Our focus will be on customer satisfaction, technological innovation, and sales efforts in each of our business segments. Our three primary business segments will be as follows:
 
First Data and its alliance partners are closely aligned with our domestic merchant clients. Our domestic merchant clients consist of 3.5 million establishments that accept credit, debit or prepaid cards or any other form of payment at the point of sale. There is an explosion of alternative forms of payment at the point of sale. These alternatives are replacing cash and checks with electronic forms of payment. Where you find an electronic payment, you will find a First Data® solution for our clients. Our objective is to efficiently process every electronic payment from the point of occurrence to the point of settlement.
This segment is closely aligned with our domestic financial institution clients. These clients issue cards of all types—credit, debit and retail—to consumers. As you know, we conducted a review of a portion of this business in late 2005 and decided to retain the business. The credit and retail card business has world-class functionality across multiple card product types that is equal to or better than that of any competitor. We are the industry leader in retail card processing. This, combined with the fact that the infrastructure of our card business is used extensively by other First Data businesses, led us to the conclusion that we need to keep and grow this business. It’s the right decision for our company. We are energized by the many opportunities we see for this segment. Over the next two to three years, we will be focusing on a select few of these opportunities to create another growth engine for First Data.
This segment provides services similar to First Data Commercial Services and First Data Financial Institution Services, but for clients outside of the United States. Because of its success outside of the U.S. and our continued focus on this business, we will now report it as a separate segment. Since its formation in 2002, revenue has increased from approximately $383 million to approximately $915 million, a compound annual growth rate of 34%. Our opportunity in the global payments market is extraordinary, as we see growth in new and emerging economies such as Eastern Europe and China, as industry consolidation continues, and as electronic payments replace cash and checks. This is a global phenomenon which is creating unprecedented opportunity for us around the world.
The new First Data will continue to provide innovative, cost-effective services to the payments industry. With long-term revenue and earnings per share growth targets of 8-10%, First Data will continue its history of strong, stable growth.
Our 33,000 employees are our best asset. Their knowledge and experience are second-to-none in the industry; and the loyalty that they have shown—particularly over the last several months—speaks volumes about the type of people we have working at First Data.
We have a formula in place for great success in all of our businesses. Western Union will continue to flourish as it becomes an independent company, and its spin-off will benefit all First Data shareholders. The new First Data will lay the groundwork for many years of solid growth to come. It’s an exciting time for us in our evolution, and I want to thank our shareholders for their continued support as we undergo this exciting transformation. 2006 will be a landmark year for First Data!
Ric Duques
Chairman and Chief Executive Officer
|
