Supplemental Guarantor Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of consolidated statements of operations

	Three months ended September 30, 2016
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
Revenues:
Transaction and processing service fees	$	—		$	1,003		$	763		$	(73	)	$	1,693
Product sales and other	—			208			144			(45		)	307
Total revenues (excluding reimbursable items)	—			1,211			907			(118		)	2,000
Reimbursable PIN debit fees, postage, and other	—			637			299			—			936
Total revenues	—			1,848			1,206			(118		)	2,936
Expenses:
Cost of services (exclusive of items shown below)	—			408			360			(57		)	711
Cost of products sold	—			84			48			(45		)	87
Selling, general, and administrative	56			272			187			(16		)	499
Depreciation and amortization	1			140			96			—			237
Other operating expenses	—			3			9			—			12
Total expenses (excluding reimbursable items)	57			907			700			(118		)	1,546
Reimbursable PIN debit fees, postage, and other	—			637			299			—			936
Total expenses	57			1,544			999			(118		)	2,482
Operating (loss) profit	(57		)	304			207			—			454
Interest expense, net	(258		)	(4		)	(1		)	—			(263		)
Loss on debt extinguishment	(3		)	—			—			—			(3		)
Interest income (expense) from intercompany notes	59			(57		)	(2		)	—			—
Other income (expense)	(2		)	—			(28		)	—			(30		)
Equity earnings from consolidated subsidiaries	240			(1		)	—			(239		)	—
(Loss) income before income taxes and equity earnings in affiliates	(21		)	242			176			(239		)	158
Income tax (benefit) expense	(154		)	144			34			—			24
Equity earnings in affiliates	(1		)	59			8			—			66
Net income (loss)	132			157			150			(239		)	200
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			16			52			68
Net income (loss) attributable to First Data Corporation	$	132		$	157		$	134		$	(291	)	$	132
Comprehensive income (loss)	$	192		$	169		$	211		$	(311	)	$	261
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			17			52			69
Comprehensive income (loss) attributable to First Data Corporation	$	192		$	169		$	194		$	(363	)	$	192

	Nine months ended September 30, 2016
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
Revenues:
Transaction and processing service fees	$	—		$	2,926		$	2,248		$	(221	)	$	4,953
Product sales and other	—			609			398			(114		)	893
Total revenues (excluding reimbursable items)	—			3,535			2,646			(335		)	5,846
Reimbursable PIN debit fees, postage, and other	—			1,903			892			—			2,795
Total revenues	—			5,438			3,538			(335		)	8,641
Expenses:
Cost of services (exclusive of items shown below)	—			1,208			1,063			(131		)	2,140
Cost of products sold	—			235			133			(117		)	251
Selling, general, and administrative	261			815			574			(87		)	1,563
Depreciation and amortization	4			430			279			—			713
Other operating expenses:	12			32			13			—			57
Total expenses (excluding reimbursable items)	277			2,720			2,062			(335		)	4,724
Reimbursable PIN debit fees, postage, and other	—			1,903			892			—			2,795
Total expenses	277			4,623			2,954			(335		)	7,519
Operating (loss) profit	(277		)	815			584			—			1,122
Interest expense, net	(792		)	(13		)	(5		)	—			(810		)
Loss on debt extinguishment	(58		)	—			—			—			(58		)
Interest income (expense) from intercompany notes	192			(176		)	(16		)	—			—
Other (expense)	(2		)	—			16			—			14
Equity earnings from consolidated subsidiaries	689			175			—			(864		)	—
(Loss) income before income taxes and equity earnings in affiliates	(248		)	801			579			(864		)	268
Income tax (benefit) expense	(477		)	404			130			—			57
Equity earnings in affiliates	(1		)	175			24			—			198
Net income (loss)	228			572			473			(864		)	409
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			50			131			181
Net income (loss) attributable to First Data Corporation	$	228		$	572		$	423		$	(995	)	$	228
Comprehensive (loss) income	$	182		$	611		$	454		$	(882	)	$	365
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			52			131			183
Comprehensive (loss) income attributable to First Data Corporation	$	182		$	611		$	402		$	(1,013	)	$	182

	Three months ended September 30, 2015
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidation Adjustments			Consolidated
Revenues:
Transaction and processing service fees	$	—		$	1,002		$	753	$	(82	)	$	1,673
Product sales and other	—			197			131		(19		)	309
Total revenues (excluding reimbursable items)	—			1,199			884		(101		)	1,982
Reimbursable PIN debit fees, postage, and other	—			646			292		—			938
Total revenues	—			1,845			1,176		(101		)	2,920
Expenses:
Cost of services (exclusive of items shown below)	—			413			355		(82		)	686
Cost of products sold	—			68			47		(19		)	96
Selling, general, and administrative	22			299			200		—			521
Depreciation and amortization	1			158			98		—			257
Other operating expenses	1			10			9		—			20
Total expenses (excluding reimbursable items)	24			948			709		(101		)	1,580
Reimbursable PIN debit fees, postage, and other	—			646			292		—			938
Total expenses	24			1,594			1,001		(101		)	2,518
Operating (loss) profit	(24		)	251			175		—			402
Interest expense, net	(386		)	(2		)	—		—			(388		)
Loss on debt extinguishment	(108		)	—			—		—			(108		)
Interest income (expense) from intercompany notes	65			(68		)	3		—			—
Other (expense) income	(18		)	—			8		—			(10		)
Equity earnings from consolidated subsidiaries	570			111			—		(681		)	—
Income (loss) before income taxes and equity earnings in affiliates	99			292			186		(681		)	(104		)
Income tax (benefit) expense	225			(197		)	4		—			32
Equity earnings in affiliates	—			55			6		—			61
Net (loss) income	(126		)	544			188		(681		)	(75		)
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			15		36			51
Net (loss) income attributable to First Data Corporation	$	(126	)	$	544		$	173	$	(717	)	$	(126	)
Comprehensive (loss) income	$	(214	)	$	494		$	83	$	(525	)	$	(162	)
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			15		36			51
Comprehensive income (loss) attributable to First Data Corporation	$	(214	)	$	494		$	68	$	(561	)	$	(213	)

	Nine months ended September 30, 2015
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
Revenues:
Transaction and processing service fees	$	—		$	2,896		$	2,242		$	(232	)	$	4,906
Product sales and other	—			538			354			(48		)	844
Total revenues (excluding reimbursable items)	—			3,434			2,596			(280		)	5,750
Reimbursable PIN debit fees, postage, and other	—			1,874			863			—			2,737
Total revenues	—			5,308			3,459			(280		)	8,487
Expenses:
Cost of services (exclusive of items shown below)	—			1,190			1,097			(232		)	2,055
Cost of products sold	—			181			124			(48		)	257
Selling, general, and administrative	81			876			610			—			1,567
Depreciation and amortization	10			459			291			—			760
Other operating expenses	7			14			19			—			40
Total expenses (excluding reimbursable items)	98			2,720			2,141			(280		)	4,679
Reimbursable PIN debit fees, postage, and other	—			1,874			863			—			2,737
Total expenses	98			4,594			3,004			(280		)	7,416
Operating (loss) profit	(98		)	714			455			—			1,071
Interest expense, net	(1,191		)	(8		)	—			—			(1,199		)
Loss on debt extinguishment	(108		)	—			—			—			(108		)
Interest income (expense) from intercompany notes	223			(224		)	1			—			—
Other income (expense)	21			3			(23		)	—			1
Equity earnings from consolidated subsidiaries	877			234			—			(1,111		)	—
(Loss) income before income taxes and equity earnings in affiliates	(276		)	719			433			(1,111		)	(235		)
Income tax (benefit) expense	(12		)	3			54			—			45
Equity earnings in affiliates	—			158			17			—			175
Net (loss) income	(264		)	874			396			(1,111		)	(105		)
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			49			110			159
Net (loss) income attributable to First Data Corporation	$	(264	)	$	874		$	347		$	(1,221	)	$	(264	)
Comprehensive (loss) income	$	(473	)	$	796		$	121		$	(765	)	$	(321	)
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			41			110			151
Comprehensive (loss) income attributable to First Data Corporation	$	(473	)	$	796		$	80		$	(875	)	$	(472	)

Schedule of consolidated balance sheets

	As of September 30, 2016
(in millions)	FDC Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidation Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	8	$	18	$	449	$	—		$	475
Accounts receivable, net of allowance for doubtful accounts	—		487		1,227		—			1,714
Settlement assets (a)	—		4,222		4,483		—			8,705
Intercompany notes receivable	1		—		—		(1		)	—
Other current assets	108		203		149		—			460
Total current assets	117		4,930		6,308		(1		)	11,354
Property and equipment, net of accumulated depreciation	34		600		262		—			896
Goodwill	—		9,145		7,680		—			16,825
Customer relationships, net of accumulated amortization	—		1,078		767		—			1,845
Other intangibles, net of accumulated amortization	604		706		483		—			1,793
Investment in affiliates	4		873		126		—			1,003
Long-term intercompany receivables	10,070		17,144		7,290		(34,504		)	—
Long-term intercompany notes receivable	3,446		219		9		(3,674		)	—
Long-term deferred tax assets	449		—		—		(449		)	—
Other long-term assets	185		342		251		(50		)	728
Investment in consolidated subsidiaries	26,658		5,862		—		(32,520		)	—
Total assets	$	41,567	$	40,899	$	23,176	$	(71,198	)	$	34,444
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	250	$	758	$	548	$	—		$	1,556
Short-term and current portion of long-term borrowings	—		94		283		—			377
Settlement obligations (a)	—		4,222		4,483		—			8,705
Intercompany notes payable	—		—		1		(1		)	—
Total current liabilities	250		5,074		5,315		(1		)	10,638
Long-term borrowings	18,316		183		15		—			18,514
Deferred tax liabilities	—		766		93		(449		)	410
Long-term intercompany payables	21,261		8,002		5,241		(34,504		)	—
Long-term intercompany notes payable	228		3,446		—		(3,674		)	—
Other long-term liabilities	474		253		159		(50		)	836
Total liabilities	40,529		17,724		10,823		(38,678		)	30,398
Redeemable equity interest	—		—		73		(73		)	—
Redeemable noncontrolling interest	—		—		—		73			73
First Data Corporation stockholders' equity	1,038		23,175		6,403		(29,578		)	1,038
Noncontrolling interests	—		—		104		2,831			2,935
Equity of consolidated alliance	—		—		5,773		(5,773		)	—
Total equity	1,038		23,175		12,280		(32,520		)	3,973
Total liabilities and equity	$	41,567	$	40,899	$	23,176	$	(71,198	)	$	34,444

(a) The majority of the Guarantor settlement assets relate to the Company’s merchant acquiring business. The Company believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities.

	As of December 31, 2015
(in millions)	FDC Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidation Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	105	$	16	$	308	$	—		$	429
Accounts receivable, net of allowance for doubtful accounts	—		826		1,000		—			1,826
Settlement assets (a)	—		4,273		3,877		—			8,150
Intercompany notes receivable	436		86		10		(532		)	—
Other current assets	98		188		95		—			381
Total current assets	639		5,389		5,290		(532		)	10,786
Property and equipment, net of accumulated depreciation	37		640		274		—			951
Goodwill	—		9,139		7,707		—			16,846
Customer relationships, net of accumulated amortization	—		1,235		901		—			2,136
Other intangibles, net of accumulated amortization	604		703		476		—			1,783
Investment in affiliates	5		900		143		—			1,048
Long-term intercompany receivables	8,523		15,192		6,321		(30,036		)	—
Long-term intercompany notes receivable	3,415		236		9		(3,660		)	—
Long-term deferred tax assets	524		—		—		(524		)	—
Other long-term assets	259		358		265		(70		)	812
Investment in consolidated subsidiaries	25,692		5,588		—		(31,280		)	—
Total assets	$	39,698	$	39,380	$	21,386	$	(66,102	)	$	34,362
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	283	$	792	$	564	$	—		$	1,639
Short-term and current portion of long-term borrowings	740		70		46		—			856
Settlement obligations (a)	—		4,273		3,877		—			8,150
Intercompany notes payable	96		408		28		(532		)	—
Total current liabilities	1,119		5,543		4,515		(532		)	10,645
Long-term borrowings	18,616		119		2		—			18,737
Deferred tax liabilities	—		875		80		(524		)	431
Long-term intercompany payables	18,583		6,874		4,579		(30,036		)	—
Long-term intercompany notes payable	245		3,353		62		(3,660		)	—
Other long-term liabilities	467		288		127		(70		)	812
Total liabilities	39,030		17,052		9,365		(34,822		)	30,625
Redeemable equity interest	—		—		77		(77		)	—
Redeemable noncontrolling interest	—		—		—		77			77
First Data Corporation stockholders' equity	668		22,328		5,933		(28,261		)	668
Noncontrolling interests	—		—		88		2,904			2,992
Equity of consolidated alliance	—		—		5,923		(5,923		)	—
Total equity	668		22,328		11,944		(31,280		)	3,660
Total liabilities and equity	$	39,698	$	39,380	$	21,386	$	(66,102	)	$	34,362

(a) The majority of the Guarantor settlement assets relate to the Company’s merchant acquiring business. The Company believes the settlement assets are not available to satisfy any claims other than those related to the settlement liabilities.

Schedule of consolidated statements of cash flows

	Nine months ended September 30, 2016
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	228		$	572		$	473		$	(864	)	$	409
Adjustments to reconcile to net cash (used in) provided by operating activities:
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)	4			484			305			—			793
Charges (gains) related to other operating expenses and other income (expense)	14			32			(3		)	—			43
Loss on debt extinguishment	58			—			—			—			58
Stock-based compensation expense	214			—			—			—			214
Other non-cash and non-operating items, net	(660		)	(174		)	—			864			30
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities	(351		)	316			148			—			113
Net cash (used in) provided by operating activities	(493		)	1,230			923			—			1,660
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment	—			(47		)	(121		)	—			(168		)
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs	—			(139		)	(44		)	—			(183		)
Acquisitions, net of cash acquired	(6		)	—			—			—			(6		)
Other investing activities, net	143			215			19			(358		)	19
Net cash provided by (used in) investing activities	137			29			(146		)	(358		)	(338		)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net	—			—			234			—			234
Proceeds from issuance of long-term debt	2,377			—			—			—			2,377
Payment of call premiums and debt issuance cost	(52		)	—			—			—			(52		)
Principal payments on long-term debt	(3,480		)	(59		)	(5		)	—			(3,544		)
Payment of taxes related to net settlement of equity awards	(59		)	—			—			—			(59		)
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest	—			—			(36		)	(204		)	(240		)
Distributions paid to equity holders	—			—			(419		)	419			—
Other financing activities, net	18			8			(143		)	143			26
Intercompany	1,455			(1,215		)	(240		)	—			—
Net cash provided by (used in) financing activities	259			(1,266		)	(609		)	358			(1,258		)
Effect of exchange rate changes on cash and cash equivalents	—			9			(27		)	—			(18		)
Change in cash and cash equivalents	(97		)	2			141			—			46
Cash and cash equivalents at beginning of period	105			16			308			—			429
Cash and cash equivalents at end of period	$	8		$	18		$	449		$	—		$	475

	Nine months ended September 30, 2015
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(264	)	$	874		$	396		$	(1,111	)	$	(105	)
Adjustments to reconcile to net cash (used in) provided by operating activities:
Depreciation and amortization (including amortization netted against equity earnings in affiliates and revenues)	10			519			314			—			843
(Gains) charges related to other operating expenses and other income (expense)	(14		)	11			42			—			39
Loss on debt extinguishment	108			—			—			—			108
Stock-based compensation expense	31			—			—			—			31
Other non-cash and non-operating items, net	(832		)	(238		)	9			1,111			50
(Decrease) increase in cash resulting from changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions	(405		)	87			39			—			(279		)
Net cash (used in) provided by operating activities	(1,366		)	1,253			800			—			687
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment	(8		)	(93		)	(112		)	—			(213		)
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs	—			(201		)	(43		)	—			(244		)
Acquisitions, net of cash acquired	(70		)	(19		)	—			—			(89		)
Other investing activities, net	110			199			—			(317		)	(8		)
Net cash provided by (used in) investing activities	32			(114		)	(155		)	(317		)	(554		)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net	250			—			(31		)	—			219
Proceeds from issuance of long-term debt	2,206			—			—			—			2,206
Payment of debt issuance cost	(104		)	—			—			—			(104		)
Principal payments on long-term debt	(2,115		)	(61		)	(9		)	—			(2,185		)
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest	—			—			(49		)	(183		)	(232		)
Distributions paid to equity holders	—			—			(375		)	375			—
Other financing activities, net	(13		)	—			(125		)	125			(13		)
Intercompany	1,129			(1,080		)	(49		)	—			—
Net cash provided by (used in) financing activities	1,353			(1,141		)	(638		)	317			(109		)
Effect of exchange rate changes on cash and cash equivalents	—			1			(15		)	—			(14		)
Change in cash and cash equivalents	19			(1		)	(8		)	—			10
Cash and cash equivalents at beginning of period	—			23			335			—			358
Cash and cash equivalents at end of period	$	19		$	22		$	327		$	—		$	368