First Data 2008 Annual Report Download - page 14

Prepaid Services Segment
The Prepaid Services segment is comprised most significantly of the management of prepaid stored-value card issuance and processing services (i.e.
gift cards) for retailers and others.
Prepaid Services revenues from external customers, operating profit, and assets represent the following percentages of FDC's consolidated revenues,
total reported segment operating profit and consolidated assets:
Successor Predecessor
Year ended
December 31,
2008
Period from
September 25, 2007
through
December 31,
2007
Period from
January 1, 2007
through
September 24,
2007
Year ended
December 31,
2006
Revenue from external customers 3% 3% 2% 3%
Operating profit (1), (2) 2% 6% 3% 3%
Assets (2) 2% 3% 1%
(1) – Operating profit, as a percentage of total segment and all other and corporate operating profit, for the predecessor period from January 1, 2007
through September 24, 2007 includes accelerated vesting of stock options and restricted stock awards and units and transaction costs related to the
merger of $265.2 million that were recognized in All Other and Corporate. The exclusion of these costs from the calculation would decrease Prepaid
Services operating profit percentage shown above by approximately 1 percentage point for the predecessor period from January 1, 2007 through
September 24, 2007.
(2) – Operating profit and assets were impacted by purchase accounting in the successor period from September 25, 2007 through December 31, 2007 and
for the year ended December 31, 2008. Assets at December 31, 2008 were additionally impacted by a goodwill impairment recorded in the fourth
quarter of 2008 as described in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-K.
Description of Prepaid Services Segment Operations
First Data Prepaid Services manages prepaid stored-value card issuance and processing services (i.e. gift cards) for retailers and others. The full-service
stored-value/gift card program offers transaction processing services, card issuance and customer service for over 200 national brands and several thousand
small and mid-tier merchants. The Company also provides program management and processing services for association-branded, bank-issued, open loop,
stored-value, reloadable and one time prepaid card products.
Electronic Fleet Systems Transportation Services ("EFSTS") provides payment processing, settlement and specialized reporting services for
transportation companies and owns and operates ATMs at truck stops. EFSTS is a closed loop payment processing system for transportation companies in the
U.S. and Canada. Its products offer truck drivers a convenient way to purchase fuel, access cash and pay for repairs while on the road. Transportation
companies use the processing system to manage their business daily through the internet or real time via a direct connection to a host.
Money Network offers prepaid products to address the needs of employers, employees, merchants and unbanked individuals. Money Network provides
electronic payroll distribution solutions and prepaid retail solutions that eliminate employer pay checks for workers. Money Network also makes it easy and
secure for cardholders to pay bills and make purchases in person, online, or on the phone.
Prepaid Services Competition and Seasonality
The Company's prepaid card services compete with other payment processing companies as well as card associations and payment networks such as
Visa and American Express. Prepaid Services revenue and earnings
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