Subsidiary Guarantors of Long-Term Debt

12 Months Ended

Dec. 31, 2012

Subsidiary Guarantors of Long-Term Debt

10. Subsidiary Guarantors of Long-Term Debt

Certain of the Company’s 100% owned domestic subsidiaries (“Guarantor Subsidiaries”) jointly and severally and fully and unconditionally guarantee the Company’s indebtedness under its revolving credit facility and senior notes. The following condensed consolidating financial information is presented on the equity method and reflects summarized financial information for: (a) the Company; (b) the Guarantor Subsidiaries on a combined basis; and (c) the Company’s non-guarantor subsidiaries on a combined basis.

CONDENSED CONSOLIDATING STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2012

(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Processing and services	$	-		$	2,642		$	1,226		$	(159	)	$	3,709
Product		-			717			114			(58	)		773
Total revenue		-			3,359			1,340			(217	)		4,482
Expenses:
Cost of processing and services		-			1,418			710			(159	)		1,969
Cost of product		-			615			71			(58	)		628
Selling, general and administrative		104			504			221			-			829
Total expenses		104			2,537			1,002			(217	)		3,426
Operating income (loss)		(104	)		822			338			-			1,056
Interest expense, net		(104	)		(57	)		(6	)		-			(167	)
Income (loss) from continuing operations before income taxes and income from investment in unconsolidated affiliate		(208	)		765			332			-			889
Income tax (provision) benefit		103			(283	)		(123	)		-			(303	)
Income from investment in unconsolidated affiliate		-			11			-			-			11
Equity in earnings of consolidated affiliates		702			-			-			(702	)		-
Income from continuing operations		597			493			209			(702	)		597
Income from discontinued operations, net of income taxes		14			-			-			-			14
Net income	$	611		$	493		$	209		$	(702	)	$	611
Comprehensive income	$	629		$	493		$	213		$	(706	)	$	629

CONDENSED CONSOLIDATING STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2011

(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Processing and services	$	-		$	2,582		$	1,094		$	(133	)	$	3,543
Product		-			709			147			(62	)		794
Total revenue		-			3,291			1,241			(195	)		4,337
Expenses:
Cost of processing and services		-			1,427			647			(133	)		1,941
Cost of product		-			572			91			(62	)		601
Selling, general and administrative		95			494			210			-			799
Total expenses		95			2,493			948			(195	)		3,341
Operating income (loss)		(95	)		798			293			-			996
Interest expense, net		(140	)		(33	)		(9	)		-			(182	)
Loss on early debt extinguishment		(85	)		-			-			-			(85	)
Income (loss) from continuing operations before income taxes and income from investment in unconsolidated affiliate		(320	)		765			284			-			729
Income tax (provision) benefit		133			(284	)		(105	)		-			(256	)
Income from investment in unconsolidated affiliate		-			18			-			-			18
Equity in earnings of consolidated affiliates		678			-			-			(678	)		-
Income from continuing operations		491			499			179			(678	)		491
(Loss) income from discontinued operations, net of income taxes		(19	)		-			3			(3	)		(19	)
Net income	$	472		$	499		$	182		$	(681	)	$	472
Comprehensive income	$	444		$	499		$	174		$	(673	)	$	444

CONDENSED CONSOLIDATING STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2010

(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Processing and services	$	-		$	2,522		$	990		$	(97	)	$	3,415
Product		-			617			136			(35	)		718
Total revenue		-			3,139			1,126			(132	)		4,133
Expenses:
Cost of processing and services		9			1,369			574			(99	)		1,853
Cost of product		1			473			92			(33	)		533
Selling, general and administrative		99			450			191			-			740
Total expenses		109			2,292			857			(132	)		3,126
Operating income (loss)		(109	)		847			269			-			1,007
Interest expense, net		(78	)		(100	)		(10	)		-			(188	)
Loss on early debt extinguishment		(26	)		-			-			-			(26	)
Income (loss) from continuing operations before income taxes and income from investment in unconsolidated affiliate		(213	)		747			259			-			793
Income tax (provision) benefit		78			(281	)		(98	)		-			(301	)
Income from investment in unconsolidated affiliate		-			14			-			-			14
Equity in earnings of consolidated affiliates		641			-			-			(641	)		-
Income from continuing operations		506			480			161			(641	)		506
Loss from discontinued operations, net of income taxes		(10	)		-			(1	)		1			(10	)
Net income	$	496		$	480		$	160		$	(640	)	$	496
Comprehensive income	$	515		$	480		$	163		$	(643	)	$	515

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2012

(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	85	$	66		$	207		$	-		$	358
Trade accounts receivable, net		-		405			258			-			663
Prepaid expenses and other current assets		45		186			160			-			391
Total current assets		130		657			625			-			1,412
Investments in consolidated affiliates		8,498		-			-			(8,498	)		-
Intangible assets, net		22		1,495			243			-			1,760
Goodwill		-		3,709			1,010			-			4,719
Other long-term assets		55		446			105			-			606
Total assets	$	8,705	$	6,307		$	1,983		$	(8,498	)	$	8,497
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	73	$	420		$	231		$	-		$	724
Current maturities of long-term debt		-		2			-			-			2
Deferred revenue		-		213			166			-			379
Total current liabilities		73		635			397			-			1,105
Long-term debt		3,223		4			1			-			3,228
Due to (from) consolidated affiliates		1,295		(988	)		(307	)		-			-
Other long-term liabilities		697		22			28			-			747
Total liabilities		5,288		(327	)		119			-			5,080
Total shareholders’ equity		3,417		6,634			1,864			(8,498	)		3,417
Total liabilities and shareholders’ equity	$	8,705	$	6,307		$	1,983		$	(8,498	)	$	8,497

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2011

(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	73	$	71		$	193		$	-		$	337
Trade accounts receivable, net		-		402			264			-			666
Prepaid expenses and other current assets		25		167			161			-			353
Total current assets		98		640			618			-			1,356
Investments in consolidated affiliates		7,864		-			-			(7,864	)		-
Intangible assets, net		15		1,597			269			-			1,881
Goodwill		-		3,709			1,011			-			4,720
Other long-term assets		28		452			111			-			591
Total assets	$	8,005	$	6,398		$	2,009		$	(7,864	)	$	8,548
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	222	$	404		$	210		$	-		$	836
Current maturities of long-term debt		175		4			-			-			179
Deferred revenue		-		208			161			-			369
Total current liabilities		397		616			371			-			1,384
Long-term debt		3,171		2			43			-			3,216
Due to (from) consolidated affiliates		524		(344	)		(180	)		-			-
Other long-term liabilities		655		12			23			-			690
Total liabilities		4,747		286			257			-			5,290
Total shareholders’ equity		3,258		6,112			1,752			(7,864	)		3,258
Total liabilities and shareholders’ equity	$	8,005	$	6,398		$	2,009		$	(7,864	)	$	8,548

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2012

(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities from continuing operations	$	(168	)	$	731		$	272		$	-		$	835
Cash flows from investing activities:
Capital expenditures, including capitalization of software costs		(4	)		(144	)		(47	)		-			(195	)
Net proceeds from sale of investments		-			2			26			-			28
Other investing activities		815			32			(1	)		(817	)		29
Net cash (used in) provided by investing activities from continuing operations		811			(110	)		(22	)		(817	)		(138	)
Cash flows from financing activities:
Proceeds from long-term debt		1,469			-			-			-			1,469
Repayments of long-term debt, including premium and costs		(1,592	)		(6	)		(44	)		-			(1,642	)
Purchases of treasury stock		(634	)		-			-			-			(634	)
Other financing activities		96			(620	)		(192	)		817			101
Net cash used in financing activities from continuing operations		(661	)		(626	)		(236	)		817			(706	)
Net change in cash and cash equivalents from continuing operations		(18	)		(5	)		14			-			(9	)
Net cash flows from discontinued operations		30			-			-			-			30
Beginning balance		73			71			193			-			337
Ending balance	$	85		$	66		$	207		$	-		$	358

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2011

(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities from continuing operations	$	(10	)	$	737		$	226		$	-		$	953
Cash flows from investing activities:
Capital expenditures, including capitalization of software costs		(13	)		(144	)		(35	)		-			(192	)
Payments for acquisitions of businesses, net of cash acquired		-			(473	)		(38	)		-			(511	)
Net proceeds from sale (purchases) of investments		-			3			(7	)		-			(4	)
Other investing activities		311			42			-			(311	)		42
Net cash (used in) provided by investing activities from continuing operations		298			(572	)		(80	)		(311	)		(665	)
Cash flows from financing activities:
Proceeds from long-term debt		1,143			-			46			-			1,189
Repayments of long-term debt, including premium and costs		(1,223	)		(3	)		-			-			(1,226	)
Purchases of treasury stock		(533	)		-			-			-			(533	)
Other financing activities		71			(159	)		(151	)		311			72
Net cash used in financing activities from continuing operations		(542	)		(162	)		(105	)		311			(498	)
Net change in cash and cash equivalents from continuing operations		(254	)		3			41			-			(210	)
Net cash flows to discontinued operations		(16	)		-			-			-			(16	)
Beginning balance		343			68			152			-			563
Ending balance	$	73		$	71		$	193		$	-		$	337

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2010

(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities from continuing operations	$	(4	)	$	749		$	213		$	-		$	958
Cash flows from investing activities:
Capital expenditures, including capitalization of software costs		(6	)		(135	)		(34	)		-			(175	)
Payments for acquisitions of businesses, net of cash acquired		(13	)		-			4			-			(9	)
Net proceeds from sale of investments		-			-			14			-			14
Other investing activities		952			22			6			(926	)		54
Net cash (used in) provided by investing activities from continuing operations		933			(113	)		(10	)		(926	)		(116	)
Cash flows from financing activities:
Proceeds from long-term debt		748			-			-			-			748
Repayments of long-term debt, including premium and costs		(1,056	)		(4	)		-			-			(1,060	)
Purchases of treasury stock		(413	)		-			-			-			(413	)
Other financing activities		51			(734	)		(189	)		926			54
Net cash used in financing activities from continuing operations		(670	)		(738	)		(189	)		926			(671	)
Net change in cash and cash equivalents from continuing operations		259			(102	)		14			-			171
Net cash flows from discontinued operations		29			-			-			-			29
Beginning balance		55			170			138			-			363
Ending balance	$	343		$	68		$	152		$	-		$	563