ATLANTA – Processing giant First Data Corp. on Wednesday reported favorable interest rate swaps helped it trim huge losses related to its 2007 buyout by Kohlberg Kravis Roberts to $54 million for the third quarter, down from a $431 million third quarter loss a year ago.
Revenues continued to expand, aided by growth in debit fees, to $2.7 billion for the third quarter, up 4%.
First Data, taken private by KKR in a $27 billion takeover, said the lower losses were mostly created by a $111 million pretax increase in mark-to-market gains related to changes in the fair value of interest rate swaps, and a charge in the prior year of $178 million associated with changes in U.S. tax legislation.
For the third quarter First Data, which owns the STAR ATM and debit network, said active card accounts on file were up 3% compared to the prior year. Debit issuer transactions were up 12% excluding the impact of the loss of Washington Mutual. During the quarter, the company’s financial services division renewed more than 300 contracts with financial institutions.
For the first three quarters of the year First Data reported a 5% increase in revenues to $8 billion. But costs related to the huge 2007 buyout continue to create big losses: $446 million loss for the first nine months of 2011, compared to an $843 million loss for the same period last year.
