First Data 2012 Annual Report Download

Download and view the complete annual report

Please find the complete 2012 First Data annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 220

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
For the fiscal year ended December 31, 2012
OR
For the transition period from to
Commission file number 001-11073
FIRST DATA CORPORATION
5565 GLENRIDGE CONNECTOR, N.E., SUITE 2000, ATLANTA, GEORGIA 30342
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (404) 890-2000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
N
o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of
the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of the registrant’s voting stock held by non-affiliates is zero. The registrant is privately held. There
were 1,000 shares of the registrant’s common stock outstanding as of March 1, 2013.
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
DELAWARE 47-0731996
(State of incorporation) (I.R.S. Employer Identification No.)
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller Reporting Company

Table of contents

  • Page 1
    ... file number 001-11073 FIRST DATA CORPORATION DELAWARE (State of incorporation) 47-0731996 (I.R.S. Employer Identification No.) 5565 GLENRIDGE CONNECTOR, N.E., SUITE 2000, ATLANTA, GEORGIA 30342 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code...

  • Page 2
    ... 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...

  • Page 3
    ... alliance partner's share of processing fees charged to consolidated alliances. In addition, segment revenue excludes debit network fees and other reimbursable items. Retail and Alliance Services provides merchant acquiring and processing services, prepaid services and check verification, guarantee...

  • Page 4
    ...thousand small and mid-tier merchants. The Company also provides program management and processing services for association-branded, bank-issued, open loop, stored-value, reloadable and one time prepaid card products. Money Network offers prepaid products to address the needs of employers, employees...

  • Page 5
    ... under its guarantee service. If the Company approves the check for warranty coverage and the merchant accepts the check, the merchant will either deposit the check in its bank account or process it for settlement through the Company's Electronic Check Acceptance service. If the check is returned...

  • Page 6
    ...Network which enables PIN-secured debit transaction acceptance at over approximately 2 million ATM and retail terminal locations in the U.S. as of December 31, 2012. Financial Services also offers payment management solutions for recurring bill payment and services to improve customer communications...

  • Page 7
    ... not approved unless there are sufficient funds in the customer's bank account. Revenues related to the STAR Network and debit card and ATM processing services are derived from fees payable under contracts but are driven more by monetary transactions processed than by accounts on file. The Company...

  • Page 8
    ... FDGS provides electronic tax payment processing services for the Electronic Federal Tax Payment System. Corporate operations include administrative and shared service functions such as the executive group, legal, tax, treasury, internal audit, accounting, human resources, information technology and...

  • Page 9
    ...many offered by the Company's customers). Separately, under Section 1075 of the Dodd-Frank Act, debit interchange transaction fees that a card issuer receives and that are established by a payment card network for an electronic debit transaction will now be regulated by the Federal Reserve Board and...

  • Page 10
    ..., the Company is not an issuer or an acquirer under Visa's and MasterCard's rules. In addition, First Data Canada Merchant Solutions ULC is a member of Interac and subject to its rules and First Data Global Services Limited is a subscriber to PULSE and is therefore subject to rules applicable to its...

  • Page 11
    ... or termination of services. Banking regulation. Because a number of the Company' s subsidiary businesses, including card issuer processing, merchant processing and STAR Network businesses as well as those subsidiaries engaged in the business of ATM deployment, provide data processing services for...

  • Page 12
    ... in the payment process. The Company' s businesses in those jurisdictions are subject to those data retention obligations. The Company has developed and is enhancing global compliance programs to monitor and address legal and regulatory requirements and developments. Money transmission and...

  • Page 13
    ... Card Accountability Responsibility and Disclosure Act of 2009 created new requirements applicable to general-use prepaid cards, store gift cards, and electronic gift certificates effective August 22, 2010, and the Federal Reserve Board published on March 23, 2010 final rules to amend Regulation...

  • Page 14
    ... in order to remain competitive within the Company' s relative markets. For example, the ability to adopt technological advancements surrounding point-of-sale ("POS") technology available to merchants could have an impact on the Company' s International and Retail and Alliance Services business. The...

  • Page 15
    ... in the global payments industry may attract hackers to conduct attacks on the Company' s systems that could compromise the security of the Company' s data. An information breach in the system and loss of confidential information such as credit card numbers and related information could have...

  • Page 16
    ... as a merchant referral source when the institution has an existing banking or other relationship. The Company provides transaction processing and related functions. Both alliance partners may provide management, sales, marketing, and other administrative services. The alliance structure allows the...

  • Page 17
    ... system, including creating a new independent agency funded by the Federal Reserve Board to regulate consumer financial products and services (including many offered by the Company' s customers), restricting debit card fees paid by merchants to issuer banks and allowing merchants to offer discounts...

  • Page 18
    ..., the Federal Reserve Board announced the final rules governing debit card interchange fees, and routing and exclusivity restrictions as well as a proposed rule governing the fraud prevention adjustment in response to the Dodd-Frank Act. Within the Retail and Alliance Services segment the Company...

  • Page 19
    ... Statements in Item 8 of this Annual Report on Form 10-K. Failure to protect the Company's intellectual property rights and defend itself from potential patent infringement claims may diminish the Company's competitive advantages or restrict it from delivering the Company's services. The Company...

  • Page 20
    ...322,664 375,217 Retail and Alliance Services' principal operations are conducted in Melville, New York; Hagerstown, Maryland; Marietta, Georgia; Coral Springs, Florida; and Houston, Texas. The principal operations for Financial Services are located in Omaha, Nebraska; Wilmington, Delaware; Maitland...

  • Page 21
    ... facilities include the Company's corporate offices in Atlanta, Georgia and Greenwood Village, Colorado. The Company believes that its facilities are suitable and adequate for its current business; however, the Company periodically reviews its space requirements and may acquire new space to meet...

  • Page 22
    ... of initial payments for new contracts, which is recorded as a contra-revenue within "Transaction and processing service fees" and amortization related to equity method investments, which is netted within "Equity earnings in affiliates" in the Consolidated Statements of Operations. Other long-term...

  • Page 23
    ... OF OPERATIONS First Data Corporation ("FDC" or "the Company"), with global headquarters and principal executive offices in Atlanta, Georgia, operates electronic commerce businesses providing services that include merchant transaction processing and acquiring services; credit, retail and debit card...

  • Page 24
    ..., and settling merchants' credit, retail, debit, stored-value and loyalty card transactions as well as for transaction authorization and posting, network switching and account management. All Other and Corporate. All Other and Corporate is comprised of the Company's business units not included in...

  • Page 25
    ... partners' share of processing fees charged to both consolidated and unconsolidated alliances. Merchant discount revenue from credit card and signature debit card transactions acquired from merchants is recorded net of interchange and assessments charged by the credit card associations. "Check...

  • Page 26
    ... below. Operating revenues overview. Transaction and processing service fees. Revenue increased in 2012 compared to 2011 due to new business, growth in merchant transactions and dollar volumes both domestically and internationally and lower debit interchange rates as a result of the Dodd-Frank Wall...

  • Page 27
    ... in processing from the alliance partner to the Company related to the Banc of America Merchant Services, LLC ("BAMS") alliance beginning in October 2011 and the impact of foreign currency exchange rate movements. In addition, the expense growth rate in 2012 benefited from the 2011 error correction...

  • Page 28
    ... amortization growth rate by 4 percentage points in 2011 compared to 2010. Other operating expenses, net. 2012 Activities Pretax Benefit (Charge) Year ended December 31, 2012 (in millions) Retail and Alliance Services Financial Services All Other and Corporate International Totals Restructuring...

  • Page 29
    ... estimates. 2010 Activities Pretax Benefit (Charge) Year ended December 31, 2010 (in millions) Retail and Alliance Services Financial Services All Other and Corporate International Totals Restructuring charges Restructuring accrual reversals Impairments Litigation and regulatory settlements Total...

  • Page 30
    ... of the Company's transportation business to an alliance in exchange for a 30% interest in that alliance. The 2010 gain related most significantly to a contingent payment received in connection with the Company's November 2009 sale of a merchant acquiring business in Canada. Non-operating foreign...

  • Page 31
    ... by their respective authorities from 2005 forward, none of which are considered major jurisdictions. Under the Tax Allocation Agreement executed at the time of the spin-off of The Western Union Company ("Western Union") on September 29, 2006, Western Union is responsible for and must indemnify...

  • Page 32
    ... of lower debit interchange rates as a result of the Dodd-Frank Act, transaction and dollar volume growth and pricing increases. Segment results. FDC classifies its businesses into three segments: Retail and Alliance Services, Financial Services and International. All Other and Corporate is not...

  • Page 33
    ... 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...

  • Page 34
    ...gateway customer transactions at the POS. Domestic merchant transactions reflect 100% of alliance transactions. Transaction and processing service fees revenue. (in millions) 2012 Year ended December 31, 2011 2010 Percent Change 2012 vs. 2011 2011 vs. 2010 Acquiring revenue Check processing revenue...

  • Page 35
    ... by sales of promotional gift cards in 2010 driven by a specific direct marketing campaign. Additionally, 2011 was impacted by a change in merchant mix resulting from increased card shipments to merchants that generate less revenue per card. Processing fees and other revenue from alliance partners...

  • Page 36
    ... in March 2012. Credit card and retail card processing revenue declined in 2011 versus 2010 with net new account conversions more than offset by price compression, declines in revenue from existing customers and the loss of call center business not driven by active accounts on file. Growth in...

  • Page 37
    ... 2012. Other revenue was flat in 2011 compared to 2010 due to a decrease in volumes related to remittance processing and information services mostly offset by an increase in online banking and bill payment services volumes as well as net new business primarily in remittance processing. Product sales...

  • Page 38
    ...the merchant acquiring businesses resulted from growth in the merchant acquiring alliances and direct sales channels primarily in the United Kingdom and Canada. Foreign currency exchange rate movements negatively impacted the transaction and processing service fees revenue growth rate in 2012 versus...

  • Page 39
    ...addition, International segment EBITDA benefited in 2012 from the 2011 correction of cumulative errors in the amortization of initial payments for new contracts related to purchase accounting associated with the KKR merger and the write-off of capitalized commissions related to terminal leases which...

  • Page 40
    ... and revenues) Charges (gains) related to other operating expenses and other income (expense) Other non-cash and non-operating items, net Increase (decrease) in cash, excluding the effects of acquisitions and dispositions, resulting from changes in: Accounts receivable, current and long-term...

  • Page 41
    ... as called for by the agreement that extended the term of the alliance in 2008. During 2010, proceeds from dispositions related most significantly to the receipt of a contingent payment associated with the Company's sale of a merchant acquiring business in Canada in the fourth quarter of 2009...

  • Page 42
    ...of 2010 related to the December 2010 debt exchange. Principal payments on long-term debt. In conjunction with the debt modifications and amendments discussed above, proceeds from the issuance of new notes were used to prepay portions of the principal balances of FDC's senior secured term loans which...

  • Page 43
    ...in Omnipay, a provider of card and electronic payment processing services to merchant acquiring banks, for approximately 37.1 million euro, of which 19.0 million euro ($25.1 million) was paid in April 2012 with the remainder to be paid in April 2013. The use of cash in 2010 relates to the redemption...

  • Page 44
    ... the registration statement or exchange offer described above. During 2012, 2011 and 2010, the Company entered into capital leases, net of trade-ins, totaling approximately $55 million, $106 million and $65 million, respectively. As discussed above, the Company acquired 100% of Clover Network, Inc...

  • Page 45
    ... and money order businesses from EBITDA due to FDC' s wind down of these businesses. Represents costs directly associated with the termination of the Chase Paymentech alliance, expenses related to First Data taking over operations of Banc of America N.A.' s legacy settlement platform in connection...

  • Page 46
    ... and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Management compensates for the limitations of using non-GAAP financial measures by using them...

  • Page 47
    ... related to materials, data, non-technical contract services, facility security, investor management fees, maintenance and marketing promotions. As of December 31, 2012, the Company had approximately $317 million of tax contingencies comprised of approximately $279 million reported in long...

  • Page 48
    ... details regarding the Company' s stock-based compensation plan. Reserve for merchant credit losses and check guarantees. With respect to the merchant acquiring business, the Company' s merchant customers (or those of its unconsolidated alliances) have the liability for any charges properly reversed...

  • Page 49
    ... estimation process has proven to be materially accurate and the Company believes the recorded reserve approximates the fair value of the contingent obligation. The majority of the TeleCheck Services, Inc. ("TeleCheck") business involves the guarantee of checks received by merchants. If the check is...

  • Page 50
    ... yields, reported trades, issuer spreads, two sided markets, benchmark securities, bids, offers, and reference data. In certain instances, amortized cost is considered an appropriate approximation of market value. Other investments are valued based upon either quoted prices from active exchanges...

  • Page 51
    .... Capitalization of initial payments for contracts and conversion costs only occurs when management is satisfied that such costs are recoverable through future operations, contractual minimums and/or penalties in case of early termination. The Company' s accounting policy is to limit the amount of...

  • Page 52
    ...been allocated to reporting units. The Company' s reporting units are businesses at the operating segment level or one level below the operating segment level for which discrete financial information is prepared and regularly reviewed by management. The Company tests goodwill annually for impairment...

  • Page 53
    ... statements of the Company. Accordingly, the revenue associated with these related party transactions are presented on the face of the Consolidated Statements of Operations. All members of the Company' s Board of Directors are affiliated with KKR. In addition, First Data has a management agreement...

  • Page 54
    ... customers of the Company; (i) achieving planned revenue growth throughout the Company, including in the merchant alliance program which involves several alliances not under the sole control of the Company and each of which acts independently of the others, and successful management of pricing...

  • Page 55
    ...the Retail and Alliance Services segment holds an ownership interest in several competing merchant acquiring businesses while serving as the electronic processor for those businesses. In order to satisfy state and federal antitrust requirements, the Company actively maintains an antitrust compliance...

  • Page 56
    ... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Item 15(a)) First Data Corporation and Subsidiaries: Consolidated Financial Statements: Report of Ernst & Young LLP, Independent Registered Public Accounting Firm Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and...

  • Page 57
    ... all material respects the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), First Data Corporation's internal control over financial reporting as of December 31, 2012, based on criteria established...

  • Page 58
    FIRST DATA CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in millions) 2012 Year ended December 31, 2011 2010 Revenues: Transaction and processing service fees: Merchant related services (a) Check services Card services Other services Product sales and other (a) Reimbursable debit network fees,...

  • Page 59
    FIRST DATA CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions) 2012 Year ended December 31, 2011 2010 Net loss Other comprehensive income (loss), net of tax: Unrealized gains on securities Unrealized gains on hedging activities Pension liability adjustments Foreign ...

  • Page 60
    ... deferred tax liabilities Other long-term liabilities Total liabilities Commitments and contingencies (See Note 11) Redeemable noncontrolling interest First Data Corporation stockholder's (deficit) equity: Common stock, $.01 par value; authorized and issued 1,000 shares (2012 and 2011) Additional...

  • Page 61
    ... to equity method investments Payments related to other businesses previously acquired Proceeds from dispositions, net of expenses paid and cash disposed Proceeds from sale of property and equipment Additions to property and equipment Payments to secure customer service contracts, including outlays...

  • Page 62
    ... Data Corporation to Parent Purchase of noncontrolling interest Balance, December 31, 2012 $ (700.9) 46.2 12.4 (46.1) 7,341.5 $ (6.7) (6.7) (47.6) 2,626.4 $ (7,387.8) $ (552.2) - $ (1.5) 3,224.9 (a) The total net loss presented in the Consolidated Statements of Equity for the twelve months...

  • Page 63
    ... Accounting Policies Business Description First Data Corporation ("FDC" or "the Company") operates electronic commerce businesses providing a variety of services to financial institutions, commercial establishments and consumers. Such services include merchant transaction processing and acquiring...

  • Page 64
    ... merchant alliances. In situations where an alliance is accounted for under the equity method, the Company's consolidated revenues include the processing fees charged to the alliance, as presented on the face of the Consolidated Statements of Operations. Revenue from check verification, settlement...

  • Page 65
    ... and the noncontrolling interest's share of that value. Reserve for Merchant Credit Losses and Check Guarantees With respect to the merchant acquiring business, the Company's merchant customers (or those of its unconsolidated alliances) have the liability for any charges properly reversed by the...

  • Page 66
    ... STATEMENTS (Continued) Operations. The amount of the reserves attributable to entities consolidated by the Company was $23.4 million and $31.6 million as of December 31, 2012 and 2011, respectively. The majority of the TeleCheck Services, Inc. ("TeleCheck") business involves the guarantee of checks...

  • Page 67
    ... initial payments for new contracts, contract renewals and conversion costs associated with customer processing relationships to the extent recoverable through future operations, contractual minimums and/or penalties in the case of early termination. The Company's accounting policy is to limit the...

  • Page 68
    ... to this annual test, these assets and all other long lived assets are tested for impairment upon an indicator of potential impairment. The Company recorded impairment charges relating to other intangibles in 2012 and 2010 as described in Note 7 of these Consolidated Financial Statements. Inventory...

  • Page 69
    ...Consolidated Financial Statements for a detailed discussion regarding the fair value of the Company's investments. New Accounting Guidance In July 2012, the Financial Accounting Standards Board issued guidance related to testing indefinite-lived intangibles for impairment. Under the amended guidance...

  • Page 70
    ....1 (a) (b) (c) Includes businesses and assets consolidated by the Company upon acquisition. For information related to equity method investments refer to Note 18 of these Consolidated Financial Statements. Includes cash acquired and debt assumed. Banc of America Merchant Services, LLC ("BAMS") 70

  • Page 71
    ... 26, 2009, Bank of America N.A. ("BofA") and the Company, together with Rockmount, an investment vehicle controlled by a third-party investor, formed a new company, BAMS. BAMS provides clients with a comprehensive suite of acquiring and processing payment products for credit and debit cards as well...

  • Page 72
    FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table presents changes to goodwill for the years ended December 31, 2011 and 2012: Retail and Alliance Services Financial Services All Other and Corporate Divested Operations (in millions) International...

  • Page 73
    ...as of December 31, 2012 and of municipal obligations and corporate bonds as of December 31, 2011. The Company' s long-term settlement assets were primarily comprised of student loan auction rate securities ("SLARS") as of December 31, 2012 and of SLARS and U.S. Government guaranteed securities as of...

  • Page 74
    ... Financial Instruments Risk Management Objectives and Strategies The Company is exposed to various financial and market risks, including those related to changes in interest rates and foreign currency exchange rates, that exist as part of its ongoing business operations. The Company utilizes certain...

  • Page 75
    FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company' s policy is to manage its cash flow and net investment exposures related to adverse changes in interest rates and foreign currency exchange rates. The Company' s objective is to engage in risk management ...

  • Page 76
    ... transactions affect earnings. As of December 31, 2012, there are no longer any losses carried in OCI related to interest rate swaps that are expected to be reclassified into the Consolidated Statements of Operations. For information on the location and amounts of derivative fair values in the...

  • Page 77
    .... The Company' s policy is to present all derivative balances on a gross basis, without regard to counterparty master netting agreements or similar arrangements. The Effect of Derivative Instruments on the Consolidated Statements of Operations 2012 Interest Rate Contracts Foreign Exchange Contracts...

  • Page 78
    ... 6 of these Consolidated Financial Statements for additional information regarding the Company' s investment securities and derivative financial instruments, respectively. The estimated fair market value of FDC' s long-term borrowings was primarily based on market trading prices and is considered to...

  • Page 79
    ...Settlement assets: Student loan auction rate securities Corporate bonds State and municipal obligations Preferred stock Total settlement assets Other current assets: Interest rate swap contracts Foreign currency derivative contracts Other long-term assets: Available-for-sale securities Interest rate...

  • Page 80
    ... 1) Total Assets: Settlement assets: Student loan auction rate securities Corporate bonds State and municipal obligations U.S. Government guaranteed agency securities Preferred stock Total settlement assets Other long-term assets: Available-for-sale securities Interest rate swap contracts Foreign...

  • Page 81
    ... currency exchange rates, yield curves and the credit quality of the counterparties. The models also incorporate the Company' s creditworthiness in order to appropriately reflect non-performance risk. Inputs to the derivative pricing models are generally observable and do not contain a high level...

  • Page 82
    ...recorded in the "Cost of services" line. The impairments related to property and equipment, customer relationships, software, and goodwill. In addition, the Company impaired a strategic investment with a total carrying value of $8.7 million within the Retail and Alliance Segment as discussed in Note...

  • Page 83
    ...DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 8: Borrowings (in millions) As of December 31, 2012 2011 Short-term borrowings Senior secured revolving credit facility Foreign lines of credit and other arrangements Total short-term borrowings Current portion of long...

  • Page 84
    ... Company made no principal payments during 2011 or 2012. During 2010, the Company paid $96.2 million of principal payments on the senior secured term loan facility in accordance with the original provisions, of which $89.2 million related to the U.S. dollardenominated loan and $7.0 million related...

  • Page 85
    ... Agreement, FDC used the net proceeds from the issue and sale of approximately $1,266 million to repay a portion of its outstanding senior secured term loans. FDC incurred costs of $23.2 million related to the August 2012 amendment and debt offering, $17.8 million of which was recorded as discounts...

  • Page 86
    FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 7.375% notes vote as one class under the related indenture. Interest on the notes is payable semi-annually on June 15 and December 15 of each year. FDC may redeem these notes, in whole or in part, at any time on or ...

  • Page 87
    ... revolving credit facility and senior secured term loan facility are unconditionally guaranteed by substantially all existing and future, direct and indirect, wholly-owned, material domestic subsidiaries of FDC other than Integrated Payment Systems Inc. The senior secured facilities contain a number...

  • Page 88
    ... similar to those described for the senior secured obligations noted above. FDC is in compliance with all applicable covenants. Debt transactions effected subsequent to December 31, 2012 Debt Offering and Debt Repurchase. On January 30, 2013, FDC commenced a tender offer to purchase for cash any and...

  • Page 89
    ...base rate plus 400 basis points. FDC used the net cash proceeds from the new term loans to repay all of its outstanding term loan borrowings maturing in 2014 and to pay related fees and expenses. Related Financing Costs. In connection with the debt offering and amendment to the senior secured credit...

  • Page 90
    ... Balance Sheet Information (in millions) $ $ (7.7) (91.4) - 4.8 - (94.3) $ $ - 58.2 57.4 5.3 3.2 124.1 $ $ 2.5 (58.3) 18.7 21.2 - (15.9) As of December 31, 2012 2011 Current assets: Accounts receivable: Customers Due from unconsolidated merchant alliances Leasing receivables Interest...

  • Page 91
    FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in millions) As of December 31, 2012 2011 Property and equipment: Land Buildings Leasehold improvements Equipment and furniture Equipment under capital lease Less accumulated depreciation $ $ Other long-term assets...

  • Page 92
    ... Statements for information concerning the Company' s stock-based compensation plans. Note 10: Related Party Transactions Merchant Alliances A substantial portion of the Company' s business within the Retail and Alliance Services and International segments is conducted through merchant alliances...

  • Page 93
    ... of management fees. All members of the Company' s Board of Directors are affiliated with KKR. Transactions and Balances Involving Company Affiliates In August 2010, the Company paid KKR Capital Markets LLC ("KCM"), an affiliate of KKR, $5 million for services rendered in arranging for the amendment...

  • Page 94
    ... operations. On July 2, 2004, a class action complaint was filed against the Company, its subsidiary Concord EFS, Inc., and various financial institutions. Plaintiffs claim that the defendants violated antitrust laws by conspiring to artificially inflate foreign ATM fees that were ultimately charged...

  • Page 95
    ...; (2) Merchant customer matters often associated with alleged processing errors or disclosure issues and claims that one of the subsidiaries of the Company has violated a federal or state requirement regarding credit reporting or collection in connection with its check verification guarantee, and...

  • Page 96
    ... not included above. Other First Data Corporation Stockholder's Equity Transactions The following table presents the effects of changes in FDC' s ownership interest in Omnipay and its BAMS alliance on FDC' s equity: (in millions) 2012 Year ended December 31, 2011 2010 Net loss attributable to FDC...

  • Page 97
    ... Statements of Operations resulting from stock options, non-vested restricted stock awards and non-vested restricted stock units was as follows: Year ended December 31, (in millions) Amount 2012 2011 2010 $ 12.4 17.6 17.1 The Company has a deferred compensation plan for non-employee directors...

  • Page 98
    ...-based options upon certain employment termination events or the latter of September 24, 2012 or a qualified public offering. In conjunction with the above noted modifications, stock plan participants also received a cash bonus payment in the second quarter of 2010 totaling $7.8 million. As of...

  • Page 99
    ... plan during 2012, 2011 and 2010. Grants were made as incentive awards. The restrictions on the awards granted subsequent to the modifications described above will lapse upon a qualified public offering, a change in control or certain employment termination or liquidity events. As such, the Company...

  • Page 100
    FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table presents the aggregate amounts charged to expense in connection with these plans: Year ended December 31, (in millions) Amount 2012 2011 2010 Defined Benefit Plans $ 45.2 42.7 41.1 The Company ...

  • Page 101
    ...Assumptions. The weighted-average rate assumptions used in the measurement of the Company' s benefit obligations are as follows: 2012 As of December 31, 2011 2010 Discount rate Rate of compensation increase (a) (a) The rate of compensation increases generally apply to active plans. 101 4.29% 3.95...

  • Page 102
    ... DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The weighted-average rate assumptions used in the measurement of the Company' s net cost are as follows: 2012 Year ended December 31, 2011 2010 Discount rate Expected long-term return on plan assets Rate of compensation...

  • Page 103
    ... Quoted prices in active markets for identical assets (Level 1) Total Investments: Cash and cash equivalents Registered investment companies: Cash management fund Equity funds Fixed income securities Private investment funds-redeemable (a) Private investment funds-non-redeemable Insurance annuity...

  • Page 104
    ..., primarily corporate bonds. The bonds were valued under a market approach using observable inputs including reported trades, benchmark yields, broker/dealer quotes, issuer spreads and other standard inputs. Private investment funds-redeemable. The Company's domestic and United Kingdom plans are...

  • Page 105
    ... 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...

  • Page 106
    ... the Company's operating segment results for the years ended December 31, 2012, 2011 and 2010: Year ended December 31, 2012 Retail and Alliance Services Financial Services All Other and Corporate (in millions) International Totals Revenues: Transaction and processing service fees Product sales...

  • Page 107
    ... to exclude the official check and money order businesses from revenue and EBITDA due to the Company's wind down of these businesses. Net adjustment to reflect First Data's proportionate share of alliance revenue and EBITDA within the Retail and Alliance Services segment, equity earnings in...

  • Page 108
    FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Segment assets are as follows: (in millions) As of December 31, 2012 2011 Assets: Retail and Alliance Services Financial Services International All Other and Corporate Consolidated $ $ 25,885.7 4,477.1 5,305.7 2,...

  • Page 109
    ...benefit in the Consolidated Statement of Operations to correct cumulative depreciation and amortization errors related to purchase accounting associated with the Company's 2007 merger with an affiliate of Kohlberg Kravis Roberts & Co. The corrections impacted amortization of initial payments for new...

  • Page 110
    ....3) 29.4 (323.8) 27.7% Effective Income Tax Rate The Company's effective tax rates differ from statutory rates as follows: 2012 Year ended December 31, 2011 2010 Federal statutory rate State income taxes, net of federal income tax benefit Nontaxable income from noncontrolling interests Impact of...

  • Page 111
    ... net operating losses which may not be utilized within the statute of limitations and foreign tax credits for which it is likely that no benefit will be realized in the future. In determining the necessary amount of valuation allowance, the Company has considered a tax planning strategy related to...

  • Page 112
    ... tax positions of prior years Increases for tax positions related to the current period Decreases for cash settlements with taxing authorities Decreases due to the lapse of the applicable statute of limitations Balance as of December 31, 2010 Increases for tax positions of prior years Decreases for...

  • Page 113
    ... by their respective authorities from 2005 forward, none of which are considered major jurisdictions. Under the Tax Allocation Agreement executed at the time of the spin-off of The Western Union Company ("Western Union") on September 29, 2006, Western Union is responsible for and must indemnify...

  • Page 114
    ... acquires credit and debit card transactions from merchants. The Company provides processing and other services to the alliance and charges fees to the alliance primarily based on contractual pricing. These fees have been separately identified on the face of the Consolidated Statements of Operations...

  • Page 115
    FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The primary components of assets and liabilities are settlement-related accounts similar to those described in Note 4 of these Consolidated Financial Statements. (in millions) 2012 Year ended December 31, 2011 2010 ...

  • Page 116
    ....0 CONSOLIDATED STATEMENTS OF OPERATIONS FDC Parent Company As previously reported As corrected $ 110.0 $ 105.6 (115.8) (111.4) 144.3 435.1 (1,031.8) (509.9) (521.9) (521.9) 234.4 375.9 (996.5) (474.6) (521.9) (521.9) For the nine months ended September 30, 2012 Guarantor Subsidiaries Non-Guarantor...

  • Page 117
    ...Data Corporation FDC Parent Company As previously reported As corrected $ - $ - (285.0) (285.0) 112.3 323.8 (1,620.3) (598.5) (1,021.8) (1,021.8) 230.3 249.8 (1,576.3) (554.5) (1,021.8) (1,021.8) Year ended December 31, 2010 Guarantor Subsidiaries Non... Long-term intercompany receivables Long-term...

  • Page 118
    ...DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) CONSOLIDATED STATEMENTS OF CASH FLOWS FDC Parent Company As previously reported As corrected For the nine months ended September 30, 2012 Guarantor Subsidiaries Non-Guarantor Subsidiaries As previously As previously reported...

  • Page 119
    ... information for FDC on a consolidated basis. Year ended December 31, 2012 NonGuarantor Guarantor Consolidation Subsidiaries Adjustments Subsidiaries (in millions) FDC Parent Company Consolidated Revenues: Transaction and processing service fees Product sales and other Reimbursable debit network...

  • Page 120
    ... STATEMENTS (Continued) Year ended December 31, 2011 (As Corrected) NonGuarantor Consolidation Guarantor Subsidiaries Adjustments Subsidiaries (in millions) FDC Parent Company Consolidated Revenues: Transaction and processing service fees Product sales and other Reimbursable debit network fees...

  • Page 121
    ... STATEMENTS (Continued) Year ended December 31, 2010 (As Corrected) NonGuarantor Consolidation Guarantor Subsidiaries Adjustments Subsidiaries (in millions) FDC Parent Company Consolidated Revenues: Transaction and processing service fees Product sales and other Reimbursable debit network fees...

  • Page 122
    FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) As of December 31, 2012 NonGuarantor Guarantor Consolidation Subsidiaries Subsidiaries Adjustments (in millions) FDC Parent Company Consolidated ASSETS Current assets: Cash and cash equivalents Accounts receivable,...

  • Page 123
    ... (98.3) - - (5,292.9) (3,539.9) - (8,931.1) (67.4) 67.4 (26,289.5) 3,250.6 (6,601.5) (29,640.4) (38,571.5) $ (a) The majority of the Guarantor settlement assets relate to FDC' s merchant acquiring business. FDC believes the settlement assets are not available to satisfy any claims other than those...

  • Page 124
    ... ACTIVITIES Current year acquisitions, net of cash acquired Contributions to equity method investments Payments related to other businesses previously acquired Proceeds from sale of property and equipment Additions to property and equipment Payments to secure customer service contracts, including...

  • Page 125
    ... to equity method investments Payments related to other businesses previously acquired Proceeds from dispositions, net of expenses paid and cash disposed Proceeds from sale of property and equipment Additions to property and equipment Payments to secure customer service contracts, including outlays...

  • Page 126
    ... to equity method investments Payments related to other businesses previously acquired Proceeds from dispositions, net of expenses paid and cash disposed Proceeds from sale of property and equipment Additions to property and equipment Payments to secure customer service contracts, including outlays...

  • Page 127
    FIRST DATA CORPORATION SCHEDULE II-Valuation and Qualifying Accounts (dollars, in millions) Balance at Beginning of Period Charged to Costs and Expenses Additions Reclassifications from Other Accounts (a) Balance at End of Period Description Deductions (b) Year ended December 31, 2012 deducted ...

  • Page 128
    ... accepted in the United States. Management's Report on Internal Control over Financial Reporting. Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange...

  • Page 129
    128

  • Page 130
    ..., in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of First Data Corporation as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), cash flows and equity...

  • Page 131
    ... Director Edward A. Labry III has been Chief Executive Officer since January 2013. Mr. Labry was Executive Vice President from February 2006 until January 2013 and President, First Data - North America from January 2011 until January 2013. Mr. Labry was President, Retail and Alliance Services...

  • Page 132
    ..., prior to that, as chief executive of the Communications and High Technology Operating Group, and as Chairman of the board of directors of Accenture Ltd. from 2001 until 2006. Mr. Forehand is a member of the Portfolio Management Committee for Kohlberg Kravis Roberts & Co. ("KKR") and has also been...

  • Page 133
    ... of Messrs. Nuttall and Olson. The Board of Directors has determined that Messrs. Nuttal and Olson are audit committee financial experts as defined by regulations of the Securities and Exchange Commission. The Company does not have procedures by which security holders may recommend nominees to its...

  • Page 134
    ... Corporation Severance/Change in Control Policy. At this time, it was also announced that executive officer, J. Mark Herrington, First Data' s Executive Vice President, Global Product, will be leaving the company. FDC remains committed to a compensation philosophy, strategy, and process that incents...

  • Page 135
    ... structure creates a strong incentive for executives to drive company performance over both the short and long term, while ensuring alignment between long-term shareholder and executive interests. Facilitate Equity Ownership The 2007 Stock Incentive Plan for Key Employees of First Data Corporation...

  • Page 136
    ..., revenue and market value. The 2012 peer group includes the following 21 companies Accenture Capital One Financial eBay Fiserv SAIC SunTrust Banks Visa ADP Computer Sciences Corp. Fidelity Nat' l Info Services Mastercard SLM Corp. Symantec Corp. Western Union American Express Discover Financial...

  • Page 137
    ... President & President, First Data - North America John Elkins, Executive Vice President & President, First Data - International Regions Ray E. Winborne, Executive Vice President & Chief Financial Officer Kevin M. Kern, Executive Vice President, Operations & Technology Annual Cash Incentives Plan...

  • Page 138
    .... Incentive targets for 2013 each named executive officer are as follows: 2013 SEIP Target as a % of Base Pay 2013 SEIP Target in $ Edward A. Labry III John Elkins Ray E. Winborne Equity 125% 125% 100% $ $ $ 1,250,000 937,500 675,000 The equity compensation program is intended to align long...

  • Page 139
    2012 Equity Awards In 2012, the Holdings Committee implemented an annual equity grant program for FDC executives in order to maintain a more competitive overall total compensation structure and promote long-term retention of key talent. Annual grants will be made on a discretionary basis, with ...

  • Page 140
    ...an annual basis. Retirement Plans In 2012, all employees in the U.S., including executive officers, were eligible to participate in the First Data Corporation Incentive Savings Plan ("ISP"). The ISP is a qualified 401(k) plan designed to comply with Internal Revenue Service ("IRS") safe harbor rules...

  • Page 141
    ... a number of restrictive covenants which are structured to protect FDC from potential loss of customers or employees and to prohibit the release of confidential company information. OTHER BENEFIT PLANS All executive officers are also eligible to participate in the employee benefit plans and programs...

  • Page 142
    ... party has provided notice to terminate the agreement. TAX AND ACCOUNTING CONSIDERATIONS During 2012, Internal Revenue Code Section 162(m) limitations on tax deductibility of compensation did not apply to FDC as the Company' s common stock is not registered or publicly traded. The Committee has not...

  • Page 143
    ... Compensation Plan track the value of shares of Holdings and are payable to participants only upon Separation of Service or Death. (1) On November 8, 2012, James Fisher informed the Company, that he did not intend to run for re-election as a member of the First Data Corporation Board of Directors...

  • Page 144
    ... Awards ($) (3) Non-Equity Incentive Plan Compensation ($) All Other Compensation ($) (5) Total ($) Jonathan J. Judge, Chief Executive Officer Ray E. Winborne, Executive Vice President & Chief Financial Officer Edward A. Labry III, Executive Vice President John Elkins, Executive Vice President...

  • Page 145
    ...in the First Data Corporation Incentive Savings Plan ("ISP"), a qualified 401(k) plan. The ISP is described in the Compensation Discussion and Analysis. Includes the value of imputed income on life insurance premiums paid by the Company. For 2012, amounts include all tax gross up payments related to...

  • Page 146
    ...(3) (4) No executive officers were eligible for any Estimated Future Payouts under Non-Equity or Equity Incentive Plans during 2012. Grants reflected in this column are grants of Restricted Stock made under the 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates...

  • Page 147
    ...Awards Stock Awards Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) Name Company (1) Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities...280,000 291,666 Edward A. Labry III 3,750,000 750...

  • Page 148
    ...Shares, Units or Other Rights That Have Not Vested ($) Name Company (1) Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable (2) Equity Incentive Plan Awards: Number of Securities...12/8/2014 2/22/2016 5/19/2020 ...

  • Page 149
    ... Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Holdings 83,333 291,666 (1) Western Union ("WU") equity awards were granted under the 1992 and/or 2002 First Data Corporation Long-Term Incentive Plans in connection with the spin-off of Western...

  • Page 150
    ... of control. The Policy is intended to promote uniform treatment of senior executives who are involuntarily terminated other than for cause or who voluntarily leave the Company for Good Reason as defined under the 2007 Incentive Plan for Key Employees of First Data Corporation and its Affiliates...

  • Page 151
    ... which are structured to protect FDC from potential loss of customers or employees and prohibit the release of confidential company information. The actual payments under the policy are contingent upon many factors as of the time benefits would be paid, including elections by the executive and tax...

  • Page 152
    .... Name Number of Shares Beneficially Owned (1,2) Percent of Class New Omaha Holdings L.P. (3) Jonathan J. Judge John Elkins Kevin M. Kern Edward A. Labry III (4) Ray E. Winborne Joe W. Forehand Henry R. Kravis (3), (5) Scott C. Nuttall (5) Tagar C. Olson (5) All directors and executive officers as...

  • Page 153
    ... a member of the Company's board of directors and serves as an executive of Kohlberg Kravis Roberts & Co. L.P. and/or one or more of its affiliates. Each of Messrs. Kravis, Nuttall and Olson disclaim beneficial ownership of the shares held by New Omaha Holdings L.P. CERTAIN RELATIONSHIPS AND RELATED...

  • Page 154
    ... and assistance with and review of documents filed with the SEC; offering memoranda, purchase accounting and other accounting and financial reporting consultation and research work billed as audit fees or necessary to comply with the standards of the Public Company Accounting Oversight Board (United...

  • Page 155
    ... pre-approve all audit and non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pursuant to the policy, the Audit Committee annually reviews and pre-approves services that...

  • Page 156
    ... by reference: DESCRIPTION EXHIBIT NO. 2.1 Agreement and Plan of Merger, dated as of April 1, 2007, among New Omaha Holdings L.P., Omaha Acquisition Corporation and First Data Corporation (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed on April...

  • Page 157
    ...750% Senior Secured Notes due 2020 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on October 2, 2012). Indenture, dated as of February 13, 2013, by and among First Data Corporation, the guarantors named therein and Wells Fargo Bank, National Association...

  • Page 158
    ...First Data Corporation, Kohlberg Kravis Roberts & Co. L.P. and New Omaha Holdings L.P. (incorporated by reference to Exhibit 10.10 of the Company's Quarterly Report on Form 10-Q filed on November 14, 2007, Commission File No. 1-11073). Employment Agreement between the Company and Edward A. Labry III...

  • Page 159
    ... Data 2002 Long-Term Incentive Plan for employees other than Executive Officers (incorporated by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K filed on March 1, 2005, Commission File No. 1-11073). * Form of Non-Qualified Stock Option Agreement under the First Data 2002 Long...

  • Page 160
    ...filed on April 17, 2012). * 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates, as amended. * First Data Corporation Severance / Change in Control Policy. * Subsidiaries of the Company. Certification of CEO pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange...

  • Page 161
    ...on its behalf by the undersigned, thereunto duly authorized. FIRST DATA CORPORATION (Registrant) By: /S/ EDWARD A. LABRY III Edward A. Labry III Chief Executive Officer Date: March 19, 2013 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 162
    EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 2.1 Agreement and Plan of Merger, dated as of April 1, 2007, among New Omaha Holdings L.P., Omaha Acquisition Corporation and First Data Corporation (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed on April 2, 2007, ...

  • Page 163
    ... 10.1 of the Company's Annual Report on Form 10-K filed on March 13, 2008, Commission File No. 1-11073). Guarantee Agreement, dated September 24, 2007, among First Data Corporation, the subsidiaries of First Data Corporation identified therein and Credit Suisse, Cayman Islands Branch, as Collateral...

  • Page 164
    ...First Data Corporation, Kohlberg Kravis Roberts & Co. L.P. and New Omaha Holdings L.P. (incorporated by reference to Exhibit 10.10 of the Company's Quarterly Report on Form 10-Q filed on November 14, 2007, Commission File No. 1-11073). Employment Agreement between the Company and Edward A. Labry III...

  • Page 165
    ... Data 2002 Long-Term Incentive Plan for employees other than Executive Officers (incorporated by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K filed on March 1, 2005, Commission File No. 1-11073). * Form of Non-Qualified Stock Option Agreement under the First Data 2002 Long...

  • Page 166
    ...These interactive data files shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under those sections. Management contracts and compensatory plans and...

  • Page 167
    ... in the Option Plan, as of the date hereof the Company is granting to the Management Stockholder Options to acquire such number of shares of Common Stock, and at such exercise prices, as set forth in such Management Stockholder's Stock Option Agreement which the Parties shall execute and deliver to...

  • Page 168
    ... statement under the Securities Act of 1933, as amended, and the rules and regulations in effect thereunder (the "Act"), and in compliance with applicable provisions of state securities laws; or (A) counsel for the Management Stockholder (which counsel shall be reasonably acceptable to the Company...

  • Page 169
    ... the Company or limited partners of Parent) and, in the case of a disposition pursuant to Rule 144, shall deliver to the Company an executed copy of any notice on Form 144 required to be filed with the SEC. The Management Stockholder agrees that, if any shares of the Stock are offered to the public...

  • Page 170
    ... of a Qualified Public Offering, the Management Stockholder may only transfer shares of Stock in compliance with Section 4 or pursuant to the Sale Participation Agreement. No transfer of any such shares in violation hereof shall be made or recorded on the books of the Company and any such...

  • Page 171
    ... includes any consideration other than cash, then at the sole option of the Company, at the equivalent all cash price, determined in good faith by the Board), by delivering (i) a certified bank check or checks in the appropriate amount (or by wire transfer of immediately available funds, if...

  • Page 172
    ... foregoing Option Excess Price is zero or a negative number, all outstanding exercisable Options granted to the Management Stockholder shall be automatically terminated without any payment in respect thereof. In addition, and for the avoidance of doubt, upon termination of employment as a result of...

  • Page 173
    ... payment of cash to the applicable Management Stockholder Entity pursuant to this Agreement; and (ii) shall bear interest at a rate equal to the effective rate of interest in respect of the Company's U.S. dollar-denominated subordinated public debt securities (including any original issue discount...

  • Page 174
    ...the Repurchase Calculation Date over the Option Exercise Price and (y) the number of Exercisable Option Shares (solely relating to the vested Options), which vested Options shall be terminated in exchange for such payment. In the event the Company elects to repurchase under this Section 6(b)(ii) and...

  • Page 175
    ...Entities provide to the Company wire transfer instructions) against delivery of certificates or other instruments representing the Stock so purchased and appropriate documents canceling the Options so terminated, appropriately endorsed or executed by the applicable Management Stockholder Entities or...

  • Page 176
    ... all of the assets of New Omaha Holdings, L.P. or the Company or First Data Corporation to any Person (or group of Persons acting in concert), other than to (x) investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (together, the "Sponsor"), any other investor in respect of whom the...

  • Page 177
    ... business plans or any proprietary or confidential information, documents or materials in any form or media, including any of the foregoing relating to research, operations, finances, current and proposed products and services, vendors, customers, advertising and marketing, and other non-public...

  • Page 178
    ... such employment agreement, "Good Reason" shall mean (i) a reduction in or demotion of the Management Stockholder's base salary or the Management Stockholder's annual incentive compensation opportunity (other than a general reduction in base salary or annual incentive compensation opportunities that...

  • Page 179
    .... "Partnership Agreement" means the Amended and Restated Limited Partnership Agreement of New Omaha Holdings L.P., as it may be amended, modified,.... "Public Offering" shall mean the sale of shares of Common Stock to the public subsequent to the date hereof pursuant to a registration statement under ...

  • Page 180
    ... prior to the occurrence of a Public Offering, the last day of the month preceding the month in which date of repurchase occurs, and (ii) on and after the occurrence of a Public Offering, the last date of trading of the Stock on which there was a closing price for the Stock immediately preceding the...

  • Page 181
    ... of a sale of Common Stock by any of the Investors in accordance with the terms of the Registration Rights Agreement, the Company will promptly notify each Senior Management Stockholder or other Management Stockholder to whom the Board, after consultation with the Chief Executive Officer and the...

  • Page 182
    ... of Registrable Securities (other than Management Stockholders) or (ii) the maximum number of shares of Stock which the Company can register in connection with such Request in the Proposed Registration without adverse effect on the offering in the view of the managing underwriters (reduced pro rata...

  • Page 183
    ... the Stock or the Options, to any and all shares of capital stock of the Company or any capital stock, partnership units or any other security evidencing ownership interests in any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued...

  • Page 184
    ... respect hereto. 16. Amendment. This Agreement may be amended by the Company at any time with the consent of the majority of the Management Stockholders on the Executive Committee of the Company (which shall be comprised of the Chief Executive Officer and his direct reports), which consent shall not...

  • Page 185
    ...or certified mail return receipt requested and postage prepaid, in each case as follows: (a) If to the Company, to it at the following address: First Data Corporation 6200 S. Quebec Street, Suite 360 Greenwood Village, Colorado 80111 Attention: General Counsel with copies to: Kohlberg Kravis Roberts...

  • Page 186
    ... or clients to compete with any business of the Company, any of its subsidiaries, the Investors or any of their respective Affiliates or (B) solicit or offer employment to any person who is, or has been at any time during the twelve (12) months immediately preceding the termination of the Management...

  • Page 187
    ... of the price paid by the Management Stockholder in acquiring such Stock, on a net after-tax basis. 24. Effectiveness. Except for Sections 1, 2(a), 2(f), 2(g), 3, 8, 13, 14, 15, 16, 18, 20 and 22 and this Section 24, which shall become effective as of the execution and delivery of this Agreement by...

  • Page 188
    IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date reflected on the Award Notice. STATUS AS SENIOR MANAGEMENT STOCKHOLDER ⌧ Yes No

  • Page 189
    ...of Plan The 2007 Stock Incentive Plan for Key Employees of First Data Corporation and its Affiliates (the "Plan") is designed: (a) to promote the long term financial interests and growth of New Omaha Holdings Corporation (the "Company") and its Subsidiaries by attracting and retaining management and...

  • Page 190
    ... public offering of the Common Stock on the New York Stock Exchange or the Nasdaq National Market or other nationally recognized stock exchange or listing system. (r) "Sale Participation Agreement" shall mean that certain Sale Participation Agreement between the applicable Participant and New Omaha...

  • Page 191
    ... the Committee, consistent, however, with the terms of the Plan; provided, however, that such Grant Agreement shall contain provisions dealing with the treatment of Grants in the event of the termination of employment or other service relationship, death or disability of a Participant, and may also...

  • Page 192
    ... Company or any other Service Recipient to terminate any Participant's employment or other service relationship at any time or for any reason. (d) Other than as specifically provided in the Management Stockholder's Agreement, Sale Participation Agreement or Grant Agreement, no benefit under the Plan...

  • Page 193
    ... have been paid to the Company in relation with such exercise. 10. Amendment and Termination (a) The Committee shall have the authority to make such amendments to any terms and conditions applicable to outstanding Grants as are consistent with this Plan, provided that no such action shall modify any...

  • Page 194
    ... the laws of the State of Delaware applicable therein. (b) With respect to Participants who reside or work outside the United States of America, the Committee may, in its sole discretion, amend the terms of the Plan or awards with respect to such Participants in order to conform such terms with the...

  • Page 195
    ...26, 2005 by First Data Corporation, a Delaware corporation ("FDC"), to enable FDC to offer a form of income protection to its Eligible Executives in the event their employment with the Company is involuntarily terminated other than for Cause. The Policy was also intended to secure for the benefit of...

  • Page 196
    ..." means an individual who is a member of the Company's executive committee unless such individual is eligible, by virtue of an acquisition agreement or otherwise, to receive severance, termination, or similar benefits under another policy, plan, program, or agreement. "Good Reason" shall have the...

  • Page 197
    ...plus (2) A pro-rata portion of the Eligible Executive's target bonus payable to the executive pursuant to the Company's Senior Executive Incentive plan (or the bonus plan then applicable to the executive) at the Company's deemed attainment rate as of the month of the Eligible Executive's Termination...

  • Page 198
    ... Eligible Executives receiving Severance Benefits under this Policy are not eligible to continue contributions to the Company's qualified retirement plans or nonqualified deferred compensation program. (iii) Incentive Awards. If an Eligible Executive's employment with the Company is terminated after...

  • Page 199
    ...to or for the benefit of the Eligible Executive within five days of receipt of the Accounting Firm's determination. (iii) The Eligible Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross...

  • Page 200
    ... agreements the Eligible Executive may have executed while employed by the Company. Should the Eligible Executive violate any applicable confidentiality, non-competition and non-solicitation provisions following receipt of Severance Pay, or should the Company discover after termination...

  • Page 201
    ... as of the date the executive becomes eligible to receive such benefits under a subsequent employer's benefit programs. 14. Funding This Policy is not funded, and payment of benefits hereunder is made from the general assets of the Company. 15. Administration This Policy shall be administered by the...

  • Page 202
    ...) may file a written claim for benefits with the Company's senior human resources executive or such other officer or body designated by the Committee for this purpose. The written claim must include the facts supporting the claim, the amount claimed, and the executive's name and mailing address. If...

  • Page 203
    ...'s office and at other specified locations such as worksites, all documents governing the plan and a copy of the latest annual report (Form 5500 Series) filed with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. The executive...

  • Page 204
    ... S. Quebec Street, Suite 360 Greenwood Village, CO 80111 In addition, service of legal process may be made upon the Plan Administrator. Identification Number (Policy Sponsor) 47-0731996 THIS DESCRIPTION OF THE FIRST DATA CORPORATION SEVERANCE/CHANGE IN CONTROL POLICY FOR EXECUTIVE COMMITTEE-LEVEL...

  • Page 205
    ...Ltd. Electronic Banking Solutions Limited EPSF Corporation European Merchant Services BV FD do Brasil Processamento de Dados Ltda. FDFS Holdings, LLC FDGS Group, LLC FDGS Partner, LLC FDR (First Data Resources) Europe B.V. FDR Ireland Limited Ohio Delaware Delaware Delaware Australia Delaware South...

  • Page 206
    ... Data Government Solutions, LP First Data Global Services Limited First Data GmbH First Data (Greece) US Holding Corp. First Data Hellas Processing Services & Holdings SA First Data Holding I (Netherlands) BV First Data Hong Kong Limited Delaware Delaware United Kingdom Delaware Ireland Ireland...

  • Page 207
    ... Data International Luxembourg VIII SARL First Data Japan Co., Ltd. First Data Korea Limited First Data Latin America Inc. First Data Latvia First Data Lietuva First Data Loan Company, Canada First Data (Mauritius) Holding Company First Data Merchant Services Corporation First Data Merchant Services...

  • Page 208
    ... Data Uruguay SA First Data Voice Services First Merchant Processing (Ireland) Limited First Merchant Solutions GmbH FSM Services Inc. FTS (NSW) Pty. Limited Funds & Assets Management LLC FundsXpress, Inc. FundsXpress Financial Network, Inc. Gift Card Services, Inc. Gratitude Holdings LLC Greenwood...

  • Page 209
    ... Ltd. Merchant Solutions Sdn Bhd Money Network Financial, LLC National Payment Systems Inc. New Payment Services, Inc. Omnipay Limited PayCargo, LLC PayPoint Electronic Payment Systems, LLC PaySys de Costa Rica, S.A. PaySys Europe, B.V. PaySys International, Inc. PaySys International Limited PaySys...

  • Page 210
    ... Card Company Limited TRS Recovery Services, Inc. Transaction Solutions, LLC Trionis SCRL Unified Merchant Services ValueLink, LLC Zolter Services Limited Delaware Delaware Delaware Delaware California Germany Germany Georgia New Zealand Pennsylvania Canada Delaware Georgia United Kingdom Colorado...

  • Page 211
    EXHIBIT 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER I, Edward A. Labry III, Chief Executive Officer of First Data Corporation, certify that: 1. I have reviewed this Annual Report on Form 10-K of First Data Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of ...

  • Page 212
    EXHIBIT 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER I, Ray E. Winborne, Chief Financial Officer of First Data Corporation, certify that: 1. I have reviewed this Annual Report on Form 10-K of First Data Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a ...

  • Page 213
    ... 31, 2012 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14 (b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code. Edward A. Labry III, the Chief Executive Officer of First Data Corporation...

  • Page 214
    ... FINANCIAL OFFICER The certification set forth below is being submitted in connection with the Annual Report of First Data Corporation on Form 10-K for the period ended December 31, 2012 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act...

  • Page 215
    fdc-20121231.xml

  • Page 216
    fdc-20121231.xsd

  • Page 217
    fdc-20121231_cal.xml

  • Page 218
    fdc-20121231_def.xml

  • Page 219
    fdc-20121231_lab.xml

  • Page 220
    fdc-20121231_pre.xml