First Data 2007 Annual Report Download - page 101

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited Pro Forma Condensed Consolidated Statements of Income
Twelve months ended
December 31,
2007 2006
(in millions)
Revenues:
Transaction and processing service fees $ 5,519.2 $ 5,037.6
Investment income, net (75.1) (128.6)
Product sales and other 839.4 699.8
Reimbursable debit network fees, postage and other 1,767.9 1,467.6
8,051.4 7,076.4
Expenses:
Cost of services 4,134.1 3,712.9
Cost of products sold 322.4 300.9
Selling, general and administrative 1,318.1 1,173.2
Reimbursable debit network fees, postage and other 1,767.9 1,467.6
Other operating expenses:
Restructuring, net 7.7 24.0
Impairments 20.6 16.1
Litigation and regulatory settlements 2.5 (34.8)
Other (7.7) (0.3)
7,565.6 6,659.6
Operating profit 485.8 416.8
Interest income 48.7 55.5
Interest expense (2,052.7) (2,043.1)
Other income (expense) (53.3) 53.4
(2,057.3) (1,934.2)
Loss before income taxes, minority interest, equity earnings in affiliates and discontinued operations (1,571.5) (1,517.4)
Income tax benefit (686.6) (779.7)
Minority interest (144.3) (142.3)
Equity earnings in affiliates 122.0 81.8
Loss from continuing operations $ (907.2) $ (798.2)
Additional Information
On September 24, 2007, Holdings sold $1.0 billion aggregate principal amount of 11.5% senior PIK notes due 2016 to GS Mezzanine Partners VI
Fund, L.P. and the Goldman Sachs Group, Inc. This $1.0 billion, net of fees, was the source of funds for a portion of Holdings' investment in FDC. No cash
interest will accrue on these notes. Interest on the notes will be paid by increasing the principal amount of the notes. Holdings' senior PIK notes are unsecured
and neither FDC nor its subsidiaries provide credit support for Holdings' obligations under the notes. As a result, the senior PIK notes of Holdings are not
indebtedness of FDC or its subsidiaries. However, the senior PIK notes contain a number of covenants that, among other things, restrict, subject to certain
exceptions, FDC's ability to:
• incur additional indebtedness;
• engage in mergers or consolidations;
• sell or transfer assets and subsidiary stock;
• pay dividends and distributions or repurchase its capital stock;
• make certain investments, loans or advances;
• prepay certain indebtedness;
• enter into agreements that restrict the payment of dividends by subsidiaries or the repayment of intercompany loans and advances; and
• engage in certain transactions with affiliates.
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