- Q2 consolidated revenue of $2,485 million, up 2%
- Q2 total segment revenue of $2,278 million, up 2% as reported;
up 7% on an organic constant currency(a) basis
- Q2 net income attributable to First Data diluted EPS of $0.28,
down 21%, primarily driven by a $107 million tax benefit in the
prior year quarter
- Q2 adjusted diluted EPS of $0.42, up 8% in the quarter
- Q2 total segment EBITDA of $893 million, up 3% as reported; up
9% on an organic constant currency(a) basis
- Q2 cash flow from operations of $713 million; free cash flow of
$414 million
- Total borrowings declined $638 million year to date; net debt
declined $534 million year to date
- Company reiterates full year 2019 guidance
- Combination with Fiserv expected to close on or about July 29,
2019
First Data Corporation (NYSE: FDC), a global leader in
commerce-enabling technology and solutions, today reported
financial results for the second quarter and six months ended June
30, 2019.
"Our strong results for the first half of the year reflect the
great momentum we continue to see around the world in both our
merchant acquiring and card processing businesses," said First Data
Chairman and CEO Frank Bisignano. "As we look ahead, we remain
focused on executing against our key strategic initiatives
including continuously innovating to help our clients, and are
confident that the pending merger with Fiserv will enhance our
offerings and create tremendous value for our clients and
shareholders."
Consolidated revenue was $2,485 million in the second quarter
and $4,801 million in the first six months of 2019, up 2% in both
periods compared to the prior year periods, reflecting solid
operational performance offset by the impact of recent divestitures
in Global Financial Solutions and unfavorable year-over-year
foreign currency movements. Total segment revenue was $2,278
million in the second quarter and $4,395 million in the first six
months of 2019, up 2% on a reported basis in both periods compared
to the prior year periods. On an organic constant currency
basis(a), total segment revenue increased 7% in both the second
quarter and the first six months of 2019.
Net income attributable to First Data was $275 million, or $0.28
per diluted share, in the second quarter and $444 million, or $0.46
per diluted share, in the first six months of 2019, down 21% and
1%, respectively, on a per share basis compared to the prior year
periods. The declines were primarily driven by the non-recurrence
of a $107 million tax benefit related to a settlement of an IRS
audit in the second quarter of 2018, and unfavorable year-over-year
foreign currency movements, partially offset by improved operating
results.
Adjusted net income, which modifies net income attributable to
First Data for items such as gains/losses from divestitures, debt
extinguishment charges, stock-based compensation, amortization of
acquisition intangibles, restructuring costs, certain discrete tax
items and other items, was $409 million, or $0.42 per diluted
share, in the second quarter and $712 million, or $0.73 per diluted
share, in the first six months of 2019, up 8% and 7%, respectively,
on a per share basis compared to the prior year periods. The
increases were driven primarily by improved operating results,
partially offset by unfavorable year-over-year foreign currency
movements.
Total segment earnings before interest, taxes, depreciation, and
amortization (total segment EBITDA) was $893 million in the second
quarter and $1,647 million in the first six months of 2019, up 3%
on a reported basis in both periods compared to prior year periods,
reflecting solid operational performance offset by the impact of
recent divestitures in Global Financial Solutions and unfavorable
year-over-year foreign currency movements. On an organic constant
currency basis(a), total EBITDA increased 9% in both periods. Total
segment EBITDA margin was 39.2% in the second quarter and 37.5% in
the first six months of 2019, up 60 basis points and 70 basis
points, respectively, on an organic constant currency basis(a)
compared to the respective prior year periods.
Second Quarter Segment Results
Global Business Solutions (GBS)
Second quarter 2019 GBS segment revenue increased 5% on a
reported basis to $1,527 million, or increased 9% on an organic
constant currency basis(a). Within geographic regions, North
America revenue increased 5% on both a reported and organic
constant currency basis(a) to $1,187 million, driven by strong
growth in the Partner Solutions channel. EMEA revenue of $181
million was flat on a reported basis, or increased 8% on an organic
constant currency basis(a). Latin America revenue increased 22% on
a reported basis to $104 million, or increased 52% on an organic
constant currency basis(a). APAC revenue increased 10% on a
reported basis to $55 million, or increased 16% on an organic
constant currency basis(a).
Second quarter 2019 GBS segment EBITDA increased 4% on a
reported basis to $564 million, or increased 9% on an organic
constant currency basis(a). GBS Segment EBITDA margin was 36.9%,
down 10 basis points compared to the prior year period on an
organic constant currency basis(a).
Global Financial Solutions (GFS)
Second quarter 2019 GFS segment revenue decreased 9% on a
reported basis to $376 million, primarily driven by recent
divestitures, partially offset by growth in all geographic regions.
On an organic constant currency basis(a), GFS segment revenue
increased 7%. Within geographic regions, North America revenue
decreased 5% on a reported basis to $222 million, or increased 4%
on an organic constant currency basis(a). EMEA revenue decreased
24% on a reported basis to $90 million, or increased 3% on an
organic constant currency basis(a). Latin America revenue decreased
4% on a reported basis to $34 million, or increased 23% on an
organic constant currency basis(a). APAC revenue increased 11% on a
reported basis to $30 million, or increased 17% on an organic
constant currency basis(a).
Second quarter 2019 GFS segment EBITDA decreased 11% on a
reported basis to $157 million, or was flat on an organic constant
currency basis(a), as organic constant currency revenue growth was
offset by added costs primarily associated with ramping new deals.
GFS segment EBITDA margin was 41.8%, down 260 basis points on an
organic constant currency basis(a).
Network & Security Solutions (NSS)
Second quarter 2019 NSS segment revenue increased 1% on both a
reported and organic constant currency basis(a) to $375 million, as
growth within the EFT business was offset by flat to modest
declines in NSS's other businesses.
Second quarter 2019 NSS segment EBITDA increased 12% on both a
reported and organic constant currency basis(a) to $216 million.
NSS Segment EBITDA margin was 57.6%, up 560 basis points on an
organic constant currency basis(a).
Cash Flow
Cash flow from operations was $713 million in the second quarter
and $1,328 million in the first six months of 2019, up $109 million
and $190 million, respectively, compared to the prior year periods.
Free cash flow, which the Company defines as cash flow from
operations less capital expenditures, distributions to minority
interests and other, was $414 million in the second quarter and
$811 million in the first six months of 2019, up $36 million and
$65 million, respectively, compared to the prior year periods,
primarily driven by improved operating results and reduced cash
interest and tax payments, partially offset by higher capital
expenditures.
Capital Structure
First Data's total borrowings at June 30, 2019 decreased by $638
million to $16,961 million, from $17,599 million at December 31,
2018. Net debt at June 30, 2019 decreased by $534 million to
$16,380 million, from $16,914 million at December 31, 2018.
2019 Guidance Reiterated
The Company reiterated its full year 2019 financial guidance.
The guidance does not include any impact related to the previously
announced merger with Fiserv.
The Company expects:
- Full year total segment revenue: organic constant currency(a)
growth of 5% to 6%
- Full year total segment EBITDA: organic constant currency(a)
growth of 6% to 8%
- Full year adjusted diluted EPS: $1.55 - $1.58
- Full year free cash flow: $1.5 billion+
The Company now expects negative impacts on second-half reported
segment revenue and EBITDA from foreign currency in the range of
30% to 40% of the impacts experienced in the first half of the
year.
“We expect to complement our strong first-half performance with
second-half revenue growth towards the upper end of our 2019
guidance,” said Bisignano.
Update on Timing of Proposed Combination with Fiserv
As of July 23, 2019, the Company and Fiserv received the final
required regulatory approvals and non-objections needed to complete
the proposed combination. The Company and Fiserv expect to close
the proposed acquisition on or about July 29, 2019.
Investor Conference Call
Due to the pending merger with Fiserv, the Company will not host
a conference call/webcast to review the second quarter 2019
financial results.
Non-GAAP Measures
To supplement the Company's consolidated financial statements
presented in accordance with generally accepted accounting
principles, or GAAP, the Company uses non-GAAP measures of certain
financial performance. These non-GAAP measures include total
segment revenue, total segment expense, total segment EBITDA,
adjusted net income, adjusted EPS, free cash flow and net debt, and
growth rates for these metrics compared to prior periods. The
Company has included non-GAAP measures because management believes
that they help to facilitate comparisons of the Company's operating
results between periods. The Company believes the non-GAAP measures
provide useful information to both management and users of our
financial statements by excluding certain expenses, gains and
losses that may not be indicative of its core operating results and
business outlook. These non-GAAP measures are not in accordance
with, or an alternative to, measures prepared in accordance with
GAAP and may be different from non-GAAP measures used by other
companies. In addition, these non-GAAP measures are not based on
any comprehensive set of accounting rules or principles. These
measures should only be used to evaluate the Company's results of
operations in conjunction with the corresponding GAAP measures.
Additional information about non-GAAP financial measures, including
reconciliations of all non-GAAP measures to the most directly
comparable GAAP measure can be found in the tables included in this
press release.
About First Data
First Data (NYSE: FDC) is a global leader in commerce-enabling
technology and solutions, serving approximately six million
business locations and more than 3,700 financial institutions in
more than 100 countries around the world. The Company’s 19,000
owner-associates are dedicated to helping companies, from start-ups
to the world’s largest corporations, conduct commerce every day by
securing and processing more than 3,000 transactions per second and
$2.6 trillion per year.
(a) Non-GAAP growth rate -- Organic constant
currency growth (“Organic CC growth”) is defined as reported growth
adjusted for the following: (1) excludes the impacts of
year-over-year currency rate changes in the current period; (2)
excludes the results of significant divestitures in the prior year
period; and (3) includes the results of significant acquisitions in
the prior year period.
First Data Corporation
Consolidated Statements of
Operations
(Unaudited)
(in millions, except per share
data)
Three months ended June
30,
Six months ended June
30,
2019
2018
2019
2018
Revenues:
Revenues excluding reimbursable items
$
2,289
$
2,244
$
4,413
$
4,328
Reimbursable items
196
204
388
402
Total revenues
2,485
2,448
4,801
4,730
Expenses:
Cost of revenues (exclusive of items shown
below)
757
751
1,514
1,530
Selling, general, and administrative
688
683
1,348
1,330
Depreciation and amortization
253
255
499
505
Other operating expenses, net
24
17
60
77
Total expenses excluding reimbursable
items
1,722
1,706
3,421
3,442
Reimbursable items
196
204
388
402
Total expenses
1,918
1,910
3,809
3,844
Operating profit
567
538
992
886
Interest expense, net
(202
)
(234
)
(405
)
(467
)
Loss on debt extinguishment
(2
)
(1
)
(3
)
(1
)
Other (expense) income
(8
)
2
(35
)
(1
)
Income before income taxes and equity
earnings in affiliates
355
305
549
417
Income tax expense (benefit)
85
(37
)
114
(10
)
Equity earnings in affiliates
64
60
116
109
Net income
334
402
551
536
Less: Net income attributable to
noncontrolling interests and redeemable noncontrolling interest
59
61
107
94
Net income attributable to First Data
Corporation
$
275
$
341
$
444
$
442
Net income attributable to First Data
Corporation per share:
Basic
$
0.29
$
0.37
$
0.47
$
0.48
Diluted
$
0.28
$
0.36
$
0.46
$
0.47
Weighted-average common shares
outstanding:
Basic
943
928
940
926
Diluted
971
954
969
950
First Data Corporation
Selected Consolidated Balance
Sheet and Cash Flow Data
(Unaudited)
(in millions)
SELECTED CONSOLIDATED BALANCE
SHEET DATA
As of
As of
6/30/2019
12/31/2018
Cash and cash equivalents
$
544
$
555
Settlement assets
23,929
11,423
Total assets
51,031
38,327
Short-term and current portion of
long-term borrowings
1,150
1,170
Settlement obligations
23,929
11,423
Long-term borrowings
15,811
16,429
Total liabilities
43,518
31,283
Redeemable noncontrolling interest
92
77
Total First Data Corporation stockholders'
equity
4,653
4,173
Noncontrolling interests
2,768
2,794
Total equity
7,421
6,967
SELECTED CONSOLIDATED CASH
FLOW DATA
Three months ended June
30,
Six months ended June
30,
2019
2018
2019
2018
Source/(Use) of cash
Net cash provided by operating
activities
$
713
$
604
$
1,328
$
1,138
Net cash used in investing activities
(225
)
(147
)
(486
)
(290
)
Net cash used in financing activities
(563
)
(480
)
(838
)
(784
)
Supplemental cash flow data
Cash interest payments(a)
$
121
$
215
$
388
$
452
(a) For purposes of this schedule, cash
interest payments excludes interest on finance leases and interest
on foreign lines of credit.
First Data Corporation
Summary Segment Data
(Unaudited)
(in millions)
Three months ended June
30,
Six months ended June
30,
2019
2018
% Change
Organic CC % Change(c)
2019
2018
% Change
Organic CC % Change(c)
Consolidated Revenues
$
2,485
$
2,448
2%
$
4,801
$
4,730
2%
Adjustments:
Non wholly owned entities(a)
(11
)
(10
)
(18
)
(14
)
Reimbursable items
(196
)
(204
)
(388
)
(402
)
Total Segment Revenues
$
2,278
$
2,234
2%
7%
$
4,395
$
4,314
2%
7%
Segment Revenues:
Global Business Solutions
$
1,527
$
1,449
5%
9%
$
2,914
$
2,767
5%
9%
Global Financial Solutions
376
414
(9)%
7%
745
814
(8)%
8%
Network & Security Solutions
375
371
1%
1%
736
733
—%
—%
Total Segment Revenues
$
2,278
$
2,234
2%
7%
$
4,395
$
4,314
2%
7%
Three months ended June
30,
Six months ended June
30,
2019
2018
% Change
Organic CC % Change(c)
2019
2018
% Change
Organic CC % Change(c)
Net income attributable to First Data
Corporation
$
275
$
341
(19)%
$
444
$
442
—%
Adjustments:
Non wholly owned entities(a)
(15
)
(4
)
275%
(28
)
(22
)
27%
Depreciation and amortization
253
255
(1)%
499
505
(1)%
Interest expense, net
202
234
(14)%
405
467
(13)%
Loss on debt extinguishment
2
1
100%
3
1
200%
Other items(b)
32
15
113%
95
78
22%
Stock-based compensation
59
59
—%
115
133
(14)%
Income tax expense (benefit)
85
(37
)
NM
114
(10
)
NM
Total Segment EBITDA
$
893
$
864
3%
9%
$
1,647
$
1,594
3%
9%
Segment EBITDA:
Global Business Solutions
$
564
$
544
4%
9%
$
1,035
$
978
6%
12%
Global Financial Solutions
157
176
(11)%
—%
304
342
(11)%
—%
Network & Security Solutions
216
193
12%
12%
411
368
12%
12%
Corporate
(44
)
(49
)
9%
9%
(103
)
(94
)
(8)%
(8)%
Total Segment EBITDA
$
893
$
864
3%
9%
$
1,647
$
1,594
3%
9%
NM represents not meaningful
(a)
Net adjustment to reflect our
proportionate share of the results of our investments in businesses
accounted for under the equity method and consolidated subsidiaries
with noncontrolling ownership interests. Segment revenue for our
significant affiliates is reflected based on our proportionate
share of the results of our investments in businesses accounted for
under the equity method and consolidated subsidiaries with
noncontrolling ownership interests. For other affiliates, we
include equity earnings in affiliates, excluding amortization
expense, in segment revenue.
(b)
Includes restructuring, non-normal course
litigation and regulatory settlements, debt issuance expenses, deal
and deal integration costs, Other (expense)/income as presented in
the unaudited consolidated statements of operations, which includes
divestitures, derivative gains (losses), non-operating foreign
currency gains (losses), and other as applicable to the periods
presented.
(c)
Organic constant currency ("Organic CC")
growth is defined as reported growth adjusted for the following:
(1) excludes the impacts of year-over-year currency rate changes in
the current period; (2) excludes the results of significant
divestitures in the prior year period; and (3) includes the results
of significant acquisitions in the prior year period.
First Data Corporation
Summary Segment Data
(Unaudited)
(in millions)
SEGMENT
REVENUE RECONCILIATION
Three months ended June
30,
Six months ended June
30,
2019
2018
% B/(W)(b)
2019
2018
% B/(W)(b)
Reported FDC segment revenue
$
2,278
$
2,234
2%
$
4,395
$
4,314
2%
Currency impact
71
—
145
—
Acquisitions/(Divestitures)(c)
—
(40
)
—
(86
)
Organic CC FDC segment revenue
growth(a)
$
2,349
$
2,194
7%
$
4,540
$
4,228
7%
Reported GBS segment revenue
$
1,527
$
1,449
5%
$
2,914
$
2,767
5%
Currency impact
54
—
113
—
Acquisitions/(Divestitures)(c)
—
6
—
6
Organic CC GBS segment revenue
growth(a)
$
1,581
$
1,455
9%
$
3,027
$
2,773
9%
Reported GBS NA segment revenue
$
1,187
$
1,134
5%
$
2,256
$
2,148
5%
Currency impact
2
—
3
—
Organic CC GBS NA segment revenue
growth(a)
$
1,189
$
1,134
5%
$
2,259
$
2,148
5%
Reported GBS EMEA segment revenue
$
181
$
180
—%
$
347
$
348
—%
Currency impact
11
—
24
—
Acquisitions/(Divestitures)(c)
—
(2
)
—
(4
)
Organic CC GBS EMEA segment revenue
growth(a)
$
192
$
178
8%
$
371
$
344
8%
Reported GBS APAC segment revenue
$
55
$
50
10%
$
107
$
98
9%
Currency impact
3
—
6
—
Organic CC GBS APAC segment revenue
growth(a)
$
58
$
50
16%
$
113
$
98
16%
Reported GBS LATAM segment revenue
$
104
$
85
22%
$
204
$
173
18%
Currency impact
38
—
80
—
Acquisitions/(Divestitures)(c)
—
8
—
10
Organic CC GBS LATAM segment revenue
growth(a)
$
142
$
93
52%
$
284
$
183
55%
Reported GFS segment revenue
$
376
$
414
(9)%
$
745
$
814
(8)%
Currency impact
17
—
32
—
Acquisitions/(Divestitures)(c)
—
(46
)
—
(92
)
Organic CC GFS segment revenue
growth(a)
$
393
$
368
7%
$
777
$
722
8%
First Data Corporation
Summary Segment Data
(Unaudited)
Three months ended June
30,
Six months ended June
30,
2019
2018
% B/(W)(b)
2019
2018
% B/(W)(b)
Reported GFS NA segment revenue
$
222
$
233
(5)%
$
443
$
461
(4)%
Acquisitions/(Divestitures)(c)
—
(20
)
—
(40
)
Organic CC GFS NA segment revenue
growth(a)
$
222
$
213
4%
$
443
$
421
5%
Reported GFS EMEA segment revenue
$
90
$
119
(24)%
$
173
$
229
(24)%
Currency impact
6
—
11
—
Acquisitions/(Divestitures)(c)
—
(26
)
—
(52
)
Organic CC GFS EMEA segment revenue
growth(a)
$
96
$
93
3%
$
184
$
177
4%
Reported GFS APAC segment revenue
$
30
$
26
11%
$
62
$
57
8%
Currency impact
2
—
4
—
Organic CC GFS APAC segment revenue
growth(a)
$
32
$
26
17%
$
66
$
57
14%
Reported GFS LATAM segment revenue
$
34
$
36
(4)%
$
67
$
67
—%
Currency impact
9
—
17
—
Organic CC GFS LATAM segment revenue
growth(a)
$
43
$
36
23%
$
84
$
67
26%
Reported NSS segment revenue
$
375
$
371
1%
$
736
$
733
—%
Organic CC NSS segment revenue
growth(a)
$
375
$
371
1%
$
736
$
733
—%
SEGMENT
EBITDA RECONCILIATION
Three months ended June
30,
Six months ended June
30,
2019
2018
% B/(W)(b)
2019
2018
% B/(W)(b)
Reported FDC segment EBITDA
$
893
$
864
3%
$
1,647
$
1,594
3%
Currency impact
34
—
72
—
Acquisitions/(Divestitures)(c)
—
(12
)
—
(23
)
Organic CC FDC segment EBITDA
growth(a)
$
927
$
852
9%
$
1,719
$
1,571
9%
Reported GBS segment EBITDA
$
564
$
544
4%
$
1,035
$
978
6%
Currency impact
26
—
55
—
Acquisitions/(Divestitures)(c)
—
—
—
(1
)
Organic CC GBS segment EBITDA
growth(a)
$
590
$
544
9%
$
1,090
$
977
12%
Reported GFS segment EBITDA
$
157
$
176
(11)%
$
304
$
342
(11)%
Currency impact
8
—
17
—
Acquisitions/(Divestitures)(c)
—
(12
)
—
(22
)
Organic CC GFS segment EBITDA
growth(a)
$
165
$
164
—%
$
321
$
320
—%
Reported NSS segment EBITDA
$
216
$
193
12%
$
411
$
368
12%
Organic CC NSS segment EBITDA
growth(a)
$
216
$
193
12%
$
411
$
368
12%
(a)
Organic constant currency ("Organic CC")
growth is defined as reported growth adjusted for the following:
(1) excludes the impacts of year-over-year currency rate changes in
the current period; (2) excludes the results of significant
divestitures in the prior year period; and (3) includes the results
of significant acquisitions in the prior year period.
(b)
“B” means results in 2019 are better than
results in 2018 “(W)” means results are worse.
(c)
“Acquisitions/(Divestitures)" includes the
following activity: the 2018 divestiture of the GFS card processing
businesses in Greece and Central/Eastern Europe, the 2018
divestiture of the GFS check remittance processing business in
North America, and the 2019 acquisition of Software Express within
GBS LATAM.
First Data Corporation
Reconciliation of Non-GAAP
Financial Measures
(Unaudited)
(in millions)
ADJUSTED NET INCOME
RECONCILIATION
Three months ended June
30,
Six months ended June
30,
2019
2018
% Change
2019
2018
% Change
Net income attributable to First Data
Corporation
$
275
$
341
(19)%
$
444
$
442
—%
Adjustments:
Stock-based compensation
59
59
—%
115
133
(14)%
Loss on debt extinguishment
2
1
NM
3
1
NM
Amortization of acquisition intangibles
and deferred financing costs(a)
89
104
(14)%
178
210
(15)%
Other operating expenses, net and Other
(expense) income
32
15
NM
95
78
22%
Other(b)
—
2
NM
—
(9
)
NM
Discrete tax items(c)
—
(107
)
NM
—
(101
)
NM
Income tax on above items(d)
(48
)
(44
)
(9)%
(123
)
(104
)
(18)%
Adjusted net income attributable to First
Data Corporation
$
409
$
371
10%
$
712
$
650
9%
Adjusted net income per share:
Basic
$
0.43
$
0.40
8%
$
0.76
$
0.70
9%
Diluted
$
0.42
$
0.39
8%
$
0.73
$
0.68
7%
Weighted-average common shares used to
compute adjusted net income per share:
Basic
943
928
2%
940
926
2%
Diluted
971
954
2%
969
950
2%
NM represents not meaningful
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 $4 million and $4 million
for the three months ended June 30, 2019 and 2018,
respectively, and $7 and $9 for the six months ended June 30,
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 the Company.
(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.
First Data Corporation
Reconciliation of Non-GAAP
Financial Measures
(Unaudited)
(in millions)
FREE CASH FLOW
RECONCILIATION
Three months ended June
30,
Six months ended June
30,
2019
2018
Change
2019
2018
$ Change
Net cash provided by operating
activities
$
713
$
604
$
109
$
1,328
$
1,138
$
190
Capital expenditures
(218
)
(151
)
(67
)
(384
)
(290
)
(94
)
Distribution and dividends paid to
noncontrolling interests and redeemable noncontrolling interest and
other
(81
)
(75
)
(6
)
(133
)
(102
)
(31
)
Free cash flow
$
414
$
378
$
36
$
811
$
746
$
65
NET DEBT
RECONCILIATION
As of
As of
6/30/2019
12/31/2018
Total long-term borrowings
$
15,811
$
16,429
Total short-term and current portion of
long-term borrowings
1,150
1,170
Total borrowings
16,961
17,599
Unamortized discount and unamortized
deferred financing costs
80
94
Total borrowings at par
17,041
17,693
Less: Settlement lines of credit
117
224
Gross debt excluding settlement lines of
credit
16,924
17,469
Less: Cash and cash equivalents
544
555
Net debt
$
16,380
$
16,914
First Data Corporation
2019 Non-GAAP Guidance
Reconciliation
(Unaudited)
(in millions)
Consolidated Revenue to Total
Segment Revenue
FY 2019 vs. FY 2018
Consolidated revenue (at reported
rates)
~2.0-3.0%
Adjustments:
+Non wholly owned entities
+Reimbursable postage and other
+Currency Impact
+Divestiture Impact
Total segment revenue (at constant
currency)
~5.0-6.0%
Net Income Attributable to FDC
to Total Segment EBITDA
FY 2019 vs. FY 2018
Net income attributable to FDC
~(5.0%) - (2.0%)(1)
Adjustments
+Depreciation and amortization
+Interest Expense, net
+Income tax (benefit) expense
+Stock Based Compensation
+Other(2)
+Currency Impact
Total segment EBITDA (at constant
currency)
~6.0-8.0%
Net Income Attributable to FDC
to Adjusted Net Income
FY 2019
Net income attributable to FDC
$0.98 - $1.01(1)
Adjustments (note: adjustments represent
positive balances)
+Stock-based compensation
+Amortization of acquisition intangibles
and deferred financing cost
+Other(3)
Adjusted Net Income
$1.55 - $1.58
Cash Flow From Operations to
Free Cash Flow
FY 2019
Cash / provided by operating
activities
$2.4B+
+Adjustments(4)
Free cash flow
$1.5B+
(1)
Impacted by the non-recurrence of a
significant one-time tax benefit recorded in 2018.
(2)
Includes non wholly owned entities
adjustment, loss on debt extinguishment, as well as other
items.
(3)
Includes loss on debt extinguishment,
gain/loss on divestitures, restructuring, impairment, litigation
and other, as well as the impact of tax expense/(benefit) of the
adjusted items.
(4)
Includes capital expenditures and
distributions to minority interest and other.
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this communication may
constitute forward-looking statements. You can identify
forward-looking statements because they contain words such as
“believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,”
“plans,” “estimates,” or “anticipates” or similar expressions which
concern strategy, plans, projections or intentions. Examples of
forward-looking statements include, but are not limited to, all
statements made relating to revenue, earnings before net interest
expense, income taxes, depreciation and amortization, earnings,
margins, growth rates and other financial results for future
periods. By their nature, forward-looking statements speak only as
of the date they are made; are not statements of historical fact or
guarantees of future performance; and are subject to risks,
uncertainties, assumptions or changes in circumstances that are
difficult to predict or quantify. In addition to factors previously
disclosed in reports filed with the SEC by First Data and Fiserv,
Inc. and those identified elsewhere in this communication, the
following factors, among others, could cause actual results to
differ materially from forward-looking statements or historical
performance: the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of
First Data and Fiserv to terminate the definitive merger agreement
between First Data and Fiserv; the outcome of any legal proceedings
that have been or may be instituted against First Data, its
stockholders or directors or Fiserv, its shareholders or directors;
the ability to satisfy closing conditions to the proposed merger in
a timely manner or at all; a delay in closing the proposed merger;
difficulties and delays in integrating the First Data and Fiserv
businesses, including with respect to implementing systems to
prevent a material security breach of any internal systems or to
successfully manage credit and fraud risks in business units;
failing to fully realizing anticipated cost savings and other
anticipated benefits of the proposed merger; business disruptions
from the proposed merger that may harm First Data’s or Fiserv’s
business, including current plans and operations; potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the proposed merger, including as it
relates to First Data’s or Fiserv’s ability to successfully renew
existing client or supplier contracts on favorable terms or at all
and obtain new clients or suppliers; certain restrictions during
the pendency of the proposed merger that may impact First Data’s or
Fiserv’s ability to pursue certain business opportunities or
strategic transactions; the ability of First Data or Fiserv to
retain and hire key personnel; uncertainty as to the long-term
value of the common stock of Fiserv following the completion of the
proposed merger; the continued availability of capital and
financing following the completion of the proposed merger; the
business, economic and political conditions in the markets in which
First Data and Fiserv operate; the impact of new or changes in
current laws, regulations, credit card association rules or other
industry standards, including privacy and cybersecurity laws and
regulations; and events beyond First Data’s or Fiserv’s control,
such as acts of terrorism.
Any forward-looking statements speak only as of the date of this
communication or as of the date they were made, and neither First
Data nor Fiserv undertakes any obligation to update forward-looking
statements. For a more detailed discussion of these factors, also
see the information under the captions “Cautionary Statement
Regarding Forward-Looking Statements” and “Risk Factors” in First
Data’s and Fiserv’s Joint Proxy and Consent Solicitation
Statement/Prospectus that forms part of the Registration Statement
on Form S-4 (No. 333-229689) filed with the SEC by Fiserv in
connection with the proposed merger and the captions “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in First Data’s and Fiserv’s most recent
reports on Form 10-K for the year ended December 31, 2018, and any
material updates to these factors contained in any of First Data’s
and Fiserv’s subsequent and future filings.
As for the forward-looking statements that relate to future
financial results and other projections, actual results will be
different due to the inherent uncertainties of estimates, forecasts
and projections and may be better or worse than projected and such
differences could be material. Given these uncertainties, you
should not place any reliance on these forward-looking statements.
Annualized, pro forma, projected and estimated numbers are used for
illustrative purpose only, are not forecasts and may not reflect
actual results.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190725005357/en/
Peter Poillon Investor Relations First Data 212-266-3565
Peter.Poillon@firstdata.com
Michael Schneider Corporate Communications First Data
212-515-0290 Michael.Schneider@firstdata.com
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