[February 12, 2018] |
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First Data Reports Fourth Quarter and Full Year 2017 Financial Results
First Data Corporation (NYSE: FDC), a global leader in commerce-enabling
technology and solutions, today reported financial results for the
fourth quarter and full year ended December 31, 2017. Consolidated
revenue for the fourth quarter was $3,150 million, up 7% versus the
prior year period. Total segment revenue was $1,949 million for the
quarter, up 7% versus the prior year period, or up 4% on an organic
constant currency basis.
Net income attributable to First Data for the fourth quarter of 2017 was
$948 million, or $1.00 per diluted share, up significantly from $192
million, or $0.21 per diluted share, in the fourth quarter of 2016. The
increase was primarily driven by significant discrete tax items in the
current period, described below in "Income Tax (Benefit) / Expense",
improved operating results and lower interest expense.
Adjusted net income, which modifies net income attributable to First
Data for items such as debt extinguishment charges, stock-based
compensation, amortization of acquisition intangibles, restructuring
costs, discrete tax items and other items, was $416 million, or $0.44
per diluted share, up 14% and 13%, respectively, from fourth quarter of
2016, primarily driven by improved operating results and lower interest
expense.
Total segment earnings before interest, taxes, depreciation, and
amortization (total segment EBITDA) in the fourth quarter 2017 was $848
million, up 10% versus the prior year period, or up 8% on an organic
constant currency basis, driven by revenue growth and expense management.
"The fourth quarter capped a solid year of performance for First Data as
we executed across all aspects of our strategy and delivered financial
results that met our guidance," said First Data Chairman and CEO Frank
Bisignano. "We generated growth, invested in innovation and strategic
M&A to further enhance our industry-leading products and services, and
generated substantial cash flow, while maintaining our focus on expense
management. As we enter 2018, we are well positioned as a technology
leader with the right capabilities to help our customers grow their
business and generate solid revenue growth and cash flow for our
shareholders," Bisignano added.
Segment Results
Global Business Solutions (GBS)
Fourth quarter 2017 GBS segment revenue was $1,131 million, up 10%
versus the prior year period, or up 4% on an organic constant currency
basis. Within geographic regions, North America revenue of $852 million
was up 6% versus the prior year period, or flat on an organic constant
currency basis. Within GBS North America, revenue growth in non-JV
channels was offset by softness in JV channel revenue. EMEA revenue was
$158 million, up 19% versus the prior year period, or up 10% on an
organic constant currency basis, primarily driven by strong growth in
the United Kingdom and Germany. Latin America revenue was $78 million,
up 44% versus the prior year period, or up 52% on an organic constant
currency basis, driven by continued strong results in Brazil and
Argentina. APAC revenue was $43 million, up 26% versus the prior year
period, or up 24% on an organic constant currency basis primarily driven
by growth in India.
Fourth quarter 2017 GBS segment expenses were $637 million, up 10%
versus the prior year period, or up 3% on an organic constant currency
basis.
Fourth quarter 2017 GBS segment EBITDA was $494 million, up 11% versus
the prior year period, or up 7% on an organic constant currency basis.
Segment EBITDA margin improved 20 basis points to 43.7% in the quarter.
Global Financial Solutions (GFS)
Fourth quarter 2017 GFS segment revenue was $412 million, down 1% versus
the prior year period on both a reported and organic constant currency
basis. Within geographic regions, North America revenue of $242 million
was down 3% versus the prior year period on both a reported and organic
constant currency basis, largely driven by the non-recurrence of a
previously disclosed termination fee in the prior year period. North
America card accounts on file grew 6% year over year. EMEA revenue was
$112 million, up 3% versus the prior year period, or up 2% on an organic
constant currency basis, driven by growth in the United Kingdom. Latin
America revenue was $32 million, down 3% versus the prior year period,
or up 2% on an organic constant currency basis, primarily driven by
growth in Argentina, partly offset by the non-recurrence of a prior year
benefit from a client contract modification. APAC revenue was $26
million, up 13% versus the prior year period, or up 6% on an organic
constant currency basis primarily driven by new and existing client
growth across the region.
Fourth quarter 2017 GFS segment expenses were $228 million, down 6%
versus the prior year period on both a reported and organic constant
currency basis, driven by solid expense management.
Fourth quarter 2017 GFS segment EBITDA was $184 million, up 6% versus
the prior year period on both a reported and organic constant currency
basis. Segment EBITDA margin improved 300 basis points to 44.7% in the
quarter.
Network & Security Solutions (NSS)
Fourth quarter 2017 NSS segment revenue was $406 million, up 4% versus
the prior year period, or up 6% on an organic constant currency basis.
Within NSS's primary businesses, Stored Value revenue grew 19% in the
quarter benefiting from strong growth in both its open and closed loop
gift card businesses and a client contract modification; Security and
Fraud revenue grew 4%; and EFT revenue was flat.
Fourth quarter 2017 NSS segment expenses were $197 million, down 4%
versus the prior year period, or down 1% on an organic constant currency
basis.
Fourth quarter 2017 NSS segment EBITDA was $209 million, up 14% versus
the prior year period on both a reported and organic constant currency
basis. Segment EBITDA margin improved 450 basis points to 51.5% in the
quarter.
Income Tax (Benefit) / Expense
Fourth quarter 2017 income tax (benefit) / expense was ($663) million,
representing a change of $687 million from expense of $24 million in the
prior year period. The change in income taxes in the current year period
was driven by multiple discrete tax items, primarily the non-cash
effects of the reversal of the valuation allowance against deferred tax
assets associated with U.S. federal net operating loss carryforwards
("U.S. federal NOLs") and the net write down of deferred tax accounts
upon the enactment of the Tax Cuts and Jobs Act.
Full year 2017 income tax (benefit) / expense was ($729) million,
representing a change of $810 million from expense of $81 million in the
prior year period. The change in income taxes in 2017 was driven by
multiple discrete tax items including the discrete tax items discussed
above.
The effective tax rate in calculating adjusted net income in the fourth
quarter and full year 2017, was approximately 12% and 10%, respectively.
Cash Flow
In the fourth quarter 2017, cash flow from operations was $465 million,
up $14 million compared to $451 million in the prior year period. Free
cash flow, which First Data defines as cash flow from operations, less
capital expenditures, distributions to minority interests and other, was
$280 million in the current quarter, up $10 million from $270 million in
the prior year period as increased segment EBITDA and lower cash
interest payments were largely offset by the unfavorable timing impact
of settlement flows on working capital.
Full year 2017 cash flow from operations was $2,047 million, down $64
million from $2,111 million in 2016. Full year free cash flow was $1,359
million, up $143 million from $1,216 million in 2016. The increase in
full year free cash flow was primarily driven by growth in total segment
EBITDA and a reduction in cash interest paid in 2017 compared to 2016,
partially offset by increased cash taxes and capital expenditures in
2017 compared to the prior year, and the unfavorable timing impact of
settlement flows on working capital.
Capital Structure
Total borrowings at December 31, 2017 increased to $19.2 billion from
$18.5 billion a year ago, reflecting increased borrowings related to the
acquisitions of BluePay, CardConnect and Acculynk in 2017, partially
offset by debt paydowns and divestitures that occurred throughout the
year. Net debt of $18.6 billion at December 31, 2017, increased by $445
million in 2017.
On November 15, 2017, the Company closed on new term loans totaling
approximately $3.9 billion with an interest rate of LIBOR plus 225 basis
points maturing in April 2024. The proceeds of the term loans were used
to redeem approximately $3.9 billion of term loans with an interest rate
of LIBOR plus 250 basis points. The interest rate on the new term loans
may be reduced by 25 basis points in the future based on the Company's
corporate family debt rating. The expected annualized cash interest
savings derived from this transaction is approximately $10 million.
On November 29, 2017, the Company incurred an aggregate principal amount
of $250 million in new term loans with an interest rate of LIBOR plus
175 basis points maturing in June 2020. The proceeds of the new term
loans, together with cash on hand and other available financing, were
used to acquire BluePay Holdings, Inc.
2018 Guidance
The guidance provided below holds foreign exchange rates constant versus
the year-ago comparable period ("constant currency").
Key metric guidance for full year 2018:
-
Total segment revenue: 5% to 7% (range includes a net
benefit attributable to the full year impact of previously announced
major acquisitions and dispositions of approximately 2 percentage
points)
-
Total segment EBITDA: 7% to 9% (range includes a net
benefit attributable to the full year impact of previously announced
major acquisitions and dispositions of approximately 1.5 percentage
points)
-
Adjusted diluted EPS: $1.35 to $1.40
-
Effective tax rate: 27% to 29%
-
Free cash flow: $1.4 billion+
See "2018 Non-GAAP Guidance Reconciliation" in the financial tables of
this press release for reconciliations of non-GAAP guidance measures to
the most directly comparable GAAP measures.
The effective tax rate range of 27% to 29% in 2018 is significantly
higher than the effective tax rate achieved in 2017 as a result of the
reversal of the valuation allowance against deferred tax assets
associated with U.S. federal NOLs in the fourth quarter of 2017, as
discussed in "Income Tax (Benefit) / Expense", above. The reversal of
the valuation allowance has no impact on First Data's U.S. federal NOL
balance, and the company estimates that it will be largely shielded from
U.S. federal cash taxes through the end of 2020.
Investor Conference Call
The company will host a conference call and webcast on Monday, February
12, 2018, at 8 a.m. ET to review the fourth 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 be webcast on the "Investor Relations" section
of the First Data website at investor.firstdata.com where an
accompanying slide presentation will also be available.
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, 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, 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 an alternative view of performance. Adjusted net income
excludes amortization of acquisition-related intangibles, stock-based
compensation, restructuring costs and other items affecting
comparability and, therefore, are not reflective 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 financial measures (revenue, expenses and EBITDA) in this
release are presented excluding the estimated impact 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 such non-GAAP constant
currency financial measures are useful to investors, lenders and other
creditors because such information enables them to measure the impact of
currency fluctuations on these measures from period to period.
About First Data
First Data (NYSE: FDC) is a global leader in commerce-enabling
technology and solutions, serving approximately six million business
locations and 4,000 financial institutions in more than 100 countries
around the world. The company's 22,000 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 3,000
transactions per second and $2.4 trillion per year.
(a)
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Organic constant currency growth ("Organic CC growth") is defined as
reported growth adjusted for the following: (1) excludes the impacts
of year-over-year currency rate changes in the current period; (2)
excludes the results of significant divestitures (including the
impact of our Digital Banking Joint Venture) in the prior year
period; and (3) includes the results of significant acquisitions in
the prior year period.
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First Data Corporation
Consolidated Statements of Operations
(Unaudited)
(in millions, except shares and per share data)
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Three months ended December 31,
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Twelve months ended December 31,
|
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2017
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2016
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% Change
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Constant Currency % Change
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2017
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2016
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% Change
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Constant Currency % Change
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Revenue:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Transaction and processing service fees (a)
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$
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1,775
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|
$
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1,647
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|
|
8
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%
|
|
7
|
%
|
|
$
|
6,757
|
|
|
$
|
6,600
|
|
|
2
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%
|
|
2
|
%
|
Product sales and other (a)
|
|
356
|
|
|
346
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|
|
3
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%
|
|
2
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%
|
|
1,372
|
|
|
1,239
|
|
|
11
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%
|
|
11
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%
|
Total revenues (excluding reimbursable items)
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2,131
|
|
|
1,993
|
|
|
7
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%
|
|
6
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%
|
|
8,129
|
|
|
7,839
|
|
|
4
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%
|
|
4
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%
|
Reimbursable debit network fees, postage, and other
|
|
1,019
|
|
|
950
|
|
|
7
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%
|
|
7
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%
|
|
3,923
|
|
|
3,745
|
|
|
5
|
%
|
|
5
|
%
|
Total revenues
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|
3,150
|
|
|
2,943
|
|
|
7
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%
|
|
6
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%
|
|
12,052
|
|
|
11,584
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|
|
4
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%
|
|
4
|
%
|
Expenses:
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|
|
|
|
|
|
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|
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|
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Cost of services (exclusive of items shown below)
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674
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|
|
715
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|
|
(6
|
)%
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|
(7
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)%
|
|
2,763
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|
|
2,855
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|
|
(3
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)%
|
|
(3
|
)%
|
Cost of products sold
|
|
92
|
|
|
86
|
|
|
7
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%
|
|
7
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%
|
|
359
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|
|
337
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|
|
7
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%
|
|
7
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%
|
Selling, general, and administrative
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|
571
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|
|
472
|
|
|
21
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%
|
|
20
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%
|
|
2,178
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|
|
2,035
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|
|
7
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%
|
|
7
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%
|
Depreciation and amortization
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|
259
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|
|
236
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|
|
10
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%
|
|
8
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%
|
|
972
|
|
|
949
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|
|
2
|
%
|
|
2
|
%
|
Other operating expenses
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|
35
|
|
|
4
|
|
|
NM
|
|
|
NM
|
|
|
143
|
|
|
61
|
|
|
NM
|
|
|
NM
|
|
Total expenses (excluding reimbursable items)
|
|
1,631
|
|
|
1,513
|
|
|
8
|
%
|
|
7
|
%
|
|
6,415
|
|
|
6,237
|
|
|
3
|
%
|
|
3
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%
|
Reimbursable debit network fees, postage, and other
|
|
1,019
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|
|
950
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|
|
7
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%
|
|
7
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%
|
|
3,923
|
|
|
3,745
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|
|
5
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%
|
|
5
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%
|
Total expenses
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|
2,650
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|
|
2,463
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|
|
8
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%
|
|
7
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%
|
|
10,338
|
|
|
9,982
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|
|
4
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%
|
|
4
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%
|
Operating profit
|
|
500
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|
|
480
|
|
|
4
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%
|
|
|
|
|
1,714
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|
|
1,602
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|
|
7
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%
|
|
|
|
Interest expense, net
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|
(231
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)
|
|
(258
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)
|
|
(10
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)%
|
|
|
|
|
(937
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)
|
|
(1,068
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)
|
|
(12
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)%
|
|
|
|
Loss on debt extinguishment
|
|
(8
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)
|
|
(12
|
)
|
|
(33
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)%
|
|
|
|
|
(80
|
)
|
|
(70
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)
|
|
14
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%
|
|
|
|
Other income
|
|
23
|
|
|
3
|
|
|
NM
|
|
|
|
|
|
16
|
|
|
17
|
|
|
(6
|
)%
|
|
|
|
Income before income taxes and equity earnings in affiliates
|
|
284
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|
|
213
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|
|
33
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%
|
|
|
|
|
713
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|
|
481
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|
|
48
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%
|
|
|
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Income tax (benefit) expense
|
|
(663
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)
|
|
24
|
|
|
NM
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|
|
|
|
|
(729
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)
|
|
81
|
|
|
NM
|
|
|
|
|
Equity earnings in affiliates
|
|
55
|
|
|
62
|
|
|
(11
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)%
|
|
|
|
|
222
|
|
|
260
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|
|
(15
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)%
|
|
|
|
Net income
|
|
1,002
|
|
|
251
|
|
|
299
|
%
|
|
|
|
|
1,664
|
|
|
660
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|
|
152
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%
|
|
|
|
Less: Net income attributable to noncontrolling interests and
redeemable noncontrolling interest
|
|
54
|
|
|
59
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|
|
(8
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)%
|
|
|
|
|
199
|
|
|
240
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|
|
(17
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)%
|
|
|
|
Net income attributable to First Data Corporation
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|
$
|
948
|
|
|
$
|
192
|
|
|
394
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%
|
|
|
|
|
$
|
1,465
|
|
|
$
|
420
|
|
|
249
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Net income per share:
|
|
|
|
|
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|
|
|
|
|
|
|
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Basic
|
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$
|
1.03
|
|
|
$
|
0.21
|
|
|
390
|
%
|
|
|
|
|
$
|
1.60
|
|
|
$
|
0.47
|
|
|
240
|
%
|
|
|
|
Diluted
|
|
$
|
1.00
|
|
|
$
|
0.21
|
|
|
376
|
%
|
|
|
|
|
$
|
1.56
|
|
|
$
|
0.46
|
|
|
239
|
%
|
|
|
|
|
|
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|
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Weighted-average common shares outstanding:
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|
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|
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|
|
|
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|
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|
|
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Basic
|
|
918,726,777
|
|
|
905,966,452
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|
|
|
|
|
|
|
|
915,870,759
|
|
|
901,671,872
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|
|
|
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Diluted
|
|
945,035,811
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|
|
929,375,020
|
|
|
|
|
|
|
|
|
939,767,019
|
|
|
921,001,863
|
|
|
|
|
|
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|
NM represents not meaningful
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(a)
|
Includes processing fees, administrative service fees, and other
fees charged to merchant alliances accounted for under the equity
method of $53 million and $215 million for the three and twelve
months ended December 31, 2017, respectively, and $48 million and
$198 million for the comparable periods in 2016.
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|
First Data Corporation Selected Consolidated
Balance Sheet and Cash Flow Data (Unaudited) (in
millions)
|
|
SELECTED CONSOLIDATED BALANCE SHEET DATA
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
498
|
|
|
$
|
385
|
|
Settlement assets
|
|
20,363
|
|
|
14,795
|
|
Total assets
|
|
48,269
|
|
|
40,292
|
|
|
|
|
|
|
Short-term and current portion of long-term borrowings
|
|
1,271
|
|
|
358
|
|
Settlement obligations
|
|
20,363
|
|
|
14,795
|
|
Long-term borrowings
|
|
17,927
|
|
|
18,131
|
|
Total liabilities
|
|
42,183
|
|
|
36,088
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
72
|
|
|
73
|
|
|
|
|
|
|
Total First Data Corporation stockholders' equity
|
|
3,152
|
|
|
1,220
|
|
Noncontrolling interests
|
|
2,862
|
|
|
2,911
|
|
Total equity
|
|
6,014
|
|
|
4,131
|
|
|
|
|
|
|
SELECTED CONSOLIDATED CASH FLOW DATA
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Source/(Use) of cash
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities (a)
|
|
$
|
465
|
|
|
$
|
451
|
|
|
$
|
2,047
|
|
|
$
|
2,111
|
|
Net cash used in investing activities
|
|
(893
|
)
|
|
(49
|
)
|
|
(1,950
|
)
|
|
(387
|
)
|
Net cash provided by (used in) financing activities
|
|
419
|
|
|
(476
|
)
|
|
9
|
|
|
(1,734
|
)
|
Supplemental cash flow data
|
|
|
|
|
|
|
|
|
Cash interest payments on long-term debt (b)
|
|
$
|
205
|
|
|
$
|
249
|
|
|
$
|
889
|
|
|
$
|
1,008
|
|
(a)
|
|
The twelve months ended December 31, 2016 includes a $102 million
reclassification related to settlement activities to conform certain
domestic and international businesses to our global policies, which
increased "Cash and cash equivalents" and decreased "Accounts
receivable, net" in our consolidated balance sheet.
|
|
(b)
|
|
For purposes of this schedule, cash interest payments on long-term
debt excludes interest on capital leases and interest on foreign
lines of credit.
|
|
|
|
|
|
First Data Corporation
Summary Segment Data
(Unaudited)
(in millions)
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
2016
|
|
% Change B/(W)
|
|
Organic CC % Change(e) B/(W)
|
|
2017
|
|
2016
|
|
% Change B/(W)
|
|
Organic CC % Change(e) B/(W)
|
Total segment revenue
|
|
$
|
1,949
|
|
|
$
|
1,830
|
|
|
7
|
%
|
|
4
|
%
|
|
$
|
7,428
|
|
|
$
|
7,141
|
|
|
4
|
%
|
|
4
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities (a)
|
|
15
|
|
|
21
|
|
|
(29
|
)%
|
|
|
|
64
|
|
|
80
|
|
|
(20
|
)%
|
|
|
Independent Sales Organization (ISO) commission expense (b)
|
|
167
|
|
|
142
|
|
|
18
|
%
|
|
|
|
637
|
|
|
618
|
|
|
3
|
%
|
|
|
Reimbursable debit network fees, postage, and other
|
|
1,019
|
|
|
950
|
|
|
7
|
%
|
|
|
|
3,923
|
|
|
3,745
|
|
|
5
|
%
|
|
|
Consolidated revenue
|
|
$
|
3,150
|
|
|
$
|
2,943
|
|
|
7
|
%
|
|
|
|
$
|
12,052
|
|
|
$
|
11,584
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
$
|
1,131
|
|
|
$
|
1,026
|
|
|
10
|
%
|
|
4
|
%
|
|
$
|
4,262
|
|
|
$
|
4,063
|
|
|
5
|
%
|
|
4
|
%
|
Global Financial Solutions
|
|
412
|
|
|
415
|
|
|
(1
|
)%
|
|
(1
|
)%
|
|
1,623
|
|
|
1,593
|
|
|
2
|
%
|
|
3
|
%
|
Network & Security Solutions
|
|
406
|
|
|
389
|
|
|
4
|
%
|
|
6
|
%
|
|
1,543
|
|
|
1,485
|
|
|
4
|
%
|
|
4
|
%
|
Total segment revenue
|
|
$
|
1,949
|
|
|
$
|
1,830
|
|
|
7
|
%
|
|
4
|
%
|
|
$
|
7,428
|
|
|
$
|
7,141
|
|
|
4
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
2016
|
|
% Change B/(W)
|
|
Organic CC % Change(e) B/(W)
|
|
2017
|
|
2016
|
|
% Change B/(W)
|
|
Organic CC % Change(e) B/(W)
|
Total segment expenses
|
|
$
|
1,101
|
|
|
$
|
1,059
|
|
|
(4
|
)%
|
|
(1
|
)%
|
|
$
|
4,356
|
|
|
$
|
4,249
|
|
|
(3
|
)%
|
|
(2
|
)%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities (a)
|
|
19
|
|
|
18
|
|
|
(6
|
)%
|
|
|
|
69
|
|
|
70
|
|
|
1
|
%
|
|
|
Independent Sales Organization (ISO) commission expense (b)
|
|
167
|
|
|
142
|
|
|
(18
|
)%
|
|
|
|
637
|
|
|
618
|
|
|
(3
|
)%
|
|
|
Reimbursable debit network fees, postage and other
|
|
1,019
|
|
|
950
|
|
|
(7
|
)%
|
|
|
|
3,923
|
|
|
3,745
|
|
|
(5
|
)%
|
|
|
Depreciation and amortization
|
|
259
|
|
|
236
|
|
|
(10
|
)%
|
|
|
|
972
|
|
|
949
|
|
|
(2
|
)%
|
|
|
Stock-based compensation
|
|
62
|
|
|
49
|
|
|
(27
|
)%
|
|
|
|
245
|
|
|
263
|
|
|
7
|
%
|
|
|
Other (c)
|
|
23
|
|
|
9
|
|
|
(156
|
)%
|
|
|
|
136
|
|
|
88
|
|
|
(55
|
)%
|
|
|
Consolidated expenses
|
|
$
|
2,650
|
|
|
$
|
2,463
|
|
|
(8
|
)%
|
|
|
|
$
|
10,338
|
|
|
$
|
9,982
|
|
|
(4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
$
|
637
|
|
|
$
|
580
|
|
|
(10
|
)%
|
|
(3
|
)%
|
|
$
|
2,438
|
|
|
$
|
2,338
|
|
|
(4
|
)%
|
|
(3
|
)%
|
Global Financial Solutions
|
|
228
|
|
|
242
|
|
|
6
|
%
|
|
6
|
%
|
|
937
|
|
|
947
|
|
|
1
|
%
|
|
-
|
%
|
Network & Security Solutions
|
|
197
|
|
|
206
|
|
|
4
|
%
|
|
1
|
%
|
|
814
|
|
|
819
|
|
|
1
|
%
|
|
-
|
%
|
Corporate
|
|
39
|
|
|
31
|
|
|
(26
|
)%
|
|
(26
|
)%
|
|
167
|
|
|
145
|
|
|
(15
|
)%
|
|
(15
|
)%
|
Total segment expenses
|
|
$
|
1,101
|
|
|
$
|
1,059
|
|
|
(4
|
)%
|
|
(1
|
)%
|
|
$
|
4,356
|
|
|
$
|
4,249
|
|
|
(3
|
)%
|
|
(2
|
)%
|
|
|
|
|
|
|
|
First Data Corporation
Summary Segment Data
(Unaudited)
(in millions)
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
2016
|
|
% Change B/(W)
|
|
Organic CC % Change(e)
B/(W)
|
|
2017
|
|
2016
|
|
% Change B/(W)
|
|
|
Organic CC % Change(e) B/(W)
|
Total Segment EBITDA
|
|
$
|
848
|
|
|
$
|
771
|
|
|
10
|
%
|
|
8
|
%
|
|
$
|
3,072
|
|
|
$
|
2,892
|
|
|
6
|
%
|
|
6
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities (a)
|
|
9
|
|
|
6
|
|
|
50
|
%
|
|
|
|
30
|
|
|
30
|
|
|
-
|
%
|
|
|
Depreciation and amortization
|
|
(259
|
)
|
|
(236
|
)
|
|
10
|
%
|
|
|
|
(972
|
)
|
|
(949
|
)
|
|
2
|
%
|
|
|
Interest expense, net
|
|
(231
|
)
|
|
(258
|
)
|
|
(10
|
)%
|
|
|
|
(937
|
)
|
|
(1,068
|
)
|
|
(12
|
)%
|
|
|
Loss on debt extinguishment
|
|
(8
|
)
|
|
(12
|
)
|
|
(33
|
)%
|
|
|
|
(80
|
)
|
|
(70
|
)
|
|
14
|
%
|
|
|
Other items (d)
|
|
(12
|
)
|
|
(6
|
)
|
|
100
|
%
|
|
|
|
(132
|
)
|
|
(71
|
)
|
|
86
|
%
|
|
|
Income tax expense
|
|
663
|
|
|
(24
|
)
|
|
NM
|
|
|
|
|
729
|
|
|
(81
|
)
|
|
NM
|
|
|
|
Stock-based compensation
|
|
(62
|
)
|
|
(49
|
)
|
|
27
|
%
|
|
|
|
(245
|
)
|
|
(263
|
)
|
|
(7
|
)%
|
|
|
Net income (loss) attributable to First Data Corporation
|
|
$
|
948
|
|
|
$
|
192
|
|
|
394
|
%
|
|
|
|
$
|
1,465
|
|
|
$
|
420
|
|
|
249
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
$
|
494
|
|
|
$
|
446
|
|
|
11
|
%
|
|
7
|
%
|
|
$
|
1,824
|
|
|
$
|
1,725
|
|
|
6
|
%
|
|
5
|
%
|
Global Financial Solutions
|
|
184
|
|
|
173
|
|
|
6
|
%
|
|
6
|
%
|
|
686
|
|
|
646
|
|
|
6
|
%
|
|
8
|
%
|
Network & Security Solutions
|
|
209
|
|
|
183
|
|
|
14
|
%
|
|
14
|
%
|
|
729
|
|
|
666
|
|
|
9
|
%
|
|
9
|
%
|
Corporate
|
|
(39
|
)
|
|
(31
|
)
|
|
(26
|
)%
|
|
(26
|
)%
|
|
(167
|
)
|
|
(145
|
)
|
|
(15
|
)%
|
|
(15
|
)%
|
Total Segment EBITDA
|
|
$
|
848
|
|
|
$
|
771
|
|
|
10
|
%
|
|
8
|
%
|
|
$
|
3,072
|
|
|
$
|
2,892
|
|
|
6
|
%
|
|
6
|
%
|
NM represents not meaningful
|
"B" means results in 2017 are better than results in 2016 "(W)"
means results are worse
|
|
|
(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,
debt issuance costs, and acquisition integration 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
(including the impact of our Digital Banking Joint Venture) in the
prior year period; and (3) includes the results of significant
acquisitions in the prior year period.
|
|
|
|
|
|
First Data Corporation
Organic Constant Currency Growth
(Unaudited)
(in millions)
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
|
2016
|
|
% B/(W)
|
|
2017
|
|
|
2016
|
|
|
% B/(W)
|
Total segment revenue
|
|
$
|
1,949
|
|
|
|
$
|
1,830
|
|
|
7
|
%
|
|
$
|
7,428
|
|
|
|
$
|
7,141
|
|
|
|
4
|
%
|
Currency impact
|
|
(17
|
)
|
|
|
-
|
|
|
|
|
16
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
34
|
|
|
|
|
-
|
|
|
|
40
|
|
|
|
|
Organic constant currency(b) segment revenue growth
|
|
$
|
1,932
|
|
|
|
$
|
1,864
|
|
|
4
|
%
|
|
$
|
7,444
|
|
|
|
$
|
7,181
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS revenue
|
|
$
|
1,131
|
|
|
|
$
|
1,026
|
|
|
10
|
%
|
|
$
|
4,262
|
|
|
|
$
|
4,063
|
|
|
|
5
|
%
|
Currency impact
|
|
(11
|
)
|
|
|
-
|
|
|
|
|
2
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
47
|
|
|
|
|
-
|
|
|
|
53
|
|
|
|
|
Organic constant currency(b) GBS revenue growth
|
|
$
|
1,120
|
|
|
|
$
|
1,073
|
|
|
4
|
%
|
|
$
|
4,264
|
|
|
|
$
|
4,116
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS NA revenue
|
|
$
|
852
|
|
|
|
$
|
805
|
|
|
6
|
%
|
|
$
|
3,262
|
|
|
|
$
|
3,176
|
|
|
|
3
|
%
|
Currency impact
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
47
|
|
|
|
|
-
|
|
|
|
84
|
|
|
|
|
Organic constant currency(b) GBS NA revenue growth
|
|
$
|
851
|
|
|
|
$
|
852
|
|
|
-
|
%
|
|
$
|
3,261
|
|
|
|
$
|
3,260
|
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS APAC revenue
|
|
$
|
43
|
|
|
|
$
|
34
|
|
|
26
|
%
|
|
$
|
152
|
|
|
|
$
|
159
|
|
|
|
(4
|
)%
|
Currency impact
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
(31
|
)
|
|
|
|
Organic constant currency(b) GBS APAC revenue growth
|
|
$
|
42
|
|
|
|
$
|
34
|
|
|
24
|
%
|
|
$
|
149
|
|
|
|
$
|
128
|
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GFS revenue
|
|
$
|
412
|
|
|
|
$
|
415
|
|
|
(1
|
)%
|
|
$
|
1,623
|
|
|
|
$
|
1,593
|
|
|
|
2
|
%
|
Currency impact
|
|
(7
|
)
|
|
|
-
|
|
|
|
|
13
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
(6
|
)
|
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
|
Organic constant currency(b) GFS revenue growth
|
|
$
|
405
|
|
|
|
$
|
409
|
|
|
(1
|
)%
|
|
$
|
1,636
|
|
|
|
$
|
1,587
|
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GFS EMEA revenue
|
|
$
|
112
|
|
|
|
$
|
109
|
|
|
3
|
%
|
|
$
|
444
|
|
|
|
$
|
433
|
|
|
|
3
|
%
|
Currency impact
|
|
(7
|
)
|
|
|
-
|
|
|
|
|
13
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
(6
|
)
|
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
|
Organic constant currency(b) GFS EMEA revenue growth
|
|
$
|
105
|
|
|
|
$
|
103
|
|
|
2
|
%
|
|
$
|
457
|
|
|
|
$
|
427
|
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NSS revenue
|
|
$
|
406
|
|
|
|
$
|
389
|
|
|
4
|
%
|
|
$
|
1,543
|
|
|
|
$
|
1,485
|
|
|
|
4
|
%
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
(7
|
)
|
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
|
Organic constant currency(b) NSS revenue growth
|
|
$
|
406
|
|
|
|
$
|
382
|
|
|
6
|
%
|
|
$
|
1,543
|
|
|
|
$
|
1,478
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
|
2016
|
|
% B/(W)
|
|
|
2017
|
|
|
2016
|
|
|
% B/(W)
|
Total segment expense
|
|
$
|
1,101
|
|
|
|
$
|
1,059
|
|
|
(4
|
)%
|
|
|
$
|
4,356
|
|
|
|
$
|
4,249
|
|
|
|
(3
|
)%
|
Currency impact
|
|
(11
|
)
|
|
|
-
|
|
|
|
|
|
3
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
22
|
|
|
|
|
|
-
|
|
|
|
22
|
|
|
|
|
Organic constant currency(b) segment expense growth
|
|
$
|
1,090
|
|
|
|
$
|
1,081
|
|
|
(1
|
)%
|
|
|
$
|
4,359
|
|
|
|
$
|
4,271
|
|
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS expense
|
|
$
|
637
|
|
|
|
$
|
580
|
|
|
(10
|
)%
|
|
|
$
|
2,438
|
|
|
|
$
|
2,338
|
|
|
|
(4
|
)%
|
Currency impact
|
|
(8
|
)
|
|
|
-
|
|
|
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
33
|
|
|
|
|
|
-
|
|
|
|
33
|
|
|
|
|
Organic constant currency(b) GBS expense growth
|
|
$
|
629
|
|
|
|
$
|
613
|
|
|
(3
|
)%
|
|
|
$
|
2,434
|
|
|
|
$
|
2,371
|
|
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
|
2016
|
|
% B/(W)
|
|
|
2017
|
|
|
2016
|
|
|
% B/(W)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GFS expense
|
|
$
|
228
|
|
|
|
$
|
242
|
|
|
6
|
%
|
|
|
$
|
937
|
|
|
|
$
|
947
|
|
|
|
1
|
%
|
Currency impact
|
|
(4
|
)
|
|
|
-
|
|
|
|
|
|
7
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
(4
|
)
|
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
|
Organic constant currency(b) GFS expense growth
|
|
$
|
224
|
|
|
|
$
|
238
|
|
|
6
|
%
|
|
|
$
|
944
|
|
|
|
$
|
943
|
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NSS expense
|
|
$
|
197
|
|
|
|
$
|
206
|
|
|
4
|
%
|
|
|
$
|
814
|
|
|
|
$
|
819
|
|
|
|
1
|
%
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
(7
|
)
|
|
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
|
Organic constant currency(b) NSS expense growth
|
|
$
|
197
|
|
|
|
$
|
199
|
|
|
1
|
%
|
|
|
$
|
814
|
|
|
|
$
|
812
|
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
|
2016
|
|
% B/(W)
|
|
|
2017
|
|
|
2016
|
|
|
% B/(W)
|
Total segment EBITDA
|
|
$
|
848
|
|
|
|
$
|
771
|
|
|
10
|
%
|
|
|
$
|
3,072
|
|
|
|
$
|
2,892
|
|
|
|
6
|
%
|
Currency impact
|
|
(5
|
)
|
|
|
-
|
|
|
|
|
|
13
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
13
|
|
|
|
|
|
-
|
|
|
|
18
|
|
|
|
|
Organic constant currency(b) Segment EBITDA growth
|
|
$
|
843
|
|
|
|
$
|
784
|
|
|
8
|
%
|
|
|
$
|
3,085
|
|
|
|
$
|
2,910
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS EBITDA
|
|
$
|
494
|
|
|
|
$
|
446
|
|
|
11
|
%
|
|
|
$
|
1,824
|
|
|
|
$
|
1,725
|
|
|
|
6
|
%
|
Currency impact
|
|
(3
|
)
|
|
|
-
|
|
|
|
|
|
6
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
14
|
|
|
|
|
|
-
|
|
|
|
20
|
|
|
|
|
Organic constant currency(b) GBS EBITDA growth
|
|
$
|
491
|
|
|
|
$
|
460
|
|
|
7
|
%
|
|
|
$
|
1,830
|
|
|
|
$
|
1,745
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GFS EBITDA
|
|
$
|
184
|
|
|
|
$
|
173
|
|
|
6
|
%
|
|
|
$
|
686
|
|
|
|
$
|
646
|
|
|
|
6
|
%
|
Currency impact
|
|
(2
|
)
|
|
|
-
|
|
|
|
|
|
7
|
|
|
|
-
|
|
|
|
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
(2
|
)
|
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
|
Organic constant currency(b) GFS EBITDA growth
|
|
$
|
182
|
|
|
|
$
|
171
|
|
|
6
|
%
|
|
|
$
|
693
|
|
|
|
$
|
644
|
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NSS EBITDA
|
|
$
|
209
|
|
|
|
$
|
183
|
|
|
14
|
%
|
|
|
$
|
729
|
|
|
|
$
|
666
|
|
|
|
9
|
%
|
Acquisitions/Divestitures(a)
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
Organic constant currency(b) NSS EBITDA growth
|
|
$
|
209
|
|
|
|
$
|
183
|
|
|
14
|
%
|
|
|
$
|
729
|
|
|
|
$
|
666
|
|
|
|
9
|
%
|
B" means results in 2017 are better than results in 2016 "(W)" means
results are worse
|
(a)
|
"Acquisitions/Divestitures" pertains to the following 2017
activity: the acquisitions of CardConnect and BluePay in GBS North
America; the formation of the Digital Banking JV in NSS (treated
as a 50% Digital Banking revenue divestiture); and the divestiture
of the GFS Baltics business. This line also pertains to the
Australian ATM divestiture in GBS APAC in 2016.
|
(b)
|
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
(including the impact of our Digital Banking Joint Venture) in the
prior year period; and (3) includes the results of significant
acquisitions in the prior year period.
|
|
|
First Data Corporation
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(in millions, except shares and per share data)
|
|
|
ADJUSTED NET INCOME RECONCILIATION
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|
Net income attributable to First Data Corporation
|
|
$
|
948
|
|
|
$
|
192
|
|
|
394
|
%
|
$
|
1,465
|
|
|
$
|
420
|
|
|
249
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation
|
|
62
|
|
|
49
|
|
|
27
|
%
|
245
|
|
|
263
|
|
|
(7
|
)%
|
Loss on debt extinguishment
|
|
8
|
|
|
12
|
|
|
(33
|
)%
|
80
|
|
|
70
|
|
|
14
|
%
|
Amortization of acquisition intangibles and deferred financing costs(a)
|
|
108
|
|
|
104
|
|
|
4
|
%
|
403
|
|
|
422
|
|
|
(5
|
)%
|
Loss (gain) of disposal of businesses
|
|
(18
|
)
|
|
3
|
|
|
NM
|
|
(18
|
)
|
|
34
|
|
|
NM
|
|
Visa Europe settlement gain
|
|
-
|
|
|
-
|
|
|
NM
|
|
-
|
|
|
(29
|
)
|
|
NM
|
|
Restructuring
|
|
20
|
|
|
(2
|
)
|
|
NM
|
|
83
|
|
|
49
|
|
|
69
|
%
|
Intercompany foreign exchange (loss) gain
|
|
(5
|
)
|
|
2
|
|
|
NM
|
|
1
|
|
|
(19
|
)
|
|
NM
|
|
Fees paid on debt modification
|
|
-
|
|
|
11
|
|
|
(100
|
)%
|
10
|
|
|
29
|
|
|
(66
|
)%
|
Impairments, litigation, and other(b)
|
|
11
|
|
|
(2
|
)
|
|
NM
|
|
24
|
|
|
11
|
|
|
118
|
%
|
Deal integration costs
|
|
1
|
|
|
-
|
|
|
NM
|
|
27
|
|
|
-
|
|
|
NM
|
|
Mark-to-market adjustment for derivatives and euro-denominated debt(c)
|
|
-
|
|
|
-
|
|
|
NM
|
|
-
|
|
|
5
|
|
|
NM
|
|
Income tax on above items and discrete tax items(d)
|
|
(719
|
)
|
|
(4
|
)
|
|
NM
|
|
(895
|
)
|
|
(35
|
)
|
|
NM
|
|
Adjusted net income
|
|
$
|
416
|
|
|
$
|
365
|
|
|
14
|
%
|
$
|
1,425
|
|
|
$
|
1,220
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.45
|
|
|
$
|
0.40
|
|
|
13
|
%
|
$
|
1.56
|
|
|
$
|
1.35
|
|
|
16
|
%
|
Diluted
|
|
$
|
0.44
|
|
|
$
|
0.39
|
|
|
13
|
%
|
$
|
1.52
|
|
|
$
|
1.32
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares used to compute adjusted net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
918,726,777
|
|
|
905,966,452
|
|
|
|
|
915,870,759
|
|
|
901,671,872
|
|
|
|
Diluted
|
|
945,035,811
|
|
|
929,375,020
|
|
|
|
|
939,767,019
|
|
|
921,001,863
|
|
|
|
|
NM represents not meaningful
|
|
|
|
|
(a)
|
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 $5 million and $6 million for the
three months ended December 31, 2017 and 2016, respectively, and
$17 million and $17 million, respectively, for the twelve months
ended December 31, 2017 and 2016.
|
(b)
|
Represents impairments, non-normal course litigation and
regulatory settlements, investments gains (losses), divestitures,
and other, as applicable to the periods presented.
|
(c)
|
Represents mark-to-market activity related to our undesignated
hedges.
|
(d)
|
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 attributable
to First Data Corporation.
|
|
First Data Corporation
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(in millions)
|
|
FREE CASH FLOW RECONCILIATION
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
465
|
|
|
$
|
451
|
|
|
$
|
14
|
|
|
$
|
2,047
|
|
|
$
|
2,111
|
|
|
$
|
(64
|
)
|
Capital expenditures
|
|
(128
|
)
|
|
(126
|
)
|
|
(2
|
)
|
|
(518
|
)
|
|
(477
|
)
|
|
(41
|
)
|
Distribution to minority interest and other
|
|
(57
|
)
|
|
(55
|
)
|
|
(2
|
)
|
|
(170
|
)
|
|
(418
|
)
|
|
248
|
|
Free cash flow
|
|
$
|
280
|
|
|
$
|
270
|
|
|
10
|
|
|
$
|
1,359
|
|
|
$
|
1,216
|
|
|
143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT RECONCILIATION
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
December 31, 2017
|
|
December 31, 2016
|
Total long-term borrowings
|
|
$
|
17,927
|
|
|
$
|
18,131
|
|
Total short-term and current portion of long-term borrowings
|
|
1,271
|
|
|
358
|
|
Total borrowings
|
|
19,198
|
|
|
18,489
|
|
Unamortized discount and unamortized deferred financing costs
|
|
126
|
|
|
156
|
|
Total borrowings at par
|
|
19,324
|
|
|
18,645
|
|
Less: Settlement lines of credit and other arrangements
|
|
205
|
|
|
84
|
|
Gross debt
|
|
19,119
|
|
|
18,561
|
|
Less: Cash and cash equivalents
|
|
498
|
|
|
385
|
|
Net debt
|
|
$
|
18,621
|
|
|
$
|
18,176
|
|
|
|
|
|
|
First Data Corporation
Operating Data
(Unaudited)
(in millions)
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
GBS:
|
|
|
|
|
|
|
|
|
|
|
|
|
North America merchant transactions (a)
|
|
12,754
|
|
|
12,004
|
|
|
6
|
%
|
|
49,248
|
|
|
46,372
|
|
|
6
|
%
|
International merchant transactions (b)
|
|
2,587
|
|
|
2,408
|
|
|
7
|
%
|
|
9,760
|
|
|
8,246
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GFS:
|
|
|
|
|
|
|
|
|
|
|
|
|
North America card accounts on file (c)
|
|
|
|
|
|
|
|
906
|
|
|
855
|
|
|
6
|
%
|
International card accounts on file (d)
|
|
|
|
|
|
|
|
170
|
|
|
151
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NSS:
|
|
|
|
|
|
|
|
|
|
|
|
|
Network transactions (EFT and Stored Value) (e)
|
|
6,109
|
|
|
5,543
|
|
|
10
|
%
|
|
22,114
|
|
|
20,258
|
|
|
9
|
%
|
|
|
|
(a)
|
|
North American merchant transactions include acquired Visa and
MasterCard credit and signature debit, American Express and
Discover, 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.
|
(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.
|
(e)
|
|
Network transactions include the debit issuer processing
transactions, STAR Network issuer transactions, and closed loop and
open loop POS transactions.
|
|
First Data Corp
2018 Non-GAAP Guidance Reconciliation
(Unaudited)
|
|
Consolidated Revenue to Total Segment Revenue
|
|
|
FY 2018 vs. FY 2017
|
Consolidated revenue (at reported rates)
|
|
~4-6%
|
Adjustments:
|
|
|
+Non wholly owned entities
|
|
|
+Reimbursable postage and other
|
|
|
Total segment revenue (reported)
|
|
~5-7%
|
Memo: Total segment revenue (at constant currency)
|
|
~5-7%
|
|
Net Income to Total Segment EBITDA
|
|
|
FY 2018 vs. FY 2017
|
Net income attributable to FDC(1)
|
|
~(40%) - (60%)
|
Adjustments
|
|
|
+Depreciation and amortization
|
|
|
+Interest Expense, net
|
|
|
+Income tax expense
|
|
|
+Stock Based Compensation
|
|
|
+ Other(2)
|
|
|
Total segment EBITDA (reported)
|
|
~7-9%
|
Memo: total segment EBITDA (at constant currency)
|
|
~7-9%
|
|
Net Income to Adj. Net Income
|
|
|
FY 2018
|
Net income attributable to FDC
|
|
$0.80-$0.85
|
Adjustments (note: adjustments represent positive balances)
|
|
|
+Stock-based compensation
|
|
|
+Amortization of acquisition intangibles and deferred financing cost
|
|
|
+Other(3)
|
|
|
Adjusted Net Income
|
|
$1.35-$1.40
|
|
Cash Flow From Operations to Free Cash Flow
|
|
|
FY 2018
|
Cash (used in) / provided by operating activities
|
|
$2.1B+
|
+Adjustments(4)
|
|
|
Free cash flow (use)/source
|
|
$1.4B+
|
(1)
|
|
Reflects a significant increase in tax expense in 2018 primarily
driven by the Q4 2017 release of a valuation allowance against
deferred tax assets associated with the U.S. federal NOL. The
reversal of the valuation allowance resulted in a significant
non-cash tax benefit in Q4 2017 and the recording of a normalized
book tax rate in 2018.
|
(2)
|
|
Includes non wholly owned entities adjustment, loss on debt
extinguishment, as well as other items.
|
(3)
|
|
Includes loss on debt extinguishment, gain/loss on divestitures,
restructuring, impairment, litigation and other, as well as the
impact of tax expense/(benefit) of the adjusted items.
|
(4)
|
|
Includes capital expenditures and distributions to minority
interest and other.
|
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 a 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/20180212005626/en/
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