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| 8-K - 8-K - GLOBAL PAYMENTS INC | form8-kq1fy14earningsrelea.htm |
Global Payments Reports First Quarter Earnings
Announces $100 Million Accelerated Share Repurchase Plan
Increases Fiscal 2014 EPS Outlook
ATLANTA, October 1, 2013 -- Global Payments Inc. (NYSE: GPN) today announced results for its fiscal first quarter ended August 31, 2013. The company delivered revenues of $629.7 million or 7% growth and cash earnings per share of $1.00 or 15% growth over prior year.
Chairman Paul R. Garcia said, “We delivered strong first quarter results reflecting solid performance in North America and Europe. We continue to focus on expanding our global market position and driving our strategic initiatives forward.”
First Quarter 2014 Summary
• | Revenues grew 7% to $629.7 million, compared to $590.3 million in the first quarter of fiscal 2013. |
• | Cash diluted earnings per share grew 15% to $1.00, compared to $0.87 in the first quarter of fiscal 2013. |
• | GAAP diluted earnings per share were $0.87, compared to $0.59 in the first quarter of 2013. |
$100 Million Accelerated Share Repurchase
David E. Mangum, Senior Executive Vice President and CFO, stated, “We are pleased with our first quarter results and delighted to announce that we plan to enter into an accelerated share repurchase plan, demonstrating our commitment to executing share repurchases while continuing to drive organic growth and pursue acquisitions.”
Global Payments intends to enter into an accelerated share repurchase (ASR) plan this month to repurchase up to $100 million of the company’s common stock. The ASR is part of the Board authorized program to repurchase up to $250 million of the company’s common stock.
1
2014 Outlook
As a result of the ASR plan, the company has increased its full-year expectations for diluted earnings per share on a cash basis by five cents to a range of $3.98 to $4.05, or growth of 9% to 11% over fiscal 2013. Annual fiscal 2014 GAAP diluted earnings per share is now expected to be $3.40 to $3.47.
The company maintains its expectations for annual revenue of $2.51 billion to $2.56 billion, or 6% to 8% growth over fiscal 2013.
Conference Call
Global Payments will hold a conference call today, October 1, 2013 at 5:00 p.m. EDT to discuss financial results and business highlights. Callers may access the conference call via the investor relations page of the company’s website at www.globalpaymentsinc.com by clicking the “Webcast” button; or callers in North America may dial 1-888-895-3550 and callers outside North America may dial 1-706-758-8809. The pass code is “GPN.” A replay of the call may be accessed through the Global Payments website through October 15, 2013.
About Global Payments
Global Payments Inc. (NYSE: GPN) is a leading provider of electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout North America, South America, Europe and the Asia-Pacific region. Global Payments, a Fortune 1000 company, offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management. Visit www.globalpaymentsinc.com for more information about the company and its services.
This announcement and comments made by Global Payments' management during the conference call may contain certain forward-looking statements within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management’s expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties. Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following: the effect on our results of operations of continued security enhancements to our processing system; foreign currency risks which become increasingly relevant as we expand internationally; the effect of current domestic and worldwide economic conditions, including sovereign insolvency situations and a decline in the value of the U.S. dollar, and future performance and integration of acquisitions, and other risks detailed in our SEC filings, including the most recently filed Form 10-K. We undertake no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.
Investor contact: investor.relations@globalpay.com | Media contact: media.relations@globalpay.com |
Jane Elliott | Amy Corn |
770-829-8234 | 770-829-8755 |
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SCHEDULE 1
GAAP CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended August 31, | ||||||||||
2013 | 2012 | % Change | ||||||||
(unaudited) | ||||||||||
Revenues | $ | 629,685 | $ | 590,287 | 6.7 | % | ||||
Operating expenses: | ||||||||||
Cost of service | 230,745 | 204,391 | 12.9 | % | ||||||
Sales, general and administrative | 291,556 | 281,419 | 3.6 | % | ||||||
Processing system intrusion | — | 23,989 | (100 | )% | ||||||
522,301 | 509,799 | 2.5 | % | |||||||
Operating income | 107,384 | 80,488 | 33.4 | % | ||||||
Other income (expense): | ||||||||||
Interest and other income | 3,338 | 1,983 | 68.3 | % | ||||||
Interest and other expense | (7,879 | ) | (3,545 | ) | 122.3 | % | ||||
(4,541 | ) | (1,562 | ) | 190.7 | % | |||||
Income before income taxes | 102,843 | 78,926 | 30.3 | % | ||||||
Provision for income taxes | (31,135 | ) | (24,764 | ) | 25.7 | % | ||||
Net income | 71,708 | 54,162 | 32.4 | % | ||||||
Less: Net income attributable to noncontrolling interests, net of tax | (7,065 | ) | (7,487 | ) | (5.6 | )% | ||||
Net income attributable to Global Payments | $ | 64,643 | $ | 46,675 | 38.5 | % | ||||
Earnings per share attributable to Global Payments: | ||||||||||
Basic | $ | 0.88 | $ | 0.59 | 49.2 | % | ||||
Diluted | $ | 0.87 | $ | 0.59 | 47.5 | % | ||||
Weighted average shares outstanding: | ||||||||||
Basic | 73,765 | 78,604 | ||||||||
Diluted | 74,289 | 79,043 | ||||||||
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SCHEDULE 2
CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended August 31, | ||||||||||
2013 | 2012 | % Change | ||||||||
Revenues | $ | 629,685 | $ | 590,287 | 6.7 | % | ||||
Operating expenses: | ||||||||||
Cost of service | 215,773 | 193,005 | 11.8 | % | ||||||
Sales, general and administrative | 290,060 | 280,619 | 3.4 | % | ||||||
505,833 | 473,624 | 6.8 | % | |||||||
Operating income | 123,852 | 116,663 | 6.2 | % | ||||||
Other income (expense): | ||||||||||
Interest and other income | 3,338 | 1,983 | 68.3 | % | ||||||
Interest and other expense | (7,879 | ) | (3,545 | ) | 122.3 | % | ||||
(4,541 | ) | (1,562 | ) | 190.7 | % | |||||
Income before income taxes | 119,311 | 115,101 | 3.7 | % | ||||||
Provision for income taxes | (36,686 | ) | (36,553 | ) | 0.4 | % | ||||
Net income | 82,625 | 78,548 | 5.2 | % | ||||||
Less: Net income attributable to noncontrolling interests, net of tax | (8,436 | ) | (9,752 | ) | (13.5 | )% | ||||
Net income attributable to Global Payments | $ | 74,189 | $ | 68,796 | 7.8 | % | ||||
Earnings per share attributable to Global Payments: | ||||||||||
Basic | $ | 1.01 | $ | 0.88 | 14.8 | % | ||||
Diluted | $ | 1.00 | $ | 0.87 | 14.9 | % | ||||
Weighted average shares outstanding: | ||||||||||
Basic | 73,765 | 78,604 | ||||||||
Diluted | 74,289 | 79,043 | ||||||||
See Schedule 6 for a reconciliation of cash earnings to GAAP.
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SCHEDULE 3
SEGMENT INFORMATION
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended August 31, | ||||||||||||||||||||||
2013 | 2012 | % Change | ||||||||||||||||||||
GAAP | Cash Earnings | GAAP | Cash Earnings | GAAP | Cash Earnings | |||||||||||||||||
Revenues: | ||||||||||||||||||||||
United States | $ | 363,833 | $ | 363,833 | $ | 345,898 | $ | 345,898 | 5.2 | % | 5.2 | % | ||||||||||
Canada | 86,672 | 86,672 | 80,897 | 80,897 | 7.1 | % | 7.1 | % | ||||||||||||||
North America merchant services | 450,505 | 450,505 | 426,795 | 426,795 | 5.6 | % | 5.6 | % | ||||||||||||||
Europe | 143,188 | 143,188 | 128,465 | 128,465 | 11.5 | % | 11.5 | % | ||||||||||||||
Asia-Pacific | 35,992 | 35,992 | 35,027 | 35,027 | 2.8 | % | 2.8 | % | ||||||||||||||
International merchant services | 179,180 | 179,180 | 163,492 | 163,492 | 9.6 | % | 9.6 | % | ||||||||||||||
Total revenues | $ | 629,685 | $ | 629,685 | $ | 590,287 | $ | 590,287 | 6.7 | % | 6.7 | % | ||||||||||
Operating income (loss) for segments: | ||||||||||||||||||||||
North America merchant services | $ | 69,699 | $ | 79,404 | $ | 67,217 | $ | 71,443 | 3.7 | % | 11.1 | % | ||||||||||
International merchant services | 61,541 | 68,757 | 57,140 | 65,044 | 7.7 | % | 5.7 | % | ||||||||||||||
Corporate1 | (23,856 | ) | (24,309 | ) | (43,869 | ) | (19,824 | ) | 45.6 | % | (22.6 | )% | ||||||||||
Operating income | $ | 107,384 | $ | 123,852 | $ | 80,488 | $ | 116,663 | 33.4 | % | 6.2 | % | ||||||||||
1 GAAP and cash earnings include incremental security spend for the three months ended August 31, 2013. GAAP earnings for the three months ended August 31, 2012 include a data intrusion charge of $24.0 million.
See Schedule 7 for reconciliation of cash earnings segment information to GAAP.
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SCHEDULE 4
CONSOLIDATED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except share data)
August 31, 2013 | May 31, 2013 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 725,887 | $ | 680,470 | |||
Accounts receivable, net of allowances for doubtful accounts of $518 and $509, respectively | 188,633 | 189,435 | |||||
Claims receivable, net of allowances for losses of $4,248 and $3,144, respectively | 1,100 | 1,156 | |||||
Settlement processing assets | 611,602 | 259,204 | |||||
Inventory | 6,677 | 11,057 | |||||
Deferred income taxes | 6,317 | 6,485 | |||||
Prepaid expenses and other current assets | 49,852 | 66,685 | |||||
Total current assets | 1,590,068 | 1,214,492 | |||||
Goodwill | 1,047,578 | 1,044,222 | |||||
Other intangible assets, net | 387,234 | 400,848 | |||||
Property and equipment, net | 355,370 | 348,064 | |||||
Deferred income taxes | 96,646 | 95,178 | |||||
Other | 22,594 | 22,252 | |||||
Total assets | $ | 3,499,490 | $ | 3,125,056 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Lines of credit | $ | 328,487 | $ | 187,461 | |||
Current portion of long-term debt | 72,228 | 72,335 | |||||
Accounts payable and accrued liabilities | 224,100 | 262,890 | |||||
Settlement processing obligations | 400,887 | 162,558 | |||||
Income taxes payable | 19,118 | 18,870 | |||||
Total current liabilities | 1,044,820 | 704,114 | |||||
Long-term debt | 1,000,383 | 891,134 | |||||
Deferred income taxes | 173,573 | 170,723 | |||||
Other long-term liabilities | 76,025 | 72,478 | |||||
Total liabilities | 2,294,801 | 1,838,449 | |||||
Equity: | |||||||
Preferred stock, no par value; 5,000,000 shares authorized and none issued | — | — | |||||
Common stock, no par value; 200,000,000 shares authorized; 72,919,576 and 75,426,099 issued and outstanding at August 31, 2013 and May 31, 2013, respectively | — | — | |||||
Paid-in capital | 166,848 | 202,396 | |||||
Retained earnings | 917,550 | 958,751 | |||||
Accumulated other comprehensive income (loss) | (17,376 | ) | (15,062 | ) | |||
Total Global Payments shareholders’ equity | 1,067,022 | 1,146,085 | |||||
Noncontrolling interest | 137,667 | 140,522 | |||||
Total equity | 1,204,689 | 1,286,607 | |||||
Total liabilities and equity | $ | 3,499,490 | $ | 3,125,056 | |||
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SCHEDULE 5
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended August 31, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 71,708 | $ | 54,162 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization of property and equipment | 13,981 | 12,670 | |||||
Amortization of acquired intangibles | 14,393 | 11,225 | |||||
Share-based compensation expense | 4,788 | 4,222 | |||||
Provision for operating losses and bad debts | 5,234 | 6,012 | |||||
Deferred income taxes | 5,784 | 10,273 | |||||
Other, net | (1,891 | ) | (941 | ) | |||
Changes in operating assets and liabilities, net of the effects of acquisitions: | |||||||
Accounts receivable | 802 | 3,087 | |||||
Claims receivable | (3,864 | ) | (3,272 | ) | |||
Settlement processing assets and obligations, net | (115,383 | ) | (7,839 | ) | |||
Inventory | 4,448 | (2,992 | ) | ||||
Prepaid expenses and other assets | 16,772 | (8,513 | ) | ||||
Accounts payable and other accrued liabilities | (40,207 | ) | (15,294 | ) | |||
Income taxes payable | 248 | 5,827 | |||||
Net cash provided by (used in) operating activities | (23,187 | ) | 68,627 | ||||
Cash flows from investing activities: | |||||||
Business, intangible and other asset acquisitions, net of cash acquired | — | (190 | ) | ||||
Capital expenditures | (20,263 | ) | (29,237 | ) | |||
Net decrease in financing receivables | 665 | 740 | |||||
Proceeds from sale of investment and contractual rights | 990 | — | |||||
Net cash used in investing activities | (18,608 | ) | (28,687 | ) | |||
Cash flows from financing activities: | |||||||
Net (payments) borrowings on short-term lines of credit | 141,026 | (6,137 | ) | ||||
Proceeds from issuance of long-term debt | 440,000 | 50,000 | |||||
Principal payments under long-term debt | (331,515 | ) | (30,080 | ) | |||
Proceeds from stock issued under employee stock plans | 3,998 | 4,375 | |||||
Common stock repurchased - share-based compensation plans | (4,604 | ) | (6,348 | ) | |||
Repurchase of common stock | (143,700 | ) | (3,249 | ) | |||
Tax benefit from employee share-based compensation | 1,213 | 1,733 | |||||
Distributions to noncontrolling interest | (12,482 | ) | (2,733 | ) | |||
Dividends paid | (1,456 | ) | (1,578 | ) | |||
Net cash provided by (used in) financing activities | 92,480 | 5,983 | |||||
Effect of exchange rate changes on cash | (5,268 | ) | 14,133 | ||||
Increase in cash and cash equivalents | 45,417 | 60,056 | |||||
Cash and cash equivalents, beginning of the period | 680,470 | 781,275 | |||||
Cash and cash equivalents, end of the period | $ | 725,887 | $ | 841,331 | |||
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SCHEDULE 6
RECONCILIATION OF QUARTERLY CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended August 31, 2013 | ||||||||||||||||
GAAP | Processing System Intrusion | Other1 | Cash Earnings Adjustments2 | Cash Earnings | ||||||||||||
Revenues | $ | 629,685 | $ | — | $ | — | $ | — | $ | 629,685 | ||||||
Operating expenses: | ||||||||||||||||
Cost of service | 230,745 | — | (579 | ) | (14,393 | ) | 215,773 | |||||||||
Sales, general and administrative | 291,556 | — | (1,496 | ) | — | 290,060 | ||||||||||
Processing system intrusion | — | — | — | — | ||||||||||||
522,301 | — | (2,075 | ) | (14,393 | ) | 505,833 | ||||||||||
Operating income | 107,384 | — | 2,075 | 14,393 | 123,852 | |||||||||||
Other income (expense): | ||||||||||||||||
Interest and other income | 3,338 | — | — | — | 3,338 | |||||||||||
Interest and other expense | (7,879 | ) | — | — | — | (7,879 | ) | |||||||||
(4,541 | ) | — | — | — | (4,541 | ) | ||||||||||
Income before income taxes | 102,843 | — | 2,075 | 14,393 | 119,311 | |||||||||||
Provision for income taxes | (31,135 | ) | — | (789 | ) | (4,762 | ) | (36,686 | ) | |||||||
Net income | 71,708 | — | 1,286 | 9,631 | 82,625 | |||||||||||
Less: Net income attributable to noncontrolling interests, net of tax | (7,065 | ) | — | — | (1,371 | ) | (8,436 | ) | ||||||||
Net income attributable to Global Payments | $ | 64,643 | $ | — | $ | 1,286 | $ | 8,260 | $ | 74,189 | ||||||
Diluted shares | 74,289 | 74,289 | ||||||||||||||
Diluted earnings per share | $ | 0.87 | $ | — | $ | 0.02 | $ | 0.11 | $ | 1.00 | ||||||
Three Months Ended August 31, 2012 | ||||||||||||||||
GAAP | Processing System Intrusion | Other1 | Cash Earnings Adjustments2 | Cash Earnings | ||||||||||||
Revenues | $ | 590,287 | $ | — | $ | — | $ | — | $ | 590,287 | ||||||
Operating expenses: | ||||||||||||||||
Cost of service | 204,391 | — | (161 | ) | (11,225 | ) | 193,005 | |||||||||
Sales, general and administrative | 281,419 | — | (800 | ) | — | 280,619 | ||||||||||
Processing System Intrusion | 23,989 | (23,989 | ) | — | — | — | ||||||||||
509,799 | (23,989 | ) | (961 | ) | (11,225 | ) | 473,624 | |||||||||
Operating income | 80,488 | 23,989 | 961 | 11,225 | 116,663 | |||||||||||
Other income (expense): | ||||||||||||||||
Interest and other income | 1,983 | — | 1,983 | |||||||||||||
Interest and other expense | (3,545 | ) | — | (3,545 | ) | |||||||||||
(1,562 | ) | — | — | — | (1,562 | ) | ||||||||||
Income before income taxes | 78,926 | 23,989 | 961 | 11,225 | 115,101 | |||||||||||
Benefit (provision) for income taxes | (24,764 | ) | (8,279 | ) | (150 | ) | (3,360 | ) | (36,553 | ) | ||||||
Net income | 54,162 | 15,710 | 811 | 7,865 | 78,548 | |||||||||||
Less: Net income attributable to noncontrolling interests, net of tax | (7,487 | ) | — | (741 | ) | (1,524 | ) | (9,752 | ) | |||||||
Net income attributable to Global Payments | $ | 46,675 | $ | 15,710 | $ | 70 | $ | 6,341 | $ | 68,796 | ||||||
Diluted shares | 79,043 | 79,043 | ||||||||||||||
Diluted earnings per share | $ | 0.59 | $ | 0.20 | $ | — | $ | 0.08 | $ | 0.87 | ||||||
1 Represents one-time charges primarily related to employee termination benefits and resolution of a contract related contingency for the period ending August 31, 2013 and the prior year represents one-time charges primarily related to employee termination benefits and the net income attributable to our Asia-Pacific redeemable noncontrolling interest.
2Represents adjustments to cost of service to exclude acquisition intangible amortization expense from net income and the related income tax benefit.
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the three months ended August 31, 2013 and 2012 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by excluding costs related to the processing system intrusion, acquisition intangible amortization and one-time charges related to employee termination benefits and resolution of a contract related contingency. We exclude these charges in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, income and earnings per share determined in accordance with GAAP. Our measures of income and earnings per share on a cash earnings basis reflect management’s judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.
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SCHEDULE 7
RECONCILIATION OF CASH EARNINGS SEGMENT INFORMATION TO GAAP
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended August 31, 2013 | |||||||||||||||
GAAP | Processing System Intrusion | Other1 | Cash Earnings Adjustments2 | Cash Earnings | |||||||||||
Revenues: | |||||||||||||||
United States | $ | 363,833 | $ | — | $ | — | $ | — | $ | 363,833 | |||||
Canada | 86,672 | — | — | — | 86,672 | ||||||||||
North America merchant services | 450,505 | — | — | — | 450,505 | ||||||||||
Europe | 143,188 | — | — | — | 143,188 | ||||||||||
Asia-Pacific | 35,992 | — | — | — | 35,992 | ||||||||||
International merchant services | 179,180 | — | — | — | 179,180 | ||||||||||
Total revenues | $ | 629,685 | $ | — | $ | — | $ | — | $ | 629,685 | |||||
Operating income (loss) for segments: | |||||||||||||||
North America merchant services | $ | 69,699 | $ | — | $ | 2,518 | $ | 7,187 | $ | 79,404 | |||||
International merchant services | 61,541 | — | 10 | 7,206 | 68,757 | ||||||||||
Corporate | (23,856 | ) | — | (453 | ) | — | (24,309 | ) | |||||||
Operating income | $ | 107,384 | $ | — | $ | 2,075 | $ | 14,393 | $ | 123,852 | |||||
Three Months Ended August 31, 2012 | |||||||||||||||
GAAP | Processing System Intrusion | Other1 | Cash Earnings Adjustments2 | Cash Earnings | |||||||||||
Revenues: | |||||||||||||||
United States | $ | 345,898 | $ | — | $ | — | $ | — | $ | 345,898 | |||||
Canada | 80,897 | — | — | — | 80,897 | ||||||||||
North America merchant services | 426,795 | — | — | — | 426,795 | ||||||||||
Europe | 128,465 | — | — | — | 128,465 | ||||||||||
Asia-Pacific | 35,027 | — | — | — | 35,027 | ||||||||||
International merchant services | 163,492 | — | — | — | 163,492 | ||||||||||
Total revenues | $ | 590,287 | $ | — | $ | — | $ | — | $ | 590,287 | |||||
Operating income (loss) for segments: | |||||||||||||||
North America merchant services | $ | 67,217 | $ | — | $ | 905 | $ | 3,321 | $ | 71,443 | |||||
International merchant services | 57,140 | — | — | 7,904 | 65,044 | ||||||||||
Corporate | (43,869 | ) | 23,989 | 56 | — | (19,824 | ) | ||||||||
Operating income | $ | 80,488 | $ | 23,989 | $ | 961 | $ | 11,225 | $ | 116,663 | |||||
1 Represents one-time charges primarily related to employee termination benefits and resolution of a contract related contingency for the period ending August 31, 2013 and the prior year represents one-time charges primarily related to employee termination benefits and the net income attributable to our Asia-Pacific redeemable noncontrolling interest.
2 Represents acquisition intangible amortization expense.
9
SCHEDULE 8
OUTLOOK SUMMARY
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In millions, except per share data)
Fiscal 2013 Actual | Fiscal 2014 Outlook | % Change FY13 | ||||||||
Revenue Outlook | ||||||||||
Total Revenues | $ | 2,376 | $2,510 to $2,560 | 6% to 8% | ||||||
EPS Outlook | ||||||||||
Cash EPS | $ | 3.65 | $3.98 to $4.05 | 9% to 11% | ||||||
Acquisition-related intangible assets, non-recurring items and processing system intrusion1 | (0.89 | ) | (0.58 | ) | 35 | % | ||||
GAAP Diluted EPS | $ | 2.76 | $3.40 to $3.47 | 23% to 26% | ||||||
We supplemented our reporting of income and the related earnings per share information determined in accordance with GAAP by reporting income and the related earnings per share for the three months ended August 31, 2013 and 2012 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income and earnings per share on a cash basis by excluding costs related to the processing system intrusion, acquisition intangible amortization and one-time charges related to employee termination benefits and resolution of a contract related contingency. We exclude these charges in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, income and earnings per share determined in accordance with GAAP. Our measures of income and earnings per share on a cash earnings basis reflect management’s judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.
1 Fiscal 2014 reflects $0.48 of acquisition-related intangibles and $0.10 of non-recurring items. Acquisition-related intangibles accounted and non-recurring items accounted for $0.57 in fiscal 2013 and processing intrusion cots were $0.32.
10