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 9 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 $ 2 9 6 1 8 M er c h a nt r el ati o ns hi ps 8 4 7 S oft w ar e s yst e ms 3 9 5 R esi d u al b u y o uts 2 3 4 Tr a d e n a m e 2 1 9 $ 4 6 3 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 $ 6 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 C ar d C o n n e ct 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. Bl u e P a y A c q uisiti o n O n D e c e m b er 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 Bl u e P a y H ol di n gs, I n c. ( Bl u e P a y) f or $ 7 5 9 milli o n i n c as h, n et of c as h a c q uir e d. Bl u e P a y is a pr o vi d er of t e c h n ol o g y- e n a bl e d p a y m e nt pr o c essi n g f or m er c h a nts i n t h e U. S. a n d C a n a d a 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 wit h a str o n g f o c us o n s oft w ar e- e n a bl e d p a y m e nts a n d c ar d- n ot- pr es e nt tr a ns a cti o ns. T h e tr a ns a cti o n is e x p e ct e d t o b e hi g hl y c o m pl e m e nt ar y t o t h e C o m p a n y's e arli er a c q uisiti o n of C ar d C o n n e ct a n d e n h a n c e t h e C o m p a n y's s uit e of 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 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 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. Bl u e P a y o p er ati o ns ar e r e p orte 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 $ 2 6 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 Bl u e P a y, 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 will b e 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 Bl u e P a y 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 $ 2 7 Pr o p ert y a n d e q ui p m e nt 3 I nt a n gi bl e ass ets 4 5 0 G o o d will 3 8 9 C urr e nt li a biliti es ( 2 5) D ef err e d t a x li a biliti es ( 8 5)