DELAWARE | 47-0731996 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
225 LIBERTY STREET 29th FLOOR | ||
NEW YORK, NEW YORK | 10281 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer x | Smaller reporting company o |
Class | Outstanding at November 1, 2016 | |
Class A Common Stock, $0.01 par value per share | 357,100,865 shares | |
Class B Common Stock, $0.01 par value per share | 553,883,262 shares |
PAGE NUMBER | |||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions, except per share and share amounts) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | ||||||||||||||||
Transaction and processing service fees (a) | $ | 1,693 | $ | 1,673 | $ | 4,953 | $ | 4,906 | ||||||||
Product sales and other (a) | 307 | 309 | 893 | 844 | ||||||||||||
Total revenues (excluding reimbursable items) | 2,000 | 1,982 | 5,846 | 5,750 | ||||||||||||
Reimbursable PIN debit fees, postage, and other | 936 | 938 | 2,795 | 2,737 | ||||||||||||
Total revenues | 2,936 | 2,920 | 8,641 | 8,487 | ||||||||||||
Expenses: | ||||||||||||||||
Cost of services (exclusive of items shown below) | 711 | 686 | 2,140 | 2,055 | ||||||||||||
Cost of products sold | 87 | 96 | 251 | 257 | ||||||||||||
Selling, general, and administrative | 499 | 521 | 1,563 | 1,567 | ||||||||||||
Depreciation and amortization | 237 | 257 | 713 | 760 | ||||||||||||
Other operating expenses | 12 | 20 | 57 | 40 | ||||||||||||
Total expenses (excluding reimbursable items) | 1,546 | 1,580 | 4,724 | 4,679 | ||||||||||||
Reimbursable PIN debit fees, postage, and other | 936 | 938 | 2,795 | 2,737 | ||||||||||||
Total expenses | 2,482 | 2,518 | 7,519 | 7,416 | ||||||||||||
Operating profit | 454 | 402 | 1,122 | 1,071 | ||||||||||||
Interest expense, net | (263 | ) | (388 | ) | (810 | ) | (1,199 | ) | ||||||||
Loss on debt extinguishment | (3 | ) | (108 | ) | (58 | ) | (108 | ) | ||||||||
Other income (expense) | (30 | ) | (10 | ) | 14 | 1 | ||||||||||
Income (loss) before income taxes and equity earnings in affiliates | 158 | (104 | ) | 268 | (235 | ) | ||||||||||
Income tax expense | 24 | 32 | 57 | 45 | ||||||||||||
Equity earnings in affiliates | 66 | 61 | 198 | 175 | ||||||||||||
Net income (loss) | 200 | (75 | ) | 409 | (105 | ) | ||||||||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 68 | 51 | 181 | 159 | ||||||||||||
Net income (loss) attributable to First Data Corporation | $ | 132 | $ | (126 | ) | $ | 228 | $ | (264 | ) | ||||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 0.15 | $ | (126,000 | ) | $ | 0.25 | $ | (264,000 | ) | ||||||
Diluted | $ | 0.14 | $ | (126,000 | ) | $ | 0.25 | $ | (264,000 | ) | ||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic | 904,738,175 | 1,000 | 900,128,754 | 1,000 | ||||||||||||
Diluted | 922,818,229 | 1,000 | 918,301,729 | 1,000 |
(a) | Includes processing fees, administrative service fees, and other fees charged to merchant alliances accounted for under the equity method of $52 million and $150 million for the three and nine months ended September 30, 2016, respectively, and $55 million and $153 million for the comparable periods in 2015. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) | $ | 200 | $ | (75 | ) | $ | 409 | $ | (105 | ) | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||
Unrealized (losses) gains on securities | — | (2 | ) | — | 3 | |||||||||||
Foreign currency translation adjustment | 61 | (85 | ) | (44 | ) | (221 | ) | |||||||||
Pension liability adjustments | — | — | — | 2 | ||||||||||||
Total other comprehensive income (loss), net of tax | 61 | (87 | ) | (44 | ) | (216 | ) | |||||||||
Comprehensive income (loss) | 261 | (162 | ) | 365 | (321 | ) | ||||||||||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest, net of tax | 69 | 51 | 183 | 151 | ||||||||||||
Comprehensive income (loss) attributable to First Data Corporation, net of tax | $ | 192 | $ | (213 | ) | $ | 182 | $ | (472 | ) |
(in millions, except common stock share amounts) | As of September 30, 2016 | As of December 31, 2015 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 475 | $ | 429 | ||||
Accounts receivable, net of allowance for doubtful accounts of $75 and $71 | 1,714 | 1,826 | ||||||
Settlement assets | 8,705 | 8,150 | ||||||
Other current assets | 460 | 381 | ||||||
Total current assets | 11,354 | 10,786 | ||||||
Property and equipment, net of accumulated depreciation of $1,442 and $1,367 | 896 | 951 | ||||||
Goodwill | 16,825 | 16,846 | ||||||
Customer relationships, net of accumulated amortization of $5,592 and $5,299 | 1,845 | 2,136 | ||||||
Other intangibles, net of accumulated amortization of $2,322 and $2,134 | 1,793 | 1,783 | ||||||
Investment in affiliates | 1,003 | 1,048 | ||||||
Other long-term assets | 728 | 812 | ||||||
Total assets | $ | 34,444 | $ | 34,362 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 1,556 | $ | 1,639 | ||||
Short-term and current portion of long-term borrowings | 377 | 856 | ||||||
Settlement obligations | 8,705 | 8,150 | ||||||
Total current liabilities | 10,638 | 10,645 | ||||||
Long-term borrowings | 18,514 | 18,737 | ||||||
Deferred tax liabilities | 410 | 431 | ||||||
Other long-term liabilities | 836 | 812 | ||||||
Total liabilities | 30,398 | 30,625 | ||||||
Commitments and contingencies (See note 10) | ||||||||
Redeemable noncontrolling interest | 73 | 77 | ||||||
First Data Corporation stockholders' equity: | ||||||||
Class A Common stock, $0.01 par value; 1,600,000,000 shares authorized as of September 30, 2016 and December 31, 2015; 352,407,420 shares and 179,873,244 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 4 | 2 | ||||||
Class B Common stock, $0.01 par value; 639,311,146 shares and 800,000,000 shares authorized as of September 30, 2016 and December 31, 2015, respectively; 558,596,918 shares and 719,330,114 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 5 | 7 | ||||||
Additional paid-in capital | 13,098 | 12,910 | ||||||
Accumulated loss | (10,804 | ) | (11,032 | ) | ||||
Accumulated other comprehensive loss | (1,265 | ) | (1,219 | ) | ||||
Total First Data Corporation stockholders' equity | 1,038 | 668 | ||||||
Noncontrolling interests | 2,935 | 2,992 | ||||||
Total equity | 3,973 | 3,660 | ||||||
Total liabilities and equity | $ | 34,444 | $ | 34,362 |
Nine months ended September 30, | ||||||||
(in millions) | 2016 | 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income (loss) | $ | 409 | $ | (105 | ) | |||
Adjustments to reconcile to net cash provided by operating activities: | ||||||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 793 | 843 | ||||||
Charges related to other operating expenses and other income (expense) | 43 | 39 | ||||||
Loss on debt extinguishment | 58 | 108 | ||||||
Stock-based compensation expense | 214 | 31 | ||||||
Other non-cash and non-operating items, net | 30 | 50 | ||||||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in: | ||||||||
Accounts receivable, current and long-term | 115 | (66 | ) | |||||
Other assets, current and long-term | 20 | (110 | ) | |||||
Accounts payable and other liabilities, current and long-term | 5 | (71 | ) | |||||
Income tax accounts | (27 | ) | (32 | ) | ||||
Net cash provided by operating activities | 1,660 | 687 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Additions to property and equipment | (168 | ) | (213 | ) | ||||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | (183 | ) | (244 | ) | ||||
Acquisitions, net of cash acquired | (6 | ) | (89 | ) | ||||
Other investing activities, net | 19 | (8 | ) | |||||
Net cash used in investing activities | (338 | ) | (554 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Short-term borrowings, net | 234 | 219 | ||||||
Proceeds from issuance of long-term debt | 2,377 | 2,206 | ||||||
Payment of call premiums and debt issuance costs | (52 | ) | (104 | ) | ||||
Principal payments on long-term debt | (3,544 | ) | (2,185 | ) | ||||
Payment of taxes related to net settlement of equity awards | (59 | ) | — | |||||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | (240 | ) | (232 | ) | ||||
Other financing activities, net | 26 | (13 | ) | |||||
Net cash used in financing activities | (1,258 | ) | (109 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (18 | ) | (14 | ) | ||||
Change in cash and cash equivalents | 46 | 10 | ||||||
Cash and cash equivalents at beginning of period | 429 | 358 | ||||||
Cash and cash equivalents at end of period | $ | 475 | $ | 368 | ||||
NON-CASH TRANSACTIONS | ||||||||
Capital leases, net of trade-ins | $ | 119 | $ | 33 |
First Data Corporation Stockholders | ||||||||||||||||||||||||||||||||||
Common Stock | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||
(in millions, except common stock share amounts) | Class A | Class B | Additional Paid-In Capital | Accumulated Loss | Noncontrolling Interest | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||||
Balance, December 31, 2015 | 179,873,244 | $ | 2 | 719,330,114 | $ | 7 | $ | 12,910 | $ | (11,032 | ) | $ | (1,219 | ) | $ | 2,992 | $ | 3,660 | ||||||||||||||||
Dividends and distributions paid to noncontrolling interests | — | — | — | — | — | — | — | (215 | ) | (215 | ) | |||||||||||||||||||||||
Net income (a) | — | — | — | — | — | 228 | — | 156 | 384 | |||||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | — | — | (46 | ) | 2 | (44 | ) | |||||||||||||||||||||||
Adjustment to redemption value of redeemable noncontrolling interest | — | — | — | — | 4 | — | — | — | 4 | |||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 214 | — | — | — | 214 | |||||||||||||||||||||||||
Stock activity under stock compensation plans and other | 172,534,176 | 2 | (160,733,196 | ) | (2 | ) | (30 | ) | — | — | — | (30 | ) | |||||||||||||||||||||
Balance, September 30, 2016 | 352,407,420 | $ | 4 | 558,596,918 | $ | 5 | $ | 13,098 | $ | (10,804 | ) | $ | (1,265 | ) | $ | 2,935 | $ | 3,973 |
First Data Corporation Stockholders | ||||||||||||||||||||||||||||||||||
Common Stock | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||
(in millions, except common stock share amounts) | Class A | Class B | Additional Paid-In Capital | Accumulated Loss | Noncontrolling Interest | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||||
Balance, December 31, 2014 (b) | 1,000 | $ | — | — | $ | — | $ | 9,906 | $ | (9,547 | ) | $ | (929 | ) | $ | 3,100 | $ | 2,530 | ||||||||||||||||
Dividends and distributions paid to noncontrolling interests | — | — | — | — | — | — | — | (206 | ) | (206 | ) | |||||||||||||||||||||||
Net (loss) income (a) | — | — | — | — | — | (264 | ) | — | 133 | (131 | ) | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (208 | ) | (8 | ) | (216 | ) | ||||||||||||||||||||||
Adjustment to redemption value of redeemable noncontrolling interest | — | — | — | — | (8 | ) | — | — | — | (8 | ) | |||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 31 | — | — | — | 31 | |||||||||||||||||||||||||
Stock activity under stock compensation plans and other | — | — | — | — | (10 | ) | — | — | — | (10 | ) | |||||||||||||||||||||||
Cash dividends paid by First Data Corporation to Parent | — | — | — | — | — | (4 | ) | — | — | (4 | ) | |||||||||||||||||||||||
Balance, September 30, 2015 | 1,000 | $ | — | — | $ | — | $ | 9,919 | $ | (9,815 | ) | $ | (1,137 | ) | $ | 3,019 | $ | 1,986 |
(a) | The total net income (loss) presented in the unaudited consolidated statements of equity for the nine months ended September 30, 2016 and 2015 is $25 million lower and $26 million higher, respectively, than the amounts presented in the unaudited consolidated statements of operations due to the net income attributable to the redeemable noncontrolling interest not included in equity. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Amortization of initial payments for new contracts | $ | 16 | $ | 14 | $ | 47 | $ | 38 | ||||||||
Amortization related to equity method investments | 12 | 15 | 33 | 45 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Interchange fees and assessments | $ | 6,184 | $ | 5,598 | $ | 17,406 | $ | 16,089 | ||||||||
PIN-Debit fees | 753 | 757 | 2,255 | 2,227 |
(in millions) | As of September 30, 2016 | As of December 31, 2015 | ||||||
Short-term borrowings: | ||||||||
Foreign lines of credit and other arrangements | $ | 71 | $ | 43 | ||||
Accounts receivable securitized loan at LIBOR plus 200 basis points or a base rate equal to the highest of (i) the applicable lender's prime rate, or (ii) the federal funds rate plus 0.50% | 208 | — | ||||||
Unamortized deferred financing costs (a) | (2 | ) | — | |||||
Total Short-term borrowings | 277 | 43 | ||||||
Current portion of long-term borrowings: | ||||||||
8.75% Senior secured second lien notes due 2022 | — | 750 | ||||||
Unamortized discount and unamortized deferred financing costs | — | (10 | ) | |||||
Other arrangements | 16 | — | ||||||
Capital lease obligations | 84 | 73 | ||||||
Total Current portion of long-term borrowings | 100 | 813 | ||||||
Total Short-term and current portion of long-term borrowings | 377 | 856 | ||||||
Long-term borrowings: | ||||||||
Senior secured term loan facility due March 2018 at LIBOR and euro LIBOR plus 3.5% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.5% | — | 4,938 | ||||||
Senior secured term loan facility due September 2018 at LIBOR plus 3.5% or a base rate plus 2.5% | — | 1,008 | ||||||
Senior secured term loan facility due March 2021 at LIBOR and euro LIBOR plus 4.0% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 3.0% | 4,541 | 1,171 | ||||||
Senior secured term loan facility due July 2022 at LIBOR and euro LIBOR plus 3.75% or, solely with respect to U.S. dollar-denominated term loans, a base rate plus 2.75% | 3,838 | 2,464 | ||||||
6.75% Senior secured first lien notes due 2020 | 1,398 | 1,398 | ||||||
5.375% Senior secured first lien notes due 2023 | 1,210 | 1,210 | ||||||
5.0% Senior secured first lien notes due 2024 | 1,900 | 1,000 | ||||||
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) | (171 | ) | (174 | ) | ||||
Other arrangements | 27 | — | ||||||
Capital lease obligations | 171 | 122 | ||||||
Total Long-term borrowings (b) | 18,514 | 18,737 | ||||||
Total Borrowings (c) | $ | 18,891 | $ | 19,593 |
(a) | Unamortized deferred financing costs are amortized on a straight-line basis, which approximates the interest method, over the remaining term of the respective debt. In addition, certain lenders' fees associated with debt transactions were capitalized as discounts and are similarly being amortized on a straight-line basis, which approximates the effective interest method, over the remaining term of the respective debt. |
(b) | As of September 30, 2016 and December 31, 2015, the fair value of the Company's long-term borrowings was $19.1 billion and $19.6 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. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Cost of services | $ | 19 | $ | — | $ | 91 | $ | — | ||||||||
Selling, general, and administrative | 24 | 8 | 123 | 31 | ||||||||||||
Total | $ | 43 | $ | 8 | $ | 214 | $ | 31 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in millions, except share and per share amounts) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Numerator: | |||||||||||||||
Net income (loss) used in computing net income (loss) per share, basic and diluted | $ | 132 | $ | (126 | ) | $ | 228 | $ | (264 | ) | |||||
Denominator: | |||||||||||||||
Shares used in computing net income (loss) per share, basic (a) | 904,738,175 | 1,000 | 900,128,754 | 1,000 | |||||||||||
Effect of dilutive securities | 18,080,054 | — | 18,172,975 | — | |||||||||||
Total dilutive securities | 922,818,229 | 1,000 | 918,301,729 | 1,000 | |||||||||||
Basic net income (loss) per share | $ | 0.15 | $ | (126,000 | ) | $ | 0.25 | $ | (264,000 | ) | |||||
Diluted net income (loss) per share | $ | 0.14 | $ | (126,000 | ) | $ | 0.25 | $ | (264,000 | ) | |||||
Anti-dilutive shares excluded from diluted net income (loss) per share | 20,439,375 | — | 27,064,859 | — |
(a) | 2015 net loss per share, basic and diluted, is calculated using 1,000 shares outstanding prior to the merger with FDH and the filing of the Company's prospectus in October 2015. |
Three months ended September 30, 2016 | ||||||||||||||||||||
(in millions) | Global Business Solutions | Global Financial Solutions | Network & Security Solutions | Corporate | Total | |||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction and processing service fees | $ | 830 | $ | 345 | $ | 335 | $ | — | $ | 1,510 | ||||||||||
Product sales and other | 207 | 52 | 43 | — | 302 | |||||||||||||||
Equity earnings in affiliates | 8 | — | — | — | 8 | |||||||||||||||
Total segment revenues | $ | 1,045 | $ | 397 | $ | 378 | $ | — | $ | 1,820 | ||||||||||
Depreciation and amortization | $ | 109 | $ | 86 | $ | 28 | $ | 8 | $ | 231 | ||||||||||
Segment EBITDA | 455 | 158 | 166 | (40 | ) | 739 | ||||||||||||||
Other operating expenses and Other income (expense) excluding divestitures | (18 | ) | 2 | (6 | ) | 11 | (11 | ) |
Three months ended September 30, 2015 | ||||||||||||||||||||
(in millions) | Global Business Solutions | Global Financial Solutions | Network & Security Solutions | Corporate | Total | |||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction and processing service fees | $ | 801 | $ | 341 | $ | 339 | $ | — | $ | 1,481 | ||||||||||
Product sales and other | 223 | 50 | 35 | — | 308 | |||||||||||||||
Equity earnings in affiliates | 8 | — | — | — | 8 | |||||||||||||||
Total segment revenues | $ | 1,032 | $ | 391 | $ | 374 | $ | — | $ | 1,797 | ||||||||||
Depreciation and amortization | $ | 124 | $ | 98 | $ | 22 | $ | 8 | $ | 252 | ||||||||||
Segment EBITDA | 431 | 145 | 162 | (35 | ) | 703 | ||||||||||||||
Other operating expenses and Other income (expense) excluding divestitures | 34 | (7 | ) | (1 | ) | (56 | ) | (30 | ) |
Nine months ended September 30, 2016 | ||||||||||||||||||||
(in millions) | Global Business Solutions | Global Financial Solutions | Network & Security Solutions | Corporate | Total | |||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction and processing service fees | $ | 2,404 | $ | 1,023 | $ | 969 | $ | — | $ | 4,396 | ||||||||||
Product sales and other | 605 | 155 | 127 | — | 887 | |||||||||||||||
Equity earnings in affiliates | 28 | — | — | — | 28 | |||||||||||||||
Total segment revenues | $ | 3,037 | $ | 1,178 | $ | 1,096 | $ | — | $ | 5,311 | ||||||||||
Depreciation and amortization | $ | 322 | $ | 268 | $ | 85 | $ | 15 | $ | 690 | ||||||||||
Segment EBITDA | 1,279 | 473 | 483 | (114 | ) | 2,121 | ||||||||||||||
Other operating expenses and Other income (expense) excluding divestitures | 4 | 6 | (8 | ) | (15 | ) | (13 | ) |
Nine months ended September 30, 2015 | ||||||||||||||||||||
(in millions) | Global Business Solutions | Global Financial Solutions | Network & Security Solutions | Corporate | Total | |||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction and processing service fees | $ | 2,413 | $ | 974 | $ | 965 | $ | — | $ | 4,352 | ||||||||||
Product sales and other | 613 | 127 | 101 | — | 841 | |||||||||||||||
Equity earnings in affiliates | 24 | — | — | — | 24 | |||||||||||||||
Total segment revenues | $ | 3,050 | $ | 1,101 | $ | 1,066 | $ | — | $ | 5,217 | ||||||||||
Depreciation and amortization | $ | 365 | $ | 293 | $ | 65 | $ | 20 | $ | 743 | ||||||||||
Segment EBITDA | 1,245 | 388 | 448 | (113 | ) | 1,968 | ||||||||||||||
Other operating expenses and Other income (expense) excluding divestitures | 55 | (14 | ) | (1 | ) | (82 | ) | (42 | ) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Consolidated revenues | $ | 2,936 | $ | 2,920 | $ | 8,641 | $ | 8,487 | ||||||||
Adjustments: | ||||||||||||||||
Non wholly owned entities (a) | (25 | ) | (18 | ) | (59 | ) | (58 | ) | ||||||||
ISOs commission expense (b) | (155 | ) | (167 | ) | (476 | ) | (475 | ) | ||||||||
Reimbursable debit network fees, postage, and other | (936 | ) | (938 | ) | (2,795 | ) | (2,737 | ) | ||||||||
Total segment revenues | $ | 1,820 | $ | 1,797 | $ | 5,311 | $ | 5,217 | ||||||||
Net income (loss) attributable to First Data Corporation | $ | 132 | $ | (126 | ) | $ | 228 | $ | (264 | ) | ||||||
Adjustments: | ||||||||||||||||
Non wholly owned entities (a) | (7 | ) | (6 | ) | (24 | ) | (19 | ) | ||||||||
Depreciation and amortization | 237 | 257 | 713 | 760 | ||||||||||||
Interest expense, net | 263 | 388 | 810 | 1,199 | ||||||||||||
Loss on debt extinguishment | 3 | 108 | 58 | 108 | ||||||||||||
Other items (c) | 44 | 42 | 65 | 108 | ||||||||||||
Income tax expense | 24 | 32 | 57 | 45 | ||||||||||||
Stock-based compensation | 43 | 8 | 214 | 31 | ||||||||||||
Total segment EBITDA | $ | 739 | $ | 703 | $ | 2,121 | $ | 1,968 |
(a) | Net adjustment to reflect the Company's proportionate share of the results of the Company's investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. Segment revenue for the Company's significant affiliates is reflected based on the Company's proportionate share of the results of the Company's investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. For other affiliates, the Company includes equity earnings in affiliates, excluding amortization expense, in segment revenue. |
(b) | Reported within "Selling, general, and administrative expense" in the unaudited consolidated statements of operations. |
(c) | Includes restructuring, certain retention bonuses, non-normal course litigation and regulatory settlements, asset impairments, debt issuance expenses, Kohlberg Kravis Roberts & Co. (KKR) related items and “Other income (expense)" as presented in the unaudited consolidated statements of operations, which includes divestitures, derivative gains (losses), non-operating foreign currency gains (losses), and the gain on Visa Europe share sale. KKR related items represent KKR annual sponsorship fees for management, consulting, financial and other advisory services. Upon completing the IPO in October 2015, the Company is no longer obligated to pay KKR annual sponsorship fees. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Segment depreciation and amortization | $ | 231 | $ | 252 | $ | 690 | $ | 743 | ||||||||
Adjustments for non wholly owned entities (a) | 18 | 20 | 56 | 62 | ||||||||||||
Amortization of initial payments for new contracts (b) | 16 | 14 | 47 | 38 | ||||||||||||
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows | 265 | 286 | 793 | 843 | ||||||||||||
Amortization of equity method investments (c) | (12 | ) | (15 | ) | (33 | ) | (45 | ) | ||||||||
Amortization of initial payments for new contracts (b) | (16 | ) | (14 | ) | (47 | ) | (38 | ) | ||||||||
Total consolidated depreciation and amortization per unaudited consolidated statements of operations | $ | 237 | $ | 257 | $ | 713 | $ | 760 |
(a) | Adjustment to reflect depreciation and amortization attributable to noncontrolling interests. |
(b) | Included in "Transaction and processing service fees" as contra-revenue in the Company's unaudited consolidated statements of operations. |
(c) | Included in "Equity earnings in affiliates" in the Company's unaudited consolidated statements of operations. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Income tax expense | $ | 24 | $ | 32 | $ | 57 | $ | 45 | ||||||||
Effective income tax rate | 11 | % | (74 | )% | 12 | % | (75 | )% |
(in millions) | 2016 | 2015 | ||||||
Balance as of January 1, | $ | 77 | $ | 70 | ||||
Distributions | (25 | ) | (26 | ) | ||||
Share of income | 25 | 26 | ||||||
Adjustment to redemption value of redeemable noncontrolling interest | (4 | ) | 8 | |||||
Balance as of September 30, | $ | 73 | $ | 78 |
• | Floating to fixed interest rate swaps: The Company used interest rate swaps to mitigate its exposure to interest rate fluctuations on interest payments related to variable rate debt. The Company is no longer invested in any such interest rate swaps. The Company's interest rate contracts were used in a non-qualifying hedging relationship. |
• | Floating to fixed interest rate collar swaps: The Company uses interest rate collar swaps 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 swaps unless interest rates rise or fall to exceed a predetermined ceiling or floor rate. The Company uses these contracts in a qualifying hedging relationship. |
• | Foreign exchange contracts: The Company uses cross-currency swaps to protect the net investment in certain foreign subsidiaries and/or affiliates with respect to changes in foreign currency exchange rates. The Company uses these contracts in both qualifying and non-qualifying hedging relationships. |
As of September 30, 2016 | As of December 31, 2015 | |||||||||||||||||||||||
(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 | AUD | 260 | $ | 55 | $ | — | 260 | $ | 65 | $ | — | |||||||||||||
Foreign exchange contracts (b) | EUR | — | — | — | 200 | 51 | — | |||||||||||||||||
Foreign exchange contracts (c) | GBP | 300 | 59 | — | 250 | 39 | — | |||||||||||||||||
Foreign exchange contracts (d) | CAD | 130 | 7 | — | 110 | 24 | — | |||||||||||||||||
121 | — | 179 | — | |||||||||||||||||||||
Derivatives designated as cash flow hedges: | ||||||||||||||||||||||||
Interest rate collar contracts | USD | 3,000 | — | — | — | — | ||||||||||||||||||
— | — | — | — | |||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||
Interest rate contracts (e) | USD | — | — | — | 5,000 | — | (56 | ) | ||||||||||||||||
$ | 121 | $ | — | $ | 179 | $ | (56 | ) |
(a) | Of the balances included in the table above, in aggregate, $121 million of assets as of September 30, 2016 and $179 million of assets and $51 million of liabilities, net $128 million, as of December 31, 2015 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 forward exchange contracts matured in January 2016 at a net settlement value of $49 million. |
(c) | Notional value 100 million GBP matured in August 2016 at a net settlement value of $25 million. The Company entered into a new foreign exchange contract with a notional value of 150 million GBP. |
(d) | Notional value 75 million CAD matured in August 2016 at a net settlement value of $14 million. The Company entered into a new foreign exchange contract with a notional value of 95 million CAD. |
(e) | Interest rate contracts matured in September 2016. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||||||||
(in millions, pretax) | Interest Rate Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Foreign Exchange Contracts | Interest Rate Contracts | Foreign Exchange Contracts | |||||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||
Gain recognized in "Foreign currency translation adjustment" in the unaudited consolidated statements of comprehensive income (loss) (effective portion) | $ | — | $ | 5 | $ | — | $ | 36 | $ | — | $ | 27 | $ | — | $ | 68 | |||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||||||
Gain (loss) recognized in "Other income (expense)" in the unaudited consolidated statements of operations | — | — | (9 | ) | — | (5 | ) | — | (27 | ) | 2 |
(in millions, after tax) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Accumulated gain included in other comprehensive income (loss) at beginning of the period | $ | 100 | $ | 57 | $ | 86 | $ | 37 | |||||||||
Increase in fair value of derivatives that qualify for hedge accounting, net of tax (a) | 3 | 22 | 17 | 42 | |||||||||||||
Accumulated gain included in other comprehensive income (loss) at end of the period | $ | 103 | $ | 79 | $ | 103 | $ | 79 |
(a) | Gains are included in “Foreign currency translation adjustment” in the unaudited consolidated statements of comprehensive income (loss). |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Global Business Solutions | $ | (2 | ) | $ | (9 | ) | $ | (7 | ) | $ | (14 | ) | ||||
Global Financial Solutions | — | (5 | ) | (2 | ) | (9 | ) | |||||||||
Network & Security Solutions | — | (1 | ) | (2 | ) | (1 | ) | |||||||||
Corporate | (4 | ) | (5 | ) | (40 | ) | (16 | ) | ||||||||
Restructuring, net | $ | (6 | ) | $ | (20 | ) | $ | (51 | ) | $ | (40 | ) |
(in millions) | Employee Severance | Other | ||||||
Remaining accrual as of January 1, 2016 | $ | 29 | $ | 1 | ||||
Restructuring, net | 28 | 23 | ||||||
Impairment of held-for-sale assets | — | (21 | ) | |||||
Cash payments and other | (49 | ) | (3 | ) | ||||
Remaining accrual as of September 30, 2016 | $ | 8 | $ | — |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net operating revenues | $ | 232 | $ | 228 | $ | 683 | $ | 668 | ||||||||
Operating expenses | 96 | 97 | 286 | 281 | ||||||||||||
Operating income | $ | 136 | $ | 131 | $ | 397 | $ | 387 | ||||||||
Net income | $ | 136 | $ | 131 | $ | 397 | $ | 387 | ||||||||
FDC equity earnings | 46 | 42 | 136 | 123 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Derivative financial instruments losses | $ | — | $ | (9 | ) | $ | (5 | ) | $ | (25 | ) | |||||
Divestitures, net (loss) gain | (31 | ) | — | (31 | ) | 3 | ||||||||||
Gain on Visa Europe share sale | — | — | 29 | — | ||||||||||||
Non-operating foreign currency gains and (losses) | 2 | (1 | ) | 21 | 23 | |||||||||||
Other miscellaneous expense | (1 | ) | — | — | — | |||||||||||
Other income (expense) | $ | (30 | ) | $ | (10 | ) | $ | 14 | $ | 1 |
• | the Guarantor ceases to be a “restricted subsidiary” for purpose of the agreement because the Company no longer directly or indirectly owns 50% of the equity or, if a corporation, stock having voting power to elect a majority of the board of directors of the Guarantor; or |
• | the Guarantor is designated as an “unrestricted subsidiary” for purposes of the agreement covenants; or |
• | the Guarantor is no longer wholly owned by the Company subject to the value of all Guarantors released under this provision does not exceed (x) 10% of the Company’s Covenant EBITDA plus (y) the amount of investments permitted under the agreement in respect of non-guarantors. |
• | the sale, exchange or transfer of the subsidiary’s capital stock or all or substantially all of its assets; |
• | designation of the Guarantor as an “unrestricted subsidiary” for purposes of the indenture covenants; |
• | release or discharge of the Guarantor’s guarantee of certain other indebtedness; or |
• | legal defeasance or covenant defeasance of the indenture obligations when provision has been made for them to be fully satisfied. |
Three months ended September 30, 2016 | ||||||||||||||||||||
(in millions) | FDC Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidation Adjustments | Consolidated | |||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction and processing service fees | $ | — | $ | 1,003 | $ | 763 | $ | (73 | ) | $ | 1,693 | |||||||||
Product sales and other | — | 208 | 144 | (45 | ) | 307 | ||||||||||||||
Total revenues (excluding reimbursable items) | — | 1,211 | 907 | (118 | ) | 2,000 | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | — | 637 | 299 | — | 936 | |||||||||||||||
Total revenues | — | 1,848 | 1,206 | (118 | ) | 2,936 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of services (exclusive of items shown below) | — | 408 | 360 | (57 | ) | 711 | ||||||||||||||
Cost of products sold | — | 84 | 48 | (45 | ) | 87 | ||||||||||||||
Selling, general, and administrative | 56 | 272 | 187 | (16 | ) | 499 | ||||||||||||||
Depreciation and amortization | 1 | 140 | 96 | — | 237 | |||||||||||||||
Other operating expenses | — | 3 | 9 | — | 12 | |||||||||||||||
Total expenses (excluding reimbursable items) | 57 | 907 | 700 | (118 | ) | 1,546 | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | — | 637 | 299 | — | 936 | |||||||||||||||
Total expenses | 57 | 1,544 | 999 | (118 | ) | 2,482 | ||||||||||||||
Operating (loss) profit | (57 | ) | 304 | 207 | — | 454 | ||||||||||||||
Interest expense, net | (258 | ) | (4 | ) | (1 | ) | — | (263 | ) | |||||||||||
Loss on debt extinguishment | (3 | ) | — | — | — | (3 | ) | |||||||||||||
Interest income (expense) from intercompany notes | 59 | (57 | ) | (2 | ) | — | — | |||||||||||||
Other income (expense) | (2 | ) | — | (28 | ) | — | (30 | ) | ||||||||||||
Equity earnings from consolidated subsidiaries | 240 | (1 | ) | — | (239 | ) | — | |||||||||||||
(Loss) income before income taxes and equity earnings in affiliates | (21 | ) | 242 | 176 | (239 | ) | 158 | |||||||||||||
Income tax (benefit) expense | (154 | ) | 144 | 34 | — | 24 | ||||||||||||||
Equity earnings in affiliates | (1 | ) | 59 | 8 | — | 66 | ||||||||||||||
Net income (loss) | 132 | 157 | 150 | (239 | ) | 200 | ||||||||||||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | — | — | 16 | 52 | 68 | |||||||||||||||
Net income (loss) attributable to First Data Corporation | $ | 132 | $ | 157 | $ | 134 | $ | (291 | ) | $ | 132 | |||||||||
Comprehensive income (loss) | $ | 192 | $ | 169 | $ | 211 | $ | (311 | ) | $ | 261 | |||||||||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | — | — | 17 | 52 | 69 | |||||||||||||||
Comprehensive income (loss) attributable to First Data Corporation | $ | 192 | $ | 169 | $ | 194 | $ | (363 | ) | $ | 192 | |||||||||
Nine months ended September 30, 2016 | ||||||||||||||||||||
(in millions) | FDC Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidation Adjustments | Consolidated | |||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction and processing service fees | $ | — | $ | 2,926 | $ | 2,248 | $ | (221 | ) | $ | 4,953 | |||||||||
Product sales and other | — | 609 | 398 | (114 | ) | 893 | ||||||||||||||
Total revenues (excluding reimbursable items) | — | 3,535 | 2,646 | (335 | ) | 5,846 | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | — | 1,903 | 892 | — | 2,795 | |||||||||||||||
Total revenues | — | 5,438 | 3,538 | (335 | ) | 8,641 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of services (exclusive of items shown below) | — | 1,208 | 1,063 | (131 | ) | 2,140 | ||||||||||||||
Cost of products sold | — | 235 | 133 | (117 | ) | 251 | ||||||||||||||
Selling, general, and administrative | 261 | 815 | 574 | (87 | ) | 1,563 | ||||||||||||||
Depreciation and amortization | 4 | 430 | 279 | — | 713 | |||||||||||||||
Other operating expenses: | 12 | 32 | 13 | — | 57 | |||||||||||||||
Total expenses (excluding reimbursable items) | 277 | 2,720 | 2,062 | (335 | ) | 4,724 | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | — | 1,903 | 892 | — | 2,795 | |||||||||||||||
Total expenses | 277 | 4,623 | 2,954 | (335 | ) | 7,519 | ||||||||||||||
Operating (loss) profit | (277 | ) | 815 | 584 | — | 1,122 | ||||||||||||||
Interest expense, net | (792 | ) | (13 | ) | (5 | ) | — | (810 | ) | |||||||||||
Loss on debt extinguishment | (58 | ) | — | — | — | (58 | ) | |||||||||||||
Interest income (expense) from intercompany notes | 192 | (176 | ) | (16 | ) | — | — | |||||||||||||
Other (expense) | (2 | ) | — | 16 | — | 14 | ||||||||||||||
Equity earnings from consolidated subsidiaries | 689 | 175 | — | (864 | ) | — | ||||||||||||||
(Loss) income before income taxes and equity earnings in affiliates | (248 | ) | 801 | 579 | (864 | ) | 268 | |||||||||||||
Income tax (benefit) expense | (477 | ) | 404 | 130 | — | 57 | ||||||||||||||
Equity earnings in affiliates | (1 | ) | 175 | 24 | — | 198 | ||||||||||||||
Net income (loss) | 228 | 572 | 473 | (864 | ) | 409 | ||||||||||||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | — | — | 50 | 131 | 181 | |||||||||||||||
Net income (loss) attributable to First Data Corporation | $ | 228 | $ | 572 | $ | 423 | $ | (995 | ) | $ | 228 | |||||||||
Comprehensive (loss) income | $ | 182 | $ | 611 | $ | 454 | $ | (882 | ) | $ | 365 | |||||||||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | — | — | 52 | 131 | 183 | |||||||||||||||
Comprehensive (loss) income attributable to First Data Corporation | $ | 182 | $ | 611 | $ | 402 | $ | (1,013 | ) | $ | 182 |
Three months ended September 30, 2015 | ||||||||||||||||||||
(in millions) | FDC Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidation Adjustments | Consolidated | |||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction and processing service fees | $ | — | $ | 1,002 | $ | 753 | $ | (82 | ) | $ | 1,673 | |||||||||
Product sales and other | — | 197 | 131 | (19 | ) | 309 | ||||||||||||||
Total revenues (excluding reimbursable items) | — | 1,199 | 884 | (101 | ) | 1,982 | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | — | 646 | 292 | — | 938 | |||||||||||||||
Total revenues | — | 1,845 | 1,176 | (101 | ) | 2,920 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of services (exclusive of items shown below) | — | 413 | 355 | (82 | ) | 686 | ||||||||||||||
Cost of products sold | — | 68 | 47 | (19 | ) | 96 | ||||||||||||||
Selling, general, and administrative | 22 | 299 | 200 | — | 521 | |||||||||||||||
Depreciation and amortization | 1 | 158 | 98 | — | 257 | |||||||||||||||
Other operating expenses | 1 | 10 | 9 | — | 20 | |||||||||||||||
Total expenses (excluding reimbursable items) | 24 | 948 | 709 | (101 | ) | 1,580 | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | — | 646 | 292 | — | 938 | |||||||||||||||
Total expenses | 24 | 1,594 | 1,001 | (101 | ) | 2,518 | ||||||||||||||
Operating (loss) profit | (24 | ) | 251 | 175 | — | 402 | ||||||||||||||
Interest expense, net | (386 | ) | (2 | ) | — | — | (388 | ) | ||||||||||||
Loss on debt extinguishment | (108 | ) | — | — | — | (108 | ) | |||||||||||||
Interest income (expense) from intercompany notes | 65 | (68 | ) | 3 | — | — | ||||||||||||||
Other (expense) income | (18 | ) | — | 8 | — | (10 | ) | |||||||||||||
Equity earnings from consolidated subsidiaries | 570 | 111 | — | (681 | ) | — | ||||||||||||||
Income (loss) before income taxes and equity earnings in affiliates | 99 | 292 | 186 | (681 | ) | (104 | ) | |||||||||||||
Income tax (benefit) expense | 225 | (197 | ) | 4 | — | 32 | ||||||||||||||
Equity earnings in affiliates | — | 55 | 6 | — | 61 | |||||||||||||||
Net (loss) income | (126 | ) | 544 | 188 | (681 | ) | (75 | ) | ||||||||||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | — | — | 15 | 36 | 51 | |||||||||||||||
Net (loss) income attributable to First Data Corporation | $ | (126 | ) | $ | 544 | $ | 173 | $ | (717 | ) | $ | (126 | ) | |||||||
Comprehensive (loss) income | $ | (214 | ) | $ | 494 | $ | 83 | $ | (525 | ) | $ | (162 | ) | |||||||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | — | — | 15 | 36 | 51 | |||||||||||||||
Comprehensive income (loss) attributable to First Data Corporation | $ | (214 | ) | $ | 494 | $ | 68 | $ | (561 | ) | $ | (213 | ) |
Nine months ended September 30, 2015 | ||||||||||||||||||||
(in millions) | FDC Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidation Adjustments | Consolidated | |||||||||||||||
Revenues: | ||||||||||||||||||||
Transaction and processing service fees | $ | — | $ | 2,896 | $ | 2,242 | $ | (232 | ) | $ | 4,906 | |||||||||
Product sales and other | — | 538 | 354 | (48 | ) | 844 | ||||||||||||||
Total revenues (excluding reimbursable items) | — | 3,434 | 2,596 | (280 | ) | 5,750 | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | — | 1,874 | 863 | — | 2,737 | |||||||||||||||
Total revenues | — | 5,308 | 3,459 | (280 | ) | 8,487 | ||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of services (exclusive of items shown below) | — | 1,190 | 1,097 | (232 | ) | 2,055 | ||||||||||||||
Cost of products sold | — | 181 | 124 | (48 | ) | 257 | ||||||||||||||
Selling, general, and administrative | 81 | 876 | 610 | — | 1,567 | |||||||||||||||
Depreciation and amortization | 10 | 459 | 291 | — | 760 | |||||||||||||||
Other operating expenses | 7 | 14 | 19 | — | 40 | |||||||||||||||
Total expenses (excluding reimbursable items) | 98 | 2,720 | 2,141 | (280 | ) | 4,679 | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | — | 1,874 | 863 | — | 2,737 | |||||||||||||||
Total expenses | 98 | 4,594 | 3,004 | (280 | ) | 7,416 | ||||||||||||||
Operating (loss) profit | (98 | ) | 714 | 455 | — | 1,071 | ||||||||||||||
Interest expense, net | (1,191 | ) | (8 | ) | — | — | (1,199 | ) | ||||||||||||
Loss on debt extinguishment | (108 | ) | — | — | — | (108 | ) | |||||||||||||
Interest income (expense) from intercompany notes | 223 | (224 | ) | 1 | — | — | ||||||||||||||
Other income (expense) | 21 | 3 | (23 | ) | — | 1 | ||||||||||||||
Equity earnings from consolidated subsidiaries | 877 | 234 | — | (1,111 | ) | — | ||||||||||||||
(Loss) income before income taxes and equity earnings in affiliates | (276 | ) | 719 | 433 | (1,111 | ) | (235 | ) | ||||||||||||
Income tax (benefit) expense | (12 | ) | 3 | 54 | — | 45 | ||||||||||||||
Equity earnings in affiliates | — | 158 | 17 | — | 175 | |||||||||||||||
Net (loss) income | (264 | ) | 874 | 396 | (1,111 | ) | (105 | ) | ||||||||||||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | — | — | 49 | 110 | 159 | |||||||||||||||
Net (loss) income attributable to First Data Corporation | $ | (264 | ) | $ | 874 | $ | 347 | $ | (1,221 | ) | $ | (264 | ) | |||||||
Comprehensive (loss) income | $ | (473 | ) | $ | 796 | $ | 121 | $ | (765 | ) | $ | (321 | ) | |||||||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | — | — | 41 | 110 | 151 | |||||||||||||||
Comprehensive (loss) income attributable to First Data Corporation | $ | (473 | ) | $ | 796 | $ | 80 | $ | (875 | ) | $ | (472 | ) |
As of September 30, 2016 | ||||||||||||||||||||
(in millions) | FDC Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidation Adjustments | Consolidated | |||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 8 | $ | 18 | $ | 449 | $ | — | $ | 475 | ||||||||||
Accounts receivable, net of allowance for doubtful accounts | — | 487 | 1,227 | — | 1,714 | |||||||||||||||
Settlement assets (a) | — | 4,222 | 4,483 | — | 8,705 | |||||||||||||||
Intercompany notes receivable | 1 | — | — | (1 | ) | — | ||||||||||||||
Other current assets | 108 | 203 | 149 | — | 460 | |||||||||||||||
Total current assets | 117 | 4,930 | 6,308 | (1 | ) | 11,354 | ||||||||||||||
Property and equipment, net of accumulated depreciation | 34 | 600 | 262 | — | 896 | |||||||||||||||
Goodwill | — | 9,145 | 7,680 | — | 16,825 | |||||||||||||||
Customer relationships, net of accumulated amortization | — | 1,078 | 767 | — | 1,845 | |||||||||||||||
Other intangibles, net of accumulated amortization | 604 | 706 | 483 | — | 1,793 | |||||||||||||||
Investment in affiliates | 4 | 873 | 126 | — | 1,003 | |||||||||||||||
Long-term intercompany receivables | 10,070 | 17,144 | 7,290 | (34,504 | ) | — | ||||||||||||||
Long-term intercompany notes receivable | 3,446 | 219 | 9 | (3,674 | ) | — | ||||||||||||||
Long-term deferred tax assets | 449 | — | — | (449 | ) | — | ||||||||||||||
Other long-term assets | 185 | 342 | 251 | (50 | ) | 728 | ||||||||||||||
Investment in consolidated subsidiaries | 26,658 | 5,862 | — | (32,520 | ) | — | ||||||||||||||
Total assets | $ | 41,567 | $ | 40,899 | $ | 23,176 | $ | (71,198 | ) | $ | 34,444 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 250 | $ | 758 | $ | 548 | $ | — | $ | 1,556 | ||||||||||
Short-term and current portion of long-term borrowings | — | 94 | 283 | — | 377 | |||||||||||||||
Settlement obligations (a) | — | 4,222 | 4,483 | — | 8,705 | |||||||||||||||
Intercompany notes payable | — | — | 1 | (1 | ) | — | ||||||||||||||
Total current liabilities | 250 | 5,074 | 5,315 | (1 | ) | 10,638 | ||||||||||||||
Long-term borrowings | 18,316 | 183 | 15 | — | 18,514 | |||||||||||||||
Deferred tax liabilities | — | 766 | 93 | (449 | ) | 410 | ||||||||||||||
Long-term intercompany payables | 21,261 | 8,002 | 5,241 | (34,504 | ) | — | ||||||||||||||
Long-term intercompany notes payable | 228 | 3,446 | — | (3,674 | ) | — | ||||||||||||||
Other long-term liabilities | 474 | 253 | 159 | (50 | ) | 836 | ||||||||||||||
Total liabilities | 40,529 | 17,724 | 10,823 | (38,678 | ) | 30,398 | ||||||||||||||
Redeemable equity interest | — | — | 73 | (73 | ) | — | ||||||||||||||
Redeemable noncontrolling interest | — | — | — | 73 | 73 | |||||||||||||||
First Data Corporation stockholders' equity | 1,038 | 23,175 | 6,403 | (29,578 | ) | 1,038 | ||||||||||||||
Noncontrolling interests | — | — | 104 | 2,831 | 2,935 | |||||||||||||||
Equity of consolidated alliance | — | — | 5,773 | (5,773 | ) | — | ||||||||||||||
Total equity | 1,038 | 23,175 | 12,280 | (32,520 | ) | 3,973 | ||||||||||||||
Total liabilities and equity | $ | 41,567 | $ | 40,899 | $ | 23,176 | $ | (71,198 | ) | $ | 34,444 |
(a) | The majority of the Guarantor settlement assets relate to the Company’s merchant acquiring business. The Company believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities. |
As of December 31, 2015 | ||||||||||||||||||||
(in millions) | FDC Parent Company | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Consolidation Adjustments | Consolidated | |||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 105 | $ | 16 | $ | 308 | $ | — | $ | 429 | ||||||||||
Accounts receivable, net of allowance for doubtful accounts | — | 826 | 1,000 | — | 1,826 | |||||||||||||||
Settlement assets (a) | — | 4,273 | 3,877 | — | 8,150 | |||||||||||||||
Intercompany notes receivable | 436 | 86 | 10 | (532 | ) | — | ||||||||||||||
Other current assets | 98 | 188 | 95 | — | 381 | |||||||||||||||
Total current assets | 639 | 5,389 | 5,290 | (532 | ) | 10,786 | ||||||||||||||
Property and equipment, net of accumulated depreciation | 37 | 640 | 274 | — | 951 | |||||||||||||||
Goodwill | — | 9,139 | 7,707 | — | 16,846 | |||||||||||||||
Customer relationships, net of accumulated amortization | — | 1,235 | 901 | — | 2,136 | |||||||||||||||
Other intangibles, net of accumulated amortization | 604 | 703 | 476 | — | 1,783 | |||||||||||||||
Investment in affiliates | 5 | 900 | 143 | — | 1,048 | |||||||||||||||
Long-term intercompany receivables | 8,523 | 15,192 | 6,321 | (30,036 | ) | — | ||||||||||||||
Long-term intercompany notes receivable | 3,415 | 236 | 9 | (3,660 | ) | — | ||||||||||||||
Long-term deferred tax assets | 524 | — | — | (524 | ) | — | ||||||||||||||
Other long-term assets | 259 | 358 | 265 | (70 | ) | 812 | ||||||||||||||
Investment in consolidated subsidiaries | 25,692 | 5,588 | — | (31,280 | ) | — | ||||||||||||||
Total assets | $ | 39,698 | $ | 39,380 | $ | 21,386 | $ | (66,102 | ) | $ | 34,362 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 283 | $ | 792 | $ | 564 | $ | — | $ | 1,639 | ||||||||||
Short-term and current portion of long-term borrowings | 740 | 70 | 46 | — | 856 | |||||||||||||||
Settlement obligations (a) | — | 4,273 | 3,877 | — | 8,150 | |||||||||||||||
Intercompany notes payable | 96 | 408 | 28 | (532 | ) | — | ||||||||||||||
Total current liabilities | 1,119 | 5,543 | 4,515 | (532 | ) | 10,645 | ||||||||||||||
Long-term borrowings | 18,616 | 119 | 2 | — | 18,737 | |||||||||||||||
Deferred tax liabilities | — | 875 | 80 | (524 | ) | 431 | ||||||||||||||
Long-term intercompany payables | 18,583 | 6,874 | 4,579 | (30,036 | ) | — | ||||||||||||||
Long-term intercompany notes payable | 245 | 3,353 | 62 | (3,660 | ) | — | ||||||||||||||
Other long-term liabilities | 467 | 288 | 127 | (70 | ) | 812 | ||||||||||||||
Total liabilities | 39,030 | 17,052 | 9,365 | (34,822 | ) | 30,625 | ||||||||||||||
Redeemable equity interest | — | — | 77 | (77 | ) | — | ||||||||||||||
Redeemable noncontrolling interest | — | — | — | 77 | 77 | |||||||||||||||
First Data Corporation stockholders' equity | 668 | 22,328 | 5,933 | (28,261 | ) | 668 | ||||||||||||||
Noncontrolling interests | — | — | 88 | 2,904 | 2,992 | |||||||||||||||
Equity of consolidated alliance | — | — | 5,923 | (5,923 | ) | — | ||||||||||||||
Total equity | 668 | 22,328 | 11,944 | (31,280 | ) | 3,660 | ||||||||||||||
Total liabilities and equity | $ | 39,698 | $ | 39,380 | $ | 21,386 | $ | (66,102 | ) | $ | 34,362 |
(a) | The majority of the Guarantor settlement assets relate to the Company’s merchant acquiring business. The Company believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities. |
Nine months ended September 30, 2016 | ||||||||||||||||||||
(in millions) | FDC Parent Company | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Consolidation Adjustments | Consolidated | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||
Net income | $ | 228 | $ | 572 | $ | 473 | $ | (864 | ) | $ | 409 | |||||||||
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 4 | 484 | 305 | — | 793 | |||||||||||||||
Charges (gains) related to other operating expenses and other income (expense) | 14 | 32 | (3 | ) | — | 43 | ||||||||||||||
Loss on debt extinguishment | 58 | — | — | — | 58 | |||||||||||||||
Stock-based compensation expense | 214 | — | — | — | 214 | |||||||||||||||
Other non-cash and non-operating items, net | (660 | ) | (174 | ) | — | 864 | 30 | |||||||||||||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities | (351 | ) | 316 | 148 | — | 113 | ||||||||||||||
Net cash (used in) provided by operating activities | (493 | ) | 1,230 | 923 | — | 1,660 | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||
Additions to property and equipment | — | (47 | ) | (121 | ) | — | (168 | ) | ||||||||||||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | — | (139 | ) | (44 | ) | — | (183 | ) | ||||||||||||
Acquisitions, net of cash acquired | (6 | ) | — | — | — | (6 | ) | |||||||||||||
Other investing activities, net | 143 | 215 | 19 | (358 | ) | 19 | ||||||||||||||
Net cash provided by (used in) investing activities | 137 | 29 | (146 | ) | (358 | ) | (338 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||
Short-term borrowings, net | — | — | 234 | — | 234 | |||||||||||||||
Proceeds from issuance of long-term debt | 2,377 | — | — | — | 2,377 | |||||||||||||||
Payment of call premiums and debt issuance cost | (52 | ) | — | — | — | (52 | ) | |||||||||||||
Principal payments on long-term debt | (3,480 | ) | (59 | ) | (5 | ) | — | (3,544 | ) | |||||||||||
Payment of taxes related to net settlement of equity awards | (59 | ) | — | — | — | (59 | ) | |||||||||||||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | — | — | (36 | ) | (204 | ) | (240 | ) | ||||||||||||
Distributions paid to equity holders | — | — | (419 | ) | 419 | — | ||||||||||||||
Other financing activities, net | 18 | 8 | (143 | ) | 143 | 26 | ||||||||||||||
Intercompany | 1,455 | (1,215 | ) | (240 | ) | — | — | |||||||||||||
Net cash provided by (used in) financing activities | 259 | (1,266 | ) | (609 | ) | 358 | (1,258 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | 9 | (27 | ) | — | (18 | ) | |||||||||||||
Change in cash and cash equivalents | (97 | ) | 2 | 141 | — | 46 | ||||||||||||||
Cash and cash equivalents at beginning of period | 105 | 16 | 308 | — | 429 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 8 | $ | 18 | $ | 449 | $ | — | $ | 475 |
Nine months ended September 30, 2015 | ||||||||||||||||||||
(in millions) | FDC Parent Company | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Consolidation Adjustments | Consolidated | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||
Net (loss) income | $ | (264 | ) | $ | 874 | $ | 396 | $ | (1,111 | ) | $ | (105 | ) | |||||||
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 10 | 519 | 314 | — | 843 | |||||||||||||||
(Gains) charges related to other operating expenses and other income (expense) | (14 | ) | 11 | 42 | — | 39 | ||||||||||||||
Loss on debt extinguishment | 108 | — | — | — | 108 | |||||||||||||||
Stock-based compensation expense | 31 | — | — | — | 31 | |||||||||||||||
Other non-cash and non-operating items, net | (832 | ) | (238 | ) | 9 | 1,111 | 50 | |||||||||||||
(Decrease) increase in cash resulting from changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions | (405 | ) | 87 | 39 | — | (279 | ) | |||||||||||||
Net cash (used in) provided by operating activities | (1,366 | ) | 1,253 | 800 | — | 687 | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||
Additions to property and equipment | (8 | ) | (93 | ) | (112 | ) | — | (213 | ) | |||||||||||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | — | (201 | ) | (43 | ) | — | (244 | ) | ||||||||||||
Acquisitions, net of cash acquired | (70 | ) | (19 | ) | — | — | (89 | ) | ||||||||||||
Other investing activities, net | 110 | 199 | — | (317 | ) | (8 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 32 | (114 | ) | (155 | ) | (317 | ) | (554 | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||
Short-term borrowings, net | 250 | — | (31 | ) | — | 219 | ||||||||||||||
Proceeds from issuance of long-term debt | 2,206 | — | — | — | 2,206 | |||||||||||||||
Payment of debt issuance cost | (104 | ) | — | — | — | (104 | ) | |||||||||||||
Principal payments on long-term debt | (2,115 | ) | (61 | ) | (9 | ) | — | (2,185 | ) | |||||||||||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | — | — | (49 | ) | (183 | ) | (232 | ) | ||||||||||||
Distributions paid to equity holders | — | — | (375 | ) | 375 | — | ||||||||||||||
Other financing activities, net | (13 | ) | — | (125 | ) | 125 | (13 | ) | ||||||||||||
Intercompany | 1,129 | (1,080 | ) | (49 | ) | — | — | |||||||||||||
Net cash provided by (used in) financing activities | 1,353 | (1,141 | ) | (638 | ) | 317 | (109 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | 1 | (15 | ) | — | (14 | ) | |||||||||||||
Change in cash and cash equivalents | 19 | (1 | ) | (8 | ) | — | 10 | |||||||||||||
Cash and cash equivalents at beginning of period | — | 23 | 335 | — | 358 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 19 | $ | 22 | $ | 327 | $ | — | $ | 368 |
◦ | Tangible improvements in North America merchant business |
◦ | Strong momentum in international markets |
◦ | Enterprise growth continues |
◦ | Maintaining expense discipline |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Cost of services | $ | 19 | $ | — | $ | 91 | $ | — | ||||||||
Selling, general, and administrative | 24 | 8 | 123 | 31 | ||||||||||||
Total | $ | 43 | $ | 8 | $ | 214 | $ | 31 |
• | The accounting policies of the operating 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 PIN debit fees, postage, and other revenue. |
• | Segment EBITDA includes equity earnings in affiliates and excludes depreciation and amortization expense, net income attributable to noncontrolling interests, other operating expenses, and other income (expense). Additionally, segment EBITDA is adjusted for items similar to certain of those used in calculating our compliance with debt covenants. The additional items that are adjusted to determine segment EBITDA are: |
• | stock-based compensation and related expenses are excluded; |
• | debt issuance costs are excluded and represent costs associated with issuing debt and modifying our debt structure; and |
• | Kohlberg Kravis Roberts & Co. (KKR) related items including annual sponsor and other fees for management, consulting, financial, contract termination, and other advisory services are excluded. Upon our public offering on October 15, 2015, we are no longer required to pay management fees to KKR. |
• | 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. In addition, our Global Business Solutions segment measures reflect revenue-based commission payments to Independent Sales Organizations (ISOs) and sales channels, which are treated as an expense in the unaudited consolidated statements of operations, as contra revenue. |
• | 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 reporting in 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. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | Constant Currency Percent Change | 2016 | 2015 | Percent Change | Constant Currency Percent Change | ||||||||||||||||||||
Consolidated revenues | $ | 2,936 | $ | 2,920 | 1 | % | 2 | % | $ | 8,641 | $ | 8,487 | 2 | % | 3 | % | ||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Non wholly owned entities | (25 | ) | (18 | ) | 39 | % | NM | (59 | ) | (58 | ) | 2 | % | NM | ||||||||||||||
Independent sales organizations (ISOs) commissions | (155 | ) | (167 | ) | (7 | )% | NM | (476 | ) | (475 | ) | — | % | NM | ||||||||||||||
Reimbursable PIN debit fees, postage, and other | (936 | ) | (938 | ) | — | % | — | % | (2,795 | ) | (2,737 | ) | 2 | % | 2 | % | ||||||||||||
Total segment revenues | $ | 1,820 | $ | 1,797 | 1 | % | 3 | % | $ | 5,311 | $ | 5,217 | 2 | % | 4 | % | ||||||||||||
Segment revenues: | ||||||||||||||||||||||||||||
Global Business Solutions | $ | 1,045 | $ | 1,032 | 1 | % | 3 | % | $ | 3,037 | $ | 3,050 | — | % | 2 | % | ||||||||||||
Global Financial Solutions | 397 | 391 | 2 | % | 5 | % | 1,178 | 1,101 | 7 | % | 10 | % | ||||||||||||||||
Network & Security Solutions | 378 | 374 | 1 | % | 1 | % | 1,096 | 1,066 | 3 | % | 3 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | Constant Currency Percent Change | 2016 | 2015 | Percent Change | Constant Currency Percent Change | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
North America | $ | 819 | $ | 813 | 1 | % | 1 | % | $ | 2,371 | $ | 2,402 | (1 | )% | (1 | )% | ||||||||||||
EMEA | 137 | 134 | 2 | % | 8 | % | 417 | 397 | 5 | % | 9 | % | ||||||||||||||||
APAC | 43 | 44 | (2 | )% | (6 | )% | 125 | 133 | (6 | )% | (3 | )% | ||||||||||||||||
LATAM | 46 | 41 | 12 | % | 45 | % | 124 | 118 | 5 | % | 44 | % | ||||||||||||||||
Total segment revenue | $ | 1,045 | $ | 1,032 | 1 | % | 3 | % | $ | 3,037 | $ | 3,050 | — | % | 2 | % | ||||||||||||
Key indicators: | ||||||||||||||||||||||||||||
North America merchant transactions (a) | 11,881 | 11,125 | 7 | % | 34,368 | 32,130 | 7 | % | ||||||||||||||||||||
International merchant transactions (b) | 2,087 | 1,741 | 20 | % | 5,801 | 4,985 | 16 | % |
(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. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | Constant Currency Percent Change | 2016 | 2015 | Percent Change | Constant Currency Percent Change | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
North America | $ | 236 | $ | 232 | 2 | % | 2 | % | $ | 706 | $ | 649 | 9 | % | 9 | % | ||||||||||||
EMEA | 113 | 114 | (1 | )% | 8 | % | 324 | 318 | 2 | % | 7 | % | ||||||||||||||||
APAC | 21 | 19 | 11 | % | 9 | % | 59 | 57 | 4 | % | 6 | % | ||||||||||||||||
LATAM | 27 | 26 | 4 | % | 28 | % | 89 | 77 | 16 | % | 39 | % | ||||||||||||||||
Total segment revenue | $ | 397 | $ | 391 | 2 | % | 5 | % | $ | 1,178 | $ | 1,101 | 7 | % | 10 | % | ||||||||||||
Key indicators: | ||||||||||||||||||||||||||||
North America card accounts on file (a) | 844 | 809 | 4 | % | ||||||||||||||||||||||||
International card accounts on file (b) | 147 | 139 | 6 | % |
(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. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | 2016 | 2015 | Percent Change | ||||||||||||||||
Revenues: | ||||||||||||||||||||||
EFT Network | $ | 126 | $ | 125 | 1 | % | $ | 363 | $ | 363 | — | % | ||||||||||
Stored Value Network | 92 | 95 | (3 | )% | 261 | 250 | 4 | % | ||||||||||||||
Security and Fraud | 110 | 105 | 5 | % | 322 | 301 | 7 | % | ||||||||||||||
Other (a) | 50 | 49 | 2 | % | 150 | 152 | (1 | )% | ||||||||||||||
Segment revenue | $ | 378 | $ | 374 | 1 | % | $ | 1,096 | $ | 1,066 | 3 | % | ||||||||||
Key indicators: | ||||||||||||||||||||||
Network transactions (EFT Network and Stored Value) (b) | 5,040 | 4,684 | 8 | % | 14,715 | 13,851 | 6 | % |
(a) | Other is primarily comprised of revenue generated from our Government and Online banking businesses. |
(b) | Network transactions include the debit issuer processing transactions, STAR Network issuer transactions, and closed loop and open loop POS transactions. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | Constant Currency Percent Change | 2016 | 2015 | Percent Change | Constant Currency Percent Change | ||||||||||||||||||||
Cost of services (exclusive of items shown below) | $ | 711 | $ | 686 | 4 | % | 5 | % | $ | 2,140 | $ | 2,055 | 4 | % | 6 | % | ||||||||||||
Cost of products sold | 87 | 96 | (9 | )% | (8 | )% | 251 | 257 | (2 | )% | — | % | ||||||||||||||||
Selling, general, and administrative | 499 | 521 | (4 | )% | (3 | )% | 1,563 | 1,567 | — | % | 1 | % | ||||||||||||||||
Depreciation and amortization | 237 | 257 | (8 | )% | (7 | )% | 713 | 760 | (6 | )% | (5 | )% | ||||||||||||||||
Other operating expenses | 12 | 20 | (40 | )% | (36 | )% | 57 | 40 | 43 | % | 45 | % | ||||||||||||||||
Total expenses (excluding reimbursable items) | 1,546 | 1,580 | (2 | )% | (1 | )% | 4,724 | 4,679 | 1 | % | 3 | % | ||||||||||||||||
Reimbursable PIN debit fees, postage, and other | 936 | 938 | — | % | — | % | 2,795 | 2,737 | 2 | % | 2 | % | ||||||||||||||||
Total expenses | $ | 2,482 | $ | 2,518 | (1 | )% | (1 | )% | $ | 7,519 | $ | 7,416 | 1 | % | 2 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | Constant Currency Percent Change | 2016 | 2015 | Percent Change | Constant Currency Percent Change | ||||||||||||||||||||
Salaries, wages, and bonus | $ | 365 | $ | 364 | — | % | $ | 1,105 | $ | 1,111 | (1 | )% | ||||||||||||||||
Stock-based compensation | 19 | — | NM | 91 | — | NM | ||||||||||||||||||||||
Outside professional services | 68 | 58 | 17 | % | 196 | 177 | 11 | % | ||||||||||||||||||||
Software, telecommunication infrastructure, and repairs | 103 | 93 | 11 | % | 299 | 284 | 5 | % | ||||||||||||||||||||
Other | 156 | 171 | (9 | )% | 449 | 483 | (7 | )% | ||||||||||||||||||||
Cost of services expense | $ | 711 | $ | 686 | 4 | % | 5 | % | $ | 2,140 | $ | 2,055 | 4 | % | 6 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | Constant Currency Percent Change | 2016 | 2015 | Percent Change | Constant Currency Percent Change | ||||||||||||||||||||
Salaries, wages, bonus, and other | $ | 166 | $ | 167 | (1 | )% | $ | 508 | $ | 535 | (5 | )% | ||||||||||||||||
Stock-based compensation | 24 | 8 | 200 | % | 123 | 31 | 297 | % | ||||||||||||||||||||
Independent sales organizations (ISOs) commissions | 155 | 167 | (7 | )% | 476 | 475 | — | % | ||||||||||||||||||||
Outside professional services | 46 | 68 | (32 | )% | 136 | 173 | (21 | )% | ||||||||||||||||||||
Commissions | 33 | 40 | (18 | )% | 104 | 115 | (10 | )% | ||||||||||||||||||||
Other | 75 | 71 | 6 | % | 216 | 238 | (9 | )% | ||||||||||||||||||||
Selling, general, and administrative expense | $ | 499 | $ | 521 | (4 | )% | (3 | )% | $ | 1,563 | $ | 1,567 | — | % | 1 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | 2016 | 2015 | Percent Change | ||||||||||||||||
Depreciation expense | $ | 79 | $ | 73 | 8 | % | $ | 227 | $ | 215 | 6 | % | ||||||||||
Amortization expense | 158 | 184 | (14 | )% | 486 | 545 | (11 | )% | ||||||||||||||
Depreciation and amortization | $ | 237 | $ | 257 | (8 | )% | $ | 713 | $ | 760 | (6 | )% |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | 2016 | 2015 | Percent Change | ||||||||||||||||
Interest expense, net | $ | (263 | ) | $ | (388 | ) | (32 | )% | $ | (810 | ) | $ | (1,199 | ) | (32 | )% |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | 2016 | 2015 | Percent Change | ||||||||||||||||
Loss on debt extinguishment | $ | (3 | ) | $ | (108 | ) | (97 | )% | $ | (58 | ) | $ | (108 | ) | (46 | )% |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Gain on Visa Europe share sale | $ | — | $ | — | $ | 29 | $ | — | ||||||||
Derivative financial instruments losses | — | (9 | ) | (5 | ) | (25 | ) | |||||||||
Divestitures, net (loss) gain | (31 | ) | — | (31 | ) | 3 | ||||||||||
Non-operating foreign currency gains (losses) | 2 | (1 | ) | 21 | 23 | |||||||||||
Other miscellaneous expense | (1 | ) | — | — | — | |||||||||||
Other income (expense) | $ | (30 | ) | $ | (10 | ) | $ | 14 | $ | 1 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Income tax expense | $ | 24 | $ | 32 | $ | 57 | $ | 45 | ||||||||
Effective income tax rate | 11 | % | (74 | )% | 12 | % | (75 | )% |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | 2016 | 2015 | Percent Change | ||||||||||||||||
Equity earnings in affiliates | $ | 66 | $ | 61 | 8 | % | $ | 198 | $ | 175 | 13 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | 2016 | 2015 | Percent Change | ||||||||||||||||
Net income attributable to noncontrolling interests and redeemable noncontrolling interest | $ | 68 | $ | 51 | 33 | % | $ | 181 | $ | 159 | 14 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
(in millions) | 2016 | 2015 | Percent Change | Constant Currency Percent Change | 2016 | 2015 | Percent Change | Constant Currency Percent Change | ||||||||||||||||||||
Segment EBITDA: | ||||||||||||||||||||||||||||
Global Business Solutions | $ | 455 | $ | 431 | 6 | % | 8 | % | $ | 1,279 | $ | 1,245 | 3 | % | 5 | % | ||||||||||||
Global Financial Solutions | 158 | 145 | 9 | % | 13 | % | 473 | 388 | 22 | % | 26 | % | ||||||||||||||||
Network & Security Solutions | 166 | 162 | 2 | % | 2 | % | 483 | 448 | 8 | % | 8 | % | ||||||||||||||||
Corporate | (40 | ) | (35 | ) | (14 | )% | (14 | )% | (114 | ) | (113 | ) | (1 | )% | (1 | )% | ||||||||||||
Total Segment EBITDA | $ | 739 | $ | 703 | 5 | % | 8 | % | $ | 2,121 | $ | 1,968 | 8 | % | 10 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
2016 | 2015 | Change | 2016 | 2015 | Change | |||||||||||||
Segment EBITDA Margin: | ||||||||||||||||||
Global Business Solutions | 43.5 | % | 41.8 | % | 170 | bps | 42.1 | % | 40.8 | % | 130 | bps | ||||||
Global Financial Solutions | 39.8 | % | 37.1 | % | 270 | bps | 40.2 | % | 35.2 | % | 500 | bps | ||||||
Network & Security Solutions | 43.9 | % | 43.3 | % | 60 | bps | 44.1 | % | 42.0 | % | 210 | bps | ||||||
Total Segment EBITDA Margin | 40.6 | % | 39.1 | % | 150 | bps | 39.9 | % | 37.7 | % | 220 | bps |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
(in millions) | 2016 | 2015 | % Change | 2016 | 2015 | % Change | ||||||||||||||||
Net income (loss) attributable to First Data Corporation | $ | 132 | $ | (126 | ) | NM | $ | 228 | $ | (264 | ) | NM | ||||||||||
Adjustments: | ||||||||||||||||||||||
Stock-based compensation | 43 | 8 | 438 | % | 214 | 31 | 590 | % | ||||||||||||||
Loss on debt extinguishment (a) | 3 | 108 | (97 | )% | 58 | 108 | (46 | )% | ||||||||||||||
Mark-to-market adjustment for derivatives and euro-denominated debt (b) | — | 13 | (100 | )% | 5 | (20 | ) | NM | ||||||||||||||
Amortization of acquisition intangibles and deferred financing costs (c) | 104 | 140 | (26 | )% | 318 | 434 | (27 | )% | ||||||||||||||
Loss on Australian ATM divestiture | 31 | — | NM | 31 | — | NM | ||||||||||||||||
Gain on Visa Europe share sale | — | — | NM | (29 | ) | — | NM | |||||||||||||||
Restructuring, impairment, litigation, and other (d) | 10 | 24 | (58 | )% | 61 | 91 | (33 | )% | ||||||||||||||
Income tax on above items (e) | (11 | ) | 4 | NM | (31 | ) | (30 | ) | 3 | % | ||||||||||||
Adjusted net income | $ | 312 | $ | 171 | 82 | % | $ | 855 | $ | 350 | 144 | % |
(a) | Represents costs associated with debt refinancing on extinguished debt. |
(b) | Represents mark-to-market activity related to our undesignated hedges, ineffectiveness of our designated hedges, and mark-to-market activity on our euro-denominated debt held in the United States. |
(c) | 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. |
(d) | Represents restructuring, impairments, non-normal course litigation and regulatory settlements, investments gains (losses), fees paid on debt modifications, and divestitures, as applicable to the periods presented. The third quarter of 2016 excludes the divestiture in our Australian ATM business, which is broken out separately within “Loss on Australian ATM divestiture” within the above table. |
(e) | 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 (loss) attributable to First Data Corporation. |
As of | As of | |||||||
(in millions) | September 30, 2016 | December 31, 2015 | ||||||
Total long-term borrowings | $ | 18,514 | $ | 18,737 | ||||
Total short-term and current portion of long-term borrowings | 377 | 856 | ||||||
Total borrowings | 18,891 | 19,593 | ||||||
Unamortized discount and unamortized deferred financing costs | 173 | 184 | ||||||
Total borrowings at par | 19,064 | 19,777 | ||||||
Less: settlement lines of credit and other arrangements | (71 | ) | (43 | ) | ||||
Gross debt | 18,993 | 19,734 | ||||||
Less: cash and cash equivalents (a) | (475 | ) | (429 | ) | ||||
Net debt | $ | 18,518 | $ | 19,305 |
(a) | As of September 30, 2016, "Cash and cash equivalents" reflects a reclassification of $123 million related to settlement activities to conform certain international joint ventures to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable" in our consolidated balance sheet. |
Nine months ended September 30, | ||||||||
Source/(use) (in millions) | 2016 | 2015 | ||||||
Net cash provided by operating activities | $ | 1,660 | $ | 687 | ||||
Net cash used in investing activities | (338 | ) | (554 | ) | ||||
Net cash used in financing activities | (1,258 | ) | (109 | ) |
Source/(use) (in millions) | Nine months ended September 30, 2016 | |||
Net cash provided by operating activities, previous period | $ | 687 | ||
Increases (decreases) in: | ||||
Net income, excluding other operating expenses and other income (expense) (a) | 631 | |||
Depreciation and amortization | (50 | ) | ||
Working capital | 392 | |||
Net cash provided by operating activities, current period (b) | $ | 1,660 |
(a) | Excludes loss on debt extinguishment, stock-based compensation expense and other non-cash items. For a review of our current quarter operating results, see "Results of operations" in Part I, Item 2 of this Form 10-Q. |
(b) | The nine months ended September 30, 2016 includes a $123 million reclassification related to settlement activities to conform certain international joint ventures to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable" in our consolidated balance sheet. |
Nine months ended September 30, | ||||||||
Source/(use) (in millions) | 2016 | 2015 | ||||||
Net cash provided by operating activities (a) | $ | 1,660 | $ | 687 | ||||
Capital expenditures | (351 | ) | (457 | ) | ||||
Distributions and dividends paid to noncontrolling interests, redeemable noncontrolling interest, and other (a) | (363 | ) | (232 | ) | ||||
Free cash flow | $ | 946 | $ | (2 | ) |
(a) | The nine months ended September 30, 2016 includes a $123 million reclassification related to settlement activities to conform certain international joint ventures to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable" in our consolidated balance sheet. Free cash flow excludes the impact of reclassification. |
Total Available (a) | Total Outstanding | |||||||||||||||
(in millions) | As of September 30, 2016 | As of December 31, 2015 | As of September 30, 2016 | As of December 31, 2015 | ||||||||||||
Letters of credit (b) | $ | 250 | $ | 250 | $ | 43 | $ | 42 | ||||||||
Lines of credit and other (c) | 344 | 245 | 71 | 43 |
(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. The largest amount of letters of credit outstanding was approximately $43 million during the three months ended September 30, 2016. All letters of credit expire on or prior to March 31, 2017 with a one-year renewal option. We expect to renew most of the letters of credit prior to expiration. |
(c) | As of September 30, 2016, represents $325 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. |
(in millions) | Last twelve months ended September 30, 2016 | |||
Net loss attributable to First Data Corporation | $ | (989 | ) | |
Interest expense, net | 1,148 | |||
Income tax expense | 113 | |||
Depreciation and amortization | 1,083 | |||
EBITDA | 1,355 | |||
Loss on debt extinguishment | 1,018 | |||
Stock-based compensation | 512 | |||
Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 235 | |||
Projected near-term cost savings and revenue enhancements (1) | 76 | |||
KKR related items | 84 | |||
Restructuring, net | 64 | |||
Non-operating foreign currency (gains) and losses | (39 | ) | ||
Investment (gains) and losses (2) | (29 | ) | ||
Derivative financial instruments (gains) and losses | (3 | ) | ||
Equity entities taxes, depreciation and amortization (3) | 14 | |||
Other (4) | 64 | |||
Covenant EBITDA | $ | 3,351 |
(1) | 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. |
(2) | Reflects the gain on Visa Europe share sale included within "Other income (expense)" in the unaudited consolidated statements of operations. |
(3) | Represents our proportional share of income taxes, depreciation and amortization on equity method investments. |
(4) | Includes items such as asset impairments, divestiture losses, customer disputes, earnouts, cost of alliance conversions, litigation and regulatory settlements, debt issuance costs, other technology initiatives, and other as applicable to the period presented. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Incorporated by Reference | |||||||||
Exhibit Number | Exhibit Description | Form | File Number | Exhibit Number | Filing Date | ||||
4.1 | 2016 October Joinder Agreement, dated as of October 14, 2016, among First Data Corporation, certain of its subsidiaries, each lender party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent Exhibit A - Marked Pages of the Conformed Credit Agreement | 8-K | 1-11073 | 4.1 | 10/17/2016 | ||||
10.1 (1)* | Form of Option Agreement under the 2015 Omnibus Incentive Plan approved August 2016 | ||||||||
10.2 (1)* | Form of Restricted Stock Award Agreement under the 2015 Omnibus Incentive Plan approved August 2016 | ||||||||
10.3 (1)* | Description of Modifications to Award Agreements | ||||||||
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. |
FIRST DATA CORPORATION | |||
(Registrant) | |||
Date: | November 9, 2016 | By | /s/ HIMANSHU A. PATEL |
Himanshu A. Patel | |||
Executive Vice President, Chief Financial Officer | |||
(principal financial officer) | |||
Date: | November 9, 2016 | By | /s/ MATTHEW CAGWIN |
Matthew Cagwin | |||
Senior Vice President, Corporate Controller and Chief Accounting Officer | |||
(principal accounting officer) |
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: |
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): |
Date: | November 9, 2016 | /s/ FRANK BISIGNANO |
Frank Bisignano Chief Executive Officer |
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: |
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): |
Date: | November 9, 2016 | /s/ HIMANSHU A. PATEL |
Himanshu A. Patel Executive Vice President, Chief Financial Officer (principal financial officer) |
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: | November 9, 2016 | /s/ FRANK BISIGNANO |
Frank Bisignano Chief Executive Officer |
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: | November 9, 2016 | /s/ HIMANSHU A. PATEL |
Himanshu A. Patel Executive Vice President, Chief Financial Officer (principal financial officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 01, 2016 |
|
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 | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity common stock, shares outstanding | 357,100,865 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity common stock, shares outstanding | 553,883,262 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||
Revenues: | |||||||
Transaction and processing service fees | [1] | $ 1,693 | $ 1,673 | $ 4,953 | $ 4,906 | ||
Product sales and other | [1] | 307 | 309 | 893 | 844 | ||
Total revenues (excluding reimbursable items) | 2,000 | 1,982 | 5,846 | 5,750 | |||
Reimbursable PIN debit fees, postage, and other | 936 | 938 | 2,795 | 2,737 | |||
Total revenues | 2,936 | 2,920 | 8,641 | 8,487 | |||
Expenses: | |||||||
Cost of services (exclusive of items shown below) | 711 | 686 | 2,140 | 2,055 | |||
Cost of products sold | 87 | 96 | 251 | 257 | |||
Selling, general, and administrative | 499 | 521 | 1,563 | 1,567 | |||
Depreciation and amortization | 237 | 257 | 713 | 760 | |||
Other operating expenses | 12 | 20 | 57 | 40 | |||
Total expenses (excluding reimbursable items) | 1,546 | 1,580 | 4,724 | 4,679 | |||
Reimbursable PIN debit fees, postage, and other | 936 | 938 | 2,795 | 2,737 | |||
Total expenses | 2,482 | 2,518 | 7,519 | 7,416 | |||
Operating (loss) profit | 454 | 402 | 1,122 | 1,071 | |||
Interest expense, net | (263) | (388) | (810) | (1,199) | |||
Loss on debt extinguishment | (3) | (108) | (58) | (108) | |||
Other income (expense) | (30) | (10) | 14 | 1 | |||
Income (loss) before income taxes and equity earnings in affiliates | 158 | (104) | 268 | (235) | |||
Income tax expense | 24 | 32 | 57 | 45 | |||
Equity earnings in affiliates | 66 | 61 | 198 | 175 | |||
Net income (loss) | 200 | (75) | 409 | (105) | |||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 68 | 51 | 181 | 159 | |||
Net income (loss) attributable to First Data Corporation | $ 132 | $ (126) | $ 228 | $ (264) | |||
Net income (loss) per share: | |||||||
Basic (in dollars per share) | $ 0.15 | $ (126,000.00) | $ 0.25 | $ (264,000.00) | |||
Diluted (in dollars per share) | $ 0.14 | $ (126,000.00) | $ 0.25 | $ (264,000.00) | |||
Weighted-average common shares outstanding: | |||||||
Basic (in shares) | 904,738,175 | 1,000 | 900,128,754 | 1,000 | |||
Diluted (in shares) | 922,818,229 | 1,000 | 918,301,729 | 1,000 | |||
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Statement [Abstract] | ||||
Processing fees, administrative service fees, and other fees charged to merchant alliances under equity method | $ 52 | $ 55 | $ 150 | $ 153 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 200 | $ (75) | $ 409 | $ (105) |
Other comprehensive income (loss), net of tax: | ||||
Unrealized (losses) gains on securities | 0 | (2) | 0 | 3 |
Foreign currency translation adjustment | 61 | (85) | (44) | (221) |
Pension liability adjustments | 0 | 0 | 0 | 2 |
Total other comprehensive income (loss), net of tax | 61 | (87) | (44) | (216) |
Comprehensive income (loss) | 261 | (162) | 365 | (321) |
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest, net of tax | 69 | 51 | 183 | 151 |
Comprehensive income (loss) attributable to First Data Corporation, net of tax | $ 192 | $ (213) | $ 182 | $ (472) |
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 75 | $ 71 |
Property and equipment, accumulated depreciation | 1,442 | 1,367 |
Customer relationships, accumulated amortization | 5,592 | 5,299 |
Other intangibles, accumulated amortization | $ 2,322 | $ 2,134 |
Class A common stock | ||
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) | 352,407,420 | 179,873,244 |
Common stock, outstanding shares (in shares) | 352,407,420 | 179,873,244 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 639,311,146 | 800,000,000 |
Common stock, issued shares (in shares) | 558,596,918 | 719,330,114 |
Common stock, outstanding shares (in shares) | 558,596,918 | 719,330,114 |
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - USD ($) $ in Millions |
Total |
Common Stock
Class A common stock
|
Common Stock
Class B common stock
|
Additional Paid-In Capital |
Accumulated Loss |
Accumulated Other Comprehensive Loss |
Noncontrolling Interests |
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2014 | 1,000 | [1] | 0 | ||||||||||
Beginning balance at Dec. 31, 2014 | $ 2,530 | $ 0 | $ 0 | $ 9,906 | $ (9,547) | $ (929) | $ 3,100 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Dividends and distributions paid to noncontrolling interests | (206) | (206) | |||||||||||
Net (loss) income | [2] | (131) | (264) | 133 | |||||||||
Other comprehensive (loss) income | (216) | (208) | (8) | ||||||||||
Adjustment to redemption value of redeemable noncontrolling interest | (8) | (8) | |||||||||||
Stock compensation expense | 31 | 31 | |||||||||||
Stock activity under stock compensation plans and other | (10) | (10) | |||||||||||
Cash dividends paid by First Data Corporation to Parent | $ (4) | (4) | |||||||||||
Ending balance (in shares) at Sep. 30, 2015 | 1,000 | 1,000 | 0 | ||||||||||
Ending balance at Sep. 30, 2015 | $ 1,986 | $ 0 | $ 0 | 9,919 | (9,815) | (1,137) | 3,019 | ||||||
Beginning balance (in shares) at Dec. 31, 2015 | 179,873,244 | 719,330,114 | |||||||||||
Beginning balance at Dec. 31, 2015 | 3,660 | $ 2 | $ 7 | 12,910 | (11,032) | (1,219) | 2,992 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Dividends and distributions paid to noncontrolling interests | (215) | (215) | |||||||||||
Net (loss) income | [2] | 384 | 228 | 156 | |||||||||
Other comprehensive (loss) income | (44) | (46) | 2 | ||||||||||
Adjustment to redemption value of redeemable noncontrolling interest | 4 | 4 | |||||||||||
Stock compensation expense | 214 | 214 | |||||||||||
Stock activity under stock compensation plans and other (in shares) | 172,534,176 | (160,733,196) | |||||||||||
Stock activity under stock compensation plans and other | (30) | $ 2 | $ (2) | (30) | |||||||||
Ending balance (in shares) at Sep. 30, 2016 | 352,407,420 | 558,596,918 | |||||||||||
Ending balance at Sep. 30, 2016 | $ 3,973 | $ 4 | $ 5 | $ 13,098 | $ (10,804) | $ (1,265) | $ 2,935 | ||||||
|
CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Unaudited) (Parenthetical) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2015
shares
| |
Common Stock | |
Number of shares eliminated upon merger | 1,000 |
Basis of Presentation and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Business Description First Data Corporation (FDC or the Company) is a global leader in commerce-enabling technology and solutions for merchants, financial institutions, and card issuers. The Company provides merchant transaction processing and acquiring; credit, retail, and debit card issuing and processing; prepaid services; and check verification, settlement and guarantee services; as well as solutions to help clients grow their businesses including the Company's Clover line of payment solutions and related applications. Basis of Presentation The accompanying unaudited consolidated financial statements of the Company should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Significant accounting policies disclosed therein have not changed. The accompanying consolidated financial statements are unaudited; however, in the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the consolidated financial position of the Company, the consolidated results of the Company's operations, comprehensive income (loss), consolidated cash flows and changes in equity as of and for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year due in part to the seasonality of certain business units. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Presentation Depreciation and amortization, presented as a separate line item on the Company’s unaudited consolidated statements of operations, does not include amortization of initial payments for new contracts which is recorded as contra-revenue within “Transaction and processing service fees.” Also not included is amortization related to equity method investments which is netted within “Equity earnings in affiliates.” The following table presents the amounts associated with such amortization for the periods presented:
Revenue Recognition The majority of the Company’s revenues are comprised of: 1) transaction-based fees, which typically constitute a percentage of dollar volume processed; 2) fees per transaction processed; 3) fees per account on file during the period; or 4) some combination thereof. The Company’s arrangements with clients often consist of multiple services and products (multiple-element arrangements). In accounting for multiple-element arrangements, the Company assesses the elements of the contract and whether each element has standalone value and allocates revenue to the various elements based on their estimated selling price as a component of total consideration for the arrangement. The selling price is based on current selling prices offered by the Company or another party for current products or management's best estimate of a selling price. In the case of contracts that the Company owns and manages, revenue is comprised of fees charged to the client, net of interchange fees and assessments charged by the credit card associations, and is recognized at the time the client accepts a point of sale transaction. The fees charged to the client are a percentage of the credit card and signature-based debit card transaction’s dollar value, a fixed amount, or a combination of the two. Personal identification number based debit (PIN-debit) and PINless-debit network fees are recognized in “Reimbursable PIN debit fees, postage, and other” revenues and expenses in the unaudited consolidated statements of operations. STAR Network access fees charged to clients are assessed on a per transaction basis. Interchange fees and assessments charged by credit card associations to the Company’s consolidated subsidiaries and network fees related to PIN-debit and PINless-debit transactions charged by debit networks were as follows for the periods presented:
Deferred Revenue The Company records deferred revenue when it receives payments in advance of the delivery of products or the performance of services. The deferred revenue is recognized into earnings when underlying performance obligations are achieved. As of September 30, 2016 and December 31, 2015, current deferred revenue included within "Accounts payable and accrued liabilities" in the Company's unaudited consolidated balance sheets was $148 million and $140 million, respectively, and noncurrent deferred revenue included within "Other long-term liabilities" in the Company's unaudited consolidated balance sheets was $170 million and $146 million, respectively. A major component of the Company's deferred revenue represents certain Clover terminal devices which do not have standalone value as of September 30, 2016. The Company will continue to assess in the future whether an adequate secondary market is capable of developing or has developed for these devices to establish standalone value. If a secondary market is deemed capable of developing or develops whereby clients are able to substantially recover their original purchase price, the Company will recognize revenue for Clover terminal devices upon delivery. Common Stock For the nine months ended September 30, 2016, 160.7 million shares of Class B common stock were converted to 160.7 million shares of Class A common stock. The majority of the shares converted shortly after the expiration of the Company's initial public offering lockup period which ended on April 11, 2016. Reclassifications Certain amounts for prior years have been reclassified to conform with the current-year financial statement presentation. Specifically, the unaudited consolidated balance sheet as of September 30, 2016 reflects a $123 million reclassification related to settlement activities to conform certain international joint ventures to our global policies, which increased "Cash and cash equivalents" and decreased "Accounts receivable". The unaudited consolidated statements of cash flows for the nine months ended September 30, 2016 reflects the reclassification of $123 million within “Net Cash provided by operating activities”. New Accounting Guidance In May 2014, the Financial Accounting Standards Board (FASB) issued guidance that requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in an exchange for those goods or services. It also requires enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively, and improves guidance for multiple-element arrangements. The guidance applies to any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. As amended in August 2015, the guidance is effective for public companies for annual periods beginning after December 15, 2017 as well as interim periods within those annual periods using either the full retrospective approach or modified retrospective approach. The FASB also permitted early adoption of the standard, but not before December 15, 2016. The Company is currently evaluating the impacts of the new guidance on its consolidated financial statements. 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 proceeding revenue recognition guidance. The Company is currently evaluating the impact of adoption of the new guidance on its consolidated financial statements. In March 2016, the FASB issued guidance that will change some aspects of the accounting for stock-based payments to employees. Under the new guidance, companies will be required to record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and to present excess tax benefits as an operating activity on the statement of cash flows. The guidance may also change how companies account for forfeitures and an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation. The new guidance will be effective for public companies for fiscal years beginning after December 15, 2016 as well as interim periods within those annual periods. Early adoption is permitted in any interim or annual period. The Company has evaluated the guidance and determined adoption will not have a material impact to its consolidated financial statements. 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. In August 2016, the FASB issued guidance which clarifies the treatment of several cash flow categories. In addition, the guidance clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company's early adoption of the guidance in the third quarter of 2016 did not have an impact on the Company's financial statements or disclosures. |
Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings
Foreign Lines of Credit and Other Arrangements As of September 30, 2016 and December 31, 2015, the Company had $344 million and $245 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 September 30, 2016 and December 31, 2015, this includes a $165 million and $75 million, respectively, committed line of credit for one of the Company's U.S. 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 September 30, 2016 and December 31, 2015, $19 million and $17 million, respectively, were uncommitted. 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 $43 million and $42 million of letters of credit were issued under these facilities as of September 30, 2016 and December 31, 2015, respectively. As of September 30, 2016, $1.2 billion remained available. Accounts Receivable Securitization Agreement On December 31, 2015, the Company established 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 September 30, 2016, the Company transferred $326 million in receivables to FDR as part of the securitization program and FDR utilized the receivables as collateral in borrowings of $208 million. As of September 30, 2016, the receivables held by FDR are recorded within “Accounts receivable, net” in the Company's unaudited consolidated balance sheets. Recent Events On January 1, 2016, the Company designated the euro-denominated portions of the senior secured term loan facility due March 2018, senior secured term loan facility due March 2021, and the senior secured term loan facility due July 2022 as non-derivative hedges of net investments in foreign operations. As such, foreign currency gains and losses on the euro-denominated portions of these terms loans is recorded within "Foreign currency translation adjustment" in the Company's unaudited consolidated statements of comprehensive income (loss) to the extent the hedges are effective. Foreign currency gains and losses on the euro-denominated portions of these term loans were previously recorded within "Other income (expense)" in the Company's unaudited consolidated statements of operations. On January 15, 2016, the Company redeemed its 8.75% senior secured second lien notes due 2022. Associated with the redemption, the Company recorded $43 million in loss on debt extinguishment. On March 29, 2016, the Company issued and sold $900 million aggregate principal amount of additional 5.0% senior secured notes due 2024, which mature on January 15, 2024, pursuant to the indenture governing the 5.0% senior secured notes due 2024 that were issued on November 25, 2015. The additional notes are treated as a single series with the existing 5.0% senior secured first lien notes due 2024 and have the same terms as the existing 5.0% notes. The Company used the net proceeds from the issue and sale of the additional notes to repay a portion of its U.S. dollar-denominated senior secured term loan facility due March 2018 and to pay related fees and expenses. Associated with the partial redemption of the U.S. dollar-denominated senior secured term loan facility, the Company recorded $3 million in loss on debt extinguishment. On April 13, 2016, the Company refinanced its U.S. dollar-denominated senior secured term loan due March 2018 through new and existing lenders to provide approximately $3.7 billion of U.S. dollar-denominated senior secured term loans due March 2021. The senior secured term loan due March 2021 bears interest at a rate of LIBOR plus 400 basis points or a base rate plus 300 basis points. In connection with this transaction, the Company recorded approximately $5 million in loss on debt extinguishment and expensed approximately $11 million in debt issuance costs, which is included within "Interest expense, net" in the unaudited consolidated statements of operations. On June 2, 2016, the Company refinanced its senior secured term loan due September 2018 and euro-denominated senior secured term loan due March 2018 through new and existing lenders to provide approximately $1.0 billion and €311 million ($342 million equivalent), respectively, of senior secured term loans due July 2022. The senior secured term loans due July 2022 bear interest at a rate of LIBOR plus 375 basis points or, solely with respect to the U.S. dollar denominated term loans, a base rate plus 275 basis points. In connection with this transaction, the Company recorded approximately $4 million in loss on debt extinguishment and expensed $4 million in debt issuance costs, which is included within "Interest expense, net" on the unaudited consolidated statements of operations. The euro-denominated senior secured term loan facility remains designated as a non-derivative hedge of net investment in foreign operations. During the current quarter, the Company paid down $350 million aggregate principal amount of the Company's March 2021 senior secured term loans. In connection with the transactions, the Company recorded $3 million in loss on debt extinguishment. On October 14, 2016, the Company refinanced, through new and existing lenders, to lower the interest rate on approximately $4.5 billion (including €0.2 billion of euro denominated term loans) of senior secured term loans due March 2021 from LIBOR plus 400 basis points to LIBOR plus 300 basis points or, solely with respect to the U.S. dollar denominated term loans, the Company's option of either LIBOR plus 300 basis points or the base rate plus 200 basis points. Subsequent to the end of the third quarter of 2016, the Company paid down $100 million aggregate principal amount of its March 2021 senior secured term loans. The Company recorded an immaterial amount of loss on debt extinguishment in connection with this transaction. |
Stock Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation Plans | Stock Compensation Plans The Company provides stock-based compensation awards to its employees under the 2015 Omnibus Incentive Plan (stock plan), which the Company adopted in conjunction with its initial public offering on October 15, 2015. Total stock-based compensation expense recognized in "Cost of services" and “Selling, general, and administrative” in the unaudited consolidated statements of operations resulting from stock options, non-vested restricted stock awards, and non-vested restricted stock units was as follows for the periods presented:
Substantially all of the Company's employees are granted restricted stock awards or units on an annual basis, which generally vest 20% after the first anniversary, 40% after the second anniversary, and the remaining 40% on the third anniversary. For the nine months ended September 30, 2016, 18 million restricted stock awards and units were granted at a weighted average price per share of $12.55. For the three months ended September 30, 2016, the Company granted less than 1 million restricted stock awards and units. As of September 30, 2016, there was $95 million and $247 million of total unrecognized compensation expense related to non-vested stock options and restricted stock, respectively. Previously unrecognized expense of $52 million was recognized during the first quarter of 2016 in connection with the Company's initial public offering. For the nine months ended September 30, 2016, the Company paid approximately $59 million of taxes related to the net settlement of vested equity awards. For the three months ended September 30, 2016 and for the three and nine months ended September 30, 2015, the amount of employee shares net settled for the payment of taxes was insignificant. The Company has an employee stock purchase plan under which the sale of 6 million shares of its common stock has been authorized. The total number of shares issued through the stock purchase plan have not been significant through September 30, 2016. 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, 2015. |
Net Income (Loss) Per Share |
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Net Income (Loss) Per Share | Net Income (Loss) Per Share Upon First Data Holdings, Inc. (FDH), the Company's direct parent company, merging with and into FDC on October 13, 2015, all outstanding shares of FDH's Class A Common Stock, Class B Common Stock, and Series A Voting Participating Convertible Preferred Stock (Series A Preferred Stock) automatically converted to identical shares of the Company's stock. Following the filing of the Company's prospectus with the Securities and Exchange Commission on October 15, 2015, holders of existing Class B Common Stock and Series A Preferred Stock received Class B Common Stock in the Company. Other than voting rights, this common stock has the same rights as the Class A Common Stock and therefore both are treated as the same class of stock for purposes of the net income (loss) per share calculation. Basic net income (loss) per share is calculated by dividing net income (loss) attributable to FDC by the weighted-average shares outstanding during the period, without consideration for any potential dilutive shares. Diluted net income (loss) 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 following table sets forth the computation of the Company's basic and diluted net income (loss) per share for the periods presented:
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Segment Information |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information For a detailed discussion of the Company’s principles and its operating 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, 2015. The following tables present the Company’s operating segment results for the periods presented:
The following table presents a reconciliation of the Company’s consolidated results to segment amounts for the periods presented:
The following table presents a reconciliation of segment depreciation and amortization amounts to the Company’s consolidated depreciation and amortization in the unaudited consolidated statements of cash flows for the periods presented:
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Income Taxes |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The following table presents the Company's income tax expense and effective income tax rate for the periods presented:
The effective tax rates for the three and nine months ended September 30, 2016 and 2015, respectively, were different from the statutory rate as a result of the Company recording tax expense on its foreign earnings, but not on its domestic earnings, as a result of the valuation allowance recorded in the U.S. The Company’s tax expense in all periods was also impacted by the Company not recording tax expense on noncontrolling interests from pass through entities. The effective income tax rate for the three and nine months ended September 30, 2016 benefited by 11% and 5%, respectively, from discrete adjustments. The Company's liability for unrecognized tax benefits was approximately $245 million as of September 30, 2016. The Company anticipates it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $122 million over the next twelve months beginning September 30, 2016 as a result of the possible closure of federal tax audits, potential settlements with certain states and foreign countries and the lapse of the statute of limitations in various state and foreign jurisdictions. |
Redeemable Noncontrolling Interest |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest One of the Company's noncontrolling interests is redeemable at the option of the holder and is presented outside of equity and carried at its estimated redemption value. The following table presents a summary of the redeemable noncontrolling interest activity during the periods presented:
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company enters into the following types of derivatives:
The Company held the following derivative instruments as of the dates indicated:
The maximum length of time over which the Company is hedging its currency exposure of net investments in foreign operations is through August 2019. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions related to the payment of variable rate interest on existing financial instruments is through September 2018. 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 are classified within Level 2 of the fair value hierarchy. While the Company believes its estimates result in a reasonable reflection of the fair value of these instruments, the estimated values may not be representative of actual values that could have been realized or that will be realized in the future. Effect of Derivative Instruments on the Unaudited Consolidated Financial Statements Derivative gains and (losses) were as follows for the periods indicated:
Accumulated Derivative Gains and Losses The following table summarizes activity in other comprehensive income (loss) related to derivative instruments classified as cash flow hedges and net investment hedges held by the Company for the periods presented:
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Restructuring |
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring During the three and nine months ended September 30, 2016 and 2015, the Company recorded restructuring charges in connection with management’s alignment of the business with strategic objectives, cost savings initiatives, the departure of certain executive officers, and refinements of estimates. In connection with the Company's announced cost management initiatives, the Company incurred $105 million of cumulative restructuring expense through September 30, 2016. For the three and nine months ended September 30, 2016, the Company incurred $6 million and $51 million, respectively. The nine month period includes a loss of $21 million on the impairment of a held-for-sale asset related to the exit of a facility. For the three and nine months ended September 30, 2015, the Company incurred approximately $20 million and $40 million in restructuring costs, respectively, primarily related to severance costs. A summary of net pretax restructuring charges incurred by segment and reported within "Other operating expenses" in the unaudited consolidated statement of operations was as follows for the periods presented:
The following table summarizes the Company’s utilization of restructuring accruals for the period presented:
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is involved in various legal proceedings. Accruals have been made with respect to these matters, where appropriate, which are reflected in the Company’s unaudited consolidated financial statements. The Company may enter into discussions regarding settlement of these matters and may enter into settlement agreements if it believes settlement is in the best interest of the Company. The matters discussed below, if decided adversely to or settled by the Company, individually or in the aggregate, may result in liability material to the Company’s financial condition and/or results of operations. Legal There are asserted claims against the Company where an unfavorable outcome is considered to be reasonably possible. These claims can generally be categorized in the following areas: (1) patent infringement which results from claims that the Company is using technology that has been patented by another party, (2) merchant customer matters often associated with alleged processing errors or disclosure issues and claims that one of the subsidiaries of the Company has violated a federal or state requirement regarding credit reporting or collection in connection with its check verification guarantee and collection activities, and (3) other matters which may include issues such as employment. The Company’s estimates of the reasonably possible ranges of losses in excess of any amounts accrued are $0 to $10 million for patent infringement, $0 to $40 million for merchant customer matters, and $0 to $30 million for other matters, resulting in a total estimated range of reasonably possible losses of $0 to $80 million for all of the matters described above. The estimated range of reasonably possible losses is based on information currently available and involves elements of judgment and significant uncertainties. As additional information becomes available and the resolution of the uncertainties becomes more apparent, it is possible that actual losses may exceed even the high end of the estimated range. Other In the normal course of business, the Company is subject to claims and litigation, including indemnification obligations to purchasers of former subsidiaries. Management of the Company believes that such matters will not have a material adverse effect on the Company’s results of operations, liquidity, or financial condition. |
Investment in Affiliates |
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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 programs. As of September 30, 2016, 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 financial information for the affiliate is presented below for the periods presented:
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Supplemental Financial Information |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | Supplemental Financial Information Supplemental Unaudited Consolidated Statements of Operations Information The following table details the components of “Other income (expense)” on the unaudited consolidated statements of operations for the periods presented:
Gain on Visa Europe share sale On June 21, 2016, Visa Inc. (Visa) acquired Visa Europe (VE), of which the Company was a member and shareholder through certain subsidiaries. On June 21, 2016, the Company received cash of €24.2 million ($27 million equivalent at June 21, 2016) and Visa preferred stock which is convertible into Visa common shares. The Company will also receive a deferred payment three years after the closing date of the acquisition, valued at approximately €2.3 million ($2.6 million equivalent at June 21, 2016). As of June 21, 2016, the Class A common stock equivalent of the preferred stock was approximately $19 million. However, the preferred shares have been assigned a value of zero based on transfer restrictions and Visa's ability to adjust the conversion ratio dependent on the outcome of existing and potential litigations in the Visa Europe territory over the next 12 years. The Company could receive additional proceeds as a number of First Data subsidiaries are working with certain members of Visa Europe who sponsor other of the Company's merchant acquiring businesses in Europe in respect of sale proceeds received by those members. Divestiture, net (loss) gain On September 30, 2016, the Company completed the sale of its Australian ATM business, which was reported as part of the Global Business Solutions segment. Associated with the transaction, the Company recognized a $31 million loss on the sale. The loss is comprised of investments of $69 million reduced by cash proceeds of $38 million which were received subsequent to September 30, 2016. As of September 30, 2016, the cash proceeds are included within "Other current assets" in the unaudited consolidated balance sheet. The Company recorded an income tax provision of $9 million as a result of the final sale settlement. |
Supplemental Guarantor Condensed Consolidating Financial Statements |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor Condensed Consolidating Financial Statements | Supplemental Guarantor Condensed Consolidating Financial Statements As described in note 2 "Borrowings" in "Item 8. Financial Statements and Supplementary Data" in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, FDC's 7.0% senior notes are guaranteed by most of the existing and future, direct and indirect, wholly owned, domestic subsidiaries of FDC (Guarantors). The Guarantors guarantee the senior secured revolving credit facility, senior secured term loan facility, the 5.0% senior secured notes, the 5.375% senior secured notes, and the 6.75% senior secured notes, which rank senior in right of payment to all existing and future unsecured and second lien indebtedness of FDC’s guarantor subsidiaries to the extent of the value of the collateral. The Guarantors guarantee the 5.75% senior second lien notes which rank senior in right of payment to all existing and future unsecured indebtedness of FDC’s guarantor subsidiaries to the extent of the value of the collateral. The 7.0% senior note guarantee is unsecured and ranks equally in right of payment with all existing and future senior indebtedness of the guarantor subsidiaries but senior in right of payment to all existing and future subordinated indebtedness of FDC’s guarantor subsidiaries. All of the above guarantees are full, unconditional, and joint and several and each of the Guarantors is 100% owned, directly or indirectly, by the Company. None of the other subsidiaries of the Company, either direct or indirect, guarantee the notes (Non-Guarantors). The Guarantors are subject to release under certain circumstances as described below. The credit agreement governing the guarantees of the senior secured revolving credit facility and senior secured term loan facility provide for a Guarantor to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including under the following circumstances:
The indentures governing all of the other guarantees described above provide for a Guarantor to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including upon the earliest to occur of:
The following tables present the results of operations, comprehensive income, financial position and cash flows of the Company (FDC Parent Company), the Guarantor subsidiaries, the Non-Guarantor subsidiaries and consolidation adjustments for the periods presented to arrive at the information for the Company on a consolidated basis:
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Sep. 30, 2016 | |
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, 2015. Significant accounting policies disclosed therein have not changed. The accompanying consolidated financial statements are unaudited; however, in the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the consolidated financial position of the Company, the consolidated results of the Company's operations, comprehensive income (loss), consolidated cash flows and changes in equity as of and for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year due in part to the seasonality of certain business units. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The majority of the Company’s revenues are comprised of: 1) transaction-based fees, which typically constitute a percentage of dollar volume processed; 2) fees per transaction processed; 3) fees per account on file during the period; or 4) some combination thereof. The Company’s arrangements with clients often consist of multiple services and products (multiple-element arrangements). In accounting for multiple-element arrangements, the Company assesses the elements of the contract and whether each element has standalone value and allocates revenue to the various elements based on their estimated selling price as a component of total consideration for the arrangement. The selling price is based on current selling prices offered by the Company or another party for current products or management's best estimate of a selling price. In the case of contracts that the Company owns and manages, revenue is comprised of fees charged to the client, net of interchange fees and assessments charged by the credit card associations, and is recognized at the time the client accepts a point of sale transaction. The fees charged to the client are a percentage of the credit card and signature-based debit card transaction’s dollar value, a fixed amount, or a combination of the two. Personal identification number based debit (PIN-debit) and PINless-debit network fees are recognized in “Reimbursable PIN debit fees, postage, and other” revenues and expenses in the unaudited consolidated statements of operations. STAR Network access fees charged to clients are assessed on a per transaction basis. |
Deferred Revenue | Deferred Revenue The Company records deferred revenue when it receives payments in advance of the delivery of products or the performance of services. The deferred revenue is recognized into earnings when underlying performance obligations are achieved. |
Reclassifications | Reclassifications Certain amounts for prior years have been reclassified to conform with the current-year financial statement presentation. |
New Accounting Guidance | New Accounting Guidance In May 2014, the Financial Accounting Standards Board (FASB) issued guidance that requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in an exchange for those goods or services. It also requires enhanced disclosures about revenue, provides guidance for transactions that were not previously addressed comprehensively, and improves guidance for multiple-element arrangements. The guidance applies to any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. As amended in August 2015, the guidance is effective for public companies for annual periods beginning after December 15, 2017 as well as interim periods within those annual periods using either the full retrospective approach or modified retrospective approach. The FASB also permitted early adoption of the standard, but not before December 15, 2016. The Company is currently evaluating the impacts of the new guidance on its consolidated financial statements. 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 proceeding revenue recognition guidance. The Company is currently evaluating the impact of adoption of the new guidance on its consolidated financial statements. In March 2016, the FASB issued guidance that will change some aspects of the accounting for stock-based payments to employees. Under the new guidance, companies will be required to record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and to present excess tax benefits as an operating activity on the statement of cash flows. The guidance may also change how companies account for forfeitures and an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation. The new guidance will be effective for public companies for fiscal years beginning after December 15, 2016 as well as interim periods within those annual periods. Early adoption is permitted in any interim or annual period. The Company has evaluated the guidance and determined adoption will not have a material impact to its consolidated financial statements. 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. In August 2016, the FASB issued guidance which clarifies the treatment of several cash flow categories. In addition, the guidance clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption in an interim period. The Company's early adoption of the guidance in the third quarter of 2016 did not have an impact on the Company's financial statements or disclosures. |
Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amounts associated with amortization of initial payments for new contracts and equity method investments | The following table presents the amounts associated with such amortization for the periods presented:
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Schedule of amounts associated with processing services revenue | Interchange fees and assessments charged by credit card associations to the Company’s consolidated subsidiaries and network fees related to PIN-debit and PINless-debit transactions charged by debit networks were as follows for the periods presented:
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Borrowings (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of borrowings |
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Stock Compensation Plans (Tables) |
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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 "Cost of services" and “Selling, general, and administrative” in the unaudited consolidated statements of operations resulting from stock options, non-vested restricted stock awards, and non-vested restricted stock units was as follows for the periods presented:
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Net Income (Loss) Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted net income (loss) per share | The following table sets forth the computation of the Company's basic and diluted net income (loss) per share for the periods presented:
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of operating segment results | The following tables present the Company’s operating segment results for the periods presented:
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Schedule of reconciliation of reportable segment amounts to the consolidated balances | The following table presents a reconciliation of the Company’s consolidated results to segment amounts for the periods presented:
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Schedule of reconciliation of reportable segment depreciation and amortization amounts to the consolidated balances | The following table presents a reconciliation of segment depreciation and amortization amounts to the Company’s consolidated depreciation and amortization in the unaudited consolidated statements of cash flows for the periods presented:
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of effective income tax rate reconciliation | The following table presents the Company's income tax expense and effective income tax rate for the periods presented:
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Redeemable Noncontrolling Interest (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the redeemable noncontrolling interest activity | The following table presents a summary of the redeemable noncontrolling interest activity during the periods presented:
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Derivative Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notional amounts of outstanding derivative positions | The Company held the following derivative instruments as of the dates indicated:
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Schedule of the effect of derivative instruments on the Consolidated Statements of Operations | Derivative gains and (losses) were as follows for the periods indicated:
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Summary of activity in other comprehensive income related to derivative instruments classified as cash flow hedges and as a net investment hedge | The following table summarizes activity in other comprehensive income (loss) related to derivative instruments classified as cash flow hedges and net investment hedges held by the Company for the periods presented:
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Restructuring (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of net pretax charges incurred by segment | A summary of net pretax restructuring charges incurred by segment and reported within "Other operating expenses" in the unaudited consolidated statement of operations was as follows for the periods presented:
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Summary of utilization of restructuring accruals | The following table summarizes the Company’s utilization of restructuring accruals for the period presented:
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Investment in Affiliates (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of financial information related to the operating results | Summarized financial information for the affiliate is presented below for the periods presented:
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Supplemental Financial Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the components of other income | The following table details the components of “Other income (expense)” on the unaudited consolidated statements of operations for the periods presented:
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Supplemental Guarantor Condensed Consolidating Financial Statements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of consolidated statements of operations |
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Schedule of consolidated balance sheets |
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Schedule of consolidated statements of cash flows |
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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 | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Amortization of initial payments for new contracts | $ 16 | $ 14 | $ 47 | $ 38 |
Amortization related to equity method investments | $ 12 | $ 15 | $ 33 | $ 45 |
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Amounts Associated with Processing Services Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Interchange fees and assessments | $ 6,184 | $ 5,598 | $ 17,406 | $ 16,089 |
PIN-Debit fees | $ 753 | $ 757 | $ 2,255 | $ 2,227 |
Basis of Presentation and Summary of Significant Accounting Policies - Deferred Revenue (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Current deferred revenue | $ 148 | $ 140 |
Noncurrent deferred revenue | $ 170 | $ 146 |
Basis of Presentation and Summary of Significant Accounting Policies - Common Stock (Details) shares in Millions |
9 Months Ended |
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Sep. 30, 2016
shares
| |
Class B common stock | |
Class of Stock [Line Items] | |
Number of shares converted to Class A common stock | 160.7 |
Class A common stock | |
Class of Stock [Line Items] | |
Number of shares issued from conversion | 160.7 |
Basis of Presentation and Summary of Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Dec. 31, 2014 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cash and cash equivalents | $ 475 | $ 429 | $ 368 | $ 358 |
Restatement adjustment prior years | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cash and cash equivalents | 123 | |||
Accounts receivable | 123 | |||
Net cash provided by operating activities | $ 123 |
Stock Compensation Plans - Allocation of Share-based Compensation Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 43 | $ 8 | $ 214 | $ 31 |
Cost of services | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 19 | 0 | 91 | 0 |
Selling, general, and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 24 | $ 8 | $ 123 | $ 31 |
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Numerator: | ||||
Net income (loss) used in computing net income (loss) per share, basic and diluted | $ 132 | $ (126) | $ 228 | $ (264) |
Denominator: | ||||
Shares used in computing net income (loss) per share, basic | 904,738,175 | 1,000 | 900,128,754 | 1,000 |
Effect of dilutive securities (in shares) | 18,080,054 | 0 | 18,172,975 | 0 |
Total dilutive securities (in shares) | 922,818,229 | 1,000 | 918,301,729 | 1,000 |
Basic net income (loss) per share (in dollars per share) | $ 0.15 | $ (126,000.00) | $ 0.25 | $ (264,000.00) |
Diluted net income (loss) per share (in dollars per share) | $ 0.14 | $ (126,000.00) | $ 0.25 | $ (264,000.00) |
Anti-dilutive shares excluded from diluted net income (loss) per share | 20,439,375 | 0 | 27,064,859 | 0 |
Shares outstanding prior to merger | 1,000 | 1,000 |
Segment Information - Schedule of Reconciliation of Reportable Segment Amounts to the Consolidated Balances (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Consolidated revenues | $ 2,936 | $ 2,920 | $ 8,641 | $ 8,487 |
Adjustments: | ||||
Reimbursable PIN debit fees, postage, and other | 936 | 938 | 2,795 | 2,737 |
Net income (loss) attributable to First Data Corporation | 132 | (126) | 228 | (264) |
Adjustments: | ||||
Depreciation and amortization | (237) | (257) | (713) | (760) |
Loss on debt extinguishment | 3 | 108 | 58 | 108 |
Income tax expense | (24) | (32) | (57) | (45) |
Stock-based compensation | (43) | (8) | (214) | (31) |
Total segment EBITDA | 739 | 703 | 2,121 | 1,968 |
Operating Segments | ||||
Adjustments: | ||||
Total segment revenues | 1,820 | 1,797 | 5,311 | 5,217 |
Adjustments: | ||||
Total segment EBITDA | 739 | 703 | 2,121 | 1,968 |
Segment Reconciling Items | ||||
Adjustments: | ||||
Non wholly owned entities | (25) | (18) | (59) | (58) |
ISOs commission expense | (155) | (167) | (476) | (475) |
Reimbursable PIN debit fees, postage, and other | (936) | (938) | (2,795) | (2,737) |
Adjustments: | ||||
Non wholly owned entities | (7) | (6) | (24) | (19) |
Depreciation and amortization | 237 | 257 | 713 | 760 |
Interest expense, net | 263 | 388 | 810 | 1,199 |
Loss on debt extinguishment | 3 | 108 | 58 | 108 |
Other items | 44 | 42 | 65 | 108 |
Income tax expense | 24 | 32 | 57 | 45 |
Stock-based compensation | $ 43 | $ 8 | $ 214 | $ 31 |
Segment Information - Schedule of Reconciliation of Reportable Segment Depreciation and Amortization Amounts to the Consolidated Balances (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Segment Reporting Information [Line Items] | ||||
Amortization of initial payments for new contracts | $ 16 | $ 14 | $ 47 | $ 38 |
Total consolidated depreciation and amortization per unaudited consolidated statements of cash flows | 265 | 286 | 793 | 843 |
Amortization of equity method investments | (12) | (15) | (33) | (45) |
Amortization of initial payments for new contracts | (16) | (14) | (47) | (38) |
Total consolidated depreciation and amortization per unaudited consolidated statements of operations | 237 | 257 | 713 | 760 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment depreciation and amortization | 231 | 252 | 690 | 743 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Adjustments for non wholly owned entities | 18 | 20 | 56 | 62 |
Amortization of initial payments for new contracts | 16 | 14 | 47 | 38 |
Amortization of equity method investments | (12) | (15) | (33) | (45) |
Amortization of initial payments for new contracts | (16) | (14) | (47) | (38) |
Total consolidated depreciation and amortization per unaudited consolidated statements of operations | $ (237) | $ (257) | $ (713) | $ (760) |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 24 | $ 32 | $ 57 | $ 45 |
Effective income tax rate | 11.00% | (74.00%) | 12.00% | (75.00%) |
Effective income tax rate | 11.00% | 5.00% | ||
Uncertain income tax liabilities | $ 245 | $ 245 | ||
Maximum | ||||
Income Tax Contingency [Line Items] | ||||
Decrease in liability for unrecognized tax benefits reasonably possible | $ 122 | $ 122 |
Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Redeemable noncontrolling interest activity [Roll Forward] | ||
Balance as of beginning of the period | $ 77 | $ 70 |
Distributions | (25) | (26) |
Share of income | 25 | 26 |
Adjustment to redemption value of redeemable noncontrolling interest | (4) | 8 |
Balance as of end of the period | $ 73 | $ 78 |
Derivative Financial Instruments - Schedule of Notional Amounts of Outstanding Derivative Positions (Details) € in Millions, £ in Millions, CAD in Millions, AUD in Millions, $ in Millions |
Sep. 30, 2016
EUR (€)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2016
CAD
|
Sep. 30, 2016
AUD
|
Sep. 30, 2016
GBP (£)
|
Aug. 31, 2016
USD ($)
|
Aug. 31, 2016
CAD
|
Aug. 31, 2016
GBP (£)
|
Jan. 31, 2016
USD ($)
|
Dec. 31, 2015
EUR (€)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2015
CAD
|
Dec. 31, 2015
AUD
|
Dec. 31, 2015
GBP (£)
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative asset subject to master netting agreements | $ 121 | $ 179 | ||||||||||||
Derivative liability subject to master netting agreement | 51 | |||||||||||||
Net derivative asset | 128 | |||||||||||||
Interest rate contracts | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Assets | 121 | 179 | ||||||||||||
Liabilities | 0 | (56) | ||||||||||||
Derivatives designated as hedges | Foreign exchange contracts | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Assets | 121 | 179 | ||||||||||||
Liabilities | 0 | 0 | ||||||||||||
Derivatives designated as hedges | Foreign exchange contracts | AUD | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Notional value | AUD | AUD 260 | AUD 260 | ||||||||||||
Assets | 55 | 65 | ||||||||||||
Liabilities | 0 | 0 | ||||||||||||
Derivatives designated as hedges | Foreign exchange contracts | EUR | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Notional value | € | € 0 | € 200 | ||||||||||||
Assets | 0 | 51 | ||||||||||||
Liabilities | 0 | 0 | ||||||||||||
Maturity of foreign exchange contracts, net settlement value | $ 49 | |||||||||||||
Derivatives designated as hedges | Foreign exchange contracts | GBP | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Notional value | £ | £ 300 | £ 150 | £ 250 | |||||||||||
Assets | 59 | 39 | ||||||||||||
Liabilities | 0 | 0 | ||||||||||||
Maturity of foreign exchange contracts, notional value | £ | £ 100 | |||||||||||||
Maturity of foreign exchange contracts, net settlement value | $ 25 | |||||||||||||
Derivatives designated as hedges | Foreign exchange contracts | CAD | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Notional value | CAD | CAD 130 | CAD 95 | CAD 110 | |||||||||||
Assets | 7 | 24 | ||||||||||||
Liabilities | 0 | 0 | ||||||||||||
Maturity of foreign exchange contracts, notional value | CAD | CAD 75 | |||||||||||||
Maturity of foreign exchange contracts, net settlement value | $ 14 | |||||||||||||
Derivatives designated as hedges | Interest rate contracts | USD | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Notional value | 3,000 | |||||||||||||
Assets | 0 | 0 | ||||||||||||
Liabilities | 0 | 0 | ||||||||||||
Derivatives not designated as hedging instruments | Interest rate contracts | USD | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Notional value | 0 | 5,000 | ||||||||||||
Assets | 0 | 0 | ||||||||||||
Liabilities | $ 0 | $ (56) |
Derivative Financial Instruments - Schedule of The Effect of Derivative Instruments on the Consolidated Statements of Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Derivatives designated as hedging instruments | Interest Rate Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain recognized in Foreign currency translation adjustment in the unaudited consolidated statements of comprehensive income (loss) (effective portion) | $ 0 | $ 0 | $ 0 | $ 0 |
Derivatives designated as hedging instruments | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain recognized in Foreign currency translation adjustment in the unaudited consolidated statements of comprehensive income (loss) (effective portion) | 5 | 36 | 27 | 68 |
Derivatives not designated as hedging instruments | Interest Rate Contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in Other income (expense) in the unaudited consolidated statements of operations | 0 | (9) | (5) | (27) |
Derivatives not designated as hedging instruments | Foreign Exchange Contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in Other income (expense) in the unaudited consolidated statements of operations | $ 0 | $ 0 | $ 0 | $ 2 |
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 | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Accumulated Other Comprehensive Income Derivatives Qualifying as Hedges, Net of Tax [Roll Forward] | ||||
Accumulated gain included in other comprehensive income (loss) at beginning of the period | $ (1,219) | |||
Increase in fair value of derivatives that qualify for hedge accounting, net of tax | $ 61 | $ (85) | (44) | $ (221) |
Accumulated gain included in other comprehensive income (loss) at end of the period | (1,265) | (1,265) | ||
Accumulated net gain (loss) from cash flow hedges | ||||
Accumulated Other Comprehensive Income Derivatives Qualifying as Hedges, Net of Tax [Roll Forward] | ||||
Accumulated gain included in other comprehensive income (loss) at beginning of the period | 100 | 57 | 86 | 37 |
Increase in fair value of derivatives that qualify for hedge accounting, net of tax | 3 | 22 | 17 | 42 |
Accumulated gain included in other comprehensive income (loss) at end of the period | $ 103 | $ 79 | $ 103 | $ 79 |
Restructuring - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Write-down of a long-term asset | $ 0 | |||
Cost Management Initiatives | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cost incurred to date | $ 105 | 105 | ||
Restructuring charges | $ 6 | 51 | ||
Write-down of a long-term asset | $ 21 | |||
Cost Management Initiatives | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 20 | $ 40 |
Restructuring - Summary of Net Pretax Charges Incurred by Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Net pretax benefits (charges), incurred by segment [Line items] | ||||
Restructuring, net | $ (6) | $ (20) | $ (51) | $ (40) |
Operating Segments | Global Business Solutions | ||||
Net pretax benefits (charges), incurred by segment [Line items] | ||||
Restructuring, net | (2) | (9) | (7) | (14) |
Operating Segments | Global Financial Solutions | ||||
Net pretax benefits (charges), incurred by segment [Line items] | ||||
Restructuring, net | 0 | (5) | (2) | (9) |
Operating Segments | Network & Security Solutions | ||||
Net pretax benefits (charges), incurred by segment [Line items] | ||||
Restructuring, net | 0 | (1) | (2) | (1) |
Corporate | ||||
Net pretax benefits (charges), incurred by segment [Line items] | ||||
Restructuring, net | $ (4) | $ (5) | $ (40) | $ (16) |
Restructuring - Summary of Utilization of Restructuring Accruals (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Utilization of restructuring accruals [Roll Forward] | ||||
Restructuring, net | $ 6 | $ 20 | $ 51 | $ 40 |
Employee Severance | ||||
Utilization of restructuring accruals [Roll Forward] | ||||
Remaining accrual at the beginning of the period | 29 | |||
Restructuring, net | 28 | |||
Impairment of held-for-sale assets | 0 | |||
Cash payments and other | (49) | |||
Remaining accrual at the end of the period | 8 | 8 | ||
Other | ||||
Utilization of restructuring accruals [Roll Forward] | ||||
Remaining accrual at the beginning of the period | 1 | |||
Restructuring, net | 23 | |||
Impairment of held-for-sale assets | (21) | |||
Cash payments and other | (3) | |||
Remaining accrual at the end of the period | $ 0 | $ 0 |
Commitments and Contingencies (Details) |
Sep. 30, 2016
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 customer matters | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 0 |
Minimum | Other matters | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 0 |
Maximum | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 80,000,000 |
Maximum | Patent infringement | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 10,000,000 |
Maximum | Merchant customer matters | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | 40,000,000 |
Maximum | Other matters | |
Commitments and contingencies | |
Possible losses in excess of any amounts accrued | $ 30,000,000 |
Investment in Affiliates (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016
USD ($)
subsidiary
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
subsidiary
|
Sep. 30, 2015
USD ($)
|
|
Financial information related to operating results | ||||
FDC equity earnings | $ 66 | $ 61 | $ 198 | $ 175 |
Unconsolidated significant subsidiary | ||||
Investment in Affiliates | ||||
Number of subsidiaries | subsidiary | 1 | 1 | ||
Pre-tax loss (as a percent) (more than) | 20.00% | 20.00% | ||
Financial information related to operating results | ||||
Net operating revenues | $ 232 | 228 | $ 683 | 668 |
Operating expenses | 96 | 97 | 286 | 281 |
Operating income | 136 | 131 | 397 | 387 |
Net income | 136 | 131 | 397 | 387 |
FDC equity earnings | $ 46 | $ 42 | $ 136 | $ 123 |
Supplemental Financial Information - Components of Other Income (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Other Income and Expenses [Abstract] | ||||
Derivative financial instruments losses | $ 0 | $ (9) | $ (5) | $ (25) |
Divestitures, net (loss) gain | (31) | 0 | (31) | 3 |
Gain on Visa Europe share sale | 0 | 0 | 29 | 0 |
Non-operating foreign currency gains and (losses) | 2 | (1) | 21 | 23 |
Other miscellaneous expense | (1) | 0 | 0 | 0 |
Other income (expense) | $ (30) | $ (10) | $ 14 | $ 1 |
Supplemental Financial Information - Gain on Visa Europe share sale (Details) - VE € in Millions |
Jun. 21, 2016
EUR (€)
|
Jun. 21, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Jun. 21, 2016
USD ($)
|
---|---|---|---|---|
Related Party Transaction [Line Items] | ||||
Proceeds from sale | € 24.2 | $ 27,000,000 | ||
Deferral period (in years) | 3 years | 3 years | ||
Deferred payment of cash proceeds | € 2.3 | $ 2,600,000 | ||
Class A common stock | ||||
Related Party Transaction [Line Items] | ||||
Common stock equivalent | $ 19,000,000 | |||
Value of preferred stock convertible to common shares | $ 0 | |||
Preferred shares, valuation based on territory and transfer restrictions, period (in years) | 12 years | 12 years |
Supplemental Financial Information - Divestiture, net (loss) gain (Details) - Australian ATM - Global Business Solutions - USD ($) $ in Millions |
1 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 09, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss on sale | $ 31 | |
Investments | 69 | |
Income tax provision resulting from sale of Australian ATM | $ 9 | |
Subsequent Event | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash proceeds from sale | $ 38 |
Supplemental Guarantor Condensed Consolidating Financial Statements - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Guarantor Subsidiaries | |
Debt Instrument [Line Items] | |
Ownership percentage in Guarantors | 100.00% |
Percentage of Company's Covenant EBITDA | 10.00% |
Guarantor Subsidiaries | Minimum | |
Debt Instrument [Line Items] | |
Ownership percentage in Guarantors | 50.00% |
7.0% Senior unsecured notes | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 7.00% |
5.0% Senior secured notes | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 5.00% |
5.375% Senior secured notes | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 5.375% |
6.75% Senior secured notes | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 6.75% |
5.75% Senior secured second lien notes | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 5.75% |
Supplemental Guarantor Condensed Consolidating Financial Statements - Schedule of Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||
Revenues: | |||||||
Transaction and processing service fees | [1] | $ 1,693 | $ 1,673 | $ 4,953 | $ 4,906 | ||
Product sales and other | [1] | 307 | 309 | 893 | 844 | ||
Total revenues (excluding reimbursable items) | 2,000 | 1,982 | 5,846 | 5,750 | |||
Reimbursable PIN debit fees, postage, and other | 936 | 938 | 2,795 | 2,737 | |||
Total revenues | 2,936 | 2,920 | 8,641 | 8,487 | |||
Expenses: | |||||||
Cost of services (exclusive of items shown below) | 711 | 686 | 2,140 | 2,055 | |||
Cost of products sold | 87 | 96 | 251 | 257 | |||
Selling, general, and administrative | 499 | 521 | 1,563 | 1,567 | |||
Depreciation and amortization | 237 | 257 | 713 | 760 | |||
Other operating expenses | 12 | 20 | 57 | 40 | |||
Total expenses (excluding reimbursable items) | 1,546 | 1,580 | 4,724 | 4,679 | |||
Reimbursable PIN debit fees, postage, and other | 936 | 938 | 2,795 | 2,737 | |||
Total expenses | 2,482 | 2,518 | 7,519 | 7,416 | |||
Operating (loss) profit | 454 | 402 | 1,122 | 1,071 | |||
Interest expense, net | (263) | (388) | (810) | (1,199) | |||
Loss on debt extinguishment | (3) | (108) | (58) | (108) | |||
Interest income (expense) from intercompany notes | 0 | 0 | 0 | 0 | |||
Other income (expense) | (30) | (10) | 14 | 1 | |||
Equity earnings from consolidated subsidiaries | 0 | 0 | 0 | 0 | |||
Income (loss) before income taxes and equity earnings in affiliates | 158 | (104) | 268 | (235) | |||
Income tax (benefit) expense | 24 | 32 | 57 | 45 | |||
Equity earnings in affiliates | 66 | 61 | 198 | 175 | |||
Net income (loss) | 200 | (75) | 409 | (105) | |||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 68 | 51 | 181 | 159 | |||
Net income (loss) attributable to First Data Corporation | 132 | (126) | 228 | (264) | |||
Comprehensive income (loss) | 261 | (162) | 365 | (321) | |||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | 69 | 51 | 183 | 151 | |||
Comprehensive income (loss) attributable to First Data Corporation, net of tax | 192 | (213) | 182 | (472) | |||
Reportable Legal Entities | FDC Parent Company | |||||||
Revenues: | |||||||
Transaction and processing service fees | 0 | 0 | 0 | 0 | |||
Product sales and other | 0 | 0 | 0 | 0 | |||
Total revenues (excluding reimbursable items) | 0 | 0 | 0 | 0 | |||
Reimbursable PIN debit fees, postage, and other | 0 | 0 | 0 | 0 | |||
Total revenues | 0 | 0 | 0 | 0 | |||
Expenses: | |||||||
Cost of services (exclusive of items shown below) | 0 | 0 | 0 | 0 | |||
Cost of products sold | 0 | 0 | 0 | 0 | |||
Selling, general, and administrative | 56 | 22 | 261 | 81 | |||
Depreciation and amortization | 1 | 1 | 4 | 10 | |||
Other operating expenses | 0 | 1 | 12 | 7 | |||
Total expenses (excluding reimbursable items) | 57 | 24 | 277 | 98 | |||
Reimbursable PIN debit fees, postage, and other | 0 | 0 | 0 | 0 | |||
Total expenses | 57 | 24 | 277 | 98 | |||
Operating (loss) profit | (57) | (24) | (277) | (98) | |||
Interest expense, net | (258) | (386) | (792) | (1,191) | |||
Loss on debt extinguishment | (3) | (108) | (58) | (108) | |||
Interest income (expense) from intercompany notes | 59 | 65 | 192 | 223 | |||
Other income (expense) | (2) | (18) | (2) | 21 | |||
Equity earnings from consolidated subsidiaries | 240 | 570 | 689 | 877 | |||
Income (loss) before income taxes and equity earnings in affiliates | (21) | 99 | (248) | (276) | |||
Income tax (benefit) expense | (154) | 225 | (477) | (12) | |||
Equity earnings in affiliates | (1) | 0 | (1) | 0 | |||
Net income (loss) | 132 | (126) | 228 | (264) | |||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 0 | 0 | 0 | 0 | |||
Net income (loss) attributable to First Data Corporation | 132 | (126) | 228 | (264) | |||
Comprehensive income (loss) | 192 | (214) | 182 | (473) | |||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | 0 | 0 | 0 | 0 | |||
Comprehensive income (loss) attributable to First Data Corporation, net of tax | 192 | (214) | 182 | (473) | |||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||
Revenues: | |||||||
Transaction and processing service fees | 1,003 | 1,002 | 2,926 | 2,896 | |||
Product sales and other | 208 | 197 | 609 | 538 | |||
Total revenues (excluding reimbursable items) | 1,211 | 1,199 | 3,535 | 3,434 | |||
Reimbursable PIN debit fees, postage, and other | 637 | 646 | 1,903 | 1,874 | |||
Total revenues | 1,848 | 1,845 | 5,438 | 5,308 | |||
Expenses: | |||||||
Cost of services (exclusive of items shown below) | 408 | 413 | 1,208 | 1,190 | |||
Cost of products sold | 84 | 68 | 235 | 181 | |||
Selling, general, and administrative | 272 | 299 | 815 | 876 | |||
Depreciation and amortization | 140 | 158 | 430 | 459 | |||
Other operating expenses | 3 | 10 | 32 | 14 | |||
Total expenses (excluding reimbursable items) | 907 | 948 | 2,720 | 2,720 | |||
Reimbursable PIN debit fees, postage, and other | 637 | 646 | 1,903 | 1,874 | |||
Total expenses | 1,544 | 1,594 | 4,623 | 4,594 | |||
Operating (loss) profit | 304 | 251 | 815 | 714 | |||
Interest expense, net | (4) | (2) | (13) | (8) | |||
Loss on debt extinguishment | 0 | 0 | 0 | 0 | |||
Interest income (expense) from intercompany notes | (57) | (68) | (176) | (224) | |||
Other income (expense) | 0 | 0 | 0 | 3 | |||
Equity earnings from consolidated subsidiaries | (1) | 111 | 175 | 234 | |||
Income (loss) before income taxes and equity earnings in affiliates | 242 | 292 | 801 | 719 | |||
Income tax (benefit) expense | 144 | (197) | 404 | 3 | |||
Equity earnings in affiliates | 59 | 55 | 175 | 158 | |||
Net income (loss) | 157 | 544 | 572 | 874 | |||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 0 | 0 | 0 | 0 | |||
Net income (loss) attributable to First Data Corporation | 157 | 544 | 572 | 874 | |||
Comprehensive income (loss) | 169 | 494 | 611 | 796 | |||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | 0 | 0 | 0 | 0 | |||
Comprehensive income (loss) attributable to First Data Corporation, net of tax | 169 | 494 | 611 | 796 | |||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||
Revenues: | |||||||
Transaction and processing service fees | 763 | 753 | 2,248 | 2,242 | |||
Product sales and other | 144 | 131 | 398 | 354 | |||
Total revenues (excluding reimbursable items) | 907 | 884 | 2,646 | 2,596 | |||
Reimbursable PIN debit fees, postage, and other | 299 | 292 | 892 | 863 | |||
Total revenues | 1,206 | 1,176 | 3,538 | 3,459 | |||
Expenses: | |||||||
Cost of services (exclusive of items shown below) | 360 | 355 | 1,063 | 1,097 | |||
Cost of products sold | 48 | 47 | 133 | 124 | |||
Selling, general, and administrative | 187 | 200 | 574 | 610 | |||
Depreciation and amortization | 96 | 98 | 279 | 291 | |||
Other operating expenses | 9 | 9 | 13 | 19 | |||
Total expenses (excluding reimbursable items) | 700 | 709 | 2,062 | 2,141 | |||
Reimbursable PIN debit fees, postage, and other | 299 | 292 | 892 | 863 | |||
Total expenses | 999 | 1,001 | 2,954 | 3,004 | |||
Operating (loss) profit | 207 | 175 | 584 | 455 | |||
Interest expense, net | (1) | 0 | (5) | 0 | |||
Loss on debt extinguishment | 0 | 0 | 0 | 0 | |||
Interest income (expense) from intercompany notes | (2) | 3 | (16) | 1 | |||
Other income (expense) | (28) | 8 | 16 | (23) | |||
Equity earnings from consolidated subsidiaries | 0 | 0 | 0 | 0 | |||
Income (loss) before income taxes and equity earnings in affiliates | 176 | 186 | 579 | 433 | |||
Income tax (benefit) expense | 34 | 4 | 130 | 54 | |||
Equity earnings in affiliates | 8 | 6 | 24 | 17 | |||
Net income (loss) | 150 | 188 | 473 | 396 | |||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 16 | 15 | 50 | 49 | |||
Net income (loss) attributable to First Data Corporation | 134 | 173 | 423 | 347 | |||
Comprehensive income (loss) | 211 | 83 | 454 | 121 | |||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | 17 | 15 | 52 | 41 | |||
Comprehensive income (loss) attributable to First Data Corporation, net of tax | 194 | 68 | 402 | 80 | |||
Consolidation Adjustments | |||||||
Revenues: | |||||||
Transaction and processing service fees | (73) | (82) | (221) | (232) | |||
Product sales and other | (45) | (19) | (114) | (48) | |||
Total revenues (excluding reimbursable items) | (118) | (101) | (335) | (280) | |||
Reimbursable PIN debit fees, postage, and other | 0 | 0 | 0 | 0 | |||
Total revenues | (118) | (101) | (335) | (280) | |||
Expenses: | |||||||
Cost of services (exclusive of items shown below) | (57) | (82) | (131) | (232) | |||
Cost of products sold | (45) | (19) | (117) | (48) | |||
Selling, general, and administrative | (16) | 0 | (87) | 0 | |||
Depreciation and amortization | 0 | 0 | 0 | 0 | |||
Other operating expenses | 0 | 0 | 0 | 0 | |||
Total expenses (excluding reimbursable items) | (118) | (101) | (335) | (280) | |||
Reimbursable PIN debit fees, postage, and other | 0 | 0 | 0 | 0 | |||
Total expenses | (118) | (101) | (335) | (280) | |||
Operating (loss) profit | 0 | 0 | 0 | 0 | |||
Interest expense, net | 0 | 0 | 0 | 0 | |||
Loss on debt extinguishment | 0 | 0 | 0 | 0 | |||
Interest income (expense) from intercompany notes | 0 | 0 | 0 | 0 | |||
Other income (expense) | 0 | 0 | 0 | 0 | |||
Equity earnings from consolidated subsidiaries | (239) | (681) | (864) | (1,111) | |||
Income (loss) before income taxes and equity earnings in affiliates | (239) | (681) | (864) | (1,111) | |||
Income tax (benefit) expense | 0 | 0 | 0 | 0 | |||
Equity earnings in affiliates | 0 | 0 | 0 | 0 | |||
Net income (loss) | (239) | (681) | (864) | (1,111) | |||
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest | 52 | 36 | 131 | 110 | |||
Net income (loss) attributable to First Data Corporation | (291) | (717) | (995) | (1,221) | |||
Comprehensive income (loss) | (311) | (525) | (882) | (765) | |||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | 52 | 36 | 131 | 110 | |||
Comprehensive income (loss) attributable to First Data Corporation, net of tax | $ (363) | $ (561) | $ (1,013) | $ (875) | |||
|
Supplemental Guarantor Condensed Consolidating Financial Statements - Schedule of Balance Sheet (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Dec. 31, 2014 |
---|---|---|---|---|
Current assets: | ||||
Cash and cash equivalents | $ 475 | $ 429 | $ 368 | $ 358 |
Accounts receivable, net of allowance for doubtful accounts | 1,714 | 1,826 | ||
Settlement assets | 8,705 | 8,150 | ||
Intercompany notes receivable | 0 | 0 | ||
Other current assets | 460 | 381 | ||
Total current assets | 11,354 | 10,786 | ||
Property and equipment, net of accumulated depreciation | 896 | 951 | ||
Goodwill | 16,825 | 16,846 | ||
Customer relationships, net of accumulated amortization | 1,845 | 2,136 | ||
Other intangibles, net of accumulated amortization | 1,793 | 1,783 | ||
Investment in affiliates | 1,003 | 1,048 | ||
Long-term intercompany receivables | 0 | 0 | ||
Long-term intercompany notes receivable | 0 | 0 | ||
Long-term deferred tax assets | 0 | 0 | ||
Other long-term assets | 728 | 812 | ||
Investment in consolidated subsidiaries | 0 | 0 | ||
Total assets | 34,444 | 34,362 | ||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 1,556 | 1,639 | ||
Short-term and current portion of long-term borrowings | 377 | 856 | ||
Settlement obligations | 8,705 | 8,150 | ||
Intercompany notes payable | 0 | 0 | ||
Total current liabilities | 10,638 | 10,645 | ||
Long-term borrowings | 18,514 | 18,737 | ||
Deferred tax liabilities | 410 | 431 | ||
Long-term intercompany payables | 0 | 0 | ||
Long-term intercompany notes payable | 0 | 0 | ||
Other long-term liabilities | 836 | 812 | ||
Total liabilities | 30,398 | 30,625 | ||
Redeemable equity interest | 0 | 0 | ||
Redeemable noncontrolling interest | 73 | 77 | 78 | 70 |
First Data Corporation stockholders' equity | 1,038 | 668 | ||
Noncontrolling interests | 2,935 | 2,992 | ||
Equity of consolidated alliance | 0 | 0 | ||
Total equity | 3,973 | 3,660 | 1,986 | 2,530 |
Total liabilities and equity | 34,444 | 34,362 | ||
Reportable Legal Entities | FDC Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 8 | 105 | 19 | 0 |
Accounts receivable, net of allowance for doubtful accounts | 0 | 0 | ||
Settlement assets | 0 | 0 | ||
Intercompany notes receivable | 1 | 436 | ||
Other current assets | 108 | 98 | ||
Total current assets | 117 | 639 | ||
Property and equipment, net of accumulated depreciation | 34 | 37 | ||
Goodwill | 0 | 0 | ||
Customer relationships, net of accumulated amortization | 0 | 0 | ||
Other intangibles, net of accumulated amortization | 604 | 604 | ||
Investment in affiliates | 4 | 5 | ||
Long-term intercompany receivables | 10,070 | 8,523 | ||
Long-term intercompany notes receivable | 3,446 | 3,415 | ||
Long-term deferred tax assets | 449 | 524 | ||
Other long-term assets | 185 | 259 | ||
Investment in consolidated subsidiaries | 26,658 | 25,692 | ||
Total assets | 41,567 | 39,698 | ||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 250 | 283 | ||
Short-term and current portion of long-term borrowings | 0 | 740 | ||
Settlement obligations | 0 | 0 | ||
Intercompany notes payable | 0 | 96 | ||
Total current liabilities | 250 | 1,119 | ||
Long-term borrowings | 18,316 | 18,616 | ||
Deferred tax liabilities | 0 | 0 | ||
Long-term intercompany payables | 21,261 | 18,583 | ||
Long-term intercompany notes payable | 228 | 245 | ||
Other long-term liabilities | 474 | 467 | ||
Total liabilities | 40,529 | 39,030 | ||
Redeemable equity interest | 0 | 0 | ||
Redeemable noncontrolling interest | 0 | 0 | ||
First Data Corporation stockholders' equity | 1,038 | 668 | ||
Noncontrolling interests | 0 | 0 | ||
Equity of consolidated alliance | 0 | 0 | ||
Total equity | 1,038 | 668 | ||
Total liabilities and equity | 41,567 | 39,698 | ||
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 18 | 16 | 22 | 23 |
Accounts receivable, net of allowance for doubtful accounts | 487 | 826 | ||
Settlement assets | 4,222 | 4,273 | ||
Intercompany notes receivable | 0 | 86 | ||
Other current assets | 203 | 188 | ||
Total current assets | 4,930 | 5,389 | ||
Property and equipment, net of accumulated depreciation | 600 | 640 | ||
Goodwill | 9,145 | 9,139 | ||
Customer relationships, net of accumulated amortization | 1,078 | 1,235 | ||
Other intangibles, net of accumulated amortization | 706 | 703 | ||
Investment in affiliates | 873 | 900 | ||
Long-term intercompany receivables | 17,144 | 15,192 | ||
Long-term intercompany notes receivable | 219 | 236 | ||
Long-term deferred tax assets | 0 | 0 | ||
Other long-term assets | 342 | 358 | ||
Investment in consolidated subsidiaries | 5,862 | 5,588 | ||
Total assets | 40,899 | 39,380 | ||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 758 | 792 | ||
Short-term and current portion of long-term borrowings | 94 | 70 | ||
Settlement obligations | 4,222 | 4,273 | ||
Intercompany notes payable | 0 | 408 | ||
Total current liabilities | 5,074 | 5,543 | ||
Long-term borrowings | 183 | 119 | ||
Deferred tax liabilities | 766 | 875 | ||
Long-term intercompany payables | 8,002 | 6,874 | ||
Long-term intercompany notes payable | 3,446 | 3,353 | ||
Other long-term liabilities | 253 | 288 | ||
Total liabilities | 17,724 | 17,052 | ||
Redeemable equity interest | 0 | 0 | ||
Redeemable noncontrolling interest | 0 | 0 | ||
First Data Corporation stockholders' equity | 23,175 | 22,328 | ||
Noncontrolling interests | 0 | 0 | ||
Equity of consolidated alliance | 0 | 0 | ||
Total equity | 23,175 | 22,328 | ||
Total liabilities and equity | 40,899 | 39,380 | ||
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 449 | 308 | 327 | 335 |
Accounts receivable, net of allowance for doubtful accounts | 1,227 | 1,000 | ||
Settlement assets | 4,483 | 3,877 | ||
Intercompany notes receivable | 0 | 10 | ||
Other current assets | 149 | 95 | ||
Total current assets | 6,308 | 5,290 | ||
Property and equipment, net of accumulated depreciation | 262 | 274 | ||
Goodwill | 7,680 | 7,707 | ||
Customer relationships, net of accumulated amortization | 767 | 901 | ||
Other intangibles, net of accumulated amortization | 483 | 476 | ||
Investment in affiliates | 126 | 143 | ||
Long-term intercompany receivables | 7,290 | 6,321 | ||
Long-term intercompany notes receivable | 9 | 9 | ||
Long-term deferred tax assets | 0 | 0 | ||
Other long-term assets | 251 | 265 | ||
Investment in consolidated subsidiaries | 0 | 0 | ||
Total assets | 23,176 | 21,386 | ||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 548 | 564 | ||
Short-term and current portion of long-term borrowings | 283 | 46 | ||
Settlement obligations | 4,483 | 3,877 | ||
Intercompany notes payable | 1 | 28 | ||
Total current liabilities | 5,315 | 4,515 | ||
Long-term borrowings | 15 | 2 | ||
Deferred tax liabilities | 93 | 80 | ||
Long-term intercompany payables | 5,241 | 4,579 | ||
Long-term intercompany notes payable | 0 | 62 | ||
Other long-term liabilities | 159 | 127 | ||
Total liabilities | 10,823 | 9,365 | ||
Redeemable equity interest | 73 | 77 | ||
Redeemable noncontrolling interest | 0 | 0 | ||
First Data Corporation stockholders' equity | 6,403 | 5,933 | ||
Noncontrolling interests | 104 | 88 | ||
Equity of consolidated alliance | 5,773 | 5,923 | ||
Total equity | 12,280 | 11,944 | ||
Total liabilities and equity | 23,176 | 21,386 | ||
Consolidation Adjustments | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts receivable, net of allowance for doubtful accounts | 0 | 0 | ||
Settlement assets | 0 | 0 | ||
Intercompany notes receivable | (1) | (532) | ||
Other current assets | 0 | 0 | ||
Total current assets | (1) | (532) | ||
Property and equipment, net of accumulated depreciation | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Customer relationships, net of accumulated amortization | 0 | 0 | ||
Other intangibles, net of accumulated amortization | 0 | 0 | ||
Investment in affiliates | 0 | 0 | ||
Long-term intercompany receivables | (34,504) | (30,036) | ||
Long-term intercompany notes receivable | (3,674) | (3,660) | ||
Long-term deferred tax assets | (449) | (524) | ||
Other long-term assets | (50) | (70) | ||
Investment in consolidated subsidiaries | (32,520) | (31,280) | ||
Total assets | (71,198) | (66,102) | ||
Current liabilities: | ||||
Accounts payable and accrued liabilities | 0 | 0 | ||
Short-term and current portion of long-term borrowings | 0 | 0 | ||
Settlement obligations | 0 | 0 | ||
Intercompany notes payable | (1) | (532) | ||
Total current liabilities | (1) | (532) | ||
Long-term borrowings | 0 | 0 | ||
Deferred tax liabilities | (449) | (524) | ||
Long-term intercompany payables | (34,504) | (30,036) | ||
Long-term intercompany notes payable | (3,674) | (3,660) | ||
Other long-term liabilities | (50) | (70) | ||
Total liabilities | (38,678) | (34,822) | ||
Redeemable equity interest | (73) | (77) | ||
Redeemable noncontrolling interest | 73 | 77 | ||
First Data Corporation stockholders' equity | (29,578) | (28,261) | ||
Noncontrolling interests | 2,831 | 2,904 | ||
Equity of consolidated alliance | (5,773) | (5,923) | ||
Total equity | (32,520) | (31,280) | ||
Total liabilities and equity | $ (71,198) | $ (66,102) |
Supplemental Guarantor Condensed Consolidating Financial Statements - Schedule of the Cash Flows (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | $ 200 | $ (75) | $ 409 | $ (105) |
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 265 | 286 | 793 | 843 |
(Gains) charges related to other operating expenses and other income (expense) | 43 | 39 | ||
Loss on debt extinguishment | 3 | 108 | 58 | 108 |
Stock-based compensation expense | 214 | 31 | ||
Other non-cash and non-operating items, net | 30 | 50 | ||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities | 113 | (279) | ||
Net cash (used in) provided by operating activities | 1,660 | 687 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Additions to property and equipment | (168) | (213) | ||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | (183) | (244) | ||
Acquisitions, net of cash acquired | (6) | (89) | ||
Other investing activities, net | 19 | (8) | ||
Net cash provided by (used in) investing activities | (338) | (554) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Short-term borrowings, net | 234 | 219 | ||
Proceeds from issuance of long-term debt | 2,377 | 2,206 | ||
Payment of call premiums and debt issuance cost | (52) | (104) | ||
Principal payments on long-term debt | (3,544) | (2,185) | ||
Payment of taxes related to net settlement of equity awards | (59) | 0 | ||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | (240) | (232) | ||
Distributions paid to equity holders | 0 | 0 | ||
Other financing activities, net | 26 | (13) | ||
Intercompany | 0 | 0 | ||
Net cash provided by (used in) financing activities | (1,258) | (109) | ||
Effect of exchange rate changes on cash and cash equivalents | (18) | (14) | ||
Change in cash and cash equivalents | 46 | 10 | ||
Cash and cash equivalents at beginning of period | 429 | 358 | ||
Cash and cash equivalents at end of period | 475 | 368 | 475 | 368 |
Reportable Legal Entities | FDC Parent Company | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | 132 | (126) | 228 | (264) |
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 4 | 10 | ||
(Gains) charges related to other operating expenses and other income (expense) | 14 | (14) | ||
Loss on debt extinguishment | 3 | 108 | 58 | 108 |
Stock-based compensation expense | 214 | 31 | ||
Other non-cash and non-operating items, net | (660) | (832) | ||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities | (351) | (405) | ||
Net cash (used in) provided by operating activities | (493) | (1,366) | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Additions to property and equipment | 0 | (8) | ||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | 0 | 0 | ||
Acquisitions, net of cash acquired | (6) | (70) | ||
Other investing activities, net | 143 | 110 | ||
Net cash provided by (used in) investing activities | 137 | 32 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Short-term borrowings, net | 0 | 250 | ||
Proceeds from issuance of long-term debt | 2,377 | 2,206 | ||
Payment of call premiums and debt issuance cost | (52) | (104) | ||
Principal payments on long-term debt | (3,480) | (2,115) | ||
Payment of taxes related to net settlement of equity awards | (59) | |||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | 0 | 0 | ||
Distributions paid to equity holders | 0 | 0 | ||
Other financing activities, net | 18 | (13) | ||
Intercompany | 1,455 | 1,129 | ||
Net cash provided by (used in) financing activities | 259 | 1,353 | ||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | ||
Change in cash and cash equivalents | (97) | 19 | ||
Cash and cash equivalents at beginning of period | 105 | 0 | ||
Cash and cash equivalents at end of period | 8 | 19 | 8 | 19 |
Reportable Legal Entities | Guarantor Subsidiaries | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | 157 | 544 | 572 | 874 |
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 484 | 519 | ||
(Gains) charges related to other operating expenses and other income (expense) | 32 | 11 | ||
Loss on debt extinguishment | 0 | 0 | 0 | 0 |
Stock-based compensation expense | 0 | 0 | ||
Other non-cash and non-operating items, net | (174) | (238) | ||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities | 316 | 87 | ||
Net cash (used in) provided by operating activities | 1,230 | 1,253 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Additions to property and equipment | (47) | (93) | ||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | (139) | (201) | ||
Acquisitions, net of cash acquired | 0 | (19) | ||
Other investing activities, net | 215 | 199 | ||
Net cash provided by (used in) investing activities | 29 | (114) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Short-term borrowings, net | 0 | 0 | ||
Proceeds from issuance of long-term debt | 0 | 0 | ||
Payment of call premiums and debt issuance cost | 0 | 0 | ||
Principal payments on long-term debt | (59) | (61) | ||
Payment of taxes related to net settlement of equity awards | 0 | |||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | 0 | 0 | ||
Distributions paid to equity holders | 0 | 0 | ||
Other financing activities, net | 8 | 0 | ||
Intercompany | (1,215) | (1,080) | ||
Net cash provided by (used in) financing activities | (1,266) | (1,141) | ||
Effect of exchange rate changes on cash and cash equivalents | 9 | 1 | ||
Change in cash and cash equivalents | 2 | (1) | ||
Cash and cash equivalents at beginning of period | 16 | 23 | ||
Cash and cash equivalents at end of period | 18 | 22 | 18 | 22 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | 150 | 188 | 473 | 396 |
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 305 | 314 | ||
(Gains) charges related to other operating expenses and other income (expense) | (3) | 42 | ||
Loss on debt extinguishment | 0 | 0 | 0 | 0 |
Stock-based compensation expense | 0 | 0 | ||
Other non-cash and non-operating items, net | 0 | 9 | ||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities | 148 | 39 | ||
Net cash (used in) provided by operating activities | 923 | 800 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Additions to property and equipment | (121) | (112) | ||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | (44) | (43) | ||
Acquisitions, net of cash acquired | 0 | 0 | ||
Other investing activities, net | 19 | 0 | ||
Net cash provided by (used in) investing activities | (146) | (155) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Short-term borrowings, net | 234 | (31) | ||
Proceeds from issuance of long-term debt | 0 | 0 | ||
Payment of call premiums and debt issuance cost | 0 | 0 | ||
Principal payments on long-term debt | (5) | (9) | ||
Payment of taxes related to net settlement of equity awards | 0 | |||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | (36) | (49) | ||
Distributions paid to equity holders | (419) | (375) | ||
Other financing activities, net | (143) | (125) | ||
Intercompany | (240) | (49) | ||
Net cash provided by (used in) financing activities | (609) | (638) | ||
Effect of exchange rate changes on cash and cash equivalents | (27) | (15) | ||
Change in cash and cash equivalents | 141 | (8) | ||
Cash and cash equivalents at beginning of period | 308 | 335 | ||
Cash and cash equivalents at end of period | 449 | 327 | 449 | 327 |
Consolidation Adjustments | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income | (239) | (681) | (864) | (1,111) |
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues) | 0 | 0 | ||
(Gains) charges related to other operating expenses and other income (expense) | 0 | 0 | ||
Loss on debt extinguishment | 0 | 0 | 0 | 0 |
Stock-based compensation expense | 0 | 0 | ||
Other non-cash and non-operating items, net | 864 | 1,111 | ||
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities | 0 | 0 | ||
Net cash (used in) provided by operating activities | 0 | 0 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Additions to property and equipment | 0 | 0 | ||
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs | 0 | 0 | ||
Acquisitions, net of cash acquired | 0 | 0 | ||
Other investing activities, net | (358) | (317) | ||
Net cash provided by (used in) investing activities | (358) | (317) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Short-term borrowings, net | 0 | 0 | ||
Proceeds from issuance of long-term debt | 0 | 0 | ||
Payment of call premiums and debt issuance cost | 0 | 0 | ||
Principal payments on long-term debt | 0 | 0 | ||
Payment of taxes related to net settlement of equity awards | 0 | |||
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest | (204) | (183) | ||
Distributions paid to equity holders | 419 | 375 | ||
Other financing activities, net | 143 | 125 | ||
Intercompany | 0 | 0 | ||
Net cash provided by (used in) financing activities | 358 | 317 | ||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | ||
Change in cash and cash equivalents | 0 | 0 | ||
Cash and cash equivalents at beginning of period | 0 | 0 | ||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
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