Ladies and gentlemen, thank you for standing by. And welcome to Global Payments’ Fiscal 2015 Third Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will open the lines for questions and answers. [Operator Instructions]. And as a reminder, today’s conference will be recorded. At this time, I would like to turn the conference over to your host, Executive Vice President and Chief of Staff, Jane Elliott. Please go ahead.

Thank you. Good morning and welcome to Global Payments Fiscal 2015 third quarter conference call. Our call today is scheduled for one hour. Joining me on the call are Jeff Sloan, CEO; David Mangum, President and COO; and Cameron Bready, Executive Vice President and CFO. Before we begin, I’d like to remind you that some of the comments made by management during the conference call contain forward-looking statements, which are subject to risks and uncertainties discussed in our SEC filings, including our most recent 10-K and Form 10-Q. These risks and uncertainties could cause actual results to differ materially. We caution you not to place undue reliance on these statements. Forward-looking statements made during this call speak only as of the date of this call, and we undertake no obligation to update them. In addition, some of the comments made on this call may refer to certain measures, such as cash earnings, which are not in accordance with GAAP. Management believes these measures more clearly reflect comparative operating performance. For a full reconciliation of cash earnings and other non-GAAP financial measures to GAAP results in accordance with Regulation G, please see our press release furnished as an exhibit to our Form 8-K filed this morning, and our trended financial highlights, both of which are available in the Investor Relations area of our website at www.globalpaymentsinc.com. Now, I’d like to introduce Jeff Sloan. Jeff?

Thank you, Jane. And thanks everyone for joining us this morning. We are delighted to report another quarter of strong financial performance while growing right through significant unfavorable currency movements. Reported revenue growth for the quarter was 8%, 13% on a constant currency basis. In addition, cash earnings per share grew 19% and margins expanded 80 basis points, solid performance by any measure. Our U.S. business again delivered robust results, led by our direct channels which generated double-digit organic revenue growth for the third consecutive quarter. Importantly, U.S. organic revenue growth accelerated from the prior two sequential quarters and it will also continue to achieve steady performance in local currency, resulting from the consistent business fundamentals and good execution. Our international results exceeded our expectations in local currency across our markets with the exception of Russia. Asia produced another quarter of consistent revenue growth with particular strength in the Philippines and Singapore. In Europe, we continue to benefit from solid transaction growth and market based pricing changes in our Spanish business. In addition, Global Solutions continues to see strong ecommerce revenue growth. We believe that our ecommerce and omni-channel payment solutions provide us with a differentiated value proposition in an increasingly dynamic international payments market. In that context, we are especially pleased with the acquisition of Realex Payments announced in March. Realex Payments is a leading ecommerce and payment gateway technology provider in Europe, delivering a wide range of payment solutions to merchants. This is a favorable time to invest in our European businesses as the region moves to a single European payment area. Merchants are increasingly seeking more comprehensive regional and worldwide payment solutions. The Realex Payments transaction represents a strategic investment in our international ecommerce capabilities, immediately enhancing our products targeted to the digital space. It also strengthens the foundation of our international omni-channel solutions by allowing us to combine Realex Payments gateway and payment service provision technology with our worldwide merchant acquiring expertise and footprint. Over the last two and a half years, we’ve invested approximately $1.2 billion in technology driven payment services through the acquisitions of APT, PayPros, Ezidebit and now Realex Payments. These transactions have advanced our strategy to expand differentiated distribution and further develop market-leading, innovative products and services. Realex Payments is a logical next step in expanding and controlling our technological edge. We believe the successful execution of our strategies will continue to set us apart from our competitors. We are particularly pleased to continue to return capital to shareholders while also significantly increasing our growth potential for the future. Now, I will turn over the call to Cameron.

Thanks, Jeff and good morning, everyone. I am also very pleased with our financial performance for the quarter, particularly in light of the significant foreign currency translation headwinds we experienced. Total company revenues for the third quarter of fiscal 2015 grew to $667 million, reflecting 8% growth over fiscal 2014 and cash operating margins expanded 80 basis points to 19%. Diluted cash earnings per share increased 19% over the prior year to $1.14. On a constant currency basis, total company cash operating margins expanded by 140 basis points. Importantly, foreign currency impacts for the quarter were more significant than we forecasted at the time of our last earnings call, in January. Relative to our foreign currency expectations at that time, revenues for the third quarter would have been $680 million and cash earnings per share would have been $0.04 higher. Our core business again demonstrated strength during the quarter even after normalizing for the additions of PayPros and Ezidebit. Assuming we own the PayPros and Ezidebit businesses in our current and prior year third quarters, or normalizing for their effect, total company revenue growth on a constant currency basis was 7% for the quarter. North America segment results were impressive with revenue growth for the quarter of 10% and margin expansion of 40 basis points. On a constant currency basis, North American margins expanded by 90 basis points. These results were driven by U.S. revenue growth of 14% which continues to benefit from strong organic performance in our direct channels. On a normalized basis, organic U.S. revenue growth was 5% for the quarter consisting of 15% growth in our direct channel and no growth in our ISO channel. Local currency revenue growth in Canada was 4% for the third quarter, ahead of our expectations. However, Canada revenue in U.S. dollars…

Thank you, Cameron. We are delighted to yet again raise guidance for the reminder of our fiscal 2015, reflecting our relentless focus on financial execution and a successful implementation of our growth strategies. As we look to fiscal 2016, we see positive momentum in our businesses as we expand technology enabled distribution and reposition Global Payments to a unified worldwide operating company. Now, I’ll turn the call over to Jane.

Before we go to the question-and-answer session, I’d like to ask everyone to limit their questions to one with one follow-up, in order to accommodate everyone in the queue. Thank you. And operator, we will now go to questions.

[Operator Instructions]. Our first question is from Bryan Keane of Deutsche Bank. You may begin.

My question is just around the International margins; they continue to impress; they’re better than what we expected. It sounds like it’s more of the same ecommerce in Spain. How do we think about the margins going forward and as we carry over to fiscal year ‘16, obviously there has been some regulatory changes. Just like to get your latest thoughts on how much the increase or the upside in International margins can continue as we go forward here.

This is Cameron. I’ll start and then ask Jeff to provide any more color that he would like to on the topic. So, I think International margins, as you look at them for the quarter, they were up 310 basis points. The first thing to take into account is FX. So bear in mind from an international point of view, given the weakness we’ve seen in foreign currencies, it actually increases to some degree the margin for the quarter. So, on a constant currency basis, margins were still up handsomely, roughly 240 basis points but not quite the 310 that we printed. As it relates to looking forward, I think our expectations remain of a view that frankly International margins should remain relatively stable at these levels going forward. We have seen some benefit in this year as it relates to the reduction of interchange in Spain. But obviously as we sit here today, we anticipate incremental benefit in FY16 with the changes in EU legislation around interchange rates that will be a positive benefit for the International margins as well even as we annualize the impacts in Spain. So, I think our general view is we would expect the margin profile for International remain relatively consistent with what we’ve seen over the course of FY15 because of some of the benefits we expect to see in Europe as well as the increment that will be provided by the transactions we’ve executed this year Ezidebit, Realex Payments et cetera that will be beneficial to margins long-term.

I would just add that Bryan by saying that since our last call, the EU has adopted in March the [cluster] [ph] and domestic regulations that we’ve been now talking about but they are not in effect yet; we would expect a benefit in fiscal ‘16 in our European business, in particular Bryan in our United Kingdom business. So, I think we have two tailwinds as it relates to our European business, in particular heading into ‘16; one is as Cameron said that Spain won’t analyze until the second fiscal quarter for us, so I will come back to that in a second. And the second benefit is probably in the back half of the year when EU rules are fully implemented, we’ll see a benefit as well primarily from our UK related business prior to Realex from a similar lowering of interchange cross-border as well as domestically. I will say as you said before that in case of Durbin, we’d assume by way of analogy with the Durbin pricing changes in the United States that those diminishes oil pricing actions due over time. I think as we said to you Bryan and others that we were positively surprised by the duration of the pricing benefit coming out of interchange reductions here in United States around half the volume; those persisted for longer than we would have expected. So while we will of course annualize in September, sort of our second quarter benefits in Spain, I would say if it follows the Durbin like trend to extrapolate that we don’t expect a full attrition of that spread action to begin in September, instead it’s more of an annualization rather than a diminution of the spread benefit.

And then my follow-up question, just looking at the guidance for revenue, you guys are still reiterating guidance, but it’s a wide range given we only have one quarter left. I got it at about 1% to 8% revenue growth; you’re saying probably towards the lower end of the range. My math says, there is probably about six points of FX headwinds in there. And then I know PayPros, the acquisition has anniversaried. So just trying to think about some of the puts and takes between FX and acquisitions. I guess Ezidebit still there and does Realex ramp up and what’s the latest on the FIS gaming business and when that ramps up? Thanks.

Yes, Bryan, it’s Cameron. I’ll start. I think the simplest way to think about guidance for the remainder of the year as it relates to revenue is look at some of the color we’ve provided in the script. If you go back to our expectations for FX in January, we then utilize those same FX rates for Q3, we would have reported revenue at around $680 million, so roughly $13 million higher than what we recorded actually for Q3. And that reflected probably about half of quarter of impact from the weaker foreign currency rates relative to the U.S. dollar. So if you assume a full quarter of that in Q4, just doing simple math that would bring the total FX headwind in the back half of the year to roughly $40 million. But if you take that off at the high end of our guidance of 2.8, it kind of puts you at 2.76, which again is towards the lower end of our guidance range. So, we think all else being equal but for FX, we would have been at the high end of our guidance range, roughly to $2.8 billion, but FX is really driving us down and it’s still a fairly wide range, but still driving us down towards the lower end of that range as we sit here today. You’re correct that PayPros does annualize in Q4. We do have the addition of Ezidebit that is helpful. As we’ve said at the time we did the Realex transaction, we expected to be [immaterial] [ph] really to Q4 and full fiscal ‘15 results. So it’s really a function of PayPros annualizing in Q4 and incremental FX headwinds that we anticipate that’s going to bring us towards the lower end of our guidance range as we sit here today that is our expectation.

And just any timing on when you expect the FIS gaming business start to ramp?

Yes, we expect it to close towards the end of the fiscal year; so, we’re not really anticipating any benefit in fiscal ‘15 for that transaction. So we would expect to have essentially a full year of impact in FY16.

Thank you. Our next question is from Dan Perlin of RBC Capital Markets. You may begin.

It’s actually Matt Roswell sitting in for Dan. Question on the Realex acquisition; what percentage of their transactions do you currently process and is there an opportunity to move those transactions on your system going forward?

It’s Jeff. So on Realex, we have been a large partner of theirs since 2012, selling their gateway services with our acquiring under the label of global IRS which is what we were calling it. We represented about 20% of Realex’s business at the time that we purchase Realex in the last week or so in March. I give you that detail because we were already doing the acquiring for the business that we were referring in Matt, to Realex. So, I don’t think that there is a substantial additional benefit on that acquiring piece, but I just described because we’re already doing it, so in other words we’re using their gateway in doing our acquiring. I think the benefit and the reasons we thought Realex to be a very attractive strategic investment were number one for us to be able to offer that bundled service in a way that we own the economics, not just of the acquiring, but also of the gateway on a bundled basis. We thought it was a very attractive and believe is a very interactive investment to make, number one. Number two, increasingly innovation is a kind of the gateway layer. So for us to make sure that we preserve the point of interaction with our customer, when customers are making choices, they are making choices on the front end about innovation, products and services. And as part of a bundled package, our ability to control the point of distribution much like we’ve done here in our other markets through our integrated channel, our ability to innovate and control the point of distribution as a key competitive sales edge. And we thought over time, it’s more important to own that more than anything else. And then lastly, as we said in our releases, as the world moves and we move to a more of an omni-channel dilution set which is to say [indiscernible] card not present which is Realex’s focus as well as a card present solution and our ability to provide our distribution with their technology, we think also is a point of competitive differentiation in omni-channel environment. So Matt, that’s really how we thought about the strategy around Realex.

Okay. And if I could ask follow-up, can you give us an update on moving some of the integrated businesses up to Canada?

Sure. I’ll start and then David, I’ll ask David to provide to a little bit more detail. So, I think one of the competitive advantages that we have globally at Global Payments is our multinational footprint and our ability to take successful models from one market into another market, given the scope of worldwide acceptance that we have, really that it’s a part. Just outside Realex one of the rationales behind Realex was to continue expand it into other markets in Europe that Realex was not present with our distribution and these were very similar pieces on integrated. David, do you want to comment on that?

Yes, I’m happy to. You’ve put your finger on important growth initiative for us for 2016 and beyond. In particular, we are starting with Canada for expansion of integrated out of the U.S. so, what we will also be expanding integrated business we have in Australia across Asia over the course of time as well where it applies. Specifically in Canada, we have a dedicated sales force. We’ve signed a number of partners and are certifying a number of partners. Although a bit in infancy in terms of the stage of business, we are very excited about the opportunity of being the first source to bring integrated payments at scale of the market with our unique global footprint. So, we will be starting with Canada; look for more news on this as we head into 2016 and beyond. But dedicated sales force, real partners now out selling as we speak and the same unique bundle of ecosystem of partners generating leads, us generating close and then driving that kind of mid-teens growth you use to see in the United States from the open edge business.

Our next question comes from Dave Koning of Baird. You may begin.

My first question, just North American margins were up pretty nicely, I think 40 basis points year-over-year. And that’s one of the better of the past many years. I’m wondering, you talked about ISO is being flat and direct growing nicely. Is that mostly just a mix shift function or are the margins actually within direct business going up year-over-year as well and that contributing to the lift. And if so, is that pretty sustainable; do you expect that business to keep expanding margins?

Yes, this is Jeff. I’ll start and Cameron will add some more color on the financial aspect of what you asked. I would say in my opinion, it is sustainable; this is part of the strategic shift that we’ve been making over the last two and half years. I’ve referenced in my comments the $1.2 billion of investments we’ve made. The first two pieces of that about $800 million were in APT and PayPros. If you think about what we’ve been trying to accomplish here strategically and you’re seeing the results is having right people in the right places with the right distribution model. So, if you look at the way organic revenue growth, it really about the whole fiscal year and accelerating days into this quarter as I said in my remarks which receives our direct book which includes open edge but is not limited to it, really accelerating to organic revenue growth to mid double digit as Cameron described in his remarks this quarter, which importantly gave us acceleration over the previous two quarters growth in the low double digit, number one. Number two, while open edge is obviously a big part of that and very good margins, I don’t want to sort of change or direct business outside of open edge; it’s a very good performance this fiscal year and excellent performance this quarter, Dave in our direct book, direct channels and in our gaming related businesses and our bank related businesses, all well in excess of market rates of growth. And Dave as you know those generally come in at much higher margins in our overall corporate margin and certain in our ISO margin. So, I would say, looking at this strategically Dave, this is what the combination of two and half years of investment, very good and consistent execution this fiscal year but really an acceleration this quarter of the trends that we saw in our direct business not only open edge but direct book more generally versus what we’ve seen earlier in the year. Cameron, do you want to comment on some of the specific margins?

Sure, I’ll just give a little more color commentary around it Dave. You correctly highlighted margins in North America were up 40 basis points for the quarter. I would also note that was 90 on a constant currency bases. So even that 40 was laid down by fairly significant FX headwinds from Canada, as you know many of expenses associated with that business are in U.S. dollars; revenues are reported in Canadian dollars. So, we absorbed roughly 50 basis points of impact from FX from Canada in that North America reported numbers. So I’d say it’s particularly impressive results when you factor in that aspect as well. There obviously is going to be a little bit of mix shift in there also if you correctly highlight it. But I think fundamentally what’s really driving that is our success in executing on our direct distribution strategy, the contributions at open edge, the combined platform of APT and PPI are bringing to the business as well as I’d say improvement in the overall momentum around just a core direct channel business that we have in the U.S. market.

Dave, this is David. I would like to add a little more color, the same thing these guys are saying but in a slightly different way. Remember the way the model works, we need a stable Canada regardless of FX and we need execution in the U.S. business; they’re executing very, very well. When we turn this to mix shift, just note this is conscious mix shift we’ve been working on driving for the last two and half years as Jeff pointed out. Quite frankly, what’s going beautifully is the slowdown the ISO channel is demonstrating to you what the rest of business can do.

And just my brief follow-up, your guidance kind of implies sequential EPS of kind of flattish to up $0.07 I’d think; and historically you’ve grown $0.10 or more sequentially in Q4. And maybe you can help just a little bit what’s the difference this year than the last few years?

Yes, I think the primary difference Dave is going to be FX. So, if you look at the impact that we bore in Q3, as I mentioned earlier, was about a half a quarter of impact. But the significant decline particularly in euro and the Canadian dollar kind of in that January, February timeframe. So we absorbed mainly half a quarter of those in Q3. We expect sitting here today based on our rate assumptions for Q4 to have a full quarter of impact of certainly a stronger dollar relative to the Canadian dollar, the euro and the pound primarily. And that’s driving incremental FX headwinds in Q4 that we have to absorb relative to Q3. So I would say on a constant currency basis, you would have seen growth or would expect growth in the same sort of magnitude that we traditionally produced between Q3 and Q4, but the impacts of FX are weighing that down slightly in Q4 relative to Q3.

Thank you. Our next question is from Tien-tsin Huang of JP Morgan. You may begin.

I wonder in terms of U.S. ISO business, just how that came in versus plan and any change from large ISO partners in general?

Yes, Tien-tsin, it’s Jeff. The ISO business was pretty much on plan. I think as you laid out, in July of 2014, looking at fiscal ‘15, we thought it was going to be a low to no growth business which our guide for the year. And it’s been pretty much, Tien-tsin, low single-digit that’s just about flat to the first couple of quarters of this year. So, if you look at the year in entire, Tien-tsin, there is really no difference. And as it relates to rest of our partners, also no difference on the ISO side, so really, Tien-tsin, nothing that is changed.

Actually, Tien-tsin, we’re within almost dollars of the full year budget as we sit here today.

And then just on Realex, it sounds like a good acquisition given everything you’ve said. Can you give us some idea on growth in revenue margin? I know they do about 28 billion [ph] in volume or so. And I am curious just why now; I get the strategic side of it, but why now? I know that EU regulation is coming through. Does that motivate some of the timing on this deal; just kind of understand a little bit better? Thank you.

I’ll start and then Cameron I think will comment on the financials around Realex. So, I think you’re right in what you said. We said at the time of the deal and also in my prepared remarks this morning, we think now is a very favorable time to invest in our European businesses. First, the regulatory changes that you alluded to: As you said a number of times, it’s probably nothing but good news, some cost come down for our customers and our potential customers; so we benefit directly at Global Payments or not that really is good news for us, number one. Number two, if you think about what the EU is trying to accomplish in a single European payment area, put aside interchange for a second, I think the thesis is that this is a common market. And our ability to offer acceptance in an omni-channel environment regardless of how the transaction comes into us and all those markets, really leverages the breadth of the distribution that we have if card not present as well as card present along with the technology that Realex has, particularly in a card not present environment. Of course as said as we look at deals around the world, there is a lot of things that go into the calculus but it’s not lost on us, the reverse of what Cameron has said about the impact on our results, it’s not lost on us that the pound and the euro and other currencies are relative low versus the dollar. So, as we look at making investment decisions, the idea that we can look at various markets on the acquisition side to take advantage of what we believe to be dislocations in exchange rates we’re making long-term investments is something that we also take into consideration from a timing point of view and place into notion that it’s a favorable time the investing in those businesses. Cameron, do you want to talk about the financials?

Sure. So Realex comes into our business at margins that are better than our total company average today. Its revenue is roughly half the size of that of Ezidebit, a little less than half the size of Ezidebit. Maybe important thing to recognize is t hat Realex going back to Jeff’s comments; this is a perfect time to be buying that business because it’s fantastic technology that needs distribution. And what we bring to the equation is leveraging our distribution. So as we grow and expand and utilize that technology in our business is going forward margins for that business will scale very nicely over the course of time as we’re able to leverage their technology through our distribution network without significant incremental investment to do it, you’re going to see a margin profile for that business on a standalone basis that really scales nicely as we continue to leverage this technology through our sales distribution network in Europe on both the UK domestic market as well as our omni-channel, omni-solutions business that’s based in UK as well.

Thank you. Our next question is from Georgios Mihalos of Credit Suisse. You may begin.

Jeff, you mentioned several times that this is a great time to be investing in Europe. And I am just curious what the outlook is there for more bank joint ventures going forward versus trade-up acquisitions. And as you think of all the different regions you’re investing in, would you say that Europe, the opportunity in Europe is now sort of at the top of the heat compared to Asia and in the U.S.?

Yes Georgios, let me start with that second question first. As I said before, we’re opportunistic but the most important thing in our corporate development pipeline is that something actually be actionable and be for sales. So to understand Georgios, we have a view on the market which I’ll go through again in a minute but it needs to be actionable and attractive for us to move ahead. So we’re thankful we’ve been able to close four transactions in the last six months and hopefully more to come. As it relates to the bank JV part, the first part of what you said, we do see a lot of activity in Europe coming through the SEPA like regulations and the lowering of interchange on the JV side with financial institutions in Europe in particular; we don’t see as much movement around the rest of the world. And we are engaged in discussions like that in a number of markets in Continental Europe. But it does require that we find the right partner; it does require, Georgios, those returns look favorable compared to our benchmark recurrence which is really investing ourselves by buying back our stock. You include the ASR [ph] that we announced this morning, we had either bought back or committed to buy back or are going to commit to buy back almost $370 million this year. So, it’s a balance between the two of them. I certainly hope that we will be able to announce additional JVs as we did with Bank of the Philippines particularly in Europe, in the coming months. So, it’s very dependent on the facts of the returns and who the partners really are. I don’t expect as a point of matter, those transactions to be sizeable uses of capital. I think they’re important to us strategically. I think they fit thesis of what we’ve been describing. But those transactions in general are not things that are material to our leverage members.

Okay, great; appreciate that color. And then, may be just to shift gears on the U.S. side, I think you mentioned the direct and aggregate has grown 15%; I think it was plus 12% last quarter, so a nice acceleration there. Within there, can you call out the growth in open edge specifically? I think that was grown high teens. Has that accelerated even further?

Georgios, this is David. We don’t call up the pieces specifically; you do recall correctly. That is growing mid to high teens; that has continued at that pace. The integration is going very well and we are very happy with the progress; there is a leadership there. I would also point out and Jeff mentioned earlier, just because I feel the need to do it. The rest of the U.S. channels are executing very well; we’re seeing double digit growth in gaming, we’re seeing strong growth in the core direct card channel; all the pieces are really executing quite well right now.

And then last thing. Did you guys call out the transaction growth in Spain this quarter? I think you have in the past; I’m not sure if I caught it this time around.

We did not call it out specifically in our prepared remarks. But it was high single digit, low double digit range again. I think it was 13 last quarter; it was probably 9 to 10 this quarter. So again very good organic execution in Spain coupled with again the continuing benefit of the lower interchanges really driving the performance in that market.

Our next question is from David Togut of Evercore ISI. You may begin.

Hi, this is Michael Landau. First question, I was just wondering if you could call out the transaction growth and revenue for transaction growth for this quarter for the U.S. and Canada.

Transaction growth in Canada again has been relatively consistent throughout the year and this quarter again it’s going to be in that low single digit range which is fairly much in line with what we saw in Q2 as well as Q1. In U.S., I think we had transaction growth of roughly 2%; it’s 10% again for the direct business weighed down by the ISO of business. So overall growth was roughly 2% which again consistent with our earlier comments around revenue growth, driven by strong growth in our direct-channel and roughly 10%, weighed down by the ISO channel that was actually in Europe.

And can you quantify just overall unit pricing trend in each of the sales channels, ISO direct and open edge in the U.S. and as well as just generally pricing trends in Canada?

The core answer is they’re very stable; there is very little change in unit pricing trends within open edge but it will change in the direct channels in United States; almost no change in Canada. And as you keep going around the world, you’d find very little change absent obviously the interchange driven spread changes that you find in Spain. What we find right now really around the world is very stable conditions really talking about unit pricing, average tickets themselves that drive them volume and obviously Canada is going to do some of the transaction trends. So again stable conditions, really positive conditions underlying the business itself as we go market by market, which again has enabled the level of execution you’re seeing around the world.

And the 26% tax rate was a bit lower than previous; is that a sustainable rate going forward?

No, I think we still expect the tax rate to be roughly 27% or crossing 27% for the full year, so a little bit lower in Q3 but I think our full year expectations around tax rate remain relatively consistent with our commentary to last quarter, which is in the 27% range.

Thank you. Our next question is from Ashwin Shirvaikar of Citi. You may begin.

So, I guess my first question is with regards to Europe. Can you share what sort of assumptions you have with regards to transaction volume or purchase volume lift that you might assume because of SEPA? And this sort of speaks to several of the comment that you have had with regards to more JVs, with regards to the Realex acquisition and so on and so forth. I mean in terms of just breaking out how you might look geographically say one to two years down the road, I just wanted to understand the breakout of the business that you’re aiming for?

Sure. Ashwin, it’s Jeff and I’ll start. The way I think about Realex for example in terms of the opportunity across Europe, before I get to the SEPA question, is that we think that the card not present market is growing across Western Europe in particular which is what we’re primarily focused in that business in the mid double-digit to high double-digit range and we think that’s $2 billion to $3 billion market today. So, we think about the size of that business relative to the size of our business and why we’re making that kind of investment. We think the ability to capture share in a $3 billion market growing at 15% plus organically is a good investment to make. I think as it relates to SEPA, I think it’s a little bit less on SEPA in the context of accelerating the 3 billion and the 15%, little more analogous to what we saw in Spain with our interchange reductions that were put into the place by the banks and the Spanish government on September 1, 2014. There are puts and takes between the two markets, the rest of the EU primarily for us the United Kingdom and Spain are not completely analogist. So for example, we have a higher SME book, small to mid-size book in Spain and we do in the United Kingdom where we have more large retailers who are pass-through. And we’re not splitting some of the interchange benefit with the JV partner in the UK as we are in Spain. So there’s puts and takes. But I think in the next couple of years, as that rolls through actually in the back half of fiscal ‘16 going into fiscal ‘17. I would certainly look to what the benefits that we saw in Durbin when we have in here United States number and years ago, the benefits we’re seeing this fiscal continuing in Spain; as we think about the immediate meaning the next year or two worth of benefit to our European business through SEPA. Realex is a slightly different thesis, as I mentioned before, which is attacking a $3 billion revenue business growing at 15% is a good idea regardless of the rate reduction environment.

And Ashwin, it’s Cameron; I’ll just add one other comment, which is if you think about separate more on a long-term basis, one of the things which hurts to do is help level the playing field. So as we think about opportunities for us and other parts of Continental Europe and particularly for situation where we can expand our card presence business, we do think SEPA is going to create opportunities and lead to hopefully potential situation, will be able to augment our existing portfolio, expand our portfolio through other ventures in Western Europe by creating more of a level playing field and foreseeing some of our competitors in those markets that be more rational about the merchant acquiring business.

And then, with regards to Asia Pac, I may have missed this, but could you specify what the contributions on revenues and margins were from Ezidebit?

We didn’t specifically call out the contributions from Ezidebit, Ashwin. What we have guided to previously is that we expected Ezidebit to contribute roughly $25 million of U.S. revenue or the entirety of fiscal ‘15, so for roughly the seven months that we will own it in fiscal ‘15. I would note however the Australian dollar has gradually weakened as has most of the foreign currencies to which we have exposure against the U.S. dollars. So, I would say that 25 million number now is a little high. We have probably guided you to something in the 22, 23 range, just more of the result of FX headwinds. From a margin profile perspective, we’ve always said that Ezidebit comes in at a margin higher that’s higher than our international margin. So, it is impactful to the overall international margin, slightly for FY15, but more importantly for FY16 and beyond.

Thank you. Our next question is from Glenn Greene of Oppenheimer. You may begin.

Just a few follow-ups on some of the prior questions. Just on Spain, it’s helpful to get the sort of high single-digit, low double-digit volume growth, but could you sort of give us a little bit color on the pricing; did it stick to small order of magnitude as last quarter or did some about sort of trade is first question?

Yes, Glenn, it’s David. Actually it’s tracking very similarly the way Jeff was describing it earlier. It is trading away but at a fairly slow rate. Most important thing is I think what Jeff pointed out is the September 1st of ‘15, it will annualize; it won’t be gone at that point. But as with all markets around the world, if we go all the way back to Australia, that’s what eight or nine years ago now or our Durbin experience more recently three years ago, it will relate to highly competitive industry; it’s just a matter of sort of wait and at pace at which it fits away. But right now it is moving in a way that we’re predicting pretty accurately. And you raise sort of the core point which is that’s happening on top of a business is executing very well which is why it’s a happy outcome in our European results.

And then on Canada, it’s helpful to get the low single digit transaction growth and we know the FX. Can you just clarify for us what the spreads look like and the specific benefit you got from the pricing actions you took earlier in the year.

Yes, happy to go and state it again. I would say while we don’t close the spreads, they remain stable. And you’ll recall what we’re managing in Canada from a sort of metrics perspective is the two curves of spread in transactions. To the extent they remain stable and somewhat similar to each other, we have something perfectly manageable and stable that generates a lot of cash and allows us to deploy it elsewhere around the world. And we have a nice solid market that performs very well for us and very high margins, setting aside entirely anything about currency for the moment which is saying within Canada itself. That’s exactly what we saw again in Q3. So without putting into specific metrics, spreads consistent, any pricing actions we’ve taken in this market have started very well to provide what we think still excellent service for the customers in Canada. So the pieces in Canada hang together very nicely for us right now.

And just finally, the benefit you got in the U.S. from up low and where we are in terms of middle innings and how much more benefit can get from a growth perspective there?

Actually I do think middle innings is an accurate characterization Glenn. We’re not incredibly early obviously; we’re almost at the year end of the initial process of sales and rolling it out. And we have other channels where it has not yet rolled out; I won’t specify them; we do have some other channels with some opportunity that we hope will help carry more of the organic growth for us in 2016. So middle innings; probably that just gets in fourth inning is about the right place to think about it. It’s a very nice piece of organic growth. As you might imagine now that we’ve established consistently performing distributions channels across our direct channels, the next thing is to pump product to that and up low has been a great additional product this year to be a nice product again next year.

Our next question is from Steven Kwok of KBW. You may begin.

Most of my questions have been answered already. I guess just wanted to touch upon the North America other revenue growth, specifically in the U.S. That accelerated quite nicely. Can you talk about how sustainable that trend is and how we should think about that going forward in the domestic direct segment?

So, we are very pleased with the growth in North America revenue. Let me just step back for a second. The way we generally think about our business and what our targets are is we start with GDP; we generally chase GDP growth plus a couple 100 basis points to represent a conversion to paper to electronic. And then of course we also look at the network statics on a transaction level in the markets that we’re in as really bogeys for growth. The thing what I mean in the United States in particular Steven and to get into your question is showing mid single digits as a bogey for keeping pace with the market. But we just posted our third consecutive quarter of low to mid now, 12% to 15% double digit organic growth in the U.S market. Whilst it’s hard to say in the future that we’ll continued to double and triple the rate of growth organically the U.S market, I certainly would expect and believe that sustainably we should operate well in excess of the rate of market growth? So that’s hardly in the future remains 5%; we should be operating at multiples of that rate. Now is that going to be two and half to three times? That’s hard to say in perpetuity. But certainly sitting here today Steven, I would say, we certainly will expect to be gaining share and growing substantially in excess of the rate of market growth which we’ve been doing whole year in our business.

Thank you. Our next question is from Darrin Peller of Barclays. You may begin.

Just a quick one as a follow-up on Canada; typically when there is price change come; I think the code of conduct requires an advanced notification. It looked like the 4% growth I think it was about 4% constant currency closer to transaction growth rates now. It’s narrow -- the spreads are narrowing back and sort of the transaction goes low which is kind what you’d expect. I think people are hoping for at least starting in April with the interchange cuts coming as you alluded to earlier there to be an opportunity there. So just timing wise, I mean are we going to be able to see some sort of a benefit off that pretty quickly just given that there is usually a time sort of advanced notification? Can you just give us a sense of what we can expect?

I would not expect to see anything visible in Q4. The interchange reductions are coming effective May 1st in Canada. I would point out, they’re not incredibly enormous interchange reductions; it’s just a mathematical matter. And as I understand the way the market is going to work going forward, you will find that being largely if not exclusively pass-through entirely. Now that doesn’t mean we and others won’t be running our businesses at the same time but that’s a good benefit coming to merchants. And whenever the cost of acceptance goes down, that’s a good thing for Global Payments; obviously for the rest of the acquirers as well. But given the size of what’s happening, I wouldn’t expect too much of a change in Canada trends in Q4, certainly as we come around to report them in again here in July. But I would say is that positions us well to have a nice stable Canada going into ‘16 which is probably the most important part of the facts that we just had another stable quarter and another manageable and predictable quarter. We expect another one in Q4 and that will be a nice platform from which to enter 2016 from a merchant relationship perspective.

I would just add to that Darrin and to build on to what David said, in addition to what he mentioned, if you think about what we’ve been doing in Canada and one of the other analysts asked this question as well, our ability now to supplement what we’ve been describing with our integrated business and bringing back into Canada with regard obviously we’ve already done and David described before the sales and marketing changes around that to drive additional growth, our ability to bring other products and services like OptBlue and other things into Canada as we head into fiscal ‘16, I think gives us a lot of confidence around the stability of that business. So, I don’t want to be locked in that conversation about just rate changes and the global macroeconomic environment. I think as we are in the rest of the North American business, I think we’re executing very well in Canada. And I think as we head into fiscal ‘16, we are going to leverage our infrastructure and bring those products and services into Canada. This is our confidence as we look at that business in the coming months.

Just one follow-up; I mean you mentioned before, I think you came up around financial JV opportunities, obviously the strengthening of the dollar helps in Europe. What kind of interest are you seeing from banks there? And obviously they’re probably worried about interchange cuts coming and loss revenue streams. I mean trying to find other sources of really good business generation maybe JVs maybe a good way to do so.

Yes, I think you’re exactly right, Darrin, in what we said. I would say that as it became clear in the last year or so that SEPA was effectively upon us culminating in the early March EU adoption of those rules; we’re seeing a fair amount of interest among banks and Continental Europe who generally combine issuing and acquiring. So, as they see issuing get reduced because interchanges coming down, they are still looking at partnerships on the acquiring side to say help me grow more quickly than I otherwise could because I know there is lot of fee income coming out of the issuing side of the business. So, we see no shortage of opportunities in Continental Europe, there are hurdles that I described before. But we’re very well engaged down in those conversations currently.

Thank you. We’ll take our last question from Jason Kupferberg of Jefferies. You may begin.

Just a follow-up question on margins; I think I’ve heard you guys say from time-to-time that over the long-term there is the potential for this business on a consolidated basis to get the cash operating margins maybe in the low to mid 20s range and obviously we’re moving in the right direction right now. Is that still an aspirational target over the long-term that’s realistic?

Jason, it’s Cameron. I think it very much is and I think you’ve seen the performance over the course of this year demonstrate that we’re clearly moving in the right direction as you correctly highlighted. Obviously this year, we have seen I think very good margin growth and currently are anticipating as I mentioned in my prepared comments, roughly 60 basis points of margin expansion over FY14. What we’ve traditionally said is something in the 30 basis points to 50 basis points annually is a reasonable expectation for margin expansion driving towards that’s overall target that we have f something in the mid 20% range which will be augmented by transactions that we do over the course of time that are going to be hopefully additive and do that overall 30 basis points to 50 basis points target that we have. So as we did here today, we’re looking at a total company margin expansion for the quarter that was 140 basis points on a constant currency basis that’s fairly impressive and certainly above our expectation of what we think we can do out on a run rate basis but as you’ve correctly highlighted, clearly moving us in the right direction for the overall target.

And just last follow-up, so with the addition of Realex now and their payment volume, if we now think about your total about your total ecommerce business as a percent of overall volume, where does that fit now and are there any longer term targets we could think about that you would be aspiring to receive there?

Yes, Jason it’s Jeff, we could break it out that way because increasingly and this is part of a thesis about Realex, increasingly it’s really omni-channel environment. Customers aren’t particularly desirous of just talking on one basis or the other. They want us to solve all their acceptance fees, it’s not just through their website and work online, this provides every type of acceptance whether it’s mobile, whether it’s online, whether it’s in the physical store environment. And as you think about part of rationale for Realex which is to expand at the omni-channel, further into the omni-channel business that really does merge the card not present with the card present world and leverages our footprint, not just in Europe but globally. So, we don’t really think about it as what share of the market do we have other than to say that we want more of it and capture more share is a key strategy of ours.

Okay, understood. Thanks guys.

Thank you. Well, thank you very much for joining us this morning on Global Payments’ third quarter FY 2015 call.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. Have a wonderful day.