First Data 2007 Annual Report Download - page 140

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The business segment measurements provided to, and evaluated by, the Company's CODM are computed in accordance with the following principles:
• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.
• Segment revenue includes interest income, equity earnings in affiliates (excluding amortization expense) and inter-segment revenue.
• The portion of corporate overhead allocated to the segments is based primarily on a relative percentage of total segment revenues.
• Segment operating profit includes interest income, minority interest (excluding minority interest related to interest expense and income taxes) and
equity earnings in affiliates, net of related amortization expense.
• Segment operating profit excludes restructuring charges, asset impairment charges, significant litigation and regulatory settlement charges, other
charges, interest expense, other income (expense), and income taxes since they are not allocated to the segments for internal evaluation purposes.
While these items are identifiable to the business segments, they are not included in the measurement of segment operating profit provided to the
CODM for purposes of assessing segment performance and decision making with respect to resource allocation.
• Revenues and operating profit of the IPS segment are stated on a pretax equivalent basis (i.e., as if investment earnings on nontaxable investments
were fully taxable at FDC's marginal tax rate).
The tables below address the operations of the Company based on how the Company operated in 2007 which is consistent with prior years. A revised
successor operating structure described below will be effective January 1, 2008.
The following tables present the Company's operating segment results for the successor period from September 25, 2007 through December 31, 2007
and the predecessor periods from January 1, 2007 through September 24, 2007 and the years ended December 31, 2006 and 2005 (in millions):
Successor period from September 25, 2007 through December 31, 2007
(in millions)
First Data
Commercial
Services
First Data
Financial
Institution
Services
First Data
International
Integrated
Payment
Systems
All Other
and
Corporate Totals
Revenues:
Transaction and processing service fees $ 759.9 $ 330.4 $ 387.7 $ 15.8 $ 82.9 $1,576.7
Investment income, net 12.6 — 4.9 30.0 — 47.5
Product sales and other 93.2 11.7 92.2 0.2 25.7 223.0
Reimbursable debit network fees, postage and other 307.4 193.8 8.6 1.8 1.1 512.7
Equity earnings in affiliates (a) 95.6 — 9.1 — 1.0 105.7
Interest income 1.7 0.1 6.2 0.1 9.8 17.9
Total segment reporting revenues $ 1,270.4 $ 536.0 $ 508.7 $ 47.9 $ 120.5 $2,483.5
Internal revenue and pretax equivalency $ 6.5 $ 9.1 $ 1.3 $ 57.8 $ 6.7 $ 81.4
External revenue 1,263.9 526.9 507.4 (9.9) 113.8 2,402.1
Depreciation and amortization 263.3 75.2 67.1 1.4 20.2 427.2
Operating profit (loss) 123.1 63.8 58.1 21.1 (30.5) 235.6
Restructuring, investment gains and (losses), derivative financial instruments gains and
(losses), debt repayment costs, and non-operating foreign exchange gain/(loss) (6.7) — (4.2) (1.0) (62.1) (74.0)
Expenditures for long-lived assets 10.6 50.3 41.8 0.2 9.8 112.7
Equity earnings in affiliates 38.7 — 7.7 — 0.4 46.8
Investment in unconsolidated affiliates 3,290.4 — 215.9 — 20.0 3,526.3
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