Business Context and Reporting Period
This Form 8-K, filed on February 5, 2016, by Global Payments Inc., serves to update the Company's Fiscal 2015 Annual Report (year ended May 31, 2015). The update is required to incorporate retrospective adjustments into the financial statements for inclusion in a Registration Statement on Form S-4 regarding the proposed acquisition of Heartland Payment Systems, Inc. The filing does not report new operational results but rather restates prior data to align with new reporting standards and corporate actions.
Key Financial Metrics and Adjustments
The filing does not provide specific numerical values for revenue, profit, cash flow, or debt. Instead, it details three material adjustments applied retrospectively to the Fiscal 2015 financial data:
- Segment Realignment: Effective for fiscal 2016, the Company realigned reportable segments to North America, Europe, and Asia-Pacific. Prior-year segment data has been restated to conform to this new structure.
- Accounting Standard Updates:
- Deferred Taxes (ASU 2015-17): Deferred tax assets and liabilities are now classified as noncurrent. This change affects balance sheet presentation only and did not impact results of operations or cash flows.
- Debt Issuance Costs (ASU 2015-03 and ASU 2015-15): Costs related to term loans are now presented as a direct deduction from the carrying amount of the debt liability. Costs related to revolving credit facilities remain presented as an asset. This change did not affect results of operations or cash flows.
- Stock Split: A two-for-one stock split in the form of a stock dividend was paid on November 2, 2015. All share and per-share information in the updated financial statements has been retrospectively adjusted to reflect this split.
Material Changes Versus Prior Period
There are no material changes to the underlying financial performance or liquidity of the Company reported in this filing. The changes are strictly presentational and structural:
- Segment reporting boundaries have shifted to reflect international investment and management structure changes.
- Balance sheet classifications for deferred taxes and debt issuance costs have been updated to comply with new FASB standards.
- Share counts and per-share metrics have been doubled to reflect the 2-for-1 stock split.
Guidance, Outlook, and Risks
This Current Report does not contain new guidance, outlook, or management commentary regarding future performance. It explicitly states that it does not update other disclosures, risks, or trends contained in the Fiscal 2015 Annual Report. Investors are directed to read the Fiscal 2015 Annual Report (specifically Item 1A Risk Factors) and subsequent SEC filings for current risk information. The filing notes that the Company intends to file a Form S-4 regarding the Heartland acquisition, which will contain important forward-looking statements and information.
Important Facts for Investor Verification
- Verify the updated segment data in Exhibit 99.1 to ensure comparability with the new North America, Europe, and Asia-Pacific reporting structure.
- Confirm that per-share metrics in historical data have been adjusted for the two-for-one stock split paid on November 2, 2015.
- Review the upcoming Form S-4 Registration Statement for detailed terms and risks associated with the proposed acquisition of Heartland Payment Systems, Inc.
- Note that this filing is a restatement of prior data and does not reflect any new operational events or financial results occurring after the Fiscal 2015 Annual Report.