First Data 2010 Annual Report Download - page 114

Table of Contents
FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
interests, other operating expenses and other income (expense). Retail and Alliance Services segment EBITDA does not include equity earnings
because it is reported using proportionate consolidation as described below. Additionally, segment EBITDA is adjusted for items similar to
certain of those used in calculating the Company's compliance with debt covenants. The additional items that are adjusted to determine segment
EBITDA are:
• stock based compensation expense is excluded;
• official check and money order businesses' EBITDA are excluded;
• cost of data center technology and savings initiatives are excluded and represent implementation costs associated with initiatives to
reduce operating expenses including items such as platform and data center consolidation initiatives in the International segment,
expenses related to the reorganization of global application development resources, expenses associated with domestic data center
consolidation initiatives and planned workforce reduction expenses, expenses related to the conversion of certain BAMS merchant clients
onto First Data platforms, as well as certain platform development and other costs directly associated with the termination of the CPS
alliance, all of which are considered nonrecurring projects (excludes costs accrued in purchase accounting);
• debt issuance costs are excluded and represent costs associated with issuing debt and modifying the Company's debt structure as well as
costs associated with the issuance of debt related to the merger with an affiliate of KKR in 2007;
• KKR related items are excluded and represent items related to the merger with an affiliate of KKR primarily resulting from annual
sponsor fees for management, consulting, financial and other advisory services and the effect of purchase accounting associated with the
merger on EBITDA which is primarily the result of revenue recognition adjustments.
• Retail and Alliance Services segment revenue and EBITDA are reflected based on the Company's proportionate share of the results of its
investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. In
addition, Retail and Alliance services segment measures reflect commission payments to certain ISO's, which are treated as an expense in the
Consolidated Statements of Operations, as contra revenue to be consistent with revenue share arrangements with other ISO's that are recorded as
contra revenue.
• Corporate operations include administrative and shared service functions such as the executive group, legal, tax, treasury, internal audit,
accounting, human resources, information technology and procurement. Costs incurred by Corporate that are directly attributable to a segment
are allocated to the respective segment. Administrative and shared service costs are retained by Corporate.
The following tables present the Company's operating segment results for the years ended December 31, 2010, 2009 and 2008 (in millions):
Year ended December 31, 2010
Retail and
Alliance
Services
Financial
Services International
All Other and
Corporate Totals
Revenues:
Transaction and processing service fees $ 2,923.9 $ 1,362.2 $ 1,237.5 $ 126.8 $ 5,650.4
Product sales and other 390.9 46.8 353.9 23.9 815.5
Equity earnings in affiliates (a) — — 29.4 — 29.4
Total segment reporting revenues $ 3,314.8 $ 1,409.0 $ 1,620.8 $ 150.7 $ 6,495.3
Internal revenue $ 18.0 $ 36.0 $ 8.4 $ — $ 62.4
External revenue 3,296.8 1,373.0 1,612.4 150.7 6,432.9
Depreciation and amortization 676.2 362.9 289.9 51.2 1,380.2
Segment EBITDA 1,322.3 553.0 329.8 (178.1) 2,027.0
Other operating expenses and other income (expense) excluding divestitures (60.2) (8.5) (26.4) (21.0) (116.1)
Expenditures for long-lived assets 26.4 69.9 167.2 100.7 364.2
Equity earnings in affiliates 104.8 — 12.5 — 117.3
Investment in unconsolidated affiliates 1,013.5 — 194.7 — 1,208.2
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