[February 13, 2017] |
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First Data Reports Fourth Quarter and Full Year 2016 Financial Results
First Data Corporation (NYSE: FDC), a global leader in commerce-enabling
technology and solutions, today reported financial results for the
fourth quarter ended December 31, 2016. Consolidated revenue for the
fourth quarter was $2.9 billion, down 1% versus the prior year period,
or up 1% excluding currency impacts. Total segment revenue was $1.8
billion for the quarter, flat over the prior year period, or up 3%
excluding the impacts from currency and divestiture of the Australian
ATM business that occurred in the third quarter of 2016.
For the fourth quarter 2016, net income attributable to First Data was
$192 million (or $0.21 per diluted share), which compares to a net loss
of $1.2 billion in the prior year period. The prior year period included
debt extinguishment charges and one-time IPO-triggered expenses totaling
approximately $1.3 billion. Adjusted net income, which modifies net
income for items such as debt extinguishment charges, stock-based
compensation, amortization of acquisition intangibles, restructuring
costs and other items, was $365 million (or $0.39 per diluted share), up
$94 million or 35% versus the prior year period, primarily driven by
lower interest expense.
Total segment earnings before interest, taxes, depreciation, and
amortization (total segment EBITDA) in the fourth quarter 2016 was $771
million, up 1% versus the prior year period, or up 4% excluding impacts
from currency and the Australian ATM divestiture, driven by revenue
growth and expense management. Total segment EBITDA margin improved 50
basis points to 42.1% in the quarter.
"First Data delivered a full-year profit, generating a nearly $2 billion
improvement from our 2015 net income. We're proud of that turnaround,
but we're intensely focused on the hard work still ahead," said First
Data Chairman and CEO Frank Bisignano. "Throughout this year and beyond,
our team is aligned to deliver solid earnings growth, disciplined
expense management, strong cash generation, and continued organic
deleveraging, all while strengthening service and driving innovation to
serve and expand our client base," Bisignano added.
Segment Results
Global Business Solutions (GBS)
Fourth quarter 2016 GBS segment revenue was $1.0 billion, down 1% versus
the prior year period, or up 2% excluding the impacts from currency and
the Australian ATM divestiture. Within geographic regions, North America
revenue of $805 million was flat versus the prior year period as 7%
transaction growth was offset by a decline in blended yield. EMEA
revenue was $133 million, down 8% versus the prior year period, or flat
excluding currency impacts, as transaction growth was largely offset by
lower hardware revenue and a prior year interchange pricing benefit.
Latin America revenue was $54 million, up 17% versus the prior year
period, or up 45% excluding currency impacts, driven by strong results
in Brazil and Argentina. APAC revenue was $34 million, down 28% versus
the prior year period, or down 3% excluding impacts from currency and
the Australian ATM divestiture.
Fourth quarter 2016 GBS segment expenses were $580 million, down 4%
versus the prior year period, or flat excluding impacts from currency
and the Australian ATM divestiture.
Fourth quarter 2016 GBS segment EBITDA was $446 million, up 2% versus
the prior year period, or up 6% excluding impacts from currency and the
Australian ATM divestiture. Segment EBITDA margin improved 150 basis
points to 43.5% in the quarter.
Global Financial Solutions (GFS)
Fourth quarter 2016 GFS segment revenue was $415 million, up 5% versus
the prior year period, or up 10% excluding currency impacts. Within
geographic regions, North America revenue of $250 million was up 7%
versus the prior year period, largely driven by growth in processing and
print revenue partially offset by a decline in card personalization
revenue. North America card accounts on file grew 5% year over year.
EMEA revenue was $109 million, down 7% versus the prior year period, or
up 6% excluding currency impacts, primarily driven by new business and
internal growth. Latin America revenue was $33 million, up 32% versus
the prior year period, or up 50% excluding currency impacts, driven by
growth primarily in Argentina and Colombia. APAC revenue was $23
million, up 28% versus the prior year period, or up 25% excluding
currency impacts, primarily driven by growth in Australia.
Fourth quarter 2016 GFS segment expenses were $242 million, up 4% versus
the prior year period, or up 9% excluding currency impacts.
Fourth quarter 2016 GFS segment EBITDA was $173 million, up 7% versus
the prior year period, or up 11% excluding currency impacts. Segment
EBITDA margin improved 60 basis points to 41.7% in the quarter.
Network & Security Solutions (NSS)
Fourth quarter 2016 NSS segment revenue was $389 million, down 2% versus
the prior year period. NSS revenue growth was partly impacted by the
non-recurrence of a previously disclosed change in contract terms for
one client that benefited the prior period by $10 million.
Fourth quarter 2016 NSS segment expenses were $206 million, flat versus
the prior year period.
Fourth quarter 2016 NSS segment EBITDA was $183 million, down 4% versus
the prior year period. Segment EBITDA margin declined 100 basis points
to 47.0% in the quarter.
Full Year Results Summary
Total Company Results
Full year 2016 consolidated revenue was $11.6 billion, up 1% versus the
prior year, or up 2% excluding currency impacts. Total segment revenue
was $7.1 billion for the full year, up 1% versus the prior year, or up
4% excluding impacts from currency and the Australian ATM divestiture.
Full year net income attributable to First Data was $420 million (or
$0.46 per diluted share), up $1.9 billion versus a net loss of $1.5
billion in the full year 2015. Adjusted net income was $1.2 billion (or
$1.32 per diluted share), up $599 million or 96% versus the prior year,
primarily driven by lower interest expense and improved operating
results.
Full year total segment EBITDA was $2.9 billion, up 6% versus the prior
year, or up 9% excluding impacts from currency and the Australian ATM
divestiture, driven by revenue growth and expense management. Total full
year segment EBITDA margin improved 180 basis points to 40.5% in the
quarter.
Segments Results
Full year 2016 GBS segment revenue was $4.1 billion, down 1% versus full
year 2015, or up 2% excluding impacts from currency and the Australian
ATM divestiture. Full year 2016 segment expenses were $2.3 billion, down
3% versus the prior year, or flat excluding impacts from currency and
the Australian ATM divestiture. Full year segment EBITDA was $1.7
billion, up 3% versus the prior year, or up 6% excluding impacts from
currency and the Australian ATM divestiture. Segment EBITDA margin
improved 140 basis points to 42.5% for the full year.
Full year 2016 GFS segment revenue was $1.6 billion, up 7% versus full
year 2015, or up 10% excluding currency impacts. Full year 2016 segment
expenses were $947 million, flat versus the prior year, or up 4%
excluding currency impacts. Full year segment EBITDA was $646 million,
up 17% versus the prior year, or up 21% excluding currency impacts.
Segment EBITDA margin improved 380 basis points to 40.6% for the full
year.
Full year 2016 NSS segment revenue was $1.5 billion, up 1% versus full
year 2015. Full year 2016 segment expenses were $819 million, down 1%
versus the prior year. Full year segment EBITDA was $666 million, up 4%
versus the prior year. Segment EBITDA margin improved 120 basis points
to 44.8% for the full year.
Cash Flow
In the fourth quarter 2016, cash flow from operations was $451 million,
up $343 million compared to $108 million in the prior year period. Free
cash flow, which First Data defines as cash flow from operations, less
capital expenditures and distributions to minority interests and other,
was $270 million in the current quarter, up $387 million compared to
$(117) million in the prior year period.
Full year 2016 cash flow from operations was $2.1 billion, up $1.3
billion from $795 million in 2015. The 2016 cash flow from operations
includes a reclassification of $102 million (see footnote (a) on
Selected Consolidated Cash Flow Data table for additional detail). Full
year free cash flow was $1.2 billion, up $1.3 billion from $(119)
million in 2015. The increase in full year free cash flow was driven by
a nearly $0.8 billion reduction in cash interest paid in 2016 compared
to 2015, as well as growth in total segment EBITDA, improved working
capital and lower capital expenditures in the current year.
Capital Structure
Total borrowings at December 31, 2016 were reduced to $18.5 billion,
from $18.9 billion at September 30, 2016 and $19.6 billion at year end
2015. Net debt at December 31, 2016 was reduced to $18.2 billion, from
$18.5 billion at September 30, 2016 and $19.3 billion at year end 2015.
As previously disclosed, on October 14, 2016, First Data refinanced
approximately $4.5 billion of term loans due in 2021, which reduced the
interest rate on these loans by 100 basis points from LIBOR plus 400
basis points to LIBOR plus 300 basis points.
On December 5, 2016, First Data refinanced approximately $3.6 billion of
term loans due in 2022, reducing the interest rate on $2.8 billion of
U.S. dollar term loans from LIBOR plus 375 basis points to LIBOR plus
300 basis points, and €0.8 billion of Euro term loans from Euro LIBOR
plus 375 basis points to Euro LIBOR plus 325 basis points.
On January 23, 2017, First Data closed on new amortizing term loans
totaling $1.3 billion with an interest rate of LIBOR plus 200 basis
points. The proceeds of these term loans and other funds were used to
redeem all of the $1.4 billion 6.75% senior secured first lien notes due
2020, along with associated fees and expenses. The new term loans mature
in June, 2020.
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 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 revenue measures 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 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.
Investor Conference Call
The company will host a conference call and webcast on Monday, February
13, 2017, at 8 a.m. ET to review the fourth quarter 2016 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.
A replay of the call will be available through March 13, 2017, at +1
(877) 344-7529 (U.S.) or +1 (412) 317-0088 (outside the U.S.); passcode
10100166 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 (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 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 $2.2 trillion per year.
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First Data Corporation
Consolidated Statements of Operations
(Unaudited)
(in millions, except shares and per share data)
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Three months ended December 31,
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Twelve months ended December 31,
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2016
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2015
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%
Change
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Constant Currency % Change
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2016
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2015
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%
Change
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Constant Currency % Change
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Revenues:
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|
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|
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|
|
|
|
|
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|
|
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|
Transaction and processing service fees (a)
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$
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1,647
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|
$
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1,691
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|
|
|
(3
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)%
|
|
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(1
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)%
|
|
|
$
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6,600
|
|
|
|
$
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6,597
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|
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|
-
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%
|
|
|
2
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%
|
Product sales and other (a)
|
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346
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|
|
|
323
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|
|
7
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%
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|
|
12
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%
|
|
|
1,239
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|
|
|
1,167
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|
|
|
6
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%
|
|
|
11
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%
|
Total revenues (excluding reimbursable items)
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1,993
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|
|
|
2,014
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|
|
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(1
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)%
|
|
|
1
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%
|
|
|
7,839
|
|
|
|
7,764
|
|
|
|
1
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%
|
|
|
3
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%
|
Reimbursable debit network fees, postage, and other
|
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950
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|
|
|
950
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|
|
|
-
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%
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|
|
-
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%
|
|
|
3,745
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|
|
|
3,687
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|
|
|
2
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%
|
|
|
2
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%
|
Total revenues
|
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|
2,943
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|
|
|
2,964
|
|
|
|
(1
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)%
|
|
|
1
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%
|
|
|
11,584
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|
|
|
11,451
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|
|
|
1
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%
|
|
|
2
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%
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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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715
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|
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816
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(12
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)%
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|
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(10
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)%
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|
2,855
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|
|
|
2,871
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|
|
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(1
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)%
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|
|
1
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%
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Cost of products sold
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|
86
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|
|
|
99
|
|
|
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(13
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)%
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|
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(11
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)%
|
|
|
337
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|
|
|
356
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|
|
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(5
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)%
|
|
|
(3
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)%
|
Selling, general, and administrative
|
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|
472
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|
|
|
725
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|
|
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(35
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)%
|
|
|
(33
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)%
|
|
|
2,035
|
|
|
|
2,292
|
|
|
|
(11
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)%
|
|
|
(10
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)%
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Depreciation and amortization
|
|
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236
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|
|
|
262
|
|
|
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(10
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)%
|
|
|
(9
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)%
|
|
|
949
|
|
|
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1,022
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|
|
|
(7
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)%
|
|
|
(6
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)%
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Other operating expenses
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4
|
|
|
|
13
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|
|
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(69
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)%
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|
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(69
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)%
|
|
|
61
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|
|
|
53
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|
|
|
15
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%
|
|
|
17
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%
|
Total expenses (excluding reimbursable items)
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1,513
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|
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|
1,915
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(21
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)%
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|
|
(19
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)%
|
|
|
6,237
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|
|
|
6,594
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|
|
|
(5
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)%
|
|
|
(4
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)%
|
Reimbursable debit network fees, postage, and other
|
|
|
950
|
|
|
|
950
|
|
|
|
-
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%
|
|
|
-
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%
|
|
|
3,745
|
|
|
|
3,687
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|
|
|
2
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%
|
|
|
2
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%
|
Total expenses
|
|
|
2,463
|
|
|
|
2,865
|
|
|
|
(14
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)%
|
|
|
(13
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)%
|
|
|
9,982
|
|
|
|
10,281
|
|
|
|
(3
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)%
|
|
|
(2
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)%
|
Operating profit
|
|
|
480
|
|
|
|
99
|
|
|
|
385
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%
|
|
|
|
|
|
1,602
|
|
|
|
1,170
|
|
|
|
37
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%
|
|
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|
Interest expense, net
|
|
|
(258
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)
|
|
|
(338
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)
|
|
|
(24
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)%
|
|
|
|
|
|
(1,068
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)
|
|
|
(1,537
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)
|
|
|
(31
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)%
|
|
|
|
Loss on debt extinguishment
|
|
|
(12
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)
|
|
|
(960
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)
|
|
|
(99
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)%
|
|
|
|
|
|
(70
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)
|
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|
(1,068
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)
|
|
|
(93
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)%
|
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|
Other income
|
|
|
3
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|
|
|
28
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|
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(89
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)%
|
|
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|
|
|
17
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|
|
|
29
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|
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(41
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)%
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|
|
Income (loss) before income taxes and equity earnings in affiliates
|
|
|
213
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|
|
|
(1,171
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)
|
|
|
NM
|
|
|
|
|
|
481
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|
|
|
(1,406
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)
|
|
|
NM
|
|
|
|
Income tax expense
|
|
|
24
|
|
|
|
56
|
|
|
|
(57
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)%
|
|
|
|
|
|
81
|
|
|
|
101
|
|
|
|
(20
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)%
|
|
|
|
Equity earnings in affiliates
|
|
|
62
|
|
|
|
64
|
|
|
|
(3
|
)%
|
|
|
|
|
|
260
|
|
|
|
239
|
|
|
|
9
|
%
|
|
|
|
Net income (loss)
|
|
|
251
|
|
|
|
(1,163
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)
|
|
|
NM
|
|
|
|
|
|
660
|
|
|
|
(1,268
|
)
|
|
|
NM
|
|
|
|
Less: Net income attributable to noncontrolling interests and
redeemable noncontrolling interest
|
|
|
59
|
|
|
|
54
|
|
|
|
9
|
%
|
|
|
|
|
|
240
|
|
|
|
213
|
|
|
|
13
|
%
|
|
|
|
Net income (loss) attributable to First Data Corporation
|
|
|
$
|
192
|
|
|
|
$
|
(1,217
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)
|
|
|
NM
|
|
|
|
|
|
$
|
420
|
|
|
|
$
|
(1,481
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)
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Basic
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
905,966,452
|
|
|
|
|
|
|
|
|
|
|
|
|
901,671,872
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
929,375,020
|
|
|
|
|
|
|
|
|
|
|
|
|
921,001,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $48 million and $198 million for the three and
twelve months ended December 31, 2016, respectively, and $52
million and $205 million for the comparable periods in 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2016
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|
Cash and cash equivalents (a)
|
|
|
$
|
385
|
|
|
|
$
|
429
|
|
Settlement assets
|
|
|
|
14,795
|
|
|
|
|
8,150
|
|
Total assets
|
|
|
|
40,292
|
|
|
|
|
34,362
|
|
|
|
|
|
|
|
|
Short-term and current portion of long-term borrowings
|
|
|
|
358
|
|
|
|
|
856
|
|
Settlement obligations
|
|
|
|
14,795
|
|
|
|
|
8,150
|
|
Long-term borrowings
|
|
|
|
18,131
|
|
|
|
|
18,737
|
|
Total liabilities
|
|
|
|
36,088
|
|
|
|
|
30,625
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
|
|
73
|
|
|
|
|
77
|
|
|
|
|
|
|
|
|
Total First Data Corporation stockholders' equity
|
|
|
|
1,220
|
|
|
|
|
668
|
|
Noncontrolling interests
|
|
|
|
2,911
|
|
|
|
|
2,992
|
|
Total equity
|
|
|
|
4,131
|
|
|
|
|
3,660
|
|
|
|
|
|
|
|
|
SELECTED CONSOLIDATED CASH FLOW DATA
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Source/(Use) of cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities (a)
|
|
|
$
|
451
|
|
|
|
$
|
108
|
|
|
|
$
|
2,111
|
|
|
|
$
|
795
|
|
Net cash used in investing activities
|
|
|
(49
|
)
|
|
|
(131
|
)
|
|
|
|
(387
|
)
|
|
|
|
(685
|
)
|
Net cash (used in) providing by financing activities
|
|
|
(476
|
)
|
|
|
93
|
|
|
|
|
(1,734
|
)
|
|
|
|
(16
|
)
|
Supplemental cash flow data
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash interest payments on long-term debt (b)
|
|
|
$
|
249
|
|
|
|
$
|
470
|
|
|
|
$
|
1,008
|
|
|
|
$
|
1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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,
|
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
Constant Currency % Change (e)
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
Constant Currency % Change (e)
|
Consolidated Revenues
|
|
|
$
|
2,943
|
|
|
|
$
|
2,964
|
|
|
|
(1
|
)%
|
|
|
1
|
%
|
|
|
$
|
11,584
|
|
|
|
$
|
11,451
|
|
|
|
1
|
%
|
|
|
2
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities (a)
|
|
|
(21
|
)
|
|
|
(16
|
)
|
|
|
31
|
%
|
|
|
|
|
|
(80
|
)
|
|
|
(74
|
)
|
|
|
8
|
%
|
|
|
|
Independent Sales Organization (ISO) commission expense (b)
|
|
|
(142
|
)
|
|
|
(167
|
)
|
|
|
(15
|
)%
|
|
|
|
|
|
(618
|
)
|
|
|
(642
|
)
|
|
|
(4
|
)%
|
|
|
|
Reimbursable debit network fees, postage, and other
|
|
|
(950
|
)
|
|
|
(950
|
)
|
|
|
-
|
%
|
|
|
|
|
|
(3,745
|
)
|
|
|
(3,687
|
)
|
|
|
2
|
%
|
|
|
|
Total Segment Revenues
|
|
|
$
|
1,830
|
|
|
|
$
|
1,831
|
|
|
|
-
|
%
|
|
|
3
|
%
|
|
|
$
|
7,141
|
|
|
|
$
|
7,048
|
|
|
|
1
|
%
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
|
$
|
1,026
|
|
|
|
$
|
1,039
|
|
|
|
(1
|
)%
|
|
|
2
|
%
|
|
|
$
|
4,063
|
|
|
|
$
|
4,089
|
|
|
|
(1
|
)%
|
|
|
2
|
%
|
Global Financial Solutions
|
|
|
415
|
|
|
|
394
|
|
|
|
5
|
%
|
|
|
10
|
%
|
|
|
1,593
|
|
|
|
1,495
|
|
|
|
7
|
%
|
|
|
10
|
%
|
Network & Security Solutions
|
|
|
389
|
|
|
|
398
|
|
|
|
(2
|
)%
|
|
|
(2
|
)%
|
|
|
1,485
|
|
|
|
1,464
|
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
Constant Currency % Change(e)
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
Constant Currency % Change (e)
|
Consolidated Expenses
|
|
|
$
|
2,463
|
|
|
|
$
|
2,865
|
|
|
|
(14
|
)%
|
|
|
(13
|
)%
|
|
|
$
|
9,982
|
|
|
|
$
|
10,281
|
|
|
|
(3
|
)%
|
|
|
(2
|
)%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities (a)
|
|
|
(18
|
)
|
|
|
(19
|
)
|
|
|
(5
|
)%
|
|
|
|
|
|
(70
|
)
|
|
|
(74
|
)
|
|
|
(5
|
)%
|
|
|
|
Independent Sales Organization (ISO) commission expense (b)
|
|
|
(142
|
)
|
|
|
(167
|
)
|
|
|
(15
|
)%
|
|
|
|
|
|
(618
|
)
|
|
|
(642
|
)
|
|
|
(4
|
)%
|
|
|
|
Reimbursable debit network fees, postage and other
|
|
|
(950
|
)
|
|
|
(950
|
)
|
|
|
-
|
%
|
|
|
|
|
|
(3,745
|
)
|
|
|
(3,687
|
)
|
|
|
2
|
%
|
|
|
|
Depreciation and amortization
|
|
|
(236
|
)
|
|
|
(262
|
)
|
|
|
(10
|
)%
|
|
|
|
|
|
(949
|
)
|
|
|
(1,022
|
)
|
|
|
(7
|
)%
|
|
|
|
Stock-based compensation
|
|
|
(49
|
)
|
|
|
(298
|
)
|
|
|
(84
|
)%
|
|
|
|
|
|
(263
|
)
|
|
|
(329
|
)
|
|
|
(20
|
)%
|
|
|
|
Other (c)
|
|
|
(9
|
)
|
|
|
(100
|
)
|
|
|
(91
|
)%
|
|
|
|
|
|
(88
|
)
|
|
|
(209
|
)
|
|
|
(58
|
)%
|
|
|
|
Total Segment Expenses
|
|
|
$
|
1,059
|
|
|
|
$
|
1,069
|
|
|
|
(1
|
)%
|
|
|
2
|
%
|
|
|
$
|
4,249
|
|
|
|
$
|
4,318
|
|
|
|
(2
|
)%
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
|
$
|
580
|
|
|
|
$
|
603
|
|
|
|
(4
|
)%
|
|
|
-
|
%
|
|
|
$
|
2,338
|
|
|
|
$
|
2,408
|
|
|
|
(3
|
)%
|
|
|
-
|
%
|
Global Financial Solutions
|
|
|
242
|
|
|
|
232
|
|
|
|
4
|
%
|
|
|
9
|
%
|
|
|
947
|
|
|
|
945
|
|
|
|
-
|
%
|
|
|
4
|
%
|
Network & Security Solutions
|
|
|
206
|
|
|
|
207
|
|
|
|
-
|
%
|
|
|
(1
|
)%
|
|
|
819
|
|
|
|
825
|
|
|
|
(1
|
)%
|
|
|
(1
|
)%
|
Corporate
|
|
|
31
|
|
|
|
27
|
|
|
|
15
|
%
|
|
|
15
|
%
|
|
|
145
|
|
|
|
140
|
|
|
|
4
|
%
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
Constant Currency % Change (e)
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
Constant Currency % Change (e)
|
Net income (loss) attributable to First Data Corporation
|
|
|
$
|
192
|
|
|
|
$
|
(1,217
|
)
|
|
|
NM
|
|
|
NM
|
|
|
$
|
420
|
|
|
|
$
|
(1,481
|
)
|
|
|
NM
|
|
|
NM
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non wholly owned entities (a)
|
|
|
(6
|
)
|
|
|
(7
|
)
|
|
|
(14
|
)%
|
|
|
|
|
|
(30
|
)
|
|
|
(26
|
)
|
|
|
15
|
%
|
|
|
|
Depreciation and amortization
|
|
|
236
|
|
|
|
262
|
|
|
|
(10
|
)%
|
|
|
|
|
|
949
|
|
|
|
1,022
|
|
|
|
(7
|
)%
|
|
|
|
Interest expense, net
|
|
|
258
|
|
|
|
338
|
|
|
|
(24
|
)%
|
|
|
|
|
|
1,068
|
|
|
|
1,537
|
|
|
|
(31
|
)%
|
|
|
|
Loss on debt extinguishment
|
|
|
12
|
|
|
|
960
|
|
|
|
(99
|
)%
|
|
|
|
|
|
70
|
|
|
|
1,068
|
|
|
|
(93
|
)%
|
|
|
|
Other items (d)
|
|
|
6
|
|
|
|
72
|
|
|
|
(92
|
)%
|
|
|
|
|
|
71
|
|
|
|
180
|
|
|
|
(61
|
)%
|
|
|
|
Income tax expense
|
|
|
24
|
|
|
|
56
|
|
|
|
(57
|
)%
|
|
|
|
|
|
81
|
|
|
|
101
|
|
|
|
(20
|
)%
|
|
|
|
Stock-based compensation
|
|
|
49
|
|
|
|
298
|
|
|
|
(84
|
)%
|
|
|
|
|
|
263
|
|
|
|
329
|
|
|
|
(20
|
)%
|
|
|
|
Total Segment EBITDA
|
|
|
$
|
771
|
|
|
|
$
|
762
|
|
|
|
1
|
%
|
|
|
4
|
%
|
|
|
$
|
2,892
|
|
|
|
$
|
2,730
|
|
|
|
6
|
%
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
|
$
|
446
|
|
|
|
$
|
436
|
|
|
|
2
|
%
|
|
|
6
|
%
|
|
|
$
|
1,725
|
|
|
|
$
|
1,681
|
|
|
|
3
|
%
|
|
|
6
|
%
|
Global Financial Solutions
|
|
|
173
|
|
|
|
162
|
|
|
|
7
|
%
|
|
|
11
|
%
|
|
|
646
|
|
|
|
550
|
|
|
|
17
|
%
|
|
|
21
|
%
|
Network & Security Solutions
|
|
|
183
|
|
|
|
191
|
|
|
|
(4
|
)%
|
|
|
(4
|
)%
|
|
|
666
|
|
|
|
639
|
|
|
|
4
|
%
|
|
|
4
|
%
|
Corporate
|
|
|
(31
|
)
|
|
|
(27
|
)
|
|
|
15
|
%
|
|
|
15
|
%
|
|
|
(145
|
)
|
|
|
(140
|
)
|
|
|
4
|
%
|
|
|
4
|
%
|
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,
and debt issuance costs.
|
|
(d) Items noted within (c) above and "Other income" as presented
in the unaudited consolidated statements of operations, which
includes divestitures, derivative gains (losses), non-operating
foreign currency gains (losses), the gain on Visa Europe share
sale, and Kohlberg Kravis Roberts & Co. (KKR) related items. KKR
related items represent KKR annual sponsorship fees for
management, consulting, financial and other advisory services.
Upon completing the IPO in October 2015, the company is no longer
obligated to pay KKR annual sponsorship fees.
|
|
(e) Segment revenues, expenses, and EBITDA constant currency %
changes exclude the impact of currency and the Australian ATM
divestiture.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corporation
Normalized Growth
(Unaudited)
(in millions)
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
Segment revenue
|
|
|
$
|
1,830
|
|
|
|
$
|
1,831
|
|
|
|
-
|
%
|
|
|
$
|
7,141
|
|
|
|
$
|
7,048
|
|
|
|
1
|
%
|
Currency impact
|
|
|
41
|
|
|
|
-
|
|
|
|
|
|
|
146
|
|
|
|
-
|
|
|
|
|
Australian ATM Divestiture (a)
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
|
|
|
(32
|
)
|
|
|
(50
|
)
|
|
|
|
Normalized segment revenue growth
|
|
|
$
|
1,871
|
|
|
|
$
|
1,819
|
|
|
|
3
|
%
|
|
|
$
|
7,255
|
|
|
|
$
|
6,998
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS revenue
|
|
|
$
|
1,026
|
|
|
|
$
|
1,039
|
|
|
|
(1
|
)%
|
|
|
$
|
4,063
|
|
|
|
$
|
4,089
|
|
|
|
(1
|
)%
|
Currency impact
|
|
|
23
|
|
|
|
-
|
|
|
|
|
|
|
91
|
|
|
|
-
|
|
|
|
|
Australian ATM Divestiture (a)
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
|
|
|
(32
|
)
|
|
|
(50
|
)
|
|
|
|
Normalized GBS revenue growth
|
|
|
$
|
1,049
|
|
|
|
$
|
1,027
|
|
|
|
2
|
%
|
|
|
$
|
4,122
|
|
|
|
$
|
4,039
|
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS APAC revenue
|
|
|
$
|
34
|
|
|
|
$
|
47
|
|
|
|
(28
|
)%
|
|
|
$
|
159
|
|
|
|
$
|
180
|
|
|
|
(12
|
)%
|
Currency impact
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
4
|
|
|
|
-
|
|
|
|
|
Australian ATM Divestiture (a)
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
|
|
|
(32
|
)
|
|
|
(50
|
)
|
|
|
|
Normalized GBS APAC revenue growth
|
|
|
$
|
34
|
|
|
|
$
|
35
|
|
|
|
(3
|
)%
|
|
|
$
|
131
|
|
|
|
$
|
130
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
Segment expense
|
|
|
$
|
1,059
|
|
|
|
$
|
1,069
|
|
|
|
(1
|
)%
|
|
|
$
|
4,249
|
|
|
|
$
|
4,318
|
|
|
|
(2
|
)%
|
Currency impact
|
|
|
22
|
|
|
|
-
|
|
|
|
|
|
|
80
|
|
|
|
-
|
|
|
|
|
Australian ATM Divestiture (a)
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
|
|
|
(28
|
)
|
|
|
(41
|
)
|
|
|
|
Normalized segment expense growth
|
|
|
$
|
1,081
|
|
|
|
$
|
1,059
|
|
|
|
2
|
%
|
|
|
$
|
4,301
|
|
|
|
$
|
4,277
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS expense
|
|
|
$
|
580
|
|
|
|
$
|
603
|
|
|
|
(4
|
)%
|
|
|
$
|
2,338
|
|
|
|
$
|
2,408
|
|
|
|
(3
|
)%
|
Currency impact
|
|
|
11
|
|
|
|
-
|
|
|
|
|
|
|
46
|
|
|
|
-
|
|
|
|
|
Australian ATM Divestiture (a)
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
|
|
|
(28
|
)
|
|
|
(41
|
)
|
|
|
|
Normalized GBS expense growth
|
|
|
$
|
591
|
|
|
|
$
|
593
|
|
|
|
-
|
%
|
|
|
$
|
2,356
|
|
|
|
$
|
2,367
|
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
Segment EBITDA
|
|
|
$
|
771
|
|
|
|
$
|
762
|
|
|
|
1
|
%
|
|
|
$
|
2,892
|
|
|
|
$
|
2,730
|
|
|
|
6
|
%
|
Currency impact
|
|
|
19
|
|
|
|
-
|
|
|
|
|
|
|
66
|
|
|
|
-
|
|
|
|
|
Australian ATM Divestiture (a)
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
|
|
|
(4
|
)
|
|
|
(9
|
)
|
|
|
|
Normalized segment EBITDA growth
|
|
|
$
|
790
|
|
|
|
$
|
760
|
|
|
|
4
|
%
|
|
|
$
|
2,954
|
|
|
|
$
|
2,721
|
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS EBITDA
|
|
|
$
|
446
|
|
|
|
$
|
436
|
|
|
|
2
|
%
|
|
|
$
|
1,725
|
|
|
|
$
|
1,681
|
|
|
|
3
|
%
|
Currency impact
|
|
|
12
|
|
|
|
-
|
|
|
|
|
|
|
45
|
|
|
|
-
|
|
|
|
|
Australian ATM Divestiture (a)
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
|
|
|
(4
|
)
|
|
|
(9
|
)
|
|
|
|
Normalized GBS EBITDA growth
|
|
|
$
|
458
|
|
|
|
$
|
434
|
|
|
|
6
|
%
|
|
|
$
|
1,766
|
|
|
|
$
|
1,672
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) 2016 Australian ATM divestiture revenue, expense, EBITDA shown
in constant currency rates.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
Net income (loss) attributable to First Data Corporation
|
|
$
|
192
|
|
|
$
|
(1,217
|
)
|
|
NM
|
|
$
|
420
|
|
|
$
|
(1,481
|
)
|
|
NM
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
49
|
|
|
298
|
|
|
(84
|
)%
|
|
263
|
|
|
329
|
|
|
(20
|
)%
|
Loss on debt extinguishment (a)
|
|
12
|
|
|
960
|
|
|
(99
|
)%
|
|
70
|
|
|
1,068
|
|
|
(93
|
)%
|
Mark-to-market adjustment for derivatives and euro-denominated debt
(b)
|
|
-
|
|
|
(33
|
)
|
|
(100
|
)%
|
|
5
|
|
|
(53
|
)
|
|
NM
|
Amortization of acquisition intangibles and deferred financing costs
(c)
|
|
104
|
|
|
145
|
|
|
(28
|
)%
|
|
422
|
|
|
579
|
|
|
(27
|
)%
|
Loss on Australian ATM divestiture
|
|
3
|
|
|
-
|
|
|
NM
|
|
34
|
|
|
-
|
|
|
NM
|
Gain on Visa Europe share sale
|
|
-
|
|
|
-
|
|
|
NM
|
|
(29
|
)
|
|
-
|
|
|
NM
|
Restructuring, impairment, litigation, and other (d)
|
|
9
|
|
|
99
|
|
|
(91
|
)%
|
|
70
|
|
|
190
|
|
|
(63
|
)%
|
Income tax on above items (e)
|
|
(4
|
)
|
|
19
|
|
|
NM
|
|
(35
|
)
|
|
(11
|
)
|
|
218
|
%
|
Adjusted net income
|
|
$
|
365
|
|
|
$
|
271
|
|
|
35
|
%
|
|
$
|
1,220
|
|
|
$
|
621
|
|
|
96
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.40
|
|
|
|
|
|
|
$
|
1.35
|
|
|
|
|
|
Diluted
|
|
$
|
0.39
|
|
|
|
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares used to compute adjusted net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
905,966,452
|
|
|
|
|
|
|
901,671,872
|
|
|
|
|
|
Diluted
|
|
929,375,020
|
|
|
|
|
|
|
921,001,863
|
|
|
|
|
|
NM represents not meaningful
|
|
(a) Represents costs associated with debt refinancing on
extinguished debt.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Represents mark-to-market activity related to our undesignated
hedges, ineffectiveness of our designated hedges, and
mark-to-market activity on our euro-denominated debt held in the
United States. The euro-denominated debt was designated as a
non-derivative hedge of net investment in foreign operations
during the first quarter of 2016 with the gain (loss) reflected
within accumulated other comprehensive income during 2016.
|
|
(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.
|
|
(d) Represents restructuring, impairments, non-normal course
litigation and regulatory settlements, investments gains (losses),
fees paid on debt modifications, and divestitures, as applicable
to the periods presented. Excludes the divestiture in our
Australian ATM business, which is broken out separately within
"Loss on Australian ATM divestiture" above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 (expense)
benefit 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 shares and per share data)
|
|
FREE CASH FLOW RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
Change
|
|
|
2016
|
|
|
2015
|
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities (a)
|
|
|
$
|
451
|
|
|
|
$
|
108
|
|
|
|
$
|
343
|
|
|
|
$
|
2,111
|
|
|
|
$
|
795
|
|
|
|
$
|
1,316
|
|
Capital expenditures
|
|
|
(126
|
)
|
|
|
(145
|
)
|
|
|
19
|
|
|
|
(477
|
)
|
|
|
(602
|
)
|
|
|
125
|
|
Distribution to minority interest and other (a)
|
|
|
(55
|
)
|
|
|
(80
|
)
|
|
|
25
|
|
|
|
(418
|
)
|
|
|
(312
|
)
|
|
|
(106
|
)
|
Free cash flow
|
|
|
$
|
270
|
|
|
|
$
|
(117
|
)
|
|
|
387
|
|
|
|
$
|
1,216
|
|
|
|
$
|
(119
|
)
|
|
|
1,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. Free cash flow excludes the impact of reclassification.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
As of
|
|
|
|
December 31, 2016
|
|
|
December 31, 2015
|
Total long-term borrowings
|
|
|
$
|
18,131
|
|
|
|
$
|
18,737
|
|
Total short-term and current portion of long-term borrowings
|
|
|
358
|
|
|
|
856
|
|
Total borrowings
|
|
|
18,489
|
|
|
|
19,593
|
|
Unamortized discount and unamortized deferred financing costs
|
|
|
156
|
|
|
|
184
|
|
Total borrowings at par
|
|
|
18,645
|
|
|
|
19,777
|
|
Less: Settlement lines of credit and other arrangements
|
|
|
(84
|
)
|
|
|
(43
|
)
|
Gross debt
|
|
|
18,561
|
|
|
|
19,734
|
|
Less: Cash and cash equivalents (a)
|
|
|
(385
|
)
|
|
|
(429
|
)
|
Net debt
|
|
|
$
|
18,176
|
|
|
|
$
|
19,305
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) As of December 31, 2016, "Cash and cash equivalents" reflects
a reclassification of $102 million 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corporation
Operating Data
(Unaudited)
(in millions)
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
Twelve months ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
|
|
2016
|
|
|
2015
|
|
|
% Change
|
GBS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America merchant transactions (a)
|
|
|
12,004
|
|
|
|
11,232
|
|
|
|
7
|
%
|
|
|
46,372
|
|
|
|
43,362
|
|
|
|
7
|
%
|
International merchant transactions (b)
|
|
|
2,408
|
|
|
|
1,871
|
|
|
|
29
|
%
|
|
|
8,246
|
|
|
|
6,826
|
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GFS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America card accounts on file (c)
|
|
|
|
|
|
|
|
|
|
|
|
855
|
|
|
|
813
|
|
|
|
5
|
%
|
International card accounts on file (d)
|
|
|
|
|
|
|
|
|
|
|
|
151
|
|
|
|
135
|
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NSS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network transactions (EFT and Stored Value) (e)
|
|
|
5,543
|
|
|
|
5,067
|
|
|
|
9
|
%
|
|
|
20,258
|
|
|
|
18,918
|
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
International merchant transactions for the three and twelve
months ended December 31, 2015 reflect an updated count on
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 for the twelve months ended December 31, 2015
reflect an updated card account total.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e) Network transactions include the debit issuer processing
transactions, STAR Network issuer transactions, and closed loop
and open loop 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 high degree of leverage; (13) adverse impacts from
currency exchange rates or currency controls imposed by any government
or otherwise; (14) changes in the interest rate environment that
increase interest on our borrowings or the interest rate at which we can
refinance our borrowings; (15) the impact of new or changes in current
laws, regulations, credit card association rules, or other industry
standards; and (16) 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, 2015,
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 and Item 1A - Risk Factors in the quarterly
report on Form 10-Q for the period ended June 30, 2016. 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/20170213005517/en/
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