First Data Reports 16% Revenue Growth in 1Q08

Loss from continuing operations was $222 million, but included $303 million of incremental interest expense, net of tax, and $118 million of incremental depreciation and amortization, net of tax, compared to the first quarter of 2007. Both the incremental interest expense and depreciation and amortization are primarily attributable to the transaction with affiliates of Kohlberg Kravis Roberts & Co. (the “Transaction.”). A table describing adjusted EBITDA and reconciling income (loss) from continuing operations to adjusted EBITDA is included in the accompanying schedules.

“Our solid performance in a difficult market reflects our laser focus on execution,” said Michael Capellas, Chairman and Chief Executive Officer of First Data. “Going forward you will see us continue to invest actively in new product development and technology innovation.”

Effective January 1, 2008, First Data adopted a revised segment reporting structure. The company’s segments include Merchant Services, Financial Services, International, Prepaid Services and Integrated Payment Systems. For prior year periods, the company has made available financials realigned to these segments. The business activities of each of these new segments are described in our Quarterly Report on Form 10-Q which was filed today with the Securities and Exchange Commission (SEC).

Segment Results

Merchant Services

For the quarter, Merchant Services generated revenues of $926 million, a growth rate of 10% or 3% excluding reimbursable debit network fees. Revenue growth was primarily driven by continued strong transaction growth. Operating profit was $73 million, down 63% or up 8% to $211 million excluding purchase accounting adjustments comprised principally of increased amortization expense related to the Transaction. Operating profit margin improved to 33.2% excluding reimbursable debit network fees and purchase accounting adjustments, compared to 31.7% in the first quarter of 2007. Reported operating profit margin for the quarter was 7.9%.

Financial Services

For the quarter, Financial Services generated revenue of $706 million, up 1% or flat excluding reimbursables and purchase accounting adjustments. Operating profit was $103 million, down 29% or down 4% to $139 million excluding purchase accounting adjustments comprised principally of increased amortization expense related to the Transaction. The decrease in operating profit was primarily the result of anticipated price compression related to contract renewals and lost business in 2007. Operating profit margin for the quarter was 27% excluding reimbursables and purchase accounting adjustments, compared to 28% in the first quarter of 2007. Reported operating margin was 14.5% for the quarter.

International

For the quarter, International generated revenue of $445 million, up 23%. Revenue growth on a constant currency basis, excluding acquisitions and divestitures, was 5%. This 5% growth was negatively impacted by price compression and lost contracts primarily in our Western European and Asia Pacific businesses. Operating profit was $21 million, down 38% or down 32% to $23 million excluding purchase accounting adjustments related to the Transaction. Operating margin was 5.2% excluding purchase accounting adjustments related to the Transaction compared to 9.5% in the first quarter of 2007. Operating profit included a loss reserve of approximately $6 million for a failed airline in one of International’s merchant acquiring alliances and approximately $5 million in incremental investments in data center consolidation, platform initiatives and other expenses related to cost reduction initiatives, which negatively impacted the 5.2% operating margin by 2.4 percentage points during the quarter. Reported operating margin was 4.8%.