Global Payments Reports Second Quarter Earnings

Further Increases Annual Fiscal 2015 Revenue, Margin and Cash EPS Outlook

Raises Share Repurchase Authorization to $300 Million

ATLANTA--(BUSINESS WIRE)--Global Payments Inc. (NYSE: GPN) today announced results for its fiscal second quarter ended November 30, 2014.

“We are very pleased to deliver another quarter of solid performance across our direct businesses,” said Chief Executive Officer Jeff Sloan. “We also continue to successfully expand our worldwide footprint, one of our key strategies to accelerate growth. During the quarter, we completed the acquisition of Ezidebit, a technology company with direct distribution in Australia and New Zealand and an expanding presence throughout Asia. We also announced an agreement to establish a new joint venture with Bank of the Philippine Islands. This partnership will increase our existing distribution in the highly attractive Philippines market. These transactions help fulfill the vision we set forth in 2012 with the purchase of the minority interest in our then joint venture in Asia.”

Second Quarter 2015 Summary

• Revenues grew 10% to $697.3 million, compared to $634.1 million in the second quarter of fiscal 2014.
• Cash diluted earnings per share¹ grew 19% to $1.27, compared to $1.07 in the second quarter of fiscal 2014.
• GAAP diluted earnings per share were $1.10, compared to $1.02 in the second quarter of fiscal 2014.

2015 Outlook

Cameron Bready, Executive Vice President and Chief Financial Officer, stated, “We experienced strong organic revenue growth and margin expansion during the quarter, despite the strengthening of the U.S. dollar, and we continue to see solid performance from our recent acquisitions. Based on these results and our outlook for the remainder of the fiscal year, we are increasing our revenue, margin and cash earnings per share guidance.”

The company is raising its annual fiscal 2015 revenue outlook to $2.75 billion to $2.80 billion, or 8% to 10% growth. In addition, Global Payments is increasing its outlook for annual fiscal 2015 diluted earnings per share on a cash basis to a range of $4.75 to $4.83, reflecting growth of 15% to 17% over fiscal 2014, and annual fiscal 2015 GAAP diluted earnings per share is expected to be in the range of $3.99 to $4.07. The company also now expects annual fiscal 2015 core cash operating margins to expand by as much as 50 basis points.

Capital Allocation

Global Payments’ Board of Directors approved a fiscal 2015 second quarter dividend of $0.02 per share payable February 27, 2015 to shareholders of record as of February 13, 2015 and also approved an increase to the existing authorization for the company’s share repurchase program, raising the total available authorization to $300 million.

Conference Call

Global Payments’ management will host a conference call today, January 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. is one of the largest worldwide providers of payment solutions for merchants, value added resellers, enterprise software providers, financial institutions, government agencies, multi-national corporations and independent sales organizations located throughout North America, Brazil, Europe and the Asia-Pacific region. Global Payments, a Fortune 1000 company, offers a comprehensive line of solutions and services 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.

_________________________

¹See Schedule 2 for cash earnings and Schedules 6, 7 and 8 for reconciliations of historical 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 Report 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 November 30,								Six Months Ended November 30,
		2014			2013		% Change			2014			2013		% Change
	(unaudited)								(unaudited)
Revenues	$	697,291		$	634,122		10.0	%	$	1,402,186		$	1,263,807		10.9	%
Operating expenses:
Cost of service		257,796			235,170		9.6	%		517,635			465,915		11.1	%
Sales, general and administrative		315,511			294,045		7.3	%		636,169			585,601		8.6	%
Processing system intrusion		—			(7,000	)				—			(7,000	)
		573,307			522,215					1,153,804			1,044,516
Operating income		123,984			111,907		10.8	%		248,382			219,291		13.3	%
Other income (expense):
Interest and other income		1,282			5,288		(75.8	)%		2,474			8,626		(71.3	)%
Interest and other expense		(10,350	)		(8,025	)	29.0	%		(21,360	)		(15,904	)	34.3	%
		(9,068	)		(2,737	)	231.3	%		(18,886	)		(7,278	)	159.5	%
Income before income taxes		114,916			109,170		5.3	%		229,496			212,013		8.2	%
Provision for income taxes		(29,660	)		(29,313	)	1.2	%		(59,806	)		(60,448	)	(1.1	)%
Net income		85,256			79,857		6.8	%		169,690			151,565		12.0	%
Less: Net income attributable to noncontrolling interests, net of income tax		(10,475	)		(5,960	)	75.8	%		(19,543	)		(13,025	)	50.0	%
Net income attributable to Global Payments	$	74,781		$	73,897		1.2	%	$	150,147		$	138,540		8.4	%
Earnings per share attributable to Global Payments:
Basic	$	1.11		$	1.02		8.4	%	$	2.22		$	1.90		16.7	%
Diluted	$	1.10		$	1.02		8.6	%	$	2.20		$	1.88		16.8	%
Weighted average shares outstanding:
Basic		67,377			72,174					67,764			72,974
Diluted		67,737			72,706					68,179			73,504

SCHEDULE 2
CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
	Three Months Ended November 30,								Six Months Ended November 30,
		2014			2013		% Change			2014			2013		% Change
Revenues	$	697,291		$	634,122		10.0	%	$	1,402,186		$	1,263,807		10.9	%
Operating expenses:
Cost of service		239,533			220,610		8.6	%		481,518			436,383		10.3	%
Sales, general and administrative		315,511			290,697		8.5	%		639,110			580,757		10.0	%
		555,044			511,307		8.6	%		1,120,628			1,017,140		10.2	%
Operating income		142,247			122,815		15.8	%		281,558			246,667		14.1	%
Other income (expense):
Interest and other income		1,282			3,165		(59.5	)%		2,474			6,503		(62.0	)%
Interest and other expense		(10,350	)		(8,025	)	29.0	%		(21,360	)		(15,904	)	34.3	%
		(9,068	)		(4,860	)	86.6	%		(18,886	)		(9,401	)	100.9	%
Income before income taxes		133,179			117,955		12.9	%		262,672			237,266		10.7	%
Provision for income taxes		(35,520	)		(32,873	)	8.1	%		(70,950	)		(69,559	)	2.0	%
Net income		97,659			85,082		14.8	%		191,722			167,707		14.3	%
Less: Net income attributable to noncontrolling interests, net of income tax		(11,648	)		(7,197	)	61.8	%		(21,951	)		(15,633	)	40.4	%
Net income attributable to Global Payments	$	86,011		$	77,885		10.4	%	$	169,771		$	152,074		11.6	%
Earnings per share attributable to Global Payments:
Basic	$	1.28		$	1.08		18.3	%	$	2.51		$	2.08		20.2	%
Diluted	$	1.27		$	1.07		18.5	%	$	2.49		$	2.07		20.4	%
Weighted average shares outstanding:
Basic		67,377			72,174					67,764			72,974
Diluted		67,737			72,706					68,179			73,504
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 November 30,
	2014						2013						% Change
	GAAP			Cash Earnings			GAAP			Cash Earnings			GAAP		Cash Earnings
Revenues:
United States	$	404,784		$	404,784		$	361,793		$	361,793		11.9	%	11.9	%
Canada		83,992			83,992			85,240			85,240		(1.5	)%	(1.5	)%
North America merchant services		488,776			488,776			447,033			447,033		9.3	%	9.3	%
Europe		159,974			159,974			146,866			146,866		8.9	%	8.9	%
Asia-Pacific		48,541			48,541			40,223			40,223		20.7	%	20.7	%
International merchant services		208,515			208,515			187,089			187,089		11.5	%	11.5	%
Total revenues	$	697,291		$	697,291		$	634,122		$	634,122		10.0	%	10.0	%
Operating income (loss) for segments:
North America merchant services	$	74,246		$	85,419		$	70,437		$	77,621		5.4	%	10.0	%
International merchant services		76,443			83,533			62,467			69,843		22.4	%	19.6	%
Corporate^1		(26,705	)		(26,705	)		(20,997	)		(24,649	)	27.2	%	8.3	%
Operating income	$	123,984		$	142,247		$	111,907		$	122,815		10.8	%	15.8	%
	Six Months Ended November 30,
	2014						2013						% Change
	GAAP			Cash Earnings			GAAP			Cash Earnings			GAAP		Cash Earnings
Revenues:
United States	$	818,825		$	818,825		$	725,626		$	725,626		12.8	%	12.8	%
Canada		173,957			173,957			171,912			171,912		1.2	%	1.2	%
North America merchant services		992,782			992,782			897,538			897,538		10.6	%	10.6	%
Europe		322,762			322,762			290,054			290,054		11.3	%	11.3	%
Asia-Pacific		86,642			86,642			76,215			76,215		13.7	%	13.7	%
International merchant services		409,404			409,404			366,269			366,269		11.8	%	11.8	%
Total revenues	$	1,402,186		$	1,402,186		$	1,263,807		$	1,263,807		10.9	%	10.9	%
Operating income (loss) for segments:
North America merchant services	$	152,183		$	174,734		$	140,136		$	157,025		8.6	%	11.3	%
International merchant services		150,045			160,670			124,008			138,600		21.0	%	15.9	%
Corporate^1		(53,846	)		(53,846	)		(44,853	)		(48,958	)	20.0	%	10.0	%
Operating income	$	248,382		$	281,558		$	219,291		$	246,667		13.3	%	14.1	%
^1 GAAP earnings for the three and six months ended November 30, 2013 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)
	November 30, 2014			May 31, 2014
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	644,469		$	581,872
Accounts receivable, net of allowances for doubtful accounts of $469 and $401, respectively		197,053			214,574
Claims receivable, net		577			809
Settlement processing assets		1,122,321			780,917
Inventory		8,002			6,636
Deferred income taxes		12,761			12,963
Prepaid expenses and other current assets		40,072			45,673
Total current assets		2,025,255			1,643,444
Goodwill		1,483,615			1,337,285
Other intangible assets, net		542,992			535,173
Property and equipment, net		362,809			369,753
Deferred income taxes		95,161			101,928
Other		31,755			31,067
Total assets	$	4,541,587		$	4,018,650
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit	$	530,721		$	440,128
Current portion of long-term debt		46,875			17,677
Accounts payable and accrued liabilities		303,008			290,106
Settlement processing obligations		781,262			451,317
Income taxes payable		14,267			12,390
Total current liabilities		1,676,133			1,211,618
Long-term debt		1,554,125			1,376,002
Deferred income taxes		200,848			209,099
Other long-term liabilities		88,245			89,132
Total liabilities		3,519,351			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; 67,031,081 issued and outstanding at November 30, 2014 and 68,845,643 issued and outstanding at May 31, 2014		—			—
Paid-in capital		144,419			183,023
Retained earnings		852,972			815,980
Accumulated other comprehensive loss		(102,726	)		(1,776	)
Total Global Payments shareholders’ equity		894,665			997,227
Noncontrolling interests		127,571			135,572
Total equity		1,022,236			1,132,799
Total liabilities and equity	$	4,541,587		$	4,018,650

SCHEDULE 5
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
	Six Months Ended November 30,
		2014			2013
Cash flows from operating activities:
Net income	$	169,690		$	151,565
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		33,055			28,439
Amortization of acquired intangibles		36,117			28,953
Share-based compensation expense		9,145			11,965
Provision for operating losses and bad debts		7,432			10,249
Deferred income taxes		(982	)		6,073
Other, net		(387	)		(4,345	)
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable		17,521			(6,353	)
Claims receivable		(4,881	)		(6,567	)
Settlement processing assets and obligations, net		(13,778	)		204,307
Inventory		(1,506	)		2,237
Prepaid expenses and other assets		5,409			5,761
Accounts payable and other accrued liabilities		(31,503	)		(21,845	)
Income taxes payable		1,604			1,244
Net cash provided by operating activities		226,936			411,683
Cash flows from investing activities:
Business, intangible and other asset acquisitions, net of cash acquired		(223,651	)		(2,324	)
Capital expenditures		(33,290	)		(41,178	)
Principal collections on financing receivables		219			1,328
Net proceeds from sales of investments and business		10,528			3,102
Net cash used in investing activities		(246,194	)		(39,072	)
Cash flows from financing activities:
Net borrowings on short-term lines of credit		90,593			259,047
Proceeds from issuance of long-term debt		1,080,000			810,000
Principal payments under long-term debt		(872,679	)		(779,380	)
Repurchase of common stock		(179,724	)		(250,183	)
Proceeds from stock issued under share-based compensation plans		17,099			27,366
Common stock repurchased - share-based compensation plans		(15,705	)		(5,260	)
Tax benefit from share-based compensation plans		3,599			4,415
Distributions to noncontrolling interests		(15,485	)		(15,593	)
Dividends paid		(2,693	)		(2,894	)
Net cash provided by financing activities		105,005			47,518
Effect of exchange rate changes on cash		(23,150	)		(3,766	)
Increase in cash and cash equivalents		62,597			416,363
Cash and cash equivalents, beginning of the period		581,872			680,470
Cash and cash equivalents, end of the period	$	644,469		$	1,096,833

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, 2014
	GAAP			Processing System Intrusion			Other			Cash Earnings Adjustments^3			Cash Earnings
Revenues	$	697,291		$	—		$	—		$	—		$	697,291
Operating expenses:
Cost of service		257,796			—			—			(18,263	)		239,533
Sales, general and administrative		315,511			—			—			—			315,511
Processing system intrusion		—			—			—			—			—
		573,307			—			—			(18,263	)		555,044
Operating income		123,984			—			—			18,263			142,247
Other income (expense):
Interest and other income		1,282			—			—			—			1,282
Interest and other expense		(10,350	)		—			—			—			(10,350	)
		(9,068	)		—			—			—			(9,068	)
Income before income taxes		114,916			—			—			18,263			133,179
Provision for income taxes		(29,660	)		—			—			(5,860	)		(35,520	)
Net income		85,256			—			—			12,403			97,659
Less: Net income attributable to noncontrolling interests, net of income tax		(10,475	)		—			—			(1,173	)		(11,648	)
Net income attributable to Global Payments	$	74,781		$	—		$	—		$	11,230		$	86,011
Diluted shares		67,737												67,737
Diluted earnings per share	$	1.10		$	—		$	—		$	0.17		$	1.27
	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 before income taxes		109,170			(7,000	)		1,225			14,560			117,955
(Provision for) benefit from 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
^1 Represents insurance proceeds associated with the fiscal 2012 processing system intrusion.
^2For the three months 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.
^3Represents 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 November 30, 2014 and 2013 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. In the three months ended November 30, 2014, we calculated income and earnings per share on a cash basis by excluding amounts related to acquisition intangible amortization. In the three months ended November 30, 2013, we calculated income and earnings per share on a cash basis by excluding amounts related to acquisition intangible amortization, the processing system intrusion, 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. 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, 2014
	GAAP			Processing System Intrusion			Other^2			Cash Earnings Adjustments^3			Cash Earnings
Revenues	$	1,402,186		$	—		$	—		$	—		$	1,402,186
Operating expenses:
Cost of service		517,635			—			—			(36,117	)		481,518
Sales, general and administrative		636,169			—			2,941			—			639,110
Processing system intrusion		—			—			—			—			—
		1,153,804			—			2,941			(36,117	)		1,120,628
Operating income		248,382			—			(2,941	)		36,117			281,558
Other income (expense):
Interest and other income		2,474			—			—			—			2,474
Interest and other expense		(21,360	)		—			—			—			(21,360	)
		(18,886	)		—			—			—			(18,886	)
Income (loss) before income taxes		229,496			—			(2,941	)		36,117			262,672
(Provision for) benefit from income taxes		(59,806	)		—			588			(11,732	)		(70,950	)
Net income (loss)		169,690			—			(2,353	)		24,385			191,722
Less: Net income attributable to noncontrolling interests, net of income tax		(19,543	)		—			—			(2,408	)		(21,951	)
Net income (loss) attributable to Global Payments	$	150,147		$	—		$	(2,353	)	$	21,977		$	169,771
Diluted shares		68,179												68,179
Diluted earnings (loss) per share	$	2.20		$	—		$	(0.03	)	$	0.32		$	2.49
	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 for) benefit from 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
^1 Represents insurance proceeds associated with the fiscal 2012 processing system intrusion.
^2 For the six months ended November 30, 2014, represents a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. For the six months ended November 30, 2013, represents one-time charges primarily related to employee termination benefits, resolution of a contract related contingency and a one-time credit related to the gain on the sale of an interest in a business.
^3Represents 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 six months ended November 30, 2014 and 2013 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. For the six months ended November 30, 2014, we calculated income and earnings per share on a cash basis by excluding amounts related to acquisition intangible amortization and a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. In the six months ended November 30, 2013, we calculated income and earnings per share on a cash basis by excluding amounts related to acquisition intangible amortization, the processing system intrusion, one-time charges 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. 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,
	2014													2013
	GAAP			Processing System Intrusion		Other			Cash Earnings Adjustments^3		Cash Earnings			GAAP			Processing System Intrusion^1			Other^2		Cash Earnings Adjustments^3		Cash Earnings
Revenues:
United States	$	404,784		$	—	$	—		$	—	$	404,784		$	361,793		$	—		$	—	$	—	$	361,793
Canada		83,992			—		—			—		83,992			85,240			—			—		—		85,240
North America merchant services		488,776			—		—			—		488,776			447,033			—			—		—		447,033
Europe		159,974			—		—			—		159,974			146,866			—			—		—		146,866
Asia-Pacific		48,541			—		—			—		48,541			40,223			—			—		—		40,223
International merchant services		208,515			—		—			—		208,515			187,089			—			—		—		187,089
Total revenues	$	697,291		$	—	$	—		$	—	$	697,291		$	634,122		$	—		$	—	$	—	$	634,122
Operating income (loss) for segments:
North America merchant services	$	74,246		$	—	$	—		$	11,173	$	85,419		$	70,437		$	—		$	—	$	7,184	$	77,621
International merchant services		76,443			—		—			7,090		83,533			62,467			—			—		7,376		69,843
Corporate		(26,705	)		—		—			—		(26,705	)		(20,997	)		(7,000	)		3,348		—		(24,649	)
Operating income (loss)	$	123,984		$	—	$	—		$	18,263	$	142,247		$	111,907		$	(7,000	)	$	3,348	$	14,560	$	122,815
	Six Months Ended November 30,
	2014													2013
	GAAP			Processing System Intrusion		Other^2			Cash Earnings Adjustments^3		Cash Earnings			GAAP			Processing System Intrusion^1			Other ^2		Cash Earnings Adjustments^3		Cash Earnings
Revenues:
United States	$	818,825		$	—	$	—		$	—	$	818,825		$	725,626		$	—		$	—	$	—	$	725,626
Canada		173,957			—		—			—		173,957			171,912			—			—		—		171,912
North America merchant services		992,782			—		—			—		992,782			897,538			—			—		—		897,538
Europe		322,762			—		—			—		322,762			290,054			—			—		—		290,054
Asia-Pacific		86,642			—		—			—		86,642			76,215			—			—		—		76,215
International merchant services		409,404			—		—			—		409,404			366,269			—			—		—		366,269
Total revenues	$	1,402,186		$	—	$	—		$	—	$	1,402,186		$	1,263,807		$	—		$	—	$	—	$	1,263,807
Operating income (loss) for segments:
North America merchant services	$	152,183		$	—	$	—		$	22,551	$	174,734		$	140,136		$	—		$	2,518	$	14,371	$	157,025
International merchant services		150,045			—		(2,941	)		13,566		160,670			124,008			—			10		14,582		138,600
Corporate		(53,846	)		—		—			—		(53,846	)		(44,853	)		(7,000	)		2,895		—		(48,958	)
Operating income (loss)	$	248,382		$	—	$	(2,941	)	$	36,117	$	281,558		$	219,291		$	(7,000	)	$	5,423	$	28,953	$	246,667
^1 Represents insurance proceeds associated with the fiscal 2012 processing system intrusion.
^2For the six months ended November 30, 2014, represents a gain on the sale of a component of our Russia business that leased ATMs to our sponsor bank in Russia. For the three and six months ended November 30, 2013, represents one-time charges primarily related to employee termination benefits and resolution of a contract related contingency.
^3Represents 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	$4.75 to $4.83	15% to 17%
Acquisition-related intangibles assets, non-recurring items and processing system intrusion^1	(0.75)	(0.76)	1 %
GAAP Diluted EPS	$3.37	$3.99 to $4.07	18% 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 excluding amounts related to acquisition intangible amortization, the processing system intrusion, 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. 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.
^1Fiscal 2015 reflects $0.72 of acquisition intangible amortization and $0.04 of one-time charges. 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 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.