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Share Name | Share Symbol | Market | Type |
---|---|---|---|
First Data Corporation | NYSE:FDC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 31.69 | 0 | 01:00:00 |
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DELAWARE
|
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47-0731996
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(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
225 LIBERTY STREET, 29th FLOOR, NEW YORK, NEW YORK 10281
|
||
(Address of principal executive offices) (Zip Code)
|
||
Registrant’s telephone number, including area code
(800) 735-3362
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
|
Trading Symbol
|
Class A Common Stock, $0.01 par value per share
|
|
New York Stock Exchange
|
|
FDC
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
Non-accelerated filer
o
|
|
Smaller Reporting Company
o
|
|
|
Emerging Growth Company
o
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Class
|
|
Outstanding at March 31, 2019
|
Class A Common Stock, $0.01 par value per share
|
|
574,939,576 shares
|
Class B Common Stock, $0.01 par value per share
|
|
368,784,737 shares
|
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|
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PAGE
NUMBER
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Three months ended March 31,
|
||||||
(in millions, except per share amounts)
|
|
2019
|
|
2018
|
||||
Revenues:
|
|
|
|
|
||||
Revenues excluding reimbursable items
(a)
|
|
$
|
2,124
|
|
|
$
|
2,084
|
|
Reimbursable items
|
|
192
|
|
|
198
|
|
||
Total revenues
|
|
2,316
|
|
|
2,282
|
|
||
Expenses:
|
|
|
|
|
||||
Cost of revenues (exclusive of items shown below)
|
|
757
|
|
|
779
|
|
||
Selling, general, and administrative
|
|
660
|
|
|
647
|
|
||
Depreciation and amortization
|
|
246
|
|
|
250
|
|
||
Other operating expenses, net
|
|
36
|
|
|
60
|
|
||
Total expenses excluding reimbursable items
|
|
1,699
|
|
|
1,736
|
|
||
Reimbursable items
|
|
192
|
|
|
198
|
|
||
Total expenses
|
|
1,891
|
|
|
1,934
|
|
||
Operating profit
|
|
425
|
|
|
348
|
|
||
Interest expense, net
|
|
(203
|
)
|
|
(233
|
)
|
||
Loss on debt extinguishment
|
|
(1
|
)
|
|
—
|
|
||
Other expense
|
|
(27
|
)
|
|
(3
|
)
|
||
Income before income taxes and equity earnings in affiliates
|
|
194
|
|
|
112
|
|
||
Income tax expense
|
|
29
|
|
|
27
|
|
||
Equity earnings in affiliates
|
|
52
|
|
|
49
|
|
||
Net income
|
|
217
|
|
|
134
|
|
||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
48
|
|
|
33
|
|
||
Net income attributable to First Data Corporation
|
|
$
|
169
|
|
|
$
|
101
|
|
|
|
|
|
|
||||
Net income attributable to First Data Corporation per share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.18
|
|
|
$
|
0.11
|
|
Diluted
|
|
$
|
0.17
|
|
|
$
|
0.11
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding:
|
|
|
|
|
||||
Basic
|
|
937
|
|
|
923
|
|
||
Diluted
|
|
967
|
|
|
946
|
|
(a)
|
Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of
$48 million
and
$51 million
for the three months ended
March 31, 2019
and
2018
, respectively.
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
217
|
|
|
$
|
134
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||
Foreign currency translation adjustment
|
|
59
|
|
|
90
|
|
||
Pension liability adjustments
|
|
2
|
|
|
—
|
|
||
Derivative instruments
|
|
(28
|
)
|
|
9
|
|
||
Total other comprehensive income, net of tax
|
|
33
|
|
|
99
|
|
||
Comprehensive income
|
|
250
|
|
|
233
|
|
||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
48
|
|
|
37
|
|
||
Comprehensive income attributable to First Data Corporation
|
|
$
|
202
|
|
|
$
|
196
|
|
(in millions, except par value)
|
|
As of March 31,
2019 |
|
As of December 31,
2018 |
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
619
|
|
|
$
|
555
|
|
Accounts receivable, net of allowance for doubtful accounts of $47 and $46
|
|
2,130
|
|
|
2,217
|
|
||
Settlement assets
|
|
22,324
|
|
|
11,423
|
|
||
Prepaid expenses and other current assets
|
|
321
|
|
|
319
|
|
||
Total current assets
|
|
25,394
|
|
|
14,514
|
|
||
Property and equipment, net of accumulated depreciation of $1,709 and $1,647
|
|
890
|
|
|
905
|
|
||
Goodwill
|
|
17,518
|
|
|
17,460
|
|
||
Customer relationships, net of accumulated amortization of $5,596 and $5,509
|
|
1,725
|
|
|
1,763
|
|
||
Other intangibles, net of accumulated amortization of $2,362 and $2,271
|
|
1,923
|
|
|
1,893
|
|
||
Investment in affiliates
|
|
1,072
|
|
|
1,055
|
|
||
Other long-term assets
|
|
1,024
|
|
|
737
|
|
||
Total assets
|
|
$
|
49,546
|
|
|
$
|
38,327
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
|
$
|
1,640
|
|
|
$
|
1,636
|
|
Short-term and current portion of long-term borrowings
|
|
1,159
|
|
|
1,170
|
|
||
Settlement obligations
|
|
22,324
|
|
|
11,423
|
|
||
Total current liabilities
|
|
25,123
|
|
|
14,229
|
|
||
Long-term borrowings
|
|
16,282
|
|
|
16,429
|
|
||
Deferred tax liabilities
|
|
84
|
|
|
97
|
|
||
Other long-term liabilities
|
|
800
|
|
|
528
|
|
||
Total liabilities
|
|
42,289
|
|
|
31,283
|
|
||
Commitments and contingencies (See note 13)
|
|
|
|
|
|
|
||
Redeemable noncontrolling interest
|
|
93
|
|
|
77
|
|
||
First Data Corporation stockholders' equity:
|
|
|
|
|
|
|
||
Class A Common stock, $0.01 par value; 1,600 shares authorized as of March 31, 2019 and December 31, 2018, 595 shares and 584 shares issued as of March 31, 2019 and December 31, 2018, respectively; and 575 shares and 568 shares outstanding as of March 31, 2019 and December 31, 2018, respectively
|
|
6
|
|
|
6
|
|
||
Class B Common stock, $0.01 par value; 448 shares authorized as of March 31, 2019 and December 31, 2018; 369 shares issued and outstanding as of March 31, 2019 and December 31, 2018
|
|
4
|
|
|
4
|
|
||
Preferred stock, $0.01 par value; 100 shares authorized as of March 31, 2019 and December 31, 2018; no shares issued and outstanding as of March 31, 2019 and December 31, 2018
|
|
—
|
|
|
—
|
|
||
Class A Treasury stock, at cost, 20 shares and 16 shares as of March 31, 2019 and December 31, 2018, respectively
|
|
(338
|
)
|
|
(251
|
)
|
||
Additional paid-in capital
|
|
13,872
|
|
|
13,791
|
|
||
Accumulated loss
|
|
(7,892
|
)
|
|
(8,067
|
)
|
||
Accumulated other comprehensive loss
|
|
(1,277
|
)
|
|
(1,310
|
)
|
||
Total First Data Corporation stockholders' equity
|
|
4,375
|
|
|
4,173
|
|
||
Noncontrolling interests
|
|
2,789
|
|
|
2,794
|
|
||
Total equity
|
|
7,164
|
|
|
6,967
|
|
||
Total liabilities and equity
|
|
$
|
49,546
|
|
|
$
|
38,327
|
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
||
Net income
|
|
$
|
217
|
|
|
$
|
134
|
|
Adjustments to reconcile to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)
|
|
261
|
|
|
271
|
|
||
Deferred income taxes
|
|
15
|
|
|
1
|
|
||
Charges related to other operating expenses, net and other expense
|
|
63
|
|
|
63
|
|
||
Loss on debt extinguishment
|
|
1
|
|
|
—
|
|
||
Stock-based compensation expense
|
|
56
|
|
|
74
|
|
||
Other non-cash and non-operating items, net
|
|
5
|
|
|
3
|
|
||
Increase (decrease) in cash, excluding the effects of acquisitions and dispositions, resulting from changes in:
|
|
|
|
|
|
|
||
Accounts receivable, current and long-term
|
|
141
|
|
|
136
|
|
||
Other assets, current and long-term
|
|
15
|
|
|
(14
|
)
|
||
Accounts payable and other liabilities, current and long-term
|
|
(137
|
)
|
|
(128
|
)
|
||
Income tax accounts
|
|
(22
|
)
|
|
(6
|
)
|
||
Net cash provided by operating activities
|
|
615
|
|
|
534
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
||
Additions to property and equipment
|
|
(84
|
)
|
|
(70
|
)
|
||
Payments to obtain customer contracts, including outlays for conversion,
and capitalized systems development costs |
|
(82
|
)
|
|
(69
|
)
|
||
Acquisitions, net of cash acquired
|
|
(73
|
)
|
|
(17
|
)
|
||
Proceeds from the maturity of net investment hedges
|
|
—
|
|
|
26
|
|
||
Other investing activities, net
|
|
(22
|
)
|
|
(13
|
)
|
||
Net cash used in investing activities
|
|
(261
|
)
|
|
(143
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
||
Short-term borrowings, net
|
|
(3
|
)
|
|
(153
|
)
|
||
Principal payments on long-term debt
|
|
(163
|
)
|
|
(53
|
)
|
||
Payment of taxes related to net settlement of equity awards
|
|
(97
|
)
|
|
(56
|
)
|
||
Distributions and dividends paid to noncontrolling interests and
redeemable noncontrolling interest |
|
(52
|
)
|
|
(52
|
)
|
||
Other financing activities, net
|
|
40
|
|
|
10
|
|
||
Net cash used in financing activities
|
|
(275
|
)
|
|
(304
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
(2
|
)
|
|
3
|
|
||
Change in cash, cash equivalents, and restricted cash
|
|
77
|
|
|
90
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period
(a)
|
|
583
|
|
|
525
|
|
||
Cash, cash equivalents, and restricted cash at end of period
(a)
|
|
$
|
660
|
|
|
$
|
615
|
|
NON-CASH TRANSACTIONS
|
|
|
|
|
||||
Finance leases, net of trade-ins
|
|
$
|
—
|
|
|
$
|
15
|
|
(a)
|
The Company held
$41 million
and
$28 million
in restricted cash within "Other long-term assets" in the unaudited consolidated balance sheets as of March 31, 2019 and December 31, 2018, respectively.
|
|
|
First Data Corporation Stockholders
|
|||||||||||||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Loss
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling Interest
|
|
Total
|
|||||||||||||||||||||||||||
(in millions)
|
|
Class A
|
|
Class B
|
|
Class A
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, December 31, 2018
|
|
568
|
|
|
$
|
6
|
|
|
369
|
|
|
$
|
4
|
|
|
16
|
|
|
$
|
(251
|
)
|
|
$
|
13,791
|
|
|
$
|
(8,067
|
)
|
|
$
|
(1,310
|
)
|
|
$
|
2,794
|
|
|
$
|
6,967
|
|
Adoption of New Lease Standard
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||||
Dividends and distributions paid to noncontrolling interests
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
(45
|
)
|
||||||||
Net income
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
169
|
|
|
—
|
|
|
40
|
|
|
209
|
|
||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||||||
Adjustments to redemption value of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||||||
Stock activity under stock compensation plans and other
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(87
|
)
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||||
Balance, March 31, 2019
|
|
575
|
|
|
$
|
6
|
|
|
369
|
|
|
$
|
4
|
|
|
20
|
|
|
$
|
(338
|
)
|
|
$
|
13,872
|
|
|
$
|
(7,892
|
)
|
|
$
|
(1,277
|
)
|
|
$
|
2,789
|
|
|
$
|
7,164
|
|
|
|
First Data Corporation Stockholders
|
|||||||||||||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Loss
|
|
Accumulated Other Comprehensive Loss
|
|
Noncontrolling Interest
|
|
Total
|
|||||||||||||||||||||||||||
(in millions)
|
|
Class A
|
|
Class B
|
|
Class A
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, December 31, 2017
|
|
482
|
|
|
$
|
5
|
|
|
443
|
|
|
$
|
4
|
|
|
11
|
|
|
$
|
(149
|
)
|
|
$
|
13,495
|
|
|
$
|
(9,059
|
)
|
|
$
|
(1,144
|
)
|
|
$
|
2,862
|
|
|
$
|
6,014
|
|
Adoption of New Revenue Standard
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||||||
Dividends and distributions paid to noncontrolling interests
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
(44
|
)
|
||||||||
Net income
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
25
|
|
|
126
|
|
||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|
4
|
|
|
99
|
|
||||||||
Adjustments to redemption value of redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
||||||||
Stock activity under stock compensation plans and other
|
|
3
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
(53
|
)
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
||||||||
Balance, March 31, 2018
|
|
485
|
|
|
$
|
5
|
|
|
444
|
|
|
$
|
4
|
|
|
14
|
|
|
$
|
(202
|
)
|
|
$
|
13,578
|
|
|
$
|
(8,971
|
)
|
|
$
|
(1,049
|
)
|
|
$
|
2,847
|
|
|
$
|
6,212
|
|
(a)
|
The total distribution presented in the unaudited consolidated statements of equity for the
three
months ended
March 31, 2019
and
2018
excludes
$7 million
and
$8 million
, respectively, in distributions paid to redeemable noncontrolling interest not included in equity.
|
(b)
|
The total net income presented in the unaudited consolidated statements of equity for the
three
months ended
March 31, 2019
and
2018
is
$8 million
and
$8 million
different, respectively, than the amounts presented in the unaudited consolidated statements of income due to the net income attributable to the redeemable noncontrolling interest not included in equity.
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Amortization of payments for customers contracts
|
|
$
|
14
|
|
|
$
|
13
|
|
Amortization related to equity method investments
|
|
1
|
|
|
8
|
|
(in millions)
|
|
As of March 31,
2019 |
|
As of December 31,
2018 |
||||
Short-term borrowings:
|
|
|
|
|
|
|
||
Lines of credit
|
|
$
|
127
|
|
|
$
|
224
|
|
Senior Secured Revolving Credit Facility
|
|
250
|
|
|
250
|
|
||
Receivable securitized loan
|
|
569
|
|
|
472
|
|
||
Unamortized deferred financing costs
(a)
|
|
(3
|
)
|
|
(3
|
)
|
||
Total short-term borrowings
|
|
943
|
|
|
943
|
|
||
Current portion of long-term borrowings:
|
|
|
|
|
|
|
||
Senior secured term loan facility due 2023
|
|
119
|
|
|
119
|
|
||
Finance lease obligations and other arrangements
|
|
97
|
|
|
108
|
|
||
Total current portion of long-term borrowings
|
|
216
|
|
|
227
|
|
||
Total short-term and current portion of long-term borrowings
|
|
1,159
|
|
|
1,170
|
|
||
Long-term borrowings:
|
|
|
|
|
|
|
||
Senior secured term loan facility due 2022
|
|
2,418
|
|
|
2,518
|
|
||
Senior secured term loan facility due 2023
|
|
4,601
|
|
|
4,631
|
|
||
Senior secured term loan facility due 2024
|
|
3,892
|
|
|
3,892
|
|
||
5.375% Senior secured first lien notes due 2023
|
|
1,210
|
|
|
1,210
|
|
||
5.0% Senior secured first lien notes due 2024
|
|
1,883
|
|
|
1,883
|
|
||
5.75% Senior secured second lien notes due 2024
|
|
2,176
|
|
|
2,176
|
|
||
Unamortized discount and unamortized deferred financing costs
(a)
|
|
(85
|
)
|
|
(91
|
)
|
||
Finance lease obligations and other arrangements
|
|
187
|
|
|
210
|
|
||
Total long-term borrowings
(b)
|
|
16,282
|
|
|
16,429
|
|
||
Total borrowings
|
|
$
|
17,441
|
|
|
$
|
17,599
|
|
(a)
|
Unamortized deferred financing costs and certain lenders' fees associated with debt transactions were capitalized as discounts and are amortized on a straight-line basis, which approximates the effective interest method, over the remaining term of the respective debt.
|
(b)
|
As of
March 31, 2019
and
December 31, 2018
, the fair value of the Company's long-term borrowings, excluding finance lease obligations and other arrangements, was
$16.4 billion
and
$15.7 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.
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Interchange fees and assessments
|
|
$
|
6,798
|
|
|
$
|
6,476
|
|
Debit network fees
|
|
871
|
|
|
818
|
|
|
|
Three months ended March 31, 2019
|
||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial Solutions
|
|
Network & Security Solutions
|
|
Total
|
||||||||
North America
|
|
$
|
1,088
|
|
|
$
|
410
|
|
|
$
|
351
|
|
|
$
|
1,849
|
|
EMEA
|
|
161
|
|
|
85
|
|
|
3
|
|
|
249
|
|
||||
LATAM
|
|
100
|
|
|
33
|
|
|
—
|
|
|
133
|
|
||||
APAC
|
|
52
|
|
|
32
|
|
|
1
|
|
|
85
|
|
||||
Total Revenue
(a)(b)
|
|
$
|
1,401
|
|
|
$
|
560
|
|
|
$
|
355
|
|
|
$
|
2,316
|
|
(a)
|
See note 7 "Segment Information"
for the reconciliation to segment revenues.
|
(b)
|
Global Business Solutions includes non wholly-owned entities and Global Financial Solutions includes reimbursable items, which includes postage and customized orders.
|
|
|
Three months ended March 31, 2018
|
||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial Solutions
|
|
Network & Security Solutions
|
|
Total
|
||||||||
North America
|
|
$
|
1,033
|
|
|
$
|
423
|
|
|
$
|
351
|
|
|
$
|
1,807
|
|
EMEA
|
|
162
|
|
|
112
|
|
|
2
|
|
|
276
|
|
||||
LATAM
|
|
87
|
|
|
31
|
|
|
—
|
|
|
118
|
|
||||
APAC
|
|
48
|
|
|
31
|
|
|
2
|
|
|
81
|
|
||||
Total Revenue
(a)(b)
|
|
$
|
1,330
|
|
|
$
|
597
|
|
|
$
|
355
|
|
|
$
|
2,282
|
|
(a)
|
See note 7 "Segment Information"
for the reconciliation to segment revenues.
|
(b)
|
Global Business Solutions includes non wholly-owned entities and Global Financial Solutions includes reimbursable items, which includes postage and customized orders.
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Transaction and processing services
|
|
$
|
2,042
|
|
|
$
|
2,011
|
|
Hardware, Professional Services, and Other
|
|
274
|
|
|
271
|
|
||
Total Revenue
|
|
$
|
2,316
|
|
|
$
|
2,282
|
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Balance, beginning of the period
|
|
$
|
298
|
|
|
$
|
344
|
|
New Revenue Standard adjustments
|
|
—
|
|
|
(39
|
)
|
||
Deferral of revenue
|
|
37
|
|
|
58
|
|
||
Recognition of unearned revenue
|
|
(45
|
)
|
|
(59
|
)
|
||
Other (primarily foreign currency translation)
|
|
(5
|
)
|
|
5
|
|
||
Balance, end of period
|
|
$
|
285
|
|
|
$
|
309
|
|
(in millions)
|
|
As of March 31, 2019
|
||
Finance leases
|
|
|
||
Assets under finance leases
|
|
$
|
546
|
|
Accumulated depreciation
|
|
(361
|
)
|
|
Assets under finance lease, net
|
|
$
|
185
|
|
|
|
|
||
Current finance lease liabilities
|
|
$
|
67
|
|
Non-current finance lease liabilities
|
|
140
|
|
|
Total finance lease liabilities
|
|
$
|
207
|
|
|
|
|
||
Operating leases
|
|
|
||
Operating lease ROU assets
|
|
$
|
315
|
|
|
|
|
||
Current operating lease liabilities
|
|
$
|
68
|
|
Non-current operating lease liabilities
|
|
266
|
|
|
Total operating lease liabilities
|
|
$
|
334
|
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Cost of revenues
|
|
$
|
15
|
|
|
$
|
16
|
|
Selling, general, and administrative
|
|
41
|
|
|
58
|
|
||
Other operating expenses, net
|
|
8
|
|
|
—
|
|
||
Total stock-based compensation expense
|
|
$
|
64
|
|
|
$
|
74
|
|
|
|
Three months ended March 31,
|
||||||
(in millions, except per share amounts)
|
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
|
||||
Net income attributable to First Data Corporation
|
|
$
|
169
|
|
|
$
|
101
|
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
||||
Weighted average shares used in computing net income per share, basic
|
|
937
|
|
|
923
|
|
||
Effect of dilutive securities
|
|
30
|
|
|
23
|
|
||
Total dilutive securities
|
|
967
|
|
|
946
|
|
||
|
|
|
|
|
||||
Net income attributable to First Data Corporation per share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.18
|
|
|
$
|
0.11
|
|
Diluted
(a)
|
|
$
|
0.17
|
|
|
$
|
0.11
|
|
|
|
|
|
|
||||
Anti-dilutive shares excluded from diluted net income per share
|
|
1
|
|
|
11
|
|
(a)
|
Potentially dilutive securities whose effect would have been anti-dilutive are excluded from the computation of diluted earnings per share for all periods presented.
|
|
|
Three months ended March 31, 2019
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial Solutions
|
|
Network & Security Solutions
|
|
Corporate
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
|
$
|
1,379
|
|
|
$
|
370
|
|
|
$
|
361
|
|
|
$
|
—
|
|
|
$
|
2,110
|
|
Equity earnings in affiliates
|
|
8
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Total segment revenues
|
|
$
|
1,387
|
|
|
$
|
369
|
|
|
$
|
361
|
|
|
$
|
—
|
|
|
$
|
2,117
|
|
Depreciation and amortization
|
|
$
|
122
|
|
|
$
|
83
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
233
|
|
Segment EBITDA
|
|
471
|
|
|
147
|
|
|
195
|
|
|
(59
|
)
|
|
754
|
|
|
|
Three months ended March 31, 2018
|
||||||||||||||||||
(in millions)
|
|
Global Business Solutions
|
|
Global Financial Solutions
|
|
Network & Security Solutions
|
|
Corporate
|
|
Total
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
|
$
|
1,310
|
|
|
$
|
401
|
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
2,073
|
|
Equity earnings in affiliates
|
|
8
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Total segment revenues
|
|
$
|
1,318
|
|
|
$
|
400
|
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
2,080
|
|
Depreciation and amortization
|
|
$
|
125
|
|
|
$
|
88
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
242
|
|
Segment EBITDA
|
|
434
|
|
|
166
|
|
|
175
|
|
|
(45
|
)
|
|
730
|
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Total segment revenues
|
|
$
|
2,117
|
|
|
$
|
2,080
|
|
Adjustments:
|
|
|
|
|
||||
Non wholly-owned entities
(a)
|
|
7
|
|
|
4
|
|
||
Reimbursable items
|
|
192
|
|
|
198
|
|
||
Consolidated revenues
|
|
$
|
2,316
|
|
|
$
|
2,282
|
|
|
|
|
|
|
||||
Total segment EBITDA
|
|
$
|
754
|
|
|
$
|
730
|
|
Adjustments:
|
|
|
|
|
||||
Non wholly-owned entities
(a)
|
|
13
|
|
|
18
|
|
||
Depreciation and amortization
|
|
(246
|
)
|
|
(250
|
)
|
||
Interest expense, net
|
|
(203
|
)
|
|
(233
|
)
|
||
Loss on debt extinguishment
|
|
(1
|
)
|
|
—
|
|
||
Other items
(b)
|
|
(63
|
)
|
|
(63
|
)
|
||
Stock-based compensation
|
|
(56
|
)
|
|
(74
|
)
|
||
Income tax expense
|
|
(29
|
)
|
|
(27
|
)
|
||
Net income attributable to First Data Corporation
|
|
$
|
169
|
|
|
$
|
101
|
|
(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)
|
See "Other operating expenses, net" and "Other expense" in the Company's unaudited consolidated statements of income.
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Segment depreciation and amortization
|
|
$
|
233
|
|
|
$
|
242
|
|
Adjustments for non wholly-owned entities
|
|
14
|
|
|
16
|
|
||
Amortization of payments for customer contracts
(a)
|
|
14
|
|
|
13
|
|
||
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows
|
|
261
|
|
|
271
|
|
||
Amortization of equity method investments
(b)
|
|
(1
|
)
|
|
(8
|
)
|
||
Amortization of payments for customer contracts
(a)
|
|
(14
|
)
|
|
(13
|
)
|
||
Total consolidated depreciation and amortization per unaudited consolidated statements of income
|
|
$
|
246
|
|
|
$
|
250
|
|
(a)
|
Included in "Revenues excluding reimbursable items" as contra-revenue in the Company's unaudited consolidated statements of income.
|
(b)
|
Included in "Equity earnings in affiliates" in the Company's unaudited consolidated statements of income.
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Income tax expense
|
|
$
|
29
|
|
|
$
|
27
|
|
Effective income tax rate
|
|
12
|
%
|
|
17
|
%
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Balance as of January 1,
|
|
$
|
77
|
|
|
$
|
72
|
|
Distributions
|
|
(7
|
)
|
|
(8
|
)
|
||
Share of income
|
|
8
|
|
|
8
|
|
||
Adjustment to redemption value of redeemable noncontrolling interest
|
|
15
|
|
|
6
|
|
||
Balance as of March 31,
|
|
$
|
93
|
|
|
$
|
78
|
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Restructuring, net
|
|
$
|
3
|
|
|
$
|
32
|
|
Deal and deal integration costs
|
|
33
|
|
|
7
|
|
||
Merchant matters
|
|
—
|
|
|
20
|
|
||
Other
|
|
—
|
|
|
1
|
|
||
Other operating expenses, net
|
|
$
|
36
|
|
|
$
|
60
|
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Global Business Solutions
|
|
$
|
3
|
|
|
$
|
5
|
|
Global Financial Solutions
|
|
—
|
|
|
2
|
|
||
Network & Security Solutions
|
|
—
|
|
|
16
|
|
||
Corporate
|
|
—
|
|
|
9
|
|
||
Restructuring, net
|
|
$
|
3
|
|
|
$
|
32
|
|
(in millions)
|
|
Employee
Severance
|
|
Other
|
|
Total
|
||||||
Remaining accrual as of January 1, 2019
|
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
16
|
|
Employee expense
|
|
3
|
|
|
—
|
|
|
3
|
|
|||
Cash payments and other
|
|
(3
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|||
Remaining accrual as of March 31, 2019
|
|
$
|
9
|
|
|
$
|
6
|
|
|
$
|
15
|
|
•
|
Interest rate contracts: The Company uses a combination of floating to fixed interest rate swaps and collars to mitigate its exposure to interest rate fluctuations on interest payments related to variable rate debt. For interest rate swaps, floating rate payments are received in exchange for fixed-rate payments. For interest rate collar contracts, no payments or receipts are exchanged unless interest rates rise or fall in excess of 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 qualifying hedging relationships.
|
|
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||||||||||
(in millions)
|
|
Notional Currency
|
|
Notional Value
|
|
Assets
(a)
|
|
Liabilities
(a)
|
|
Notional Value
|
|
Assets
(a)
|
|
Liabilities
(a)
|
||||||||||
Derivatives designated as hedges of net investments in foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign exchange contracts
|
|
EUR
|
|
915
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
915
|
|
|
$
|
—
|
|
|
$
|
19
|
|
Foreign exchange contracts
|
|
GBP
|
|
150
|
|
|
2
|
|
|
—
|
|
|
150
|
|
|
6
|
|
|
—
|
|
||||
Foreign exchange contracts
|
|
CAD
|
|
95
|
|
|
3
|
|
|
—
|
|
|
95
|
|
|
5
|
|
|
—
|
|
||||
|
|
|
|
|
|
7
|
|
|
—
|
|
|
|
|
11
|
|
|
19
|
|
||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate collar contracts
(b)
|
|
USD
|
|
1,500
|
|
|
5
|
|
|
—
|
|
|
2,800
|
|
|
10
|
|
|
—
|
|
||||
Interest rate swap contracts
|
|
USD
|
|
7,250
|
|
|
—
|
|
|
67
|
|
|
7,250
|
|
|
—
|
|
|
44
|
|
||||
|
|
|
|
|
|
5
|
|
|
67
|
|
|
|
|
10
|
|
|
44
|
|
||||||
|
|
|
|
|
|
$
|
12
|
|
|
$
|
67
|
|
|
|
|
$
|
21
|
|
|
$
|
63
|
|
(a)
|
The Company's derivatives are subject to master netting agreements to the extent that the swaps are with the same counterparty. The terms of those agreements require that the Company net settle the outstanding positions at the option of the counterparty upon certain events of default.
|
(b)
|
The interest rate collar with a notional value of
$1.3 billion
matured in January 2019. The remaining interest rate collar with a notional value of
$1.5 billion
will mature in September 2019.
|
|
|
Three months ended March 31,
|
||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||
(in millions, pretax)
|
|
Interest
Rate Contracts |
|
Foreign
Exchange Contracts |
|
Interest
Rate Contracts |
|
Foreign
Exchange Contracts |
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain (loss) recognized in "Foreign currency translation adjustment" in the unaudited consolidated statements of comprehensive income (effective portion)
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
(Loss) gain recognized in "Derivative instruments" in the unaudited consolidated statements of comprehensive income (effective portion)
|
|
(28
|
)
|
|
—
|
|
|
9
|
|
|
—
|
|
|
|
Three months ended March 31,
|
||||||
(in millions, after tax)
|
|
2019
|
|
2018
|
||||
Accumulated gain included in other comprehensive income at beginning of the period
|
|
$
|
165
|
|
|
$
|
121
|
|
Decrease in fair value of derivatives that qualify for hedge accounting, net of tax
(a) (b)
|
|
(3
|
)
|
|
(16
|
)
|
||
Accumulated gain included in other comprehensive income at end of the period
|
|
$
|
162
|
|
|
$
|
105
|
|
(a)
|
Losses are included in "Derivative instruments" and “Foreign currency translation adjustment” in the unaudited consolidated statements of comprehensive income.
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Net operating revenues
|
|
$
|
192
|
|
|
$
|
195
|
|
Operating expenses
|
|
103
|
|
|
101
|
|
||
Operating income
|
|
$
|
89
|
|
|
$
|
94
|
|
Net income
|
|
$
|
90
|
|
|
$
|
94
|
|
FDC equity earnings
|
|
36
|
|
|
33
|
|
(in millions)
|
|
Three months ended March 31,
|
||
Net income attributable to First Data Corporation ending March 31, 2018
|
|
$
|
101
|
|
Better (worse):
|
|
|
|
|
Revenues excluding reimbursable items
|
|
40
|
|
|
Cost of revenues
|
|
22
|
|
|
Selling, general, and administrative
|
|
(13
|
)
|
|
Depreciation and amortization
|
|
4
|
|
|
Other operating expenses, net
|
|
24
|
|
|
Interest expense, net
|
|
30
|
|
|
Loss on debt extinguishment
|
|
(1
|
)
|
|
Other expense
|
|
(24
|
)
|
|
Income tax
|
|
(2
|
)
|
|
Equity earnings in affiliates
|
|
3
|
|
|
Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
(15
|
)
|
|
Net income attributable to First Data Corporation ending March 31, 2019
|
|
$
|
169
|
|
•
|
The accounting policies of the reportable 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 items.
|
•
|
Segment EBITDA (earnings before net interest expense, income taxes, depreciation, and amortization) includes equity earnings in affiliates and excludes net income attributable to noncontrolling interests, other operating expenses, net, other expense, and stock-based compensation.
|
•
|
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.
|
•
|
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. To present this information, monthly results during the periods presented for entities with functional 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 period, rather than the actual average exchange rates in effect during the current period. Once translated, each month during the periods presented is added together to calculate the constant currency results for the periods presented.
|
•
|
Organic constant currency growth is defined as reported growth adjusted for the following, if applicable: (1) excludes the impacts of period-over-period currency rate changes in the current period; (2) excludes the results of significant divestitures in the prior period; and (3) includes the results of significant acquisitions in the prior period.
|
•
|
Currency impact is defined as the difference between the current period's actual results and the same period's results converted with the prior period's foreign exchange rate.
|
|
|
Three months ended March 31,
|
|
|
|
Organic Constant Currency Percent Change
|
||||||||
(in millions)
|
|
2019
|
|
2018
|
|
Percent Change
|
|
|||||||
Consolidated revenues
|
|
$
|
2,316
|
|
|
$
|
2,282
|
|
|
|
|
|
||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||
Non wholly-owned entities
|
|
(7
|
)
|
|
(4
|
)
|
|
|
|
|
||||
Reimbursable items
|
|
(192
|
)
|
|
(198
|
)
|
|
|
|
|
||||
Total segment revenues
|
|
$
|
2,117
|
|
|
$
|
2,080
|
|
|
2
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Three months ended March 31,
|
|
Percent Change
|
|
Organic Constant Currency Percent Change
|
||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|
||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|
|
|||||
Global Business Solutions
|
|
$
|
1,387
|
|
|
$
|
1,318
|
|
|
5
|
%
|
|
10
|
%
|
Global Financial Solutions
|
|
369
|
|
|
400
|
|
|
(8
|
)%
|
|
9
|
%
|
||
Network & Security Solutions
|
|
361
|
|
|
362
|
|
|
—
|
%
|
|
—
|
%
|
||
Total segment revenues
|
|
$
|
2,117
|
|
|
$
|
2,080
|
|
|
2
|
%
|
|
8
|
%
|
(in millions)
|
|
Three months ended March 31, 2018
|
|
Acquisitions/(Dispositions)
|
|
Core Growth
|
|
Currency Impact
|
|
Three months ended March 31, 2019
|
|
Percent Change
|
|
Organic Constant Currency Percent Change
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
|
$
|
1,014
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
(1
|
)
|
|
$
|
1,069
|
|
|
5
|
%
|
|
5
|
%
|
EMEA
|
|
168
|
|
|
(2
|
)
|
|
13
|
|
|
(13
|
)
|
|
166
|
|
|
(1
|
)%
|
|
8
|
%
|
|||||
LATAM
|
|
88
|
|
|
2
|
|
|
52
|
|
|
(42
|
)
|
|
100
|
|
|
14
|
%
|
|
58
|
%
|
|||||
APAC
|
|
48
|
|
|
—
|
|
|
7
|
|
|
(3
|
)
|
|
52
|
|
|
9
|
%
|
|
16
|
%
|
|||||
Total segment revenue
|
|
$
|
1,318
|
|
|
$
|
—
|
|
|
$
|
128
|
|
|
$
|
(59
|
)
|
|
$
|
1,387
|
|
|
5
|
%
|
|
10
|
%
|
(in millions)
|
|
Three months ended March 31, 2018
|
|
(Dispositions)
|
|
Core Growth
|
|
Currency Impact
|
|
Three months ended March 31, 2019
|
|
Percent Change
|
|
Organic Constant Currency Percent Change
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
North America
|
|
$
|
228
|
|
|
$
|
(20
|
)
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
221
|
|
|
(3
|
)%
|
|
6
|
%
|
EMEA
|
|
110
|
|
|
(26
|
)
|
|
4
|
|
|
(5
|
)
|
|
83
|
|
|
(25
|
)%
|
|
5
|
%
|
|||||
LATAM
|
|
31
|
|
|
—
|
|
|
10
|
|
|
(8
|
)
|
|
33
|
|
|
4
|
%
|
|
29
|
%
|
|||||
APAC
|
|
31
|
|
|
—
|
|
|
3
|
|
|
(2
|
)
|
|
32
|
|
|
6
|
%
|
|
13
|
%
|
|||||
Total segment revenue
|
|
$
|
400
|
|
|
$
|
(46
|
)
|
|
$
|
30
|
|
|
$
|
(15
|
)
|
|
$
|
369
|
|
|
(8
|
)%
|
|
9
|
%
|
(in millions)
|
|
Three months ended March 31, 2018
|
|
Core Growth (Decline)
|
|
Three months ended March 31, 2019
|
|
Percent Change
|
|
Organic Constant Currency Percent Change
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
EFT Network
|
|
$
|
120
|
|
|
$
|
5
|
|
|
$
|
125
|
|
|
4
|
%
|
|
4
|
%
|
Security and Fraud
|
|
112
|
|
|
(2
|
)
|
|
110
|
|
|
(2
|
)%
|
|
(2
|
)%
|
|||
Stored Value Network
|
|
84
|
|
|
(1
|
)
|
|
83
|
|
|
(2
|
)%
|
|
(1
|
)%
|
|||
Other
|
|
46
|
|
|
(3
|
)
|
|
43
|
|
|
(4
|
)%
|
|
(4
|
)%
|
|||
Total segment revenue
|
|
$
|
362
|
|
|
$
|
(1
|
)
|
|
$
|
361
|
|
|
—
|
%
|
|
—
|
%
|
|
|
Three months ended March 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|
||||||||
Cost of revenues (exclusive of items shown below)
|
|
$
|
757
|
|
|
$
|
779
|
|
|
(3
|
)%
|
|
—
|
%
|
Selling, general, and administrative
|
|
660
|
|
|
647
|
|
|
2
|
%
|
|
4
|
%
|
||
Cost of revenues and Selling, general, and administrative expenses
|
|
1,417
|
|
|
1,426
|
|
|
(1
|
)%
|
|
2
|
%
|
||
Depreciation and amortization
|
|
246
|
|
|
250
|
|
|
(2
|
)%
|
|
4
|
%
|
||
Other operating expenses, net
|
|
36
|
|
|
60
|
|
|
(40
|
)%
|
|
(40
|
)%
|
||
Total expenses (excluding reimbursable items)
|
|
1,699
|
|
|
1,736
|
|
|
(2
|
)%
|
|
1
|
%
|
||
Reimbursable items
|
|
192
|
|
|
198
|
|
|
(3
|
)%
|
|
(3
|
)%
|
||
Total expenses
|
|
$
|
1,891
|
|
|
$
|
1,934
|
|
|
(2
|
)%
|
|
—
|
%
|
(in millions)
|
|
Three months ended March 31, 2018
|
|
Acquisitions/(Dispositions)
(a)
|
|
Core Growth (Decline)
|
|
Three months ended March 31, 2019
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||||
Sales and distribution incentives
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
43
|
|
(b)
|
$
|
345
|
|
|
|
|
|
||
Salaries, wages, bonus, and outside professional fees
|
|
641
|
|
|
(21
|
)
|
|
(22
|
)
|
(c)
|
598
|
|
|
|
|
|
||||||
Stock-based compensation
|
|
74
|
|
|
—
|
|
|
(18
|
)
|
(d)
|
56
|
|
|
|
|
|
||||||
Cost of products sold
|
|
82
|
|
|
(1
|
)
|
|
16
|
|
(e)
|
97
|
|
|
|
|
|
||||||
Software, telecommunication infrastructure, and repairs
|
|
93
|
|
|
(2
|
)
|
|
5
|
|
|
96
|
|
|
|
|
|
||||||
Other
|
|
234
|
|
|
(2
|
)
|
|
(7
|
)
|
|
225
|
|
|
|
|
|
||||||
Cost of revenues and Selling, general, and administrative expenses
|
|
$
|
1,426
|
|
|
$
|
(26
|
)
|
|
$
|
17
|
|
|
$
|
1,417
|
|
|
(1
|
)%
|
|
2
|
%
|
(a)
|
Expenses were impacted by the acquisition of Software Express in March 2019, the dispositions of the remittance processing business in August 2018, and disposition of the card processing business in Central and Southeastern Europe in September 2018. See
note 11 "Acquisitions"
in our unaudited consolidated financial statements in Part I of this Form 10-Q and note 13 "Acquisitions and Dispositions" in "Item 8. Financial Statements and Supplementary Data" in our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information.
|
(b)
|
Increase related to growth in our merchant acquiring business.
|
(c)
|
Decrease primarily due to cost savings initiatives.
|
(d)
|
Decrease primarily due to cost savings initiatives and sizable stock awards which vested prior to the three months ended March 31, 2019.
|
(e)
|
Increase primarily due to organic growth and initial direct cost related to hardware revenue.
|
|
|
Three months ended March 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|
||||||||
Depreciation expense
|
|
$
|
83
|
|
|
$
|
82
|
|
|
1
|
%
|
|
|
|
Amortization expense
|
|
163
|
|
|
168
|
|
|
(3
|
)%
|
|
|
|||
Depreciation and amortization
|
|
$
|
246
|
|
|
$
|
250
|
|
|
(2
|
)%
|
|
4
|
%
|
|
|
Three months ended March 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|
||||||||
Restructuring, net
|
|
$
|
3
|
|
|
$
|
32
|
|
|
|
|
|
||
Deal and deal integration costs
|
|
33
|
|
|
7
|
|
|
|
|
|
||||
Merchant matters
|
|
—
|
|
|
20
|
|
|
|
|
|
||||
Other
|
|
—
|
|
|
1
|
|
|
|
|
|
||||
Other operating expenses, net
(a)
|
|
$
|
36
|
|
|
$
|
60
|
|
|
(40
|
)%
|
|
(40
|
)%
|
(a)
|
See note 10 "Other Operating Expenses, Net" in our unaudited consolidated financial statements in Part I of this Form 10-Q
for additional information regarding other operating expenses.
|
|
|
Three months ended March 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|
||||||||
Interest expense, net
(a)
|
|
$
|
203
|
|
|
$
|
233
|
|
|
(13
|
)%
|
|
(13
|
)%
|
(a)
|
See note 2 "Borrowings" in our unaudited consolidated financial statements in Part I of this Form 10-Q
for additional information.
|
|
|
Three months ended March 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
|
||||||
Non-operating foreign currency loss
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
|
|
|
Other miscellaneous expense
(a)
|
|
(25
|
)
|
|
—
|
|
|
|
|
|
||
Other expense
|
|
$
|
(27
|
)
|
|
$
|
(3
|
)
|
|
NM
|
|
NM
|
(a)
|
For the three months ended March 31, 2019 we recorded expenses of $23 million for an out of period adjustment, which impacted multiple years, related to correction of a lease classification error. We do not believe this adjustment will be material to the financial statements for the year ended December 31, 2019 and it is not material to previously reported financial statements.
|
|
|
Three months ended March 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|
||||||||
Equity earnings in affiliates
(a)
|
|
$
|
52
|
|
|
$
|
49
|
|
|
6
|
%
|
|
8
|
%
|
(a)
|
Equity earnings in affiliates is related to the earnings of our unconsolidated merchant alliance partnerships. The improvement in equity earnings for the three months ended March 31, 2019 was driven primarily by lower amortization expense as one of our equity method investments was fully amortized by December 31, 2018.
|
|
|
Three months ended March 31,
|
|
Percent Change
|
|
Constant Currency Percent Change
|
||||||||
(in millions)
|
|
2019
|
|
2018
|
|
|
||||||||
Net income attributable to noncontrolling interests and redeemable noncontrolling interest
(a)
|
|
$
|
48
|
|
|
$
|
33
|
|
|
45
|
%
|
|
48
|
%
|
(a)
|
Net income attributable to noncontrolling interests and redeemable noncontrolling interest relates to the ownership interest of our alliance partners in our consolidated results. The improvement in Net income attributable to noncontrolling interests and redeemable noncontrolling interest for the three months ended March 31, 2019 was primarily driven by the non-recurrence of a $10 million expense related to a merchant matter in the prior year period.
|
(in millions)
|
|
Three months ended March 31, 2018
|
|
(Dispositions)
(a)
|
|
Core Growth (Decline)
|
|
Currency Impact
|
|
Three months ended March 31, 2019
|
|
Reported Percent Change
|
|
Organic Constant Currency Percent Change
|
||||||||||||
Segment EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Global Business Solutions
|
|
$
|
434
|
|
|
$
|
(1
|
)
|
|
$
|
67
|
|
|
$
|
(29
|
)
|
|
$
|
471
|
|
|
8
|
%
|
|
15
|
%
|
Global Financial Solutions
|
|
166
|
|
|
(10
|
)
|
|
—
|
|
|
(9
|
)
|
|
147
|
|
|
(12
|
)%
|
|
—
|
%
|
|||||
Network & Security Solutions
|
|
175
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
195
|
|
|
11
|
%
|
|
11
|
%
|
|||||
Corporate
|
|
(45
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(59
|
)
|
|
(26
|
)%
|
|
(26
|
)%
|
|||||
Total Segment EBITDA (non-GAAP)
|
|
$
|
730
|
|
|
$
|
(11
|
)
|
|
$
|
73
|
|
|
$
|
(38
|
)
|
|
$
|
754
|
|
|
3
|
%
|
|
10
|
%
|
(a)
|
EBITDA was impacted by the acquisitions and dispositions discussed previously.
|
|
|
Three months ended March 31,
|
|
Reported Percent Change
|
|
Organic Constant Currency Percent Change
|
|||||
|
|
2019
|
|
2018
|
|
|
|||||
Segment EBITDA Margin:
|
|
|
|
|
|
|
|
|
|
|
|
Global Business Solutions
|
|
34.0
|
%
|
|
32.9
|
%
|
|
110
|
bps
|
|
170 bps
|
Global Financial Solutions
|
|
39.8
|
%
|
|
41.5
|
%
|
|
(170
|
) bps
|
|
(340) bps
|
Network & Security Solutions
|
|
54.0
|
%
|
|
48.3
|
%
|
|
570
|
bps
|
|
570 bps
|
Total Segment EBITDA Margin
|
|
35.6
|
%
|
|
35.1
|
%
|
|
50
|
bps
|
|
80 bps
|
|
|
Three months ended March 31,
|
|||||||||
(in millions)
|
|
2019
|
|
2018
|
|
% Change
|
|||||
Net income attributable to First Data Corporation
|
|
$
|
169
|
|
|
$
|
101
|
|
|
67
|
%
|
Adjustments:
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
|
56
|
|
|
74
|
|
|
(24
|
)%
|
||
Loss on debt extinguishment
|
|
1
|
|
|
—
|
|
|
NM
|
|
||
Amortization of acquisition intangibles and deferred financing costs
(a)
|
|
89
|
|
|
106
|
|
|
(16
|
)%
|
||
Other operating expenses, net and Other expense
|
|
63
|
|
|
63
|
|
|
—
|
%
|
||
Other
(b)
|
|
—
|
|
|
(11
|
)
|
|
NM
|
|
||
Discrete tax items
(c)
|
|
—
|
|
|
6
|
|
|
NM
|
|
||
Income tax on above items
(d)
|
|
(75
|
)
|
|
(60
|
)
|
|
(25
|
)%
|
||
Adjusted net income attributable to First Data Corporation
|
|
$
|
303
|
|
|
$
|
279
|
|
|
9
|
%
|
(a)
|
Represents amortization of intangibles established in connection with the 2007 merger and acquisitions we have made since 2007, excluding the percentage of our consolidated amortization of acquisition intangibles related to non-wholly owned consolidated alliances equal to the portion of such alliances owned by our alliance partners. This line also includes amortization related to deferred financing costs of
$3 million
and
$5 million
for the
three
months ended
March 31, 2019
and
2018
, respectively.
|
(b)
|
The 2018 balance represents adjustments for non wholly-owned entities.
|
(c)
|
We exclude from "Adjusted net income attributable to First Data Corporation" certain discrete tax items, such as tax law changes, tax impact of mergers and acquisitions, valuation allowance releases, and tax reserves related to issues that arose before KKR acquired us.
|
(d)
|
The tax effect of the adjustments between our GAAP and adjusted results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact at the U.S. effective tax rate for certain adjustments, including the majority of amortization of intangible assets, deferred financing costs, stock compensation, and loss on debt extinguishment; whereas the tax impact of other adjustments, including restructuring expense, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable effective tax rate(s) in those jurisdictions.
|
|
|
As of
|
|
As of
|
||||
(in millions)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Total long-term borrowings
|
|
$
|
16,282
|
|
|
$
|
16,429
|
|
Total short-term and current portion of long-term borrowings
|
|
1,159
|
|
|
1,170
|
|
||
Total borrowings
|
|
17,441
|
|
|
17,599
|
|
||
Unamortized discount and unamortized deferred financing costs
|
|
88
|
|
|
94
|
|
||
Total borrowings at par
|
|
17,529
|
|
|
17,693
|
|
||
Less: settlement lines of credit
|
|
127
|
|
|
224
|
|
||
Gross debt excluding settlement lines of credit
|
|
17,402
|
|
|
17,469
|
|
||
Less: cash and cash equivalents
|
|
619
|
|
|
555
|
|
||
Net debt
|
|
$
|
16,783
|
|
|
$
|
16,914
|
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||||||||||||
(in millions)
|
|
Available
|
|
Unavailable
|
|
Total
|
|
Available
|
|
Unavailable
|
|
Total
|
||||||||||||
Domestic
|
|
$
|
62
|
|
|
$
|
150
|
|
(a)
|
$
|
212
|
|
|
$
|
28
|
|
|
$
|
156
|
|
(a)
|
$
|
184
|
|
International
|
|
208
|
|
|
199
|
|
(b)
|
407
|
|
|
200
|
|
|
171
|
|
(b)
|
371
|
|
||||||
Total
|
|
$
|
270
|
|
|
$
|
349
|
|
|
$
|
619
|
|
|
$
|
228
|
|
|
$
|
327
|
|
|
$
|
555
|
|
(a)
|
Represents cash held by two of our domestic entities that are not available to fund operations outside of these entities unless the Board of Directors of these respective entities declare a dividend. Also, one of these entities is subject to regulatory capital requirements that must be satisfied before a dividend may be declared.
|
(b)
|
Consolidated foreign joint ventures held
$194 million
and
$169 million
in cash and cash equivalents as of
March 31, 2019
and
December 31, 2018
, respectively. Distributions of these funds are subject to the joint ventures' Board of Directors authorization.
|
|
|
Three months ended March 31,
|
||||||
Source/(use) (in millions)
|
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
|
$
|
615
|
|
|
$
|
534
|
|
Net cash used in investing activities
|
|
(261
|
)
|
|
(143
|
)
|
||
Net cash used in financing activities
|
|
(275
|
)
|
|
(304
|
)
|
Source/(use) (in millions)
|
|
Three months ended March 31, 2019
|
||
Net cash provided by operating activities, previous period
|
|
$
|
534
|
|
Increases (decreases) in:
|
|
|
||
Net income, excluding other operating expenses, net and other expense
(a)
|
|
82
|
|
|
Depreciation and amortization
|
|
(10
|
)
|
|
Working capital
(b)
|
|
9
|
|
|
Net cash provided by operating activities, end of period
|
|
$
|
615
|
|
(a)
|
Excludes loss on debt extinguishment, stock-based compensation expense, and other non-cash items.
|
(b)
|
Change driven by timing of receipts and payments.
|
|
|
Three months ended March 31,
|
||||||||||
Source/(use) (in millions)
|
|
2019
|
|
2018
|
|
Change
|
||||||
Acquisitions
(a)
|
|
$
|
(73
|
)
|
|
$
|
(17
|
)
|
|
$
|
(56
|
)
|
Capital expenditures
(b)
|
|
(166
|
)
|
|
(139
|
)
|
|
(27
|
)
|
|||
Other
(c)
|
|
(22
|
)
|
|
13
|
|
|
(35
|
)
|
|||
Net cash used in investing activities
|
|
$
|
(261
|
)
|
|
$
|
(143
|
)
|
|
$
|
(118
|
)
|
(a)
|
See note 11 "Acquisitions" in our unaudited consolidated financial statements in Part I of this Form 10-Q
and note 13 "Acquisitions and Dispositions" in "Item 8. Financial Statements and Supplementary Data" in our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information.
|
(b)
|
Change in capital expenditures is related to an increase in cash outlays for software, technology, and building improvements.
|
(c)
|
Other represents proceeds from maturity of net investment hedges, purchase of investments, and other investing activities.
|
|
|
Three months ended March 31,
|
||||||||||
Source/(use) (in millions)
|
|
2019
|
|
2018
|
|
Change
|
||||||
Net debt transactions
(a)
|
|
$
|
(166
|
)
|
|
$
|
(206
|
)
|
|
$
|
40
|
|
Other
(b)
|
|
(109
|
)
|
|
(98
|
)
|
|
(11
|
)
|
|||
Net cash used in financing activities
|
|
$
|
(275
|
)
|
|
$
|
(304
|
)
|
|
$
|
29
|
|
(a)
|
Details regarding our debt structure are provided in
note 2 "Borrowings"
in our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.
|
(b)
|
Other represents payment of taxes related to net settlement of equity awards, distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest, and other financing activities.
|
|
|
Three months ended March 31,
|
||||||||||
Source/(use) (in millions)
|
|
2019
|
|
2018
|
|
Change
|
||||||
Net cash provided by operating activities
(a)
|
|
$
|
615
|
|
|
$
|
534
|
|
|
$
|
81
|
|
Capital expenditures
(b)
|
|
(166
|
)
|
|
(139
|
)
|
|
(27
|
)
|
|||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest, and other
(c)
|
|
(52
|
)
|
|
(27
|
)
|
|
(25
|
)
|
|||
Free cash flow
|
|
$
|
397
|
|
|
$
|
368
|
|
|
$
|
29
|
|
(a)
|
See "
Cash provided by operating activities
".
|
(b)
|
See "
Cash used in investing activities
".
|
(c)
|
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest, and other decreased due to a non-recurring $26 million received from the maturity of a net investment hedge in 2018.
|
|
|
Total Available
(a)
|
|
Total Outstanding
|
||||||||||||
(in millions)
|
|
As of March 31,
2019 |
|
As of December 31,
2018 |
|
As of March 31,
2019 |
|
As of December 31,
2018 |
||||||||
Letters of credit
(b)
|
|
$
|
283
|
|
|
$
|
283
|
|
|
$
|
35
|
|
|
$
|
35
|
|
Lines of credit
|
|
378
|
|
|
516
|
|
|
127
|
|
|
224
|
|
(a)
|
Total available without giving effect to amounts outstanding.
|
(b)
|
See note 2 "Borrowings" in our unaudited consolidated financial statements in Part I of this Form 10-Q
.
|
(in millions)
|
|
Last twelve
months ended March 31, 2019 |
||
Net income attributable to First Data Corporation
|
|
$
|
1,073
|
|
Interest expense, net
|
|
887
|
|
|
Income tax expense
|
|
51
|
|
|
Depreciation and amortization
|
|
1,080
|
|
|
EBITDA
|
|
3,091
|
|
|
|
|
|
|
|
Loss on debt extinguishment
|
|
153
|
|
|
Stock-based compensation
|
|
230
|
|
|
Net income attributable to noncontrolling interests and redeemable noncontrolling interest
|
|
208
|
|
|
Projected near-term cost savings and revenue enhancements
(a)
|
|
48
|
|
|
Restructuring, net
|
|
56
|
|
|
Non-operating foreign currency losses
|
|
(7
|
)
|
|
Equity entities taxes, depreciation and amortization
(b)
|
|
18
|
|
|
Divestitures, net
|
|
(197
|
)
|
|
Other
(c)
|
|
47
|
|
|
Covenant EBITDA
|
|
$
|
3,647
|
|
(a)
|
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.
|
(b)
|
Represents our proportional share of income taxes, depreciation, and amortization on equity method investments.
|
(c)
|
Includes items such as pension losses, litigation and regulatory settlements, impairments, deal and deal integration costs, acquisitions and dispositions, and other as applicable to the period presented.
|
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased Under Announced Program
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under Announced Programs
|
January 1, 2019 through January 31, 2019
|
-
|
-
|
-
|
-
|
February 1, 2019 through February 28, 2019
|
336,684
(a)
|
$25.27
|
-
|
-
|
March 1, 2019 through March 31, 2019
|
-
|
-
|
-
|
-
|
(a)
|
Shares surrendered to us to satisfy tax withholding obligations in connection with the vesting of restricted stock awards issued to employees.
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
Incorporated by Reference
|
||||||||
Exhibit Number
|
|
Exhibit Description
|
Form
|
|
File Number
|
|
Exhibit Number
|
|
Filing Date
|
31.1
(1)
|
|
|
|
|
|
|
|
|
|
31.2
(1)
|
|
|
|
|
|
|
|
|
|
32.1
(1)
|
|
|
|
|
|
|
|
|
|
32.2
(1)
|
|
|
|
|
|
|
|
|
|
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
|
|
|
FIRST DATA CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
April 30, 2019
|
By
|
/s/ Himanshu A. Patel
|
|
|
|
Himanshu A. Patel
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
|
Date:
|
April 30, 2019
|
By
|
/s/ Michael K. Neborak
|
|
|
|
Michael K. Neborak
|
|
|
|
Executive Vice President, Corporate Controller and
Chief Accounting Officer
|
|
|
|
(principal accounting officer)
|
1 Year First Data Chart |
1 Month First Data Chart |
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