First Data 2014 Annual Report Download - page 27

impacted the transaction and processing service fees revenue growth rate compared to the same period in 2013 by approximately 1 percentage point.
Revenue remained flat in 2013 compared to 2012 as increases in merchant related services revenue were offset by decreases in card services and check
services. The net increases in merchant related services revenue resulted from increases in both domestic and international merchant transactions and dollar
volumes in addition to new sales, pricing increases, and network routing incentives. These increases were offset by decreases resulting from the impact of
merchant mix on transactions and dollar volumes, the effects of shifts in pricing mix, merchant attrition, and price compression. The decreases in card services
revenue resulted primarily from net lost business both domestically and internationally. We experienced decreases in check processing revenue as a result of
lower overall check volumes and merchant attrition. The foreign currency exchange rate movements did not materially impact the transaction and processing
service fees revenue growth rate for 2013 compared to 2012.
Product sales and other revenue increased during 2014 compared to 2013 due to higher equipment sales and revenue streams with lower variable expenses
such as portfolio growth in the leasing business, including interest income and fees on terminal leases, and the $12 million sale of a merchant portfolio in
Poland in the fourth quarter for 2014. During 2014, we recognized $5 million for contract settlements and waivers. The foreign currency exchange rate
movements negatively impacted the product sales and other growth rate for 2014 compared to 2013 by approximately 3 percentage points.
Revenue decreased in 2013 compared to 2012 due to a decline in domestic terminal sales, including lower bulk sales, a decrease in international software
license sales and foreign currency exchange rates partially offset by growth in professional services revenue resulting from new projects. Foreign currency
exchange rate movements negatively impacted the product sales and other growth rate in 2013 compared to 2012 by approximately 2 percentage points.
Reimbursable debit network fees, postage, and other revenue increased in 2014 and 2013 due to transaction and volume growth related to debit network fees
related to both new and existing customers partially offset by changes in regulated financial institution mix.










Cost of services (exclusive of items shown below)
$ 2,741.3
$ 2,808.8
$ 2,863.5
(2)%
(2)%
Cost of products sold
337.2
334.0
336.3
1 %
(1)%
Selling, general, and administrative
1,961.8
1,888.8
1,825.4
4 %
3 %
Reimbursable debit network fees, postage, and
other
3,603.5
3,507.4
3,361.5
3 %
4 %
Depreciation and amortization
1,055.5
1,091.3
1,191.6
(3)%
(8)%
Other operating expenses, net
13.2
56.0
28.2
(76)%
99 %
Total Expenses
$ 9,712.5
$ 9,686.3
$ 9,606.5
— %
1 %
Cost of services expense decreased in 2014 compared to 2013 due to our focus on operational and processing efficiencies including lower headcount and
changes in compensation programs, a tax recovery in Australia, and lower bonus expense partially offset by product development initiatives and a $22
million reserve for uncollectible receivables in Latin America.
Cost of services expense decreased in 2013 compared to 2012 mostly due to cost reduction initiatives offset by increases in product development costs.
27