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DELAWARE
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47-0731996
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(State of incorporation)
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(I.R.S. Employer Identification No.)
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Class
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Outstanding at January 31, 2017
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Class A Common Stock, $0.01 par value per share
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371,975,017 shares
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Class B Common Stock, $0.01 par value per share
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544,031,779 shares
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PAGE
NUMBER
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Year ended December 31,
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|||||||
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2016
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2015
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2014
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|||
Total generated from processing transactions:
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|||
Domestic
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85
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%
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|
86
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%
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|
85
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%
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International
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15
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%
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|
14
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%
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15
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%
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Long-lived assets attributable to operations:
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|||
Domestic
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89
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%
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|
89
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%
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88
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%
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International
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11
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%
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11
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%
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12
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%
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•
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Global Business Solutions
- GBS provides retail point-of-sale merchant acquiring and eCommerce services as well as next-generation offerings such as mobile payment services, webstore-in-a-box solutions, and our cloud-based
Clover
point-of-sale operating system, which includes a marketplace for proprietary and third-party business applications.
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•
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Global Financial Solutions -
GFS provides credit solutions for bank and non-bank issuers. These include credit and retail private-label card processing within the United States and international markets, as well as licensed financial software systems, such as our
VisionPLUS
bank processing application, and lending solutions. GFS also provides financial institutions with a suite of related services including card personalization and embossing, statement printing, client service, and remittance processing.
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•
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Network & Security Solutions -
NSS provides a wide range of value-added solutions that we sell to clients in our GBS and GFS segments, smaller financial institutions, and other enterprise clients. These solutions include our EFT network solutions, such as our
STAR Network
, our debit card processing solutions, our Stored Value Network solutions, such as
Money Network
, Gift Solutions and our Security and Fraud solutions, such as
TransArmor
and
TeleCheck
. NSS also supports our other digital strategies, including online and mobile banking, and our business supporting mobile wallets.
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1.
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Once the consumer is ready to make a purchase, he or she presents their card for payment;
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2.
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The card is swiped in the Point-of-Sale (POS) device at the business location, which captures the account information contained on the card's magnetic stripe or Europay, MasterCard and Visa (EMV) - compliant chip;
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•
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In a mobile commerce transaction facilitated by a mobile wallet, such as Apple Pay, the appropriate card details are stored virtually on an application on the phone and transmitted to the POS device through a chip equipped with near-field communication (NFC) technology;
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•
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In an eCommerce transaction, the POS device is replaced by a virtual terminal application and the consumer types the card number into the check-out page of the online storefront. In some circumstances, an online wallet, such as PayPal, may be used to transmit the appropriate payment credentials;
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3.
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The customer's card details are transmitted from the POS to the merchant acquirer, or the merchant acquirer's processor, via an internet connection or a phone line;
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•
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In an eCommerce transaction, the information is encrypted and then transmitted to the merchant acquirer, or merchant acquirer's processor, via an online gateway;
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4.
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The merchant acquirer, or the merchant acquirer's processor, identifies the appropriate payment network affiliated with the card, such as Visa, MasterCard, or
STAR
, and forwards the card details to the appropriate network;
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5.
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The payment network receives the request for payment authorization, identifies the appropriate card issuing bank, and routes the transaction to the bank or its issuer processor;
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6.
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The card issuing bank, or its issuer processor, receives the request and then executes a series of inquiries into its account systems to assess the potential risk of fraud for the transaction, establish that the account is in good standing, and verify that the cardholder has sufficient credit or adequate funds to cover the amount of the transaction;
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7.
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The card issuing bank, or its issuer processor, approves or declines the transaction and sends back the response to the payment network. In this example the transaction is approved;
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8.
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The payment network receives the approval and forwards the authorization to the merchant acquirer, or merchant acquirer's processor; and
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9.
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The merchant acquirer, or merchant acquirer's processor, sends the authorization back to the POS device at the business location, which provides an approval confirmation and prints a receipt;
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•
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In a mobile commerce transaction, the approval confirmation and receipt may also be transmitted to the consumer's mobile wallet application or to the consumer via email;
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•
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In an eCommerce transaction, the authorization is sent to the online storefront, which communicates the approval to the consumer on the screen, and may provide the receipt for printing online or via email.
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10.
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Typically at the end of the day, the business submits a batch of all of its approved authorizations to the merchant acquirer, or the merchant acquirer's processor, through a function on its POS device;
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•
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In the case of an eCommerce business, the online storefront's gateway sends the batch to the merchant acquirer, or to the merchant acquirer's processor;
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11.
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The merchant acquirer, or the merchant acquirer's processor, receives the batch, notes the final amounts due for settlement, and routes the batch of approved authorizations to each applicable payment network;
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12.
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Each payment network sends the batch of approved authorizations to the applicable card issuing bank, or its issuer processor, which posts the transaction to the consumer's statement;
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13.
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Typically within 48 hours, the payment network calculates net settlement positions for the merchant acquirer and the card issuing bank, sends advisements to the merchant acquirer and card issuing bank, and submits a fund transfer order to a settlement bank; and
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14.
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The settlement bank facilitates the exchange of funds between the merchant acquirer and the card issuing bank; and the merchant acquirer transfers the funds to the business owner's account.
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Year ended December 31,
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|||||||
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2016
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2015
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2014
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Segment revenue
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57
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%
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58
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%
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58
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%
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Segment EBITDA
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60
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%
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62
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%
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63
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%
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•
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Discount fees charged to a merchant, net of credit and debit card interchange and assessment fees charged by the payment networks. The discount fee is typically either a percentage of the purchase amount or an interchange fee plus a fixed dollar amount;
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•
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Processing fees charged to our alliances;
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•
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Processing fees charged to merchant acquirers who have outsourced their transaction processing to us;
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•
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Sales and leases of POS devices;
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•
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Fees from providing reporting and other services; and
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•
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Software fees such as security applications and
Clover
related fees.
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•
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Retail POS - Physical businesses or storefront locations, such as retailers, supermarkets, restaurants, and petroleum stations, with brick and mortar facilities;
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•
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Mobile POS - Physical businesses with remote or wireless storefront locations, such as small retailers and service providers that use mobile devices to accept electronic payments; and
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•
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Online POS (eCommerce) - Online businesses or website locations, such as retailers, digital content providers, and mobile app developers with Internet-based storefronts that can be accessed through a personal computer or a mobile device.
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Year ended December 31,
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2016
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2015
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2014
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Segment revenue
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22
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%
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21
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%
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22
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%
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Segment EBITDA
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22
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%
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|
20
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%
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20
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%
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Year ended December 31,
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|||||||
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2016
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2015
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2014
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Segment revenue
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21
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%
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21
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%
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20
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%
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Segment EBITDA
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23
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%
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23
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%
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23
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%
|
•
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a fee from the card issuing financial institution for running the transaction through the
STAR Network
;
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•
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a fee from the card issuer for obtaining the authorization;
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•
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a fee from the business for acquiring the transaction, recognized in GBS; and
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•
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a network acquirer fee from the business for accessing the
STAR Network
.
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•
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Gift Solutions -
Includes
ValueLink, Gyft, and Transaction Wireless.
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◦
|
ValueLink
- Provides card and account issuing, program management, and transaction processing services for a range of prepaid card programs. Our closed-loop prepaid programs include gift, incentive, and rebate cards. We serve over 200 brands globally and several thousand SMBs. Our programs include reloadable and non-reloadable prepaid cards, and may be used with a variety of mobile applications.
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◦
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Gyft
- A leading digital platform that enables consumers to buy, send, manage, and redeem virtual closed-loop cards using mobile devices. The
Gyft
solution, combined with our leadership in prepaid issuing solutions, creates a unique combination to support growth in a rapidly expanding market for virtual cards.
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◦
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Transaction Wireless
- A leading digital platform that enables businesses to sell virtual gift cards online, either to consumers through an integration with their eCommerce storefront, or to other businesses through a proprietary business-to-business solution.
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•
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Payroll Solutions -
Includes
Money Network
which provides open-loop electronic payroll distribution solutions that reduce or eliminate an employer's expense associated with traditional paper paychecks and helps employees without bank accounts avoid check cashing fees. The solution also provides important employee security as the funds are stored on the account, not as cash that can be lost or stolen.
Money Network
accounts can be used at any business location that accepts Visa, MasterCard, or STAR branded cards, includes a packet of checks to be used to pay bills and avoid the cost of money orders, and offers a web portal to track account activity.
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ITEM 1A.
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RISK FACTORS
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•
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Declining economies, foreign currency fluctuations, and the pace of economic recovery can change consumer spending behaviors, such as cross-border travel patterns, on which a significant portion of our revenues are dependent.
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•
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Low levels of consumer and business confidence typically associated with recessionary environments and those markets experiencing relatively high unemployment, may cause decreased spending by cardholders.
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•
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Budgetary concerns in the United States and other countries around the world could affect the United States and other specific sovereign credit ratings, impact consumer confidence and spending, and increase the risks of operating in those countries.
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•
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Emerging market economies tend to be more volatile than the more established markets we serve in the United States and Europe, and adverse economic trends may be more pronounced in such emerging markets.
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•
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Financial institutions may restrict credit lines to cardholders or limit the issuance of new cards to mitigate cardholder defaults.
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•
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Uncertainty and volatility in the performance of our clients' businesses may make estimates of our revenues, rebates, incentives, and realization of prepaid assets less predictable.
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•
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Our clients may decrease spending for value-added services.
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•
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Government intervention, including the effect of laws, regulations, and /or government investments in our clients, may have potential negative effects on our business and our relationships with our clients or otherwise alter their strategic direction away from our products.
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•
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Rapid and significant changes in technology, resulting in new and innovative payment methods and programs that could place us at a competitive disadvantage and that could reduce the use of our products.
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•
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Competitors, clients, governments, and other industry participants may develop products that compete with or replace our value-added products and services.
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•
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Participants in the financial services, payments, and technology industries may merge, create joint ventures, or form other business combinations that may strengthen their existing business services or create new payment services that compete with our services.
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•
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New services and technologies that we develop may be impacted by industry-wide solutions and standards related to migration to EMV chip technology, tokenization, or other safety and security technologies.
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•
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managing geographically separated organizations, systems and facilities;
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•
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integrating personnel with diverse business backgrounds and organizational cultures;
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•
|
complying with non-U.S. regulatory requirements;
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•
|
fluctuations in currency exchange rates;
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•
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enforcement of intellectual property rights in some non-U.S. countries;
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•
|
difficulty entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets; and
|
•
|
general economic and political conditions.
|
•
|
increasing our vulnerability to adverse economic, industry or competitive developments;
|
•
|
requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use cash flow to fund our operations, capital expenditures, and future business opportunities;
|
•
|
making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing such indebtedness;
|
•
|
restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
|
•
|
making it more difficult for us to obtain network sponsorship and clearing services from financial institutions or to obtain or retain other business with financial institutions;
|
•
|
limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.
|
•
|
incur additional indebtedness or issue certain preferred shares;
|
•
|
pay dividends on, repurchase, or make distributions in respect of, our capital stock or make other restricted payments;
|
•
|
make certain investments;
|
•
|
sell certain assets;
|
•
|
create liens;
|
•
|
consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets; and
|
•
|
enter into certain transactions with our affiliates.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
|
Leased Facilities
|
|
Owned Facilities
|
||||||||
|
No.
|
|
Sq. Ft.
|
|
No.
|
|
Sq. Ft.
|
||||
Facilities in the United States
|
47
|
|
|
2,328,142
|
|
|
11
|
|
|
1,592,740
|
|
International Facilities
|
69
|
|
|
985,356
|
|
|
8
|
|
|
406,051
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
2015
|
|
High
|
|
Low
|
||||
Fourth quarter (beginning October 15, 2015)
|
|
$
|
17.80
|
|
|
$
|
15.36
|
|
2016
|
|
High
|
|
Low
|
||||
First Quarter
|
|
$
|
15.95
|
|
|
$
|
8.67
|
|
Second Quarter
|
|
$
|
13.34
|
|
|
$
|
10.13
|
|
Third Quarter
|
|
$
|
14.48
|
|
|
$
|
10.66
|
|
Fourth Quarter
|
|
$
|
15.53
|
|
|
$
|
13.03
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
December 31,
|
|||||||||||||||||||
(in millions, except shares and per share data)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
||||||||||
Statement of operations data (Year-end):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
11,584
|
|
|
$
|
11,451
|
|
|
$
|
11,152
|
|
|
$
|
10,809
|
|
|
$
|
10,680
|
|
|
Total revenues (excluding reimbursables)
|
|
7,839
|
|
|
7,764
|
|
|
7,548
|
|
|
7,302
|
|
|
7,318
|
|
|
|||||
Operating expenses (a)
|
|
9,921
|
|
|
10,228
|
|
|
9,701
|
|
|
9,629
|
|
|
9,578
|
|
|
|||||
Other operating expenses, net (b)
|
|
61
|
|
|
53
|
|
|
13
|
|
|
56
|
|
|
28
|
|
|
|||||
Total expenses (excluding reimbursables)
|
|
6,237
|
|
|
6,594
|
|
|
6,110
|
|
|
6,178
|
|
|
6,244
|
|
|
|||||
Interest expense, net
|
|
(1,068
|
)
|
|
(1,537
|
)
|
|
(1,728
|
)
|
|
(1,856
|
)
|
|
(1,887
|
)
|
|
|||||
Net income (loss)
|
|
660
|
|
|
(1,268
|
)
|
|
(265
|
)
|
|
(775
|
)
|
|
(562
|
)
|
|
|||||
Net income (loss) attributable to First Data Corporation
|
|
420
|
|
|
(1,481
|
)
|
|
(458
|
)
|
|
(952
|
)
|
|
(736
|
)
|
|
|||||
Depreciation and amortization (c)
|
|
1,061
|
|
|
1,133
|
|
|
1,163
|
|
|
1,212
|
|
|
1,331
|
|
|
|||||
Net income (loss) per share (d):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
0.47
|
|
|
(7.70
|
)
|
|
(458,000
|
)
|
|
(952,000
|
)
|
|
(736,000
|
)
|
|
|||||
Diluted
|
|
0.46
|
|
|
(7.70
|
)
|
|
(458,000
|
)
|
|
(952,000
|
)
|
|
(736,000
|
)
|
|
|||||
Weighted average common shares outstanding (d):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
901,671,872
|
|
|
192,263,793
|
|
|
1,000
|
|
|
1,000
|
|
|
1,000
|
|
|
|||||
Diluted
|
|
921,001,863
|
|
|
192,263,793
|
|
|
1,000
|
|
|
1,000
|
|
|
1,000
|
|
|
|||||
Balance sheet data (As of year-end):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total assets
|
|
$
|
40,292
|
|
|
$
|
34,362
|
|
|
$
|
34,034
|
|
|
$
|
34,962
|
|
|
$
|
37,617
|
|
|
Settlement assets
|
|
14,795
|
|
|
8,150
|
|
|
7,557
|
|
|
7,553
|
|
|
9,226
|
|
|
|||||
Total liabilities
|
|
36,088
|
|
|
30,625
|
|
|
31,434
|
|
|
33,318
|
|
|
34,959
|
|
|
|||||
Settlement obligations
|
|
14,795
|
|
|
8,150
|
|
|
7,557
|
|
|
7,553
|
|
|
9,226
|
|
|
|||||
Long-term borrowings
|
|
18,131
|
|
|
18,737
|
|
|
20,697
|
|
|
22,499
|
|
|
22,365
|
|
|
|||||
Other long-term liabilities (e)
|
|
1,240
|
|
|
1,243
|
|
|
1,223
|
|
|
1,202
|
|
|
1,249
|
|
|
|||||
Redeemable noncontrolling interest
|
|
73
|
|
|
77
|
|
|
70
|
|
|
69
|
|
|
67
|
|
|
|||||
Total equity
|
|
4,131
|
|
|
3,660
|
|
|
2,530
|
|
|
1,575
|
|
|
2,591
|
|
|
|||||
Cash flow data (Year-end):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
|
$
|
2,111
|
|
|
$
|
795
|
|
|
$
|
1,035
|
|
|
$
|
715
|
|
|
$
|
803
|
|
|
Net cash used in investing activities
|
|
(387
|
)
|
|
(685
|
)
|
|
(329
|
)
|
|
(353
|
)
|
|
(397
|
)
|
|
|||||
Net cash used in financing activities
|
|
(1,734
|
)
|
|
(16
|
)
|
|
(743
|
)
|
|
(532
|
)
|
|
(285
|
)
|
|
(a)
|
Operating expenses include Cost of services; Cost of products sold; Selling, general, and administrative; Depreciation and amortization; and Reimbursable debit network fees, postage and other.
|
(b)
|
Other operating expenses, net includes restructuring, net; impairments; litigation and regulatory settlements; and other as applicable to the periods presented.
|
(c)
|
Includes amortization of initial payments for new contracts, which is recorded as a contra-revenue within “Transaction and processing service fees” and amortization related to equity method investments, which is netted within “Equity earnings in affiliates” in our consolidated statements of operations.
|
(d)
|
As a result of the HoldCo Merger, all outstanding shares of FDH were converted into Class B common stock, which are entitled to ten votes per share. All of FDC's outstanding common stock was eliminated upon the merger. We accounted for the HoldCo Merger as a transfer of assets between entities under common control and have reflected the transactions impact on net loss per share and weighted average shares on a prospective basis.
|
(e)
|
Other long-term liabilities include Deferred tax liabilities.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
◦
|
Accelerate top line growth
|
◦
|
Innovate for tomorrow's client needs
|
◦
|
Maintain positive operating leverage
|
◦
|
Generate significant free cash flow
|
•
|
Discount fees, net of credit and debit card interchange and assessment fees charged by the payment networks. The discount fee is typically either a percentage of the purchase amount or an interchange fee plus a fixed dollar amount;
|
•
|
Processing fees charged to our alliances;
|
•
|
Processing fees charged to merchant acquirers who have outsourced their transaction processing to us;
|
•
|
Sales and leases of POS devices;
|
•
|
Fees from providing reporting and other services; and
|
•
|
Software fees such as security and
Clover
related fees
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of services
|
|
$
|
112
|
|
|
$
|
130
|
|
|
$
|
2
|
|
Selling, general, and administrative
|
|
151
|
|
|
199
|
|
|
49
|
|
|||
Total
|
|
$
|
263
|
|
|
$
|
329
|
|
|
$
|
51
|
|
•
|
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 debit network 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;
|
•
|
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, GBS measures reflect revenue-based commission payments to Independent Sales Organizations (ISOs) and sales channels, which are treated as an expense in the 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.
|
|
|
Year ended December 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||
Consolidated revenues
|
|
$
|
11,584
|
|
|
$
|
11,451
|
|
|
$
|
11,152
|
|
|
1
|
%
|
|
3
|
%
|
|
2
|
%
|
|
5
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non wholly owned entities
|
|
(80
|
)
|
|
(74
|
)
|
|
(57
|
)
|
|
8
|
%
|
|
30
|
%
|
|
NM
|
|
|
NM
|
|
|||
Independent sales organizations (ISOs) commissions
|
|
(618
|
)
|
|
(642
|
)
|
|
(587
|
)
|
|
(4
|
)%
|
|
9
|
%
|
|
NM
|
|
|
NM
|
|
|||
Reimbursable debit network fees, postage, and other
|
|
(3,745
|
)
|
|
(3,687
|
)
|
|
(3,604
|
)
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|||
Total segment revenues
|
|
$
|
7,141
|
|
|
$
|
7,048
|
|
|
$
|
6,904
|
|
|
1
|
%
|
|
2
|
%
|
|
3
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Global Business Solutions
|
|
$
|
4,063
|
|
|
$
|
4,089
|
|
|
$
|
4,046
|
|
|
(1
|
)%
|
|
1
|
%
|
|
2
|
%
|
|
4
|
%
|
Global Financial Solutions
|
|
1,593
|
|
|
1,495
|
|
|
1,489
|
|
|
7
|
%
|
|
—
|
%
|
|
10
|
%
|
|
6
|
%
|
|||
Network & Security Solutions
|
|
1,485
|
|
|
1,464
|
|
|
1,369
|
|
|
1
|
%
|
|
7
|
%
|
|
1
|
%
|
|
7
|
%
|
|
|
Year ended December 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
North America
|
|
$
|
3,176
|
|
|
$
|
3,204
|
|
|
$
|
3,117
|
|
|
(1
|
)%
|
|
3
|
%
|
|
(1
|
)%
|
|
3
|
%
|
EMEA
|
|
550
|
|
|
541
|
|
|
583
|
|
|
2
|
%
|
|
(7
|
)%
|
|
6
|
%
|
|
7
|
%
|
|||
APAC
|
|
159
|
|
|
180
|
|
|
207
|
|
|
(12
|
)%
|
|
(13
|
)%
|
|
(10
|
)%
|
|
(3
|
)%
|
|||
LATAM
|
|
178
|
|
|
164
|
|
|
139
|
|
|
9
|
%
|
|
18
|
%
|
|
44
|
%
|
|
35
|
%
|
|||
Total segment revenue
|
|
$
|
4,063
|
|
|
$
|
4,089
|
|
|
$
|
4,046
|
|
|
(1
|
)%
|
|
1
|
%
|
|
2
|
%
|
|
4
|
%
|
Key indicators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
North America merchant transactions (a)
|
|
46,372
|
|
|
43,362
|
|
|
41,453
|
|
|
7
|
%
|
|
5
|
%
|
|
|
|
|
|||||
International merchant transactions (b)
|
|
8,246
|
|
|
6,826
|
|
|
6,030
|
|
|
21
|
%
|
|
13
|
%
|
|
|
|
|
(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. International merchant transactions for the year ended December 31, 2015 reflects an updated count on transactions.
|
|
|
Year ended December 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
|
$
|
956
|
|
|
$
|
883
|
|
|
$
|
815
|
|
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
EMEA
|
|
433
|
|
|
435
|
|
|
490
|
|
|
—
|
%
|
|
(11
|
)%
|
|
7
|
%
|
|
—
|
%
|
|||
APAC
|
|
82
|
|
|
75
|
|
|
87
|
|
|
9
|
%
|
|
(14
|
)%
|
|
10
|
%
|
|
(1
|
)%
|
|||
LATAM
|
|
122
|
|
|
102
|
|
|
97
|
|
|
20
|
%
|
|
5
|
%
|
|
42
|
%
|
|
14
|
%
|
|||
Total segment revenue
|
|
$
|
1,593
|
|
|
$
|
1,495
|
|
|
$
|
1,489
|
|
|
7
|
%
|
|
—
|
%
|
|
10
|
%
|
|
6
|
%
|
Key indicators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
North America card accounts on file (a)
|
|
855
|
|
|
813
|
|
|
714
|
|
|
5
|
%
|
|
14
|
%
|
|
|
|
|
|||||
International card accounts on file (b)
|
|
151
|
|
|
135
|
|
|
132
|
|
|
12
|
%
|
|
2
|
%
|
|
|
|
|
(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. 2015 International card accounts on file reflect an updated card account total.
|
|
|
Year ended December 31,
|
|
Percent Change
|
||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
EFT Network
|
|
$
|
491
|
|
|
$
|
491
|
|
|
$
|
466
|
|
|
—
|
%
|
|
5
|
%
|
Stored Value Network
|
|
358
|
|
|
359
|
|
|
322
|
|
|
—
|
%
|
|
11
|
%
|
|||
Security and Fraud
|
|
434
|
|
|
412
|
|
|
394
|
|
|
5
|
%
|
|
5
|
%
|
|||
Other (a)
|
|
202
|
|
|
202
|
|
|
187
|
|
|
—
|
%
|
|
8
|
%
|
|||
Segment revenue
|
|
$
|
1,485
|
|
|
$
|
1,464
|
|
|
$
|
1,369
|
|
|
1
|
%
|
|
7
|
%
|
Key indicators:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Network transactions (EFT Network and Stored Value) (b)
|
|
20,258
|
|
|
18,918
|
|
|
17,435
|
|
|
7
|
%
|
|
9
|
%
|
(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.
|
|
|
Year ended December 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||
Cost of services (exclusive of items shown below)
|
|
$
|
2,855
|
|
|
$
|
2,871
|
|
|
$
|
2,668
|
|
|
(1
|
)%
|
|
8
|
%
|
|
1
|
%
|
|
11
|
%
|
Cost of products sold
|
|
337
|
|
|
356
|
|
|
330
|
|
|
(5
|
)%
|
|
8
|
%
|
|
(3
|
)%
|
|
14
|
%
|
|||
Selling, general, and administrative
|
|
2,035
|
|
|
2,292
|
|
|
2,043
|
|
|
(11
|
)%
|
|
12
|
%
|
|
(10
|
)%
|
|
15
|
%
|
|||
Depreciation and amortization
|
|
949
|
|
|
1,022
|
|
|
1,056
|
|
|
(7
|
)%
|
|
(3
|
)%
|
|
(6
|
)%
|
|
—
|
%
|
|||
Other operating expenses
|
|
61
|
|
|
53
|
|
|
13
|
|
|
15
|
%
|
|
308
|
%
|
|
17
|
%
|
|
331
|
%
|
|||
Total expenses (excluding reimbursable items)
|
|
6,237
|
|
|
6,594
|
|
|
6,110
|
|
|
(5
|
)%
|
|
8
|
%
|
|
(4
|
)%
|
|
11
|
%
|
|||
Reimbursable debit network fees, postage, and other
|
|
3,745
|
|
|
3,687
|
|
|
3,604
|
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|||
Total expenses
|
|
$
|
9,982
|
|
|
$
|
10,281
|
|
|
$
|
9,714
|
|
|
(3
|
)%
|
|
6
|
%
|
|
(2
|
)%
|
|
8
|
%
|
|
|
Year ended December 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||
Salaries, wages, and bonus
|
|
$
|
1,474
|
|
|
$
|
1,478
|
|
|
$
|
1,446
|
|
|
—
|
%
|
|
2
|
%
|
|
|
|
|
||
Stock-based compensation
|
|
112
|
|
|
130
|
|
|
2
|
|
|
(14
|
)%
|
|
NM
|
|
|
|
|
|
|||||
Outside professional services
|
|
264
|
|
|
250
|
|
|
252
|
|
|
6
|
%
|
|
(1
|
)%
|
|
|
|
|
|||||
Software, telecommunication infrastructure, and repairs
|
|
396
|
|
|
380
|
|
|
375
|
|
|
4
|
%
|
|
1
|
%
|
|
|
|
|
|||||
Other
|
|
609
|
|
|
633
|
|
|
593
|
|
|
(4
|
)%
|
|
7
|
%
|
|
|
|
|
|||||
Cost of services expense
|
|
$
|
2,855
|
|
|
$
|
2,871
|
|
|
$
|
2,668
|
|
|
(1
|
)%
|
|
8
|
%
|
|
1
|
%
|
|
11
|
%
|
|
|
Year ended December 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||||
Salaries, wages, bonus, and other
|
|
$
|
659
|
|
|
$
|
697
|
|
|
$
|
692
|
|
|
(5
|
)%
|
|
1
|
%
|
|
|
|
|
|
|
Stock-based compensation
|
|
151
|
|
|
199
|
|
|
49
|
|
|
(24
|
)%
|
|
306
|
%
|
|
|
|
|
|||||
Independent sales organizations (ISOs) commissions
|
|
618
|
|
|
642
|
|
|
587
|
|
|
(4
|
)%
|
|
9
|
%
|
|
|
|
|
|
||||
Outside professional services
|
|
182
|
|
|
295
|
|
|
216
|
|
|
(38
|
)%
|
|
37
|
%
|
|
|
|
|
|
||||
Commissions
|
|
137
|
|
|
158
|
|
|
147
|
|
|
(13
|
)%
|
|
7
|
%
|
|
|
|
|
|
||||
Other
|
|
288
|
|
|
301
|
|
|
352
|
|
|
(4
|
)%
|
|
(14
|
)%
|
|
|
|
|
|
||||
Selling, general, and administrative expense
|
|
$
|
2,035
|
|
|
$
|
2,292
|
|
|
$
|
2,043
|
|
|
(11
|
)%
|
|
12
|
%
|
|
(10
|
)%
|
|
15
|
%
|
|
|
Year ended December 31,
|
|
Percent Change
|
||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
Depreciation expense
|
|
$
|
300
|
|
|
$
|
290
|
|
|
$
|
286
|
|
|
3
|
%
|
|
1
|
%
|
Amortization expense
|
|
649
|
|
|
732
|
|
|
770
|
|
|
(11
|
)%
|
|
(5
|
)%
|
|||
Depreciation and amortization
|
|
$
|
949
|
|
|
$
|
1,022
|
|
|
$
|
1,056
|
|
|
(7
|
)%
|
|
(3
|
)%
|
|
|
Year ended December 31,
|
|
Percent Change
|
||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
Restructuring, net
|
|
$
|
49
|
|
|
$
|
53
|
|
|
$
|
13
|
|
|
(8
|
)%
|
|
308
|
%
|
Pension settlement loss
|
|
10
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
NM
|
|
|||
Other
|
|
2
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
NM
|
|
|||
Other operating expenses
|
|
$
|
61
|
|
|
$
|
53
|
|
|
$
|
13
|
|
|
15
|
%
|
|
308
|
%
|
|
|
Year ended December 31,
|
|
Percent Change
|
||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
Interest expense, net
|
|
$
|
(1,068
|
)
|
|
$
|
(1,537
|
)
|
|
$
|
(1,728
|
)
|
|
(31
|
)%
|
|
(11
|
)%
|
|
|
Year ended December 31,
|
|
Percent Change
|
||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
Loss on debt extinguishment
|
|
$
|
(70
|
)
|
|
$
|
(1,068
|
)
|
|
$
|
(274
|
)
|
|
(93
|
)%
|
|
290
|
%
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Investment gains
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
100
|
|
Derivatives
|
|
(5
|
)
|
|
(17
|
)
|
|
—
|
|
|||
Divestitures, net (loss) gain
|
|
(34
|
)
|
|
5
|
|
|
2
|
|
|||
Non-operating foreign currency gains
|
|
19
|
|
|
41
|
|
|
59
|
|
|||
Other miscellaneous income
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Other income
|
|
$
|
17
|
|
|
$
|
29
|
|
|
$
|
161
|
|
|
|
Year ended December 31,
|
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
||||||
Income tax expense
|
|
$
|
81
|
|
|
$
|
101
|
|
|
$
|
82
|
|
|
Effective income tax rate
|
|
11
|
%
|
|
(9
|
)%
|
|
(45
|
)%
|
|
|
|
Year ended December 31,
|
|
Percent Change
|
||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
Equity earnings in affiliates
|
|
$
|
260
|
|
|
$
|
239
|
|
|
$
|
220
|
|
|
9
|
%
|
|
9
|
%
|
|
|
Year ended December 31,
|
|
Percent Change
|
||||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||||||
Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
$
|
240
|
|
|
$
|
213
|
|
|
$
|
193
|
|
|
13
|
%
|
|
10
|
%
|
|
|
Year ended December 31,
|
|
Change
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2016 vs. 2015
|
|
2015 vs. 2014
|
||||
Segment EBITDA Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
42.5
|
%
|
|
41.1
|
%
|
|
41.7
|
%
|
|
140 bps
|
|
(60) bps
|
|
Global Financial Solutions
|
|
40.6
|
%
|
|
36.8
|
%
|
|
35.5
|
%
|
|
380 bps
|
|
130 bps
|
|
Network & Security Solutions
|
|
44.8
|
%
|
|
43.6
|
%
|
|
44.4
|
%
|
|
120 bps
|
|
(80) bps
|
|
Total Segment EBITDA Margin
|
|
40.5
|
%
|
|
38.7
|
%
|
|
38.6
|
%
|
|
180 bps
|
|
10 bps
|
|
|
|
Year ended December 31,
|
|
Percent Change
|
||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|
|||||
Net income (loss) attributable to First Data Corporation
|
|
$
|
420
|
|
|
$
|
(1,481
|
)
|
|
NM
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
|
263
|
|
|
329
|
|
|
(20
|
)%
|
|
||
Loss on debt extinguishment (a)
|
|
70
|
|
|
1,068
|
|
|
(93
|
)%
|
|
||
Mark-to-market adjustment for derivatives and euro-denominated debt (b)
|
|
5
|
|
|
(53
|
)
|
|
(109
|
)%
|
|
||
Amortization of acquisition intangibles and deferred financing costs (c)
|
|
422
|
|
|
579
|
|
|
(27
|
)%
|
|
||
Loss on Australian ATM divestiture
|
|
34
|
|
|
—
|
|
|
NM
|
|
|
||
Gain on Visa Europe share sale
|
|
(29
|
)
|
|
—
|
|
|
NM
|
|
|
||
Restructuring, impairment, litigation, and other (d)
|
|
70
|
|
|
190
|
|
|
(63
|
)%
|
|
||
Income tax on above items (e)
|
|
(35
|
)
|
|
(11
|
)
|
|
218
|
%
|
|
||
Adjusted net income
|
|
$
|
1,220
|
|
|
$
|
621
|
|
|
96
|
%
|
|
(a)
|
Represents costs associated with debt refinancing on extinguished debt.
|
(b)
|
Represents mark-to-market activity related to our undesignated hedges, ineffectiveness of our designated hedges, and mark-to-market activity on our euro-denominated debt held in the United States. The euro-denominated debt was designated as a non-derivative hedge of net investment in foreign operations during the first quarter of 2016 with the gain (loss) reflected within accumulated other comprehensive income during 2016.
|
(c)
|
Represents amortization of intangibles established in connection with the 2007 Merger and acquisitions we have made since 2007, excluding the percentage of our consolidated amortization of acquisition intangibles related to non wholly owned consolidated alliances equal to the portion of such alliances owned by our alliance partners. This line also includes amortization related to deferred financing costs.
|
(d)
|
Represents restructuring, impairments, non-normal course litigation and regulatory settlements, investments gains (losses), fees paid on debt modifications, and divestitures, as applicable to the periods presented. Excludes the divestiture in our Australian ATM business, which is broken out separately within “Loss on Australian ATM divestiture” above.
|
(e)
|
The tax effect of the adjustments between our GAAP and adjusted results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact at the U.S. effective tax rate for certain adjustments, including the majority of amortization of intangible assets, deferred financing costs, stock compensation, and loss on debt extinguishment; whereas the tax impact of other adjustments, including restructuring expense, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable effective tax rate(s) in those jurisdictions. Income tax (expense) benefit also includes the impact of significant discrete tax items impacting Net income (loss) attributable to First Data Corporation.
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Total long-term borrowings
|
|
$
|
18,131
|
|
|
$
|
18,737
|
|
Total short-term and current portion of long-term borrowings
|
|
358
|
|
|
856
|
|
||
Total borrowings
|
|
18,489
|
|
|
19,593
|
|
||
Unamortized discount and unamortized deferred financing costs
|
|
156
|
|
|
184
|
|
||
Total borrowings at par
|
|
18,645
|
|
|
19,777
|
|
||
Less: settlement lines of credit and other arrangements
|
|
84
|
|
|
43
|
|
||
Gross debt
|
|
18,561
|
|
|
19,734
|
|
||
Less: cash and cash equivalents (a)
|
|
385
|
|
|
429
|
|
||
Net debt
|
|
$
|
18,176
|
|
|
$
|
19,305
|
|
(a)
|
As of December 31, 2016, "Cash and cash equivalents" reflects a reclassification of $102 million related to settlement activities to conform certain domestic and international businesses to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable, net" in our consolidated balance sheets.
|
|
|
Year ended December 31,
|
||||||||||
Source/(use) (in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by operating activities
|
|
$
|
2,111
|
|
|
$
|
795
|
|
|
$
|
1,035
|
|
Net cash used in investing activities
|
|
(387
|
)
|
|
(685
|
)
|
|
(329
|
)
|
|||
Net cash used in financing activities
|
|
(1,734
|
)
|
|
(16
|
)
|
|
(743
|
)
|
|
|
Year ended December 31,
|
||||||
Source/(use) (in millions)
|
|
2016
|
|
2015
|
||||
Net cash provided by operating activities, previous period
|
|
$
|
795
|
|
|
$
|
1,035
|
|
Increases (decreases) in:
|
|
|
|
|
||||
Net income, excluding other operating expenses and other income (a)
|
|
871
|
|
|
219
|
|
||
Depreciation and amortization
|
|
(72
|
)
|
|
(30
|
)
|
||
Working capital
|
|
517
|
|
|
(429
|
)
|
||
Net cash provided by operating activities, end of period
|
|
$
|
2,111
|
|
|
$
|
795
|
|
(a)
|
Excludes loss on debt extinguishment, stock-based compensation expense and other non-cash items.
|
|
|
Year ended December 31,
|
||||||||||
Source/(use) (in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by operating activities (a)
|
|
$
|
2,111
|
|
|
$
|
795
|
|
|
$
|
1,035
|
|
Capital expenditures
|
|
(477
|
)
|
|
(602
|
)
|
|
(567
|
)
|
|||
Distributions and dividends paid to noncontrolling interests, redeemable noncontrolling interest, and other (a)
|
|
(418
|
)
|
|
(312
|
)
|
|
(266
|
)
|
|||
Free cash flow
|
|
$
|
1,216
|
|
|
$
|
(119
|
)
|
|
$
|
202
|
|
(a)
|
The year ended December 31, 2016 includes a $102 million reclassification related to settlement activities to conform certain domestic and international businesses to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable, net" in our consolidated balance sheets. Free cash flow excludes the impact of reclassification.
|
|
|
Total Available (a)
|
|
Total Outstanding
|
||||||||||||
|
|
As of December 31,
|
|
As of December 31,
|
||||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Letters of credit (b)
|
|
$
|
250
|
|
|
$
|
250
|
|
|
$
|
41
|
|
|
$
|
42
|
|
Lines of credit and other (c)
|
|
489
|
|
|
245
|
|
|
84
|
|
|
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 during 2016 was approximately $43 million. All letters of credit expire on or prior to
December 31, 2017
with a one-year renewal option. We expect to renew most of the letters of credit prior to expiration.
|
(c)
|
As of
December 31, 2016
represents $479 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)
|
|
Twelve Months Ended
December 31, 2016 |
||
Net income attributable to First Data Corporation
|
|
$
|
420
|
|
Interest expense, net
|
|
1,068
|
|
|
Income tax expense
|
|
81
|
|
|
Depreciation and amortization
|
|
1,061
|
|
|
EBITDA
|
|
2,630
|
|
|
|
|
|
||
Loss on debt extinguishment
|
|
70
|
|
|
Stock-based compensation
|
|
263
|
|
|
Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
240
|
|
|
Projected near-term cost savings and revenue enhancements (1)
|
|
86
|
|
|
Restructuring, net
|
|
49
|
|
|
Non-operating foreign currency (gains) and losses
|
|
(19
|
)
|
|
Investment (gains) and losses (2)
|
|
(35
|
)
|
|
Derivative financial instruments (gains) and losses
|
|
5
|
|
|
Equity entities taxes, depreciation and amortization (3)
|
|
14
|
|
|
Divestitures, net (4)
|
|
34
|
|
|
Other (5)
|
|
41
|
|
|
Covenant EBITDA
|
|
$
|
3,378
|
|
(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 gains on Visa Europe share sale and international joint venture sale reflected within "Other income" in the consolidated statements of operations.
|
(3)
|
Represents our proportional share of income taxes, depreciation, and amortization on equity method investments.
|
(4)
|
Reflects loss on divestiture of Australian ATM business reflected within "Other income" in the consolidated statements of operations.
|
(5)
|
Includes items such as pension losses, earn-outs, litigation and regulatory settlements, and other as applicable to the period presented.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in millions)
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
After
5 years
|
||||||||||
Borrowings (a)
|
|
$
|
23,939
|
|
|
$
|
1,348
|
|
|
$
|
1,845
|
|
|
$
|
7,338
|
|
|
$
|
13,408
|
|
Capital lease obligations (b)
|
|
294
|
|
|
93
|
|
|
143
|
|
|
51
|
|
|
7
|
|
|||||
Operating leases
|
|
293
|
|
|
56
|
|
|
87
|
|
|
54
|
|
|
96
|
|
|||||
Purchase obligations (c):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Technology and telecommunications (d)
|
|
930
|
|
|
408
|
|
|
301
|
|
|
156
|
|
|
65
|
|
|||||
All other (e)
|
|
64
|
|
|
30
|
|
|
26
|
|
|
4
|
|
|
4
|
|
|||||
Total (f) (g)
|
|
$
|
25,520
|
|
|
$
|
1,935
|
|
|
$
|
2,402
|
|
|
$
|
7,603
|
|
|
$
|
13,580
|
|
(a)
|
Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Includes $8.1 billion of variable rate debt, $3.0 billion of which is subject to fixed interest rate collar contracts which mitigate exposure to interest rate fluctuations, but are subject to contractual ceilings and floors. Borrowings and interest rate swaps are discussed in note 2 "Borrowings" and note 13 "Derivative Financial Instruments", respectively,
|
(b)
|
Represents future payments on existing capital leases, including interest expense, through scheduled expiration dates.
|
(c)
|
Many of our contracts contain clauses that allow us to terminate the contract with notice, and with or without a termination penalty. Termination penalties are generally an amount less than the original obligation. Certain contracts also have an automatic renewal clause if we do not provide written notification of our intent to terminate the contract. Obligations under certain contracts are usage-based and are, therefore, estimated in the above amounts. Historically, we have not had any significant defaults of our contractual obligations or incurred significant penalties for termination of our contractual obligations.
|
(d)
|
Technology and telecommunications represents obligations related to hardware purchases, including purchases of ATMs and terminals, as well as software licenses, hardware and software maintenance and support, technical consulting services, and telecommunications services.
|
(e)
|
All other includes obligations related to materials, data, non-technical contract services, facility security, investor management fees, maintenance, and marketing promotions.
|
(f)
|
We evaluate the need to make contributions to our pension plans after considering the funded status of the pension plans, movements in the discount rates, performance of the plan assets and related tax consequences. Expected contributions to our pension plan have not been included in the table as such amounts are dependent upon the considerations discussed above, and may result in a wide range of amounts. See note 15 "Employee Benefit Plans" to our consolidated financial statements in Part II, Item 8 of this Form 10-K.
|
(g)
|
As of
December 31, 2016
, we had approximately $271 million of tax contingencies comprised of approximately $263 million reported in long-term income taxes payable in the “Other long-term liabilities” line of our consolidated balance sheets, including approximately $3 million of income tax liabilities for which The Western Union Company (Western Union) is required to indemnify us, and approximately $8 million recorded as an increase of our deferred tax liability. These amounts have been excluded from the table because the settlement period cannot be reasonably estimated. The timing of these payments will ultimately depend on the progress of tax examinations with the various tax authorities.
|
•
|
Global economic, political, and other conditions may adversely affect trends in consumer, business, and government spending, which may adversely impact the demand for our services and our revenue and profitability;
|
•
|
Our ability to anticipate and respond to changing industry trends and the needs and preferences of our clients and consumers may affect our competitiveness or demand for our products, which may adversely affect our operating results;
|
•
|
Substantial and increasingly intense competition worldwide in the financial services, payments, and technology industries may materially and adversely affect our overall business and operations;
|
•
|
Potential changes in the competitive landscape, including disintermediation from other participants in the payments value chain, could harm our business;
|
•
|
The market for our electronic commerce services is evolving and may not continue to develop or grow rapidly enough for us to maintain and increase our profitability;
|
•
|
If we are unable to maintain merchant relationships and alliances, our business may be adversely affected;
|
•
|
Failure to obtain new clients or renew client contracts on favorable terms could adversely affect results of operations and financial condition; and
|
•
|
Cost savings initiatives may not produce the savings expected and may negatively impact our other initiatives and efforts to grow our business.
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Cash and cash equivalents collateral
|
|
$
|
494
|
|
|
$
|
544
|
|
Collateral in the form of letters of credit
|
|
134
|
|
|
108
|
|
||
Total collateral
|
|
$
|
628
|
|
|
$
|
652
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
First Data and consolidated and unconsolidated alliances credit losses
|
|
$
|
93
|
|
|
$
|
67
|
|
|
$
|
63
|
|
First Data and consolidated alliances credit losses
|
|
83
|
|
|
55
|
|
|
55
|
|
|||
Total dollar volume acquired (in billions)
|
|
2,153
|
|
|
1,885
|
|
|
1,876
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
First Data and consolidated and unconsolidated alliances merchant credit loss reserves
|
|
$
|
28
|
|
|
$
|
26
|
|
First Data and consolidated alliances merchant credit loss reserves
|
|
23
|
|
|
22
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Estimate of losses on returned checks
|
|
$
|
5
|
|
|
$
|
6
|
|
Fair value of checks guaranteed
|
|
17
|
|
|
21
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Aggregate face value of guaranteed checks (in billions)
|
|
$
|
28
|
|
|
$
|
32
|
|
|
$
|
36
|
|
Aggregate amount of checks presented for warranty (in millions)
|
|
188
|
|
|
216
|
|
|
253
|
|
|||
Warranty losses net of recoveries and service fees (in millions)
|
|
55
|
|
|
61
|
|
|
67
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
/s/ Ernst & Young LLP
|
|
|
|
Atlanta, Georgia
|
|
February 24, 2017
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions, except per share and share amounts)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|||
Transaction and processing service fees (a)
|
|
$
|
6,600
|
|
|
$
|
6,597
|
|
|
$
|
6,510
|
|
Product sales and other (a)
|
|
1,239
|
|
|
1,167
|
|
|
1,038
|
|
|||
Total revenues (excluding reimbursable items)
|
|
7,839
|
|
|
7,764
|
|
|
7,548
|
|
|||
Reimbursable debit network fees, postage, and other
|
|
3,745
|
|
|
3,687
|
|
|
3,604
|
|
|||
Total revenues
|
|
11,584
|
|
|
11,451
|
|
|
11,152
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|
|||
Cost of services (exclusive of items shown below)
|
|
2,855
|
|
|
2,871
|
|
|
2,668
|
|
|||
Cost of products sold
|
|
337
|
|
|
356
|
|
|
330
|
|
|||
Selling, general, and administrative
|
|
2,035
|
|
|
2,292
|
|
|
2,043
|
|
|||
Depreciation and amortization
|
|
949
|
|
|
1,022
|
|
|
1,056
|
|
|||
Other operating expenses
|
|
61
|
|
|
53
|
|
|
13
|
|
|||
Total expenses (excluding reimbursable items)
|
|
6,237
|
|
|
6,594
|
|
|
6,110
|
|
|||
Reimbursable debit network fees, postage, and other
|
|
3,745
|
|
|
3,687
|
|
|
3,604
|
|
|||
Total expenses
|
|
9,982
|
|
|
10,281
|
|
|
9,714
|
|
|||
Operating profit
|
|
1,602
|
|
|
1,170
|
|
|
1,438
|
|
|||
Interest expense, net
|
|
(1,068
|
)
|
|
(1,537
|
)
|
|
(1,728
|
)
|
|||
Loss on debt extinguishment
|
|
(70
|
)
|
|
(1,068
|
)
|
|
(274
|
)
|
|||
Other income
|
|
17
|
|
|
29
|
|
|
161
|
|
|||
Income (loss) before income taxes and equity earnings in affiliates
|
|
481
|
|
|
(1,406
|
)
|
|
(403
|
)
|
|||
Income tax expense
|
|
81
|
|
|
101
|
|
|
82
|
|
|||
Equity earnings in affiliates
|
|
260
|
|
|
239
|
|
|
220
|
|
|||
Net income (loss)
|
|
660
|
|
|
(1,268
|
)
|
|
(265
|
)
|
|||
Less: Net income attributable to noncontrolling interests
and redeemable noncontrolling interest |
|
240
|
|
|
213
|
|
|
193
|
|
|||
Net income (loss) attributable to First Data Corporation
|
|
$
|
420
|
|
|
$
|
(1,481
|
)
|
|
$
|
(458
|
)
|
|
|
|
|
|
|
|
||||||
Net income (loss) per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.47
|
|
|
$
|
(7.70
|
)
|
|
$
|
(458,000
|
)
|
Diluted
|
|
$
|
0.46
|
|
|
$
|
(7.70
|
)
|
|
$
|
(458,000
|
)
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
901,671,872
|
|
|
192,263,793
|
|
|
1,000
|
|
|||
Diluted
|
|
921,001,863
|
|
|
192,263,793
|
|
|
1,000
|
|
(a)
|
Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of
$198 million
,
$205 million
, and
$181 million
for the years ended December 31,
2016
,
2015
, and
2014
, respectively.
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
|
$
|
660
|
|
|
$
|
(1,268
|
)
|
|
$
|
(265
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustment
|
|
(153
|
)
|
|
(290
|
)
|
|
(308
|
)
|
|||
Pension liability adjustments
|
|
38
|
|
|
(13
|
)
|
|
(36
|
)
|
|||
Derivative instruments
|
|
3
|
|
|
—
|
|
|
—
|
|
|||
Marketable securities
|
|
—
|
|
|
3
|
|
|
(7
|
)
|
|||
Total other comprehensive loss, net of tax
|
|
(112
|
)
|
|
(300
|
)
|
|
(351
|
)
|
|||
Comprehensive income (loss)
|
|
548
|
|
|
(1,568
|
)
|
|
(616
|
)
|
|||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
235
|
|
|
203
|
|
|
182
|
|
|||
Comprehensive income (loss) attributable to First Data Corporation
|
|
$
|
313
|
|
|
$
|
(1,771
|
)
|
|
$
|
(798
|
)
|
|
|
As of December 31,
|
||||||
(in millions, except common stock share amounts)
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
385
|
|
|
$
|
429
|
|
Accounts receivable, net of allowance for doubtful accounts of $74 and $71
|
|
1,877
|
|
|
1,826
|
|
||
Settlement assets
|
|
14,795
|
|
|
8,150
|
|
||
Prepaid expenses and other current assets
|
|
360
|
|
|
381
|
|
||
Total current assets
|
|
17,417
|
|
|
10,786
|
|
||
Property and equipment, net of accumulated depreciation of $1,416 and $1,367
|
|
883
|
|
|
951
|
|
||
Goodwill
|
|
16,696
|
|
|
16,846
|
|
||
Customer relationships, net of accumulated amortization of $5,660 and $5,299
|
|
1,739
|
|
|
2,136
|
|
||
Other intangibles, net of accumulated amortization of $2,365 and $2,134
|
|
1,800
|
|
|
1,783
|
|
||
Investment in affiliates
|
|
988
|
|
|
1,048
|
|
||
Other long-term assets
|
|
769
|
|
|
812
|
|
||
Total assets
|
|
$
|
40,292
|
|
|
$
|
34,362
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
|
$
|
1,564
|
|
|
$
|
1,639
|
|
Short-term and current portion of long-term borrowings
|
|
358
|
|
|
856
|
|
||
Settlement obligations
|
|
14,795
|
|
|
8,150
|
|
||
Total current liabilities
|
|
16,717
|
|
|
10,645
|
|
||
Long-term borrowings
|
|
18,131
|
|
|
18,737
|
|
||
Deferred tax liabilities
|
|
409
|
|
|
431
|
|
||
Other long-term liabilities
|
|
831
|
|
|
812
|
|
||
Total liabilities
|
|
36,088
|
|
|
30,625
|
|
||
Commitments and contingencies (See note 14)
|
|
|
|
|
|
|
||
Redeemable noncontrolling interest
|
|
73
|
|
|
77
|
|
||
First Data Corporation stockholders' equity:
|
|
|
|
|
|
|
||
Common stock, $0.01 par value; no shares and 1,000 shares authorized and issued as of December 31, 2016 and 2015, respectively
|
|
—
|
|
|
—
|
|
||
Class A Common stock, $0.01 par value; 1,600,000,000 shares authorized as of December 31, 2016 and 2015, respectively; 367,893,026 shares and 179,873,244 shares issued and outstanding as of December 31, 2016 and 2015, respectively.
|
|
4
|
|
|
2
|
|
||
Class B Common stock, $0.01 par value; 624,998,004 shares and 800,000,000 shares authorized as of December 31, 2016 and 2015, respectively; 544,066,353 shares and 719,330,114 shares issued and outstanding as of December 31, 2016 and 2015, respectively. Class B Common stock is convertible into one share of Class A Common stock
|
|
5
|
|
|
7
|
|
||
Additional paid-in capital
|
|
13,149
|
|
|
12,910
|
|
||
Accumulated loss
|
|
(10,612
|
)
|
|
(11,032
|
)
|
||
Accumulated other comprehensive loss
|
|
(1,326
|
)
|
|
(1,219
|
)
|
||
Total First Data Corporation stockholders' equity
|
|
1,220
|
|
|
668
|
|
||
Noncontrolling interests
|
|
2,911
|
|
|
2,992
|
|
||
Total equity
|
|
4,131
|
|
|
3,660
|
|
||
Total liabilities and equity
|
|
$
|
40,292
|
|
|
$
|
34,362
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
660
|
|
|
$
|
(1,268
|
)
|
|
$
|
(265
|
)
|
Adjustments to reconcile to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)
|
|
1,061
|
|
|
1,133
|
|
|
1,163
|
|
|||
Charges (gains) related to other operating expenses and other income
|
|
44
|
|
|
24
|
|
|
(148
|
)
|
|||
Loss on debt extinguishment
|
|
70
|
|
|
1,068
|
|
|
274
|
|
|||
Stock-based compensation expense
|
|
263
|
|
|
329
|
|
|
51
|
|
|||
Other non-cash and non-operating items, net
|
|
35
|
|
|
48
|
|
|
70
|
|
|||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable, current and long-term
|
|
(81
|
)
|
|
(184
|
)
|
|
(50
|
)
|
|||
Other assets, current and long-term
|
|
61
|
|
|
(199
|
)
|
|
(48
|
)
|
|||
Accounts payable and other liabilities, current and long-term
|
|
35
|
|
|
(162
|
)
|
|
1
|
|
|||
Income tax accounts
|
|
(37
|
)
|
|
6
|
|
|
(13
|
)
|
|||
Net cash provided by operating activities
|
|
2,111
|
|
|
795
|
|
|
1,035
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|||
Additions to property and equipment
|
|
(232
|
)
|
|
(282
|
)
|
|
(308
|
)
|
|||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs
|
|
(245
|
)
|
|
(320
|
)
|
|
(259
|
)
|
|||
Acquisitions, net of cash acquired
|
|
(6
|
)
|
|
(89
|
)
|
|
(31
|
)
|
|||
Proceeds from dispositions
|
|
38
|
|
|
4
|
|
|
270
|
|
|||
Proceeds from sale of property and equipment
|
|
38
|
|
|
17
|
|
|
3
|
|
|||
Other investing activities, net
|
|
20
|
|
|
(15
|
)
|
|
(4
|
)
|
|||
Net cash used in investing activities
|
|
(387
|
)
|
|
(685
|
)
|
|
(329
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|||
Short-term borrowings, net
|
|
205
|
|
|
(31
|
)
|
|
12
|
|
|||
Proceeds from issuance of long-term debt
|
|
3,533
|
|
|
10,258
|
|
|
1,830
|
|
|||
Payment of call premiums and debt issuance cost
|
|
(53
|
)
|
|
(1,062
|
)
|
|
(355
|
)
|
|||
Principal payments on long-term debt
|
|
(5,073
|
)
|
|
(11,568
|
)
|
|
(3,751
|
)
|
|||
Payment of taxes related to net settlement of equity awards
|
|
(61
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
|
23
|
|
|
2,718
|
|
|
—
|
|
|||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest
|
|
(316
|
)
|
|
(312
|
)
|
|
(266
|
)
|
|||
Capital transactions with former parent, net
|
|
—
|
|
|
(19
|
)
|
|
1,788
|
|
|||
Other financing activities, net
|
|
8
|
|
|
—
|
|
|
(1
|
)
|
|||
Net cash used in financing activities
|
|
(1,734
|
)
|
|
(16
|
)
|
|
(743
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(34
|
)
|
|
(23
|
)
|
|
(30
|
)
|
|||
Change in cash and cash equivalents
|
|
(44
|
)
|
|
71
|
|
|
(67
|
)
|
|||
Cash and cash equivalents at beginning of period
|
|
429
|
|
|
358
|
|
|
425
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
385
|
|
|
$
|
429
|
|
|
$
|
358
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
||||||
Income tax payments, net of refunds received
|
|
$
|
118
|
|
|
$
|
95
|
|
|
$
|
96
|
|
Interest paid
|
|
1,032
|
|
|
1,815
|
|
|
1,729
|
|
|||
Distributions received from equity method investments
|
|
304
|
|
|
289
|
|
|
278
|
|
|||
NON-CASH TRANSACTIONS:
|
|
|
|
|
|
|
||||||
Capital leases and other financing arrangements, net of trade-ins
|
|
$
|
215
|
|
|
$
|
83
|
|
|
$
|
128
|
|
|
|
First Data Corporation Stockholders'
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Common Stock
|
|
|
|
|
|
Accumulated Other Comprehensive Income (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, 2013 (a)
|
|
1,000
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
7,384
|
|
|
$
|
(8,403
|
)
|
|
$
|
(589
|
)
|
|
$
|
3,183
|
|
|
$
|
1,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Dividends and distributions paid to noncontrolling interests (b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(231
|
)
|
|
(231
|
)
|
|||||||
Net (loss) income (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(458
|
)
|
|
—
|
|
|
159
|
|
|
(299
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(340
|
)
|
|
(11
|
)
|
|
(351
|
)
|
|||||||
Adjustments to redemption value of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Stock compensation expense and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||||
Capital contributed by former Parent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,482
|
|
|||||||
Cash dividends paid by First Data Corporation to former Parent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(686
|
)
|
|
—
|
|
|
—
|
|
|
(686
|
)
|
|||||||
Purchase of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Balance, December 31, 2014 (a)
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,906
|
|
|
(9,547
|
)
|
|
(929
|
)
|
|
3,100
|
|
|
2,530
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Dividends and distributions paid to noncontrolling interests (b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(277
|
)
|
|
(277
|
)
|
|||||||
Net (loss) income (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,481
|
)
|
|
—
|
|
|
179
|
|
|
(1,302
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(290
|
)
|
|
(10
|
)
|
|
(300
|
)
|
|||||||
Adjustments to redemption value of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||||
Stock compensation expense and other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|||||||
Cash dividends paid by First Data Corporation to former Parent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Holding Company Merger (a)
|
|
(1,000
|
)
|
|
—
|
|
|
719,330,114
|
|
|
7
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||||||
Initial Public Offering
|
|
179,873,244
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2,716
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,718
|
|
|||||||
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 (b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(283
|
)
|
|
(283
|
)
|
|||||||
Net income (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
420
|
|
|
—
|
|
|
207
|
|
|
627
|
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
|
(5
|
)
|
|
(112
|
)
|
|||||||
Adjustment to redemption value of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|||||||
Stock activity under stock compensation plans and other
|
|
188,019,782
|
|
|
2
|
|
|
(175,263,761
|
)
|
|
(2
|
)
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|||||||
Balance, December 31, 2016
|
|
367,893,026
|
|
|
$
|
4
|
|
|
544,066,353
|
|
|
$
|
5
|
|
|
$
|
13,149
|
|
|
$
|
(10,612
|
)
|
|
$
|
(1,326
|
)
|
|
$
|
2,911
|
|
|
$
|
4,131
|
|
(a)
|
1,000
shares relates to common stock without a class that was eliminated upon the merger with First Data Holdings.
|
(b)
|
The total distribution presented in the consolidated statements of equity for the years ended December 31, 2016, 2015, and 2014 excludes
$33 million
,
$35 million
, and
$35 million
, respectively, in distributions paid to redeemable non-controlling interest not included in equity.
|
(c)
|
The total net income (loss) presented in the consolidated statements of equity for the years ended
December 31, 2016
,
2015
, and
2014
is
$33 million
lower,
$34 million
higher, and
$34 million
higher, respectively, than the amount presented on the consolidated statements of operations due to the net income attributable to the redeemable noncontrolling interest not included in equity.
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Amortization of initial payments for new contracts
|
|
$
|
65
|
|
|
$
|
51
|
|
|
$
|
45
|
|
Amortization related to equity method investments
|
|
47
|
|
|
60
|
|
|
62
|
|
|
Year ended December 31,
|
|||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Interchange fees and assessments
|
|
$
|
23,810
|
|
|
$
|
21,711
|
|
|
$
|
20,406
|
|
Debit network fees
|
|
3,121
|
|
|
2,991
|
|
|
2,965
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Estimate of losses on returned checks
|
|
$
|
5
|
|
|
$
|
6
|
|
Fair value of checks guaranteed
|
|
17
|
|
|
21
|
|
•
|
Level 1 Inputs—Quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date.
|
•
|
Level 2 Inputs—Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including but not limited to quoted prices in markets that are not active, quoted prices in active markets for similar assets or liabilities, and observable inputs other than quoted prices such as interest rates or yield curves.
|
•
|
Level 3 Inputs—Unobservable inputs reflecting the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Short-term borrowings:
|
|
|
|
|
|
|
||
Foreign lines of credit and other arrangements
|
|
$
|
84
|
|
|
$
|
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%
|
|
160
|
|
|
—
|
|
||
Unamortized deferred financing costs (a)
|
|
(2
|
)
|
|
—
|
|
||
Total short-term borrowings
|
|
242
|
|
|
43
|
|
||
Current portion of long-term borrowings:
|
|
|
|
|
|
|||
8.75% Senior secured second lien notes due 2022
|
|
—
|
|
|
750
|
|
||
Unamortized discount and unamortized deferred financing costs (a)
|
|
—
|
|
|
(10
|
)
|
||
Other arrangements and capital lease obligations
|
|
116
|
|
|
73
|
|
||
Total current portion of long-term borrowings
|
|
116
|
|
|
813
|
|
||
Total short-term and current portion of long-term borrowings
|
|
358
|
|
|
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%
|
|
—
|
|
|
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%
|
|
—
|
|
|
2,464
|
|
||
Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 3.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.0%
|
|
4,379
|
|
|
—
|
|
||
Senior secured term loan facility due July 2022 at LIBOR plus 3.0% or a base rate plus 2.0%, or solely with respect to euro-denominated term loans, euro LIBOR plus 3.25%
|
|
3,583
|
|
|
—
|
|
||
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)
|
|
(154
|
)
|
|
(174
|
)
|
||
Other arrangements and capital lease obligations
|
|
215
|
|
|
122
|
|
||
Total long-term borrowings (b)
|
|
18,131
|
|
|
18,737
|
|
||
Total borrowings (c)
|
|
$
|
18,489
|
|
|
$
|
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
December 31, 2016
and
2015
, the fair value of the Company's long-term borrowings was
$18.8 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.
|
Year ended December 31,
(in millions)
|
|
Par Amount
|
||
2017
|
|
$
|
116
|
|
2018
|
|
89
|
|
|
2019
|
|
60
|
|
|
2020
|
|
1,443
|
|
|
2021
|
|
4,390
|
|
|
Thereafter
|
|
12,303
|
|
|
Total
|
|
$
|
18,401
|
|
(in millions)
|
|
Global Business Solutions
|
|
Global Financial
Solutions |
|
Network & Security Solutions
|
|
Divested Operations
|
|
Totals
|
||||||||||
Balance as of January 1, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
$
|
15,712
|
|
|
$
|
2,126
|
|
|
$
|
2,238
|
|
|
$
|
181
|
|
|
$
|
20,257
|
|
Accumulated impairment losses
|
|
(1,363
|
)
|
|
(683
|
)
|
|
(1,013
|
)
|
|
(181
|
)
|
|
(3,240
|
)
|
|||||
|
|
14,349
|
|
|
1,443
|
|
|
1,225
|
|
|
—
|
|
|
17,017
|
|
|||||
Acquisitions
|
|
9
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
55
|
|
|||||
Other adjustments (primarily foreign currency)
|
|
(154
|
)
|
|
(72
|
)
|
|
—
|
|
|
—
|
|
|
(226
|
)
|
|||||
Balance as of December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
15,567
|
|
|
2,054
|
|
|
2,284
|
|
|
181
|
|
|
20,086
|
|
|||||
Accumulated impairment losses
|
|
(1,363
|
)
|
|
(683
|
)
|
|
(1,013
|
)
|
|
(181
|
)
|
|
(3,240
|
)
|
|||||
|
|
14,204
|
|
|
1,371
|
|
|
1,271
|
|
|
—
|
|
|
16,846
|
|
|||||
Acquisitions
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Dispositions
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|||||
Other adjustments (primarily foreign currency)
|
|
(42
|
)
|
|
(88
|
)
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|||||
Balance as of December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
15,505
|
|
|
1,966
|
|
|
2,284
|
|
|
181
|
|
|
19,936
|
|
|||||
Accumulated impairment losses
|
|
(1,363
|
)
|
|
(683
|
)
|
|
(1,013
|
)
|
|
(181
|
)
|
|
(3,240
|
)
|
|||||
|
|
$
|
14,142
|
|
|
$
|
1,283
|
|
|
$
|
1,271
|
|
|
$
|
—
|
|
|
$
|
16,696
|
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
|
|
Accumulated
|
|
Net of
Accumulated
|
|
|
|
Accumulated
|
|
Net of
Accumulated
|
||||||||||||
(in millions)
|
|
Cost
|
|
Amortization
|
|
Amortization
|
|
Cost
|
|
Amortization
|
|
Amortization
|
||||||||||||
Customer relationships
|
|
$
|
7,399
|
|
|
$
|
(5,660
|
)
|
|
$
|
1,739
|
|
|
$
|
7,435
|
|
|
$
|
(5,299
|
)
|
|
$
|
2,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other intangibles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Conversion costs
|
|
$
|
248
|
|
|
$
|
(109
|
)
|
|
$
|
139
|
|
|
$
|
218
|
|
|
$
|
(102
|
)
|
|
$
|
116
|
|
Contract costs
|
|
306
|
|
|
(149
|
)
|
|
157
|
|
|
280
|
|
|
(123
|
)
|
|
157
|
|
||||||
Software
|
|
2,236
|
|
|
(1,726
|
)
|
|
510
|
|
|
2,019
|
|
|
(1,547
|
)
|
|
472
|
|
||||||
Other, including trade names
|
|
1,375
|
|
|
(381
|
)
|
|
994
|
|
|
1,400
|
|
|
(362
|
)
|
|
1,038
|
|
||||||
Total other intangibles
|
|
$
|
4,165
|
|
|
$
|
(2,365
|
)
|
|
$
|
1,800
|
|
|
$
|
3,917
|
|
|
$
|
(2,134
|
)
|
|
$
|
1,783
|
|
Year ended December 31,
(in millions)
|
|
Cost of services
|
|
Selling, general, and administrative
|
|
Total
|
||||||
2016
(a)
|
|
$
|
112
|
|
|
$
|
151
|
|
|
$
|
263
|
|
2015
(b)
|
|
130
|
|
|
199
|
|
|
329
|
|
|||
2014
(c)
|
|
2
|
|
|
49
|
|
|
51
|
|
(a)
|
Approximately
$52 million
of stock-based compensation expense was recognized in conjunction with the IPO.
|
(c)
|
Approximately
$37 million
of stock-based compensation expense was recognized as a result of the departure of certain executive officers.
|
|
|
Year ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Risk-free interest rate
|
|
2.08
|
%
|
|
1.87
|
%
|
|
2.24
|
%
|
|||
Dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Expected volatility
|
|
41.33
|
%
|
|
55.15
|
%
|
|
50.45
|
%
|
|||
Expected term (in years)
|
|
7
|
|
|
7
|
|
|
7
|
|
|||
Fair value of stock
|
|
$
|
12.62
|
|
|
$
|
15.53
|
|
|
$
|
12.64
|
|
Fair value of options
|
|
$
|
5.33
|
|
|
$
|
8.68
|
|
|
$
|
6.76
|
|
(options in millions)
|
|
Options
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average
Remaining
Contractual
Term
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Outstanding as of December 31, 2014
|
|
32
|
|
|
$
|
10.75
|
|
|
|
|
|
||
Granted
|
|
11
|
|
|
15.53
|
|
|
|
|
|
|||
Exercised
|
|
(1
|
)
|
|
9.86
|
|
|
|
|
|
|||
Canceled / Forfeited
|
|
(1
|
)
|
|
11.25
|
|
|
|
|
|
|||
Outstanding as of December 31, 2015
|
|
41
|
|
|
$
|
11.94
|
|
|
7 years
|
|
$
|
166
|
|
Granted
|
|
2
|
|
|
12.62
|
|
|
|
|
|
|||
Exercised
|
|
(2
|
)
|
|
9.86
|
|
|
|
|
|
|||
Canceled / Forfeited
|
|
(2
|
)
|
|
15.39
|
|
|
|
|
|
|||
Outstanding as of December 31, 2016 (a)
|
|
39
|
|
|
$
|
12.00
|
|
|
6 years
|
|
$
|
98
|
|
Options exercisable as of December 31, 2016 (a)
|
|
22
|
|
|
$
|
10.78
|
|
|
5 years
|
|
$
|
76
|
|
(a)
|
Includes
2 million
of outstanding options subject to the market conditions described above. There are
no
exercisable options subject to these market conditions.
|
(awards/units in millions)
|
|
Awards/Units
|
|
Weighted-Average
Grant-Date Fair Value
|
|||
Non-vested as of December 31, 2014
|
|
15
|
|
|
$
|
11.98
|
|
Granted
|
|
19
|
|
|
14.96
|
|
|
Vested
|
|
(1
|
)
|
|
15.04
|
|
|
Canceled / Forfeited
|
|
(1
|
)
|
|
14.02
|
|
|
Non-vested December 31, 2015
|
|
32
|
|
|
$
|
14.30
|
|
Granted
|
|
18
|
|
|
12.49
|
|
|
Vested
|
|
(10
|
)
|
|
13.91
|
|
|
Canceled / Forfeited
|
|
(6
|
)
|
|
13.74
|
|
|
Non-vested as of December 31, 2016 (a)
|
|
34
|
|
|
$
|
13.59
|
|
(a)
|
Includes
1 million
of shares subject to the market conditions described above.
|
(in millions)
|
|
Beginning
Balance
|
|
Pretax
Gain
(Loss)
Amount
|
|
Tax
(Benefit)
Expense
|
|
Net-of-
Tax
Amount
|
|
Ending
Balance
|
||||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
(a)
|
|
$
|
(1,081
|
)
|
|
$
|
(149
|
)
|
|
$
|
(1
|
)
|
|
$
|
(148
|
)
|
|
$
|
(1,229
|
)
|
Pension liability adjustments
(b)
|
|
(136
|
)
|
|
34
|
|
|
(4
|
)
|
|
38
|
|
|
(98
|
)
|
|||||
Derivative instruments
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Marketable securities
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
|
|
$
|
(1,219
|
)
|
|
$
|
(112
|
)
|
|
$
|
(5
|
)
|
|
$
|
(107
|
)
|
|
$
|
(1,326
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
(a)
|
|
$
|
(801
|
)
|
|
$
|
(261
|
)
|
|
$
|
19
|
|
|
$
|
(280
|
)
|
|
$
|
(1,081
|
)
|
Pension liability adjustments
|
|
(123
|
)
|
|
(19
|
)
|
|
(6
|
)
|
|
(13
|
)
|
|
(136
|
)
|
|||||
Marketable securities
|
|
(5
|
)
|
|
3
|
|
|
—
|
|
|
3
|
|
|
(2
|
)
|
|||||
|
|
$
|
(929
|
)
|
|
$
|
(277
|
)
|
|
$
|
13
|
|
|
$
|
(290
|
)
|
|
$
|
(1,219
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
(a)
|
|
$
|
(504
|
)
|
|
$
|
(298
|
)
|
|
$
|
(1
|
)
|
|
$
|
(297
|
)
|
|
$
|
(801
|
)
|
Pension liability adjustments
|
|
(87
|
)
|
|
(35
|
)
|
|
1
|
|
|
(36
|
)
|
|
(123
|
)
|
|||||
Marketable securities
|
|
2
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
(5
|
)
|
|||||
|
|
$
|
(589
|
)
|
|
$
|
(340
|
)
|
|
$
|
—
|
|
|
$
|
(340
|
)
|
|
$
|
(929
|
)
|
(a)
|
Net-of-tax Foreign currency translation adjustment for the years ended
December 31, 2016
,
2015
, and
2014
is different than the amount presented on the consolidated statements of comprehensive income (loss) by
$(5) million
,
$(10) million
, and
$(11) million
, respectively, due to the foreign currency translation adjustment related to noncontrolling interests not included above.
|
(b)
|
2016 pretax benefit includes an approximate
$10 million
reclassification out of OCI to "Other operating expenses" in the consolidated statements of operations related to the lump sum cash payout of certain U.S. based pension liabilities.
|
(in millions)
|
|
Redeemable
Noncontrolling
Interest
|
||
Balance as of January 1, 2014
|
|
$
|
69
|
|
Distributions
|
|
(35
|
)
|
|
Share of income
|
|
34
|
|
|
Adjustment to redemption value of redeemable noncontrolling interest
|
|
2
|
|
|
Balance as of December 31, 2014
|
|
70
|
|
|
Distributions
|
|
(35
|
)
|
|
Share of income
|
|
34
|
|
|
Adjustment to redemption value of redeemable noncontrolling interest
|
|
8
|
|
|
Balance as of December 31, 2015
|
|
77
|
|
|
Distributions
|
|
(33
|
)
|
|
Share of income
|
|
33
|
|
|
Adjustment to redemption value of redeemable noncontrolling interest
|
|
(4
|
)
|
|
Balance as of December 31, 2016
|
|
$
|
73
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions, except share amounts)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income (loss) used in computing net income (loss) per share, basic and diluted
|
|
$
|
420
|
|
|
$
|
(1,481
|
)
|
|
$
|
(458
|
)
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Shares used in computing net income (loss) per share, basic (a)
|
|
901,671,872
|
|
|
192,263,793
|
|
|
1,000
|
|
|||
Effect of dilutive securities
|
|
19,329,991
|
|
|
—
|
|
|
—
|
|
|||
Total dilutive securities
|
|
921,001,863
|
|
|
192,263,793
|
|
|
1,000
|
|
|||
|
|
|
|
|
|
|
||||||
Basic net income (loss) per share
|
|
$
|
0.47
|
|
|
$
|
(7.70
|
)
|
|
$
|
(458,000
|
)
|
Diluted net income (loss) per share (b)
|
|
0.46
|
|
|
(7.70
|
)
|
|
(458,000
|
)
|
|||
|
|
|
|
|
|
|
||||||
Anti-dilutive shares excluded from diluted net income (loss) per share
|
|
20,967,794
|
|
|
26,752,706
|
|
|
—
|
|
(a)
|
2015 weighted-average shares calculated using
1,000
shares outstanding prior to the HoldCo Merger and the filing of the Company's prospectus in October 2015 and the Class A and Class B common stock outstanding after these transactions. 2014 weighted-average shares calculated using
1,000
shares outstanding prior to the HoldCo Merger and the filing of the Company's prospectus in October 2015.
|
(b)
|
Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share.
|
•
|
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 debit network 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 the Company's compliance with debt covenants. The additional items that are adjusted to determine segment EBITDA are:
|
•
|
stock-based compensation and related expense is excluded; 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 the Company's public offering on October 15, 2015, the Company is no longer required to pay management fees to KKR.
|
•
|
For significant affiliates, segment revenue and segment EBITDA are 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 and segment EBITDA. In addition, the Company's 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 consolidated statements of operations, as contra revenue.
|
•
|
Corporate operations include corporate-wide governance functions such as the Company's 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.
|
|
|
Year ended December 31, 2016
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial
Solutions |
|
Network & Security Solutions
|
|
Corporate
|
|
Totals
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
3,201
|
|
|
$
|
1,372
|
|
|
$
|
1,309
|
|
|
$
|
—
|
|
|
$
|
5,882
|
|
Product sales and other
|
|
826
|
|
|
221
|
|
|
176
|
|
|
—
|
|
|
1,223
|
|
|||||
Equity earnings in affiliates
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||
Total segment revenues
|
|
$
|
4,063
|
|
|
$
|
1,593
|
|
|
$
|
1,485
|
|
|
$
|
—
|
|
|
$
|
7,141
|
|
Depreciation and amortization
|
|
$
|
435
|
|
|
$
|
357
|
|
|
$
|
115
|
|
|
$
|
14
|
|
|
$
|
921
|
|
Segment EBITDA
|
|
1,725
|
|
|
646
|
|
|
666
|
|
|
(145
|
)
|
|
2,892
|
|
|||||
Other operating expenses and other income (expense) excluding divestitures
|
|
28
|
|
|
(4
|
)
|
|
(7
|
)
|
|
(28
|
)
|
|
(11
|
)
|
|||||
Equity earnings in affiliates
|
|
260
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
260
|
|
|
|
Year ended December 31, 2015
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial
Solutions |
|
Network & Security Solutions
|
|
Corporate
|
|
Totals
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
3,209
|
|
|
$
|
1,323
|
|
|
$
|
1,322
|
|
|
$
|
—
|
|
|
$
|
5,854
|
|
Product sales and other
|
|
845
|
|
|
172
|
|
|
142
|
|
|
—
|
|
|
1,159
|
|
|||||
Equity earnings in affiliates
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|||||
Total segment revenues
|
|
$
|
4,089
|
|
|
$
|
1,495
|
|
|
$
|
1,464
|
|
|
$
|
—
|
|
|
$
|
7,048
|
|
Depreciation and amortization
|
|
$
|
490
|
|
|
$
|
393
|
|
|
$
|
91
|
|
|
$
|
25
|
|
|
$
|
999
|
|
Segment EBITDA
|
|
1,681
|
|
|
550
|
|
|
639
|
|
|
(140
|
)
|
|
2,730
|
|
|||||
Other operating expenses and other income (expense) excluding divestitures
|
|
26
|
|
|
(16
|
)
|
|
(3
|
)
|
|
(36
|
)
|
|
(29
|
)
|
|||||
Equity earnings in affiliates
|
|
239
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239
|
|
|
|
Year ended December 31, 2014
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial
Solutions |
|
Network & Security Solutions
|
|
Corporate
|
|
Totals
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
3,250
|
|
|
$
|
1,313
|
|
|
$
|
1,277
|
|
|
$
|
—
|
|
|
$
|
5,840
|
|
Product sales and other
|
|
766
|
|
|
176
|
|
|
92
|
|
|
—
|
|
|
1,034
|
|
|||||
Equity earnings in affiliates
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Total segment revenues
|
|
$
|
4,046
|
|
|
$
|
1,489
|
|
|
$
|
1,369
|
|
|
$
|
—
|
|
|
$
|
6,904
|
|
Depreciation and amortization
|
|
$
|
518
|
|
|
$
|
401
|
|
|
$
|
90
|
|
|
$
|
23
|
|
|
$
|
1,032
|
|
Segment EBITDA
|
|
1,687
|
|
|
529
|
|
|
608
|
|
|
(161
|
)
|
|
2,663
|
|
|||||
Other operating expenses and other income (expense) excluding divestitures
|
|
38
|
|
|
(3
|
)
|
|
96
|
|
|
15
|
|
|
146
|
|
|||||
Equity earnings in affiliates
|
|
216
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
220
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Consolidated revenues
|
|
$
|
11,584
|
|
|
$
|
11,451
|
|
|
$
|
11,152
|
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Non wholly owned entities (a)
|
|
(80
|
)
|
|
(74
|
)
|
|
(57
|
)
|
|||
ISOs commission expense (b)
|
|
(618
|
)
|
|
(642
|
)
|
|
(587
|
)
|
|||
Reimbursable debit network fees, postage, and other
|
|
(3,745
|
)
|
|
(3,687
|
)
|
|
(3,604
|
)
|
|||
Total segment revenues
|
|
$
|
7,141
|
|
|
$
|
7,048
|
|
|
$
|
6,904
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to First Data Corporation
|
|
$
|
420
|
|
|
$
|
(1,481
|
)
|
|
$
|
(458
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|||||
Non wholly owned entities (a)
|
|
(30
|
)
|
|
(26
|
)
|
|
(24
|
)
|
|||
Depreciation and amortization
|
|
949
|
|
|
1,022
|
|
|
1,056
|
|
|||
Interest expense, net
|
|
1,068
|
|
|
1,537
|
|
|
1,728
|
|
|||
Loss on debt extinguishment
|
|
70
|
|
|
1,068
|
|
|
274
|
|
|||
Other items (c)
|
|
71
|
|
|
180
|
|
|
(45
|
)
|
|||
Income tax expense
|
|
81
|
|
|
101
|
|
|
82
|
|
|||
Stock-based compensation
|
|
263
|
|
|
329
|
|
|
50
|
|
|||
Total segment EBITDA
|
|
$
|
2,892
|
|
|
$
|
2,730
|
|
|
$
|
2,663
|
|
(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 consolidated statements of operations.
|
(c)
|
Includes restructuring, certain retention bonuses, non-normal course litigation and regulatory settlements, asset impairments, debt issuance expenses, KKR related items and “Other income" as presented in the 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.
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Segment depreciation and amortization
|
|
$
|
921
|
|
|
$
|
999
|
|
|
$
|
1,032
|
|
Adjustments for non wholly owned entities
|
|
75
|
|
|
83
|
|
|
86
|
|
|||
Amortization of initial payments for new contracts (a)
|
|
65
|
|
|
51
|
|
|
45
|
|
|||
Total consolidated depreciation and amortization per consolidated statements of cash flows
|
|
1,061
|
|
|
1,133
|
|
|
1,163
|
|
|||
Amortization of equity method investment (b)
|
|
(47
|
)
|
|
(60
|
)
|
|
(62
|
)
|
|||
Amortization of initial payments for new contracts (a)
|
|
(65
|
)
|
|
(51
|
)
|
|
(45
|
)
|
|||
Total consolidated depreciation and amortization per consolidated statements of operations
|
|
$
|
949
|
|
|
$
|
1,022
|
|
|
$
|
1,056
|
|
(a)
|
Included in "Transaction and processing service fees" as contra-revenue in the Company's consolidated statements of operations.
|
(b)
|
Included in "Equity earnings in affiliates" in the Company's consolidated statements of operations.
|
(in millions)
|
|
United
States |
|
International
|
|
Total
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|||
2016
|
|
$
|
9,890
|
|
|
$
|
1,694
|
|
|
$
|
11,584
|
|
2015
|
|
9,795
|
|
|
1,656
|
|
|
11,451
|
|
|||
2014
|
|
9,428
|
|
|
1,724
|
|
|
11,152
|
|
|||
Long-Lived Assets:
|
|
|
|
|
|
|
|
|
|
|||
2016
|
|
$
|
18,846
|
|
|
$
|
2,272
|
|
|
$
|
21,118
|
|
2015
|
|
19,400
|
|
|
2,316
|
|
|
21,716
|
|
|||
2014
|
|
19,708
|
|
|
2,588
|
|
|
22,296
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Components of pretax income (loss):
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
492
|
|
|
$
|
(1,332
|
)
|
|
$
|
(378
|
)
|
Foreign
|
|
249
|
|
|
165
|
|
|
195
|
|
|||
|
|
$
|
741
|
|
|
$
|
(1,167
|
)
|
|
$
|
(183
|
)
|
Provision for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
20
|
|
|
$
|
7
|
|
|
$
|
16
|
|
State and local
|
|
20
|
|
|
14
|
|
|
22
|
|
|||
Foreign
|
|
41
|
|
|
80
|
|
|
44
|
|
|||
Income tax expense
|
|
$
|
81
|
|
|
$
|
101
|
|
|
$
|
82
|
|
|
|
|
|
|
|
|
||||||
Effective income tax rate
|
|
11
|
%
|
|
(9
|
)%
|
|
(45
|
)%
|
|
|
Year ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Federal statutory rate
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
State income taxes, net of federal income tax benefit
|
|
1
|
|
|
3
|
|
|
(1
|
)
|
Nontaxable income from noncontrolling interests
|
|
(11
|
)
|
|
6
|
|
|
37
|
|
Impact of foreign operations (a)
|
|
13
|
|
|
—
|
|
|
(9
|
)
|
Tax effects of foreign exchange gains/losses
|
|
—
|
|
|
(1
|
)
|
|
(6
|
)
|
Valuation allowances
|
|
(35
|
)
|
|
(54
|
)
|
|
(103
|
)
|
Liability for unrecognized tax benefits
|
|
—
|
|
|
(2
|
)
|
|
12
|
|
Prior year adjustments
|
|
3
|
|
|
4
|
|
|
(7
|
)
|
Nondeductible bad debts
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
Equity Compensation
|
|
5
|
|
|
—
|
|
|
—
|
|
Effective tax rate
|
|
11
|
%
|
|
(9
|
)%
|
|
(45
|
)%
|
(a)
|
The impact of foreign operations includes the effects of earnings and profits adjustments, foreign losses, and differences between foreign tax expense and foreign taxes eligible for the U.S. foreign tax credit.
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Deferred tax assets related to:
|
|
|
|
|
||||
Reserves and other accrued expenses
|
|
$
|
—
|
|
|
$
|
90
|
|
Pension obligations
|
|
—
|
|
|
6
|
|
||
Employee related liabilities
|
|
176
|
|
|
171
|
|
||
Deferred revenues
|
|
34
|
|
|
44
|
|
||
Net operating losses and tax credit carryforwards
|
|
3,122
|
|
|
3,116
|
|
||
U.S. foreign tax credits on undistributed earnings
|
|
252
|
|
|
330
|
|
||
Foreign exchange loss
|
|
33
|
|
|
32
|
|
||
Total deferred tax assets
|
|
3,617
|
|
|
3,789
|
|
||
Valuation allowance
|
|
(2,520
|
)
|
|
(2,694
|
)
|
||
Realizable deferred tax assets
|
|
1,097
|
|
|
1,095
|
|
||
Deferred tax liabilities related to:
|
|
|
|
|
||||
Property, equipment, and intangibles
|
|
(969
|
)
|
|
(1,019
|
)
|
||
Reserves and other accrued expenses
|
|
(49
|
)
|
|
—
|
|
||
Pension obligations
|
|
(4
|
)
|
|
—
|
|
||
Investment in affiliates and other
|
|
(217
|
)
|
|
(306
|
)
|
||
U.S. tax on foreign undistributed earnings
|
|
(252
|
)
|
|
(192
|
)
|
||
Total deferred tax liabilities
|
|
(1,491
|
)
|
|
(1,517
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(394
|
)
|
|
$
|
(422
|
)
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Deferred tax assets
|
|
$
|
15
|
|
|
$
|
9
|
|
Deferred tax liabilities
|
|
(409
|
)
|
|
(431
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(394
|
)
|
|
$
|
(422
|
)
|
|
|
As of December 31,
|
||
(in millions)
|
|
2016
|
||
Federal net operating loss carryforwards (a)
|
|
$
|
4,766
|
|
State net operating loss carryforwards (b)
|
|
5,893
|
|
|
Foreign net operating loss carryforwards (c)
|
|
3,079
|
|
|
Foreign tax credit carryforwards (d)
|
|
289
|
|
|
General business credit carryforwards (e)
|
|
12
|
|
|
Minimum tax credit carryforwards (f)
|
|
18
|
|
(a)
|
If not utilized, these carryforwards will expire in years 2024 through 2036.
|
(b)
|
If not utilized, these carryforwards will expire in years 2017 through 2036.
|
(c)
|
Foreign net operating loss carryforwards of
$66 million
, if not utilized, will expire in years 2017 through 2036. The remaining foreign net operating loss carryforwards of
$3.0 billion
have an indefinite life.
|
(d)
|
If not utilized, these carryforwards will expire in years 2018 through 2026.
|
(e)
|
If not utilized, these carryforwards will expire in years 2027 through 2035.
|
(f)
|
These carryforwards have an indefinite life.
|
(in millions)
|
|
Unrecognized Tax Benefits
|
||
Balance as of January 1, 2014
|
|
$
|
279
|
|
Increases for tax positions of prior years
|
|
3
|
|
|
Decreases for tax positions of prior years
|
|
(29
|
)
|
|
Increases for tax positions related to the current period
|
|
1
|
|
|
Decreases for cash settlements with taxing authorities
|
|
(13
|
)
|
|
Decreases due to the lapse of the applicable statute of limitations
|
|
(5
|
)
|
|
Balance as of December 31, 2014
|
|
236
|
|
|
Increases for tax positions of prior years
|
|
25
|
|
|
Decreases for tax positions of prior years
|
|
(4
|
)
|
|
Increases for tax positions related to the current period
|
|
1
|
|
|
Decreases for cash settlements with taxing authorities
|
|
(3
|
)
|
|
Decreases due to the lapse of the applicable statute of limitations
|
|
(6
|
)
|
|
Balance as of December 31, 2015
|
|
249
|
|
|
Increases for tax positions of prior years
|
|
2
|
|
|
Decreases for tax positions of prior years
|
|
(1
|
)
|
|
Increases for tax positions related to the current period
|
|
—
|
|
|
Decreases for cash settlements with taxing authorities
|
|
(1
|
)
|
|
Decreases due to the lapse of the applicable statute of limitations
|
|
(9
|
)
|
|
Balance as of December 31, 2016
|
|
$
|
240
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current year accrued interest expense (net of related tax benefits)
|
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
1
|
|
Cumulative accrued interest and penalties (net of related tax benefits)
|
|
48
|
|
|
45
|
|
|
39
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Restructuring, net
|
|
$
|
49
|
|
|
$
|
53
|
|
|
$
|
13
|
|
Pension settlement loss
|
|
10
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Other operating expenses
|
|
$
|
61
|
|
|
$
|
53
|
|
|
$
|
13
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Global Business Solutions
|
|
$
|
(9
|
)
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
Global Financial Solutions
|
|
(10
|
)
|
|
(11
|
)
|
|
1
|
|
|||
Network & Security Solutions
|
|
(3
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|||
Corporate
|
|
(27
|
)
|
|
(19
|
)
|
|
(12
|
)
|
|||
Restructuring, net
|
|
$
|
(49
|
)
|
|
$
|
(53
|
)
|
|
$
|
(13
|
)
|
(in millions)
|
|
Employee Severance
|
|
Other
|
||||
Remaining accrual as of January 1, 2015
|
|
$
|
12
|
|
|
$
|
1
|
|
Restructuring, net
|
|
46
|
|
|
7
|
|
||
Cash payments and other
|
|
(29
|
)
|
|
(7
|
)
|
||
Remaining accrual as of December 31, 2015
|
|
29
|
|
|
1
|
|
||
Restructuring, net
|
|
33
|
|
|
16
|
|
||
Loss on sale of property and equipment, net
|
|
—
|
|
|
(13
|
)
|
||
Cash payments and other
|
|
(53
|
)
|
|
(4
|
)
|
||
Remaining accrual as of December 31, 2016
|
|
$
|
9
|
|
|
$
|
—
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Settlement assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
1,620
|
|
|
$
|
1,426
|
|
Investment securities
|
|
—
|
|
|
1
|
|
||
Due from card associations, bank partners, and merchants
|
|
13,175
|
|
|
6,723
|
|
||
Total settlement assets
|
|
$
|
14,795
|
|
|
$
|
8,150
|
|
Settlement obligations:
|
|
|
|
|
|
|||
Payment instruments outstanding
|
|
$
|
12
|
|
|
$
|
34
|
|
Card settlements due to merchants
|
|
14,783
|
|
|
8,116
|
|
||
Total settlement obligations
|
|
$
|
14,795
|
|
|
$
|
8,150
|
|
•
|
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 interest rate swaps. The Company's interest rate contracts were used in a non-qualifying hedging relationship.
|
•
|
Floating to fixed interest rate collar contracts: The Company uses interest rate collar contracts 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 contracts 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 December 31,
|
||||||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||||||
(in millions)
|
|
Notional Currency
|
|
Notional Value
|
|
Assets (a)
|
|
Liabilities (a)
|
|
Notional Currency
|
|
Notional Value
|
|
Assets (a)
|
|
Liabilities (a)
|
||||||||||
Derivatives designated as hedges of net investments in foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign exchange contracts (b)
|
|
AUD
|
|
211
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
AUD
|
|
260
|
|
|
$
|
65
|
|
|
$
|
—
|
|
Foreign exchange contracts (c)
|
|
EUR
|
|
—
|
|
|
—
|
|
|
—
|
|
|
EUR
|
|
200
|
|
|
51
|
|
|
—
|
|
||||
Foreign exchange contracts (d)
|
|
GBP
|
|
300
|
|
|
78
|
|
|
—
|
|
|
GBP
|
|
250
|
|
|
39
|
|
|
—
|
|
||||
Foreign exchange contracts (e)
|
|
CAD
|
|
130
|
|
|
9
|
|
|
—
|
|
|
CAD
|
|
110
|
|
|
24
|
|
|
—
|
|
||||
|
|
|
|
|
|
144
|
|
|
—
|
|
|
|
|
|
|
179
|
|
|
—
|
|
||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate collar contracts (f)
|
|
USD
|
|
3,000
|
|
|
3
|
|
|
—
|
|
|
USD
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate contracts (g)
|
|
USD
|
|
—
|
|
|
—
|
|
|
—
|
|
|
USD
|
|
5,000
|
|
|
—
|
|
|
(56
|
)
|
||||
|
|
|
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
|
|
|
|
$
|
179
|
|
|
$
|
(56
|
)
|
(a)
|
Of the balances included in the table above, in aggregate,
$147 million
of assets as of
December 31, 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)
|
In connection with the divestiture of the Company's Australian ATM business, the Company settled notional value
49 million
AUD in October 2016 at a net settlement value of
$8 million
. Refer to note 16 "Supplemental Financial Information" for additional details on the divestiture of the Company's Australian ATM business.
|
(c)
|
Matured in January 2016 at a net settlement value of
$49 million
.
|
(d)
|
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.
|
(e)
|
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.
|
(f)
|
Subsequent to December 31, 2016, the Company entered into notional value
1.3 billion
USD interest rate collar contracts.
|
(g)
|
Matured in September 2016.
|
|
|
Year ended December 31,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
(in millions, pretax)
|
|
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 consolidated statements of comprehensive income (loss) (effective portion)
|
|
$
|
—
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
80
|
|
Gain recognized in "Derivative instruments" in the consolidated statements of comprehensive income (loss) (effective portion) (a)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(Loss) gain recognized in "Other income" in the consolidated statements of operations
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
2
|
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
(a)
|
Interest rate collar contracts.
|
|
|
Year ended December 31,
|
||||||||||
(in millions, after tax)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Accumulated gain (loss) included in other comprehensive income (loss) at beginning of the period
|
|
$
|
86
|
|
|
$
|
37
|
|
|
$
|
(12
|
)
|
Increase in fair value of derivatives that qualify for hedge accounting, net of tax (a) (b)
|
|
38
|
|
|
49
|
|
|
49
|
|
|||
Accumulated gain included in other comprehensive income at end of the period
|
|
$
|
124
|
|
|
$
|
86
|
|
|
$
|
37
|
|
(a)
|
Gains are included in "Derivative instruments" and “Foreign currency translation adjustment” on the consolidated statements of comprehensive income (loss).
|
(b)
|
Net of
$23 million
,
$30 million
, and
$31 million
of tax for the years ended
December 31, 2016
,
2015
, and
2014
, respectively.
|
Year ended December 31,
(in millions)
|
|
Amount
|
||
2017
|
|
$
|
56
|
|
2018
|
|
46
|
|
|
2019
|
|
41
|
|
|
2020
|
|
28
|
|
|
2021
|
|
26
|
|
|
Thereafter
|
|
96
|
|
|
Total
|
|
$
|
293
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
U.K. plan:
|
|
|
|
|
|
|
||
Plan benefit obligations
|
|
$
|
(713
|
)
|
|
$
|
(715
|
)
|
Fair value of plan assets
|
|
808
|
|
|
783
|
|
||
Net pension assets (a)
|
|
95
|
|
|
68
|
|
||
|
|
|
|
|
||||
U.S. and other foreign plans:
|
|
|
|
|
|
|||
Plan benefit obligations (b)
|
|
(222
|
)
|
|
(252
|
)
|
||
Fair value of plan assets
|
|
137
|
|
|
154
|
|
||
Net pension liabilities (c)
|
|
(85
|
)
|
|
(98
|
)
|
||
Funded status of the plans
|
|
$
|
10
|
|
|
$
|
(30
|
)
|
(a)
|
Pension assets are included in “Other long-term assets” of the consolidated balance sheets.
|
(b)
|
Reflects a
$30 million
reduction in plan benefit obligations resulting from the cash settlement of certain employee pension fund obligations, which resulted in a settlement loss of
$10 million
.
|
(c)
|
Pension liabilities are included in “Other long-term liabilities” of the consolidated balance sheets.
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Investment gains
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
100
|
|
Derivatives
|
|
(5
|
)
|
|
(17
|
)
|
|
—
|
|
|||
Divestitures
|
|
(34
|
)
|
|
5
|
|
|
2
|
|
|||
Non-operating foreign currency gains
|
|
19
|
|
|
41
|
|
|
59
|
|
|||
Other miscellaneous income
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Other income
|
|
$
|
17
|
|
|
$
|
29
|
|
|
$
|
161
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Prepaid expenses and other current assets:
|
|
|
|
|
|
|||
Prepaid expenses
|
|
$
|
168
|
|
|
$
|
139
|
|
Inventory
|
|
77
|
|
|
128
|
|
||
Other
|
|
115
|
|
|
114
|
|
||
Total Prepaid expenses and other current assets
|
|
$
|
360
|
|
|
$
|
381
|
|
Property and equipment:
|
|
|
|
|
|
|||
Land
|
|
$
|
56
|
|
|
$
|
79
|
|
Buildings
|
|
269
|
|
|
313
|
|
||
Leasehold improvements
|
|
89
|
|
|
79
|
|
||
Equipment and furniture
|
|
1,386
|
|
|
1,379
|
|
||
Equipment under capital lease
|
|
499
|
|
|
468
|
|
||
Property and equipment
|
|
2,299
|
|
|
2,318
|
|
||
Less: Accumulated depreciation
|
|
(1,416
|
)
|
|
(1,367
|
)
|
||
Total Property and equipment, net of accumulated depreciation
|
|
$
|
883
|
|
|
$
|
951
|
|
|
|
|
|
|
|
|||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
|||
Accounts payable
|
|
$
|
206
|
|
|
$
|
238
|
|
Accrued interest expense
|
|
169
|
|
|
132
|
|
||
Other accrued expenses
|
|
685
|
|
|
637
|
|
||
Other
|
|
504
|
|
|
632
|
|
||
Total Accounts payable and accrued liabilities
|
|
$
|
1,564
|
|
|
$
|
1,639
|
|
|
|
As of December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Total current assets
|
|
$
|
4,070
|
|
|
$
|
3,002
|
|
Total long-term assets
|
|
84
|
|
|
55
|
|
||
Total assets
|
|
$
|
4,154
|
|
|
$
|
3,057
|
|
|
|
|
|
|
||||
Total current liabilities
|
|
$
|
3,994
|
|
|
$
|
2,925
|
|
Total long-term liabilities
|
|
9
|
|
|
16
|
|
||
Total liabilities
|
|
$
|
4,003
|
|
|
$
|
2,941
|
|
|
|
Year ended December 31,
|
||||||||||
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net operating revenues
|
|
$
|
1,434
|
|
|
$
|
1,424
|
|
|
$
|
1,357
|
|
Operating expenses
|
|
666
|
|
|
666
|
|
|
638
|
|
|||
Operating income
|
|
$
|
768
|
|
|
$
|
758
|
|
|
$
|
719
|
|
Net income
|
|
$
|
749
|
|
|
$
|
744
|
|
|
$
|
696
|
|
FDC equity earnings
|
|
260
|
|
|
239
|
|
|
220
|
|
|
|
2016
|
||||||||||||||
(in millions, except per share amounts)
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
Revenues
|
|
$
|
2,777
|
|
|
$
|
2,928
|
|
|
$
|
2,936
|
|
|
$
|
2,943
|
|
Expenses
|
|
2,539
|
|
|
2,498
|
|
|
2,482
|
|
|
2,463
|
|
||||
Operating profit
|
|
$
|
238
|
|
|
$
|
430
|
|
|
$
|
454
|
|
|
$
|
480
|
|
Net (loss) income
|
|
$
|
(6
|
)
|
|
$
|
215
|
|
|
$
|
200
|
|
|
$
|
251
|
|
Net (loss) income attributable to First Data Corporation
|
|
(56
|
)
|
|
152
|
|
|
132
|
|
|
192
|
|
||||
Net (loss) income per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
(0.06
|
)
|
|
0.17
|
|
|
0.15
|
|
|
0.21
|
|
||||
Diluted
|
|
(0.06
|
)
|
|
0.17
|
|
|
0.14
|
|
|
0.21
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2015
|
||||||||||||||
(in millions, except per share amounts)
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
Revenues
|
|
$
|
2,695
|
|
|
$
|
2,872
|
|
|
$
|
2,920
|
|
|
$
|
2,964
|
|
Expenses
|
|
2,435
|
|
|
2,463
|
|
|
2,518
|
|
|
2,865
|
|
||||
Operating profit
|
|
$
|
260
|
|
|
$
|
409
|
|
|
$
|
402
|
|
|
$
|
99
|
|
Net (loss) income
|
|
$
|
(63
|
)
|
|
$
|
33
|
|
|
$
|
(75
|
)
|
|
$
|
(1,163
|
)
|
Net loss attributable to First Data Corporation
|
|
(112
|
)
|
|
(26
|
)
|
|
(126
|
)
|
|
(1,217
|
)
|
||||
Net loss per share, basic and diluted (a)
|
|
(112,000
|
)
|
|
(26,000
|
)
|
|
(126,000
|
)
|
|
(1.60
|
)
|
(a)
|
As a result of the prospective treatment of the HoldCo Merger, as discussed within note 1 "Summary of Significant Accounting Policies", net loss per share was computed using
1,000
shares outstanding for the first, second, and third quarters of 2015 and
763 million
for the fourth quarter of 2015.
|
•
|
the Guarantor ceases to be a “restricted subsidiary” for purpose of the agreement because FDC 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 FDC subject to the value of all Guarantors released under this provision does not exceed (x)
10%
of FDC’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.
|
|
|
Year ended December 31, 2016
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidation
Adjustments
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
—
|
|
|
$
|
3,924
|
|
|
$
|
2,979
|
|
|
$
|
(303
|
)
|
|
$
|
6,600
|
|
Product sales and other
|
|
—
|
|
|
835
|
|
|
555
|
|
|
(151
|
)
|
|
1,239
|
|
|||||
Total revenues (excluding reimbursable items)
|
|
—
|
|
|
4,759
|
|
|
3,534
|
|
|
(454
|
)
|
|
7,839
|
|
|||||
Reimbursable debit network fees, postage, and other
|
|
—
|
|
|
2,527
|
|
|
1,218
|
|
|
—
|
|
|
3,745
|
|
|||||
Total revenues
|
|
—
|
|
|
7,286
|
|
|
4,752
|
|
|
(454
|
)
|
|
11,584
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of items shown below)
|
|
—
|
|
|
1,597
|
|
|
1,447
|
|
|
(189
|
)
|
|
2,855
|
|
|||||
Cost of products sold
|
|
—
|
|
|
315
|
|
|
182
|
|
|
(160
|
)
|
|
337
|
|
|||||
Selling, general, and administrative
|
|
318
|
|
|
1,077
|
|
|
745
|
|
|
(105
|
)
|
|
2,035
|
|
|||||
Depreciation and amortization
|
|
5
|
|
|
571
|
|
|
373
|
|
|
—
|
|
|
949
|
|
|||||
Other operating expenses
|
|
7
|
|
|
41
|
|
|
13
|
|
|
—
|
|
|
61
|
|
|||||
Total expenses (excluding reimbursable items)
|
|
330
|
|
|
3,601
|
|
|
2,760
|
|
|
(454
|
)
|
|
6,237
|
|
|||||
Reimbursable debit network fees, postage, and other
|
|
—
|
|
|
2,527
|
|
|
1,218
|
|
|
—
|
|
|
3,745
|
|
|||||
Total expenses
|
|
330
|
|
|
6,128
|
|
|
3,978
|
|
|
(454
|
)
|
|
9,982
|
|
|||||
Operating (loss) profit
|
|
(330
|
)
|
|
1,158
|
|
|
774
|
|
|
—
|
|
|
1,602
|
|
|||||
Interest expense, net
|
|
(1,044
|
)
|
|
(18
|
)
|
|
(6
|
)
|
|
—
|
|
|
(1,068
|
)
|
|||||
Loss on debt extinguishment
|
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|||||
Interest income (expense) from intercompany notes
|
|
234
|
|
|
(219
|
)
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||||
Equity earnings from consolidated subsidiaries
|
|
997
|
|
|
369
|
|
|
—
|
|
|
(1,366
|
)
|
|
—
|
|
|||||
Other income (expense)
|
|
(1
|
)
|
|
(1
|
)
|
|
19
|
|
|
—
|
|
|
17
|
|
|||||
(Loss) income before income taxes and equity earnings in affiliates
|
|
(214
|
)
|
|
1,289
|
|
|
772
|
|
|
(1,366
|
)
|
|
481
|
|
|||||
Income tax (benefit) expense
|
|
(635
|
)
|
|
490
|
|
|
226
|
|
|
—
|
|
|
81
|
|
|||||
Equity earnings in affiliates
|
|
(1
|
)
|
|
231
|
|
|
30
|
|
|
—
|
|
|
260
|
|
|||||
Net (loss) income
|
|
420
|
|
|
1,030
|
|
|
576
|
|
|
(1,366
|
)
|
|
660
|
|
|||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
64
|
|
|
176
|
|
|
240
|
|
|||||
Net (loss) income attributable to First Data Corporation
|
|
$
|
420
|
|
|
$
|
1,030
|
|
|
$
|
512
|
|
|
$
|
(1,542
|
)
|
|
$
|
420
|
|
Comprehensive (loss) income
|
|
$
|
313
|
|
|
$
|
1,055
|
|
|
$
|
384
|
|
|
$
|
(1,204
|
)
|
|
$
|
548
|
|
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
59
|
|
|
176
|
|
|
235
|
|
|||||
Comprehensive (loss) income attributable to First Data Corporation
|
|
$
|
313
|
|
|
$
|
1,055
|
|
|
$
|
325
|
|
|
$
|
(1,380
|
)
|
|
$
|
313
|
|
|
|
Year ended December 31, 2015
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidation
Adjustments
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
—
|
|
|
$
|
3,906
|
|
|
$
|
2,999
|
|
|
$
|
(308
|
)
|
|
$
|
6,597
|
|
Product sales and other
|
|
—
|
|
|
741
|
|
|
503
|
|
|
(77
|
)
|
|
1,167
|
|
|||||
Total revenues (excluding reimbursable items)
|
|
—
|
|
|
4,647
|
|
|
3,502
|
|
|
(385
|
)
|
|
7,764
|
|
|||||
Reimbursable debit network fees, postage, and other
|
|
—
|
|
|
2,521
|
|
|
1,166
|
|
|
—
|
|
|
3,687
|
|
|||||
Total revenues
|
|
—
|
|
|
7,168
|
|
|
4,668
|
|
|
(385
|
)
|
|
11,451
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of items shown below)
|
|
—
|
|
|
1,576
|
|
|
1,473
|
|
|
(178
|
)
|
|
2,871
|
|
|||||
Cost of products sold
|
|
—
|
|
|
260
|
|
|
173
|
|
|
(77
|
)
|
|
356
|
|
|||||
Selling, general, and administrative
|
|
476
|
|
|
1,143
|
|
|
803
|
|
|
(130
|
)
|
|
2,292
|
|
|||||
Depreciation and amortization
|
|
12
|
|
|
620
|
|
|
390
|
|
|
—
|
|
|
1,022
|
|
|||||
Other operating expenses
|
|
8
|
|
|
24
|
|
|
21
|
|
|
—
|
|
|
53
|
|
|||||
Total expenses (excluding reimbursable items)
|
|
496
|
|
|
3,623
|
|
|
2,860
|
|
|
(385
|
)
|
|
6,594
|
|
|||||
Reimbursable debit network fees, postage, and other
|
|
—
|
|
|
2,521
|
|
|
1,166
|
|
|
—
|
|
|
3,687
|
|
|||||
Total expenses
|
|
496
|
|
|
6,144
|
|
|
4,026
|
|
|
(385
|
)
|
|
10,281
|
|
|||||
Operating (loss) profit
|
|
(496
|
)
|
|
1,024
|
|
|
642
|
|
|
—
|
|
|
1,170
|
|
|||||
Interest expense, net
|
|
(1,527
|
)
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(1,537
|
)
|
|||||
Loss on debt extinguishment
|
|
(1,068
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,068
|
)
|
|||||
Interest income (expense) from intercompany notes
|
|
288
|
|
|
(289
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Equity earnings from consolidated subsidiaries
|
|
810
|
|
|
304
|
|
|
—
|
|
|
(1,114
|
)
|
|
—
|
|
|||||
Other income (expense)
|
|
55
|
|
|
3
|
|
|
(29
|
)
|
|
—
|
|
|
29
|
|
|||||
(Loss) income before income taxes and equity earnings in affiliates
|
|
(1,938
|
)
|
|
1,032
|
|
|
614
|
|
|
(1,114
|
)
|
|
(1,406
|
)
|
|||||
Income tax (benefit) expense
|
|
(457
|
)
|
|
422
|
|
|
136
|
|
|
—
|
|
|
101
|
|
|||||
Equity earnings in affiliates
|
|
—
|
|
|
213
|
|
|
26
|
|
|
—
|
|
|
239
|
|
|||||
Net (loss) income
|
|
(1,481
|
)
|
|
823
|
|
|
504
|
|
|
(1,114
|
)
|
|
(1,268
|
)
|
|||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
66
|
|
|
147
|
|
|
213
|
|
|||||
Net (loss) income attributable to First Data Corporation
|
|
$
|
(1,481
|
)
|
|
$
|
823
|
|
|
$
|
438
|
|
|
$
|
(1,261
|
)
|
|
$
|
(1,481
|
)
|
Comprehensive (loss) income
|
|
$
|
(1,771
|
)
|
|
$
|
760
|
|
|
$
|
158
|
|
|
$
|
(715
|
)
|
|
$
|
(1,568
|
)
|
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
56
|
|
|
147
|
|
|
203
|
|
|||||
Comprehensive (loss) income attributable to First Data Corporation
|
|
$
|
(1,771
|
)
|
|
$
|
760
|
|
|
$
|
102
|
|
|
$
|
(862
|
)
|
|
$
|
(1,771
|
)
|
|
|
Year ended December 31, 2014
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidation
Adjustments
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Transaction and processing service fees
|
|
$
|
—
|
|
|
$
|
3,712
|
|
|
$
|
3,056
|
|
|
$
|
(258
|
)
|
|
$
|
6,510
|
|
Product sales and other
|
|
—
|
|
|
625
|
|
|
473
|
|
|
(60
|
)
|
|
1,038
|
|
|||||
Total revenues (excluding reimbursable items)
|
|
—
|
|
|
4,337
|
|
|
3,529
|
|
|
(318
|
)
|
|
7,548
|
|
|||||
Reimbursable debit network fees, postage, and other
|
|
—
|
|
|
2,510
|
|
|
1,094
|
|
|
—
|
|
|
3,604
|
|
|||||
Total revenues
|
|
—
|
|
|
6,847
|
|
|
4,623
|
|
|
(318
|
)
|
|
11,152
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of services (exclusive of items shown below)
|
|
—
|
|
|
1,403
|
|
|
1,523
|
|
|
(258
|
)
|
|
2,668
|
|
|||||
Cost of products sold
|
|
—
|
|
|
223
|
|
|
167
|
|
|
(60
|
)
|
|
330
|
|
|||||
Selling, general, and administrative
|
|
131
|
|
|
1,125
|
|
|
787
|
|
|
—
|
|
|
2,043
|
|
|||||
Depreciation and amortization
|
|
10
|
|
|
607
|
|
|
439
|
|
|
—
|
|
|
1,056
|
|
|||||
Other operating expenses
|
|
10
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Total expenses (excluding reimbursable items)
|
|
151
|
|
|
3,361
|
|
|
2,916
|
|
|
(318
|
)
|
|
6,110
|
|
|||||
Reimbursable debit network fees, postage, and other
|
|
—
|
|
|
2,510
|
|
|
1,094
|
|
|
—
|
|
|
3,604
|
|
|||||
Total expenses
|
|
151
|
|
|
5,871
|
|
|
4,010
|
|
|
(318
|
)
|
|
9,714
|
|
|||||
Operating (loss) profit
|
|
(151
|
)
|
|
976
|
|
|
613
|
|
|
—
|
|
|
1,438
|
|
|||||
Interest expense, net
|
|
(1,724
|
)
|
|
(9
|
)
|
|
5
|
|
|
—
|
|
|
(1,728
|
)
|
|||||
Loss on debt extinguishment
|
|
(274
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(274
|
)
|
|||||
Interest income (expense) from intercompany notes
|
|
316
|
|
|
(305
|
)
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|||||
Equity earnings from consolidated subsidiaries
|
|
833
|
|
|
294
|
|
|
—
|
|
|
(1,127
|
)
|
|
—
|
|
|||||
Other income (expense)
|
|
81
|
|
|
100
|
|
|
(20
|
)
|
|
—
|
|
|
161
|
|
|||||
(Loss) income before income taxes and equity earnings in affiliates
|
|
(919
|
)
|
|
1,056
|
|
|
587
|
|
|
(1,127
|
)
|
|
(403
|
)
|
|||||
Income tax (benefit) expense
|
|
(461
|
)
|
|
377
|
|
|
166
|
|
|
—
|
|
|
82
|
|
|||||
Equity earnings in affiliates
|
|
—
|
|
|
202
|
|
|
18
|
|
|
—
|
|
|
220
|
|
|||||
Net (loss) income
|
|
(458
|
)
|
|
881
|
|
|
439
|
|
|
(1,127
|
)
|
|
(265
|
)
|
|||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
66
|
|
|
127
|
|
|
193
|
|
|||||
Net (loss) income attributable to First Data Corporation
|
|
$
|
(458
|
)
|
|
$
|
881
|
|
|
$
|
373
|
|
|
$
|
(1,254
|
)
|
|
$
|
(458
|
)
|
Comprehensive (loss) income
|
|
$
|
(798
|
)
|
|
$
|
709
|
|
|
$
|
187
|
|
|
$
|
(714
|
)
|
|
$
|
(616
|
)
|
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
55
|
|
|
127
|
|
|
182
|
|
|||||
Comprehensive (loss) income attributable to First Data Corporation
|
|
$
|
(798
|
)
|
|
$
|
709
|
|
|
$
|
132
|
|
|
$
|
(841
|
)
|
|
$
|
(798
|
)
|
|
|
As of December 31, 2016
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidation
Adjustments
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
378
|
|
|
$
|
—
|
|
|
$
|
385
|
|
Accounts receivable, net of allowance for doubtful accounts
|
|
—
|
|
|
593
|
|
|
1,284
|
|
|
—
|
|
|
1,877
|
|
|||||
Settlement assets (a)
|
|
—
|
|
|
7,457
|
|
|
7,338
|
|
|
—
|
|
|
14,795
|
|
|||||
Intercompany notes receivable
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Other current assets
|
|
109
|
|
|
147
|
|
|
104
|
|
|
—
|
|
|
360
|
|
|||||
Total current assets
|
|
110
|
|
|
8,204
|
|
|
9,104
|
|
|
(1
|
)
|
|
17,417
|
|
|||||
Property and equipment, net of accumulated depreciation
|
|
52
|
|
|
577
|
|
|
254
|
|
|
—
|
|
|
883
|
|
|||||
Goodwill
|
|
—
|
|
|
9,145
|
|
|
7,551
|
|
|
—
|
|
|
16,696
|
|
|||||
Customer relationships, net of accumulated amortization
|
|
—
|
|
|
1,026
|
|
|
713
|
|
|
—
|
|
|
1,739
|
|
|||||
Other intangibles, net of accumulated amortization
|
|
604
|
|
|
735
|
|
|
461
|
|
|
—
|
|
|
1,800
|
|
|||||
Investment in affiliates
|
|
6
|
|
|
860
|
|
|
122
|
|
|
—
|
|
|
988
|
|
|||||
Long-term intercompany receivables
|
|
3,866
|
|
|
12,001
|
|
|
2,822
|
|
|
(18,689
|
)
|
|
—
|
|
|||||
Long-term intercompany notes receivable
|
|
3,481
|
|
|
197
|
|
|
9
|
|
|
(3,687
|
)
|
|
—
|
|
|||||
Deferred tax assets
|
|
510
|
|
|
—
|
|
|
—
|
|
|
(510
|
)
|
|
—
|
|
|||||
Other long-term assets
|
|
212
|
|
|
302
|
|
|
298
|
|
|
(43
|
)
|
|
769
|
|
|||||
Investment in consolidated subsidiaries
|
|
26,286
|
|
|
5,981
|
|
|
—
|
|
|
(32,267
|
)
|
|
—
|
|
|||||
Total assets
|
|
$
|
35,127
|
|
|
$
|
39,028
|
|
|
$
|
21,334
|
|
|
$
|
(55,197
|
)
|
|
$
|
40,292
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable and accrued liabilities
|
|
$
|
227
|
|
|
$
|
781
|
|
|
$
|
555
|
|
|
$
|
1
|
|
|
$
|
1,564
|
|
Short-term and current portion of long-term borrowings
|
|
—
|
|
|
110
|
|
|
249
|
|
|
(1
|
)
|
|
358
|
|
|||||
Settlement obligations (a)
|
|
—
|
|
|
7,457
|
|
|
7,338
|
|
|
—
|
|
|
14,795
|
|
|||||
Intercompany notes payable
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||
Total current liabilities
|
|
227
|
|
|
8,348
|
|
|
8,143
|
|
|
(1
|
)
|
|
16,717
|
|
|||||
Long-term borrowings
|
|
17,916
|
|
|
202
|
|
|
13
|
|
|
—
|
|
|
18,131
|
|
|||||
Deferred tax liabilities
|
|
—
|
|
|
817
|
|
|
102
|
|
|
(510
|
)
|
|
409
|
|
|||||
Long-term intercompany payables
|
|
15,097
|
|
|
2,769
|
|
|
823
|
|
|
(18,689
|
)
|
|
—
|
|
|||||
Long-term intercompany notes payable
|
|
206
|
|
|
3,481
|
|
|
—
|
|
|
(3,687
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
|
461
|
|
|
245
|
|
|
168
|
|
|
(43
|
)
|
|
831
|
|
|||||
Total liabilities
|
|
33,907
|
|
|
15,862
|
|
|
9,249
|
|
|
(22,930
|
)
|
|
36,088
|
|
|||||
Redeemable equity interest
|
|
—
|
|
|
—
|
|
|
73
|
|
|
(73
|
)
|
|
—
|
|
|||||
Redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
73
|
|
|||||
First Data Corporation stockholders' equity (deficit)
|
|
1,220
|
|
|
23,166
|
|
|
6,175
|
|
|
(29,341
|
)
|
|
1,220
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
94
|
|
|
2,817
|
|
|
2,911
|
|
|||||
Equity of consolidated alliance
|
|
—
|
|
|
—
|
|
|
5,743
|
|
|
(5,743
|
)
|
|
—
|
|
|||||
Total equity
|
|
1,220
|
|
|
23,166
|
|
|
12,012
|
|
|
(32,267
|
)
|
|
4,131
|
|
|||||
Total liabilities and equity
|
|
$
|
35,127
|
|
|
$
|
39,028
|
|
|
$
|
21,334
|
|
|
$
|
(55,197
|
)
|
|
$
|
40,292
|
|
(a)
|
The majority of the Guarantor settlement assets relate to FDC’s merchant acquiring business. FDC 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
|
)
|
|
—
|
|
|||||
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' (deficit) 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 FDC’s merchant acquiring business. FDC believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities.
|
|
|
Year ended December 31, 2016
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidation
Adjustments
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income
|
|
$
|
420
|
|
|
$
|
1,030
|
|
|
$
|
576
|
|
|
$
|
(1,366
|
)
|
|
$
|
660
|
|
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)
|
|
5
|
|
|
645
|
|
|
411
|
|
|
—
|
|
|
1,061
|
|
|||||
Charges (gains) related to other operating expenses and other income (expense)
|
|
8
|
|
|
42
|
|
|
(6
|
)
|
|
—
|
|
|
44
|
|
|||||
Loss on debt extinguishment
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|||||
Stock-based compensation expense
|
|
263
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|||||
Other non-cash and non-operating items, net
|
|
(961
|
)
|
|
(366
|
)
|
|
(4
|
)
|
|
1,366
|
|
|
35
|
|
|||||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions,
resulting from changes in operating assets and liabilities
|
|
(583
|
)
|
|
432
|
|
|
129
|
|
|
—
|
|
|
(22
|
)
|
|||||
Net cash (used in) provided by operating activities
|
|
(778
|
)
|
|
1,783
|
|
|
1,106
|
|
|
—
|
|
|
2,111
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to property and equipment
|
|
(2
|
)
|
|
(70
|
)
|
|
(160
|
)
|
|
—
|
|
|
(232
|
)
|
|||||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs
|
|
—
|
|
|
(185
|
)
|
|
(60
|
)
|
|
—
|
|
|
(245
|
)
|
|||||
Acquisitions, net of cash acquired
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Proceeds from dispositions
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
38
|
|
|||||
Proceeds from sale of property and equipment
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||
Other investing activities, net
|
|
206
|
|
|
281
|
|
|
30
|
|
|
(497
|
)
|
|
20
|
|
|||||
Net cash provided by (used in) investing activities
|
|
236
|
|
|
26
|
|
|
(152
|
)
|
|
(497
|
)
|
|
(387
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term borrowings, net
|
|
—
|
|
|
—
|
|
|
205
|
|
|
—
|
|
|
205
|
|
|||||
Proceeds from issuance of long-term debt
|
|
3,533
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,533
|
|
|||||
Payment of call premiums and debt issuance cost
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|||||
Principal payments on long-term debt
|
|
(4,986
|
)
|
|
(80
|
)
|
|
(7
|
)
|
|
—
|
|
|
(5,073
|
)
|
|||||
Payment of taxes related to net settlement of equity awards
|
|
(61
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
|||||
Proceeds from issuance of common stock
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
(264
|
)
|
|
(316
|
)
|
|||||
Distributions paid to equity holders
|
|
—
|
|
|
—
|
|
|
(541
|
)
|
|
541
|
|
|
—
|
|
|||||
Other financing activities, net
|
|
—
|
|
|
8
|
|
|
(220
|
)
|
|
220
|
|
|
8
|
|
|||||
Intercompany
|
|
1,981
|
|
|
(1,748
|
)
|
|
(233
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
437
|
|
|
(1,820
|
)
|
|
(848
|
)
|
|
497
|
|
|
(1,734
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
2
|
|
|
(36
|
)
|
|
—
|
|
|
(34
|
)
|
|||||
Change in cash and cash equivalents
|
|
(105
|
)
|
|
(9
|
)
|
|
70
|
|
|
—
|
|
|
(44
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
105
|
|
|
16
|
|
|
308
|
|
|
—
|
|
|
429
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
378
|
|
|
$
|
—
|
|
|
$
|
385
|
|
|
|
Year ended December 31, 2015
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidation
Adjustments
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (loss) income
|
|
$
|
(1,481
|
)
|
|
$
|
823
|
|
|
$
|
504
|
|
|
$
|
(1,114
|
)
|
|
$
|
(1,268
|
)
|
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)
|
|
12
|
|
|
701
|
|
|
420
|
|
|
—
|
|
|
1,133
|
|
|||||
(Gains) charges related to other operating expenses and other income (expense)
|
|
(47
|
)
|
|
21
|
|
|
50
|
|
|
—
|
|
|
24
|
|
|||||
Loss on debt extinguishment
|
|
1,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,068
|
|
|||||
Stock-based compensation expense
|
|
329
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
329
|
|
|||||
Other non-cash and non-operating items, net
|
|
(746
|
)
|
|
(306
|
)
|
|
(14
|
)
|
|
1,114
|
|
|
48
|
|
|||||
(Decrease) increase in cash resulting from changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions
|
|
(1,044
|
)
|
|
431
|
|
|
74
|
|
|
—
|
|
|
(539
|
)
|
|||||
Net cash (used in) provided by operating activities
|
|
(1,909
|
)
|
|
1,670
|
|
|
1,034
|
|
|
—
|
|
|
795
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to property and equipment
|
|
(9
|
)
|
|
(107
|
)
|
|
(166
|
)
|
|
—
|
|
|
(282
|
)
|
|||||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs
|
|
—
|
|
|
(264
|
)
|
|
(56
|
)
|
|
—
|
|
|
(320
|
)
|
|||||
Acquisitions, net of cash acquired
|
|
(70
|
)
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
(89
|
)
|
|||||
Proceeds from dispositions
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Other investing activities, net
|
|
134
|
|
|
254
|
|
|
—
|
|
|
(403
|
)
|
|
(15
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
55
|
|
|
(115
|
)
|
|
(222
|
)
|
|
(403
|
)
|
|
(685
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term borrowings, net
|
|
(10
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(31
|
)
|
|||||
Proceeds from issuance of long-term debt
|
|
10,258
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,258
|
|
|||||
Payment of call premiums and debt issuance cost
|
|
(1,062
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,062
|
)
|
|||||
Principal payments on long-term debt
|
|
(11,472
|
)
|
|
(87
|
)
|
|
(9
|
)
|
|
—
|
|
|
(11,568
|
)
|
|||||
Proceeds from issuance of common stock
|
|
2,718
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,718
|
|
|||||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|
(243
|
)
|
|
(312
|
)
|
|||||
Distributions paid to equity holders
|
|
—
|
|
|
—
|
|
|
(497
|
)
|
|
497
|
|
|
—
|
|
|||||
Capital transactions with former parent, net
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|||||
Other financing activities, net
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
149
|
|
|
—
|
|
|||||
Intercompany
|
|
1,546
|
|
|
(1,477
|
)
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
1,959
|
|
|
(1,564
|
)
|
|
(814
|
)
|
|
403
|
|
|
(16
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
2
|
|
|
(25
|
)
|
|
—
|
|
|
(23
|
)
|
|||||
Change in cash and cash equivalents
|
|
105
|
|
|
(7
|
)
|
|
(27
|
)
|
|
—
|
|
|
71
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
23
|
|
|
335
|
|
|
—
|
|
|
358
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
105
|
|
|
$
|
16
|
|
|
$
|
308
|
|
|
$
|
—
|
|
|
$
|
429
|
|
|
|
Year ended December 31, 2014
|
||||||||||||||||||
(in millions)
|
|
FDC Parent
Company
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidation
Adjustments
|
|
Consolidated
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (loss) income
|
|
$
|
(458
|
)
|
|
$
|
881
|
|
|
$
|
439
|
|
|
$
|
(1,127
|
)
|
|
$
|
(265
|
)
|
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
|
|
|
683
|
|
|
470
|
|
|
—
|
|
|
1,163
|
|
|||||
(Gains) charges related to other operating expenses and other income (expense)
|
|
(71
|
)
|
|
(97
|
)
|
|
20
|
|
|
—
|
|
|
(148
|
)
|
|||||
Loss on debt extinguishment
|
|
274
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
274
|
|
|||||
Stock-based compensation expense
|
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
Other non-cash and non-operating items, net
|
|
(751
|
)
|
|
(306
|
)
|
|
—
|
|
|
1,127
|
|
|
70
|
|
|||||
(Decrease) increase in cash resulting from changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions
|
|
(731
|
)
|
|
571
|
|
|
50
|
|
|
—
|
|
|
(110
|
)
|
|||||
Net cash (used in) provided by operating activities
|
|
(1,676
|
)
|
|
1,732
|
|
|
979
|
|
|
—
|
|
|
1,035
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to property and equipment
|
|
(8
|
)
|
|
(124
|
)
|
|
(176
|
)
|
|
—
|
|
|
(308
|
)
|
|||||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs
|
|
—
|
|
|
(183
|
)
|
|
(76
|
)
|
|
—
|
|
|
(259
|
)
|
|||||
Acquisitions, net of cash acquired
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|||||
Proceeds from dispositions
|
|
—
|
|
|
270
|
|
|
—
|
|
|
—
|
|
|
270
|
|
|||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|||||
Other investing activities, net
|
|
75
|
|
|
232
|
|
|
(4
|
)
|
|
(307
|
)
|
|
(4
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
67
|
|
|
166
|
|
|
(255
|
)
|
|
(307
|
)
|
|
(329
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term borrowings, net
|
|
10
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
12
|
|
|||||
Proceeds from issuance of long-term debt
|
|
1,830
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,830
|
|
|||||
Payment of call premiums and debt issuance cost
|
|
(355
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(355
|
)
|
|||||
Principal payments on long-term debt
|
|
(3,673
|
)
|
|
(73
|
)
|
|
(5
|
)
|
|
—
|
|
|
(3,751
|
)
|
|||||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
(221
|
)
|
|
(266
|
)
|
|||||
Distributions paid to equity holders
|
|
—
|
|
|
—
|
|
|
(453
|
)
|
|
453
|
|
|
—
|
|
|||||
Capital transactions with former parent, net
|
|
1,788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,788
|
|
|||||
Other financing activities, net
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
|
75
|
|
|
(1
|
)
|
|||||
Intercompany
|
|
1,973
|
|
|
(1,840
|
)
|
|
(133
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
1,573
|
|
|
(1,913
|
)
|
|
(710
|
)
|
|
307
|
|
|
(743
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
5
|
|
|
(35
|
)
|
|
—
|
|
|
(30
|
)
|
|||||
Change in cash and cash equivalents
|
|
(36
|
)
|
|
(10
|
)
|
|
(21
|
)
|
|
—
|
|
|
(67
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
36
|
|
|
33
|
|
|
356
|
|
|
—
|
|
|
425
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
335
|
|
|
$
|
—
|
|
|
$
|
358
|
|
|
|
|
|
Additions
|
|
Deductions
|
|
|
||||||||||||
Description (in millions)
|
|
Balance at
Beginning of
Period
|
|
Charged
to Costs and
Expenses
|
|
Reclassifications from Other Accounts (a)
|
|
Write-offs Against Assets
|
|
Balance at
End of
Period
|
||||||||||
Year ended December 31, 2016 deducted from receivables
|
|
$
|
83
|
|
|
$
|
85
|
|
|
$
|
1
|
|
|
$
|
82
|
|
|
$
|
87
|
|
Year ended December 31, 2015 deducted from receivables
|
|
72
|
|
|
79
|
|
|
3
|
|
|
71
|
|
|
83
|
|
|||||
Year ended December 31, 2014 deducted from receivables
|
|
43
|
|
|
99
|
|
|
11
|
|
|
81
|
|
|
72
|
|
(a)
|
Amounts related to reclassifications from "Accounts payable and accrued liabilities" to "Allowance for doubtful accounts" in the Company's consolidated balance sheets.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
/s/ Ernst & Young LLP
|
|
|
|
Atlanta, Georgia
|
|
February 24, 2017
|
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
Financial Statements
|
(2)
|
Financial Statement Schedules
|
(b)
|
The following exhibits are filed as part of this Annual Report or, where indicated, were filed and are incorporated by reference:
|
Incorporated by Reference
|
||||||||||
Exhibit Number
|
|
Exhibit Description
|
Form
|
|
File Number
|
|
Exhibit Number
|
|
Filing Date
|
|
3.1(a)
|
|
Ninth Amended and Restated Certificate of Incorporation
|
8-K
|
|
1-11073
|
|
3.1
|
|
10/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1(b)
|
|
Certificate of Retirement of 175,001,996 Shares of Class B Common Stock
|
8-K
|
|
1-11073
|
|
3.1
|
|
12/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
Amended and Restated By-laws
|
S-1/A
|
|
1-11073
|
|
3.2
|
|
10/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Indenture, dated as August 16, 2012, by and among First Data Corporation, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 6.750% Senior Secured Notes due 2020
|
8-K
|
|
1-11073
|
|
10.2
|
|
8/20/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
First Supplemental Indenture, dated as September 27, 2012, by and among First Data Corporation, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the additional 6.750% Senior Secured Notes due 2020
|
8-K
|
|
1-11073
|
|
10.2
|
|
10/2/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3
|
|
Indenture, dated as of August 11, 2015, among First Data Corporation, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 5.375% Senior Secured Notes Due 2023
|
8-K
|
|
1-11073
|
|
4.1
|
|
8/13/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
Indenture, dated as November 18, 2015, by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 7.000% Senior Notes due 2023
|
8-K
|
|
1-11073
|
|
4.1
|
|
11/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.5
|
|
Indenture, dated as November 25, 2015, by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 5.000% Senior Secured Notes due 2024
|
8-K
|
|
1-11073
|
|
4.1
|
|
12/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
4.6
|
|
Indenture, dated as November 25, 2015, by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 5.750% Senior Secured Second Lien Notes due 2024
|
8-K
|
|
1-11073
|
|
4.4
|
|
12/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.7
|
|
First Supplemental Indenture, dated as of March 29, 2016, by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the additional 5.000% Senior Secured Notes due 2024
|
8-K
|
|
1-11073
|
|
4.2
|
|
3/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
4.8
|
|
Credit Agreement, dated as of September 24, 2007, as amended and restated as of September 28, 2007 among First Data Corporation, the several lenders from time to time parties thereto, Credit Suisse, Cayman Islands Branch, as administrative agent, swingline lender and letter of credit issuer, Citibank, N.A., as syndication agent, and Credit Suisse Securities (USA) LLC, Citigroup Global Markets, Inc., Deutsche Bank Securities Inc., Goldman Sachs Credit Partners L.P., HSBC Securities (USA) Inc., Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers and bookrunners
|
10-K
|
|
1-11073
|
|
10.1
|
|
3/13/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
4.9
|
|
Guarantee Agreement, dated September 24, 2007, among First Data Corporation, the subsidiaries of First Data Corporation identified therein and Credit Suisse, Cayman Islands Branch, as Collateral Agent
|
10-Q
|
|
1-11073
|
|
10.11
|
|
11/14/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
4.10
|
|
Pledge Agreement, dated September 24, 2007, among First Data Corporation, the subsidiaries of First Data Corporation identified therein, and Credit Suisse, Cayman Islands Branch, as Collateral Agent
|
10-Q
|
|
1-11073
|
|
10.12
|
|
11/14/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
4.11
|
|
Security Agreement, dated September 24, 2007, among First Data Corporation, the subsidiaries of First Data Corporation identified therein, and Credit Suisse, Cayman Islands Branch, as Collateral Agent
|
10-Q
|
|
1-11073
|
|
10.13
|
|
11/14/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
4.12
|
|
2015 June Joinder Agreement, dated as of July 10, 2015, among the Company, certain of its subsidiaries, the lender party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent Exhibit B-Marked Pages of the Conformed Credit Agreement
|
8-K
|
|
1-11073
|
|
4.1
|
|
7/15/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.13
|
|
Amended and Restated Pledge Agreement, dated as of August 11, 2015, among First Data Corporation, the other pledgors named therein and Wells Fargo Bank, National Association, as collateral agent
|
8-K
|
|
1-11073
|
|
4.3
|
|
8/13/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.14
|
|
Amended and Restated Security Agreement, dated as of August 11, 2015, among First Data Corporation, the other grantors named therein and Wells Fargo Bank, National Association, as collateral agent
|
8-K
|
|
1-11073
|
|
4.2
|
|
8/13/2015
|
|
|
|
|
|
|
|
|
|
|
|
4.15
|
|
2015 November Joinder Agreement, dated as of November 24, 2015, among the Company, certain of its subsidiaries, the lender party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent Exhibit B - Marked Pages of the Conformed Credit Agreement
|
8-K
|
|
1-11073
|
|
4.7
|
|
12/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.16
|
|
Amended and Restated Security Agreement, dated as of November 25, 2015, among the Company, the other grantors named therein and Wells Fargo Bank, National Association, as collateral agent
|
8-K
|
|
1-11073
|
|
4.5
|
|
12/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.17
|
|
Amended and Restated Pledge Agreement, dated as of November 25, 2015, among the Company, the other pledgors named therein and Wells Fargo Bank, National Association, as collateral agent
|
8-K
|
|
1-11073
|
|
4.6
|
|
12/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.18
|
|
2016 March Extension Amendment and Joinder, dated as of April 13, 2016, among the Company, certain of its subsidiaries, the 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
|
|
4/19/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
4.19
|
|
2016 May Extension Amendment and Joinder, dated as of June 2, 2016, among the Company, 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
|
|
6/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
4.20
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
4.21
|
|
2016 November Joinder Agreement, dated as of December 5, 2016, among the Company, 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
|
|
12/7/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
4.22
|
|
2017 January Joinder Agreement, dated as of January 23, 2017, among the Company, 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
|
|
1/24/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
4.23
|
|
Registration Rights Agreement, dated as of September 24, 2007 with New Omaha Holdings L.P. and other Investors party thereto
|
S-1/A
|
|
1-11073
|
|
4.22
|
|
8/25/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Stockholders Agreement, dated as of July 11, 2014 with New Omaha Holdings L.P. and other Holders party thereto
|
S-1/A
|
|
1-11073
|
|
10.15
|
|
8/25/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
Form of Sale Participation Agreement
|
10-Q
|
|
1-11073
|
|
10.8
|
|
11/14/2007
|
|
|
|
|
|
|
|
|
|
|
|
10.3 *
|
|
Form of Management Stockholder’s Agreement for Executive Committee Members (as amended)
|
10-K
|
|
1-11073
|
|
10.16
|
|
3/19/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4 *
|
|
Form of Management Stockholder’s Agreement
|
S-1
|
|
1-11073
|
|
10.18
|
|
7/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5 *
|
|
First Data Corporation Senior Executive Incentive Plan as amended and restated effective January 1, 2014
|
10-K
|
|
1-11073
|
|
10.21
|
|
3/10/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6 *
|
|
2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates, as amended
|
10-K
|
|
1-11073
|
|
10.10
|
|
2/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7 *
|
|
Form of Stock Option Agreement for Executive Committee Members
|
10-Q
|
|
1-11073
|
|
10.6
|
|
11/14/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8 *
|
|
Form of Stock Option Agreement
|
8-K
|
|
1-11073
|
|
10.3
|
|
5/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9 *
|
|
Form of Stock Option Agreement for U.S. Employees effective for grants in or after January 2014
|
S-1
|
|
1-11073
|
|
10.16
|
|
7/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10 *
|
|
Form of Restricted Stock Agreement for Management Committee effective for grants in or after January 2014
|
S-1
|
|
1-11073
|
|
10.17
|
|
7/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11 *
|
|
Form of Restricted Stock Award Agreement
|
8-K
|
|
1-11073
|
|
10.2
|
|
5/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12 *
|
|
First Data Corporation 2015 Omnibus Incentive Plan
|
8-K
|
|
1-11073
|
|
10.1
|
|
10/19/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13 *
|
|
Form of Option Grant Notice and Option Grant Agreement under the 2015 Omnibus Incentive Plan
|
S-1/A
|
|
1-11073
|
|
10.21
|
|
10/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14 *
|
|
Form of Restricted Stock Grant Notice and Restricted Stock Grant Agreement under the 2015 Omnibus Incentive Plan
|
S-1/A
|
|
1-11073
|
|
10.22
|
|
10/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15 *
|
|
Form of Option Agreement under the 2015 Omnibus Incentive Plan for Management Committee and Directors
|
10-K
|
|
1-11073
|
|
10.16
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.16 *
|
|
Form of Restricted Stock Award Agreement under the 2015 Omnibus Incentive Plan for Management Committee and Directors
|
10-K
|
|
1-11073
|
|
10.17
|
|
2/25/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.17 *
|
|
Form of Option Agreement under the 2015 Omnibus Incentive Plan approved August 2016
|
10-Q
|
|
1-11073
|
|
10.1
|
|
11/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18 *
|
|
Form of Restricted Stock Award Agreement under the 2015 Omnibus Incentive Plan approved August 2016
|
10-Q
|
|
1-11073
|
|
10.2
|
|
11/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.19 *
|
|
Description of Modifications to Award Agreements for owner-associates other than Management Committee
|
10-Q
|
|
1-11073
|
|
10.3
|
|
11/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.20 *
|
|
First Data Corporation Amended and Restated 2015 Employee Stock Purchase Plan
|
10-Q
|
|
1-11073
|
|
10.1
|
|
5/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.21 *
|
|
Form of Cash Bonus Letter Agreement
|
S-1/A
|
|
1-11073
|
|
10.23
|
|
10/1/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.22 *
|
|
First Data Corporation Severance / Change in Control Policy (Management Committee Level), as amended and restated effective January 1, 2015
|
10-K
|
|
1-11073
|
|
10.11
|
|
2/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
10.23 (1)*
|
|
Description of Compensation of Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.24 *
|
|
2008 Non-Employee Director Deferred Compensation Plan
|
S-4
|
|
1-11073
|
|
10.25
|
|
8/13/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
10.25 *
|
|
Employment Agreement with Frank J. Bisignano effective September 18, 2015
|
8-K
|
|
1-11073
|
|
10.1
|
|
9/24/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.26
|
|
Receivables Financing Agreement dated December 31, 2015 between First Data Corporation, First Data Receivables, LLC, PNC Bank, National Association, and the persons from time to time party thereto as Lenders and Group Agents
|
8-K
|
|
1-11073
|
|
10.1
|
|
1/7/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.27
|
|
Transfer and Contribution Agreement dated December 31, 2015 between First Data Corporation, First Data Receivables, LLC, First Data Resources, LLC, Remitco LLC, TeleCheck Services, Inc., Star Networks, Inc., Star Processing, Inc., Instant Cash Services, LLC, TASQ Technology, Inc., First Data Government Solutions, Inc., and First Data Government Solutions, LP
|
8-K
|
|
1-11073
|
|
10.2
|
|
1/7/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.28 (1)
|
|
First Amendment to Transfer and Contribution Agreement dated December 31, 2015 between First Data Corporation, First Data Receivables, LLC, First Data Resources, LLC, Remitco LLC, TeleCheck Services, Inc., Star Networks, Inc., Star Processing, Inc., Instant Cash Services, LLC, TASQ Technology, Inc., First Data Government Solutions, Inc., and First Data Government Solutions, LP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21 (1)
|
|
Subsidiaries of First Data Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1 (1)
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.2 (1)
|
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 15(b) of this report.
|
(c)
|
The following financial statements are included in this annual report pursuant to Regulations S-X Rule 3-09:
|
(1)
|
Wells Fargo Merchant Services, LLC
|
|
WELLS FARGO MERCHANT SERVICES, LLC
|
(A Joint Venture)
|
Financial Statements
|
For the years ended December 31, 2016 and 2015
|
(With Independent Auditors’ Report Thereon)
|
|
|
||
|
Page
|
|
Independent Auditors’ Report
|
|
|
|
|
|
Balance Sheet
|
128
|
|
|
|
|
Statement of Revenues and Expenses
|
129
|
|
|
|
|
Statement of Members’ Equity
|
130
|
|
|
|
|
Statement of Cash Flows
|
131
|
|
|
|
|
Notes to Financial Statements
|
132
|
|
Assets
|
|
2016
|
|
|
2015
|
||
Cash and cash equivalents
|
$
|
35,527
|
|
|
$
|
52,089
|
|
Settlement assets
|
|
2,416,073
|
|
|
|
1,258,031
|
|
Accounts receivable, net of reserve for merchant credit losses
|
|
490,666
|
|
|
|
400,827
|
|
$5.4 million in 2016 and $5.2 million 2015
|
|
|
|
|
|
||
Intangibles
|
|
797
|
|
|
|
457
|
|
Other assets
|
|
1,038
|
|
|
|
144
|
|
Total assets
|
$
|
2,944,101
|
|
|
$
|
1,711,548
|
|
Liabilities and Members’ Equity
|
|
|
|
|
|
||
Settlement liabilities
|
$
|
2,328,205
|
|
|
$
|
1,171,815
|
|
Accounts payable and accrued expenses
|
|
62,391
|
|
|
|
43,952
|
|
Interchange payable to Wells Fargo Bank, N.A.
|
|
414,122
|
|
|
|
340,437
|
|
Related party payable to First Data Merchant Services Corporation
|
|
8,295
|
|
|
|
23,200
|
|
Distribution payable to Wells Fargo Bank, N.A.
|
|
75,898
|
|
|
|
76,532
|
|
Distribution payable to First Data Merchant Services Corporation
|
|
50,599
|
|
|
|
51,021
|
|
Total liabilities
|
|
2,939,510
|
|
|
|
1,706,957
|
|
Members’ equity
|
|
4,591
|
|
|
|
4,591
|
|
Total liabilities and members’ equity
|
$
|
2,944,101
|
|
|
$
|
1,711,548
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Card services revenue, net of $5.5 billion, $4.3 billion and $3.5 billion in interchange and assessments in 2016, 2015 and 2014, respectively
|
$
|
786,803
|
|
|
$
|
762,608
|
|
|
$
|
704,972
|
|
Product sales revenue
|
|
50,359
|
|
|
|
70,635
|
|
|
|
54,593
|
|
Other revenue
|
|
69,030
|
|
|
|
60,777
|
|
|
|
53,612
|
|
Net revenue
|
|
906,192
|
|
|
|
894,020
|
|
|
|
813,177
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of card services
|
|
222,790
|
|
|
|
202,769
|
|
|
|
186,955
|
|
Cost of product sold
|
|
15,536
|
|
|
|
21,464
|
|
|
|
16,141
|
|
Selling, general and administrative
|
|
135,546
|
|
|
|
145,197
|
|
|
|
132,520
|
|
Other expenses
|
|
9,721
|
|
|
|
11,160
|
|
|
|
8,734
|
|
Total expenses
|
|
383,593
|
|
|
|
380,590
|
|
|
|
344,350
|
|
Net operating income
|
|
522,599
|
|
|
|
513,430
|
|
|
|
468,827
|
|
Interest income
|
|
788
|
|
|
|
695
|
|
|
|
1,338
|
|
Net income
|
$
|
523,387
|
|
|
$
|
514,125
|
|
|
$
|
470,165
|
|
|
|
Wells Fargo Bank, N.A.
|
|
|
First Data Merchant Services Corporation
|
|
|
Total
|
|||
Members’ equity at December 31, 2013
|
$
|
2,755
|
|
|
$
|
1,836
|
|
|
$
|
4,591
|
|
Net income
|
|
282,099
|
|
|
|
188,066
|
|
|
|
470,165
|
|
Distributions to members
|
|
(282,099
|
)
|
|
|
(188,066
|
)
|
|
|
(470,165
|
)
|
Members’ equity at December 31, 2014
|
|
2,755
|
|
|
|
1,836
|
|
|
|
4,591
|
|
Net income
|
|
308,475
|
|
|
|
205,650
|
|
|
|
514,125
|
|
Distributions to members
|
|
(308,475
|
)
|
|
|
(205,650
|
)
|
|
|
(514,125
|
)
|
Members’ equity at December 31, 2015
|
|
2,755
|
|
|
|
1,836
|
|
|
|
4,591
|
|
Net income
|
|
314,032
|
|
|
|
209,355
|
|
|
|
523,387
|
|
Distributions to members
|
|
(314,032
|
)
|
|
|
(209,355
|
)
|
|
|
(523,387
|
)
|
Members’ equity at December 31, 2016
|
$
|
2,755
|
|
|
$
|
1,836
|
|
|
$
|
4,591
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
523,387
|
|
|
$
|
514,125
|
|
|
$
|
470,165
|
|
Adjustments to reconcile net income to net cash provided
|
|
|
|
|
|
|
|
|
|||
by operating activities:
|
|
|
|
|
|
|
|
|
|||
Amortization of intangibles
|
|
322
|
|
|
|
318
|
|
|
|
298
|
|
Provisions for credit losses
|
|
12,220
|
|
|
|
13,108
|
|
|
|
10,375
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Settlement assets
|
|
(1,158,042
|
)
|
|
|
(212,497
|
)
|
|
|
(172,676
|
)
|
Accounts receivable, net of reserve for merchant credit losses
|
|
(102,059
|
)
|
|
|
(97,490
|
)
|
|
|
(54,891
|
)
|
Other assets
|
|
(895
|
)
|
|
|
(132
|
)
|
|
|
—
|
|
Settlement liabilities
|
|
1,156,390
|
|
|
|
194,672
|
|
|
|
163,911
|
|
Accounts payable and accrued expenses
|
|
18,439
|
|
|
|
13,487
|
|
|
|
5,091
|
|
Interchange Payable to Wells Fargo Bank, N.A.
|
|
73,685
|
|
|
|
59,455
|
|
|
|
47,815
|
|
Related Party Payable to First Data Merchant Services Corporation
|
|
(14,905
|
)
|
|
|
9,536
|
|
|
|
(8,847
|
)
|
Net cash provided by operating activities
|
|
508,542
|
|
|
|
494,582
|
|
|
|
461,241
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Signing bonus on executed contract
|
|
(662
|
)
|
|
|
(296
|
)
|
|
|
(339
|
)
|
Net cash used in investing activities
|
|
(662
|
)
|
|
|
(296
|
)
|
|
|
(339
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Distributions to members
|
|
(524,442
|
)
|
|
|
(506,600
|
)
|
|
|
(460,576
|
)
|
Net cash used in financing activities
|
|
(524,442
|
)
|
|
|
(506,600
|
)
|
|
|
(460,576
|
)
|
Increase/(Decrease) in cash and cash equivalents
|
|
(16,562
|
)
|
|
|
(12,314
|
)
|
|
|
326
|
|
Cash and cash equivalents at beginning of year
|
|
52,089
|
|
|
|
64,403
|
|
|
|
64,077
|
|
Cash and cash equivalents at end of year
|
$
|
35,527
|
|
|
$
|
52,089
|
|
|
$
|
64,403
|
|
(1)
|
Business Description
|
(2)
|
Summary of Significant Accounting Policies
|
(a)
|
Use of Estimates
|
(b)
|
Settlement Assets and Liabilities
|
(c)
|
Cash and Cash Equivalents
|
(d)
|
Intangibles
|
(e)
|
Accounts Payable and Accrued Expenses
|
(f)
|
Income Taxes
|
(g)
|
Members’ Equity
|
(h)
|
Revenue Recognition
|
(i)
|
Comprehensive Income
|
(3)
|
Intangibles
|
|
|
Intangible Assets, Gross of Accumulated Amortization
|
|
|
Accumulated Amortization
|
|
|
Intangible Assets, Net of
Accumulated Amortization
|
Beginning balance as of January 1, 2016
|
$
|
2,266
|
|
$
|
(1,809)
|
|
$
|
457
|
Additions
|
|
662
|
|
|
—
|
|
|
662
|
Retirements
|
|
(384)
|
|
|
384
|
|
|
—
|
Amortization
|
|
—
|
|
|
(322)
|
|
|
(322)
|
Ending balance as of December 31, 2016
|
$
|
2,544
|
|
$
|
(1,747)
|
|
$
|
797
|
|
|
|
|
|
|
|
|
|
Beginning balance as of January 1, 2015
|
$
|
2,309
|
|
$
|
(1,830)
|
|
$
|
479
|
Additions
|
|
296
|
|
|
—
|
|
|
296
|
Retirements
|
|
(339)
|
|
|
339
|
|
|
—
|
Amortization
|
|
—
|
|
|
(318)
|
|
|
(318)
|
Ending balance as of December 31, 2015
|
$
|
2,266
|
|
$
|
(1,809)
|
|
$
|
457
|
|
|
|
|
|
|
|
|
|
Beginning balance as of January 1, 2014
|
$
|
2,370
|
|
$
|
(1,933)
|
|
$
|
437
|
Additions
|
|
340
|
|
|
—
|
|
|
340
|
Retirements
|
|
(401)
|
|
|
401
|
|
|
—
|
Amortization
|
|
—
|
|
|
(298)
|
|
|
(298)
|
Ending balance as of December 31, 2014
|
$
|
2,309
|
|
$
|
(1,830)
|
|
$
|
479
|
(4)
|
Related Party Transactions
|
|
|
2016
|
|||
|
|
First Data Merchant Services, Corporation
|
|
|
Wells Fargo
Bank, NA
|
Cost of card services
|
$
|
92,161
|
|
$
|
—
|
Cost of product sold
|
|
15,536
|
|
|
—
|
Selling, general and administrative
|
|
11,766
|
|
|
123,780
|
Total
|
$
|
119,463
|
|
$
|
123,780
|
|
|
|
|
|
|
|
|
2015
|
|||
|
|
First Data Merchant Services, Corporation
|
|
|
Wells Fargo
Bank, NA
|
Cost of card services
|
$
|
76,686
|
|
$
|
—
|
Cost of product sold
|
|
21,464
|
|
|
—
|
Selling, general and administrative
|
|
14,324
|
|
|
130,873
|
Total
|
$
|
112,474
|
|
$
|
130,873
|
|
|
|
|
|
|
|
|
2014
|
|||
|
|
First Data Merchant Services, Corporation
|
|
|
Wells Fargo
Bank, NA
|
Cost of card services
|
$
|
66,980
|
|
$
|
—
|
Cost of product sold
|
|
16,141
|
|
|
—
|
Selling, general and administrative
|
|
12,206
|
|
|
120,314
|
Total
|
$
|
95,327
|
|
$
|
120,314
|
(5)
|
Allocation and Distribution of Income to Members
|
(6)
|
Termination of Company
|
(7)
|
Limited Liability of Members
|
(8)
|
Fair Value of Financial Instruments
|
(9)
|
Guarantees and Reserve for Merchant Credit Losses
|
Beginning balance as of January 1, 2016
|
$
|
5,185
|
|
Provisions for credit loss
|
|
12,220
|
|
Charge-offs, net of recoveries of $797
|
|
(11,982
|
)
|
Ending balance as of December 31, 2016
|
$
|
5,423
|
|
|
|
|
|
Beginning balance as of January 1, 2015
|
$
|
4,507
|
|
Provisions for credit loss
|
|
13,108
|
|
Charge-offs, net of recoveries of $696
|
|
(12,430
|
)
|
Ending balance as of December 31, 2015
|
$
|
5,185
|
|
|
|
|
|
Beginning balance as of January 1, 2014
|
$
|
3,361
|
|
Provisions for credit loss
|
|
10,375
|
|
Charge-offs, net of recoveries of $387
|
|
(9,229
|
)
|
Ending balance as of December 31, 2014
|
$
|
4,507
|
|
(10)
|
Subsequent Events
|
|
FIRST DATA CORPORATION
|
|
|
(Registrant)
|
|
|
|
|
|
By:
|
/S/ FRANK BISIGNANO
|
|
|
Frank Bisignano
|
|
|
Chief Executive Officer
|
|
|
|
|
Date:
|
February 24, 2017
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/S/ FRANK BISIGNANO
|
|
Chief Executive Officer and Director
|
|
February 24, 2017
|
Frank Bisignano
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/S/ HIMANSHU A. PATEL
|
|
Executive Vice President, Chief Financial Officer
|
|
February 24, 2017
|
Himanshu A. Patel
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/S/ MATTHEW CAGWIN
|
|
Senior Vice President, Corporate Controller and Chief Accounting Officer
|
|
February 24, 2017
|
Matthew Cagwin
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
/S/ HENRY R. KRAVIS
|
|
Director
|
|
February 24, 2017
|
Henry R. Kravis
|
|
|
|
|
|
|
|
|
|
/S/ HEIDI G. MILLER
|
|
Director
|
|
February 24, 2017
|
Heidi G. Miller
|
|
|
|
|
|
|
|
|
|
/S/ JAMES E. NEVELS
|
|
Director
|
|
February 17, 2017
|
James E. Nevels
|
|
|
|
|
|
|
|
|
|
/S/ SCOTT C. NUTTALL
|
|
Director
|
|
February 24, 2017
|
Scott C. Nuttall
|
|
|
|
|
|
|
|
|
|
/S/ TAGAR C. OLSON
|
|
Director
|
|
February 24, 2017
|
Tagar C. Olson
|
|
|
|
|
|
|
|
|
|
/S/ JOSEPH J. PLUMERI
|
|
Director
|
|
February 24, 2017
|
Joseph J. Plumeri
|
|
|
|
|
|
|
|
|
|
/S/ BARBARA A. YASTINE
|
|
Director
|
|
February 24, 2017
|
Barbara A. Yastine
|
|
|
|
|
•
|
At the time of their appointment, a one-time grant of 158,182 options to purchase shares of Class A common stock of First Data pursuant to the First Data Corporation 2015 Omnibus Incentive Plan (2015 Plan) with a strike price equal to the Fair Market Value at the time of grant to vest in equal annual installments on the first three anniversaries of the grant date.
|
•
|
Annual grant of restricted stock of First Data equivalent in value to $125,000, both at the time of their appointment and in connection with each First Data Annual Shareholder Meeting at which they continue to serve pursuant to the 2015 Plan and on the following terms:
|
◦
|
20% vesting one year from the grant date;
|
◦
|
40% vesting two years from the grant date;
|
◦
|
40% vesting three years from the grant date;
|
◦
|
Forfeiture of unvested awards upon termination of Board service for any reason other than Death or Disability; and
|
◦
|
In the event of Death or Disability, all shares shall vest immediately.
|
•
|
Annual cash retainer of $75,000 to be paid in quarterly installments on the first day of each calendar quarter.
|
•
|
his existing restricted stock grants will continue to vest under their existing terms, and
|
•
|
his existing stock option can be exercised for a period of three years (but in no event past the original term of the option).
|
Originator
|
Location
|
First Data Resources, LLC
|
Delaware
|
REMITCO LLC
|
Delaware
|
TeleCheck Services, Inc.
|
Delaware
|
Star Networks, Inc.
|
Delaware
|
Star Processing, Inc.
|
Delaware
|
Instant Cash Services, LLC
|
Delaware
|
First Data Hardware Services Inc.
|
California
|
First Data Government Solutions, Inc.
|
Delaware
|
First Data Government Solutions, LP
|
Delaware
|
Originator
|
Location of Books and Records
|
First Data Resources, LLC
|
6902 Pine Street, Omaha, NE 68106
|
REMITCO LLC
|
6902 Pine Street, Omaha, NE 68106
|
TeleCheck Services, Inc.
|
1307 Walt Whitman Road, Melville, NY 11747
|
Star Networks, Inc.
|
6902 Pine Street, Omaha, NE 68106
|
Star Processing, Inc.
|
6902 Pine Street, Omaha, NE 68106
|
Instant Cash Services, LLC
|
6902 Pine Street, Omaha, NE 68106
|
First Data Hardware Services Inc.
|
3975 NW 120th Avenue, Corral Springs, FL 33065
|
First Data Government Solutions, Inc.
|
1307 Walt Whitman Road, Melville, NY 11747
|
First Data Government Solutions, LP
|
1307 Walt Whitman Road, Melville, NY 11747
|
First Data Resources, LLC
|
REMITCO LLC
|
TeleCheck Services, Inc.
|
Star Networks, Inc.
|
Star Processing, Inc.
|
Instant Cash Services, LLC
|
TASQ Technology, Inc.
|
First Data Hardware Services Inc.
First Data Government Solutions, Inc.
|
First Data Government Solutions, LP
|
Jurisdiction
|
DBA Name
|
Start Date
|
Florida
|
GovConnect, Inc.
|
9/29/2004
|
Jurisdiction
|
DBA Name
|
Start Date
|
Colorado
|
Telepath
|
8/21/2003
|
Connecticut
|
FDGS Limited Partnership
|
3/7/2007
|
Kentucky
|
FDGS, LP
|
1/28/2008
|
Maryland
|
First Data Government Solutions, Limited Partnership
|
8/9/2004
|
Michigan
|
First Data Government Solutions, Limited Partnership
|
8/13/2004
|
New Jersey
|
FD Government Solutions LP
|
3/28/2006
|
Virginia
|
First Data Government Solutions of Virginia, LP
|
11/24/2004
|
Jurisdiction
|
DBA Name
|
Start Date
|
California
|
First Data Remitco
|
6/1/2008
|
Jurisdiction
|
DBA Name
|
Start Date
|
California
|
Star EFT, Inc.
|
9/20/2004
|
Florida
|
Star Networks Systems, Inc.
|
10/2/1998
|
Jurisdiction
|
DBA Name
|
Start Date
|
Vermont
|
Check Payment Services
|
4/12/2000
|
Name of Subsidiary
|
|
Jurisdiction of Incorporation
|
Administradora de Tarjetas S.R.L.
|
|
Argentina
|
BA Merchant Services, LLC
|
|
Ohio
|
Banc of America Merchant Services, LLC
|
|
Delaware
|
Bank of America Merchant Services Canada Corp.
|
|
Canada
|
Bankcard Investigative Group Inc.
|
|
Delaware
|
BOFA Merrill Lynch Merchant Services (Europe) Limited
|
|
United Kingdom
|
BUYPASS Inco Corporation
|
|
Delaware
|
BWA Merchant Services Pty Ltd
|
|
Australia
|
Call Interactive Holdings LLC
|
|
Delaware
|
Cash Axcess Corporation (Proprietary) Limited
|
|
South Africa
|
CESI Holdings, LLC
|
|
Delaware
|
Clover MarketPlace, LLC
|
|
Delaware
|
Clover Network, Inc.
|
|
Delaware
|
Concord Computing Corporation
|
|
Delaware
|
Concord Corporate Services, Inc.
|
|
Delaware
|
Concord EFS Financial Services, Inc.
|
|
Delaware
|
Concord EFS, Inc.
|
|
Delaware
|
Concord Emerging Technologies, Inc.
|
|
Arizona
|
Concord Financial Technologies, Inc.
|
|
Delaware
|
Concord Payment Services, Inc.
|
|
Georgia
|
Concord Processing, Inc.
|
|
Delaware
|
Concord Transaction Services, LLC
|
|
Colorado
|
CTS Holdings, LLC
|
|
Colorado
|
CTS, Inc.
|
|
Tennessee
|
D.Man Debtors Notification Company S.A.
|
|
Greece
|
DW Holdings Canada ULC
|
|
Canada
|
Eastern States Bankcard Association Inc.
|
|
New York not-for-profit
|
Eastern States Monetary Services Inc.
|
|
New York not-for-profit
|
Electronic Banking Solutions Limited
|
|
Australia
|
European Merchant Services B.V.
|
|
Netherlands
|
FD do Brasil Soluções de Pagamento Ltda.
|
|
Brazil
|
FDGS Group, LLC
|
|
Delaware
|
FDGS Partner, LLC
|
|
Delaware
|
FDR Limited
|
|
Delaware
|
FDR Missouri Inc.
|
|
Delaware
|
FDR U.K. Limited
|
|
United Kingdom
|
FDS Holdings, Inc.
|
|
Delaware
|
Federated Union Systems, Limited
|
|
Ireland
|
Federated Union Systems Europe, Ltd.
|
|
Ireland
|
First Data Asia Pte Ltd.
|
|
Singapore
|
First Data Austria GmbH
|
|
Austria
|
First Data Austria Holdings GmbH
|
|
Austria
|
First Data Canada Ltd.
|
|
Canada
|
First Data Capital, Inc.
|
|
Delaware
|
First Data Card Solutions, Inc.
|
|
Maryland
|
First Data (China) Co., Ltd.
|
|
China
|
First Data Chile Limitada
|
|
Chile
|
First Data CIS
|
|
Russia
|
First Data Colombia Ltda.
|
|
Colombia
|
First Data Commercial Services Limited
|
|
Ireland
|
First Data Communications Corporation
|
|
Delaware
|
First Data Cono Sur SRL
|
|
Argentina
|
First Data Corporation Australia (Holdings) Pty Limited
|
|
Australia
|
First Data Czech Republic
|
|
Czech Republic
|
First Data Deutschland GmbH
|
|
Germany
|
First Data Development Private Ltd
|
|
India
|
First Data EC, LLC
|
|
Delaware
|
First Data EESTI OU
|
|
Estonia
|
First Data Europe Limited
|
|
United Kingdom
|
First Data Egypt LLC
|
|
Egypt
|
First Data Government Solutions, Inc.
|
|
Delaware
|
First Data Government Solutions, LP
|
|
Delaware
|
First Data Global Services Limited
|
|
Ireland
|
First Data GmbH
|
|
Germany
|
First Data (Greece) US Holding Corp.
|
|
Delaware
|
First Data Hardware Services, Inc.
|
|
California
|
First Data Hellas Processing Services and Holdings SA
|
|
Greece
|
First Data Holding I (Netherlands) BV
|
|
Netherlands
|
First Data Hong Kong Limited
|
|
Hong Kong
|
First Data Magyarorszag Kereskedelmi es Szolgaltato Kft
|
|
Hungary
|
First Data (India) Private Limited
|
|
India
|
First Data International d.o.o.
|
|
Croatia
|
First Data International LLC
|
|
Delaware
|
First Data International (Italia) Srl
|
|
Italy
|
First Data International Luxembourg II SARL
|
|
Luxembourg
|
First Data International Luxembourg III SARL
|
|
Luxembourg
|
First Data International Luxembourg IV SARL
|
|
Luxembourg
|
First Data International Luxembourg VII SARL
|
|
Luxembourg
|
First Data Korea Limited
|
|
Korea
|
First Data Latin America Inc.
|
|
Delaware
|
First Data Latvia
|
|
Latvia
|
First Data (Mauritius) Holding Company
|
|
Mauritius
|
First Data Merchant Services LLC
|
|
Florida
|
First Data Merchant Services México, S. de R.L. de C.V.
|
|
Mexico
|
First Data Merchant Services Northeast, LLC
|
|
Delaware
|
First Data Merchant Services Southeast, L.L.C.
|
|
Delaware
|
First Data Merchant Solutions (B) Sdn Bhd
|
|
Brunei
|
First Data Merchant Solutions (Hellas) Ltd
|
|
Greece
|
First Data Merchant Solutions (Hong Kong) Private Limited
|
|
Hong Kong
|
First Data Merchant Solutions (Malaysia) Sdn. Bhd.
|
|
Malaysia
|
First Data Merchant Solutions Private Limited (Singapore)
|
|
Singapore
|
First Data Middle East FZ-LLC
|
|
UAE
|
First Data Mobile Holdings, Inc.
|
|
Delaware
|
First Data Mobile (Bermuda) Holdings, Ltd.
|
|
Bermuda
|
First Data Mobile Holdings Limited
|
|
Ireland
|
First Data Mobile Payments Limited
|
|
Ireland
|
First Data Mobile Solutions GmbH
|
|
Germany
|
First Data Mobile Solutions Limited
|
|
Ireland
|
First Data (Norway) Holding AS
|
|
Norway
|
First Data Network Australia Limited
|
|
Australia
|
First Data Operations (Austria) GmbH
|
|
Austria
|
First Data Payment Services, LLC
|
|
Delaware
|
First Data Polska S.A.
|
|
Poland
|
First Data Procurements México, S. de R.L. de C.V.
|
|
Mexico
|
First Data Puerto Rico, LLC
|
|
Puerto Rico
|
First Data Real Estate Holdings L.L.C.
|
|
Delaware
|
First Data Receivables, LLC
|
|
Delaware
|
First Data Reporting Services LLC
|
|
Delaware
|
First Data Resources Australia Limited
|
|
Australia
|
First Data Resources Investments Pty Limited
|
|
Australia
|
First Data Resources, LLC
|
|
Delaware
|
First Data Resources South Africa (Proprietary) Limited
|
|
South Africa
|
First Data Retail ATM Services L.P.
|
|
Texas
|
First Data Romania SRL
|
|
Romania
|
First Data Serbia and Montenegro d.o.o.
|
|
Serbia
|
First Data Services LLC
|
|
Delaware
|
First Data (Singapore) Pte. Ltd.
|
|
Singapore
|
First Data Slovakia, s.r.o.
|
|
Slovakia
|
First Data Solutions Inc.
|
|
Washington
|
First Data Spain Holdings, S.L.
|
|
Spain
|
First Data Technologies, Inc.
|
|
Delaware
|
First Data Transportation Services Inc.
|
|
Tennessee
|
First Data Trust Company, LLC
|
|
Colorado
|
First Data Uruguay SA
|
|
Uruguay
|
First Data Voice Services
|
|
Delaware general partnership
|
First Merchant Processing (Ireland) Limited
|
|
Ireland
|
FTS (NSW) Pty. Limited
|
|
Australia
|
Funds & Assets Management LLC
|
|
New York
|
FundsXpress, Inc.
|
|
Delaware
|
FundsXpress Financial Network, Inc.
|
|
Texas
|
GoEasy LLC
|
|
Delaware
|
GYFT, Inc.
|
|
Delaware
|
Gyft Mobile, Inc.
|
|
Delaware
|
Huntington Merchant Services, L.L.C.
|
|
Delaware
|
ICICI Merchant Services Private Limited
|
|
India
|
Ignite Payments, LLC
|
|
California
|
Instant Cash Services, LLC
|
|
Delaware
|
Integrated Payment Systems Canada Inc.
|
|
Canada
|
Integrated Payment Systems Inc.
|
|
Delaware
|
Inverland Jasper SL
|
|
Spain
|
IRS Intelligent Risk Management Solutions GmbH
|
|
Germany
|
Linkpoint International, Inc.
|
|
Nevada
|
Marketplace Merchant Solutions Limited
|
|
Ireland
|
MAS Ohio Corporation
|
|
Delaware
|
Merchant Solutions Private Limited
|
|
Bangladesh
|
Merchant Solutions Private Limited
|
|
Sri Lanka
|
Merchant Solutions Pte (Macau) Limited
|
|
Macau
|
Money Network Financial, LLC
|
|
Delaware
|
National Payment Systems Inc.
|
|
New York
|
New Payment Services, Inc.
|
|
Georgia
|
Omnipay Limited
|
|
Ireland
|
PayPoint Electronic Payment Systems, LLC
|
|
Delaware
|
PaySys Europe, B.V.
|
|
Netherlands
|
PaySys International, Inc.
|
|
Florida
|
PaySys International Limited
|
|
Ireland
|
PaySys International Pty. Ltd.
|
|
Australia
|
Pegaso Argentina S.R.L.
|
|
Argentina
|
Perka, Inc.
|
|
Delaware
|
Perka Limited
|
|
Ireland
|
Posnet SRL
|
|
Argentina
|
Processing Center, S.A.
|
|
Panama
|
Publicdatasystems, Inc.
|
|
Delaware
|
REMITCO LLC
|
|
Delaware
|
Research Park Association, Inc.
|
|
Florida not-for-profit
|
Sagebrush Holdings LLC
|
|
Delaware
|
Scotia Cardpoint Merchant Services
|
|
Puerto Rico
|
Servicios de Aceptación S.A.S.
|
|
Colombia
|
Spree Commerce Inc.
|
|
Delaware
|
Star Networks, Inc.
|
|
Delaware
|
Star Processing, Inc.
|
|
Delaware
|
Star Systems Assets, Inc.
|
|
Delaware
|
Star Systems, Inc.
|
|
Delaware
|
Star Systems, LLC
|
|
Delaware
|
SunTrust Merchant Services, LLC
|
|
Delaware
|
TASQ LLC
|
|
Delaware
|
TeleCash GmbH & Co. KG
|
|
Germany
|
TeleCash Management GmbH
|
|
Germany
|
TeleCheck International, Inc.
|
|
Georgia
|
TeleCheck Payment Systems Limited
|
|
New Zealand
|
TeleCheck Services Canada, Inc.
|
|
Canada
|
TeleCheck Services, Inc.
|
|
Delaware
|
TeleCheck Services of Puerto Rico, Inc.
|
|
Georgia
|
The Next Generation POS LLC
|
|
Delaware
|
Tissington Limited
|
|
Ireland
|
Transaction Solutions, LLC
|
|
Delaware
|
Transaction Wireless, Inc.
|
|
Delaware
|
TruBeacon, Inc.
|
|
Delaware
|
TRS Recovery Services, Inc.
|
|
Colorado
|
TWI MOR Holding, LLC
|
|
Delaware
|
UAB “First Data Lietuva”
|
|
Lithuania
|
Unified Merchant Services
|
|
Georgia General Partnership
|
ValueLink, LLC
|
|
Delaware
|
Zolter Services Limited
|
|
Ireland
|
/s/ Ernst & Young LLP
|
|
Atlanta, Georgia
|
February 24, 2017
|
|
|
KPMG LLP
|
|
|
|
Suite 1400
|
|
|
|
55 Second Street
|
|
|
|
San Francisco, CA 94105
|
|
(1)
|
Form S-1 No. 333-205750 of First Data Corporation; and
|
(2)
|
Form S-8 No. 333-207439 of First Data Corporation
|
San Francisco, California
|
February 24, 2017
|
1.
|
I have reviewed this Annual Report on Form 10-K of First Data Corporation;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
5.
|
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):
|
Date:
|
February 24, 2017
|
/s/ FRANK BISIGNANO
|
|
|
Frank Bisignano
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of First Data Corporation;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
5.
|
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):
|
Date:
|
February 24, 2017
|
/s/ HIMANSHU A. PATEL
|
|
|
Himanshu A. Patel
Executive Vice President, Chief Financial Officer (principal financial officer) |
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of First Data Corporation.
|
Date:
|
February 24, 2017
|
/s/ FRANK BISIGNANO
|
|
|
Frank Bisignano
Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of First Data Corporation.
|
Date:
|
February 24, 2017
|
/s/ HIMANSHU A. PATEL
|
|
|
Himanshu A. Patel
Executive Vice President, Chief Financial Officer (principal financial officer) |