First Data 2008 Annual Report Download - page 193

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in millions)
Predecessor
Year ended December 31, 2006
Parent
Company
Guarantor
Subsidiaries
Non-
Guarantor
Subsidiaries Eliminations Consolidated
Revenues:
Transaction and processing service fees $ 3.2 $ 3,751.4 $ 1,284.9 $ (1.9) $ 5,037.6
Investment income, net — 37.5 (166.1) — (128.6)
Product sales and other — 476.2 252.4 (28.8) 699.8
Reimbursable debit network fees, postage and other — 1,419.1 48.5 — 1,467.6
3.2 5,684.2 1,419.7 (30.7) 7,076.4
Expenses:
Cost of services (exclusive of items shown below) 39.2 1,826.2 631.1 (3.2) 2,493.3
Cost of products sold — 209.2 99.3 (27.5) 281.0
Selling, general and administrative 213.8 638.4 277.1 — 1,129.3
Reimbursable debit network fees, postage and other — 1,419.1 48.5 — 1,467.6
Depreciation and amortization 7.9 474.1 137.7 — 619.7
Other operating expenses:
Restructuring, net 3.1 11.4 9.5 — 24.0
Impairments (0.5) 16.6 — — 16.1
Litigation and regulatory settlements (42.4) 15.0 (7.4) — (34.8)
Other — (0.3) — — (0.3)
221.1 4,609.7 1,195.8 (30.7) 5,995.9
Operating (loss) profit (217.9) 1,074.5 223.9 — 1,080.5
Interest income 39.5 7.2 8.8 — 55.5
Interest expense (237.9) (2.2) (7.9) — (248.0)
Interest (expense) income from intercompany notes (18.7) 44.2 (25.5) — —
Other (expense) income (27.7) 5.2 45.1 — 22.6
Equity earnings from consolidated subsidiaries 1,765.1 269.5 — (2,034.6) —
1,520.3 323.9 20.5 (2,034.6) (169.9)
Income (loss) before income taxes, minority interest, equity earnings in affiliates and discontinued
operations 1,302.4 1,398.4 244.4 (2,034.6) 910.6
Income tax (benefit) expense (1) (175.0) 567.7 (189.0) — 203.7
Minority interest — (5.5) (136.8) — (142.3)
Equity earnings in affiliates 36.0 240.4 6.7 — 283.1
Income from continuing operations $1,513.4 $ 1,065.6 $ 303.3 $ (2,034.6) $ 847.7
Income from discontinued operations, net of taxes — — 665.7 — 665.7
Net income $1,513.4 $ 1,065.6 $ 969.0 $ (2,034.6) $ 1,513.4
(1) The Non-Guarantor tax benefits were predominately attributable to tax losses of IPS, a wholly owned subsidiary of the Parent. Under tax sharing
agreements, IPS received the tax benefit for tax losses utilized in the Parent's consolidated tax return. The losses were in large part due to IPS
historically investing its investment portfolio in non-taxable municipal bonds at the instruction of Parent. The IPS tax benefit included for the successor
period from September 25, 2007 through December 31, 2007 and the predecessor periods from January 1, 2007 through September 24, 2007 and year
ended December 31, 2006 was $46.7 million, $171.3 million and $228.6 million, respectively. As of January 1, 2008 with the wind-down of the official
check and money order business and the shift from tax exempt investments to a taxable portfolio, IPS is no longer in a taxable loss position.
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