First Data 2013 Annual Report Download - page 39

International segment results.
 
     
Revenues:
Transaction and processing service fees $1,320.3 $1,291.2 $ 1,337.9 2% (3)%
Product sales and other 367.2 391.0 388.8 (6)% 1%
Equity earnings in affiliates 31.9 36.2 34.6 (12)% 5%
Segment revenue $1,719.4 $ 1,718.4 $ 1,761.3 0% (2)%
Segment EBITDA $475.3 $483.8 $454.3 (2)% 6%
Segment margin 28% 28% 26% 0pts 2pts
Key indicators:
International transactions (a) 9,409.7 8,519.0 7,637.9 10% 12%
International card accounts on file (end of
period) (b) 78.8 73.6 75.0 7% (2)%
(a) International transactions include VISA, MasterCard and other card association merchant acquiring and switching and debit issuer transactions for
clients outside the U.S. Transactions include credit, signature debit and PIN-debit POS, POS gateway and ATM transactions. International
transactions for the year ended December 31, 2012 reflect an updated count of transactions.
(b) International card accounts on file include bankcard and retail.
Summary. Segment revenue in 2013 compared to 2012 was impacted by the items discussed below as well as foreign currency exchange rate
movements. Foreign currency exchange rate movements negatively impacted the total segment revenue growth rates in 2013 compared to 2012 by 2 percentage
points and negatively impacted growth rate in 2012 compared to 2011 by 4 percentage points.
Transaction and processing service fee revenue. Transaction and processing service fees revenue includes merchant related services and card services
revenue. Merchant related services revenue encompasses merchant acquiring and processing revenue, debit transaction revenue, POS/ATM transaction
revenue and fees from switching services. Card services revenue represents monthly managed service fees for issued cards. Merchant related services
transaction and processing service fee revenue represented approximately 60% and card services revenue represented approximately 40% of total transaction
and processing service fees revenue for the periods presented.
Transaction and processing service fees revenue increased in 2013 compared to 2012 primarily due to volume growth and pricing in the merchant
acquiring businesses and card issuing businesses partially offset by lost business in the card issuing businesses. The majority of increases in the merchant
acquiring businesses resulted from volume growth in merchant acquiring alliances and direct sales channels primarily in Ireland, United Kingdom and
Poland. Revenue in the card issuing businesses declined primarily due to lost business in Australia and Germany partially offset by volume growth from
existing customers in Argentina and the United Kingdom. In 2013, foreign currency exchange rate movements negatively impacted the transaction and
processing service fees revenue growth rate by 2 percentage points compared to 2012.
Transaction and processing service fees revenue decreased in 2012 compared to 2011 due to the impact of foreign currency exchange rate movements. In
addition, declines in the card issuing businesses were partially offset by growth in the merchant acquiring businesses. Revenue in the card issuing businesses
declined primarily due to lost business in Germany, Australia, the United Kingdom and China as well as lower revenue in Greece driven by the economic
recession and a strategic decision to exit low-margin businesses. Partially offsetting these decreases were increased transaction volumes in the card issuing
business primarily in Argentina and new business in Canada. Increases in the merchant acquiring businesses resulted from growth in the merchant acquiring
alliances and direct sales channels primarily in the United Kingdom and Canada. Foreign currency exchange rate movements negatively impacted the
transaction and processing service fees revenue growth rate in 2012 versus 2011 by 4 percentage points.
Transaction and processing service fee revenue is driven by accounts on file and transactions. The spread between growth in these two indicators and
revenue growth was driven mostly by the mix of transaction types, price compression and the impact of foreign currency exchange rate movements.
International card accounts on file increased in 2013 compared to 2012 primarily due to new accounts in India and the United Kingdom partially offset by the
removal of inactive accounts in Canada.
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