FDC 2017 Annual Report

FI R S T D A T A C O R P O R A TI O N N O T E S T O T H E C O N S O LI D A T E D FI N A N CI A L S T A T E M E N T S ( C o nti n u e d) 1 0 0 T h e f oll o wi n g t a bl e s ets f ort h t h e c o m p o n e nts of t h e i nt a n gi bl e ass ets ass o ci at e d wit h t h e a c q uisiti o n as of t h e a c q uisiti o n d a t e: (i n milli o ns) A c q uisiti o n- D at e F ai r V al u e Us ef ul Lif e ( Ye a rs) A g e nt r el ati o ns hi ps $ 1 9 5 1 8 M er c h a nt r el ati o ns hi ps 2 1 6 1 0 S oft w ar e s yst e ms 2 7 5 Tr a d e n a m e 1 2 5 $ 4 5 0 I n c o n n e cti o n wit h t h e cl osi n g of t h e a c q uisiti o n, t h e C o m p a n y i n c urr e d $ 1 milli o n of tr a ns a cti o ns c osts, w hi c h h as b e e n i n cl u d e d as d e al a n d d e al i nt e gr ati o n c osts wit hi n " Ot h er o p er ati n g e x p e ns es " i n t h e c o ns oli d at e d st at e m e nt of o p er ati o ns f or t h e y e ar e n d e d D e c e m b er 3 1, 2 0 1 7. T h e r e v e n u e a n d e ar ni n gs of Bl u e P a y h a v e b e e n i n cl u d e d i n t h e C o m p a n y’s r es ults si n c e t h e a c q uisiti o n d at e a n d ar e n ot m at eri al t o t h e C o m p a n y’s c o ns oli d at e d fi n a n ci al r es ults. S u p pl e m e nt al pr o f or m a r es ults of o p er ati o ns of t h e c o m bi n e d e ntiti es h a v e n ot b e e n pr es e nt e d as t h e fi n a n ci al i m p a ct t o t h e C o m p a n y’s c o ns oli d at e d fi n a n ci al st at e m e nts w o ul d b e i m m at eri al. B alti cs Di v estit u r e O n S e pt e m b er 2 7, 2 0 1 7, t h e C o m p a n y di v est e d all of its b usi n ess es i n Lit h u a ni a, L at vi a a n d Est o ni a f or € 7 3 milli o n ( a p pr o xi m at e l y $ 8 5 milli o n), s u bj e ct t o cl osi n g a dj ust m e nts. T h e b usi n ess es w er e r e p ort e d wit hi n t h e G F S s e g m e nt. O nli n e B a n ki n g O n O ct o b er 2, 2 0 1 7, t h e C o m p a n y f or m e d a di git al b a n ki n g j oi nt v e nt ur e, n a m e d A pit ur e, w hi c h c o m bi n es F D C a n d Li v e O a k B a n cs h ar es, I n c. di git al b a n ki n g pl atf or ms, pr o d u cts, a n d s er vi c es, d eli v eri n g i n n o v ati v e t e c h n ol o g y s ol uti o ns t ail or e d f or fi n a n ci al i nstit uti o ns. T h e j oi nt v e nt ur e will b e a c c o u nt e d f or as a n e q uit y m et h o d i n v est m e nt, as A pit ur e is o w n e d a n d m a n a g e d e q u all y b et w e e n t h e C o m p a n y a n d Li v e O a k B a n cs h ar es, I n c. As a r es ult, t h e c o ntri b ut e d di git al b a n ki n g b usi n ess will n o l o n g er b e c o ns oli d at e d i nt o t h e C o m p a n y’s r es ults. D uri n g t h e t w el v e m o nt hs e n d e d D e c e m b er 3 1, 2 0 1 6, t h e C o m p a n y’s di git al b a n ki n g b usi n ess h a d r e v e n u e a n d o p er ati n g i n c o m e of $ 5 7 milli o n a n d $ 1 1 milli o n, r es p e cti v el y. Ass o ci at e d wit h t h e tr a ns a cti o n, t h e C o m p a n y r e c o g ni z e d a $ 1 8 milli o n g ai n o n t h e f or m ati o n of t h e j oi nt v e nt ur e, i n cl u d e d wit hi n " Ot h er i n c o m e " i n t h e c o ns oli d at e d st at e m e nt of o p er ati o ns. T h e g ai n r e c o g ni z e d r e pr es e nts t h e e x c ess i n v est m e nt v al u e o v er ass ets c o ntri b ut e d. 2 0 1 6 Dis p ositi o ns O n S e pt e m b er 3 0, 2 0 1 6, t h e C o m p a n y c o m pl et e d t h e s al e of its A ustr ali a n A T M b usi n ess, w hi c h w as r e p ort e d as p art of t h e C o m p a n y's Gl o b al B usi n ess S ol uti o ns s e g m e nt. Ass o ci at e d wit h t h e tr a ns a cti o n, t h e C o m p a n y r e c o g ni z e d a $ 3 4 milli o n l oss o n t h e s al e, i n cl u d e d wit hi n " Ot h er i n c o m e " i n t h e c o ns oli d at e d st at e m e nt of o p er ati o ns. T h e l oss is c o m pris e d of i n v est m e nts of $7 2 milli o n r e d u c e d b y c as h pr o c e e ds of $ 3 8 milli o n. T h e c as h pr o c e e ds ar e r efl e ct e d wit hi n " Pr o c e e ds fr o m dis p ositi o ns " wit hi n t h e c o ns oli d at e d st at e m e nt of c as h fl o ws. 2 0 1 5 A c q uisiti o ns O n J u n e 9, 2 0 1 5, t h e C o m p a n y a c q uir e d Tr a ns a cti o n Wir el ess, I n c. ( T WI) a pr o vi d er of di git al st or e d v al u e pr o d u cts t h at off ers gift c ar d pr o gr a ms, l o y alt y i n c e nti v es, a n d i nt e gr at e d m ar k eti n g s ol uti o ns f or r et ail ers, p art n ers, a n d c o ns u m ers. T h e p ur c h as e pri c e w as a p pr o xi m at el y $ 6 2 milli o n i n c as h. T h e a c q uisiti o n is r e p ort e d i n t h e C o m p a n y's N et w or k & S e c urit y S ol uti o ns s e g m e nt. I n a d diti o n t o T WI, t h e C o m p a n y als o c o m pl et e d a n a c q uisiti o n of a w e bst or e b uil d er as w ell as a n a c q uisiti o n of a w h ol es al e i n d e p e n d e nt s al es or g a ni z ati o n, b ot h of w hi c h ar e r e p ort e d i n t h e C o m p a n y's Gl o b al B usi n ess S ol uti o ns s e g m e nt. N ot e 1 3: D e ri v ati v e Fi n a n ci al I nst r u m e nts T h e C o m p a n y e nt ers i nt o t h e f oll o wi n g t y p es of d eri v ati v es: • Fl o ati n g t o fi x e d i nt er est r at e c oll ar c o ntr a cts: T h e C o m p a n y us es i nt er est r at e c oll ar c o ntr a cts t o miti g at e its e x p os ur e t o i nt er est r at e fl u ct u ati o ns o n i nt er est p a y m e nts r el at e d t o v ari a bl e r at e d e bt. N o p a y m e nts or r e c ei pts ar e e x c h a n g e d o n i nt er est