Supplemental Guarantor Condensed Consolidating Financial Statements

As described in note 2 "Borrowings" of these consolidated financial statements, FDC’s 7.0% senior notes are guaranteed by most of the existing and future, direct and indirect, wholly owned, domestic subsidiaries of FDC (Guarantors). The Guarantors guarantee the senior secured revolving credit facility, senior secured term loan facility, the 5.0% senior secured notes, the 5.375% senior secured notes and the 6.75% senior secured notes, which rank senior in right of payment to all existing and future unsecured and second lien indebtedness of FDC’s guarantor subsidiaries to the extent of the value of the collateral. The Guarantors guarantee the 5.750% senior second lien notes which rank senior in right of payment to all existing and future unsecured indebtedness of FDC’s guarantor subsidiaries to the extent of the value of the collateral. The 7.0% senior note guarantee is unsecured and ranks equally in right of payment with all existing and future senior indebtedness of the guarantor subsidiaries but senior in right of payment to all existing and future subordinated indebtedness of FDC’s guarantor subsidiaries.

All of the above guarantees are full, unconditional, and joint and several and each of the Guarantors is 100% owned, directly or indirectly, by FDC. None of the other subsidiaries of FDC, either direct or indirect, guarantee the notes (Non-Guarantors). The Guarantors are subject to release under certain circumstances as described below.

The credit agreement governing the guarantees of the senior secured revolving credit facility and senior secured term loan facility provide for a Guarantor to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including under the following circumstances:


•	the Guarantor ceases to be a “restricted subsidiary” for purpose of the agreement because FDC no longer directly or indirectly owns 50% of the equity or, if a corporation, stock having voting power to elect a majority of the board of directors of the Guarantor; or


•	the Guarantor is designated as an “unrestricted subsidiary” for purposes of the agreement covenants; or


•	the Guarantor is no longer wholly owned by FDC subject to the value of all Guarantors released under this provision does not exceed (x) 10% of FDC’s Covenant EBITDA plus (y) the amount of investments permitted under the agreement in respect of non-guarantors.

The indentures governing all of the other guarantees described above provide for a Guarantor to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including upon the earliest to occur of:


•	the sale, exchange or transfer of the subsidiary’s capital stock or all or substantially all of its assets;


•	designation of the Guarantor as an “unrestricted subsidiary” for purposes of the indenture covenants;


•	release or discharge of the Guarantor’s guarantee of certain other indebtedness; or


•	legal defeasance or covenant defeasance of the indenture obligations when provision has been made for them to be fully satisfied.

The following tables present the results of operations, financial position, and cash flows of FDC (FDC Parent Company), the Guarantor subsidiaries, the Non-Guarantor subsidiaries and consolidation adjustments for the years ended December 31, 2016, 2015, and 2014 and as of December 31, 2016 and 2015 to arrive at the information for FDC on a consolidated basis.



	Year ended December 31, 2016
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
Revenues:
Transaction and processing service fees	$	—		$	3,924		$	2,979		$	(303	)	$	6,600
Product sales and other	—			835			555			(151		)	1,239
Total revenues (excluding reimbursable items)	—			4,759			3,534			(454		)	7,839
Reimbursable debit network fees, postage, and other	—			2,527			1,218			—			3,745
Total revenues	—			7,286			4,752			(454		)	11,584
Expenses:
Cost of services (exclusive of items shown below)	—			1,597			1,447			(189		)	2,855
Cost of products sold	—			315			182			(160		)	337
Selling, general, and administrative	318			1,077			745			(105		)	2,035
Depreciation and amortization	5			571			373			—			949
Other operating expenses	7			41			13			—			61
Total expenses (excluding reimbursable items)	330			3,601			2,760			(454		)	6,237
Reimbursable debit network fees, postage, and other	—			2,527			1,218			—			3,745
Total expenses	330			6,128			3,978			(454		)	9,982
Operating (loss) profit	(330		)	1,158			774			—			1,602
Interest expense, net	(1,044		)	(18		)	(6		)	—			(1,068		)
Loss on debt extinguishment	(70		)	—			—			—			(70		)
Interest income (expense) from intercompany notes	234			(219		)	(15		)	—			—
Equity earnings from consolidated subsidiaries	997			369			—			(1,366		)	—
Other income (expense)	(1		)	(1		)	19			—			17
(Loss) income before income taxes and equity earnings in affiliates	(214		)	1,289			772			(1,366		)	481
Income tax (benefit) expense	(635		)	490			226			—			81
Equity earnings in affiliates	(1		)	231			30			—			260
Net (loss) income	420			1,030			576			(1,366		)	660
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			64			176			240
Net (loss) income attributable to First Data Corporation	$	420		$	1,030		$	512		$	(1,542	)	$	420
Comprehensive (loss) income	$	313		$	1,055		$	384		$	(1,204	)	$	548
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			59			176			235
Comprehensive (loss) income attributable to First Data Corporation	$	313		$	1,055		$	325		$	(1,380	)	$	313



	Year ended December 31, 2015
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
Revenues:
Transaction and processing service fees	$	—		$	3,906		$	2,999		$	(308	)	$	6,597
Product sales and other	—			741			503			(77		)	1,167
Total revenues (excluding reimbursable items)	—			4,647			3,502			(385		)	7,764
Reimbursable debit network fees, postage, and other	—			2,521			1,166			—			3,687
Total revenues	—			7,168			4,668			(385		)	11,451
Expenses:
Cost of services (exclusive of items shown below)	—			1,576			1,473			(178		)	2,871
Cost of products sold	—			260			173			(77		)	356
Selling, general, and administrative	476			1,143			803			(130		)	2,292
Depreciation and amortization	12			620			390			—			1,022
Other operating expenses	8			24			21			—			53
Total expenses (excluding reimbursable items)	496			3,623			2,860			(385		)	6,594
Reimbursable debit network fees, postage, and other	—			2,521			1,166			—			3,687
Total expenses	496			6,144			4,026			(385		)	10,281
Operating (loss) profit	(496		)	1,024			642			—			1,170
Interest expense, net	(1,527		)	(10		)	—			—			(1,537		)
Loss on debt extinguishment	(1,068		)	—			—			—			(1,068		)
Interest income (expense) from intercompany notes	288			(289		)	1			—			—
Equity earnings from consolidated subsidiaries	810			304			—			(1,114		)	—
Other income (expense)	55			3			(29		)	—			29
(Loss) income before income taxes and equity earnings in affiliates	(1,938		)	1,032			614			(1,114		)	(1,406		)
Income tax (benefit) expense	(457		)	422			136			—			101
Equity earnings in affiliates	—			213			26			—			239
Net (loss) income	(1,481		)	823			504			(1,114		)	(1,268		)
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			66			147			213
Net (loss) income attributable to First Data Corporation	$	(1,481	)	$	823		$	438		$	(1,261	)	$	(1,481	)
Comprehensive (loss) income	$	(1,771	)	$	760		$	158		$	(715	)	$	(1,568	)
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			56			147			203
Comprehensive (loss) income attributable to First Data Corporation	$	(1,771	)	$	760		$	102		$	(862	)	$	(1,771	)



	Year ended December 31, 2014
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
Revenues:
Transaction and processing service fees	$	—		$	3,712		$	3,056		$	(258	)	$	6,510
Product sales and other	—			625			473			(60		)	1,038
Total revenues (excluding reimbursable items)	—			4,337			3,529			(318		)	7,548
Reimbursable debit network fees, postage, and other	—			2,510			1,094			—			3,604
Total revenues	—			6,847			4,623			(318		)	11,152
Expenses:
Cost of services (exclusive of items shown below)	—			1,403			1,523			(258		)	2,668
Cost of products sold	—			223			167			(60		)	330
Selling, general, and administrative	131			1,125			787			—			2,043
Depreciation and amortization	10			607			439			—			1,056
Other operating expenses	10			3			—			—			13
Total expenses (excluding reimbursable items)	151			3,361			2,916			(318		)	6,110
Reimbursable debit network fees, postage, and other	—			2,510			1,094			—			3,604
Total expenses	151			5,871			4,010			(318		)	9,714
Operating (loss) profit	(151		)	976			613			—			1,438
Interest expense, net	(1,724		)	(9		)	5			—			(1,728		)
Loss on debt extinguishment	(274		)	—			—			—			(274		)
Interest income (expense) from intercompany notes	316			(305		)	(11		)	—			—
Equity earnings from consolidated subsidiaries	833			294			—			(1,127		)	—
Other income (expense)	81			100			(20		)	—			161
(Loss) income before income taxes and equity earnings in affiliates	(919		)	1,056			587			(1,127		)	(403		)
Income tax (benefit) expense	(461		)	377			166			—			82
Equity earnings in affiliates	—			202			18			—			220
Net (loss) income	(458		)	881			439			(1,127		)	(265		)
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			66			127			193
Net (loss) income attributable to First Data Corporation	$	(458	)	$	881		$	373		$	(1,254	)	$	(458	)
Comprehensive (loss) income	$	(798	)	$	709		$	187		$	(714	)	$	(616	)
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest	—			—			55			127			182
Comprehensive (loss) income attributable to First Data Corporation	$	(798	)	$	709		$	132		$	(841	)	$	(798	)



	As of December 31, 2016
(in millions)	FDC Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidation Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	7	$	378	$	—		$	385
Accounts receivable, net of allowance for doubtful accounts	—		593		1,284		—			1,877
Settlement assets (a)	—		7,457		7,338		—			14,795
Intercompany notes receivable	1		—		—		(1		)	—
Other current assets	109		147		104		—			360
Total current assets	110		8,204		9,104		(1		)	17,417
Property and equipment, net of accumulated depreciation	52		577		254		—			883
Goodwill	—		9,145		7,551		—			16,696
Customer relationships, net of accumulated amortization	—		1,026		713		—			1,739
Other intangibles, net of accumulated amortization	604		735		461		—			1,800
Investment in affiliates	6		860		122		—			988
Long-term intercompany receivables	3,866		12,001		2,822		(18,689		)	—
Long-term intercompany notes receivable	3,481		197		9		(3,687		)	—
Deferred tax assets	510		—		—		(510		)	—
Other long-term assets	212		302		298		(43		)	769
Investment in consolidated subsidiaries	26,286		5,981		—		(32,267		)	—
Total assets	$	35,127	$	39,028	$	21,334	$	(55,197	)	$	40,292
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	227	$	781	$	555	$	1		$	1,564
Short-term and current portion of long-term borrowings	—		110		249		(1		)	358
Settlement obligations (a)	—		7,457		7,338		—			14,795
Intercompany notes payable	—		—		1		(1		)	—
Total current liabilities	227		8,348		8,143		(1		)	16,717
Long-term borrowings	17,916		202		13		—			18,131
Deferred tax liabilities	—		817		102		(510		)	409
Long-term intercompany payables	15,097		2,769		823		(18,689		)	—
Long-term intercompany notes payable	206		3,481		—		(3,687		)	—
Other long-term liabilities	461		245		168		(43		)	831
Total liabilities	33,907		15,862		9,249		(22,930		)	36,088
Redeemable equity interest	—		—		73		(73		)	—
Redeemable noncontrolling interest	—		—		—		73			73
First Data Corporation stockholders' equity (deficit)	1,220		23,166		6,175		(29,341		)	1,220
Noncontrolling interests	—		—		94		2,817			2,911
Equity of consolidated alliance	—		—		5,743		(5,743		)	—
Total equity	1,220		23,166		12,012		(32,267		)	4,131
Total liabilities and equity	$	35,127	$	39,028	$	21,334	$	(55,197	)	$	40,292


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



	Year ended December 31, 2016
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	420		$	1,030		$	576		$	(1,366	)	$	660
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)	5			645			411			—			1,061
Charges (gains) related to other operating expenses and other income (expense)	8			42			(6		)	—			44
Loss on debt extinguishment	70			—			—			—			70
Stock-based compensation expense	263			—			—			—			263
Other non-cash and non-operating items, net	(961		)	(366		)	(4		)	1,366			35
(Decrease) increase in cash, excluding the effects of acquisitions and dispositions, resulting from changes in operating assets and liabilities	(583		)	432			129			—			(22		)
Net cash (used in) provided by operating activities	(778		)	1,783			1,106			—			2,111
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment	(2		)	(70		)	(160		)	—			(232		)
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs	—			(185		)	(60		)	—			(245		)
Acquisitions, net of cash acquired	(6		)	—			—			—			(6		)
Proceeds from dispositions	—			—			38			—			38
Proceeds from sale of property and equipment	38			—			—			—			38
Other investing activities, net	206			281			30			(497		)	20
Net cash provided by (used in) investing activities	236			26			(152		)	(497		)	(387		)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net	—			—			205			—			205
Proceeds from issuance of long-term debt	3,533			—			—			—			3,533
Payment of call premiums and debt issuance cost	(53		)	—			—			—			(53		)
Principal payments on long-term debt	(4,986		)	(80		)	(7		)	—			(5,073		)
Payment of taxes related to net settlement of equity awards	(61		)	—			—			—			(61		)
Proceeds from issuance of common stock	23			—			—			—			23
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest	—			—			(52		)	(264		)	(316		)
Distributions paid to equity holders	—			—			(541		)	541			—
Other financing activities, net	—			8			(220		)	220			8
Intercompany	1,981			(1,748		)	(233		)	—			—
Net cash provided by (used in) financing activities	437			(1,820		)	(848		)	497			(1,734		)
Effect of exchange rate changes on cash and cash equivalents	—			2			(36		)	—			(34		)
Change in cash and cash equivalents	(105		)	(9		)	70			—			(44		)
Cash and cash equivalents at beginning of period	105			16			308			—			429
Cash and cash equivalents at end of period	$	—		$	7		$	378		$	—		$	385



	Year ended December 31, 2015
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(1,481	)	$	823		$	504		$	(1,114	)	$	(1,268	)
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)	12			701			420			—			1,133
(Gains) charges related to other operating expenses and other income (expense)	(47		)	21			50			—			24
Loss on debt extinguishment	1,068			—			—			—			1,068
Stock-based compensation expense	329			—			—			—			329
Other non-cash and non-operating items, net	(746		)	(306		)	(14		)	1,114			48
(Decrease) increase in cash resulting from changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions	(1,044		)	431			74			—			(539		)
Net cash (used in) provided by operating activities	(1,909		)	1,670			1,034			—			795
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment	(9		)	(107		)	(166		)	—			(282		)
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs	—			(264		)	(56		)	—			(320		)
Acquisitions, net of cash acquired	(70		)	(19		)	—			—			(89		)
Proceeds from dispositions	—			4			—			—			4
Proceeds from sale of property and equipment	—			17			—			—			17
Other investing activities, net	134			254			—			(403		)	(15		)
Net cash provided by (used in) investing activities	55			(115		)	(222		)	(403		)	(685		)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net	(10		)	—			(21		)	—			(31		)
Proceeds from issuance of long-term debt	10,258			—			—			—			10,258
Payment of call premiums and debt issuance cost	(1,062		)	—			—			—			(1,062		)
Principal payments on long-term debt	(11,472		)	(87		)	(9		)	—			(11,568		)
Proceeds from issuance of common stock	2,718			—			—			—			2,718
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest	—			—			(69		)	(243		)	(312		)
Distributions paid to equity holders	—			—			(497		)	497			—
Capital transactions with former parent, net	(19		)	—			—			—			(19		)
Other financing activities, net	—			—			(149		)	149			—
Intercompany	1,546			(1,477		)	(69		)	—			—
Net cash provided by (used in) financing activities	1,959			(1,564		)	(814		)	403			(16		)
Effect of exchange rate changes on cash and cash equivalents	—			2			(25		)	—			(23		)
Change in cash and cash equivalents	105			(7		)	(27		)	—			71
Cash and cash equivalents at beginning of period	—			23			335			—			358
Cash and cash equivalents at end of period	$	105		$	16		$	308		$	—		$	429



	Year ended December 31, 2014
(in millions)	FDC Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation Adjustments			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(458	)	$	881		$	439		$	(1,127	)	$	(265	)
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			683			470			—			1,163
(Gains) charges related to other operating expenses and other income (expense)	(71		)	(97		)	20			—			(148		)
Loss on debt extinguishment	274			—			—			—			274
Stock-based compensation expense	51			—			—			—			51
Other non-cash and non-operating items, net	(751		)	(306		)	—			1,127			70
(Decrease) increase in cash resulting from changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions	(731		)	571			50			—			(110		)
Net cash (used in) provided by operating activities	(1,676		)	1,732			979			—			1,035
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment	(8		)	(124		)	(176		)	—			(308		)
Payments to secure customer service contracts, including outlays for conversion, and capitalized systems development costs	—			(183		)	(76		)	—			(259		)
Acquisitions, net of cash acquired	—			(31		)	—			—			(31		)
Proceeds from dispositions	—			270			—			—			270
Proceeds from sale of property and equipment	—			2			1			—			3
Other investing activities, net	75			232			(4		)	(307		)	(4		)
Net cash provided by (used in) investing activities	67			166			(255		)	(307		)	(329		)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net	10			—			2			—			12
Proceeds from issuance of long-term debt	1,830			—			—			—			1,830
Payment of call premiums and debt issuance cost	(355		)	—			—			—			(355		)
Principal payments on long-term debt	(3,673		)	(73		)	(5		)	—			(3,751		)
Distributions and dividends paid to noncontrolling interests and redeemable noncontrolling interest	—			—			(45		)	(221		)	(266		)
Distributions paid to equity holders	—			—			(453		)	453			—
Capital transactions with former parent, net	1,788			—			—			—			1,788
Other financing activities, net	—			—			(76		)	75			(1		)
Intercompany	1,973			(1,840		)	(133		)	—			—
Net cash provided by (used in) financing activities	1,573			(1,913		)	(710		)	307			(743		)
Effect of exchange rate changes on cash and cash equivalents	—			5			(35		)	—			(30		)
Change in cash and cash equivalents	(36		)	(10		)	(21		)	—			(67		)
Cash and cash equivalents at beginning of period	36			33			356			—			425
Cash and cash equivalents at end of period	$	—		$	23		$	335		$	—		$	358