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) 9 8 T h e pri n ci p al c o m p o n e nts of t h e C o m p a n y’s s ettl e m e nt ass ets a n d o bli g ati o ns w er e as f oll o ws: As of D e c e m b e r 3 1, (i n milli o ns) 2 0 1 7 2 0 1 6 S ettl e m e nt ass ets: C as h a n d c as h e q ui v al e nts $ 1, 7 3 8 $ 1, 6 2 0 D u e fr o m c ar d ass o ci ati o ns, b a n k p art n ers, a n d m er c h a nts 1 8, 6 2 5 1 3, 1 7 5 T ot al s ettl e m e nt ass ets $ 2 0, 3 6 3 $ 1 4, 7 9 5 S ettl e m e nt o bli g ati o ns: P a y m e nt i nstr u m e nts o utst a n di n g $ 1 1 $ 1 2 C ar d s ettl e m e nts d u e t o m er c h a nts 2 0, 3 5 2 1 4, 7 8 3 T ot al s ettl e m e nt o bli g ati o ns $ 2 0, 3 6 3 $ 1 4, 7 9 5 T h e c h a n g es i n s ettl e m e nt ass ets a n d o bli g ati o ns ar e pr es e nt e d o n a n et b asis wit hi n o p er ati n g a cti viti es i n t h e c o ns oli d at e d s t at e m e nts of c as h fl o ws. H o w e v er, b e c a us e t h e c h a n g es i n t h e s ettl e m e nt ass ets b al a n c e e x a ctl y offs et c h a n g es i n s ettl e m e nt o bli g ati o ns, t h e a cti vit y n ets t o z er o. N ot e 1 2: A c q uisiti o ns a n d Dis p ositi o ns A c c ul y n k A c q uisiti o n O n M a y 1, 2 0 1 7, t h e C o m p a n y a c q uir e d 1 0 0 % of A c c ulli n k I n c. ( A c c ul y n k), a l e a di n g t e c h n ol o g y c o m p a n y t h at d eli v ers e C o m m er c e s ol uti o ns f or d e bit c ar d a c c e pt a n c e. T h e a c q uisiti o n i n cl u d e d A c c ul y n k's P a y S e c ur e d e bit r o uti n g t e c h n ol o g y a n d its r a n g e of ot h er s er vi c es. T h e p ur c h as e pri c e w as a p pr o xi m at el y $ 8 5 milli o n a n d A c c ul y n k is 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. C a r d C o n n e ct A c q uisiti o n O n J ul y 6, 2 0 1 7, t h e C o m p a n y a c q uir e d 1 0 0 % of C ar d C o n n e ct C or p. ( C ar d C o n n e ct) f or $ 7 6 3 milli o n i n c as h, n et of c as h a c q uir e d. C ar d C o n n e ct is a n i n n o v ati v e pr o vi d er of p a y m e nt pr o c essi n g a n d t e c h n ol o g y s ol uti o ns a n d w as o n e of t h e C o m p a n y's l ar g est distri b uti o n p art n ers. T h e tr a ns a cti o n is e x p e ct e d t o e n a bl e t h e C o m p a n y t o bri n g i n n o v ati v e p art n er m a n a g e m e nt t o ols t o i m pr o v e m er c h a nt r et e nti o n, a c c el er at e t h e C o m p a n y's fir m- wi d e i n d e p e n d e nt s oft w ar e v e n d or (I S V) i niti ati v e a n d bri n g i m m e di at e c a p a biliti es i n e nt er pris e r es o ur c e pl a n ni n g ( E R P) i nt e gr at e d p a y m e nt s ol uti o ns t o its c ust o m ers. C ar d C o n n e ct o p er ati o ns ar e 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. T h e a c q uisiti o n w as a c c o u nt e d f or as b usi n ess c o m bi n ati o n a n d t his a c c o u nti n g is s u bst a nti all y c o m pl et e. I n a d diti o n t o t h e p ur c h as e pri c e, t h e C o m p a n y iss u e d $ 4 4 milli o n i n t h e f or m of st o c k b as e d c o m p e ns ati o n t o c ert ai n k e y e m pl o y e es of C ar d C o n n e ct, w hi c h is s u bj e ct t o s er vi c e v esti n g c o n diti o ns i n cl u di n g c o nti n u e d e m pl o y m e nt wit h t h e C o m p a n y. T h e v al u e assi g n e d t o t h e c o m m o n st o c k is b ei n g r e c or d e d as p ost- a c q uisiti o n c o m p e ns ati o n e x p e ns e a n d h as b e e n e x cl u d e d fr o m t h e t ot al p ur c h as e pri c e. T h e f oll o wi n g t a bl e s u m m ari z es t h e f air v al u es of t h e ass ets a c q uir e d a n d li a biliti es ass u m e d o n t h e a c q uisiti o n d at e. T h e e x c e ss of t h e p ur c h as e pri c e o v er t h e n et t a n gi bl e a n d i d e ntifi a bl e i nt a n gi bl e ass ets' f air v al u e w as r e c or d e d as g o o d will wit hi 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. T h e g o o d will r e c o g ni z e d w as attri b ut a bl e t o i n cr e as e d s y n er gi es t h at ar e e x p e ct e d t o b e a c hi e v e d fr o m t h e i nt e gr ati o n of C ar d C o n n e ct as w ell as p ot e nti al r e v e n u e e n h a n c e m e nts t o t h e C o m p a n y. T h e C o m p a n y a c c o u nt e d f or t h e b usi n ess c o m bi n ati o n as f oll o ws: (i n milli o ns) Ot h er c urr e nt ass ets $ 5 8 Pr o p ert y a n d e q ui p m e nt 7 I nt a n gi bl e ass ets 4 6 3 G o o d will 4 3 2 C urr e nt li a biliti es ( 5 8) D ef err e d t a x li a biliti es ( 1 3 9)