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Press release from PR Newswire

Global Payments Reports Second Quarter Earnings for Fiscal 2013

Tuesday, January 08, 2013

Global Payments Reports Second Quarter Earnings for Fiscal 201316:01 EST Tuesday, January 08, 2013Increases EPS Outlook for Full-Year 2013 Doubles Share Repurchase Authorization to $300 MillionATLANTA, Jan. 8, 2013 /PRNewswire/ -- Global Payments Inc. (NYSE: GPN), a leading, worldwide provider of electronic transaction processing solutions, today announced results for its fiscal second quarter ended November 30, 2012.  (Logo:  http://photos.prnewswire.com/prnh/20010221/ATW031LOGO)Second Quarter 2013 SummaryRevenue grew 11% to $588.5 million compared to $530.5 million in the second quarter of 2012. Cash diluted earnings per share[1] grew 8% to $0.93 compared to $0.86 in the second quarter of 2012. GAAP diluted earnings per share were $0.89, compared to $0.78 in the second quarter of 2012. Chairman and CEO Paul R. Garcia said, "We are pleased with our solid performance in the quarter and the recent completion of the two previously announced acquisitions, Accelerated Payment Technologies in October, and the remaining 44% ownership interest in the Asia-Pacific joint venture from HSBC in December. We have also increased our full-year cash EPS expectation to a range of $3.61 to $3.68."Additionally, I am delighted to announce that we have essentially completed our remediation work as anticipated and the required documentation is in the process of being provided to the Qualified Security Assessor for verification. This verification allows the Networks to evaluate the results and return us to the list of PCI compliant service providers," concluded Garcia.Share Repurchase AuthorizationThe Board of Directors approved an additional $150 million share repurchase authorization of Global Payments' stock which increased the current $150 million share repurchase authorization to a total of $300 million.  As of January 8, 2013, $287 million remains available.  Under this program, Global Payments may repurchase shares in the open market or as otherwise may be determined by the company, subject to market conditions, business opportunities and other factors.  Repurchased shares will be retired but will be available for future issuance.David Mangum, Senior Executive Vice President and CFO, stated,  "We are pleased with the increase in the share repurchase authorization and we expect to execute on our buyback plans. With the recently increased financing capacity we completed in the second quarter of 2013, we have significant capital flexibility to drive organic growth, acquisitions and on-going share repurchases." Acquisition Closings and Funding Global Payments closed the Accelerated Payment Technologies (APT) acquisition for $413 million on October 1, 2012.  APT is an innovative provider of fully-integrated payment technology solutions for small to medium sized merchants.  The company also closed on a new five-year senior unsecured term loan facility of $700 million and increased its existing senior unsecured revolving credit facility by $150 million.  In addition, effective December 1, 2012, the company completed its previously announced acquisition of the remaining 44% ownership interest in the Asia-Pacific joint venture for $242 million. Global Payments will continue to be HSBC's preferred strategic partner for card acquiring services in Asia-Pacific, covering 11 markets.2013 OutlookFor the full-year of fiscal 2013, the company continues to expect annual revenue of $2,360 million to $2,400 million, or 7% to 9% growth over fiscal 2012.  Annual expectations for fiscal 2013 diluted earnings per share on a cash basis are now increased to a range of $3.61 to $3.68, or growth of 2% to 4% over fiscal 2012.  On a constant currency basis, the company continues to expect revenue to grow 8% to 10% and diluted earnings per share on a cash basis to grow 5% to 7%.  Annual fiscal 2013 GAAP diluted earnings per share, excluding the impact of all intrusion remediation costs, are expected to be in a range of $3.01 to $3.08. Both cash and GAAP diluted earnings per share expectations exclude the impact of any potential future share repurchases. For reconciliation of Cash Earnings to GAAP and constant currency, see schedule 9. Conference CallGlobal Payments will hold a conference call today, January 8, 2013 at 5:00 p.m. EST 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 January 21, 2013.   About Global PaymentsGlobal Payments Inc. (NYSE:GPN) is a leading provider of electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Europe and the Asia-Pacific region.  Global Payments, a Fortune 1000 company, offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management.  Visit www.globalpaymentsinc.com for more information about the company and its services.This announcement and comments made by Global Payments' management during the conference call may contain certain forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.  Statements that are not historical facts, including revenue and earnings estimates and management's expectations regarding future events and developments, are forward-looking statements and are subject to significant risks and uncertainties.  Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following: the effect on our results of operations of the remediation efforts resulting from the unauthorized access to our processing system announced in March 2012; 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 including APT, and other risks detailed in the company's SEC filings, including the most recently filed Form Form 10-K, as applicable.  The company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.[1] See Schedule 2 for Cash Earnings and Schedules 6 and 7 for Reconciliations of Cash Earnings to GAAP.Investor contact:  investor.relations@globalpay.comMedia contact:  media.relations@globalpay.comJane Elliott                  Kay Sharpton                                      Amy Corn770-829-8234              770-829-8870                                      770-829-8755 SCHEDULE 1GAAP CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES(In thousands, except per share data)Three Months Ended November 30,Six Months Ended November 30,20122011% Change20122011% Change(unaudited)Revenues$        588,538$         530,50511%$      1,178,825$    1,073,27610%Operating expenses:     Cost of service210,268185,93113%414,659377,46710%     Sales, general and administrative276,177247,99411%557,596490,61914%     Processing system intrusion(14,489)-NM9,500-NM471,956433,9259%981,755868,08613%Operating income116,58296,58021%197,070205,190(4%)Other income (expense):     Interest and other income2,1872,259(3%)4,1704,760(12%)     Interest and other expense(14,609)(4,878)199%(18,154)(8,965)102%(12,422)(2,619)374%(13,984)(4,205)233%Income before income taxes 104,16093,96111%183,086200,985(9%)Provision for income taxes(28,789)(25,812)12%(53,553)(60,755)(12%)Net income75,37168,14911%129,533140,230(8%)Less: Net income attributable to noncontrolling interests, net of tax(5,188)(6,968)(26%)(12,675)(15,075)(16%)          Net income attributable to Global Payments$          70,183$           61,18115%$         116,858$       125,155(7%)Earnings per share attributable to Global Payments:          Basic$              0.89$               0.7814%$               1.49$             1.58(6%)          Diluted$              0.89$               0.7814%$               1.48$             1.57(6%)Weighted average shares outstanding:          Basic78,75178,34878,66979,207          Diluted79,14478,87679,06279,831NM - Not Meaningful SCHEDULE 2CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTSGLOBAL PAYMENTS INC. AND SUBSIDIARIES(In thousands, except per share data)Three Months Ended November 30,Six Months Ended November 30,20122011% Change20122011% ChangeRevenues$         588,538$       530,50511%$      1,178,825$    1,073,27610%Operating expenses:     Cost of service195,932173,77813%388,937352,67110%     Sales, general and administrative276,177247,99411%556,796490,61913%472,109421,77212%945,733843,29012%Operating income116,429108,7337%233,092229,9861%Other income (expense):     Interest and other income2,1872,259(3%)4,1704,760(12%)     Interest and other expense(6,226)(4,878)28%(9,771)(8,965)9%(4,039)(2,619)54%(5,601)(4,205)33%Income before income taxes 112,390106,1146%227,491225,7811%Provision for income taxes(29,385)(29,569)(1%)(65,938)(68,251)(3%)Net income  83,00576,5458%161,553157,5303%Less: Net income attributable to noncontrolling interests, net of tax(9,419)(8,913)6%(19,171)(19,085)0%Net income attributable to Global Payments$           73,586$         67,6329%$         142,382$       138,4453%Basic earnings per share$               0.93$             0.868%$               1.81$             1.753%Diluted earnings per share$               0.93$             0.868%$               1.80$             1.734%Weighted average shares outstanding:          Basic78,75178,34878,66979,207          Diluted79,14478,87679,06279,831NM - Not MeaningfulSee Schedules 6 and 7 for a reconciliation of cash earnings to GAAP. SCHEDULE 3SEGMENT INFORMATION GLOBAL PAYMENTS INC. AND SUBSIDIARIES(In thousands) Three Months Ended November 30, 20122011 % Change  GAAP  Cash Earnings  GAAP  Cash Earnings  GAAP  CashEarningsRevenues:United States$    339,998$    339,998$    293,416$    293,41616%16%Canada80,77080,77085,52185,521(6%)(6%)North America merchant services420,768420,768378,937378,93711%11%Europe131,161131,161115,169115,16914%14%Asia-Pacific36,60936,60936,39936,3991%1%International merchant services167,770167,770151,568151,56811%11%Total revenues$    588,538$    588,538$    530,505$    530,50511%11%Operating income:North America merchant services$      67,114$      73,280$      70,673$      73,495(5%)(0%)International merchant services53,98762,15744,49453,82521%15%Corporate1(4,519)(19,008)(18,587)(18,587)76%(2%)Operating income$    116,582$    116,429$      96,580$    108,73321%7% Six Months Ended November 30, 20122011 % Change  GAAP  Cash Earnings  GAAP  Cash Earnings  GAAP  Cash Earnings Revenues:United States$    685,896$    685,896$    580,841$    580,84118%18%Canada161,667161,667176,742176,742(9%)(9%)North America merchant services847,563847,563757,583757,58312%12%Europe259,626259,626244,583244,5836%6%Asia-Pacific71,63671,63671,11071,1101%1%International merchant services331,262331,262315,693315,6935%5%Total revenues$ 1,178,825$ 1,178,825$ 1,073,276$ 1,073,27610%10%Operating income:North America merchant services$    134,331$    144,723$    142,431$    148,111(6%)(2%)International merchant services111,127127,201100,152119,26811%7%Corporate1(48,388)(38,832)(37,393)(37,393)(29%)(4%)Operating income$    197,070$    233,092$    205,190$    229,986(4%)1%1Fiscal 2013 GAAP amounts include a processing intrusion credit of $14.5 million for the three months ended November 30, 2012 and processing system intrusion costs of $9.5 million for the six months ended November 30, 2012.See Schedule 8 for reconciliation of cash earnings segment information to GAAP.  SCHEDULE 4CONSOLIDATED BALANCE SHEETSGLOBAL PAYMENTS INC. AND SUBSIDIARIES(In thousands)November 30,May 31,20122012(unaudited)ASSETSCurrent assets:Cash and cash equivalents$         998,261$       781,275Accounts receivable, net of allowances for doubtful accounts of $833 and $532, respectively183,256182,962Claims receivable, net of allowance for losses of $3,786 and $3,435, respectively9681,029Settlement processing assets237,640217,994Inventory14,1479,864Deferred income taxes6,46421,969Prepaid expenses and other current assets49,18433,646Total current assets1,489,9201,248,739Goodwill1,059,520724,687Other intangible assets, net of accumulated amortization of $267,956 and $235,296, respectively416,170290,188Property and equipment, net of accumulated depreciation of $179,846 and $161,911, respectively338,195305,848Deferred income taxes97,96697,235Other26,95021,446Total assets$      3,428,721$    2,688,143LIABILITIES AND EQUITYCurrent liabilities:Lines of credit$         212,399$       215,391Current portion of long-term debt102,42576,420Commitment to purchase redeemable noncontrolling interest242,000-Accounts payable and accrued liabilities244,499316,313Settlement processing obligations228,711216,878Income taxes payable7,43612,283  Total current liabilities1,037,470837,285Long-term debt777,988236,565Deferred income taxes167,365106,644Other long-term liabilities71,09762,306Total liabilities2,053,9201,242,800Commitments and contingenciesRedeemable noncontrolling interest-144,422Equity:Preferred stock, no par value; 5,000,000 shares authorized and none issued--Common stock, no par value; 200,000,000 shares authorized; 78,724,622 and78,551,297 issued and outstanding at November 30, 2012 and May 31, 2012, respectively.--Paid-in capital257,554358,728Retained earnings957,978843,456Accumulated other comprehensive income (loss) 18,432(30,000)      Total Global Payments shareholders' equity1,233,9641,172,184Noncontrolling interest140,837128,737Total equity1,374,8011,300,921Total liabilities and equity$      3,428,721$    2,688,143 SCHEDULE 5UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWSGLOBAL PAYMENTS INC. AND SUBSIDIARIES(In thousands)Six Months Ended November 30,20122011Cash flows from operating activities:Net income$   129,533$    140,230Adjustments to reconcile net income to net cash used in operating activities:Depreciation and amortization of property and equipment26,49423,444Amortization of acquired intangibles25,56124,796Share-based compensation expense9,1788,425Provision for operating losses and bad debts11,97013,061Deferred income taxes30,0555,915Other, net(2,231)(100)Changes in operating assets and liabilities, net of the effects of acquisitions:   Accounts receivable7213,897Claims receivable(6,600)(7,880)Settlement processing assets and obligations, net(11,671)(499,849)Inventory(4,297)(4,212)Prepaid expenses and other assets(11,204)62Accounts payable and other accrued liabilities(67,869)(31,257)Income taxes payable(4,847)9,402Net cash provided by (used in) operating activities124,793(314,066)Cash flows from investing activities:Business, intangible and other asset acquisitions, net of cash acquired(409,731)(7,000)Capital expenditures(54,393)(35,146)Net decrease in financing receivables1,4851,203Net cash used in investing activities(462,639)(40,943)Cash flows from financing activities:Net payments on short-term lines of credit(2,992)(45,069)Proceeds from issuance of long-term debt910,32771,374Principal payments under long-term debt(343,133)(131,345)Payment of debt issuance costs(3,987)-Proceeds from stock issued under employee stock plans7,080(768)Common stock repurchased - share-based compensation plans(10,224)-Repurchase of common stock(12,653)(99,604)Tax benefit from employee share-based compensation 1,7911,436Distribution to noncontrolling interests(5,740)(4,660)Dividends paid(3,153)(3,169)Net cash provided by (used in) financing activities537,316(211,805)Effect of exchange rate changes on cash17,516(16,611)Increase (decrease) in cash and cash equivalents216,986(583,425)Cash and cash equivalents, beginning of period781,2751,354,285Cash and cash equivalents, end of period$   998,261$    770,860 SCHEDULE 6RECONCILIATION OF QUARTERLY CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAPGLOBAL PAYMENTS INC. AND SUBSIDIARIES(In thousands, except per share data)Three Months Ended November 30, 2012GAAPProcessing System IntrusionOther2Cash Earnings Adjustments1Cash EarningsRevenues$           588,538$                -$                  -$                   -$          588,538Operating expenses:   Cost of service210,268--(14,336)195,932   Sales, general and administrative276,177---276,177   Processing system intrusion(14,489)14,489---471,95614,489-(14,336)472,109Operating income116,582(14,489)-14,336116,429Other income (expense):   Interest and other income2,187---2,187   Interest and other expense(14,609)-8,383-(6,226)(12,422)-8,383-(4,039)Income before income taxes 104,160(14,489)8,38314,336112,390Provision for income taxes(28,789)5,000(1,383)(4,213)(29,385)Net income  75,371(9,489)7,00010,12383,005Less: Net income attributable to noncontrolling interests, net of tax(5,188)-(2,853)(1,378)(9,419)Net income attributable to Global Payments$             70,183$         (9,489)$             4,147$             8,745$            73,586Diluted shares79,14479,144Diluted earnings per share$                 0.89$           (0.12)$               0.05$               0.11$                0.93Three Months Ended November 30, 2011GAAPCash Earnings Adjustments1Cash EarningsRevenues$           530,505$                   -$          530,505Operating expenses:   Cost of service185,931(12,153)173,778   Sales, general and administrative247,994-247,994433,925(12,153)421,772Operating income96,58012,153108,733Other income (expense):   Interest and other income2,259-2,259   Interest and other expense(4,878)-(4,878)(2,619)-(2,619)Income before income taxes 93,96112,153106,114Provision for income taxes(25,812)(3,757)(29,569)Net income  68,1498,39676,545Less: Net income attributable to noncontrolling interests, net of tax(6,968)(1,945)(8,913)Net income attributable to Global Payments$             61,181$             6,451$            67,632Diluted shares78,87678,876Diluted earnings per share$                 0.78$               0.08$                0.861Represents adjustments to cost of service to exclude acquisition intangible amortization expense and the related income tax benefit.2Represents HSBC's share of GPAP dividends declared.We supplemented our reporting of net income and the related earnings per share information determined in accordance with GAAP by reporting net income and the related earnings per share for the three months ended November 30, 2012 and 2011 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated November 30,2012 net income and earnings per share on a cash basis by excluding credits related to the processing system intrusion and acquisition intangible amortization. We also adjusted the net income attributable to noncontrolling interests to include HSBC's share of second quarter 2013 GPAP net income. We calculated November 30, 2011 net income and earnings per share on a cash basis by excluding acquisition intangible amortization from our results. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our net income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, net income and earnings per share determined in accordance with GAAP. Our measures of net income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies. SCHEDULE 7RECONCILIATION OF YEAR TO DATE CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAPGLOBAL PAYMENTS INC. AND SUBSIDIARIES(In thousands, except per share data)Six Months Ended November 30, 2012GAAPProcessing System IntrusionOther2Cash Earnings Adjustments1Cash EarningsRevenues$        1,178,825$                  -$                  -$                   -$       1,178,825Operating expenses:   Cost of service414,659-(161)(25,561)388,937   Sales, general and administrative557,596-(800)-556,796   Processing system intrusion9,500(9,500)---981,755(9,500)(961)(25,561)945,733Operating income197,0709,50096125,561233,092Other income (expense):   Interest and other income4,170---4,170   Interest and other expense(18,154)-8,383-(9,771)(13,984)-8,383-(5,601)Income before income taxes 183,0869,5009,34425,561227,491Provision for income taxes(53,553)(3,279)(1,533)(7,573)(65,938)Net income  129,5336,2217,81117,988161,553Less: Net income attributable to noncontrolling interests, net of tax(12,675)-(3,594)(2,902)(19,171)Net income attributable to Global Payments$           116,858$            6,221$             4,217$           15,086$          142,382Diluted shares79,06279,062Diluted earnings per share$                 1.48$              0.08$               0.05$               0.19$                1.80Six Months Ended November 30, 2011GAAPCash Earnings Adjustments1Cash EarningsRevenues$        1,073,276$                   -$       1,073,276Operating expenses:   Cost of service377,467(24,796)352,671   Sales, general and administrative490,619-490,619868,086(24,796)843,290Operating income205,19024,796229,986Other income (expense):   Interest and other income4,760-4,760   Interest and other expense(8,965)-(8,965)(4,205)-(4,205)Income before income taxes 200,98524,796225,781Provision for income taxes(60,755)(7,496)(68,251)Net income  140,23017,300157,530Less: Net income attributable to noncontrolling interests, net of tax(15,075)(4,010)(19,085)Net income attributable to Global Payments$           125,155$           13,290$          138,445Diluted shares79,83179,831Diluted earnings per share$                 1.57$                  -$                  -$               0.18$                1.731Represents adjustments to cost of service to exclude acquisition intangible amortization expense and the related income tax benefit.2Represents HSBC's share of GPAP dividends declared and one-time charges primarily related to employee termination benefits.We supplemented our reporting of net income and the related earnings per share information determined in accordance with GAAP by reporting net income and the related earnings per share for the six months ended November 30, 2012 and 2011 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated November 30,2012 net 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. We also adjusted the net income attributable to noncontrolling interests to include HSBC's share of August 2012 through November 2012 GPAP net income. We calculated November 30, 2011 net income and earnings per share on a cash basis by excluding acquisition intangible amortization from our results. We exclude these charges in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our net income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, net income and earnings per share determined in accordance with GAAP. Our measures of net income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies. SCHEDULE 8RECONCILIATION OF CASH EARNINGS SEGMENT INFORMATION TO GAAPGLOBAL PAYMENTS INC. AND SUBSIDIARIES(In thousands) Three Months Ended November 30, 20122011 GAAP Processing System IntrusionOtherCash Earnings Adjustments1 Cash Earnings  GAAP Cash Earnings Adjustments1 Cash Earnings Revenues:United States$      339,998$                -$                -$                       -$      339,998$      293,416$                       -$      293,416Canada80,770---80,77085,521-85,521North America merchant services420,768---420,768378,937-378,937Europe131,161---131,161115,169-115,169Asia-Pacific36,609---36,60936,399-36,399International merchant services167,770---167,770151,568-151,568Total revenues$      588,538$                -$                -$                       -$      588,538$      530,505$                       -$      530,505Operating income:North America merchant services$        67,114$                -$                 6,166$        73,280$        70,673$                 2,822$        73,495International merchant services53,987-8,17062,15744,4949,33153,825Corporate(4,519)(14,489)-(19,008)(18,587)-(18,587)Operating income$      116,582$       (14,489)$                -$               14,336$      116,429$        96,580$               12,153$      108,733 Six Months Ended November 30, 20122011 GAAP Processing System IntrusionOther2Cash Earnings Adjustments1 Cash Earnings  GAAP Cash Earnings Adjustments1 Cash Earnings Revenues:United States$      685,896$                -$                -$                       -$      685,896$      580,841$                       -$      580,841Canada161,667---161,667176,742-176,742North America merchant services847,563---847,563757,583-757,583Europe259,626---259,626244,583-244,583Asia-Pacific71,636---71,63671,110-71,110International merchant services331,262---331,262315,693-315,693Total revenues$   1,178,825$                -$                -$                       -$   1,178,825$   1,073,276$                       -$   1,073,276Operating income:North America merchant services$      134,331$                -$             905$                 9,487$      144,723$      142,431$                 5,680$      148,111International merchant services111,127--16,074127,201100,15219,116119,268Corporate(48,388)9,50056-(38,832)(37,393)-(37,393)Operating income$      197,070$          9,500$             961$               25,561$      233,092$      205,190$               24,796$      229,9861 Represents acquisition intangible amortization expense.2 Represents one-time charges primarily related to employee termination benefits. SCHEDULE 9OUTLOOK SUMMARYGLOBAL PAYMENTS INC. AND SUBSIDIARIES(In millions, except per share data)Fiscal 2012 ActualFiscal 2013 Outlook% Change FY12Revenue OutlookConstant currency1$       2,204$2,385 to $2,4258% to 10%Foreign currency impact2 NA  ($25)Total Revenues$       2,204$2,360 to $2,4007% to 9%EPS OutlookConstant currency1$         3.53 $3.69 to $3.76 5% to 7%Foreign currency impact2 NA  ($0.08)Cash EPS $         3.53 $3.61 to $3.68 2% to 4%Acquisition-related intangibles and non-recurring items 3(0.48)($0.60)25%Processing system intrusion(0.68)TBD*NMGAAP Diluted EPS $         2.37 $3.01 to $3.08 27% to 30% We supplement our fiscal 2013 outlook of total revenues and earnings per share information determined in accordance with GAAP by reporting revenues and earnings per share on a "constant currency" basis in this earnings release as a measure to help evaluate performance.  We calculated revenues and earnings per share on a constant currency basis by converting our fiscal 2013 expected revenues and expenses at fiscal 2012 exchange rates.  We exclude the impact of exchange rate fluctuations in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations, and our management uses constant currency measures to evaluate the impact of operational business decisions.  Our revenues and earnings per share reported on a constant currency basis should be considered in addition to, and not as a substitute for, revenues and earnings per share determined in accordance with GAAP. Our measures of revenues and earnings per share on a constant currency basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies. 1 Reflects current period and forecasted results on a pro forma basis as if foreign currency rates did not change from the comparable prior year period. 2 Reflects the impact of actual and forecasted changes in foreign currency rates from the comparable prior year period.   3 Fiscal 2013 reflects $0.56 of acquisition-related intangibles and $0.04 of non-recurring items.  Acquisition-related intangibles accounted for $0.35 in fiscal 2012 and non-recurring items $0.13.   * Not able to accurately estimate 2013 charges for processing system intrusion, remediation, true-ups, etc. We currently anticipate that such additional costs may be $25 to $35 million in fiscal 2013 which reflects a $31.5 million reduction of the company's original estimate of fraud losses, fines and other charges resulting in total processing system intrusion costs for six months ended November 30, 2012 of $9.5 million.  Insurance proceeds of up to $28 million may possibly occur in fiscal 2014 rather than 2013.   NA=Not ApplicableNM=Not Meaningful SOURCE Global Payments Inc.