Financial News Release

First Data Q1 2011 News Release with Schedules
First Data Reports First Quarter 2011 Financial Results
  • First quarter 2011 consolidated revenue of $2.5 billion, up 6%; First quarter 2011 adjusted revenue of $1.5 billion, up 2%
  • Earnings growth in all three business segments
  • Extended $12 billion in debt maturities to 2018 and beyond
  • Generated $108 million in operating cash flow and ended the quarter with $1.9 billion in unrestricted liquidity

ATLANTA, May 4, 2011– First Data Corporation today reported its financial results for the first quarter ended March 31, 2011. Consolidated revenue for the first quarter increased $142 million to $2.5 billion, up 6% compared to $2.4 billion a year ago. Revenue growth was primarily attributable to increases in debit network fees, merchant related services from the favorable impact of U.S. economic growth, and improved international volumes. Adjusted revenue, which excludes reimbursables, increased $29 million, or 2%, year-over-year to $1.5 billion.

For the first quarter, the net loss attributable to First Data was $217 million, a year-over-year improvement of $23 million from $240 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $468 million was up 10% compared to $424 million in the first quarter of 2010, driven by growth across all three business segments.

First Data generated $108 million in operating cash flow, after interest payments of $353 million, for the quarter and finished the quarter with $1.9 billion in unrestricted liquidity—$150 million in cash available for corporate use plus $1.7 billion under the revolving credit facility.

“Higher volumes and good sales performance in our domestic and international merchant acquiring businesses coupled with lower expenses led to increased profitability across the board during the first quarter for First Data,” said Jonathan J. Judge, chief executive officer. “We continued to strengthen the capital structure by refinancing debt well ahead of maturities.  This provides increased financial flexibility and the opportunity to invest for future top-line growth.”

Segment Results

Retail and Alliance Servicessegment revenue of $765 million increased $27.6 million, or 4%, in the first quarter of 2011 compared to $737 million in 2010. Revenue growth was driven by transaction growth of 9% and continued cross-selling of complementary products including prepaid card and point-of-sale equipment. Credit mix was stable at 72% and regional average ticket was $69.85, down 1% compared to the same quarter a year ago. Segment EBITDA was $286 million, up $36 million, or 15%, compared to 2010 as a result of revenue growth and related operating leverage, and lower expenses including reduced credit losses. Margin for the first quarter was 37%, up approximately 300 basis points compared to the same quarter a year ago. During the quarter, Retail and Alliance Services added nine referral agreements, 10 new independent sales organizations and one new revenue sharing agreement.

Financial Services segment revenue for the first quarter was $338 million, down $8.5 million, or 2%, compared to $346 million in the same quarter of 2010 as new business and growth in debit transaction volumes were offset by customer losses, pricing pressure, and a 1% decline in active card accounts on file. Debit issuer transactions were up 12% excluding the impact of the loss of Washington Mutual. Segment EBITDA was $137 million, up $4 million, or 3%, compared to $133 million in 2010, driven by lower technology and operations costs. Margin for the first quarter was 41%, up approximately 200 basis points compared to the same quarter a year ago. During the quarter, Financial Services renewed approximately 400 contracts with financial institutions.

International segment revenue for the first quarter was $415 million, up $23.6 million, or 6%, compared to $392 million in the prior year. On a constant currency basis, segment revenue was up 4%. Revenue increases were driven by growth in the merchant acquiring business, primarily due to growth in bank alliances in Europe and volumes in Argentina. The card issuing business was relatively stable, on a constant currency basis, as new business substantially offset lower volumes and lost business.  The year-over-year comparison of the issuing business also improved as price compression from large contract extensions eased.  Segment EBITDA was $92 million, up $14 million compared to $78 million in 2010 on higher revenue.  Margin was 22%, up approximately 200 basis points compared to the same quarter of the previous year.

Recent Events

John Elkins Appointed President, First Data – International Regions
On March 16, 2011, First Data announced that John Elkins was appointed the President – International Regions, covering the company's business in Europe, the Middle East and Africa (EMEA), Asia Pacific (APAC) and Latin America (LA). Elkins has served as the company’s chief marketing and strategy officer since joining First Data in 2009.  Prior to joining First Data, Elkins served as a senior advisor at McKinsey and Company. He also previously served as executive vice president and chief marketing officer for Visa International.

First Data Extends Additional Debt Maturities
In an effort to improve its overall capital structure, the company executed an amendment to its Credit Agreement which became effective on April 13, 2011, that extended the maturity date of approximately $1 billion (after a 20% reduction in commitments) of the Revolving Credit Facility to 2016 and approximately $5.0 billion of Term Loans under its senior secured facilities to 2018. In connection with the amendment and extension, on April 13, 2011, the company issued $750 million in senior secured notes with a coupon of 7.375% due in 2019 to refinance existing term loan debt and extend the company’s debt maturity profile.

First Data and SK C&C USA Initiate Landmark Trusted Service Manager Solution
On April 5, 2011, First Data and SK C&C USA, a pioneer in mobile commerce technology, announced the commercial release of a Trusted Service Manager (TSM) solution. The comprehensive First Data TSM solution is now available for enablement of Near Field Communication (NFC) devices for issuers, merchants and mobile network operators (MNOs) looking to prepare consumers for mobile payments through the most scalable, cost-effective and secure service available.

New Operations and Technology Service Center in Bratislava, Slovakia
Also on April 5, 2011, First Data announced the opening of its new operations and technology service center in Bratislava, Slovakia. The center will enable First Data to further improve its client service and operational efficiency across the EMEA region. First Data's regional technical operations in EMEA are already partially provided from Bratislava and this move continues the company's investment there, eventually bringing the total number of First Data staff in Bratislava to approximately 400 people.

Non-GAAP Measures
In certain circumstances, results have been presented that are non-GAAP (generally accepted accounting principles) measures and should be viewed in addition to, and not in lieu of, the company's reported results. Reconciliations to comparable GAAP measures are available in the accompanying schedules and in the "Investor Relations" section of the company's website at investor.firstdata.com.

Investor Conference Call
The company will host an investor conference call and webcast on Wednesday, May 4, 2011 at 10 a.m. EDT to review first quarter 2011 financial results. First Data Chief Financial Officer Ray Winborne, will lead the call and will be joined by CEO Jon Judge.

The call will be webcast on the “Investor Relations” section of the First Data website at investor.firstdata.com and a slide presentation will accompany the call.

To listen to the call via teleconference, dial 866-804-6923 (U.S.) or 857-350-1669 (outside the U.S.), pass code 33578587. 

A replay of the call will be available through May 18, 2011, at 888-286-8010 (U.S.) or 617-801-6888 (outside the U.S.), pass code 85132052, and via webcast at investor.firstdata.com.

Please note: All statements made by First Data officers on this call are the property of First Data and subject to copyright protection. Other than the replay, First Data has not authorized, and disclaims responsibility for, any recording, replay or distribution of any transcription of this call.

Around the world, every second of every day, First Data makes payment transactions secure, fast and easy for merchants, financial institutions and their customers. First Data leverages its vast product portfolio and expertise to drive customer revenue and profitability. Whether the choice of payment is by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, First Data takes every opportunity to go beyond the transaction.

Contact:

Chip Swearngan
Senior Vice President, Communications and Investor Relations
First Data
404-890-3000
chip.swearngan@firstdata.com

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