First Data 2014 Annual Report Download - page 31
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• official check and money order businesses’ EBITDA are excluded as these are winding down;
• certain costs directly associated with the termination of the Chase Paymentech Solutions alliance and expenses related to
the conversion of certain Banc of America Merchant Services, LLC (BAMS) alliance merchant clients onto our platforms
(excludes costs accrued in purchase accounting). Effective October 1, 2011, we and Bank of America N.A. (the Bank)
jointly decided to have us operate the Bank’s legacy settlement platform. Transition costs associated with the revised
strategy are also excluded from segment EBITDA;
• debt issuance costs are excluded and represent costs associated with issuing debt and modifying our debt structure; and
• KKR related items including annual sponsor and other fees for management, consulting, financial, and other advisory
services are excluded.
• Merchant Solutions segment revenue and EBITDA are reflected based on our 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,
Merchant Solutions segment measures reflect commission payments to certain independent sales organizations (ISOs), 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, shared service, and certain information technology costs are retained by
Corporate.
Revenues:
Transaction and processing service fees
$ 3,253.5
$ 3,255.2
$ 3,198.8
— %
2 %
Product sales and other
414.3
384.2
404.0
8 %
(5)%
Segment revenue
$ 3,667.8
$ 3,639.4
$ 3,602.8
1 %
1 %
Segment EBITDA
$ 1,664.6
$ 1,629.8
$ 1,594.8
2 %
2 %
Segment margin
45%
45%
44%
—
100 bps
Key indicators:
Domestic merchant transactions (a)
41,251.3
40,266.2
38,644.2
2 %
4 %
(a) Domestic merchant transactions include acquired VISA and MasterCard credit and signature debit, American Express and Discover, PIN-debit, electronic benefits transactions,
processed-only, and gateway customer transactions at the POS. Domestic merchant transactions reflect 100% of alliance transactions. Domestic merchant transactions for the years
ended December 31, 2013 and 2012 reflect an updated count of transactions.
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