Supplemental Guarantor Condensed Consolidating Financial Statements | 3 Months Ended |
Mar. 31, 2015 |
Supplemental Guarantor Condensed Consolidating Financial Statements | |
Supplemental Guarantor Condensed Consolidating Financial Statements | Supplemental Guarantor Condensed Consolidating Financial Statements |
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As described in Note 6 "Borrowings" in the Company's Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, the Company’s 12.625% senior notes, 11.25% senior notes, 10.625% senior notes, and 11.75% senior subordinated notes are guaranteed by most of the existing and future, direct and indirect, wholly owned, domestic subsidiaries of the Company (Guarantors). The Guarantors guarantee the senior secured revolving credit facility, senior secured term loan facility, the 8.875% senior secured notes, the 7.375% senior secured notes, and the 6.75% senior secured notes, which rank senior in right of payment to all existing and future unsecured and second lien indebtedness of the Company’s guarantor subsidiaries to the extent of the value of the collateral. The Guarantors guarantee the 8.25% and 8.75% senior second lien notes which rank senior in right of payment to all existing and future unsecured indebtedness of the Company’s guarantor subsidiaries to the extent of the value of the collateral. The 12.625% senior note, 10.625% senior note, and 11.25% senior note guarantees are unsecured and rank equally in right of payment with all existing and future senior indebtedness of the guarantor subsidiaries but senior in right of payment to all existing and future subordinated indebtedness of the Company’s guarantor subsidiaries. The 11.75% senior subordinated note guarantee is unsecured and ranks equally in right of payment with all existing and future senior subordinated indebtedness of the guarantor subsidiaries. |
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All of the above guarantees are full, unconditional, and joint and several and each of the Guarantors is 100% owned, directly or indirectly, by the Company. None of the other subsidiaries of the Company, either direct or indirect, guarantee the notes (Non-Guarantors). The Guarantors are subject to release under certain circumstances as described below. |
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The credit agreement governing the guarantees of the senior secured revolving credit facility and senior secured term loan facility provide for a Guarantor to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including under the following circumstances: |
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• | the Guarantor ceases to be a “restricted subsidiary” for purpose of the agreement because the Company no longer directly or indirectly owns 50% of the equity or, if a corporation, stock having voting power to elect a majority of the board of directors of the Guarantor; or | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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• | the Guarantor is designated as an “unrestricted subsidiary” for purposes of the agreement covenants; or | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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• | the Guarantor is no longer wholly owned by the Company subject to the value of all Guarantors released under this provision does not exceed (x) 10% of the Company’s Consolidated EBITDA plus (y) the amount of investments permitted under the agreement in respect of non-guarantors. | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The indentures governing all of the other guarantees described above provide for a Guarantor to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including upon the earliest to occur of: |
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• | the sale, exchange or transfer of the subsidiary’s capital stock or all or substantially all of its assets; | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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• | designation of the Guarantor as an “unrestricted subsidiary” for purposes of the indenture covenants; | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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• | release or discharge of the Guarantor’s guarantee of certain other indebtedness; or | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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• | legal defeasance or covenant defeasance of the indenture obligations when provision has been made for them to be fully satisfied. | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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During the third quarter of 2014, the senior secured loan facilities were amended and three subsidiaries were removed as guarantors. Although these changes were not material and did not have an impact to the Company’s Unaudited Consolidated Financial Statements, the Company adjusted prior periods to align with the new guarantor structure. These adjustments are limited to the guarantor footnote and do not affect any other reported amounts or disclosures in the Company’s Unaudited Consolidated Financial Statements. A summary of the adjustments is as follows: |
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| | Three months ended March 31, 2014 |
| | FDC Parent Company | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Consolidation Adjustments |
(in millions) | | As previously reported | As adjusted | | As previously reported | As adjusted | | As previously reported | As adjusted | | As previously reported | As adjusted |
Revenues | | $ | — | | $ | — | | | $ | 1,771 | | $ | 1,642 | | | $ | 943 | | $ | 1,072 | | | $ | (74 | ) | $ | (74 | ) |
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(Loss) income before income taxes and equity earnings in affiliates | | (278 | ) | (278 | ) | | 158 | | 160 | | | 125 | | 126 | | | (183 | ) | (186 | ) |
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Income tax (benefit) expense | | (77 | ) | (77 | ) | | 67 | | 65 | | | 47 | | 49 | | | — | | — | |
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Net (loss) income attributable to First Data Corporation | | (201 | ) | (201 | ) | | 142 | | 141 | | | 61 | | 66 | | | (203 | ) | (207 | ) |
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Comprehensive (loss) income attributable to First Data Corporation | | (218 | ) | (218 | ) | | 151 | | 120 | | | 42 | | 76 | | | (193 | ) | (196 | ) |
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| | Three months ended March 31, 2014 |
| | FDC Parent Company | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Consolidation Adjustments |
(in millions) | | As previously reported | As adjusted | | As previously reported | As adjusted | | As previously reported | As adjusted | | As previously reported | As adjusted |
Net cash (used in) provided by operating activities | | $ | (630 | ) | $ | (630 | ) | | $ | 365 | | $ | 364 | | | $ | 221 | | $ | 222 | | | $ | — | | $ | — | |
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Net cash provided by (used in) investing activities | | 27 | | 27 | | | (19 | ) | (12 | ) | | (48 | ) | (55 | ) | | (72 | ) | (72 | ) |
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Net cash provided by (used in) financing activities | | 574 | | 574 | | | (348 | ) | (360 | ) | | (152 | ) | (140 | ) | | 72 | | 72 | |
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The following tables present the results of operations, comprehensive income, financial position and cash flows of the Company (FDC Parent Company), the Guarantor subsidiaries, the Non-Guarantor subsidiaries and consolidation adjustments for the period presented to arrive at the information for the Company on a consolidated basis. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
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| | Three months ended March 31, 2015 | | | | | | | | |
(in millions) | | FDC Parent | | Guarantor | | Non-Guarantor | | Consolidation | | Consolidated | | | | | | | | |
Company | Subsidiaries | Subsidiaries | Adjustments | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | |
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Transaction and processing service fees | | $ | — | | | $ | 945 | | | $ | 733 | | | $ | (73 | ) | | $ | 1,605 | | | | | | | | | |
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Product sales and other | | — | | | 134 | | | 97 | | | (14 | ) | | 217 | | | | | | | | | |
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Reimbursable debit network fees, postage, and other | | — | | | 601 | | | 272 | | | — | | | 873 | | | | | | | | | |
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Total revenues | | — | | | 1,680 | | | 1,102 | | | (87 | ) | | 2,695 | | | | | | | | | |
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Expenses: | | | | | | | | | | | | | | | | | | |
Cost of services (exclusive of items shown below) | | — | | | 405 | | | 402 | | | (73 | ) | | 734 | | | | | | | | | |
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Cost of products sold | | — | | | 53 | | | 38 | | | (14 | ) | | 77 | | | | | | | | | |
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Selling, general, and administrative | | 32 | | | 287 | | | 180 | | | — | | | 499 | | | | | | | | | |
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Reimbursable debit network fees, postage, and other | | — | | | 601 | | | 272 | | | — | | | 873 | | | | | | | | | |
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Depreciation and amortization | | 4 | | | 150 | | | 97 | | | — | | | 251 | | | | | | | | | |
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Other operating expenses: | | | | | | | | | | | | | | | | | | |
Restructuring, net | | (1 | ) | | 2 | | | — | | | — | | | 1 | | | | | | | | | |
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Total expenses | | 35 | | | 1,498 | | | 989 | | | (87 | ) | | 2,435 | | | | | | | | | |
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Operating (loss) profit | | (35 | ) | | 182 | | | 113 | | | — | | | 260 | | | | | | | | | |
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Interest income | | — | | | — | | | 1 | | | — | | | 1 | | | | | | | | | |
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Interest expense | | (402 | ) | | (3 | ) | | (2 | ) | | — | | | (407 | ) | | | | | | | | |
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Interest income (expense) from intercompany notes | | 81 | | | (77 | ) | | (4 | ) | | — | | | — | | | | | | | | | |
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Other income (expense) | | 69 | | | — | | | (34 | ) | | — | | | 35 | | | | | | | | | |
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Equity earnings from consolidated subsidiaries | | 172 | | | 38 | | | — | | | (210 | ) | | — | | | | | | | | | |
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| | (80 | ) | | (42 | ) | | (39 | ) | | (210 | ) | | (371 | ) | | | | | | | | |
(Loss) income before income taxes and equity earnings in affiliates | | (115 | ) | | 140 | | | 74 | | | (210 | ) | | (111 | ) | | | | | | | | |
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Income tax (benefit) expense | | (3 | ) | | 3 | | | 3 | | | — | | | 3 | | | | | | | | | |
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Equity earnings in affiliates | | — | | | 48 | | | 3 | | | — | | | 51 | | | | | | | | | |
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Net (loss) income | | (112 | ) | | 185 | | | 74 | | | (210 | ) | | (63 | ) | | | | | | | | |
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Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | | — | | | — | | | 16 | | | 33 | | | 49 | | | | | | | | | |
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Net (loss) income attributable to First Data Corporation | | $ | (112 | ) | | $ | 185 | | | $ | 58 | | | $ | (243 | ) | | $ | (112 | ) | | | | | | | | |
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Comprehensive (loss) income | | $ | (267 | ) | | $ | 158 | | | $ | (156 | ) | | $ | 35 | | | $ | (230 | ) | | | | | | | | |
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Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | | — | | | — | | | 5 | | | 33 | | | 38 | | | | | | | | | |
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Comprehensive (loss) income attributable to First Data Corporation | | $ | (267 | ) | | $ | 158 | | | $ | (161 | ) | | $ | 2 | | | $ | (268 | ) | | | | | | | | |
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| | Three months ended March 31, 2014 (As Adjusted) | | | | | | | | |
(in millions) | | FDC Parent | | Guarantor | | Non-Guarantor | | Consolidation | | Consolidated | | | | | | | | |
Company | Subsidiaries | Subsidiaries | Adjustments | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | |
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Transaction and processing service fees | | $ | — | | | $ | 894 | | | $ | 726 | | | $ | (59 | ) | | $ | 1,561 | | | | | | | | | |
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Product sales and other | | — | | | 122 | | | 97 | | | (15 | ) | | 204 | | | | | | | | | |
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Reimbursable debit network fees, postage, and other | | — | | | 626 | | | 249 | | | — | | | 875 | | | | | | | | | |
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Total revenues | | — | | | 1,642 | | | 1,072 | | | (74 | ) | | 2,640 | | | | | | | | | |
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Expenses: | | | | | | | | | | | | | | | | | | |
Cost of services (exclusive of items shown below) | | — | | | 337 | | | 368 | | | (59 | ) | | 646 | | | | | | | | | |
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Cost of products sold | | — | | | 52 | | | 43 | | | (15 | ) | | 80 | | | | | | | | | |
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Selling, general, and administrative | | 42 | | | 275 | | | 169 | | | — | | | 486 | | | | | | | | | |
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Reimbursable debit network fees, postage, and other | | — | | | 626 | | | 249 | | | — | | | 875 | | | | | | | | | |
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Depreciation and amortization | | 2 | | | 154 | | | 109 | | | — | | | 265 | | | | | | | | | |
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Other operating expenses: | | | | | | | | | | | | | | | | | | |
Restructuring, net | | 1 | | | 2 | | | — | | | — | | | 3 | | | | | | | | | |
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Total expenses | | 45 | | | 1,446 | | | 938 | | | (74 | ) | | 2,355 | | | | | | | | | |
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Operating (loss) profit | | (45 | ) | | 196 | | | 134 | | | — | | | 285 | | | | | | | | | |
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Interest income | | — | | | — | | | 3 | | | — | | | 3 | | | | | | | | | |
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Interest expense | | (464 | ) | | (2 | ) | | (1 | ) | | — | | | (467 | ) | | | | | | | | |
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Interest income (expense) from intercompany notes | | 79 | | | (70 | ) | | (9 | ) | | — | | | — | | | | | | | | | |
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Other income (expense) | | 2 | | | — | | | (1 | ) | | — | | | 1 | | | | | | | | | |
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Equity earnings from consolidated subsidiaries | | 150 | | | 36 | | | — | | | (186 | ) | | — | | | | | | | | | |
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| | (233 | ) | | (36 | ) | | (8 | ) | | (186 | ) | | (463 | ) | | | | | | | | |
(Loss) income before income taxes and equity earnings in affiliates | | (278 | ) | | 160 | | | 126 | | | (186 | ) | | (178 | ) | | | | | | | | |
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Income tax (benefit) expense | | (77 | ) | | 65 | | | 49 | | | — | | | 37 | | | | | | | | | |
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Equity earnings in affiliates | | — | | | 46 | | | 4 | | | — | | | 50 | | | | | | | | | |
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Net (loss) income | | (201 | ) | | 141 | | | 81 | | | (186 | ) | | (165 | ) | | | | | | | | |
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Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | | — | | | — | | | 15 | | | 21 | | | 36 | | | | | | | | | |
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Net (loss) income attributable to First Data Corporation | | $ | (201 | ) | | $ | 141 | | | $ | 66 | | | $ | (207 | ) | | $ | (201 | ) | | | | | | | | |
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Comprehensive (loss) income | | $ | (218 | ) | | $ | 120 | | | $ | 92 | | | $ | (175 | ) | | $ | (181 | ) | | | | | | | | |
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Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | | — | | | — | | | 16 | | | 21 | | | 37 | | | | | | | | | |
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Comprehensive (loss) income attributable to First Data Corporation | | $ | (218 | ) | | $ | 120 | | | $ | 76 | | | $ | (196 | ) | | $ | (218 | ) | | | | | | | | |
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CONSOLIDATED BALANCE SHEETS |
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| | As of March 31, 2015 | | | | | | | | |
(in millions) | | FDC Parent | | Guarantor | | Non-Guarantor | | Consolidation | | Consolidated | | | | | | | | |
Company | Subsidiaries | Subsidiaries | Adjustments | | | | | | | | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | |
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Current assets: | | | | | | | | | | | | | | | | | | | | | | | |
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Cash and cash equivalents | | $ | 13 | | | $ | 27 | | | $ | 300 | | | $ | — | | | $ | 340 | | | | | | | | | |
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Accounts receivable, net of allowance for doubtful accounts | | 11 | | | 786 | | | 918 | | | — | | | 1,715 | | | | | | | | | |
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Settlement assets (a) | | — | | | 3,549 | | | 4,139 | | | — | | | 7,688 | | | | | | | | | |
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Intercompany notes receivable | | 3,412 | | | 311 | | | — | | | (3,723 | ) | | — | | | | | | | | | |
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Other current assets | | 158 | | | 145 | | | 111 | | | — | | | 414 | | | | | | | | | |
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Total current assets | | 3,594 | | | 4,818 | | | 5,468 | | | (3,723 | ) | | 10,157 | | | | | | | | | |
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Property and equipment, net of accumulated depreciation | | 35 | | | 619 | | | 254 | | | — | | | 908 | | | | | | | | | |
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Goodwill | | — | | | 9,088 | | | 7,773 | | | — | | | 16,861 | | | | | | | | | |
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Customer relationships, net of accumulated amortization | | — | | | 1,404 | | | 1,067 | | | — | | | 2,471 | | | | | | | | | |
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Other intangibles, net of accumulated amortization | | 604 | | | 647 | | | 506 | | | — | | | 1,757 | | | | | | | | | |
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Investment in affiliates | | 5 | | | 934 | | | 149 | | | — | | | 1,088 | | | | | | | | | |
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Long-term intercompany receivables | | 7,118 | | | 15,283 | | | 5,406 | | | (27,807 | ) | | — | | | | | | | | | |
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Long-term intercompany notes receivable | | 321 | | | 1 | | | 9 | | | (331 | ) | | — | | | | | | | | | |
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Long-term deferred tax assets | | 654 | | | — | | | — | | | (654 | ) | | — | | | | | | | | | |
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Other long-term assets | | 371 | | | 325 | | | 290 | | | (90 | ) | | 896 | | | | | | | | | |
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Investment in consolidated subsidiaries | | 24,364 | | | 5,304 | | | — | | | (29,668 | ) | | — | | | | | | | | | |
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Total assets | | $ | 37,066 | | | $ | 38,423 | | | $ | 20,922 | | | $ | (62,273 | ) | | $ | 34,138 | | | | | | | | | |
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LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | |
Accounts payable | | $ | 9 | | | $ | 152 | | | $ | 104 | | | $ | — | | | $ | 265 | | | | | | | | | |
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Short-term and current portion of long-term borrowings | | 392 | | | 68 | | | 36 | | | — | | | 496 | | | | | | | | | |
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Settlement obligations (a) | | — | | | 3,549 | | | 4,140 | | | — | | | 7,689 | | | | | | | | | |
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Intercompany notes payable | | 311 | | | 3,385 | | | 27 | | | (3,723 | ) | | — | | | | | | | | | |
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Other current liabilities | | 349 | | | 544 | | | 404 | | | — | | | 1,297 | | | | | | | | | |
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Total current liabilities | | 1,061 | | | 7,698 | | | 4,711 | | | (3,723 | ) | | 9,747 | | | | | | | | | |
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Long-term borrowings | | 20,523 | | | 117 | | | 1 | | | — | | | 20,641 | | | | | | | | | |
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Long-term deferred tax liabilities | | — | | | 1,029 | | | 155 | | | (654 | ) | | 530 | | | | | | | | | |
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Long-term intercompany payables | | 15,649 | | | 8,508 | | | 3,650 | | | (27,807 | ) | | — | | | | | | | | | |
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Long-term intercompany notes payable | | 9 | | | 259 | | | 63 | | | (331 | ) | | — | | | | | | | | | |
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Other long-term liabilities | | 547 | | | 223 | | | 110 | | | (90 | ) | | 790 | | | | | | | | | |
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Total liabilities | | 37,789 | | | 17,834 | | | 8,690 | | | (32,605 | ) | | 31,708 | | | | | | | | | |
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Redeemable equity interest | | — | | | — | | | 78 | | | (78 | ) | | — | | | | | | | | | |
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Redeemable noncontrolling interest | | — | | | — | | | — | | | 78 | | | 78 | | | | | | | | | |
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First Data Corporation shareholder's (deficit) equity | | (723 | ) | | 20,589 | | | 5,994 | | | (26,583 | ) | | (723 | ) | | | | | | | | |
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Noncontrolling interests | | — | | | — | | | 98 | | | 2,977 | | | 3,075 | | | | | | | | | |
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Equity of consolidated alliance | | — | | | — | | | 6,062 | | | (6,062 | ) | | — | | | | | | | | | |
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Total equity | | (723 | ) | | 20,589 | | | 12,154 | | | (29,668 | ) | | 2,352 | | | | | | | | | |
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Total liabilities and equity | | $ | 37,066 | | | $ | 38,423 | | | $ | 20,922 | | | $ | (62,273 | ) | | $ | 34,138 | | | | | | | | | |
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(a) | The majority of the Guarantor settlement assets relate to the Company’s merchant acquiring business. The Company believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | As of December 31, 2014 | | | | | | | | |
(in millions) | | FDC Parent | | Guarantor | | Non- | | Consolidation | | Consolidated | | | | | | | | |
Company | Subsidiaries | Guarantor | Adjustments | | | | | | | | |
| | Subsidiaries | | | | | | | | | |
ASSETS | | | | | | | | | | | | | | | | | | | | | | | |
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Current assets: | | | | | | | | | | | | | | | | | | | | | | | |
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Cash and cash equivalents | | $ | — | | | $ | 23 | | | $ | 335 | | | $ | — | | | $ | 358 | | | | | | | | | |
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Accounts receivable, net of allowance for doubtful accounts | | 8 | | | 729 | | | 1,015 | | | — | | | 1,752 | | | | | | | | | |
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Settlement assets (a) | | — | | | 3,849 | | | 3,706 | | | — | | | 7,555 | | | | | | | | | |
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Intercompany notes receivable | | 3,375 | | | 307 | | | — | | | (3,682 | ) | | — | | | | | | | | | |
| | | | | | | |
Other current assets | | 44 | | | 119 | | | 126 | | | — | | | 289 | | | | | | | | | |
| | | | | | | |
Total current assets | | 3,427 | | | 5,027 | | | 5,182 | | | (3,682 | ) | | 9,954 | | | | | | | | | |
| | | | | | | |
Property and equipment, net of accumulated depreciation | | 33 | | | 619 | | | 278 | | | — | | | 930 | | | | | | | | | |
| | | | | | | |
Goodwill | | — | | | 9,085 | | | 7,932 | | | — | | | 17,017 | | | | | | | | | |
| | | | | | | |
Customer relationships, net of accumulated amortization | | — | | | 1,469 | | | 1,135 | | | — | | | 2,604 | | | | | | | | | |
| | | | | | | |
Other intangibles, net of accumulated amortization | | 603 | | | 623 | | | 519 | | | — | | | 1,745 | | | | | | | | | |
| | | | | | | |
Investment in affiliates | | — | | | 948 | | | 153 | | | — | | | 1,101 | | | | | | | | | |
| | | | | | | |
Long-term intercompany receivables | | 6,064 | | | 14,442 | | | 5,135 | | | (25,641 | ) | | — | | | | | | | | | |
| | | | | | | |
Long-term intercompany notes receivable | | 320 | | | 1 | | | 9 | | | (330 | ) | | — | | | | | | | | | |
| | | | | | | |
Long-term deferred tax assets | | 671 | | | — | | | — | | | (671 | ) | | — | | | | | | | | | |
| | | | | | | |
Other long-term assets | | 397 | | | 317 | | | 301 | | | (97 | ) | | 918 | | | | | | | | | |
| | | | | | | |
Investment in consolidated subsidiaries | | 24,474 | | | 5,331 | | | — | | | (29,805 | ) | | — | | | | | | | | | |
| | | | | | | |
Total assets | | $ | 35,989 | | | $ | 37,862 | | | $ | 20,644 | | | $ | (60,226 | ) | | $ | 34,269 | | | | | | | | | |
| | | | | | | |
LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | |
Accounts payable | | $ | 9 | | | $ | 171 | | | $ | 100 | | | $ | — | | | $ | 280 | | | | | | | | | |
| | | | | | | |
Short-term and current portion of long-term borrowings | | 20 | | | 64 | | | 77 | | | — | | | 161 | | | | | | | | | |
| | | | | | | |
Settlement obligations (a) | | — | | | 3,849 | | | 3,708 | | | — | | | 7,557 | | | | | | | | | |
| | | | | | | |
Intercompany notes payable | | 309 | | | 3,346 | | | 27 | | | (3,682 | ) | | — | | | | | | | | | |
| | | | | | | |
Other current liabilities | | 583 | | | 528 | | | 422 | | | — | | | 1,533 | | | | | | | | | |
| | | | | | | |
Total current liabilities | | 921 | | | 7,958 | | | 4,334 | | | (3,682 | ) | | 9,531 | | | | | | | | | |
| | | | | | | |
Long-term borrowings | | 20,578 | | | 131 | | | 2 | | | — | | | 20,711 | | | | | | | | | |
| | | | | | | |
Long-term deferred tax liabilities | | — | | | 1,024 | | | 168 | | | (671 | ) | | 521 | | | | | | | | | |
| | | | | | | |
Long-term intercompany payables | | 14,397 | | | 7,804 | | | 3,440 | | | (25,641 | ) | | — | | | | | | | | | |
| | | | | | | |
Long-term intercompany notes payable | | 9 | | | 260 | | | 61 | | | (330 | ) | | — | | | | | | | | | |
| | | | | | | |
Other long-term liabilities | | 536 | | | 225 | | | 124 | | | (97 | ) | | 788 | | | | | | | | | |
| | | | | | | |
Total liabilities | | 36,441 | | | 17,402 | | | 8,129 | | | (30,421 | ) | | 31,551 | | | | | | | | | |
| | | | | | | |
Redeemable equity interest | | — | | | — | | | 70 | | | (70 | ) | | — | | | | | | | | | |
| | | | | | | |
Redeemable noncontrolling interest | | — | | | — | | | — | | | 70 | | | 70 | | | | | | | | | |
| | | | | | | |
First Data Corporation shareholder's (deficit) equity | | (452 | ) | | 20,460 | | | 6,241 | | | (26,701 | ) | | (452 | ) | | | | | | | | |
| | | | | | | |
Noncontrolling interests | | — | | | — | | | 101 | | | 2,999 | | | 3,100 | | | | | | | | | |
| | | | | | | |
Equity of consolidated alliance | | — | | | — | | | 6,103 | | | (6,103 | ) | | — | | | | | | | | | |
| | | | | | | |
Total equity | | (452 | ) | | 20,460 | | | 12,445 | | | (29,805 | ) | | 2,648 | | | | | | | | | |
| | | | | | | |
Total liabilities and equity | | $ | 35,989 | | | $ | 37,862 | | | $ | 20,644 | | | $ | (60,226 | ) | | $ | 34,269 | | | | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(a) | The majority of the Guarantor settlement assets relate to the Company’s merchant acquiring business. The Company believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended March 31, 2015 | | | | | | | | |
(in millions) | | FDC Parent | | Guarantor | | Non- | | Consolidation | | Consolidated | | | | | | | | |
Company | Subsidiaries | Guarantor | Adjustments | | | | | | | | |
| | Subsidiaries | | | | | | | | | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Net (loss) income | | $ | (112 | ) | | $ | 185 | | | $ | 74 | | | $ | (210 | ) | | $ | (63 | ) | | | | | | | | |
| | | | | | | |
Adjustments to reconcile to net cash (used in) provided by operating activities: | | | | | | | | | | | | | | | | | | |
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | | 4 | | | 170 | | | 103 | | | — | | | 277 | | | | | | | | | |
| | | | | | | |
(Gains) charges related to other operating expenses and other income (expense) | | (70 | ) | | 2 | | | 34 | | | — | | | (34 | ) | | | | | | | | |
| | | | | | | |
Other non-cash and non-operating items, net | | (153 | ) | | (99 | ) | | (7 | ) | | 210 | | | (49 | ) | | | | | | | | |
| | | | | | | |
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities | | (258 | ) | | (14 | ) | | 39 | | | — | | | (233 | ) | | | | | | | | |
| | | | | | | |
Net cash (used in) provided by operating activities | | (589 | ) | | 244 | | | 243 | | | — | | | (102 | ) | | | | | | | | |
| | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Proceeds from dispositions, net of expenses paid | | — | | | 2 | | | — | | | — | | | 2 | | | | | | | | | |
| | | | | | | |
Additions to property and equipment | | (4 | ) | | (37 | ) | | (26 | ) | | — | | | (67 | ) | | | | | | | | |
| | | | | | | |
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | | — | | | (59 | ) | | (19 | ) | | — | | | (78 | ) | | | | | | | | |
| | | | | | | |
Acquisitions, net of cash acquired | | (8 | ) | | — | | | — | | | — | | | (8 | ) | | | | | | | | |
| | | | | | | |
Purchase of investments | | (16 | ) | | — | | | — | | | — | | | (16 | ) | | | | | | | | |
| | | | | | | |
Distributions and dividends from subsidiaries | | 36 | | | 57 | | | — | | | (93 | ) | | — | | | | | | | | | |
| | | | | | | |
Net cash provided by (used in) investing activities | | 8 | | | (37 | ) | | (45 | ) | | (93 | ) | | (167 | ) | | | | | | | | |
| | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Short-term borrowings, net | | 372 | | | — | | | (35 | ) | | — | | | 337 | | | | | | | | | |
| | | | | | | |
Principal payments on long-term debt | | — | | | (16 | ) | | (4 | ) | | — | | | (20 | ) | | | | | | | | |
| | | | | | | |
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | | — | | | — | | | (8 | ) | | (55 | ) | | (63 | ) | | | | | | | | |
| | | | | | | |
Distributions paid to equity holders | | — | | | — | | | (112 | ) | | 112 | | | — | | | | | | | | | |
| | | | | | | |
Capital transactions, net | | (1 | ) | | — | | | (36 | ) | | 36 | | | (1 | ) | | | | | | | | |
| | | | | | | |
Intercompany | | 223 | | | (191 | ) | | (32 | ) | | — | | | — | | | | | | | | | |
| | | | | | | |
Net cash provided by (used in) financing activities | | 594 | | | (207 | ) | | (227 | ) | | 93 | | | 253 | | | | | | | | | |
| | | | | | | |
Effect of exchange rate changes on cash and cash equivalents | | — | | | 4 | | | (6 | ) | | — | | | (2 | ) | | | | | | | | |
| | | | | | | |
Change in cash and cash equivalents | | 13 | | | 4 | | | (35 | ) | | — | | | (18 | ) | | | | | | | | |
| | | | | | | |
Cash and cash equivalents at beginning of period | | — | | | 23 | | | 335 | | | — | | | 358 | | | | | | | | | |
| | | | | | | |
Cash and cash equivalents at end of period | | $ | 13 | | | $ | 27 | | | $ | 300 | | | $ | — | | | $ | 340 | | | | | | | | | |
| | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended March 31, 2014 (As Adjusted) | | | | | | | | |
(in millions) | | FDC Parent | | Guarantor | | Non- | | Consolidation | | Consolidated | | | | | | | | |
Company | Subsidiaries | Guarantor | Adjustments | | | | | | | | |
| | Subsidiaries | | | | | | | | | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Net (loss) income | | $ | (201 | ) | | $ | 141 | | | $ | 81 | | | $ | (186 | ) | | $ | (165 | ) | | | | | | | | |
| | | | | | | |
Adjustments to reconcile to net cash (used in) provided by operating activities: | | | | | | | | | | | | | | | | | | |
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | | 3 | | | 173 | | | 116 | | | — | | | 292 | | | | | | | | | |
| | | | | | | |
(Gains) charges related to other operating expenses and other income (expense) | | (1 | ) | | 2 | | | 1 | | | — | | | 2 | | | | | | | | | |
| | | | | | | |
Other non-cash and non-operating items, net | | (109 | ) | | (95 | ) | | (16 | ) | | 186 | | | (34 | ) | | | | | | | | |
| | | | | | | |
(Decrease) increase in cash resulting from changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions | | (322 | ) | | 143 | | | 40 | | | — | | | (139 | ) | | | | | | | | |
| | | | | | | |
Net cash (used in) provided by operating activities | | (630 | ) | | 364 | | | 222 | | | — | | | (44 | ) | | | | | | | | |
| | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Proceeds from dispositions, net of expenses paid | | — | | | 2 | | | — | | | — | | | 2 | | | | | | | | | |
| | | | | | | |
Additions to property and equipment | | (1 | ) | | (17 | ) | | (36 | ) | | — | | | (54 | ) | | | | | | | | |
| | | | | | | |
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | | — | | | (43 | ) | | (19 | ) | | — | | | (62 | ) | | | | | | | | |
| | | | | | | |
Proceeds from sale of property and equipment | | — | | | 2 | | | — | | | — | | | 2 | | | | | | | | | |
| | | | | | | |
Distributions and dividends from subsidiaries | | 28 | | | 44 | | | — | | | (72 | ) | | — | | | | | | | | | |
| | | | | | | |
Net cash provided by (used in) investing activities | | 27 | | | (12 | ) | | (55 | ) | | (72 | ) | | (112 | ) | | | | | | | | |
| | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Short-term borrowings, net | | 326 | | | — | | | 1 | | | — | | | 327 | | | | | | | | | |
| | | | | | | |
Debt modification payments and related financing costs, net | | (91 | ) | | — | | | — | | | — | | | (91 | ) | | | | | | | | |
| | | | | | | |
Principal payments on long-term debt | | — | | | (17 | ) | | (2 | ) | | — | | | (19 | ) | | | | | | | | |
| | | | | | | |
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | | — | | | — | | | (10 | ) | | (42 | ) | | (52 | ) | | | | | | | | |
| | | | | | | |
Distributions paid to equity holders | | — | | | — | | | (87 | ) | | 87 | | | — | | | | | | | | | |
| | | | | | | |
Capital transactions, net | | (19 | ) | | — | | | (27 | ) | | 27 | | | (19 | ) | | | | | | | | |
| | | | | | | |
Intercompany | | 358 | | | (343 | ) | | (15 | ) | | — | | | — | | | | | | | | | |
| | | | | | | |
Net cash provided by (used in) financing activities | | 574 | | | (360 | ) | | (140 | ) | | 72 | | | 146 | | | | | | | | | |
| | | | | | | |
Effect of exchange rate changes on cash and cash equivalents | | — | | | (4 | ) | | (2 | ) | | — | | | (6 | ) | | | | | | | | |
| | | | | | | |
Change in cash and cash equivalents | | (29 | ) | | (12 | ) | | 25 | | | — | | | (16 | ) | | | | | | | | |
| | | | | | | |
Cash and cash equivalents at beginning of period | | 36 | | | 33 | | | 356 | | | — | | | 425 | | | | | | | | | |
| | | | | | | |
Cash and cash equivalents at end of period | | $ | 7 | | | $ | 21 | | | $ | 381 | | | $ | — | | | $ | 409 | | | | | | | | | |
| | | | | | | |
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