Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | FIRST DATA CORP | |
Entity Central Index Key | 883,980 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity common stock, shares outstanding | 374,872,715 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity common stock, shares outstanding | 544,173,197 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Revenues: | |||
Transaction and processing service fees | [1] | $ 1,563 | $ 1,591 |
Product sales and other | [1] | 319 | 279 |
Total revenues (excluding reimbursable items) | 1,882 | 1,870 | |
Reimbursable debit network fees, postage, and other | 919 | 907 | |
Total revenues | 2,801 | 2,777 | |
Expenses: | |||
Cost of services (exclusive of items shown below) | 700 | 731 | |
Cost of products sold | 80 | 78 | |
Selling, general, and administrative | 525 | 564 | |
Depreciation and amortization | 228 | 238 | |
Other operating expenses | 22 | 21 | |
Total expenses (excluding reimbursable items) | 1,555 | 1,632 | |
Reimbursable debit network fees, postage, and other | 919 | 907 | |
Total expenses | 2,474 | 2,539 | |
Operating (loss) profit | 327 | 238 | |
Interest expense, net | (234) | (263) | |
Loss on debt extinguishment | (56) | (46) | |
Other (expense) income | (1) | 6 | |
Income (loss) before income taxes and equity earnings in affiliates | 36 | (65) | |
Income tax expense | 12 | 5 | |
Equity earnings in affiliates | 55 | 64 | |
Net income (loss) | 79 | (6) | |
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 43 | 50 | |
Net income (loss) attributable to First Data Corporation | $ 36 | $ (56) | |
Net income (loss) attributable to First Data Corporation per share: | |||
Basic (in dollars per share) | $ 0.04 | $ (0.06) | |
Diluted (in dollars per share) | $ 0.04 | $ (0.06) | |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 910 | 896 | |
Diluted (in shares) | 931 | 896 | |
[1] | Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of $52 million and $53 million for the three months ended March 31, 2017 and 2016, respectively. |
CONSOLIDATED STATEMENTS OF OPE3
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Processing fees, administrative service fees, and other fees charged to merchant alliances under equity method | $ 52 | $ 53 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 79 | $ (6) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustment | 90 | (64) |
Gain on derivative instruments | 1 | 0 |
Total other comprehensive income (loss), net of tax | 91 | (64) |
Comprehensive income (loss) | 170 | (70) |
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | 46 | 52 |
Comprehensive income (loss) attributable to First Data Corporation | $ 124 | $ (122) |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 503 | $ 385 |
Accounts receivable, net of allowance for doubtful accounts of $42 and $74 | 1,753 | 1,877 |
Settlement assets | 9,381 | 14,795 |
Prepaid expenses and other current assets | 418 | 360 |
Total current assets | 12,055 | 17,417 |
Property and equipment, net of accumulated depreciation of $1,500 and $1,416 | 924 | 883 |
Goodwill | 16,770 | 16,696 |
Customer relationships, net of accumulated amortization of $5,765 and $5,660 | 1,658 | 1,739 |
Other intangibles, net of accumulated amortization of $2,445 and $2,365 | 1,887 | 1,800 |
Investment in affiliates | 982 | 988 |
Other long-term assets | 741 | 769 |
Total assets | 35,017 | 40,292 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,457 | 1,564 |
Short-term and current portion of long-term borrowings | 501 | 358 |
Settlement obligations | 9,381 | 14,795 |
Total current liabilities | 11,339 | 16,717 |
Long-term borrowings | 18,123 | 18,131 |
Deferred tax liabilities | 413 | 409 |
Other long-term liabilities | 793 | 831 |
Total liabilities | 30,668 | 36,088 |
Commitments and contingencies (See note 11) | ||
Redeemable noncontrolling interest | 72 | 73 |
First Data Corporation stockholders' equity: | ||
Additional paid-in capital | 13,168 | 13,149 |
Accumulated loss | (10,576) | (10,612) |
Accumulated other comprehensive loss | (1,238) | (1,326) |
Total First Data Corporation stockholders' equity | 1,363 | 1,220 |
Noncontrolling interests | 2,914 | 2,911 |
Total equity | 4,277 | 4,131 |
Total liabilities and equity | 35,017 | 40,292 |
Class A common stock | ||
First Data Corporation stockholders' equity: | ||
Common stock, $0.01 par value | 4 | 4 |
Class B common stock | ||
First Data Corporation stockholders' equity: | ||
Common stock, $0.01 par value | $ 5 | $ 5 |
CONSOLIDATED BALANCE SHEETS (U6
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 42 | $ 74 |
Property and equipment, accumulated depreciation | 1,500 | 1,416 |
Customer relationships, accumulated amortization | 5,765 | 5,660 |
Other intangibles, accumulated amortization | $ 2,445 | $ 2,365 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 1,600 | 1,600 |
Common stock, issued shares (in shares) | 374 | 368 |
Common stock, outstanding shares (in shares) | 374 | 368 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 625 | 625 |
Common stock, issued shares (in shares) | 544 | 544 |
Common stock, outstanding shares (in shares) | 544 | 544 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 79 | $ (6) |
Adjustments to reconcile to net cash provided by operating activities: | ||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 258 | 262 |
Charges related to other operating expenses and other income (expense) | 23 | 15 |
Loss on debt extinguishment | 56 | 46 |
Stock-based compensation expense | 65 | 115 |
Other non-cash and non-operating items, net | 9 | 0 |
Increase (decrease) in cash, excluding the effects of acquisitions and dispositions, resulting from changes in: | ||
Accounts receivable, current and long-term | 136 | 61 |
Other assets, current and long-term | (26) | 16 |
Accounts payable and other liabilities, current and long-term | (170) | (102) |
Income tax accounts | (9) | (21) |
Net cash (used in) provided by operating activities | 421 | 386 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Additions to property and equipment | (58) | (53) |
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | (59) | (64) |
Other investing activities, net | 1 | (6) |
Net cash provided by (used in) investing activities | (116) | (123) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Short-term borrowings, net | 119 | 498 |
Proceeds from issuance of long-term debt | 1,300 | 896 |
Payment of call premiums and debt issuance cost | (57) | (43) |
Principal payments on long-term debt | (1,456) | (1,651) |
Payment of taxes related to net settlement of equity awards | (60) | (39) |
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | (43) | (58) |
Other financing activities, net | 10 | 24 |
Net cash provided by (used in) financing activities | (187) | (373) |
Effect of exchange rate changes on cash and cash equivalents | 0 | (8) |
Change in cash and cash equivalents | 118 | (118) |
Cash and cash equivalents at beginning of period | 385 | 429 |
Cash and cash equivalents at end of period | 503 | 311 |
NON-CASH TRANSACTIONS | ||
Capital leases, net of trade-ins | 54 | 44 |
Other financing arrangements | $ 100 | $ 22 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common StockClass A common stock | Common StockClass B common stock | Additional Paid-In Capital | Accumulated Loss | Accumulated Other Comprehensive Loss | Noncontrolling Interests | ||
Beginning balance (in shares) at Dec. 31, 2015 | 180 | [1] | 719 | ||||||
Beginning balance at Dec. 31, 2015 | $ 3,660 | $ 2 | $ 7 | $ 12,910 | $ (11,032) | $ (1,219) | $ 2,992 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Dividends and distributions paid to noncontrolling interests | [2] | (50) | (50) | ||||||
Net (loss) income | [1] | (14) | (56) | 42 | |||||
Other comprehensive (loss) income | (64) | (66) | 2 | ||||||
Adjustment to redemption value of redeemable noncontrolling interest | 4 | 4 | |||||||
Stock compensation expense | 115 | 115 | |||||||
Stock activity under stock compensation plans and other (in shares) | 3 | 5 | |||||||
Stock activity under stock compensation plans and other | (40) | (40) | |||||||
Ending balance (in shares) at Mar. 31, 2016 | 183 | 724 | |||||||
Ending balance at Mar. 31, 2016 | 3,611 | $ 2 | $ 7 | 12,989 | (11,088) | (1,285) | 2,986 | ||
Beginning balance (in shares) at Dec. 31, 2016 | 368 | 544 | |||||||
Beginning balance at Dec. 31, 2016 | 4,131 | $ 4 | $ 5 | 13,149 | (10,612) | (1,326) | 2,911 | ||
Increase (Decrease) in Stockholders' Equity | |||||||||
Dividends and distributions paid to noncontrolling interests | [2] | (35) | (35) | ||||||
Net (loss) income | [1] | 71 | 36 | 35 | |||||
Other comprehensive (loss) income | 91 | 88 | 3 | ||||||
Adjustment to redemption value of redeemable noncontrolling interest | 1 | 1 | |||||||
Stock compensation expense | 65 | 65 | |||||||
Stock activity under stock compensation plans and other (in shares) | 6 | ||||||||
Stock activity under stock compensation plans and other | (47) | (47) | |||||||
Ending balance (in shares) at Mar. 31, 2017 | 374 | 544 | |||||||
Ending balance at Mar. 31, 2017 | $ 4,277 | $ 4 | $ 5 | $ 13,168 | $ (10,576) | $ (1,238) | $ 2,914 | ||
[1] | The total net income (loss) presented in the unaudited consolidated statements of equity for the three months ended March 31, 2017 and 2016 is $8 million lower and $8 million higher, respectively, than the amounts presented in the unaudited consolidated statements of operations due to the net income attributable to the redeemable noncontrolling interest not included in equity. | ||||||||
[2] | The total distribution presented in the unaudited consolidated statements of equity for the three months ended March 31, 2017 and 2016 excludes $8 million in distributions paid to redeemable non-controlling interest not included in equity. |
CONSOLIDATED STATEMENTS OF EQU9
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Distributions paid to redeemable non-controlling interest | $ 8 |
Change in total net income (loss), Redeemable noncontrolling interest | $ 8 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Business Description First Data Corporation (FDC or the Company) is a global leader in commerce-enabling technology and solutions for merchants, financial institutions, and card issuers. The Company provides merchant transaction processing and acquiring; credit, retail, and debit card issuing and processing; prepaid services; check verification; settlement and guarantee services; as well as solutions to help clients grow their businesses including the Company's Clover line of payment solutions and related applications. Basis of Presentation The accompanying unaudited consolidated financial statements of the Company should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Significant accounting policies disclosed therein have not changed. The accompanying consolidated financial statements are unaudited; however, in the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the consolidated financial position of the Company, the consolidated results of the Company's operations, comprehensive income (loss), consolidated cash flows and changes in equity as of and for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year due in part to the seasonality of certain business units. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Presentation Depreciation and amortization, presented as a separate line item on the Company’s unaudited consolidated statements of operations, does not include amortization of initial payments for new contracts which is recorded as contra-revenue within “Transaction and processing service fees.” Also not included is amortization related to equity method investments which is netted within “Equity earnings in affiliates.” The following table presents the amounts associated with such amortization for the periods presented: Three months ended (in millions) 2017 2016 Amortization of initial payments for new contracts $ 19 $ 15 Amortization related to equity method investments 11 9 Revenue Recognition Interchange fees and assessments charged by credit card associations to the Company’s consolidated subsidiaries and network fees related to PIN-debit and PINless-debit transactions charged by debit networks were as follows for the periods presented: Three months ended (in millions) 2017 2016 Interchange fees and assessments $ 6,039 $ 5,287 Debit network fees 745 726 Deferred Revenue The Company records deferred revenue when it receives payments or invoices in advance of the delivery of products or the performance of services. The deferred revenue is recognized when underlying performance obligations are achieved. As of March 31, 2017 and December 31, 2016 , current deferred revenue included within "Accounts payable and accrued liabilities" in the Company's unaudited consolidated balance sheets was $155 million and $149 million , respectively. As of March 31, 2017 and December 31, 2016 , noncurrent deferred revenue included within "Other long-term liabilities" in the Company's unaudited consolidated balance sheets was $176 million and $184 million , respectively. In January 2017, the Company determined that standalone value had been achieved for its Clover terminal devices, principally because a secondary market had been established. The Company accounted for the change on a prospective basis. Beginning January 1, 2017, the Company recognized revenue on sales of Clover terminal devices upon delivery, while Clover terminal devices sold prior to January 1, 2017 continued to be deferred over the term of the respective processing agreement. As of March 31, 2017, approximately $84 million of the Company's deferred revenue represented sales of Clover terminal devices which did not have standalone value prior to the change in accounting. Reclassifications Certain amounts for prior years have been reclassified to conform with the current-year financial statement presentation. New Accounting Guidance Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued guidance that requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the Company expects to be entitled in an exchange for those goods or services. It also requires enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively, and improves guidance for multiple-element arrangements. The FASB has subsequently issued several amendments to the standard, including clarification on accounting for licenses, identifying performance obligations, and principal versus agent consideration (reporting revenue gross vs. net). Since the issuance of ASC 606 and ASC 340-40 (collectively, the New Revenue Standard) in May 2014, the Company has been preparing for the adoption of the New Revenue Standard. The Company has been monitoring the activity of the FASB and the Transition Resource Group as it relates to specific industry interpretive guidance and further overall interpretations and clarifications. Beginning in the second half of 2016, the Company began Phase I of its three-phase plan to complete its adoption of the New Revenue Standard: • Phase I entailed activities such as completion of an accounting guidance gap analysis, reviewing significant revenue streams (and related costs) and representative contracts to determine the potential changes to its existing accounting policies. The Company has completed Phase I. • Phase II will further determine the impact of the adoption of the New Revenue Standard and will include activities such as validating and concluding on potential accounting guidance gaps from Phase I, quantifying the effects the New Revenue Standard will have on its consolidated financial statements, identifying and documenting changes to its accounting policies, expanding disclosures as required by the New Revenue Standard, and identifying and addressing the impact the New Revenue Standard will have on business processes, systems and internal controls to support the recognition and disclosure requirements. The Company has begun Phase II. • Phase III will complete the Company’s adoption and implementation of the New Revenue Standard and will include activities such as running parallel reporting for impacted areas under the New and Current Revenue Standard, recording the accounting adjustments that were identified in Phase II, evaluating and testing modified and newly implemented internal controls over the New Revenue Standard, and revising the Company’s financial statement disclosures. While the Company is still in the process of evaluating the full impact of the New Revenue Standard and related amendments on its consolidated financial statements and related disclosures, the Company has identified certain expected changes of the New Revenue Standard on its consolidated financial statements and is in the process of quantifying the impact. These include items such as: • The capitalization of certain costs that are part of setting up a customer on the Company’s platforms and certain customer acquisition costs that meet the definition of incremental costs of obtaining a contract, both of which are currently recognized as an expense when incurred; and • Certain software license arrangements that are currently recognized over the term of the software arrangement may be recognized earlier. The Company is also continuing to validate potential changes, which may be significant to the consolidated financial statements, such as: • Certain customer contractual arrangements with volume-based discounts which could result in a potential deferral of revenue; • Certain services revenue associated with programming activities that currently have standalone value and are recognized as work is performed may need to be deferred and recognized over the contract period; and • Principal versus agent conclusions (reporting revenue gross vs. net), including interchange fees and assessments charged by credit card associations, network fees related to PIN-debit and PINless debit transactions and revenue-based commission payments to Independent Sales Organizations (ISOs) and sales channels. The Company plans to adopt the New Revenue Standard, as well as other clarifications and technical guidance issued by the FASB related to this New Revenue Standard, on January 1, 2018, and the Company currently expects to apply the modified retrospective transition method. This would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the New Revenue Standard to contracts in process as of the adoption date. Under this method, the Company would not restate the prior consolidated financial statements presented. However, the Company would include additional disclosures of the amount by which each financial statement line item is affected in the current reporting period during 2018, as compared to the guidance that was in effect before the change, and an explanation of the reasons for significant changes, if any. Leases In February 2016, the FASB issued guidance which requires lessees to put most leases on their balance sheets. The guidance also modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors and provides new presentation and disclosure requirements for both lessees and lessors. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period subsequent to adoption of the preceding revenue recognition guidance. The Company is currently evaluating the impact of adoption of the new guidance on its consolidated financial statements. Stock-based Compensation In March 2016, the FASB issued guidance that will change some aspects of the accounting for stock-based payments to employees. Under the new guidance, companies will be required to record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and to present excess tax benefits as an operating activity on the statement of cash flows. The guidance may also change how companies account for forfeitures and an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation. The Company adopted the various amendments in its consolidated financial statements for the quarterly period ending March 31, 2017 with an effective date of January 1, 2017. The Company has elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The adoption of these amendments did not have a material effect on its consolidated financial statements while the Company still has income tax valuation allowances within the U.S. When these income tax valuation allowances in the U.S. are fully utilized or released, the Company could experience volatility in its income tax expense. Credit Losses In June 2016, the FASB issued guidance that will change the accounting for credit impairment. Under the new guidance, companies are required to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. Statement of Cash Flows In November 2016, the FASB issued guidance that will change the presentation of restricted cash and restricted cash equivalents on the statement of cash flows. Under the new guidance, companies will be required to include restricted cash and restricted cash equivalents with the cash and cash equivalents line item when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Given this change, transfers between cash, cash equivalents, and restricted cash and cash equivalents will not be reported as cash flow activities on the statement of cash flows. In addition, the guidance requires entities to disclose information about the nature of restrictions on its cash and cash equivalents, including restricted cash and cash equivalents. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted, including adoption in an interim period. The guidance should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. Goodwill In January 2017, the FASB issued guidance simplifying the test for goodwill impairment. This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted. This guidance must be applied on a prospective basis. The Company does not expect the adoption of this guidance to have a material impact on the Company's financial position, results of operations or cash flows. Pension Costs In March 2017, the FASB issued guidance that requires employers that sponsor defined benefit plans for pensions and/or other post-retirement benefits to present the service cost component of net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers will present the other components of the net periodic benefit cost separately from the line item that includes the service cost and outside of any subtotal of operating income, if one is presented. These components will not be eligible for capitalization in assets. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted, including adoption in an interim period. The Company plans to adopt the guidance on January 1, 2018. This guidance must be applied on a prospective basis. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings (in millions) As of March 31, As of December 31, Short-term borrowings: Foreign lines of credit and other arrangements $ 126 $ 84 Senior secured revolving credit facility at either (i) LIBOR for deposits in the applicable currency plus 350 basis points or (ii) prime rate plus 250 basis points 11 — Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50% 228 160 Unamortized deferred financing costs (a) (1 ) (2 ) Total short-term borrowings 364 242 Current portion of long-term borrowings: Other arrangements and capital lease obligations 137 116 Total current portion of long-term borrowings 137 116 Total short-term and current portion of long-term borrowings 501 358 Long-term borrowings: Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 3.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.0% (d), (e) 4,381 4,379 Senior secured term loan facility due July 2022 at LIBOR plus 3.0% or a base rate plus 2.0%, or solely with respect to euro-denominated term loans, euro LIBOR plus 3.25% (e) 3,594 3,583 Senior secured term loan facility due June 2020 at LIBOR plus 2.0% or a base rate plus 1.0% 1,284 — 6.75% Senior secured first lien notes due 2020 — 1,398 5.375% Senior secured first lien notes due 2023 1,210 1,210 5.0% Senior secured first lien notes due 2024 1,900 1,900 5.75% Senior secured second lien notes due 2024 2,200 2,200 7.0% Senior unsecured notes due 2023 3,400 3,400 Unamortized discount and unamortized deferred financing costs (a) (150 ) (154 ) Other arrangements and capital lease obligations 304 215 Total long-term borrowings (b) 18,123 18,131 Total borrowings (c) $ 18,624 $ 18,489 (a) Unamortized deferred financing costs are amortized on a straight-line basis, which approximates the interest method, over the remaining term of the respective debt. In addition, certain lenders' fees associated with debt transactions were capitalized as discounts and are similarly being amortized on a straight-line basis, which approximates the effective interest method, over the remaining term of the respective debt. (b) As of March 31, 2017 and December 31, 2016 , the fair value of the Company's long-term borrowings was $18.7 billion and $18.8 billion , respectively. The estimated fair value of the Company's long-term borrowings was primarily based on market trading prices and is considered to be a Level 2 measurement. (c) The effective interest rate is not substantially different than the coupon rate on any of the Company's debt tranches. (d) The U.S. dollar denominated Senior secured term loan facility maturing March 2021was refinanced on April 26, 2017. See note 13 "Subsequent Events" for additional information. (e) The euro-denominated portions of the Senior secured term loan facilities are designated as non-derivative hedges of net investments in foreign operations. As such, foreign currency gains and losses on the euro-denominated portions of these terms loans is recorded within "Foreign currency translation adjustment" on the Company's unaudited consolidated statements of comprehensive income (loss) to the extent the hedges are effective. Foreign Lines of Credit and Other Arrangements As of March 31, 2017 and December 31, 2016 , the Company had $337 million and $489 million , respectively, available under short-term lines of credit and other arrangements with foreign banks and alliance partners primarily to fund settlement activity. As of March 31, 2017 and December 31, 2016 , this includes a $165 million and $355 million , respectively, committed line of credit for one of the Company's consolidated alliances. The remainder of these arrangements are primarily associated with international operations and are in various functional currencies, the most significant of which are the Australian dollar, the Polish zloty, and the euro. Of the amounts outstanding as of March 31, 2017 and December 31, 2016 , $40 million and $10 million , respectively, were uncommitted. As of March 31, 2017 and December 31, 2016, the weighted average interest rate associated with foreign lines of credit was 2.6% for both periods. Senior Secured Revolving Credit Facility The Company has a $1.25 billion senior secured revolving credit facility maturing on June 2, 2020 subject to certain earlier springing maturity provisions in certain circumstances. Up to $250 million of the senior secured revolving credit facility is available for letters of credit, of which $44 million and $41 million of letters of credit were issued under the facilities as of March 31, 2017 and December 31, 2016 , respectively. As of March 31, 2017 , $1.2 billion remained available. Accounts Receivable Securitization Agreement The Company has a fully consolidated and wholly owned subsidiary, First Data Receivables, LLC (FDR). FDR and FDC entered into an agreement where certain wholly owned subsidiaries of FDC agreed to transfer and contribute receivables to FDR. FDR’s assets are not available to satisfy obligations of any other entities or affiliates of FDC. FDR's creditors will be entitled, upon its liquidation, to be satisfied out of FDR’s assets prior to any assets or value in FDR becoming available to FDR’s equity holders. As of March 31, 2017 and December 31, 2016 , the Company transferred $305 million and $312 million , respectively, in receivables to FDR as part of the securitization program and FDR utilized the receivables as collateral for borrowings of $228 million and $ 160 million , respectively. The receivables held by FDR are recorded within “Accounts receivable, net” in the Company's unaudited consolidated balance sheets. Recent Events On January 23, 2017, the Company incurred an aggregate principal amount of $1.3 billion in new U.S. dollar denominated term loans maturing on June 2, 2020. The interest rate applicable to the new term loans is either LIBOR plus 2.0% or a base rate plus 1.0% . The Company is required to make quarterly principal payments of 1.25% on the new term loans. The new term loans were utilized to pay down all of the existing 6.75% senior secured first lien notes. In connection with this transaction, the Company recorded $56 million in loss on debt extinguishment. |
Stock Compensation Plans
Stock Compensation Plans | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Plans | Stock Compensation Plans The Company provides stock-based compensation awards to its employees under the 2015 Omnibus Incentive Plan (stock plan), which the Company adopted in conjunction with its initial public offering (IPO) on October 15, 2015. Total stock-based compensation expense recognized in the "Cost of services" and “Selling, general, and administrative” line items of the unaudited consolidated statements of operations resulting from stock options, non-vested restricted stock awards, and non-vested restricted stock units was as follows for the periods presented: Three months ended March 31, (in millions) 2017 2016 Cost of services $ 19 $ 49 Selling, general, and administrative 46 66 Total $ 65 $ 115 Substantially all of the Company's employees are granted restricted stock awards or units on an annual basis, which generally vest 20% on the first anniversary, 40% on the second anniversary, and the remaining 40% on the third anniversary. For the three months ended March 31, 2017 , 9 million restricted stock awards and units were granted at a weighted average price per share of $15.31 . For the three months ended March 31, 2016 , 14 million restricted stock awards and units were granted at a weighted average price per share of $12.54 . As of March 31, 2017 , there was $73 million and $273 million of total unrecognized compensation expense related to non-vested stock options and restricted stock awards and units, respectively. For the three months ended March 31, 2017 and March 31, 2016 , the Company paid approximately $60 million and $39 million , respectively, of taxes related to the net settlement of vested equity awards. For additional information on the Company’s stock compensation plans, refer to note 4 “Stock Compensation Plans” in “Item 8. Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
Net Income (Loss) Attributable
Net Income (Loss) Attributable to First Data Corporation Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Attributable to First Data Corporation Per Share | Net Income (Loss) Attributable to First Data Corporation Per Share Basic net income (loss) attributable to FDC per share is calculated by dividing "Net income (loss) attributable to FDC" by the weighted-average shares outstanding during the period, without consideration for any potential dilutive shares. Diluted net income (loss) attributable to FDC per share has been computed to give effect to the impact, if any, of shares issuable upon the assumed exercise of the Company’s common stock equivalents, which consist of outstanding stock options and unvested restricted stock. The dilutive effect of potentially dilutive securities is reflected in net income (loss) attributable to FDC per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company's common stock can result in a greater dilutive effect from potentially dilutive securities. Other than voting rights, the Company's Class A Common Stock and Class B Common Stock have the same rights and therefore both are treated as the same class of stock for purposes of the net income (loss) attributable to FDC per share calculation. The following table sets forth the computation of the Company's basic and diluted net income (loss) attributable to First Data Corporation per share: Three months ended March 31, (in millions, except per share amounts) 2017 2016 Numerator: Net income (loss) used in computing net income (loss) per share, basic and diluted $ 36 $ (56 ) Denominator: Weighted average shares used in computing net income (loss) per share, basic 910 896 Effect of dilutive securities 21 — Total dilutive securities 931 896 Net income (loss) attributable to First Data Corporation per share: Basic $ 0.04 $ (0.06 ) Diluted $ 0.04 $ (0.06 ) Anti-dilutive shares excluded from diluted net income (loss) per share (a) 13 46 (a) Potentially dilutive securities whose effect would have been anti-dilutive are excluded from the computation of diluted earnings per share for the three months ended March 31, 2017 and 2016. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information For a detailed discussion of the Company’s principles and its reportable segments refer to note 7 “Segment Information” in the Company’s consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The following tables present the Company’s reportable segment results for the three months ended March 31, 2017 and 2016 : Three months ended March 31, 2017 (in millions) Global Business Solutions Global Financial Solutions Network & Security Solutions Corporate Total Revenues: Transaction and processing service fees $ 743 $ 347 $ 316 $ — $ 1,406 Product sales and other 219 46 45 — 310 Equity earnings in affiliates 9 — — — 9 Total segment revenues $ 971 $ 393 $ 361 $ — $ 1,725 Depreciation and amortization $ 106 $ 85 $ 30 $ 1 $ 222 Segment EBITDA 382 155 156 (42 ) 651 Other operating expenses and other income (expense) excluding divestitures (10 ) (2 ) (1 ) (10 ) (23 ) Three months ended March 31, 2016 (in millions) Global Business Solutions Global Financial Solutions Network & Security Solutions Corporate Total Revenues: Transaction and processing service fees $ 755 $ 337 $ 313 $ — $ 1,405 Product sales and other 189 49 39 — 277 Equity earnings in affiliates 11 — — — 11 Total segment revenues $ 955 $ 386 $ 352 $ — $ 1,693 Depreciation and amortization $ 103 $ 94 $ 27 $ 4 $ 228 Segment EBITDA 376 155 151 (46 ) 636 Other operating expenses and other income (expense) excluding divestitures (17 ) 4 (2 ) — (15 ) The following table presents a reconciliation of reportable segment amounts to the Company’s consolidated balances for the three months ended March 31, 2017 and 2016 : Three months ended (in millions) 2017 2016 Total segment revenues $ 1,725 $ 1,693 Adjustments: Non wholly owned entities (a) 10 14 Independent sales organizations (ISOs) commission expense (b) 147 163 Reimbursable debit network fees, postage, and other 919 907 Consolidated revenues $ 2,801 $ 2,777 Total segment EBITDA $ 651 $ 636 Adjustments: Non wholly owned entities (a) 6 10 Depreciation and amortization (228 ) (238 ) Interest expense, net (234 ) (263 ) Loss on debt extinguishment (56 ) (46 ) Other items (c) (26 ) (35 ) Income tax expense (12 ) (5 ) Stock-based compensation (65 ) (115 ) Net income (loss) attributable to First Data Corporation $ 36 $ (56 ) (a) Net adjustment to reflect the Company's proportionate share of the results of the Company's investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. Segment revenue for the Company's significant affiliates is reflected based on the Company's proportionate share of the results of the Company's investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. For other affiliates, the Company includes equity earnings in affiliates, excluding amortization expense, in segment revenue. (b) Reported within "Selling, general, and administrative expense" in the unaudited consolidated statements of operations. (c) Includes restructuring, non-normal course litigation and regulatory settlements, debt issuance expenses and “Other income (expense)" as presented in the unaudited consolidated statements of operations, which includes divestitures, derivative gains (losses), non-operating foreign currency gains (losses), and other, as applicable to the periods presented. The following table presents a reconciliation of reportable segment depreciation and amortization expense to the Company’s consolidated balances in the unaudited consolidated statements of cash flows for the three months ended March 31, 2017 and 2016 : Three months ended (in millions) 2017 2016 Segment depreciation and amortization $ 222 $ 228 Adjustments for non wholly owned entities 17 19 Amortization of initial payments for new contracts (a) 19 15 Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows 258 262 Amortization of equity method investments (b) (11 ) (9 ) Amortization of initial payments for new contracts (a) (19 ) (15 ) Total consolidated depreciation and amortization per unaudited consolidated statements of operations $ 228 $ 238 (a) Included in "Transaction and processing service fees" as contra-revenue in the Company's unaudited consolidated statements of operations. (b) Included in "Equity earnings in affiliates" in the Company's unaudited consolidated statements of operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the Company's income tax expense and effective income tax rate for the periods presented: Three months ended (in millions) 2017 2016 Income tax expense $ 12 $ 5 Effective income tax rate 13 % (500 )% The effective tax rates for the three months ended March 31, 2017 and 2016 were different from the statutory tax rate as a result of the Company recording tax expense on its foreign earnings, but not on its domestic earnings, as a result of the valuation allowance recorded in the U.S. The Company’s tax expense in both periods was also impacted by the Company not recording tax expense on noncontrolling interests from pass through entities. Additionally, the near breakeven pretax loss for the period ended March 31, 2016 amplifies variations between the effective tax rate and the statutory tax rate in the same period. The Company's liability for unrecognized tax benefits was approximately $237 million as of March 31, 2017 . The Company anticipates it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $122 million over the next twelve months beginning March 31, 2017 as a result of the possible closure of federal tax audits, potential settlements with certain states and foreign countries and the lapse of the statute of limitations in various state and foreign jurisdictions. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest One of the Company's noncontrolling interests is redeemable at the option of the holder and is presented outside of equity and carried at its estimated redemption value. The following table presents a summary of the redeemable noncontrolling interest activity during the periods presented: (in millions) 2017 2016 Balance as of January 1, $ 73 $ 77 Distributions (8 ) (8 ) Share of income 8 8 Adjustment to redemption value of redeemable noncontrolling interest (1 ) (4 ) Balance as of March 31, $ 72 $ 73 |
Other Operating Expenses
Other Operating Expenses | 3 Months Ended |
Mar. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Other Operating Expense | Other Operating Expenses The following table details the components of "Other operating expenses" in the unaudited consolidated statements of operations: Three months ended (in millions) 2017 2016 Restructuring, net $ 23 $ 21 Other (1 ) — Other operating expenses $ 22 $ 21 Restructuring During the three months ended March 31, 2017 and 2016 , the Company recorded restructuring charges in connection with management’s alignment of the business with strategic objectives, cost savings initiatives, and the departure of certain executive officers. The $23 million incurred during the first quarter of 2017 was driven by a workforce productivity initiative. The Company expects to incur an additional $20 million in restructuring costs associated with this initiative in the second quarter. The Company continues to evaluate operating efficiencies and could incur further restructuring costs beyond this initiative. A summary of net pretax charges incurred by segment was as follows for the periods presented: Three months ended (in millions) 2017 2016 Global Business Solutions $ 9 $ 3 Global Financial Solutions 4 1 Network & Security Solutions 2 2 Corporate 8 15 Restructuring, net $ 23 $ 21 The following table summarizes the Company’s utilization of restructuring accruals for the period presented: (in millions) Employee Severance Remaining accrual as of January 1, 2017 $ 9 Restructuring, net 23 Cash payments and other (20 ) Remaining accrual as of March 31, 2017 $ 12 |
Acquisitions and Dispositions
Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions 2017 Joint Venture On March 6, 2017, the Company announced a new joint venture equity alliance with FleetCor Technologies, Inc. (FleetCor), which would combine the gift card businesses of both companies. The joint venture is pending regulatory approval. The joint venture will combine the Company's gift card business, included within the Network & Security Solutions segment, with FleetCor's Stored Value Solutions prepaid card services and gift card program management assets. The Company will hold a 57.5% equity interest in the joint venture while FleetCor will retain a 42.5% equity interest. The joint venture will be included as part of the Network & Security Solutions segment. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company enters into the following types of derivatives: • Floating to fixed interest rate collar contracts: The Company uses interest rate collar contracts to mitigate its exposure to interest rate fluctuations on interest payments related to variable rate debt. No payments or receipts are exchanged on interest rate collar contracts unless interest rates rise or fall to exceed a predetermined ceiling or floor rate. The Company uses these contracts in a qualifying hedging relationship. • Foreign exchange contracts: The Company uses cross-currency swaps to protect the net investment in certain foreign subsidiaries and/or affiliates with respect to changes in foreign currency exchange rates. The Company uses these contracts in both qualifying and non-qualifying hedging relationships. The Company held the following derivative instruments as of the dates indicated: As of March 31, 2017 As of December 31, 2016 (in millions) Notional Currency Notional Value Assets (a) Liabilities Notional Value Assets (a) Liabilities Derivatives designated as hedges of net investments in foreign operations: Foreign exchange contracts (b) AUD 211 $ 48 $ — 211 $ 57 $ — Foreign exchange contracts (c) GBP 300 72 — 300 78 — Foreign exchange contracts (d) CAD 130 9 — 130 9 — 129 — 144 — Derivatives designated as cash flow hedges: Interest rate collar contracts (e) USD 4,300 4 — 3,000 3 — $ 133 $ — $ 147 $ — (a) Of the balances included in the table above, in aggregate, $133 million of assets as of March 31, 2017 and $147 million of assets as of December 31, 2016 are subject to master netting agreements to the extent that the swaps are with the same counterparty. The terms of those agreements require that the Company net settle the outstanding positions at the option of the counterparty upon certain events of default. (b) Notional value 111 million AUD, matured in April 2017. See note 13 "Subsequent Events" for additional information. (c) Notional value 150 million GBP, matured in April 2017. See note 13 "Subsequent Events" for additional information. (d) Notional value 35 million CAD, matured in April 2017. See note 13 "Subsequent Events" for additional information. (e) On January 31, 2017, the Company entered into $1.3 billion of zero -cost interest rate collars with an interest rate cap of 1.5% of interest rate floors ranging between 1.160% - 1.168% . The collars will hedge variability in the interest rates on the senior secured term loan facilities. The maximum length of time over which the Company is hedging its currency exposure of net investments in foreign operations, through utilization of foreign exchange contracts, is through August 2019. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions related to the payment of variable interest on existing financial instruments is through January 2019. Fair Value Measurement The carrying amounts for the Company's derivative financial instruments are the estimated fair value of the financial instruments. The Company’s derivatives are not exchange listed and therefore the fair value is estimated under an income approach using Bloomberg analytics models that are based on readily observable market inputs. These models reflect the contractual terms of the derivatives, such as notional value and expiration date, as well as market-based observables including interest and foreign 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 of subjectivity and, accordingly, the Company’s derivatives were classified within Level 2 of the fair value hierarchy. While the Company believes its estimates result in a reasonable reflection of the fair value of these instruments, the estimated values may not be representative of actual values that could have been realized or that will be realized in the future. Effect of Derivative Instruments on the Unaudited Consolidated Financial Statements Derivative gains and (losses) were as follows for the periods indicated: Three months ended March 31, 2017 2016 (in millions, pretax) Interest Foreign Interest Foreign Derivatives designated as hedging instruments: Loss recognized in "Foreign currency translation adjustment" in the unaudited consolidated statements of comprehensive income (loss) (effective portion) $ — $ (14 ) $ — $ (8 ) Gain recognized in "Derivative instruments" in the unaudited consolidated statements of comprehensive income (loss) (effective portion) 1 — — — Derivatives not designated as hedging instruments: Loss recognized in "Other (expense) income" in the unaudited consolidated statements of operations — — (4 ) — Accumulated Derivative Gains and Losses The following table summarizes activity in other comprehensive income (loss) related to derivative instruments classified as cash flow hedges and net investment hedges held by the Company for the periods presented: Three months ended March 31, (in millions, after tax) 2017 2016 Accumulated gain included in other comprehensive income (loss) as of January 1, $ 124 $ 86 Decrease in fair value of derivatives that qualify for hedge accounting, net of tax (a) (b) (9 ) (5 ) Accumulated gain included in other comprehensive income (loss) as of March 31, $ 115 $ 81 (a) Losses are included in "Derivative instruments" and “Foreign currency translation adjustment” in the unaudited consolidated statements of comprehensive income (loss). (b) Net of $4 million and $3 million of tax for the three months ended March 31, 2017 and 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is involved in various legal proceedings. Accruals have been made with respect to these matters, where appropriate, which are reflected in the Company’s unaudited consolidated financial statements. The Company may enter into discussions regarding settlement of these matters and may enter into settlement agreements, if it believes settlement is in the best interest of the Company. The matters discussed below, if decided adversely to or settled by the Company, individually or in the aggregate, may result in liability material to the Company’s financial condition and/or results of operations. Legal There are asserted claims against the Company where an unfavorable outcome is considered to be reasonably possible. These claims can generally be categorized in the following areas: (1) patent infringement which results from claims that the Company is using technology that has been patented by another party; (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 collection activities; and (3) other matters which may include issues such as employment and indemnification obligations to purchasers of former subsidiaries. The Company’s estimates of the possible ranges of losses in excess of any amounts accrued are $0 to $5 million for patent infringement, $0 to $100 million for merchant customer matters, and $0 to $5 million for other matters, resulting in a total estimated range of possible losses of $0 to $110 million for all of the matters described above. The estimated range of reasonably possible losses is based on information currently available and involves elements of judgment and significant uncertainties. As additional information becomes available and the resolution of the uncertainties becomes more apparent, it is possible that actual losses may exceed even the high end of the estimated range. |
Investment in Affiliates
Investment in Affiliates | 3 Months Ended |
Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Affiliates | Investment in Affiliates Segment results include the Company’s proportionate share of income from affiliates, which consist of unconsolidated investments accounted for under the equity method of accounting. The most significant of these affiliates are related to the Company’s merchant bank alliance program. As of March 31, 2017 , the Company had two unconsolidated significant subsidiaries that were not required to be consolidated, but represents more than 20% of the Company’s pretax income. Summarized financial information for the affiliates is presented below for the periods presented: Three months ended (in millions) 2017 2016 Net operating revenues $ 268 $ 280 Operating expenses 129 129 Operating income $ 139 $ 151 Net income $ 139 $ 151 FDC equity earnings 48 55 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Cross-Currency Swaps Settlements On April 18, 2017, the Company cash settled three cross currency swaps (notional values of 111 million AUD, 150 million GBP and 35 million CAD) at a favorable cash settlement value of $90 million . Debt Refinancing On April 26, 2017, the Company refinanced its $4.2 billion U.S. dollar-denominated senior secured term loan due March 2021 through new and existing lenders to provide approximately $4.2 billion of U.S. dollar-denominated senior secured term loans due April 2024. The senior secured term loan due April 2024 bears interest at a rate of LIBOR plus 250 basis points or a base rate plus 150 basis points . In connection with this transaction, the Company will record approximately $6 million in loss on debt extinguishment and expense of approximately $5 million in debt issuance costs. 2017 Acquisition On May 1, 2017, the Company acquired Acculynk, a leading technology company that delivers eCommerce solutions for debit card acceptance. The acquisition provides access to Acculynk's PaySecure debit routing technology and its range of other services. The purchase price was approximately $85 million and Acculynk related operations will be reported as part of the Company's Global Business Solutions segment. |
Basis of Presentation and Sum23
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of the Company should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Significant accounting policies disclosed therein have not changed. The accompanying consolidated financial statements are unaudited; however, in the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the consolidated financial position of the Company, the consolidated results of the Company's operations, comprehensive income (loss), consolidated cash flows and changes in equity as of and for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year due in part to the seasonality of certain business units. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Deferred Revenue | Deferred Revenue The Company records deferred revenue when it receives payments or invoices in advance of the delivery of products or the performance of services. The deferred revenue is recognized when underlying performance obligations are achieved. |
Reclassifications | Reclassifications Certain amounts for prior years have been reclassified to conform with the current-year financial statement presentation. |
New Accounting Guidance | New Accounting Guidance Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued guidance that requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the Company expects to be entitled in an exchange for those goods or services. It also requires enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively, and improves guidance for multiple-element arrangements. The FASB has subsequently issued several amendments to the standard, including clarification on accounting for licenses, identifying performance obligations, and principal versus agent consideration (reporting revenue gross vs. net). Since the issuance of ASC 606 and ASC 340-40 (collectively, the New Revenue Standard) in May 2014, the Company has been preparing for the adoption of the New Revenue Standard. The Company has been monitoring the activity of the FASB and the Transition Resource Group as it relates to specific industry interpretive guidance and further overall interpretations and clarifications. Beginning in the second half of 2016, the Company began Phase I of its three-phase plan to complete its adoption of the New Revenue Standard: • Phase I entailed activities such as completion of an accounting guidance gap analysis, reviewing significant revenue streams (and related costs) and representative contracts to determine the potential changes to its existing accounting policies. The Company has completed Phase I. • Phase II will further determine the impact of the adoption of the New Revenue Standard and will include activities such as validating and concluding on potential accounting guidance gaps from Phase I, quantifying the effects the New Revenue Standard will have on its consolidated financial statements, identifying and documenting changes to its accounting policies, expanding disclosures as required by the New Revenue Standard, and identifying and addressing the impact the New Revenue Standard will have on business processes, systems and internal controls to support the recognition and disclosure requirements. The Company has begun Phase II. • Phase III will complete the Company’s adoption and implementation of the New Revenue Standard and will include activities such as running parallel reporting for impacted areas under the New and Current Revenue Standard, recording the accounting adjustments that were identified in Phase II, evaluating and testing modified and newly implemented internal controls over the New Revenue Standard, and revising the Company’s financial statement disclosures. While the Company is still in the process of evaluating the full impact of the New Revenue Standard and related amendments on its consolidated financial statements and related disclosures, the Company has identified certain expected changes of the New Revenue Standard on its consolidated financial statements and is in the process of quantifying the impact. These include items such as: • The capitalization of certain costs that are part of setting up a customer on the Company’s platforms and certain customer acquisition costs that meet the definition of incremental costs of obtaining a contract, both of which are currently recognized as an expense when incurred; and • Certain software license arrangements that are currently recognized over the term of the software arrangement may be recognized earlier. The Company is also continuing to validate potential changes, which may be significant to the consolidated financial statements, such as: • Certain customer contractual arrangements with volume-based discounts which could result in a potential deferral of revenue; • Certain services revenue associated with programming activities that currently have standalone value and are recognized as work is performed may need to be deferred and recognized over the contract period; and • Principal versus agent conclusions (reporting revenue gross vs. net), including interchange fees and assessments charged by credit card associations, network fees related to PIN-debit and PINless debit transactions and revenue-based commission payments to Independent Sales Organizations (ISOs) and sales channels. The Company plans to adopt the New Revenue Standard, as well as other clarifications and technical guidance issued by the FASB related to this New Revenue Standard, on January 1, 2018, and the Company currently expects to apply the modified retrospective transition method. This would result in an adjustment to retained earnings for the cumulative effect, if any, of applying the New Revenue Standard to contracts in process as of the adoption date. Under this method, the Company would not restate the prior consolidated financial statements presented. However, the Company would include additional disclosures of the amount by which each financial statement line item is affected in the current reporting period during 2018, as compared to the guidance that was in effect before the change, and an explanation of the reasons for significant changes, if any. Leases In February 2016, the FASB issued guidance which requires lessees to put most leases on their balance sheets. The guidance also modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors and provides new presentation and disclosure requirements for both lessees and lessors. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period subsequent to adoption of the preceding revenue recognition guidance. The Company is currently evaluating the impact of adoption of the new guidance on its consolidated financial statements. Stock-based Compensation In March 2016, the FASB issued guidance that will change some aspects of the accounting for stock-based payments to employees. Under the new guidance, companies will be required to record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and to present excess tax benefits as an operating activity on the statement of cash flows. The guidance may also change how companies account for forfeitures and an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation. The Company adopted the various amendments in its consolidated financial statements for the quarterly period ending March 31, 2017 with an effective date of January 1, 2017. The Company has elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period. The adoption of these amendments did not have a material effect on its consolidated financial statements while the Company still has income tax valuation allowances within the U.S. When these income tax valuation allowances in the U.S. are fully utilized or released, the Company could experience volatility in its income tax expense. Credit Losses In June 2016, the FASB issued guidance that will change the accounting for credit impairment. Under the new guidance, companies are required to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. Statement of Cash Flows In November 2016, the FASB issued guidance that will change the presentation of restricted cash and restricted cash equivalents on the statement of cash flows. Under the new guidance, companies will be required to include restricted cash and restricted cash equivalents with the cash and cash equivalents line item when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Given this change, transfers between cash, cash equivalents, and restricted cash and cash equivalents will not be reported as cash flow activities on the statement of cash flows. In addition, the guidance requires entities to disclose information about the nature of restrictions on its cash and cash equivalents, including restricted cash and cash equivalents. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted, including adoption in an interim period. The guidance should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. Goodwill In January 2017, the FASB issued guidance simplifying the test for goodwill impairment. This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted. This guidance must be applied on a prospective basis. The Company does not expect the adoption of this guidance to have a material impact on the Company's financial position, results of operations or cash flows. Pension Costs In March 2017, the FASB issued guidance that requires employers that sponsor defined benefit plans for pensions and/or other post-retirement benefits to present the service cost component of net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers will present the other components of the net periodic benefit cost separately from the line item that includes the service cost and outside of any subtotal of operating income, if one is presented. These components will not be eligible for capitalization in assets. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted, including adoption in an interim period. The Company plans to adopt the guidance on January 1, 2018. This guidance must be applied on a prospective basis. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. |
Basis of Presentation and Sum24
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of amounts associated with amortization of initial payments for new contracts and equity method investments | The following table presents the amounts associated with such amortization for the periods presented: Three months ended (in millions) 2017 2016 Amortization of initial payments for new contracts $ 19 $ 15 Amortization related to equity method investments 11 9 |
Schedule of amounts associated with processing services revenue | Interchange fees and assessments charged by credit card associations to the Company’s consolidated subsidiaries and network fees related to PIN-debit and PINless-debit transactions charged by debit networks were as follows for the periods presented: Three months ended (in millions) 2017 2016 Interchange fees and assessments $ 6,039 $ 5,287 Debit network fees 745 726 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | (in millions) As of March 31, As of December 31, Short-term borrowings: Foreign lines of credit and other arrangements $ 126 $ 84 Senior secured revolving credit facility at either (i) LIBOR for deposits in the applicable currency plus 350 basis points or (ii) prime rate plus 250 basis points 11 — Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50% 228 160 Unamortized deferred financing costs (a) (1 ) (2 ) Total short-term borrowings 364 242 Current portion of long-term borrowings: Other arrangements and capital lease obligations 137 116 Total current portion of long-term borrowings 137 116 Total short-term and current portion of long-term borrowings 501 358 Long-term borrowings: Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 3.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.0% (d), (e) 4,381 4,379 Senior secured term loan facility due July 2022 at LIBOR plus 3.0% or a base rate plus 2.0%, or solely with respect to euro-denominated term loans, euro LIBOR plus 3.25% (e) 3,594 3,583 Senior secured term loan facility due June 2020 at LIBOR plus 2.0% or a base rate plus 1.0% 1,284 — 6.75% Senior secured first lien notes due 2020 — 1,398 5.375% Senior secured first lien notes due 2023 1,210 1,210 5.0% Senior secured first lien notes due 2024 1,900 1,900 5.75% Senior secured second lien notes due 2024 2,200 2,200 7.0% Senior unsecured notes due 2023 3,400 3,400 Unamortized discount and unamortized deferred financing costs (a) (150 ) (154 ) Other arrangements and capital lease obligations 304 215 Total long-term borrowings (b) 18,123 18,131 Total borrowings (c) $ 18,624 $ 18,489 (a) Unamortized deferred financing costs are amortized on a straight-line basis, which approximates the interest method, over the remaining term of the respective debt. In addition, certain lenders' fees associated with debt transactions were capitalized as discounts and are similarly being amortized on a straight-line basis, which approximates the effective interest method, over the remaining term of the respective debt. (b) As of March 31, 2017 and December 31, 2016 , the fair value of the Company's long-term borrowings was $18.7 billion and $18.8 billion , respectively. The estimated fair value of the Company's long-term borrowings was primarily based on market trading prices and is considered to be a Level 2 measurement. (c) The effective interest rate is not substantially different than the coupon rate on any of the Company's debt tranches. (d) The U.S. dollar denominated Senior secured term loan facility maturing March 2021was refinanced on April 26, 2017. See note 13 "Subsequent Events" for additional information. (e) The euro-denominated portions of the Senior secured term loan facilities are designated as non-derivative hedges of net investments in foreign operations. As such, foreign currency gains and losses on the euro-denominated portions of these terms loans is recorded within "Foreign currency translation adjustment" on the Company's unaudited consolidated statements of comprehensive income (loss) to the extent the hedges are effective. |
Stock Compensation Plans (Table
Stock Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense recognized in the consolidated statements of operations | Total stock-based compensation expense recognized in the "Cost of services" and “Selling, general, and administrative” line items of the unaudited consolidated statements of operations resulting from stock options, non-vested restricted stock awards, and non-vested restricted stock units was as follows for the periods presented: Three months ended March 31, (in millions) 2017 2016 Cost of services $ 19 $ 49 Selling, general, and administrative 46 66 Total $ 65 $ 115 |
Net Income (Loss) Attributabl27
Net Income (Loss) Attributable to First Data Corporation Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net income (loss) per share | The following table sets forth the computation of the Company's basic and diluted net income (loss) attributable to First Data Corporation per share: Three months ended March 31, (in millions, except per share amounts) 2017 2016 Numerator: Net income (loss) used in computing net income (loss) per share, basic and diluted $ 36 $ (56 ) Denominator: Weighted average shares used in computing net income (loss) per share, basic 910 896 Effect of dilutive securities 21 — Total dilutive securities 931 896 Net income (loss) attributable to First Data Corporation per share: Basic $ 0.04 $ (0.06 ) Diluted $ 0.04 $ (0.06 ) Anti-dilutive shares excluded from diluted net income (loss) per share (a) 13 46 (a) Potentially dilutive securities whose effect would have been anti-dilutive are excluded from the computation of diluted earnings per share for the three months ended March 31, 2017 and 2016. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of operating segment results | The following tables present the Company’s reportable segment results for the three months ended March 31, 2017 and 2016 : Three months ended March 31, 2017 (in millions) Global Business Solutions Global Financial Solutions Network & Security Solutions Corporate Total Revenues: Transaction and processing service fees $ 743 $ 347 $ 316 $ — $ 1,406 Product sales and other 219 46 45 — 310 Equity earnings in affiliates 9 — — — 9 Total segment revenues $ 971 $ 393 $ 361 $ — $ 1,725 Depreciation and amortization $ 106 $ 85 $ 30 $ 1 $ 222 Segment EBITDA 382 155 156 (42 ) 651 Other operating expenses and other income (expense) excluding divestitures (10 ) (2 ) (1 ) (10 ) (23 ) Three months ended March 31, 2016 (in millions) Global Business Solutions Global Financial Solutions Network & Security Solutions Corporate Total Revenues: Transaction and processing service fees $ 755 $ 337 $ 313 $ — $ 1,405 Product sales and other 189 49 39 — 277 Equity earnings in affiliates 11 — — — 11 Total segment revenues $ 955 $ 386 $ 352 $ — $ 1,693 Depreciation and amortization $ 103 $ 94 $ 27 $ 4 $ 228 Segment EBITDA 376 155 151 (46 ) 636 Other operating expenses and other income (expense) excluding divestitures (17 ) 4 (2 ) — (15 ) |
Schedule of reconciliation of reportable segment amounts to the consolidated balances | The following table presents a reconciliation of reportable segment amounts to the Company’s consolidated balances for the three months ended March 31, 2017 and 2016 : Three months ended (in millions) 2017 2016 Total segment revenues $ 1,725 $ 1,693 Adjustments: Non wholly owned entities (a) 10 14 Independent sales organizations (ISOs) commission expense (b) 147 163 Reimbursable debit network fees, postage, and other 919 907 Consolidated revenues $ 2,801 $ 2,777 Total segment EBITDA $ 651 $ 636 Adjustments: Non wholly owned entities (a) 6 10 Depreciation and amortization (228 ) (238 ) Interest expense, net (234 ) (263 ) Loss on debt extinguishment (56 ) (46 ) Other items (c) (26 ) (35 ) Income tax expense (12 ) (5 ) Stock-based compensation (65 ) (115 ) Net income (loss) attributable to First Data Corporation $ 36 $ (56 ) (a) Net adjustment to reflect the Company's proportionate share of the results of the Company's investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. Segment revenue for the Company's significant affiliates is reflected based on the Company's proportionate share of the results of the Company's investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. For other affiliates, the Company includes equity earnings in affiliates, excluding amortization expense, in segment revenue. (b) Reported within "Selling, general, and administrative expense" in the unaudited consolidated statements of operations. (c) Includes restructuring, non-normal course litigation and regulatory settlements, debt issuance expenses and “Other income (expense)" as presented in the unaudited consolidated statements of operations, which includes divestitures, derivative gains (losses), non-operating foreign currency gains (losses), and other, as applicable to the periods presented. |
Schedule of reconciliation of reportable segment depreciation and amortization amounts to the consolidated balances | The following table presents a reconciliation of reportable segment depreciation and amortization expense to the Company’s consolidated balances in the unaudited consolidated statements of cash flows for the three months ended March 31, 2017 and 2016 : Three months ended (in millions) 2017 2016 Segment depreciation and amortization $ 222 $ 228 Adjustments for non wholly owned entities 17 19 Amortization of initial payments for new contracts (a) 19 15 Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows 258 262 Amortization of equity method investments (b) (11 ) (9 ) Amortization of initial payments for new contracts (a) (19 ) (15 ) Total consolidated depreciation and amortization per unaudited consolidated statements of operations $ 228 $ 238 (a) Included in "Transaction and processing service fees" as contra-revenue in the Company's unaudited consolidated statements of operations. (b) Included in "Equity earnings in affiliates" in the Company's unaudited consolidated statements of operations. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | The following table presents the Company's income tax expense and effective income tax rate for the periods presented: Three months ended (in millions) 2017 2016 Income tax expense $ 12 $ 5 Effective income tax rate 13 % (500 )% |
Redeemable Noncontrolling Int30
Redeemable Noncontrolling Interest (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Summary of the redeemable noncontrolling interest activity | The following table presents a summary of the redeemable noncontrolling interest activity during the periods presented: (in millions) 2017 2016 Balance as of January 1, $ 73 $ 77 Distributions (8 ) (8 ) Share of income 8 8 Adjustment to redemption value of redeemable noncontrolling interest (1 ) (4 ) Balance as of March 31, $ 72 $ 73 |
Other Operating Expenses (Table
Other Operating Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Summary of other operating expenses | The following table details the components of "Other operating expenses" in the unaudited consolidated statements of operations: Three months ended (in millions) 2017 2016 Restructuring, net $ 23 $ 21 Other (1 ) — Other operating expenses $ 22 $ 21 |
Summary of net pretax charges incurred by segment | A summary of net pretax charges incurred by segment was as follows for the periods presented: Three months ended (in millions) 2017 2016 Global Business Solutions $ 9 $ 3 Global Financial Solutions 4 1 Network & Security Solutions 2 2 Corporate 8 15 Restructuring, net $ 23 $ 21 |
Summary of utilization of restructuring accruals | The following table summarizes the Company’s utilization of restructuring accruals for the period presented: (in millions) Employee Severance Remaining accrual as of January 1, 2017 $ 9 Restructuring, net 23 Cash payments and other (20 ) Remaining accrual as of March 31, 2017 $ 12 |
Derivative Financial Instrume32
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts of outstanding derivative positions | The Company held the following derivative instruments as of the dates indicated: As of March 31, 2017 As of December 31, 2016 (in millions) Notional Currency Notional Value Assets (a) Liabilities Notional Value Assets (a) Liabilities Derivatives designated as hedges of net investments in foreign operations: Foreign exchange contracts (b) AUD 211 $ 48 $ — 211 $ 57 $ — Foreign exchange contracts (c) GBP 300 72 — 300 78 — Foreign exchange contracts (d) CAD 130 9 — 130 9 — 129 — 144 — Derivatives designated as cash flow hedges: Interest rate collar contracts (e) USD 4,300 4 — 3,000 3 — $ 133 $ — $ 147 $ — (a) Of the balances included in the table above, in aggregate, $133 million of assets as of March 31, 2017 and $147 million of assets as of December 31, 2016 are subject to master netting agreements to the extent that the swaps are with the same counterparty. The terms of those agreements require that the Company net settle the outstanding positions at the option of the counterparty upon certain events of default. (b) Notional value 111 million AUD, matured in April 2017. See note 13 "Subsequent Events" for additional information. (c) Notional value 150 million GBP, matured in April 2017. See note 13 "Subsequent Events" for additional information. (d) Notional value 35 million CAD, matured in April 2017. See note 13 "Subsequent Events" for additional information. (e) On January 31, 2017, the Company entered into $1.3 billion of zero -cost interest rate collars with an interest rate cap of 1.5% of interest rate floors ranging between 1.160% - 1.168% . The collars will hedge variability in the interest rates on the senior secured term loan facilities. |
Schedule of the effect of derivative instruments on the Consolidated Statements of Operations | Derivative gains and (losses) were as follows for the periods indicated: Three months ended March 31, 2017 2016 (in millions, pretax) Interest Foreign Interest Foreign Derivatives designated as hedging instruments: Loss recognized in "Foreign currency translation adjustment" in the unaudited consolidated statements of comprehensive income (loss) (effective portion) $ — $ (14 ) $ — $ (8 ) Gain recognized in "Derivative instruments" in the unaudited consolidated statements of comprehensive income (loss) (effective portion) 1 — — — Derivatives not designated as hedging instruments: Loss recognized in "Other (expense) income" in the unaudited consolidated statements of operations — — (4 ) — |
Summary of activity in other comprehensive income related to derivative instruments classified as cash flow hedges and as a net investment hedge | The following table summarizes activity in other comprehensive income (loss) related to derivative instruments classified as cash flow hedges and net investment hedges held by the Company for the periods presented: Three months ended March 31, (in millions, after tax) 2017 2016 Accumulated gain included in other comprehensive income (loss) as of January 1, $ 124 $ 86 Decrease in fair value of derivatives that qualify for hedge accounting, net of tax (a) (b) (9 ) (5 ) Accumulated gain included in other comprehensive income (loss) as of March 31, $ 115 $ 81 (a) Losses are included in "Derivative instruments" and “Foreign currency translation adjustment” in the unaudited consolidated statements of comprehensive income (loss). (b) Net of $4 million and $3 million of tax for the three months ended March 31, 2017 and 2016, respectively. |
Investment in Affiliates (Table
Investment in Affiliates (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of financial information related to the operating results | Summarized financial information for the affiliates is presented below for the periods presented: Three months ended (in millions) 2017 2016 Net operating revenues $ 268 $ 280 Operating expenses 129 129 Operating income $ 139 $ 151 Net income $ 139 $ 151 FDC equity earnings 48 55 |
Basis of Presentation and Sum34
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Amounts Associated with Amortization of Initial Payments for New Contracts and Equity Method Investments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Amortization of initial payments for new contracts | $ 19 | $ 15 |
Amortization related to equity method investments | $ 11 | $ 9 |
Basis of Presentation and Sum35
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Amounts Associated with Processing Services Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Interchange fees and assessments | $ 6,039 | $ 5,287 |
Debit network fees | $ 745 | $ 726 |
Basis of Presentation and Sum36
Basis of Presentation and Summary of Significant Accounting Policies - Deferred Revenue (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Current deferred revenue | $ 155 | $ 149 |
Noncurrent deferred revenue | 176 | $ 184 |
Clover | ||
Revenue from External Customer [Line Items] | ||
Deferred revenue | $ 84 |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Millions | Jan. 23, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Short-term borrowings: | |||
Total short-term borrowings | $ 364 | $ 242 | |
Unamortized deferred financing costs | (1) | (2) | |
Current portion of long-term borrowings: | |||
Other arrangements and capital lease obligations | 137 | 116 | |
Total current portion of long-term borrowings | 137 | 116 | |
Total short-term and current portion of long-term borrowings | 501 | 358 | |
Long-term borrowings: | |||
Total Long-term borrowings | 18,123 | 18,131 | |
Unamortized discount and unamortized deferred financing costs | (150) | (154) | |
Other arrangements and capital lease obligations | 304 | 215 | |
Total Borrowings | 18,624 | 18,489 | |
Long-term borrowings | 18,700 | 18,800 | |
Senior secured term loan facility due June 2020 at LIBOR plus 2.0% or a base rate plus 1.0% | LIBOR | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 2.00% | ||
Senior secured term loan facility due June 2020 at LIBOR plus 2.0% or a base rate plus 1.0% | Base Rate | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 1.00% | ||
Secured debt | Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 3.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.0% | |||
Long-term borrowings: | |||
Total Long-term borrowings | $ 4,381 | 4,379 | |
Secured debt | Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 3.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.0% | Euro LIBOR | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 3.00% | ||
Secured debt | Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 3.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.0% | Base Rate | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 2.00% | ||
Secured debt | Senior secured term loan facility due July 2022 at LIBOR plus 3.0% or a base rate plus 2.0%, or solely with respect to euro-denominated term loans, euro LIBOR plus 3.25% | |||
Long-term borrowings: | |||
Total Long-term borrowings | $ 3,594 | 3,583 | |
Secured debt | Senior secured term loan facility due July 2022 at LIBOR plus 3.0% or a base rate plus 2.0%, or solely with respect to euro-denominated term loans, euro LIBOR plus 3.25% | LIBOR | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 3.00% | ||
Secured debt | Senior secured term loan facility due July 2022 at LIBOR plus 3.0% or a base rate plus 2.0%, or solely with respect to euro-denominated term loans, euro LIBOR plus 3.25% | Euro LIBOR | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 3.25% | ||
Secured debt | Senior secured term loan facility due July 2022 at LIBOR plus 3.0% or a base rate plus 2.0%, or solely with respect to euro-denominated term loans, euro LIBOR plus 3.25% | Base Rate | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 2.00% | ||
Secured debt | Senior secured term loan facility due June 2020 at LIBOR plus 2.0% or a base rate plus 1.0% | |||
Long-term borrowings: | |||
Total Long-term borrowings | $ 1,284 | 0 | |
Secured debt | Senior secured term loan facility due June 2020 at LIBOR plus 2.0% or a base rate plus 1.0% | LIBOR | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 2.00% | ||
Secured debt | Senior secured term loan facility due June 2020 at LIBOR plus 2.0% or a base rate plus 1.0% | Base Rate | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 1.00% | ||
Secured debt | 6.75% Senior secured first lien notes due 2020 | |||
Long-term borrowings: | |||
Total Long-term borrowings | $ 0 | $ 1,398 | |
Interest rate (as a percent) | 6.75% | ||
Secured debt | 5.375% Senior secured first lien notes due 2023 | |||
Long-term borrowings: | |||
Total Long-term borrowings | $ 1,210 | $ 1,210 | |
Interest rate (as a percent) | 5.375% | ||
Secured debt | 5.0% Senior secured first lien notes due 2024 | |||
Long-term borrowings: | |||
Total Long-term borrowings | $ 1,900 | 1,900 | |
Interest rate (as a percent) | 5.00% | ||
Secured debt | 5.75% Senior secured second lien notes due 2024 | |||
Long-term borrowings: | |||
Total Long-term borrowings | $ 2,200 | 2,200 | |
Interest rate (as a percent) | 5.75% | ||
Unsecured debt | 7.0% Senior unsecured notes due 2023 | |||
Long-term borrowings: | |||
Total Long-term borrowings | $ 3,400 | 3,400 | |
Interest rate (as a percent) | 7.00% | ||
Foreign lines of credit and other arrangements | |||
Short-term borrowings: | |||
Total short-term borrowings | $ 126 | 84 | |
Senior secured revolving credit facility at either (i) LIBOR for deposits in the applicable currency plus 350 basis points or (ii) prime rate plus 250 basis points | |||
Short-term borrowings: | |||
Senior secured revolving credit facility at either (i) LIBOR for deposits in the applicable currency plus 350 basis points or (ii) prime rate plus 250 basis points | $ 11 | 0 | |
Senior secured revolving credit facility at either (i) LIBOR for deposits in the applicable currency plus 350 basis points or (ii) prime rate plus 250 basis points | LIBOR | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 3.50% | ||
Senior secured revolving credit facility at either (i) LIBOR for deposits in the applicable currency plus 350 basis points or (ii) prime rate plus 250 basis points | Prime Rate | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 2.50% | ||
Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50% | |||
Short-term borrowings: | |||
Total short-term borrowings | $ 228 | $ 160 | |
Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50% | LIBOR | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 2.00% | ||
Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50% | Federal Funds Rate | |||
Long-term borrowings: | |||
Basis spread on variable rate (as a percent) | 0.50% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | Jan. 23, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Short-Term Borrowings | ||||
Borrowings | $ 364,000,000 | $ 242,000,000 | ||
Loss on debt extinguishment | 56,000,000 | $ 46,000,000 | ||
Subsidiaries | Collateral pledged | ||||
Short-Term Borrowings | ||||
Receivables transferred to FDR as part of securitization program | 305,000,000 | 312,000,000 | ||
Short-term foreign lines of credit and other arrangements | ||||
Short-Term Borrowings | ||||
Amount outstanding and uncommitted | 40,000,000 | 10,000,000 | ||
Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50% | ||||
Short-Term Borrowings | ||||
Borrowings | $ 228,000,000 | 160,000,000 | ||
Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50% | LIBOR | ||||
Short-Term Borrowings | ||||
Basis spread on variable rate (as a percent) | 2.00% | |||
U.S. denominated term loan maturing 2020 | ||||
Short-Term Borrowings | ||||
Principal amount | $ 1,300,000,000 | |||
Quarterly principal payments required | 1.25% | |||
U.S. denominated term loan maturing 2020 | LIBOR | ||||
Short-Term Borrowings | ||||
Basis spread on variable rate (as a percent) | 2.00% | |||
U.S. denominated term loan maturing 2020 | Base Rate | ||||
Short-Term Borrowings | ||||
Basis spread on variable rate (as a percent) | 1.00% | |||
6.75% Senior secured notes | ||||
Short-Term Borrowings | ||||
Loss on debt extinguishment | $ 56,000,000 | |||
Foreign lines of credit and other arrangements | ||||
Short-Term Borrowings | ||||
Amount available | $ 337,000,000 | $ 489,000,000 | ||
Weighted average interest rate | 2.60% | 2.60% | ||
Foreign lines of credit and other arrangements | Committed line of credit | ||||
Short-Term Borrowings | ||||
Amount available | $ 165,000,000 | $ 355,000,000 | ||
Senior secured revolving credit facility | ||||
Short-Term Borrowings | ||||
Amount available | 1,250,000,000 | |||
Line of credit facility, remaining borrowing capacity | 1,200,000,000 | |||
Letter of credit | ||||
Short-Term Borrowings | ||||
Amount available | 250,000,000 | |||
Letters of credit outstanding, amount | $ 44,000,000 | $ 41,000,000 | ||
Secured debt | U.S. denominated term loan maturing 2020 | LIBOR | ||||
Short-Term Borrowings | ||||
Basis spread on variable rate (as a percent) | 2.00% | |||
Secured debt | U.S. denominated term loan maturing 2020 | Base Rate | ||||
Short-Term Borrowings | ||||
Basis spread on variable rate (as a percent) | 1.00% | |||
Secured debt | 6.75% Senior secured notes | ||||
Short-Term Borrowings | ||||
Interest rate (as a percent) | 6.75% |
Stock Compensation Plans - Allo
Stock Compensation Plans - Allocation of Share-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 65 | $ 115 |
Cost of services | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 19 | 49 |
Selling, general, and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 46 | $ 66 |
Stock Compensation Plans - Narr
Stock Compensation Plans - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Taxes related to net settlement of vested equity awards | $ 60 | $ 39 |
Restricted stock awards and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 9 | 14 |
Weighted average price per share (in dollars per share) | $ 15.31 | $ 12.54 |
Unrecognized compensation expense | $ 273 | |
Restricted stock awards and restricted stock units | First Anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 20.00% | |
Restricted stock awards and restricted stock units | Second Anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 40.00% | |
Restricted stock awards and restricted stock units | Third Anniversary | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 40.00% | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense | $ 73 |
Net Income (Loss) Attributabl41
Net Income (Loss) Attributable to First Data Corporation Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net income (loss) used in computing net income (loss) per share, basic and diluted | $ 36 | $ (56) |
Denominator: | ||
Weighted average shares used in computing net income (loss) per share, basic (in shares) | 910 | 896 |
Effect of dilutive securities (in shares) | 21 | 0 |
Total dilutive securities (in shares) | 931 | 896 |
Net income (loss) attributable to First Data Corporation per share: | ||
Basic (in dollars per share) | $ 0.04 | $ (0.06) |
Diluted (in dollars per share) | $ 0.04 | $ (0.06) |
Anti-dilutive shares excluded from diluted net income (loss) per share | 13 | 46 |
Segment Information - Schedule
Segment Information - Schedule of Operating Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Revenues: | |||
Transaction and processing service fees | [1] | $ 1,563 | $ 1,591 |
Product sales and other | [1] | 319 | 279 |
Total revenues | 2,801 | 2,777 | |
Depreciation and amortization | 228 | 238 | |
Segment EBITDA | 651 | 636 | |
Operating Segments | |||
Revenues: | |||
Total revenues | 1,725 | 1,693 | |
Operating Segments | Global Business Solutions | |||
Revenues: | |||
Transaction and processing service fees | 743 | 755 | |
Product sales and other | 219 | 189 | |
Equity earnings in affiliates | 9 | 11 | |
Total revenues | 971 | 955 | |
Depreciation and amortization | 106 | 103 | |
Segment EBITDA | 382 | 376 | |
Other operating expenses and other income (expense) excluding divestitures | (10) | (17) | |
Operating Segments | Global Financial Solutions | |||
Revenues: | |||
Transaction and processing service fees | 347 | 337 | |
Product sales and other | 46 | 49 | |
Equity earnings in affiliates | 0 | 0 | |
Total revenues | 393 | 386 | |
Depreciation and amortization | 85 | 94 | |
Segment EBITDA | 155 | 155 | |
Other operating expenses and other income (expense) excluding divestitures | (2) | 4 | |
Operating Segments | Network & Security Solutions | |||
Revenues: | |||
Transaction and processing service fees | 316 | 313 | |
Product sales and other | 45 | 39 | |
Equity earnings in affiliates | 0 | 0 | |
Total revenues | 361 | 352 | |
Depreciation and amortization | 30 | 27 | |
Segment EBITDA | 156 | 151 | |
Other operating expenses and other income (expense) excluding divestitures | (1) | (2) | |
Corporate | |||
Revenues: | |||
Transaction and processing service fees | 0 | 0 | |
Product sales and other | 0 | 0 | |
Equity earnings in affiliates | 0 | 0 | |
Total revenues | 0 | 0 | |
Depreciation and amortization | 1 | 4 | |
Segment EBITDA | (42) | (46) | |
Other operating expenses and other income (expense) excluding divestitures | (10) | 0 | |
Total | |||
Revenues: | |||
Transaction and processing service fees | 1,406 | 1,405 | |
Product sales and other | 310 | 277 | |
Equity earnings in affiliates | 9 | 11 | |
Total revenues | 1,725 | 1,693 | |
Depreciation and amortization | 222 | 228 | |
Segment EBITDA | 651 | 636 | |
Other operating expenses and other income (expense) excluding divestitures | $ (23) | $ (15) | |
[1] | Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of $52 million and $53 million for the three months ended March 31, 2017 and 2016, respectively. |
Segment Information - Schedul43
Segment Information - Schedule of Reconciliation of Reportable Segment Amounts to the Consolidated Balances (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total segment revenues | $ 2,801 | $ 2,777 |
Adjustments: | ||
Reimbursable debit network fees, postage, and other | 919 | 907 |
Consolidated revenues | 2,801 | 2,777 |
Total segment EBITDA | 651 | 636 |
Adjustments: | ||
Depreciation and amortization | (228) | (238) |
Interest expense, net | (234) | (263) |
Loss on debt extinguishment | (56) | (46) |
Income tax expense | (12) | (5) |
Stock-based compensation | (65) | (115) |
Net income (loss) attributable to First Data Corporation | 36 | (56) |
Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total segment revenues | 1,725 | 1,693 |
Adjustments: | ||
Consolidated revenues | 1,725 | 1,693 |
Segment Reconciling Items | ||
Adjustments: | ||
Non wholly owned entities | 10 | 14 |
Independent sales organizations (ISOs) commission expense | 147 | 163 |
Reimbursable debit network fees, postage, and other | 919 | 907 |
Adjustments: | ||
Non wholly owned entities | 6 | 10 |
Depreciation and amortization | (228) | (238) |
Interest expense, net | (234) | (263) |
Loss on debt extinguishment | (56) | (46) |
Other items | (26) | (35) |
Income tax expense | (12) | (5) |
Stock-based compensation | $ (65) | $ (115) |
Segment Information - Schedul44
Segment Information - Schedule of Reconciliation of Reportable Segment Depreciation and Amortization Amounts to the Consolidated Balances (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total consolidated depreciation and amortization per unaudited consolidated statements of operations | $ 228 | $ 238 |
Amortization of initial payments for new contracts | (19) | (15) |
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows | 258 | 262 |
Amortization of equity method investments | (11) | (9) |
Amortization of initial payments for new contracts | (19) | (15) |
Operating segments and corporate | ||
Segment Reporting Information [Line Items] | ||
Total consolidated depreciation and amortization per unaudited consolidated statements of operations | 222 | 228 |
Adjustments | ||
Segment Reporting Information [Line Items] | ||
Total consolidated depreciation and amortization per unaudited consolidated statements of operations | 228 | 238 |
Adjustments for non wholly owned entities | 17 | 19 |
Amortization of initial payments for new contracts | (19) | (15) |
Amortization of equity method investments | (11) | (9) |
Amortization of initial payments for new contracts | $ (19) | $ (15) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 12 | $ 5 |
Effective income tax rate | 13.00% | (500.00%) |
Uncertain income tax liabilities | $ 237 | |
Maximum | ||
Income Tax Contingency [Line Items] | ||
Decrease in liability for unrecognized tax benefits reasonably possible | $ 122 |
Redeemable Noncontrolling Int46
Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Redeemable noncontrolling interest activity [Roll Forward] | ||
Balance as of beginning of the period | $ 73 | $ 77 |
Distributions | (8) | (8) |
Share of income | 8 | 8 |
Adjustment to redemption value of redeemable noncontrolling interest | (1) | (4) |
Balance as of end of the period | $ 72 | $ 73 |
Other Operating Expenses - Summ
Other Operating Expenses - Summary of Other Operating Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other Income and Expenses [Abstract] | ||
Restructuring, net | $ 23 | $ 21 |
Other | (1) | 0 |
Other operating expenses | $ 22 | $ 21 |
Other Operating Expenses - Narr
Other Operating Expenses - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 23 | $ 21 |
Cost Management Initiatives | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 23 | |
Additional cost expected to be incurred | $ 20 |
Other Operating Expenses - Su49
Other Operating Expenses - Summary of Net Pretax Charges Incurred by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net pretax benefits (charges), incurred by segment [Line items] | ||
Restructuring, net | $ 23 | $ 21 |
Operating Segments | Global Business Solutions | ||
Net pretax benefits (charges), incurred by segment [Line items] | ||
Restructuring, net | 9 | 3 |
Operating Segments | Global Financial Solutions | ||
Net pretax benefits (charges), incurred by segment [Line items] | ||
Restructuring, net | 4 | 1 |
Operating Segments | Network & Security Solutions | ||
Net pretax benefits (charges), incurred by segment [Line items] | ||
Restructuring, net | 2 | 2 |
Corporate | ||
Net pretax benefits (charges), incurred by segment [Line items] | ||
Restructuring, net | $ 8 | $ 15 |
Other Operating Expenses - Su50
Other Operating Expenses - Summary of Utilization of Restructuring Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Utilization of restructuring accruals [Roll Forward] | ||
Restructuring, net | $ 23 | $ 21 |
Employee Severance | ||
Utilization of restructuring accruals [Roll Forward] | ||
Remaining accrual at the beginning of the period | 9 | |
Restructuring, net | 23 | |
Cash payments and other | (20) | |
Remaining accrual at the end of the period | $ 12 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Details) - FLEETCOR joint venture | Mar. 06, 2017 |
Business Acquisition [Line Items] | |
Equity method investment, ownership percentage | 57.50% |
FLEETCOR | |
Business Acquisition [Line Items] | |
Joint venture, ownership interest by noncontrolling owners | 42.50% |
Derivative Financial Instrume52
Derivative Financial Instruments - Schedule of Notional Amounts of Outstanding Derivative Positions (Details) £ in Millions, CAD in Millions, AUD in Millions, $ in Millions | Apr. 18, 2017AUD | Apr. 18, 2017GBP (£) | Apr. 18, 2017CAD | Mar. 31, 2017AUD | Mar. 31, 2017GBP (£) | Mar. 31, 2017CAD | Mar. 31, 2017USD ($) | Jan. 31, 2017USD ($) | Dec. 31, 2016AUD | Dec. 31, 2016GBP (£) | Dec. 31, 2016CAD | Dec. 31, 2016USD ($) |
Derivatives, Fair Value [Line Items] | ||||||||||||
Derivative asset subject to master netting agreements | $ 133 | $ 147 | ||||||||||
Interest rate collar contracts | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Assets | 133 | 147 | ||||||||||
Liabilities | 0 | 0 | ||||||||||
Derivatives designated as hedges | Foreign exchange contracts | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Assets | 129 | 144 | ||||||||||
Liabilities | 0 | 0 | ||||||||||
Derivatives designated as hedges | Foreign exchange contracts | Subsequent Event | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Notional value | £ | £ 150 | |||||||||||
Maturity of foreign exchange contracts, notional value | AUD 111 | £ 150 | CAD 35 | |||||||||
Derivatives designated as hedges | Foreign exchange contracts | AUD | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Notional value | AUD | AUD 211 | AUD 211 | ||||||||||
Assets | 48 | 57 | ||||||||||
Liabilities | 0 | 0 | ||||||||||
Derivatives designated as hedges | Foreign exchange contracts | GBP | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Notional value | £ | £ 300 | £ 300 | ||||||||||
Assets | 72 | 78 | ||||||||||
Liabilities | 0 | 0 | ||||||||||
Derivatives designated as hedges | Foreign exchange contracts | CAD | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Notional value | CAD | CAD 130 | CAD 130 | ||||||||||
Assets | 9 | 9 | ||||||||||
Liabilities | 0 | 0 | ||||||||||
Derivatives designated as hedges | Interest rate collar contracts | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Notional value | $ 1,300 | |||||||||||
Fixed interest rate | 0.00% | |||||||||||
Interest rate cap (as a percent) | 1.50% | |||||||||||
Derivatives designated as hedges | Interest rate collar contracts | Minimum | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Interest rate floor (as a percent) | 1.16% | |||||||||||
Derivatives designated as hedges | Interest rate collar contracts | Maximum | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Interest rate floor (as a percent) | 1.168% | |||||||||||
Derivatives designated as hedges | Interest rate collar contracts | USD | ||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||
Notional value | 4,300 | 3,000 | ||||||||||
Assets | 4 | 3 | ||||||||||
Liabilities | $ 0 | $ 0 |
Derivative Financial Instrume53
Derivative Financial Instruments - Schedule of The Effect of Derivative Instruments on the Consolidated Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Derivatives designated as hedging instruments | Interest Rate Contracts | Foreign currency translation adjustment | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in the unaudited consolidated statements of comprehensive income (loss) (effective portion) | $ 0 | $ 0 |
Derivatives designated as hedging instruments | Interest Rate Contracts | Derivative instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in the unaudited consolidated statements of comprehensive income (loss) (effective portion) | 1 | 0 |
Derivatives designated as hedging instruments | Foreign Exchange Contracts | Foreign currency translation adjustment | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in the unaudited consolidated statements of comprehensive income (loss) (effective portion) | (14) | (8) |
Derivatives designated as hedging instruments | Foreign Exchange Contracts | Derivative instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in the unaudited consolidated statements of comprehensive income (loss) (effective portion) | 0 | 0 |
Derivatives not designated as hedging instruments | Interest Rate Contracts | Other (expense) income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss recognized in Other (expense) income in the unaudited consolidated statements of operations | 0 | (4) |
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | Other (expense) income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss recognized in Other (expense) income in the unaudited consolidated statements of operations | $ 0 | $ 0 |
Derivative Financial Instrume54
Derivative Financial Instruments - Summary of Activity in Other Comprehensive Income Related to Derivative Instruments Classified as Cash Flow Hedges and as a Net Investment Hedge (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 4,131 | $ 3,660 |
Decrease in fair value of derivatives that qualify for hedge accounting, net of tax | 90 | (64) |
Ending balance | 4,277 | 3,611 |
Fair value of derivatives that qualify for hedge accounting, tax | 4 | 3 |
Accumulated derivative gains and losses | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | 124 | 86 |
Decrease in fair value of derivatives that qualify for hedge accounting, net of tax | (9) | (5) |
Ending balance | $ 115 | $ 81 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Mar. 31, 2017USD ($) |
Minimum | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | $ 0 |
Minimum | Patent infringement | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 0 |
Minimum | Merchant customer matters | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 0 |
Minimum | Other matters | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 0 |
Maximum | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 110,000,000 |
Maximum | Patent infringement | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 5,000,000 |
Maximum | Merchant customer matters | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 100,000,000 |
Maximum | Other matters | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | $ 5,000,000 |
Investment in Affiliates (Detai
Investment in Affiliates (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)subsidiary | Mar. 31, 2016USD ($) | |
Financial information related to operating results | ||
FDC equity earnings | $ 55 | $ 64 |
Unconsolidated significant subsidiary | ||
Investment in Affiliates | ||
Number of subsidiaries | subsidiary | 2 | |
Pre-tax loss (as a percent) (more than) | 20.00% | |
Financial information related to operating results | ||
Net operating revenues | $ 268 | 280 |
Operating expenses | 129 | 129 |
Operating income | 139 | 151 |
Net income | 139 | 151 |
FDC equity earnings | $ 48 | $ 55 |
Subsequent Events (Details)
Subsequent Events (Details) £ in Millions, CAD in Millions, AUD in Millions, $ in Millions | May 01, 2017USD ($) | Apr. 26, 2017USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Apr. 18, 2017AUD | Apr. 18, 2017GBP (£) | Apr. 18, 2017CAD | Apr. 18, 2017USD ($) |
Subsequent Event [Line Items] | ||||||||
Amount to be provided through debt refinanced | $ 1,300 | $ 896 | ||||||
Loss on debt extinguishment | $ 56 | $ 46 | ||||||
Secured debt | U.S. dollar-denominated senior secured term loan due March 2021 | Base Rate | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.00% | |||||||
Subsequent Event | Acculynk | Global Business Solutions | ||||||||
Subsequent Event [Line Items] | ||||||||
Purchase price | $ 85 | |||||||
Subsequent Event | Secured debt | U.S. dollar-denominated senior secured term loan due April 2024 | ||||||||
Subsequent Event [Line Items] | ||||||||
Amount to be provided through debt refinanced | $ 4,200 | |||||||
Subsequent Event | Secured debt | U.S. dollar-denominated senior secured term loan due April 2024 | LIBOR | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.50% | |||||||
Subsequent Event | Secured debt | U.S. dollar-denominated senior secured term loan due April 2024 | Base Rate | ||||||||
Subsequent Event [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.50% | |||||||
Subsequent Event | Secured debt | U.S. dollar-denominated senior secured term loan due March 2021 | ||||||||
Subsequent Event [Line Items] | ||||||||
Amount of debt refinanced | $ 4,200 | |||||||
Loss on debt extinguishment | 6 | |||||||
Debt issuance costs expensed | $ 5 | |||||||
Subsequent Event | Derivatives designated as hedges | Foreign exchange contracts | ||||||||
Subsequent Event [Line Items] | ||||||||
Maturity of foreign exchange contracts, notional value | AUD 111 | £ 150 | CAD 35 | |||||
Maturity of foreign exchange contracts, net settlement value | $ 90 |