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SEC Filings

10-Q
FIRST DATA CORP filed this Form 10-Q on 10/31/2018
Entire Document
 

(a)
Effective January 1, 2018, we adopted the New Revenue Standard using a modified retrospective basis. See Revenue Recognition in note 1 "Basis of Presentation and Summary of Significant Accounting Policies" to our unaudited consolidated financial statements in Part I of this Form 10-Q for additional information.
(b)
EBITDA was impacted by acquisitions and dispositions. See acquisitions and dispositions previously discussed above.
(c)
Currency impact is the difference between the current year's actual results and the same year's results converted with the prior year's foreign exchange rate. Constant currency percentage change is a measure of revenue growth before foreign currency impact.
(d)
Organic constant currency growth is defined as reported growth adjusted for the exclusion of the impacts of year-over-year currency rate changes in the current period, the results of significant dispositions and/or acquisitions impacting the periods presented, and is adjusted to retrospectively apply the New Revenue Standard to the prior year period.

The following table displays Segment EBITDA margin by segment for the three and nine months ended September 30, 2018 and 2017:    
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2018
 
2017
 
Change
 
2018
 
2017
 
Change
Segment EBITDA Margin:
 
 

 
 

 
 

 
 

 
 

 
 
Global Business Solutions
 
36.3
%
 
37.0
%
 
(70
) bps
 
35.7
%
 
36.9
%
 
(120
) bps
Global Financial Solutions (a)
 
39.6
%
 
43.0
%
 
(340
) bps
 
41.2
%
 
41.1
%
 
10
  bps
Network & Security Solutions(b)
 
53.1
%
 
46.6
%
 
650
  bps
 
51.2
%
 
45.7
%
 
550
  bps
Total Segment EBITDA Margin (Non-GAAP)
 
37.8
%
 
38.0
%
 
(20
) bps
 
37.2
%
 
37.3
%
 
(10
) bps
(a)
The decrease for the three months ended September 30, 2018 was primarily driven by added costs associated with the ramping up of new deals and compression on client renewals.
(b)
The increase for the three months ended September 30, 2018 was primarily driven by lower revenue attributed to the New Revenue Standard, expense management, and the impact from the non-renewal of a low-margin plastics' client.
Adjusted Net Income
Adjusted net income is a non-GAAP financial measure used by management that provides additional insight on performance. Adjusted net income excludes amortization of acquisition-related intangibles, stock-based compensation, restructuring costs, certain discrete tax items and other items affecting comparability and, therefore, provides a more complete understanding of continuing operating performance. Management believes that the presentation of adjusted net income provides users of our financial statements greater transparency into ongoing results of operations allowing them to better compare our results from period to period. This non-GAAP measure is not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, adjusted net income is not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. These measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

Prior to January 1, 2018, we excluded the impact of all discrete tax items from Adjusted Net Income and Diluted Adjusted Net Income per Share. We will no longer exclude certain discrete items which were deemed to be recurring in nature. We retrospectively adjusted the prior period results presented in these unaudited consolidated financial statements.

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