Segment Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by a company’s chief operating decision maker (CODM), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company's CODM is its Chief Executive Officer. The Company is organized into three segments: Global Business Solutions, Global Financial Solutions, and Network & Security Solutions.

The business segment measurements provided to and evaluated by the chief operating decision maker are computed in accordance with the principles listed below.

• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

• Intersegment revenues are eliminated in the segment that sells directly to the end market.

• Segment revenue excludes reimbursable PIN debit fees, postage, and other revenue.

• Adjusted EBITDA by segment includes equity earnings in affiliates and excludes depreciation and amortization expense, net income attributable to noncontrolling interests, other operating expenses, and other income (expense). Additionally, adjusted EBITDA is adjusted for items similar to certain of those used in calculating the Company's compliance with debt covenants. The additional items that are adjusted to determine adjusted EBITDA are:

• share-based compensation and related expense is excluded;

• debt issuance costs are excluded and represent costs associated with issuing debt and modifying the Company's debt structure; and

• KKR related items including annual sponsor and other fees for management, consulting, financial, contract termination, and other advisory services are excluded.

• For significant affiliates, segment revenue and adjusted EBITDA are reflected based on the Company's proportionate share of the results of its investments in businesses accounted for under the equity method and consolidated subsidiaries with noncontrolling ownership interests. For other affiliates, the Company includes equity earnings in affiliates, excluding amortization expense, in segment revenue and adjusted EBITDA. In addition, the Company's segment measures reflect revenue-based commission payments to Independent Sales Organizations and sales channels, which are treated as an expense in the consolidated statements of operations, as contra revenue.

• Corporate operations include corporate-wide governance functions such as the Company's executive management team, aviation, tax, treasury, internal audit, corporate strategy, and certain accounting, human resources and legal costs related to supporting the corporate function. Costs incurred by Corporate that are attributable to a segment are allocated to the respective segment.

The following tables present the Company’s operating segment results for the years ended December 31, 2015, 2014, and 2013:

	Year ended December 31, 2015
(in millions)	Global Business Solutions		Global Financial Solutions			Network & Security Solutions			Corporate			Totals
Revenues:
Transaction and processing service fees	$	3,209	$	1,323		$	1,322		$	—		$	5,854
Product sales and other	845		172			142			—			1,159
Equity earnings in affiliates	35		—			—			—			35
Total segment revenues	$	4,089	$	1,495		$	1,464		$	—		$	7,048
Depreciation and amortization	$	490	$	393		$	91		$	25		$	999
Adjusted EBITDA	1,681		550			639			(140		)	2,730
Other operating expenses and other income (expense) excluding divestitures	26		(16		)	(3		)	(36		)	(29		)
Equity earnings in affiliates	239		—			—			—			239

	Year ended December 31, 2014
(in millions)	Global Business Solutions		Global Financial Solutions			Network & Security Solutions		Corporate			Totals
Revenues:
Transaction and processing service fees	$	3,250	$	1,313		$	1,277	$	—		$	5,840
Product sales and other	766		176			92		—			1,034
Equity earnings in affiliates	30		—			—		—			30
Total segment revenues	$	4,046	$	1,489		$	1,369	$	—		$	6,904
Depreciation and amortization	$	518	$	401		$	90	$	23		$	1,032
Adjusted EBITDA	1,687		529			608		(161		)	2,663
Other operating expenses and other income (expense) excluding divestitures	38		(3		)	96		15			146
Equity earnings in affiliates	216		—			4		—			220

	Year ended December 31, 2013
(in millions)	Global Business Solutions		Global Financial Solutions			Network & Security Solutions			Corporate			Totals
Revenues:
Transaction and processing service fees	$	3,197	$	1,217		$	1,284		$	—		$	5,698
Product sales and other	709		167			78			—			954
Equity earnings in affiliates	32		—			—			—			32
Total segment revenues	$	3,938	$	1,384		$	1,362		$	—		$	6,684
Depreciation and amortization	$	543	$	424		$	107		$	17		$	1,091
Adjusted EBITDA	1,644		404			549			(148		)	2,449
Other operating expenses and other income (expense) excluding divestitures	36		(10		)	(5		)	(118		)	(97		)
Equity earnings in affiliates	185		—			3			—			188

The following table presents a reconciliation of reportable segment amounts to the Company’s consolidated balances for the years ended December 31, 2015, 2014, and 2013:

	Year ended December 31,
(in millions)	2015			2014			2013
Total segment revenues	$	7,048		$	6,904		$	6,684
Adjustments for non wholly owned entities (a)	74			57			39
ISOs commission expense (b)	642			587			579
Reimbursable debit network fees, postage, and other	3,687			3,604			3,507
Total revenues	$	11,451		$	11,152		$	10,809
Total Adjusted EBITDA	$	2,730		$	2,663		$	2,449
Adjustments to reconcile to Net loss attributable to First Data Corporation:
Adjustments for non wholly owned entities (a)	26			24			2
Depreciation and amortization	(1,022		)	(1,056		)	(1,091		)
Interest expense, net	(1,537		)	(1,728		)	(1,856		)
Loss on debt extinguishment	(1,068		)	(274		)	(79		)
Other items (c)	(75		)	92			(134		)
Income tax expense	(101		)	(82		)	(105		)
Share-based compensation	(329		)	(50		)	(38		)
Costs of alliance conversions	(5		)	(20		)	(68		)
KKR related items	(100		)	(27		)	(32		)
Net loss attributable to First Data Corporation	$	(1,481	)	$	(458	)	$	(952	)

(a) Net adjustment to reflect the Company's proportionate share of alliance revenue and adjusted EBITDA and amortization related to equity method investments not included in adjusted EBITDA.

(b) Reported within Selling, general, and administrative expense in the consolidated statements of operations.

(c) Includes adjustments to exclude the official check and money order businesses due to the Company's wind down of these businesses, restructuring, certain retention bonuses, non-normal course litigation and regulatory settlements, and “Other income (expense)” as presented in the consolidated statements of operations, which includes divestitures, impairments, derivative gains and (losses), and non-operating foreign currency gains and (losses).

Total segment assets, capital expenditures, and investment in unconsolidated affiliates are not disclosed as the Company's CODM does not utilize such information when allocating resources to the segment or when assessing the segments' performance.

The following tables presents a reconciliation of reportable segment depreciation and amortization amounts to the Company’s consolidated balances in the consolidated statements of cash flows for the years ended December 31, 2015, 2014, and 2013:

	Year ended December 31,
(in millions)	2015			2014			2013
Segment depreciation and amortization	$	999		$	1,032		$	1,091
Adjustments for non wholly owned entities	83			86			79
Amortization of initial payments for new contracts (a)	51			45			42
Total consolidated depreciation and amortization per consolidated statements of cash flows	1,133			1,163			1,212
Amortization of equity method investment (b)	(60		)	(62		)	(79		)
Amortization of initial payments for new contracts (a)	(51		)	(45		)	(42		)
Total consolidated depreciation and amortization per consolidated statements of operations	$	1,022		$	1,056		$	1,091

(a) Included in "Transaction and processing service fees" as contra-revenue in the Company's consolidated statements of operations.

(b) Included in "Equity earnings in affiliates" in the Company's consolidated statements of operations.

The following tables presents revenues and long-lived assets by principal geographic area for the years ended December 31, 2015, 2014, and 2013:

(in millions)	United States		International		Total
Revenues:
2015	$	9,795	$	1,656	$	11,451
2014	9,428		1,724		11,152
2013	9,145		1,664		10,809
Long-Lived Assets:
2015	$	19,400	$	2,316	$	21,716
2014	19,708		2,588		22,296
2013	20,020		2,959		22,979