First Data 2008 Annual Report Download - page 73

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Historical
Pro Forma
Adjustments Pro Forma
Successor Predecessor
(in millions)
Period from
September 25
through
December 31,
2007
Period from
January 1
through
September 24,
2007
Year ended
December 31,
2007
Revenues:
Transaction and processing service fees $ 1,553.3 $ 3,965.9 $ — $ 5,519.2
Investment income, net (8.2) (66.9) — (75.1)
Product sales and other 223.0 616.4 — 839.4
Reimbursable debit network fees, postage and other 510.4 1,257.5 — 1,767.9
2,278.5 5,772.9 — 8,051.4
Expenses:
Cost of services (exclusive of items shown below) 790.3 2,207.3 (114.2) (a) 2,883.4
Cost of products sold 87.3 209.2 — 296.5
Selling, general and administrative 367.9 1,058.8 (150.1) (b) 1,276.6
Reimbursable debit network fees, postage and other 510.4 1,257.5 — 1,767.9
Depreciation and amortization 367.8 476.4 409.7 (c) 1,253.9
Other operating expenses (d) (0.2) 23.3 — 23.1
2,123.5 5,232.5 145.4 7,501.4
Operating profit 155.0 540.4 (145.4) 550.0
Interest income 17.9 30.8 — 48.7
Interest expense (584.7) (103.6) (1,348.1) (e) (2,036.4)
Other income (expense) (74.0) 4.9 15.8 (f) (53.3)
(Loss) income before income taxes, minority interest, equity earnings in affiliates and
discontinued operations (485.8) 472.5 (1,477.7) (1,491.0)
Income tax (benefit) expense (176.1) 125.8 (601.8) (g) (652.1)
Minority interest (39.0) (105.3) — (144.3)
Equity earnings in affiliates 46.8 223.0 (135.8) (h) 134.0
(Loss) income from continuing operations $ (301.9) $ 464.4 $ (1,011.7) $ (849.2)
(a) Adjustments to Cost of services consist of adjustments related to the reversal of amortization of prior year service costs and actuarial gains and losses
related to defined benefit plans of $3.9 million; the reversal of costs associated with the accelerated vesting of equity awards of $105.6 million; and the
reversal of rent expense of $4.7 million related to synthetic leases bought out as a result of change in control provisions.
(b) Adjustments to Selling, general and administrative expenses consist of adjustments to recognize expense resulting from the sponsor's management fee
of $15.0 million; the reversal of merger transaction costs of $72.6 million; the reversal of costs associated with the accelerated vesting of equity awards
of $89.9 million; and the reversal of amortization of prior year service costs and actuarial gains and losses related to defined benefit plans of $2.6
million.
(c) Adjustments to Depreciation and amortization consists of adjustments related to increased other intangible asset amortization expense of $425.2
million; an adjustment for increased depreciation expense on buildings bought out of synthetic leases of $3.6 million; and an adjustment related to
decreased fixed asset depreciation
72