First Data 2007 Annual Report Download - page 70

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
The calculation of Consolidated EBITDA under the senior secured term loan facility is as follows (in millions):
Successor Predecessor
Last Twelve
Months
December 31,
2007
Period from
September 25
through
December 31,
2007
Period from
January 1
through
September 24,
2007
Twelve
months ended
December 31,
2006
Income (loss) from continuing operations $ 162.5 $ (301.9) $ 464.4 $ 847.7
Interest expense, net (1) 639.6 566.8 72.8 192.5
Income tax (benefit) expense (50.3) (176.1) 125.8 203.7
Depreciation and amortization 967.4 427.2 540.2 700.8
EBITDA (15) 1,719.2 516.0 1,203.2 1,944.7
Stock based compensation (2) 267.0 — 267.0 66.5
Other items (3) 62.6 56.0 6.6 (46.0)
Debt repayment (4) 15.8 17.2 (1.4) 30.8
Pretax equivalency adjustment (5) 231.4 55.7 175.7 245.8
Official check and money order EBITDA (6) (53.3) (20.4) (32.9) (22.7)
Cost of data center, technology and other savings initiatives (7) 81.0 31.2 49.8 7.4
Western Union spin-off costs (8) — — — 20.3
Transaction related fees 72.6 2.9 69.7 —
Purchase accounting (9) 35.3 35.3 — —
Sponsor's annual management fee 5.3 5.3 — —
Pre-acquisition EBITDA of acquired businesses (10) 21.7 0.1 21.6 71.1
Adjusted EBITDA excluding projected near-term cost savings (15) 2,458.6 699.3 1,759.3 2,317.9
Projected near-term cost savings (11) 200.0 53.3 146.7 —
Adjusted EBITDA (15) 2,658.6 752.6 1,906.0 $ 2,317.9
Minority interest (12) 146.9 39.4 107.5
Equity entities taxes, depreciation and amortization (13) 85.0 25.0 60.0
Other (14) 13.9 1.5 12.4
Consolidated EBITDA (15) $ 2,904.4 $ 818.5 $ 2,085.9
(1) Includes interest expense and interest income.
(2) Stock based compensation recognized as expense and related payroll taxes.
(3) Other items include net restructuring, impairments, litigation and regulatory settlements, investment gains and losses, net divestiture gains, foreign
exchange gains and losses (operating and non-operating), minority interest adjustments pertaining to other items, and other.
(4) Loss or net gain resulting from the early repayment of long-term debt.
(5) Represents an adjustment to reflect Integrated Payment Systems segment operating results as if the underlying investments were held in taxable
securities rather than the tax-exempt variable rate demand notes in which they were actually held through 2007.
(6) Represents an adjustment to exclude the official check and money order business from EBITDA due to the Company's announcement to wind down
these businesses. Predecessor period amounts have been adjusted to conform with current period presentation.
(7) Represents implementation costs associated with initiatives to reduce operating expenses including platform and data center consolidation initiatives in
the First Data International segment, expense related to the reorganization of global application development resources, expense associated with
domestic data center consolidation initiatives and "100 day plan" workforce reduction expenses, all of which are considered one-time projects.
(8) Represents consulting fees expensed during 2006 related to the Western Union spin-off which occurred on September 29, 2006.
(9) Represents the effect of purchase accounting on EBITDA which is primarily the result of revenue recognition adjustments.
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