Global Payments Reports Record Annual Results for 2018 and Establishes 2019 Growth Outlook
ATLANTA–(BUSINESS WIRE)–Global Payments Inc. (NYSE: GPN) today announced results for the
fourth quarter and year ended December 31, 2018.
“In 2018, we produced the best financial performance in our history,
culminating with strong momentum across our businesses in the fourth
quarter,” said Jeff Sloan, Chief Executive Officer. “Successful
execution of our strategy has created a more diverse, predictable and
resilient business model entering 2019.
“We believe the advantages of our technology-enabled, software-driven
strategy will continue to differentiate our company, with a balanced
approach across owned SaaS, partnered software and ecommerce and
omnichannel assets,” Sloan continued. “The positive outlook for our
business is reflected in our absolute and relative growth expectations
for 2019.”
Full-Year 2018 Summary
-
GAAP revenues were $3.37 billion, compared to $3.98 billion in 2017;
diluted earnings per share were $2.84 compared to $3.01 in the prior
year; and operating margin was 21.9% compared to 14.1% in 2017; 2018
results reflect the adoption of Accounting Standards Codification
Topic 606, Revenue from Contracts with Customers. -
Adjusted net revenue plus network fees grew 15% to $3.97 billion,
compared to $3.46 billion in 2017. -
Adjusted earnings per share grew 29% to $5.19, compared to $4.01 in
2017. - Adjusted operating margin expanded 130 basis points to 31.7%.
Fourth Quarter 2018 Summary
-
GAAP revenues were $881 million, compared to $1.05 billion in the
fourth quarter of 2017; diluted earnings per share were $0.47 compared
to $1.51 in the prior year; and operating margin was 19.0% compared to
14.2% in the fourth quarter of 2017; 2018 results reflect the adoption
of Accounting Standards Codification Topic 606, Revenue from
Contracts with Customers. -
Adjusted net revenue plus network fees grew over 12% to $1.04 billion,
compared to $923.7 million in the fourth quarter of 2017. -
Adjusted earnings per share grew 24% to $1.33, compared to $1.07 in
the fourth quarter of 2017. - Adjusted operating margin expanded 80 basis points to 31.6%.
2019 Outlook
“We are delighted with our performance in the fourth quarter, despite
facing incremental pressure from foreign currency exchange rates, and
the record results we achieved in 2018 as we consistently executed on
our growth strategy,” stated Cameron Bready, Senior Executive Vice
President and Chief Financial Officer. “We could not be more pleased
with how our business is positioned as we enter 2019 and the resulting
financial outlook for the year. The company expects adjusted net revenue
plus network fees to range from $4.43 billion to $4.49 billion,
reflecting growth of 12% to 13% over 2018 results and adjusted earnings
per share to be in a range of $5.90 to $6.10, reflecting growth of 14%
to 18% over 2018. Annual adjusted operating margin for 2019 is expected
to expand by up to 70 basis points.”
Capital Allocation
Global Payments’ Board of Directors approved a dividend of $0.01 per
share payable March 29, 2019 to shareholders of record as of March 15,
2019.
The Board also approved an increase to the existing authorization for
the company’s share repurchase program, raising the total available
authorization to $750 million.
Conference Call
Global Payments’ management will host a conference call today, February
13, 2019 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, operating income and
earnings per share information determined in accordance with GAAP by
providing those measures on an adjusted basis, and other measures, 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 and software solutions delivering innovative services
to our customers globally. Our technologies, services and employee
expertise enable us to provide a broad range of solutions that allow our
customers to accept all payment types and operate their businesses more
efficiently across a variety of distribution channels in many markets
around the world.
Headquartered in Atlanta, Georgia with approximately 11,000 employees
worldwide, Global Payments is a member of the S&P 500 with customers and
partners in 32 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 concerning our business operations, economic performance and
financial condition, including in particular: our business strategy and
means to implement the strategy, measures of future results of
operations, such as revenues, expenses, operating margins, income tax
rates, and earnings per share and other operating metrics; our success
and timing in developing and introducing new services and expanding our
business; statements about the benefits of our acquisitions, including
future financial and operating results, the combined company’s plans,
objectives, expectations and intentions, and the successful integration
of our acquisitions, and other statements that are not historical facts.
You can sometimes identify forward-looking statements by our use of the
words “believes,” “anticipates,” “expects,” “intends,” “plan,”
“forecast,” “guidance” and similar expressions. For these statements, we
claim the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
Although we believe that the plans and expectations reflected in or
suggested by our forward-looking statements are reasonable, those
statements are based on a number of assumptions, estimates, projections
or plans that are inherently subject to significant risks, uncertainties
and contingencies, many of which are beyond our control, cannot be
foreseen and reflect future business decisions that are subject to
change. Accordingly, we cannot guarantee you that our plans and
expectations will be achieved. Our actual revenues, revenue growth rates
and margins, other results of operations and shareholder values could
differ materially from those anticipated in our forward-looking
statements as a result of many known and unknown factors, many of which
are beyond our ability to predict or control. 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; development of
market trends and technologies; a decline in the use of cards for
payment generally; 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, including without limitation
difficulties and delays in integrating or fully realizing cost savings
and other benefits of our 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 Report on Form 10-K for the year ended December 31, 2017 and any
subsequent SEC filings, which we advise you to review. These cautionary
statements qualify all of our forward-looking statements, and you are
cautioned not to place undue reliance on these forward-looking
statements.
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. While we may elect to update or revise
forward-looking statements at some time in the future, we specifically
disclaim any obligation to publicly release the results of any revisions
to our forward-looking statements, except as required by law.
| SCHEDULE 1 | |||||||||||||||||||||||||||||
| GAAP CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||||||||||||
|
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||||||||||||||||||||
|
(In thousands, except per share data) |
|||||||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||
| 2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||||||||||
| Revenues(1) | $ | 880,555 | $ | 1,054,253 | (16.5 | )% | $ | 3,366,366 | $ | 3,975,163 | (15.3 | )% | |||||||||||||||||
| Operating expenses(1): | |||||||||||||||||||||||||||||
| Cost of service | 313,071 | 509,069 | (38.5 | )% | 1,095,014 | 1,928,037 | (43.2 | )% | |||||||||||||||||||||
| Selling, general and administrative | 400,498 | 395,609 | 1.2 | % | 1,534,297 | 1,488,258 | 3.1 | % | |||||||||||||||||||||
| 713,569 | 904,678 | (21.1 | )% | 2,629,311 | 3,416,295 | (23.0 | )% | ||||||||||||||||||||||
| Operating income | 166,986 | 149,575 | 11.6 | % | 737,055 | 558,868 | 31.9 | % | |||||||||||||||||||||
| Interest and other income | 3,323 | 2,875 | 15.6 | % | 20,719 | 8,662 | 139.2 | % | |||||||||||||||||||||
| Interest and other expense | (55,939 | ) | (44,425 | ) | 25.9 | % | (195,619 | ) | (174,847 | ) | 11.9 | % | |||||||||||||||||
| (52,616 | ) | (41,550 | ) | 26.6 | % | (174,900 | ) | (166,185 | ) | 5.2 | % | ||||||||||||||||||
| Income before income taxes | 114,370 | 108,025 | 5.9 | % | 562,155 | 392,683 | 43.2 | % | |||||||||||||||||||||
| Income tax (provision) benefit | (31,047 | ) | 142,280 | NM | (77,488 | ) | 101,387 | NM | |||||||||||||||||||||
| Net income | 83,323 | 250,305 | NM | 484,667 | 494,070 | NM | |||||||||||||||||||||||
|
Less: Net income attributable to noncontrolling interests, net of |
(8,109 | ) | (8,343 | ) | (2.8 | )% | (32,614 | ) | (25,645 | ) | 27.2 | % | |||||||||||||||||
|
Net income attributable to Global Payments |
$ | 75,214 | $ | 241,962 | NM | $ | 452,053 | $ | 468,425 | NM | |||||||||||||||||||
| Earnings per share attributable to Global Payments: | |||||||||||||||||||||||||||||
| Basic | $ | 0.48 | $ | 1.52 | NM | $ | 2.85 | $ | 3.03 | NM | |||||||||||||||||||
| Diluted | $ | 0.47 | $ | 1.51 | NM | $ | 2.84 | $ | 3.01 | NM | |||||||||||||||||||
| Weighted-average number of shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 158,213 | 159,143 | 158,672 | 154,652 | |||||||||||||||||||||||||
| Diluted | 158,711 | 159,827 | 159,271 | 155,528 | |||||||||||||||||||||||||
|
NM – Not Meaningful |
|||||||||||||||||||||||||||||
(1) Global Payments adopted Accounting Standards Codification
Topic 606, Revenue from Contracts with Customers (“ASC 606”) on
January 1, 2018. The new accounting standard changed the presentation of
certain amounts that we pay to third parties, including payment
networks. This change in presentation affected our reported GAAP
revenues and operating expenses by the same amount and had no effect on
operating income. Also, ASC 606 changed the presentation of revenue for
our gaming cash advance solutions and had a de minimis impact on revenue
from our European business. For our gaming cash advance solutions,
certain amounts we previously presented as operating expenses are now
recognized as a reduction of revenue under GAAP. As a result of adopting
ASC 606, results for 2018 and 2017 revenues and operating expenses are
not comparable, thus the changes from the prior year are not meaningful.
| SCHEDULE 2 | |||||||||||||||||||||||||
| NON-GAAP FINANCIAL MEASURES (UNAUDITED) | |||||||||||||||||||||||||
|
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||||||||||||||||
|
(In thousands, except per share data) |
|||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||
| 2018 | 2017 |
% |
2018 | 2017 |
% |
||||||||||||||||||||
| Adjusted net revenue plus network fees | $ | 1,037,617 | $ | 923,743 | 12.3 | % | $ | 3,969,376 | $ | 3,457,144 | 14.8 | % | |||||||||||||
| Adjusted operating income | $ | 328,256 | $ | 284,072 | 15.6 | % | $ | 1,256,447 | $ | 1,051,333 | 19.5 | % | |||||||||||||
| Adjusted net income attributable to Global Payments | $ | 211,551 | $ | 171,260 | 23.5 | % | $ | 826,337 | $ | 623,976 | 32.4 | % | |||||||||||||
|
Adjusted diluted earnings per share attributable to Global Payments |
$ | 1.33 | $ | 1.07 | 24.3 | % | $ | 5.19 | $ | 4.01 | 29.4 | % | |||||||||||||
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 December 31 | |||||||||||||||||||||||||||||||||||||||||
| 2018 | 2017 | % Change | |||||||||||||||||||||||||||||||||||||||
| GAAP |
Non- |
Non-GAAP |
GAAP |
Non- |
Non-GAAP |
GAAP(3) |
Non- |
Non-GAAP |
|||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||
| North America | $ | 662,739 | $ | 600,805 | $ | 764,786 | $ | 766,611 | $ | 687,708 | $ | 671,671 | NM | NM | 13.9 | % | |||||||||||||||||||||||||
| Europe | 154,438 | 154,438 | 188,103 | 210,267 | 173,872 | 174,696 | NM | NM | 7.7 | % | |||||||||||||||||||||||||||||||
| Asia-Pacific | 63,378 | 63,797 | 84,728 | 77,375 | 77,375 | 77,376 | NM | NM | 9.5 | % | |||||||||||||||||||||||||||||||
| $ | 880,555 | $ | 819,040 | $ | 1,037,617 | $ | 1,054,253 | $ | 938,955 | $ | 923,743 | NM | NM | 12.3 | % | ||||||||||||||||||||||||||
| Operating income: | |||||||||||||||||||||||||||||||||||||||||
| North America | $ | 124,030 | $ | 247,069 | $ | 112,405 | $ | 206,218 | 10.3 | % | 19.8 | % | |||||||||||||||||||||||||||||
| Europe | 79,381 | 89,645 | 76,375 | 83,336 | 3.9 | % | 7.6 | % | |||||||||||||||||||||||||||||||||
| Asia-Pacific | 26,359 | 29,179 | 23,952 | 26,365 | 10.0 | % | 10.7 | % | |||||||||||||||||||||||||||||||||
| Corporate | (62,784 | ) | (37,637 | ) | (63,157 | ) | (31,847 | ) | (0.6 | )% | 18.2 | % | |||||||||||||||||||||||||||||
| $ | 166,986 | $ | 328,256 | $ | 149,575 | $ | 284,072 | 11.6 | % | 15.6 | % | ||||||||||||||||||||||||||||||
| Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||
| 2018 | 2017 | % Change | |||||||||||||||||||||||||||||||||||||||
| GAAP |
Non- |
Non-GAAP |
GAAP |
Non- |
Non-GAAP |
GAAP(3) |
Non- |
Non-GAAP |
|||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||
| North America | $ | 2,522,284 | $ | 2,252,819 | $ | 2,915,681 | $ | 2,929,522 | $ | 2,595,378 | $ | 2,527,899 | NM | NM | 15.3 | % | |||||||||||||||||||||||||
| Europe | 610,930 | 610,930 | 742,901 | 767,524 | 647,691 | 651,128 | NM | NM | 14.1 | % | |||||||||||||||||||||||||||||||
| Asia-Pacific | 233,152 | 233,571 | 310,794 | 278,117 | 278,117 | 278,117 | NM | NM | 11.7 | % | |||||||||||||||||||||||||||||||
| $ | 3,366,366 | $ | 3,097,320 | $ | 3,969,376 | $ | 3,975,163 | $ | 3,521,186 | $ | 3,457,144 | NM | NM | 14.8 | % | ||||||||||||||||||||||||||
| Operating income: | |||||||||||||||||||||||||||||||||||||||||
| North America | $ | 570,630 | $ | 952,881 | $ | 457,009 | $ | 780,609 | 24.9 | % | 22.1 | % | |||||||||||||||||||||||||||||
| Europe | 318,392 | 349,660 | 272,769 | 302,641 | 16.7 | % | 15.5 | % | |||||||||||||||||||||||||||||||||
| Asia-Pacific | 93,402 | 103,735 | 81,273 | 89,122 | 14.9 | % | 16.4 | % | |||||||||||||||||||||||||||||||||
| Corporate | (245,369 | ) | (149,829 | ) | (252,183 | ) | (121,039 | ) | (2.7 | )% | 23.8 | % | |||||||||||||||||||||||||||||
| $ | 737,055 | $ | 1,256,447 | $ | 558,868 | $ | 1,051,333 | 31.9 | % | 19.5 | % | ||||||||||||||||||||||||||||||
|
NM – Not Meaningful |
|||||||||||||||||||||||||||||||||||||||||
(1) See Schedules 8 and 9 for a reconciliation of adjusted
net revenue, adjusted net revenue plus network fees and adjusted
operating income by segment to the most comparable GAAP measures and
Schedule 10 for a discussion of non-GAAP financial measures.
(2) Global Payments adopted ASC 606 on January 1, 2018. The
new accounting standard changed the presentation of certain amounts that
we pay to third parties, including payment networks. This change in
presentation affected our reported GAAP revenues and operating expenses
by the same amount and had no effect on operating income. Also, ASC 606
changed the presentation of revenue for our gaming cash advance
solutions and had a de minimis impact on revenue from our European
business. For our gaming cash advance solutions, certain amounts we
previously presented as operating expenses are now recognized as a
reduction of revenue under GAAP.
(3) As a result of adopting ASC 606, results for 2018 and
2017 GAAP revenues and adjusted net revenue are not comparable, thus the
change from the prior year is not meaningful.
| SCHEDULE 4 | |||||||||||
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||||||
|
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||
|
(In thousands, except share data) |
|||||||||||
| December 31, | |||||||||||
| 2018 | 2017 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,210,878 | $ | 1,335,855 | |||||||
|
Accounts receivable, net of allowances for doubtful accounts of $3,164 and $1,827, respectively |
348,400 | 301,887 | |||||||||
| Settlement processing assets | 1,600,222 | 2,459,292 | |||||||||
| Prepaid expenses and other current assets | 216,708 | 206,545 | |||||||||
| Total current assets | 3,376,208 | 4,303,579 | |||||||||
| Goodwill | 6,341,355 | 5,703,992 | |||||||||
| Other intangible assets, net | 2,488,618 | 2,181,707 | |||||||||
| Property and equipment, net | 653,542 | 588,348 | |||||||||
| Deferred income taxes | 8,128 | 13,146 | |||||||||
| Other noncurrent assets | 362,923 | 207,297 | |||||||||
| Total assets | $ | 13,230,774 | $ | 12,998,069 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Settlement lines of credit | $ | 700,486 | $ | 635,166 | |||||||
| Current portion of long-term debt | 115,075 | 100,308 | |||||||||
| Accounts payable and accrued liabilities | 1,176,703 | 1,039,607 | |||||||||
| Settlement processing obligations | 1,276,356 | 2,040,509 | |||||||||
| Total current liabilities | 3,268,620 | 3,815,590 | |||||||||
| Long-term debt | 5,015,168 | 4,559,408 | |||||||||
| Deferred income taxes | 585,025 | 436,879 | |||||||||
| Other noncurrent liabilities | 175,618 | 220,961 | |||||||||
| Total liabilities | 9,044,431 | 9,032,838 | |||||||||
| 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; 157,961,982 issued and outstanding at December 31, 2018 and 159,180,317 issued and outstanding at December 31, 2017 |
— | — | |||||||||
| Paid-in capital | 2,235,167 | 2,379,774 | |||||||||
| Retained earnings | 2,066,415 | 1,597,897 | |||||||||
| Accumulated other comprehensive loss | (310,175 | ) | (183,144 | ) | |||||||
| Total Global Payments shareholders’ equity | 3,991,407 | 3,794,527 | |||||||||
| Noncontrolling interests | 194,936 | 170,704 | |||||||||
| Total equity | 4,186,343 | 3,965,231 | |||||||||
| Total liabilities and equity | $ | 13,230,774 | $ | 12,998,069 | |||||||
| SCHEDULE 5 | |||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||
|
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||
|
(In thousands) |
|||||||||||
| Year Ended December 31, | |||||||||||
| 2018 | 2017 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 484,667 | $ | 494,070 | |||||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||
| Depreciation and amortization of property and equipment | 145,128 | 113,273 | |||||||||
| Amortization of acquired intangibles | 377,685 | 337,878 | |||||||||
| Share-based compensation expense | 57,826 | 39,095 | |||||||||
| Provision for operating losses and bad debts | 43,237 | 48,443 | |||||||||
| Amortization of capitalized customer acquisition costs | 51,541 | 45,098 | |||||||||
| Deferred income taxes | (1,451 | ) | (250,670 | ) | |||||||
| Other, net | (8,025 | ) | 44,070 | ||||||||
|
Changes in operating assets and liabilities, net of the effects of business combinations: |
|||||||||||
| Accounts receivable | (33,386 | ) | (14,096 | ) | |||||||
| Settlement processing assets and obligations, net | 83,478 | (361,673 | ) | ||||||||
| Prepaid expenses and other assets | (160,800 | ) | (129,427 | ) | |||||||
| Accounts payable and other liabilities | 66,182 | 146,327 | |||||||||
| Net cash provided by operating activities | 1,106,082 | 512,388 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Business combinations and other acquisitions, net of cash acquired | (1,259,692 | ) | (562,688 | ) | |||||||
| Capital expenditures | (213,290 | ) | (181,905 | ) | |||||||
| Net proceeds from sales of property and equipment | — | 37,565 | |||||||||
| Other, net | (3,305 | ) | (28,997 | ) | |||||||
| Net cash used in investing activities | (1,476,287 | ) | (736,025 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Net proceeds from settlement lines of credit | 70,783 | 221,532 | |||||||||
| Proceeds from long-term debt | 2,774,214 | 1,994,324 | |||||||||
| Repayments of long-term debt | (2,304,314 | ) | (1,781,541 | ) | |||||||
| Payment of debt issuance costs | (16,345 | ) | (9,520 | ) | |||||||
| Repurchase of common stock | (208,198 | ) | (34,811 | ) | |||||||
| Proceeds from stock issued under share-based compensation plans | 14,318 | 10,115 | |||||||||
| Common stock repurchased – share-based compensation plans | (31,510 | ) | (31,761 | ) | |||||||
| Distributions to noncontrolling interests | (5,686 | ) | (9,301 | ) | |||||||
| Dividends paid | (6,332 | ) | (6,732 | ) | |||||||
| Net cash provided by financing activities | 286,930 | 352,305 | |||||||||
| Effect of exchange rate changes on cash | (41,702 | ) | 44,408 | ||||||||
| Increase (decrease) in cash and cash equivalents | (124,977 | ) | 173,076 | ||||||||
| Cash and cash equivalents, beginning of the period | 1,335,855 | 1,162,779 | |||||||||
| Cash and cash equivalents, end of the period | $ | 1,210,878 | $ | 1,335,855 | |||||||
| SCHEDULE 6 | ||||||||||||||||||||||||||||||||
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES (UNAUDITED) |
||||||||||||||||||||||||||||||||
|
THREE MONTHS ENDED DECEMBER 31, 2018 AND 2017 |
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|
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
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|
(In thousands, except per share data) |
||||||||||||||||||||||||||||||||
| Three Months Ended December 31, 2018 | ||||||||||||||||||||||||||||||||
| GAAP |
Net Revenue |
Earnings |
Income Taxes |
Non-GAAP |
Network |
Non-GAAP |
||||||||||||||||||||||||||
| Revenues | $ | 880,555 | $ | (61,515 | ) | $ | — | $ | — | $ | 819,040 | $ | 218,577 | $ | 1,037,617 | |||||||||||||||||
| Operating income | $ | 166,986 | $ | 4,469 | $ | 156,801 | $ | — | $ | 328,256 | ||||||||||||||||||||||
| Net income attributable to Global Payments | $ | 75,214 | $ | 4,469 | $ | 153,877 | $ | (22,009 | ) | $ | 211,551 | |||||||||||||||||||||
| Diluted earnings per share attributable to Global Payments | $ | 0.47 | $ | 1.33 | ||||||||||||||||||||||||||||
| Diluted weighted average shares outstanding | 158,711 | 158,711 | ||||||||||||||||||||||||||||||
| Three Months Ended December 31, 2017 | ||||||||||||||||||||||||||||||||
| GAAP |
Net Revenue |
Earnings |
Income Taxes |
Non-GAAP |
Gaming |
Non-GAAP |
||||||||||||||||||||||||||
| Revenues | $ | 1,054,253 | $ | (115,298 | ) | $ | — | $ | — | $ | 938,955 | $ | (15,212 | ) | $ | 923,743 | ||||||||||||||||
| Operating income | $ | 149,575 | $ | 5,226 | $ | 129,271 | $ | — | $ | 284,072 | ||||||||||||||||||||||
| Net income attributable to Global Payments | $ | 241,962 | $ | 5,226 | $ | 127,444 | $ | (203,372 | ) | $ | 171,260 | |||||||||||||||||||||
|
Diluted earnings per share attributable to Global Payments |
$ | 1.51 | $ | 1.07 | ||||||||||||||||||||||||||||
| Diluted weighted average shares outstanding | 159,827 | 159,827 | ||||||||||||||||||||||||||||||
(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 December 31, 2018 and December 31, 2017, includes $4.5
million and $5.2 million, respectively to eliminate the effect of
acquisition accounting fair value adjustments for software-related
contract liabilities associated with acquired businesses.
(2) For the three months ended December 31, 2018, earnings
adjustments to operating income include $122.8 million in cost of
service (COS) and $34.0 million in selling, general and administrative
expenses (SG&A). Adjustments to COS include amortization of acquired
intangibles of $114.5 million and acquisition and integration expenses
of $8.3 million. Adjustments to SG&A include share-based compensation
expense of $12.9 million, acquisition and integration expenses of $13.4
million, non-cash asset abandonment charges of $7.6 million associated
with technology integrations and other adjustments of $0.1 million.
For the three months ended December 31, 2017, earnings adjustments to
operating income include $89.5 million in COS and $39.8 million in SG&A.
Adjustments to COS include amortization of acquired intangibles of $89.3
million and other adjustments of $0.2 million. Adjustments to SG&A
include share-based compensation expense of $8.3 million and acquisition
and integration expenses of $31.5 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.
For the three months ended December 31, 2018, also includes the removal
of a $9.7 million income tax expense adjustment related to tax reform
and the removal of a tax expense adjustment associated with the vesting
of share-based awards. For the three months ended December 31, 2017,
includes the removal of a $156.
Contacts
Investor contact:
investor.relations@globalpay.com
Winnie
Smith
770-829-8478
Media contact:
media.relations@globalpay.com
Kimberly
Mann
770-829-8755