First Data 2009 Annual Report Download - page 4

First Data Products and Services Segment Information
Financial information relating to each of the Company’s segments is set forth in Note 16 to the Company’s
Consolidated Financial Statements in Item 8 of this Form 10-K. A discussion of factors potentially affecting the
Company’s operations is set forth in Item 7 “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” of this form 10-K. The Company does not have any significant customers that account
for 10% or more of total consolidated revenues. Refer to the following segment discussions, which address
significant customer relationships within each segment.
The Company sold a merchant acquiring business in Canada as well as a debit and credit card issuing and
acquiring processing business in Austria and Active Business Services, Ltd, all reported within the International
segment, in November 2009, August 2009 and July 2008, respectively, and Peace Software, reported within the
Financial Services segment, in October 2008. The results of divested businesses are excluded from segment
results. The International and Financial Services performance measures have been adjusted for 2008 and 2007 to
exclude the results of divested businesses. Retail and Alliance Services segment performance measures have
been adjusted for 2008 and 2007 to reflect the sale of 12.5% of the Company’s ownership interest in the Wells
Fargo Merchant Services alliance that occurred on December 31, 2008.
Retail and Alliance Services Segment
The Retail and Alliance Services segment is comprised of merchant acquiring and processing services,
prepaid services and check verification, settlement and guarantee services.
Retail and Alliance Services segment revenues from external customers, segment EBITDA and assets
represent the following percentages of total segment and All Other and Corporate revenues from external
customers, total segment and All Other and Corporate EBITDA, and consolidated assets:
Successor Predecessor
Year ended
December 31,
2009
Year ended
December 31,
2008
Period from
September 25, 2007
through
December 31,
2007
Period from
January 1, 2007
through
September 24,
2007
Segment revenues from external customers ........ 49% 48% 50% 52%
Segment EBITDA ............................ 56% 55% 57% 58%
Assets (at December 31) (1) .................... 64% 55% 45%
(1) Segment assets in the successor periods were impacted by purchase accounting for the merger. Assets at
December 31, 2008 were additionally impacted by a goodwill impairment recorded in the fourth quarter of
2008 as described in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of
Operations, of this Form 10-K.
Description of Retail and Alliance Services Segment Operations
In the Retail and Alliance Services segment, revenues are derived primarily from providing merchant
acquiring and processing services, prepaid services and check verification, settlement and guarantee services.
Retail and Alliance Services businesses facilitate the acceptance of consumer transactions at the point of sale,
whether it is a transaction at a physical merchant location or over the internet. A brief explanation of the
segment’s service and product offerings is presented below.
Merchant acquiring and processing services
Merchant acquiring services facilitate the merchants’ ability to accept credit, debit, stored-value and loyalty
cards by authorizing, capturing and settling the merchants’ transactions. Acquiring services also provide POS
devices and other equipment necessary to capture merchant transactions. A majority of these services are offered
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