Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Feb. 28, 2015 | Mar. 31, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | GLOBAL PAYMENTS INC | |
Entity Central Index Key | 1123360 | |
Current Fiscal Year End Date | -26 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 28-Feb-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding (shares) | 66,458,271 |
UNAUDITED_CONSOLIDATED_STATEME
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Income Statement [Abstract] | ||||
Revenues | $664,983 | $616,452 | $2,067,169 | $1,880,259 |
Operating expenses: | ||||
Cost of service | 250,255 | 232,937 | 767,890 | 698,852 |
Sales, general and administrative | 310,113 | 286,224 | 946,282 | 871,825 |
Processing system intrusion | 0 | -7,000 | ||
Total costs and expenses | 560,368 | 519,161 | 1,714,172 | 1,563,677 |
Operating income | 104,615 | 97,291 | 352,997 | 316,582 |
Other income (expense): | ||||
Interest and other income | 1,160 | 2,944 | 3,634 | 11,570 |
Interest and other expense | -13,429 | -16,457 | -34,789 | -32,361 |
Total nonoperating income (expense) | -12,269 | -13,513 | -31,155 | -20,791 |
Income before income taxes | 92,346 | 83,778 | 321,842 | 295,791 |
Provision for income taxes | -23,031 | -23,657 | -82,837 | -84,105 |
Net income | 69,315 | 60,121 | 239,005 | 211,686 |
Less: Net income attributable to noncontrolling interest, net of income tax | -6,747 | -5,000 | -26,290 | -18,025 |
Net income attributable to Global Payments | $62,568 | $55,121 | $212,715 | $193,661 |
Earnings per share attributable to Global Payments: | ||||
Basic | $0.94 | $0.77 | $3.15 | $2.67 |
Diluted | $0.93 | $0.76 | $3.13 | $2.65 |
UNAUDITED_CONSOLIDATED_STATEME1
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $69,315 | $60,121 | $239,005 | $211,686 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | -103,283 | -10,604 | -221,138 | 11,057 |
Income tax benefit related to foreign currency translation adjustments | 7,958 | 4,805 | 15,249 | 7,058 |
Unrealized losses on hedging activities | -1,859 | 0 | -6,278 | 0 |
Reclassification of losses on hedging activities to interest expense | 1,750 | 0 | 2,281 | 0 |
Income tax benefit related to hedging activities | 41 | 0 | 1,484 | 0 |
Other comprehensive loss, net of tax | -95,393 | -5,799 | -208,402 | 18,115 |
Comprehensive (loss) income | -26,078 | 54,322 | 30,603 | 229,801 |
Less: comprehensive loss (income) attributable to noncontrolling interests | 7,146 | -7,181 | -338 | -26,823 |
Comprehensive (loss) income attributable to Global Payments | ($18,932) | $47,141 | $30,265 | $202,978 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $610,148 | $581,872 |
Accounts receivable, net of allowances for doubtful accounts of $405 and $401, respectively | 170,895 | 214,574 |
Claims receivable, net | 584 | 809 |
Settlement processing assets | 744,976 | 780,917 |
Inventory | 5,587 | 6,636 |
Deferred income taxes | 11,933 | 12,963 |
Prepaid expenses and other current assets | 49,027 | 45,673 |
Total current assets | 1,593,150 | 1,643,444 |
Goodwill | 1,422,900 | 1,337,285 |
Other intangible assets, net | 516,083 | 535,173 |
Property and equipment, net | 355,885 | 369,753 |
Deferred income taxes | 93,549 | 101,928 |
Other | 36,753 | 31,067 |
Total assets | 4,018,320 | 4,018,650 |
Current liabilities: | ||
Lines of credit | 446,800 | 440,128 |
Current portion of long-term debt | 62,500 | 17,677 |
Accounts payable and accrued liabilities | 284,472 | 290,106 |
Settlement processing obligations | 426,368 | 451,317 |
Income taxes payable | 22,560 | 12,390 |
Total current liabilities | 1,242,700 | 1,211,618 |
Long-term debt | 1,546,000 | 1,376,002 |
Deferred income taxes | 201,737 | 209,099 |
Other long-term liabilities | 86,255 | 89,132 |
Total liabilities | 3,076,692 | 2,885,851 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, no par value; 5,000,000 shares authorized and none issued | 0 | 0 |
Common stock, no par value; 200,000,000 shares authorized; 66,457,816 issued and outstanding at February 28, 2015 and 68,845,643 issued and outstanding at May 31, 2014 | 0 | 0 |
Paid-in capital | 147,344 | 183,023 |
Retained earnings | 861,955 | 815,980 |
Accumulated other comprehensive loss | -184,226 | -1,776 |
Total Global Payments shareholders’ equity | 825,073 | 997,227 |
Noncontrolling interests | 116,555 | 135,572 |
Total equity | 941,628 | 1,132,799 |
Total liabilities and equity | $4,018,320 | $4,018,650 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances for doubtful accounts | $405 | $401 |
Preferred stock, shares authorized (shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 66,457,816 | 68,845,643 |
Common stock, shares outstanding (shares) | 66,457,816 | 68,845,643 |
UNAUDITED_CONSOLIDATED_STATEME2
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 |
Cash flows from operating activities: | ||
Net income | $239,005 | $211,686 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 48,628 | 43,645 |
Amortization of acquired intangibles | 54,184 | 43,553 |
Share-based compensation expense | 14,827 | 17,269 |
Provision for operating losses and bad debts | 10,530 | 14,203 |
Deferred income taxes | 13,479 | 3,103 |
Other, net | 469 | -1,006 |
Changes in operating assets and liabilities, net of the effects of acquisitions: | ||
Accounts receivable | 32,124 | 14,442 |
Claims receivable | -7,159 | -9,145 |
Settlement processing assets and obligations, net | -27,948 | -19,669 |
Inventory | -256 | 3,811 |
Prepaid expenses and other assets | -5,431 | 18,980 |
Accounts payable and accrued liabilities | -36,044 | -16,422 |
Income taxes payable | 10,677 | -10,049 |
Net cash provided by operating activities | 347,085 | 314,401 |
Cash flows from investing activities: | ||
Business, intangible and other asset acquisitions, net of cash acquired | -232,864 | -2,519 |
Capital expenditures | -56,746 | -61,270 |
Principal collections on financing receivables | 219 | 1,997 |
Net proceeds from sales of investments and business | 10,597 | 3,521 |
Net cash used in investing activities | -278,794 | -58,271 |
Cash flows from financing activities: | ||
Net borrowings on short-term lines of credit | 44,622 | 74,594 |
Proceeds from issuance of long-term debt | 1,593,500 | 2,390,000 |
Principal payments under long-term debt | -1,378,679 | -2,099,869 |
Payments of Debt Issuance Costs | 0 | -5,961 |
Repurchase of common stock | -231,844 | -258,562 |
Proceeds from stock issued under share-based compensation plans | 18,867 | 29,740 |
Common stock repurchased - share-based compensation plans | -16,175 | -5,682 |
Tax benefit from share-based compensation plans | 3,851 | 4,782 |
Distributions to noncontrolling interests | -19,355 | -33,744 |
Dividends paid | -4,035 | -4,330 |
Net cash provided by financing activities | 10,752 | 90,968 |
Effect of exchange rate changes on cash | -50,767 | -14,008 |
Increase in cash and cash equivalents | 28,276 | 333,090 |
Cash and cash equivalents, beginning of the period | 581,872 | 680,470 |
Cash and cash equivalents, end of the period | $610,148 | $1,013,560 |
UNAUDITED_CONSOLIDATED_STATEME3
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total | Number of Shares | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Global Payments Shareholders’ Equity | Noncontrolling Interests |
In Thousands, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Balance, beginning balance at May. 31, 2013 | $1,286,607 | $202,396 | $958,751 | ($15,062) | $1,146,085 | $140,522 | |
Balance, beginning balance (in shares) at May. 31, 2013 | 75,426 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 211,686 | 193,661 | 193,661 | 18,025 | |||
Other comprehensive loss, net of tax | 18,115 | 9,317 | 9,317 | 8,798 | |||
Stock issued under employee stock plans (in shares) | 1,557 | ||||||
Stock issued under employee stock plans | 29,740 | 29,740 | 29,740 | ||||
Common stock repurchased - share based compensation plans (in shares) | -361 | ||||||
Common stock repurchased - share-based compensation plans | -5,682 | -5,682 | -5,682 | ||||
Tax benefit from employee share-based compensation, net | 4,657 | 4,657 | 4,657 | ||||
Share-based compensation expense | 17,269 | 17,269 | 17,269 | ||||
Distributions to noncontrolling interests | -33,744 | -33,744 | |||||
Repurchase of common stock (in shares) | -5,000 | -4,961 | |||||
Repurchase of common stock | -260,609 | -53,072 | -207,537 | -260,609 | |||
Dividends paid ($0.06 per share) | -4,330 | -4,330 | -4,330 | ||||
Balance, ending balance at Feb. 28, 2014 | 1,263,709 | 195,308 | 940,545 | -5,745 | 1,130,108 | 133,601 | |
Balance, ending balance (in shares) at Feb. 28, 2014 | 71,661 | ||||||
Balance, beginning balance at May. 31, 2014 | 1,132,799 | 183,023 | 815,980 | -1,776 | 997,227 | 135,572 | |
Balance, beginning balance (in shares) at May. 31, 2014 | 68,846 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 239,005 | 212,715 | 212,715 | 26,290 | |||
Other comprehensive loss, net of tax | -208,402 | -182,450 | -182,450 | -25,952 | |||
Stock issued under employee stock plans (in shares) | 1,011 | ||||||
Stock issued under employee stock plans | 18,867 | 18,867 | 18,867 | ||||
Common stock repurchased - share based compensation plans (in shares) | -321 | ||||||
Common stock repurchased - share-based compensation plans | -7,389 | -7,389 | -7,389 | ||||
Tax benefit from employee share-based compensation, net | 3,851 | 3,851 | 3,851 | ||||
Share-based compensation expense | 14,827 | 14,827 | 14,827 | ||||
Distributions to noncontrolling interests | -19,355 | -19,355 | |||||
Repurchase of common stock (in shares) | -3,100 | -3,078 | |||||
Repurchase of common stock | -228,540 | -65,835 | -162,705 | -228,540 | |||
Dividends paid ($0.06 per share) | -4,035 | -4,035 | -4,035 | ||||
Balance, ending balance at Feb. 28, 2015 | $941,628 | $147,344 | $861,955 | ($184,226) | $825,073 | $116,555 | |
Balance, ending balance (in shares) at Feb. 28, 2015 | 66,458 |
UNAUDITED_CONSOLIDATED_STATEME4
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parentheticals) (USD $) | 9 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends per share (in dollars per share) | $0.06 | $0.06 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||
Feb. 28, 2015 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Summary of significant accounting policies | —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Business, consolidation and presentation— We are a leading worldwide provider of payment technology services that delivers innovative solutions to our customers globally. Our partnerships, technologies and employee expertise enable us to provide a broad range of products and services that allow our customers to accept all payment types. We distribute our products and services across a variety of channels to merchants and partners in 28 countries throughout North America, Europe, the Asia-Pacific region and Brazil. We provide payment and digital commerce solutions and operate in two reportable segments: North America merchant services and International merchant services. | ||||||||||||
We were incorporated in Georgia as Global Payments Inc. in September 2000, and we spun-off from our former parent company on January 31, 2001. Including our time as part of our former parent company, we have been in the payments business since 1967. Global Payments Inc. and its consolidated subsidiaries are referred to collectively in this report as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise. | ||||||||||||
These unaudited consolidated financial statements include our accounts and those of our majority-owned subsidiaries, and all intercompany balances and transactions have been eliminated. These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with Rule 10-01 of Regulation S-X. | ||||||||||||
In the opinion of our management, all known adjustments necessary for a fair presentation of the results of the interim periods have been made. These adjustments consist of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. We suggest that these financial statements be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2014. | ||||||||||||
Use of estimates— The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. | ||||||||||||
Revenue recognition— Our two merchant services segments primarily provide payment solutions for credit cards, debit cards, electronic payments and check-related services. Revenue is recognized as such services are performed. Revenue for services provided directly to merchants is recorded net of interchange fees charged by card issuing banks. Our primary business model provides payment products and services directly to merchants as our end customers. We also provide similar products and services to financial institutions and a limited number of independent sales organizations ("ISOs") that, in turn, resell our products and services, in which case, the financial institutions and select ISOs are our end customers. The majority of merchant services revenue is generated on services priced as a percentage of transaction value or a specified fee per transaction, depending on card type. We also charge other fees based on specific services that are unrelated to the number of transactions or the transaction value. Revenue from credit cards and signature debit cards is generally based on a percentage of transaction value along with other related fees, while revenue from PIN-based debit cards is typically based on a fee per transaction. | ||||||||||||
Cash and cash equivalents— Cash and cash equivalents include cash on hand and all liquid investments with an initial maturity of three months or less when purchased. Cash and cash equivalents include reserve funds collected from our merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under the merchant agreement (“Merchant Reserves”). We record a corresponding liability in settlement processing assets and settlement processing obligations in our consolidated balance sheet. While this cash is not restricted in its use, we believe that designating this cash as Merchant Reserves strengthens our fiduciary standing with banks that sponsor us and is in accordance with guidelines set by the card networks. As of February 28, 2015 and May 31, 2014, our cash and cash equivalents included $169.8 million and $124.7 million, respectively, related to Merchant Reserves. | ||||||||||||
Certain of the banks that sponsor us hold Merchant Reserves on our behalf. In these instances, neither the Merchant Reserve cash nor the corresponding liability appears on our consolidated balance sheet; however, we have access to the collateral in the event that we incur a merchant loss. | ||||||||||||
Our cash and cash equivalents include settlement related cash balances. Settlement related cash balances represent surplus funds that we hold when the incoming amount from the card networks precedes the funding obligation to the merchant. Settlement related cash balances are not restricted; however, these funds are generally paid out in satisfaction of settlement processing obligations the following day. Please see Note 2 - Settlement Processing Assets and Obligations. | ||||||||||||
Goodwill— We test goodwill for impairment at the reporting unit level annually as of January 1st and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its net carrying value. Macroeconomic factors such as general economic conditions, fluctuations in foreign exchange rates and other developments in equity and credit markets are monitored for indications that goodwill assigned to one of our reporting units may be impaired. We have the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. The option of whether to perform a qualitative assessment is made annually and may vary by reporting unit. | ||||||||||||
When conducting a qualitative assessment, we consider factors including general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying value of the net assets of our reporting units, sustained decrease in our share price, and other relevant entity-specific events. If we elect to bypass the qualitative assessment or if we determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying value, a two-step quantitative test is required. In the first step, the reporting unit's carrying amount, including goodwill, is compared to its fair value. If the carrying amount of the reporting unit is greater than its fair value, goodwill may be impaired and step two must be performed. Step two measures any impairment loss by comparing the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit to all the assets and liabilities of that unit (including unrecognized intangibles) as if the reporting unit had been acquired in a business combination. The excess of the fair value over the amounts allocated to the assets and liabilities of the reporting unit is the implied fair value of the goodwill. The excess of the carrying amount over the implied fair value of the goodwill is the impairment loss. | ||||||||||||
We have six reporting units: North America merchant services, U.K. merchant services, Asia-Pacific merchant services, Central and Eastern Europe merchant services, Russia merchant services and Spain merchant services. As of January 1, 2015, we elected to perform a qualitative assessment of impairment for each of our reporting units, except Russia merchant services. We determined on the basis of qualitative factors, as described above, that the fair values of these five reporting units were not more likely than not less than their respective carrying values. Due to the deterioration of economic conditions in the Russian Federation and the recent devaluation of the Russian Ruble compared to the United States Dollar, we elected to perform a quantitative assessment of impairment for the Russia merchant services reporting unit as of January 1, 2015. Based on this quantitative assessment, we determined that goodwill of our Russia merchant services reporting unit was not impaired. We believe that the fair values of our reporting units are substantially in excess of their carrying values. | ||||||||||||
Our goodwill impairment testing involves the use of estimates and the exercise of judgment on the part of management. Our assessment of qualitative factors involves significant judgments about expected future business performance and general market conditions. Significant changes in our assessment of such qualitative factors could affect our assessment of the fair value of one or more of our reporting units and could result in a goodwill impairment charge in a future period. | ||||||||||||
When applying a quantitative approach, we estimate the fair value of our reporting units using a combination of the income approach and the market approach. The income approach utilizes a discounted cash flow model incorporating management’s expectations for future revenue, operating expenses, EBITDA (earnings before interest, taxes, depreciation and amortization), capital expenditures and an anticipated tax rate. We discount the related cash flow forecasts using an estimated weighted-average cost of capital for each reporting unit at the date of valuation. The market approach utilizes comparative market multiples in the valuation estimate. Multiples are derived by relating the value of guideline companies, based on either the market price of publicly traded shares or the prices of companies being acquired in the marketplace, to various measures of their earnings and cash flow. Such multiples are then applied to the historical and projected earnings and cash flow of the reporting unit in developing the valuation estimate. | ||||||||||||
Preparation of forecasts and the selection of discount rates involve significant judgments about expected future business performance and general market conditions. Significant changes in our forecasts, the discount rates selected or the weighting of the income and market approach could affect the estimated fair value of one or more of our reporting units and could result in a goodwill impairment charge in a future period. | ||||||||||||
Other intangible assets— Other intangible assets primarily represent customer-related intangible assets (such as customer lists and merchant contracts), contract-based intangible assets (such as non-compete agreements, referral agreements and processing rights), acquired technologies and trademarks associated with acquisitions. Customer-related intangible assets, contract-based intangible assets and trademarks are amortized over their estimated useful lives from 5 to 30 years. The useful lives for customer-related intangible assets are determined based primarily on forecasted cash flows, which include estimates for the revenues, expenses, and customer attrition associated with the assets. The useful lives of contract-based intangible assets are equal to the terms of the agreements. The useful lives of amortizable trademarks and trade names are based on our plans to phase out the trademarks and trade names in the applicable markets. | ||||||||||||
Amortization for most of our customer-related intangible assets is calculated using an accelerated method. In determining amortization expense under our accelerated method for any given period, we calculate the expected cash flows for that period that were used in determining the acquired value of the asset and divide that amount by the expected total cash flows over the estimated life of the asset. We multiply that percentage by the initial carrying value of the asset to arrive at the amortization expense for that period. If the cash flow patterns that we experience differ significantly from our initial estimates, we will adjust the amortization schedule accordingly. These cash flow patterns are derived using certain assumptions and cost allocations due to a significant amount of asset interdependencies that exist in our business. | ||||||||||||
We believe that our accelerated method better approximates the distribution of cash flows generated by our acquired customer relationships. We use the straight-line method of amortization for our contract-based intangibles and amortizable trademarks and trade names. Acquired technologies are amortized on a straight-line basis over their estimated useful lives. | ||||||||||||
Impairment of long-lived assets— We regularly evaluate whether events and circumstances have occurred that indicate the carrying amount of property and equipment and finite-life intangible assets may not be recoverable. When factors indicate that these long-lived assets should be evaluated for possible impairment, we assess the potential impairment by determining whether the carrying value of such long-lived assets will be recovered through the future undiscounted cash flows expected from use of the asset and its eventual disposition. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market prices or discounted cash flow analysis, as applicable. We regularly evaluate whether events and circumstances have occurred that indicate the useful lives of property and equipment and finite-life intangible assets may warrant revision. In our opinion, the carrying values of our long-lived assets, including property and equipment and finite-life intangible assets, were not impaired at February 28, 2015 or May 31, 2014. | ||||||||||||
Derivative Instruments— Our long-term debt bears interest, at our election, at either the London Interbank Offered Rate ("LIBOR") or a base rate, in each case plus a leverage-based margin. Consequently, we are exposed to variability in our interest payment cash flows due to changes in interest rates. We use interest rate swaps to manage a portion of this exposure. These financial instruments are recognized at fair value on our consolidated balance sheets, and changes in fair value are recognized in shareholders’ equity through accumulated other comprehensive income (loss) ("AOCI"). Our objective in managing our exposure to fluctuation in interest rates is to better control this element of cost and to mitigate the earnings and cash flow volatility associated with changes in applicable rates. | ||||||||||||
We have established policies and procedures that encompass risk-management philosophy and objectives, guidelines for derivative instrument usage, counterparty credit approval, and the monitoring and reporting of derivative activity. We do not enter into derivative instruments for the purpose of speculation. We formally designate and document instruments at inception that qualify for hedge accounting of underlying exposures in accordance with GAAP. | ||||||||||||
We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. Fluctuations in the value of these instruments generally are offset by changes in the cash flows of the underlying exposures being hedged. This offset is driven by the high degree of effectiveness between the exposure being hedged and the hedging instrument. GAAP requires all derivative instruments to be recognized as either assets or liabilities at fair value in our consolidated balance sheets. We designated our interest rate swap agreements as a cash flow hedge of interest payments on variable rate borrowings. Any ineffective portion of a change in the fair value of a qualifying instrument is immediately recognized in earnings. Please see Note 5-Long-Term Debt and Credit Facilities for more information about our interest rate swaps. | ||||||||||||
Earnings per share— Basic earnings per share is computed by dividing reported net income attributable to Global Payments by the weighted average shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to Global Payments by the weighted average shares outstanding during the period, including the impact of securities that would have a dilutive effect on earnings per share. All stock options with an exercise price less than the average market share price of our common stock for the period are assumed to have a dilutive effect on earnings per share. | ||||||||||||
The following table sets forth the computation of diluted weighted average shares outstanding for the three and nine months ended February 28, 2015 and February 28, 2014: | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | |||||||||
(in thousands) | (in thousands) | |||||||||||
Basic weighted average shares outstanding | 66,890 | 71,835 | 67,476 | 72,598 | ||||||||
Plus: Dilutive effect of stock options and other share-based awards | 416 | 599 | 415 | 554 | ||||||||
Diluted weighted average shares outstanding | 67,306 | 72,434 | 67,891 | 73,152 | ||||||||
Repurchased shares— We account for the retirement of repurchased shares using the par value method under which we allocate the cost of repurchased and retired shares between paid-in capital and retained earnings by comparing the price of shares repurchased to the original issue proceeds of those shares. When the repurchase price is greater than the original issue proceeds, the excess is charged to retained earnings. We use a last-in, first-out cost flow assumption to identify the original issue proceeds to the cost of the shares repurchased. We believe that this allocation method is preferable because it more accurately reflects our paid-in capital balances by allocating the cost of the shares repurchased and retired to paid-in capital in proportion to paid-in capital associated with the original issuance of said shares. | ||||||||||||
New accounting pronouncements— From time-to-time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standards setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed below, our management believes that the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption. | ||||||||||||
In April 2015, the FASB issued Accounting Standards Update ("ASU") 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption permitted for financial statements that have not been previously issued. We are evaluating the impact of ASU 2015-03 on our consolidated financial statements. | ||||||||||||
In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The amendments in this update make changes to consolidation guidance to address concerns of stakeholders that current accounting for certain legal entities might require a reporting entity to consolidate another legal entity in situations in which the reporting entity’s contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entity’s voting rights, or the reporting entity is not exposed to a majority of the legal entity’s economic benefits or obligations. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. | ||||||||||||
In January 2015, the FASB issued ASU 2015-01, Income Statement Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. The amendments in this update eliminate from GAAP the concept of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. | ||||||||||||
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are evaluating the impact of ASU 2014-09 on our consolidated financial statements. |
Settlement_Processing_Assets_a
Settlement Processing Assets and Obligations | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Offsetting [Abstract] | ||||||||
Settlement processing assets and obligations | SETTLEMENT PROCESSING ASSETS AND OBLIGATIONS | |||||||
Funds settlement refers to the process of transferring funds for sales and credits between card issuers and merchants. For transactions processed on our systems, we use our internal network to provide funding instructions to financial institutions that in turn fund the merchants. We process funds settlement under two models, a sponsorship model and a direct membership model. | ||||||||
Under the sponsorship model, we are designated as a Merchant Service Provider by MasterCard and an Independent Sales Organization by Visa, which means that member clearing banks ("Member") sponsor us and require our adherence to the standards of the payment networks. In certain markets, we have sponsorship or depository and clearing agreements with financial institution sponsors. These agreements allow us to route transactions under the Members' control and identification numbers to clear credit card transactions through MasterCard and Visa. In this model, the standards of the payment networks restrict us from performing funds settlement or accessing merchant settlement funds, and, instead, require that these funds be in the possession of the Member until the merchant is funded. | ||||||||
Under the direct membership model, we are members in various payment networks, allowing us to process and fund transactions without third-party sponsorship. In this model, we route and clear transactions directly through the card brand’s network and are not restricted from performing funds settlement. Otherwise, we process these transactions similarly to how we process transactions in the sponsorship model. We are required to adhere to the standards of the payment | ||||||||
networks in which we are direct members. We maintain relationships with financial institutions, which may also serve as our Member sponsors for other card brands or in other markets, to assist with funds settlement. | ||||||||
Timing differences, interchange expense, Merchant Reserves and exception items cause differences between the amount received from the payment networks and the amount funded to the merchants. These intermediary balances arising in our settlement process for direct merchants are reflected as settlement processing assets and obligations on our consolidated balance sheets. Settlement processing assets and obligations include the components outlined below: | ||||||||
• | Interchange reimbursement - our receivable from merchants for the portion of the discount fee related to reimbursement of the interchange expense. | |||||||
• | Receivable from Members - our receivable from the Members for transactions in which merchants have been funded in advance of receipt of funding. | |||||||
• | Receivable from networks - our receivable from a payment network for transactions processed on behalf of merchants where we are a direct member of that particular network. | |||||||
• | Exception items - items such as customer chargeback amounts received from merchants. | |||||||
• | Merchant Reserves - reserves held to minimize contingent liabilities associated with losses that may occur under the merchant agreement. | |||||||
• | Liability to Members - our liability to the Members for transactions for which funding from the payment network has been received by the Members but merchants have not yet been funded. | |||||||
• | Liability to merchants - our liability to merchants for transactions that have been processed but not yet funded where we are a direct member of a particular payment network. | |||||||
• | Reserve for operating losses - our allowance for charges or losses that we are not able to collect from the merchants due to merchant fraud, insolvency, bankruptcy or any other merchant-related reason. | |||||||
In accordance with ASC 210-20, Offsetting, we apply offsetting to our settlement processing assets and obligations where legal right of set-off exists. In the sponsorship model, we apply offsetting by Member because the Member is ultimately responsible for funds settlement. With these Member transactions, we do not have access to the gross proceeds of the receivable from the payment networks and, thus, do not have a direct obligation or any ability to satisfy the payable to fund the merchant. In these situations, we apply offsetting to determine a net position with each Member sponsor. If that net position is an asset, we reflect the net amount in settlement processing assets on our consolidated balance sheet, and we present the individual components in the settlement processing assets table below. If that net position is a liability, we reflect the net amount in settlement processing obligations on our consolidated balance sheet, and we present the individual components in the settlement processing obligations table below. In the direct membership model, offsetting is not applied, and the individual components are presented as an asset or obligation based on the nature of that component. | ||||||||
February 28, 2015 | May 31, 2014 | |||||||
(in thousands) | ||||||||
Settlement processing assets: | ||||||||
Interchange reimbursement | $ | 183,973 | $ | 217,806 | ||||
Receivable from Members | 189,877 | 206,322 | ||||||
Receivable from networks | 411,997 | 430,763 | ||||||
Exception items | 9,055 | 5,573 | ||||||
Merchant Reserves | (49,926 | ) | (79,547 | ) | ||||
$ | 744,976 | $ | 780,917 | |||||
Settlement processing obligations: | ||||||||
Interchange reimbursement | $ | 31,246 | $ | 54,459 | ||||
Liability to Members | (1,710 | ) | (5,490 | ) | ||||
Liability to merchants | (338,868 | ) | (407,651 | ) | ||||
Exception items | 4,299 | 6,313 | ||||||
Merchant Reserves | (119,919 | ) | (96,622 | ) | ||||
Reserve for operating losses | (1,119 | ) | (1,725 | ) | ||||
Reserves for sales allowances | (297 | ) | (601 | ) | ||||
$ | (426,368 | ) | $ | (451,317 | ) |
Business_and_Intangible_Asset_
Business and Intangible Asset Acquisitions and Joint Ventures | 9 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||
Business and intangible asset acquisitions and joint ventures | BUSINESS AND INTANGIBLE ASSET ACQUISITIONS AND JOINT VENTURES | |||||||||||||||
Fiscal 2015 | ||||||||||||||||
Bank of the Philippine Islands | ||||||||||||||||
On December 17, 2014, we announced an agreement with Bank of the Philippine Islands ("BPI") to provide merchant acquiring and payment services in the Philippines. We believe this arrangement will enable us to expand our direct distribution in the Philippines, further leverage our technological strengths and provide superior product and service offerings to customers in the Philippines. Under this arrangement, BPI will contribute its existing merchant acquiring business to our subsidiary in the Philippines, Global Payments Asia-Pacific Philippines Incorporated ("GPAPPI"), in return for a 49% ownership interest in GPAPPI and a cash payment of $3.6 million. We will retain a controlling 51% interest in GPAPPI, which is included in our International merchant services segment. The transaction is expected to close late in the fourth quarter of fiscal 2015, subject to receipt of regulatory approvals and satisfaction of customary closing conditions. For fiscal 2015, we expect this transaction to be immaterial to our consolidated revenues and earnings per share. | ||||||||||||||||
Fidelity National Information Services Gaming Business | ||||||||||||||||
On September 30, 2014, we entered into an asset purchase agreement with Certegy Check Services, Inc., a Delaware corporation and wholly-owned subsidiary of Fidelity National Information Services, Inc. (NYSE:FIS) ("FIS"), to acquire its gaming business related to licensed gaming operators (the "FIS Gaming Business"). Pursuant to the terms of the asset purchase agreement, we will acquire substantially all of the assets of the FIS Gaming Business, which includes approximately 260 gaming client locations, for $236.5 million, subject to certain adjustments at closing. We expect the acquisition to close early in the first quarter of fiscal 2016, subject to the satisfaction of customary closing conditions, and to be funded from borrowings on our credit facility. | ||||||||||||||||
At the same time, we entered into a gaming bureau license agreement and an outsourcing agreement with FIS. Under the license agreement, we acquired a perpetual software license for a gaming bureau application that we believe enhances our casino clients’ credit decision process. The software license is reflected in property and equipment in our consolidated balance sheet at February 28, 2015. Under the outsourcing agreement, which has a term of 10 years, we have engaged FIS to provide a variety of services for our gaming clients, including: check and ACH verification services, collection services, claims management services, billing services and other gaming bureau services. The outsourcing agreement will become effective when the asset purchase agreement closes. | ||||||||||||||||
Ezidebit | ||||||||||||||||
On October 10, 2014, we completed the acquisition of 100% of the outstanding stock of Ezi Holdings Pty Ltd ("Ezidebit") for AU$305.0 million less working capital of AU$2.4 million (US$268.1 million less working capital of US$2.1 million). This acquisition was funded by a combination of cash on hand and borrowings on our revolving credit facility. Ezidebit is a leading integrated payments company focused on recurring payments verticals in Australia and New Zealand. Ezidebit markets its products through a network of integrated software vendors and direct channels to numerous vertical markets. We acquired Ezidebit to establish a direct distribution channel in Australia and New Zealand and to further enhance our existing integrated solutions offerings. This acquisition was recorded as a business combination, and the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values. Due to the timing of this transaction, the allocation of the purchase price is preliminary pending final valuation of intangible assets. Acquisition costs associated with this purchase were not material. The revenue and earnings of Ezidebit for the three and nine months ended February 28, 2015 are not material nor are the historical revenue and earnings of Ezidebit material for the purpose of presenting pro forma information for the current or prior-year periods. | ||||||||||||||||
The following table summarizes the preliminary purchase price allocation (in thousands): | ||||||||||||||||
Cash | $ | 45,826 | ||||||||||||||
Goodwill | 194,136 | |||||||||||||||
Customer-related intangible assets | 42,721 | |||||||||||||||
Acquired technology | 27,954 | |||||||||||||||
Trade name | 2,901 | |||||||||||||||
Other assets | 2,337 | |||||||||||||||
Total assets acquired | 315,875 | |||||||||||||||
Liabilities | (49,797 | ) | ||||||||||||||
Deferred income taxes | (96 | ) | ||||||||||||||
Net assets acquired | $ | 265,982 | ||||||||||||||
The preliminary purchase price allocation resulted in goodwill, included in the International merchant services segment, of $194.1 million. Goodwill is attributable to expected growth opportunities in Australia and New Zealand, as well as growth opportunities and operating synergies in integrated payments in our existing Asia-Pacific and North America markets. Goodwill associated with this acquisition is not deductible for tax purposes. The customer-related intangible assets have an estimated amortization periods of 15 years. The acquired technology has an estimated amortization period of 15 years. The trade name has an estimated amortization period of 5 years. | ||||||||||||||||
Fiscal 2014 | ||||||||||||||||
Comercia Global Payments Brazil | ||||||||||||||||
Effective September 30, 2013, CaixaBank, S.A. ("CaixaBank"), which owns 49% of Comercia Global Payments ("Comercia"), our subsidiary in Spain, purchased 50% of Global Payments Brazil for $2.1 million in cash and a commitment to fund the capital needs of the business until such time as its cumulative funding was equal to funding that we provided from inception through the effective date of the transaction. The transaction created a new joint venture which does business as Comercia Global Payments Brazil. As a result of the transaction, we deconsolidated Global Payments Brazil. Thereafter, we have applied the equity method of accounting to our retained interest in Global Payments Brazil. We recorded a gain on the transaction of $2.1 million which was included in interest and other income in the consolidated statement of income for the nine months ended February 28, 2014. The results of the Brazil operation from inception until the restructuring into a joint venture on September 30, 2013 were not material to our consolidated results of operations, and the assets and liabilities that we derecognized were not material to our consolidated balance sheet. | ||||||||||||||||
In late fiscal 2014, CaixaBank completed its initial funding commitment. During the three months ended August 31, 2014, CaixaBank and Global Payments each made an additional investment of $3.9 million in Global Payments Brazil to fund the operations of the business. During the three months ended February 28, 2015, we advanced an additional $6.7 million to Global Payments Brazil. We expect this advance will be replaced with permanent financing from CaixaBank and us in the fourth quarter of fiscal 2015. | ||||||||||||||||
PayPros | ||||||||||||||||
On March 4, 2014, we completed the acquisition of 100% of the outstanding stock of Payment Processing, Inc. ("PayPros") for $420.0 million in cash plus $6.5 million in cash for working capital. We funded the acquisition with a combination of cash on hand and proceeds from our Term Loan (as defined in Note 5). PayPros, based in California, is a provider of fully-integrated payment solutions for small-to-medium sized merchants in the United States. PayPros delivers its products and services through a network of technology-based enterprise software partners to vertical markets that are complementary to the markets served by Accelerated Payment Technologies, which we acquired in October 2012. We acquired PayPros to expand our direct distribution capabilities in the United States and to further enhance our existing integrated solutions offerings. This acquisition was recorded as a business combination, and the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The purchase price of PayPros was determined by analyzing the historical and prospective financial statements. Acquisition costs associated with this purchase were not material. | ||||||||||||||||
The following table summarizes the purchase price allocation (in thousands): | ||||||||||||||||
Goodwill | $ | 270,878 | ||||||||||||||
Customer-related intangible assets | 147,500 | |||||||||||||||
Contract-based intangible assets | 30,200 | |||||||||||||||
Acquired technology | 10,800 | |||||||||||||||
Property and equipment | 1,680 | |||||||||||||||
Other assets | 3,872 | |||||||||||||||
Total assets acquired | 464,930 | |||||||||||||||
Deferred income taxes | (38,478 | ) | ||||||||||||||
Net assets acquired | $ | 426,452 | ||||||||||||||
The purchase price allocation resulted in goodwill, included in the North America merchant services segment, of $270.9 million. Such goodwill is attributable primarily to operating synergies with the services offered and markets served by PayPros. The goodwill associated with the acquisition is not deductible for tax purposes. The customer-related intangible assets and the contract-based intangible assets have estimated amortization periods of 13 years. The acquired technology has an estimated amortization period of 7 years. | ||||||||||||||||
The following pro forma information shows the results of our operations for the three and nine months ended February 28, 2014 as if the PayPros acquisition had occurred on June 1, 2013. The pro forma information is presented for information purposes only and is not necessarily indicative of what would have occurred if the acquisition had been made as of that date. The pro forma information is also not intended to be a projection of future results due to the integration of the acquired business. | ||||||||||||||||
Unaudited | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
February 28, 2014 | February 28, 2014 | February 28, 2014 | February 28, 2014 | |||||||||||||
(Actual) | (Pro forma) | (Actual) | (Pro forma) | |||||||||||||
(in thousands, except per share data) | (in thousands, except per share data) | |||||||||||||||
Total revenues | $ | 616,452 | $ | 643,086 | $ | 1,880,259 | $ | 1,954,570 | ||||||||
Net income attributable to Global Payments | $ | 55,121 | $ | 54,885 | $ | 193,661 | $ | 189,645 | ||||||||
Net income per share attributable to Global Payments, basic | $ | 0.77 | $ | 0.76 | $ | 2.67 | $ | 2.61 | ||||||||
Net income per share attributable to Global Payments, diluted | $ | 0.76 | $ | 0.76 | $ | 2.65 | $ | 2.59 | ||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | |||||||||||
Feb. 28, 2015 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Goodwill and intangible assets | GOODWILL AND INTANGIBLE ASSETS | |||||||||||
As of February 28, 2015 and May 31, 2014, goodwill and intangible assets consisted of the following: | ||||||||||||
February 28, 2015 | May 31, 2014 | |||||||||||
(in thousands) | ||||||||||||
Goodwill | $ | 1,422,900 | $ | 1,337,285 | ||||||||
Other intangible assets: | ||||||||||||
Customer-related intangible assets | $ | 702,037 | $ | 714,704 | ||||||||
Contract-based intangible assets | 131,612 | 145,967 | ||||||||||
Acquired technologies | 50,337 | 25,700 | ||||||||||
Trademarks and trade names | 7,015 | 6,140 | ||||||||||
891,001 | 892,511 | |||||||||||
Less accumulated amortization: | ||||||||||||
Customer-related intangible assets | 328,633 | 317,629 | ||||||||||
Contract-based intangible assets | 35,411 | 32,031 | ||||||||||
Acquired technologies | 6,839 | 3,531 | ||||||||||
Trademarks and trade names | 4,035 | 4,147 | ||||||||||
374,918 | 357,338 | |||||||||||
$ | 516,083 | $ | 535,173 | |||||||||
The following table sets forth the changes in the carrying amount of goodwill for the nine months ended February 28, 2015: | ||||||||||||
North America Merchant Services | International Merchant Services | Total | ||||||||||
(in thousands) | ||||||||||||
Balance at May 31, 2014 | $ | 786,655 | $ | 550,630 | $ | 1,337,285 | ||||||
Accumulated impairment losses | — | — | — | |||||||||
786,655 | 550,630 | 1,337,285 | ||||||||||
Goodwill acquired | — | 194,136 | 194,136 | |||||||||
Adjustment(1) | (699 | ) | — | (699 | ) | |||||||
Effect of foreign currency translation | (12,065 | ) | (95,757 | ) | (107,822 | ) | ||||||
Balance at February 28, 2015 | $ | 773,891 | $ | 649,009 | $ | 1,422,900 | ||||||
(1) During the nine months ended February 28, 2015, we recorded an adjustment to decrease goodwill by $0.7 million in our North America merchant services segment in connection with the finalization of the intangible asset and deferred tax valuations associated with the purchase price allocation and the working capital settlement for the PayPros acquisition. |
LongTerm_Debt_And_Credit_Facil
Long-Term Debt And Credit Facilities | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Long-term debt and credit facilities | LONG-TERM DEBT AND CREDIT FACILITIES | |||||||
As of February 28, 2015 and May 31, 2014, outstanding debt consisted of the following: | ||||||||
February 28, 2015 | May 31, 2014 | |||||||
Lines of credit: | (in thousands) | |||||||
Corporate Credit Facility - long-term | $ | 358,500 | $ | 140,000 | ||||
Short-term lines of credit | 446,800 | 440,128 | ||||||
Total lines of credit | 805,300 | 580,128 | ||||||
Notes payable | — | 3,679 | ||||||
Term loan | 1,250,000 | 1,250,000 | ||||||
Total debt | $ | 2,055,300 | $ | 1,833,807 | ||||
Current portion | $ | 509,300 | $ | 457,805 | ||||
Long-term debt | 1,546,000 | 1,376,002 | ||||||
Total debt | $ | 2,055,300 | $ | 1,833,807 | ||||
On February 28, 2014, we entered into an amended and restated term loan agreement ("Term Loan") and an amended and restated credit agreement ("Corporate Credit Facility") with a syndicate of financial institutions. | ||||||||
The Term Loan is a five-year senior unsecured $1.25 billion term loan. We used proceeds from the Term Loan to partially fund our acquisition of PayPros on March 4, 2014 and to repay the outstanding balances on our previously existing revolving credit facility and our previously existing term loan. | ||||||||
The Term Loan expires February 28, 2019 and bears interest, at our election, at either LIBOR or a base rate, in each case plus a leverage-based margin. As of February 28, 2015, the interest rate on the Term Loan was 1.92%. Commencing in May 2015 and ending in November 2018, the Term Loan has scheduled quarterly principal payments of 1.25%, increasing up to 2.50% of the original principal balance. At maturity, 27.5% of the Term Loan will have been repaid through scheduled amortization and the remaining principal balance will be due. With notice, the Term Loan may be voluntarily prepaid at any time, in whole or in part, without penalty. | ||||||||
The Corporate Credit Facility is a five-year senior unsecured $1.0 billion revolving credit facility that expires February 28, 2019 and bears interest, at our election, at either LIBOR or a base rate, in each case plus a leverage-based margin. Borrowing under the Corporate Credit Facility is available in various currencies. As of February 28, 2015, the outstanding balance on the Corporate Credit Facility was $358.5 million, and the interest rate was 1.89%. The Corporate Credit Facility is available for general corporate purposes. | ||||||||
The Corporate Credit Facility allows us to issue standby letters of credit of up to $100.0 million in the aggregate. Outstanding letters of credit under the Corporate Credit Facility reduce the amount of borrowings available to us. At February 28, 2015 and May 31, 2014, we had standby letters of credit of $7.4 million and $8.1 million, respectively. Borrowings available to us under the Corporate Credit Facility are further limited by the covenants described below under "Compliance with Covenants." The total available incremental borrowings under our Corporate Credit Facility at February 28, 2015 and May 31, 2014 was $626.5 million and $851.9 million, respectively. | ||||||||
The agreements contain customary affirmative and restrictive covenants, including, among others, financial covenants based on our leverage and fixed charge coverage ratios. Please see "Compliance with Covenants" below. Each of the agreements includes customary events of default, the occurrence of which, following any applicable cure period, would permit lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. | ||||||||
Short-term Lines of Credit | ||||||||
We have short-term lines of credit with banks in the United States and Canada as well as several countries in Europe and the Asia-Pacific region in which we do business. The short-term lines of credit, which are primarily used to fund settlement, generally have variable short-term interest rates and are subject to annual review. The credit facilities are generally denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. For certain of our lines of credit, the line of credit balance is reduced by the amount of cash we have on deposit in specific accounts with the lender when determining compliance with the credit limit. Accordingly, the line of credit balance may exceed the stated credit limit at any given point in time, when in fact the combined position is less than the credit limit. As of February 28, 2015 and May 31, 2014, we had $901.5 million and $818.5 million, respectively, of additional borrowing capacity under our short-term lines of credit to fund settlement. | ||||||||
Compliance with Covenants | ||||||||
There are certain financial and non-financial covenants contained in our various credit facilities and Term Loan. Our Term Loan and Corporate Credit Facility include financial covenants requiring (i) a leverage ratio no greater than 3.50 to 1.00 (3.75 to 1.00 in the case of a business acquisition, subject to certain conditions) and (ii) a fixed charge coverage ratio no less than 2.50 to 1.00. We complied with all applicable covenants as of and for the three and nine months ended February 28, 2015 and as of May 31, 2014. | ||||||||
Interest Rate Swap Agreement | ||||||||
On October 9, 2014, we entered into an interest rate swap agreement with a major financial institution to hedge changes in cash flows attributable to interest rate risk on a portion of our variable-rate debt instruments. The interest rate swap agreement, which became effective on October 31, 2014, will mature on February 28, 2019. The fair value of our interest rate swap as of February 28, 2015 was a liability of $4.0 million, which is reflected in accounts payable and accrued liabilities in our consolidated balance sheet. Net amounts to be received or paid under the swap agreement are reflected as adjustments to interest expense. Since we have designated the interest rate swap agreement as a cash flow hedge, unrealized gains or losses resulting from adjusting this swap to its fair value are recorded as elements of AOCI within the consolidated balance sheet except for any ineffective portion of the change in fair value, which would be immediately recorded in interest expense. During the three and nine months ended February 28, 2015, there was no ineffectiveness. The fair value of the swap agreement is determined based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date. This derivative instrument is classified within Level 2 of the valuation hierarchy. | ||||||||
At February 28, 2015, our interest rate swap agreement effectively converted $500.0 million of our variable-rate debt to a fixed rate of 1.52% plus a leverage-based margin. During the three and nine months ended February 28, 2015, we recognized $1.8 million and $2.3 million, respectively, in interest expense related to settlements on the interest rate swap. At February 28, 2015, the amount in AOCI related to our interest rate swap that is expected to be reclassified into interest expense during the next 12 months is not material. |
Income_Tax
Income Tax | 9 Months Ended |
Feb. 28, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax | INCOME TAX |
Our effective tax rates were 24.9% and 28.2% for the three months ended February 28, 2015 and February 28, 2014, respectively. Our effective tax rates were 25.7% and 28.4% for the nine months ended February 28, 2015 and February 28, 2014, respectively. The effective tax rates for the three and nine months ended February 28, 2014 reflects additional income tax expense we recorded as a result of the reduction of certain U.K. deferred tax assets due to enacted corporate tax rate reductions in the United Kingdom of 3%. Our effective tax rate differs from the U.S. statutory rate due to domestic and international tax planning initiatives and income generated in international jurisdictions with lower tax rates. | |
As of February 28, 2015 and May 31, 2014, other long-term liabilities included liabilities for unrecognized income tax benefits of $71.1 million and $71.2 million, respectively, including interest. $68.0 million of our liabilities for unrecognized income tax benefits at February 28, 2015 relate to tax positions that are currently under review by tax authorities. It is reasonably possible that the total amounts of unrecognized tax benefits will decrease by between $0.0 million and $68.0 million as a result of this review. Based on the nature of the underlying positions, we do not believe that a negative outcome would have any impact on our income or results of operations in the period of change. Further, a negative outcome would not have a significant impact on our financial condition or liquidity. During the three and nine months ended February 28, 2015 and February 28, 2014, amounts recorded for accrued interest and penalty expense related to the unrecognized income tax benefits were insignificant. | |
We conduct business globally and file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities around the world, including, without limitation, the United States, the United Kingdom and Canada. We are no longer subject to state income tax examinations for years ended on or before May 31, 2008 and are no longer subject to U.S. federal income tax examinations by the U.S. Internal Revenue Service for fiscal years prior to 2012. |
Shareholders_Equity
Shareholders' Equity | 9 Months Ended |
Feb. 28, 2015 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | SHAREHOLDERS’ EQUITY |
During the three and nine months ended February 28, 2015, we repurchased and retired 0.6 million and 3.1 million shares of our common stock at a cost of $56.6 million and $228.5 million, or an average of $88.74 and $74.25 per share, respectively, including commissions. As of February 28, 2015, we had $243.4 million of remaining authorized share repurchases. | |
During the three and nine months ended February 28, 2014, we repurchased and retired 0.3 million and 5.0 million shares of our common stock at a cost of $21.5 million and $260.6 million, or an average of $64.04 and $52.53 per share, respectively, including commissions. |
ShareBased_Awards_and_Options
Share-Based Awards and Options | 9 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||
Share-Based Awards and Options | SHARE-BASED AWARDS AND OPTIONS | |||||||||||||||
Non-qualified stock options and restricted stock have been granted to officers, key employees and directors under the Global Payments Inc. 2000 Long-Term Incentive Plan, as amended and restated (the "2000 Plan"), the Global Payments Inc. Amended and Restated 2005 Incentive Plan (the "2005 Plan"), the Amended and Restated 2000 Non-Employee Director Stock Option Plan (the "Director Stock Option Plan"), and the Global Payments Inc. 2011 Incentive Plan (the "2011 Plan") (collectively, the "Plans"). There were no further grants made under the 2000 Plan after the 2005 Plan was effective, and the Director Stock Option Plan expired by its terms on February 1, 2011. There will be no future grants under the 2000 Plan, the 2005 Plan or the Director Stock Option Plan. | ||||||||||||||||
The 2011 Plan permits grants of equity to employees, officers, directors and consultants. A total of 7.0 million shares of our common stock was reserved and made available for issuance pursuant to awards granted under the 2011 Plan. | ||||||||||||||||
The following table summarizes share-based compensation expense and the related income tax benefit recognized for stock options, restricted stock, performance units, TSR units, and shares issued under our employee stock purchase plan (each as described below). | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Share-based compensation expense | $ | 5.7 | $ | 5.3 | $ | 14.8 | $ | 17.3 | ||||||||
Income tax benefit | $ | 1.9 | $ | 2 | $ | 4.8 | $ | 5.2 | ||||||||
We grant various share-based awards pursuant to the Plans under what we refer to as our "long-term incentive plan." The awards are held in escrow and released upon the grantee’s satisfaction of conditions of the award certificate. | ||||||||||||||||
Restricted Stock | ||||||||||||||||
We grant restricted stock awards and restricted stock units. Restricted stock awards vest over a period of time, provided, however, that if the grantee is not employed by us on the vesting date, the shares are forfeited. Restricted shares cannot be sold or transferred until they have vested. Restricted stock granted before fiscal 2015 vests in equal installments on each of the first four anniversaries of the grant date. Restricted stock granted during fiscal 2015 will either vest in equal installments on each of the first three anniversaries of the grant date or cliff vest at the end of a three-year service period. Restricted shares entitle the holder to vote with common shareholders and receive dividends paid on our common stock during the vesting period. Holders of restricted stock units do not have the right to vote shares or receive dividends. The grant date fair value of restricted stock, which is based on the quoted market value of our common stock at the closing of the award date, is recognized as share-based compensation expense on a straight-line basis over the vesting period. | ||||||||||||||||
Performance Units | ||||||||||||||||
Certain of our executives have been granted up to three types of "performance units" under our long-term incentive plan. "Performance units" are performance-based restricted stock units that, after a performance period, convert into common shares, which may be restricted. The number of shares is dependent upon the achievement of certain performance measures during the performance period. The target number of performance units and any market-based performance measures ("at threshold," "target," and "maximum") are set by the Compensation Committee of our Board of Directors. Performance units are converted only after the Compensation Committee certifies performance based on pre-established goals. | ||||||||||||||||
The performance units granted to certain executives in fiscal 2014 were based on a one-year performance period. After the Compensation Committee certified the performance results, 25% of the performance units converted to unrestricted shares. The remaining 75% converted to restricted shares that vest in equal installments on each of the first three anniversaries of the conversion date. The performance units granted to certain executives during fiscal 2015 were based on a three-year performance period. After the Compensation Committee certifies the performance results for the three-year period, performance units earned will convert into unrestricted common stock. | ||||||||||||||||
The Compensation Committee may set a range of possible performance-based outcomes for performance units. Depending on the achievement of the performance measures, the grantee may earn as little as 0% and up to a maximum of 200% of the target number of shares. For awards with only performance conditions, we recognize compensation expense over the performance period using the grant date fair value of the award, which is based on the number of shares expected to be earned according to the level of achievement of performance goals. If the number of shares expected to be earned were to change at any time during the performance period, we would make a cumulative adjustment to share-based compensation expense based on the revised number of shares expected to be earned. | ||||||||||||||||
During fiscal 2015, certain executives were granted performance units that we refer to as "leveraged performance units," or "LPUs." LPUs contain a market condition based on our relative stock price growth over a three-year performance period. The LPUs contain a minimum threshold performance, which if not met would result in no payout. The LPUs also contain a maximum award opportunity set as a fixed dollar and fixed number of shares. After the three-year performance period, one-third of any earned units converts to unrestricted common stock. The remaining two-thirds convert to restricted stock that will vest in equal installments on each of the first two anniversaries of the conversion date. We recognize share-based compensation expense based on the grant date fair value of the LPUs, as determined by use of a Monte Carlo model, on a straight-line basis over the requisite service period for each separately vesting portion of the LPU award. | ||||||||||||||||
Total Shareholder Return ("TSR") Units | ||||||||||||||||
Before fiscal 2015, certain of our executives were granted “TSR units,” which are performance-based restricted stock units that are earned based on our total shareholder return over a three-year performance period compared to companies in the S&P 500. Once the performance results are certified, TSR units convert into unrestricted common stock. Depending on our performance, the grantee may earn as little as 0% and up to a maximum of 200% of the target number of shares. The target number of TSR units for each executive is set by the Compensation Committee. We recognize share-based compensation expense based on the grant date fair value of the TSR units, as determined by use of a Monte Carlo model, on a straight-line basis over the vesting period. | ||||||||||||||||
The following table summarizes the changes in unvested share-based awards for the nine months ended February 28, 2015: | ||||||||||||||||
Shares | Weighted Average | |||||||||||||||
Grant-Date | ||||||||||||||||
Fair Value | ||||||||||||||||
(in thousands) | ||||||||||||||||
Unvested at May 31, 2014 | 877 | $ | 45 | |||||||||||||
Granted | 469 | 72 | ||||||||||||||
Vested | (322 | ) | 46 | |||||||||||||
Forfeited | (92 | ) | 53 | |||||||||||||
Unvested at February 28, 2015 | 932 | $ | 58 | |||||||||||||
Including the restricted stock, performance units and TSR units described above, the total fair value of share-based awards vested during the nine months ended February 28, 2015 and February 28, 2014 was $14.9 million and $15.9 million, respectively. | ||||||||||||||||
For these share-based awards, we recognized compensation expense of $5.4 million and $5.0 million in the three months ended February 28, 2015 and February 28, 2014, respectively. For the nine months ended February 28, 2015 and February 28, 2014, we recognized compensation expense for these share-based awards of $13.8 million and $16.2 million, respectively. As of February 28, 2015, there was $47.5 million of unrecognized compensation expense related to unvested share-based awards that we expect to recognize over a weighted average period of 2.27 years. | ||||||||||||||||
Employee Stock Purchase Plan | ||||||||||||||||
We have an employee stock purchase plan under which the sale of 2.4 million shares of our common stock has been authorized. Employees may designate up to the lesser of $25,000 or 20% of their annual compensation for the purchase of our common stock. The price for shares purchased under the plan is 85% of the market value on the last day of each calendar quarter. As of February 28, 2015, 1.1 million shares had been issued under this plan, with 1.3 million shares reserved for future issuance. We recognized compensation expense for the plan of $0.1 million in both the three months ended February 28, 2015 and February 28, 2014. We recognized compensation expense for the plan of $0.5 million and $0.4 million in the nine months ended February 28, 2015 and February 28, 2014, respectively. | ||||||||||||||||
The weighted average grant-date fair value of each designated share purchased under this plan during the nine months ended February 28, 2015 and February 28, 2014 was approximately $8 and $7, respectively, which represents the fair value of the 15% discount. | ||||||||||||||||
Stock Options | ||||||||||||||||
Stock options are granted with an exercise price equal to 100% of fair market value on the date of grant and have a term of ten years. Stock options granted before fiscal 2015 vest in equal installments on each of the first four anniversaries of the grant date. Stock options granted during fiscal 2015 vest in equal installments on each of the first three anniversaries of the grant date. During the nine months ended February 28, 2015, we granted 0.2 million stock options. We did not grant stock options during the three months ended February 28, 2015 or during the three and nine months ended February 28, 2014. Our stock option plans provide for accelerated vesting under certain conditions. | ||||||||||||||||
The following is a summary of our stock option activity as of and for the nine months ended February 28, 2015: | ||||||||||||||||
Options | Weight Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
(in thousands) | (in years) | (in millions) | ||||||||||||||
Outstanding at May 31, 2014 | 766 | $ | 41 | 3.8 | $ | 21.3 | ||||||||||
Granted | 153 | 72 | ||||||||||||||
Forfeited | (23 | ) | 56 | |||||||||||||
Exercised | (366 | ) | 41 | |||||||||||||
Outstanding at February 28, 2015 | 530 | $ | 49 | 4.9 | $ | 22.8 | ||||||||||
Options vested and exercisable at February 28, 2015 | 392 | $ | 41 | 3.3 | $ | 20 | ||||||||||
We recognized compensation expense for stock options of $0.2 million in both the three months ended February 28, 2015 and February 28, 2014. We recognized compensation expense for stock options of $0.5 million and $0.7 million in the nine months ended February 28, 2015 and February 28, 2014, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended February 28, 2015 and February 28, 2014 was $11.7 million and $24.0 million, respectively. As of February 28, 2015, we had $1.9 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted average period of 3.3 years. | ||||||||||||||||
The weighted average grant-date fair value of each stock option granted during the nine months ended February 28, 2015 was $17. Fair value was estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions: | ||||||||||||||||
Risk-free interest rates | 1.57% | |||||||||||||||
Expected volatility | 23.65% | |||||||||||||||
Dividend yields | 0.13% | |||||||||||||||
Expected lives | 5 years | |||||||||||||||
The risk-free interest rate is based on the yield of a zero coupon U.S. Treasury security with a maturity equal to the expected life of the option from the date of the grant. Our assumption on expected volatility is based on our historical volatility. The dividend yield assumption is calculated using our average stock price over the preceding year and the annualized amount of our current quarterly dividend. We based our assumptions on the expected lives of the options on our analysis of the historical exercise patterns of the options and our assumption on the future exercise pattern of options. |
Segment_Information
Segment Information | 9 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Segment Information | SEGMENT INFORMATION | |||||||||||||||
General Information | ||||||||||||||||
We are a leading worldwide provider of payment technology services that delivers innovative solutions driven by our customer needs globally. Our partnerships, technologies and employee expertise enable us to provide a broad range of products and services that allow our customers to accept all payment types across a variety of distribution channels in many markets around the world. We have merchants and partners in 28 countries throughout North America, Europe, the Asia-Pacific region and Brazil. We provide payment and digital commerce solutions and operate in two reportable segments: North America merchant services and International merchant services. | ||||||||||||||||
Information About Profit and Assets | ||||||||||||||||
We evaluate performance and allocate resources based on the operating income of each segment. The operating income of each segment includes the revenues of the segment less those expenses that are directly related to those revenues. Operating overhead, shared costs and certain compensation costs are included in Corporate in the following table. Interest and other income, interest and other expense and provision for income taxes are not allocated to the individual segments. We do not evaluate performance or allocate resources using segment asset data. The accounting policies of the reportable segments are the same as those described in our Annual Report on Form 10-K for the year ended May 31, 2014 and our summary of significant accounting policies in Note 1. | ||||||||||||||||
Information on segments, including revenue by geographic distribution within segments, and reconciliations to consolidated revenues and consolidated operating income are as follows for the three and nine months ended February 28, 2015 and 2014: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Revenues: | ||||||||||||||||
United States | $ | 404,016 | $ | 355,880 | $ | 1,222,841 | $ | 1,081,506 | ||||||||
Canada | 69,047 | 73,467 | 243,004 | 245,379 | ||||||||||||
North America merchant services | 473,063 | 429,347 | 1,465,845 | 1,326,885 | ||||||||||||
Europe | 138,378 | 143,832 | 461,140 | 433,886 | ||||||||||||
Asia-Pacific (1) | 53,542 | 43,273 | 140,184 | 119,488 | ||||||||||||
International merchant services | 191,920 | 187,105 | 601,324 | 553,374 | ||||||||||||
Consolidated revenues | $ | 664,983 | $ | 616,452 | $ | 2,067,169 | $ | 1,880,259 | ||||||||
Operating income (loss) for segments: | ||||||||||||||||
North America merchant services | $ | 66,723 | $ | 61,695 | $ | 218,906 | $ | 201,831 | ||||||||
International merchant services (2) | 64,902 | 58,077 | 214,947 | 182,085 | ||||||||||||
Corporate | (27,010 | ) | (22,481 | ) | (80,856 | ) | (67,334 | ) | ||||||||
Consolidated operating income | $ | 104,615 | $ | 97,291 | $ | 352,997 | $ | 316,582 | ||||||||
Depreciation and amortization: | ||||||||||||||||
North America merchant services | $ | 20,100 | $ | 14,422 | $ | 61,018 | $ | 41,488 | ||||||||
International merchant services | 11,928 | 13,790 | 36,984 | 40,934 | ||||||||||||
Corporate | 1,612 | 1,594 | 4,810 | 4,776 | ||||||||||||
Consolidated depreciation and amortization | $ | 33,640 | $ | 29,806 | $ | 102,812 | $ | 87,198 | ||||||||
(1) Revenues for Ezidebit, which operates primarily in Australia and New Zealand, are included in the Asia-Pacific region. | ||||||||||||||||
(2) During the nine months ended February 28, 2015, operating income for the International merchant services segment includes a $2.9 million gain on the sale of a component of our Russia business that leased automated teller machines to our sponsor bank in Russia. The gain is presented in the “Sales, general and administrative” line in the consolidated statements of income. |
Subsequent_Event
Subsequent Event | 9 Months Ended |
Feb. 28, 2015 | |
Subsequent Events [Abstract] | |
Subsequent event | SUBSEQUENT EVENT |
On March 25, 2015, we acquired approximately 95% of the outstanding shares of Pay and Shop Limited for €108.5 million ($119.1 million equivalent as of the acquisition date), adjusted for working capital, funded by borrowings on our revolving credit facility. Pay and Shop Limited, which does business as Realex Payments, is a leading European online payment gateway technology provider based in Dublin, Ireland. This transaction furthers our strategy to provide omni-channel solutions that combine gateway services, payment service provisioning and merchant acquiring across Europe. This transaction will be recorded as a business combination, and the purchase price will be allocated to the assets acquired and liabilities assumed based on their estimated fair values. Due to the timing of this transaction, the allocation of purchase price has not been finalized pending valuation of intangible assets acquired. For fiscal 2015, we expect this transaction to be immaterial to our consolidated revenues and earnings per share. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Feb. 28, 2015 | |
Accounting Policies [Abstract] | |
Business, consolidation and presentation | Business, consolidation and presentation— We are a leading worldwide provider of payment technology services that delivers innovative solutions to our customers globally. Our partnerships, technologies and employee expertise enable us to provide a broad range of products and services that allow our customers to accept all payment types. We distribute our products and services across a variety of channels to merchants and partners in 28 countries throughout North America, Europe, the Asia-Pacific region and Brazil. We provide payment and digital commerce solutions and operate in two reportable segments: North America merchant services and International merchant services. |
We were incorporated in Georgia as Global Payments Inc. in September 2000, and we spun-off from our former parent company on January 31, 2001. Including our time as part of our former parent company, we have been in the payments business since 1967. Global Payments Inc. and its consolidated subsidiaries are referred to collectively in this report as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise. | |
These unaudited consolidated financial statements include our accounts and those of our majority-owned subsidiaries, and all intercompany balances and transactions have been eliminated. These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with Rule 10-01 of Regulation S-X. | |
In the opinion of our management, all known adjustments necessary for a fair presentation of the results of the interim periods have been made. These adjustments consist of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. We suggest that these financial statements be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2014. | |
Use of estimates | Use of estimates— The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. |
Revenue recognition | Revenue recognition— Our two merchant services segments primarily provide payment solutions for credit cards, debit cards, electronic payments and check-related services. Revenue is recognized as such services are performed. Revenue for services provided directly to merchants is recorded net of interchange fees charged by card issuing banks. Our primary business model provides payment products and services directly to merchants as our end customers. We also provide similar products and services to financial institutions and a limited number of independent sales organizations ("ISOs") that, in turn, resell our products and services, in which case, the financial institutions and select ISOs are our end customers. The majority of merchant services revenue is generated on services priced as a percentage of transaction value or a specified fee per transaction, depending on card type. We also charge other fees based on specific services that are unrelated to the number of transactions or the transaction value. Revenue from credit cards and signature debit cards is generally based on a percentage of transaction value along with other related fees, while revenue from PIN-based debit cards is typically based on a fee per transaction. |
Cash and cash equivalents | Cash and cash equivalents— Cash and cash equivalents include cash on hand and all liquid investments with an initial maturity of three months or less when purchased. Cash and cash equivalents include reserve funds collected from our merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under the merchant agreement (“Merchant Reserves”). We record a corresponding liability in settlement processing assets and settlement processing obligations in our consolidated balance sheet. While this cash is not restricted in its use, we believe that designating this cash as Merchant Reserves strengthens our fiduciary standing with banks that sponsor us and is in accordance with guidelines set by the card networks. As of February 28, 2015 and May 31, 2014, our cash and cash equivalents included $169.8 million and $124.7 million, respectively, related to Merchant Reserves. |
Certain of the banks that sponsor us hold Merchant Reserves on our behalf. In these instances, neither the Merchant Reserve cash nor the corresponding liability appears on our consolidated balance sheet; however, we have access to the collateral in the event that we incur a merchant loss. | |
Our cash and cash equivalents include settlement related cash balances. Settlement related cash balances represent surplus funds that we hold when the incoming amount from the card networks precedes the funding obligation to the merchant. Settlement related cash balances are not restricted; however, these funds are generally paid out in satisfaction of settlement processing obligations the following day. Please see Note 2 - Settlement Processing Assets and Obligations. | |
Goodwill and other intangible assets | Goodwill— We test goodwill for impairment at the reporting unit level annually as of January 1st and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its net carrying value. Macroeconomic factors such as general economic conditions, fluctuations in foreign exchange rates and other developments in equity and credit markets are monitored for indications that goodwill assigned to one of our reporting units may be impaired. We have the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. The option of whether to perform a qualitative assessment is made annually and may vary by reporting unit. |
When conducting a qualitative assessment, we consider factors including general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying value of the net assets of our reporting units, sustained decrease in our share price, and other relevant entity-specific events. If we elect to bypass the qualitative assessment or if we determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying value, a two-step quantitative test is required. In the first step, the reporting unit's carrying amount, including goodwill, is compared to its fair value. If the carrying amount of the reporting unit is greater than its fair value, goodwill may be impaired and step two must be performed. Step two measures any impairment loss by comparing the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit to all the assets and liabilities of that unit (including unrecognized intangibles) as if the reporting unit had been acquired in a business combination. The excess of the fair value over the amounts allocated to the assets and liabilities of the reporting unit is the implied fair value of the goodwill. The excess of the carrying amount over the implied fair value of the goodwill is the impairment loss. | |
We have six reporting units: North America merchant services, U.K. merchant services, Asia-Pacific merchant services, Central and Eastern Europe merchant services, Russia merchant services and Spain merchant services. As of January 1, 2015, we elected to perform a qualitative assessment of impairment for each of our reporting units, except Russia merchant services. We determined on the basis of qualitative factors, as described above, that the fair values of these five reporting units were not more likely than not less than their respective carrying values. Due to the deterioration of economic conditions in the Russian Federation and the recent devaluation of the Russian Ruble compared to the United States Dollar, we elected to perform a quantitative assessment of impairment for the Russia merchant services reporting unit as of January 1, 2015. Based on this quantitative assessment, we determined that goodwill of our Russia merchant services reporting unit was not impaired. We believe that the fair values of our reporting units are substantially in excess of their carrying values. | |
Our goodwill impairment testing involves the use of estimates and the exercise of judgment on the part of management. Our assessment of qualitative factors involves significant judgments about expected future business performance and general market conditions. Significant changes in our assessment of such qualitative factors could affect our assessment of the fair value of one or more of our reporting units and could result in a goodwill impairment charge in a future period. | |
When applying a quantitative approach, we estimate the fair value of our reporting units using a combination of the income approach and the market approach. The income approach utilizes a discounted cash flow model incorporating management’s expectations for future revenue, operating expenses, EBITDA (earnings before interest, taxes, depreciation and amortization), capital expenditures and an anticipated tax rate. We discount the related cash flow forecasts using an estimated weighted-average cost of capital for each reporting unit at the date of valuation. The market approach utilizes comparative market multiples in the valuation estimate. Multiples are derived by relating the value of guideline companies, based on either the market price of publicly traded shares or the prices of companies being acquired in the marketplace, to various measures of their earnings and cash flow. Such multiples are then applied to the historical and projected earnings and cash flow of the reporting unit in developing the valuation estimate. | |
Preparation of forecasts and the selection of discount rates involve significant judgments about expected future business performance and general market conditions. Significant changes in our forecasts, the discount rates selected or the weighting of the income and market approach could affect the estimated fair value of one or more of our reporting units and could result in a goodwill impairment charge in a future period. | |
Other intangible assets— Other intangible assets primarily represent customer-related intangible assets (such as customer lists and merchant contracts), contract-based intangible assets (such as non-compete agreements, referral agreements and processing rights), acquired technologies and trademarks associated with acquisitions. Customer-related intangible assets, contract-based intangible assets and trademarks are amortized over their estimated useful lives from 5 to 30 years. The useful lives for customer-related intangible assets are determined based primarily on forecasted cash flows, which include estimates for the revenues, expenses, and customer attrition associated with the assets. The useful lives of contract-based intangible assets are equal to the terms of the agreements. The useful lives of amortizable trademarks and trade names are based on our plans to phase out the trademarks and trade names in the applicable markets. | |
Amortization for most of our customer-related intangible assets is calculated using an accelerated method. In determining amortization expense under our accelerated method for any given period, we calculate the expected cash flows for that period that were used in determining the acquired value of the asset and divide that amount by the expected total cash flows over the estimated life of the asset. We multiply that percentage by the initial carrying value of the asset to arrive at the amortization expense for that period. If the cash flow patterns that we experience differ significantly from our initial estimates, we will adjust the amortization schedule accordingly. These cash flow patterns are derived using certain assumptions and cost allocations due to a significant amount of asset interdependencies that exist in our business. | |
We believe that our accelerated method better approximates the distribution of cash flows generated by our acquired customer relationships. We use the straight-line method of amortization for our contract-based intangibles and amortizable trademarks and trade names. | |
Impairment of long-lived assets | Impairment of long-lived assets— We regularly evaluate whether events and circumstances have occurred that indicate the carrying amount of property and equipment and finite-life intangible assets may not be recoverable. When factors indicate that these long-lived assets should be evaluated for possible impairment, we assess the potential impairment by determining whether the carrying value of such long-lived assets will be recovered through the future undiscounted cash flows expected from use of the asset and its eventual disposition. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market prices or discounted cash flow analysis, as applicable. We regularly evaluate whether events and circumstances have occurred that indicate the useful lives of property and equipment and finite-life intangible assets may warrant revision. In our opinion, the carrying values of our long-lived assets, including property and equipment and finite-life intangible assets, were not impaired at February 28, 2015 or May 31, 2014. |
Derivatives, hedge discontinuances, termination of hedging instrument or hedged item | Derivative Instruments— Our long-term debt bears interest, at our election, at either the London Interbank Offered Rate ("LIBOR") or a base rate, in each case plus a leverage-based margin. Consequently, we are exposed to variability in our interest payment cash flows due to changes in interest rates. We use interest rate swaps to manage a portion of this exposure. These financial instruments are recognized at fair value on our consolidated balance sheets, and changes in fair value are recognized in shareholders’ equity through accumulated other comprehensive income (loss) ("AOCI"). Our objective in managing our exposure to fluctuation in interest rates is to better control this element of cost and to mitigate the earnings and cash flow volatility associated with changes in applicable rates. |
We have established policies and procedures that encompass risk-management philosophy and objectives, guidelines for derivative instrument usage, counterparty credit approval, and the monitoring and reporting of derivative activity. We do not enter into derivative instruments for the purpose of speculation. We formally designate and document instruments at inception that qualify for hedge accounting of underlying exposures in accordance with GAAP. | |
We formally assess, both at inception and at least quarterly, whether the financial instruments used in hedging transactions are effective at offsetting changes in cash flows of the related underlying exposure. Fluctuations in the value of these instruments generally are offset by changes in the cash flows of the underlying exposures being hedged. This offset is driven by the high degree of effectiveness between the exposure being hedged and the hedging instrument. GAAP requires all derivative instruments to be recognized as either assets or liabilities at fair value in our consolidated balance sheets. We designated our interest rate swap agreements as a cash flow hedge of interest payments on variable rate borrowings. Any ineffective portion of a change in the fair value of a qualifying instrument is immediately recognized in earnings. Please see Note 5-Long-Term Debt and Credit Facilities for more information about our interest rate swaps. | |
Earnings per share | Earnings per share— Basic earnings per share is computed by dividing reported net income attributable to Global Payments by the weighted average shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to Global Payments by the weighted average shares outstanding during the period, including the impact of securities that would have a dilutive effect on earnings per share. All stock options with an exercise price less than the average market share price of our common stock for the period are assumed to have a dilutive effect on earnings per share. |
Repurchased shares | Repurchased shares— We account for the retirement of repurchased shares using the par value method under which we allocate the cost of repurchased and retired shares between paid-in capital and retained earnings by comparing the price of shares repurchased to the original issue proceeds of those shares. When the repurchase price is greater than the original issue proceeds, the excess is charged to retained earnings. We use a last-in, first-out cost flow assumption to identify the original issue proceeds to the cost of the shares repurchased. We believe that this allocation method is preferable because it more accurately reflects our paid-in capital balances by allocating the cost of the shares repurchased and retired to paid-in capital in proportion to paid-in capital associated with the original issuance of said shares. |
New accounting pronouncements | New accounting pronouncements— From time-to-time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standards setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed below, our management believes that the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements upon adoption. |
In April 2015, the FASB issued Accounting Standards Update ("ASU") 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early adoption permitted for financial statements that have not been previously issued. We are evaluating the impact of ASU 2015-03 on our consolidated financial statements. | |
In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The amendments in this update make changes to consolidation guidance to address concerns of stakeholders that current accounting for certain legal entities might require a reporting entity to consolidate another legal entity in situations in which the reporting entity’s contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entity’s voting rights, or the reporting entity is not exposed to a majority of the legal entity’s economic benefits or obligations. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. | |
In January 2015, the FASB issued ASU 2015-01, Income Statement Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. The amendments in this update eliminate from GAAP the concept of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The amendments are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are evaluating the impact of ASU 2014-09 on our consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||
Feb. 28, 2015 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
Schedule of weighted average number of shares | The following table sets forth the computation of diluted weighted average shares outstanding for the three and nine months ended February 28, 2015 and February 28, 2014: | |||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | |||||||||
(in thousands) | (in thousands) | |||||||||||
Basic weighted average shares outstanding | 66,890 | 71,835 | 67,476 | 72,598 | ||||||||
Plus: Dilutive effect of stock options and other share-based awards | 416 | 599 | 415 | 554 | ||||||||
Diluted weighted average shares outstanding | 67,306 | 72,434 | 67,891 | 73,152 | ||||||||
Settlement_Processing_Assets_a1
Settlement Processing Assets and Obligations (Tables) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Offsetting [Abstract] | ||||||||
Offsetting assets and liabilities | If that net position is an asset, we reflect the net amount in settlement processing assets on our consolidated balance sheet, and we present the individual components in the settlement processing assets table below. If that net position is a liability, we reflect the net amount in settlement processing obligations on our consolidated balance sheet, and we present the individual components in the settlement processing obligations table below. In the direct membership model, offsetting is not applied, and the individual components are presented as an asset or obligation based on the nature of that component. | |||||||
February 28, 2015 | May 31, 2014 | |||||||
(in thousands) | ||||||||
Settlement processing assets: | ||||||||
Interchange reimbursement | $ | 183,973 | $ | 217,806 | ||||
Receivable from Members | 189,877 | 206,322 | ||||||
Receivable from networks | 411,997 | 430,763 | ||||||
Exception items | 9,055 | 5,573 | ||||||
Merchant Reserves | (49,926 | ) | (79,547 | ) | ||||
$ | 744,976 | $ | 780,917 | |||||
Settlement processing obligations: | ||||||||
Interchange reimbursement | $ | 31,246 | $ | 54,459 | ||||
Liability to Members | (1,710 | ) | (5,490 | ) | ||||
Liability to merchants | (338,868 | ) | (407,651 | ) | ||||
Exception items | 4,299 | 6,313 | ||||||
Merchant Reserves | (119,919 | ) | (96,622 | ) | ||||
Reserve for operating losses | (1,119 | ) | (1,725 | ) | ||||
Reserves for sales allowances | (297 | ) | (601 | ) | ||||
$ | (426,368 | ) | $ | (451,317 | ) |
Business_and_Intangible_Asset_1
Business and Intangible Asset Acquisitions and Joint Ventures (Tables) | 9 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Ezidebit | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Schedule of recognized identified assets acquired and liabilities assumed | The following table summarizes the preliminary purchase price allocation (in thousands): | |||||||||||||||
Cash | $ | 45,826 | ||||||||||||||
Goodwill | 194,136 | |||||||||||||||
Customer-related intangible assets | 42,721 | |||||||||||||||
Acquired technology | 27,954 | |||||||||||||||
Trade name | 2,901 | |||||||||||||||
Other assets | 2,337 | |||||||||||||||
Total assets acquired | 315,875 | |||||||||||||||
Liabilities | (49,797 | ) | ||||||||||||||
Deferred income taxes | (96 | ) | ||||||||||||||
Net assets acquired | $ | 265,982 | ||||||||||||||
PayPros | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Schedule of recognized identified assets acquired and liabilities assumed | The following table summarizes the purchase price allocation (in thousands): | |||||||||||||||
Goodwill | $ | 270,878 | ||||||||||||||
Customer-related intangible assets | 147,500 | |||||||||||||||
Contract-based intangible assets | 30,200 | |||||||||||||||
Acquired technology | 10,800 | |||||||||||||||
Property and equipment | 1,680 | |||||||||||||||
Other assets | 3,872 | |||||||||||||||
Total assets acquired | 464,930 | |||||||||||||||
Deferred income taxes | (38,478 | ) | ||||||||||||||
Net assets acquired | $ | 426,452 | ||||||||||||||
Business acquisition, pro forma information | ||||||||||||||||
Unaudited | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
February 28, 2014 | February 28, 2014 | February 28, 2014 | February 28, 2014 | |||||||||||||
(Actual) | (Pro forma) | (Actual) | (Pro forma) | |||||||||||||
(in thousands, except per share data) | (in thousands, except per share data) | |||||||||||||||
Total revenues | $ | 616,452 | $ | 643,086 | $ | 1,880,259 | $ | 1,954,570 | ||||||||
Net income attributable to Global Payments | $ | 55,121 | $ | 54,885 | $ | 193,661 | $ | 189,645 | ||||||||
Net income per share attributable to Global Payments, basic | $ | 0.77 | $ | 0.76 | $ | 2.67 | $ | 2.61 | ||||||||
Net income per share attributable to Global Payments, diluted | $ | 0.76 | $ | 0.76 | $ | 2.65 | $ | 2.59 | ||||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | |||||||||||
Feb. 28, 2015 | ||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||
Schedule of goodwill and intangible assets | As of February 28, 2015 and May 31, 2014, goodwill and intangible assets consisted of the following: | |||||||||||
February 28, 2015 | May 31, 2014 | |||||||||||
(in thousands) | ||||||||||||
Goodwill | $ | 1,422,900 | $ | 1,337,285 | ||||||||
Other intangible assets: | ||||||||||||
Customer-related intangible assets | $ | 702,037 | $ | 714,704 | ||||||||
Contract-based intangible assets | 131,612 | 145,967 | ||||||||||
Acquired technologies | 50,337 | 25,700 | ||||||||||
Trademarks and trade names | 7,015 | 6,140 | ||||||||||
891,001 | 892,511 | |||||||||||
Less accumulated amortization: | ||||||||||||
Customer-related intangible assets | 328,633 | 317,629 | ||||||||||
Contract-based intangible assets | 35,411 | 32,031 | ||||||||||
Acquired technologies | 6,839 | 3,531 | ||||||||||
Trademarks and trade names | 4,035 | 4,147 | ||||||||||
374,918 | 357,338 | |||||||||||
$ | 516,083 | $ | 535,173 | |||||||||
Schedule of goodwill | The following table sets forth the changes in the carrying amount of goodwill for the nine months ended February 28, 2015: | |||||||||||
North America Merchant Services | International Merchant Services | Total | ||||||||||
(in thousands) | ||||||||||||
Balance at May 31, 2014 | $ | 786,655 | $ | 550,630 | $ | 1,337,285 | ||||||
Accumulated impairment losses | — | — | — | |||||||||
786,655 | 550,630 | 1,337,285 | ||||||||||
Goodwill acquired | — | 194,136 | 194,136 | |||||||||
Adjustment(1) | (699 | ) | — | (699 | ) | |||||||
Effect of foreign currency translation | (12,065 | ) | (95,757 | ) | (107,822 | ) | ||||||
Balance at February 28, 2015 | $ | 773,891 | $ | 649,009 | $ | 1,422,900 | ||||||
(1) During the nine months ended February 28, 2015, we recorded an adjustment to decrease goodwill by $0.7 million in our North America merchant services segment in connection with the finalization of the intangible asset and deferred tax valuations associated with the purchase price allocation and the working capital settlement for the PayPros acquisition. |
Recovered_Sheet1
Long-Term Debt and Credit Facilities (Tables) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of outstanding debt | As of February 28, 2015 and May 31, 2014, outstanding debt consisted of the following: | |||||||
February 28, 2015 | May 31, 2014 | |||||||
Lines of credit: | (in thousands) | |||||||
Corporate Credit Facility - long-term | $ | 358,500 | $ | 140,000 | ||||
Short-term lines of credit | 446,800 | 440,128 | ||||||
Total lines of credit | 805,300 | 580,128 | ||||||
Notes payable | — | 3,679 | ||||||
Term loan | 1,250,000 | 1,250,000 | ||||||
Total debt | $ | 2,055,300 | $ | 1,833,807 | ||||
Current portion | $ | 509,300 | $ | 457,805 | ||||
Long-term debt | 1,546,000 | 1,376,002 | ||||||
Total debt | $ | 2,055,300 | $ | 1,833,807 | ||||
ShareBased_Awards_and_Options_
Share-Based Awards and Options (Tables) | 9 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||
Schedule of compensation cost for share-based payment arrangements, allocation of share-based compensation costs by plan | The following table summarizes share-based compensation expense and the related income tax benefit recognized for stock options, restricted stock, performance units, TSR units, and shares issued under our employee stock purchase plan (each as described below). | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Share-based compensation expense | $ | 5.7 | $ | 5.3 | $ | 14.8 | $ | 17.3 | ||||||||
Income tax benefit | $ | 1.9 | $ | 2 | $ | 4.8 | $ | 5.2 | ||||||||
Schedule of changes in non-vested restricted stock awards activity | The following table summarizes the changes in unvested share-based awards for the nine months ended February 28, 2015: | |||||||||||||||
Shares | Weighted Average | |||||||||||||||
Grant-Date | ||||||||||||||||
Fair Value | ||||||||||||||||
(in thousands) | ||||||||||||||||
Unvested at May 31, 2014 | 877 | $ | 45 | |||||||||||||
Granted | 469 | 72 | ||||||||||||||
Vested | (322 | ) | 46 | |||||||||||||
Forfeited | (92 | ) | 53 | |||||||||||||
Unvested at February 28, 2015 | 932 | $ | 58 | |||||||||||||
Schedule of share-based compensation, stock options, activity | The following is a summary of our stock option activity as of and for the nine months ended February 28, 2015: | |||||||||||||||
Options | Weight Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||
(in thousands) | (in years) | (in millions) | ||||||||||||||
Outstanding at May 31, 2014 | 766 | $ | 41 | 3.8 | $ | 21.3 | ||||||||||
Granted | 153 | 72 | ||||||||||||||
Forfeited | (23 | ) | 56 | |||||||||||||
Exercised | (366 | ) | 41 | |||||||||||||
Outstanding at February 28, 2015 | 530 | $ | 49 | 4.9 | $ | 22.8 | ||||||||||
Options vested and exercisable at February 28, 2015 | 392 | $ | 41 | 3.3 | $ | 20 | ||||||||||
Schedule of share-based payment award, stock options, valuation assumptions | Fair value was estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions: | |||||||||||||||
Risk-free interest rates | 1.57% | |||||||||||||||
Expected volatility | 23.65% | |||||||||||||||
Dividend yields | 0.13% | |||||||||||||||
Expected lives | 5 years |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | |||||||||||||||
Feb. 28, 2015 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Schedule of segment reporting information, by segment | Information on segments, including revenue by geographic distribution within segments, and reconciliations to consolidated revenues and consolidated operating income are as follows for the three and nine months ended February 28, 2015 and 2014: | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
28-Feb-15 | 28-Feb-14 | 28-Feb-15 | 28-Feb-14 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Revenues: | ||||||||||||||||
United States | $ | 404,016 | $ | 355,880 | $ | 1,222,841 | $ | 1,081,506 | ||||||||
Canada | 69,047 | 73,467 | 243,004 | 245,379 | ||||||||||||
North America merchant services | 473,063 | 429,347 | 1,465,845 | 1,326,885 | ||||||||||||
Europe | 138,378 | 143,832 | 461,140 | 433,886 | ||||||||||||
Asia-Pacific (1) | 53,542 | 43,273 | 140,184 | 119,488 | ||||||||||||
International merchant services | 191,920 | 187,105 | 601,324 | 553,374 | ||||||||||||
Consolidated revenues | $ | 664,983 | $ | 616,452 | $ | 2,067,169 | $ | 1,880,259 | ||||||||
Operating income (loss) for segments: | ||||||||||||||||
North America merchant services | $ | 66,723 | $ | 61,695 | $ | 218,906 | $ | 201,831 | ||||||||
International merchant services (2) | 64,902 | 58,077 | 214,947 | 182,085 | ||||||||||||
Corporate | (27,010 | ) | (22,481 | ) | (80,856 | ) | (67,334 | ) | ||||||||
Consolidated operating income | $ | 104,615 | $ | 97,291 | $ | 352,997 | $ | 316,582 | ||||||||
Depreciation and amortization: | ||||||||||||||||
North America merchant services | $ | 20,100 | $ | 14,422 | $ | 61,018 | $ | 41,488 | ||||||||
International merchant services | 11,928 | 13,790 | 36,984 | 40,934 | ||||||||||||
Corporate | 1,612 | 1,594 | 4,810 | 4,776 | ||||||||||||
Consolidated depreciation and amortization | $ | 33,640 | $ | 29,806 | $ | 102,812 | $ | 87,198 | ||||||||
(1) Revenues for Ezidebit, which operates primarily in Australia and New Zealand, are included in the Asia-Pacific region. | ||||||||||||||||
(2) During the nine months ended February 28, 2015, operating income for the International merchant services segment includes a $2.9 million gain on the sale of a component of our Russia business that leased automated teller machines to our sponsor bank in Russia. The gain is presented in the “Sales, general and administrative” line in the consolidated statements of income. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 9 Months Ended |
Feb. 28, 2015 | |
segment | |
Country | |
Accounting Policies [Abstract] | |
Number of Countries in which Entity Operates | 28 |
Number of merchant services segments | 2 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Cash and Cash Equivalents [Line Items] | ||
Settlement processing assets | $744,976 | $780,917 |
Cash and cash equivalents | ||
Cash and Cash Equivalents [Line Items] | ||
Settlement processing assets | $169,800 | $124,700 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Goodwill and Other Intangible assets (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2015 | 31-May-14 |
segment | ||
Finite-Lived Intangible Assets [Line Items] | ||
Number of reporting units | 6 | |
Goodwill | $1,422,900 | $1,337,285 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 30 years | |
International merchant services | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $649,009 | $550,630 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Earnings per share (Details) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Earnings per share attributable to Global Payments: | ||||
Basic weighted average shares outstanding | 66,890,000 | 71,835,000 | 67,476,000 | 72,598,000 |
Plus: Dilutive effect of stock options and other share-based awards | 416,000 | 599,000 | 415,000 | 554,000 |
Diluted weighted average shares outstanding | 67,306,000 | 72,434,000 | 67,891,000 | 73,152,000 |
Employee stock option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted share base | 0 | 0 | 0 |
Settlement_Processing_Assets_a2
Settlement Processing Assets and Obligations (Details) (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Offsetting Assets [Line Items] | ||
Total | $744,976 | $780,917 |
Total | -426,368 | -451,317 |
Merchant Reserves | ||
Offsetting Assets [Line Items] | ||
Merchant Reserves | -49,926 | -79,547 |
Reserves for processing obligations | -119,919 | -96,622 |
Reserve for operating losses | ||
Offsetting Assets [Line Items] | ||
Reserves for processing obligations | -1,119 | -1,725 |
Reserves for sales allowances | ||
Offsetting Assets [Line Items] | ||
Reserves for processing obligations | -297 | -601 |
Interchange reimbursement | ||
Offsetting Assets [Line Items] | ||
Settlement processing assets, gross | 183,973 | 217,806 |
Settlement processing obligations, gross | 31,246 | 54,459 |
(Liability to) Receivable from Members | ||
Offsetting Assets [Line Items] | ||
Settlement processing assets, gross | 189,877 | 206,322 |
Settlement processing obligations, gross | -1,710 | -5,490 |
Receivable from networks | ||
Offsetting Assets [Line Items] | ||
Settlement processing assets, gross | 411,997 | 430,763 |
Liability to merchants | ||
Offsetting Assets [Line Items] | ||
Settlement processing obligations, gross | -338,868 | -407,651 |
Exception items | ||
Offsetting Assets [Line Items] | ||
Settlement processing assets, gross | 9,055 | 5,573 |
Settlement processing obligations, gross | $4,299 | $6,313 |
Business_and_Intangible_Asset_2
Business and Intangible Asset Acquisitions and Joint Ventures - Narrative (Details) | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||||||
Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Dec. 17, 2014 | Oct. 10, 2014 | Oct. 10, 2014 | Oct. 10, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 04, 2014 | Mar. 04, 2014 | Feb. 28, 2015 | Mar. 04, 2014 | Feb. 28, 2015 | Oct. 10, 2014 | Mar. 04, 2014 | Feb. 28, 2015 | Oct. 10, 2014 | Feb. 28, 2015 | Sep. 30, 2013 | Aug. 31, 2014 | Aug. 31, 2014 | Sep. 30, 2013 | Dec. 17, 2014 | |
USD ($) | USD ($) | USD ($) | Global Payments Asia-Pacific Philippines Incorporated | Ezidebit | Ezidebit | Ezidebit | Fidelity Information Services’ (FIS) Check Gaming Guarantee business | Fidelity Information Services’ (FIS) Check Gaming Guarantee business | PayPros | PayPros | Contract-based and customer-related finite-lived intangible assets | Contract-based intangible assets | Acquired technologies | Acquired technologies | Acquired technologies | Tradenames | Tradenames | Comercia Global Payments Brazil | Comercia Global Payments Brazil | Comercia Global Payments Brazil | Comercia Global Payments Brazil | Comercia Global Payments | Global Payments Asia-Pacific Philippines Incorporated | |
USD ($) | USD ($) | AUD | USD ($) | USD ($) | customer | USD ($) | USD ($) | Ezidebit | PayPros | Ezidebit | Ezidebit | PayPros | Ezidebit | Ezidebit | USD ($) | USD ($) | USD ($) | Interest and other income | ||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||
Cash | $45,826,000 | |||||||||||||||||||||||
Goodwill | 1,422,900,000 | 1,337,285,000 | 194,136,000 | 270,878,000 | ||||||||||||||||||||
Intangible assets acquired | 30,200,000 | 27,954,000 | 10,800,000 | 2,901,000 | ||||||||||||||||||||
Proceeds from divestiture of business | 10,597,000 | 3,521,000 | 6,700,000 | 2,100,000 | 3,900,000 | |||||||||||||||||||
Gain (loss) on deconsolidation | 2,100,000 | |||||||||||||||||||||||
Finite-lived intangible asset, useful life | 15 years | 13 years | 15 years | 7 years | 5 years | |||||||||||||||||||
Number of customers acquired | 260 | |||||||||||||||||||||||
Ownership percentage by noncontrolling owners | 50.00% | 49.00% | 49.00% | |||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 51.00% | |||||||||||||||||||||||
Percentage of controlling financial interest acquired | 100.00% | 100.00% | ||||||||||||||||||||||
Payments to Acquire Businesses, Gross | 3,600,000 | 268,100,000 | 305,000,000 | 236,500,000 | 420,000,000 | |||||||||||||||||||
Gaming Bureau Services Agreement Term | 10 years | |||||||||||||||||||||||
Payments to acquire business, working capital | -2,100,000 | -2,400,000 | 6,500,000 | |||||||||||||||||||||
Net assets acquired | $265,982,000 | $426,452,000 |
Business_and_Intangible_Asset_3
Business and Intangible Asset Acquisitions and Joint Ventures - Purchase Price Allocation (Details) (USD $) | Feb. 28, 2015 | 31-May-14 | Mar. 04, 2014 | Oct. 10, 2014 |
In Thousands, unless otherwise specified | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Goodwill | $1,422,900 | $1,337,285 | ||
PayPros | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Goodwill | 270,878 | |||
Property and equipment | 1,680 | |||
Other assets | 3,872 | |||
Total assets acquired | 464,930 | |||
Deferred income taxes | -38,478 | |||
Net assets acquired | 426,452 | |||
PayPros | Customer-related intangible assets | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Intangible assets | 147,500 | |||
PayPros | Acquired technologies | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Intangible assets | 10,800 | |||
Ezidebit | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Cash | 45,826 | |||
Goodwill | 194,136 | |||
Other assets | 2,337 | |||
Total assets acquired | 315,875 | |||
Liabilities | -49,797 | |||
Deferred income taxes | -96 | |||
Net assets acquired | 265,982 | |||
Ezidebit | Customer-related intangible assets | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Intangible assets | 42,721 | |||
Ezidebit | Acquired technologies | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Intangible assets | 27,954 | |||
Ezidebit | Contract-based intangible assets | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ||||
Intangible assets | $2,901 |
Business_and_Intangible_Asset_4
Business and Intangible Asset Acquisitions and Joint Ventures - Pro Forma Information - Unaudited (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Business Acquisition [Line Items] | ||||
Net income per share attributable to Global Payments, basic, Actual (in dollars per share) | $0.94 | $0.77 | $3.15 | $2.67 |
Net income per share attributable to Global Payments, diluted, Actual (in dollars per share) | $0.93 | $0.76 | $3.13 | $2.65 |
PayPros | ||||
Business Acquisition [Line Items] | ||||
Total revenues, Actual | $616,452 | $1,880,259 | ||
Total revenues, Pro forma | 643,086 | 1,954,570 | ||
Net income attributable to Global Payments, Actual | 55,121 | 193,661 | ||
Net income attributable to Global Payments, Pro forma | $54,885 | $189,645 | ||
Net income per share attributable to Global Payments, basic, Actual (in dollars per share) | $0.77 | $2.67 | ||
Net income per share attributable to Global Payments, basic, Pro forma (in dollars per share) | $0.76 | $2.61 | ||
Net income per share attributable to Global Payments, diluted, Actual (in dollars per share) | $0.76 | $2.65 | ||
Net income per share attributable to Global Payments, diluted, Pro forma (in dollars per share) | $0.76 | $2.59 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $1,422,900 | $1,337,285 |
Other intangible assets | 891,001 | 892,511 |
Less accumulated amortization | 374,918 | 357,338 |
Other intangible assets, net | 516,083 | 535,173 |
Customer-related intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 702,037 | 714,704 |
Less accumulated amortization | 328,633 | 317,629 |
Contract-based intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 131,612 | 145,967 |
Less accumulated amortization | 35,411 | 32,031 |
Acquired technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 50,337 | 25,700 |
Less accumulated amortization | 6,839 | 3,531 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 7,015 | 6,140 |
Less accumulated amortization | $4,035 | $4,147 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets - Goodwill Rollforward (Details) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2015 | 31-May-14 | |
Goodwill [Line Items] | |||
Goodwill, gross | $1,337,285 | ||
Accumulated impairment losses | 0 | ||
Goodwill [Roll Forward] | |||
Goodwill, balance at beginning of period | 1,337,285 | ||
Goodwill acquired | 194,136 | ||
Adjustment | -699 | [1] | |
Effect of foreign currency translation | -107,822 | ||
Goodwill, balance at end of period | 1,422,900 | ||
North America merchant services | |||
Goodwill [Line Items] | |||
Goodwill, gross | 786,655 | ||
Accumulated impairment losses | 0 | ||
Goodwill [Roll Forward] | |||
Goodwill, balance at beginning of period | 786,655 | ||
Goodwill acquired | 0 | ||
Adjustment | -699 | [1] | |
Effect of foreign currency translation | -12,065 | ||
Goodwill, balance at end of period | 773,891 | ||
International merchant services | |||
Goodwill [Line Items] | |||
Goodwill, gross | 550,630 | ||
Accumulated impairment losses | 0 | ||
Goodwill [Roll Forward] | |||
Goodwill, balance at beginning of period | 550,630 | ||
Goodwill acquired | 194,136 | ||
Adjustment | 0 | [1] | |
Effect of foreign currency translation | -95,757 | ||
Goodwill, balance at end of period | $649,009 | ||
[1] | During the nine months ended February 28, 2015, we recorded an adjustment to decrease goodwill by $0.7 million in our North America merchant services segment in connection with the finalization of the intangible asset and deferred tax valuations associated with the purchase price allocation and the working capital settlement for the PayPros acquisition. |
LongTerm_Debt_and_Credit_Facil1
Long-Term Debt and Credit Facilities - Schedule of Outstanding Debt (Details) (USD $) | Feb. 28, 2015 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Total | $2,055,300 | $1,833,807 |
Current portion | 509,300 | 457,805 |
Long-term debt | 1,546,000 | 1,376,002 |
Line of credit | ||
Debt Instrument [Line Items] | ||
Total | 805,300 | 580,128 |
Line of credit | ||
Debt Instrument [Line Items] | ||
Short-term debt | 446,800 | 440,128 |
Line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt (including current portion) | 358,500 | 140,000 |
Notes payable | ||
Debt Instrument [Line Items] | ||
Long-term debt (including current portion) | 0 | 3,679 |
Term loan | ||
Debt Instrument [Line Items] | ||
Long-term debt (including current portion) | $1,250,000 | $1,250,000 |
LongTerm_Debt_and_Credit_Facil2
Long-Term Debt and Credit Facilities - Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 27, 2014 | Oct. 09, 2014 | Aug. 31, 2014 | |
Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum leverage ratio | 3.5 | 3.5 | ||||||
Maximum coverage ratio in case of acquisition | 3.75 | 3.75 | ||||||
Minimum interest coverage ratio | 2.5 | 2.5 | ||||||
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion | $1,750,000 | $0 | $2,281,000 | $0 | ||||
Term loan | Five Year Unsecured Term Loan Due February 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt term | 5 years | |||||||
Loan, face amount | 1,250,000,000 | |||||||
Interest rate at period end | 1.92% | 1.92% | ||||||
Periodic payment, principal, percentage, minimum | 1.25% | |||||||
Periodic payment, principal, percentage, maximum | 2.50% | |||||||
Periodic payment terms, principal to be paid prior to balloon payment at maturity, percentage | 27.50% | 27.50% | ||||||
Term loan | Five Year Unsecured Term Loan Due February 2019 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate basis | London Interbank Offered Rate ("LIBOR") | |||||||
Line of credit | Revolving Credit Facility Expiring February 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt term | 5 years | |||||||
Line of credit facility, maximum borrowing capacity | 1,000,000,000 | 1,000,000,000 | ||||||
Line of credit | Revolving Credit Facility Expiring February 2019 | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 1.89% | 1.89% | 1.52% | |||||
Line of credit | Corporate Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, fair value of amount outstanding | 358,500,000 | 358,500,000 | ||||||
Line of credit facility, remaining borrowing capacity | 626,500,000 | 626,500,000 | 851,900,000 | |||||
Line of credit | Corporate Credit Facility | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable rate basis | LIBOR | |||||||
Standby letters of credit | Revolving Credit Facility Expiring February 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | 100,000,000 | 100,000,000 | ||||||
Standby letters of credit | Corporate Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, fair value of amount outstanding | 7,400,000 | 7,400,000 | 8,100,000 | |||||
Line of credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, remaining borrowing capacity | 901,500,000 | 901,500,000 | 818,500,000 | |||||
Interest Rate Swap | ||||||||
Debt Instrument [Line Items] | ||||||||
Derivative, amount of hedged item | 500,000,000 | 500,000,000 | ||||||
Accounts Payable and Accrued Liabilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash flow hedge derivative instrument liabilities at fair value | $4,000,000 | $4,000,000 |
Income_Tax_Narrative_Details
Income Tax - Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 |
Income Tax Contingency [Line Items] | |||||
Effective tax rate | 24.90% | 28.20% | 25.70% | 28.40% | |
Unrecognized tax benefits | $68 | $68 | |||
Other noncurrent liabilities | |||||
Income Tax Contingency [Line Items] | |||||
Unrecognized tax benefits | 71.1 | 71.1 | 71.2 | ||
United Kingdom | Foreign tax authority | |||||
Income Tax Contingency [Line Items] | |||||
Effective income tax rate reconciliation, change in enacted tax rate | 3.00% | ||||
Minimum | |||||
Income Tax Contingency [Line Items] | |||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 0 | 0 | |||
Maximum | |||||
Income Tax Contingency [Line Items] | |||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $68 | $68 |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Share data in Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Class of Stock [Line Items] | ||||
Repurchase of common stock (in shares) | 600 | 300 | 3,100 | 5,000 |
Repurchase of common stock | $228,540,000 | $260,609,000 | ||
Repurchase of common stock, average price per share | $88.74 | $64.04 | $74.25 | $52.53 |
Remaining authorized repurchase amount | 243,400,000 | 243,400,000 | ||
Other than accelerated share repurchase program | ||||
Class of Stock [Line Items] | ||||
Repurchase of common stock | $56,600,000 | $21,500,000 | $228,500,000 | $260,600,000 |
ShareBased_Awards_and_Options_1
Share-Based Awards and Options (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Sep. 27, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $5.70 | $5.30 | $14.80 | $17.30 | |
Income tax benefit | 1.9 | 2 | 4.8 | 5.2 | |
Stock Option Plan 2011 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for future issuance (in shares) | 7,000,000 | ||||
Employee stock option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $0.20 | $0.20 | $0.50 | $0.70 | |
Performance period. year one | Leveraged performance units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 0.00% | ||||
Performance period, year two | Leveraged performance units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 100.00% |
ShareBased_Awards_and_Options_2
Share-Based Awards and Options - Restricted Stock Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Aug. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $5.70 | $5.30 | $14.80 | $17.30 | |
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | 4 years | |||
Performance restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of types of performance units offered | 3 | 3 | |||
Award performance period | 3 years | 1 year | |||
Performance restricted stock units | One year increment | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
Performance restricted stock units | Three year equal vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 75.00% | ||||
Performance restricted stock units | Minimum | Three year equal vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Target shares of company stock | 0.00% | ||||
Performance restricted stock units | Maximum | Three year equal vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Target shares of company stock | 200.00% | ||||
Leveraged performance units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award performance period | 3 years | ||||
Leveraged performance units | Performance period. year one | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 2 years | ||||
Vesting percentage | 0.00% | ||||
Total shareholder return restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award performance period | 3 years | ||||
Total shareholder return restricted stock units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Target shares of company stock | 0.00% | ||||
Total shareholder return restricted stock units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Target shares of company stock | 200.00% | ||||
Restricted stock and restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total fair value of share awards vested in period | 14.9 | 15.9 | |||
Share-based compensation expense | 5.4 | 5 | 13.8 | 16.2 | |
Total unrecognized compensation cost | $47.50 | $47.50 | |||
Total unrecognized compensation cost, weighted average period | 2 years 3 months 7 days |
ShareBased_Awards_and_Options_3
Share-Based Awards and Options - Restricted Stock Activity (Details) (Restricted stock and restricted stock units, USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2015 |
Restricted stock and restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Nonvested, beginning of period (in shares) | 877 |
Granted (in shares) | 469 |
Vested (in shares) | -322 |
Forfeited (in shares) | -92 |
Nonvested, end of period (in shares) | 932 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Nonvested, weighted average grant-date fair value, beginning of period (in dollars per share) | $45 |
Granted, weighted average grant-date fair value (in dollars per share) | $72 |
Vested, weighted average grant-date fair value (in dollars per share) | $46 |
Forfeited, weighted average grant-date fair value (in dollars per share) | $53 |
Nonvested, weighted average grant-date fair value, end of period (in dollars per share) | $58 |
Recovered_Sheet2
Share-based Awards and Options - Employee Stock Purchase Plan (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $5,700,000 | $5,300,000 | $14,800,000 | $17,300,000 |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock authorized (in shares) | 2,400,000 | 2,400,000 | ||
Maximum employee subscription amount | 25,000 | |||
Maximum employee subscription rate | 20.00% | 20.00% | ||
Discounted market value | 85.00% | |||
Shares issued in period, net (in shares) | 1,100,000 | |||
Shares reserved for future issuance (in shares) | 1,300,000 | 1,300,000 | ||
Share-based compensation expense | $100,000 | $500,000 | $400,000 | |
Weighted average grant-date fair value (in dollars per share) | $8 | $7 | $8 | $7 |
Discount from market price | 15.00% |
ShareBased_Awards_and_Options_4
Share-Based Awards and Options - Stock Options Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (in shares) | 0 | 153 | ||
Aggregate intrinsic value of stock options exercised | $11.70 | $24 | ||
Total unrecognized compensation cost | 1.9 | 1.9 | ||
Share-based compensation expense | 5.7 | 5.3 | 14.8 | 17.3 |
Employee stock option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair market value, percentage | 100.00% | 100.00% | ||
Stock option term | 10 years | |||
Total unrecognized compensation cost, weighted average period | 3 years 3 months 18 days | |||
Share-based compensation expense | $0.20 | $0.20 | $0.50 | $0.70 |
Leveraged performance units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award performance period | 3 years | |||
Leveraged performance units | Performance period. year one | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 2 years | |||
Stock Option Plan 2011 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant date fair value for each option granted | $17 | $17 |
ShareBased_Awards_and_Options_5
Share-Based Awards and Options - Stock Option Activity (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |
In Millions, except Share data in Thousands, unless otherwise specified | Feb. 28, 2015 | 31-May-14 | Feb. 28, 2014 | Feb. 28, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding, beginning of period (in shares) | 530 | 766 | 766 | |
Granted (in shares) | 0 | 153 | ||
Forfeited (in shares) | -23 | |||
Exercised (in shares) | -366 | |||
Outstanding, end of period (in shares) | 530 | |||
Options vested and exercisable (in shares) | 392 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Outstanding, weighted average exercise price, beginning of period (in dollars per share) | $49 | $41 | $41 | |
Granted, weighted average exercise price (in dollars per share) | $72 | |||
Forfeited, weighted average exercise price (in dollars per share) | $56 | |||
Exercised, weighted average exercise price (in dollars per share) | $41 | |||
Options vested and exercisable, weighted average exercise price (in dollars per share) | $41 | |||
Outstanding, weighted average remaining contractual term | 4 years 10 months 24 days | 3 years 9 months 18 days | ||
Options vested and exercisable, weighted average remaining contractual term | 3 years 3 months 18 days | |||
Outstanding, aggregate intrinsic value | $22.80 | $21.30 | $21.30 | |
Options vested and exercisable, aggregate intrinsic value | $20 |
ShareBased_Awards_and_Options_6
Share-Based Awards and Options - Valuation Assumptions (Details) | 9 Months Ended |
Feb. 28, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Risk-free interest rates | 1.57% |
Expected volatility | 23.65% |
Dividend yields | 0.13% |
Expected lives | 5 years |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |||
Country | segment | |||||
Country | ||||||
Segment Reporting Information [Line Items] | ||||||
Number of Countries in which Entity Operates | 28 | 28 | ||||
Number of reportable segments | 2 | |||||
Revenues | $664,983,000 | $616,452,000 | $2,067,169,000 | $1,880,259,000 | ||
Operating income (loss) for segments | 104,615,000 | 97,291,000 | 352,997,000 | 316,582,000 | ||
Depreciation and amortization | 33,640,000 | 29,806,000 | 102,812,000 | 87,198,000 | ||
Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 664,983,000 | 616,452,000 | 2,067,169,000 | 1,880,259,000 | ||
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating income (loss) for segments | -27,010,000 | -22,481,000 | -80,856,000 | -67,334,000 | ||
Depreciation and amortization | 1,612,000 | 1,594,000 | 4,810,000 | 4,776,000 | ||
North America merchant services | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 473,063,000 | 429,347,000 | 1,465,845,000 | 1,326,885,000 | ||
Operating income (loss) for segments | 66,723,000 | 61,695,000 | 218,906,000 | 201,831,000 | ||
Depreciation and amortization | 20,100,000 | 14,422,000 | 61,018,000 | 41,488,000 | ||
International merchant services | ||||||
Segment Reporting Information [Line Items] | ||||||
Gain (loss) on disposition of assets | 2,900,000 | |||||
International merchant services | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 191,920,000 | 187,105,000 | 601,324,000 | 553,374,000 | ||
Operating income (loss) for segments | 64,902,000 | [1] | 58,077,000 | 214,947,000 | [1] | 182,085,000 |
Depreciation and amortization | 11,928,000 | 13,790,000 | 36,984,000 | 40,934,000 | ||
United States | North America merchant services | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 404,016,000 | 355,880,000 | 1,222,841,000 | 1,081,506,000 | ||
Canada | North America merchant services | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 69,047,000 | 73,467,000 | 243,004,000 | 245,379,000 | ||
Europe | International merchant services | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 138,378,000 | 143,832,000 | 461,140,000 | 433,886,000 | ||
Asia-Pacific | International merchant services | Operating segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | $53,542,000 | [2] | $43,273,000 | $140,184,000 | [2] | $119,488,000 |
[1] | uring the nine months ended February 28, 2015, operating income for the International merchant services segment includes a $2.9 million gain on the sale of a component of our Russia business that leased automated teller machines to our sponsor bank in Russia. The gain is presented in the “Sales, general and administrative†line in the consolidated statements of income. | |||||
[2] | Revenues for Ezidebit, which operates primarily in Australia and New Zealand, are included in the Asia-Pacific region. |
SUBSEQUENT_EVENT_SUBSEQUENT_EV
SUBSEQUENT EVENT SUBSEQUENT EVENT (Details) (Realex Payments [Member]) | Mar. 25, 2015 | Mar. 25, 2015 | Mar. 25, 2015 |
In Millions, unless otherwise specified | Euro Member Countries, Euro | United States of America, Dollars | |
EUR (€) | USD ($) | ||
Subsequent Event [Line Items] | |||
Percentage of controlling financial interest acquired | 95.00% | ||
Payments to Acquire Businesses, Gross | € 108.50 | $119.10 |