First Data 2008 Annual Report Download - page 74

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
expense of $19.1 million (although the total value of the fixed assets increased from the valuation, certain of the depreciable assets had longer lives
which resulted in lower annual depreciation).
(d) Other operating expenses include: net restructuring charges, impairments, litigation and regulatory settlements, and other.
(e) Reflects pro forma interest expense resulting from the Company's new capital structure. The adjustment includes interest expense, amortization of
commitment fees and debt issuance costs, and the impact of interest rate swaps associated with the new facilities and notes described in Note 10 of the
Consolidated Financial Statements in Item 8 of this Form 10-K less the interest expense recognized on the notes that were repaid in conjunction with
the merger. The adjustment also includes amortization of structuring fees incurred upon modification of the term loan facilities also described in Note
10 of the Consolidated Financial Statements in Item 8 of this Form 10-K. The adjustment excludes the impact of the bridge financing fees paid at the
closing of the merger and amortized through the date of the aforementioned modification as they are not considered indicative of long-term ongoing
operations. Interest has been calculated, as applicable, at rates consistent with the final fixed interest rates stipulated in the modifications in June 2008
of the term loan facilities. Interest for floating rate debt has been calculated using the applicable effective LIBOR rate.
(f) Represents the elimination of debt repayment costs associated with the Company's debt existing prior to the merger.
(g) Represents the tax effect of the pro forma adjustments, calculated at a marginal rate of 37.3% for 2007.
(h) Adjustment to equity method investments consists of increased other intangible asset amortization expense.
Unaudited Pro Forma Segment Revenues (a)
Successor Predecessor Pro Forma
(in millions)
Period from
September 25
through
December 31,
2007
Period from
January 1
through
September 24,
2007
Pro Forma
Adjustments
Adjusted
Revenue
Merchant Services $ 1,037.3 $ 2,705.2 $ — $ 3,742.5
Financial Services 773.5 2,081.7 — 2,855.2
International 490.6 1,126.2 — 1,616.8
Prepaid Services 76.8 138.0 — 214.8
Integrated Payments Systems 34.3 71.5 — 105.8
All Other and Corporate 44.4 122.5 — 166.9
Divested businesses 12.8 35.0 — 47.8
Total segment, all other and corporate and divested businesses $ 2,469.7 $ 6,280.1 $ — $ 8,749.8
Unaudited Pro Forma Segment Operating Profit
Successor Predecessor Pro Forma
(in millions)
Period from
September 25
through
December 31,
2007
Period from
January 1
through
September 24,
2007
Pro Forma
Adjustments
Adjusted
Operating Profit
Merchant Services $ 100.9 $ 713.3 $ (441.1) (b) $ 373.1
Financial Services 102.9 440.6 (89.9) (c) 453.6
International 46.9 93.7 18.4 (d) 159.0
Prepaid Services 13.2 24.2 (11.1) (e) 26.3
Integrated Payments Systems 21.3 30.1 2.0 (f) 53.4
All Other and Corporate (67.6) (445.6) 240.6 (g) (272.6)
Divested businesses 0.7 0.7 (0.1) 1.3
Total segment, all other and corporate and divested businesses $ 218.3 $ 857.0 $ (281.2) $ 794.1
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