First Data 2008 Annual Report Download - page 124

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unaudited Pro Forma Condensed Consolidated Statements of Operations
Year 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 (exclusive of items shown below) 2,883.4 2,479.5
Cost of products sold 296.5 281.0
Selling, general and administrative 1,276.6 1,145.0
Reimbursable debit network fees, postage and other 1,767.9 1,467.6
Depreciation and amortization 1,253.9 1,196.4
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)
7,501.4 6,574.5
Operating profit 550.0 501.9
Interest income 48.7 55.5
Interest expense (2,036.4) (1,982.3)
Other (expense) income (53.3) 53.4
(2,041.0) (1,873.4)
Loss before income taxes, minority interest, equity earnings in affiliates and discontinued operations (1,491.0) (1,371.5)
Income tax benefit (652.1) (719.7)
Minority interest (144.3) (142.3)
Equity earnings in affiliates 134.0 96.2
Loss from continuing operations $ (849.2) $ (697.9)
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;
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