First Data Reports First Quarter Results; Revenue Growth Was Strong at 10%.DENVER Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. -- First Data Corp. (NYSE NYSE See: New York Stock Exchange :FDC FDC - Floppy Disk Controller ) today reported its financial results for the first quarter of 2006. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenue was $2.7 billion, up 10%. Net income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $375 million, or $0.48 per share. Earnings per share were negatively impacted by a net $0.01 of other items, primarily related to the $15 million settlement of a previously filed patent lawsuit lawsuit: see procedure; tort. . "We are excited about our performance in the first quarter, especially that of Commercial Services. Results were in line with our expectations and we are pleased with the underlying strength in all of our major segments. Segment revenue growth was 10%, with strong segment operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. growth of 13%," said Ric Duques, chairman and chief executive officer. "We are well positioned to deliver on our committed earnings growth projections. We continue to focus on driving sales and delivering quality service to our clients. We will continue to take positive actions in areas that do not meet our expectations; thereby unlocking the inherent shareholder value within First Data." Segment Results For the quarter, Western Union generated revenue of $1.1 billion, a 16% increase, and operating profit was $337 million, up 13%. Profit margin was strong at 32%. Western Union's results were driven by strong consumer-to-consumer Consumer-to-consumer (or C2C) electronic commerce involves the electronically-facilitated transactions between consumers through some third party. A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase transaction growth of 31%. Consumer-to-consumer revenue increased 18%. The consumer-to-business Consumer-to-business (C2B ) is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. service continues its turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. and delivered transaction growth of 12% and revenue growth of 5%. For the quarter, Commercial Services generated revenue of $934 million, a very strong 9% growth or 6% excluding reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. debit A monetary amount that is subtracted from an account balance. A debit from one account is a credit to another. See credit. network fees. Operating profit was $214 million, up a strong 24% or 9% excluding integration expense from 2005. Margin for the quarter improved to 23% from 20% or to 28.4% from 27.6% excluding reimbursable debit network fees and 2005 integration costs. First quarter results were driven by a continued focus on sales, operating cost efficiencies and strong transaction growth of 15%. For the quarter, Financial Institution Services generated revenue of $445 million, down 5%. Operating profit was $84 million, down 4%. Margin for the quarter improved to 18.9% from 18.6% or to 28.8% from 27.6% excluding reimbursables. For the quarter, First Data International generated revenue of $264 million, up 24% and operating profit was $29 million, up 35%. Margin improved to 11.0% from 10.1%. Outlook for 2006 Commenting on the rest of the year Duques said, "We are confident in delivering on our 2006 earnings per share target of $2.35 - $2.42 from continuing operations. While it has not been our practice to provide quarterly guidance, given the transitional nature of this year, we feel it is important to share our earnings per share expectations for the second quarter. We anticipate second quarter earnings per share to be in the range of $0.52 to $0.55 from continuing operations, which is squarely square·ly adv. 1. Mathematics At right angles: sawed the beam squarely. 2. In a square shape. 3. in line with our original second quarter 2006 operating plan. Both full year and second quarter guidance exclude future spin costs and any impact from the spin or sales of businesses, as we are currently unable to reasonably estimate these items." Non-GAAP Measures In certain circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or results have been presented that are non-GAAP (generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ) measures and should be viewed in addition to, and not in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. , the company's reported results. Reconciliations to comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures are available in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. schedules and in the "Invest" section of the company's web site at www.firstdata.com. Investor and Analyst Conference First Data will hold an investor and analyst conference call tomorrow April 21, at 8:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . Ric Duques, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , will host the call. To listen to the broadcast, please log on to http://www.firstdata.com, and click on the link under the Invest section at least 15 minutes prior to the start of the call. To participate in the call, dial 888-831-9087 (U.S.) or 773-799-3935 (outside the U.S.) ten minutes prior to the start of the call and enter passcode FDC. A replay of the webcast will be available on the company website shortly after the call ends until 5:00 p.m. EDT April 28, or call 888-445-8681 (U.S.) or 203-369-3156 (outside the U.S.). No passcode is required. Please note: All statements made by First Data officers on this call are the property of First Data and subject to copyright protection. Other than the replay, First Data has not authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: , and disclaims responsibility for, any recording, replay or distribution of any transcription transcription /trans·crip·tion/ (-krip´shun) the synthesis of RNA using a DNA template catalyzed by RNA polymerase; the base sequences of the RNA and DNA are complementary. tran·scrip·tion n. of this call. About First Data First Data Corp. (NYSE:FDC) is a leading provider of electronic commerce and payment solutions for businesses and consumers worldwide. Serving 4.6 million merchant locations, 1,600 card issuers and millions of consumers, First Data powers the global economy by making it easy, fast and secure for people and businesses around the world to buy goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. using virtually any form of payment. The company's portfolio of services and solutions includes credit, debit, private-label, smart and stored-value card A smart card that is "loaded" with cash. See smart card. issuing and merchant transaction processing Updating the appropriate database records as soon as a transaction (order, payment, etc.) is entered into the computer. It may also imply that confirmations are sent at the same time. Transaction processing systems are the backbone of an organization because they update constantly. services; money transfer services; money orders; fraud protection and authentication (1) Verifying the integrity of a transmitted message. See message integrity, e-mail authentication and MAC. (2) Verifying the identity of a user logging into a network. solutions; check guarantee and verification See verify. verification - The process of determining whether or not the products of a given phase in the life-cycle fulfil a set of established requirements. services through TeleCheck; as well as Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the commerce and mobile solutions. Western Union, Vigo Vigo (vē`gō), city (1990 pop. 279,986), Pontevedra prov., NW Spain, in Galicia, on an inlet of the Atlantic Ocean. A naval base and one of the most active ports of Spain, it has the country's most important fishing fleet. and Orlandi Valuta together make up one of the world's largest money transfer networks with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 274,000 Agent locations in more than 200 countries and territories. The company's STAR Network offers PIN-secured debit acceptance at 1.9 million ATM and retail locations. For more information, visit www.firstdata.com. Notice to Investors, Prospective Investors and the Investment Community; Cautionary Information Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements in this press release regarding First Data Corporation's business which are not historical facts, including the revenue and earnings projections, are "forward-looking statements." All forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected. Important factors upon which the Company's forward-looking statements are premised include: (a) no unanticipated developments that delay or negatively impact the planned tax-free tax-free adj. Not subject to taxation; tax-exempt. tax-free Adjective not needing to have tax paid on it: a tax-free lump sum Adj. 1. spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of 100% of the Western Union subsidiary to the Company's shareholders; (b) continued growth at rates approximating approximating, adj See approximal. recent levels for card-based payment transactions, consumer money transfer transactions and other product markets; (c) successful conversions under service contracts with major clients; (d) renewal of material contracts in the Company's business units consistent with past experience; (e) timely, successful and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. implementation of processing systems to provide new products, improved functionality and increased efficiencies; (f) successful and timely integration of significant businesses and technologies acquired by the Company and realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of anticipated synergies; (g) continuing development and maintenance of appropriate business continuity plans for the Company's processing systems based on the needs and risks relative to each such system; (h) absence of further consolidation among client financial institutions or other client groups which has a significant impact on FDC client relationships and no material loss of business from significant customers of the Company; (i) achieving planned revenue growth throughout the Company, including in the merchant alliance program which involves several joint ventures not under the sole control of the Company and each of which acts independently of the others, and successful management of pricing pressures through cost efficiencies and other cost-management initiatives; (j) successfully managing the credit and fraud risks in the Company's business units and the merchant alliances, particularly in the context of the developing e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. markets; (k) anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of and response to technological changes, particularly with respect to e-commerce; (l) attracting and retaining qualified key employees; (m) no unanticipated changes in laws, regulations, credit card association rules or other industry standards affecting FDC's businesses which require significant product redevelopment efforts, reduce the market for or value of its products or render (1) To make visible; to draw. The term comes from the graphics world where a rendering is an artist's drawing of what a new structure would look like. In computer-aided design (CAD), a rendering is a particular view of a 3D model that has been converted into a realistic image. products obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. ; (n) continuation continuation - continuation passing style of the existing interest rate environment so as to avoid increases in agent fees related to IPS' products and increases in interest on the Company's borrowings; (o) absence of significant changes in foreign exchange spreads on retail money transfer transactions, particularly in high-volume corridors, without a corresponding increase in volume or consumer fees; (p) continued political stability in countries in which Western Union has material operations; (q) implementation of Western Union agent agreements with governmental entities according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. schedule and no interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. of relations with countries in which Western Union has or is implementing material agent agreements; (r) no unanticipated developments relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). lawsuits, investigations or similar matters; (s) no catastrophic events that could impact the Company's or its major customer's operating facilities, communication systems and technology or that has a material negative impact on current economic conditions or levels of consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. ; (t) no material breach of security of any of our systems; and (u) successfully managing the potential both for patent protection and patent liability in the context of rapidly developing legal framework for expansive software patent protection.
FIRST DATA CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in millions, except per share amounts)
Three Months Ended March 31,
----------------------------
2006 2005 Change
--------- -------- -------
Revenues:
Transaction and processing service fees:
Money transfer services $ 1,034.0 $ 897.7 15%
Merchant services 593.4 543.6 9%
Check services 94.3 95.9 -2%
Card services 390.9 407.9 -4%
Other services 80.7 85.9 -6%
Investment income, net (13.0) (12.8) -2%
Product sales and other 181.2 146.0 24%
Reimbursable debit network fees, postage
and other 340.3 302.1 13%
--------- --------
2,701.8 2,466.3 10%
--------- --------
Expenses:
Cost of services 1,330.4 1,203.6 11%
Cost of products sold 66.6 59.6 12%
Selling, general and administrative 407.5 390.4 4%
Reimbursable debit network fees, postage
and other 340.3 302.1 13%
Other operating expenses:
Restructuring, net (0.8) - NM
Impairments - (1.0) NM
Litigation and regulatory settlements 15.0 0.1 NM
Other 2.2 - NM
--------- --------
2,161.2 1,954.8 11%
---------- --------
Operating profit 540.6 511.5 6%
--------- --------
Other income (expense):
Interest income 8.4 4.9 71%
Interest expense (69.2) (48.1) 44%
Investment gains and (losses) - 22.8 NM
Divestitures, net 7.6 6.3 NM
--------- --------
(53.2) (14.1) NM
--------- --------
Income before income taxes, minority
interest, equity earnings in affiliates
and discontinued operations 487.4 497.4 -2%
Income taxes 143.9 143.4 0%
Minority interest (29.6) (27.6) 7%
Equity earnings in affiliates 60.8 48.1 26%
---------- --------
Income from continuing operations 374.7 374.5 0%
Loss from discontinued operations, net of
taxes of $(0.6) and $0, respectively(a) (1.0) - NM
---------- --------
Net income $ 373.7 $ 374.5 0%
========= ========
Earnings per share from continuing
operations:
Basic $ 0.49 $ 0.47 4%
Diluted $ 0.48 $ 0.47 2%
Earnings per share:
Basic $ 0.49 $ 0.47 4%
Diluted $ 0.48 $ 0.47 2%
Weighted-average shares outstanding:
Basic 765.5 793.6 -4%
Diluted 780.2 803.9 -3%
Shares outstanding at end of period 765.6 778.6 -2%
(See accompanying notes)
FIRST DATA CORPORATION
SUMMARY SEGMENT DATA
(Unaudited)
(in millions)
Three Months Ended March 31,
----------------------------
2006 2005 Change
--------- -------- -------
Revenues:
---------
Western Union $ 1,060.9 $ 918.2 16%
First Data Commercial Services 934.4 855.0 9%
First Data Financial Institution
Services 445.2 470.6 -5%
First Data International 263.9 213.4 24%
Integrated Payment Systems 30.3 33.1 -8%
--------- --------
Subtotal segment revenues 2,734.7 2,490.3 10%
All Other and Corporate 147.3 131.0 12%
--------- --------
2,882.0 2,621.3 10%
--------- --------
Adjustments for items included in
segment and All Other and Corporate
revenues:(b)
Equity earnings in affiliates(c) (68.9) (57.3) 20%
Interest income (8.4) (4.9) 71%
Eliminations(d) (102.9) (92.8) NM
--------- --------
Consolidated revenue $ 2,701.8 $2,466.3 10%
========= ========
Operating profit:(e)
--------------------
Western Union $ 336.8 $ 298.2 13%
First Data Commercial Services 214.4 173.4 24%
First Data Financial Institution
Services 84.3 87.6 -4%
First Data International 29.1 21.6 35%
Integrated Payment Systems 4.4 10.8 -59%
--------- --------
Subtotal segment operating
profit 669.0 591.6 13%
All Other and Corporate (12.0) 1.0 NM
--------- --------
657.0 592.6 11%
--------- --------
Adjustments for items included in
segment and All Other and Corporate
operating profit:(b)
Equity earnings in affiliates (60.8) (48.1) 26%
Minority interest from segment
operations(f) 29.9 27.6 8%
Eliminations(d) (60.7) (56.6) NM
Interest expense (69.2) (48.1) 44%
Items excluded from segment
operations(g) (8.8) 30.0 NM
--------- --------
Income before income taxes, minority
interest, equity earnings in
affiliates and discontinued
operations $ 487.4 $ 497.4 -2%
========= ========
Depreciation & Amortization:
----------------------------
Western Union $ 25.9 $ 20.4 27%
First Data Commercial Services 78.1 81.5 -4%
First Data Financial Institution
Services 38.6 42.0 -8%
First Data International 42.1 35.6 18%
Integrated Payment Systems 2.9 3.0 -3%
All Other and Corporate 13.9 12.9 8%
--------- --------
Consolidated depreciation &
amortization $ 201.5 $ 195.4 3%
========= ========
(See accompanying notes)
FIRST DATA CORPORATION
NOTES TO FINANCIAL SCHEDULES
(Unaudited)
Effective January 1, 2006, the Company began assessing performance and
allocating resources based on a new segment structure. Segment results
for 2005 and 2004 have been adjusted to reflect the new structure. In
addition, consolidated revenues for 2005 and 2004 have been adjusted
to present "Transaction and processing service fees" by revenue type
and to reflect the reclassification of debit network fees from
"Transaction and processing service fees" to "Reimbursable debit
network fees, postage and other."
(a) Discontinued operations relate to NYCE.
(b) Reconciles the total segment and All Other and Corporate revenue
to consolidated revenue or total segment and All Other and
Corporate operating profit to income before income taxes, minority
interest, equity earnings in affiliates and discontinued
operations as reported on the Consolidated Statements of Income.
(c) Excludes equity losses that were recorded in expense and the
amortization related to the excess of the investment balance over
the Company's proportionate share of the investee's net book
value.
(d) Represents elimination of adjustment to record Integrated Payment
Systems segment investment income and its related operating profit
on a pretax equivalent basis and elimination of intersegment
revenue.
(e) Segment and All Other and Corporate operating profit includes
interest income, minority interest from segment operations, equity
earnings in affiliates and the allocation of corporate overhead.
Segment and All Other and Corporate operating profit excludes
items discussed in note (g) below and interest expense.
(f) Minority interest from segment operations excludes minority
interest attributable to items excluded from segment operations
discussed in note (g) below as well as minority interest related
to interest expense and income taxes.
(g) Items, other than interest expense, excluded from segment
operations consist of the following:
(in millions) Three months ended
March 31, 2006
--------------------------------------
Restructuring, net Reversals of excess
restructuring accruals of $1.2
million during the three
months were partially offset
by a $0.4 million charge
related to a facility closure
associated with actions taken
$ 0.8 in the fourth quarter 2005.
Litigation and A charge was recorded during
regulatory the three months related to
settlements the settlement of a patent
infringement lawsuit in the
(15.0) Commercial Services segment.
Divestitures, net Gains on the sale of corporate
aircraft and a small business
were recorded during the three
7.6 months.
Other Other relates to direct
external costs incurred
related to the spinoff of
Western Union partially offset
by the reversal of a portion
of other charges recorded in
(2.2) 2005.
-----------------
(8.8)
Minority interest -
-----------------
$ (8.8)
=================
(in millions) Three months ended
March 31, 2005
--------------------------------------
Impairments A gain was recorded for the
three months due to the
subsequent sale of assets
$ 1.0 previously impaired.
Litigation and Charges recorded during the
regulatory three months relate to a
settlements regulatory settlement of $1.5
million in the Western Union
segment offset by the reversal
of an unutilized reserve
established in 2000 for the
settlement of a lawsuit also
(0.1) in the Western Union segment.
Investment gains A gain of $21.4 million on the
and (losses) sale of CheckFree Corporation
common stock was recorded for
the three months as well as
the sale of other strategic
22.8 investments.
Divestitures, net A gain on the sale of a small
business was recorded and
certain excess divestiture
accruals were reversed during
the three months due to the
expiration of certain
6.3 contingencies.
-----------------
30.0
Minority interest -
-----------------
$ 30.0
=================
NM = Not meaningful.
FIRST DATA CORPORATION
FINANCIAL TRANSACTION PROCESSING
KEY INDICATORS
(Unaudited)
(in millions)
Three Months Ended March 31,
----------------------------
2006 2005 Change
------------ -------- ------
Western Union
-------------
Consumer-to-consumer money transfer
transactions(a) 33.26 25.34 31%
Consumer-to-business transactions(b) 44.30 39.59 12%
Commercial Services
-------------------
Domestic merchant transactions(c) 5,833.9 5,092.0 15%
Financial Institution Services
------------------------------
Domestic active card accounts on
file:(d)
Bankcard 30.3 43.4 -30%
Retail 57.2 56.6 1%
------------ --------
Total 87.5 100.0 -13%
============ ========
Domestic debit issuer transactions(e) 2,074.5 1,839.5 13%
First Data International
------------------------
International card accounts on file:
Bankcard 27.2 22.8 19%
Retail 5.2 3.9 33%
------------ --------
Total 32.4 26.7 21%
============ ========
International transactions(f) 955.2 518.1 84%
(a) Consumer-to-consumer money transfer transactions include
consumer-to-consumer money transfer services worldwide. Amounts
for 2006 include Vigo Remittance Corp. ("Vigo") which was acquired
in October 2005. Excluding Vigo, consumer-to-consumer money
transfer transactions grew 22% for the three months ended March
31, 2006.
(b) Consumer-to-business transactions include Quick Collect, EasyPay,
PhonePay, Paymap's Just-in-Time and Equity Accelerator services,
and E Commerce Group's Speedpay transactions directly processed by
E Commerce Group.
(c) Domestic merchant transactions include acquired VISA and
MasterCard credit and signature debit, PIN-debit, electronic
benefits transactions ("EBT"), and processed-only or gateway
customer transactions at the point of sale ("POS"). Domestic
merchant transactions also include acquired ATM transactions,
gateway transactions at ATMs, and STAR PIN-debit POS transactions
received from other acquirers.
(d) Domestic active card accounts on file include customer accounts
that had a balance or any monetary posting or authorization during
the last month of the quarter.
(e) Domestic debit issuer transactions include VISA and MasterCard
signature debit, STAR ATM, STAR PIN-debit POS, and ATM and
PIN-debit POS gateway transactions.
(f) International transactions include VISA, MasterCard and other card
association merchant acquiring and switching and debit issuer
transactions for clients outside the U.S. Merchant transactions
include credit, signature debit and PIN-debit POS, POS gateway and
ATM transactions. Debit issuer transactions include signature and
PIN-debit POS, POS gateway and ATM transactions.
FIRST DATA CORPORATION
SUPPLEMENTAL METRICS
(Unaudited)
For the Three Months Ended March 31, 2006:
------------------------------------------
Consolidated financial metrics (in
millions):
Capital expenditures $ 143
Dividends $ 46
Western Union
-------------
Consumer-to-consumer: Including Vigo Excluding Vigo
--------------- --------------
U.S. same store sales transaction
growth N/A 16%
International transaction growth 35% 28%
International revenue growth 18% 15%
Mexico transaction growth 55% 17%
Mexico revenue growth 54% 20%
Financial Institution Services
------------------------------
At March 31, 2006
-----------------
Domestic card accounts on file (in
millions):
Bankcard 66.5
Retail 259.2
Debit 100.0
--------------
Total 425.7
==============
First Data International
------------------------
At March 31, 2006
-----------------
International card accounts on file
(in millions):
Bankcard 27.2
Retail 5.2
Debit 14.4
--------------
Total 46.8
==============
N/A - Not applicable
FIRST DATA CORPORATION
CONSOLIDATED REVENUE AND EXPENSE - ADJUSTED FOR SEGMENT REALIGNMENT
(unaudited)
(in millions)
Twelve Three Three
Months ended Months ended Months ended
12/31/2004 3/31/2005 6/30/2005
------------ ----------- ------------
Revenues:
---------
Transaction and processing
service fees:
Money transfer services $ 3,448.1 $ 897.7 $ 957.9
Merchant services 2,324.9 543.6 589.5
Check services 413.8 95.9 94.5
Card services 1,627.2 407.9 398.3
Other services 353.3 85.9 85.7
Investment income, net 91.2 (12.8) (14.8)
Product sales and other 671.3 146.0 160.6
Reimbursable debit network
fees, postage and other 1,083.4 302.1 323.5
------------ ----------- ------------
$ 10,013.2 $ 2,466.3 $ 2,595.2
============ =========== ============
Expenses:
---------
Cost of services $ 4,641.0 $ 1,203.6 $ 1,232.6
Selling, general and
administrative 1,610.5 390.4 407.9
Reimbursable debit network
fees, postage and other 1,083.4 302.1 323.5
Other expenses 344.5 58.7 80.4
------------ ----------- ------------
$ 7,679.4 $ 1,954.8 $ 2,044.4
============ =========== ============
Three Three Twelve
Months ended Months ended Months ended
9/30/2005 12/31/2005 12/31/2005
------------ ------------ -----------
Revenues:
---------
Transaction and processing
service fees:
Money transfer
services $ 1,001.3 $ 1,057.8 $ 3,914.7
Merchant services 611.6 653.4 2,398.1
Check services 95.6 95.3 381.3
Card services 392.8 393.0 1,592.0
Other services 79.5 80.3 331.4
Investment income, net (14.2) (16.5) (58.3)
Product sales and other 178.7 164.5 649.8
Reimbursable debit network
fees, postage and other 316.6 339.2 1,281.4
------------ ------------ -----------
$ 2,661.9 $ 2,767.0 $ 10,490.4
============ ============ ===========
Expenses:
---------
Cost of services $ 1,255.3 $ 1,304.3 $ 4,995.8
Selling, general and
administrative 402.8 427.3 1,628.4
Reimbursable debit network
fees, postage and other 316.6 339.2 1,281.4
Other expenses 103.2 187.1 429.4
------------ ------------ -----------
$ 2,077.9 $ 2,257.9 $ 8,335.0
============ ============ ===========
FIRST DATA CORPORATION
SUMMARY SEGMENT DATA - ADJUSTED FOR SEGMENT REALIGNMENT
(unaudited)
(in millions)
Twelve Three Three
Months ended Months ended Months ended
12/31/2004 3/31/2005 6/30/2005
----------- ----------- ------------
Revenues:
---------
Western Union $ 3,523.6 $ 918.2 $ 979.6
First Data Commercial
Services 3,582.1 855.0 929.7
First Data Financial
Institution Services 1,858.3 470.6 482.1
First Data International 769.5 213.4 212.8
Integrated Payment Systems 278.7 33.1 34.9
----------- ----------- ------------
Subtotal
segment
revenues 10,012.2 2,490.3 2,639.1
All other and corporate 522.0 131.0 123.7
----------- ----------- ------------
10,534.2 2,621.3 2,762.8
----------- ----------- ------------
Adjustments for items
included in segment and
all other and corporate
revenue:
Equity earnings in
affiliates (198.3) (57.3) (64.6)
Interest income (25.1) (4.9) (4.6)
Divested operations 58.1 - -
Eliminations (355.7) (92.8) (98.4)
----------- ----------- ------------
Consolidated
revenue $ 10,013.2 $ 2,466.3 $ 2,595.2
=========== =========== ============
Operating profit:
-----------------
Western Union $ 1,121.0 $ 298.2 $ 324.3
First Data Commercial
Services 944.1 173.4 217.3
First Data Financial
Institution Services 413.4 87.6 106.1
First Data International 77.7 21.6 23.5
Integrated Payment Systems 177.3 10.8 10.5
----------- ----------- ------------
Subtotal
segment
operating
profit 2,733.5 591.6 681.7
All other and corporate (25.0) 1.0 (19.7)
----------- ----------- ------------
2,708.5 592.6 662.0
----------- ----------- ------------
Adjustments for items
included in segment and
all other and corporate
operating profit:
Equity earnings in
affiliates (163.9) (48.1) (55.4)
Divested operations 11.2 - -
Minority interest from
segment operations 136.8 27.6 32.9
Eliminations (212.3) (56.6) (62.3)
Interest expense (136.8) (48.1) (55.0)
Items excluded from
segment operations 149.7 30.0 (22.2)
Income before income
taxes, minority interest,
equity earnings in
affiliates and ----------- ----------- ------------
discontinued operations $ 2,493.2 $ 497.4 $ 500.0
=========== =========== ============
Three Three Twelve
Months ended Months ended Months ended
9/30/2005 12/31/2005 12/31/2005
----------- ------------ -----------
Revenues:
---------
Western Union $ 1,023.4 $ 1,079.1 $ 4,000.3
First Data Commercial
Services 962.7 1,014.1 3,761.5
First Data Financial
Institution Services 474.3 438.3 1,865.3
First Data
International 228.7 263.3 918.2
Integrated Payment
Systems 32.5 29.8 130.3
----------- ------------ -----------
Subtotal
segment
revenues 2,721.6 2,824.6 10,675.6
All other and corporate 123.3 130.8 508.8
----------- ------------ -----------
2,844.9 2,955.4 11,184.4
----------- ------------ -----------
Adjustments for items
included in segment
and all other and
corporate revenue:
Equity earnings in
affiliates (74.5) (76.8) (273.2)
Interest income (5.6) (6.1) (21.2)
Divested operations - - -
Eliminations (102.9) (105.5) (399.6)
----------- ------------ -----------
Consolidated
revenue $ 2,661.9 $ 2,767.0 $ 10,490.4
=========== ============ ===========
Operating profit:
-----------------
Western Union $ 351.1 $ 360.1 $ 1,333.7
First Data Commercial
Services 239.9 262.5 893.1
First Data Financial
Institution Services 98.6 85.6 377.9
First Data
International 29.5 38.7 113.3
Integrated Payment
Systems 7.7 6.4 35.4
----------- ------------ -----------
Subtotal
segment
operating
profit 726.8 753.3 2,753.4
All other and corporate (16.3) (26.4) (61.4)
----------- ------------ -----------
710.5 726.9 2,692.0
----------- ------------ -----------
Adjustments for items
included in segment
and all other and
corporate operating
profit:
Equity earnings in
affiliates (65.7) (67.7) (236.9)
Divested operations - - -
Minority interest from
segment operations 35.4 34.5 130.4
Eliminations (61.9) (63.4) (244.2)
Interest expense (59.9) (65.3) (228.3)
Items excluded from
segment operations (18.4) (70.5) (81.1)
Income before income
taxes, minority
interest, equity
earnings in
affiliates and
discontinued ----------- ------------ -----------
operations $ 540.0 $ 494.5 $ 2,031.9
=========== ============ ===========
FIRST DATA CORPORATION
FINANCIAL TRANSACTION PROCESSING
HISTORICAL KEY INDICATORS
(Unaudited)
(in millions)
2004 2005
--------- ---------------------------------------------
FY Q1 Q2 Q3 Q4 FY
--------- ---------------------------------------------
Commercial
Services
----------
Domestic
merchant
trans-
actions(a) 19,107.1 5,092.0 5,640.4 5,715.8 6,098.4 22,546.6
Financial
Institution
Services
------------
Domestic
active card
accounts on
file:(b)
Bankcard 48.1 43.4 44.0 28.8 30.1 30.1
Retail 51.6 56.6 57.1 58.3 61.8 61.8
--------- ---------------------------------------------
Total 99.7 100.0 101.1 87.1 91.9 91.9
========= =============================================
First Data
International
--------------
International
card
accounts on
file:
Bankcard 31.5 22.8 23.1 24.0 25.9 25.9
Retail - 3.9 4.1 4.9 5.0 5.0
--------- ---------------------------------------------
Total 31.5 26.7 27.2 28.9 30.9 30.9
========= =============================================
International
trans-
actions(c) 1,850.7 518.1 568.4 667.8 919.8 2,674.1
(a) Domestic merchant transactions include acquired VISA and
MasterCard credit and signature debit, PIN-debit, electronic
benefits transactions ("EBT"), and processed-only or gateway
customer transactions at the point of sale ("POS"). Domestic
merchant transactions also include acquired ATM transactions,
gateway transactions at ATMs, and STAR PIN-debit POS transactions
received from other acquirers.
(b) Domestic active card accounts on file include customer accounts
that had a balance or any monetary posting or authorization
activity during the last month of the quarter.
(c) International transactions include VISA, MasterCard and other card
association merchant acquiring and switching and debit issuer
transactions for clients outside the U.S. Merchant transactions
include credit, signature debit and PIN-debit POS, POS gateway and
ATM transactions. Debit issuer transactions include signature and
PIN-debit POS, POS gateway and ATM transactions.
FIRST DATA CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
(in millions)
Management believes the following measures provide meaningful
information to assist investors and analysts in understanding our
financial results and to better analyze trends in our underlying
business. The non-GAAP financial measures should not be considered in
isolation or as a substitute for the most comparable GAAP financial
measures. The non-GAAP financial measures reflect an additional way of
viewing aspects of our operations that, when viewed with our GAAP
results and the reconciliation to the corresponding GAAP financial
measures, provide a more complete understanding of our business.
Investors are strongly encouraged to review our financial statements
and publicly-filed reports in their entirety and not to rely on any
single financial measure. A reconciliation of the non-GAAP measures to
the most directly comparable GAAP financial measures is included
below.
Three Months Ended March 31,
----------------------------
2006 2005 Change
--------- --------- ------
Commercial Services
-------------------
Revenue $ 934.4 $ 855.0 9%
Reimbursable debit network fees (179.5) (141.8)
--------- ---------
Revenue excluding reimbursable debit
network fees $ 754.9 $ 713.2 6%
========= =========
Operating profit $ 214.4 $ 173.4 24%
Integration expenses(1) - 23.4
--------- ---------
Operating profit excluding integration
expenses $ 214.4 $ 196.8 9%
========= =========
Profit margin 22.9% 20.3%
Profit margin excluding debit network
fees and integration expenses 28.4% 27.6%
Financial Institution Services
------------------------------
Revenue $ 445.2 $ 470.6
Reimbursable postage and other (152.8) (153.4)
--------- ---------
Revenue excluding reimbursable postage
and other $ 292.4 $ 317.2
========= =========
Operating profit $ 84.3 $ 87.6
Profit margin 18.9% 18.6%
Profit margin excluding reimbursable
postage and other 28.8% 27.6%
(1) Integration expenses relate to the cost of personnel who were
assigned to work exclusively on the Concord integration or Company
reorganization plus the allocation of a portion of the cost of
certain Company personnel that were partially dedicated to such
activities. Additionally, these expenses include certain internal
and contract system development costs and infrastructure costs.
FDC - 1 |
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