
|
|
831,496
|
|
|
|
4.2
|
%
|
|
|
2,511,617
|
|
|
|
2,144,667
|
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
172,471
|
|
|
|
120,389
|
|
|
|
43.3
|
%
|
|
|
409,293
|
|
|
|
276,122
|
|
|
|
48.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income
|
|
|
|
2,347
|
|
|
|
1,465
|
|
|
|
60.2
|
%
|
|
|
5,787
|
|
|
|
45,312
|
|
|
|
(87.2
|
)%
|
Interest and other expense
|
|
|
|
(40,764
|
)
|
|
|
(45,609
|
)
|
|
|
(10.6
|
)%
|
|
|
(130,422
|
)
|
|
|
(95,280
|
)
|
|
|
36.9
|
%
|
|
|
|
|
(38,417
|
)
|
|
|
(44,144
|
)
|
|
|
(13.0
|
)%
|
|
|
(124,635
|
)
|
|
|
(49,968
|
)
|
|
|
149.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
134,054
|
|
|
|
76,245
|
|
|
|
75.8
|
%
|
|
|
284,658
|
|
|
|
226,154
|
|
|
|
25.9
|
%
|
Provision for income taxes
|
|
|
|
(15,692
|
)
|
|
|
(14,021
|
)
|
|
|
11.9
|
%
|
|
|
(40,893
|
)
|
|
|
(33,350
|
)
|
|
|
22.6
|
%
|
Net income
|
|
|
|
118,362
|
|
|
|
62,224
|
|
|
|
90.2
|
%
|
|
|
243,765
|
|
|
|
192,804
|
|
|
|
26.4
|
%
|
Less: Net income attributable to noncontrolling interests, net of
income tax
|
|
|
|
(7,622
|
)
|
|
|
(6,714
|
)
|
|
|
13.5
|
%
|
|
|
(17,302
|
)
|
|
|
(15,150
|
)
|
|
|
14.2
|
%
|
Net income attributable to Global Payments
|
|
|
|
$
|
110,740
|
|
|
|
$
|
55,510
|
|
|
|
99.5
|
%
|
|
|
$
|
226,463
|
|
|
|
$
|
177,654
|
|
|
|
27.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Global Payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.72
|
|
|
|
$
|
0.36
|
|
|
|
100.0
|
%
|
|
|
$
|
1.48
|
|
|
|
$
|
1.24
|
|
|
|
19.4
|
%
|
Diluted
|
|
|
|
$
|
0.71
|
|
|
|
$
|
0.36
|
|
|
|
97.2
|
%
|
|
|
$
|
1.47
|
|
|
|
$
|
1.23
|
|
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
154,560
|
|
|
|
153,668
|
|
|
|
|
|
|
153,138
|
|
|
|
143,794
|
|
|
|
|
Diluted
|
|
|
|
155,402
|
|
|
|
154,530
|
|
|
|
|
|
|
154,079
|
|
|
|
144,731
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 2 NON-GAAP FINANCIAL MEASURES (UNAUDITED) GLOBAL
PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per
share data)
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
September 30
|
|
September 30
|
|
|
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net revenue
|
|
|
|
|
$
|
930,411
|
|
$
|
828,436
|
|
12.3
|
%
|
|
$
|
2,582,231
|
|
$
|
2,024,346
|
|
27.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income
|
|
|
|
|
$
|
290,773
|
|
$
|
249,943
|
|
16.3
|
%
|
|
$
|
767,260
|
|
$
|
581,749
|
|
31.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
|
|
|
$
|
178,313
|
|
$
|
137,925
|
|
29.3
|
%
|
|
$
|
452,714
|
|
$
|
335,736
|
|
34.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS
|
|
|
|
|
$
|
1.15
|
|
$
|
0.89
|
|
29.2
|
%
|
|
$
|
2.94
|
|
$
|
2.32
|
|
26.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Schedules 6 and 7 for a reconciliation of each non-GAAP
financial measure to the most comparable GAAP measure and Schedule
10 for a discussion of non-GAAP financial measures.
|
|
|
|
|
|
|
SCHEDULE 3 SEGMENT INFORMATION (UNAUDITED) GLOBAL
PAYMENTS INC. AND SUBSIDIARIES (In thousands)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
% Change
|
|
|
|
|
|
GAAP
|
|
Non-GAAP1
|
|
GAAP
|
|
|
Non-GAAP1
|
|
GAAP
|
|
Non-GAAP1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
$
|
764,902
|
|
|
$
|
685,776
|
|
|
$
|
718,977
|
|
|
|
$
|
618,712
|
|
|
6.4
|
%
|
|
10.8
|
%
|
Europe
|
|
|
|
|
|
205,203
|
|
|
|
175,833
|
|
|
|
173,246
|
|
|
|
|
150,062
|
|
|
18.4
|
%
|
|
17.2
|
%
|
Asia-Pacific
|
|
|
|
|
|
68,802
|
|
|
|
68,802
|
|
|
|
59,662
|
|
|
|
|
59,662
|
|
|
15.3
|
%
|
|
15.3
|
%
|
|
|
|
|
|
$
|
1,038,907
|
|
|
$
|
930,411
|
|
|
$
|
951,885
|
|
|
|
$
|
828,436
|
|
|
9.1
|
%
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
$
|
138,345
|
|
|
$
|
216,870
|
|
|
$
|
110,983
|
|
|
|
$
|
188,197
|
|
|
24.7
|
%
|
|
15.2
|
%
|
Europe
|
|
|
|
|
|
76,214
|
|
|
|
83,130
|
|
|
|
63,727
|
|
|
|
|
71,017
|
|
|
19.6
|
%
|
|
17.1
|
%
|
Asia-Pacific
|
|
|
|
|
|
20,032
|
|
|
|
22,197
|
|
|
|
14,657
|
|
|
|
|
17,291
|
|
|
36.7
|
%
|
|
28.4
|
%
|
Corporate
|
|
|
|
|
|
(62,120
|
)
|
|
|
(31,424
|
)
|
|
|
(68,978
|
)
|
|
|
|
(26,562
|
)
|
|
(9.9
|
)%
|
|
18.3
|
%
|
|
|
|
|
|
$
|
172,471
|
|
|
$
|
290,773
|
|
|
$
|
120,389
|
|
|
|
$
|
249,943
|
|
|
43.3
|
%
|
|
16.3
|
%
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
% Change
|
|
|
|
|
|
GAAP
|
|
Non-GAAP1
|
|
GAAP
|
|
|
Non-GAAP1
|
|
GAAP
|
|
Non-GAAP1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
$
|
2,162,911
|
|
|
$
|
1,907,670
|
|
|
$
|
1,770,957
|
|
|
|
$
|
1,435,680
|
|
|
22.1
|
%
|
|
32.9
|
%
|
Europe
|
|
|
|
|
|
557,258
|
|
|
|
473,820
|
|
|
|
479,620
|
|
|
|
|
418,454
|
|
|
16.2
|
%
|
|
13.2
|
%
|
Asia-Pacific
|
|
|
|
|
|
200,741
|
|
|
|
200,741
|
|
|
|
170,212
|
|
|
|
|
170,212
|
|
|
17.9
|
%
|
|
17.9
|
%
|
|
|
|
|
|
$
|
2,920,910
|
|
|
$
|
2,582,231
|
|
|
$
|
2,420,789
|
|
|
|
$
|
2,024,346
|
|
|
20.7
|
%
|
|
27.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
$
|
344,604
|
|
|
$
|
574,391
|
|
|
$
|
258,648
|
|
|
|
$
|
409,302
|
|
|
33.2
|
%
|
|
40.3
|
%
|
Europe
|
|
|
|
|
|
196,394
|
|
|
|
219,305
|
|
|
|
172,293
|
|
|
|
|
199,612
|
|
|
14.0
|
%
|
|
9.9
|
%
|
Asia-Pacific
|
|
|
|
|
|
57,321
|
|
|
|
62,756
|
|
|
|
40,266
|
|
|
|
|
49,021
|
|
|
42.4
|
%
|
|
28.0
|
%
|
Corporate
|
|
|
|
|
|
(189,026
|
)
|
|
|
(89,192
|
)
|
|
|
(195,085
|
)
|
|
|
|
(76,186
|
)
|
|
(3.1
|
)%
|
|
17.1
|
%
|
|
|
|
|
|
$
|
409,293
|
|
|
$
|
767,260
|
|
|
$
|
276,122
|
|
|
|
$
|
581,749
|
|
|
48.2
|
%
|
|
31.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 See Schedules 8 and 9 for a reconciliation of
adjusted net revenue and adjusted operating income by segment to
the most comparable GAAP measures and Schedule 10 for a discussion
of non-GAAP financial measures.
|
|
|
|
|
|
|
SCHEDULE 4 UNAUDITED CONSOLIDATED BALANCE SHEETS GLOBAL
PAYMENTS INC. AND SUBSIDIARIES (In thousands, except share
data)
|
|
|
|
|
|
September 30,
2017
|
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
1,186,050
|
|
|
|
$
|
1,162,779
|
|
Accounts receivable, net of allowances for doubtful accounts of
$1,423 and $1,092, respectively
|
|
|
|
296,366
|
|
|
|
275,032
|
|
Settlement processing assets
|
|
|
|
1,847,232
|
|
|
|
1,546,854
|
|
Prepaid expenses and other current assets
|
|
|
|
220,649
|
|
|
|
131,341
|
|
Total current assets
|
|
|
|
3,550,297
|
|
|
|
3,116,006
|
|
Goodwill
|
|
|
|
5,616,414
|
|
|
|
4,807,594
|
|
Other intangible assets, net
|
|
|
|
2,328,709
|
|
|
|
2,085,292
|
|
Property and equipment, net
|
|
|
|
577,188
|
|
|
|
526,370
|
|
Deferred income taxes
|
|
|
|
16,736
|
|
|
|
15,789
|
|
Other noncurrent assets
|
|
|
|
192,205
|
|
|
|
113,299
|
|
Total assets
|
|
|
|
$
|
12,281,549
|
|
|
|
$
|
10,664,350
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Settlement lines of credit
|
|
|
|
$
|
487,513
|
|
|
|
$
|
392,072
|
|
Current portion of long-term debt
|
|
|
|
93,408
|
|
|
|
177,785
|
|
Accounts payable and accrued liabilities
|
|
|
|
992,363
|
|
|
|
804,887
|
|
Settlement processing obligations
|
|
|
|
1,550,627
|
|
|
|
1,477,212
|
|
Total current liabilities
|
|
|
|
3,123,911
|
|
|
|
2,851,956
|
|
Long-term debt
|
|
|
|
4,677,910
|
|
|
|
4,260,827
|
|
Deferred income taxes
|
|
|
|
632,648
|
|
|
|
676,472
|
|
Other noncurrent liabilities
|
|
|
|
152,127
|
|
|
|
95,753
|
|
Total liabilities
|
|
|
|
8,586,596
|
|
|
|
7,885,008
|
|
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;
158,762,894 issued and outstanding at September 30, 2017 and
152,185,616 issued and outstanding at December 31, 2016
|
|
|
|
-
|
|
|
|
-
|
|
Paid-in capital
|
|
|
|
2,376,331
|
|
|
|
1,816,278
|
|
Retained earnings
|
|
|
|
1,357,526
|
|
|
|
1,137,230
|
|
Accumulated other comprehensive loss
|
|
|
|
(202,508
|
)
|
|
|
(322,717
|
)
|
Total Global Payments shareholders' equity
|
|
|
|
3,531,349
|
|
|
|
2,630,791
|
|
Noncontrolling interests
|
|
|
|
163,604
|
|
|
|
148,551
|
|
Total equity
|
|
|
|
3,694,953
|
|
|
|
2,779,342
|
|
Total liabilities and equity
|
|
|
|
$
|
12,281,549
|
|
|
|
$
|
10,664,350
|
|
|
|
|
|
|
|
SCHEDULE 5 UNAUDITED CONSOLIDATED STATEMENTS OF
CASH FLOWS GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In
thousands)
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
2017
|
|
|
September 30,
2016
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
243,765
|
|
|
|
$
|
192,804
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization of property and equipment
|
|
|
|
|
80,868
|
|
|
|
62,964
|
|
Amortization of acquired intangibles
|
|
|
|
|
249,095
|
|
|
|
173,345
|
|
Share-based compensation expense
|
|
|
|
|
30,771
|
|
|
|
26,060
|
|
Provision for operating losses and bad debts
|
|
|
|
|
37,203
|
|
|
|
26,069
|
|
Amortization of capitalized customer acquisition costs
|
|
|
|
|
32,863
|
|
|
|
9,337
|
|
Deferred income taxes
|
|
|
|
|
(51,093
|
)
|
|
|
(30,504
|
)
|
Gain on sale of investments
|
|
|
|
|
-
|
|
|
|
(41,150
|
)
|
Other, net
|
|
|
|
|
34,190
|
|
|
|
26,790
|
|
Changes in operating assets and liabilities, net of the effects of
acquisitions:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
(6,070
|
)
|
|
|
14,216
|
|
Settlement processing assets and obligations, net
|
|
|
|
|
(232,713
|
)
|
|
|
(109
|
)
|
Prepaid expenses and other assets
|
|
|
|
|
(12,605
|
)
|
|
|
(27,474
|
)
|
Capitalized customer acquisition costs
|
|
|
|
|
(65,697
|
)
|
|
|
(45,425
|
)
|
Accounts payable and other liabilities
|
|
|
|
|
19,546
|
|
|
|
(19,491
|
)
|
Net cash provided by operating activities
|
|
|
|
|
360,123
|
|
|
|
367,432
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Business acquisitions, net of cash acquired
|
|
|
|
|
(563,009
|
)
|
|
|
(1,825,975
|
)
|
Capital expenditures
|
|
|
|
|
(136,612
|
)
|
|
|
(102,442
|
)
|
Proceeds from sale of investments
|
|
|
|
|
-
|
|
|
|
37,783
|
|
Proceeds from sales of property and equipment
|
|
|
|
|
37,520
|
|
|
|
-
|
|
Other, net
|
|
|
|
|
(48,056
|
)
|
|
|
(1,409
|
)
|
Net cash used in investing activities
|
|
|
|
|
(710,157
|
)
|
|
|
(1,892,043
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Net proceeds from (repayments of) settlement lines of credit
|
|
|
|
|
77,397
|
|
|
|
(952
|
)
|
Proceeds from long-term debt
|
|
|
|
|
1,713,324
|
|
|
|
3,263,045
|
|
Repayments of long-term debt
|
|
|
|
|
(1,386,721
|
)
|
|
|
(1,110,258
|
)
|
Payment of debt issuance costs
|
|
|
|
|
(9,520
|
)
|
|
|
(58,448
|
)
|
Repurchase of common stock
|
|
|
|
|
(32,811
|
)
|
|
|
(130,314
|
)
|
Proceeds from stock issued under share-based compensation plans
|
|
|
|
|
7,068
|
|
|
|
5,614
|
|
Common stock repurchased - share-based compensation plans
|
|
|
|
|
(21,171
|
)
|
|
|
(15,622
|
)
|
Proceeds from sale of subsidiary shares to noncontrolling interest
|
|
|
|
|
-
|
|
|
|
16,374
|
|
Distributions to noncontrolling interests
|
|
|
|
|
(9,301
|
)
|
|
|
(10,216
|
)
|
Dividends paid
|
|
|
|
|
(5,141
|
)
|
|
|
(4,376
|
)
|
Net cash provided by financing activities
|
|
|
|
|
333,124
|
|
|
|
1,954,847
|
|
Effect of exchange rate changes on cash
|
|
|
|
|
40,181
|
|
|
|
(7,142
|
)
|
Increase in cash and cash equivalents
|
|
|
|
|
23,271
|
|
|
|
423,094
|
|
Cash and cash equivalents, beginning of the period
|
|
|
|
|
1,162,779
|
|
|
|
587,751
|
|
Cash and cash equivalents, end of the period
|
|
|
|
|
$
|
1,186,050
|
|
|
|
$
|
1,010,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 6 RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES TO GAAP MEASURES (UNAUDITED) THREE MONTHS ENDED
SEPTEMBER 30, 2017 AND 2016 GLOBAL PAYMENTS INC. AND
SUBSIDIARIES (In thousands, except per share data)
|
|
|
|
|
Three Months Ended September 30, 2017
|
|
|
|
GAAP
|
|
Net Revenue
Adjustments1
|
|
Earnings
Adjustments2
|
|
Income
Taxes on
Adjustments3
|
|
Non-GAAP
|
Revenues
|
|
|
$
|
1,038,907
|
|
|
$
|
(108,496
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
930,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
172,471
|
|
|
$
|
2,008
|
|
|
$
|
116,294
|
|
|
$
|
-
|
|
|
$
|
290,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Global Payments
|
|
|
$
|
110,740
|
|
|
$
|
2,008
|
|
|
$
|
114,496
|
|
|
$
|
(48,931
|
)
|
|
$
|
178,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Global Payments4
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
$
|
1.15
|
|
|
|
|
|
|
Three Months Ended September 30, 2016
|
|
|
|
GAAP
|
|
Net Revenue
Adjustments1
|
|
Earnings
Adjustments2
|
|
Income
Taxes on
Adjustments3
|
|
Non-GAAP
|
Revenues
|
|
|
$
|
951,885
|
|
|
$
|
(123,449
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
828,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
120,389
|
|
|
$
|
-
|
|
|
$
|
129,554
|
|
|
$
|
-
|
|
|
$
|
249,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Global Payments
|
|
|
$
|
55,510
|
|
|
$
|
-
|
|
|
$
|
127,723
|
|
|
$
|
(45,308
|
)
|
|
$
|
137,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Global Payments4
|
|
|
$
|
0.36
|
|
|
|
|
|
|
|
|
$
|
0.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Represents adjustments to revenues for gross-up
related payments (included in operating expenses) associated with
certain lines of business to reflect economic benefits to the
company. For the three months ended September 30, 2017, includes
$2.0 million to eliminate the effect of acquisition accounting
fair value adjustments for software deferred revenue associated
with the ACTIVE Network transaction.
|
|
2 Earnings adjustments to operating income for the
three months ended September 30, 2017 include $84.9 million in
cost of service and $31.4 million in selling, general and
administrative expenses. Adjustments to cost of service include
amortization of acquired intangibles of $84.5 million, $0.3
million of acquisition and integration costs and employee
termination costs of $0.1 million. Adjustments to selling, general
and administrative expenses include share-based compensation
expense of $9.9 million, acquisition and integration costs of
$21.2 million and employee termination costs of $0.3 million.
|
|
Earnings adjustments to operating income for the three months
ended September 30, 2016 include $87.0 million in cost of service
and $42.6 million in selling, general and administrative expenses.
Adjustments to cost of service include amortization of acquired
intangibles of $86.2 million and employee termination costs and
other adjustments of $0.8 million. Adjustments to selling, general
and administrative expenses include share-based compensation
expense of $8.4 million, acquisition and integration costs of
$34.0 million and employee termination costs and other adjustments
of $0.2 million.
|
|
3 Income taxes on adjustments reflect the tax effect of
earnings adjustments to income before income taxes. The tax rate
used in determining the tax impact of 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. In addition, income taxes on adjustments for the three
months ended September 30, 2017 reflect the removal of a $7.7
million tax benefit associated with the vesting of share-based
awards.
|
|
4 Adjusted EPS is calculated by dividing adjusted net
income attributable to Global Payments by the diluted
weighted-average number of shares outstanding.
|
|
See "Non-GAAP Financial Measures" discussion on Schedule 10.
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 7 RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES TO GAAP MEASURES (UNAUDITED) NINE MONTHS ENDED
SEPTEMBER 30, 2017 AND 2016 GLOBAL PAYMENTS INC. AND
SUBSIDIARIES (In thousands, except per share data)
|
|
|
|
|
Nine Months Ended September 30, 2017
|
|
|
|
GAAP
|
|
Net Revenue
Adjustments1
|
|
Earnings
Adjustments2
|
|
Income
Taxes on
Adjustments3
|
|
Non-GAAP
|
Revenues
|
|
|
$
|
2,920,910
|
|
|
$
|
(338,679
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,582,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
409,293
|
|
|
$
|
2,008
|
|
|
$
|
355,959
|
|
|
$
|
-
|
|
|
$
|
767,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Global Payments
|
|
|
$
|
226,463
|
|
|
$
|
2,008
|
|
|
$
|
357,372
|
|
|
$
|
(133,129
|
)
|
|
$
|
452,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Global Payments4
|
|
|
$
|
1.47
|
|
|
|
|
|
|
|
|
$
|
2.94
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2016
|
|
|
|
GAAP
|
|
Net Revenue
Adjustments1
|
|
Earnings
Adjustments2
|
|
Income
Taxes on
Adjustments3
|
|
Non-GAAP
|
Revenues
|
|
|
$
|
2,420,789
|
|
|
$
|
(396,443
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,024,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
276,122
|
|
|
$
|
-
|
|
|
$
|
305,627
|
|
|
$
|
-
|
|
|
$
|
581,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Global Payments
|
|
|
$
|
177,654
|
|
|
$
|
-
|
|
|
$
|
260,596
|
|
|
$
|
(102,514
|
)
|
|
$
|
335,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Global Payments4
|
|
|
$
|
1.23
|
|
|
|
|
|
|
|
|
$
|
2.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Represents adjustments to revenues for gross-up
related payments (included in operating expenses) associated with
certain lines of business to reflect economic benefits to the
company. For the nine months ended September 30, 2017, includes
$2.0 million to eliminate the effect of acquisition accounting
fair value adjustments for software deferred revenue associated
with the ACTIVE Network transaction.
|
|
2 Earnings adjustments to operating income for the nine
months ended September 30, 2017 include $252.8 million in cost of
service and $103.2 million in selling, general and administrative
expenses. Adjustments to cost of service include amortization of
acquired intangibles of $250.7 million, employee termination costs
of $1.8 million and acquisition and integration costs of $0.3
million. Adjustments to selling, general and administrative
expenses include share-based compensation expense of $31.1
million, acquisition and integration costs of $69.2 million and
employee termination costs of $2.9 million. Net income
attributable to Global Payments also reflects an adjustment to
remove a non-cash charge of $6.8 million associated with the
refinancing of our corporate credit facility.
|
|
Earnings adjustments to operating income for the nine months ended
September 30, 2016 include $176.1 million in cost of service and
$129.5 million in selling, general and administrative expenses.
Adjustments to cost of service represent amortization of acquired
intangibles of $175.0 million and employee termination costs and
other adjustments of $1.1 million. Adjustments to selling, general
and administrative expenses include share-based compensation
expense of $25.0 million, acquisition and integration costs of
$94.0 million, litigation related costs of $7.6 million and
employee termination costs and other adjustments of $2.9 million.
Net income attributable to Global Payments also reflects an
adjustment to remove a gain on the sale of membership interests in
Visa Europe of $41.2 million.
|
|
3 Income taxes on adjustments reflect the tax effect of
earnings adjustments to income before income taxes. The tax rate
used in determining the tax impact of 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. In addition, income taxes on adjustments for the nine
months ended September 30, 2017 reflect the removal of a $2.4
million tax benefit associated with the elimination of a deferred
tax liability and the removal of a $4.0 million tax benefit
associated with the vesting of share-based awards. For the nine
months ended September 30, 2016, income taxes on adjustments
reflect the removal of a $10.9 million tax benefit associated with
our decision to indefinitely reinvest earnings in Canada.
|
|
4 Adjusted EPS is calculated by dividing adjusted net
income attributable to Global Payments by the diluted
weighted-average number of shares outstanding.
|
|
See "Non-GAAP Financial Measures" discussion on Schedule 10.
|
|
|
|
|
|
|
SCHEDULE 8 RECONCILIATION OF SEGMENT NON-GAAP
FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED) THREE
MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 GLOBAL PAYMENTS INC.
AND SUBSIDIARIES (In thousands)
|
|
|
|
|
|
Three Months Ended September 30, 2017
|
|
Three Months Ended September 30, 2016
|
|
|
|
|
GAAP
|
|
Net Revenue
Adjustments1
|
|
Earnings
Adjustments2
|
|
Non-GAAP
|
|
GAAP
|
|
Net Revenue
Adjustments1
|
|
Earnings
Adjustments2
|
|
Non-GAAP
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
$
|
764,902
|
|
|
$
|
(79,126
|
)
|
|
$
|
-
|
|
|
$
|
685,776
|
|
|
$
|
718,977
|
|
|
$
|
(100,265
|
)
|
|
$
|
-
|
|
|
$
|
618,712
|
|
Europe
|
|
|
|
205,203
|
|
|
(29,370
|
)
|
|
-
|
|
|
175,833
|
|
|
173,246
|
|
|
(23,184
|
)
|
|
-
|
|
|
150,062
|
|
Asia-Pacific
|
|
|
|
68,802
|
|
|
-
|
|
|
-
|
|
|
68,802
|
|
|
59,662
|
|
|
-
|
|
|
-
|
|
|
59,662
|
|
|
|
|
|
$
|
1,038,907
|
|
|
$
|
(108,496
|
)
|
|
$
|
-
|
|
|
$
|
930,411
|
|
|
$
|
951,885
|
|
|
$
|
(123,449
|
)
|
|
$
|
-
|
|
|
$
|
828,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
$
|
138,345
|
|
|
$
|
2,008
|
|
|
$
|
76,517
|
|
|
$
|
216,870
|
|
|
$
|
110,983
|
|
|
$
|
-
|
|
|
$
|
77,214
|
|
|
$
|
188,197
|
|
Europe
|
|
|
|
76,214
|
|
|
-
|
|
|
6,916
|
|
|
83,130
|
|
|
63,727
|
|
|
-
|
|
|
7,290
|
|
|
71,017
|
|
Asia-Pacific
|
|
|
|
20,032
|
|
|
-
|
|
|
2,165
|
|
|
22,197
|
|
|
14,657
|
|
|
-
|
|
|
2,634
|
|
|
17,291
|
|
Corporate
|
|
|
|
(62,120
|
)
|
|
-
|
|
|
30,696
|
|
|
(31,424
|
)
|
|
(68,978
|
)
|
|
-
|
|
|
42,416
|
|
|
(26,562
|
)
|
|
|
|
|
$
|
172,471
|
|
|
$
|
2,008
|
|
|
$
|
116,294
|
|
|
$
|
290,773
|
|
|
$
|
120,389
|
|
|
$
|
-
|
|
|
$
|
129,554
|
|
|
$
|
249,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Represents adjustments to revenues for gross-up
related payments (included in operating expenses) associated with
certain lines of business to reflect economic benefits to the
company. For the three months ended September 30, 2017, includes
$2.0 million to eliminate the effect of acquisition accounting
fair value adjustments for software deferred revenue associated
with the ACTIVE Network transaction.
|
|
2 Earnings adjustments to operating income for the
three months ended September 30, 2017 include $84.9 million in
cost of service and $31.4 million in selling, general and
administrative expenses. Adjustments to cost of service include
amortization of acquired intangibles of $84.5 million, $0.3
million of acquisition and integration costs and employee
termination costs of $0.1 million. Adjustments to selling, general
and administrative expenses include share-based compensation
expense of $9.9 million, acquisition and integration costs of
$21.2 million and employee termination costs of $0.3 million.
|
|
Earnings adjustments to operating income for the three months
ended September 30, 2016 include $87.0 million in cost of service
and $42.6 million in selling, general and administrative expenses.
Adjustments to cost of service include amortization of acquired
intangibles of $86.2 million and employee termination costs and
other adjustments of $0.8 million. Adjustments to selling, general
and administrative expenses include share-based compensation
expense of $8.4 million, acquisition and integration costs of
$34.0 million and employee termination costs and other adjustments
of $0.2 million.
|
|
See "Non-GAAP Financial Measures" discussion on Schedule 10.
|
|
|
|
|
|
|
SCHEDULE 9 RECONCILIATION OF SEGMENT NON-GAAP
FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED) NINE
MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 GLOBAL PAYMENTS INC.
AND SUBSIDIARIES (In thousands)
|
|
|
|
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
|
|
|
|
GAAP
|
|
Net Revenue
Adjustments1
|
|
Earnings
Adjustments2
|
|
Non-GAAP
|
|
GAAP
|
|
Net Revenue
Adjustments1
|
|
Earnings
Adjustments2
|
|
Non-GAAP
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
$
|
2,162,911
|
|
|
$
|
(255,241
|
)
|
|
$
|
-
|
|
|
$
|
1,907,670
|
|
|
$
|
1,770,957
|
|
|
$
|
(335,277
|
)
|
|
$
|
-
|
|
|
$
|
1,435,680
|
|
Europe
|
|
|
|
557,258
|
|
|
(83,438
|
)
|
|
-
|
|
|
473,820
|
|
|
479,620
|
|
|
(61,166
|
)
|
|
-
|
|
|
418,454
|
|
Asia-Pacific
|
|
|
|
200,741
|
|
|
-
|
|
|
-
|
|
|
200,741
|
|
|
170,212
|
|
|
-
|
|
|
-
|
|
|
170,212
|
|
|
|
|
|
$
|
2,920,910
|
|
|
$
|
(338,679
|
)
|
|
$
|
-
|
|
|
$
|
2,582,231
|
|
|
$
|
2,420,789
|
|
|
$
|
(396,443
|
)
|
|
$
|
-
|
|
|
$
|
2,024,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
$
|
344,604
|
|
|
$
|
2,008
|
|
|
$
|
227,779
|
|
|
$
|
574,391
|
|
|
$
|
258,648
|
|
|
$
|
-
|
|
|
$
|
150,654
|
|
|
$
|
409,302
|
|
Europe
|
|
|
|
196,394
|
|
|
-
|
|
|
22,911
|
|
|
219,305
|
|
|
172,293
|
|
|
-
|
|
|
27,319
|
|
|
199,612
|
|
Asia-Pacific
|
|
|
|
57,321
|
|
|
-
|
|
|
5,435
|
|
|
62,756
|
|
|
40,266
|
|
|
-
|
|
|
8,755
|
|
|
49,021
|
|
Corporate
|
|
|
|
(189,026
|
)
|
|
-
|
|
|
99,834
|
|
|
(89,192
|
)
|
|
(195,085
|
)
|
|
-
|
|
|
118,899
|
|
|
(76,186
|
)
|
|
|
|
|
$
|
409,293
|
|
|
$
|
2,008
|
|
|
$
|
355,959
|
|
|
$
|
767,260
|
|
|
$
|
276,122
|
|
|
$
|
-
|
|
|
$
|
305,627
|
|
|
$
|
581,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Represents adjustments to revenues for gross-up
related payments (included in operating expenses) associated with
certain lines of business to reflect economic benefits to the
company. For the nine months ended September 30, 2017, includes
$2.0 million to eliminate the effect of acquisition accounting
fair value adjustments for software deferred revenue associated
with the ACTIVE Network transaction.
|
|
2 Earnings adjustments to operating income for the nine
months ended September 30, 2017 include $252.8 million in cost of
service and $103.2 million in selling, general and administrative
expenses. Adjustments to cost of service include amortization of
acquired intangibles of $250.7 million, employee termination costs
of $1.8 million and acquisition and integration costs of $0.3
million. Adjustments to selling, general and administrative
expenses include share-based compensation expense of $31.1
million, acquisition and integration costs of $69.2 million and
employee termination costs of $2.9 million.
|
|
Earnings adjustments to operating income for the nine months ended
September 30, 2016 include $176.1 million in cost of service and
$129.5 million in selling, general and administrative expenses.
Adjustments to cost of service represent amortization of acquired
intangibles of $175.0 million and employee termination costs and
other adjustments of $1.1 million. Adjustments to selling, general
and administrative expenses include share-based compensation
expense of $25.0 million, acquisition and integration costs of
$94.0 million, litigation related costs of $7.6 million and
employee termination costs and other adjustments of $2.9 million.
|
|
See "Non-GAAP Financial Measures" discussion on Schedule 10.
|
|
|
|
|
|
|
SCHEDULE 10 OUTLOOK SUMMARY (UNAUDITED) GLOBAL
PAYMENTS INC. AND SUBSIDIARIES (In billions, except per
share data)
|
|
|
|
|
|
2016 Actual
|
|
2017 Outlook
|
|
% Change
|
Revenues:
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
|
|
$
|
3.37
|
|
|
$3.945 to $3.97
|
|
17% to 18%
|
Adjustments1
|
|
|
|
|
(0.53
|
)
|
|
(0.44
|
)
|
|
|
Adjusted net revenue
|
|
|
|
$
|
2.84
|
|
|
$3.505 to $3.53
|
|
23% to 24%
|
|
|
|
|
|
|
|
|
|
Earnings Per Share ("EPS"):
|
|
|
|
|
|
|
|
|
GAAP diluted EPS
|
|
|
|
$
|
1.37
|
|
|
$1.97 to $2.05
|
|
44% to 50%
|
Acquisition-related amortization expense, share-based compensation
expense and other items2
|
|
|
|
|
1.82
|
|
|
1.97
|
|
|
|
Adjusted EPS
|
|
|
|
$
|
3.19
|
|
|
$3.94 to $4.02
|
|
24% to 26%
|
|
|
|
|
|
|
|
|
|
|
|
1 Represents adjustments to revenues for gross-up
related payments (included in operating expenses) associated with
certain lines of business to reflect economic benefits to the
company. For 2017, includes adjustments to eliminate the effect of
acquisition accounting fair value adjustments for software
deferred revenue associated with the ACTIVE Network transaction.
|
|
2 Adjustments to Calendar 2016 GAAP diluted EPS include
acquisition related amortization expense of $1.17, share-based
compensation expense of $0.14 and net other items of $0.51,
including merger-related costs of $0.62, a $0.16 adjustment to
remove a gain on the sale of membership interests in Visa Europe
and a $0.07 adjustment to remove a tax benefit associated with our
decision to indefinitely reinvest earnings in Canada. Adjustments
to 2016 GAAP diluted EPS also includes the effect of these
adjustments on noncontrolling interests and income taxes, as
applicable. For 2017, includes the revenue adjustment described
above and adjustments for acquisition-related amortization
expense, share-based compensation expense, acquisition and
integration costs, employee termination costs and certain income
tax benefits.
|
|
|
|
NON-GAAP FINANCIAL MEASURES
Global Payments supplements revenues, income and EPS information
determined in accordance with U.S. GAAP by providing these measures with
certain adjustments (such measures being non-GAAP financial measures) in
this document to assist with evaluating our performance. In addition to
GAAP measures, management uses these non-GAAP financial measures to
focus on the factors the company believes 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 financial measures, together with other
metrics, to set goals for and measure the performance of the business
and to determine incentive compensation. Adjusted net revenue, adjusted
operating income, adjusted net income and adjusted EPS should be
considered in addition to, and not as substitutes for, revenues,
operating income, net income and EPS determined in accordance with GAAP.
The non-GAAP financial measures 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 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.
Adjusted operating income, adjusted net income and adjusted EPS 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 Schedules 6, 7, 8 and
9. The tax rate used in determining the net income impact of 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171108005375/en/
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