WHO WE ARE:

First Data Corporation (FDC) is a leading provider of electronic commerce and payment solutions for businesses and governments around the world.

OUR MISSION:

From point of sale to point of settlement our clients trust First Data to deliver innovative electronic processing solutions that improve their competitiveness and efficiency.

OUR VISION:

To seamlessly enable virtually every type of electronic transaction anywhere in the world, anytime - reliably and securely - on behalf of our clients and their customers.

First Data is a company with more than $7 billion in revenue and 29,000 employees in 39 countries around the world. We are number one or two in virtually every market we serve. In thinking back over the 15 years that I have been a part of this truly remarkable organization, there have been many exciting years, but 2006 will certainly stand out in my mind as one to remember.

We executed the spin-off of Western Union with exceptional speed and quality. This was a monumental task. Separating a large piece of our organization, in roughly nine months time, is a real testament to the talent and dedication of the employees who make up First Data and Western Union.

Not only was the spin-off an impressive achievement, we also reorganized and instituted significant changes and improvements in all of our other segments. Considering the scope and size of our company, this was no small feat. I have enormous respect and appreciation for my First Data colleagues and thank them for their hard work and commitment.

The rationale behind the many changes in 2006 was to achieve a laser-like focus on our clients. Getting closer to our clients helps us anticipate their needs and respond quickly. In turn, we are more likely to earn additional business from them. It’s that simple. Maintain the expansive customer base we have today, and sell more value-added products to those clients. When we really examine the potential in cross-sell opportunities and lower attrition rates, our client base represents an enormous opportunity for our company.

The work we do for our clients is critical – moving their money in and out of their businesses. This isn’t work that you entrust to just anybody. We’ve built trust-based relationships from years of providing high-quality, reliable services and through unparalleled industry knowledge. Our goal is to make certain that First Data and our clients are reaping the full benefits of our scale, scope, skills and global presence.

Our intensified client focus is embedded into the four key strategies we established for First Data in 2006:
1. Grow our core business
2. Expand product offerings
3. Improve overall cost structure and efficiencies
4. Extend our global reach

Our first priority is to provide outstanding service to every client of First Data. If we can accomplish this, we will be afforded the opportunity to gain additional business from existing clients, and our core business will thrive.

We are committed to product innovation and increasing the contribution of new products to our growth rate. Our product investments not only will generate revenue through new sales, but also will support our client retention efforts. Expanding our product offerings also means entering adjacent markets and strategic partnerships, both of which we successfully initiated during the year.

We have made, and we will continue to make, sound improvements to our overall cost structure, creating efficiencies globally. The end result of our comprehensive analysis of First Data’s systems and processes will have a positive impact on our bottom line for many years to come. We have started initiatives in data center consolidation, global sourcing and platform consolidation, all of which are designed to make First Data more cost competitive with any service alternative, anywhere in the world.

And last, but probably the most exciting component of our growth strategy, is extending our global reach. When I think about the progress that we have made in such a short period of time, and the foundation that we now have in place, I am confident we will continue to see extraordinary geographic expansion for First Data. The combined strength of our human capital and state-of-the-art technology will ensure our continued success worldwide.


Our superior cash flow, our high percentage of recurring revenue, our global portfolio of strong growth businesses, and our exceptionally talented employees, truly places First Data in a class by itself. These rich resources make it possible for First Data to achieve virtually any goal we set. We will prudently expand as we look for new ways to leverage our valuable resources.

If you think about the ongoing, dramatic growth in electronic transactions, you start to get a sense of the incredible potential the future holds for First Data. Cash and check transactions still represent the majority of payments around the world. This is clearly changing in favor of electronic payments. This secular trend will continue for many years. As a shareholder in First Data, you are participating in the long-term transition to a cashless society with the leading company in this space. You are an owner of a company that has publicly stated that it will grow over the long-term at 8–10 percent per year in both revenue and earnings per share with the potential to exceed these growth rates in any given quarter or year. Being able to reliably deliver on this goal – even during economic downturns – gives First Data unique characteristics as a public company investment.


Our strong finish in 2006 puts us in an excellent position to execute against our business objectives and financial targets in 2007. We will continue to focus on our four key strategies, and I am confident we will continue to achieve positive results.

By this time next year, a new chief executive officer will be leading First Data, and I will make another attempt to retire. I have complete confidence in our Board of Directors to make the right choice for the long-term success of the company. They are determined to name a CEO with the right experience, leadership skills and passion to successfully lead First Data to the next level of success.

First Data is a great company, with an outstanding leadership team and an incredibly exciting future. I feel very fortunate and proud to have been a part of this organization. I am deeply appreciative of the support that my colleagues, our Board of Directors, and our investors have shown me over the years. Thank you all.