Financial News Release
|First Data Q2 2012 News Release with Schedules|
|First Data Reports Second Quarter 2012 Financial Results|
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."
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.
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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 888-771-4371 (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.