First Data 2013 Annual Report Download - page 35

payments to certain ISO’s, which are treated as an expense in the Consolidated Statements of Operations, as contra revenue to be consistent with
revenue share arrangements with other ISO’s that are recorded as contra revenue.
· Corporate operations include administrative and shared service functions such as the executive group, legal, tax, treasury, internal audit,
accounting, human resources, information technology and procurement. Costs incurred by Corporate that are directly attributable to a segment are
allocated to the respective segment. Administrative, shared service and certain information technology costs are retained by Corporate.
Retail and Alliance Services segment results.
 
     
Revenues:
Transaction and processing service fees $3,255.2 $3,198.8 $2,974.5 2% 8%
Product sales and other 384.2 404.0 407.5 (5)% (1)%
Segment revenue $ 3,639.4 $ 3,602.8 $ 3,382.0 1% 7%
Segment EBITDA $1,629.8 $1,594.8 $ 1,407.5 2% 13%
Segment margin 45% 44% 42% 1pt 2pts
Key indicators:
Domestic merchant transactions (a) 38,377.0 36,747.9 35,261.9 4% 4%
(a) Domestic merchant transactions include acquired VISA and MasterCard credit and signature debit, PIN-debit, electronic benefits transactions,
processed-only and gateway customer transactions at the POS. Domestic merchant transactions reflect 100% of alliance transactions. Domestic merchant
transactions for the years ended December 31, 2012 and 2011 reflect an updated count of transactions.
Transaction and processing service fees revenue.
 
     
Acquiring revenue $2,416.6 $2,368.7 $2,204.4 2% 7%
Check processing revenue 274.3 306.1 330.1 (10)% (7)%
Prepaid revenue 341.1 306.5 291.1 11% 5%
Processing fees and other revenue from
alliance partners 223.2 217.5 148.9 3% 46%
Total transaction and processing service
fees revenue $3,255.2 $3,198.8 $2,974.5 2% 8%
Acquiring revenue. Acquiring revenue increased in 2013 compared to 2012 mainly due to growth in merchant transactions and dollar volumes, new
sales, pricing increases for some regional merchants and network routing incentives. These increases were partially offset by decreases resulting from the
impact of merchant mix on transactions and dollar volumes, the effect of shifts in pricing mix, merchant attrition and price compression.
Acquiring revenue increased in 2012 compared to 2011 mainly from lower debit interchange rates as a result of the Dodd-Frank Act described in the
“Regulatory Reform” section above which benefited growth for acquiring revenue by an estimated $75 million or 3 percentage points. Acquiring revenue also
benefited from increases in merchant transactions and dollar volumes, new sales and pricing increases for a certain segment of merchants. These increases
were partially offset by decreases resulting from the impact of merchant mix on transactions and dollar volumes, the effect of shifts in pricing mix, merchant
attrition and price compression.
Transaction growth outpaced revenue growth in 2013 compared to 2012 driven by the factors noted above, particularly merchant mix, pricing mix and
price compression. A greater portion of transaction growth was driven by the Company’s national merchants which contributed to lower revenue per
transaction. The average ticket size of regional signature based transactions increased in 2013 as compared to the same period in 2012, but are a smaller
portion of the total. Revenue per transaction decreased 3 percentage points for 2013 compared to 2012 driven largely by the items discussed above.
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