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First Data moves back into the black

11 February 2015  |  1630 views  |  0 Source: First Data

First Data Corporation today reported financial results for the fourth quarter ended December 31, 2014. Consolidated revenue for the fourth quarter was $2.9 billion, the highest since First Data's privatization in 2007 and up 3% versus the prior year period.

Adjusted revenue, modified for items such as the exclusion of pass-through debit network fees and postage, was up 4% versus the prior year period to $1.8 billion or 6% excluding currency impacts.

“Our historic fourth quarter, and the year as a whole, demonstrated the continued transformation of First Data,” said Chairman and CEO Frank Bisignano. “This past year saw the launch of numerous new products, the development of strategic partnerships, and a significantly strengthened capital position. We look to 2015 and beyond with great anticipation as we leverage our assets, relationships, and innovative solutions to help drive the future of commerce.”

For the fourth quarter, the net income attributable to First Data was $12 million, compared to a loss of $123 million in the prior year period. Driving the increase was a material improvement in operating profit, up 17% versus the prior year period, and a reduction in interest expense. Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $712 million, up 6% versus the prior year period or 8% excluding currency impacts, driven by growth in revenue and positive operating leverage. EBITDA margin for the quarter was 39%, up 1 percentage point versus the prior year period. EBITDA and EBITDA margin also constituted record highs since First Data's privatization.

For the fourth quarter, the company generated $436 million in cash flow from operations after $220 million in cash interest payments. The company finished the quarter with $1.1 billion in unrestricted liquidity.

Segment Results

Merchant Solutions segment revenue for the fourth quarter was $947 million, up 1% versus the prior year period. Merchant acquiring revenue increased 3% versus the prior year period. Product revenue declined 1% versus the prior year period, adversely impacted by the sale of Electronic Funds Source, LLC, (EFS) as well as the continued decline in check processing, offset by growth in equipment revenue. Segment EBITDA was $426 million, down 2% versus the prior year period. EBITDA margin for the fourth quarter was 45%, down 2 percentage points versus the prior year period. EFS contributed $12 million in revenue and $7 million of EBITDA in the fourth quarter of 2013.

Financial Services segment revenue for the fourth quarter was $383 million, up 8% versus the prior year period, a record quarterly growth rate since First Data’s privatization. Growth was driven by the continued benefit from new business wins and growth in existing portfolios and network revenue. Segment EBITDA was $201 million, up 17% versus the prior year period. EBITDA margin for the fourth quarter was 52%, up 4 percentage points versus the prior year period, reflecting positive revenue growth while holding expenses flat.

International segment revenue for the fourth quarter was $473 million, up 4% versus the prior year period. On a constant currency basis, revenue was up 13% versus the prior year period, with merchant acquiring revenue up 14% on volume growth and a portfolio sale in EMEA. Issuing revenue was up 12% on growth in volume and cards on file. Segment EBITDA was $154 million, up 15% versus the prior year period and up 23% on a constant currency basis. EBITDA margin for the fourth quarter was 33%, up 4 percentage points versus the prior year period.

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.

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