First Data 2010 Annual Report Download - page 29

Table of Contents
FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Cost of products sold. These costs include those directly associated with product and software sales such as cost of POS devices, merchant terminal
leasing costs and software licensing and maintenance costs.
Selling, general and administrative. This caption primarily consists of salaries, wages and related expenses paid to sales personnel, administrative
employees and management as well as advertising and promotional costs and other selling expenses.
Depreciation and amortization. This caption consists of the Company's depreciation and amortization expense. Excluded from this caption is the
amortization of initial payments for contracts which is recorded as a contra-revenue within the "Transaction and processing services fees" line as well as
amortization related to equity method investments which is netted within the "Equity earnings in affiliates" line.
Results of Operations
The following discussion for both consolidated results and segment results are for the year ended December 31, 2010 compared to the year ended
December 31, 2009 as well as for the year ended December 31, 2009 compared to the year ended December 31, 2008. Consolidated results should be read in
conjunction with segment results, which provide more detailed discussions concerning certain components of the Consolidated Statements of Operations. All
significant intercompany accounts and transactions have been eliminated.
Consolidated results.
Year ended December 31, Percent Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Revenues:
Transaction and processing service fees $ 6,181.5 $ 5,788.9 $ 5,785.3 7% 0%
Product sales and other 809.3 796.7 925.3 2% (14)%
Reimbursable debit network fees, postage and other 3,389.6 2,728.2 2,100.7 24% 30%
10,380.4 9,313.8 8,811.3 11% 6%
Expenses:
Cost of services (exclusive of items shown below) 3,023.3 2,945.1 2,870.6 3% 3%
Cost of products sold 375.2 305.5 316.8 23% (4)%
Selling, general and administrative 1,579.7 1,438.2 1,374.8 10% 5%
Reimbursable debit network fees, postage and other 3,389.6 2,728.2 2,100.7 24% 30%
Depreciation and amortization 1,414.4 1,452.3 1,369.7 (3)% 6%
Other operating expenses, net 81.5 289.7 3,255.6 * *
9,863.7 9,159.0 11,288.2 8% (19)%
Interest income 7.8 11.7 26.0 (33)% (55)%
Interest expense (1,796.6) (1,796.4) (1,964.9) 0% (9)%
Other income (expense) (a) (15.9) (61.3) (14.4) * *
Income tax benefit (323.8) (578.8) (699.2) (44)% (17)%
Equity earnings in affiliates 117.3 97.8 123.0 20% (20)%
Net loss (846.9) (1,014.6) (3,608.0) (17)% (72)%
Less: Net income attributable to noncontrolling interests 174.9 71.8 156.3 * (54)%
Net loss attributable to First Data Corporation $ (1,021.8) $ (1,086.4) $ (3,764.3) (6)% (71)%
* Calculation not meaningful.
(a) Other income (expense) includes investment gains and (losses), derivative financial instruments gains and losses, divestitures, net, debt repayment gains
and losses and non-operating foreign currency exchange gains and (losses).
The following provides highlights of revenue and expense growth on a consolidated basis while a more detailed discussion is included in the "Segment
Results" section below.
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