First Data 2009 Annual Report Download - page 167

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The estimated future benefit payments, which reflect expected future service, are expected to be $21.8
million in 2010, $22.8 million in 2011, $22.9 million in 2012, $25.5 million in 2013, $26.7 million in 2014 and
$166.2 million in 2015 through 2019.
The Company does not offer post-retirement health care or other insurance benefits for retired employees.
Note 16: Segment Information
Operating segments are defined as components of an enterprise about which separate financial information
is available that is evaluated regularly by the Company’s chief operating decision maker (“CODM”), or decision-
making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its
Chief Executive Officer. The Company is organized in three primary segments: Retail and Alliance Services,
Financial Services and International. In addition, the Company currently operates its official check business
through its IPS segment but is in the process of winding-down the official check business.
As discussed in Note 1, the Company began operating under a new segment structure effective January 1,
2009. Segment results for the year ended December 31, 2008, the successor period from September 25, 2007
through December 31, 2007 and the predecessor period from January 1, 2007 through September 24, 2007 have
been revised to reflect the new structure. The most significant changes were check verification, settlement and
guarantee services moving from the Financial Services segment into the Retail and Alliance Services segment as
well as the Prepaid Services segment moving into the Retail and Alliance Services segment. A summary of the
segments follows:
• The Retail and Alliance Services segment is comprised of businesses that provide services which
facilitate the merchants’ ability to accept credit, debit, stored-value and loyalty cards and checks. The
segment’s merchant processing and acquiring services include authorization, transaction capture,
settlement, chargeback handling and internet-based transaction processing. Retail and Alliance
Services also provides point-of-sale (“POS”) solutions and other equipment necessary to capture
merchant transactions. A majority of these services pertain to transactions in which consumer payments
to merchants are made through a card association (such as Visa or MasterCard), a debit network, or
another payment network (such as Discover). In addition, Retail and Alliance Services provides check
verification, settlement and guarantee services and a wide range of open and closed loop stored-value
products and processing services. The segment’s largest components of revenue consist of discount
fees charged to merchants, processing fees due from alliance partners, revenues from selling and
leasing of POS devices and fees for check verification, settlement and guarantee services.
• The Financial Services segment provides issuer card and network solutions and payment management
solutions for recurring bill payments. Financial Services also offers services to improve customer
communications, billing, online banking and consumer bill payment. Issuer card and network solutions
includes credit, retail and debit card processing, debit network services (including the STAR Network)
and output services for financial institutions and other organizations offering credit cards, debit cards
and retail private label cards to consumers and businesses to manage customer accounts. The segment’s
largest components of revenue consist of fees for account management, transaction authorization and
posting and network switching.
• The International segment is comprised of businesses that provide the following services outside of the
U.S.: credit, retail, debit and prepaid card processing; merchant acquiring and processing; ATM and
POS processing, driving, acquiring and switching services; and card processing software. The largest
components of the segment’s revenue are fees for facilitating the merchants’ ability to accept credit,
retail and debit cards by authorizing, capturing, and settling merchants’ credit, retail, debit, stored-
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