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|
DELAWARE
|
|
47-0731996
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
|
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|
225 LIBERTY STREET
29th FLOOR
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|
|
NEW YORK, NEW YORK
|
|
10281
|
(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
|
|
Accelerated filer
o
|
Non-accelerated filer
x
|
|
Smaller reporting company
o
|
Class
|
|
Outstanding at November 1, 2016
|
Class A Common Stock, $0.01 par value per share
|
|
357,100,865 shares
|
Class B Common Stock, $0.01 par value per share
|
|
553,883,262 shares
|
|
|
|
|
PAGE
NUMBER
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||
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||
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||
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Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions, except per share and share amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transaction and processing service fees (a)
|
|
$
|
1,693
|
|
|
$
|
1,673
|
|
|
$
|
4,953
|
|
|
$
|
4,906
|
|
Product sales and other (a)
|
|
307
|
|
|
309
|
|
|
893
|
|
|
844
|
|
||||
Total revenues (excluding reimbursable items)
|
|
2,000
|
|
|
1,982
|
|
|
5,846
|
|
|
5,750
|
|
||||
Reimbursable PIN debit fees, postage, and other
|
|
936
|
|
|
938
|
|
|
2,795
|
|
|
2,737
|
|
||||
Total revenues
|
|
2,936
|
|
|
2,920
|
|
|
8,641
|
|
|
8,487
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of services (exclusive of items shown below)
|
|
711
|
|
|
686
|
|
|
2,140
|
|
|
2,055
|
|
||||
Cost of products sold
|
|
87
|
|
|
96
|
|
|
251
|
|
|
257
|
|
||||
Selling, general, and administrative
|
|
499
|
|
|
521
|
|
|
1,563
|
|
|
1,567
|
|
||||
Depreciation and amortization
|
|
237
|
|
|
257
|
|
|
713
|
|
|
760
|
|
||||
Other operating expenses
|
|
12
|
|
|
20
|
|
|
57
|
|
|
40
|
|
||||
Total expenses (excluding reimbursable items)
|
|
1,546
|
|
|
1,580
|
|
|
4,724
|
|
|
4,679
|
|
||||
Reimbursable PIN debit fees, postage, and other
|
|
936
|
|
|
938
|
|
|
2,795
|
|
|
2,737
|
|
||||
Total expenses
|
|
2,482
|
|
|
2,518
|
|
|
7,519
|
|
|
7,416
|
|
||||
Operating profit
|
|
454
|
|
|
402
|
|
|
1,122
|
|
|
1,071
|
|
||||
Interest expense, net
|
|
(263
|
)
|
|
(388
|
)
|
|
(810
|
)
|
|
(1,199
|
)
|
||||
Loss on debt extinguishment
|
|
(3
|
)
|
|
(108
|
)
|
|
(58
|
)
|
|
(108
|
)
|
||||
Other income (expense)
|
|
(30
|
)
|
|
(10
|
)
|
|
14
|
|
|
1
|
|
||||
Income (loss) before income taxes and equity earnings in affiliates
|
|
158
|
|
|
(104
|
)
|
|
268
|
|
|
(235
|
)
|
||||
Income tax expense
|
|
24
|
|
|
32
|
|
|
57
|
|
|
45
|
|
||||
Equity earnings in affiliates
|
|
66
|
|
|
61
|
|
|
198
|
|
|
175
|
|
||||
Net income (loss)
|
|
200
|
|
|
(75
|
)
|
|
409
|
|
|
(105
|
)
|
||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
68
|
|
|
51
|
|
|
181
|
|
|
159
|
|
||||
Net income (loss) attributable to First Data Corporation
|
|
$
|
132
|
|
|
$
|
(126
|
)
|
|
$
|
228
|
|
|
$
|
(264
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.15
|
|
|
$
|
(126,000
|
)
|
|
$
|
0.25
|
|
|
$
|
(264,000
|
)
|
Diluted
|
|
$
|
0.14
|
|
|
$
|
(126,000
|
)
|
|
$
|
0.25
|
|
|
$
|
(264,000
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
904,738,175
|
|
|
1,000
|
|
|
900,128,754
|
|
|
1,000
|
|
||||
Diluted
|
|
922,818,229
|
|
|
1,000
|
|
|
918,301,729
|
|
|
1,000
|
|
(a)
|
Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of
$52 million
and
$150 million
for the
three and nine
months ended
September 30, 2016
, respectively, and
$55 million
and
$153 million
for the comparable periods in 2015.
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
|
$
|
200
|
|
|
$
|
(75
|
)
|
|
$
|
409
|
|
|
$
|
(105
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized (losses) gains on securities
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
3
|
|
||||
Foreign currency translation adjustment
|
|
61
|
|
|
(85
|
)
|
|
(44
|
)
|
|
(221
|
)
|
||||
Pension liability adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total other comprehensive income (loss), net of tax
|
|
61
|
|
|
(87
|
)
|
|
(44
|
)
|
|
(216
|
)
|
||||
Comprehensive income (loss)
|
|
261
|
|
|
(162
|
)
|
|
365
|
|
|
(321
|
)
|
||||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest, net of tax
|
|
69
|
|
|
51
|
|
|
183
|
|
|
151
|
|
||||
Comprehensive income (loss) attributable to First Data Corporation, net of tax
|
|
$
|
192
|
|
|
$
|
(213
|
)
|
|
$
|
182
|
|
|
$
|
(472
|
)
|
(in millions, except common stock share amounts)
|
|
As of September 30,
2016 |
|
As of December 31,
2015 |
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
475
|
|
|
$
|
429
|
|
Accounts receivable, net of allowance for doubtful accounts of $75 and $71
|
|
1,714
|
|
|
1,826
|
|
||
Settlement assets
|
|
8,705
|
|
|
8,150
|
|
||
Other current assets
|
|
460
|
|
|
381
|
|
||
Total current assets
|
|
11,354
|
|
|
10,786
|
|
||
Property and equipment, net of accumulated depreciation of $1,442 and $1,367
|
|
896
|
|
|
951
|
|
||
Goodwill
|
|
16,825
|
|
|
16,846
|
|
||
Customer relationships, net of accumulated amortization of $5,592 and $5,299
|
|
1,845
|
|
|
2,136
|
|
||
Other intangibles, net of accumulated amortization of $2,322 and $2,134
|
|
1,793
|
|
|
1,783
|
|
||
Investment in affiliates
|
|
1,003
|
|
|
1,048
|
|
||
Other long-term assets
|
|
728
|
|
|
812
|
|
||
Total assets
|
|
$
|
34,444
|
|
|
$
|
34,362
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
|
$
|
1,556
|
|
|
$
|
1,639
|
|
Short-term and current portion of long-term borrowings
|
|
377
|
|
|
856
|
|
||
Settlement obligations
|
|
8,705
|
|
|
8,150
|
|
||
Total current liabilities
|
|
10,638
|
|
|
10,645
|
|
||
Long-term borrowings
|
|
18,514
|
|
|
18,737
|
|
||
Deferred tax liabilities
|
|
410
|
|
|
431
|
|
||
Other long-term liabilities
|
|
836
|
|
|
812
|
|
||
Total liabilities
|
|
30,398
|
|
|
30,625
|
|
||
Commitments and contingencies (See note 10)
|
|
|
|
|
|
|
||
Redeemable noncontrolling interest
|
|
73
|
|
|
77
|
|
||
First Data Corporation stockholders' equity:
|
|
|
|
|
|
|
||
Class A Common stock, $0.01 par value; 1,600,000,000 shares authorized as of September 30, 2016 and December 31, 2015; 352,407,420 shares and 179,873,244 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively
|
|
4
|
|
|
2
|
|
||
Class B Common stock, $0.01 par value; 639,311,146 shares and 800,000,000 shares authorized as of September 30, 2016 and December 31, 2015, respectively; 558,596,918 shares and 719,330,114 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively
|
|
5
|
|
|
7
|
|
||
Additional paid-in capital
|
|
13,098
|
|
|
12,910
|
|
||
Accumulated loss
|
|
(10,804
|
)
|
|
(11,032
|
)
|
||
Accumulated other comprehensive loss
|
|
(1,265
|
)
|
|
(1,219
|
)
|
||
Total First Data Corporation stockholders' equity
|
|
1,038
|
|
|
668
|
|
||
Noncontrolling interests
|
|
2,935
|
|
|
2,992
|
|
||
Total equity
|
|
3,973
|
|
|
3,660
|
|
||
Total liabilities and equity
|
|
$
|
34,444
|
|
|
$
|
34,362
|
|
|
|
Nine months ended September 30,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
||
Net income (loss)
|
|
$
|
409
|
|
|
$
|
(105
|
)
|
Adjustments to reconcile to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)
|
|
793
|
|
|
843
|
|
||
Charges related to other operating expenses and other income (expense)
|
|
43
|
|
|
39
|
|
||
Loss on debt extinguishment
|
|
58
|
|
|
108
|
|
||
Stock-based compensation expense
|
|
214
|
|
|
31
|
|
||
Other non-cash and non-operating items, net
|
|
30
|
|
|
50
|
|
||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in:
|
|
|
|
|
|
|
||
Accounts receivable, current and long-term
|
|
115
|
|
|
(66
|
)
|
||
Other assets, current and long-term
|
|
20
|
|
|
(110
|
)
|
||
Accounts payable and other liabilities, current and long-term
|
|
5
|
|
|
(71
|
)
|
||
Income tax accounts
|
|
(27
|
)
|
|
(32
|
)
|
||
Net cash provided by operating activities
|
|
1,660
|
|
|
687
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
||
Additions to property and equipment
|
|
(168
|
)
|
|
(213
|
)
|
||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs
|
|
(183
|
)
|
|
(244
|
)
|
||
Acquisitions, net of cash acquired
|
|
(6
|
)
|
|
(89
|
)
|
||
Other investing activities, net
|
|
19
|
|
|
(8
|
)
|
||
Net cash used in investing activities
|
|
(338
|
)
|
|
(554
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
||
Short-term borrowings, net
|
|
234
|
|
|
219
|
|
||
Proceeds from issuance of long-term debt
|
|
2,377
|
|
|
2,206
|
|
||
Payment of call premiums and debt issuance costs
|
|
(52
|
)
|
|
(104
|
)
|
||
Principal payments on long-term debt
|
|
(3,544
|
)
|
|
(2,185
|
)
|
||
Payment of taxes related to net settlement of equity awards
|
|
(59
|
)
|
|
—
|
|
||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest
|
|
(240
|
)
|
|
(232
|
)
|
||
Other financing activities, net
|
|
26
|
|
|
(13
|
)
|
||
Net cash used in financing activities
|
|
(1,258
|
)
|
|
(109
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(18
|
)
|
|
(14
|
)
|
||
Change in cash and cash equivalents
|
|
46
|
|
|
10
|
|
||
Cash and cash equivalents at beginning of period
|
|
429
|
|
|
358
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
475
|
|
|
$
|
368
|
|
NON-CASH TRANSACTIONS
|
|
|
|
|
||||
Capital leases, net of trade-ins
|
|
$
|
119
|
|
|
$
|
33
|
|
|
|
First Data Corporation Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Common Stock
|
|
|
|
|
|
Accumulated Other Comprehensive Loss
|
|
|
|
|
||||||||||||||||||||||
(in millions, except common stock share amounts)
|
|
Class A
|
|
Class B
|
|
Additional Paid-In Capital
|
|
Accumulated Loss
|
|
|
Noncontrolling Interest
|
|
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
Total
|
|||||||||||||||||||||
Balance, December 31, 2015
|
|
179,873,244
|
|
|
$
|
2
|
|
|
719,330,114
|
|
|
$
|
7
|
|
|
$
|
12,910
|
|
|
$
|
(11,032
|
)
|
|
$
|
(1,219
|
)
|
|
$
|
2,992
|
|
|
$
|
3,660
|
|
Dividends and distributions paid to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(215
|
)
|
|
(215
|
)
|
|||||||
Net income (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
228
|
|
|
—
|
|
|
156
|
|
|
384
|
|
|||||||
Other comprehensive (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
2
|
|
|
(44
|
)
|
|||||||
Adjustment to redemption value of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||||
Stock activity under stock compensation plans and other
|
|
172,534,176
|
|
|
2
|
|
|
(160,733,196
|
)
|
|
(2
|
)
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||||
Balance, September 30, 2016
|
|
352,407,420
|
|
|
$
|
4
|
|
|
558,596,918
|
|
|
$
|
5
|
|
|
$
|
13,098
|
|
|
$
|
(10,804
|
)
|
|
$
|
(1,265
|
)
|
|
$
|
2,935
|
|
|
$
|
3,973
|
|
|
|
First Data Corporation Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Common Stock
|
|
|
|
|
|
Accumulated Other Comprehensive Loss
|
|
|
|
|
||||||||||||||||||||||
(in millions, except common stock share amounts)
|
|
Class A
|
|
Class B
|
|
Additional Paid-In Capital
|
|
Accumulated Loss
|
|
|
Noncontrolling Interest
|
|
|
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
Total
|
|||||||||||||||||||||
Balance, December 31, 2014 (b)
|
|
1,000
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
9,906
|
|
|
$
|
(9,547
|
)
|
|
$
|
(929
|
)
|
|
$
|
3,100
|
|
|
$
|
2,530
|
|
Dividends and distributions paid to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
(206
|
)
|
|||||||
Net (loss) income (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(264
|
)
|
|
—
|
|
|
133
|
|
|
(131
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(208
|
)
|
|
(8
|
)
|
|
(216
|
)
|
|||||||
Adjustment to redemption value of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|||||||
Stock activity under stock compensation plans and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||||
Cash dividends paid by First Data Corporation to Parent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Balance, September 30, 2015
|
|
1,000
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
9,919
|
|
|
$
|
(9,815
|
)
|
|
$
|
(1,137
|
)
|
|
$
|
3,019
|
|
|
$
|
1,986
|
|
(a)
|
The total net income (loss) presented in the unaudited consolidated statements of equity for the
nine
months ended
September 30, 2016
and
2015
is
$25 million
lower and
$26 million
higher, respectively, than the amounts presented in the unaudited consolidated statements of operations due to the net income attributable to the redeemable noncontrolling interest not included in equity.
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amortization of initial payments for new contracts
|
|
$
|
16
|
|
|
$
|
14
|
|
|
$
|
47
|
|
|
$
|
38
|
|
Amortization related to equity method investments
|
|
12
|
|
|
15
|
|
|
33
|
|
|
45
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interchange fees and assessments
|
|
$
|
6,184
|
|
|
$
|
5,598
|
|
|
$
|
17,406
|
|
|
$
|
16,089
|
|
PIN-Debit fees
|
|
753
|
|
|
757
|
|
|
2,255
|
|
|
2,227
|
|
(in millions)
|
|
As of September 30,
2016 |
|
As of December 31,
2015 |
||||
Short-term borrowings:
|
|
|
|
|
|
|
||
Foreign lines of credit and other arrangements
|
|
$
|
71
|
|
|
$
|
43
|
|
Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50%
|
|
208
|
|
|
—
|
|
||
Unamortized deferred financing costs (a)
|
|
(2
|
)
|
|
—
|
|
||
Total Short-term borrowings
|
|
277
|
|
|
43
|
|
||
Current portion of long-term borrowings:
|
|
|
|
|
|
|
||
8.75% Senior secured second lien notes due 2022
|
|
—
|
|
|
750
|
|
||
Unamortized discount and unamortized deferred financing costs
|
|
—
|
|
|
(10
|
)
|
||
Other arrangements
|
|
16
|
|
|
—
|
|
||
Capital lease obligations
|
|
84
|
|
|
73
|
|
||
Total Current portion of long-term borrowings
|
|
100
|
|
|
813
|
|
||
Total Short-term and current portion of long-term borrowings
|
|
377
|
|
|
856
|
|
||
Long-term borrowings:
|
|
|
|
|
|
|
||
Senior secured term loan facility due March 2018 at LIBOR and euro LIBOR plus 3.5% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.5%
|
|
—
|
|
|
4,938
|
|
||
Senior secured term loan facility due September 2018 at LIBOR plus 3.5% or a base rate plus 2.5%
|
|
—
|
|
|
1,008
|
|
||
Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 4.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 3.0%
|
|
4,541
|
|
|
1,171
|
|
||
Senior secured term loan facility due July 2022 at LIBOR and euro LIBOR plus 3.75% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.75%
|
|
3,838
|
|
|
2,464
|
|
||
6.75% Senior secured first lien notes due 2020
|
|
1,398
|
|
|
1,398
|
|
||
5.375% Senior secured first lien notes due 2023
|
|
1,210
|
|
|
1,210
|
|
||
5.0% Senior secured first lien notes due 2024
|
|
1,900
|
|
|
1,000
|
|
||
5.75% Senior secured second lien notes due 2024
|
|
2,200
|
|
|
2,200
|
|
||
7.0% Senior unsecured notes due 2023
|
|
3,400
|
|
|
3,400
|
|
||
Unamortized discount and unamortized deferred financing costs (a)
|
|
(171
|
)
|
|
(174
|
)
|
||
Other arrangements
|
|
27
|
|
|
—
|
|
||
Capital lease obligations
|
|
171
|
|
|
122
|
|
||
Total Long-term borrowings (b)
|
|
18,514
|
|
|
18,737
|
|
||
Total Borrowings (c)
|
|
$
|
18,891
|
|
|
$
|
19,593
|
|
(a)
|
Unamortized deferred financing costs are amortized on a straight-line basis, which approximates the interest method, over the remaining term of the respective debt. In addition, certain lenders' fees associated with debt transactions were capitalized as discounts and are similarly being amortized on a straight-line basis, which approximates the effective interest method, over the remaining term of the respective debt.
|
(b)
|
As of
September 30, 2016
and
December 31, 2015
, the fair value of the Company's long-term borrowings was
$19.1 billion
and
$19.6 billion
, respectively. The estimated fair value of the Company's long-term borrowings was primarily based on market trading prices and is considered to be a Level 2 measurement.
|
(c)
|
The effective interest rate is not substantially different than the coupon rate on any of the Company's debt tranches.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of services
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
—
|
|
Selling, general, and administrative
|
|
24
|
|
|
8
|
|
|
123
|
|
|
31
|
|
||||
Total
|
|
$
|
43
|
|
|
$
|
8
|
|
|
$
|
214
|
|
|
$
|
31
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(in millions, except share and per share amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) used in computing net income (loss) per share, basic and diluted
|
$
|
132
|
|
|
$
|
(126
|
)
|
|
$
|
228
|
|
|
$
|
(264
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Shares used in computing net income (loss) per share, basic (a)
|
904,738,175
|
|
|
1,000
|
|
|
900,128,754
|
|
|
1,000
|
|
||||
Effect of dilutive securities
|
18,080,054
|
|
|
—
|
|
|
18,172,975
|
|
|
—
|
|
||||
Total dilutive securities
|
922,818,229
|
|
|
1,000
|
|
|
918,301,729
|
|
|
1,000
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per share
|
$
|
0.15
|
|
|
$
|
(126,000
|
)
|
|
$
|
0.25
|
|
|
$
|
(264,000
|
)
|
Diluted net income (loss) per share
|
$
|
0.14
|
|
|
$
|
(126,000
|
)
|
|
$
|
0.25
|
|
|
$
|
(264,000
|
)
|
|
|
|
|
|
|
|
|
||||||||
Anti-dilutive shares excluded from diluted net income (loss) per share
|
20,439,375
|
|
|
—
|
|
|
27,064,859
|
|
|
—
|
|
(a)
|
2015 net loss per share, basic and diluted, is calculated using
1,000
shares outstanding prior to the merger with FDH and the filing of the Company's prospectus in October 2015.
|
|
|
Three months ended September 30, 2016
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial Solutions
|
|
Network & Security Solutions
|
|
Corporate
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
830
|
|
|
$
|
345
|
|
|
$
|
335
|
|
|
$
|
—
|
|
|
$
|
1,510
|
|
Product sales and other
|
|
207
|
|
|
52
|
|
|
43
|
|
|
—
|
|
|
302
|
|
|||||
Equity earnings in affiliates
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Total segment revenues
|
|
$
|
1,045
|
|
|
$
|
397
|
|
|
$
|
378
|
|
|
$
|
—
|
|
|
$
|
1,820
|
|
Depreciation and amortization
|
|
$
|
109
|
|
|
$
|
86
|
|
|
$
|
28
|
|
|
$
|
8
|
|
|
$
|
231
|
|
Segment EBITDA
|
|
455
|
|
|
158
|
|
|
166
|
|
|
(40
|
)
|
|
739
|
|
|||||
Other operating expenses and Other income (expense) excluding divestitures
|
|
(18
|
)
|
|
2
|
|
|
(6
|
)
|
|
11
|
|
|
(11
|
)
|
|
|
Three months ended September 30, 2015
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial Solutions
|
|
Network & Security Solutions
|
|
Corporate
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
801
|
|
|
$
|
341
|
|
|
$
|
339
|
|
|
$
|
—
|
|
|
$
|
1,481
|
|
Product sales and other
|
|
223
|
|
|
50
|
|
|
35
|
|
|
—
|
|
|
308
|
|
|||||
Equity earnings in affiliates
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Total segment revenues
|
|
$
|
1,032
|
|
|
$
|
391
|
|
|
$
|
374
|
|
|
$
|
—
|
|
|
$
|
1,797
|
|
Depreciation and amortization
|
|
$
|
124
|
|
|
$
|
98
|
|
|
$
|
22
|
|
|
$
|
8
|
|
|
$
|
252
|
|
Segment EBITDA
|
|
431
|
|
|
145
|
|
|
162
|
|
|
(35
|
)
|
|
703
|
|
|||||
Other operating expenses and Other income (expense) excluding divestitures
|
|
34
|
|
|
(7
|
)
|
|
(1
|
)
|
|
(56
|
)
|
|
(30
|
)
|
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial Solutions
|
|
Network & Security Solutions
|
|
Corporate
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
2,404
|
|
|
$
|
1,023
|
|
|
$
|
969
|
|
|
$
|
—
|
|
|
$
|
4,396
|
|
Product sales and other
|
|
605
|
|
|
155
|
|
|
127
|
|
|
—
|
|
|
887
|
|
|||||
Equity earnings in affiliates
|
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||
Total segment revenues
|
|
$
|
3,037
|
|
|
$
|
1,178
|
|
|
$
|
1,096
|
|
|
$
|
—
|
|
|
$
|
5,311
|
|
Depreciation and amortization
|
|
$
|
322
|
|
|
$
|
268
|
|
|
$
|
85
|
|
|
$
|
15
|
|
|
$
|
690
|
|
Segment EBITDA
|
|
1,279
|
|
|
473
|
|
|
483
|
|
|
(114
|
)
|
|
2,121
|
|
|||||
Other operating expenses and Other income (expense) excluding divestitures
|
|
4
|
|
|
6
|
|
|
(8
|
)
|
|
(15
|
)
|
|
(13
|
)
|
|
|
Nine months ended September 30, 2015
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial Solutions
|
|
Network & Security Solutions
|
|
Corporate
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
2,413
|
|
|
$
|
974
|
|
|
$
|
965
|
|
|
$
|
—
|
|
|
$
|
4,352
|
|
Product sales and other
|
|
613
|
|
|
127
|
|
|
101
|
|
|
—
|
|
|
841
|
|
|||||
Equity earnings in affiliates
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Total segment revenues
|
|
$
|
3,050
|
|
|
$
|
1,101
|
|
|
$
|
1,066
|
|
|
$
|
—
|
|
|
$
|
5,217
|
|
Depreciation and amortization
|
|
$
|
365
|
|
|
$
|
293
|
|
|
$
|
65
|
|
|
$
|
20
|
|
|
$
|
743
|
|
Segment EBITDA
|
|
1,245
|
|
|
388
|
|
|
448
|
|
|
(113
|
)
|
|
1,968
|
|
|||||
Other operating expenses and Other income (expense) excluding divestitures
|
|
55
|
|
|
(14
|
)
|
|
(1
|
)
|
|
(82
|
)
|
|
(42
|
)
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Consolidated revenues
|
|
$
|
2,936
|
|
|
$
|
2,920
|
|
|
$
|
8,641
|
|
|
$
|
8,487
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Non wholly owned entities (a)
|
|
(25
|
)
|
|
(18
|
)
|
|
(59
|
)
|
|
(58
|
)
|
||||
ISOs commission expense (b)
|
|
(155
|
)
|
|
(167
|
)
|
|
(476
|
)
|
|
(475
|
)
|
||||
Reimbursable debit network fees, postage, and other
|
|
(936
|
)
|
|
(938
|
)
|
|
(2,795
|
)
|
|
(2,737
|
)
|
||||
Total segment revenues
|
|
$
|
1,820
|
|
|
$
|
1,797
|
|
|
$
|
5,311
|
|
|
$
|
5,217
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to First Data Corporation
|
|
$
|
132
|
|
|
$
|
(126
|
)
|
|
$
|
228
|
|
|
$
|
(264
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Non wholly owned entities (a)
|
|
(7
|
)
|
|
(6
|
)
|
|
(24
|
)
|
|
(19
|
)
|
||||
Depreciation and amortization
|
|
237
|
|
|
257
|
|
|
713
|
|
|
760
|
|
||||
Interest expense, net
|
|
263
|
|
|
388
|
|
|
810
|
|
|
1,199
|
|
||||
Loss on debt extinguishment
|
|
3
|
|
|
108
|
|
|
58
|
|
|
108
|
|
||||
Other items (c)
|
|
44
|
|
|
42
|
|
|
65
|
|
|
108
|
|
||||
Income tax expense
|
|
24
|
|
|
32
|
|
|
57
|
|
|
45
|
|
||||
Stock-based compensation
|
|
43
|
|
|
8
|
|
|
214
|
|
|
31
|
|
||||
Total segment EBITDA
|
|
$
|
739
|
|
|
$
|
703
|
|
|
$
|
2,121
|
|
|
$
|
1,968
|
|
(a)
|
Net adjustment to reflect the Company's proportionate share of the results of the Company's investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. Segment revenue for the Company's significant affiliates is reflected based on the Company's proportionate share of the results of the Company's investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. For other affiliates, the Company includes equity earnings in affiliates, excluding amortization expense, in segment revenue.
|
(b)
|
Reported within "Selling, general, and administrative expense" in the unaudited consolidated statements of operations.
|
(c)
|
Includes restructuring, certain retention bonuses, non-normal course litigation and regulatory settlements, asset impairments, debt issuance expenses, Kohlberg Kravis Roberts & Co. (KKR) related items and “Other income (expense)" as presented in the unaudited consolidated statements of operations, which includes divestitures, derivative gains (losses), non-operating foreign currency gains (losses), and the gain on Visa Europe share sale. 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.
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Segment depreciation and amortization
|
|
$
|
231
|
|
|
$
|
252
|
|
|
$
|
690
|
|
|
$
|
743
|
|
Adjustments for non wholly owned entities (a)
|
|
18
|
|
|
20
|
|
|
56
|
|
|
62
|
|
||||
Amortization of initial payments for new contracts (b)
|
|
16
|
|
|
14
|
|
|
47
|
|
|
38
|
|
||||
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows
|
|
265
|
|
|
286
|
|
|
793
|
|
|
843
|
|
||||
Amortization of equity method investments (c)
|
|
(12
|
)
|
|
(15
|
)
|
|
(33
|
)
|
|
(45
|
)
|
||||
Amortization of initial payments for new contracts (b)
|
|
(16
|
)
|
|
(14
|
)
|
|
(47
|
)
|
|
(38
|
)
|
||||
Total consolidated depreciation and amortization per unaudited consolidated statements of operations
|
|
$
|
237
|
|
|
$
|
257
|
|
|
$
|
713
|
|
|
$
|
760
|
|
(a)
|
Adjustment to reflect depreciation and amortization attributable to noncontrolling interests.
|
(b)
|
Included in "Transaction and processing service fees" as contra-revenue in the Company's unaudited consolidated statements of operations.
|
(c)
|
Included in "Equity earnings in affiliates" in the Company's unaudited consolidated statements of operations.
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income tax expense
|
|
$
|
24
|
|
|
$
|
32
|
|
|
$
|
57
|
|
|
$
|
45
|
|
Effective income tax rate
|
|
11
|
%
|
|
(74
|
)%
|
|
12
|
%
|
|
(75
|
)%
|
(in millions)
|
|
2016
|
|
2015
|
||||
Balance as of January 1,
|
|
$
|
77
|
|
|
$
|
70
|
|
Distributions
|
|
(25
|
)
|
|
(26
|
)
|
||
Share of income
|
|
25
|
|
|
26
|
|
||
Adjustment to redemption value of redeemable noncontrolling interest
|
|
(4
|
)
|
|
8
|
|
||
Balance as of September 30,
|
|
$
|
73
|
|
|
$
|
78
|
|
•
|
Floating to fixed interest rate swaps: The Company used interest rate swaps to mitigate its exposure to interest rate fluctuations on interest payments related to variable rate debt. The Company is no longer invested in any such interest rate swaps. The Company's interest rate contracts were used in a non-qualifying hedging relationship.
|
•
|
Floating to fixed interest rate collar swaps: The Company uses interest rate collar swaps to mitigate its exposure to interest rate fluctuations on interest payments related to variable rate debt. No payments or receipts are exchanged on interest rate collar swaps unless interest rates rise or fall to exceed a predetermined ceiling or floor rate. The Company uses these contracts in a qualifying hedging relationship.
|
•
|
Foreign exchange contracts: The Company uses cross-currency swaps to protect the net investment in certain foreign subsidiaries and/or affiliates with respect to changes in foreign currency exchange rates. The Company uses these contracts in both qualifying and non-qualifying hedging relationships.
|
|
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||
(in millions)
|
|
Notional Currency
|
|
Notional Value
|
|
Assets
(a)
|
|
Liabilities
(a)
|
|
Notional Value
|
|
Assets
(a)
|
|
Liabilities
(a)
|
||||||||||
Derivatives designated as hedges of net investments in foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign exchange contracts
|
|
AUD
|
|
260
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
260
|
|
|
$
|
65
|
|
|
$
|
—
|
|
Foreign exchange contracts (b)
|
|
EUR
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
51
|
|
|
—
|
|
||||
Foreign exchange contracts (c)
|
|
GBP
|
|
300
|
|
|
59
|
|
|
—
|
|
|
250
|
|
|
39
|
|
|
—
|
|
||||
Foreign exchange contracts (d)
|
|
CAD
|
|
130
|
|
|
7
|
|
|
—
|
|
|
110
|
|
|
24
|
|
|
—
|
|
||||
|
|
|
|
|
|
121
|
|
|
—
|
|
|
|
|
179
|
|
|
—
|
|
||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate collar contracts
|
|
USD
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate contracts (e)
|
|
USD
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
|
—
|
|
|
(56
|
)
|
||||
|
|
|
|
|
|
$
|
121
|
|
|
$
|
—
|
|
|
|
|
$
|
179
|
|
|
$
|
(56
|
)
|
(a)
|
Of the balances included in the table above, in aggregate,
$121 million
of assets as of
September 30, 2016
and
$179 million
of assets and
$51 million
of liabilities, net
$128 million
, as of
December 31, 2015
are subject to master netting agreements to the extent that the swaps are with the same counterparty. The terms of those agreements require that the Company net settle the outstanding positions at the option of the counterparty upon certain events of default.
|
(b)
|
The forward exchange contracts matured in January 2016 at a net settlement value of
$49 million
.
|
(c)
|
Notional value
100 million
GBP matured in August 2016 at a net settlement value of
$25 million
. The Company entered into a new foreign exchange contract with a notional value of
150 million
GBP.
|
(d)
|
Notional value
75 million
CAD matured in August 2016 at a net settlement value of
$14 million
. The Company entered into a new foreign exchange contract with a notional value of
95 million
CAD.
|
(e)
|
Interest rate contracts matured in September 2016.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||||||||||||||||||
(in millions, pretax)
|
|
Interest
Rate Contracts |
|
Foreign
Exchange Contracts |
|
Interest
Rate Contracts |
|
Foreign
Exchange Contracts |
|
Interest
Rate Contracts |
|
Foreign
Exchange Contracts |
|
Interest
Rate Contracts |
|
Foreign
Exchange Contracts |
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain recognized in "Foreign currency translation adjustment" in the unaudited consolidated statements of comprehensive income (loss) (effective portion)
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gain (loss) recognized in "Other income (expense)" in the unaudited consolidated statements of operations
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(27
|
)
|
|
2
|
|
|
(in millions, after tax)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
||||||||
Accumulated gain included in other comprehensive income (loss) at beginning of the period
|
|
$
|
100
|
|
|
$
|
57
|
|
|
$
|
86
|
|
|
$
|
37
|
|
|
Increase in fair value of derivatives that qualify for hedge accounting, net of tax (a)
|
|
3
|
|
|
22
|
|
|
17
|
|
|
42
|
|
|
||||
Accumulated gain included in other comprehensive income (loss) at end of the period
|
|
$
|
103
|
|
|
$
|
79
|
|
|
$
|
103
|
|
|
$
|
79
|
|
|
(a)
|
Gains are included in “Foreign currency translation adjustment” in the unaudited consolidated statements of comprehensive income (loss).
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Global Business Solutions
|
|
$
|
(2
|
)
|
|
$
|
(9
|
)
|
|
$
|
(7
|
)
|
|
$
|
(14
|
)
|
Global Financial Solutions
|
|
—
|
|
|
(5
|
)
|
|
(2
|
)
|
|
(9
|
)
|
||||
Network & Security Solutions
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||
Corporate
|
|
(4
|
)
|
|
(5
|
)
|
|
(40
|
)
|
|
(16
|
)
|
||||
Restructuring, net
|
|
$
|
(6
|
)
|
|
$
|
(20
|
)
|
|
$
|
(51
|
)
|
|
$
|
(40
|
)
|
(in millions)
|
|
Employee
Severance
|
|
Other
|
||||
Remaining accrual as of January 1, 2016
|
|
$
|
29
|
|
|
$
|
1
|
|
Restructuring, net
|
|
28
|
|
|
23
|
|
||
Impairment of held-for-sale assets
|
|
—
|
|
|
(21
|
)
|
||
Cash payments and other
|
|
(49
|
)
|
|
(3
|
)
|
||
Remaining accrual as of September 30, 2016
|
|
$
|
8
|
|
|
$
|
—
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net operating revenues
|
|
$
|
232
|
|
|
$
|
228
|
|
|
$
|
683
|
|
|
$
|
668
|
|
Operating expenses
|
|
96
|
|
|
97
|
|
|
286
|
|
|
281
|
|
||||
Operating income
|
|
$
|
136
|
|
|
$
|
131
|
|
|
$
|
397
|
|
|
$
|
387
|
|
Net income
|
|
$
|
136
|
|
|
$
|
131
|
|
|
$
|
397
|
|
|
$
|
387
|
|
FDC equity earnings
|
|
46
|
|
|
42
|
|
|
136
|
|
|
123
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Derivative financial instruments losses
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
(5
|
)
|
|
$
|
(25
|
)
|
Divestitures, net (loss) gain
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|
3
|
|
||||
Gain on Visa Europe share sale
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
||||
Non-operating foreign currency gains and (losses)
|
|
2
|
|
|
(1
|
)
|
|
21
|
|
|
23
|
|
||||
Other miscellaneous expense
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other income (expense)
|
|
$
|
(30
|
)
|
|
$
|
(10
|
)
|
|
$
|
14
|
|
|
$
|
1
|
|
•
|
the Guarantor ceases to be a “restricted subsidiary” for purpose of the agreement because the Company no longer directly or indirectly owns
50%
of the equity or, if a corporation, stock having voting power to elect a majority of the board of directors of the Guarantor; or
|
•
|
the Guarantor is designated as an “unrestricted subsidiary” for purposes of the agreement covenants; or
|
•
|
the Guarantor is no longer wholly owned by the Company subject to the value of all Guarantors released under this provision does not exceed (x)
10%
of the Company’s Covenant EBITDA plus (y) the amount of investments permitted under the agreement in respect of non-guarantors.
|
•
|
the sale, exchange or transfer of the subsidiary’s capital stock or all or substantially all of its assets;
|
•
|
designation of the Guarantor as an “unrestricted subsidiary” for purposes of the indenture covenants;
|
•
|
release or discharge of the Guarantor’s guarantee of certain other indebtedness; or
|
•
|
legal defeasance or covenant defeasance of the indenture obligations when provision has been made for them to be fully satisfied.
|
|
|
Three months ended September 30, 2016
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidation
Adjustments |
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
—
|
|
|
$
|
1,003
|
|
|
$
|
763
|
|
|
$
|
(73
|
)
|
|
$
|
1,693
|
|
Product sales and other
|
|
—
|
|
|
208
|
|
|
144
|
|
|
(45
|
)
|
|
307
|
|
|||||
Total revenues (excluding reimbursable items)
|
|
—
|
|
|
1,211
|
|
|
907
|
|
|
(118
|
)
|
|
2,000
|
|
|||||
Reimbursable PIN debit fees, postage, and other
|
|
—
|
|
|
637
|
|
|
299
|
|
|
—
|
|
|
936
|
|
|||||
Total revenues
|
|
—
|
|
|
1,848
|
|
|
1,206
|
|
|
(118
|
)
|
|
2,936
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of items shown below)
|
|
—
|
|
|
408
|
|
|
360
|
|
|
(57
|
)
|
|
711
|
|
|||||
Cost of products sold
|
|
—
|
|
|
84
|
|
|
48
|
|
|
(45
|
)
|
|
87
|
|
|||||
Selling, general, and administrative
|
|
56
|
|
|
272
|
|
|
187
|
|
|
(16
|
)
|
|
499
|
|
|||||
Depreciation and amortization
|
|
1
|
|
|
140
|
|
|
96
|
|
|
—
|
|
|
237
|
|
|||||
Other operating expenses
|
|
—
|
|
|
3
|
|
|
9
|
|
|
—
|
|
|
12
|
|
|||||
Total expenses (excluding reimbursable items)
|
|
57
|
|
|
907
|
|
|
700
|
|
|
(118
|
)
|
|
1,546
|
|
|||||
Reimbursable PIN debit fees, postage, and other
|
|
—
|
|
|
637
|
|
|
299
|
|
|
—
|
|
|
936
|
|
|||||
Total expenses
|
|
57
|
|
|
1,544
|
|
|
999
|
|
|
(118
|
)
|
|
2,482
|
|
|||||
Operating (loss) profit
|
|
(57
|
)
|
|
304
|
|
|
207
|
|
|
—
|
|
|
454
|
|
|||||
Interest expense, net
|
|
(258
|
)
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
(263
|
)
|
|||||
Loss on debt extinguishment
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Interest income (expense) from intercompany notes
|
|
59
|
|
|
(57
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||
Other income (expense)
|
|
(2
|
)
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
(30
|
)
|
|||||
Equity earnings from consolidated subsidiaries
|
|
240
|
|
|
(1
|
)
|
|
—
|
|
|
(239
|
)
|
|
—
|
|
|||||
(Loss) income before income taxes and equity earnings in affiliates
|
|
(21
|
)
|
|
242
|
|
|
176
|
|
|
(239
|
)
|
|
158
|
|
|||||
Income tax (benefit) expense
|
|
(154
|
)
|
|
144
|
|
|
34
|
|
|
—
|
|
|
24
|
|
|||||
Equity earnings in affiliates
|
|
(1
|
)
|
|
59
|
|
|
8
|
|
|
—
|
|
|
66
|
|
|||||
Net income (loss)
|
|
132
|
|
|
157
|
|
|
150
|
|
|
(239
|
)
|
|
200
|
|
|||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
16
|
|
|
52
|
|
|
68
|
|
|||||
Net income (loss) attributable to First Data Corporation
|
|
$
|
132
|
|
|
$
|
157
|
|
|
$
|
134
|
|
|
$
|
(291
|
)
|
|
$
|
132
|
|
Comprehensive income (loss)
|
|
$
|
192
|
|
|
$
|
169
|
|
|
$
|
211
|
|
|
$
|
(311
|
)
|
|
$
|
261
|
|
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
17
|
|
|
52
|
|
|
69
|
|
|||||
Comprehensive income (loss) attributable to First Data Corporation
|
|
$
|
192
|
|
|
$
|
169
|
|
|
$
|
194
|
|
|
$
|
(363
|
)
|
|
$
|
192
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidation
Adjustments |
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
—
|
|
|
$
|
2,926
|
|
|
$
|
2,248
|
|
|
$
|
(221
|
)
|
|
$
|
4,953
|
|
Product sales and other
|
|
—
|
|
|
609
|
|
|
398
|
|
|
(114
|
)
|
|
893
|
|
|||||
Total revenues (excluding reimbursable items)
|
|
—
|
|
|
3,535
|
|
|
2,646
|
|
|
(335
|
)
|
|
5,846
|
|
|||||
Reimbursable PIN debit fees, postage, and other
|
|
—
|
|
|
1,903
|
|
|
892
|
|
|
—
|
|
|
2,795
|
|
|||||
Total revenues
|
|
—
|
|
|
5,438
|
|
|
3,538
|
|
|
(335
|
)
|
|
8,641
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of items shown below)
|
|
—
|
|
|
1,208
|
|
|
1,063
|
|
|
(131
|
)
|
|
2,140
|
|
|||||
Cost of products sold
|
|
—
|
|
|
235
|
|
|
133
|
|
|
(117
|
)
|
|
251
|
|
|||||
Selling, general, and administrative
|
|
261
|
|
|
815
|
|
|
574
|
|
|
(87
|
)
|
|
1,563
|
|
|||||
Depreciation and amortization
|
|
4
|
|
|
430
|
|
|
279
|
|
|
—
|
|
|
713
|
|
|||||
Other operating expenses:
|
|
12
|
|
|
32
|
|
|
13
|
|
|
—
|
|
|
57
|
|
|||||
Total expenses (excluding reimbursable items)
|
|
277
|
|
|
2,720
|
|
|
2,062
|
|
|
(335
|
)
|
|
4,724
|
|
|||||
Reimbursable PIN debit fees, postage, and other
|
|
—
|
|
|
1,903
|
|
|
892
|
|
|
—
|
|
|
2,795
|
|
|||||
Total expenses
|
|
277
|
|
|
4,623
|
|
|
2,954
|
|
|
(335
|
)
|
|
7,519
|
|
|||||
Operating (loss) profit
|
|
(277
|
)
|
|
815
|
|
|
584
|
|
|
—
|
|
|
1,122
|
|
|||||
Interest expense, net
|
|
(792
|
)
|
|
(13
|
)
|
|
(5
|
)
|
|
—
|
|
|
(810
|
)
|
|||||
Loss on debt extinguishment
|
|
(58
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|||||
Interest income (expense) from intercompany notes
|
|
192
|
|
|
(176
|
)
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|||||
Other (expense)
|
|
(2
|
)
|
|
—
|
|
|
16
|
|
|
—
|
|
|
14
|
|
|||||
Equity earnings from consolidated subsidiaries
|
|
689
|
|
|
175
|
|
|
—
|
|
|
(864
|
)
|
|
—
|
|
|||||
(Loss) income before income taxes and equity earnings in affiliates
|
|
(248
|
)
|
|
801
|
|
|
579
|
|
|
(864
|
)
|
|
268
|
|
|||||
Income tax (benefit) expense
|
|
(477
|
)
|
|
404
|
|
|
130
|
|
|
—
|
|
|
57
|
|
|||||
Equity earnings in affiliates
|
|
(1
|
)
|
|
175
|
|
|
24
|
|
|
—
|
|
|
198
|
|
|||||
Net income (loss)
|
|
228
|
|
|
572
|
|
|
473
|
|
|
(864
|
)
|
|
409
|
|
|||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
50
|
|
|
131
|
|
|
181
|
|
|||||
Net income (loss) attributable to First Data Corporation
|
|
$
|
228
|
|
|
$
|
572
|
|
|
$
|
423
|
|
|
$
|
(995
|
)
|
|
$
|
228
|
|
Comprehensive (loss) income
|
|
$
|
182
|
|
|
$
|
611
|
|
|
$
|
454
|
|
|
$
|
(882
|
)
|
|
$
|
365
|
|
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
52
|
|
|
131
|
|
|
183
|
|
|||||
Comprehensive (loss) income attributable to First Data Corporation
|
|
$
|
182
|
|
|
$
|
611
|
|
|
$
|
402
|
|
|
$
|
(1,013
|
)
|
|
$
|
182
|
|
|
|
Three months ended September 30, 2015
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidation
Adjustments |
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transaction and processing service fees
|
|
$
|
—
|
|
|
$
|
1,002
|
|
|
$
|
753
|
|
|
$
|
(82
|
)
|
|
$
|
1,673
|
|
Product sales and other
|
|
—
|
|
|
197
|
|
|
131
|
|
|
(19
|
)
|
|
309
|
|
|||||
Total revenues (excluding reimbursable items)
|
|
—
|
|
|
1,199
|
|
|
884
|
|
|
(101
|
)
|
|
1,982
|
|
|||||
Reimbursable PIN debit fees, postage, and other
|
|
—
|
|
|
646
|
|
|
292
|
|
|
—
|
|
|
938
|
|
|||||
Total revenues
|
|
—
|
|
|
1,845
|
|
|
1,176
|
|
|
(101
|
)
|
|
2,920
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of items shown below)
|
|
—
|
|
|
413
|
|
|
355
|
|
|
(82
|
)
|
|
686
|
|
|||||
Cost of products sold
|
|
—
|
|
|
68
|
|
|
47
|
|
|
(19
|
)
|
|
96
|
|
|||||
Selling, general, and administrative
|
|
22
|
|
|
299
|
|
|
200
|
|
|
—
|
|
|
521
|
|
|||||
Depreciation and amortization
|
|
1
|
|
|
158
|
|
|
98
|
|
|
—
|
|
|
257
|
|
|||||
Other operating expenses
|
|
1
|
|
|
10
|
|
|
9
|
|
|
—
|
|
|
20
|
|
|||||
Total expenses (excluding reimbursable items)
|
|
24
|
|
|
948
|
|
|
709
|
|
|
(101
|
)
|
|
1,580
|
|
|||||
Reimbursable PIN debit fees, postage, and other
|
|
—
|
|
|
646
|
|
|
292
|
|
|
—
|
|
|
938
|
|
|||||
Total expenses
|
|
24
|
|
|
1,594
|
|
|
1,001
|
|
|
(101
|
)
|
|
2,518
|
|
|||||
Operating (loss) profit
|
|
(24
|
)
|
|
251
|
|
|
175
|
|
|
—
|
|
|
402
|
|
|||||
Interest expense, net
|
|
(386
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(388
|
)
|
|||||
Loss on debt extinguishment
|
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
|||||
Interest income (expense) from intercompany notes
|
|
65
|
|
|
(68
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Other (expense) income
|
|
(18
|
)
|
|
—
|
|
|
8
|
|
|
—
|
|
|
(10
|
)
|
|||||
Equity earnings from consolidated subsidiaries
|
|
570
|
|
|
111
|
|
|
—
|
|
|
(681
|
)
|
|
—
|
|
|||||
Income (loss) before income taxes and equity earnings in affiliates
|
|
99
|
|
|
292
|
|
|
186
|
|
|
(681
|
)
|
|
(104
|
)
|
|||||
Income tax (benefit) expense
|
|
225
|
|
|
(197
|
)
|
|
4
|
|
|
—
|
|
|
32
|
|
|||||
Equity earnings in affiliates
|
|
—
|
|
|
55
|
|
|
6
|
|
|
—
|
|
|
61
|
|
|||||
Net (loss) income
|
|
(126
|
)
|
|
544
|
|
|
188
|
|
|
(681
|
)
|
|
(75
|
)
|
|||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
15
|
|
|
36
|
|
|
51
|
|
|||||
Net (loss) income attributable to First Data Corporation
|
|
$
|
(126
|
)
|
|
$
|
544
|
|
|
$
|
173
|
|
|
$
|
(717
|
)
|
|
$
|
(126
|
)
|
Comprehensive (loss) income
|
|
$
|
(214
|
)
|
|
$
|
494
|
|
|
$
|
83
|
|
|
$
|
(525
|
)
|
|
$
|
(162
|
)
|
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
15
|
|
|
36
|
|
|
51
|
|
|||||
Comprehensive income (loss) attributable to First Data Corporation
|
|
$
|
(214
|
)
|
|
$
|
494
|
|
|
$
|
68
|
|
|
$
|
(561
|
)
|
|
$
|
(213
|
)
|
|
|
Nine months ended September 30, 2015
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidation
Adjustments |
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transaction and processing service fees
|
|
$
|
—
|
|
|
$
|
2,896
|
|
|
$
|
2,242
|
|
|
$
|
(232
|
)
|
|
$
|
4,906
|
|
Product sales and other
|
|
—
|
|
|
538
|
|
|
354
|
|
|
(48
|
)
|
|
844
|
|
|||||
Total revenues (excluding reimbursable items)
|
|
—
|
|
|
3,434
|
|
|
2,596
|
|
|
(280
|
)
|
|
5,750
|
|
|||||
Reimbursable PIN debit fees, postage, and other
|
|
—
|
|
|
1,874
|
|
|
863
|
|
|
—
|
|
|
2,737
|
|
|||||
Total revenues
|
|
—
|
|
|
5,308
|
|
|
3,459
|
|
|
(280
|
)
|
|
8,487
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of services (exclusive of items shown below)
|
|
—
|
|
|
1,190
|
|
|
1,097
|
|
|
(232
|
)
|
|
2,055
|
|
|||||
Cost of products sold
|
|
—
|
|
|
181
|
|
|
124
|
|
|
(48
|
)
|
|
257
|
|
|||||
Selling, general, and administrative
|
|
81
|
|
|
876
|
|
|
610
|
|
|
—
|
|
|
1,567
|
|
|||||
Depreciation and amortization
|
|
10
|
|
|
459
|
|
|
291
|
|
|
—
|
|
|
760
|
|
|||||
Other operating expenses
|
|
7
|
|
|
14
|
|
|
19
|
|
|
—
|
|
|
40
|
|
|||||
Total expenses (excluding reimbursable items)
|
|
98
|
|
|
2,720
|
|
|
2,141
|
|
|
(280
|
)
|
|
4,679
|
|
|||||
Reimbursable PIN debit fees, postage, and other
|
|
—
|
|
|
1,874
|
|
|
863
|
|
|
—
|
|
|
2,737
|
|
|||||
Total expenses
|
|
98
|
|
|
4,594
|
|
|
3,004
|
|
|
(280
|
)
|
|
7,416
|
|
|||||
Operating (loss) profit
|
|
(98
|
)
|
|
714
|
|
|
455
|
|
|
—
|
|
|
1,071
|
|
|||||
Interest expense, net
|
|
(1,191
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(1,199
|
)
|
|||||
Loss on debt extinguishment
|
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
|||||
Interest income (expense) from intercompany notes
|
|
223
|
|
|
(224
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Other income (expense)
|
|
21
|
|
|
3
|
|
|
(23
|
)
|
|
—
|
|
|
1
|
|
|||||
Equity earnings from consolidated subsidiaries
|
|
877
|
|
|
234
|
|
|
—
|
|
|
(1,111
|
)
|
|
—
|
|
|||||
(Loss) income before income taxes and equity earnings in affiliates
|
|
(276
|
)
|
|
719
|
|
|
433
|
|
|
(1,111
|
)
|
|
(235
|
)
|
|||||
Income tax (benefit) expense
|
|
(12
|
)
|
|
3
|
|
|
54
|
|
|
—
|
|
|
45
|
|
|||||
Equity earnings in affiliates
|
|
—
|
|
|
158
|
|
|
17
|
|
|
—
|
|
|
175
|
|
|||||
Net (loss) income
|
|
(264
|
)
|
|
874
|
|
|
396
|
|
|
(1,111
|
)
|
|
(105
|
)
|
|||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
49
|
|
|
110
|
|
|
159
|
|
|||||
Net (loss) income attributable to First Data Corporation
|
|
$
|
(264
|
)
|
|
$
|
874
|
|
|
$
|
347
|
|
|
$
|
(1,221
|
)
|
|
$
|
(264
|
)
|
Comprehensive (loss) income
|
|
$
|
(473
|
)
|
|
$
|
796
|
|
|
$
|
121
|
|
|
$
|
(765
|
)
|
|
$
|
(321
|
)
|
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
41
|
|
|
110
|
|
|
151
|
|
|||||
Comprehensive (loss) income attributable to First Data Corporation
|
|
$
|
(473
|
)
|
|
$
|
796
|
|
|
$
|
80
|
|
|
$
|
(875
|
)
|
|
$
|
(472
|
)
|
|
|
As of September 30, 2016
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidation
Adjustments |
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
$
|
8
|
|
|
$
|
18
|
|
|
$
|
449
|
|
|
$
|
—
|
|
|
$
|
475
|
|
Accounts receivable, net of allowance for doubtful accounts
|
|
—
|
|
|
487
|
|
|
1,227
|
|
|
—
|
|
|
1,714
|
|
|||||
Settlement assets (a)
|
|
—
|
|
|
4,222
|
|
|
4,483
|
|
|
—
|
|
|
8,705
|
|
|||||
Intercompany notes receivable
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Other current assets
|
|
108
|
|
|
203
|
|
|
149
|
|
|
—
|
|
|
460
|
|
|||||
Total current assets
|
|
117
|
|
|
4,930
|
|
|
6,308
|
|
|
(1
|
)
|
|
11,354
|
|
|||||
Property and equipment, net of accumulated depreciation
|
|
34
|
|
|
600
|
|
|
262
|
|
|
—
|
|
|
896
|
|
|||||
Goodwill
|
|
—
|
|
|
9,145
|
|
|
7,680
|
|
|
—
|
|
|
16,825
|
|
|||||
Customer relationships, net of accumulated amortization
|
|
—
|
|
|
1,078
|
|
|
767
|
|
|
—
|
|
|
1,845
|
|
|||||
Other intangibles, net of accumulated amortization
|
|
604
|
|
|
706
|
|
|
483
|
|
|
—
|
|
|
1,793
|
|
|||||
Investment in affiliates
|
|
4
|
|
|
873
|
|
|
126
|
|
|
—
|
|
|
1,003
|
|
|||||
Long-term intercompany receivables
|
|
10,070
|
|
|
17,144
|
|
|
7,290
|
|
|
(34,504
|
)
|
|
—
|
|
|||||
Long-term intercompany notes receivable
|
|
3,446
|
|
|
219
|
|
|
9
|
|
|
(3,674
|
)
|
|
—
|
|
|||||
Long-term deferred tax assets
|
|
449
|
|
|
—
|
|
|
—
|
|
|
(449
|
)
|
|
—
|
|
|||||
Other long-term assets
|
|
185
|
|
|
342
|
|
|
251
|
|
|
(50
|
)
|
|
728
|
|
|||||
Investment in consolidated subsidiaries
|
|
26,658
|
|
|
5,862
|
|
|
—
|
|
|
(32,520
|
)
|
|
—
|
|
|||||
Total assets
|
|
$
|
41,567
|
|
|
$
|
40,899
|
|
|
$
|
23,176
|
|
|
$
|
(71,198
|
)
|
|
$
|
34,444
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
|
$
|
250
|
|
|
$
|
758
|
|
|
$
|
548
|
|
|
$
|
—
|
|
|
$
|
1,556
|
|
Short-term and current portion of long-term borrowings
|
|
—
|
|
|
94
|
|
|
283
|
|
|
—
|
|
|
377
|
|
|||||
Settlement obligations (a)
|
|
—
|
|
|
4,222
|
|
|
4,483
|
|
|
—
|
|
|
8,705
|
|
|||||
Intercompany notes payable
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||
Total current liabilities
|
|
250
|
|
|
5,074
|
|
|
5,315
|
|
|
(1
|
)
|
|
10,638
|
|
|||||
Long-term borrowings
|
|
18,316
|
|
|
183
|
|
|
15
|
|
|
—
|
|
|
18,514
|
|
|||||
Deferred tax liabilities
|
|
—
|
|
|
766
|
|
|
93
|
|
|
(449
|
)
|
|
410
|
|
|||||
Long-term intercompany payables
|
|
21,261
|
|
|
8,002
|
|
|
5,241
|
|
|
(34,504
|
)
|
|
—
|
|
|||||
Long-term intercompany notes payable
|
|
228
|
|
|
3,446
|
|
|
—
|
|
|
(3,674
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
|
474
|
|
|
253
|
|
|
159
|
|
|
(50
|
)
|
|
836
|
|
|||||
Total liabilities
|
|
40,529
|
|
|
17,724
|
|
|
10,823
|
|
|
(38,678
|
)
|
|
30,398
|
|
|||||
Redeemable equity interest
|
|
—
|
|
|
—
|
|
|
73
|
|
|
(73
|
)
|
|
—
|
|
|||||
Redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
73
|
|
|||||
First Data Corporation stockholders' equity
|
|
1,038
|
|
|
23,175
|
|
|
6,403
|
|
|
(29,578
|
)
|
|
1,038
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
104
|
|
|
2,831
|
|
|
2,935
|
|
|||||
Equity of consolidated alliance
|
|
—
|
|
|
—
|
|
|
5,773
|
|
|
(5,773
|
)
|
|
—
|
|
|||||
Total equity
|
|
1,038
|
|
|
23,175
|
|
|
12,280
|
|
|
(32,520
|
)
|
|
3,973
|
|
|||||
Total liabilities and equity
|
|
$
|
41,567
|
|
|
$
|
40,899
|
|
|
$
|
23,176
|
|
|
$
|
(71,198
|
)
|
|
$
|
34,444
|
|
(a)
|
The majority of the Guarantor settlement assets relate to the Company’s merchant acquiring business. The Company believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities.
|
|
|
As of December 31, 2015
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Consolidation
Adjustments |
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
$
|
105
|
|
|
$
|
16
|
|
|
$
|
308
|
|
|
$
|
—
|
|
|
$
|
429
|
|
Accounts receivable, net of allowance for doubtful accounts
|
|
—
|
|
|
826
|
|
|
1,000
|
|
|
—
|
|
|
1,826
|
|
|||||
Settlement assets (a)
|
|
—
|
|
|
4,273
|
|
|
3,877
|
|
|
—
|
|
|
8,150
|
|
|||||
Intercompany notes receivable
|
|
436
|
|
|
86
|
|
|
10
|
|
|
(532
|
)
|
|
—
|
|
|||||
Other current assets
|
|
98
|
|
|
188
|
|
|
95
|
|
|
—
|
|
|
381
|
|
|||||
Total current assets
|
|
639
|
|
|
5,389
|
|
|
5,290
|
|
|
(532
|
)
|
|
10,786
|
|
|||||
Property and equipment, net of accumulated depreciation
|
|
37
|
|
|
640
|
|
|
274
|
|
|
—
|
|
|
951
|
|
|||||
Goodwill
|
|
—
|
|
|
9,139
|
|
|
7,707
|
|
|
—
|
|
|
16,846
|
|
|||||
Customer relationships, net of accumulated amortization
|
|
—
|
|
|
1,235
|
|
|
901
|
|
|
—
|
|
|
2,136
|
|
|||||
Other intangibles, net of accumulated amortization
|
|
604
|
|
|
703
|
|
|
476
|
|
|
—
|
|
|
1,783
|
|
|||||
Investment in affiliates
|
|
5
|
|
|
900
|
|
|
143
|
|
|
—
|
|
|
1,048
|
|
|||||
Long-term intercompany receivables
|
|
8,523
|
|
|
15,192
|
|
|
6,321
|
|
|
(30,036
|
)
|
|
—
|
|
|||||
Long-term intercompany notes receivable
|
|
3,415
|
|
|
236
|
|
|
9
|
|
|
(3,660
|
)
|
|
—
|
|
|||||
Long-term deferred tax assets
|
|
524
|
|
|
—
|
|
|
—
|
|
|
(524
|
)
|
|
—
|
|
|||||
Other long-term assets
|
|
259
|
|
|
358
|
|
|
265
|
|
|
(70
|
)
|
|
812
|
|
|||||
Investment in consolidated subsidiaries
|
|
25,692
|
|
|
5,588
|
|
|
—
|
|
|
(31,280
|
)
|
|
—
|
|
|||||
Total assets
|
|
$
|
39,698
|
|
|
$
|
39,380
|
|
|
$
|
21,386
|
|
|
$
|
(66,102
|
)
|
|
$
|
34,362
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
|
$
|
283
|
|
|
$
|
792
|
|
|
$
|
564
|
|
|
$
|
—
|
|
|
$
|
1,639
|
|
Short-term and current portion of long-term borrowings
|
|
740
|
|
|
70
|
|
|
46
|
|
|
—
|
|
|
856
|
|
|||||
Settlement obligations (a)
|
|
—
|
|
|
4,273
|
|
|
3,877
|
|
|
—
|
|
|
8,150
|
|
|||||
Intercompany notes payable
|
|
96
|
|
|
408
|
|
|
28
|
|
|
(532
|
)
|
|
—
|
|
|||||
Total current liabilities
|
|
1,119
|
|
|
5,543
|
|
|
4,515
|
|
|
(532
|
)
|
|
10,645
|
|
|||||
Long-term borrowings
|
|
18,616
|
|
|
119
|
|
|
2
|
|
|
—
|
|
|
18,737
|
|
|||||
Deferred tax liabilities
|
|
—
|
|
|
875
|
|
|
80
|
|
|
(524
|
)
|
|
431
|
|
|||||
Long-term intercompany payables
|
|
18,583
|
|
|
6,874
|
|
|
4,579
|
|
|
(30,036
|
)
|
|
—
|
|
|||||
Long-term intercompany notes payable
|
|
245
|
|
|
3,353
|
|
|
62
|
|
|
(3,660
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
|
467
|
|
|
288
|
|
|
127
|
|
|
(70
|
)
|
|
812
|
|
|||||
Total liabilities
|
|
39,030
|
|
|
17,052
|
|
|
9,365
|
|
|
(34,822
|
)
|
|
30,625
|
|
|||||
Redeemable equity interest
|
|
—
|
|
|
—
|
|
|
77
|
|
|
(77
|
)
|
|
—
|
|
|||||
Redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
77
|
|
|||||
First Data Corporation stockholders' equity
|
|
668
|
|
|
22,328
|
|
|
5,933
|
|
|
(28,261
|
)
|
|
668
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
88
|
|
|
2,904
|
|
|
2,992
|
|
|||||
Equity of consolidated alliance
|
|
—
|
|
|
—
|
|
|
5,923
|
|
|
(5,923
|
)
|
|
—
|
|
|||||
Total equity
|
|
668
|
|
|
22,328
|
|
|
11,944
|
|
|
(31,280
|
)
|
|
3,660
|
|
|||||
Total liabilities and equity
|
|
$
|
39,698
|
|
|
$
|
39,380
|
|
|
$
|
21,386
|
|
|
$
|
(66,102
|
)
|
|
$
|
34,362
|
|
(a)
|
The majority of the Guarantor settlement assets relate to the Company’s merchant acquiring business. The Company believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities.
|
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidation
Adjustments
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income
|
|
$
|
228
|
|
|
$
|
572
|
|
|
$
|
473
|
|
|
$
|
(864
|
)
|
|
$
|
409
|
|
Adjustments to reconcile to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)
|
|
4
|
|
|
484
|
|
|
305
|
|
|
—
|
|
|
793
|
|
|||||
Charges (gains) related to other operating expenses and other income (expense)
|
|
14
|
|
|
32
|
|
|
(3
|
)
|
|
—
|
|
|
43
|
|
|||||
Loss on debt extinguishment
|
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|||||
Stock-based compensation expense
|
|
214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||
Other non-cash and non-operating items, net
|
|
(660
|
)
|
|
(174
|
)
|
|
—
|
|
|
864
|
|
|
30
|
|
|||||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities
|
|
(351
|
)
|
|
316
|
|
|
148
|
|
|
—
|
|
|
113
|
|
|||||
Net cash (used in) provided by operating activities
|
|
(493
|
)
|
|
1,230
|
|
|
923
|
|
|
—
|
|
|
1,660
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to property and equipment
|
|
—
|
|
|
(47
|
)
|
|
(121
|
)
|
|
—
|
|
|
(168
|
)
|
|||||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs
|
|
—
|
|
|
(139
|
)
|
|
(44
|
)
|
|
—
|
|
|
(183
|
)
|
|||||
Acquisitions, net of cash acquired
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Other investing activities, net
|
|
143
|
|
|
215
|
|
|
19
|
|
|
(358
|
)
|
|
19
|
|
|||||
Net cash provided by (used in) investing activities
|
|
137
|
|
|
29
|
|
|
(146
|
)
|
|
(358
|
)
|
|
(338
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term borrowings, net
|
|
—
|
|
|
—
|
|
|
234
|
|
|
—
|
|
|
234
|
|
|||||
Proceeds from issuance of long-term debt
|
|
2,377
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,377
|
|
|||||
Payment of call premiums and debt issuance cost
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|||||
Principal payments on long-term debt
|
|
(3,480
|
)
|
|
(59
|
)
|
|
(5
|
)
|
|
—
|
|
|
(3,544
|
)
|
|||||
Payment of taxes related to net settlement of equity awards
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|||||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
(204
|
)
|
|
(240
|
)
|
|||||
Distributions paid to equity holders
|
|
—
|
|
|
—
|
|
|
(419
|
)
|
|
419
|
|
|
—
|
|
|||||
Other financing activities, net
|
|
18
|
|
|
8
|
|
|
(143
|
)
|
|
143
|
|
|
26
|
|
|||||
Intercompany
|
|
1,455
|
|
|
(1,215
|
)
|
|
(240
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
259
|
|
|
(1,266
|
)
|
|
(609
|
)
|
|
358
|
|
|
(1,258
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
9
|
|
|
(27
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Change in cash and cash equivalents
|
|
(97
|
)
|
|
2
|
|
|
141
|
|
|
—
|
|
|
46
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
105
|
|
|
16
|
|
|
308
|
|
|
—
|
|
|
429
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
8
|
|
|
$
|
18
|
|
|
$
|
449
|
|
|
$
|
—
|
|
|
$
|
475
|
|
|
|
Nine months ended September 30, 2015
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company |
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Consolidation
Adjustments |
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (loss) income
|
|
$
|
(264
|
)
|
|
$
|
874
|
|
|
$
|
396
|
|
|
$
|
(1,111
|
)
|
|
$
|
(105
|
)
|
Adjustments to reconcile to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)
|
|
10
|
|
|
519
|
|
|
314
|
|
|
—
|
|
|
843
|
|
|||||
(Gains) charges related to other operating expenses and other income (expense)
|
|
(14
|
)
|
|
11
|
|
|
42
|
|
|
—
|
|
|
39
|
|
|||||
Loss on debt extinguishment
|
|
108
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|||||
Stock-based compensation expense
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|||||
Other non-cash and non-operating items, net
|
|
(832
|
)
|
|
(238
|
)
|
|
9
|
|
|
1,111
|
|
|
50
|
|
|||||
(Decrease) increase in cash resulting from changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions
|
|
(405
|
)
|
|
87
|
|
|
39
|
|
|
—
|
|
|
(279
|
)
|
|||||
Net cash (used in) provided by operating activities
|
|
(1,366
|
)
|
|
1,253
|
|
|
800
|
|
|
—
|
|
|
687
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to property and equipment
|
|
(8
|
)
|
|
(93
|
)
|
|
(112
|
)
|
|
—
|
|
|
(213
|
)
|
|||||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs
|
|
—
|
|
|
(201
|
)
|
|
(43
|
)
|
|
—
|
|
|
(244
|
)
|
|||||
Acquisitions, net of cash acquired
|
|
(70
|
)
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
(89
|
)
|
|||||
Other investing activities, net
|
|
110
|
|
|
199
|
|
|
—
|
|
|
(317
|
)
|
|
(8
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
32
|
|
|
(114
|
)
|
|
(155
|
)
|
|
(317
|
)
|
|
(554
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term borrowings, net
|
|
250
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
219
|
|
|||||
Proceeds from issuance of long-term debt
|
|
2,206
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,206
|
|
|||||
Payment of debt issuance cost
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|||||
Principal payments on long-term debt
|
|
(2,115
|
)
|
|
(61
|
)
|
|
(9
|
)
|
|
—
|
|
|
(2,185
|
)
|
|||||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
(183
|
)
|
|
(232
|
)
|
|||||
Distributions paid to equity holders
|
|
—
|
|
|
—
|
|
|
(375
|
)
|
|
375
|
|
|
—
|
|
|||||
Other financing activities, net
|
|
(13
|
)
|
|
—
|
|
|
(125
|
)
|
|
125
|
|
|
(13
|
)
|
|||||
Intercompany
|
|
1,129
|
|
|
(1,080
|
)
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
1,353
|
|
|
(1,141
|
)
|
|
(638
|
)
|
|
317
|
|
|
(109
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
1
|
|
|
(15
|
)
|
|
—
|
|
|
(14
|
)
|
|||||
Change in cash and cash equivalents
|
|
19
|
|
|
(1
|
)
|
|
(8
|
)
|
|
—
|
|
|
10
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
23
|
|
|
335
|
|
|
—
|
|
|
358
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
19
|
|
|
$
|
22
|
|
|
$
|
327
|
|
|
$
|
—
|
|
|
$
|
368
|
|
◦
|
Tangible improvements in North America merchant business
|
◦
|
Strong momentum in international markets
|
◦
|
Enterprise growth continues
|
◦
|
Maintaining expense discipline
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of services
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
—
|
|
Selling, general, and administrative
|
|
24
|
|
|
8
|
|
|
123
|
|
|
31
|
|
||||
Total
|
|
$
|
43
|
|
|
$
|
8
|
|
|
$
|
214
|
|
|
$
|
31
|
|
•
|
The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.
|
•
|
Intersegment revenues are eliminated in the segment that sells directly to the end market.
|
•
|
Segment revenue excludes reimbursable PIN debit fees, postage, and other revenue.
|
•
|
Segment EBITDA includes equity earnings in affiliates and excludes depreciation and amortization expense, net income attributable to noncontrolling interests, other operating expenses, and other income (expense). Additionally, segment EBITDA is adjusted for items similar to certain of those used in calculating our compliance with debt covenants. The additional items that are adjusted to determine segment EBITDA are:
|
•
|
stock-based compensation and related expenses are excluded;
|
•
|
debt issuance costs are excluded and represent costs associated with issuing debt and modifying our debt structure; and
|
•
|
Kohlberg Kravis Roberts & Co. (KKR) related items including annual sponsor and other fees for management, consulting, financial, contract termination, and other advisory services are excluded. Upon our public offering on October 15, 2015, we are no longer required to pay management fees to KKR.
|
•
|
For significant affiliates, segment revenue and segment EBITDA are 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 and segment EBITDA. In addition, our Global Business Solutions segment measures reflect revenue-based commission payments to Independent Sales Organizations (ISOs) and sales channels, which are treated as an expense in the unaudited consolidated statements of operations, as contra revenue.
|
•
|
Corporate operations include corporate-wide governance functions such as our executive management team, tax, treasury, internal audit, corporate strategy, and certain accounting, human resources and legal costs related to supporting the corporate function. Costs incurred by Corporate that are attributable to a segment are allocated to the respective segment.
|
•
|
Certain measures exclude the estimated impact of foreign currency changes (constant currency). To present this information, monthly results during the periods presented for entities reporting in currencies other than U.S. dollars are translated into U.S. 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 during the periods presented is added together to calculate the constant currency results for the periods presented.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||
Consolidated revenues
|
|
$
|
2,936
|
|
|
$
|
2,920
|
|
|
1
|
%
|
|
2
|
%
|
|
$
|
8,641
|
|
|
$
|
8,487
|
|
|
2
|
%
|
|
3
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non wholly owned entities
|
|
(25
|
)
|
|
(18
|
)
|
|
39
|
%
|
|
NM
|
|
|
(59
|
)
|
|
(58
|
)
|
|
2
|
%
|
|
NM
|
|
||||
Independent sales organizations (ISOs) commissions
|
|
(155
|
)
|
|
(167
|
)
|
|
(7
|
)%
|
|
NM
|
|
|
(476
|
)
|
|
(475
|
)
|
|
—
|
%
|
|
NM
|
|
||||
Reimbursable PIN debit fees, postage, and other
|
|
(936
|
)
|
|
(938
|
)
|
|
—
|
%
|
|
—
|
%
|
|
(2,795
|
)
|
|
(2,737
|
)
|
|
2
|
%
|
|
2
|
%
|
||||
Total segment revenues
|
|
$
|
1,820
|
|
|
$
|
1,797
|
|
|
1
|
%
|
|
3
|
%
|
|
$
|
5,311
|
|
|
$
|
5,217
|
|
|
2
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Global Business Solutions
|
|
$
|
1,045
|
|
|
$
|
1,032
|
|
|
1
|
%
|
|
3
|
%
|
|
$
|
3,037
|
|
|
$
|
3,050
|
|
|
—
|
%
|
|
2
|
%
|
Global Financial Solutions
|
|
397
|
|
|
391
|
|
|
2
|
%
|
|
5
|
%
|
|
1,178
|
|
|
1,101
|
|
|
7
|
%
|
|
10
|
%
|
||||
Network & Security Solutions
|
|
378
|
|
|
374
|
|
|
1
|
%
|
|
1
|
%
|
|
1,096
|
|
|
1,066
|
|
|
3
|
%
|
|
3
|
%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
|
$
|
819
|
|
|
$
|
813
|
|
|
1
|
%
|
|
1
|
%
|
|
$
|
2,371
|
|
|
$
|
2,402
|
|
|
(1
|
)%
|
|
(1
|
)%
|
EMEA
|
|
137
|
|
|
134
|
|
|
2
|
%
|
|
8
|
%
|
|
417
|
|
|
397
|
|
|
5
|
%
|
|
9
|
%
|
||||
APAC
|
|
43
|
|
|
44
|
|
|
(2
|
)%
|
|
(6
|
)%
|
|
125
|
|
|
133
|
|
|
(6
|
)%
|
|
(3
|
)%
|
||||
LATAM
|
|
46
|
|
|
41
|
|
|
12
|
%
|
|
45
|
%
|
|
124
|
|
|
118
|
|
|
5
|
%
|
|
44
|
%
|
||||
Total segment revenue
|
|
$
|
1,045
|
|
|
$
|
1,032
|
|
|
1
|
%
|
|
3
|
%
|
|
$
|
3,037
|
|
|
$
|
3,050
|
|
|
—
|
%
|
|
2
|
%
|
Key indicators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
North America merchant transactions (a)
|
|
11,881
|
|
|
11,125
|
|
|
7
|
%
|
|
|
|
34,368
|
|
|
32,130
|
|
|
7
|
%
|
|
|
||||||
International merchant transactions (b)
|
|
2,087
|
|
|
1,741
|
|
|
20
|
%
|
|
|
|
5,801
|
|
|
4,985
|
|
|
16
|
%
|
|
|
(a)
|
North American merchant transactions include acquired Visa and MasterCard credit and signature debit, American Express and Discover, PIN-debit, electronic benefits transactions, processed-only and gateway customer transactions at the Point of Sale (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 Automated Teller Machine (ATM) transactions.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
|
$
|
236
|
|
|
$
|
232
|
|
|
2
|
%
|
|
2
|
%
|
|
$
|
706
|
|
|
$
|
649
|
|
|
9
|
%
|
|
9
|
%
|
EMEA
|
|
113
|
|
|
114
|
|
|
(1
|
)%
|
|
8
|
%
|
|
324
|
|
|
318
|
|
|
2
|
%
|
|
7
|
%
|
||||
APAC
|
|
21
|
|
|
19
|
|
|
11
|
%
|
|
9
|
%
|
|
59
|
|
|
57
|
|
|
4
|
%
|
|
6
|
%
|
||||
LATAM
|
|
27
|
|
|
26
|
|
|
4
|
%
|
|
28
|
%
|
|
89
|
|
|
77
|
|
|
16
|
%
|
|
39
|
%
|
||||
Total segment revenue
|
|
$
|
397
|
|
|
$
|
391
|
|
|
2
|
%
|
|
5
|
%
|
|
$
|
1,178
|
|
|
$
|
1,101
|
|
|
7
|
%
|
|
10
|
%
|
Key indicators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
North America card accounts on file (a)
|
|
|
|
|
|
|
|
844
|
|
|
809
|
|
|
4
|
%
|
|
|
|||||||||||
International card accounts on file (b)
|
|
|
|
|
|
|
|
147
|
|
|
139
|
|
|
6
|
%
|
|
|
(a)
|
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.
|
(b)
|
International card accounts on file reflect total bankcard and retail accounts outside the United States and Canada as of the end of the periods presented.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
EFT Network
|
|
$
|
126
|
|
|
$
|
125
|
|
|
1
|
%
|
|
$
|
363
|
|
|
$
|
363
|
|
|
—
|
%
|
Stored Value Network
|
|
92
|
|
|
95
|
|
|
(3
|
)%
|
|
261
|
|
|
250
|
|
|
4
|
%
|
||||
Security and Fraud
|
|
110
|
|
|
105
|
|
|
5
|
%
|
|
322
|
|
|
301
|
|
|
7
|
%
|
||||
Other (a)
|
|
50
|
|
|
49
|
|
|
2
|
%
|
|
150
|
|
|
152
|
|
|
(1
|
)%
|
||||
Segment revenue
|
|
$
|
378
|
|
|
$
|
374
|
|
|
1
|
%
|
|
$
|
1,096
|
|
|
$
|
1,066
|
|
|
3
|
%
|
Key indicators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Network transactions (EFT Network and Stored Value) (b)
|
|
5,040
|
|
|
4,684
|
|
|
8
|
%
|
|
14,715
|
|
|
13,851
|
|
|
6
|
%
|
(a)
|
Other is primarily comprised of revenue generated from our Government and Online banking businesses.
|
(b)
|
Network transactions include the debit issuer processing transactions,
STAR Network
issuer transactions, and closed loop and open loop POS transactions.
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||
Cost of services (exclusive of items shown below)
|
|
$
|
711
|
|
|
$
|
686
|
|
|
4
|
%
|
|
5
|
%
|
|
$
|
2,140
|
|
|
$
|
2,055
|
|
|
4
|
%
|
|
6
|
%
|
Cost of products sold
|
|
87
|
|
|
96
|
|
|
(9
|
)%
|
|
(8
|
)%
|
|
251
|
|
|
257
|
|
|
(2
|
)%
|
|
—
|
%
|
||||
Selling, general, and administrative
|
|
499
|
|
|
521
|
|
|
(4
|
)%
|
|
(3
|
)%
|
|
1,563
|
|
|
1,567
|
|
|
—
|
%
|
|
1
|
%
|
||||
Depreciation and amortization
|
|
237
|
|
|
257
|
|
|
(8
|
)%
|
|
(7
|
)%
|
|
713
|
|
|
760
|
|
|
(6
|
)%
|
|
(5
|
)%
|
||||
Other operating expenses
|
|
12
|
|
|
20
|
|
|
(40
|
)%
|
|
(36
|
)%
|
|
57
|
|
|
40
|
|
|
43
|
%
|
|
45
|
%
|
||||
Total expenses (excluding reimbursable items)
|
|
1,546
|
|
|
1,580
|
|
|
(2
|
)%
|
|
(1
|
)%
|
|
4,724
|
|
|
4,679
|
|
|
1
|
%
|
|
3
|
%
|
||||
Reimbursable PIN debit fees, postage, and other
|
|
936
|
|
|
938
|
|
|
—
|
%
|
|
—
|
%
|
|
2,795
|
|
|
2,737
|
|
|
2
|
%
|
|
2
|
%
|
||||
Total expenses
|
|
$
|
2,482
|
|
|
$
|
2,518
|
|
|
(1
|
)%
|
|
(1
|
)%
|
|
$
|
7,519
|
|
|
$
|
7,416
|
|
|
1
|
%
|
|
2
|
%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||
Salaries, wages, and bonus
|
|
$
|
365
|
|
|
$
|
364
|
|
|
—
|
%
|
|
|
|
$
|
1,105
|
|
|
$
|
1,111
|
|
|
(1
|
)%
|
|
|
||
Stock-based compensation
|
|
19
|
|
|
—
|
|
|
NM
|
|
|
|
|
91
|
|
|
—
|
|
|
NM
|
|
|
|
||||||
Outside professional services
|
|
68
|
|
|
58
|
|
|
17
|
%
|
|
|
|
196
|
|
|
177
|
|
|
11
|
%
|
|
|
||||||
Software, telecommunication infrastructure, and repairs
|
|
103
|
|
|
93
|
|
|
11
|
%
|
|
|
|
299
|
|
|
284
|
|
|
5
|
%
|
|
|
||||||
Other
|
|
156
|
|
|
171
|
|
|
(9
|
)%
|
|
|
|
449
|
|
|
483
|
|
|
(7
|
)%
|
|
|
||||||
Cost of services expense
|
|
$
|
711
|
|
|
$
|
686
|
|
|
4
|
%
|
|
5
|
%
|
|
$
|
2,140
|
|
|
$
|
2,055
|
|
|
4
|
%
|
|
6
|
%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||
Salaries, wages, bonus, and other
|
|
$
|
166
|
|
|
$
|
167
|
|
|
(1
|
)%
|
|
|
|
$
|
508
|
|
|
$
|
535
|
|
|
(5
|
)%
|
|
|
||
Stock-based compensation
|
|
24
|
|
|
8
|
|
|
200
|
%
|
|
|
|
123
|
|
|
31
|
|
|
297
|
%
|
|
|
||||||
Independent sales organizations (ISOs) commissions
|
|
155
|
|
|
167
|
|
|
(7
|
)%
|
|
|
|
476
|
|
|
475
|
|
|
—
|
%
|
|
|
||||||
Outside professional services
|
|
46
|
|
|
68
|
|
|
(32
|
)%
|
|
|
|
136
|
|
|
173
|
|
|
(21
|
)%
|
|
|
||||||
Commissions
|
|
33
|
|
|
40
|
|
|
(18
|
)%
|
|
|
|
104
|
|
|
115
|
|
|
(10
|
)%
|
|
|
||||||
Other
|
|
75
|
|
|
71
|
|
|
6
|
%
|
|
|
|
216
|
|
|
238
|
|
|
(9
|
)%
|
|
|
||||||
Selling, general, and administrative expense
|
|
$
|
499
|
|
|
$
|
521
|
|
|
(4
|
)%
|
|
(3
|
)%
|
|
$
|
1,563
|
|
|
$
|
1,567
|
|
|
—
|
%
|
|
1
|
%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||||
Depreciation expense
|
|
$
|
79
|
|
|
$
|
73
|
|
|
8
|
%
|
|
$
|
227
|
|
|
$
|
215
|
|
|
6
|
%
|
Amortization expense
|
|
158
|
|
|
184
|
|
|
(14
|
)%
|
|
486
|
|
|
545
|
|
|
(11
|
)%
|
||||
Depreciation and amortization
|
|
$
|
237
|
|
|
$
|
257
|
|
|
(8
|
)%
|
|
$
|
713
|
|
|
$
|
760
|
|
|
(6
|
)%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||||
Interest expense, net
|
|
$
|
(263
|
)
|
|
$
|
(388
|
)
|
|
(32
|
)%
|
|
$
|
(810
|
)
|
|
$
|
(1,199
|
)
|
|
(32
|
)%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||||
Loss on debt extinguishment
|
|
$
|
(3
|
)
|
|
$
|
(108
|
)
|
|
(97
|
)%
|
|
$
|
(58
|
)
|
|
$
|
(108
|
)
|
|
(46
|
)%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Gain on Visa Europe share sale
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
—
|
|
Derivative financial instruments losses
|
|
—
|
|
|
(9
|
)
|
|
(5
|
)
|
|
(25
|
)
|
||||
Divestitures, net (loss) gain
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|
3
|
|
||||
Non-operating foreign currency gains (losses)
|
|
2
|
|
|
(1
|
)
|
|
21
|
|
|
23
|
|
||||
Other miscellaneous expense
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other income (expense)
|
|
$
|
(30
|
)
|
|
$
|
(10
|
)
|
|
$
|
14
|
|
|
$
|
1
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income tax expense
|
|
$
|
24
|
|
|
$
|
32
|
|
|
$
|
57
|
|
|
$
|
45
|
|
Effective income tax rate
|
|
11
|
%
|
|
(74
|
)%
|
|
12
|
%
|
|
(75
|
)%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||||
Equity earnings in affiliates
|
|
$
|
66
|
|
|
$
|
61
|
|
|
8
|
%
|
|
$
|
198
|
|
|
$
|
175
|
|
|
13
|
%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||||
Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
$
|
68
|
|
|
$
|
51
|
|
|
33
|
%
|
|
$
|
181
|
|
|
$
|
159
|
|
|
14
|
%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Global Business Solutions
|
|
$
|
455
|
|
|
$
|
431
|
|
|
6
|
%
|
|
8
|
%
|
|
$
|
1,279
|
|
|
$
|
1,245
|
|
|
3
|
%
|
|
5
|
%
|
Global Financial Solutions
|
|
158
|
|
|
145
|
|
|
9
|
%
|
|
13
|
%
|
|
473
|
|
|
388
|
|
|
22
|
%
|
|
26
|
%
|
||||
Network & Security Solutions
|
|
166
|
|
|
162
|
|
|
2
|
%
|
|
2
|
%
|
|
483
|
|
|
448
|
|
|
8
|
%
|
|
8
|
%
|
||||
Corporate
|
|
(40
|
)
|
|
(35
|
)
|
|
(14
|
)%
|
|
(14
|
)%
|
|
(114
|
)
|
|
(113
|
)
|
|
(1
|
)%
|
|
(1
|
)%
|
||||
Total Segment EBITDA
|
|
$
|
739
|
|
|
$
|
703
|
|
|
5
|
%
|
|
8
|
%
|
|
$
|
2,121
|
|
|
$
|
1,968
|
|
|
8
|
%
|
|
10
|
%
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||
Segment EBITDA Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
43.5
|
%
|
|
41.8
|
%
|
|
170
|
bps
|
|
42.1
|
%
|
|
40.8
|
%
|
|
130
|
bps
|
Global Financial Solutions
|
|
39.8
|
%
|
|
37.1
|
%
|
|
270
|
bps
|
|
40.2
|
%
|
|
35.2
|
%
|
|
500
|
bps
|
Network & Security Solutions
|
|
43.9
|
%
|
|
43.3
|
%
|
|
60
|
bps
|
|
44.1
|
%
|
|
42.0
|
%
|
|
210
|
bps
|
Total Segment EBITDA Margin
|
|
40.6
|
%
|
|
39.1
|
%
|
|
150
|
bps
|
|
39.9
|
%
|
|
37.7
|
%
|
|
220
|
bps
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
Net income (loss) attributable to First Data Corporation
|
|
$
|
132
|
|
|
$
|
(126
|
)
|
|
NM
|
|
|
$
|
228
|
|
|
$
|
(264
|
)
|
|
NM
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock-based compensation
|
|
43
|
|
|
8
|
|
|
438
|
%
|
|
214
|
|
|
31
|
|
|
590
|
%
|
||||
Loss on debt extinguishment (a)
|
|
3
|
|
|
108
|
|
|
(97
|
)%
|
|
58
|
|
|
108
|
|
|
(46
|
)%
|
||||
Mark-to-market adjustment for derivatives and euro-denominated debt (b)
|
|
—
|
|
|
13
|
|
|
(100
|
)%
|
|
5
|
|
|
(20
|
)
|
|
NM
|
|
||||
Amortization of acquisition intangibles and deferred financing costs (c)
|
|
104
|
|
|
140
|
|
|
(26
|
)%
|
|
318
|
|
|
434
|
|
|
(27
|
)%
|
||||
Loss on Australian ATM divestiture
|
|
31
|
|
|
—
|
|
|
NM
|
|
|
31
|
|
|
—
|
|
|
NM
|
|
||||
Gain on Visa Europe share sale
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
(29
|
)
|
|
—
|
|
|
NM
|
|
||||
Restructuring, impairment, litigation, and other (d)
|
|
10
|
|
|
24
|
|
|
(58
|
)%
|
|
61
|
|
|
91
|
|
|
(33
|
)%
|
||||
Income tax on above items (e)
|
|
(11
|
)
|
|
4
|
|
|
NM
|
|
|
(31
|
)
|
|
(30
|
)
|
|
3
|
%
|
||||
Adjusted net income
|
|
$
|
312
|
|
|
$
|
171
|
|
|
82
|
%
|
|
$
|
855
|
|
|
$
|
350
|
|
|
144
|
%
|
(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.
|
(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. The third quarter of 2016 excludes the divestiture in our Australian ATM business, which is broken out separately within “Loss on Australian ATM divestiture” within the above table.
|
(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.
|
|
|
As of
|
|
As of
|
||||
(in millions)
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Total long-term borrowings
|
|
$
|
18,514
|
|
|
$
|
18,737
|
|
Total short-term and current portion of long-term borrowings
|
|
377
|
|
|
856
|
|
||
Total borrowings
|
|
18,891
|
|
|
19,593
|
|
||
Unamortized discount and unamortized deferred financing costs
|
|
173
|
|
|
184
|
|
||
Total borrowings at par
|
|
19,064
|
|
|
19,777
|
|
||
Less: settlement lines of credit and other arrangements
|
|
(71
|
)
|
|
(43
|
)
|
||
Gross debt
|
|
18,993
|
|
|
19,734
|
|
||
Less: cash and cash equivalents (a)
|
|
(475
|
)
|
|
(429
|
)
|
||
Net debt
|
|
$
|
18,518
|
|
|
$
|
19,305
|
|
(a)
|
As of September 30, 2016, "Cash and cash equivalents" reflects a reclassification of $123 million related to settlement activities to conform certain international joint ventures to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable" in our consolidated balance sheet.
|
|
|
Nine months ended September 30,
|
||||||
Source/(use) (in millions)
|
|
2016
|
|
2015
|
||||
Net cash provided by operating activities
|
|
$
|
1,660
|
|
|
$
|
687
|
|
Net cash used in investing activities
|
|
(338
|
)
|
|
(554
|
)
|
||
Net cash used in financing activities
|
|
(1,258
|
)
|
|
(109
|
)
|
Source/(use) (in millions)
|
|
Nine months ended September 30, 2016
|
||
Net cash provided by operating activities, previous period
|
|
$
|
687
|
|
Increases (decreases) in:
|
|
|
||
Net income, excluding other operating expenses and other income (expense) (a)
|
|
631
|
|
|
Depreciation and amortization
|
|
(50
|
)
|
|
Working capital
|
|
392
|
|
|
Net cash provided by operating activities, current period (b)
|
|
$
|
1,660
|
|
(a)
|
Excludes loss on debt extinguishment, stock-based compensation expense and other non-cash items. For a review of our current quarter operating results, see "Results of operations" in Part I, Item 2 of this Form 10-Q.
|
(b)
|
The nine months ended September 30, 2016 includes a $123 million reclassification related to settlement activities to conform certain international joint ventures to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable" in our consolidated balance sheet.
|
|
|
Nine months ended September 30,
|
||||||
Source/(use) (in millions)
|
|
2016
|
|
2015
|
||||
Net cash provided by operating activities (a)
|
|
$
|
1,660
|
|
|
$
|
687
|
|
Capital expenditures
|
|
(351
|
)
|
|
(457
|
)
|
||
Distributions and dividends paid to noncontrolling interests, redeemable noncontrolling interest, and other (a)
|
|
(363
|
)
|
|
(232
|
)
|
||
Free cash flow
|
|
$
|
946
|
|
|
$
|
(2
|
)
|
(a)
|
The nine months ended September 30, 2016 includes a $123 million reclassification related to settlement activities to conform certain international joint ventures to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable" in our consolidated balance sheet. Free cash flow excludes the impact of reclassification.
|
|
|
Total Available (a)
|
|
Total Outstanding
|
||||||||||||
(in millions)
|
|
As of September 30,
2016 |
|
As of December 31,
2015 |
|
As of September 30,
2016 |
|
As of December 31,
2015 |
||||||||
Letters of credit (b)
|
|
$
|
250
|
|
|
$
|
250
|
|
|
$
|
43
|
|
|
$
|
42
|
|
Lines of credit and other (c)
|
|
344
|
|
|
245
|
|
|
71
|
|
|
43
|
|
(a)
|
Total available without giving effect to amounts outstanding.
|
(b)
|
Outstanding letters of credit are held in connection with lease arrangements, bankcard association agreements and other security agreements. The largest amount of letters of credit outstanding was approximately $43 million during the three months ended
September 30, 2016
. All letters of credit expire on or prior to March 31, 2017 with a one-year renewal option. We expect to renew most of the letters of credit prior to expiration.
|
(c)
|
As of
September 30, 2016
, represents $325 million of committed lines of credit as well as certain uncommitted lines of credit and other agreements that are available in various currencies to fund settlement and other activity. We cannot use these lines of credit for general corporate purposes. Certain of these arrangements are uncommitted but, as of the dates presented, we had borrowings outstanding against them.
|
(in millions)
|
|
Last twelve
months ended September 30, 2016 |
||
Net loss attributable to First Data Corporation
|
|
$
|
(989
|
)
|
Interest expense, net
|
|
1,148
|
|
|
Income tax expense
|
|
113
|
|
|
Depreciation and amortization
|
|
1,083
|
|
|
EBITDA
|
|
1,355
|
|
|
|
|
|
|
|
Loss on debt extinguishment
|
|
1,018
|
|
|
Stock-based compensation
|
|
512
|
|
|
Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
235
|
|
|
Projected near-term cost savings and revenue enhancements (1)
|
|
76
|
|
|
KKR related items
|
|
84
|
|
|
Restructuring, net
|
|
64
|
|
|
Non-operating foreign currency (gains) and losses
|
|
(39
|
)
|
|
Investment (gains) and losses (2)
|
|
(29
|
)
|
|
Derivative financial instruments (gains) and losses
|
|
(3
|
)
|
|
Equity entities taxes, depreciation and amortization (3)
|
|
14
|
|
|
Other (4)
|
|
64
|
|
|
Covenant EBITDA
|
|
$
|
3,351
|
|
(1)
|
Reflects cost savings and revenue enhancements projected to be realized as a result of specific actions as if they were achieved on the first day of the period. Includes cost savings initiatives associated with the business optimization projects and other technology initiatives. We may not realize the anticipated cost savings pursuant to our anticipated timetable or at all.
|
(2)
|
Reflects the gain on Visa Europe share sale included within "Other income (expense)" in the unaudited consolidated statements of operations.
|
(3)
|
Represents our proportional share of income taxes, depreciation and amortization on equity method investments.
|
(4)
|
Includes items such as asset impairments, divestiture losses, customer disputes, earnouts, cost of alliance conversions, litigation and regulatory settlements, debt issuance costs, other technology initiatives, and other as applicable to the period presented.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
Incorporated by Reference
|
||||||||
Exhibit Number
|
|
Exhibit Description
|
Form
|
|
File Number
|
|
Exhibit Number
|
|
Filing Date
|
4.1
|
|
2016 October Joinder Agreement, dated as of October 14, 2016, among First Data Corporation, certain of its subsidiaries, each lender party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent
Exhibit A - Marked Pages of the Conformed Credit Agreement
|
8-K
|
|
1-11073
|
|
4.1
|
|
10/17/2016
|
10.1 (1)*
|
|
Form of Option Agreement under the 2015 Omnibus Incentive Plan approved August 2016
|
|
|
|
|
|
|
|
10.2 (1)*
|
|
Form of Restricted Stock Award Agreement under the 2015 Omnibus Incentive Plan approved August 2016
|
|
|
|
|
|
|
|
10.3 (1)*
|
|
Description of Modifications to Award Agreements
|
|
|
|
|
|
|
|
31.1 (1)
|
|
Certification of CEO pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
31.2 (1)
|
|
Certification of CFO pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
32.1 (1)
|
|
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
32.2 (1)
|
|
Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
101.INS (1)
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
101.SCH (1)
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
101.CAL (1)
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
101.DEF (1)
|
|
XBRL Taxonomy Extension Definitions Linkbase Document
|
|
|
|
|
|
|
|
101.LAB (1)
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
101.PRE (1)
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
(1)
|
Filed herewith
|
*
|
Management contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 6 of this report.
|
|
|
FIRST DATA CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
November 9, 2016
|
By
|
/s/ HIMANSHU A. PATEL
|
|
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Himanshu A. Patel
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Executive Vice President, Chief Financial Officer
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(principal financial officer)
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Date:
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November 9, 2016
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By
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/s/ MATTHEW CAGWIN
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Matthew Cagwin
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Senior Vice President, Corporate Controller and
Chief Accounting Officer
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(principal accounting officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of First Data Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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Date:
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November 9, 2016
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/s/ FRANK BISIGNANO
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Frank Bisignano
Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of First Data Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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Date:
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November 9, 2016
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/s/ HIMANSHU A. PATEL
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Himanshu A. Patel
Executive Vice President, Chief Financial Officer (principal financial officer) |
1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of First Data Corporation.
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Date:
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November 9, 2016
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/s/ FRANK BISIGNANO
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Frank Bisignano
Chief Executive Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of First Data Corporation.
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Date:
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November 9, 2016
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/s/ HIMANSHU A. PATEL
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Himanshu A. Patel
Executive Vice President, Chief Financial Officer (principal financial officer) |