| [April 30, 2019] |
 |
First Data Reports First Quarter 2019 Financial Results
First Data Corporation (NYSE: FDC), a global leader in commerce-enabling
technology and solutions, today reported financial results for the first
quarter ended March 31, 2019.
"We delivered a great start to 2019, driven by strong growth across our
core global merchant acquiring and card processing businesses," said
First Data Chairman and CEO Frank Bisignano. "We remain focused on the
successful execution of our growth initiatives and developing innovative
solutions for our clients, and confident in the value that the merger
with Fiserv will create for our clients and our shareholders."
Consolidated revenue for the first quarter was $2,316 million, up 1%(a),
reflecting solid segment revenue growth, partially offset by the impact
of recent divestitures in Global Financial Solutions and by unfavorable
year-over-year foreign currency movements. Total segment revenue was
$2,117 million for the quarter, up 2% versus the prior year period on a
reported basis(a), or up 8% on an organic constant currency
basis(b).
Net income attributable to First Data for the first quarter of 2019 was
$169 million, or $0.17 per diluted share, up 67% and 64%, respectively,
from comparable figures in the first quarter of 2018. This growth was
primarily driven by improved operating performance and reduced interest
expense, partially offset by unfavorable year-over-year foreign currency
movements during the quarter.
In the first quarter of 2019, adjusted net income, which modifies net
income for items such as gains/losses from divestitures, debt
extinguishment charges, stock-based compensation, amortization of
acquisition intangibles, restructuring costs, certain discrete tax items
and other items, was $303 million, or $0.31 per diluted share, up 9% and
6%, respectively, from comparable figures in the first quarter of 2018.
The increase was driven primarily by improved operating results,
partially offset by unfavorable year-over-year foreign currency
movements and a higher adjusted tax rate in the current period.
Total segment earnings before interest, taxes, depreciation, and
amortization (total segment EBITDA) in the first quarter of 2019 was
$754 million, up 3% versus the prior year period on a reported basis(a),
or up 10% on an organic constant currency basis(b). Total
segment EBITDA margin was 35.6%, up 80 basis points on an organic
constant currency basis(b).
Segment Results
Global Business Solutions (GBS)
First quarter 2019 GBS segment revenue was $1,387 million, up 5% versus
the prior year period on a reported basis(a), or up 10% on an
organic constant currency basis(b). Within geographic
regions, North America revenue of $1,069 million was up 5% versus the
prior year period on both a reported(a) and organic constant
currency basis(b), driven by strong growth in the Partner
Solutions channel. EMEA revenue was $166 million, down 1% on a reported
basis(a), or up 8% on an organic constant currency basis(b).
Latin America revenue was $100 million, up 14% on a reported basis(a),
or up 58% on an organic constant currency basis(b). APAC
revenue was $52 million, up 9% on a reported basis(a), or up
16% on an organic constant currency basis(b).
First quarter 2019 GBS segment EBITDA was $471 million up 8% versus the
prior year period on a reported basis(a), or up 15% on an
organic constant currency basis(b). GBS Segment EBITDA margin
was 34.0%, up 170 basis points on an organic constant currency basis(b).
Global Financial Solutions (GFS)
First quarter 2019 GFS segment revenue was $369 million, down 8% versus
the prior year period on a reported basis(a), or up 9% on an
organic constant currency basis(b). Within geographic
regions, North America revenue of $221 million was down 3% on a reported
basis(a), or up 6% on an organic constant currency basis(b).
EMEA revenue was $83 million, down 25% on a reported basis(a),
or up 5% on an organic constant currency basis(b). Latin
America revenue was $33 million, up 4% on a reported basis(a),
or up 29% on an organic constant currency basis(b). APAC
revenue was $32 million, up 6% on a reported basis(a), or up
13% on an organic constant currency basis(b).
First quarter 2019 GFS segment EBITDA was $147 million, down 12% versus
the prior year period on a reported basis(a), or flat on an
organic constant currency basis(b), as revenue growth was
offset by added costs primarily associated with ramping new deals. GFS
Segment EBITDA margin was 39.8%, down 340 basis points on an organic
constant currency basis(b).
Network & Security Solutions (NSS)
First quarter 2019 NSS segment revenue was $361 million, flat versus the
prior year period on both a reported(a) and organic constant
currency basis(b), as modest growth within the EFT
business was offset by modest declines in the Stored Value and Security
and Fraud businesses.
First quarter 2019 NSS segment EBITDA was $195 million, up 11% versus
the prior year period on both a reported(a) and organic
constant currency basis(b). NSS Segment EBITDA margin was
54.0%, up 570 basis points on an organic constant currency basis(b).
Cash Flow
In the first quarter of 2019, cash flow from operations was $615
million, up $81 million compared to $534 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 $397 million in the current quarter, up $29
million compared to $368 million in the prior year period, primarily
driven by improved operating results and working capital timing,
partially offset by timing of cash interest payments and higher capital
expenditures in the quarter.
Capital Structure
First Data's total borrowings at March 31, 2019 decreased by $158
million to $17,441 million, from $17,599 million at December 31, 2018.
Net debt at March 31, 2019 decreased by $131 million to $16,783 million,
from $16,914 million at December 31, 2018.
2019 Guidance Reiterated
The Company reiterated its full year 2019 financial guidance. The
guidance does not include any impact related to the previously announced
merger with Fiserv.
The Company expects:
-
Total segment revenue: organic constant currency(b) growth
of 5% to 6%
-
Total segment EBITDA: organic constant currency(b) growth
of 6% to 8%
-
Adjusted diluted EPS: $1.55 - $1.58
-
Free cash flow: $1.5 billion+
The Company expects negative impacts to reported segment revenue and
EBITDA from divestitures and adverse foreign currency movements to be
more pronounced in the first half of 2019.
Investor Conference Call
Due to the pending merger with Fiserv, the Company will not host a
conference call/webcast to review the first quarter 2019 financial
results.
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 EPS, free
cash flow and net debt, and growth rates for these metrics compared to
prior periods. 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. 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. These measures should only be used to
evaluate the Company's results of operations in conjunction with the
corresponding GAAP measures. Additional information about non-GAAP
financial measures, including reconciliations of all non-GAAP measures
to the most directly comparable GAAP measure can be found in the tables
included in this press release.
About First Data
First Data (NYSE: FDC) is a global leader in commerce-enabling
technology and solutions, serving approximately six million business
locations and more than 3,700 financial institutions in more than 100
countries around the world. The Company's 19,000 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 $2.6 trillion per year.
|
|
|
|
(a)
|
GAAP growth rate.
|
|
(b)
|
Non-GAAP growth rate -- 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.
|
|
|
|
|
|
|
|
|
First Data Corporation
Consolidated Statements of Operations
(Unaudited)
(in millions, except per share data)
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
Revenues:
|
|
|
|
|
|
Revenues excluding reimbursable items
|
|
$
|
2,124
|
|
|
$
|
2,084
|
|
|
Reimbursable items
|
|
192
|
|
|
198
|
|
|
Total revenues
|
|
2,316
|
|
|
2,282
|
|
|
Expenses:
|
|
|
|
|
|
Cost of revenues (exclusive of items shown below)
|
|
757
|
|
|
779
|
|
|
Selling, general, and administrative
|
|
660
|
|
|
647
|
|
|
Depreciation and amortization
|
|
246
|
|
|
250
|
|
|
Other operating expenses, net
|
|
36
|
|
|
60
|
|
|
Total expenses excluding reimbursable items
|
|
1,699
|
|
|
1,736
|
|
|
Reimbursable items
|
|
192
|
|
|
198
|
|
|
Total expenses
|
|
1,891
|
|
|
1,934
|
|
|
Operating profit
|
|
425
|
|
|
348
|
|
|
Interest expense, net
|
|
(203
|
)
|
|
(233
|
)
|
|
Loss on debt extinguishment
|
|
(1
|
)
|
|
-
|
|
|
Other expense
|
|
(27
|
)
|
|
(3
|
)
|
|
Income before income taxes and equity earnings in affiliates
|
|
194
|
|
|
112
|
|
|
Income tax expense
|
|
29
|
|
|
27
|
|
|
Equity earnings in affiliates
|
|
52
|
|
|
49
|
|
|
Net income
|
|
217
|
|
|
134
|
|
|
Less: Net income attributable to noncontrolling interests and
redeemable noncontrolling interest
|
|
48
|
|
|
33
|
|
|
Net income attributable to First Data Corporation
|
|
$
|
169
|
|
|
$
|
101
|
|
|
|
|
|
|
|
|
Net income attributable to First Data Corporation per share:
|
|
|
|
|
|
Basic
|
|
$
|
0.18
|
|
|
$
|
0.11
|
|
|
Diluted
|
|
$
|
0.17
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
Basic
|
|
937
|
|
|
923
|
|
|
Diluted
|
|
967
|
|
|
946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corporation
Selected Consolidated Balance Sheet and Cash Flow Data
(Unaudited)
(in millions)
|
|
|
|
|
|
SELECTED CONSOLIDATED BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
|
3/31/2019
|
|
12/31/2018
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
619
|
|
|
$
|
555
|
|
|
Settlement assets
|
|
|
22,324
|
|
|
|
11,423
|
|
|
Total assets
|
|
|
49,546
|
|
|
|
38,327
|
|
|
|
|
|
|
|
|
Short-term and current portion of long-term borrowings
|
|
|
1,159
|
|
|
|
1,170
|
|
|
Settlement obligations
|
|
|
22,324
|
|
|
|
11,423
|
|
|
Long-term borrowings
|
|
|
16,282
|
|
|
|
16,429
|
|
|
Total liabilities
|
|
|
42,289
|
|
|
|
31,283
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
|
93
|
|
|
|
77
|
|
|
|
|
|
|
|
|
Total First Data Corporation stockholders' equity
|
|
|
4,375
|
|
|
|
4,173
|
|
|
Noncontrolling interests
|
|
|
2,789
|
|
|
|
2,794
|
|
|
Total equity
|
|
|
7,164
|
|
|
|
6,967
|
|
|
|
|
|
|
|
|
SELECTED CONSOLIDATED CASH FLOW DATA
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
Source/(Use) of cash
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
615
|
|
|
$
|
534
|
|
|
Net cash used in investing activities
|
|
|
(261
|
)
|
|
|
(143
|
)
|
|
Net cash used in financing activities
|
|
|
(275
|
)
|
|
|
(304
|
)
|
|
Supplemental cash flow data
|
|
|
|
|
|
Cash interest payments(a)
|
|
$
|
267
|
|
|
$
|
237
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
For purposes of this schedule, cash interest payments excludes
interest on finance leases and interest on foreign lines of credit.
|
|
|
|
|
|
|
|
|
First Data Corporation
Summary Segment Data
(Unaudited)
(in millions)
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
% Change
|
|
Organic CC
% Change(c)
|
|
Consolidated Revenues
|
|
$
|
2,316
|
|
|
$
|
2,282
|
|
|
1
|
%
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities(a)
|
|
(7
|
)
|
|
(4
|
)
|
|
79
|
%
|
|
|
|
Reimbursable items
|
|
(192
|
)
|
|
(198
|
)
|
|
(3
|
)%
|
|
|
|
Total Segment Revenues
|
|
$
|
2,117
|
|
|
$
|
2,080
|
|
|
2
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues:
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
$
|
1,387
|
|
|
$
|
1,318
|
|
|
5
|
%
|
|
10
|
%
|
|
Global Financial Solutions
|
|
369
|
|
|
400
|
|
|
(8
|
)%
|
|
9
|
%
|
|
Network & Security Solutions
|
|
361
|
|
|
362
|
|
|
-
|
%
|
|
-
|
%
|
|
Total Segment Revenues
|
|
$
|
2,117
|
|
|
$
|
2,080
|
|
|
2
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
% Change
|
|
Organic CC
% Change(c)
|
|
Net income attributable to First Data Corporation
|
|
$
|
169
|
|
|
$
|
101
|
|
|
67
|
%
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities(a)
|
|
(13
|
)
|
|
(18
|
)
|
|
(28
|
)%
|
|
|
|
Depreciation and amortization
|
|
246
|
|
|
250
|
|
|
(2
|
)%
|
|
|
|
Interest expense, net
|
|
203
|
|
|
233
|
|
|
(13
|
)%
|
|
|
|
Loss on debt extinguishment
|
|
1
|
|
|
-
|
|
|
NM
|
|
|
|
|
Other items(b)
|
|
63
|
|
|
63
|
|
|
-
|
%
|
|
|
|
Income tax expense
|
|
29
|
|
|
27
|
|
|
7
|
%
|
|
|
|
Stock-based compensation
|
|
56
|
|
|
74
|
|
|
(24
|
)%
|
|
|
|
Total Segment EBITDA
|
|
$
|
754
|
|
|
$
|
730
|
|
|
3
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
$
|
471
|
|
|
$
|
434
|
|
|
8
|
%
|
|
15
|
%
|
|
Global Financial Solutions
|
|
147
|
|
|
166
|
|
|
(12
|
)%
|
|
-
|
%
|
|
Network & Security Solutions
|
|
195
|
|
|
175
|
|
|
11
|
%
|
|
11
|
%
|
|
Corporate
|
|
(59
|
)
|
|
(45
|
)
|
|
(26
|
)%
|
|
(26
|
)%
|
|
Total Segment EBITDA
|
|
$
|
754
|
|
|
$
|
730
|
|
|
3
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
(b)
|
Includes restructuring, non-normal course litigation and
regulatory settlements, debt issuance expenses, deal and deal
integration costs, Other expense as presented in the unaudited
consolidated statements of operations, which includes
divestitures, derivative gains (losses), non-operating foreign
currency gains (losses), and other as applicable to the periods
presented.
|
|
(c)
|
Organic constant currency ("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.
|
|
|
|
|
|
|
First Data Corporation
Summary Segment Data
(Unaudited)
(in millions)
|
|
|
|
SEGMENT REVENUE RECONCILIATION
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
% B/(W)(b)
|
|
Reported FDC segment revenue
|
|
$
|
2,117
|
|
|
$
|
2,080
|
|
|
2
|
%
|
|
Currency impact
|
|
74
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
(46
|
)
|
|
|
|
Organic CC FDC segment revenue growth(a)
|
|
$
|
2,191
|
|
|
$
|
2,034
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
Reported GBS segment revenue
|
|
$
|
1,387
|
|
|
$
|
1,318
|
|
|
5
|
%
|
|
Currency impact
|
|
59
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
-
|
|
|
|
|
Organic CC GBS segment revenue growth(a)
|
|
$
|
1,446
|
|
|
$
|
1,318
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
Reported GBS NA segment revenue
|
|
$
|
1,069
|
|
|
$
|
1,014
|
|
|
5
|
%
|
|
Currency impact
|
|
1
|
|
|
-
|
|
|
|
|
Organic CC GBS NA segment revenue growth(a)
|
|
$
|
1,070
|
|
|
$
|
1,014
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Reported GBS EMEA segment revenue
|
|
$
|
166
|
|
|
$
|
168
|
|
|
(1
|
)%
|
|
Currency impact
|
|
13
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
(2
|
)
|
|
|
|
Organic CC GBS EMEA segment revenue growth(a)
|
|
$
|
179
|
|
|
$
|
166
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
Reported GBS APAC segment revenue
|
|
$
|
52
|
|
|
$
|
48
|
|
|
9
|
%
|
|
Currency impact
|
|
3
|
|
|
-
|
|
|
|
|
Organic CC GBS APAC segment revenue growth(a)
|
|
$
|
55
|
|
|
$
|
48
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
Reported GBS LATAM segment revenue
|
|
$
|
100
|
|
|
$
|
88
|
|
|
14
|
%
|
|
Currency impact
|
|
42
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
2
|
|
|
|
|
Organic CC GBS LATAM segment revenue growth(a)
|
|
$
|
142
|
|
|
$
|
90
|
|
|
58
|
%
|
|
|
|
|
|
|
|
|
|
Reported GFS segment revenue
|
|
$
|
369
|
|
|
$
|
400
|
|
|
(8
|
)%
|
|
Currency impact
|
|
15
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
(46
|
)
|
|
|
|
Organic CC GFS segment revenue growth(a)
|
|
$
|
384
|
|
|
$
|
354
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corporation
Summary Segment Data
(Unaudited)
(in millions)
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
% B/(W)(b)
|
|
Reported GFS NA segment revenue
|
|
$
|
221
|
|
|
$
|
228
|
|
|
(3
|
)%
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
(20
|
)
|
|
|
|
Organic CC GFS NA segment revenue growth(a)
|
|
$
|
221
|
|
|
$
|
208
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Reported GFS EMEA segment revenue
|
|
$
|
83
|
|
|
$
|
110
|
|
|
(25
|
)%
|
|
Currency impact
|
|
5
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
(26
|
)
|
|
|
|
Organic CC GFS EMEA segment revenue growth(a)
|
|
$
|
88
|
|
|
$
|
84
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
Reported GFS APAC segment revenue
|
|
$
|
32
|
|
|
$
|
31
|
|
|
6
|
%
|
|
Currency impact
|
|
2
|
|
|
-
|
|
|
|
|
Organic CC GFS APAC segment revenue growth(a)
|
|
$
|
34
|
|
|
$
|
31
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
Reported GFS LATAM segment revenue
|
|
$
|
33
|
|
|
$
|
31
|
|
|
4
|
%
|
|
Currency impact
|
|
8
|
|
|
-
|
|
|
|
|
Organic CC GFS LATAM segment revenue growth(a)
|
|
$
|
41
|
|
|
$
|
31
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
Reported NSS segment revenue
|
|
$
|
361
|
|
|
$
|
362
|
|
|
-
|
%
|
|
Organic CC NSS segment revenue growth(a)
|
|
$
|
361
|
|
|
$
|
362
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
SEGMENT EBITDA RECONCILIATION
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
% B/(W)(b)
|
|
Reported FDC segment EBITDA
|
|
$
|
754
|
|
|
$
|
730
|
|
|
3
|
%
|
|
Currency impact
|
|
38
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
(11
|
)
|
|
|
|
Organic CC FDC segment EBITDA growth(a)
|
|
$
|
792
|
|
|
$
|
719
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
Reported GBS segment EBITDA
|
|
$
|
471
|
|
|
$
|
434
|
|
|
8
|
%
|
|
Currency impact
|
|
29
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
(1
|
)
|
|
|
|
Organic CC GBS segment EBITDA growth(a)
|
|
$
|
500
|
|
|
$
|
433
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
Reported GFS segment EBITDA
|
|
$
|
147
|
|
|
$
|
166
|
|
|
(12
|
)%
|
|
Currency impact
|
|
9
|
|
|
-
|
|
|
|
|
Acquisitions/(Divestitures)(c)
|
|
-
|
|
|
(10
|
)
|
|
|
|
Organic CC GFS segment EBITDA growth(a)
|
|
$
|
156
|
|
|
$
|
156
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
Reported NSS segment EBITDA
|
|
$
|
195
|
|
|
$
|
175
|
|
|
11
|
%
|
|
Organic CC NSS segment EBITDA growth(a)
|
|
$
|
195
|
|
|
$
|
175
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Organic constant currency ("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.
|
|
(b)
|
"B" means results in 2019 are better than results in 2018 "(W)"
means results are worse.
|
|
(c)
|
"Acquisitions/(Divestitures)" includes the following activity: the
2018 divestiture of the GFS card processing businesses in Greece
and Central/Eastern Europe, the 2018 divestiture of the GFS check
remittance processing business in North America, and the 2019
acquisition of Software Express within GBS LATAM.
|
|
|
|
|
|
|
First Data Corporation
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(in millions)
|
|
|
|
ADJUSTED NET INCOME RECONCILIATION
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
% Change
|
|
Net income attributable to First Data Corporation
|
|
$
|
169
|
|
|
$
|
101
|
|
|
67
|
%
|
|
Adjustments:
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
56
|
|
|
74
|
|
|
(24
|
)%
|
|
Loss on debt extinguishment
|
|
1
|
|
|
-
|
|
|
NM
|
|
|
Amortization of acquisition intangibles and deferred financing costs(a)
|
|
89
|
|
|
106
|
|
|
(16
|
)%
|
|
Other operating expenses, net and Other expense
|
|
63
|
|
|
63
|
|
|
-
|
%
|
|
Other(b)
|
|
-
|
|
|
(11
|
)
|
|
NM
|
|
|
Discrete tax items(c)
|
|
-
|
|
|
6
|
|
|
NM
|
|
|
Income tax on above items(d)
|
|
(75
|
)
|
|
(60
|
)
|
|
(25
|
)%
|
|
Adjusted net income attributable to First Data Corporation
|
|
$
|
303
|
|
|
$
|
279
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
Adjusted net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.32
|
|
|
$
|
0.30
|
|
|
7
|
%
|
|
Diluted
|
|
$
|
0.31
|
|
|
$
|
0.29
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares used to compute adjusted net income
per share:
|
|
|
|
|
|
|
|
Basic
|
|
937
|
|
|
923
|
|
|
2
|
%
|
|
Diluted
|
|
967
|
|
|
946
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $3 million and $5 million for the
three months ended March 31, 2019 and 2018, respectively.
|
|
(b)
|
The 2018 balance represents adjustments for non wholly-owned
entities.
|
|
(c)
|
We exclude from "Adjusted net income attributable to First Data
Corporation" certain discrete tax items, such as tax law changes,
tax impact of mergers and acquisitions, valuation allowance
releases, and tax reserves related to issues that arose before KKR
acquired the Company.
|
|
(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.
|
|
|
|
|
|
|
First Data Corporation
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(in millions)
|
|
|
|
FREE CASH FLOW RECONCILIATION
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
2019
|
|
2018
|
|
$ Change
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
615
|
|
|
$
|
534
|
|
|
$
|
81
|
|
|
Capital expenditures
|
|
(166
|
)
|
|
(139
|
)
|
|
(27
|
)
|
|
Distribution and dividends paid to noncontrolling interests and
redeemable noncontrolling interest and other
|
|
(52
|
)
|
|
(27
|
)
|
|
(25
|
)
|
|
Free cash flow
|
|
$
|
397
|
|
|
$
|
368
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT RECONCILIATION
|
|
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
|
3/31/2019
|
|
12/31/2018
|
|
Total long-term borrowings
|
|
$
|
16,282
|
|
$
|
16,429
|
|
Total short-term and current portion of long-term borrowings
|
|
1,159
|
|
1,170
|
|
Total borrowings
|
|
17,441
|
|
17,599
|
|
Unamortized discount and unamortized deferred financing costs
|
|
88
|
|
94
|
|
Total borrowings at par
|
|
17,529
|
|
17,693
|
|
Less: Settlement lines of credit
|
|
127
|
|
224
|
|
Gross debt excluding settlement lines of credit
|
|
17,402
|
|
17,469
|
|
Less: Cash and cash equivalents
|
|
619
|
|
555
|
|
Net debt
|
|
$
|
16,783
|
|
$
|
16,914
|
|
|
|
First Data Corporation
2019 Non-GAAP Guidance Reconciliation
(Unaudited)
(in millions)
|
|
|
|
Consolidated Revenue to Total Segment Revenue
|
|
|
|
FY 2019 vs. FY 2018
|
|
Consolidated revenue (at reported rates)
|
|
~2.0-3.0%
|
|
Adjustments:
|
|
|
|
+Non wholly owned entities
|
|
|
|
+Reimbursable postage and other
|
|
|
|
+Currency Impact
|
|
|
|
+Divestiture Impact
|
|
|
|
Total segment revenue (at constant currency)
|
|
~5.0-6.0%
|
|
|
|
Net Income Attributable to FDC to Total Segment EBITDA
|
|
|
|
FY 2019 vs. FY 2018
|
|
Net income attributable to FDC
|
|
~(5.0%) - (2.0%)(1)
|
|
Adjustments
|
|
|
|
+Depreciation and amortization
|
|
|
|
+Interest Expense, net
|
|
|
|
+Income tax (benefit) expense
|
|
|
|
+Stock Based Compensation
|
|
|
|
+Other(2)
|
|
|
|
+Currency Impact
|
|
|
|
Total segment EBITDA (at constant currency)
|
|
~6.0-8.0%
|
|
|
|
Net Income Attributable to FDC to Adjusted Net Income
|
|
|
|
FY 2019
|
|
Net income attributable to FDC
|
|
$0.98 - $1.01(1)
|
|
Adjustments (note: adjustments represent positive balances)
|
|
|
|
+Stock-based compensation
|
|
|
|
+Amortization of acquisition intangibles and deferred financing cost
|
|
|
|
+Other(3)
|
|
|
|
Adjusted Net Income
|
|
$1.55 - $1.58
|
|
|
|
Cash Flow From Operations to Free Cash Flow
|
|
|
|
FY 2019
|
|
Cash / provided by operating activities
|
|
$2.4B+
|
|
+Adjustments(4)
|
|
|
|
Free cash flow
|
|
$1.5B+
|
|
|
|
|
|
(1)
|
Impacted by the non-recurrence of a significant one-time tax
benefit recorded 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
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this communication 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 strategy, plans, projections or
intentions. Examples of forward-looking statements include, but are not
limited to, all statements made relating to revenue, earnings before net
interest expense, income taxes, depreciation and amortization, 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. In
addition to factors previously disclosed in reports filed with the SEC
by First Data and Fiserv, Inc. and those identified elsewhere in this
communication, the following factors, among others, could cause actual
results to differ materially from forward-looking statements or
historical performance: the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of First
Data and Fiserv to terminate the definitive merger agreement between
First Data and Fiserv; the outcome of any legal proceedings that have
been or may be instituted against First Data, its stockholders or
directors or Fiserv, its shareholders or directors; the ability to
obtain regulatory approvals and satisfy other closing conditions to the
proposed merger in a timely manner or at all, including the risk that
regulatory approvals required for the proposed merger are not obtained
or are obtained subject to conditions that are not anticipated or that
are material and adverse to First Data's or Fiserv's business; a delay
in closing the proposed merger; difficulties and delays in integrating
the First Data and Fiserv businesses, including with respect to
implementing systems to prevent a material security breach of any
internal systems or to successfully manage credit and fraud risks in
business units; failing to fully realizing anticipated cost savings and
other anticipated benefits of the proposed merger; business disruptions
from the proposed merger that may harm First Data's or Fiserv's
business, including current plans and operations; potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the proposed merger, including as it
relates to First Data's or Fiserv's ability to successfully renew
existing client or supplier contracts on favorable terms or at all and
obtain new clients or suppliers; certain restrictions during the
pendency of the proposed merger that may impact First Data's or Fiserv's
ability to pursue certain business opportunities or strategic
transactions; the ability of First Data or Fiserv to retain and hire key
personnel; uncertainty as to the long-term value of the common stock of
Fiserv following the completion of the proposed merger; the continued
availability of capital and financing following the completion of the
proposed merger; the business, economic and political conditions in the
markets in which First Data and Fiserv operate; the impact of new or
changes in current laws, regulations, credit card association rules or
other industry standards, including privacy and cybersecurity laws and
regulations; and events beyond First Data's or Fiserv's control, such as
acts of terrorism.
Any forward-looking statements speak only as of the date of this
communication or as of the date they were made, and neither First Data
nor Fiserv undertakes any obligation to update forward-looking
statements. For a more detailed discussion of these factors, also see
the information under the captions "Cautionary Statement Regarding
Forward-Looking Statements" and "Risk Factors" in First Data's and
Fiserv's Joint Proxy and Consent Solicitation Statement/Prospectus that
forms part of the Registration Statement on Form S-4 (No. 333-229689)
filed with the SEC by Fiserv in connection with the proposed merger and
the captions "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in First Data's and
Fiserv's most recent reports on Form 10-K for the year ended December
31, 2018, and any material updates to these factors contained in any of
First Data's and Fiserv's subsequent and future filings.
As for the forward-looking statements that relate to future financial
results and other projections, actual results will be different due to
the inherent uncertainties of estimates, forecasts and projections and
may be better or worse than projected and such differences could be
material. Given these uncertainties, you should not place any reliance
on these forward-looking statements. Annualized, pro forma, projected
and estimated numbers are used for illustrative purpose only, are not
forecasts and may not reflect actual results.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190430005511/en/
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