Market Overview

EVERTEC Reports Second Quarter 2018 Results

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Increases Annual Guidance

EVERTEC, Inc. (NYSE:EVTC) ("Evertec" or the "Company") today announced
results for the second quarter ended June 30, 2018.

Second Quarter 2018 and Recent Highlights

  • Revenue grew 10% to $113.3 million
  • GAAP Net Income attributable to common shareholders was $20.1 million
    or $0.27 per diluted share flat when compared with the prior year
  • Adjusted EBITDA increased 7% to $53.8 million
  • Adjusted earnings per common share was $0.46, an increase of 5%
  • Quarterly dividend reinstated at $0.05 per share

Six-Month Year-to-Date 2018 Highlights

  • Revenue grew 9% to $223.6 million
  • GAAP Net Income attributable to common shareholders was $43.1 million
    or $0.58 per diluted share
  • Adjusted EBITDA increased 9% to $107.7 million
  • Adjusted earnings per common share was $0.93, an increase of 4%

Mac Schuessler, President and Chief Executive Officer stated, "We are
pleased with our second quarter financial results and given our
expectation for the remainder of the year, we have increased our 2018
guidance."

Second Quarter 2018 Results

Revenue. Total revenue for the quarter ended June 30, 2018 was
$113.3 million an increase of 10% compared with $103.5 million in the
prior year. Revenue growth in the quarter reflected the impact of the
acquisition of PayGroup as well as elevated sales volumes in Puerto Rico
driven by post-hurricane recovery activity, federal relief and benefit
programs and insurance proceeds.

Net Income attributable to common shareholders. For the quarter
ended June 30, 2018, GAAP Net Income attributable to common shareholders
was $20.1 million, or $0.27 per diluted share, flat as compared to the
prior year.

Adjusted EBITDA. For the quarter ended June 30, 2018, Adjusted
EBITDA was $53.8 million, an increase of 7% compared to the prior year.
Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total
revenues) decreased 100 basis points to 47.4% compared with 48.4% in the
prior year. The decrease in Adjusted EBITDA margin was primarily driven
by the impact of PayGroup's lower margin contribution, which was
partially offset by other revenue mix changes and the benefit of expense
management actions.

Adjusted Net Income. For the quarter ended June 30, 2018,
Adjusted Net Income was $34.5 million, an increase of 7% compared with
$32.2 million in the prior year and included the impact of increased
interest expense and a higher tax rate in the current year. Adjusted
earnings per common share was $0.46, an increase of 5% as compared to
$0.44 in the prior year.

2018 Outlook

The Company is increasing its financial outlook for 2018 as follows:

  • Total consolidated revenue between $435 million and $445 million
    representing growth of 7% to 9%
  • Adjusted earnings per common share guidance of $1.68 to $1.77
    representing a range of 14% to 20% as compared to $1.47 in 2017
  • Capital expenditures ranging between $35 and $40 million
  • Non-GAAP effective tax rate ranging between 13% to 14%.

Earnings Conference Call and Audio Webcast

The Company will host a conference call to discuss its second quarter
2018 financial results today at 4:30 p.m. ET. Hosting the call will be
Mac Schuessler, President and Chief Executive Officer, and Peter Smith,
Executive Vice President and Chief Financial Officer. The conference
call can be accessed live over the phone by dialing (888) 338-7153 or
for international callers by dialing (412) 317-5117. A replay will be
available one hour after the end of the conference call and can be
accessed by dialing (877) 344-7529 or (412) 317-0088 for international
callers; the pin number is 10122245. The replay will be available
through Tuesday, August 7, 2018. The call will be webcast live from the
Company's website at www.evertecinc.com
under the Investor Relations section or directly at http://ir.evertecinc.com.
A supplemental slide presentation that accompanies this call and webcast
can be found on the investor relations website at ir.evertecinc.com and
will remain available after the call.

About Evertec

EVERTEC, Inc. (NYSE:EVTC) is a leading full-service transaction
processing business in Latin America, providing a broad range of
merchant acquiring, payment processing and business solutions services.
The Company manages a system of electronic payment networks that process
more than two billion transactions annually and offers a comprehensive
suite of services for core bank processing, cash processing and
technology outsourcing. In addition, Evertec owns and operates the ATH®
network, one of the leading personal identification number ("PIN") debit
networks in Latin America. Based in Puerto Rico, the Company operates in
26 Latin American countries and serves a diversified customer base of
leading financial institutions, merchants, corporations and government
agencies with "mission-critical" technology solutions. For more
information, visit www.evertecinc.com.

Use of Non-GAAP Financial Information

The non-GAAP measures referenced in this release material are
supplemental measures of the Company's performance and are not required
by, or presented in accordance with, accounting principles generally
accepted in the United States of America ("GAAP"). They are not
measurements of the Company's financial performance under GAAP and
should not be considered as alternatives to total revenue, net income or
any other performance measures derived in accordance with GAAP or as
alternatives to cash flows from operating activities, as indicators of
operating performance or as measures of the Company's liquidity. In
addition to GAAP measures, management uses these non-GAAP measures to
focus on the factors the Company believes are pertinent to the daily
management of the Company's operations and believes that they are also
frequently used by analysts, investors and other interested parties to
evaluate companies in the industry. Reconciliations of the non-GAAP
measures to the most directly comparable GAAP measure are included in
the schedules to this release. These non-GAAP measures include EBITDA,
Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common
share and are defined below.

EBITDA is defined as earnings before interest, taxes,
depreciation and amortization.

Adjusted EBITDA is defined as EBITDA further adjusted to exclude
unusual items and other adjustments. This measure is reported to the
chief operating decision maker for purposes of making decisions about
allocating resources to the segments and assessing their performance.
For this reason, Adjusted EBITDA, as it relates to our segments, is
presented in conformity with Accounting Standards Codification 280,
Segment Reporting, and is excluded from the definition of non-GAAP
financial measures under the Securities and Exchange Commission's
Regulation G and Item 10(e) of Regulation S-K. Our presentation of
Adjusted EBITDA is substantially consistent with the equivalent
measurements that are contained in the senior secured credit facilities
in testing EVERTEC Group's compliance with covenants therein such as the
senior secured leverage ratio.

Adjusted Net Income is defined as net income adjusted to exclude
unusual items and other adjustments.

Adjusted Earnings per common share is defined as Adjusted Net
Income divided by diluted shares outstanding.

We use Adjusted Net Income to measure our overall profitability because
we believe it better reflects our comparable operating performance by
excluding the impact of the non-cash amortization and depreciation that
was created as a result of Apollo Global Management LLC's acquisition of
a 51% indirect ownership in EVERTEC Group. In addition, in evaluating
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per
common share, you should be aware that in the future we may incur
expenses such as those excluded in calculating them. Further, our
presentation of these measures should not be construed as an inference
that our future operating results will not be affected by unusual or
nonrecurring items.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking
statements" within the meaning of, and subject to the protection of, the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties, and other
factors that may cause the actual results, performance or achievements
of EVERTEC to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Statements preceded by, followed by, or that otherwise
include the words "believes," "expects," "anticipates," "intends,"
"projects," "estimates," and "plans" and similar expressions of future
or conditional verbs such as "will," "should," "would," "may," and
"could" are generally forward-looking in nature and not historical
facts. Any statements that refer to expectations or other
characterizations of future events, circumstances or results are
forward-looking statements.

Various factors that could cause actual future results and other future
events to differ materially from those estimated by management include,
but are not limited to: the Company's reliance on its relationship with
Popular for a significant portion of revenue; our ability to renew our
client contracts on terms favorable to us; the effectiveness of our risk
management procedures; our dependence on our processing systems,
technology infrastructure, security systems and
fraudulent-payment-detection systems, and the risk that our systems may
experience breakdowns or fail to prevent security breaches or fraudulent
transfers; our ability to develop, install and adopt new technology; a
decreased client base due to consolidations in the banking and
financial-services industry; the credit risk of our merchant clients,
for which we may also be liable; the continuing market position of the
ATH® network; reduction in consumer confidence leading to decreased
consumer spending; the Company's dependence on credit card associations;
regulatory limitations on our activities, including the potential need
to seek regulatory approval to consummate transactions, due to our
relationship with Popular and our role as a service provider to
financial institutions; changes in the regulatory environment and
changes in international, legal, tax, political, administrative or
economic conditions; the geographical concentration of the Company's
business in Puerto Rico; operating an international business in multiple
regions with potential political and economic instability; increased
compliance risks associated with operating an international business;
operating in countries and counterparties that put us at risk of
violating U.S. sanctions laws; our ability to execute our expansion and
acquisition strategies; our ability to protect our intellectual property
rights; our ability to recruit and retain qualified personnel; our
ability to comply with federal, state, and local regulatory
requirements; evolving industry standards; the Company's high level of
indebtedness and restrictions contained in the Company's debt
agreements; and the Company's ability to generate sufficient cash to
service the Company's indebtedness and to generate future profits.

Consideration should be given to the areas of risk described above, as
well as those risks set forth under the headings "Forward-Looking
Statements" and "Risk Factors" in the reports the Company files with the
SEC from time to time, in connection with considering any
forward-looking statements that may be made by the Company and its
businesses generally. We undertake no obligation to release publicly any
revisions to any forward-looking statements, to report events or to
report the occurrence of unanticipated events unless we are required to
do so by law.

EVERTEC, Inc.

Schedule 1: Unaudited Consolidated Condensed Statements of Income
and Comprehensive Income

   
Three months ended June 30, Six months ended June 30,
2018   2017 2018   2017
(Dollar amounts in thousands, except share data)    
Revenues $ 113,347   $ 103,511   $ 223,621   $ 204,791  
 
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization shown
below
49,131 43,030 96,551 87,203
Selling, general and administrative expenses 17,848 14,588 31,280 25,419
Depreciation and amortization 15,728   15,899   31,595   31,583  
Total operating costs and expenses 82,707   73,517   159,426   144,205  
Income from operations 30,640   29,994   64,195   60,586  
Non-operating income (expenses)
Interest income 164 216 321 401
Interest expense (7,665 ) (7,406 ) (15,344 ) (14,442 )
Earnings of equity method investment 175 115 374 258
Other income (expense) (69 ) 1,363   748   2,637  
Total non-operating expenses (7,395 ) (5,712 ) (13,901 ) (11,146 )
Income before income taxes 23,245 24,282 50,294 49,440
Income tax expense 3,112   4,068   7,047   6,088  
Net income 20,133 20,214 43,247 43,352
Less: Net income attributable to non-controlling interest 81   125   173   234  
Net income attributable to EVERTEC, Inc.'s common stockholders 20,052 20,089 43,074 43,118
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments (4,307 ) (1,956 ) (1,900 ) (2,601 )
Gain on cash flow hedge 387   (242 ) 1,890   376  
Total comprehensive income attributable to EVERTEC, Inc.'s common
stockholders
$ 16,132 $ 17,891 $ 43,064 $ 40,893
Net income per common share:
Basic $ 0.28 $ 0.28 $ 0.59 $ 0.59
Diluted $ 0.27 $ 0.27 $ 0.58 $ 0.59
Shares used in computing net income per common share:
Basic 72,637,733 72,508,852 72,524,228 72,572,157
Diluted 74,389,126 73,074,591 73,905,690 73,087,387

EVERTEC, Inc.

Schedule 2: Unaudited Consolidated Condensed Balance Sheets

   
(Dollar amounts in thousands) June 30, 2018 December 31, 2017
Assets
Current Assets:
Cash and cash equivalents $ 59,333 $ 50,423
Restricted cash 11,076 9,944
Accounts receivable, net 82,447 83,328
Prepaid expenses and other assets 29,444   25,011  
Total current assets 182,300 168,706
Investment in equity investee 13,335 13,073
Property and equipment, net 38,336 37,924
Goodwill 397,221 398,575
Other intangible assets, net 266,253 279,961
Deferred tax asset 1,071 988
Other long-term assets 5,653   3,561  
Total assets $ 904,169   $ 902,788  
Liabilities and stockholders' equity
Current Liabilities:
Accrued liabilities $ 41,822 $ 38,451
Accounts payable 34,561 41,135
Unearned income 9,633 7,737
Income tax payable 3,892 1,406
Current portion of long-term debt 21,820 46,487
Short-term borrowings   12,000  
Total current liabilities 111,728 147,216
Long-term debt 547,551 557,251
Deferred tax liability 12,976 13,820
Unearned income - long term 24,049 23,486
Other long-term liabilities 10,502   13,039  
Total liabilities 706,806   754,812  
Stockholders' equity
Preferred stock, par value $0.01; 2,000,000 shares authorized; none
issued

Common stock, par value $0.01; 206,000,000 shares authorized;
72,717,138
shares issued and outstanding at June 30, 2018
(December 31, 2017 - 72,393,933)

727 723
Additional paid-in capital 10,654 5,350
Accumulated earnings 192,819 148,887
Accumulated other comprehensive loss, net of tax (10,858 ) (10,848 )
Total EVERTEC, Inc. stockholders' equity 193,342 144,112
Non-controlling interest 4,021   3,864  
Total equity 197,363   147,976  
Total liabilities and equity $ 904,169   $ 902,788  

EVERTEC, Inc.

Schedule 3: Unaudited Consolidated Condensed Statements of Cash
Flows

 
Six months ended June 30,
2018   2017
Cash flows from operating activities
Net income $ 43,247 $ 43,352
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 31,595 31,583
Amortization of debt issue costs and accretion of discount 2,361 2,490
Provision for doubtful accounts and sundry losses 369 107
Deferred tax benefit (1,113 ) (1,799 )
Share-based compensation 7,322 4,189
Loss on disposition of property and equipment and other intangibles 11 176
Earnings of equity method investment (374 ) (258 )
Dividend received from equity method investment 390
(Increase) decrease in assets:
Accounts receivable, net 811 953
Prepaid expenses and other assets (4,236 ) (6,067 )
Other long-term assets (333 ) 188
(Decrease) increase in liabilities:
Accounts payable and accrued liabilities (8,856 ) (9,215 )
Income tax payable 2,487 932
Unearned income 3,102 4,126
Other long-term liabilities 73   297  
Total adjustments 33,609   27,702  
Net cash provided by operating activities 76,856   71,054  
Cash flows from investing activities
Additions to software (9,015 ) (9,989 )
Property and equipment acquired (6,837 ) (5,485 )
Proceeds from sales of property and equipment 14   25  
Net cash used in investing activities (15,838 ) (15,449 )
Cash flows from financing activities
Statutory withholding taxes paid on share-based compensation (2,014 ) (1,485 )
Net (decrease) increase in short-term borrowings (12,000 ) 20,000
Repayment of short-term borrowing for purchase of equipment and
software
(700 ) (996 )
Dividends paid (14,523 )
Repurchase of common stock (7,671 )
Repayment of long-term debt (36,262 ) (9,707 )
Net cash used in financing activities (50,976 ) (14,382 )
Net increase in cash, cash equivalents and restricted cash 10,042 41,223
Cash, cash equivalents and restricted cash at beginning of the
period
60,367   60,032  
Cash, cash equivalents and restricted cash at end of the period $ 70,409   $ 101,255  

EVERTEC, Inc.

Schedule 4: Unaudited Segment Information

 
Three months ended June 30, 2018
(In thousands)

Payment
Services -
Puerto Rico &
Caribbean

 

Payment
Services -
Latin America

 

Merchant
Acquiring, net

 

Business
Solutions

 

Corporate and Other (1)

 

Total

 
Revenues $ 28,043 $ 19,236 $ 25,964 $ 49,233 $ (9,129 ) $ 113,347
Operating costs and expenses 13,130 18,407 14,112 30,351 6,707 82,707
Depreciation and amortization 2,409 2,249 421 3,520 7,129 15,728
Non-operating income (expenses) 551   1,401   4   66   (1,916 ) 106
EBITDA 17,873   4,479   12,277   22,468   (10,623 ) 46,474
Compensation and benefits (2) 485 317 360 684 2,627 4,473
Transaction, refinancing and other fees (3)     1     2,820   2,821
Adjusted EBITDA $ 18,358   $ 4,796   $ 12,638   $ 23,152   $ (5,176 ) $ 53,768
 
(1)   Corporate and Other consists of corporate overhead, certain
leveraged activities, other non-operating expenses and intersegment
eliminations. Intersegment eliminations predominantly reflect the
$9.1 million processing fee from Payments Services - Puerto Rico and
Caribbean to Merchant Acquiring and cost transfer fees from
Corporate and Other to Payment Services Latin America for leveraged
services and management fees.
(2) Primarily represents share-based compensation, other compensation
expense and severance payments.
(3) Primarily represents fees and expenses associated with corporate
transactions as defined in the Credit Agreement.
  Three months ended June 30, 2017
(In thousands)

Payment
Services -
Puerto Rico &
Caribbean

 

Payment
Services -
Latin America

 

Merchant
Acquiring, net

 

Business
Solutions

 

Corporate and Other (1)

 

Total

 
Revenues $ 27,144 $ 12,973 $ 23,506 $ 48,672 $ (8,784 ) $ 103,511
Operating costs and expenses 11,682 13,603 13,688 29,600 4,944 73,517
Depreciation and amortization 2,269 1,848 596 4,082 7,104 15,899
Non-operating income (expenses) 556   2,724     3   (1,805 ) 1,478
EBITDA 18,287   3,942   10,414   23,157   (8,429 ) 47,371
Compensation and benefits (2) 125 156 121 286 1,439 2,127
Transaction, refinancing and other fees (3)         632   632
Adjusted EBITDA $ 18,412   $ 4,098   $ 10,535   $ 23,443   $ (6,358 ) $ 50,130
 
(1)   Corporate and Other consists of corporate overhead, certain
leveraged activities, other non-operating expenses and intersegment
eliminations. Intersegment eliminations predominantly reflect the
$8.8 million processing fee from Payments Services - Puerto Rico and
Caribbean to Merchant Acquiring and cost transfer fees from
Corporate and Other to Payment Services Latin America for leveraged
services and management fees.
(2) Primarily represents share-based compensation, other compensation
expense and severance payments.
(3) Primarily represents fees and expenses associated with corporate
transactions as defined in the Credit Agreement.
  Six months ended June 30, 2018
(In thousands) Payment
Services -
Puerto Rico &
Caribbean
  Payment
Services -
Latin America
  Merchant
Acquiring, net
  Business
Solutions
  Corporate and Other (1)   Total
 
Revenues $ 55,211 $ 39,627 $ 49,343 $ 97,154 $ (17,714 ) $ 223,621
Operating costs and expenses 26,063 36,467 27,253 59,366 10,277 159,426
Depreciation and amortization 4,725 4,698 841 7,039 14,292 31,595
Non-operating income (expenses) 1,367   3,214   8   366   (3,833 ) 1,122
EBITDA 35,240   11,072   22,939   45,193   (17,532 ) 96,912
Compensation and benefits (2) 678 717 550 1,124 5,233 8,302
Transaction, refinancing and other fees (3) (250 )   1     2,771   2,522
Adjusted EBITDA $ 35,668   $ 11,789   $ 23,490   $ 46,317   $ (9,528 ) $ 107,736
 
(1)   Corporate and Other consists of corporate overhead, certain
leveraged activities, other non-operating expenses and intersegment
eliminations. Intersegment eliminations predominantly reflect the
$17.7 million processing fee from Payments Services - Puerto Rico
and Caribbean to Merchant Acquiring and cost transfer fees from
Corporate and Other to Payment Services Latin America for leveraged
services and management fees.
(2) Primarily represents share-based compensation, other compensation
expense and severance payments.
(3) Primarily represents fees and expenses associated with corporate
transactions as defined in the Credit Agreement.
  Six months ended June 30, 2017
(In thousands) Payment
Services -
Puerto Rico &
Caribbean
  Payment
Services -
Latin America
  Merchant
Acquiring, net
  Business
Solutions
  Corporate and Other (1)   Total
 
Revenues $ 53,596 $ 25,937 $ 45,991 $ 96,669 $ (17,402 ) $ 204,791
Operating costs and expenses 23,484 25,869 27,101 59,365 8,386 144,205
Depreciation and amortization 4,418 3,719 1,195 8,096 14,155 31,583
Non-operating income (expenses) 1,109   5,455   1   3   (3,673 ) 2,895
EBITDA 35,639   9,242   20,086   45,403   (15,306 ) 95,064
Compensation and benefits (2) 224 307 216 512 2,944 4,203
Transaction, refinancing and other fees (3) (660 )       682   22
Adjusted EBITDA $ 35,203   $ 9,549   $ 20,302   $ 45,915   $ (11,680 ) $ 99,289
 
(1)   Corporate and Other consists of corporate overhead, certain
leveraged activities, other non-operating expenses and intersegment
eliminations. Intersegment eliminations predominantly reflect the
$17.4 million processing fee from Payments Services - Puerto Rico
and Caribbean to Merchant Acquiring and cost transfer fees from
Corporate and Other to Payment Services Latin America for leveraged
services and management fees.
(2) Primarily represents share-based compensation, other compensation
expense and severance payments.
(3) Primarily represents fees and expenses associated with corporate
transactions as defined in the Credit Agreement.

EVERTEC, Inc.

Schedule 5: Reconciliation of GAAP to Non-GAAP Operating Results

   
Three months ended June 30, Six months ended June 30,
(Dollar amounts in thousands, except share data) 2018   2017 2018   2017
Net income $ 20,133 $ 20,214 $ 43,247 $ 43,352
Income tax expense 3,112 4,068 7,047 6,088
Interest expense, net 7,501 7,190 15,023 14,041
Depreciation and amortization 15,728   15,899   31,595   31,583  
EBITDA 46,474 47,371 96,912 95,064
Equity income (1) 258 (115 ) 59 (258 )
Compensation and benefits (2) 4,473 2,127 8,302 4,203
Transaction, refinancing and other fees (3) 2,563   747   2,463   280  
Adjusted EBITDA 53,768 50,130 107,736 99,289
Operating depreciation and amortization (4) (7,223 ) (7,696 ) (14,544 ) (15,157 )
Cash interest expense, net (5) (6,555 ) (6,036 ) (12,923 ) (11,738 )
Income tax expense (6) (5,367 ) (4,072 ) (10,934 ) (6,969 )
Non-controlling interest (7) (126 ) (170 ) (264 ) (325 )
Adjusted net income $ 34,497   $ 32,156   $ 69,071   $ 65,100  
Net income per common share (GAAP):
Diluted $ 0.27 $ 0.27 $ 0.58 $ 0.59
Adjusted Earnings per common share (Non-GAAP):
Diluted $ 0.46 $ 0.44 $ 0.93 $ 0.89
Shares used in computing adjusted earnings per common share:
Diluted 74,389,126 73,074,591 73,905,690 73,087,387
 
1)   Represents the elimination of non-cash equity earnings from our
19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A.,
net of cash dividends received.
2)

Primarily represents share-based compensation and other
compensation expense of $3.7 million and $2.2 million for the
quarters ended June 30, 2018 and 2017 and severance payments $0.8
million for the quarter ended June 30, 2018. Primarily represents
share-based compensation and other compensation expense of $7.3
million and $4.2 million for the six months ended June 30, 2018
and 2017 and severance payments $1.0 million and $0.1 million for
the same periods, respectively.

3) Represents fees and expenses associated with corporate transactions
as defined in the Credit Agreement, recorded as part of selling,
general and administrative expenses and cost of revenues.
4) Represents operating depreciation and amortization expense, which
excludes amounts generated as a result of the Merger and other from
purchase accounting intangibles generated from acquisitions.
5) Represents interest expense, less interest income, as they appear on
our consolidated statements of income and comprehensive income,
adjusted to exclude non-cash amortization of the debt issue costs,
premium and accretion of discount.
6) Represents income tax expense calculated on adjusted pre-tax income
using the applicable GAAP tax rate.
7) Represents the 35% non-controlling equity interest in Processa, net
of amortization for intangibles created as part of the purchase.

EVERTEC, Inc.

Schedule 6: Outlook Summary and Reconciliation to Non-GAAP
Adjusted Earnings per Share

     
2018 Outlook

2017 Actual

(Dollar amounts in millions, except share data)    
 
Revenues $ 435 to $ 445 $ 407
 
Earnings per Share (EPS) - Diluted (GAAP) $ 1.07 to $ 1.16 $ 0.76
 
Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted EPS:
Share-based comp, non-cash equity earnings and other (1) $ 0.23 $ 0.23 $ 0.33
Merger related depreciation and amortization (2) $ 0.42 $ 0.42 $ 0.42
Non-cash interest expense (3) $ 0.07 $ 0.07 $ 0.07
Tax effect of non-GAAP adjustments (4) $ (0.10 ) $ (0.10 ) $ (0.10 )
Non-controlling interest (5) $ (0.01 ) $ (0.01 ) $ (0.01 )
Total adjustments $ 0.61 $ 0.61 $ 0.71
 
Adjusted Earnings per common share (Non-GAAP) $ 1.68 to $ 1.77 $ 1.47
Shares used in computing adjusted earnings per share (in millions) 74.2 72.9
 
1)   Represents share based compensation, the elimination of non-cash
equity earnings from our 19.99% equity investment in Consorcio de
Tarjetas Dominicanas S.A., and other adjustments to reconcile GAAP
EPS to Non-GAAP EPS.
2) Represents depreciation and amortization expenses amounts generated
as a result of the Merger and other M&A transactions.
3) Represents non-cash amortization of the debt issue costs, premium
and accretion of discount.
4) Represents income tax expense on non-GAAP adjustments using the
applicable GAAP tax rate ranging between 13% to 14%.
5) Represents the 35% non-controlling equity interest in Processa, net
of amortization of intangibles created as part of the purchase.

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