Financial News Release
|First Data Q1 2012 News Release with Schedules|
|First Data Reports First Quarter 2012 Financial Results|
ATLANTA, May 2, 2012 -- First Data Corporation today reported its financial results for the first quarter ended March 31, 2012. Consolidated revenue for the first quarter was $2.6 billion, up $20 million, or 1%, compared to a year ago on an increase in merchant acquiring revenue partially offset by a $71 million decline in debit network fees. These fees are passed directly to customers and therefore did not impact operating income. Adjusted revenue, which excludes certain items including debit network fees, increased $78 million, or 5% year-over-year to $1.6 billion.
For the first quarter, the net loss attributable to First Data was $153 million, compared to a loss of $217 million a year ago. The change was largely driven by a $110 million improvement in operating income. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) was $551 million, up $83 million, or 18%, compared to $468 million in the first quarter of 2011, driven by revenue growth in the U.S. business and cost reductions across the segments.
For the quarter, the company had a net use of $54 million in cash flows from operations driven by a $142 million increase in interest payments compared to a year ago. The company finished the quarter with $1.5 billion in unrestricted liquidity -- $74 million in cash available for corporate use plus $1.4 billion under the revolving credit facility.
"For the second quarter in a row, First Data achieved double-digit EBITDA growth on an expanding top-line, supported by improving trends in the U.S. economy, and cost management," said Chief Executive Officer Jonathan J. Judge. "Our scale, our people and our strong relationships with both merchants and financial institutions drove great results this quarter, and we are positioned to continue to benefit from emerging opportunities in mobile commerce and secular payments growth."
Retail and Alliance Servicessegment revenue for the first quarter was $847 million, up $82 million, or 11%, compared to $765 million in 2011. Merchant revenue was up 17% driven by lower debit interchange rates, new processing revenue from the Bank of America Merchant Services alliance and volume growth. Transaction growth was 6%, credit mix was stable at 72% and regional average ticket was $69, down slightly compared to a year ago. Product revenue was down 3% as flat results in prepaid were offset by declining check-processing as consumers migrate from checks to electronic payments. Segment EBITDA was $352 million, up $66 million, or 23%, compared to 2011 driven primarily by revenue growth. Margin for the first quarter improved to 42%, up 420 basis points. During the quarter, Retail and Alliance Services added 2 new revenue sharing agreements, 3 bank referral agreements and 13 new independent sales organizations.
Financial Services segment revenue for the first quarter was $346 million, up $8 million, or 2%, compared to $338 million in the same quarter of 2011, as new business and volume growth offset lost business and price compression. Active card accounts on file were up 17% compared to the prior year, primarily driven by a new customer conversion. Debit issuer transactions were up 1%, impacted by a large customer deconversion. Underlying growth was 12% absent this impact. Segment EBITDA was $157 million, up $20 million, or 15%, compared to $137 million in 2011. Expenses declined by $12 million compared to a year ago driven primarily by lower technology and operations costs. Margin for the first quarter improved to 46%, up 500 basis points. During the quarter, Financial Services renewed more than 250 contracts with financial institutions.
International segment revenue for the first quarter was $405 million, down $10 million, or 3%, compared to $415 million in the prior year. On a constant currency basis, segment revenue was flat. Merchant acquiring revenue, on a constant currency basis, grew 3% on higher transaction volumes and terminal sales. Issuing revenue, on a constant currency basis, declined 3% as lost business and product mix shifts away from lower margin revenue was partially offset by higher volumes and new business. Segment EBITDA was $95 million, up $3 million, or 4%, compared to $92 million in 2011, due to cost reductions. Margin improved to 24% compared to a year ago.
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Investor Conference Call
The webcast of the call and accompanying slide presentation will be available on the "Investor Relations" section of the First Data website at investor.firstdata.com.
To listen to the call, dial 888-679-8037 (U.S.) or 617-213-4849 (outside the U.S.); pass code 70074409, at least 10 minutes prior to the start of the call.
A replay of the call will be available through May 16, 2012, at 888-286-8010 (U.S.) or 617-801-6888 (outside the U.S.), pass code 51914809 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.