DENVER, April 14 /PRNewswire-FirstCall/ -- First Data Corp. (NYSE: FDC)
today reported first quarter operating results of $0.47 per share. Revenue
grew 10% to $2.5 billion and operating margin improved to 21%. Cash flow from
operating activities was $523 million.
During the quarter, 25.6 million shares were repurchased for $1.0 billion
at an average price of $40.66, leaving an authorized $1.9 billion in the
company's buy-back program.
"We are excited about achieving these strong first quarter operating
results," said Charlie Fote, chairman and chief executive officer. "First
Data's success comes from executing on the strategy of providing the most
relevant, cost-efficient integrated payments solutions to our customers. Our
worldwide distribution network, extensive product offerings and improved
merchant sales productivity -- especially within the regional base -- drove
the strong performance. We will continue investing in businesses and products
that deliver the highest growth and meet the changing demands of the payments
marketplace."
Fote continued, "Concord has been part of First Data for five quarters
now, and we are very pleased with the strategic fit and the financial
performance of this acquisition. In the first quarter, integration expenses
impacted EPS by $0.03, right in-line with our expectations."
Fote noted that the momentum created will continue to build. "I remain
confident in our ability to deliver full-year EPS within our stated range with
EPS growth rates accelerating in the second half of the year."
Conference Call and Webcast
Charlie Fote, chairman and chief executive officer; Kim Patmore, executive
vice president and chief financial officer; and David Banks, senior vice
president of Investor Relations will host a conference call today at 8:00 a.m.
EDT to discuss the company's first quarter results. The conference call can
be accessed by calling 888-831-9087 in the U.S. or 1-415-228-5043
internationally and passcode: FDC. A broadcast of the call will be available
on the company's Web site at http://www.firstdata.com. Interested parties are
encouraged to click on the webcast link 10-15 minutes prior to the start of
the conference call. The call will be open to the public.
A replay of the conference call and the webcast will be available one hour
after the call concludes through 5:00 p.m. EDT April 21, 2005. The replay of
the call is available at 866-420-4827 in the U.S. or 1-203-369-0789
internationally (no passcode required), and a replay of the webcast is
available at http://www.firstdata.com.
Please note: All statements made by First Data officers on this call are
the property of First Data and subject to copyright protection. Other than
the replay, First Data has not authorized, and disclaims responsibility for,
any recording, replay or distribution of any transcription of this call.
About First Data:
First Data Corp. (NYSE: FDC), with global headquarters in Denver, helps
power the global economy. As a leader in electronic commerce and payment
services, First Data serves approximately 4.1 million merchant locations,
1,400 card issuers and millions of consumers, making it easy, fast and secure
for people and businesses around the world to buy goods and services using
virtually any form of payment. With 32,000 employees worldwide, the company
provides credit, debit, private-label, smart and stored-value card issuing and
merchant transaction processing services; Internet commerce solutions; money
transfer services; money orders; and check guarantee and verification
services. The STAR(R) Network offers PIN-secured debit acceptance at
1.6 million ATM and retail locations. First Data also offers a variety of
payment services to businesses around the world including those in the United
Kingdom, Australia, Canada, Japan, Mexico, Spain, Panama, Brazil, China, the
Netherlands, Greece, the Middle East and Germany. Its Western Union and
Orlandi Valuta money transfer networks include approximately 225,000 agent
locations in more than 200 countries and territories. Visit http://www.firstdata.com
for more information.
Notice to Investors, Prospective Investors and the Investment Community
Cautionary Information Regarding Forward-Looking Statements
Statements in this press release regarding First Data Corporation's
business which are not historical facts, including the revenue and earnings
projections, are "forward-looking statements." All forward-looking statements
are inherently uncertain as they are based on various expectations and
assumptions concerning future events and they are subject to numerous known
and unknown risks and uncertainties which could cause actual events or results
to differ materially from those projected. Important factors upon which the
Company's forward-looking statements are premised include: (a) no
unanticipated developments that delay or negatively impact the integration of
Concord EFS, Inc. according to the Company's integration plans, including its
plans to integrate IT systems, eliminate duplicative overhead and costs, and
retain customers and critical employees; (b) continued growth at rates
approximating recent levels for card-based payment transactions, consumer
money transfer transactions and other product markets; (c) successful
conversions under service contracts with major clients; (d) renewal of
material contracts in the Company's business units consistent with past
experience; (e) timely, successful and cost-effective implementation of
processing systems to provide new products, improved functionality and
increased efficiencies; (f) successful and timely integration of significant
businesses and technologies acquired by the Company and realization of
anticipated synergies; (g) continuing development and maintenance of
appropriate business continuity plans for the Company's processing systems
based on the needs and risks relative to each such system; (h) absence of
further consolidation among client financial institutions or other client
groups which has a significant impact on FDC client relationships and no
material loss of business from significant customers of the Company; (i)
achieving planned revenue growth throughout the Company, including in the
merchant alliance program which involves several joint ventures not under the
sole control of the Company and each of which acts independently of the
others, and successful management of pricing pressures through cost
efficiencies and other cost management initiatives; (j) successfully managing
the credit and fraud risks in the Company's business units and the merchant
alliances, particularly in the context of the developing e-commerce markets;
(k) anticipation of and response to technological changes, particularly with
respect to e-commerce; (l) attracting and retaining qualified key employees;
(m) no unanticipated changes in laws, regulations, credit card association
rules or other industry standards affecting FDC's businesses which require
significant product redevelopment efforts, reduce the market for or value of
its products or render products obsolete; (n) continuation of the existing
interest rate environment so as to avoid increases in agent fees related to
Payment Services' products and increases in interest on the Company's
borrowings; (o) absence of significant changes in foreign exchange spreads on
retail money transfer transactions, particularly in high-volume corridors,
without a corresponding increase in volume or consumer fees; (p) continued
political stability in countries in which Western Union has material
operations; (q) implementation of Western Union agent agreements with
governmental entities according to schedule and no interruption of relations
with countries in which Western Union has or is implementing material agent
agreements; (r) no unanticipated developments relating to previously disclosed
lawsuits, investigations or similar matters; (s) no catastrophic events that
could impact the Company's or its major customer's operating facilities,
communication systems and technology or that has a material negative impact on
current economic conditions or levels of consumer spending; (t) no material
breach of security of any of our systems; and (u) successfully managing the
potential both for patent protection and patent liability in the context of
rapidly developing legal framework for expansive software patent protection.
FDC-1
FIRST DATA CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in millions, except per share amounts)
Three Months Ended March 31,
2005 2004 Change
Revenues:
Transaction and processing service
fees:
Payment Services $976.5 $853.1 14%
Merchant Services 682.7 574.9 19%
Check verification and guarantee
services 94.0 97.8 -4%
Card Issuing Services 409.8 379.0 8%
All other 32.2 39.2 -18%
Investment income, net (12.6) 49.9 NM
Professional services 21.8 22.6 -4%
Software licensing and maintenance 13.1 15.7 -17%
Product sales and other 102.2 76.2 34%
Reimbursable postage and other 160.2 150.0 7%
2,479.9 2,258.4 10%
Expenses:
Cost of services 1,351.6 1,183.4 14%
Cost of products sold 59.6 46.9 27%
Selling, general and administrative 390.5 356.8 9%
Reimbursable postage and other 160.2 150.0 7%
Other operating expenses:
Restructuring, net -- 32.2 NM
Impairments (1.0) 5.7 NM
Litigation and regulatory
settlements 0.1 -- NM
Other -- 25.0 NM
1,961.0 1,800.0 9%
Operating profit 518.9 458.4 13%
Other income (expense):
Interest income 4.9 5.4 -9%
Interest expense (48.1) (31.1) 55%
Investment gains and (losses) 22.8 (1.8) NM
Divestitures, net 6.3 265.1 NM
(14.1) 237.6 NM
Income before income taxes,
minority interest, equity earnings
in affiliates and discontinued
operations 504.8 696.0 -27%
Income taxes 143.4 218.6 -34%
Minority interest (30.7) (28.3) 8%
Equity earnings in affiliates 43.8 30.8 42%
Income from continuing operations 374.5 479.9 -22%
Income from discontinued operations,
net of taxes of $0 and $2.7,
respectively (a) -- 3.6 NM
Net income $374.5 $483.5 -23%
Earnings per share from continuing
operations:
Basic $0.47 $0.61 -23%
Diluted $0.47 $0.61 -23%
Earnings per share:
Basic $0.47 $0.62 -24%
Diluted $0.47 $0.61 -23%
Weighted-average shares
outstanding:
Basic 793.6 780.8 2%
Diluted 803.9 792.7 1%
Shares outstanding at end of period 778.6 872.5 -11%
(See accompanying notes)
FIRST DATA CORPORATION
SUMMARY SEGMENT DATA
(Unaudited)
(in millions)
Three Months Ended March 31,
2005 2004 Change
Revenues:
Payment Services $1,023.5 $958.2 7%
Merchant Services 935.0 744.1 26%
Card Issuing Services 603.2 558.0 8%
Subtotal segment revenues 2,561.7 2,260.3 13%
All Other and Corporate 61.7 64.6 -4%
2,623.4 2,324.9 13%
Adjustments for items included in
segment and All Other
and Corporate revenues: (b)
Equity earnings in affiliates (c) (52.7) (38.7) 36%
Interest income (4.9) (5.4) -9%
Divested business (d) -- 58.1 NM
Eliminations (e) (85.9) (80.5) NM
Consolidated revenue $2,479.9 $2,258.4 10%
Operating profit: (f)
Payment Services $314.3 $328.6 -4%
Merchant Services 185.2 153.8 20%
Card Issuing Services 108.8 97.9 11%
Subtotal segment operating
profit 608.3 580.3 5%
All Other and Corporate (15.7) (18.1) 13%
592.6 562.2 5%
Adjustments for items included
in segment and All Other and
Corporate operating profit: (b)
Equity earnings in affiliates (43.8) (30.8) 42%
Divested business (d) -- 11.2 NM
Minority interest from segment
operations (g) 30.7 34.4 -11%
Eliminations (e) (56.6) (50.3) NM
Interest expense (48.1) (31.1) 55%
Items excluded from segment
operations (h) 30.0 200.4 NM
Income before income taxes,
minority interest, equity
earnings in affiliates and
discontinued operations $504.8 $696.0 -27%
Depreciation & Amortization:
Payment Services $28.9 $24.8 17%
Merchant Services 94.2 70.2 34%
Card Issuing Services 65.5 57.8 13%
All Other and Corporate 6.8 7.1 -4%
Divested business -- 2.7 NM
Consolidated depreciation &
amortization $195.4 $162.6 20%
(See accompanying notes)
FIRST DATA CORPORATION
NOTES TO FINANCIAL SCHEDULES
(Unaudited)
(a) Discontinued operations consist of NYCE.
(b) Reconciles the total segment and All Other and Corporate revenue
to consolidated revenue or total segment and All Other and
Corporate operating profit to income before income taxes,
minority interest, equity earnings in affiliates and
discontinued operations as reported on the Consolidated
Statements of Income.
(c) Excludes equity losses that were recorded in expense of
$0.6 million and $0.4 million for the three months ended March
31, 2005 and 2004, respectively, and the amortization related to
the excess of the investment balance over the Company's
proportionate share of the investee's net book value for 2005
and 2004.
(d) The Company sold its 67% owned subsidiary, Global Cash Access,
("GCA") in March 2004. Revenue and operating profit associated
with GCA are excluded from segment results.
(e) Represents elimination of adjustment to record Payment Services
segment revenues and operating profit on a pretax equivalent
basis and elimination of intersegment revenue.
(f) Segment and All Other and Corporate operating profit includes
interest income, minority interest from segment operations,
equity earnings in affiliates net of related amortization
expense and the allocation of corporate overhead. Segment and
All Other and Corporate operating profit excludes items
discussed in note (h) below and interest expense.
(g) Minority interest from segment operations excludes minority
interest attributable to items excluded from segment operations
discussed in note (h) below.
(h) Items, other than interest expense, excluded from segment
operations consist of the following:
(in millions) Three months ended
March 31, 2005
Restructuring, net --
Impairments $1.0 A gain was recorded for the
three months due to the
subsequent sale of assets
previously impaired.
Litigation and regulatory
settlements (0.1) Charges recorded during the
three months relate to a
regulatory settlement of
$1.5 million in the Payment
Services segment offset by the
reversal of an unutilized
reserve established in 2000
for the settlement of a
lawsuit also in the Payment
Services segment.
Investment gains and
(losses) 22.8 A gain of $21.4 million on the
sale of Checkfree Corporation
common stock was recorded for
the three months as well as
the sale of other strategic
investments.
Divestitures, net 6.3 A gain on the sale of a small
business was recorded and
certain excess divestiture
accruals were reversed during
the three months due to the
expiration of certain
contingencies.
30.0
Minority interest --
$30.0
(in millions) Three months ended
March 31, 2004
Restructuring, net $(32.2) Restructuring charges of
$32.3 million were recorded in
the three months, offset with
reversals of excess
restructuring accruals of
$0.1 million.
Impairments (5.7) Impairment charges were
recorded for the three months
related to software and
goodwill as a result of the
eONE Global business
restructuring.
Investment gains and
(losses) (1.8) Net investment losses were
recorded in the three months
related to e-commerce
businesses and strategic
investments.
Divestitures, net 265.1 Divestitures related to the
gain on the sale of GCA and
the release of $1.3 million
divestiture accruals related
to the expiration of certain
contingencies.
Other (25.0) Other related to adjustments
for Telecheck accounting
entries that originated
primarily during 2002 and
2003.
200.4
Minority interest 6.1
$206.5
NM = Not meaningful.
FIRST DATA CORPORATION
FINANCIAL TRANSACTION PROCESSING
KEY INDICATORS
(Unaudited)
(in millions)
At March 31, 2005 2004 Change
Card accounts on file
Domestic cards 409.3 365.4 12%
International cards 31.4 32.9 -5%
Total 440.7 398.3 11%
For the Three Months Ended
March 31:
Payment Services transactions:
Consumer-to-consumer money
transfer (a) 25.344 21.566 18%
Consumer-to-business (b) 39.591 36.513 8%
North America merchant
transactions (c) 5,275.7 3,825.8 38%
North America issuer
transactions (d) 1,839.5 1,164.3 58%
(a) Consumer-to-consumer money transfer transactions include North
America and international consumer money transfer services.
(b) Consumer-to-business transactions include Quick Collect,
EasyPay, PhonePay, Paymap's Just-in-Time and Equity Accelerator
services, and E Commerce Group's Speedpay transactions directly
processed by E Commerce Group.
(c) North America merchant transactions include acquired VISA and
MasterCard credit and signature debit, PIN-debit, electronic
benefits transactions ("EBT"), and processed-only or gateway
customer transactions at the point of sale ("POS"). North
America merchant transactions also include acquired ATM
transactions, gateway transactions at ATMs, and STAR PIN-debit
POS transactions received from other acquirers.
(d) North America issuer transactions include VISA and MasterCard
signature debit, STAR ATM, STAR PIN-debit POS, and ATM and
PIN-debit POS gateway transactions.
FIRST DATA CORPORATION
SUPPLEMENTAL METRICS
(Unaudited)
At March 31, 2005
Card accounts on file (in millions):
Bankcard 112
Retail 237
Debit 92
Total 441
For the Three Months Ended March 31:
Money transfer and bill payment:
Revenue growth 13%
Operating profit growth 15%
Money transfer:
U.S. C2C same store sales transaction
growth (a) 12%
C2C International transaction growth 23%
C2C International revenue growth 19%
Mexico transaction growth 17%
Mexico revenue growth 15%
North America merchant transactions:
PIN debit POS and network transaction growth 77%
Consolidated financial metrics (in millions):
Capital expenditures $106
Dividends $16
(a) Includes U.S. outbound
SOURCE First Data Corp.
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Related links:
http://www.firstdata.com
CONTACT:
Investor Relations, David Banks,
+1-303-967-8057, david.banks@firstdata.com, or Media Relations,
Nancy Etheredge, +1-402-222-6214, nancy.etheredge@firstdata.com,
both of First Data Corp.
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