Financial News Release

First Data Q2 2012 News Release with Schedules
First Data Reports Second Quarter 2012 Financial Results
  • Second quarter 2012 consolidated revenue of $2.7 billion, down 2%; adjusted revenue of $1.7 billion, up 3%
  • Second quarter net loss attributable to First Data improved $18 million to $157 million; adjusted EBITDA of $621 million, up 11%
  • Ended the quarter with$1.7 billion in unrestricted liquidity

ATLANTA, Aug. 1, 2012 -- First Data Corporation today reported its financial results for the second quarter ended June 30, 2012. Consolidated revenue for the second quarter was $2.7 billion, down $64 million, or 2%, compared to a year ago on a $92 million decline in debit network fees partially offset by an increase in merchant acquiring revenue. Debit network fees are passed directly to customers and therefore did not impact operating income. Adjusted revenue, which excludes certain items including debit network fees, increased $43 million, or 3% year-over-year to $1.7 billion.

For the second quarter, the net loss attributable to First Data was $157 million, compared to a loss of $176 million a year ago. The change was largely driven by a $56 million improvement in operating income, offset by higher interest rate hedge losses. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) was $621 million, up $60 million, or 11%, compared to $561 million in the second quarter of 2011, driven by revenue growth in the U.S. business and lower overall expense.

For the quarter, First Data generated $449 million in operating cash flow, after a $254 million increase in interest payments. The company finished the quarter with $1.7 billion in unrestricted liquidity -- $223 million in cash available for corporate use plus $1.5 billion under the revolving credit facility.

"For a third consecutive quarter, First Data grew adjusted EBITDA at a double-digit rate on continued merchant acquiring growth and cost management," said Chief Executive Officer Jonathan J. Judge. "There are tremendous opportunities to continue to grow this business through both mobile payments and emerging markets. With our strong customer relationships, distribution channels, assets and people, we are well-positioned to benefit from the changes occurring in the payments space."

Segment Results

Retail and Alliance Servicessegment revenue for the second quarter was $914 million, up $70 million, or 8%, compared to $844 million in 2011. Merchant revenue was up 11% driven by lower debit interchange rates, new processing revenue from the Bank of America Merchant Services alliance and volume growth. Transaction growth was 3%, credit mix was 72% and regional average ticket was $68, down slightly compared to a year ago. Product revenue was up 1% as growth in prepaid open-loop and equipment leasing was offset by declining check-processing as consumers migrate from checks to electronic payments. Segment EBITDA was $415 million, up $63 million, or 18%, compared to 2011 driven primarily by revenue growth. Margin for the second quarter improved to 45%, up 400 basis points. During the quarter, Retail and Alliance Services added 6 bank referral agreements, 1 new revenue sharing agreement and 13 new independent sales organizations.

Financial Services segment revenue for the second quarter was $349 million, up $4 million, or 1%, compared to $345 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 down 5%, impacted by a large customer deconversion. Absent this impact, debit issuer transactions were up 14% on new STAR network business and continued growth from existing customers. Segment EBITDA was $150 million, up $8 million, or 5%, compared to $142 million in 2011. Margin for the second quarter improved to 43%. During the quarter, Financial Services renewed more than 420 contracts with financial institutions.

International segment revenue for the second quarter was $425 million, down $27 million, or 6%, compared to $451 million in the prior year. On a constant currency basis, segment revenue was up 1%. Merchant acquiring revenue, on a constant currency basis, grew 3% on higher transaction volumes and growth in terminal sales in Latin America partially offset by exiting lower margin business. Issuing revenue, on a constant currency basis, declined 1% as lost business and product mix shifts away from lower margin revenue was partially offset by new business and a software license fee. Segment EBITDA was $118 million, down $2 million or 1%, compared to $119 million in 2011 and reflects a $7 million unfavorable impact from foreign currency. Margin improved to 28%, up 200 basis points.

Recent Events
First Data Acquires Remaining Equity Stake in OmniPay from FEXCO
On April 30, 2012,First Data and FEXCO, a specialist provider of financial transaction processing, foreign exchange and outsourcing services, announced an agreement whereby First Data acquired FEXCO's equity stake in OmniPay, a global provider of card and electronic payment processing services to merchant acquiring banks, bringing First Data's ownership to 100 percent. The OmniPay platform will support First Data's alliances and other strategic business units as part of the company's technology portfolio.

First Data OfferWise Solution Enables Universal Commerce for Offer Publishers and Merchants
On June 18, 2012, First Data announced the extension of the First DataSM OfferWiseSM solution to all offer publishers and the first wave of First Data's network of more than four million U.S. merchant locations. Over 500,000 merchant locations are now enabled to leverage the OfferWise solution for customized offers programs and other electronic incentive solutions, with more than 100 publishers using the platform to develop innovative, card-linked services. Introduced in February, the First Data OfferWise solution is an open platform that dramatically simplifies the offer redemption process and creation of card-linked services for consumers and merchants.

Scoutmob Continuing to Disrupt Local Mobile Discovery with First Data Payments Integration
On May 24, 2012, Scoutmob announced it is teaming up with First Data to help close the loop between offer, purchase and loyalty for local merchants. Combining Scoutmob's strength in mobile offers with First Data's strength in payment technology presents a powerful opportunity to innovate the way that consumers interact at the point of sale. The partnership with First Data gives Scoutmob the potential to work with First Data's network of over four million U.S. merchant relationships, allowing Scoutmob to link the consumer's intent to their resulting purchase with the First Data OfferWise solution.

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, Aug. 1, 2012 at 10 a.m. EDT to review second quarter 2012 financial results. First Data Chief Financial Officer Ray Winborne will lead the call and will be joined by Chief Executive Officer Jonathan J. Judge.

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 888-771-4371 (U.S.) or 847-585-4405 (outside the U.S.); pass code 32545075, at least 10 minutes prior to the start of the call.

A replay of the call will be available through Aug. 31, 2012, at 888-843-7419 (U.S.) or 630-652-3042 (outside the U.S.); pass code 32545075# 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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