First Data 2013 Annual Report Download - page 46

The calculation of Consolidated EBITDA under FDC’s senior secured term loan facility is as follows:
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Net loss attributable to First Data Corporation $(869.1)
Interest expense, net (1) 1,869.6
Income tax expense 86.5
Depreciation and amortization (2) 1,211.9
EBITDA (16) 2,298.9
Stock based compensation (3) 38.1
Restructuring, net (4) 71.5
Non-operating foreign currency (gains) and losses (5) 19.4
Derivative financial instruments (gains) and losses (6) 24.4
Official check and money order EBITDA (7) (2.7)
Cost of alliance conversions and other technology initiatives (8) 68.3
KKR related items (9) 20.7
Debt issuance costs (10) 5.3
Litigation and regulatory settlements (11) 19.2
Projected near-term cost savings and revenue enhancements (12) 217.4
Net income attributable to noncontrolling interests and redeemable noncontrolling
interest (13) 177.0
Equity entities taxes, depreciation and amortization (14) 10.3
Other (15) (0.4)
Consolidated EBITDA (16) $2,967.4
(1) Includes interest expense and interest income.
(2) Includes amortization of initial payments for new contracts which is recorded as a contra-revenue within “Transaction and processing service fees”
of $41.5 million and amortization related to equity method investments, which is netted within the “Equity earnings in affiliates” line of $79.1
million.
(3) Stock based compensation recognized as expense.
(4) Restructuring charges and retention bonuses in connection with management’s alignment of the business with strategic objectives and the departure
of executive officers.
(5) Represents net gains and losses related to currency translations on certain intercompany loans and euro-denominated debt.
(6) Represents fair market value adjustments for cross-currency swaps and interest rate swaps that are not designated as accounting hedges.
(7) Represents an adjustment to exclude the official check and money order businesses from EBITDA due to wind down of these businesses.
(8) Represents costs directly associated with the strategy to have First Data operate Bank of America N.A.’s legacy settlement platform and costs
associated with the termination of the Chase Paymentech alliance, both of which are considered business optimization projects, and other technology
initiatives.
(9) Represents KKR annual sponsorship fees for management, financial and other advisory services.
(10) Debt issuance costs represent non-capitalized costs associated with issuing debt and modifying First Data’s debt structure.
(11) Represents settlements of litigation or regulatory matters.
(12) Reflects cost savings and revenue enhancements projected to be realized as a result of specific actions as if they were achieved on the first day of the
period. Includes cost savings initiatives associated with the business optimization projects and other technology initiatives described in Note 8, the
BAMS alliance, operations and technology initiatives, headcount reductions and other addressable spend reductions.
(13) Net income attributable to noncontrolling interests and redeemable noncontrolling interest in restricted subsidiaries.
(14) Represents FDC’s proportional share of income taxes, depreciation and amortization on equity method investments.
(15) Includes items such as investment gains and losses, divestitures, impairments and other as applicable to the period presented.
(16) EBITDA is defined as net income (loss) attributable to First Data Corporation before net interest expense, income taxes, depreciation and
amortization. EBITDA is not a recognized term under U.S. generally accepted accounting principles (“GAAP”) and does not purport to be an
alternative to net income (loss) attributable to First Data Corporation as a measure of operating performance or to cash flows from operating activities
as a measure of liquidity. Additionally, EBITDA is not
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