10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to

Commission file number 001-11073

FIRST DATA CORPORATION

(Exact name of registrant as specified in its charter)

www.firstdata.com

DELAWARE	47-0731996
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
225 LIBERTY STREET, 29th FLOOR, NEW YORK, NEW YORK 10281
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (800) 735-3362

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ý  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	o	Smaller reporting company	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date

Class	Outstanding at March 31, 2018
Class A Common Stock, $0.01 par value per share	485,170,696 shares
Class B Common Stock, $0.01 par value per share	443,844,872 shares

INDEX

		PAGE NUMBER
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017	4
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2018 and 2017	5
	Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017	6
	Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017	7
	Consolidated Statements of Equity for the three months ended March 31, 2018 and 2017	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44

Unless otherwise indicated or the context otherwise requires, financial data in this Form 10-Q reflects the consolidated business and operations of First Data Corporation and its consolidated subsidiaries. Unless the context otherwise requires, all references herein to “First Data,” “FDC,” the “Company,” “we,” “our,” or “us” refer to First Data Corporation and its consolidated subsidiaries.

Amounts in this Form 10-Q and the unaudited consolidated financial statements included in this Form 10-Q are presented in U.S. Dollars rounded to the nearest million, unless otherwise noted.

2

Forward-Looking Statements

Certain matters we discuss in this Form 10-Q and in other public statements may constitute forward-looking statements. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions which concern our strategy, plans, projections or intentions. Examples of forward-looking statements include, but are not limited to, all statements we make relating to revenue, earnings before net interest expense, income taxes, depreciation, and amortization (EBITDA), earnings, margins, growth rates, and other financial results for future periods. By their nature, forward-looking statements speak only as of the date they are made; are not statements of historical fact or guarantees of future performance; and are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Actual results could differ materially and adversely from our forward-looking statements due to a variety of factors, including the following: (1) adverse impacts from global economic, political, and other conditions affecting trends in consumer, business, and government spending; (2) our ability to anticipate and respond to changing industry trends, including technological changes and increasing competition; (3) our ability to successfully renew existing client contracts on favorable terms and obtain new clients; (4) our ability to prevent a material breach of security of any of our systems; (5) our ability to implement and improve processing systems to provide new products, improve functionality, and increase efficiencies; (6) the successful management of our merchant alliance program which involves several alliances not under our sole control and each of which acts independently of the others; (7) our successful management of credit and fraud risks in our business units and merchant alliances, particularly in the context of eCommerce and mobile markets; (8) consolidation among financial institution clients or other client groups that impacts our client relationships; (9) our ability to use our net operating losses without restriction to offset income for US tax purposes; (10) our ability to improve our profitability and maintain flexibility in our capital resources through the implementation of cost savings initiatives; (11) the acquisition or disposition of a material business or assets; (12) our ability to successfully value and integrate acquired businesses; (13) our high degree of leverage; (14) adverse impacts from currency exchange rates or currency controls imposed by any government or otherwise; (15) changes in the interest rate environment that increase interest on our borrowings or the interest rate at which we can refinance our borrowings; (16) the impact of new or changes in current laws, regulations, credit card association rules, or other industry standards; and (17) new lawsuits, investigations, or proceedings, or changes to our potential exposure in connection with pending lawsuits, investigations or proceedings, and various other factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2017, including but not limited to, Item 1 - Business, Item 1A - Risk Factors, and Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations. Except as required by law, we do not intend to revise or update any forward-looking statement as a result of new information, future developments or otherwise.

3

PART I. FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

FIRST DATA CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended   March 31,
(in millions, except per share amounts)	2018			2017
Revenues:
Revenues excluding reimbursable items(a)	$	2,084		$	1,882
Reimbursable items	198			919
Total revenues	2,282			2,801
Expenses:
Cost of revenues (exclusive of items shown below)	779			781
Selling, general, and administrative	647			525
Depreciation and amortization	250			228
Other operating expenses	60			22
Total expenses excluding reimbursable items	1,736			1,556
Reimbursable items	198			919
Total expenses	1,934			2,475
Operating profit	348			326
Interest expense, net	(233		)	(233		)
Loss on debt extinguishment	—			(56		)
Other expense	(3		)	(1		)
Income before income taxes and equity earnings in affiliates	112			36
Income tax expense	27			12
Equity earnings in affiliates	49			55
Net income	134			79
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	33			43
Net income attributable to First Data Corporation	$	101		$	36
Net income attributable to First Data Corporation per share:
Basic	$	0.11		$	0.04
Diluted	$	0.11		$	0.04
Weighted-average common shares outstanding:
Basic	923			910
Diluted	946			931

(a) Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of $51 million and $52 million for the three months ended March 31, 2018 and 2017, respectively.

The 2018 results include the impact of adopting ASC 606 and ASC 340-40 (collectively, the New Revenue Standard). Refer to note 1 "Basis of Presentation and Summary of Significant Accounting Policies" to the Company's unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q for more information.

See notes to unaudited consolidated financial statements.

4

FIRST DATA CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three months ended   March 31,
(in millions)	2018		2017
Net income	$	134	$	79
Other comprehensive income, net of tax:
Foreign currency translation adjustment	90		90
Derivative instruments	9		1
Total other comprehensive income, net of tax	99		91
Comprehensive income	233		170
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	37		46
Comprehensive income attributable to First Data Corporation	$	196	$	124

See notes to unaudited consolidated financial statements.

5

FIRST DATA CORPORATION

CONSOLIDATED BALANCE SHEETS

 (Unaudited)

(in millions, except par value)	As of March 31, 2018			As of December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	586		$	498
Accounts receivable, net of allowance for doubtful accounts of $48 and $45	2,062			2,176
Settlement assets	17,547			20,363
Prepaid expenses and other current assets	295			335
Total current assets	20,490			23,372
Property and equipment, net of accumulated depreciation of $1,617 and $1,588	951			951
Goodwill	17,774			17,710
Customer relationships, net of accumulated amortization of $5,378 and $5,940	2,096			2,184
Other intangibles, net of accumulated amortization of $2,250 and $2,665	1,936			1,935
Investment in affiliates	1,067			1,054
Other long-term assets	1,101			1,063
Total assets	$	45,415		$	48,269
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,578		$	1,659
Short-term and current portion of long-term borrowings	1,104			1,271
Settlement obligations	17,547			20,363
Total current liabilities	20,229			23,293
Long-term borrowings	17,908			17,927
Deferred tax liabilities	83			77
Other long-term liabilities	905			886
Total liabilities	39,125			42,183
Commitments and contingencies (See note 12)
Redeemable noncontrolling interest	78			72
First Data Corporation stockholders' equity:
Class A Common stock, $0.01 par value; 1,600 shares authorized as of March 31, 2018 and December 31, 2017, respectively; 498 shares and 492 shares issued as of March 31, 2018 and December 31, 2017, respectively; and 485 shares and 482 shares outstanding as of March 31, 2018 and December 31, 2017, respectively	5			5
Class B Common stock, $0.01 par value; 523 shares authorized as of March 31, 2018 and December 31, 2017, respectively; 444 shares and 443 shares issued and outstanding as of March 31, 2018 and December 31, 2017	4			4
Preferred stock, $0.01 par value; 100 shares authorized as of March 31, 2018 and December 31, 2017, respectively; no shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively	—			—
Class A Treasury stock, at cost, 14 shares and 11 shares as of March 31, 2018 and December 31, 2017, respectively	(202		)	(149		)
Additional paid-in capital	13,578			13,495
Accumulated loss	(8,971		)	(9,059		)
Accumulated other comprehensive loss	(1,049		)	(1,144		)
Total First Data Corporation stockholders' equity	3,365			3,152
Noncontrolling interests	2,847			2,862
Total equity	6,212			6,014
Total liabilities and equity	$	45,415		$	48,269

 See notes to unaudited consolidated financial statements.

6

FIRST DATA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months ended March 31,
(in millions)	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	134		$	79
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)	271			258
Deferred income taxes	1			15
Charges related to other operating expenses and other income	63			23
Loss on debt extinguishment	—			56
Stock-based compensation expense	74			65
Other non-cash and non-operating items, net	3			9
Increase (decrease) in cash, excluding the effects of acquisitions and dispositions, resulting from changes in:
Accounts receivable, current and long-term	136			136
Other assets, current and long-term	(14		)	(26		)
Accounts payable and other liabilities, current and long-term	(128		)	(170		)
Income tax accounts	(6		)	(24		)
Net cash provided by operating activities	534			421
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment	(70		)	(58		)
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs	(69		)	(59		)
Acquisitions, net of cash acquired	(17		)	—
Purchase of investments	(12		)	—
Proceeds from the maturity of net investment hedges	26			—
Other investing activities, net	(1		)	1
Net cash used in investing activities	(143		)	(116		)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net	(153		)	119
Proceeds from issuance of long-term debt	—			1,300
Payment of call premiums and debt issuance cost	—			(57		)
Principal payments on long-term debt	(53		)	(1,456		)
Payment of taxes related to settlement of equity awards	(56		)	(60		)
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest	(52		)	(43		)
Other financing activities, net	10			10
Net cash used in financing activities	(304		)	(187		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	3			—
Change in cash, cash equivalents and restricted cash	90			118
Cash, cash equivalents and restricted cash at beginning of period	525			414
Cash, cash equivalents and restricted cash at end of period	$	615		$	532
NON-CASH TRANSACTIONS
Capital leases, net of trade-ins	$	15		$	54
Other financing arrangements	$	—		$	100

See notes to unaudited consolidated financial statements.

7

FIRST DATA CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

	First Data Corporation Stockholders
	Common Stock						Treasury Stock				Additional Paid-In Capital			Accumulated Loss			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total
(in millions)	Class A			Class B			Class A
	Shares	Amount		Shares	Amount		Shares	Amount
Balance, December 31, 2017	482	$	5	443	$	4	11	$	(149	)	$	13,495		$	(9,059	)	$	(1,144	)	$	2,862		$	6,014
Adoption of New Revenue Standard	—	—		—	—		—	—			—			(13		)	—			—			(13		)
Dividends and distributions paid to noncontrolling interests(a)	—	—		—	—		—	—			—			—			—			(44		)	(44		)
Net income(b)	—	—		—	—		—	—			—			101			—			25			126
Other comprehensive income	—	—		—	—		—	—			—			—			95			4			99
Adjustment to redemption value of redeemable noncontrolling interest	—	—		—	—		—	—			(6		)	—			—			—			(6		)
Stock compensation expense	—	—		—	—		—	—			74			—			—			—			74
Stock activity under stock compensation plans and other	3	—		1	—		3	(53		)	15			—			—			—			(38		)
Balance, March 31, 2018	485	$	5	444	$	4	14	$	(202	)	$	13,578		$	(8,971	)	$	(1,049	)	$	2,847		$	6,212

	First Data Corporation Stockholders
	Common Stock						Treasury Stock				Additional Paid-In Capital		Accumulated Loss			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total
(in millions)	Class A			Class B			Class A
	Shares	Amount		Shares	Amount		Shares	Amount
Balance, December 31, 2016	368	$	4	544	$	5	5	$	(61	)	$	13,210	$	(10,524	)	$	(1,414	)	$	2,911		$	4,131
Dividends and distributions paid to noncontrolling interests(a)	—	—		—	—		—	—			—		—			—			(35		)	(35		)
Net income (b)	—	—		—	—		—	—			—		36			—			35			71
Other comprehensive income	—	—		—	—		—	—			—		—			88			3			91
Adjustment to redemption value of redeemable noncontrolling interest	—	—		—	—		—	—			1		—			—			—			1
Stock compensation expense	—	—		—	—		—	—			65		—			—			—			65
Stock activity under stock compensation plans and other	6	—		—	—		4	(61		)	14		—			—			—			(47		)
Balance, March 31, 2017	374	$	4	544	$	5	9	$	(122	)	$	13,290	$	(10,488	)	$	(1,326	)	$	2,914		$	4,277

(a) The total distribution presented in the unaudited consolidated statements of equity for the three months ended March 31, 2018 and 2017 excludes $8 million and $8 million, respectively, in distributions paid to redeemable noncontrolling interest not included in equity.

(b) The total net income presented in the unaudited consolidated statements of equity for the three months ended March 31, 2018 and 2017 is $8 million and $8 million different, 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.

See notes to unaudited consolidated financial statements.

8

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: 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 processing; prepaid and payroll services; check verification; settlement and guarantee services; statement printing and remittance 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, 2017. Significant accounting policies disclosed herein have not changed, except for those disclosed below in the recently adopted section.

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, 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 “Revenues excluding reimbursable items.” 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 three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Amortization of initial payments for new contracts	$	13	$	19
Amortization related to equity method investments	8		11

Treasury Stock

In connection with the vesting of restricted stock awards or exercise of stock options, shares of Class A and Class B common stock are delivered to the Company by employees to satisfy tax withholding obligations. The Company accounts for treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. Because Class B common stock converts automatically to Class A common stock upon any transfer, whether or not for value, except for certain transactions described in the Company's amended and restated certificate of incorporation, all shares of treasury stock reside as Class A.

9

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Reclassifications

During 2017, the Company revised its financial statements to reflect immaterial adjustments to its accounting for deferred income taxes. In the periods prior to 2015, the Company had incorrectly recorded deferred income tax assets on foreign currency translation adjustments included in other comprehensive income (loss) which the Company provided a full valuation. The adjustment resulted in a decrease of $88 million to the previously reported balances of "Accumulated Loss" and an offsetting increase to "Accumulated Other Comprehensive Income (Loss)" at December 31, 2014, and a reduction to deferred tax assets and related valuation allowance of $124 million at December 31, 2016.

Certain amounts for prior years have been reclassified to conform with the current year financial statement presentation.

New Accounting Guidance

Recently Adopted Accounting Guidance

Stock-based Compensation

In May 2017, the FASB issued guidance that clarifies when changes to terms or conditions of a stock-based payment award must be accounted for as a modification. Under the new guidance, companies only apply modification accounting guidance if the fair value, vesting conditions or classification of an award changes. The guidance was adopted prospectively to awards modified on or after the adoption date. The Company adopted the new guidance on January 1, 2018. The impact of adoption on the Company's consolidated financial statements is dependent on future changes to share-based compensation awards.

Statement of Cash Flows

In November 2016, the FASB issued guidance that changes the presentation of restricted cash and restricted cash equivalents on the statement of cash flows. Under the new guidance, companies are 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 are no longer reported as cash flow activities on the statement of cash flows. The guidance was applied using a retrospective transition method to each period presented. The Company adopted the new guidance on January 1, 2018 with no material impact to its statement of cash flows. For the three month ended March 31, 2018 and 2017, the Company held $29 million in restricted cash in both periods presented within "Other long-term assets" in the unaudited consolidated balance sheets.

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. The Company adopted the new guidance on January 1, 2018, using a retrospective approach. The impact on the Company's financial statements for the three months ended March 31, 2018 and 2017 was an increase in operating expense and a decrease in "Interest expense, net" of $2 million and $1 million, respectively.

Derivatives and Hedging

In August 2017, the FASB issued guidance to simplify the current application of hedge accounting. This standard is intended to better align a company’s risk management strategies and financial reporting for hedging relationships through changes to both designation and measurement for qualifying hedging relationships and more accurately presenting the economic effects in the financial statements. In addition, the new guidance establishes flexibility in the requirements to qualify and maintain hedge accounting. The Company adopted the new guidance on January 1, 2018 with no material impact to the Company’s consolidated financial statements.

10

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Revenue Recognition

In May 2014, the FASB issued ASC 606 and ASC 340-40 (collectively, the New Revenue Standard) 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 New Revenue Standard, including clarification on accounting for licenses, identifying performance obligations, and principal versus agent consideration (reporting revenue gross vs. net).

The Company adopted the New Revenue Standard using a modified retrospective basis on January 1, 2018 to all contracts that were not completed. The adoption resulted in a decrease to retained earnings of $13 million for the cumulative effect of applying the New Revenue Standard. This impact was principally driven by certain software arrangements being recognized sooner; changes related to costs to obtain customers, including the related amortization period; and the release of deferred revenue associated with Clover terminals that had previously lacked standalone value. Under the modified retrospective basis, the Company did not restate its comparative consolidated financial statements for these effects.

The following tables present the impact of adopting the New Revenue Standard on the Company’s unaudited consolidated financial statements for the three months ended March 31, 2018:

	Three months ended March 31, 2018
(in millions, except per share amounts)	As Reported			Adjustments			Balances Without Adoption of ASC 606
Revenues:
Revenues excluding reimbursable items	$	2,084		$	(43	)	$	2,041
Reimbursable items	198			818			1,016
Total revenues	2,282			775			3,057
Expenses:
Total expenses excluding reimbursable items	1,736			(34		)	1,702
Reimbursable items	198			818			1,016
Total expenses	1,934			784			2,718
Operating profit	348			(9		)	339
Interest expense, net	(233		)	—			(233		)
Other expense	(3		)	—			(3		)
Income before income taxes and equity earnings in affiliates	112			(9		)	103
Income tax expense (benefit)	27			(2		)	25
Equity earnings in affiliates	49			—			49
Net income	134			(7		)	127
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	33			—			33
Net income attributable to First Data Corporation	$	101		$	(7	)	$	94
Net income attributable to First Data Corporation per share:
Basic	$	0.11		$	(0.01	)	$	0.10
Diluted	$	0.11		$	(0.01	)	$	0.10

The adoption of the New Revenue Standard had an immaterial impact on the Company’s unaudited consolidated balance sheet and unaudited consolidated statement of cash flows as of and for the three months ended March 31, 2018. Refer to note 3 "Revenue Recognition" to the Company's unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q for more information.

11

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Recently Issued Accounting Guidance

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.

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.

12

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2: Borrowings

(in millions)	As of March 31, 2018			As of December 31, 2017
Short-term borrowings:
Foreign lines of credit and other arrangements	$	164		$	205
Senior Secured Revolving Credit Facility June 2, 2020 at LIBOR plus 3.50% or a base rate plus 2.50%	195			272
Receivable securitized loan at LIBOR plus 1.5% 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%	563			600
Unamortized deferred financing costs(a)	(3		)	(3		)
Total short-term borrowings	919			1,074
Current portion of long-term borrowings:
Senior secured term loan facility due June 2020 at LIBOR plus 1.75% or a base rate plus 0.75%	78			78
Other arrangements and capital lease obligations	107			119
Total current portion of long-term borrowings	185			197
Total short-term and current portion of long-term borrowings	1,104			1,271
Long-term borrowings:
Senior secured term loan facility due April 2024 at LIBOR plus 2.25% or a base rate plus 1.25%	3,892			3,892
Senior secured term loan facility due July 2022 at LIBOR plus 2.25% or a base rate plus 1.25%	3,758			3,758
Senior secured term loan facility due June 2020 at LIBOR plus 1.75% or a base rate plus 0.75%	1,384			1,404
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)	(117		)	(123		)
Other arrangements and capital lease obligations	281			286
Total long-term borrowings(b)	17,908			17,927
Total borrowings(c)	$	19,012		$	19,198

(a) Unamortized deferred financing costs and certain lenders' fees associated with debt transactions were capitalized as discounts are 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, 2018 and December 31, 2017, the fair value of the Company's long-term borrowings was $18.0 billion and $18.2 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.

Foreign Lines of Credit and Other Arrangements

As of March 31, 2018 and December 31, 2017, the Company had $374 million and $546 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, 2018 and December 31, 2017, 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, 2018 and December 31, 2017, $11 million and $15 million, respectively, were uncommitted. As of March 31, 2018 and December 31, 2017, the weighted average interest rate associated with foreign lines of credit and other arrangements was 2.9% for both periods presented.

13

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 $6 million and $29 million of letters of credit were issued under the facilities as of March 31, 2018 and December 31, 2017, respectively. As of March 31, 2018, $1.0 billion remained available.

Senior Unsecured Revolving Credit Facility

On December 14, 2017 the Company executed a $33 million senior unsecured revolving credit facility maturing December 20, 2019, available for letters of credit. As of March 31, 2018, the Company issued $30 million of letters of credit with an interest rate of 1.85%.

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, 2018, the maximum borrowing capacity, subject to collateral availability, under the agreement is $563 million. The term of the receivables securitization agreement is through June 2020. The receivables held by FDR are recorded within "Accounts receivable, net" in the Company's unaudited consolidated balance sheets.

Note 3: Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To achieve this core principle, the Company applies the following five steps:

1. Identify the contract with a customer

2. Identify the performance obligations in the contract

3. Determine the transaction price

4. Allocate the transaction price to the performance obligations in the contract

5. Recognize revenue when or as the entity satisfies a performance obligation

Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. The Company has elected to present shipping and handling costs associated with its products as a cost of fulfilling the Company's promise to transfer its products and services.

Nature of Products and Services

Transaction and Processing Services

The majority of the Company’s revenues are comprised of: 1) fees calculated based on a percentage of dollar volume of transactions processed; 2) fees calculated based on number of transactions processed; 3) fees calculated based on number of accounts on file during a period; or 4) some combination thereof that are associated with transaction and processing services.

The Company typically contracts with financial institutions, merchants, or affiliates of those parties. Contracts stipulate the types of processing services and articulate how fees will be incurred and calculated.

The Company's core performance obligations are to stand ready to provide holistic electronic payment processing services consisting of a series of distinct elements that are substantially the same and have the same pattern of transfer over time. The Company’s promise to its customers is to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of payment transactions processed, number of cards on file, etc.); as such, the total transaction price is variable. The Company allocates the variable fees charged to the day in which it has the contractual right to bill under the contract.

14

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Revenue is comprised of fees charged to the Company's customers, net of interchange fees and assessments charged by the credit card associations and debit networks, which are pass-through charges collected on behalf of the card issuers and payment networks. Interchange fees and assessments charged by credit card and debit network fees to the Company’s consolidated subsidiaries were as follows for the three months ended March 31, 2018 and 2017.

	Three months ended March 31,
(in millions)	2018		2017
Interchange fees and assessments	$	6,476	$	6,039
Debit network fees(a)	818		745

^(a)Prior to the adoption of the New Revenue Standard, debit network fees were reported gross.  

Hardware Revenues

The Company may sell or lease hardware (POS devices) and other peripherals as part of its contract with customers. Hardware typically consists of terminals or Clover devices. The Company does not manufacture hardware, but purchases hardware from third-party vendors and holds the hardware in inventory until purchased by a customer. The Company accounts for hardware as a separate performance obligation and recognizes the revenue at its standalone selling price when the customer obtains control of the hardware.

Professional Services Revenues

The Company’s professional services generally consist of professional services sold as part of a new or existing agreement or sold as a separate service. The Company’s professional services may or may not be considered distinct based on the nature of the services being provided. Professional services are recognized over time as control is transferred to the customer, either as the professional services are performed or as the services from a combined performance obligation are transferred to the customer (over the term of the related transaction and processing agreement).

Other

Other revenues principally include software licensing (fixed and usage based) and maintenance as well as interest on hardware leases. The Company's software licensing and maintenance is considered distinct and is generally recognized over the implementation period and over time, respectively, at their standalone selling prices.

Contracts with Multiple Performance Obligations

The Company’s contracts with its customers can consist of multiple performance obligations, for example in the case of hardware sold with transaction and processing services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the customer class.

15

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Disaggregation of Revenue

The following tables present revenues disaggregated by primary geographical regions and product types for the three months ended March 31, 2018:

	Three months ended March 31, 2018
(in millions)	Global Business Solutions		Global Financial Solutions		Network & Security Solutions		Total
North America	$	1,033	$	423	$	351	$	1,807
EMEA	162		112		2		276
LATAM	87		31		—		118
APAC	48		31		2		81
Total Revenue(a)(b)	$	1,330	$	597	$	355	$	2,282

	Three months ended March 31, 2018
(in millions)	Total
Transaction and processing services	$	2,011
Hardware, Professional Services, and Other	271
Total Revenue(a)	$	2,282

^(a)Refer to note 6 "Segment Information" of these unaudited consolidated financial statements for the reconciliation to segment revenues.

^(b)Global Business Solutions includes non wholly-owned entities and Global Financial Solutions includes reimbursable items, which includes postage and customized orders.

Contract Balances

Accounts Receivable and Leasing Receivables

Accounts receivable balances are stated net of allowance for doubtful accounts. The Company records allowances for doubtful accounts when it is probable that the accounts receivable balance will not be collected. Long-term accounts receivable balances are included in “Other long-term assets” in the unaudited consolidated balance sheets.

The Company has receivables associated with its POS terminal leasing businesses. Leasing receivables are included in “Accounts receivable” and “Other long-term assets” in the unaudited consolidated balance sheets. The Company recognizes interest income on its leasing receivables using the effective interest method. For direct financing leases, the interest rate used incorporates initial direct costs included in the net investment in the lease. For sales type leases, initial direct costs are expensed as incurred.

As of March 31, 2018 and December 31, 2017, long-term accounts receivable, net of allowance for doubtful accounts, included within “Other long-term assets” in the unaudited consolidated balance sheets was $399 million and $401 million, respectively.

Contract liabilities

The Company records deferred revenue when it receives payments or invoices in advance of delivery of products or the performance of services. A significant portion of this balance relates to service contracts where the Company received payments for upfront conversions/implementation type activities of which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term or a longer period if it provides the customer with a material right.

16

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents the changes in deferred revenue for the three months ended March 31, 2018:

(in millions)	Three months ended   March 31, 2018
Balance, beginning of the period	$	344
New Revenue Standard adjustments	(39		)
Deferral of revenue	58
Recognition of unearned revenue	(59		)
Other (primarily foreign currency)	5
Balance, end of period	$	309

Remaining Performance Obligation

Over 95% of the Company’s performance obligations relate to transaction and processing services or hardware that are subject to a practical expedient (e.g., variable consideration) or point in time recognition, respectively. The Company's contracts with customers typically do not specify fixed revenues to be realized. Certain customer contracts contain fixed minimums and non-refundable up-front fees (fixed price guarantees). However, the amounts which are considered fixed price guarantees are not material to total consolidated revenue. The Company's contracts with Small Medium Business (SMB) merchants have an original expected duration of less than one year. Larger contracts in the Global Business Solutions, Global Financial Solutions, and Network & Security Solutions segments typically have contractual terms ranging from one to fifteen years with variability being resolved on a daily basis.

Costs to Obtain and Fulfill a Contract

The Company capitalizes initial payments for new contracts and contract renewals. These costs are amortized as a reduction of revenue over the benefit period, which is generally the contract term, unless a commensurate payment is not expected at renewal. As of March 31, 2018 and December 31, 2017, the Company had $166 million and $145 million, respectively, of capitalized contract costs included with Other Intangibles, net. For the three months ended March 31, 2018 and 2017, the Company had $13 million and $19 million, respectively, of amortization expense related to these costs.

The Company generally expenses sales commissions as incurred, as the Company's commission plans are paid on recurring monthly revenues, portfolios of existing customers or have a substantive stay requirement prior to payment.

The Company capitalizes conversion related costs associated with enabling customers to receive its processing services. These costs are amortized over the expected benefit period of seven years based on the related services being provided, and are reflected within “Depreciation and amortization” in the Company's unaudited consolidated statement of operations. As of March 31, 2018 and December 31, 2017, the Company had $156 million and $160 million, respectively, of capitalized conversion costs included with Other Intangibles, net. For the three months ended March 31, 2018 and 2017, the Company had $10 million and $7 million, respectively, of amortization expense related to these costs.

Note 4: Stock Compensation Plans

The Company provides stock-based compensation awards to its employees. Total stock-based compensation expense recognized in the "Cost of revenues" 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 three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions)	2018		2017
Cost of revenues	$	16	$	19
Selling, general, and administrative	58		46
Total stock-based compensation expense	$	74	$	65

17

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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, 2018, 9 million restricted stock awards and units were granted at a weighted average price per share of $15.37. 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.

As of March 31, 2018, there was $37 million and $405 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, 2018 and 2017, the Company paid approximately $56 million and $60 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, 2017.

Note 5: Net Income Attributable to First Data Corporation Per Share

Basic net income per share is calculated by dividing net income attributable to FDC by the weighted-average shares outstanding during the period, without consideration for any potential dilutive shares. Diluted net income 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 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. Both Class A and B common stock are included in the net income attributable to First Data Corporation per share calculation since they have the same rights other than voting.

The following table sets forth the computation of the Company's basic and diluted net income attributable to First Data Corporation per share for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions, except per share amounts)	2018		2017
Numerator:
Net income attributable to First Data Corporation	$	101	$	36
Denominator:
Weighted average shares used in computing net income per share, basic	923		910
Effect of dilutive securities	23		21
Total dilutive securities	946		931
Net income attributable to First Data Corporation per share:
Basic	$	0.11	$	0.04
Diluted	$	0.11	$	0.04
Anti-dilutive shares excluded from diluted net income per share(a)	11		13

(a) Potentially dilutive securities whose effect would have been anti-dilutive are excluded from the computation of diluted earnings per share for all periods presented.

18

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 6: Segment Information

For a detailed discussion of the Company’s accounting 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, 2017.

Prior to January 1, 2018, the Company presented segment revenues net of certain items including revenue-based commission payments to Independent Sales Organizations (ISOs) and sales channels. The Company is no longer excluding ISO commissions from segment revenue as this change enhances the consistency of accounting methodologies amongst the Company's various distribution channels in the Global Business Solutions segment. This change in segment reporting has been applied retrospectively. Under the retrospective approach, the Company adjusted the prior period results presented in these unaudited consolidated financial statements.

The following tables present the Company’s reportable segment results for the three months ended March 31, 2018 and 2017:

	Three months ended March 31, 2018
(in millions)	Global Business Solutions		Global Financial Solutions			Network & Security Solutions		Corporate			Total
Revenues:
Total revenues	$	1,310	$	401		$	362	$	—		$	2,073
Equity earnings in affiliates	8		(1		)	—		—			7
Total segment revenues	$	1,318	$	400		$	362	$	—		$	2,080
Depreciation and amortization	$	125	$	88		$	29	$	—		$	242
Segment EBITDA	434		166			175		(45		)	730

	Three months ended March 31, 2017
(in millions)	Global Business Solutions		Global Financial Solutions		Network & Security Solutions		Corporate			Total
Revenues:
Total revenues	$	1,109	$	393	$	361	$	—		$	1,863
Equity earnings in affiliates	9		—		—		—			9
Total segment revenues	$	1,118	$	393	$	361	$	—		$	1,872
Depreciation and amortization	$	106	$	85	$	30	$	1		$	222
Segment EBITDA	382		154		156		(42		)	650

19

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The following table presents a reconciliation of reportable segment amounts to the Company’s consolidated balances for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Total segment revenues	$	2,080		$	1,872
Adjustments:
Non wholly-owned entities(a)	4			10
Reimbursable items(b)	198			919
Consolidated revenues	$	2,282		$	2,801
Total segment EBITDA	$	730		$	650
Adjustments:
Non wholly-owned entities(a)	18			6
Depreciation and amortization	(250		)	(228		)
Interest expense, net	(233		)	(233		)
Loss on debt extinguishment	—			(56		)
Other items(c)	(63		)	(26		)
Stock-based compensation	(74		)	(65		)
Income tax expense	(27		)	(12		)
Net income attributable to First Data Corporation	$	101		$	36

(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) Reimbursable items for the three months ended March 31, 2018 reflect adoption of the New Revenue Standard.

(c) Includes restructuring, non-normal course litigation and regulatory settlements, debt issuance expenses, deal and deal integration costs, and “Other 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, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Segment depreciation and amortization	$	242		$	222
Adjustments for non wholly-owned entities	16			17
Amortization of initial payments for new contracts(a)	13			19
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows	271			258
Amortization of equity method investments(b)	(8		)	(11		)
Amortization of initial payments for new contracts(a)	(13		)	(19		)
Total consolidated depreciation and amortization per unaudited consolidated statements of operations	$	250		$	228

(a) Included in "Revenues excluding reimbursable items" 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.

20

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 7: Income Taxes

The following table presents the Company's income tax expense and effective income tax rate for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Income tax expense	$	27		$	12
Effective income tax rate	17		%	13		%

The effective tax rate for the three months ended March 31, 2018 was lower than the statutory rate due to $21 million benefit attributed to equity compensation related tax benefits, reductions to the liability for unrecognized tax benefits, the recording of tax benefits associated with the 2017 research and development credit along with a favorable adjustment for noncontrolling interests from pass through entities. These benefits were partially offset by expenses associated with state income taxes, taxation of the Company's U.K. operations in both the U.S. and the U.K., disallowed executive compensation deductions, and the taxable inclusion associated with global intangible low-taxed income (GILTI).

The effective tax rate for the three months ended March 31, 2017 was 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 was also impacted by the Company not recording tax expense on noncontrolling interests from pass through entities.

The primary driver of the increased tax rate from 2017 to 2018 is the release of the valuation allowance against the net deferred tax assets in the U.S. federal and certain state jurisdictions in Q4 of 2017.

At March 31, 2018, the Company has not completed its accounting for the tax effects of the enactment of the Tax Cuts and Jobs Act (the 2017 Tax Act). During 2017, the Company made reasonable estimates of the effects on its existing deferred tax balances, valuation allowance assessment for certain tax assets and the one-time transition tax. These estimates were not adjusted during the quarter ended March 31, 2018, although they remain subject to change as the Company obtains the information necessary to complete the calculations or refines its interpretations of the application of the 2017 Tax Act.

The Company's liability for unrecognized tax benefits was approximately $211 million as of March 31, 2018. The Company anticipates it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $133 million over the next twelve months beginning March 31, 2018 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.

Note 8: 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 three months ended March 31, 2018 and 2017:

(in millions)	2018			2017
Balance as of January 1,	$	72		$	73
Distributions	(8		)	(8		)
Share of income	8			8
Adjustment to redemption value of redeemable noncontrolling interest	6			(1		)
Balance as of March 31,	$	78		$	72

21

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 9: Other Operating Expenses

The following table details the components of "Other operating expenses" in the unaudited consolidated statements of operations for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Restructuring, net	$	32	$	23
Deal and deal integration costs	7		—
Customer related costs	20		—
Other	1		(1		)
Other operating expenses	$	60	$	22

Restructuring

During the three months ended March 31, 2018 and 2017, the Company recorded restructuring charges in connection with ongoing expense management initiatives. The Company has ongoing initiatives, which are expected to result in $25 million in additional restructuring costs over the next twelve months. The Company continues to evaluate operating efficiencies and could incur further restructuring costs beyond these initiatives.

A summary of net pretax charges incurred by segment was as follows for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Global Business Solutions	$	5	$	9
Global Financial Solutions	2		4
Network & Security Solutions	16		2
Corporate	9		8
Restructuring, net	$	32	$	23

The following table summarizes the Company’s utilization of restructuring accruals for the three months ended March 31, 2018:

(in millions)	Employee Severance			Other
Remaining accrual as of January 1, 2018	$	21		$	—
Employee expense	22			—
Loss on disposal of property and equipment, net	—			10
Cash payments and other	(18		)	(6		)
Remaining accrual as of March 31, 2018	$	25		$	4

Deal and Deal Integration Costs

Over the past 12 months, the Company completed several acquisitions, the two largest of which were CardConnect and BluePay. In connection with these acquisitions, the Company incurred $7 million in deal and deal integration costs for the three months ended March 31, 2018.

Note 10: Acquisitions and Dispositions

GreekBill Acquisition

In January 2018 the Company acquired 100% of GreekBill, a web-based billing and financial management company catering exclusively to fraternities and sororities. The purchase price was approximately $17 million and GreekBill is reported as part of

22

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

the Company's Global Business Solutions segment. The acquisition of GreekBill had an immaterial impact on revenue and EBITDA.

Note 11: 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 in excess of 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 March 31, 2018 and December 31, 2017:

		As of March 31, 2018					As of December 31, 2017
(in millions)	Notional Currency	Notional Value	Assets(a)		Liabilities(a)		Notional Value	Assets(a)		Liabilities(a)
Derivatives designated as hedges of net investments in foreign operations:
Foreign exchange contracts(b)	AUD	—	$	—	$	—	100	$	28	$	—
Foreign exchange contracts	EUR	915	—		105		915	—		76
Foreign exchange contracts	GBP	150	—		13		150	—		6
Foreign exchange contracts	CAD	95	—		—		95	—		2
			—		118			28		84
Derivatives designated as cash flow hedges:
Interest rate collar contracts	USD	4,300	22		—		4,300	12		—
			$	22	$	118		$	40	$	84

(a) The Company's derivatives 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) The cross-currency swap with a notional value of AUD 100 million matured on January 18, 2018 and the Company received $26 million.

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 June 2020.

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 September 2019.

As of March 31, 2018, the Company has not posted any collateral related to any of its derivative financial instruments.

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.

23

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Effect of Derivative Instruments on the Unaudited Consolidated Financial Statements

Derivative gains and (losses) were as follows for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
	2018					2017
(in millions, pretax)	Interest Rate Contracts		Foreign Exchange Contracts			Interest Rate Contracts		Foreign Exchange Contracts
Derivatives designated as hedging instruments:
(Loss) recognized in "Foreign currency translation adjustment" in the unaudited consolidated statements of comprehensive income (effective portion)	$	—	$	(30	)	$	—	$	(14	)
Gain recognized in "Derivative instruments" in the unaudited consolidated statements of comprehensive income (effective portion)	9		—			1		—

Accumulated Derivative Gains and Losses

The following table summarizes activity in other comprehensive income related to derivative instruments classified as cash flow hedges and net investment hedges held by the Company for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions, after tax)	2018			2017
Accumulated gain included in other comprehensive income at beginning of period	$	121		$	177
Decrease in fair value of derivatives that qualify for hedge accounting, net of tax(a) (b)	(16		)	(13		)
Accumulated gain included in other comprehensive income at end of period	$	105		$	164

(a) (Losses) gains are included in "Derivative instruments" and “Foreign currency translation adjustment” in the unaudited consolidated statements of comprehensive income. 

(b) Net of $5 million and $0 tax benefit for the three months ended March 31, 2018 and 2017, respectively.

Note 12: 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.

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 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 or other claims arising from its merchant business; 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 $165 million for merchant matters, and $0 to $5 million for other matters, resulting in a total estimated range of possible losses of $0 to $175 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 the high end of the estimated range.

24

FIRST DATA CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 13: 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, 2018, the Company had one unconsolidated significant subsidiary that was not required to be consolidated, but represents more than 20% of the Company’s pretax income. Summarized unaudited financial information for the affiliate is presented below for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Net operating revenues	$	195	$	208
Operating expenses	101		98
Operating income	$	94	$	110
Net income	$	94	$	110
FDC equity earnings	33		38

Note 14: Subsequent Events

On April 24, 2018, the Company and the Internal Revenue Service reached an agreement regarding the audit of its federal tax returns for the years 2005-2007, which will result in a $117 million income tax benefit. The Company will record this income tax benefit in the second quarter of 2018.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For an understanding of the significant factors that influenced our results, the following discussion should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this report. This management's discussion and analysis should also be read in conjunction with the management's discussion and analysis and consolidated financial statements for the year ended December 31, 2017 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 21, 2018.

Year over year percent changes are calculated on whole-dollar values as management views this as a more accurate representation of our performance. As such, the values herein may not recalculate due to rounding.

Executive Overview

First Data Corporation sits at the center of global electronic commerce. We believe we offer our clients the most complete array of integrated solutions in the industry, covering their needs across next generation commerce technologies, merchant acquiring, issuing, and network solutions. We believe we have the industry’s largest distribution network, driven by our partnerships with many of the world’s leading financial institutions, our direct sales force, and a network of distribution partners. We are the largest merchant acquirer, issuer processor, and third largest network services provider in the United States, enabling businesses to accept electronic payments, helping financial institutions issue credit, debit and prepaid cards, and routing secure transactions between them.

Our business is characterized by transaction related fees, multi-year contracts, and a diverse client base, which allows us to grow alongside our clients. Our multi-year contracts allow us to achieve a high level of recurring revenues with the same clients. While the contracts typically do not specify fixed revenues to be realized thereunder, they do provide a framework for revenues to be generated based on volume of services provided during such contracts' terms. Our business also generally requires minimal incremental capital expenditures and working capital to support additional revenue within our existing business lines.

Components of Revenue

We generate revenue by providing commerce-enabling solutions. Our major components of revenue have not changed from those discussed within “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017.

Factors Affecting the Comparability of Our Results of Operations

As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Key factors affecting the comparability of our results of operations are summarized below.

Accounting Guidance

On January 1, 2018, we adopted ASC 606 and ASC 340-40 (collectively, the New Revenue Standard) to revenue recognition. The New Revenue Standard was applied modified retrospectively beginning January 1, 2018.

Currency Impact

Although the majority of our revenue is earned in U.S. dollars, a portion of our revenues and expenses are in foreign currencies. As a result, changes in foreign currencies against the U.S. dollar can impact our results of operations. Additionally, we have intercompany debts in foreign currencies, which impacts our results of operations. In recent periods, the U.S. dollar has fluctuated versus most foreign currencies, which has impacted our revenues generated in foreign currencies as presented in U.S. dollars in our unaudited consolidated financial statements. We believe the presentation of constant currency provides relevant information and we use this non-GAAP financial measure to, among other things, evaluate our ongoing operations in relation to foreign currency fluctuations. The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for our related financial results prepared in accordance with Generally Accepted Accounting Principles (GAAP). For additional information on our constant currency calculation, see “Segment Results” within this Form 10-Q.

26

Acquisitions and Divestitures

Acquisitions and divestitures over the past year have affected the comparability of our results. The largest acquisitions in 2017, CardConnect and BluePay, are being integrated into our Global Business Solutions segment and the results for the current period are included within the segment results.

Results of Operations

Consolidated results should be read in conjunction with note 6 "Segment Information" to our unaudited consolidated financial statements in Part I of this Form 10-Q, which provides more detailed discussions concerning certain components of our unaudited consolidated statements of operations. All significant intercompany accounts and transactions have been eliminated within the consolidated results.

Overview

The chart below reconciles Net income attributable to First Data Corporation for the three months ended March 31, 2017 to March 31, 2018:

(in millions)	Three months ended   March 31,
Net income attributable to First Data Corporation ending March 31, 2017	$	36
Better (worse):
Revenues excluding reimbursable items(a)	185
Cost of revenues(a)	(22		)
Selling, general, and administrative(a)	(76		)
Depreciation and amortization(a)	(24		)
Other operating expenses	(38		)
Loss on debt extinguishment	56
Net income attributable to noncontrolling interests and redeemable noncontrolling interest	10
Income tax	(15		)
New Revenue Standard	(3		)
Other miscellaneous, net	(8		)
Net income attributable to First Data Corporation ending March 31, 2018	$	101

(a) Exclusive of New Revenue Standard.

Segment Results

We operate three reportable segments: Global Business Solutions (GBS), Global Financial Solutions (GFS), and Network & Security Solutions (NSS). Our segments are designed to establish global lines of businesses that work seamlessly with our teams in our regions of North America (United States and Canada), EMEA (Europe, Middle East, and Africa), LATAM (Latin America and Caribbean region), and APAC (Asia Pacific).

The business segment measurements provided to and evaluated by the chief operating decision maker are computed in accordance with the principles listed below:

• The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

• Intersegment revenues are eliminated in the segment that sells directly to the end market.

• Segment revenue excludes reimbursable items.

• Segment EBITDA includes equity earnings in affiliates and excludes depreciation and amortization expense, net income attributable to noncontrolling interests, other operating expenses, other income (expense) and stock-based compensation.

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• For significant affiliates, segment revenue and segment EBITDA are reflected based on our proportionate share of the results of our investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. For other affiliates, we include equity earnings in affiliates, excluding amortization expense, in segment revenue and segment EBITDA.

• Corporate operations include corporate-wide governance functions such as our executive management team, tax, treasury, internal audit, corporate strategy, and certain accounting, human resources and legal costs related to supporting the corporate function. Costs incurred by Corporate that are attributable to a segment are allocated to the respective segment.

• Certain measures exclude the estimated impact of foreign currency changes (constant currency). To present this information, monthly results during the periods presented for entities with functional currencies other than U.S. dollars are translated into U.S. dollars at the average exchange rates in effect during the corresponding month of the prior fiscal year, rather than the actual average exchange rates in effect during the current fiscal year. Once translated, each month during the periods presented is added together to calculate the constant currency results for the periods presented.

Operating revenues overview

	Three months ended March 31,
(in millions)	2018			2017			Percent Change		Reported Constant Currency Percent Change
Consolidated revenues	$	2,282		$	2,801		(19	)%	(19	)%
Adjustments:
Non-wholly owned entities	(4		)	(10		)	(60	)%	(90	)%
Reimbursable items	(198		)	(919		)	(78	)%	(78	)%
Total segment revenues	$	2,080		$	1,872		11	%	10	%
(in millions)	2018			2017			Percent Change		Organic Constant Currency Percent Change
Segment revenues:
Global Business Solutions	$	1,318		$	1,118		18	%	7	%
Global Financial Solutions	400			393			2	%	1	%
Network & Security Solutions	362			361			—	%	7	%

NM represents not meaningful

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Global Business Solutions segment results

The following table displays total segment revenue by region and illustrates, on a percentage basis, the impact of foreign currency fluctuations on revenue growth for the periods presented:

	Three months ended March 31, 2017
	As Reported		New Revenue Standard Adjustments(a)		As Adjusted		Acquisitions(b)		Core Growth			Currency Impact(c)			Three months ended March 31, 2018		Reported Percent Change		Organic Constant Currency Percent Change(d)
(in millions)
Revenues:
North America	$	880	$	26	$	906	$	71	$	36	(e)	$	1		$	1,014	15	%	4	%
EMEA	140		1		141		—		7		(f)	20			168		20	%	4	%
APAC	39		—		39		—		6		(g)	3			48		21	%	15	%
LATAM	59		5		64		—		33		(h)	(9		)	88		49	%	52	%
Total segment revenue	$	1,118	$	32	$	1,150	$	71	$	82		$	15		$	1,318	18	%	7	%

(a) Effective January 1, 2018, we adopted the New Revenue Standard using a modified retrospective basis. See Revenue Recognition in note 1 "Basis of Presentation and Summary of Significant Accounting Policies" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

(b) North America revenue was impacted by acquisitions of CardConnect in July 2017 and BluePay in December 2017. See note 12 "Acquisitions and Dispositions" in Item 8. Financial Statements and Supplementary Data" in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional information.

(c) Currency impact is the difference between the current year's actual results and the same year's results converted with the prior year's foreign exchange rate. Constant currency percentage change is a measure of revenue growth before foreign currency impact.

(d) Organic constant currency growth is defined as reported growth adjusted for the following: excludes the impacts of year-over-year currency rate changes in the current period; includes the results of significant acquisitions in the prior year period; and is adjusted to retrospectively apply the New Revenue Standard to the prior year period.

(e) North America revenue increased due to transaction volume and hardware revenue of $37 million and $8 million, respectively, offset by decline in our alliances.

(f) EMEA revenue increased due to growth in United Kingdom of $6 million.

(g) APAC revenue increased due to growth in South Korea and India of $2 million and $3 million, respectively.

(h) LATAM revenue increased due to sales volumes of $16 million in Brazil and $16 million in Argentina.

The following table displays total merchant transactions for the periods presented:

	Three months ended   March 31,
(in millions)	2018	2017	Percent Change
Key indicators:
North America merchant transactions(a)	12,121	11,483	6	%
International merchant transactions(b)	2,497	2,227	12	%

(a) North American merchant transactions include acquired Visa and MasterCard credit and signature debit, American Express and Discover, PIN-debit, electronic benefits transactions, processed-only and gateway customer transactions at the Point of Sale (POS). North American merchant transactions reflect 100% of alliance transactions.

(b) International transactions include Visa, MasterCard, and other payment network merchant acquiring transactions for clients outside the U.S. and Canada. Transactions include credit, signature debit, PIN-debit POS, POS gateway, and Automated Teller Machine (ATM) transactions.

North America transactions increased for the three months ended March 31, 2018, compared to the same periods in 2017, driven by growth in existing clients. The transaction volumes for the three months ended March 31, 2018 and 2017 were not impacted by the 2017 acquisitions of CardConnect and BluePay as the vast majority of their transactions were processed on the First Data platforms prior to the acquisition. International transaction growth for the three months ended March 31, 2018 compared to the same periods in 2017 outpaced revenue growth due to significant transaction growth in our Brazil acquiring business and new portfolios of existing clients throughout all of our international regions.

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Global Financial Solutions segment results

The following table displays total segment revenue for the three months ended March 31, 2018 and 2017 by region and illustrates, on a percentage basis, the impact of foreign currency fluctuations on revenue growth:

	Three months ended March 31, 2017
	As Reported		New Revenue Standard Adjustments(a)			As Adjusted		Dispositions(b)			Core Growth (Decline)				Currency Impact(c)			Three months ended March 31, 2018		Reported Percent Change		Organic Constant Currency Percent Change(d)
(in millions)
Revenues:
North America	$	236	$	(2	)	$	234	$	—		$	(6	)	(e)	$	—		$	228	(3	)%	(2	)%
EMEA	101		(1		)	100		(6		)	3			(f)	13			110		9	%	5	%
APAC	23		(2		)	21		—			9			(g)	1			31		32	%	39	%
LATAM	33		4			37		—			(4		)	(h)	(2		)	31		(6	)%	(11	)%
Total segment revenue	$	393	$	(1	)	$	392	$	(6	)	$	2			$	12		$	400	2	%	1	%

(a) Effective January 1, 2018, we adopted the New Revenue Standard using a modified retrospective basis. See Revenue Recognition in note 1 "Basis of Presentation and Summary of Significant Accounting Policies" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

(b) Business disposition of Lithuania, Latvia and Estonia (i.e. the Baltics) in September 2017. See note 12 "Acquisitions and Dispositions" in Item 8. Financial Statements and Supplementary Data" in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional information.

(c) Currency impact is the difference between the current year's actual results and the same year's results converted with the prior year's foreign exchange rate. Constant currency percentage change is a measure of revenue growth before foreign currency impact.

(d) Organic constant currency growth is defined as reported growth adjusted for the following: excludes the impacts of year-over-year currency rate changes in the current period; excludes the results of significant dispositions in the prior year period; and is adjusted to retrospectively apply the New Revenue Standard to the prior year period.

(e) North America revenue decreased due to growth in net new business of $3 million, offset by compression due to client renewals and lower plastics volumes of $7 million and $2 million, respectively.

(f) EMEA revenue increased due to license resolution fees.

(g) APAC revenue increased due to $3 million in new license sales, $3 million of new business, and higher professional services revenue of $3 million.

(h) LATAM revenue decreased due to growth in new and existing business in Argentina and Colombia of $4 million, offset by prior year license resolution fees of $8 million.

The following table displays total card accounts on file for the periods presented:

	Three months ended March 31,
(in millions)	2018	2017	Percent Change
Key indicators:
North America card accounts on file(a)	908	867	5	%
International card accounts on file(b)	179	156	15	%

(a) North America card accounts on file reflect the total number of bankcard credit and retail credit accounts as of the end of the periods presented.

(b) International card accounts on file reflect total bankcard and retail accounts outside the United States and Canada as of the end of the periods presented.

North America card accounts on file increased for the three months ended March 31, 2018 compared to the same period in 2017 due to growth in existing clients. International card accounts on file increased for the three months ended March 31, 2018 compared to the same period in 2017 due to growth in existing clients and new business.

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Network & Security Solutions segment results

The following table displays total revenue by product. Our Network & Security Solutions segment is comprised of more than 95% domestic businesses with no material foreign exchange impact on reported results.

	Three months ended March 31, 2017
	As Reported		New Revenue Standard Adjustments(a)			As Adjusted		Dispositions(b)			Core Growth (Decline)			Three months ended March 31, 2018		Reported Percent Change		Organic Constant Currency Percent Change(c)
(in millions)
Revenues:
EFT Network	$	115	$	—		$	115	$	—		$	5	(d)	$	120	5	%	5	%
Stored Value Network	89		(16		)	73		—			11		(e)	84		(6	)%	15	%
Security and Fraud	106		2			108		—			4		(f)	112		6	%	4	%
Other	51		—			51		(7		)	2			46		(10	)%	5	%
Total segment revenue	$	361	$	(14	)	$	347	$	(7	)	$	22		$	362	—	%	7	%

(a) Effective January 1, 2018, we adopted the New Revenue Standard using a modified retrospective basis. See Revenue Recognition in note 1 "Basis of Presentation and Summary of Significant Accounting Policies" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

(b) Represents adjustment to exclude net revenue associated with business that was contributed to our digital banking joint venture with Live Oak on October 2, 2017 offset by our 50% of the joint ventures revenue. See note 12 "Acquisitions and Dispositions" in Item 8. Financial Statements and Supplementary Data" in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional information.

(c) Organic constant currency growth is defined as reported growth adjusted for the following: excludes the results of significant dispositions in the prior year period and is adjusted to retrospectively apply New Revenue Standard to the prior year period.

(d) EFT Network revenue increased due to transaction growth.

(e) Stored Value Network revenue increased due to higher rate and volume of $3 million and $8 million, respectively.

(f) Security and Fraud revenue increased due to growth in our Security and Fraud product categories of $8 million, offset by declines within the TeleCheck business of $4 million.

The following table displays total network transactions the periods presented:

	Three months ended March 31,
(in millions)	2018	2017	Percent Change
Key indicators:
Network transactions (EFT Network and Stored Value)(a)	5,950	5,114	16	%

(a) Network transactions include the debit issuer processing transactions, STAR Network issuer transactions, Payroll and Gift Solutions and POS transactions.

Reimbursable items

Reimbursable items revenues and expenses decreased $721 million for the three months ended March 31, 2018 compared to the same period in 2017 due to the adoption of the New Revenue Standard which went into effect on January 1, 2018 changing the financial presentation of reimbursable debit network fees from a gross to net presentation.

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Operating expenses overview

	Three months ended March 31,
(in millions)	2018		2017		Percent Change		Constant Currency Percent Change
Cost of revenues (exclusive of items shown below)	$	779	$	781	—	%	(2	)%
Selling, general, and administrative	647		525		23	%	22	%
Depreciation and amortization	250		228		10	%	8	%
Other operating expenses	60		22		173	%	173	%
Total expenses (excluding reimbursable items)	1,736		1,556		12	%	10	%
Reimbursable items	198		919		(78	)%	(78	)%
Total expenses	$	1,934	$	2,475	(22	)%	(23	)%

Cost of revenues

	Three months ended March 31,
(in millions)	2018		2017		Percent Change		Constant Currency Percent Change
Salaries, wages, and bonus	$	371	$	380	(2	)%
Stock-based compensation	16		19		(16	)%
Outside professional services(a)	60		63		(5	)%
Cost of products sold(b)	82		80		3	%
Software, telecommunication infrastructure, and repairs	93		95		(2	)%
Other(c)	157		144		9	%
Cost of revenues expense	$	779	$	781	—	%	(2	)%

(a) Decrease due to $16 million impact of adoption of the New Revenue Standard offset by increase in consulting fees.

(b) Increase due to $14 million from increased hardware revenue offset by $12 million in 2017 Clover expense which was impacted by certain changes in accounting for Clover terminals due to adopting the New Revenue Standard. See note 1 "Basis of Presentation and Summary of Significant Accounting Policies" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

(c) Increase was related to plastic cost of $7 million and impact from the adoption of the New Revenue Standard.

Selling, general, and administrative

	Three months ended March 31,
(in millions)	2018		2017		Percent Change		Constant Currency Percent Change
Sales and distribution incentives(a)	$	302	$	203	49	%
Salaries, wages, bonus, and other	177		176		1	%
Stock-based compensation(b)	58		46		26	%
Professional services (c)	33		23		43	%
Other	77		77		—	%
Selling, general, and administrative expense	$	647	$	525	23	%	22	%

(a) Increase was related to adoption of the New Revenue Standard of $45 million, acquisition of CardConnect and BluePay of $35 million, and growth in business.

(b) The three months ended March 31, 2018 increased due to equity awards granted as a result of the CardConnect and BluePay acquisitions and retention awards to FDC's executive management during the second half of 2017.

(c) Increase was related to acquisitions of CardConnect and BluePay of $2 million and higher legal fees.

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Depreciation and amortization

	Three months ended March 31,
(in millions)	2018		2017		Percent Change		Constant Currency Percent Change
Depreciation expense	$	82	$	76	8	%
Amortization expense	168		152		11	%
Depreciation and amortization(a)	$	250	$	228	10	%	8	%

(a) The increase in the three months ended March 31, 2018 includes $23 million related to the acquisition of CardConnect and BluePay partially offset by a reduction in amortization expense on intangibles arising from the KKR acquisition of First Data.

Other operating expenses

	Three months ended March 31,
(in millions)	2018		2017			Percent Change		Constant Currency Percent Change
Restructuring, net(a)	$	32	$	23		39	%
Deal and deal integration costs(a)	7		—			NM
Customer related costs	20		—			NM
Other	1		(1		)	NM
Other operating expenses	$	60	$	22		173	%	173	%

(a) Refer to note 9 "Other operating expenses" to our unaudited consolidated financial statements in Part I of this Form 10-Q for details regarding other operating expenses.

Interest expense, net

	Three months ended March 31,
(in millions)	2018		2017		Percent Change		Constant Currency Percent Change
Interest expense, net(a)	$	233	$	233	—	%	—	%

(a) Refer to note 2 "Borrowings" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

Loss on debt extinguishment

	Three months ended March 31,
(in millions)	2018		2017			Percent Change	Constant Currency Percent Change
Loss on debt extinguishment	$	—	$	(56	)	NM	NM

Other expense

	Three months ended March 31,
(in millions)	2018			2017			Percent Change	Constant Currency Percent Change
Non-operating foreign currency (loss) gain	$	(3	)	$	(1	)
Other expense	$	(3	)	$	(1	)	NM	NM

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Income taxes

Refer to note 7 "Income Taxes" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

Equity earnings in affiliates

	Three months ended March 31,
(in millions)	2018		2017		Percent Change		Constant Currency Percent Change
Equity earnings in affiliates(a)	$	49	$	55	(11	)%	(11	)%

(a) Balance relates to the earnings of our unconsolidated merchant alliance partnerships. Decrease for the three months ended March 31, 2018 compared to the same periods in 2017 due to a decline in our North American joint venture partners mainly due to declines in sales and margin erosion.

Net income attributable to noncontrolling interests and redeemable noncontrolling interest

	Three months ended March 31,
(in millions)	2018		2017		Percent Change		Constant Currency Percent Change
Net income attributable to noncontrolling interests and redeemable noncontrolling interest(a)	$	33	$	43	(23	)%	(26	)%

(a) Balance relates to the interest of our merchant partners in our consolidated merchant alliances. Decrease for the three months ended March 31, 2018 compared to the same periods in 2017 driven by an assessment from Visa and MasterCard related to a former merchant.

Segment EBITDA Overview

The following table displays Segment EBITDA by segment for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions)	2017			New Revenue Standard Adjustments(a)			As Adjusted			Acquisitions\ Dispositions(b)			Core Growth (Decline)			Currency Impact(c)		Three months ended March 31, 2018			Reported Percent Change		Organic Constant Currency Percent Change(d)
Segment EBITDA:
Global Business Solutions	$	382		$	(8	)	$	374		$	20		$	38		$	2	$	434		14	%	10	%
Global Financial Solutions	154			—			154			(2		)	11			3		166			8	%	6	%
Network & Security Solutions	156			—			156			—			19			—		175			13	%	13	%
Corporate	(42		)	—			(42		)	—			(3		)	—		(45		)	(7	)%	(7	)%
Total Segment EBITDA (Non-GAAP)	$	650		$	(8	)	$	642		$	18		$	65		$	5	$	730		12	%	10	%

(a) Effective January 1, 2018, we adopted the New Revenue Standard using a modified retrospective basis. See Revenue Recognition in note 1 "Basis of Presentation and Summary of Significant Accounting Policies" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

(b) EBITDA was impacted by acquisitions and dispositions. See acquisitions and dispositions previously discussed above.

(c) Currency impact is the difference between the current year's actual results and the same year's results converted with the prior year's foreign exchange rate. Constant currency percentage change is a measure of revenue growth before foreign currency impact.

(d) Organic constant currency growth is defined as reported growth adjusted for the following: excludes the impacts of year-over-year currency rate changes in the current period; includes the results of significant acquisitions in the prior year period; excludes the results of significant dispositions in the prior year period; and is adjusted to retrospectively apply the New Revenue Standard to the prior year period.

34

The following table displays Segment EBITDA margin by segment for the three months ended March 31, 2018 and 2017:    

	Three months ended March 31,
	2018		2017		Change
Segment EBITDA Margin:
Global Business Solutions	32.9	%	34.2	%	(130	) bps
Global Financial Solutions	41.5	%	39.2	%	230	bps
Network & Security Solutions	48.3	%	43.2	%	510	bps
Total Segment EBITDA Margin (Non-GAAP)	35.1	%	34.7	%	40	bps

Adjusted Net Income

Adjusted net income is a non-GAAP financial measure used by management that provides additional insight on performance. Adjusted net income excludes amortization of acquisition-related intangibles, stock-based compensation, restructuring costs, certain discrete tax items and other items affecting comparability and, therefore, provides a more complete understanding of continuing operating performance. Management believes that the presentation of adjusted net income provides users of our financial statements greater transparency into ongoing results of operations allowing them to better compare our results from period to period. This non-GAAP measure is not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, adjusted net income is not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. These measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

Prior to January 1, 2018, we excluded the impact of all discrete tax items from Adjusted Net Income and Diluted Adjusted Net Income per Share.  We will no longer exclude certain discrete items which were deemed to be recurring in nature.  These changes will be applied retrospectively.  We retrospectively adjusted the prior period results presented in these unaudited consolidated financial statements. We will continue to adjust Adjusted Net Income and Diluted Adjusted Net Income per Share for tax law changes, tax impact of mergers and acquisitions, valuation allowance releases, tax reserves related to issues that arose before KKR purchased us, and tax impact of other Adjusted Net Income adjustments. 

35

The following table reconciles the reported Net income attributable to First Data Corporation presented in accordance with GAAP to the non-GAAP financial measure of adjusted net income for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions)	2018			2017			% Change
Net income attributable to First Data Corporation	$	101		$	36		181	%
Adjustments:
Stock-based compensation	74			65			14	%
Loss on debt extinguishment	—			56			NM
Amortization of acquisition intangibles and deferred financing costs(a)	106			95			12	%
Restructuring	32			23			39	%
Intercompany foreign exchange gain (loss)	3			1			200	%
Impairment, litigation, and other(b)	10			(1		)	NM
Deal and deal integration costs	7			—			NM
Income tax on above items and discrete tax items(c)	(54		)	(17		)	NM
Adjusted net income attributable to First Data Corporation	$	279		$	258		8	%

NM represents not meaningful

(a) Represents amortization of intangibles established in connection with the 2007 merger and acquisitions we have made since 2007, excluding the percentage of our consolidated amortization of acquisition intangibles related to non-wholly owned consolidated alliances equal to the portion of such alliances owned by our alliance partners. This line also includes amortization related to deferred financing costs of $5 million and $4 million for the three months ended March 31, 2018 and 2017, respectively.

(b) Represents impairments, non-normal course litigation and regulatory settlements, investments gains (losses), divestitures, and other, as applicable to the periods presented.

(c) The tax effect of the adjustments between our GAAP and adjusted results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact at the U.S. effective tax rate for certain adjustments, including the majority of amortization of intangible assets, deferred financing costs, stock compensation, and loss on debt extinguishment; whereas the tax impact of other adjustments, including restructuring expense, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable effective tax rate(s) in those jurisdictions. Income tax (expense) benefit also includes the impact of significant discrete tax items impacting Net income attributable to First Data Corporation.

Liquidity and Capital Resources

Our source of liquidity is principally cash generated from operating activities supplemented by our receivable securitization facility and, as necessary, on a short-term basis by borrowings against our senior secured revolving credit facility. We believe our current level of cash and short-term financing capabilities along with future cash flows from operations are sufficient to meet the ongoing needs of the business. To the extent future cash flows exceed the ongoing needs of the business, we expect to use all or a portion of the excess cash to reduce our debt balances.

Total borrowings and net debt

The chart below shows the net debt balances as of March 31, 2018 and December 31, 2017. Net debt is a non-GAAP measure defined as total long-term borrowings plus short-term and current portion of long-term borrowings at par value excluding lines of credit used for settlement purposes less cash and cash equivalents. We believe that net debt provides additional insight on the level and management of leverage. Net debt is not, and should not be viewed as, a substitute for total outstanding borrowings under GAAP.

	As of		As of
(in millions)	March 31, 2018		December 31, 2017
Total long-term borrowings	$	17,908	$	17,927
Total short-term and current portion of long-term borrowings	1,104		1,271
Total borrowings	19,012		19,198
Unamortized discount and unamortized deferred financing costs	120		126
Total borrowings at par	19,132		19,324
Less: settlement lines of credit and other arrangements	164		205
Gross debt excluding settlement lines of credit and other arrangements	18,968		19,119
Less: cash and cash equivalents	586		498
Net debt	$	18,382	$	18,621

36

Credit ratings

As of April 30, 2018, our long-term corporate family rating from Moody’s was B1 (outlook stable). The long-term local issuer credit rating from Standard and Poor’s was B+ (outlook stable). The long-term issuer default rating from Fitch was B+ (outlook positive). A decrease in our credit ratings could affect our ability to access future financing at current funding rates, which could result in increased interest expense in the future.

Cash and cash equivalents

Investments (other than those included in settlement assets) with original maturities of three months or less (that are readily convertible to cash) are considered to be cash equivalents and are stated at cost, which approximates market value. As of March 31, 2018 and December 31, 2017, we held $586 million and $498 million in cash and cash equivalents, respectively.

The following table details the cash and cash equivalents as of March 31, 2018 and December 31, 2017:

	As of March 31, 2018							As of December 31, 2017
(in millions)	Available		Unavailable			Total		Available		Unavailable			Total
Domestic	$	50	$	170	(a)	$	220	$	50	$	101	(a)	$	151
International	176		190		(b)	366		174		173		(b)	347
Total	$	226	$	360		$	586	$	224	$	274		$	498

(a) Represents cash held by two of our domestic entities that are not available to fund operations outside of these entities unless the Board of Directors of those respective entities declare a dividend. Also, one of these entities is subject to regulatory capital requirements that must be satisfied before a dividend may be declared.

(b) Consolidated foreign joint ventures held $175 million and $163 million in cash and cash equivalents until the joint ventures' Board of Directors authorize a distribution as of March 31, 2018 and December 31, 2017, respectively. In addition, $15 million and $10 million of the remaining unavailable cash and cash equivalents in our international subsidiaries is held in countries that have currency controls as of March 31, 2018 and December 31, 2017, respectively.

Cash flows

	Three months ended March 31,
Source/(use) (in millions)	2018			2017
Net cash provided by operating activities	$	534		$	421
Net cash used in investing activities	(143		)	(116		)
Net cash used in financing activities	(304		)	(187		)

Cash flows from operating activities

The chart below reconciles the change in operating cash flows for the three months ended March 31, 2017 to March 31, 2018:

Source/(use) (in millions)	Three months ended March 31, 2018
Net cash provided by operating activities, previous period	$	421
Increases in:
Net income, excluding other operating expenses and other income (expense)(a)	28
Depreciation and amortization	13
Working capital	72
Net cash provided by operating activities, end of period	$	534

(a) Excludes loss on debt extinguishment, stock-based compensation expense, deferred income tax (expense) benefit, and other non-cash items.

Our operating cash flow is impacted by our level of debt. Approximately $237 million and $245 million in cash interest was paid during the three months ended March 31, 2018 and 2017, respectively.

Refer to "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a detailed discussion on how a 100 basis point increase in the applicable London Interbank Offered Rate (LIBOR) index on an annualized basis would impact our annual interest expense.

37

The table below represents the working capital change for the three months ended March 31, 2018 compared to the same period in 2017:

	Three months ended March 31,
Source/(use) (in millions)	2018			2017			Change
Accounts receivable, current and long-term	$	136		$	136		$	—
Other assets, current and long-term	(14		)	(26		)	12
Accounts payable and other liabilities, current and long-term (a)	(128		)	(170		)	42
Income tax accounts	(6		)	(24		)	18
Total working capital change	$	(12	)	$	(84	)	$	72

(a) Change is related to timing of vendor payments. 

Cash flows from investing activities

The table below summarizes the changes in investing activities for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
Source/(use) (in millions)	2018			2017			Change
Acquisitions (a)	$	(17	)	$	—		$	(17	)
Capital expenditures	(139		)	(117		)	(22		)
Other (b)	13			1			12
Net cash used in investing activities	$	(143	)	$	(116	)	$	(27	)

(a) Increase is related to acquisition of GreekBill during 2018. For additional detail about this acquisition, see note 10 "Acquisitions and Dispositions" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

(b) Other represents proceeds from maturity of net investment hedge, purchase of equity method investments, and other investing activities.

Cash flows from financing activities

The table below summarizes the changes in financing activities for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
Source/(use) (in millions)	2018			2017			Change
Net debt transactions (a)	$	(206	)	$	(37	)	$	(169	)
Other (b)	(98		)	(150		)	52
Net cash used in financing activities	$	(304	)	$	(187	)	$	(117	)

(a) Details regarding our debt structure are provided in note 2 "Borrowings" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.

(b) Other represents payment of call premiums and debt issuance cost, payment of taxes related to net settlement of equity awards, distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest and other financing activities. Change is related to $57 million of debt modification payments incurred in the three months ended March 31, 2017.

Free Cash Flow

Free cash flow is a non-GAAP measure defined as cash flow provided by operating activities less capital expenditures and distributions to minority interests and other. We consider free cash flow to be a liquidity measure that provides useful information to management and users of our financial statements about the amount of cash generated by the business which can then be used to, among other things, reduce outstanding debt. Free cash flow is not, and should not be viewed as, a substitute for GAAP reported financial information.

38

The chart below reconciles cash flow from operations to free cash flow for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
Source/(use) (in millions)	2018			2017			Change
Net cash provided by operating activities (a)	$	534		$	421		$	113
Capital expenditures	(139		)	(117		)	(22		)
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest and other (b)	(27		)	(43		)	16
Free cash flow	$	368		$	261		$	107

(a) Net cash provided by operating activities increased due to the items noted previously in the "Cash flows from operating activities" above.

(b) Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest and other decreased due to $26 million received from the maturity of a net investment hedge in 2018 offset by higher distributions and dividends paid to noncontrolling interest.

Letters, lines of credit, and other

	Total Available(a)				Total Outstanding
(in millions)	As of March 31, 2018		As of December 31, 2017		As of March 31, 2018		As of December 31, 2017
Letters of credit(b)	$	283	$	283	$	36	$	29
Lines of credit and other(c)	374		546		164		205

(a) Total available without giving effect to amounts outstanding.

(b) Outstanding letters of credit are held in connection with lease arrangements, bankcard association agreements and other security agreements. All letters of credit expire on or prior to December 20, 2019 with a one-year renewal option.

(c) As of March 31, 2018, represents $363 million of committed lines of credit as well as certain uncommitted lines of credit and other agreements that are available in various currencies to fund settlement and other activity. We cannot use these lines of credit for general corporate purposes. Certain of these arrangements are uncommitted but, as of the dates presented, we had borrowings outstanding against them. Total available under lines of credit and other is highest at year-end due to seasonality of business.

In the event one or more of the aforementioned lines of credit becomes unavailable, we will utilize our existing cash, cash flows from operating activities or our senior secured revolving credit facility to meet our liquidity needs.

Covenant Compliance

Under the senior secured revolving credit and term loan facilities, certain limitations, restrictions, and defaults could occur if we are not able to satisfy and remain in compliance with specified financial ratios. We have agreed that we will not permit the Consolidated Senior Secured Debt to Covenant EBITDA (both as defined in the agreement) Ratio for any 12 month period (last four fiscal quarters) to be greater than 6.00 to 1.00.

The breach of this covenant could result in a default under the senior secured revolving credit facility and the senior secured term loan credit facility and the lenders could elect to declare all amounts borrowed due and payable. Any such acceleration could also result in a default under the indentures for the senior secured notes, senior notes, and senior subordinated notes. As of March 31, 2018, we were in compliance with all applicable covenants, including our sole financial covenant with Consolidated Senior Secured Debt of $12.1 billion, Covenant EBITDA of $3.6 billion and a Ratio of 3.37 to 1.00.

39

The calculation of Covenant EBITDA under our senior secured facilities was as follows:

(in millions)	Last twelve months ended March 31, 2018
Net income attributable to First Data Corporation	$	1,530
Interest expense, net	936
Income tax benefit	(714		)
Depreciation and amortization	1,086
EBITDA	2,838
Loss on debt extinguishment	24
Stock-based compensation	254
Net income attributable to noncontrolling interests and redeemable noncontrolling interest	189
Projected near-term cost savings and revenue enhancements(a)	101
Restructuring, net	92
Non-operating foreign currency losses	3
Investment gains
Equity entities taxes, depreciation and amortization(b)	14
Divestitures, net	(17		)
Other(c)	86
Covenant EBITDA	$	3,584

(a) Reflects cost savings and revenue enhancements projected to be realized as a result of specific actions as if they were achieved on the first day of the period. Includes cost savings initiatives associated with the business optimization projects and other technology initiatives. We may not realize the anticipated cost savings pursuant to our anticipated timetable or at all.

(b) Represents our proportional share of income taxes, depreciation, and amortization on equity method investments.

(c) Includes items such as pension losses, litigation and regulatory settlements, impairments, deal and deal integration costs, and other as applicable to the period presented.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2018, there were no material changes outside the ordinary course of business in our off-balance sheet arrangements from those reported as of December 31, 2017 in our Annual Report on Form 10-K for the year ended December 31, 2017.

Contractual Obligations

During the three months ended March 31, 2018, there were no material changes outside the ordinary course of business in our contractual obligations and commercial commitments from those reported as of December 31, 2017 in our Annual Report on Form 10-K for the year ended December 31, 2017.

Critical Accounting Policies

Our critical accounting policies have not changed from those reported as of December 31, 2017 in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017.

New Accounting Guidance

Refer to note 1 “Basis of Presentation and Summary of Significant Accounting Policies” in our unaudited consolidated financial statements in Part I of this Form 10-Q for new accounting guidance.

40

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to market risk from changes in interest rates. Our assets include cash equivalents as well as both fixed and floating rate interest-bearing securities. These investments arise primarily from settlement funds held by us pending settlement.

Our interest rate-sensitive liabilities are our debt instruments. Our senior secured term loan facilities are subject to variable interest rates. As of March 31, 2018, we have $10.0 billion in variable rate debt, which includes $563 million on our accounts receivable securitization facility and also includes $195 million drawn on our revolving credit facility. Additionally, we have $4.3 billion in variable to fixed interest rate collar contracts, of which $1.5 billion expires in September 2018, $1.3 billion expires in January 2019, and the remaining $1.5 billion expires in September 2019. The interest rate collar contracts mitigate exposure to interest rate fluctuations, but are subject to contractual ceilings and floors. The interest rate collar contracts provide for interest rate protection if one month LIBOR rises above 150 basis points on the contracts expiring September 2018 and January 2019 and 175 basis points on the contracts expiring September 2019.

Based on the March 31, 2018 balances, a 100 basis point increase in short-term interest rates compared to the interest rates as of March 31, 2018, which for one month LIBOR was 1.8831% and a corresponding and parallel shift in the yield curve, would result in a decrease to pretax income of $47 million over the next twelve months. This decrease is due to a $66 million increase in interest expense related to our balance of variable interest rate debt, net of interest rate collar contracts partially offset by a $19 million increase in interest income primarily on settlement assets. A decrease in interest rates would result in an increase to pretax income. Actual interest rates could change significantly more than 100 basis points. There are inherent limitations in the sensitivity analysis presented, primarily due to the assumption that interest rate movements are linear and instantaneous. As a result, the analysis is unable to reflect the potential effects of more complex market changes that could arise, which may positively or negatively affect income.

Foreign Currency Risk

We are exposed to changes in currency rates as a result of our investments in foreign operations and revenues and expenses generated in currencies other than the U.S. dollar. Revenue and profit generated by international operations will increase or decrease compared to prior periods as a result of changes in foreign currency exchange rates. Refer to note 11 "Derivative Financial Instruments" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information regarding the changes in foreign currency exchange rates.

A hypothetical uniform 10% weakening in the value of the U.S. dollar relative to all the currencies in which our revenues and profits are denominated would result in an increase to pretax income of approximately $50 million. This increase results from a $47 million increase related to foreign exchange on foreign currency earnings, assuming consistent operating results as the twelve months preceding March 31, 2018, and a $3 million increase related to foreign exchange on intercompany loans. Foreign exchange exposure on pretax income has increased from the prior year driven by significant growth in foreign pretax earnings. There are inherent limitations in the sensitivity analysis presented, primarily due to the assumption that foreign exchange movements are linear and instantaneous. As a result, the analysis is unable to reflect the potential effects of more complex market changes that could arise, which may positively or negatively affect income.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have evaluated, under the supervision of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of disclosure controls and procedures as of March 31, 2018. This is done in order to ensure that information we are required to disclose in reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2018.

41

Changes in Internal Control over Financial Reporting

In July 2017 and December 2017, we completed our acquisitions of CardConnect and BluePay, which are being integrated into our Global Business Solutions segment. As part of our ongoing integration activities, we are continuing to augment our company-wide controls to reflect the risks inherent in the acquisitions. Also, following the October 2017 announcement of the closure of our Denver and Houston locations, we commenced the migration of the majority of our tax and treasury activities and TeleCheck business as well as portions of other functions. This migration continues to present transitional risks to maintaining adequate internal controls over financial reporting. Additionally, due to the recently adopted New Revenue Standard, we have implemented changes to our internal controls over revenue recognition and related disclosures. Other than with respect to these items, there were no changes in our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

42

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are involved in various litigation matters arising in the ordinary course of our business. None of these matters, either individually or in the aggregate, currently are material to us. 

ITEM 1A. RISK FACTORS

There are no material changes to the risk factors as reported in our Annual Report on Form 10-K for the year ended December 31, 2017.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In connection with the vesting of restricted stock awards, shares of Class A common stock are delivered to the Company by employees to satisfy tax withholding obligations. The following table summarizes such purchases of Class A common stock in the three months ended March 31, 2018:

	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased Under Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under Announced Programs
January 1, 2018 through January 31, 2018	-	-	-	-
February 1, 2018 through February 28, 2018	361,712 (a)	$16.04	-	-
March 1, 2018 through March 31, 2018	-	-	-	-

(a) Shares surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of restricted stock awards issued to employees.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None. 

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable. 

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The following exhibits are filed as part of this Quarterly Report or, where indicated, were filed and are incorporated by reference:

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File Number	Exhibit Number	Filing Date
10.1*(1)	Employment Agreement with Jeffrey Shanahan
31.1(1)	Certification of CEO pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2(1)	Certification of CFO pursuant to rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1(1)	Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2(1)	Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS(1)	XBRL Instance Document
101.SCH(1)	XBRL Taxonomy Extension Schema Document
101.CAL(1)	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF(1)	XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB(1)	XBRL Taxonomy Extension Label Linkbase Document
101.PRE(1)	XBRL Taxonomy Extension Presentation Linkbase Document

(1) Filed herewith

* Management contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 6 of this report.

44

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

		FIRST DATA CORPORATION
		(Registrant)
Date:	May 1, 2018	By	/s/ Himanshu A. Patel
			Himanshu A. Patel
			Executive Vice President, Chief Financial Officer
			(principal financial officer)
Date:	May 1, 2018	By	/s/ Matthew Cagwin
			Matthew Cagwin
			Senior Vice President, Corporate Controller and Chief Accounting Officer
			(principal accounting officer)

45

EX-10.1

Exhibit 10.1

June 6, 2017

BY HAND

Mr. Jeffrey Shanahan

c/o CardConnect Corp.

1000 Continental Drive, Suite 300 King of Prussia, Pennsylvania 19406

Dear Jeff:

We are delighted to extend to you our offer to join First Data Corporation, a Delaware corporation (“Parent”), effective as of the consummation of the transactions contemplated by that certain Agreement and Plan of Merger, dated as of May 26, 2017 (the “Merger Agreement”), by and among Parent, CardConnect Corp., a Delaware corporation (the “Company”), and Minglewood Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, at the Effective Time (as defined in the Merger Agreement), Merger Sub shall merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). This amended and restated offer letter (this “Offer Letter”) supersedes the offer letter executed on May 26, 2017 and memorializes our discussions regarding your role at Parent following consummation of the Merger and shall become effective upon the Effective Time. If, however, the Merger Agreement is terminated by the parties thereto without the consummation of the transactions contemplated thereby, this Offer Letter shall be null and void ab initio and of no force or effect. This Offer Letter modifies your Amended and Restated Employment Agreement, dated as of July 29, 2016 (the “Employment Agreement”), by and among the Company, CardConnect, LLC (f/k/a Financial Transaction Services, LLC), a Delaware limited liability company, and you, as set forth herein, and in the event of any inconsistency between this Offer Letter and your Employment Agreement, the terms of this Offer Letter shall control.

1.Position and Reporting. You shall have the title of Executive Vice President and will report directly to the Chief Executive Officer of Parent. You will also be a member of Parent’s Management Committee. Following the Effective Time, you shall continue to manage and direct the ordinary business affairs of the Company’s business and shall have a level of duties, responsibilities, and authority (a) with respect to the Company’s business, generally commensurate with the level you possessed prior to the Effective Time, and (b) generally commensurate with the duties, responsibilities, and authority of an Executive Vice President of Parent and a member of Parent’s Management Committee.

2. Compensation Arrangements.

(a)Generally. As your annual compensation, you shall receive the following: (i) an annual base salary of $500,000; and (ii) an annual target incentive opportunity of $1,500,000, which amount will be delivered as a mix of a cash bonus and equity awards. For members of Parent’s Management Committee, we anticipate that our cash/equity mix will be 25%/75% for the 2017 plan year. The amount of your full year annual incentive compensation for the 2017 plan year shall not be prorated for the partial calendar year following the Effective Time. The amounts set forth in Sections 2(a)(i) and (ii) may not be decreased (but may be increased) prior to the second anniversary of the Closing

Date.

(b)Investment in Parent Common Stock. Within 90 days following the Closing Date (as defined in the Merger Agreement) or, if later, within five days following the expiration of any applicable securities trading blackout period of Parent, you shall purchase in the public market or pursuant to a private placement (such manner of purchase as mutually determined by you and Parent), a number of shares of Class A common stock, par value $0.01 per share, of Parent (“Parent Common Stock”) having an aggregate fair market value on the date(s) of purchase equal to 50% of the net after-tax cash proceeds you receive in connection with your outstanding Company equity and stock options that you hold as of the date hereof (such purchased shares, the “Purchased Shares”), determined based on a reasonable good faith estimate by you of your federal and state capital gains or ordinary income tax liabilities (as applicable) with respect to such proceeds. It is currently estimated that the amount of such net after-tax proceeds will be approximately $5,500,000. The calculation of such actual amount shall be subject to the reasonable review and consent of Parent, which consent shall not be unreasonably withheld.

You agree that you will not, and will not cause any trust or other entity controlled by you to, directly or indirectly, sell, transfer, assign, tender in any tender or exchange offer, pledge, encumber, hypothecate, or similarly dispose of, (i) 25% of the Purchased Shares until the first anniversary of the Closing Date, (ii) 25% of the Purchased Shares until the second anniversary of the Closing Date, (iii) 25% of the Purchased Shares until the third anniversary of the Closing Date, and (iv) 25% of the Purchased Shares until the fourth anniversary of the Closing Date (in each case, other than pursuant to a corporate transaction in which shares of Parent Common Stock are exchanged or sold). The restrictions set forth in the immediately preceding sentence shall lapse and cease to apply upon your termination of employment with Parent and its subsidiaries by Parent without Cause (as defined below), by you for Good Reason (as defined below, except that, for purposes of this Section 2(c), any resignation prior to the fourth anniversary of the Closing Date that satisfies clauses (i), (ii), or (iii) of such definition shall constitute Good Reason), or due to your death or disability.

(c)Inaugural Equity Award. On the Closing Date, Parent shall grant to you a restricted stock unit award in respect of Parent Common Stock, having a grant date fair market value equal to $14,500,000 (the “Inaugural Equity Award”). The Inaugural Equity Award shall vest in four equal installments on each of the first four anniversaries of the Closing Date, subject to your continued service through the applicable vesting date, and shall be settled as soon as practicable, but in no event later than fifteen (15) days following the vesting date; provided, however, that, upon a termination of your employment prior to the second anniversary of the Closing Date by the Company without Cause or by you for Good Reason, the next tranche of your Inaugural Equity Award that would have vested following such termination of employment shall immediately vest. The Inaugural Equity Award shall be subject to the terms of an award agreement that shall be consistent with the foregoing and shall otherwise have terms and

conditions that are customary for service-based equity awards granted by Parent generally, including provisions relating to death and disability.

(d)Performance Equity Award. On the Closing Date, Parent shall grant to you a restricted stock unit award in respect of Parent Common Stock, having a grant date fair market value equal to $3,500,000, the vesting of which shall be based on the achievement of performance and other conditions specified below (the “Performance Equity Award”), it being understood that the Performance Equity Award shall be a special one-time grant and not in satisfaction of Parent’s obligations under Section 2(a)(ii). The Performance Equity Award shall become 100% vested upon (i) NewCo’s (as defined below) achievement of 12% organic revenue growth and 20% adjusted EBITDA growth for the fourth quarter

of the 2018 fiscal year, as compared to the fourth quarter of the 2017 fiscal year, and (ii) NewCo’s achievement of 12% organic revenue growth and 20% adjusted EBITDA growth for the 2019 fiscal year, as compared to the 2018 fiscal year, subject to your continued employment through the end of the 2019 fiscal year. For purposes of this Performance Equity Award, “NewCo” shall be comprised of the Company, Parent’s Ignite business, and other related businesses as will be determined by Parent’s Chief Executive Officer in good faith consultation with you. The Board of Directors (or Compensation Committee) of Parent shall have the authority (and may delegate such authority to the Chief Executive Officer of Parent) to accelerate the vesting of the Performance Equity Award at an earlier date based upon its determination of satisfactory performance, and to increase the size of the Performance Equity Award (through a supplemental grant or otherwise) up to

$5,000,000. The Performance Equity Award shall be subject to the terms of an award agreement that shall be consistent with the foregoing and contain such other terms and conditions that are customary for equity awards granted by Parent generally.

(e)Severance. If, during the period commencing on the Closing Date and ending on the second anniversary of the Closing Date, your employment is terminated by the Company without Cause or by you for Good Reason, you shall be entitled to the severance benefits in such amount and manner as set forth in your Employment Agreement; provided that the cash portion of severance thereunder shall be equal to (i) two times your annual base salary (determined without taking into account any reduction in breach of Section 2(a)) and (ii) the pro rata portion of your annual target incentive opportunity (determined without taking into account any reduction in breach of Section 2(a)), based on the number of days in the calendar year through your date of termination, divided by 365. After the second anniversary of the Closing Date, you will participate in the First Data Corporation Severance/Change in Control Policy (Management Committee Level), as then in effect.

(f)Parent Common Stock Holding Period. Any Parent Common Stock acquired by you pursuant to your Inaugural Equity Award, Performance Equity Award, and Parent’s annual equity incentive compensation award (but not, for the avoidance of doubt, any Purchased Shares) shall be subject to Parent’s Equity Retention Policy, a copy of which has been provided to you.

3.Other Key Employees. Between the date of this Offer Letter and the Closing Date, you and Parent’s Chief Executive Officer shall cooperate to formalize the compensation (including equity awards and purchased share obligation) and benefits for other key executives of the Company that shall be offered by Parent to other key employees of the Company between the date of this Offer Letter and the Closing Date. Such compensation and benefits shall be

substantially consistent with the amounts set forth in the schedule exchanged between you and the Parent’s Chief Executive Officer on May 26, 2017 and such offers made by Parent shall have terms and conditions, and be in a form of offer letter, that are substantially consistent with the terms and conditions set forth in, and the form of, this Offer Letter. Nothing in this Section 3 shall be construed to impose upon you any obligation to ensure that any such key executive elects to accept such offer or to sign any offer letter.

4.Certain Definitions. For purposes of this Offer Letter, the following terms have the following meanings, which shall supersede the definitions set forth in your Employment Agreement:

“Cause” means one or more of the following: (a) the conviction of, or plea of no contest by, you with respect to a felony or other crime involving moral turpitude, (b) the commission of any other material act or omission by you involving misappropriation, embezzlement, theft, or fraud with respect to Parent or its subsidiaries or any of their business relationships, (c) your failure to substantially perform material duties as reasonably directed by Parent or its subsidiaries continuing beyond 30 days’

prior written notice of such failure, (d) your willful failure to comply in all material respects with Parent’s material and reasonable written policies, including corporate governance and human relations policies, and applicable laws with respect to Parent’s business operations, or (e) your breach of fiduciary duty, gross negligence, or willful misconduct that causes material harm to Parent or any of its subsidiaries. For purposes of clauses (d) and (e) above, no act or failure to act on your part shall be considered “willful” unless it is done, or omitted to be done, by you in bad faith or without reasonable belief that your action or omission was in the best interests of Parent.

“Good Reason” means if you resign from employment with Parent or the Company prior to the second anniversary of the Closing Date as a result of one or more of the following reasons:

(i) any material breach by Parent or the Company of the Employment Agreement, as modified by this Offer Letter, or of this Offer Letter, (ii) a material reduction or diminution of your title, duties, authority, or responsibilities from that in effect immediately following the Closing Date, it being understood that the changes to your role as contemplated by this Offer Letter and as a result of the Company ceasing to be a publicly traded entity and becoming a subsidiary corporation as a result of the Merger, shall not on their own constitute a basis for a termination of employment for Good Reason, or (iii) a material change in your principal place of employment to a location more than 25 miles outside of King of Prussia, Pennsylvania. Notwithstanding the above, the occurrence of any of the events described in clauses (i), (ii), or (iii) above will not constitute a “Good Reason” unless you give Parent written notice, within 60 calendar days after the occurrence of any such events that such circumstances constitute “Good Reason,” and Parent or the Company thereafter fails to cure such circumstances within 30 days after receipt of such notice. The termination of your employment with Parent or any of its affiliates for Cause shall preclude your resignation with Good Reason.

5.Coordination with Employment Agreement. Except as modified by this Offer Letter, your Employment Agreement shall remain in full force and effect in accordance with its terms and, following the Effective Time, Parent shall cause the Company to comply with the terms and conditions of the Employment Agreement, as modified by this Offer Letter. Notwithstanding the foregoing, your Employment Agreement (including the provisions of

Sections 5-7 thereof) shall expire upon the second anniversary of the Closing Date. You acknowledge and agree that the expiration of such Employment Agreement on the second anniversary of the Closing Date shall not constitute a termination without Cause or serve as the basis for a Good Reason termination thereunder.

6.Restrictive Covenants. Without limitation of the foregoing, and in consideration of Parent entering into the Offer Letter, you agree that you will not directly or indirectly at any time during your service with Parent or any of its affiliates and for two years following your termination of employment with Parent and any of its affiliates for any reason, (a) act as a proprietor, investor, director, officer, employee, stockholder, consultant, or partner in any business that directly or indirectly competes, at the relevant determination date, with Parent’s business or any of its affiliate’s business in any geographic area where Parent or any of its affiliates manufactures, produces, sells, leases, rents, licenses, or otherwise provides products or services, except that this section does not restrict you from investing in publicly-available mutual funds or exchange-traded funds; or (b) (i) solicit customers or clients of Parent or any of its affiliates to terminate their relationship with Parent or any of its affiliates or solicit those customers or clients to compete with any business of Parent or any of its affiliates or (ii) solicit or offer employment to any person who is, or has been at any time during the 12 months before your date of termination, employed by Parent or any of its affiliates.

7. Certain Reductions in Payments.

(a)Anything in this Offer Letter or the Employment Agreement to the contrary notwithstanding, in the event the Accounting Firm (as defined below) shall determine that receipt of all Payments (as defined below) would subject you to the excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the Accounting Firm shall determine whether to reduce any of the Payments paid or payable pursuant to this Offer Letter and the Employment Agreement (the “Agreement Payments”) so that the Parachute Value (as defined below) of all Payments, in the aggregate, equals the Safe Harbor Amount (as defined below). The Agreement Payments shall be so reduced only if the Accounting Firm determines that you would have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if the Agreement Payments were so reduced. If the Accounting Firm determines that you would not have a greater Net After-Tax Receipt of aggregate Payments if the Agreement Payments were so reduced, you shall receive all Agreement Payments to which you are entitled hereunder.

(b)If the Accounting Firm determines that aggregate Agreement Payments should be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, Parent shall promptly give you notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Accounting Firm under this Section 7 shall be binding upon Parent, the Company, and you and shall be made as soon as reasonably practicable and in no event later than 15 days following the date of your termination of employment. For purposes of reducing the Agreement Payments so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, only amounts payable under the Offer Letter and the Employment Agreement (and no other Payments) shall be reduced. The reduction of the amounts payable, if applicable, shall be made by reducing the payments and benefits in the following order: (i) cash payments that may not be valued under Treas. Reg.

§ 1.280G-1, Q&A-24(c) (“Q&A-24(c)”), (ii) equity-based payments that may not be valued

under Q&A-24(c), (iii) cash payments that may be valued under Q&A-24(c), (iv) equity-based payments that may be valued under Q&A-24(c), and (v) other types of benefits. With respect to each category of the foregoing, such reduction shall occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the Code and next with respect to payments that are deferred compensation, in each case, beginning with payments or benefits that are to be paid the farthest in time from the Accounting Firm’s determination. All reasonable fees and expenses of the Accounting Firm shall be borne solely by Parent.

(c)To the extent requested by you, Parent shall, and shall cause the Company to, cooperate with you in good faith in valuing, and the Accounting Firm shall take into account the value of, services provided or to be provided by you (including, without limitation, your agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant, before, on, or after the date of a change in ownership or control of the Company (within the meaning of Treas. Reg. § 1.280G-1, Q&A-2(b)), such that payments in respect of such services may be considered reasonable compensation within the meaning of Treas. Reg. § 1.280G-1, Q&A-9 and Q&A-40 to Q&A-44 and/or exempt from the definition of the term “parachute payment” within the meaning of Treas. Reg. § 1.280G-1, Q&A-2(a) in accordance with Treas. Reg. § 1.280G-1, Q&A-5(a).

(d)The following terms shall have the following meanings for purposes of this Section 7:

“Accounting Firm” means a nationally recognized certified public accounting firm or other professional organization that is a certified public accounting firm recognized as an expert in determinations and calculations for purposes of Section 280G of the Code that is selected by the Company and approved by Parent prior to the Merger for purposes of making the applicable

determinations hereunder, which firm shall not, without your consent, be a firm serving as accountant or auditor for Parent.

“Net After-Tax Receipt” means the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on you with respect thereto under Sections 1 and 4999 of the Code and under applicable state and local laws, determined by applying the highest marginal rate under Section 1 of the Code and under state and local laws that applied to your taxable income for the immediately preceding taxable year, or such other rate(s) as the Accounting Firm determines to be likely to apply to you in the relevant tax year(s).

“Parachute Value” of a Payment means the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the excise tax under Section 4999 of the Code will apply to such Payment.

“Payment” means any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to you or for your benefit, whether paid or payable pursuant to this Offer Letter, the Employment Agreement, or otherwise.

“Safe Harbor Amount” means 2.99 times your “base amount,” within the meaning of Section 280G(b)(3) of the Code.

8.Miscellaneous. This Offer Letter, together with your Employment Agreement, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof. This Offer Letter may not be amended or modified except by an agreement in writing signed by you and Parent. This Offer Letter shall be binding upon any successor of Parent or its businesses (whether direct or indirect, by purchase, merger, consolidation, or otherwise), in the same manner and to the same extent that Parent would be obligated under this Offer Letter if no succession had taken place. The term “Parent,” as used in this letter, shall mean Parent as defined above and any successor or assignee to the business or assets that by reason hereof becomes bound by this Offer Letter. This Offer Letter shall be governed by, and construed in accordance with, the laws of the State of Delaware without reference to conflict of law rules.

9.Pre-Employment Screening. Between the date hereof and the Closing Date, Parent’s Chief Executive Officer will determine in good faith consultation with you the appropriate background and other pre-employment screening criteria applicable to you and other Company employees.

****

We look forward to a promising future as a combined entity and believe this opportunity will result in a mutually beneficial and rewarding relationship. If you have any questions, please feel free to contact me.

[Signature Page Follows]

Please acknowledge your agreement to the terms of this Offer Letter by your signature below.

Sincerely,

FIRST DATA CORPORATION

By: /s/ Anthony S. Marino

Name: Anthony S. Mario

Title: Executive Vice President and

Head of Human Resources

ACCEPTED AND AGREED:

/s/ Jeffrey Shanahan

Jeffrey Shanahan

CARDCONNECT, LLC

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made as of July 29, 2016, by and betweenFinTech Acquisition Corp., a Delaware corporation (“Parent”),CardConnect, LLC (f/k/aFinancial Transaction Services, LLC), aDelaware limited liability company and indirect wholly-owned subsidiary of Parent (the “Company”), and Jeffrey Shanahan(“Executive”).

WHEREAS, effective as of the date hereof, FTS Holding Corporation, the Company’s parent corporation, merged with and into FinTech Merger Sub, Inc. (the “Merger”), a wholly-owned subsidiary of Parent, and the entity surviving the merger changed its name to FTS Holding Corporation (“FTS”);

WHEREAS, in connection with the Merger, the Company and the Executive desire to modify certain terms of the Employment Agreement between such parties dated as of September 15, 2010 (the “Original Employment Agreement”); and

WHEREAS, this Agreement amends and restates in its entirety the Original Employment Agreement.

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Employment. Parent and the Company shall employ Executive, and Executive hereby accepts employment with Parent and the Company, upon the terms and conditions set forth in this Agreement for the period beginning on the date hereof and ending as provided in Section 4 hereof (the “Employment Period”).

2. Position and Duties.

(a) During the Employment Period, Executive shall serve as the President and Chief Executive Officer of Parent, the Company and their Subsidiaries (as defined below) and shall have the normal duties, responsibilities, and authority of an executive serving in such position subject to the direction of Parent’s board of directors (the “Board”).

(b) Executive shall report to the Board and shall devote his best efforts and full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of Parent, the Company and their Subsidiaries. Executive shall perform his duties, responsibilities and functions to Parent, the Company and their Subsidiaries hereunder in good faith and to the best of his abilities in a diligent, trustworthy, professional and efficient manner and shall comply with Parent’s, the Company’s and their Subsidiaries’ policies and procedures in all material respects. So long as Executive is employed by Parent or the Company, Executive shall not, without the prior written consent of the Board (which consent shall not be unreasonably withheld), accept other employment or perform other services for compensation; provided, that Executive may (i) serve as an officer or director of or otherwise participate in purely educational, welfare, social, religious and civic organizations so long as such activities do not materially interfere with Executive’s services and obligations hereunder, and (ii) make and manage personal investments of his choice so long as such activities do not materially interfere with Executive’s services and obligations hereunder.

(c) Executive shall perform his duties hereunder at the Company’s office in King of Prussia, Pennsylvania. It is understood that Executive shall undertake such business travel as reasonably required by Parent or the Company to perform his duties and responsibilities.

(d) For purposes of this Agreement, “Subsidiaries” shall mean any corporation or other entity of which the securities or other ownership interests having the voting power to elect a majority of the board of directors or other governing body are, at the time of determination, owned by Parent or the Company, directly or through one of more Subsidiaries

3. Compensation and Benefits.

(a) During the Employment Period, Executive’s base salary shall be five hundred thousand dollars ($500,000) per annum, subject to increase as approved by Parent’s compensation committee (the “Base Salary”), which salary shall be payable by Parent in regular installments in accordance with Parent’s general payroll practices (in effect from time to time).In addition, during the Employment Period, Executive shall be entitled to participate in all of Parent and the Company’s vacation, paid holidays, medical and other employee benefit programs for which members of Parent, the Company and their Subsidiaries’ executive management team are generally eligible. Executive shall be entitled to six (6) weeks of paid time off each calendar year, which if not taken during any year may not be carried forward to any subsequent year and no compensation shall be payable in lieu thereof, except as otherwise required by law.

(b) During the Employment Period, Parent shall reimburse Executive for all reasonable business expenses incurred by Executive in the course of performing his duties and responsibilities under this Agreement which are consistent with Parent’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to Parent’s requirements with respect to reporting and documentation of such expenses, provided that Executive shall be entitled to travel business class on all flights taken by Executive in the course of performing his duties and responsibilities under this Agreement.

(c) All expenses or other reimbursements under this Agreement which would be deemed taxable income to the Executive shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive. Any right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, and no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

(d) In addition to the Base Salary, Executive shall be eligible to receive, in respect of each full calendar year, subject to his continued employment through the last day of each calendar year and at the discretion of Parent’s compensation committee (except as otherwise provided herein), a bonus based on the performance of the Company, as measured by the Company’s achievement of certain target(s) approved by Parent’s compensation committee (the “Annual Bonus”). During the Employment Period, Executive’s target Annual Bonus shall not be less than sixty percent (60%) of the Base Salary. The amount of the Annual Bonus for the 2016 calendar year shall be determined in accordance with the terms and conditions of the annual incentive plan under which Executive participated immediately prior to the Merger. All amounts payable pursuant to this subsection shall be payable in cash to Executive within fourteen (14) days following completion of the annual accounting audit of Parent and the Company, but in any event no later than the fifteenth (15th) day of the third month following the fiscal year in respect of

which such payment is earned or as soon as administratively practicable within the meaning of Code Section 409A (as defined below). 

(e) As soon as practicable after the consummation of the Merger, Executive shall be granted equity compensation in the form of nonqualified stock options (the “Options”) pursuant to the equity compensation plan to be adopted by Parent (or its successor) in connection with the Merger (the “Equity Plan”), to purchase a number of shares of common stock of the Parent (or its successor) equal to 33.3% of the total shares authorized for issuance under the Equity Plan at an exercise price equal to the fair market value of such shares on the grant date. The Options shall be issued pursuant to the terms and conditions of the Equity Plan and the terms and conditions of the Options shall be consistent with similar equity-based compensation awards granted to similarly-situated senior executives of Parent; provided, however, that (i) the Options shall vest and become exercisable in four equal annual installments beginning on the first anniversary of the date hereof, except that the Options shall become fully vested and exercisable (A) if the Employment Period is terminated by Parent without Cause or by Executive with Good Reason or (B) upon a “change of control” (as such term is defined in the Equity Plan) and (ii) the scheduled expiration date of the Options shall be 10 years from the grant date of the Options.

4. Term.

(a) The Employment Period shall end on thefifth (5th) anniversary of the date hereof and shall automatically be renewed on the same terms and conditions set forth herein as modified from time to time by the parties hereto for additional one-year periods beginning on such fifth (5th) anniversary unless either party notifies the other no later than sixty (60) days prior to the end of the then current term that it does not wish to renew the Agreement; provided, that (i) the Employment Period shall terminate immediately upon Executive’s resignation with Good Reason or without Good Reason, death or Disability, and (ii) the Employment Period may be terminated by Parent at the sole discretion of the Board at any time for Cause or without Cause. Any termination of the Employment Period by Parent shall be effective as specified in a written notice from Parent to Executive.

(b) If the Employment Period is terminated by Parent without Cause (other than as a result of Executive’s Disability) or by Executive with Good Reason, Executive shall be entitled to (i) a lump sum cash payment within fourteen (14) days following the date of his termination of employment equal to the sum of (A) his accrued but unused vacation, (B) Base Salary payable through the date of termination, (C) any accrued but unpaid bonus or incentive compensation earned by Executive for a prior fiscal year, (D) the target Annual Bonus for the year in which the Employment Period was terminated, to the extent it would have been payable to Executive under Section 3(d), prorated on the basis of the number of full days of service rendered by Executive during such year, and (E) any unreimbursed business expenses that are reimbursable in accordance with Section 3(b), and (ii) an amount equal to twenty-four (24) months of Executive’s Base Salary, less applicable withholdings and deductions, such amount payable in regular installments in accordance with Parent’s normal payroll practices at the time of termination over a period of twenty-four (24) months commencing on the date the Employment Period is terminated (the “Severance Period”), in each case if and only if Executive has executed and delivered to Parent and the Company the Parent’s standard, general release in form and substance satisfactory to the Board (the “Release”) within thirty (30) days of such termination and only so long as Executive has not revoked or breached the provisions of such Release or breached the provisions of Sections 5, 6 and 7 hereof during the Severance Period. Executive shall forfeit all rights to payment under clause (ii) of this Section 4(b) unless the Release is signed and delivered (and no longer subject to revocation, if applicable) within thirty (30) days following the date of Executive’s termination of employment. Subject to the provisions of Section 24, if the general release is executed and delivered and no longer subject to revocation as provided in the preceding sentence, then payments under clause (ii) of this Section 4(b) shall

be made or commence upon the thirtieth (30^th) day following Executive’s termination of employment. The first such cash payment shall include payment of all amounts that otherwise would have been due prior thereto under the terms of this Agreement had such payments commenced immediately upon Executive’s termination of employment, and any payments made thereafter shall continue in accordance with Parent’s payroll practices at the time of termination. In addition, if Executive elects to continue and pays his health insurance coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (“COBRA”), following the termination of Executive’s employment, then Parent shall pay or reimburse Executive for the portion of the monthly premium under COBRA for such coverage in excess of the portion paid by active employees for similar coverage until the earliest of (x) the expiration of the Severance Period and (y) the date Executive receives substantially equivalent health insurance coverage in connection with new employment or self-employment. 

(c) If the Employment Period is terminated (i) by Parent for Cause, (ii) due to Executive’s death or Disability, or (iii) by Executive’s resignation without Good Reason, Executive shall be entitled to receive his Base Salary through the date of such termination, any accrued but unused vacation, any accrued but unpaid bonus or incentive compensation earned by Executive for a prior fiscal year, and unreimbursed business expenses that are reimbursable in accordance with Section 3(b), all of which shall be payable in a lump sum cash payment within fourteen (14) days following the date of his termination of employment.

(d) Except as otherwise expressly provided herein, Executive shall not be entitled to any other salary, bonuses, employee benefits or compensation from Parent, the Company or their Subsidiaries after the termination of the Employment Period and all of Executive’s rights to salary, bonuses, employee benefits and other compensation hereunder which would have accrued or become payable after the termination of the Employment Period (other than vested retirement or other benefits accrued on or prior to the termination of the Employment Period (including, without limitation, any vested rights under the Equity Plan (and any successor plans)) or other amounts owing hereunder as of the date of such termination that have not yet been paid) shall cease upon such termination, other than those expressly required under applicable law (such as COBRA).

(e) Parent, the Company and their Subsidiaries may offset any amounts Executive owes Parent, the Company or such Subsidiaries against any amounts Parent, the Company or such Subsidiaries, as applicable, owes Executive hereunder, except as provided in Section 24(e) or under applicable law.

(f) For purposes of this Agreement, “Cause” shall mean with respect to Executive one or more of the following: (i) the conviction of, or plea of no contest by, Executive with respect to a felony or other crime involving moral turpitude offense if, and only if, it is determined by the Board that such event has occurred and merits termination of the Executive’s employment pursuant to this Agreement, (ii) the commission of any other act or omission by Executive involving misappropriation, embezzlement, dishonesty, theft or fraud with respect to Parent, the Company or any of their Subsidiaries or any of their business relationships, (iii) Executive’s illegal possession of a controlled substance, use of illegal drugs or repetitive abuse of alcohol or other behavior which materially interferes with the performance of his duties to Parent, the Company or any Subsidiary or which compromises the integrity and reputation of Executive, Parent, the Company or any Subsidiaries, (iv) Executive’s failure to substantially perform material duties as reasonably directed by the Board in accordance with this Agreement continuing beyond thirty (30) days’ prior written notice of such failure, (v) Executive’s willful act or omission aiding or abetting a competitor of Parent, the Company or any of their Subsidiaries to the material disadvantage or detriment of Parent, the Company and their Subsidiaries, (vi) Executive’s willful failure to comply in all material respects with Parent and the Company’s material policies, procedures and guidelines, including

corporate governance and human relations policies, and applicable laws with respect to Parent’s and the Company’s business operations, (vii) Executive’s breach of fiduciary duty, gross negligence or willful misconduct with respect to Parent, the Company or any of their Subsidiaries, or (viii) any other material breach by Executive of this Agreement which is not cured to the Board’s reasonable satisfaction within thirty (30) days after written notice thereof to Executive. For purposes of clauses (v), (vi) and (vii) above, no act or failure to act on the part of Executive shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of Parent or the Company. 

(g) The Executive’s “Disability” shall be deemed to have occurred only if, as a result of his incapacity due to physical or mental illness, Executive is considered disabled under the Company’s or Parent’s long-term disability insurance plans.

(h) For purposes of this Agreement, “Good Reason” shall mean if Executive resigns from employment with Parent or the Company prior to the end of the Employment Period as a result of one or more of the following reasons: (i) any material breach by Parent or the Company of this Agreement including a reduction in Executive’s Base Salary or target Annual Bonus opportunity or a material reduction in Executive’s employee benefits in the aggregate under this Agreement, (ii) a material reduction or diminution of Executive’s duties, authority or responsibilities (including any change in his reporting requirements), or (iii) a material change in Executive’s principal place of employment to a location more than 25 miles outside of King of Prussia, Pennsylvania. Notwithstanding the above, the occurrence of any of the events described in (i), (ii) or (iii) above will not constitute a “Good Reason” unless Executive gives Parent written notice, within sixty (60) calendar days after the occurrence of any such events that such circumstances constitute “Good Reason,” and Parent or the Company thereafter fails to cure such circumstances within 30 days after receipt of such notice. The termination of the Employment Period for Cause shall preclude Executive’s resignation with Good Reason.

(i) Executive shall not be required to mitigate the severance benefits contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such severance benefits.

5. Confidential Information.

(a) Executive acknowledges that the continued success of Parent, the Company and their Subsidiaries and affiliates, depends upon the use and protection of a large body of confidential and proprietary information. All of such confidential and proprietary information now existing or to be developed in the future will be referred to in this Agreement as “Confidential Information.” Confidential Information will be interpreted as broadly as possible to include all information of any sort (whether merely remembered or embodied in a tangible or intangible form) that is (i) related to Parent’s, the Company’s or their Subsidiaries’ or affiliates’ current or potential business, and (ii) is not generally or publicly known. Confidential Information includes, without specific limitation, the information, observations and data obtained by him whether before or after the date of this Agreement concerning the business and affairs of Parent, the Company and their Subsidiaries and affiliates, information concerning acquisition opportunities in or reasonably related to Parent, the Company’s or their Subsidiaries’ or affiliates’ business or industry of which Executive becomes aware, the persons or entities that are current, former or prospective business relations, as well as development, transition and transformation plans, methodologies and methods of doing business, strategic, marketing and expansion plans, including plans regarding planned and potential sales, financial and business plans, employee lists and telephone numbers, locations of sales agents, new and existing programs and services, prices and terms, merchant service, integration processes, requirements and costs of providing service, support and equipment. Therefore,

Executive agrees that he shall not disclose to any unauthorized person or use for his own account any of such Confidential Information without the Board’s prior written consent, unless and to the extent that any Confidential Information (i) becomes generally known to and available for use by the public other than as a result of Executive’s acts or omissions to act, or (ii) is required to be disclosed pursuant to any applicable law or court order. Executive agrees to deliver to Parent at the end of the Employment Period, or at any other time the Board may request in writing, all memoranda, notes, plans, records, reports and other documents (and copies thereof) relating to the business of Parent, the Company or their Subsidiaries or affiliates (including, without limitation, all Confidential Information) that he may then possess or have under his control. 

(b) During the Employment Period, Executive shall not use or disclose any confidential information or trade secrets, if any, of any former employers or any other person to whom Executive has an obligation of confidentiality, and shall not bring onto the premises of Parent, the Company or their Subsidiaries or affiliates any unpublished documents or any property belonging to any former employer or any other person to whom Executive has an obligation of confidentiality unless consented to in writing by the former employer or person. Executive shall use in the performance of his duties only information that is (i) generally known and used by persons with training and experience comparable to Executive’s and that is (x) common knowledge in the industry or (y) is otherwise legally in the public domain, (ii) otherwise provided or developed by Parent, the Company or their Subsidiaries or affiliates, or (iii) in the case of materials, property or information belonging to any former employer or other person to whom Executive has an obligation of confidentiality, approved for such use in writing by such former employer or person. If at any time during employment with Parent, the Company or any Subsidiary, Executive believes he is being asked to engage in work that will, or will be likely to, jeopardize any confidentiality or other obligations Executive may have to former employers or other persons, Executive shall immediately advise the Board so that Executive’s duties can be modified appropriately.

(c) Executive shall immediately notify the Board of any intended or unintended, unauthorized disclosure or use of any trade secrets or Confidential Information by Executive or any other person or entity of which Executive becomes aware. Executive shall cooperate fully with the Company in the procurement of any protection of Parent or the Company’s rights to or in any of the trade secrets or Confidential Information.

(d) Executive understands that Parent, the Company and their Subsidiaries and affiliates will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on Parent’s, the Company’s and their Subsidiaries’ and affiliates’ part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the Employment Period and thereafter, and without in any way limiting the provisions of Section 5(a) above, Executive will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than personnel of Parent, the Company or their Subsidiaries and affiliates who need to know such information in connection with their work for Parent, the Company or such Subsidiaries and affiliates) or use, except in connection with his work for Parent, the Company or their Subsidiaries and affiliates, Third Party Information unless expressly authorized by the Board’s written consent.

6. Intellectual Property, Inventions and Patents. Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Confidential Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to Parent’s, the Company’s or any of their Subsidiaries’ actual or anticipated business, research and

development or existing or future products or services and which are conceived, developed or made by Executive (whether alone or jointly with others) while employed by Parent, the Company or any Subsidiary, whether before or after the date of this Agreement (“Work Product”), shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C.A. § 101 et seq., as amended) and belong exclusively to Parent, the Company or such Subsidiary. Executive shall promptly disclose such Work Product to the Board and, at Parent’s expense, perform all actions reasonably requested by the Board (whether during or after the Employment Period) to establish and confirm such title and ownership (including, without limitation, assignments, consents, powers of attorney and other instruments).

7. Non-Compete, Non-Solicitation.

(a) In further consideration of the compensation to be paid to Executive hereunder, Executive acknowledges that during the course of his employment with Parent, the Company and their Subsidiaries (including predecessors of such entities) Executive has and shall become familiar with Parent’s, the Company’s and their Subsidiaries’ trade secrets and with other Confidential Information concerning Parent, the Company and their Subsidiaries and affiliates and that his services have been and shall be of special, unique and extraordinary value to Parent, the Company and their Subsidiaries and affiliates, and, therefore, Executive agrees that, during the Employment Period and for twenty four (24) months thereafter (the “Noncompete Period”), Executive shall not directly or indirectly, either for himself or for any other person, partnership, corporation, company or other entity, own any interest in, manage, control, participate in, consult with, render services for, or in any other manner engage in any business or enterprise which (i) is engaged in the business of developing, marketing, licensing and maintaining payment, security and encryption software solutions, including payment acceptance, authorization, settlement and reconciliation of funds functionality or (ii) provides payment processing services to merchants (provided directly and indirectly through independent sales organizations and agents) and related operations, including, but not limited to, facilitating the exchange of information and funds between merchants and cardholders’ financial institutions, providing end-to-end electronic payment processing services to merchants, including merchant set-up and training, transaction authorization and electronic draft capture, clearing and settlement, merchant accounting, merchant assistance and support and risk management or provides products, or services which are similar to or compete with any other products or services of Parent, the Company or any of their Subsidiaries (or any products or services Parent, the Company or any of their Subsidiaries are currently in the process of developing), as of the expiration date or earlier termination of the Employment Period, anywhere within the United States of America (any of the foregoing, a “Competitive Activity”). For purposes of this Agreement, “participate” includes any direct or indirect interest in any enterprise, whether as an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, executive, franchisor, franchisee, creditor, owner or otherwise; provided, that the foregoing activities shall not include the passive ownership (i.e., Executive does not directly or indirectly participate in the business or management of the applicable entity) of less than two (2)% of the stock of a publicly-traded corporation. Executive agrees that the aforementioned covenant is reasonable with respect to its duration, geographical area and scope. In particular, Executive acknowledges and agrees that the geographic scope of this restriction is necessary to protect the goodwill and Confidential Information of Parent, the Company and their Subsidiaries. 

(b) During the Employment Period and for twenty-four (24) months thereafter, Executive shall not directly or indirectly through another person or entity (i) induce or attempt to induce any employee of Parent, the Company or any Subsidiary to leave the employ of Parent, the Company or such Subsidiary, or in any way interfere with the relationship between Parent, the Company or any Subsidiary and any employee thereof, (ii) hire any person who was an employee of Parent, the Company or any Subsidiary at any time during the twelve (12) months preceding such hiring, (iii) induce or attempt

to induce any merchant, agent, independent sales organization, or other business relation of Parent, the Company or any Subsidiary to cease doing business with Parent, the Company or such Subsidiary, or in any way interfere with the relationship between any such merchant, agent, independent sales organization, or other business relation and Parent, the Company or any Subsidiary (including, without limitation, making any negative or disparaging statements or communications about Parent, the Company or their Subsidiaries) or (iv) service, engage in business with or provide products or services to any merchant, agent, independent sales organization, or other business relation of Parent, the Company or any Subsidiary with respect to any product or service provided or rendered by Parent, the Company or any of their Subsidiaries or which Parent, the Company or any of their Subsidiaries is in the process of developing, as of the expiration date or earlier termination of the Employment Period. For purposes of this Section 7(b), the term “employee” shall include consultants and independent contractors of Parent, the Company and their Subsidiaries.

(c) If, at the time of enforcement of Section 5, 6 or 7, a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. Executive acknowledges that the restrictions contained in this Section 7 are reasonable and that hehas reviewed the provisions of this Agreement with his legal counsel.

(d) In the event of the breach or a threatened breach by Executive of any of the provisions of this Section 7, Parent and the Company would suffer irreparable harm, and in addition and supplementary to other rights and remedies existing in its favor, each of Parent and the Company shall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security). In addition, in the event of an alleged breach or violation by Executive of this Section 7, the Noncompete Period or other restricted period shall be tolled until such breach or violation has been duly cured.

8. Executive’s Representations. Executive hereby represents and warrants to Parent and the Company that (i) the execution, delivery and performance of this Agreement by Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which he is bound, (ii) Executive is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any other person or entity, and (iii) upon the execution and delivery of this Agreement by Parent and the Company, this Agreement shall be the valid and binding obligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges and agrees that Executive is not entitled to receive any payments pursuant to Section 4 of the Original Employment Agreement in connection with Executive’s execution and delivery of this Agreement and the amendment and restatement of the Original Employment Agreement. Executive hereby acknowledges and represents that he has consulted with independent legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

9. Survival. Sections 4 through 24 (other than Section 22) shall survive and continue in full force in accordance with their terms notwithstanding the termination of the Employment Period. 

10. Notices. Any notice provided for in this Agreement will be in writing and will be either personally delivered, delivered by certified mail (return receipt requested), sent by reputable overnight courier service (charges prepaid), delivered by means of electronic mail (with hard copy sent to

the recipient by reputable overnight courier service (charges prepaid) that same day), or transmitted by facsimile (transmission confirmed) to the address, facsimile number or electronic mail address set forth below or at any address listed in the Company’s records, or at such address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder when delivered personally, sent by facsimile (with receipt confirmed) or electronic mail on a business day during regular business hours of the recipient (or, if not, on the next succeeding business day), three (3) days after deposit in the U.S. mail and one day after deposit with a reputable overnight courier service.

Notices to Executive:

Jeffrey Shanahan

1000 Continental Drive

Suite 300

King of Prussia, PA 19406

Facsimile: (216) 682-2416

Notices to Parent or the Company:

CardConnect, LLC

1000 Continental Drive

Suite 300

King of Prussia, PA 19406

Attention: Board of Directors

Facsimile: (216) 682-2401

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent, mailed or faxed.

11. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any action in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

12. Complete Agreement. This Agreement, those documents expressly referred to herein and other documents of even date herewith embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. Nothing contained herein shall diminish or abrogate (i) Executive’s rights under any indemnification agreements between Parent, the Company or any of their Subsidiaries on the one hand, and Executive on the other, (ii) the provisions of any such entity’s charter, bylaws, memorandum and articles of association, agreement, policies, resolutions or similar documents or statements which provide for indemnification, advancement of expenses, or contribution, or relieve Executive from fiduciary duties or standards of care, (iii) any agreement with a third party, or (iv) Executive’s rights under any insurance policy or similar arrangement. 

13. No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.

14. Counterparts. This Agreement may be executed in separate counterparts (including by means of facsimile), each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

15. Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement). This Agreement will inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees, but otherwise will not otherwise be assignable, transferable or delegable by Executive. This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as otherwise expressly provided in this Section 15.

16. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania, without giving effect to any choice of law or conflict of law rules or provisions (whether of the Commonwealth of Pennsylvania or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.

17. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company (as approved by the Board) and Executive, and no course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions of this Agreement (including, without limitation, the Company’s right to terminate the Employment Period for Cause or, except as otherwise stated herein, Executive’s right to terminate this Agreement for Good Reason) shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

18. Insurance. The Company may, at its discretion, apply for and procure in its own name and for its own benefit life and/or disability insurance on Executive in any amount or amounts considered advisable. Executive agrees to cooperate in any medical or other examination, supply any information and execute and deliver any applications or other instruments in writing as may be reasonably necessary to obtain and constitute such insurance. Executive hereby represents that he has no reason to believe that his life is not insurable at rates now prevailing for healthy men of his age.

19. Taxes. Parent, the Company and their Subsidiaries shall be entitled to deduct or withhold from any amounts owing from Parent, the Company or any of their Subsidiaries to Executive any federal, state, local or foreign withholding taxes, excise tax, or employment taxes imposed with respect to Executive’s compensation or other payments from Parent, the Company or any of their Subsidiaries or Executive’s ownership interest in Parent or the Company (including, without limitation, wages, bonuses, dividends, the receipt or exercise of equity options and/or the receipt or vesting of restricted equity). 

20. Dispute Resolution. Except with respect to disputes or claims under Sections 5, 6 or 7 hereof (which may be pursued in any court of competent jurisdiction and with respect to which each party shall bear the cost of its own attorney’s fees and expenses except as otherwise required by applicable law), this Agreement and the rights of any and all parties hereto pursuant hereto shall be settled by arbitration in Philadelphia, Pennsylvania, before three (3) arbitrators pursuant to the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (the “Association”). Arbitration may be commenced at any time by any party hereto giving written notice to each other party to a dispute that such dispute has been referred to arbitration under this Section 20. Each of the parties hereto shall select one (1) arbitrator within twenty (20) days after the date of the notice referred to above and the third arbitrator shall be a state or federal court judge selected by the two arbitrators appointed by the parties hereto, but if the two arbitrators do not so agree within twenty (20) days after their selection by the parties hereto, the selection shall be made pursuant to the rules of, and from the panels of arbitrators maintained by, the Association. Any award rendered by the arbitrators shall be conclusive and binding upon the parties hereto; provided, however, that any such award shall be accompanied by a written opinion of the arbitrators giving the reasons for the award. This provision for arbitration shall be specifically enforceable by the parties and the decision of the arbitrators in accordance herewith shall be final and binding and there shall be no right of appeal therefrom. Each party shall pay its own expenses of arbitration and the expenses of the arbitrators shall be equally shared; provided, however, that if in the opinion of the arbitrators any claim for indemnification or any defense or objection thereto was unreasonable, the arbitrators may assess, as part of their award, all or any part of the arbitration expenses of the other party (including reasonable attorneys’ fees) and of the arbitrators against the party raising such unreasonable claim, defense or objection. To the extent that arbitration may not be legally permitted hereunder and the parties to any dispute hereunder may not at the time of such dispute mutually agree to submit such dispute to arbitration, the resolution of such dispute shall be subject to the other provisions of this Agreement. Nothing contained in this Section 20 shall prevent the parties from settling any dispute by mutual agreement at any time.

21. Waiver of Jury Trial. As a specifically bargained for inducement for each of the parties hereto to enter into this Agreement (after having the opportunity to consult with counsel), each party hereto expressly waives the right to trial by jury in any lawsuit or proceeding relating to or arising in any way from this Agreement or the matters contemplated hereby.

22. Corporate Opportunity. During the Employment Period, Executive shall submit to the Board all business, commercial and investment opportunities or offers presented to Executive or of which Executive becomes aware which relate to the business of providing payment processing services to merchants (provided directly and indirectly through independent sales organizations and agents) and related operations, including, but not limited to, facilitating the exchange of information and funds between merchants and cardholders’ financial institutions, providing end-to-end electronic payment processing services to merchants, including merchant set-up and training, transaction authorization and electronic draft capture, clearing and settlement, merchant accounting, merchant assistance and support and risk management or provides products at any time during the Employment Period (“Corporate Opportunities”). Unless approved by the Board, Executive shall not accept or pursue, directly or indirectly, any Corporate Opportunities on Executive’s own behalf. 

23. Executive’s Cooperation. During the Employment Period and for one (1) year thereafter, Executive shall, subject to the Company reimbursing Executive for out-of-pocket expenses, cooperate with Parent, the Company and their Subsidiaries in any internal investigation or administrative, regulatory or judicial proceeding as reasonably requested by the Company (including, without limitation, Executive being available to the Company upon reasonable notice for interviews and factual

investigations, appearing at the Company’s request to give testimony without requiring service of a subpoena or other legal process, volunteering to the Company all pertinent information and turning over to the Company all relevant documents which are or may come into Executive’s possession, all at times and on schedules that are reasonably consistent with Executive’s other permitted activities and commitments).

24. Section 409A Compliance.

(a) The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on Executive by Code Section 409A or damages for failing to comply with Code Section 409A.

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(c) Notwithstanding any other payment schedule provided herein to the contrary, if Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then each of the following shall apply:

(i) With regard to any payment that is considered deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment shall be made on the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (B) the date of Executive’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to Executive in a lump sum, and all remaining payments due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein; and

(ii) To the extent that any benefits to be provided during the Delay Period is considered deferred compensation under Code Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Code Section 409A, Executive shall pay the cost of such benefits during the Delay Period, and the Company shall reimburse Executive, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein. 

(d) For purposes of Code Section 409A, Executive’s right to receive any installment payment pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

(e) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Code Section 409A be subject to offset, counterclaim or recoupment by any other amount payable to Executive unless otherwise permitted by Code Section 409A.

25. Legal Fees Associated with this Agreement. Following the closing of the Merger, Parent shall reimburse Executive for the documented legal fees and expenses of Executive’s counsel in connection with the review, negotiation, drafting and finalization of this Agreement in an amount not to exceed twenty thousand dollars ($20,000). 

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Employment Agreement as of the date first written above.

FINTECH ACQUISITION CORP.
	/s/ Daniel Cohen
By:	Daniel Cohen
Its:	Chief Executive Officer and President
CARDCONNECT, LLC
By:	/s/ Jeffrey Shanahan
Its:	Chief Executive Officer and President
/s/ Jeffrey Shanahan
Jeffrey Shanahan

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Frank Bisignano, Chief Executive Officer of First Data Corporation, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Data Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 1, 2018	/s/ Frank Bisignano
		Frank Bisignano Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Himanshu Patel, Executive Vice President, Chief Financial Officer (principal financial officer) of First Data Corporation, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of First Data Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 1, 2018	/s/ Himanshu A. Patel
		Himanshu A. Patel Executive Vice President, Chief Financial Officer (principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

The certification set forth below is being submitted in connection with the Quarterly Report of First Data Corporation on Form 10-Q for the period ended March 31, 2018 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Frank Bisignano, the Chief Executive Officer of First Data Corporation, certifies that, to the best of his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of First Data Corporation.

Date:	May 1, 2018	/s/ Frank Bisignano
		Frank Bisignano Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

The certification set forth below is being submitted in connection with the Quarterly Report of First Data Corporation on Form 10-Q for the period ended March 31, 2018 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Himanshu Patel, Executive Vice President, Chief Financial Officer (principal financial officer) of First Data Corporation, certifies that, to the best of his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of First Data Corporation.

Date:	May 1, 2018	/s/ Himanshu A. Patel
		Himanshu A. Patel Executive Vice President, Chief Financial Officer (principal financial officer)

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2018 shares
Document and Entity Information
Entity Registrant Name	FIRST DATA CORP
Entity Central Index Key	0000883980
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Amendment Flag	false
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	485,170,696
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	443,844,872

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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Revenues:
Revenues excluding reimbursable items	[1]	$ 2,084	$ 1,882
Reimbursable items		198	919
Total revenues		2,282	2,801
Expenses:
Cost of revenues (exclusive of items shown below)		779	781
Selling, general, and administrative		647	525
Depreciation and amortization		250	228
Other operating expenses		60	22
Total expenses excluding reimbursable items		1,736	1,556
Reimbursable items		198	919
Total expenses		1,934	2,475
Operating profit		348	326
Interest expense, net		(233)	(233)
Loss on debt extinguishment		0	(56)
Other expense		(3)	(1)
Income before income taxes and equity earnings in affiliates		112	36
Income tax expense		27	12
Equity earnings in affiliates		49	55
Net income		134	79
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest		33	43
Net income attributable to First Data Corporation		$ 101	$ 36
Net income attributable to First Data Corporation per share:
Basic (in dollars per share)		$ 0.11	$ 0.04
Diluted (in dollars per share)		$ 0.11	$ 0.04
Weighted-average common shares outstanding:
Basic (in shares)		923	910
Diluted (in shares)		946	931

[1] Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of $51 million and $52 million for the three months ended March 31, 2018 and 2017, respectively.

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CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenues accounted for under the equity method	$ 51	$ 52

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 134	$ 79
Other comprehensive income, net of tax:
Foreign currency translation adjustment	90	90
Derivative instruments	9	1
Total other comprehensive income, net of tax	99	91
Comprehensive income	233	170
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	37	46
Comprehensive income attributable to First Data Corporation	$ 196	$ 124

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CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 586	$ 498
Accounts receivable, net of allowance for doubtful accounts of $48 and $45	2,062	2,176
Settlement assets	17,547	20,363
Prepaid expenses and other current assets	295	335
Total current assets	20,490	23,372
Property and equipment, net of accumulated depreciation of $1,617 and $1,588	951	951
Goodwill	17,774	17,710
Customer relationships, net of accumulated amortization of $5,378 and $5,940	2,096	2,184
Other intangibles, net of accumulated amortization of $2,250 and $2,665	1,936	1,935
Investment in affiliates	1,067	1,054
Other long-term assets	1,101	1,063
Total assets	45,415	48,269
Current liabilities:
Accounts payable and accrued liabilities	1,578	1,659
Short-term and current portion of long-term borrowings	1,104	1,271
Settlement obligations	17,547	20,363
Total current liabilities	20,229	23,293
Long-term borrowings	17,908	17,927
Deferred tax liabilities	83	77
Other long-term liabilities	905	886
Total liabilities	39,125	42,183
Commitments and contingencies (See note 12)
Redeemable noncontrolling interest	78	72
First Data Corporation stockholders' equity:
Preferred stock, $0.01 par value; 100 shares authorized as of March 31, 2018 and December 31, 2017, respectively; no shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively	0	0
Additional paid-in capital	13,578	13,495
Accumulated loss	(8,971)	(9,059)
Accumulated other comprehensive loss	(1,049)	(1,144)
Total First Data Corporation stockholders' equity	3,365	3,152
Noncontrolling interests	2,847	2,862
Total equity	6,212	6,014
Total liabilities and equity	45,415	48,269
Class A
First Data Corporation stockholders' equity:
Common stock, $0.01 par value	5	5
Class A Treasury stock, at cost, 14 shares and 11 shares as of March 31, 2018 and December 31, 2017, respectively	(202)	(149)
Class B
First Data Corporation stockholders' equity:
Common stock, $0.01 par value	$ 4	$ 4

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CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 48	$ 45
Property and equipment, accumulated depreciation	1,617	1,588
Customer relationships, accumulated amortization	5,378	5,940
Other intangibles, accumulated amortization	$ 2,250	$ 2,665
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares (in shares)	100,000,000	100,000,000
Preferred stock, issued shares (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Class A
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares (in shares)	1,600,000,000	1,600,000,000
Common stock, issued shares (in shares)	498,000,000	492,000,000
Common stock, outstanding shares (in shares)	485,000,000	482,000,000
Treasury stock (in shares)	14,000,000	11,000,000
Class B
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares (in shares)	523,000,000	523,000,000
Common stock, issued shares (in shares)	444,000,000	443,000,000
Common stock, outstanding shares (in shares)	444,000,000	443,000,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 134	$ 79
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)	271	258
Deferred income taxes	1	15
Charges related to other operating expenses and other income	63	23
Loss on debt extinguishment	0	56
Stock-based compensation expense	74	65
Other non-cash and non-operating items, net	3	9
Increase (decrease) in cash, excluding the effects of acquisitions and dispositions, resulting from changes in:
Accounts receivable, current and long-term	136	136
Other assets, current and long-term	(14)	(26)
Accounts payable and other liabilities, current and long-term	(128)	(170)
Income tax accounts	(6)	(24)
Net cash provided by operating activities	534	421
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment	(70)	(58)
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs	(69)	(59)
Acquisitions, net of cash acquired	(17)	0
Purchase of investments	(12)	0
Proceeds from the maturity of net investment hedges	26	0
Other investing activities, net	(1)	1
Net cash used in investing activities	(143)	(116)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net	(153)	119
Proceeds from issuance of long-term debt	0	1,300
Payment of call premiums and debt issuance cost	0	(57)
Principal payments on long-term debt	(53)	(1,456)
Payment of taxes related to settlement of equity awards	(56)	(60)
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest	(52)	(43)
Other financing activities, net	10	10
Net cash used in financing activities	(304)	(187)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	3	0
Change in cash, cash equivalents and restricted cash	90	118
Cash, cash equivalents and restricted cash at beginning of period	525	414
Cash, cash equivalents and restricted cash at end of period	615	532
NON-CASH TRANSACTIONS
Capital leases, net of trade-ins	15	54
Other financing arrangements	$ 0	$ 100

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CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions		Total	Common Stock Class A	Common Stock Class B	Treasury Stock Class A	Additional Paid-In Capital	Accumulated Loss	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interest
Beginning balance (in shares) at Dec. 31, 2016			368	544	(5)
Beginning balance at Dec. 31, 2016		$ 4,131	$ 4	$ 5	$ (61)	$ 13,210	$ (10,524)	$ (1,414)	$ 2,911
Increase (Decrease) in Stockholders' Equity
Dividends and distributions paid to noncontrolling interests	[1]	(35)							(35)
Net income	[2]	71					36		35
Other comprehensive 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		4
Stock activity under stock compensation plans and other		(47)			$ (61)	14
Ending balance (in shares) at Mar. 31, 2017			374	544	(9)
Ending balance at Mar. 31, 2017		4,277	$ 4	$ 5	$ (122)	13,290	(10,488)	(1,326)	2,914
Increase (Decrease) in Stockholders' Equity
Adoption of New Revenue Standard		(13)					(13)
Beginning balance (in shares) at Dec. 31, 2017			482	443	(11)
Beginning balance at Dec. 31, 2017		6,014	$ 5	$ 4	$ (149)	13,495	(9,059)	(1,144)	2,862
Increase (Decrease) in Stockholders' Equity
Dividends and distributions paid to noncontrolling interests	[1]	(44)							(44)
Net income	[2]	126					101		25
Other comprehensive income		99						95	4
Adjustment to redemption value of redeemable noncontrolling interest		(6)				(6)
Stock compensation expense		74				74
Stock activity under stock compensation plans and other (in shares)			3	1	3
Stock activity under stock compensation plans and other		(38)			$ (53)	15
Ending balance (in shares) at Mar. 31, 2018			485	444	(14)
Ending balance at Mar. 31, 2018		$ 6,212	$ 5	$ 4	$ (202)	$ 13,578	$ (8,971)	$ (1,049)	$ 2,847

[1] The total distribution presented in the unaudited consolidated statements of equity for the three months ended March 31, 2018 and 2017 excludes $8 million and $8 million, respectively, in distributions paid to redeemable noncontrolling interest not included in equity.

[2] The total net income presented in the unaudited consolidated statements of equity for the three months ended March 31, 2018 and 2017 is $8 million and $8 million different, 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.

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CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Stockholders' Equity [Abstract]
Distributions to redeemable noncontrolling interest not included in equity	$ 8	$ 8
Change in total net income due to redeemable noncontrolling interest	$ 8	$ 8

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Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

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 processing; prepaid and payroll services; check verification; settlement and guarantee services; statement printing and remittance 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, 2017. Significant accounting policies disclosed herein have not changed, except for those disclosed below in the recently adopted section.

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, 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 “Revenues excluding reimbursable items.” 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 three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Amortization of initial payments for new contracts	$	13	$	19
Amortization related to equity method investments	8		11

Treasury Stock

In connection with the vesting of restricted stock awards or exercise of stock options, shares of Class A and Class B common stock are delivered to the Company by employees to satisfy tax withholding obligations. The Company accounts for treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. Because Class B common stock converts automatically to Class A common stock upon any transfer, whether or not for value, except for certain transactions described in the Company's amended and restated certificate of incorporation, all shares of treasury stock reside as Class A.

Reclassifications

During 2017, the Company revised its financial statements to reflect immaterial adjustments to its accounting for deferred income taxes. In the periods prior to 2015, the Company had incorrectly recorded deferred income tax assets on foreign currency translation adjustments included in other comprehensive income (loss) which the Company provided a full valuation. The adjustment resulted in a decrease of $88 million to the previously reported balances of "Accumulated Loss" and an offsetting increase to "Accumulated Other Comprehensive Income (Loss)" at December 31, 2014, and a reduction to deferred tax assets and related valuation allowance of $124 million at December 31, 2016.

Certain amounts for prior years have been reclassified to conform with the current year financial statement presentation.

New Accounting Guidance

Recently Adopted Accounting Guidance

Stock-based Compensation

In May 2017, the FASB issued guidance that clarifies when changes to terms or conditions of a stock-based payment award must be accounted for as a modification. Under the new guidance, companies only apply modification accounting guidance if the fair value, vesting conditions or classification of an award changes. The guidance was adopted prospectively to awards modified on or after the adoption date. The Company adopted the new guidance on January 1, 2018. The impact of adoption on the Company's consolidated financial statements is dependent on future changes to share-based compensation awards.

Statement of Cash Flows

In November 2016, the FASB issued guidance that changes the presentation of restricted cash and restricted cash equivalents on the statement of cash flows. Under the new guidance, companies are 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 are no longer reported as cash flow activities on the statement of cash flows. The guidance was applied using a retrospective transition method to each period presented. The Company adopted the new guidance on January 1, 2018 with no material impact to its statement of cash flows. For the three month ended March 31, 2018 and 2017, the Company held $29 million in restricted cash in both periods presented within "Other long-term assets" in the unaudited consolidated balance sheets.

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. The Company adopted the new guidance on January 1, 2018, using a retrospective approach. The impact on the Company's financial statements for the three months ended March 31, 2018 and 2017 was an increase in operating expense and a decrease in "Interest expense, net" of $2 million and $1 million, respectively.

Derivatives and Hedging

In August 2017, the FASB issued guidance to simplify the current application of hedge accounting. This standard is intended to better align a company’s risk management strategies and financial reporting for hedging relationships through changes to both designation and measurement for qualifying hedging relationships and more accurately presenting the economic effects in the financial statements. In addition, the new guidance establishes flexibility in the requirements to qualify and maintain hedge accounting. The Company adopted the new guidance on January 1, 2018 with no material impact to the Company’s consolidated financial statements.

Revenue Recognition

In May 2014, the FASB issued ASC 606 and ASC 340-40 (collectively, the New Revenue Standard) 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 New Revenue Standard, including clarification on accounting for licenses, identifying performance obligations, and principal versus agent consideration (reporting revenue gross vs. net).

The Company adopted the New Revenue Standard using a modified retrospective basis on January 1, 2018 to all contracts that were not completed. The adoption resulted in a decrease to retained earnings of $13 million for the cumulative effect of applying the New Revenue Standard. This impact was principally driven by certain software arrangements being recognized sooner; changes related to costs to obtain customers, including the related amortization period; and the release of deferred revenue associated with Clover terminals that had previously lacked standalone value. Under the modified retrospective basis, the Company did not restate its comparative consolidated financial statements for these effects.

The following tables present the impact of adopting the New Revenue Standard on the Company’s unaudited consolidated financial statements for the three months ended March 31, 2018:

	Three months ended March 31, 2018
(in millions, except per share amounts)	As Reported			Adjustments			Balances Without Adoption of ASC 606
Revenues:
Revenues excluding reimbursable items	$	2,084		$	(43	)	$	2,041
Reimbursable items	198			818			1,016
Total revenues	2,282			775			3,057
Expenses:
Total expenses excluding reimbursable items	1,736			(34		)	1,702
Reimbursable items	198			818			1,016
Total expenses	1,934			784			2,718
Operating profit	348			(9		)	339
Interest expense, net	(233		)	—			(233		)
Other expense	(3		)	—			(3		)
Income before income taxes and equity earnings in affiliates	112			(9		)	103
Income tax expense (benefit)	27			(2		)	25
Equity earnings in affiliates	49			—			49
Net income	134			(7		)	127
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	33			—			33
Net income attributable to First Data Corporation	$	101		$	(7	)	$	94
Net income attributable to First Data Corporation per share:
Basic	$	0.11		$	(0.01	)	$	0.10
Diluted	$	0.11		$	(0.01	)	$	0.10

The adoption of the New Revenue Standard had an immaterial impact on the Company’s unaudited consolidated balance sheet and unaudited consolidated statement of cash flows as of and for the three months ended March 31, 2018. Refer to note 3 "Revenue Recognition" to the Company's unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q for more information.

Recently Issued Accounting Guidance

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.

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.

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Borrowings

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Borrowings

Borrowings

(in millions)	As of March 31, 2018			As of December 31, 2017
Short-term borrowings:
Foreign lines of credit and other arrangements	$	164		$	205
Senior Secured Revolving Credit Facility June 2, 2020 at LIBOR plus 3.50% or a base rate plus 2.50%	195			272
Receivable securitized loan at LIBOR plus 1.5% 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%	563			600
Unamortized deferred financing costs(a)	(3		)	(3		)
Total short-term borrowings	919			1,074
Current portion of long-term borrowings:
Senior secured term loan facility due June 2020 at LIBOR plus 1.75% or a base rate plus 0.75%	78			78
Other arrangements and capital lease obligations	107			119
Total current portion of long-term borrowings	185			197
Total short-term and current portion of long-term borrowings	1,104			1,271
Long-term borrowings:
Senior secured term loan facility due April 2024 at LIBOR plus 2.25% or a base rate plus 1.25%	3,892			3,892
Senior secured term loan facility due July 2022 at LIBOR plus 2.25% or a base rate plus 1.25%	3,758			3,758
Senior secured term loan facility due June 2020 at LIBOR plus 1.75% or a base rate plus 0.75%	1,384			1,404
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)	(117		)	(123		)
Other arrangements and capital lease obligations	281			286
Total long-term borrowings(b)	17,908			17,927
Total borrowings(c)	$	19,012		$	19,198

(a) Unamortized deferred financing costs and certain lenders' fees associated with debt transactions were capitalized as discounts are 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, 2018 and December 31, 2017, the fair value of the Company's long-term borrowings was $18.0 billion and $18.2 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.

Foreign Lines of Credit and Other Arrangements

As of March 31, 2018 and December 31, 2017, the Company had $374 million and $546 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, 2018 and December 31, 2017, 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, 2018 and December 31, 2017, $11 million and $15 million, respectively, were uncommitted. As of March 31, 2018 and December 31, 2017, the weighted average interest rate associated with foreign lines of credit and other arrangements was 2.9% for both periods presented.

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 $6 million and $29 million of letters of credit were issued under the facilities as of March 31, 2018 and December 31, 2017, respectively. As of March 31, 2018, $1.0 billion remained available.

Senior Unsecured Revolving Credit Facility

On December 14, 2017 the Company executed a $33 million senior unsecured revolving credit facility maturing December 20, 2019, available for letters of credit. As of March 31, 2018, the Company issued $30 million of letters of credit with an interest rate of 1.85%.

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, 2018, the maximum borrowing capacity, subject to collateral availability, under the agreement is $563 million. The term of the receivables securitization agreement is through June 2020. The receivables held by FDR are recorded within "Accounts receivable, net" in the Company's unaudited consolidated balance sheets.

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Revenue Recognition

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To achieve this core principle, the Company applies the following five steps:

1. Identify the contract with a customer

2. Identify the performance obligations in the contract

3. Determine the transaction price

4. Allocate the transaction price to the performance obligations in the contract

5. Recognize revenue when or as the entity satisfies a performance obligation

Revenue is recognized net of taxes collected from customers, which are subsequently remitted to governmental authorities. The Company has elected to present shipping and handling costs associated with its products as a cost of fulfilling the Company's promise to transfer its products and services.

Nature of Products and Services

Transaction and Processing Services

The majority of the Company’s revenues are comprised of: 1) fees calculated based on a percentage of dollar volume of transactions processed; 2) fees calculated based on number of transactions processed; 3) fees calculated based on number of accounts on file during a period; or 4) some combination thereof that are associated with transaction and processing services.

The Company typically contracts with financial institutions, merchants, or affiliates of those parties. Contracts stipulate the types of processing services and articulate how fees will be incurred and calculated.

The Company's core performance obligations are to stand ready to provide holistic electronic payment processing services consisting of a series of distinct elements that are substantially the same and have the same pattern of transfer over time. The Company’s promise to its customers is to perform an unknown or unspecified quantity of tasks and the consideration received is contingent upon the customers’ use (i.e., number of payment transactions processed, number of cards on file, etc.); as such, the total transaction price is variable. The Company allocates the variable fees charged to the day in which it has the contractual right to bill under the contract.

Revenue is comprised of fees charged to the Company's customers, net of interchange fees and assessments charged by the credit card associations and debit networks, which are pass-through charges collected on behalf of the card issuers and payment networks. Interchange fees and assessments charged by credit card and debit network fees to the Company’s consolidated subsidiaries were as follows for the three months ended March 31, 2018 and 2017.

	Three months ended March 31,
(in millions)	2018		2017
Interchange fees and assessments	$	6,476	$	6,039
Debit network fees(a)	818		745

^(a)Prior to the adoption of the New Revenue Standard, debit network fees were reported gross.  

Hardware Revenues

The Company may sell or lease hardware (POS devices) and other peripherals as part of its contract with customers. Hardware typically consists of terminals or Clover devices. The Company does not manufacture hardware, but purchases hardware from third-party vendors and holds the hardware in inventory until purchased by a customer. The Company accounts for hardware as a separate performance obligation and recognizes the revenue at its standalone selling price when the customer obtains control of the hardware.

Professional Services Revenues

The Company’s professional services generally consist of professional services sold as part of a new or existing agreement or sold as a separate service. The Company’s professional services may or may not be considered distinct based on the nature of the services being provided. Professional services are recognized over time as control is transferred to the customer, either as the professional services are performed or as the services from a combined performance obligation are transferred to the customer (over the term of the related transaction and processing agreement).

Other

Other revenues principally include software licensing (fixed and usage based) and maintenance as well as interest on hardware leases. The Company's software licensing and maintenance is considered distinct and is generally recognized over the implementation period and over time, respectively, at their standalone selling prices.

Contracts with Multiple Performance Obligations

The Company’s contracts with its customers can consist of multiple performance obligations, for example in the case of hardware sold with transaction and processing services. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the customer class.

Disaggregation of Revenue

The following tables present revenues disaggregated by primary geographical regions and product types for the three months ended March 31, 2018:

	Three months ended March 31, 2018
(in millions)	Global Business Solutions		Global Financial Solutions		Network & Security Solutions		Total
North America	$	1,033	$	423	$	351	$	1,807
EMEA	162		112		2		276
LATAM	87		31		—		118
APAC	48		31		2		81
Total Revenue(a)(b)	$	1,330	$	597	$	355	$	2,282

	Three months ended March 31, 2018
(in millions)	Total
Transaction and processing services	$	2,011
Hardware, Professional Services, and Other	271
Total Revenue(a)	$	2,282

^(a)Refer to note 6 "Segment Information" of these unaudited consolidated financial statements for the reconciliation to segment revenues.

^(b)Global Business Solutions includes non wholly-owned entities and Global Financial Solutions includes reimbursable items, which includes postage and customized orders.

Contract Balances

Accounts Receivable and Leasing Receivables

Accounts receivable balances are stated net of allowance for doubtful accounts. The Company records allowances for doubtful accounts when it is probable that the accounts receivable balance will not be collected. Long-term accounts receivable balances are included in “Other long-term assets” in the unaudited consolidated balance sheets.

The Company has receivables associated with its POS terminal leasing businesses. Leasing receivables are included in “Accounts receivable” and “Other long-term assets” in the unaudited consolidated balance sheets. The Company recognizes interest income on its leasing receivables using the effective interest method. For direct financing leases, the interest rate used incorporates initial direct costs included in the net investment in the lease. For sales type leases, initial direct costs are expensed as incurred.

As of March 31, 2018 and December 31, 2017, long-term accounts receivable, net of allowance for doubtful accounts, included within “Other long-term assets” in the unaudited consolidated balance sheets was $399 million and $401 million, respectively.

Contract liabilities

The Company records deferred revenue when it receives payments or invoices in advance of delivery of products or the performance of services. A significant portion of this balance relates to service contracts where the Company received payments for upfront conversions/implementation type activities of which do not transfer a service to the customer but rather are used in fulfilling the related performance obligations that transfer over time. The advance consideration received from customers is deferred over the contract term or a longer period if it provides the customer with a material right.

The following table presents the changes in deferred revenue for the three months ended March 31, 2018:

(in millions)	Three months ended   March 31, 2018
Balance, beginning of the period	$	344
New Revenue Standard adjustments	(39		)
Deferral of revenue	58
Recognition of unearned revenue	(59		)
Other (primarily foreign currency)	5
Balance, end of period	$	309

Remaining Performance Obligation

Over 95% of the Company’s performance obligations relate to transaction and processing services or hardware that are subject to a practical expedient (e.g., variable consideration) or point in time recognition, respectively. The Company's contracts with customers typically do not specify fixed revenues to be realized. Certain customer contracts contain fixed minimums and non-refundable up-front fees (fixed price guarantees). However, the amounts which are considered fixed price guarantees are not material to total consolidated revenue. The Company's contracts with Small Medium Business (SMB) merchants have an original expected duration of less than one year. Larger contracts in the Global Business Solutions, Global Financial Solutions, and Network & Security Solutions segments typically have contractual terms ranging from one to fifteen years with variability being resolved on a daily basis.

Costs to Obtain and Fulfill a Contract

The Company capitalizes initial payments for new contracts and contract renewals. These costs are amortized as a reduction of revenue over the benefit period, which is generally the contract term, unless a commensurate payment is not expected at renewal. As of March 31, 2018 and December 31, 2017, the Company had $166 million and $145 million, respectively, of capitalized contract costs included with Other Intangibles, net. For the three months ended March 31, 2018 and 2017, the Company had $13 million and $19 million, respectively, of amortization expense related to these costs.

The Company generally expenses sales commissions as incurred, as the Company's commission plans are paid on recurring monthly revenues, portfolios of existing customers or have a substantive stay requirement prior to payment.

The Company capitalizes conversion related costs associated with enabling customers to receive its processing services. These costs are amortized over the expected benefit period of seven years based on the related services being provided, and are reflected within “Depreciation and amortization” in the Company's unaudited consolidated statement of operations. As of March 31, 2018 and December 31, 2017, the Company had $156 million and $160 million, respectively, of capitalized conversion costs included with Other Intangibles, net. For the three months ended March 31, 2018 and 2017, the Company had $10 million and $7 million, respectively, of amortization expense related to these costs.

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Stock Compensation Plans

3 Months Ended

Mar. 31, 2018

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. Total stock-based compensation expense recognized in the "Cost of revenues" 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 three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions)	2018		2017
Cost of revenues	$	16	$	19
Selling, general, and administrative	58		46
Total stock-based compensation expense	$	74	$	65

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, 2018, 9 million restricted stock awards and units were granted at a weighted average price per share of $15.37. 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.

As of March 31, 2018, there was $37 million and $405 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, 2018 and 2017, the Company paid approximately $56 million and $60 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, 2017.

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Net Income Attributable to First Data Corporation Per Share

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Net Income Attributable to First Data Corporation Per Share

Net Income Attributable to First Data Corporation Per Share

Basic net income per share is calculated by dividing net income attributable to FDC by the weighted-average shares outstanding during the period, without consideration for any potential dilutive shares. Diluted net income 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 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. Both Class A and B common stock are included in the net income attributable to First Data Corporation per share calculation since they have the same rights other than voting.

The following table sets forth the computation of the Company's basic and diluted net income attributable to First Data Corporation per share for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions, except per share amounts)	2018		2017
Numerator:
Net income attributable to First Data Corporation	$	101	$	36
Denominator:
Weighted average shares used in computing net income per share, basic	923		910
Effect of dilutive securities	23		21
Total dilutive securities	946		931
Net income attributable to First Data Corporation per share:
Basic	$	0.11	$	0.04
Diluted	$	0.11	$	0.04
Anti-dilutive shares excluded from diluted net income per share(a)	11		13

(a) Potentially dilutive securities whose effect would have been anti-dilutive are excluded from the computation of diluted earnings per share for all periods presented.

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Segment Information

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Segment Information

Segment Information

For a detailed discussion of the Company’s accounting 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, 2017.

Prior to January 1, 2018, the Company presented segment revenues net of certain items including revenue-based commission payments to Independent Sales Organizations (ISOs) and sales channels. The Company is no longer excluding ISO commissions from segment revenue as this change enhances the consistency of accounting methodologies amongst the Company's various distribution channels in the Global Business Solutions segment. This change in segment reporting has been applied retrospectively. Under the retrospective approach, the Company adjusted the prior period results presented in these unaudited consolidated financial statements.

The following tables present the Company’s reportable segment results for the three months ended March 31, 2018 and 2017:

	Three months ended March 31, 2018
(in millions)	Global Business Solutions		Global Financial Solutions			Network & Security Solutions		Corporate			Total
Revenues:
Total revenues	$	1,310	$	401		$	362	$	—		$	2,073
Equity earnings in affiliates	8		(1		)	—		—			7
Total segment revenues	$	1,318	$	400		$	362	$	—		$	2,080
Depreciation and amortization	$	125	$	88		$	29	$	—		$	242
Segment EBITDA	434		166			175		(45		)	730

	Three months ended March 31, 2017
(in millions)	Global Business Solutions		Global Financial Solutions		Network & Security Solutions		Corporate			Total
Revenues:
Total revenues	$	1,109	$	393	$	361	$	—		$	1,863
Equity earnings in affiliates	9		—		—		—			9
Total segment revenues	$	1,118	$	393	$	361	$	—		$	1,872
Depreciation and amortization	$	106	$	85	$	30	$	1		$	222
Segment EBITDA	382		154		156		(42		)	650

The following table presents a reconciliation of reportable segment amounts to the Company’s consolidated balances for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Total segment revenues	$	2,080		$	1,872
Adjustments:
Non wholly-owned entities(a)	4			10
Reimbursable items(b)	198			919
Consolidated revenues	$	2,282		$	2,801
Total segment EBITDA	$	730		$	650
Adjustments:
Non wholly-owned entities(a)	18			6
Depreciation and amortization	(250		)	(228		)
Interest expense, net	(233		)	(233		)
Loss on debt extinguishment	—			(56		)
Other items(c)	(63		)	(26		)
Stock-based compensation	(74		)	(65		)
Income tax expense	(27		)	(12		)
Net income attributable to First Data Corporation	$	101		$	36

(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) Reimbursable items for the three months ended March 31, 2018 reflect adoption of the New Revenue Standard.

(c) Includes restructuring, non-normal course litigation and regulatory settlements, debt issuance expenses, deal and deal integration costs, and “Other 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, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Segment depreciation and amortization	$	242		$	222
Adjustments for non wholly-owned entities	16			17
Amortization of initial payments for new contracts(a)	13			19
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows	271			258
Amortization of equity method investments(b)	(8		)	(11		)
Amortization of initial payments for new contracts(a)	(13		)	(19		)
Total consolidated depreciation and amortization per unaudited consolidated statements of operations	$	250		$	228

(a) Included in "Revenues excluding reimbursable items" 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.

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Income Taxes

3 Months Ended

Mar. 31, 2018

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 three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Income tax expense	$	27		$	12
Effective income tax rate	17		%	13		%

The effective tax rate for the three months ended March 31, 2018 was lower than the statutory rate due to $21 million benefit attributed to equity compensation related tax benefits, reductions to the liability for unrecognized tax benefits, the recording of tax benefits associated with the 2017 research and development credit along with a favorable adjustment for noncontrolling interests from pass through entities. These benefits were partially offset by expenses associated with state income taxes, taxation of the Company's U.K. operations in both the U.S. and the U.K., disallowed executive compensation deductions, and the taxable inclusion associated with global intangible low-taxed income (GILTI).

The effective tax rate for the three months ended March 31, 2017 was 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 was also impacted by the Company not recording tax expense on noncontrolling interests from pass through entities.

The primary driver of the increased tax rate from 2017 to 2018 is the release of the valuation allowance against the net deferred tax assets in the U.S. federal and certain state jurisdictions in Q4 of 2017.

At March 31, 2018, the Company has not completed its accounting for the tax effects of the enactment of the Tax Cuts and Jobs Act (the 2017 Tax Act). During 2017, the Company made reasonable estimates of the effects on its existing deferred tax balances, valuation allowance assessment for certain tax assets and the one-time transition tax. These estimates were not adjusted during the quarter ended March 31, 2018, although they remain subject to change as the Company obtains the information necessary to complete the calculations or refines its interpretations of the application of the 2017 Tax Act.

The Company's liability for unrecognized tax benefits was approximately $211 million as of March 31, 2018. The Company anticipates it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $133 million over the next twelve months beginning March 31, 2018 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.

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Redeemable Noncontrolling Interest

3 Months Ended

Mar. 31, 2018

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 three months ended March 31, 2018 and 2017:

(in millions)	2018			2017
Balance as of January 1,	$	72		$	73
Distributions	(8		)	(8		)
Share of income	8			8
Adjustment to redemption value of redeemable noncontrolling interest	6			(1		)
Balance as of March 31,	$	78		$	72

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Other Operating Expenses

3 Months Ended

Mar. 31, 2018

Other Income and Expenses [Abstract]

Other Operating Expenses

Other Operating Expenses

The following table details the components of "Other operating expenses" in the unaudited consolidated statements of operations for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Restructuring, net	$	32	$	23
Deal and deal integration costs	7		—
Customer related costs	20		—
Other	1		(1		)
Other operating expenses	$	60	$	22

Restructuring

During the three months ended March 31, 2018 and 2017, the Company recorded restructuring charges in connection with ongoing expense management initiatives. The Company has ongoing initiatives, which are expected to result in $25 million in additional restructuring costs over the next twelve months. The Company continues to evaluate operating efficiencies and could incur further restructuring costs beyond these initiatives.

A summary of net pretax charges incurred by segment was as follows for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Global Business Solutions	$	5	$	9
Global Financial Solutions	2		4
Network & Security Solutions	16		2
Corporate	9		8
Restructuring, net	$	32	$	23

The following table summarizes the Company’s utilization of restructuring accruals for the three months ended March 31, 2018:

(in millions)	Employee Severance			Other
Remaining accrual as of January 1, 2018	$	21		$	—
Employee expense	22			—
Loss on disposal of property and equipment, net	—			10
Cash payments and other	(18		)	(6		)
Remaining accrual as of March 31, 2018	$	25		$	4

Deal and Deal Integration Costs

Over the past 12 months, the Company completed several acquisitions, the two largest of which were CardConnect and BluePay. In connection with these acquisitions, the Company incurred $7 million in deal and deal integration costs for the three months ended March 31, 2018.

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Acquisitions and Dispositions

3 Months Ended

Mar. 31, 2018

Business Combinations [Abstract]

Acquisitions and Dispositions

Acquisitions and Dispositions

GreekBill Acquisition

In January 2018 the Company acquired 100% of GreekBill, a web-based billing and financial management company catering exclusively to fraternities and sororities. The purchase price was approximately $17 million and GreekBill is reported as part of the Company's Global Business Solutions segment. The acquisition of GreekBill had an immaterial impact on revenue and EBITDA.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2018

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 in excess of 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 March 31, 2018 and December 31, 2017:

		As of March 31, 2018					As of December 31, 2017
(in millions)	Notional Currency	Notional Value	Assets(a)		Liabilities(a)		Notional Value	Assets(a)		Liabilities(a)
Derivatives designated as hedges of net investments in foreign operations:
Foreign exchange contracts(b)	AUD	—	$	—	$	—	100	$	28	$	—
Foreign exchange contracts	EUR	915	—		105		915	—		76
Foreign exchange contracts	GBP	150	—		13		150	—		6
Foreign exchange contracts	CAD	95	—		—		95	—		2
			—		118			28		84
Derivatives designated as cash flow hedges:
Interest rate collar contracts	USD	4,300	22		—		4,300	12		—
			$	22	$	118		$	40	$	84

(a) The Company's derivatives 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) The cross-currency swap with a notional value of AUD 100 million matured on January 18, 2018 and the Company received $26 million.

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 June 2020.

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 September 2019.

As of March 31, 2018, the Company has not posted any collateral related to any of its derivative financial instruments.

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 three months ended March 31, 2018 and 2017:

	Three months ended March 31,
	2018					2017
(in millions, pretax)	Interest Rate Contracts		Foreign Exchange Contracts			Interest Rate Contracts		Foreign Exchange Contracts
Derivatives designated as hedging instruments:
(Loss) recognized in "Foreign currency translation adjustment" in the unaudited consolidated statements of comprehensive income (effective portion)	$	—	$	(30	)	$	—	$	(14	)
Gain recognized in "Derivative instruments" in the unaudited consolidated statements of comprehensive income (effective portion)	9		—			1		—

Accumulated Derivative Gains and Losses

The following table summarizes activity in other comprehensive income related to derivative instruments classified as cash flow hedges and net investment hedges held by the Company for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions, after tax)	2018			2017
Accumulated gain included in other comprehensive income at beginning of period	$	121		$	177
Decrease in fair value of derivatives that qualify for hedge accounting, net of tax(a) (b)	(16		)	(13		)
Accumulated gain included in other comprehensive income at end of period	$	105		$	164

(a) (Losses) gains are included in "Derivative instruments" and “Foreign currency translation adjustment” in the unaudited consolidated statements of comprehensive income. 

(b) Net of $5 million and $0 tax benefit for the three months ended March 31, 2018 and 2017, respectively.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2018

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.

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 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 or other claims arising from its merchant business; 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 $165 million for merchant matters, and $0 to $5 million for other matters, resulting in a total estimated range of possible losses of $0 to $175 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 the high end of the estimated range.

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Investment in Affiliates

3 Months Ended

Mar. 31, 2018

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, 2018, the Company had one unconsolidated significant subsidiary that was not required to be consolidated, but represents more than 20% of the Company’s pretax income. Summarized unaudited financial information for the affiliate is presented below for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Net operating revenues	$	195	$	208
Operating expenses	101		98
Operating income	$	94	$	110
Net income	$	94	$	110
FDC equity earnings	33		38

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On April 24, 2018, the Company and the Internal Revenue Service reached an agreement regarding the audit of its federal tax returns for the years 2005-2007, which will result in a $117 million income tax benefit. The Company will record this income tax benefit in the second quarter of 2018.

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2018

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, 2017. Significant accounting policies disclosed herein have not changed, except for those disclosed below in the recently adopted section.

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, 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.

Treasury Stock

Treasury Stock

In connection with the vesting of restricted stock awards or exercise of stock options, shares of Class A and Class B common stock are delivered to the Company by employees to satisfy tax withholding obligations. The Company accounts for treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. Because Class B common stock converts automatically to Class A common stock upon any transfer, whether or not for value, except for certain transactions described in the Company's amended and restated certificate of incorporation, all shares of treasury stock reside as Class A.

Reclassifications

Reclassifications

During 2017, the Company revised its financial statements to reflect immaterial adjustments to its accounting for deferred income taxes. In the periods prior to 2015, the Company had incorrectly recorded deferred income tax assets on foreign currency translation adjustments included in other comprehensive income (loss) which the Company provided a full valuation. The adjustment resulted in a decrease of $88 million to the previously reported balances of "Accumulated Loss" and an offsetting increase to "Accumulated Other Comprehensive Income (Loss)" at December 31, 2014, and a reduction to deferred tax assets and related valuation allowance of $124 million at December 31, 2016.

Certain amounts for prior years have been reclassified to conform with the current year financial statement presentation.

New Accounting Guidance

New Accounting Guidance

Recently Adopted Accounting Guidance

Stock-based Compensation

In May 2017, the FASB issued guidance that clarifies when changes to terms or conditions of a stock-based payment award must be accounted for as a modification. Under the new guidance, companies only apply modification accounting guidance if the fair value, vesting conditions or classification of an award changes. The guidance was adopted prospectively to awards modified on or after the adoption date. The Company adopted the new guidance on January 1, 2018. The impact of adoption on the Company's consolidated financial statements is dependent on future changes to share-based compensation awards.

Statement of Cash Flows

In November 2016, the FASB issued guidance that changes the presentation of restricted cash and restricted cash equivalents on the statement of cash flows. Under the new guidance, companies are 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 are no longer reported as cash flow activities on the statement of cash flows. The guidance was applied using a retrospective transition method to each period presented. The Company adopted the new guidance on January 1, 2018 with no material impact to its statement of cash flows. For the three month ended March 31, 2018 and 2017, the Company held $29 million in restricted cash in both periods presented within "Other long-term assets" in the unaudited consolidated balance sheets.

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. The Company adopted the new guidance on January 1, 2018, using a retrospective approach. The impact on the Company's financial statements for the three months ended March 31, 2018 and 2017 was an increase in operating expense and a decrease in "Interest expense, net" of $2 million and $1 million, respectively.

Derivatives and Hedging

In August 2017, the FASB issued guidance to simplify the current application of hedge accounting. This standard is intended to better align a company’s risk management strategies and financial reporting for hedging relationships through changes to both designation and measurement for qualifying hedging relationships and more accurately presenting the economic effects in the financial statements. In addition, the new guidance establishes flexibility in the requirements to qualify and maintain hedge accounting. The Company adopted the new guidance on January 1, 2018 with no material impact to the Company’s consolidated financial statements.

Revenue Recognition

In May 2014, the FASB issued ASC 606 and ASC 340-40 (collectively, the New Revenue Standard) 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 New Revenue Standard, including clarification on accounting for licenses, identifying performance obligations, and principal versus agent consideration (reporting revenue gross vs. net).

The Company adopted the New Revenue Standard using a modified retrospective basis on January 1, 2018 to all contracts that were not completed. The adoption resulted in a decrease to retained earnings of $13 million for the cumulative effect of applying the New Revenue Standard. This impact was principally driven by certain software arrangements being recognized sooner; changes related to costs to obtain customers, including the related amortization period; and the release of deferred revenue associated with Clover terminals that had previously lacked standalone value. Under the modified retrospective basis, the Company did not restate its comparative consolidated financial statements for these effects.

The following tables present the impact of adopting the New Revenue Standard on the Company’s unaudited consolidated financial statements for the three months ended March 31, 2018:

	Three months ended March 31, 2018
(in millions, except per share amounts)	As Reported			Adjustments			Balances Without Adoption of ASC 606
Revenues:
Revenues excluding reimbursable items	$	2,084		$	(43	)	$	2,041
Reimbursable items	198			818			1,016
Total revenues	2,282			775			3,057
Expenses:
Total expenses excluding reimbursable items	1,736			(34		)	1,702
Reimbursable items	198			818			1,016
Total expenses	1,934			784			2,718
Operating profit	348			(9		)	339
Interest expense, net	(233		)	—			(233		)
Other expense	(3		)	—			(3		)
Income before income taxes and equity earnings in affiliates	112			(9		)	103
Income tax expense (benefit)	27			(2		)	25
Equity earnings in affiliates	49			—			49
Net income	134			(7		)	127
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	33			—			33
Net income attributable to First Data Corporation	$	101		$	(7	)	$	94
Net income attributable to First Data Corporation per share:
Basic	$	0.11		$	(0.01	)	$	0.10
Diluted	$	0.11		$	(0.01	)	$	0.10

The adoption of the New Revenue Standard had an immaterial impact on the Company’s unaudited consolidated balance sheet and unaudited consolidated statement of cash flows as of and for the three months ended March 31, 2018. Refer to note 3 "Revenue Recognition" to the Company's unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q for more information.

Recently Issued Accounting Guidance

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.

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.

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Basis of Presentation and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2018

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 three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Amortization of initial payments for new contracts	$	13	$	19
Amortization related to equity method investments	8		11

Impact of adopting the new revenue standard

The following tables present the impact of adopting the New Revenue Standard on the Company’s unaudited consolidated financial statements for the three months ended March 31, 2018:

	Three months ended March 31, 2018
(in millions, except per share amounts)	As Reported			Adjustments			Balances Without Adoption of ASC 606
Revenues:
Revenues excluding reimbursable items	$	2,084		$	(43	)	$	2,041
Reimbursable items	198			818			1,016
Total revenues	2,282			775			3,057
Expenses:
Total expenses excluding reimbursable items	1,736			(34		)	1,702
Reimbursable items	198			818			1,016
Total expenses	1,934			784			2,718
Operating profit	348			(9		)	339
Interest expense, net	(233		)	—			(233		)
Other expense	(3		)	—			(3		)
Income before income taxes and equity earnings in affiliates	112			(9		)	103
Income tax expense (benefit)	27			(2		)	25
Equity earnings in affiliates	49			—			49
Net income	134			(7		)	127
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	33			—			33
Net income attributable to First Data Corporation	$	101		$	(7	)	$	94
Net income attributable to First Data Corporation per share:
Basic	$	0.11		$	(0.01	)	$	0.10
Diluted	$	0.11		$	(0.01	)	$	0.10

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Borrowings (Tables)

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Schedule of borrowings

(in millions)	As of March 31, 2018			As of December 31, 2017
Short-term borrowings:
Foreign lines of credit and other arrangements	$	164		$	205
Senior Secured Revolving Credit Facility June 2, 2020 at LIBOR plus 3.50% or a base rate plus 2.50%	195			272
Receivable securitized loan at LIBOR plus 1.5% 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%	563			600
Unamortized deferred financing costs(a)	(3		)	(3		)
Total short-term borrowings	919			1,074
Current portion of long-term borrowings:
Senior secured term loan facility due June 2020 at LIBOR plus 1.75% or a base rate plus 0.75%	78			78
Other arrangements and capital lease obligations	107			119
Total current portion of long-term borrowings	185			197
Total short-term and current portion of long-term borrowings	1,104			1,271
Long-term borrowings:
Senior secured term loan facility due April 2024 at LIBOR plus 2.25% or a base rate plus 1.25%	3,892			3,892
Senior secured term loan facility due July 2022 at LIBOR plus 2.25% or a base rate plus 1.25%	3,758			3,758
Senior secured term loan facility due June 2020 at LIBOR plus 1.75% or a base rate plus 0.75%	1,384			1,404
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)	(117		)	(123		)
Other arrangements and capital lease obligations	281			286
Total long-term borrowings(b)	17,908			17,927
Total borrowings(c)	$	19,012		$	19,198

(a) Unamortized deferred financing costs and certain lenders' fees associated with debt transactions were capitalized as discounts are 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, 2018 and December 31, 2017, the fair value of the Company's long-term borrowings was $18.0 billion and $18.2 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.

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Schedule of amounts associated with processing services revenue

Interchange fees and assessments charged by credit card and debit network fees to the Company’s consolidated subsidiaries were as follows for the three months ended March 31, 2018 and 2017.

	Three months ended March 31,
(in millions)	2018		2017
Interchange fees and assessments	$	6,476	$	6,039
Debit network fees(a)	818		745

Revenue disaggregated by geographical regions and product types

The following tables present revenues disaggregated by primary geographical regions and product types for the three months ended March 31, 2018:

	Three months ended March 31, 2018
(in millions)	Global Business Solutions		Global Financial Solutions		Network & Security Solutions		Total
North America	$	1,033	$	423	$	351	$	1,807
EMEA	162		112		2		276
LATAM	87		31		—		118
APAC	48		31		2		81
Total Revenue(a)(b)	$	1,330	$	597	$	355	$	2,282

	Three months ended March 31, 2018
(in millions)	Total
Transaction and processing services	$	2,011
Hardware, Professional Services, and Other	271
Total Revenue(a)	$	2,282

^(a)Refer to note 6 "Segment Information" of these unaudited consolidated financial statements for the reconciliation to segment revenues.

^(b)Global Business Solutions includes non wholly-owned entities and Global Financial Solutions includes reimbursable items,

Changes in deferred revenue

(in millions)	Three months ended   March 31, 2018
Balance, beginning of the period	$	344
New Revenue Standard adjustments	(39		)
Deferral of revenue	58
Recognition of unearned revenue	(59		)
Other (primarily foreign currency)	5
Balance, end of period	$	309

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Stock Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2018

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 revenues" 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 three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions)	2018		2017
Cost of revenues	$	16	$	19
Selling, general, and administrative	58		46
Total stock-based compensation expense	$	74	$	65

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Net Income Attributable to First Data Corporation Per Share (Tables)

3 Months Ended

Mar. 31, 2018

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 attributable to First Data Corporation per share for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions, except per share amounts)	2018		2017
Numerator:
Net income attributable to First Data Corporation	$	101	$	36
Denominator:
Weighted average shares used in computing net income per share, basic	923		910
Effect of dilutive securities	23		21
Total dilutive securities	946		931
Net income attributable to First Data Corporation per share:
Basic	$	0.11	$	0.04
Diluted	$	0.11	$	0.04
Anti-dilutive shares excluded from diluted net income per share(a)	11		13

(a) Potentially dilutive securities whose effect would have been anti-dilutive are excluded from the computation of diluted earnings per share for all periods presented.

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018 and 2017:

	Three months ended March 31, 2018
(in millions)	Global Business Solutions		Global Financial Solutions			Network & Security Solutions		Corporate			Total
Revenues:
Total revenues	$	1,310	$	401		$	362	$	—		$	2,073
Equity earnings in affiliates	8		(1		)	—		—			7
Total segment revenues	$	1,318	$	400		$	362	$	—		$	2,080
Depreciation and amortization	$	125	$	88		$	29	$	—		$	242
Segment EBITDA	434		166			175		(45		)	730

	Three months ended March 31, 2017
(in millions)	Global Business Solutions		Global Financial Solutions		Network & Security Solutions		Corporate			Total
Revenues:
Total revenues	$	1,109	$	393	$	361	$	—		$	1,863
Equity earnings in affiliates	9		—		—		—			9
Total segment revenues	$	1,118	$	393	$	361	$	—		$	1,872
Depreciation and amortization	$	106	$	85	$	30	$	1		$	222
Segment EBITDA	382		154		156		(42		)	650

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, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Total segment revenues	$	2,080		$	1,872
Adjustments:
Non wholly-owned entities(a)	4			10
Reimbursable items(b)	198			919
Consolidated revenues	$	2,282		$	2,801
Total segment EBITDA	$	730		$	650
Adjustments:
Non wholly-owned entities(a)	18			6
Depreciation and amortization	(250		)	(228		)
Interest expense, net	(233		)	(233		)
Loss on debt extinguishment	—			(56		)
Other items(c)	(63		)	(26		)
Stock-based compensation	(74		)	(65		)
Income tax expense	(27		)	(12		)
Net income attributable to First Data Corporation	$	101		$	36

(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) Reimbursable items for the three months ended March 31, 2018 reflect adoption of the New Revenue Standard.

(c) Includes restructuring, non-normal course litigation and regulatory settlements, debt issuance expenses, deal and deal integration costs, and “Other 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, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Segment depreciation and amortization	$	242		$	222
Adjustments for non wholly-owned entities	16			17
Amortization of initial payments for new contracts(a)	13			19
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows	271			258
Amortization of equity method investments(b)	(8		)	(11		)
Amortization of initial payments for new contracts(a)	(13		)	(19		)
Total consolidated depreciation and amortization per unaudited consolidated statements of operations	$	250		$	228

(a) Included in "Revenues excluding reimbursable items" 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.

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2018

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 three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018			2017
Income tax expense	$	27		$	12
Effective income tax rate	17		%	13		%

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Redeemable Noncontrolling Interest (Tables)

3 Months Ended

Mar. 31, 2018

Noncontrolling Interest [Abstract]

Summary of the redeemable noncontrolling interest activity

The following table presents a summary of the redeemable noncontrolling interest activity during the three months ended March 31, 2018 and 2017:

(in millions)	2018			2017
Balance as of January 1,	$	72		$	73
Distributions	(8		)	(8		)
Share of income	8			8
Adjustment to redemption value of redeemable noncontrolling interest	6			(1		)
Balance as of March 31,	$	78		$	72

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Other Operating Expenses (Tables)

3 Months Ended

Mar. 31, 2018

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 for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Restructuring, net	$	32	$	23
Deal and deal integration costs	7		—
Customer related costs	20		—
Other	1		(1		)
Other operating expenses	$	60	$	22

Summary of net pretax charges incurred by segment

A summary of net pretax charges incurred by segment was as follows for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Global Business Solutions	$	5	$	9
Global Financial Solutions	2		4
Network & Security Solutions	16		2
Corporate	9		8
Restructuring, net	$	32	$	23

Summary of utilization of restructuring accruals

The following table summarizes the Company’s utilization of restructuring accruals for the three months ended March 31, 2018:

(in millions)	Employee Severance			Other
Remaining accrual as of January 1, 2018	$	21		$	—
Employee expense	22			—
Loss on disposal of property and equipment, net	—			10
Cash payments and other	(18		)	(6		)
Remaining accrual as of March 31, 2018	$	25		$	4

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional amounts of outstanding derivative positions

The Company held the following derivative instruments as of March 31, 2018 and December 31, 2017:

		As of March 31, 2018					As of December 31, 2017
(in millions)	Notional Currency	Notional Value	Assets(a)		Liabilities(a)		Notional Value	Assets(a)		Liabilities(a)
Derivatives designated as hedges of net investments in foreign operations:
Foreign exchange contracts(b)	AUD	—	$	—	$	—	100	$	28	$	—
Foreign exchange contracts	EUR	915	—		105		915	—		76
Foreign exchange contracts	GBP	150	—		13		150	—		6
Foreign exchange contracts	CAD	95	—		—		95	—		2
			—		118			28		84
Derivatives designated as cash flow hedges:
Interest rate collar contracts	USD	4,300	22		—		4,300	12		—
			$	22	$	118		$	40	$	84

(a) The Company's derivatives 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) The cross-currency swap with a notional value of AUD 100 million matured on January 18, 2018 and the Company received $26 million.

Schedule of the effect of derivative instruments on the Consolidated Statements of Operations

Derivative gains and (losses) were as follows for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
	2018					2017
(in millions, pretax)	Interest Rate Contracts		Foreign Exchange Contracts			Interest Rate Contracts		Foreign Exchange Contracts
Derivatives designated as hedging instruments:
(Loss) recognized in "Foreign currency translation adjustment" in the unaudited consolidated statements of comprehensive income (effective portion)	$	—	$	(30	)	$	—	$	(14	)
Gain recognized in "Derivative instruments" in the unaudited consolidated statements of comprehensive income (effective portion)	9		—			1		—

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 related to derivative instruments classified as cash flow hedges and net investment hedges held by the Company for the three months ended March 31, 2018 and 2017:

	Three months ended March 31,
(in millions, after tax)	2018			2017
Accumulated gain included in other comprehensive income at beginning of period	$	121		$	177
Decrease in fair value of derivatives that qualify for hedge accounting, net of tax(a) (b)	(16		)	(13		)
Accumulated gain included in other comprehensive income at end of period	$	105		$	164

(a) (Losses) gains are included in "Derivative instruments" and “Foreign currency translation adjustment” in the unaudited consolidated statements of comprehensive income. 

(b) Net of $5 million and $0 tax benefit for the three months ended March 31, 2018 and 2017, respectively.

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Investment in Affiliates (Tables)

3 Months Ended

Mar. 31, 2018

Equity Method Investments and Joint Ventures [Abstract]

Summary of unaudited financial information related to the operating results

Summarized unaudited financial information for the affiliate is presented below for the three months ended March 31, 2018 and 2017:

	Three months ended   March 31,
(in millions)	2018		2017
Net operating revenues	$	195	$	208
Operating expenses	101		98
Operating income	$	94	$	110
Net income	$	94	$	110
FDC equity earnings	33		38

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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, 2018	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Amortization of initial payments for new contracts	$ 13	$ 19
Amortization related to equity method investments	$ 8	$ 11

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Basis of Presentation and Summary of Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2014
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Reclassification from AOCI to accumulated loss		$ 88
Restatement Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Deferred tax assets	$ 124
Valuation allowance	$ 124

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Basis of Presentation and Summary of Significant Accounting Policies - New Accounting Guidance (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Restricted cash	$ 29	$ 29
Interest expense, net	(233)	(233)
Adoption of new revenue standard			$ 13
Accumulated Loss
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adoption of new revenue standard			$ 13
Accounting Standards Update 2017-07
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating expenses	$ 2	1
Interest expense, net		$ 1

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Basis of Presentation and Summary of Significant Accounting Policies - Impact of Adoption of New Revenue Standard (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Revenues:
Revenues excluding reimbursable items	[1]	$ 2,084	$ 1,882
Reimbursable items		198	919
Total revenues		2,282	2,801
Expenses:
Total expenses excluding reimbursable items		1,736	1,556
Reimbursable items		198	919
Total expenses		1,934	2,475
Operating profit		348	326
Interest expense, net		(233)	(233)
Other expense		(3)	(1)
Income before income taxes and equity earnings in affiliates		112	36
Income tax (benefit) expense		27	12
Equity earnings in affiliates		49	55
Net income		134	79
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest		33	43
Net income attributable to First Data Corporation		$ 101	$ 36
Net income attributable to First Data Corporation per share:
Basic (in dollars per share)		$ 0.11	$ 0.04
Diluted (in dollars per share)		$ 0.11	$ 0.04
Accounting Standards Update 2014-09 | Adjustments
Revenues:
Revenues excluding reimbursable items		$ (43)
Reimbursable items		818
Total revenues		775
Expenses:
Total expenses excluding reimbursable items		(34)
Reimbursable items		818
Total expenses		784
Operating profit		(9)
Interest expense, net		0
Other expense		0
Income before income taxes and equity earnings in affiliates		(9)
Income tax (benefit) expense		(2)
Equity earnings in affiliates		0
Net income		(7)
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest		0
Net income attributable to First Data Corporation		$ (7)
Net income attributable to First Data Corporation per share:
Basic (in dollars per share)		$ (0.01)
Diluted (in dollars per share)		$ (0.01)
Accounting Standards Update 2014-09 | Balances Without Adoption of ASC 606
Revenues:
Revenues excluding reimbursable items		$ 2,041
Reimbursable items		1,016
Total revenues		3,057
Expenses:
Total expenses excluding reimbursable items		1,702
Reimbursable items		1,016
Total expenses		2,718
Operating profit		339
Interest expense, net		(233)
Other expense		(3)
Income before income taxes and equity earnings in affiliates		103
Income tax (benefit) expense		25
Equity earnings in affiliates		49
Net income		127
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest		33
Net income attributable to First Data Corporation		$ 94
Net income attributable to First Data Corporation per share:
Basic (in dollars per share)		$ 0.10
Diluted (in dollars per share)		$ 0.10

[1] Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of $51 million and $52 million for the three months ended March 31, 2018 and 2017, respectively.

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Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Short-term borrowings:
Total short-term borrowings	$ 919	$ 1,074
Unamortized deferred financing costs	(3)	(3)
Current portion of long-term borrowings:
Total current portion of long-term borrowings	185	197
Other arrangements and capital lease obligations	107	119
Total short-term and current portion of long-term borrowings	1,104	1,271
Long-term borrowings:
Total Long-term borrowings	17,908	17,927
Unamortized discount and unamortized deferred financing costs	(117)	(123)
Other arrangements and capital lease obligations	281	286
Total Borrowings	19,012	19,198
Long-term borrowings	18,000	18,200
Secured debt | Senior secured term loan facility due April 2024 at LIBOR plus 2.25% or a base rate plus 1.25%
Long-term borrowings:
Total Long-term borrowings	$ 3,892	3,892
Secured debt | Senior secured term loan facility due April 2024 at LIBOR plus 2.25% or a base rate plus 1.25% | LIBOR
Long-term borrowings:
Basis spread on variable rate (as a percent)	2.25%
Secured debt | Senior secured term loan facility due April 2024 at LIBOR plus 2.25% or a base rate plus 1.25% | Base Rate
Long-term borrowings:
Basis spread on variable rate (as a percent)	1.25%
Secured debt | Senior secured term loan facility due July 2022 at LIBOR plus 2.25% or a base rate plus 1.25%
Long-term borrowings:
Total Long-term borrowings	$ 3,758	3,758
Secured debt | Senior secured term loan facility due July 2022 at LIBOR plus 2.25% or a base rate plus 1.25% | LIBOR
Long-term borrowings:
Basis spread on variable rate (as a percent)	2.25%
Secured debt | Senior secured term loan facility due July 2022 at LIBOR plus 2.25% or a base rate plus 1.25% | Base Rate
Long-term borrowings:
Basis spread on variable rate (as a percent)	1.25%
Secured debt | Senior secured term loan facility due June 2020 at LIBOR plus 2.0% or a base rate plus 1.0%
Current portion of long-term borrowings:
Total current portion of long-term borrowings	$ 78	78
Long-term borrowings:
Total Long-term borrowings	$ 1,384	1,404
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)	1.75%
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)	0.75%
Secured debt | 5.375% Senior secured first lien notes due 2023
Long-term borrowings:
Total Long-term borrowings	$ 1,210	1,210
Interest rate	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	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	5.75%
Unsecured debt | 7.0% Senior unsecured notes due 2023
Long-term borrowings:
Total Long-term borrowings	$ 3,400	3,400
Interest rate	7.00%
Line of credit | Foreign lines of credit and other arrangements
Short-term borrowings:
Total short-term borrowings	$ 164	205
Line of credit | Senior Secured Revolving Credit Facility June 2, 2020 at LIBOR plus 3.50% or a base rate plus 2.50% | Revolving credit facility
Short-term borrowings:
Credit facility	$ 195	272
Line of credit | Senior Secured Revolving Credit Facility June 2, 2020 at LIBOR plus 3.50% or a base rate plus 2.50% | Revolving credit facility | LIBOR
Long-term borrowings:
Basis spread on variable rate (as a percent)	3.50%
Line of credit | Senior Secured Revolving Credit Facility June 2, 2020 at LIBOR plus 3.50% or a base rate plus 2.50% | Revolving credit facility | Base Rate
Long-term borrowings:
Basis spread on variable rate (as a percent)	2.50%
Receivable securitized loan at LIBOR plus 1.5% 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	$ 563	$ 600
Receivable securitized loan at LIBOR plus 1.5% 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)	1.50%
Receivable securitized loan at LIBOR plus 1.5% 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%

XML

Borrowings - Foreign Lines of Credit and Other Arrangements (Details) - Line of credit - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Line of Credit Facility [Line Items]
Amount outstanding and uncommitted	$ 11	$ 15
Foreign lines of credit and other arrangements
Line of Credit Facility [Line Items]
Available amount	$ 374	$ 546
Weighted average interest rate	2.90%	2.90%
Foreign lines of credit and other arrangements | Affiliated entity
Line of Credit Facility [Line Items]
Available amount	$ 165	$ 355

XML

Borrowings - Senior Secured Revolving Credit Facility (Details) - Line of credit - Senior secured revolving credit facility due June 2, 2020 - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Revolving credit facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 1,250,000,000
Line of credit facility, remaining borrowing capacity	1,000,000,000
Letter of credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	250,000,000
Letters of credit outstanding, amount	$ 6,000,000	$ 29,000,000

XML

Borrowings - Senior Unsecured Revolving Credit Facility (Details) - Line of credit - Senior unsecured revolving credit facility due December 2019 - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 14, 2017
Revolving credit facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 33,000,000
Letter of credit
Line of Credit Facility [Line Items]
Letters of credit outstanding, amount	$ 30,000,000
Interest rate	1.85%

XML

Borrowings - Receivable Securitization Agreement (Details)	Mar. 31, 2018 USD ($)
Receivable securitized loan
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 563,000,000

XML

Revenue Recognition - Interchange Fees and Assessments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenue from Contract with Customer [Abstract]
Interchange fees and assessments	$ 6,476	$ 6,039
Debit network fees	$ 818	$ 745

XML

Revenue Recognition - Disaggregation of Revenue (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Disaggregation of Revenue [Line Items]
Total Revenue	$ 2,282
Transaction and processing services
Disaggregation of Revenue [Line Items]
Total Revenue	2,011
Hardware, Professional Services, and Other
Disaggregation of Revenue [Line Items]
Total Revenue	271
North America
Disaggregation of Revenue [Line Items]
Total Revenue	1,807
EMEA
Disaggregation of Revenue [Line Items]
Total Revenue	276
LATAM
Disaggregation of Revenue [Line Items]
Total Revenue	118
APAC
Disaggregation of Revenue [Line Items]
Total Revenue	81
Global Business Solutions
Disaggregation of Revenue [Line Items]
Total Revenue	1,330
Global Business Solutions | North America
Disaggregation of Revenue [Line Items]
Total Revenue	1,033
Global Business Solutions | EMEA
Disaggregation of Revenue [Line Items]
Total Revenue	162
Global Business Solutions | LATAM
Disaggregation of Revenue [Line Items]
Total Revenue	87
Global Business Solutions | APAC
Disaggregation of Revenue [Line Items]
Total Revenue	48
Global Financial Solutions
Disaggregation of Revenue [Line Items]
Total Revenue	597
Global Financial Solutions | North America
Disaggregation of Revenue [Line Items]
Total Revenue	423
Global Financial Solutions | EMEA
Disaggregation of Revenue [Line Items]
Total Revenue	112
Global Financial Solutions | LATAM
Disaggregation of Revenue [Line Items]
Total Revenue	31
Global Financial Solutions | APAC
Disaggregation of Revenue [Line Items]
Total Revenue	31
Network & Security Solutions
Disaggregation of Revenue [Line Items]
Total Revenue	355
Network & Security Solutions | North America
Disaggregation of Revenue [Line Items]
Total Revenue	351
Network & Security Solutions | EMEA
Disaggregation of Revenue [Line Items]
Total Revenue	2
Network & Security Solutions | LATAM
Disaggregation of Revenue [Line Items]
Total Revenue	0
Network & Security Solutions | APAC
Disaggregation of Revenue [Line Items]
Total Revenue	$ 2

XML

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Revenue from Contract with Customer [Abstract]
Long-term accounts receivable, net of allowance for doubtful accounts	$ 399	$ 401

XML

Revenue Recognition - Changes in Deferred Revenue (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Change in Contract with Customer, Liability [Abstract]
Balance, beginning of the period	$ 344
New Revenue Standard adjustments	(39)
Deferral of revenue	58
Recognition of unearned revenue	(59)
Other (primarily foreign currency)	5
Balance, end of period	$ 309

XML

Revenue Recognition - Remaining Performance Obligation (Details	3 Months Ended
	Mar. 31, 2018
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contractual period	1 year
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contractual period	15 years
Transaction and Processing Services or Hardware
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Percentage of performance obligation	95.00%

XML

Revenue Recognition - Costs to Obtain and Fulfill a Contract (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Contract Costs
Capitalized Contract Cost [Line Items]
Capitalized costs	$ 166		$ 145
Amortization expense	13	$ 19
Conversion Costs
Capitalized Contract Cost [Line Items]
Capitalized costs	156		$ 160
Amortization expense	$ 10	$ 7
Amortization period	7 years

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Stock Compensation Plans - Allocation of Share-based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 74	$ 65
Cost of revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	16	19
Selling, general, and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 58	$ 46

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Stock Compensation Plans - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payment of taxes related to net settlement of equity awards	$ 56	$ 60
Restricted stock awards and restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted	9	9
Weighted average price per share (in dollars per share)	$ 15.37	$ 15.31
Unrecognized compensation expense	$ 405
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	$ 37

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Net Income Attributable to First Data Corporation Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator:
Net income attributable to First Data Corporation	$ 101	$ 36
Denominator:
Weighted average shares used in computing net income per share, basic (in shares)	923	910
Effect of dilutive securities (in shares)	23	21
Total dilutive securities (in shares)	946	931
Net income attributable to First Data Corporation per share:
Basic (in dollars per share)	$ 0.11	$ 0.04
Diluted (in dollars per share)	$ 0.11	$ 0.04
Anti-dilutive shares excluded from diluted net income per share	11	13

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Segment Information - Schedule of Operating Segment Results (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues:
Total revenues	$ 2,282	$ 2,801
Depreciation and amortization	250	228
Segment EBITDA	730	650
Operating Segments
Revenues:
Total revenues	2,080	1,872
Operating Segments | Global Business Solutions
Revenues:
Total revenues	1,318	1,118
Depreciation and amortization	125	106
Segment EBITDA	434	382
Operating Segments | Global Business Solutions | Total revenues
Revenues:
Total revenues	1,310	1,109
Operating Segments | Global Business Solutions | Equity earnings in affiliates
Revenues:
Total revenues	8	9
Operating Segments | Global Financial Solutions
Revenues:
Total revenues	400	393
Depreciation and amortization	88	85
Segment EBITDA	166	154
Operating Segments | Global Financial Solutions | Total revenues
Revenues:
Total revenues	401	393
Operating Segments | Global Financial Solutions | Equity earnings in affiliates
Revenues:
Total revenues	(1)	0
Operating Segments | Network & Security Solutions
Revenues:
Total revenues	362	361
Depreciation and amortization	29	30
Segment EBITDA	175	156
Operating Segments | Network & Security Solutions | Total revenues
Revenues:
Total revenues	362	361
Operating Segments | Network & Security Solutions | Equity earnings in affiliates
Revenues:
Total revenues	0	0
Corporate
Revenues:
Total revenues	0	0
Depreciation and amortization	0	1
Segment EBITDA	(45)	(42)
Corporate | Total revenues
Revenues:
Total revenues	0	0
Corporate | Equity earnings in affiliates
Revenues:
Total revenues	0	0
Total
Revenues:
Total revenues	2,080	1,872
Depreciation and amortization	242	222
Segment EBITDA	730	650
Total | Total revenues
Revenues:
Total revenues	2,073	1,863
Total | Equity earnings in affiliates
Revenues:
Total revenues	$ 7	$ 9

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Segment Information - Schedule of Reconciliation of Reportable Segment Amounts to the Consolidated Balances (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting, Revenue Reconciling Item [Line Items]
Total segment revenues	$ 2,282	$ 2,801
Adjustments:
Reimbursable items	198	919
Consolidated revenues	2,282	2,801
Total segment EBITDA	730	650
Adjustments:
Depreciation and amortization	(250)	(228)
Interest expense, net	(233)	(233)
Loss on debt extinguishment	0	(56)
Stock-based compensation	(74)	(65)
Income tax expense	(27)	(12)
Net income attributable to First Data Corporation	101	36
Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Total segment revenues	2,080	1,872
Adjustments:
Consolidated revenues	2,080	1,872
Segment Reconciling Items
Adjustments:
Non wholly-owned entities	4	10
Reimbursable items	198	919
Adjustments:
Non wholly-owned entities	18	6
Depreciation and amortization	(250)	(228)
Interest expense, net	(233)	(233)
Loss on debt extinguishment	0	(56)
Other items	(63)	(26)
Stock-based compensation	(74)	(65)
Income tax expense	$ (27)	$ (12)

XML

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, 2018	Mar. 31, 2017
Segment Reporting Information [Line Items]
Total consolidated depreciation and amortization per unaudited consolidated statements of operations	$ 250	$ 228
Amortization of initial payments for new contracts	13	19
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows	271	258
Amortization of equity method investments	(8)	(11)
Amortization of initial payments for new contracts	(13)	(19)
Operating segments and corporate
Segment Reporting Information [Line Items]
Total consolidated depreciation and amortization per unaudited consolidated statements of operations	242	222
Adjustments
Segment Reporting Information [Line Items]
Total consolidated depreciation and amortization per unaudited consolidated statements of operations	250	228
Adjustments for non wholly-owned entities	16	17
Amortization of initial payments for new contracts	13	19
Amortization of equity method investments	(8)	(11)
Amortization of initial payments for new contracts	$ (13)	$ (19)

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Income Taxes - Income Tax Expense and Effective Income Tax Rate (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Income tax expense	$ 27	$ 12
Effective income tax rate	17.00%	13.00%

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Income Taxes - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Income Tax Disclosure [Abstract]
Benefit attributed to equity compensation related tax benefits, reductions to liability for unrecognized tax benefits and tax benefits from research and development credit	$ 21
Unrecognized tax benefits	211
Decrease in liability for unrecognized tax benefits reasonably possible	$ 133

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Redeemable Noncontrolling Interest (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($) noncontrolling_interest	Mar. 31, 2017 USD ($)
Noncontrolling Interest [Abstract]
Number of redeemable noncontrolling interests | noncontrolling_interest	1
Redeemable noncontrolling interest activity [Roll Forward]
Balance as of beginning of the period	$ 72	$ 73
Distributions	(8)	(8)
Share of income	8	8
Adjustment to redemption value of redeemable noncontrolling interest	6	(1)
Balance as of end of the period	$ 78	$ 72

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Other Operating Expenses - Summary of Other Operating Expenses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Other Income and Expenses [Abstract]
Restructuring, net	$ 32	$ 23
Deal and deal integration costs	7	0
Customer related costs	20	0
Other	1	(1)
Other operating expenses	$ 60	$ 22

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Other Operating Expenses - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Other Income and Expenses [Abstract]
Restructuring costs expected to incur	$ 25
Deal and deal integration costs	$ 7	$ 0

XML

Other Operating Expenses - Summary of Net Pretax Charges Incurred by Segment (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net pretax benefits (charges), incurred by segment [Line items]
Restructuring, net	$ 32	$ 23
Operating Segments | Global Business Solutions
Net pretax benefits (charges), incurred by segment [Line items]
Restructuring, net	5	9
Operating Segments | Global Financial Solutions
Net pretax benefits (charges), incurred by segment [Line items]
Restructuring, net	2	4
Operating Segments | Network & Security Solutions
Net pretax benefits (charges), incurred by segment [Line items]
Restructuring, net	16	2
Corporate
Net pretax benefits (charges), incurred by segment [Line items]
Restructuring, net	$ 9	$ 8

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Other Operating Expenses - Summary of Utilization of Restructuring Accruals (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)
Employee Severance
Utilization of restructuring accruals [Roll Forward]
Remaining accrual at the beginning of the period	$ 21
Employee expense	22
Loss on disposal of property and equipment, net	0
Cash payments and other	(18)
Remaining accrual at the end of the period	25
Other
Utilization of restructuring accruals [Roll Forward]
Remaining accrual at the beginning of the period	0
Employee expense	0
Loss on disposal of property and equipment, net	10
Cash payments and other	(6)
Remaining accrual at the end of the period	$ 4

XML

Acquisitions and Dispositions (Details) - GreekBill $ in Millions	1 Months Ended
	Jan. 31, 2018 USD ($)
Business Acquisition [Line Items]
Percentage acquired	100.00%
Purchase price	$ 17

XML

Derivative Financial Instruments - Schedule of Notional Amounts of Outstanding Derivative Positions (Details) - Derivatives designated as hedges € in Millions, £ in Millions, $ in Millions, $ in Millions, $ in Millions	Mar. 31, 2018 EUR (€)	Mar. 31, 2018 AUD ($)	Mar. 31, 2018 GBP (£)	Mar. 31, 2018 CAD ($)	Mar. 31, 2018 USD ($)	Jan. 18, 2018 AUD ($)	Jan. 18, 2018 USD ($)	Dec. 31, 2017 EUR (€)	Dec. 31, 2017 AUD ($)	Dec. 31, 2017 GBP (£)	Dec. 31, 2017 CAD ($)	Dec. 31, 2017 USD ($)
Derivatives, Fair Value [Line Items]
Assets					$ 22							$ 40
Liabilities					118							84
Foreign exchange contracts
Derivatives, Fair Value [Line Items]
Assets					0							28
Liabilities					118							84
Foreign exchange contracts | AUD
Derivatives, Fair Value [Line Items]
Notional Value		$ 0							$ 100
Assets					0							28
Liabilities					0							0
Foreign exchange contracts | EUR
Derivatives, Fair Value [Line Items]
Notional Value | €	€ 915							€ 915
Assets					0							0
Liabilities					105							76
Foreign exchange contracts | GBP
Derivatives, Fair Value [Line Items]
Notional Value | £			£ 150							£ 150
Assets					0							0
Liabilities					13							6
Foreign exchange contracts | CAD
Derivatives, Fair Value [Line Items]
Notional Value				$ 95							$ 95
Assets					0							0
Liabilities					0							2
Interest rate collar contracts | USD
Derivatives, Fair Value [Line Items]
Notional Value					4,300							4,300
Assets					22							12
Liabilities					$ 0							$ 0
Cross-currency swap
Derivatives, Fair Value [Line Items]
Notional Value						$ 100
Cash settlement value of foreign currency derivatives							$ 26

XML

Derivative Financial Instruments - Schedule of The Effect of Derivative Instruments on the Consolidated Statements of Operations (Details) - Derivatives designated as hedging instruments - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest Rate Contracts | Foreign currency translation adjustment
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in the unaudited consolidated statements of comprehensive income (effective portion)	$ 0	$ 0
Interest Rate Contracts | Derivative instruments
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in the unaudited consolidated statements of comprehensive income (effective portion)	9	1
Foreign Exchange Contracts | Foreign currency translation adjustment
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in the unaudited consolidated statements of comprehensive income (effective portion)	(30)	(14)
Foreign Exchange Contracts | Derivative instruments
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in the unaudited consolidated statements of comprehensive income (effective portion)	$ 0	$ 0

XML

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, 2018	Mar. 31, 2017
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 6,014	$ 4,131
Decrease in fair value of derivatives that qualify for hedge accounting, net of tax	9	1
Ending balance	6,212	4,277
Derivatives qualifying as hedges, tax benefit	5	0
Accumulated derivative gains and losses
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	121	177
Decrease in fair value of derivatives that qualify for hedge accounting, net of tax	(16)	(13)
Ending balance	$ 105	$ 164

XML

Commitments and Contingencies (Details) $ in Millions	Mar. 31, 2018 USD ($)
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 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	175
Maximum | Patent infringement
Commitments and contingencies
Possible losses in excess of any amounts accrued	5
Maximum | Merchant matters
Commitments and contingencies
Possible losses in excess of any amounts accrued	165
Maximum | Other matters
Commitments and contingencies
Possible losses in excess of any amounts accrued	$ 5

XML

Investment in Affiliates (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($) subsidiary	Mar. 31, 2017 USD ($)
Equity Method Investments and Joint Ventures [Abstract]
Number of subsidiaries not required to be consolidated | subsidiary	1
Pre-tax loss (as a percent) (more than)	20.00%
Financial information related to operating results
FDC equity earnings	$ 49	$ 55
Unconsolidated significant subsidiary
Financial information related to operating results
Net operating revenues	195	208
Operating expenses	101	98
Operating income	94	110
Net income	94	110
FDC equity earnings	$ 33	$ 38

XML

Subsequent Events (Details) $ in Millions	3 Months Ended
	Jun. 30, 2018 USD ($)
Scenario, Forecast
Subsequent Event [Line Items]
Income tax benefit resulting from audit of federal tax returns	$ 117