DENVER, Apr 19, 2007 (BUSINESS WIRE) -- First Data Corp. (NYSE: FDC) today reported its financial results for the first quarter of 2007. Consolidated revenues were up 12% to $1.8 billion. Free cash flow was $232 million and operating cash flow from continuing operations was $440 million. Earnings per share was $0.24 excluding items or $0.23 from continuing operations. The items were primarily related to a non cash impairment charge from the wind-down of the Official Check and Money Order business.

First quarter 2007 earnings per share of $0.24 excluding items represents strong growth of 20% over first quarter 2006 earnings per share of $0.20 excluding items. First quarter 2006 earnings per share from continuing operations of $0.28 (reflective of the Western Union spin-off) includes a favorable $0.08 of items, primarily due to a SFAS 133 derivative accounting restatement.

"We have enjoyed an excellent quarter and a great start to the year. Underlying these results were strong individual performances from each of our three main business segments," said Ric Duques, chairman and chief executive officer. "I'm proud to report that our 29,000 employees around the world delivered another quarter of results that met or exceeded our expectations."

Revenues for Commercial Services and Financial Institution Services each grew 9% and First Data International grew revenues 39%. Results reflected continued progress in executing our four key strategies: 1) Growing the core business; 2) Expanding product offerings; 3) Improving the overall cost structure, and; 4) Expanding the business globally.

Segment Results

Commercial Services

For the quarter, Commercial Services generated revenue of $1.0 billion, a growth rate of 9% or 5% excluding reimbursable debit network fees. Operating profit was $225 million, up 5%. As anticipated, the first quarter was impacted by the buyout of a revenue sharing agreement with Discover Financial Services. Excluding the Discover buyout, operating profit growth was 9%. Margin improved to 29.6% excluding reimbursable debit network fees and the Discover buyout. Reported margin for the quarter was 22.1%.

Financial Institution Services

For the quarter, Financial Institution Services generated revenue of $485 million, up 9% or 7% excluding reimbursables. Operating profit was $97 million, up 15%. Operating profit improved due to continued progress in cost-cutting initiatives. Margin for the quarter improved to 19.9% from 18.9%, or to 31.0% from 28.8% excluding reimbursables.

First Data International

For the quarter, First Data International generated revenue of $367 million, up 39%. Revenue growth on a constant currency basis, excluding acquisitions and divestitures, was 9%. Operating profit was $35 million, up 20% and margin was 9.5%, which included $7 million of incremental investments in data center consolidation, platform initiatives and strategic business development. These incremental investments negatively impacted margin by approximately two percentage points during the quarter.

Outlook

On April 1, 2007, First Data entered into an agreement to be acquired by an affiliate of Kohlberg Kravis Roberts & Co. in a transaction with a total value of approximately $29 billion or $34 per share in cash. For the full year 2007, First Data affirmed its earnings per share guidance from continuing operations in the range of $1.20-$1.26. This guidance excludes costs related to the aforementioned proposed transaction as well as costs related to the wind-down of the Official Check and Money Order business, which the company is not able to accurately estimate at this time.

Non-GAAP Measures

In certain circumstances, results have been presented that are non-GAAP measures and should be viewed in addition to, and not in lieu of, the company's reported results. Reconciliations to comparable GAAP (generally accepted accounting principles) measures are available in the accompanying schedules and in the "Invest" section of the company's web site at www.firstdata.com.

Investor and Analyst Conference Call

First Data will hold an investor and analyst conference call and webcast tomorrow, Friday, April 20, at 8:00 a.m. EDT to review first quarter 2007 results. Ric Duques, chairman and CEO of First Data, will lead the call. Also participating will be Kim Patmore, chief financial officer, and Silvio Tavares, senior vice president.

To listen to the call, dial 888-831-9087 (U.S. only) or +1-773-799-3935 (outside the U.S.) ten minutes prior to the start of the call. The passcode is "FDC". The call will also be webcast on the First Data website, www.firstdata.com. Please click on the webcast link at least 15 minutes prior to the call. A slide presentation to accompany the call will be included in the webcast and will be made available under the Invest section of firstdata.com (http://ir.firstdatacorp.com/events.cfm).

The company noted that due to the current "go-shop" period related to the aforementioned proposed transaction, there will be no live question and answer session on the call.

A replay of the call will be available one hour after the call ends through April 27 at 5:00 p.m. EDT at 800-239-4561 (U.S.) or +1-402-220-9697 (outside the U.S.) and via webcast on www.firstdata.com. No passcode is required.

Please note: All statements made by First Data officers on this call are the property of First Data and subject to copyright protection. Other than the replay, First Data has not authorized, and disclaims responsibility for any recording, replay or distribution of any transcription of this call.

About First Data

First Data Corp. (NYSE: FDC) is a leading provider of electronic commerce and payment solutions for businesses worldwide. Serving over 5 million merchant locations, 1,900 card issuers and their customers, First Data powers the global economy by making it easy, fast and secure for people and businesses around the world to buy goods and services using virtually any form of payment. The company's portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions. The company's STAR Network offers PIN-secured debit acceptance at 2 million ATM and retail locations. For more information, visit www.firstdata.com.

Additional Information About the Merger and Where to Find It

In connection with the proposed transaction announced on April 2, 2007 with New Omaha Holdings L.P., an affiliate of Kohlberg, Kravis Roberts and Co. (the "Merger" and the agreement for such transaction the "Merger Agreement"), First Data Corporation (the "Company") will file a proxy statement with the Securities and Exchange Commission ("SEC"). STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT FILED WITH THE SEC CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final proxy statement will be mailed to the Company's stockholders. In addition, stockholders will be able to obtain the proxy statement and all other relevant documents filed by the Company with the SEC free of charge at the SEC's Web site www.sec.gov or from First Data Corporation, Investor Relations Department at 6200 S. Quebec Street, Suite 340, Greenwood Village, Colorado 80111, 303-967-6756.

Participants in the Solicitation

First Data Corporation and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the proposed transaction. Information about the Company and its directors and executive officers, and their ownership of the Company's securities, is set forth in the proxy statement for the 2007 Annual Meeting of Stockholders of the Company, which was filed with the SEC on April 17, 2007. Additional information regarding the interests of those persons may be obtained by reading the proxy statement when it becomes available.

Notice to Investors, Prospective Investors and the Investment Community; Cautionary Information Regarding Forward-Looking Statements

Statements in this press release regarding First Data Corporation's business which are not historical facts, including the earnings estimates, are "forward-looking statements." All forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected. Important factors upon which the Company's forward-looking statements are premised include: (a) continued growth at rates approximating recent levels for card-based payment transactions and other product markets; (b) successful conversions under service contracts with major clients; © renewal of material contracts in the Company's business units consistent with past experience; (d) timely, successful and cost-effective implementation of processing systems to provide new products, improved functionality and increased efficiencies; (e) successful and timely integration of significant businesses and technologies acquired by the Company and realization of anticipated synergies; (f) continuing development and maintenance of appropriate business continuity plans for the Company's processing systems based on the needs and risks relative to each such system; (g) absence of further consolidation among client financial institutions or other client groups which has a significant impact on FDC client relationships and no material loss of business from significant customers of the Company; (h) achieving planned revenue growth throughout the Company, including in the merchant alliance program which involves several joint ventures not under the sole control of the Company and each of which acts independently of the others, and successful management of pricing pressures through cost efficiencies and other cost-management initiatives; (i) successfully managing the credit and fraud risks in the Company's business units and the merchant alliances, particularly in the context of the developing e-commerce markets; (j) anticipation of and response to technological changes, particularly with respect to e-commerce; (k) attracting and retaining qualified key employees; (l) no unanticipated changes in laws, regulations, credit card association rules or other industry standards affecting FDC's businesses which require significant product redevelopment efforts, reduce the market for or value of its products or render products obsolete; (m) continuation of the existing interest rate environment so as to avoid increases in agent fees related to IPS' products and increases in interest on the Company's borrowings; (n) no unanticipated developments relating to previously disclosed lawsuits, investigations or similar matters; (o) no catastrophic events that could impact the Company's or its major customer's operating facilities, communication systems and technology or that has a material negative impact on current economic conditions or levels of consumer spending; (p) no material breach of security of any of our systems; (q) successfully managing the potential both for patent protection and patent liability in the context of rapidly developing legal framework for expansive software patent protection; © the occurrence of any effect, event, development or change that could give rise to the termination of the Merger Agreement; (s) the outcome of any legal proceedings that may be instituted against the Company and others following announcement of entering into the Merger Agreement; (t) the inability to complete the Merger due to the failure to obtain shareholder approval or the failure to satisfy other conditions to completion of the Merger, including the receipt of certain foreign and domestic regulatory approvals; (u) the failure to obtain the necessary financing arrangements set forth in commitment letters received in connection with the proposed transactions; (v) risks that the proposed transactions disrupt current plans and operations and the potential difficulties in employee retention; (w) risks that the proposed transactions cause the Company's alliance partners, customers or service providers to terminate or reduce their relationship with the Company; (x) the amount of the costs, fees, expenses and charges related to the Merger and the actual terms of certain financings that will need to be obtained for the Merger; and (y) the impact of the substantial indebtedness that will need to be incurred to finance the consummation of the Merger; and other risks that are set forth in the "Risk Factors," "Legal Proceedings" and "Management Discussion and Analysis of Results of Operations and Financial Condition" sections of the Company's filings with the Securities and Exchange Commission ("SEC").

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SOURCE: First Data Corp.

First Data Corp. Investor Relations: Silvio Tavares, 303-967-8276 silvio.tavares@firstdata.com or Media Relations: Colin Wheeler, 303-967-6553 colin.wheeler@firstdata.com



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