Global Payments (GPN) 8-K Global Payments Reports Third Quarter Earnings for Fiscal 2013

Global Payments Reports Third Quarter Earnings for Fiscal 2013

Reaffirms Fiscal 2013 Annual Revenue and Cash Earnings Expectations

ATLANTA, April 2, 2013 -- Global Payments Inc. (NYSE: GPN), a leading, worldwide provider of electronic transaction processing solutions, today announced results for its fiscal third quarter ended February 28, 2013.

Third Quarter 2013 Summary

• Revenue grew 8% to $578.7 million compared to $533.5 million in the third quarter of 2012.

• Cash diluted earnings per share¹grew 5% to $0.87 compared to $0.83 in the third quarter of 2012.

• GAAP diluted earnings per share were $0.75, compared to $0.73 in the third quarter of 2012.

Chairman and CEO Paul R. Garcia said, “We are pleased with the progress we have made on our strategic initiatives, and we are on track to achieve our full-year earnings expectations in 2013. These initiatives include focusing on expanding distribution channels through our partner of choice strategy, leveraging our technology infrastructure and driving innovation. We recently launched a number of innovative mobility and loyalty products to our worldwide merchants, and we are fully focused on expanding our unparalleled global footprint.”

Data Remediation Expense Update

During the third quarter, the company was returned to the list of PCI DSS compliant service providers and received reports on compliance covering all of the systems that process, store, transmit or otherwise utilize card data. The company expects that net full-year 2013 expenses for the data intrusion will total approximately $20 million. Based on the assumption that the company will receive an additional $10 million of insurance proceeds in fiscal 2014, the company estimates that the total cost for the processing system intrusion since inception will be approximately $95 million.

David Mangum, Senior Executive Vice President and CFO, stated, “Now that the remediation work is behind us, we can turn our undivided attention to driving the business forward. We are grateful to our customers, partners and the card networks for their support as well as the significant efforts of our team.”

¹See Schedule 2 for Cash Earnings and Schedules 6 and 7 for Reconciliations of Cash Earnings to GAAP.

2013 Outlook

For the full-year of fiscal 2013, the company continues to expect annual revenue of $2,360 million to $2,400 million, or 7% to 9% growth over fiscal 2012 and expected diluted earnings per share on a cash basis continue to be in a range of $3.64 to $3.71, or growth of 3% to 5% over fiscal 2012.

Annual fiscal 2013 GAAP diluted earnings per share have been revised to include the estimated impact of net intrusion remediation costs of $0.17 per share and are now expected to be in a range of $2.87 to $2.94.

For reconciliation of expected full-year fiscal 2013 Cash Earnings to GAAP and constant currency, see schedule 9.

Conference Call

Global Payments will hold a conference call today, April 2, 2013 at 5:00 p.m. EDT to discuss financial results and business highlights. Callers may access the conference call via the investor relations page of the company's website at www.globalpaymentsinc.com by clicking the “Webcast” button; or callers in North America may dial 1-888-895-3550 and callers outside North America may dial 1-706-758-8809. The pass code is “GPN.” A replay of the call may be accessed through the Global Payments website through April 16, 2013.

About Global Payments

Global Payments Inc. (NYSE:GPN) is a leading provider of electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Europe and the Asia-Pacific region. Global Payments, a Fortune 1000 company, offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management. Visit www.globalpaymentsinc.com for more information about the company and its services.

This announcement and comments made by Global Payments' management during the conference call may contain certain forward-looking statements within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management's expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties. Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following:the effect on our results of operations of continued security enhancements to our processing system; foreign currency risks which become increasingly relevant as we expand internationally; the effect of current domestic and worldwide economic conditions, including sovereign insolvency situations and a decline in the value of the U.S. dollar, and future performance and integration of acquisitions, and other risks detailed in our SEC filings, including the most recently filed Form 10-K. We undertake no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.

Investor contact: investor.relations@globalpay.com Media contact: media.relations@globalpay.com

Jane ElliottKay SharptonAmy Corn

770-829-8234 770-829-8870770-829-8755

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
	February 28, 2013			February 29, 2012			% Change		February 28, 2013			February 29, 2012			% Change
Revenues	578,746			533,539			8	%	1,757,571			1,606,815			9	%
Operating expenses:
Cost of service	217,465			194,218			12	%	632,124			571,685			11	%
Sales, general and administrative	271,696			246,973			10	%	829,292			737,593			12	%
Processing system intrusion	(1,189		)	—			NM		8,311			—			NM
	487,972			441,191			11	%	1,469,727			1,309,278			12	%
Operating income	90,774			92,348			(2	)%	287,844			297,537			(3	)%
Other income (expense):
Interest and other income	2,536			2,368			7	%	6,706			7,128			(6	)%
Interest and other expense	(7,063		)	(3,698		)	91	%	(25,217		)	(12,663		)	99	%
	(4,527		)	(1,330		)	240	%	(18,511		)	(5,535		)	234	%
Income before income taxes	86,247			91,018			(5	)%	269,333			292,002			(8	)%
Provision for income taxes	(23,433		)	(25,328		)	(7	)%	(76,986		)	(86,082		)	(11	)%
Net income	62,814			65,690			(4	)%	192,347			205,920			(7	)%
Less: Net income attributable to noncontrolling interests, net of tax	(4,352		)	(7,770		)	(44	)%	(17,027		)	(22,845		)	(25	)%
Net income attributable to Global Payments	58,462			57,920			1	%	175,320			183,075			(4	)%
Earnings per share attributable to Global Payments:
Basic	$	0.75		$	0.74		1	%	$	2.24		$	2.32		(3	)%
Diluted	$	0.75		$	0.73		3	%	$	2.23		$	2.30		(3	)%
Weighted average shares outstanding:
Basic	77,756			78,421					78,364			78,937
Diluted	78,324			79,065					78,747			79,511

NM - Not Meaningful

SCHEDULE 2

CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

	Three Months Ended								Nine Months Ended
	February 28, 2013			February 29, 2012			% Change		February 28, 2013			February 29, 2012			% Change
Revenues	$	578,746		$	533,539		8	%	$	1,757,571		$	1,606,815		9	%
Operating expenses:
Cost of service	200,935			181,338			11	%	589,872			534,009			10	%
Sales, general and administrative	271,696			246,973			10	%	828,492			737,593			12	%
	472,631			428,311			10	%	1,418,364			1,271,602			12	%
Operating income	106,115			105,228			1	%	339,207			335,213			1	%
Other income (expense):
Interest and other income	2,536			2,368			7	%	6,706			7,128			(6	)%
Interest and other expense	(7,063		)	(3,698		)	91	%	(16,834		)	(12,663		)	33	%
	(4,527		)	(1,330		)	240	%	(10,128		)	(5,535		)	83	%
Income before income taxes	101,588			103,898			(2	)%	329,079			329,678			—	%
Provision for income taxes	(27,662		)	(28,912		)	(4	)%	(93,601		)	(97,163		)	(4	)%
Net income	73,926			74,986			(1	)%	235,478			232,515			1	%
Less: Net income attributable to noncontrolling interests, net of tax	(5,993		)	(9,671		)	(38	)%	(25,164		)	(28,756		)	(12	)%
Net income attributable to Global Payments	$	67,933		$	65,315		4	%	$	210,314		$	203,759		3	%
Basic earnings per share	$	0.87		$	0.83		5	%	$	2.68		$	2.58		4	%
Diluted earnings per share	$	0.87		$	0.83		5	%	$	2.67		$	2.56		4	%
Weighted average shares outstanding:
Basic	77,756			78,421					78,364			78,937
Diluted	78,324			79,065					78,747			79,511

See Schedules 6 and 7 for a reconciliation of cash earnings to GAAP.

SCHEDULE 3

SEGMENT INFORMATION

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

	Three Months Ended
	February 28, 2013						February 29, 2012						% Change
	GAAP			Cash Earnings			GAAP			Cash Earnings			GAAP		Cash Earnings
Revenues:
United States	$	336,354		$	336,354		$	302,105		$	302,105		11	%	11	%
Canada	72,218			72,218			76,677			76,677			(6	)%	(6	)%
North America merchant services	408,572			408,572			378,782			378,782			8	%	8	%
Europe	130,750			130,750			116,196			116,196			13	%	13	%
Asia-Pacific	39,424			39,424			38,561			38,561			2	%	2	%
International merchant services	170,174			170,174			154,757			154,757			10	%	10	%
Total revenues	$	578,746		$	578,746		$	533,539		$	533,539		8	%	8	%
Operating income:
North America merchant services	$	55,478		$	63,210		$	62,462		$	65,697		(11	)%	(4	)%
International merchant services	51,820			60,618			47,911			57,556			8	%	5	%
Corporate1	(16,524		)	(17,713		)	(18,025		)	(18,025		)	8	%	2	%
Operating income	$	90,774		$	106,115		$	92,348		$	105,228		(2	)%	1	%
	Nine Months Ended
	February 28, 2013						February 29, 2012						% Change
	GAAP			Cash Earnings			GAAP			Cash Earnings			GAAP		Cash Earnings
Revenues:
United States	$	1,022,250		$	1,022,250		$	882,946		$	882,946		16	%	16	%
Canada	233,885			233,885			253,419			253,419			(8	)%	(8	)%
North America merchant services	1,256,135			1,256,135			1,136,365			1,136,365			11	%	11	%
Europe	390,376			390,376			360,779			360,779			8	%	8	%
Asia-Pacific	111,060			111,060			109,671			109,671			1	%	1	%
International merchant services	501,436			501,436			470,450			470,450			7	%	7	%
Total revenues	$	1,757,571		$	1,757,571		$	1,606,815		$	1,606,815		9	%	9	%
Operating income:
North America merchant services	$	189,809		$	207,933		$	204,893		$	213,808		(7	)%	(3	)%
International merchant services	162,947			187,819			148,063			176,824			10	%	6	%
Corporate1	(64,912		)	(56,545		)	(55,419		)	(55,419		)	(17	)%	(2	)%
Operating income	$	287,844		$	339,207		297,537			$	335,213		(3	)%	1	%

¹ Fiscal 2013 GAAP amounts include a processing intrusion credit of $1.2 million for the three months ended February 28, 2013 and processing intrusion costs of $8.3 million for the nine months ended February 28, 2013.

See Schedule 8 for reconciliation of cash earnings segment information to GAAP.

SCHEDULE 4

CONSOLIDATED BALANCE SHEETS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

	February 28, 2013			May 31, 2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	682,960		$	781,275
Accounts receivable, net of allowances for doubtful accounts of $478 and $532, respectively	166,271			182,962
Claims receivable, net of allowances for losses of $3,438 and $3,435, respectively	897			1,029
Settlement processing assets	208,471			217,994
Inventory	11,349			9,864
Deferred income taxes	6,350			21,969
Prepaid expenses and other current assets	70,564			33,646
Total current assets	1,146,862			1,248,739
Goodwill	1,051,614			724,687
Other intangible assets, net	412,995			290,188
Property and equipment, net of accumulated depreciation of $185,722 and $161,911, respectively	341,573			305,848
Deferred income taxes	93,626			97,235
Other	29,554			21,446
Total assets	$	3,076,224		$	2,688,143
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit	$	167,152		$	215,391
Current portion of long-term debt	72,332			76,420
Accounts payable and accrued liabilities	227,367			316,313
Settlement processing obligations	201,190			216,878
Income taxes payable	5,787			12,283
Total current liabilities	673,828			837,285
Long-term debt	883,462			236,565
Deferred income taxes	162,389			106,644
Other long-term liabilities	71,307			62,306
Total liabilities	1,790,986			1,242,800
Commitments and contingencies
Redeemable noncontrolling interest	—			144,422
Equity:
Preferred stock, no par value; 5,000,000 shares authorized and none issued	—			—
Common stock, no par value; 200,000,000 shares authorized; 76,749,164 and 78,551,297 issued and outstanding at February 28, 2013 and May 31, 2012, respectively	—			—
Paid-in capital	207,666			358,728
Retained earnings	946,195			843,456
Accumulated other comprehensive income (loss)	(6,774		)	(30,000		)
Total Global Payments shareholders’ equity	1,147,087			1,172,184
Noncontrolling interest	138,151			128,737
Total equity	1,285,238			1,300,921
Total liabilities and equity	$	3,076,224		$	2,688,143

SCHEDULE 5

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands)

	Nine Months Ended
	February 28, 2013			February 29, 2012
Cash flows from operating activities:
Net income	$	192,347		$	205,920
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment	40,856			35,821
Amortization of acquired intangibles	42,091			37,676
Share-based compensation expense	14,063			12,796
Provision for operating losses and bad debts	16,681			18,833
Deferred income taxes	27,282			5,858
Other, net	(3,692		)	(949		)
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable	17,706			10,502
Claims receivable	(9,235		)	(11,744		)
Settlement processing assets and obligations, net	(12,028		)	(523,802		)
Inventory	(1,535		)	(4,773		)
Prepaid expenses and other assets	(34,898		)	(2,388		)
Accounts payable and other accrued liabilities	(78,375		)	(22,211		)
Income taxes payable	(6,496		)	11,615
Net cash provided by (used in) operating activities	204,767			(226,846		)
Cash flows from investing activities:
Business, intangible and other asset acquisitions, net of cash acquired	(433,427		)	(44,245		)
Capital expenditures	(75,016		)	(71,084		)
Net decrease in financing receivables	2,158			1,862
Net cash used in investing activities	(506,285		)	(113,467		)
Cash flows from financing activities:
Net payments on short-term lines of credit	(48,239		)	(55,029		)
Proceeds from issuance of long-term debt	1,085,327			71,374
Principal payments under long-term debt	(439,789		)	(162,482		)
Payment of debt issuance cost	(3,987		)	—
Acquisition of redeemable noncontrolling interests	(242,000		)	—
Proceeds from stock issued under share-based compensation plans	9,257			9,630
Common stock repurchased - share-based compensation plans	(10,215		)	(4,847		)
Repurchase of common stock	(137,653		)	(99,604		)
Tax benefit from employee share-based compensation	1,791			2,036
Distributions to noncontrolling interest	(13,656		)	(24,334		)
Dividends paid	(4,688		)	(4,740		)
Net cash provided by (used in) financing activities	196,148			(267,996		)
Effect of exchange rate changes on cash	7,055			(10,243		)
Decrease in cash and cash equivalents	(98,315		)	(618,552		)
Cash and cash equivalents, beginning of the period	781,275			1,354,285
Cash and cash equivalents, end of the period	$	682,960		$	735,733

SCHEDULE 6

RECONCILIATION OF QUARTERLY CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

	Three Months Ended February 28, 2013
	GAAP			Processing System Intrusion			Cash Earnings Adjustments1			Cash Earnings
Revenues	$	578,746		—			—			$	578,746
Operating expenses:
Cost of service	217,465			—			(16,530		)	200,935
Sales, general and administrative	271,696			—			—			271,696
Processing system intrusion	(1,189		)	1,189			—			—
	487,972			1,189			(16,530		)	472,631
Operating income	90,774			(1,189		)	16,530			106,115
Other income (expense):
Interest and other income	2,536			—			—			2,536
Interest and other expense	(7,063		)	—			—			(7,063		)
	(4,527		)	—			—			(4,527		)
Income before income taxes	86,247			(1,189		)	16,530			101,588
Provision for income taxes	(23,433		)	232			(4,461		)	(27,662		)
Net income	62,814			(957		)	12,069			73,926
Less: Net income attributable to noncontrolling interests, net of tax	(4,352		)	—			(1,641		)	(5,993		)
Net income attributable to Global Payments	$	58,462		$	(957	)	$	10,428		$	67,933
Diluted shares	78,324									78,324
Diluted earnings per share	$	0.75		$	(0.01	)	$	0.13		$	0.87
	Three Months Ended February 29, 2012
	GAAP						Cash Earnings Adjustments1			Cash Earnings
Revenues	$	533,539					$	—		$	533,539
Operating expenses:
Cost of service	194,218						(12,880		)	181,338
Sales, general and administrative	246,973						—			246,973
	441,191						(12,880		)	428,311
Operating income	92,348						12,880			105,228
Other income (expense):
Interest and other income	2,368						—			2,368
Interest and other expense	(3,698		)				—			(3,698		)
	(1,330		)				—			(1,330		)
Income before income taxes	91,018						12,880			103,898
Provision for income taxes	(25,328		)				(3,584		)	(28,912		)
Net income	65,690						9,296			74,986
Less: Net income attributable to noncontrolling interests, net of tax	(7,770		)				(1,901		)	(9,671		)
Net income attributable to Global Payments	$	57,920					$	7,395		$	65,315
Diluted shares	79,065									79,065
Diluted earnings per share	$	0.73					$	0.10		$	0.83

¹ Represents adjustments to cost of service to exclude acquisition intangible amortization expense and the related income tax benefit.

We supplemented our reporting of net income and the related earnings per share information determined in accordance with GAAP by reporting net income and the related earnings per share for the three months ended February 28, 2013 and February 29, 2012 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated February 28, 2013 net income and earnings per share on a cash basis by excluding credits related to the processing system intrusion and acquisition intangible amortization. We calculated February 29, 2012 net income and earnings per share on a cash basis by excluding acquisition intangible amortization from our results. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our net income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, net income and earnings per share determined in accordance with GAAP. Our measures of net income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.

SCHEDULE 7

RECONCILIATION OF YEAR TO DATE CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In thousands, except per share data)

	Nine Months Ended February 28, 2013
	GAAP			Processing System Intrusion			Other2			Cash Earnings Adjustments1			Cash Earnings
Revenues	$	1,757,571		—			—			—			$	1,757,571
Operating expenses:
Cost of service	632,124			—			(161		)	(42,091		)	589,872
Sales, general and administrative	829,292			—			(800		)	—			828,492
Processing system intrusion	8,311			(8,311		)	—			—			—
	1,469,727			(8,311		)	(961		)	(42,091		)	1,418,364
Operating income	287,844			8,311			961			42,091			339,207
Other income (expense):
Interest and other income	6,706			—			—			—			6,706
Interest and other expense	(25,217		)	—			8,383			—			(16,834		)
	(18,511		)	—			8,383			—			(10,128		)
Income before income taxes	269,333			8,311			9,344			42,091			329,079
Provision for income taxes	(76,986		)	(3,048		)	(1,533		)	(12,034		)	(93,601		)
Net income	192,347			5,263			7,811			30,057			235,478
Less: Net income attributable to noncontrolling interests, net of tax	(17,027		)				(3,594		)	(4,543		)	(25,164		)
Net income attributable to Global Payments	$	175,320		$	5,263		$	4,217		$	25,514		$	210,314
Diluted shares	78,747												78,747
Diluted earnings per share	$	2.23		$	0.07		$	0.05		$	0.32		$	2.67
	Nine Months Ended February 29, 2012
	GAAP									Cash Earnings Adjustments1			Cash Earnings
Revenues	$	1,606,815								$	—		$	1,606,815
Operating expenses:
Cost of service	571,685									(37,676		)	534,009
Sales, general and administrative	737,593									—			737,593
	1,309,278									(37,676		)	1,271,602
Operating income	297,537									37,676			335,213
Other income (expense):
Interest and other income	7,128									—			7,128
Interest and other expense	(12,663		)							—			(12,663		)
	(5,535		)							—			(5,535		)
Income before income taxes	292,002									37,676			329,678
Provision for income taxes	(86,082		)							(11,081		)	(97,163		)
Net income	205,920									26,595			232,515
Less: Net income attributable to noncontrolling interests, net of tax	(22,845		)							(5,911		)	(28,756		)
Net income attributable to Global Payments	$	183,075								$	20,684		$	203,759
Diluted shares	79,511												79,511
Diluted earnings per share	$	2.30								$	0.26		$	2.56

¹Represents adjustments to cost of service to exclude acquisition intangible amortization expense and the related income tax benefit.

²Represents HSBC's share of GPAP dividends declared and one-time charges primarily related to employee termination benefits.

We supplemented our reporting of net income and the related earnings per share information determined in accordance with GAAP by reporting net income and the related earnings per share for the nine months ended February 28, 2013 and February 29, 2012 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated February 28, 2013 net income and earnings per share on a cash basis by excluding costs related to the processing system intrusion, acquisition intangible amortization, the dividend paid to HSBC that was classified as interest expense, and one-time charges related to employee termination benefits. We also adjusted the net income attributable to noncontrolling interests to include HSBC's share of August 2012 through November 2012 GPAP net income. We calculated February 29, 2012 net income and earnings per share on a cash basis by excluding acquisition intangible amortization from our results. 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 net income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, net income and earnings per share determined in accordance with GAAP. Our measures of net 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, except per share data)

	Three Months Ended February 28, 2013													Three Months Ended February 29, 2012
	GAAP			Processing System Intrusion			Other		Cash Earnings Adjustments1		Cash Earnings			GAAP			Cash Earnings Adjustments1		Cash Earnings
Revenues:
United States	$	336,354		$	—		$	—	$	—	$	336,354		$	302,105		$	—	$	302,105
Canada	72,218			—			—		—		72,218			76,677			—		76,677
North America merchant services	408,572			—			—		—		408,572			378,782			—		378,782
Europe	130,750			—			—		—		130,750			116,196			—		116,196
Asia-Pacific	39,424			—			—		—		39,424			38,561			—		38,561
International merchant services	170,174			—			—		—		170,174			154,757			—		154,757
Total revenues	$	578,746		$	—		$	—	$	—	$	578,746		$	533,539		$	—	$	533,539
Operating income:
North America merchant services	$	55,478		$	—		$	—	$	7,732	$	63,210		62,462			$	3,235	$	65,697
International merchant services	51,820			—			—		8,798		60,618			47,911			9,645		57,556
Corporate	(16,524		)	(1,189		)	—		—		(17,713		)	(18,025		)	—		(18,025		)
Operating income	$	90,774		$	(1,189	)	$	—	$	16,530	$	106,115		92,348			$	12,880	$	105,228
	Nine Months Ended February 28, 2013													Nine Months Ended February 29, 2012
	GAAP			Processing System Intrusion			Other2		Cash Earnings Adjustments1		Cash Earnings			GAAP			Cash Earnings Adjustments1		Cash Earnings
Revenues:
United States	$	1,022,250		$	—		$	—	$	—	$	1,022,250		$	882,946		$	—	$	882,946
Canada	233,885			—			—		—		233,885			253,419			—		253,419
North America merchant services	1,256,135			—			—		—		1,256,135			1,136,365			—		1,136,365
Europe	390,376			—			—		—		390,376			360,779			—		360,779
Asia-Pacific	111,060			—			—		—		111,060			109,671			—		109,671
International merchant services	501,436			—			—		—		501,436			470,450			—		470,450
Total revenues	$	1,757,571		$	—		$	—	$	—	$	1,757,571		$	1,606,815		$	—	$	1,606,815
Operating income:
North America merchant services	$	189,809		$	—		$	905	$	17,219	$	207,933		$	204,893		$	8,915	$	213,808
International merchant services	162,947			—			—		24,872		187,819			148,063			28,761		176,824
Corporate	(64,912		)	8,311			56		—		(56,545		)	(55,419		)	—		(55,419		)
Operating income	$	287,844		$	8,311		$	961	$	42,091	$	339,207		$	297,537		$	37,676	$	335,213

¹ Represents acquisition intangible amortization expense.

² Represents one-time charges primarily related to employee termination benefits.

SCHEDULE 9

OUTLOOK SUMMARY

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

(In millions, except per share data)

	Fiscal 2012 Actual			Fiscal 2013 Outlook	% Change FY12
Revenue Outlook
Constant currency1	$	2,204		$2,385 to $2,425	8% to 10%
Foreign currency impact2	NA			$(25)
Total Revenues	$	2,204		$2,360 to $2,400	7% to 9%
EPS Outlook
Constant currency1	$	3.53		$3.70 to $3.77	5% to 7%
Foreign currency impact2	NA			$(0.06)
Cash EPS	$	3.53		$3.64 to $3.71	3% to 5%
Acquisition-related intangible assets, non-recurring items and processing system intrusion3	(1.16		)	$(0.77)	(34)%
GAAP Diluted EPS	$	2.37		$2.87 to $2.94	21% to 24%

We supplement our fiscal 2013 outlook of total revenues and earnings per share information determined in accordance with GAAP by reporting revenues and earnings per share on a “constant currency” basis in this earnings release as a measure to help evaluate performance.  We calculated revenues and earnings per share on a constant currency basis by converting our fiscal 2013 expected revenues and expenses at fiscal 2012 exchange rates.  We exclude the impact of exchange rate fluctuations in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations, and our management uses constant currency measures to evaluate the impact of operational business decisions.  Our revenues and earnings per share reported on a constant currency basis should be considered in addition to, and not as a substitute for, revenues and earnings per share determined in accordance with GAAP. Our measures of revenues and earnings per share on a constant currency basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.

¹ Reflects current period and forecasted results on a pro forma basis as if foreign currency rates did not change from the comparable prior year period.

² Reflects the impact of actual and forecasted changes in foreign currency rates from the comparable prior year period.

³ Fiscal 2013 reflects $0.60 of acquisition-related intangibles and non-recurring items and $0.17 of processing system intrusion costs. Acquisition-related intangibles accounted and non-recurring items accounted for $0.48 in fiscal 2012 and processing intrusion costs $0.68.

NA=Not Applicable