[October 30, 2017] |
|
First Data Reports Third Quarter 2017 Financial Results
First Data Corporation (NYSE: FDC), a global leader in commerce-enabling
technology, today reported financial results for the third quarter ended
September 30, 2017. Consolidated revenue for the third quarter was $3.1
billion, up 5% versus the prior year period. Total segment revenue was
$1.9 billion for the quarter, up 5% versus the prior year period, or up
3% on an organic constant currency basis.
Net income attributable to First Data for the third quarter of 2017 was
$296 million, or $0.31 per diluted share, up 124% and 121%,
respectively, from third quarter of 2016 comparable figures. The
increase in net income attributable to First Data was driven by a
significant discrete tax item in the current period (see "Income Tax
(Benefit) / Expense," below), improved operating results and lower
interest expense.
Adjusted net income, which modifies net income for items such as debt
extinguishment charges, stock-based compensation, amortization of
acquisition intangibles, restructuring costs, discrete tax items and
other items, was $373 million, or $0.40 per diluted share, up 20% and
18%, respectively, from third quarter of 2016 comparable figures. The
increase was primarily driven by improved operating results and lower
interest expense.
Total segment earnings before interest, taxes, depreciation, and
amortization (total segment EBITDA) in the third quarter 2017 was $787
million, up 6% versus the prior year period, or up 5% on an organic
constant currency basis.
"During the quarter we saw solid results in our GFS and NSS segments
with strong performances across all of our international businesses,"
said First Data Chairman and CEO Frank Bisignano. "We continue to make
significant progress in establishing First Data as a major player in the
ISV market, driven by the addition of CardConnect's cutting-edge ISV
product suite and the highly complementary acquisition of BluePay, which
brings to us innovative Card-Not-Present integrated solutions,"
Bisignano added.
Segment Results
Global Business Solutions (GBS)
Third quarter 2017 GBS segment revenue was $1.1 billion, up 5% versus
the prior year period, or up 2% on an organic constant currency basis.
Within geographic regions, North America revenue of $833 million was up
2% versus the prior year period or down 3% on an organic constant
currency basis. The North America region's results were negatively
impacted by the non-recurrence of previously disclosed unusual items
that benefited the prior year period's results and a decline in JV
revenue. EMEA revenue was $150 million, up 9% versus the prior year, or
up 6% on an organic constant currency basis, primarily driven by growth
in the United Kingdom and Germany. Latin America revenue was $72
million, up 53%, or up 61% on an organic constant currency basis, driven
by strong results in Brazil and Argentina. APAC revenue was $39 million,
down 8%, or up 18% on an organic constant currency basis, primarily
driven by growth in India.
Third quarter 2017 GBS segment expenses were $629 million, up 7% versus
the prior year period, or up 3% on an organic constant currency basis.
Third quarter 2017 GBS segment EBITDA was $465 million, up 2% versus the
prior year period, or flat on an organic constant currency basis.
Reported segment EBITDA margin declined 100 basis points to 42.5% in the
quarter.
Global Financial Solutions (GFS)
Third quarter 2017 GFS segment revenue was $416 million, up 5% versus
the prior year period both on a reported and organic constant currency
basis. Within geographic regions, North America revenue of $238 million
was up 1%, driven by good processing revenue growth largely offset by a
decline in card personalization revenue. North America GFS card accounts
on file grew 6% year over year. EMEA revenue was $121 million, up 7%
both on a reported and organic constant currency basis, driven by
internal growth and new business. Latin America revenue was $33 million,
up 22%, or up 24% on an organic constant currency basis, driven by
growth in Argentina. APAC revenue was $24 million, up 14%, or up 13% on
an organic constant currency basis, primarily driven by growth in
Australia.
Third quarter 2017 GFS segment expenses were $236 million, down 1%
versus the prior year period on both a reported and organic constant
currency basis.
Third quarter 2017 GFS segment EBITDA was $180 million, up 14% versus
the prior year period on both a reported and organic constant currency
basis. Reported segment EBITDA margin improved 350 basis points to 43.3%
in the quarter.
Network & Security Solutions (NSS)
Third quarter 2017 NSS segment revenue was $395 million, up 5% versus
the prior year period. Within NSS's primary businesses, Stored Value
revenue grew 16% in the quarter, Security and Fraud revenue grew 5%, and
EFT revenue declined 3%.
Third quarter 2017 NSS segment expenses were $211 million, flat versus
the prior year period.
Third quarter 2017 NSS segment EBITDA was $184 million, up 11% versus
the prior year period. Reported segment EBITDA margin improved 270 basis
points to 46.6% in the quarter.
Income Tax (Benefit)/Expense
Third quarter 2017 income tax (benefit) / expense was a benefit of
$(106) million, representing a change of $130 million from expense of
$24 million in the prior year period. The significant change in income
taxes in the current year period was primarily driven by discrete tax
items in the quarter including a $132 million benefit associated with
the release of a valuation allowance as a result of deferred tax
liabilities recorded in connection with the accounting for the purchase
of CardConnect in the current quarter.
Cash Flow
In the third quarter 2017, cash flow from operations was $581 million,
down $171 million compared to $752 million in the prior year period.
Free cash flow, which the Company defines as cash flow from operations
less capital expenditures, distributions to minority interests and
other, was $370 million in the current quarter, down $57 million
compared to $427 million in the prior year period, primarily driven by
the non-recurrence of a derivative settlement that occurred in the prior
year period and timing impacts on settlement flows from day-of-week
differences at respective period's quarter ends, partially offset by
lower cash interest payments and improved operating results in the
current period.
Capital Structure
First Data's total borrowings at September 30, 2017 increased to $18.6
billion, from $18.5 billion at December 31, 2016. The increase is a
result of the recent acquisitions of CardConnect in July 2017, and
Acculynk earlier in the year, partially offset by debt paydowns and
divestitures. Net debt increased $32 million over the same timeframe.
BluePay Acquisition
As previously disclosed, on October 20, 2017, the Company announced that
it has entered into an agreement to acquire BluePay Holdings, Inc., a
provider of technology-enabled payment processing for merchants in the
U.S. and Canada. BluePay is one of First Data's largest distribution
partners with a strong focus on software-enabled payments and
Card-Not-Present transactions. The transaction is subject to customary
closing conditions and is expected to close in the fourth quarter.
Innovation
First Data continues to invest in innovation to differentiate itself as
a leader in commerce-enabling solutions. Below are examples of
innovative solutions that the company introduced recently:
-
Disburse-to-debit: First Data's innovative solution for the gig
economy allows businesses to disburse funds in real-time
directly to a debit card. Faster payouts lead to increased loyalty,
satisfaction, and reduced costs for businesses.
-
Breeze mobile apps: First Data and CareCloud joined forces to
introduce the mobile app, Breeze. Backed by the power of First Data's
Clover platform, Breeze's mobile and web apps allow patients to manage
their doctor appointments from their smart device, fill out necessary
insurance and medical forms, and manage payments anywhere, anytime.
-
Apple/Clover launch: First Data and Apple announced the
enablement of Apple Pay loyalty and gift cards through integration
with First Data's Clover platform. Developers and third party loyalty
providers will also be able to leverage the Clover platform to
facilitate Apple Pay for merchant clients. First Data's Clover Go
devices will be available in Apple retail stores across the U.S.
-
UnionPay International partnership: First Data and UnionPay
International will partner to expand UnionPay card acceptance in the
United States, both with in-store and online purchases. The
partnership allows Chinese visitors to use their UnionPay chip credit
and debit cards at First Data's U.S. merchant clients.
-
Amazon Pay mobile app accepted through First Data's Clover POS:
certain restaurants utilizing First Data's Clover POS can now
accept takeout orders directly from the Amazon mobile app.
-
Financial Services developer portal: First Data has launched a
developer portal for our financial services clients in North America.
This portal offers an extensive catalog of APIs to streamline how our
issuing clients engage with us. Through the developer portal, our
clients can now introduce enhancements and changes to their solutions
faster and in a more frictionless way.
Non-GAAP Measures
To supplement the Company's consolidated financial statements presented
in accordance with generally accepted accounting principles, or GAAP,
the company uses non-GAAP measures of certain financial performance.
These non-GAAP measures include total segment revenue, total segment
expense, total segment EBITDA, total segment EBITDA margin, adjusted net
income, adjusted net income per diluted share, free cash flow and net
debt. The company has included non-GAAP measures because management
believes that they help to facilitate comparisons of the company's
operating results between periods. The company believes the non-GAAP
measures provide useful information to both management and users of our
financial statements by excluding certain expenses, gains and losses
that may not be indicative of its core operating results and business
outlook. In disclosing year-over-year comparisons, the company has
chosen to present non-GAAP measures because it believes that these
measures provide users of our financial statements a consistent basis
for reviewing the company's performance across different periods.
These non-GAAP measures are not in accordance with, or an alternative
to, measures prepared in accordance with GAAP and may be different from
non-GAAP measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with the company's results of
operations as determined in accordance with GAAP. These measures should
only be used to evaluate the company's results of operations in
conjunction with the corresponding GAAP measures.
Reconciliation to the most directly comparable GAAP measure of all
non-GAAP measures can be found in the tables included in this press
release.
The company excludes certain items and other adjustments from total
segment revenue, total segment expense, total segment EBITDA, total
segment EBITDA margin, adjusted net income and adjusted net income per
diluted share. See reconciliations for a complete list of items excluded
from non-GAAP measures.
Adjusted net income is a non-GAAP financial measure used by management
that provides additional insight on performance. Adjusted net income
excludes amortization of acquisition-related intangibles, stock-based
compensation, restructuring costs, deal integration costs, and other
items affecting comparability and, therefore, provides a more complete
understanding of continuing operating performance. Management believes
that the presentation of adjusted net income provides users of our
financial statements greater transparency into ongoing results of
operations allowing them to better compare our results from period to
period.
The company uses free cash flow, a non-GAAP measure. Free cash flow is
defined as cash flow used in/provided by operating activities less
capital expenditures, distributions to minority interest, and other. The
company considers free cash flow to be a liquidity measure that provides
useful information to management and users of our financial statements
about the amount of cash generated by the business which can then be
used to, among other things, reduce debt outstanding.
The company also uses net debt, a non-GAAP measure. Net debt is defined
as total long-term borrowings plus short-term and current portion of
long-term borrowings, at par value, excluding lines of credit used for
settlement purposes, less cash and cash equivalents. The company
believes that net debt provides additional insight on its level and
management of leverage.
Certain revenue and expense measures in this release are presented
excluding the estimated impacts of foreign currency changes ("Constant
currency"). To present this information, monthly results in the current
period for entities reporting in currencies other than United States
dollars are translated into United States dollars at the average
exchange rates in effect during the corresponding month of the prior
fiscal year, rather than the actual average exchange rates in effect
during the current fiscal year. Once translated, each month in the
period is added together to calculate the constant currency current
period results. The company believes that revenue growth is a key
indication of how First Data is progressing from period to period and
the non-GAAP constant currency financial measure is useful to investors,
lenders and other creditors because such information enables them to
measure the impact of currency fluctuations on the company's revenue
from period to period.
Certain non-GAAP measures (segment revenue, segment expense and segment
EBITDA) in this release are presented excluding the estimated impacts of
foreign currency changes and acquisitions and divestitures ("Organic
constant currency"). To present this information, results are adjusted
as described above for currency fluctuations, and are further adjusted
to exclude the results of significant divestitures in the prior year
period, and include the results of significant acquisitions in the prior
year period. The company believes that revenue, expense and EBITDA
growth are key indications of how First Data is progressing from period
to period and the non-GAAP organic constant currency financial measures
are useful to investors, lenders and other creditors because such
information enables them to measure the impact of currency fluctuations
and recent acquisitions and divestitures on the company's revenue,
expenses and EBITDA from period to period.
Investor Conference Call
The company will host a conference call and webcast on Monday, October
30, 2017, at 8 a.m. ET to review the third quarter 2017 financial
results.
To listen to the call, dial +1 (844) 826-3033 (U.S.) or +1 (412)
317-5172 (outside the U.S.) at least 10 minutes prior to the start of
the call. The call will also be webcast on the "Investor Relations"
section of the First Data website at investor.firstdata.com along with a
slide presentation to accompany the call.
A replay of the call will be available through November 30, 2017, at +1
(877) 344-7529 (U.S.) or +1 (412) 317-0088 (outside the U.S.); passcode
10112524 and via webcast at investor.firstdata.com.
Please note: Other than the replay, First Data has not authorized, and
disclaims responsibility for any recording, replay or distribution of
any transcription of this call.
About First Data
First Data Corporation (NYSE: FDC) is a global leader in
commerce-enabling technology, serving approximately six million business
locations and 4,000 financial institutions in more than 100 countries
around the world. The company's 24,000 owner-associates are dedicated to
helping companies, from start-ups to the world's largest corporations,
conduct commerce every day by securing and processing more than 2,800
transactions per second and $2.2 trillion per year.
(a)
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|
Organic constant currency growth ("Organic CC growth") is defined as
reported growth adjusted for the following: (1) excludes the impacts
of year-over-year currency rate changes in the current period; (2)
excludes the results of significant divestitures in the prior year
period; and (3) includes the results of significant acquisitions in
the prior year period. Impacts to growth rates from
acquisitions/divestitures only relate to the GBS segment.
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First Data Corporation
|
Consolidated Statements of Operations
|
(Unaudited)
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
|
|
|
|
|
|
Constant
|
|
|
|
|
|
|
|
Constant
|
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
|
Currency
|
|
|
|
|
|
|
%
|
|
%
|
|
|
|
|
|
%
|
|
%
|
|
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|
Change
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction and processing service fees(a)
|
|
$
|
1,733
|
|
|
$
|
1,693
|
|
|
2
|
%
|
|
2
|
%
|
|
$
|
4,982
|
|
|
$
|
4,953
|
|
|
1
|
%
|
|
1
|
%
|
Product sales and other(a)
|
|
348
|
|
|
307
|
|
|
13
|
%
|
|
14
|
%
|
|
1,016
|
|
|
893
|
|
|
14
|
%
|
|
15
|
%
|
Total revenues (excluding reimbursable items)
|
|
2,081
|
|
|
2,000
|
|
|
4
|
%
|
|
4
|
%
|
|
5,998
|
|
|
5,846
|
|
|
3
|
%
|
|
3
|
%
|
Reimbursable debit network fees, postage, and other
|
|
995
|
|
|
936
|
|
|
6
|
%
|
|
6
|
%
|
|
2,904
|
|
|
2,795
|
|
|
4
|
%
|
|
4
|
%
|
Total revenues
|
|
3,076
|
|
|
2,936
|
|
|
5
|
%
|
|
5
|
%
|
|
8,902
|
|
|
8,641
|
|
|
3
|
%
|
|
3
|
%
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services (exclusive of items shown below)
|
|
698
|
|
|
711
|
|
|
(2
|
)%
|
|
(2
|
)%
|
|
2,089
|
|
|
2,140
|
|
|
(2
|
)%
|
|
(2
|
)%
|
Cost of products sold
|
|
96
|
|
|
87
|
|
|
10
|
%
|
|
9
|
%
|
|
267
|
|
|
251
|
|
|
6
|
%
|
|
7
|
%
|
Selling, general, and administrative
|
|
564
|
|
|
499
|
|
|
13
|
%
|
|
13
|
%
|
|
1,607
|
|
|
1,563
|
|
|
3
|
%
|
|
3
|
%
|
Depreciation and amortization
|
|
248
|
|
|
237
|
|
|
5
|
%
|
|
4
|
%
|
|
713
|
|
|
713
|
|
|
-
|
%
|
|
-
|
%
|
Other operating expenses
|
|
57
|
|
|
12
|
|
|
375
|
%
|
|
375
|
%
|
|
108
|
|
|
57
|
|
|
89
|
%
|
|
91
|
%
|
Total expenses (excluding reimbursable items)
|
|
1,663
|
|
|
1,546
|
|
|
8
|
%
|
|
7
|
%
|
|
4,784
|
|
|
4,724
|
|
|
1
|
%
|
|
2
|
%
|
Reimbursable debit network fees, postage, and other
|
|
995
|
|
|
936
|
|
|
6
|
%
|
|
6
|
%
|
|
2,904
|
|
|
2,795
|
|
|
4
|
%
|
|
4
|
%
|
Total expenses
|
|
2,658
|
|
|
2,482
|
|
|
7
|
%
|
|
7
|
%
|
|
7,688
|
|
|
7,519
|
|
|
2
|
%
|
|
2
|
%
|
Operating profit
|
|
418
|
|
|
454
|
|
|
(8
|
)%
|
|
|
|
1,214
|
|
|
1,122
|
|
|
8
|
%
|
|
|
Interest expense, net
|
|
(234
|
)
|
|
(263
|
)
|
|
(11
|
)%
|
|
|
|
(706
|
)
|
|
(810
|
)
|
|
(13
|
)%
|
|
|
Loss on debt extinguishment
|
|
(1
|
)
|
|
(3
|
)
|
|
(67
|
)%
|
|
|
|
(72
|
)
|
|
(58
|
)
|
|
24
|
%
|
|
|
Other (expense) income
|
|
(4
|
)
|
|
(30
|
)
|
|
(87
|
)%
|
|
|
|
(7
|
)
|
|
14
|
|
|
(150
|
)%
|
|
|
Income before income taxes and equity earnings in affiliates
|
|
179
|
|
|
158
|
|
|
13
|
%
|
|
|
|
429
|
|
|
268
|
|
|
60
|
%
|
|
|
Income tax (benefit) expense
|
|
(106
|
)
|
|
24
|
|
|
(542
|
)%
|
|
|
|
(66
|
)
|
|
57
|
|
|
(216
|
)%
|
|
|
Equity earnings in affiliates
|
|
55
|
|
|
66
|
|
|
(17
|
)%
|
|
|
|
167
|
|
|
198
|
|
|
(16
|
)%
|
|
|
Net income
|
|
340
|
|
|
200
|
|
|
70
|
%
|
|
|
|
662
|
|
|
409
|
|
|
62
|
%
|
|
|
Less: Net income attributable to noncontrolling interests and
redeemable noncontrolling interest
|
|
44
|
|
|
68
|
|
|
(35
|
)%
|
|
|
|
145
|
|
|
181
|
|
|
(20
|
)%
|
|
|
Net income attributable to First Data Corporation
|
|
$
|
296
|
|
|
$
|
132
|
|
|
124
|
%
|
|
|
|
$
|
517
|
|
|
$
|
228
|
|
|
127
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to First Data Corporation per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.32
|
|
|
$
|
0.15
|
|
|
113
|
%
|
|
|
|
$
|
0.57
|
|
|
$
|
0.25
|
|
|
128
|
%
|
|
|
Diluted
|
|
$
|
0.31
|
|
|
$
|
0.14
|
|
|
121
|
%
|
|
|
|
$
|
0.55
|
|
|
$
|
0.25
|
|
|
120
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
918
|
|
|
905
|
|
|
|
|
|
|
915
|
|
|
900
|
|
|
|
|
|
Diluted
|
|
944
|
|
|
923
|
|
|
|
|
|
|
938
|
|
|
918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM represents not meaningful
|
|
(a)
|
|
Includes processing fees, administrative service fees, and other
fees charged to merchant alliances accounted for under the equity
method of $56 million and $162 million for the three and nine months
ended September 30, 2017, respectively, and $52 million and $150
million for the comparable periods in 2016.
|
|
|
|
|
First Data Corporation
|
Selected Consolidated Balance Sheet and Cash Flow Data
|
(Unaudited)
|
(in millions)
|
|
SELECTED CONSOLIDATED BALANCE SHEET DATA
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
502
|
|
|
$
|
385
|
|
Settlement assets
|
|
15,139
|
|
|
14,795
|
|
Total assets
|
|
41,645
|
|
|
40,292
|
|
|
|
|
|
|
Short-term and current portion of long-term borrowings
|
|
854
|
|
|
358
|
|
Settlement obligations
|
|
15,139
|
|
|
14,795
|
|
Long-term borrowings
|
|
17,795
|
|
|
18,131
|
|
Total liabilities
|
|
36,609
|
|
|
36,088
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
72
|
|
|
73
|
|
|
|
|
|
|
Total First Data Corporation stockholders' equity
|
|
2,098
|
|
|
1,220
|
|
Noncontrolling interests
|
|
2,866
|
|
|
2,911
|
|
Total equity
|
|
4,964
|
|
|
4,131
|
|
|
|
|
|
|
SELECTED CONSOLIDATED CASH FLOW DATA
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Source/(Use) of cash
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
581
|
|
|
$
|
752
|
|
|
$
|
1,582
|
|
|
$
|
1,660
|
|
Net cash used in investing activities
|
|
(818
|
)
|
|
(128
|
)
|
|
(1,057
|
)
|
|
(338
|
)
|
Net cash provided by (used in) financing activities
|
|
252
|
|
|
(435
|
)
|
|
(410
|
)
|
|
(1,258
|
)
|
Supplemental cash flow data
|
|
|
|
|
|
|
|
|
Cash interest payments(a)
|
|
$
|
231
|
|
|
$
|
279
|
|
|
$
|
684
|
|
|
$
|
759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) For purposes of this schedule, cash interest payments excludes
interest on capital leases and interest on foreign lines of credit.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corporation
|
Summary Segment Data
|
(Unaudited)
|
(in millions)
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
|
|
|
|
%
|
|
Organic CC
|
|
|
|
|
|
%
|
|
Organic CC
|
|
|
2017
|
|
2016
|
|
Change
|
|
% Change(e)
|
|
2017
|
|
2016
|
|
Change
|
|
% Change(e)
|
Consolidated Revenues
|
|
$
|
3,076
|
|
|
$
|
2,936
|
|
|
5
|
%
|
|
|
|
$
|
8,902
|
|
|
$
|
8,641
|
|
|
3
|
%
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities(a)
|
|
(14
|
)
|
|
(25
|
)
|
|
(44
|
)%
|
|
|
|
(49
|
)
|
|
(59
|
)
|
|
(17
|
)%
|
|
|
Independent Sales Organization (ISO) commission expense(b)
|
|
(162
|
)
|
|
(155
|
)
|
|
5
|
%
|
|
|
|
(470
|
)
|
|
(476
|
)
|
|
(1
|
)%
|
|
|
Reimbursable debit network fees, postage, and other
|
|
(995
|
)
|
|
(936
|
)
|
|
6
|
%
|
|
|
|
(2,904
|
)
|
|
(2,795
|
)
|
|
4
|
%
|
|
|
Total Segment Revenues
|
|
$
|
1,905
|
|
|
$
|
1,820
|
|
|
5
|
%
|
|
3
|
%
|
|
$
|
5,479
|
|
|
$
|
5,311
|
|
|
3
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
$
|
1,094
|
|
|
$
|
1,045
|
|
|
5
|
%
|
|
2
|
%
|
|
$
|
3,131
|
|
|
$
|
3,037
|
|
|
3
|
%
|
|
3
|
%
|
Global Financial Solutions
|
|
416
|
|
|
397
|
|
|
5
|
%
|
|
5
|
%
|
|
1,211
|
|
|
1,178
|
|
|
3
|
%
|
|
5
|
%
|
Network & Security Solutions
|
|
395
|
|
|
378
|
|
|
5
|
%
|
|
5
|
%
|
|
1,137
|
|
|
1,096
|
|
|
4
|
%
|
|
4
|
%
|
Total Segment Revenues
|
|
$
|
1,905
|
|
|
$
|
1,820
|
|
|
5
|
%
|
|
3
|
%
|
|
$
|
5,479
|
|
|
$
|
5,311
|
|
|
3
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
|
|
|
|
%
|
|
Organic CC
|
|
|
|
|
|
%
|
|
Organic CC
|
|
|
2017
|
|
2016
|
|
Change
|
|
% Change(e)
|
|
2017
|
|
2016
|
|
Change
|
|
% Change(e)
|
Consolidated Expenses
|
|
$
|
2,658
|
|
|
$
|
2,482
|
|
|
7
|
%
|
|
|
|
$
|
7,688
|
|
|
$
|
7,519
|
|
|
2
|
%
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities(a)
|
|
(15
|
)
|
|
(16
|
)
|
|
(6
|
)%
|
|
|
|
(50
|
)
|
|
(52
|
)
|
|
(4
|
)%
|
|
|
Independent Sales Organization (ISO) commission expense(b)
|
|
(162
|
)
|
|
(155
|
)
|
|
5
|
%
|
|
|
|
(470
|
)
|
|
(476
|
)
|
|
(1
|
)%
|
|
|
Reimbursable debit network fees, postage, and other
|
|
(995
|
)
|
|
(936
|
)
|
|
6
|
%
|
|
|
|
(2,904
|
)
|
|
(2,795
|
)
|
|
4
|
%
|
|
|
Depreciation and amortization
|
|
(248
|
)
|
|
(237
|
)
|
|
5
|
%
|
|
|
|
(713
|
)
|
|
(713
|
)
|
|
-
|
%
|
|
|
Stock-based compensation
|
|
(62
|
)
|
|
(43
|
)
|
|
44
|
%
|
|
|
|
(183
|
)
|
|
(214
|
)
|
|
(14
|
)%
|
|
|
Other(c)
|
|
(58
|
)
|
|
(14
|
)
|
|
314
|
%
|
|
|
|
(113
|
)
|
|
(79
|
)
|
|
43
|
%
|
|
|
Total Segment Expenses
|
|
$
|
1,118
|
|
|
$
|
1,081
|
|
|
3
|
%
|
|
1
|
%
|
|
$
|
3,255
|
|
|
$
|
3,190
|
|
|
2
|
%
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
$
|
629
|
|
|
$
|
590
|
|
|
7
|
%
|
|
3
|
%
|
|
$
|
1,801
|
|
|
$
|
1,758
|
|
|
2
|
%
|
|
3
|
%
|
Global Financial Solutions
|
|
236
|
|
|
239
|
|
|
(1
|
)%
|
|
(1
|
)%
|
|
709
|
|
|
705
|
|
|
1
|
%
|
|
2
|
%
|
Network & Security Solutions
|
|
211
|
|
|
212
|
|
|
-
|
%
|
|
-
|
%
|
|
617
|
|
|
613
|
|
|
1
|
%
|
|
1
|
%
|
Corporate
|
|
42
|
|
|
40
|
|
|
5
|
%
|
|
5
|
%
|
|
128
|
|
|
114
|
|
|
12
|
%
|
|
12
|
%
|
Total Segment Expenses
|
|
$
|
1,118
|
|
|
$
|
1,081
|
|
|
3
|
%
|
|
1
|
%
|
|
$
|
3,255
|
|
|
$
|
3,190
|
|
|
2
|
%
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
|
|
|
|
%
|
|
Organic CC
|
|
|
|
|
|
%
|
|
Organic CC
|
|
|
2017
|
|
2016
|
|
Change
|
|
% Change(e)
|
|
2017
|
|
2016
|
|
Change
|
|
% Change(e)
|
Net income attributable to First Data Corporation
|
|
$
|
296
|
|
|
$
|
132
|
|
|
124
|
%
|
|
|
|
$
|
517
|
|
|
$
|
228
|
|
|
127
|
%
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities(a)
|
|
(9
|
)
|
|
(7
|
)
|
|
29
|
%
|
|
|
|
(21
|
)
|
|
(24
|
)
|
|
(13
|
)%
|
|
|
Depreciation and amortization
|
|
248
|
|
|
237
|
|
|
5
|
%
|
|
|
|
713
|
|
|
713
|
|
|
-
|
%
|
|
|
Interest expense, net
|
|
234
|
|
|
263
|
|
|
(11
|
)%
|
|
|
|
706
|
|
|
810
|
|
|
(13
|
)%
|
|
|
Loss on debt extinguishment
|
|
1
|
|
|
3
|
|
|
(67
|
)%
|
|
|
|
72
|
|
|
58
|
|
|
24
|
%
|
|
|
Other items(d)
|
|
61
|
|
|
44
|
|
|
39
|
%
|
|
|
|
120
|
|
|
65
|
|
|
85
|
%
|
|
|
Income tax expense
|
|
(106
|
)
|
|
24
|
|
|
NM
|
|
|
|
|
(66
|
)
|
|
57
|
|
|
(216
|
)%
|
|
|
Stock-based compensation
|
|
62
|
|
|
43
|
|
|
44
|
%
|
|
|
|
183
|
|
|
214
|
|
|
(14
|
)%
|
|
|
Total Segment EBITDA
|
|
$
|
787
|
|
|
$
|
739
|
|
|
6
|
%
|
|
5
|
%
|
|
$
|
2,224
|
|
|
$
|
2,121
|
|
|
5
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
$
|
465
|
|
|
$
|
455
|
|
|
2
|
%
|
|
-
|
%
|
|
$
|
1,330
|
|
|
$
|
1,279
|
|
|
4
|
%
|
|
4
|
%
|
Global Financial Solutions
|
|
180
|
|
|
158
|
|
|
14
|
%
|
|
14
|
%
|
|
502
|
|
|
473
|
|
|
6
|
%
|
|
8
|
%
|
Network & Security Solutions
|
|
184
|
|
|
166
|
|
|
11
|
%
|
|
11
|
%
|
|
520
|
|
|
483
|
|
|
8
|
%
|
|
8
|
%
|
Corporate
|
|
(42
|
)
|
|
(40
|
)
|
|
5
|
%
|
|
5
|
%
|
|
(128
|
)
|
|
(114
|
)
|
|
12
|
%
|
|
12
|
%
|
Total Segment EBITDA
|
|
$
|
787
|
|
|
$
|
739
|
|
|
6
|
%
|
|
5
|
%
|
|
$
|
2,224
|
|
|
$
|
2,121
|
|
|
5
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to First Data Corporation margin:
|
|
9.6
|
%
|
|
4.5
|
%
|
|
|
|
|
|
5.8
|
%
|
|
2.6
|
%
|
|
|
|
|
Total segment EBITDA margin:
|
|
41.3
|
%
|
|
40.6
|
%
|
|
70bps
|
|
|
|
40.6
|
%
|
|
39.9
|
%
|
|
70bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM represents not meaningful
|
|
(a)
|
|
Net adjustment to reflect our proportionate share of the results of
our investments in businesses accounted for under the equity method
and consolidated subsidiaries with noncontrolling ownership
interests. Segment revenue for our significant affiliates is
reflected based on our proportionate share of the results of our
investments in businesses accounted for under the equity method and
consolidated subsidiaries with noncontrolling ownership interests.
For other affiliates, we include equity earnings in affiliates,
excluding amortization expense, in segment revenue. In addition, our
segment measures reflect revenue-based commission payments to
Independent Sales Organizations (ISOs).
|
(b)
|
|
Retail Independent Sales Organization commissions are presented
within Selling, general, and administrative expense in the unaudited
consolidated statements of operations but are netted in segment
revenues for segment reporting.
|
(c)
|
|
Includes restructuring, certain retention bonuses, non-normal course
litigation and regulatory settlements, asset impairments, deal
costs, and debt issuance costs.
|
(d)
|
|
Items noted within (c) above and "Other income (expense)" as
presented in the unaudited consolidated statements of operations,
which includes divestitures, derivative gains (losses),
non-operating foreign currency gains (losses) and the gain on Visa
Europe share sale.
|
(e)
|
|
Organic constant currency growth ("Organic CC growth") is defined as
reported growth adjusted for the following: (1) excludes the impacts
of year-over-year currency rate changes in the current period; (2)
excludes the results of significant divestitures in the prior year
period; and (3) includes the results of significant acquisitions in
the prior year period. Impacts to growth rates from
acquisitions/divestitures only relate to the GBS segment.
|
|
|
|
|
First Data Corporation
|
Summary Segment Data
|
(Unaudited)
|
(in millions)
|
|
SEGMENT REVENUE RECONCILIATION
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
Total Segment revenue
|
|
$
|
1,905
|
|
|
$
|
1,820
|
|
|
5
|
%
|
|
$
|
5,479
|
|
|
$
|
5,311
|
|
|
3
|
%
|
Currency impact
|
|
(3
|
)
|
|
-
|
|
|
|
|
33
|
|
|
-
|
|
|
|
Acquisitions/Divestitures
|
|
-
|
|
|
26
|
|
|
|
|
-
|
|
|
6
|
|
|
|
Organic constant currency(a) segment revenue growth
|
|
$
|
1,902
|
|
|
$
|
1,846
|
|
|
3
|
%
|
|
$
|
5,512
|
|
|
$
|
5,317
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS revenue
|
|
$
|
1,094
|
|
|
$
|
1,045
|
|
|
5
|
%
|
|
$
|
3,131
|
|
|
$
|
3,037
|
|
|
3
|
%
|
Currency impact
|
|
(3
|
)
|
|
-
|
|
|
|
|
12
|
|
|
-
|
|
|
|
Acquisitions/Divestitures
|
|
-
|
|
|
26
|
|
|
|
|
-
|
|
|
6
|
|
|
|
Organic constant currency(a) GBS revenue growth
|
|
$
|
1,091
|
|
|
$
|
1,071
|
|
|
2
|
%
|
|
$
|
3,143
|
|
|
$
|
3,043
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS NA revenue
|
|
$
|
833
|
|
|
$
|
819
|
|
|
2
|
%
|
|
$
|
2,410
|
|
|
$
|
2,371
|
|
|
2
|
%
|
Currency impact
|
|
(1
|
)
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
Acquisitions/Divestitures
|
|
-
|
|
|
36
|
|
|
|
|
-
|
|
|
36
|
|
|
|
Organic constant currency(a) GBS NA revenue growth
|
|
$
|
832
|
|
|
$
|
855
|
|
|
(3
|
)%
|
|
$
|
2,410
|
|
|
$
|
2,407
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS APAC revenue
|
|
$
|
39
|
|
|
$
|
43
|
|
|
(8
|
)%
|
|
$
|
109
|
|
|
$
|
125
|
|
|
(13
|
)%
|
Currency impact
|
|
-
|
|
|
-
|
|
|
|
|
(2
|
)
|
|
-
|
|
|
|
Acquisitions/Divestitures
|
|
-
|
|
|
(10
|
)
|
|
|
|
-
|
|
|
(31
|
)
|
|
|
Organic constant currency(a) GBS APAC revenue growth
|
|
$
|
39
|
|
|
$
|
33
|
|
|
18
|
%
|
|
$
|
107
|
|
|
$
|
94
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT EXPENSE RECONCILIATION
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
Total Segment expense
|
|
$
|
1,118
|
|
|
$
|
1,081
|
|
|
3
|
%
|
|
$
|
3,255
|
|
|
$
|
3,190
|
|
|
2
|
%
|
Currency impact
|
|
(4
|
)
|
|
-
|
|
|
|
|
14
|
|
|
-
|
|
|
|
Acquisitions/Divestitures
|
|
-
|
|
|
17
|
|
|
|
|
-
|
|
|
-
|
|
|
|
Organic constant currency(a) segment expense growth
|
|
$
|
1,114
|
|
|
$
|
1,098
|
|
|
1
|
%
|
|
$
|
3,269
|
|
|
$
|
3,190
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS expense
|
|
$
|
629
|
|
|
$
|
590
|
|
|
7
|
%
|
|
$
|
1,801
|
|
|
$
|
1,758
|
|
|
2
|
%
|
Currency impact
|
|
(3
|
)
|
|
-
|
|
|
|
|
3
|
|
|
-
|
|
|
|
Acquisitions/Divestitures
|
|
-
|
|
|
17
|
|
|
|
|
-
|
|
|
-
|
|
|
|
Organic constant currency(a) GBS expense growth
|
|
$
|
626
|
|
|
$
|
607
|
|
|
3
|
%
|
|
$
|
1,804
|
|
|
$
|
1,758
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT EBITDA RECONCILIATION
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
Total Segment EBITDA
|
|
$
|
787
|
|
|
$
|
739
|
|
|
6
|
%
|
|
$
|
2,224
|
|
|
$
|
2,121
|
|
|
5
|
%
|
Currency impact
|
|
1
|
|
|
-
|
|
|
|
|
18
|
|
|
-
|
|
|
|
Acquisitions/Divestitures
|
|
-
|
|
|
9
|
|
|
|
|
-
|
|
|
6
|
|
|
|
Organic constant currency(a) segment EBITDA growth
|
|
$
|
788
|
|
|
$
|
748
|
|
|
5
|
%
|
|
$
|
2,242
|
|
|
$
|
2,127
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS EBITDA
|
|
$
|
465
|
|
|
$
|
455
|
|
|
2
|
%
|
|
$
|
1,330
|
|
|
$
|
1,279
|
|
|
4
|
%
|
Currency impact
|
|
1
|
|
|
-
|
|
|
|
|
9
|
|
|
-
|
|
|
|
Acquisitions/Divestitures
|
|
-
|
|
|
9
|
|
|
|
|
-
|
|
|
6
|
|
|
|
Organic constant currency(a) GBS EBITDA growth
|
|
$
|
466
|
|
|
$
|
464
|
|
|
-
|
%
|
|
$
|
1,339
|
|
|
$
|
1,285
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Organic constant currency growth ("Organic CC growth") is defined as
reported growth adjusted for the following: (1) excludes the impacts
of year-over-year currency rate changes in the current period; (2)
excludes the results of significant divestitures in the prior year
period; and (3) includes the results of significant acquisitions in
the prior year period. Impacts to growth rates from
acquisitions/divestitures only relate to the GBS segment.
|
|
|
|
|
First Data Corporation
|
Reconciliation of Non-GAAP Financial Measures
|
(Unaudited)
|
(in millions, except per share data)
|
|
ADJUSTED NET INCOME RECONCILIATION
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
Net income attributable to First Data Corporation
|
|
$
|
296
|
|
|
$
|
132
|
|
|
124
|
%
|
|
$
|
517
|
|
|
$
|
228
|
|
|
127
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
62
|
|
|
43
|
|
|
44
|
%
|
|
183
|
|
|
214
|
|
|
(14
|
)%
|
Loss on debt extinguishment(a)
|
|
1
|
|
|
3
|
|
|
(67
|
)%
|
|
72
|
|
|
58
|
|
|
24
|
%
|
Mark-to-market adjustment for derivatives and euro-denominated debt(b)
|
|
-
|
|
|
-
|
|
|
NM
|
|
|
-
|
|
|
5
|
|
|
(100
|
)%
|
Amortization of acquisition intangibles and deferred financing costs(c)
|
|
106
|
|
|
104
|
|
|
2
|
%
|
|
295
|
|
|
318
|
|
|
(7
|
)%
|
Loss on disposal of businesses
|
|
-
|
|
|
31
|
|
|
NM
|
|
|
-
|
|
|
31
|
|
|
NM
|
|
Visa Europe settlement gain
|
|
-
|
|
|
-
|
|
|
NM
|
|
|
-
|
|
|
(29
|
)
|
|
NM
|
|
Restructuring
|
|
24
|
|
|
6
|
|
|
300
|
%
|
|
63
|
|
|
51
|
|
|
24
|
%
|
Intercompany foreign exchange gain (loss)
|
|
2
|
|
|
(2
|
)
|
|
(200
|
)%
|
|
6
|
|
|
(21
|
)
|
|
(129
|
)%
|
Fees paid on debt modification
|
|
1
|
|
|
-
|
|
|
NM
|
|
|
10
|
|
|
18
|
|
|
(44
|
)%
|
Impairment, litigation, and other(d)
|
|
10
|
|
|
6
|
|
|
67
|
%
|
|
13
|
|
|
13
|
|
|
-
|
%
|
Deal and integration costs
|
|
21
|
|
|
-
|
|
|
NM
|
|
|
26
|
|
|
-
|
|
|
NM
|
|
Income tax on above items and discrete tax items(e)
|
|
(150
|
)
|
|
(11
|
)
|
|
NM
|
|
|
(176
|
)
|
|
(31
|
)
|
|
NM
|
|
Adjusted net income
|
|
$
|
373
|
|
|
$
|
312
|
|
|
20
|
%
|
|
$
|
1,009
|
|
|
$
|
855
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.41
|
|
|
$
|
0.34
|
|
|
21
|
%
|
|
$
|
1.10
|
|
|
$
|
0.95
|
|
|
16
|
%
|
Diluted
|
|
$
|
0.40
|
|
|
$
|
0.34
|
|
|
18
|
%
|
|
$
|
1.08
|
|
|
$
|
0.93
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares used to compute adjusted net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
918
|
|
|
905
|
|
|
1
|
%
|
|
915
|
|
|
900
|
|
|
2
|
%
|
Diluted
|
|
944
|
|
|
923
|
|
|
2
|
%
|
|
938
|
|
|
918
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM represents not meaningful
|
|
(a)
|
|
Represents costs associated with debt restructuring activities on
extinguished debt.
|
(b)
|
|
Represents mark-to-market activity related to our undesignated
hedges.
|
(c)
|
|
Represents amortization of intangibles established in connection
with the 2007 Merger and acquisitions we have made since 2007,
excluding the percentage of our consolidated amortization of
acquisition intangibles related to non wholly owned consolidated
alliances equal to the portion of such alliances owned by our
alliance partners. This line also includes amortization related to
deferred financing costs of $4 million for the three months ended
September 30, 2017 and 2016, respectively, and $12 million and $11
million, respectively, for the nine months ended September 30, 2017
and 2016.
|
(d)
|
|
Represents impairments, non-normal course litigation and regulatory
settlements, investments gains (losses), divestitures, and other, as
applicable to the periods presented.
|
(e)
|
|
The tax effect of the adjustments between our GAAP and adjusted
results takes into account the tax treatment and related tax rate(s)
that apply to each adjustment in the applicable tax jurisdiction(s).
Generally, this results in a tax impact at the U.S. effective tax
rate for certain adjustments, including the majority of amortization
of intangible assets, deferred financing costs, stock compensation,
and loss on debt extinguishment; whereas the tax impact of other
adjustments, including restructuring expense, depends on whether the
amounts are deductible in the respective tax jurisdictions and the
applicable effective tax rate(s) in those jurisdictions. "Income tax
on above items and discrete tax items" also includes the impact of
significant discrete tax items impacting Net income (loss)
attributable to First Data Corporation.
|
|
|
|
|
First Data Corporation
|
Reconciliation of Non-GAAP Financial Measures
|
(Unaudited)
|
(in millions, except per share data)
|
|
FREE CASH FLOW RECONCILIATION
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
581
|
|
|
$
|
752
|
|
|
$
|
(171
|
)
|
|
$
|
1,582
|
|
|
$
|
1,660
|
|
|
$
|
(78
|
)
|
Capital expenditures
|
|
(134
|
)
|
|
(119
|
)
|
|
(15
|
)
|
|
(390
|
)
|
|
(351
|
)
|
|
(39
|
)
|
Distribution to minority interest and other
|
|
(77
|
)
|
|
(206
|
)
|
|
129
|
|
|
(113
|
)
|
|
(363
|
)
|
|
250
|
|
Free cash flow
|
|
$
|
370
|
|
|
$
|
427
|
|
|
(57
|
)
|
|
$
|
1,079
|
|
|
$
|
946
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT RECONCILIATION
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
September 30, 2017
|
|
December 31, 2016
|
Total long-term borrowings
|
|
$
|
17,795
|
|
|
$
|
18,131
|
|
Total short-term and current portion of long-term borrowings
|
|
854
|
|
|
358
|
|
Total borrowings
|
|
18,649
|
|
|
18,489
|
|
Unamortized discount and unamortized deferred financing costs
|
|
140
|
|
|
156
|
|
Total borrowings at par
|
|
18,789
|
|
|
18,645
|
|
Less: Settlement lines of credit and other arrangements
|
|
(79
|
)
|
|
(84
|
)
|
Gross debt
|
|
18,710
|
|
|
18,561
|
|
Less: Cash and cash equivalents
|
|
(502
|
)
|
|
(385
|
)
|
Net debt
|
|
$
|
18,208
|
|
|
$
|
18,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corporation
|
Operating Data
|
(Unaudited)
|
(in millions)
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
GBS:
|
|
|
|
|
|
|
|
|
|
|
|
|
North America merchant transactions(a)
|
|
12,517
|
|
|
11,881
|
|
|
5
|
%
|
|
36,494
|
|
|
34,368
|
|
|
6
|
%
|
International merchant transactions(b)
|
|
2,453
|
|
|
2,087
|
|
|
18
|
%
|
|
7,173
|
|
|
5,801
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GFS:
|
|
|
|
|
|
|
|
|
|
|
|
|
North America card accounts on file(c)
|
|
|
|
|
|
|
|
894
|
|
|
844
|
|
|
6
|
%
|
International card accounts on file(d)
|
|
|
|
|
|
|
|
166
|
|
|
147
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NSS:
|
|
|
|
|
|
|
|
|
|
|
|
|
Network transactions (EFT and Stored Value)(e)
|
|
5,539
|
|
|
5,040
|
|
|
10
|
%
|
|
16,005
|
|
|
14,715
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
North American merchant transactions include acquired Visa and
MasterCard credit and signature debit, American Express and
Discover, PIN-debit, electronic benefits transactions,
processed-only and gateway customer transactions at the POS. North
American merchant transactions reflect 100% of alliance transactions.
|
(b)
|
|
International transactions include Visa, MasterCard, and other
payment network merchant acquiring transactions for clients outside
the U.S. and Canada. Transactions include credit, signature debit,
PIN-debit POS, POS gateway, and ATM transactions. International
merchant transaction for the three and nine months ended September
30, 2016 reflected an updated count of transactions. International
merchant transactions reflect 100% of alliance transactions.
|
(c)
|
|
North America card accounts on file reflect the total number of
bankcard credit and retail credit accounts as of the end of the
periods presented.
|
(d)
|
|
International card accounts on file reflect the total number of
bankcard and retail accounts outside the United States and Canada as
of the end of the periods presented. International card accounts on
file as of September 30, 2016 reflect an updated cards on account
total.
|
(e)
|
|
Network transactions include the debit issuer processing
transactions, STAR Network issuer transactions, Payroll and Gift
Solutions and POS transactions.
|
|
|
|
First Data Corporation Forward Looking Statements
Notice to Investors, Prospective Investors and the Investment
Community; Cautionary Information Regarding Forward-Looking Statements
Certain matters we discuss in our public statements may constitute
forward-looking statements. You can identify forward-looking statements
because they contain words such as "believes," "expects," "may," "will,"
"should," "seeks," "intends," "plans," "estimates," or "anticipates" or
similar expressions which concern our strategy, plans, projections or
intentions. Examples of forward-looking statements include, but are not
limited to, all statements we make relating to revenue, earnings before
net interest expense, income taxes, depreciation, and amortization
(EBITDA), earnings, margins, growth rates, and other financial results
for future periods. By their nature, forward-looking statements speak
only as of the date they are made; are not statements of historical fact
or guarantees of future performance; and are subject to risks,
uncertainties, assumptions or changes in circumstances that are
difficult to predict or quantify. Actual results could differ materially
and adversely from our forward-looking statements due to a variety of
factors, including the following: (1) adverse impacts from global
economic, political, and other conditions affecting trends in consumer,
business, and government spending; (2) our ability to anticipate and
respond to changing industry trends, including technological changes and
increasing competition; (3) our ability to successfully renew existing
client contracts on favorable terms and obtain new clients; (4) our
ability to prevent a material breach of security of any of our systems;
(5) our ability to implement and improve processing systems to provide
new products, improve functionality, and increase efficiencies; (6) the
successful management of our merchant alliance program which involves
several alliances not under our sole control and each of which acts
independently of the others; (7) our successful management of credit and
fraud risks in our business units and merchant alliances, particularly
in the context of eCommerce and mobile markets; (8) consolidation among
financial institution clients or other client groups that impacts our
client relationships; (9) our ability to use our net operating losses
without restriction to offset income for US tax purposes; (10) our
ability to improve our profitability and maintain flexibility in our
capital resources through the implementation of cost savings
initiatives; (11) the acquisition or disposition of material business or
assets; (12) our ability to successfully value and integrate acquired
businesses; (13) our high degree of leverage; (14) adverse impacts from
currency exchange rates or currency controls imposed by any government
or otherwise; (15) changes in the interest rate environment that
increase interest on our borrowings or the interest rate at which we can
refinance our borrowings; (16) the impact of new or changes in current
laws, regulations, credit card association rules, or other industry
standards; and (17) new lawsuits, investigations, or proceedings, or
changes to our potential exposure in connection with pending lawsuits,
investigations or proceedings, and various other factors set forth in
our Annual Report on Form 10-K for the period ended December 31, 2016,
including but not limited to, Item 1 - Business, Item 1A - Risk Factors,
and Item 7 - Management's Discussion and Analysis of Financial Condition
and Results of Operations. Except as required by law, we do not intend
to revise or update any forward-looking statement as a result of new
information, future developments or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171030005491/en/
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