First Data 2008 Annual Report Download - page 49

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Results of Operations
The following discussion for both consolidated results and segment results for the year ended December 31, 2008 includes comparisons to the successor
period from September 25, 2007 to December 31, 2007 and to the predecessor period from January 1, 2007 to September 24, 2007. On a supplemental basis,
2008 is compared to pro forma results for the year ended December 31, 2007 which reflects consolidated results of operations as if the merger had occurred
on January 1, 2007. The consolidated results and segment results for the successor period from September 25, 2007 to December 31, 2007 and the predecessor
period from January 1, 2007 to September 24, 2007 compared to the year ended December 31, 2006 are also presented. On a supplemental basis, the pro
forma results for the year ended December 31, 2007 period are compared to the year ended December 31, 2006. Consolidated results should be read in
conjunction with segment results, which provide more detailed discussions concerning certain components of the Consolidated Statements of Operations. All
significant intercompany accounts and transactions have been eliminated.
Consolidated Results
Historical Pro Forma Historical
Successor Successor Predecessor Percent Change
(in millions)
Year ended
December 31,
2008
Year ended
December 31,
2007
Period from
September 25
through
December 31,
2007
Period from
January 1
through
September 24,
2007
Year ended
December 31,
2006
Historical
2008
vs.
Pro Forma
2007
Pro Forma
2007
vs.
Historical
2006
Revenues:
Transaction and processing service fees $ 5,785.3 $ 5,519.2 $ 1,553.3 $ 3,965.9 $ 5,037.6 5% 10%
Investment income, net 77.1 (75.1) (8.2) (66.9) (128.6) * *
Product sales and other 848.2 839.4 223.0 616.4 699.8 1% 20%
Reimbursable debit network fees, postage and other 2,100.7 1,767.9 510.4 1,257.5 1,467.6 19% 20%
8,811.3 8,051.4 2,278.5 5,772.9 7,076.4 9% 14%
Expenses:
Cost of services (exclusive of items shown below) 3,048.0 2,883.4 790.3 2,207.3 2,493.3 6% 16%
Cost of products sold 316.8 296.5 87.3 209.2 281.0 7% 6%
Selling, general and administrative 1,197.4 1,276.6 367.9 1,058.8 1,129.3 (6)% 13%
Reimbursable debit network fees, postage and other 2,100.7 1,767.9 510.4 1,257.5 1,467.6 19% 20%
Depreciation and amortization 1,369.7 1,253.9 367.8 476.4 619.7 9% 102%
Other operating expenses, net 3,255.6 23.1 (0.2) 23.3 5.0 * *
11,288.2 7,501.4 2,123.5 5,232.5 5,995.9 50% 25%
Interest income 26.0 48.7 17.9 30.8 55.5 (47)% (12)%
Interest expense (1,964.9) (2,036.4) (584.7) (103.6) (248.0) (4)% 721%
Other income (expense) (a) (14.4) (53.3) (74.0) 4.9 22.6 * *
Income tax (benefit) expense (699.2) (652.1) (176.1) 125.8 203.7 7% *
Minority interest (156.3) (144.3) (39.0) (105.3) (142.3) 8% 1%
Equity earnings in affiliates 123.0 134.0 46.8 223.0 283.1 (8)% (53)%
(Loss) income from discontinued operations, net of taxes — — — (3.6) 665.7 — *
Net (loss) income $ (3,764.3) $ (849.2) $ (301.9) $ 460.8 $ 1,513.4 * *
* Calculation not meaningful.
(a) Other income (expense) includes investment gains and (losses), derivative financial instruments gains and losses, divestitures, net, debt repayment gains
and losses and non-operating foreign exchange gains and losses.
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