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| [March 11, 2010] |
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First Data Reports Fourth Quarter 2009 Revenue of $2.6 Billion Full-Year 2009 Revenue of $9.3 Billion
ATLANTA --(Business Wire)--
First Data Corp. (News - Alert) today reported its financial results for the fourth quarter and full year ended Dec. 31, 2009. Consolidated revenue for the quarter was up 12% to $2.6 billion. Consolidated revenue growth was primarily driven by the formation of the Bank of America Merchant Services alliance, which substantially extended First Data's leadership in merchant acquiring. Adjusted Revenue increased 1% for the quarter due mainly to growth in International Segment Revenue helped by a weaker U.S. dollar.
For the fourth quarter, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $530 million compared to $645 million for the fourth quarter of 2008. Several items unfavorably affected Adjusted EBITDA including; higher credit losses and warranty expense of $26 million, the timing of incentive compensation accruals which increased quarterly expenses by $29 million, a $9 million impact from lost business due to Washington Mutual's acquisition by J.P. Morgan Chase, and lower royalty revenues of $6 million. For the quarter, the net loss attributable to First Data was $369 million which includes after-tax interest expense of $281 million.
For the full year, consolidated revenue was up 6% to $9.3 billion. Full-year Adjusted Revenue declined 7%. Adjusted Revenue declined primarily due to lower revenue in the Retail and Alliance Services segment and the stronger U.S. dollar. For 2009, Adjusted EBITDA was $2.1 billion compared to $2.6 billion for 2008. Adjusted EBITDA was unfavorably impacted by the weaker economy, a stronger U.S. dollar and lower royalty revenues. The full-year net loss attributable to First Data was $1.1 billion, which includes after-tax interest expense of $1.1 billion.
"In 2009 First Data improved its solid competitive position in the U.S. and around the globe," said Michael Capellas, chairman and CEO. "We remain focused on leveraging our strengths in distribution and product innovation as we emerge from a challenging 2009 economic environment."
Segment Results
Retail and Alliance Services
Retail and Alliance Services reported Segment Revenue of $820 million, which was unchanged compared to the fourth quarter of 2008. Favorable drivers of Segment Revenue included strong transaction growth, the addition of 15 independent sales organizations, nine referral partners and one revenue share agreement. This growth was offset by a decline in average ticket sizes and continued economic weakness affecting consumer spending. Segment EBITDA was $298 million, compared to $366 million for the fourth quarter of 2008. Segment EBITDA declined due to changes in revenue mix, increased merchant credit losses, additional check warranty expense and an increase in product development expense. Margin was 36.4%.
Full-year Segment Revenue was $3.1 billion, down 7%. Favorable drivers of Segment Revenue included 5% merchant transaction growth and the significant expansion of merchant distribution channels through alliances, revenue share agreements and independent sales organizations. This growth was more than offset by declining average tickets, continued economic weakness affecting consumer spending and lower interest income on deposits. For 2009, Segment EBITDA was $1.2 billion, compared to $1.4 billion for 2008. Segment EBITDA declined mainly due to lower revenue. In addition Retail and Alliance Services experienced higher credit losses from merchant failures. Margin was 39.0%.
Financial Services
Financial Services reported Segment Revenue of $353 million for the fourth quarter, down 7%. Growth from new business was more than offset by the previously disclosed loss of Washington Mutual as well as price compression on certain renewals. Segment EBITDA was $148 million, compared to $196 million for the fourth quarter of 2008. Segment EBITDA declined due to lower revenue and an increase in technology costs partially related to compliance with new regulations. Margin was 41.9%.
Full-year Segment Revenue was $1.4 billion, down 5%. Growth from new business was more than offset by lost business, primarily the loss of Washington Mutual, and price compression on certain renewals. For 2009, Segment EBITDA was $645 million, compared to $753 million for 2008. Segment EBITDA declined due to lower revenue and an increase in technology costs. Margin was 44.7%.
International
International reported Segment Revenue of $452 million for the fourth quarter, up 12%. Segment Revenue on a constant currency basis was up 2%, due in part to increased license sales and revenue growth in the Asia Pacific region. Segment EBITDA was $122 million, compared to $109 million for the fourth quarter of 2008. Margin was 27.1%. On a constant currency basis, Segment EBITDA was $112 million, up 3% and margin was 27.2%. Constant currency Segment EBITDA grew primarily due to an increase in license sales and cost reduction initiatives.
Full-year International Segment Revenue was $1.6 billion, down 7%. Segment Revenue on a constant currency basis was up 1%. For 2009, Segment EBITDA was $399 million, compared to $433 million for 2008. Margin was 25.4%. Segment EBITDA was unfavorably impacted by the stronger U.S. dollar. On a constant currency basis, Segment EBITDA was $446 million, up 3% and margin was 26.0%. Constant currency Segment EBITDA increased primarily due to cost reduction initiatives.
Significant Events
Senior Management Changes
First Data today announced the appointment of board member Joe Forehand, as chairman and interim CEO effective March 31, 2010. Forehand succeeds Michael Capellas, who after serving three years with the company has accepted a new role as a senior advisor to Kohlberg Kravis Roberts & Co. focusing on technology.
Forehand has been a member of First Data's board of directors since September 2009. Mr. Forehand retired as chairman of the board of directors of Accenture (News - Alert) Ltd in 2006. In his more than 30 years with Accenture, Forehand served as the CEO from 1999-2004, prior to that, as chief executive of the Communications and High Technology Operating Group, and as chairman of the board of directors from 2001-2006. Since Sept. 2007, Forehand has been a member of the Portfolio Management Committee for Kohlberg Kravis Roberts & Co.
Sovereign Merchant Services Renewal
On Dec. 3, 2009, First Data announced that Sovereign Bank, a wholly owned subsidiary of Banco Santander, S.A., had agreed to extend their existing merchant services agreement. Sovereign and First Data began their cooperation to offer merchant services programs in 2001.
Globalization of First Data Business Lines
In order to increase operating efficiencies and accelerate product commercialization, the International business will now be aligned with the company's two global lines of business: Financial Services, and Retail and Alliance Services. The company does not currently intend to revise its segment reporting structure.
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 "Investor Relations" section of the company's Web site at www.firstdata.com.
Investor Conference Call
The company will host a conference call and webcast on Thursday, March 11, at 8 a.m. EST to review fourth quarter and full year 2009 financial results. Michael Capellas, chairman and CEO of First Data, will lead the call. Also participating will be Pat Shannon, chief financial officer, and Silvio Tavares, senior vice president, investor relations.
To listen to the call, dial 888-378-4350 (U.S.) or +1-719-457-2734 (outside the U.S.) 10 minutes prior to the start of the call. The call will also be webcast on the "Investor Relations" section of the First Data Web site, http://ir.firstdatacorp.com/events.cfm. 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 also will be available under the "Investor Relations" section of the Web site.
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 powers the global economy by making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of electronic payment. Whether the choice of payment is a gift card, a credit or debit card or a check, First Data securely processes the transaction and harnesses the power of the data to deliver intelligence and insight for millions of merchant locations and thousands of card issuers in 36 countries. For more information, visit www.firstdata.com.
FIRST DATA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in millions)
Three months ended December 31,
2009
2008
Change
Revenues:
Transaction and processing service fees (a):
Merchant related services
$
847.7
$
749.8
13
%
Check services
102.5
94.3
9
%
Card services
465.1
496.1
-6
%
Other services
155.5
159.8
-3
%
Investment income, net
8.1
9.8
-17
%
Product sales and other
219.7
206.6
6
%
Reimbursable debit network fees, postage and other
787.2
600.1
31
%
2,585.8
2,316.5
12
%
Expenses:
Cost of services (exclusive of items shown below)
800.6
717.7
12
%
Cost of products sold
80.9
85.4
-5
%
Selling, general and administrative
403.0
334.5
20
%
Reimbursable debit network fees, postage and other
787.2
600.1
31
%
Depreciation and amortization
382.4
372.9
3
%
Other operating expenses:
Restructuring, net
48.4
(3.9
)
NM
Impairments
177.4
3,214.0
NM
Litigation and regulatory settlements
14.5
-
NM
2,694.4
5,320.7
-49
%
Operating loss
(108.6
)
(3,004.2
)
-96
%
Interest income
2.1
4.5
-53
%
Interest expense
(451.1
)
(498.4
)
-9
%
Other income (expense) (b)
3.5
(48.1
)
NM
(445.5
)
(542.0
)
-18
%
Loss before income taxes and equity earnings in affiliates
(554.1
)
(3,546.2
)
-84
%
Income tax benefit
(188.7
)
(353.8
)
-47
%
Equity earnings in affiliates (a)
27.0
14.3
89
%
Net loss
(338.4
)
(3,178.1
)
-89
%
Less: Net income attributable to noncontrolling interests
30.2
39.5
-24
%
Net loss attributable to First Data Corporation
$
(368.6
)
$
(3,217.6
)
-89
%
(See accompanying notes)
FIRST DATA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in millions)
Twelve months ended December 31,
2009
2008
Change
Revenues:
Transaction and processing service fees (a):
Merchant related services
$
3,047.0
$
2,786.9
9
%
Check services
364.1
386.4
-6
%
Card services
1,841.6
2,035.7
-10
%
Other services
536.2
576.3
-7
%
Investment income, net
8.4
77.1
-89
%
Product sales and other
788.3
848.2
-7
%
Reimbursable debit network fees, postage and other
2,728.2
2,100.7
30
%
9,313.8
8,811.3
6
%
Expenses:
Cost of services (exclusive of items shown below)
2,945.1
2,870.6
3
%
Cost of products sold
305.5
316.8
-4
%
Selling, general and administrative
1,438.2
1,374.8
5
%
Reimbursable debit network fees, postage and other
2,728.2
2,100.7
30
%
Depreciation and amortization
1,452.3
1,369.7
6
%
Other operating expenses:
Restructuring, net
92.8
12.0
NM
Impairments
185.1
3,243.6
NM
Litigation and regulatory settlements
11.8
-
NM
9,159.0
11,288.2
-19
%
Operating profit (loss)
154.8
(2,476.9
)
-106
%
Interest income
11.7
26.0
-55
%
Interest expense
(1,796.4
)
(1,964.9
)
-9
%
Other income (expense) (b)
(61.3
)
(14.4
)
NM
(1,846.0
)
(1,953.3
)
-5
%
Loss before income taxes and equity earnings in affiliates
(1,691.2
)
(4,430.2
)
-62
%
Income tax benefit
(578.8
)
(699.2
)
-17
%
Equity earnings in affiliates (a)
97.8
123.0
-20
%
Net loss
(1,014.6
)
(3,608.0
)
-72
%
Less: Net income attributable to noncontrolling interests
71.8
156.3
-54
%
Net loss attributable to First Data Corporation
$
(1,086.4
)
$
(3,764.3
)
-71
%
(See accompanying notes)
FIRST DATA CORPORATION
SUMMARY SEGMENT DATA
(Unaudited)
(in millions)
Three months ended December 31,
2009
2008
Change
Revenues: (c)
Retail and Alliance Services
$
819.5
$
819.8
0
%
Financial Services (d)
352.9
379.2
-7
%
International (d)
451.8
403.2
12
%
Integrated Payment Systems
5.6
4.3
30
%
Subtotal segment revenues
1,629.8
1,606.5
1
%
All Other and Corporate
63.0
69.5
-9
%
Adjustments to reconcile to Adjusted revenue:
Official check and money order revenues (e)
(5.6
)
(4.3
)
30
%
Eliminations of intersegment revenues
(15.7
)
(15.4
)
2
%
Adjusted revenue
1,671.5
1,656.3
1
%
Adjustments to reconcile to Consolidated revenues: (f)
Divested businesses (d)
6.8
37.0
NM
Adjustments for non-wholly owned entities (g)
45.0
(21.2
)
NM
Official check and money order revenues (e)
5.6
4.3
30
%
ISO commission expense (h)
69.7
40.0
NM
Reimbursable debit network fees, postage and other
787.2
600.1
31
%
Consolidated revenues
$
2,585.8
$
2,316.5
12
%
Segment EBITDA: (i)
Retail and Alliance Services
$
298.3
$
366.3
-19
%
Financial Services (d)
148.0
196.0
-24
%
International (d)
122.4
109.0
12
%
Integrated Payment Systems
-
-
NM
Subtotal segment EBITDA
568.7
671.3
-15
%
All Other and Corporate
(38.6
)
(25.9
)
49
%
Adjusted EBITDA
530.1
645.4
-18
%
Adjustments to reconcile to Loss before income taxes and equity earnings in affiliates: (f)
Divested businesses (d)
4.9
22.2
NM
Adjustments for non-wholly owned entities (g)
10.3
(5.2
)
NM
Depreciation and amortization
(382.4
)
(372.9
)
3
%
Interest expense
(451.1
)
(498.4
)
-9
%
Interest income
2.1
4.5
-53
%
Other items
(236.8
)
(3,258.2
)
NM
Stock based compensation
(5.4
)
2.9
NM
Official check and money order EBITDA (e)
1.2
(2.5
)
NM
Cost of data center, technology and savings initiatives (j)
(20.4
)
(66.9
)
NM
KKR merger related items (k)
(6.6
)
(17.1
)
NM
Loss before income taxes and equity earnings in affiliates
$
(554.1
)
$
(3,546.2
)
-84
%
Segment depreciation and amortization: (a)
Retail and Alliance Services
$
186.7
$
224.0
-17
%
Financial Services (d)
83.9
82.7
1
%
International (d)
84.7
65.2
30
%
Integrated Payment Systems
1.6
-
100
%
Subtotal segment depreciation and amortization
356.9
371.9
-4
%
All Other and Corporate
18.2
25.6
-29
%
375.1
397.5
-6
%
Adjustments to reconcile to consolidated depreciation and amortization:
Divested businesses (d)
0.2
3.2
NM
Adjustments for non-wholly owned entities (g)
26.7
(2.7
)
NM
Amortization of initial payments for new contracts
9.6
4.0
140
%
Total consolidated depreciation and amortization
$
411.6
$
402.0
2
%
(See accompanying notes)
FIRST DATA CORPORATION
SUMMARY SEGMENT DATA
(Unaudited)
(in millions)
Twelve months ended December 31,
2009
2008
Change
Revenues: (c)
Retail and Alliance Services
$
3,062.8
$
3,277.2
-7
%
Financial Services (d)
1,442.8
1,517.5
-5
%
International (d)
1,572.1
1,696.0
-7
%
Integrated Payment Systems
0.8
43.1
-98
%
Subtotal segment revenues
6,078.5
6,533.8
-7
%
All Other and Corporate
249.6
336.3
-26
%
Adjustments to reconcile to Adjusted revenue:
Official check and money order revenues (e)
(0.8
)
(43.1
)
-98
%
Eliminations of intersegment revenues
(58.1
)
(62.6
)
NM
Adjusted revenue
6,269.2
6,764.4
-7
%
Adjustments to reconcile to Consolidated revenues: (f)
Divested businesses (d)
75.2
178.0
NM
Adjustments for non-wholly owned entities (g)
(12.3
)
(375.8
)
NM
Official check and money order revenues (e)
0.8
43.1
-98
%
ISO commission expense (h)
252.7
100.9
NM
Reimbursable debit network fees, postage and other
2,728.2
2,100.7
30
%
Consolidated revenues
$
9,313.8
$
8,811.3
6
%
Segment EBITDA: (i)
Retail and Alliance Services
$
1,193.5
$
1,407.8
-15
%
Financial Services (d)
645.3
753.1
-14
%
International (d)
398.7
433.3
-8
%
Integrated Payment Systems
-
-
NM
Subtotal segment EBITDA
2,237.5
2,594.2
-14
%
All Other and Corporate
(122.7
)
(39.2
)
213
%
Adjusted EBITDA
2,114.8
2,555.0
-17
%
Adjustments to reconcile to Loss before income taxes and equity earnings in affiliates: (f)
Divested businesses (d)
43.7
88.3
NM
Adjustments for non-wholly owned entities (g)
(47.3
)
(204.5
)
NM
Depreciation and amortization
(1,452.3
)
(1,369.7
)
6
%
Interest expense
(1,796.4
)
(1,964.9
)
-9
%
Interest income
11.7
26.0
-55
%
Other items
(351.0
)
(3,270.0
)
NM
Stock based compensation
(19.2
)
(16.6
)
16
%
Official check and money order EBITDA (e)
(19.9
)
5.7
NM
Cost of data center, technology and savings initiatives (j)
(147.9
)
(229.2
)
NM
KKR merger related items (k)
(27.2
)
(50.3
)
NM
Eliminations
(0.2
)
-
NM
Loss before income taxes and equity earnings in affiliates
$
(1,691.2
)
$
(4,430.2
)
-62
%
Segment depreciation and amortization: (a)
Retail and Alliance Services
$
752.2
$
901.9
-17
%
Financial Services (d)
353.3
321.5
10
%
International (d)
285.6
254.6
12
%
Integrated Payment Systems
2.0
0.2
NM
Subtotal segment depreciation and amortization
1,393.1
1,478.2
-6
%
All Other and Corporate
71.7
81.4
-12
%
1,464.8
1,559.6
-6
%
Adjustments to reconcile to consolidated depreciation and amortization:
Divested businesses (d)
8.9
15.8
NM
Adjustments for non-wholly owned entities (g)
52.4
(26.7
)
NM
Amortization of initial payments for new contracts
27.7
10.9
154
%
Total consolidated depreciation and amortization
$
1,553.8
$
1,559.6
0
%
(See accompanying notes)
FIRST DATA CORPORATION
NOTES TO FINANCIAL SCHEDULES
(Unaudited)
Effective January 1, 2009, the Company re-aligned the business and began making strategic and operating decisions with regards to assessing performance and allocating resources based on a new segment structure. Results for 2008 have been adjusted to reflect the new structure. Other amounts in 2008 have been adjusted to conform to current year presentation, the largest of which was the reclassification of certain expenses from "Cost of services" to "Selling, general and administrative".
The Company adopted new accounting guidance effective January 1, 2009 which requires that earnings attributed to noncontrolling interests be reported as part of consolidated earnings and not as a separate component of income or expense. The Company's Consolidated Statement of Operations for 2008 has been revised to conform to the presentation requirements of the new accounting guidance.
Beginning in the third quarter of 2009 the Company changed the financial reports provided to its Chief Executive Officer to assess the performance of the Company's business segments. The segments have not changed but the presentation of the results has changed. Refer to the Company's Form 8-K filed on November 10, 2009 for a description of how the presentation of segment results has changed and for a schedule of prior period segment results adjusted to conform to the new presentation.
(a)
Includes amortization of initial payments for new contracts which is recorded as a contra-revenue within "Transaction and processing service fees" (presented on "Summary Segment Data") and amortization related to equity method investments which is netted within the "Equity earnings in affiliates" line of $19.6 million and $73.8 million for the three and twelve months ended December 31, 2009, respectively, and $25.1 million and $179.0 million for the three and twelve months ended December 31, 2008, respectively.
(b)
Other income (expense) includes investment gains and (losses), derivative financial instruments gains and (losses), divestitures, net, non-operating foreign currency gains and (losses) and other.
(c)
Segment revenue is adjusted to exclude reimbursable debit network fees, postage and other. Revenue from divested businesses are excluded from segment revenue as if these businesses had been divested for all periods presented. Retail and Alliance Services segment revenue is further adjusted to present results on a proportionate consolidation basis and to reflect the Independent Sales Organization commissions classified as expense on a contra-revenue basis.
(d)
The Company sold a merchant acquiring business in Canada as well as a debit and credit card issuing and acquiring processing business in Austria and Active Business Services, Ltd, all reported within the International segment, in November 2009, August 2009 and July 2008, respectively, and Peace Software, reported within the Financial Services segment, in October 2008. The results of divested businesses are excluded from segment results. The International and Financial Services performance measures have been adjusted for 2009 and 2008 to exclude the results of divested businesses. Retail and Alliance Services segment performance measures have been adjusted for 2008 to reflect the sale of 12.5% of the Company's ownership interest in the Wells Fargo Merchant Services alliance that occurred on December 31, 2008.
(e)
Represents an adjustment to exclude the official check and money order businesses from revenue and EBITDA due to the Company's wind-down of these businesses.
(f)
Reconciles Adjusted revenue to consolidated revenue or Adjusted EBITDA to Loss before income taxes and equity earnings in affiliates as reported on the Consolidated Statements of Operations.
(g)
Net adjustment to reflect First Data's proportionate share of alliance revenue and EBITDA within the Retail and Alliance services segment and equity earnings included in the International segment and All Other and Corporate revenue or segment EBITDA. Also includes the add back of net income attributable to noncontrolling interests excluded from International segment EBITDA.
(h)
Independent Sales Organization commissions are presented as contra-revenue for Retail and Alliance Services segment revenue reporting purposes while such commissions are reflected as expense in the Consolidated Statements of Operations.
(i)
Segment EBITDA represents earnings before net interest expense, income taxes, depreciation and amortization. Retail and Alliance Services segment EBITDA is presented on a proportionate consolidation basis. Segment EBITDA excludes the adjustments to reconcile to "Loss before income taxes and equity earnings in affiliates."
(j)
Cost of data center, technology and savings initiatives represents implementation costs associated with initiatives to reduce operating expenses including items such as platform and data center consolidation initiatives in the International segment, expense related to the reorganization of global application development resources, expense associated with domestic data center consolidation initiatives and planned workforce reduction expenses, as well as certain platform development and other costs directly associated with the termination of the Chase Paymentech alliance, all of which are considered one-time projects (excludes costs accrued in purchase accounting).
(k)
Represents the exclusion of third party expenses including legal, accounting and other advisory fees incurred in connection with the merger of the Company with an affiliate of KKR and the debt issued thereunder, KKR annual sponsor fees for management, consulting, financial and other advisory services and the effect of purchase accounting associated with the merger on EBITDA, which is primarily the result of revenue recognition adjustments.
FIRST DATA CORPORATION
SUMMARY SEGMENT DATA - ADJUSTED FOR DIVESTED BUSINESS
(Unaudited)
(in millions)
In November 2009, the Company sold a merchant acquiring business in Canada. The International segment's results for prior periods have been adjusted to exclude the divested business.
Three Months ended
March 31, 2008
Three Months ended
June 30, 2008
Three Months ended
September 30, 2008
Three Months ended
December 31, 2008
Previously
reported
International
segment
Divested
business
Adjusted
International
segment
Previously
reported
International
segment
Divested
business
Adjusted
International
segment
Previously
reported
International
segment
Divested
business
Adjusted
International
segment
Previously
reported
International
segment
Divested
business
Adjusted
International
segment
Segment revenue
$
412.4
$
7.2
$
405.2
$
441.8
$
8.0
$
433.8
$
462.3
$
8.5
$
453.8
$
409.6
$
6.4
$
403.2
Segment EBITDA
$
89.4
$
4.1
$
85.3
$
109.2
$
5.3
$
103.9
$
140.9
$
5.8
$
135.1
$
113.0
$
4.0
$
109.0
Three Months ended
March 31, 2009
Three Months ended
June 30, 2009
Three Months ended
September 30, 2009
Three Months ended
December 31, 2009
Previously
reported
International
segment
Divested
business
Adjusted
International
segment
Previously
reported
International
segment
Divested
business
Adjusted
International
segment
Previously
reported
International
segment
Divested
business
Adjusted
International
segment
Divested
business
International
segment
Segment revenue
$
346.6
$
6.4
$
340.2
$
384.4
$
8.4
$
376.0
$
414.6
$
10.5
$
404.1
$
6.8
$
451.8
Segment EBITDA
$
76.1
$
3.8
$
72.3
$
110.4
$
5.5
$
104.9
$
106.5
$
7.4
$
99.1
$
4.9
$
122.4
FIRST DATA CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
($ in millions)
Management believes the following non-GAAP measures provide meaningful supplemental information to assist investors in understanding our financial results and to better analyze trends in our underlying business. These non-GAAP financial measures should not be considered in isolation or as a substitute for the most comparable GAAP financial measures. The non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliation to the corresponding GAAP financial measures, provide a more complete understanding of our business. Investors are strongly encouraged to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. A reconciliation of the non-GAAP measures to the most directly comparable GAAP financial measures is included below.
Management believes that these non-GAAP measures provide insight into the company's core performance.
Three Months Ended December 31,
Twelve Months Ended December 31,
International
2009
2008
Change
2009
2008
Change
Segment Revenue
$
451.8
$
403.2
12
%
$
1,572.1
$
1,696.0
-7
%
Foreign exchange impact (1)
(40.4
)
-
145.8
-
Segment Revenue on a constant currency basis
$
411.4
$
403.2
2
%
$
1,717.9
$
1,696.0
1
%
Segment EBITDA
$
122.4
$
109.0
12
%
$
398.7
$
433.3
-8
%
Foreign exchange impact (1)
(10.6
)
-
47.6
-
Segment EBITDA on a constant currency basis
$
111.8
$
109.0
3
%
$
446.3
$
433.3
3
%
Margin
27.1
%
27.0
%
25.4
%
25.5
%
Margin on a constant currency basis
27.2
%
27.0
%
26.0
%
25.5
%
(1) Foreign exchange impact represents the difference between actual 2009 and 2009 calculated using 2008 exchange rates.
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