Filed by First Data Corporation
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-6
of the Securities Exchange Act of 1934
Commission File No: 001-31527
Subject Company: Concord EFS, Inc.
This communication is not a solicitation of a proxy from any security holder of Concord EFS, Inc. First Data Corporation has filed a proxy statement/prospectus with the Securities and Exchange Commission (SEC) concerning the planned merger of Concord EFS, Inc. with a subsidiary of First Data Corporation. WE URGE INVESTORS TO READ THE DEFINITIVE VERSION OF THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov. In addition, documents filed with the SEC by First Data Corporation will be available free of charge from First Data Investor Relations, 6200 S. Quebec St., Suite 340, Greenwood Village, CO, 80111. Documents filed with the SEC by Concord EFS, Inc. will be available free of charge from Concord Investor Relations, 2525 Horizon Lake Drive, Suite 120, Memphis, TN, 38133.
First Data, its directors and executive officers and other members of its management and employees, may be deemed to be participants in the solicitation of proxies in connection with the planned merger. Information about the directors and executive officers of First Data and their ownership of First Data stock is set forth in the proxy statement for First Data’s 2003 annual meeting of stockholders. Investors may obtain additional information regarding the interests of the participants by reading the proxy statement/prospectus.
FIRST DATA CORPORATION USED THE FOLLOWING PRESENTATION AS PART OF A WEBCAST INVESTOR AND ANALYST MEETING HELD ON FEBRUARY 3, 2004:
February 3, 2004
Safe Harbor
Statements in this presentation regarding First Data Corporation’s business which are not historical facts 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. Please refer to the company’s meaningful cautionary statements contained in the appendix of this presentation and the company’s most recent earnings release for a more detailed list of risks and uncertainties.
David Banks,SVP
Investor Relations
Welcome & Opening Comments
Charlie Fote
Chairman and CEO
Key Takeaways
• Flawless execution
• Strength of enterprise
• Recurring revenue
• Long-term growth
• Right people
Ultimate Focus on Shareholder Return
Agenda
• Introductions
• 2003 Financial Review
• 2004 Strategy & Outlook
• Enterprise Payments
• Western Union
• Card Issuing, Emerging Payments, International
• Questions & Answers
Senior Management Team
Scott Betts
President
Enterprise Payments
Pam Patsley
President
First Data International
Jim Schoedinger
President
Card Issuing Services
Senior Management Team
Christina Gold
President Western Union
Bill Thomas
President of Americas Western Union
Mike Yerington
President,
Global Business Development Western Union
Senior Management Team
Kim Patmore
Chief Financial Officer
Mike Whealy
Chief Administrative Officer
Senior Management Team
Guy Battista
Chief Information Officer
Mike D’Ambrose
Human Resources
2003
Financial Review
Strong, Consistent Record of Growth
Revenue
12% CAGR $8.4 $5.9
2000 2003
Highly Visible, Recurring Revenue Streams
Strong, Consistent Record of Growth
Operating Cash Flow
18% CAGR
$2.0 $1.2
2000 2003
Outstanding Cash Generation with Smart Allocation
Strong, Consistent Record of Growth
Earnings Per Share
15% CAGR
Note: Adjusted for SFAS 142 $1.88 $1.24
2000 2003
Double-Digit Earnings Growth
Resulting in Outstanding Returns
December 31, 1992—2003
378%
217%
155%
196%
Shareholder Value Remains High Priority
Ended the Year with a Strong Quarter
Q4 Financial Highlights
Up 11% Revenue $2.2B Up 20% EPS $0.55 25% Margin
2003
Financial Review
Kim Patmore,
Chief Financial Officer
Strong Cash Flow Generation
Operating Cash Flow $2B
• Investments in the business
• Acquisitions
• Capital structure
Disciplined, Smart Cash Allocation
Strong Cash Flow Generation
In Millions 2003 2002 Change
Net Income $ 1,409 $ 1,238 14%
D&A 569 523 9%
Capex 395 418 (6%)
Dividends 60 45 33%
Other Financial Measures
2003 Results
$395M CAPEX
36.8M shares Stock repurchases
$3.6B Debt balance
A1, A+ Credit ratings
Disciplined Cash Management
Payment Services
2003 Results
Up 15% Revenue $3.7B
Up 18% Profit $1.2B
34% Margin
Payment Services
2003 Key Metrics
Up 21% Agent locations
182,000
Up 19% Consumer-to-consumer transfers
81M
Up 12% Consumer-to-business transfers
134M
Up 32% Prepaid transactions
885M
1 Billion+ Transactions
Merchant Services
2003 Results
Up 14% Revenue $3.0B Up 13% Profit $807M
27% Margin
Merchant Services
2003 Key Metrics
Merchant locations
3.1M
Up 23% Merchant transactions
12.6B
Up 21% Merchant dollar volume
$683B
Card Issuing Services
2003 Results
Up 6% Revenue $2.0B Down 18% Profit $306M
15% Margin
Up 7% Card accounts on file 348M
Charlie Fote
2004 Strategy & Outlook
Three Pillars of Success
Unity of Purpose Dedication to Performance Scope of Enterprise Capabilities
Three Pillars of Success
We are, and will be, wherever transactions occur – next door or around the world
We promote choice, voice and innovation
Unity of Purpose
Global Footprint
Employees representing 70+ nationalities,speaking 75 languages
Western Union Agent Footprint
• Continually building super agent relationships for international growth
• We are the super agent in U.S.
Source: Celent Communications, 2002
Positioned in High-Growth Markets
175 Million Immigrants Worldwide
25M
41M
6M
31M
20M
16M
30M
6M
Source: United Nations, October 2002
Payments
Market Value Chain
Touch Points in Payments Marketplace
Merchant POS presence
Card issuing
Network
Acquiring & processing
Single Source Provider of End-to-End Payment Solutions
Choice, Voice and Innovation
• Address unique client needs
• Scope & expertise
• Innovations
– Loyalty cards
– Gift cards –Electronic checkacceptance –Internet checkacceptance
Three Pillars of Success
Dedication to Performance
History of generating efficiencies – benefiting consumers, merchants and banks alike
Handling tens of billions of transactions—one transaction at a time
Historical Set Up of Efficiencies
Execution
• 6:30 a.m. Daily Call
– Customer issues
– Volume reports
• Six Sigma
•$ 1M spend requires executive committee approval
• Quarterly deep reviews of Balance Sheet
• Constant review of open position report
Broadest Product Offering
Merchant Card Money Check Acquiring Processing Transfer Guarantee
Enterprise-wide solutions
Three Pillars of Success
Scope of Enterprise Capabilities
Handling trillions of dollars per year,via 25 billion transactions, executed one at a time Aligning products, services and expertise with highest growth opportunities
Enterprise Scope
• Handled 25 billion transactions during 2003
• Western Union—14% worldwide volume*
• We moved from point A to point B $683 billion on behalf of our merchants
*Source: Celent Communications, 2002
Size in this Business is Good
Global Footprint
First Data Revenue
1%
72%
7%
1%
11%
5%
2%
1%
Note: Western Union revenue attributed to inbound country
Partner Strategy
• Bank alliances
• Western Union agents
• Card issuers
Aligned with Growth Focused Partners
High-Growth Opportunities
Positioned in High-Growth Markets
Credit Cards
(Billions of US Transactions)
Up 1.2X
24.9
21.0
Source: The Nilson Report, November 2003
2002
2007
Positioned in High-Growth Markets
Stored Value & Debit Cards
(Billions of US Transactions)
Up 2.4X
36.6
15.3
2002
Source: The Nilson Report, November 2003
2007
A Clear Growth Strategy
First Data Long-Term Growth
NEW PRODUCTS / TECHNOLOGIES
LEVERAGE ENTERPRISE-WIDE
CAPABILITY
EXTEND GLOBAL
REACH
Rev. Growth w/o Acquisitions
Double Digit Revenue Growth
Our International Revenue Goal in 2007
28% 33% International International
2003 2007
New Structure—Vision
First Data Market Position
• Extreme focus on scale businesses that fit into our core
• Aligning products, services and expertise to meet marketplace demands
Aligned to Meet Marketplace Demands
2004 Outlook
First Data 2004 Outlook
• Understanding 2003 EPS
• 2004 outlook
• Long-term growth objectives
Understanding 2003 EPS $1.88 2003 EPS, including $0.03 of charges (0.02) Less NYCE as discontinued operations
$1.86 2003 continuing operations EPS
2004 Guidance
EPS Range Continuing Operations
$2.00 $2.10 $2.18
Up to $0.10 Concord Restructuring and Dilution Integration Charges
Revenue > 20%
First Data 2004 Outlook
Key Metrics
210k-220k Western Union locations Mid-teens Merchant transaction growth 360M± Card accounts on file $400-$500M Capital expenditures $2.2B-$2.3B Operating cash flow
Closer to 27% than 25% Tax rate $1.146B Stock buyback authorization
Earnings Expansion
Revenue EPS
($ B) 15%
12%
CAGR $8.4 CAGR $1.88 $5.9 $1.24
2000 2003 2000 2003
Adjusted for SFAS 142
A Record of Flawless Execution
Long-Term Growth Objectives
• Revenue – double-digit Growth
• EPS 14%-17% growth
[GRAPHIC]
Scott Betts
Enterprise Payments
Winning in the Marketplace
• Creating “Enterprise Payments”
• Realizing strategic and economic benefits of Concord
• Leveraging the core merchant business
Ultimate Focus on Shareholder Return
Benefits of
Enterprise Payments
• Drive efficiencies by aggregating common operations
• Greater customer focus
• Provide broadest offerings through single source
• Align Enterprise sales teams with our largest clients
• Focus on high-growth opportunities
The New Enterprise Payments Organization
Debit/ Enterprise Future Merchant DDA Concord Sales Opportunities
Transaction Processing Operations / Back Office Customer Support / Marketing Shared Services
Structure Provides Flexibility
Drive Efficiencies
• Leverage scale to provide best in class services
• End-to-end solution provider
• Integrated product sets for merchants of all sizes
• Create “plug and play” capability for acquisition/new business
Best in Class
Leverage Enterprise Sales
• Focus on value-based enterprise solutions
• More integrated offerings
• Collaborate with clients to drive payment system innovation
• Expand cross-selling
• Greater expertise of our customers business needs and strategies
Addressing Industry Trends
• Margin, profitability and pricing pressures
• Consolidation and emergence of new clients
• Conflicts between players in the payment system
• Market segmentation
Strategic & Economic Benefits of Concord Merger
• Strategic alignment in new market segments and verticals
– Petroleum – Debit
– STAR (PPS, Network, ATM driving)
• Economic benefits
– Leverage new sales force with our large referral relationships
– Immediate product solutions to be leveraged
Strategic & Economic Benefits of Concord Merger (con’t.)
• Economic benefits (con’t)
– Maximize TeleCheck through PPS expanded view of DDA information lowering warranty expenses
– Debit solutions
– Terminal deployment
– Web-based payments
Branding New Opportunities When Appropriate
Concord Integration
• Synergy plans defined, resourced and ready to execute
– Over 100 individual project teams
– On track to deliver $205M
• Organization design completed at business unit level
• Consolidate platforms and data centers
Ready to Hit The Ground Running!
Acquisition Strategy Going Forward
• Continue to look for opportunities within core competencies
• Enhance speed and ease of integration
– Expertise developed on Concord project
– Enterprise Payments utilities
Core Merchant Business
• Accelerate sales engine
– Right products into right footprint
– Investment in sales force
• Tailored to channel
• Performance measures that reflect market changes
• Raise the talent bar
– Lower attrition
Focus on Sales Productivity
Core Merchant Business
• Focus on high growth business
• Some growth through acquisitions
– 2003 handcuffs are off
• Maximizing POS cross-sell opportunities
– Concord = new products + new merchants
• Grow with growth-oriented partners
TeleCheck
• Initiatives
– Sales force reorganization and expansion
– System enhancements
– Combined product offerings
• Opportunities
– Concord sales force selling TeleCheck
– Untapped verification market
– Demand for single source solutions
– Cross-sell and leverage Concord products
Why We Win
• Scale
• Breadth of product offerings
• Execution
Ultimate Focus on Shareholder Return
Hong Kong
New York
Uganda
Frankfurt
Christina Gold
Western Union
Unmatched Size
$3.7B Revenue $1.2B Profit 34% Margin 215M Money transfers 885M Prepaid transactions 182,000+ Agent locations
Consistent Track Record of Performance
Winning in the Marketplace
• Well-positioned in a huge market
• Expand and diversify distribution
• Build the brand and enhance the consumer experience
• Leverage channels and diversify product offerings
Ultimate Focus on Shareholder Return
Well-Positioned in a Huge Market
• Estimated Remittance Market = $151B
• Face value of international transactions up 21%
Year over year
Source: Celent Communications, 2002
Huge Market Opportunity
Well-Positioned in a Huge Market
Europe
Asia Pacific Middle East
Africa
Americas
182,000 Locations Across the Globe
Well-Positioned in a Huge Market
North America Agent Locations International Agent Locations
Supermarkets/ Convenience Stores
Check Cashers
15%
Banks
40%
Post Offices
45%
35%
40%
Other
25%
Other
Diverse Distribution
Well-Positioned in a Huge Market
Hungarian Post Hungary
France
Europe
Turkey
Poland
India
United States
Argentina
Africa
Names Customers Know & Trust
Consumer-to-Consumer Strategy
• C2C growth strategy is clear
– Aggressively expand and diversify distribution
– Develop corridors and build brand awareness
– Drive agent productivity and market strength
Simple Strategy—Dynamic Results
Aggressively Expand Distribution
182
210—220
International North America
55
1998
2003
LOCATIONS (000’s)
2004
More Than 127,000 Locations Added in the Last 5 Years
Age of Locations
40%
44%
59%
16%
26%
15%
International North America
0—2 Years 3—5 Years > 5 Years
International Network Still Young and Developing
Develop Corridors and Build Brand Awareness
International / Ethnic Locations in the U.S. / Canada
15%
60%
Locations Transactions
Ethnic Agents Positively Impacting International Growth
Develop Corridors and Build Brand Awareness
Ethnic Agents Accelerate Corridor Growth
Develop Corridors and Build Brand Awareness
Transactions
232% CAGR
2000 2001 2002 2003
China Strategy On Track
• Revenue nearly triples
• Building corridors
– 15,000 locations in U.S. sending to China
• Marketing campaigns in place
• Raising brand awareness
Corridor Development Drives Transactions
Agent Productivity and Market Strength
• Solid performance continues
• C2C growth trends in high teens
• International business strong
• Increased productivity from send agents added in 2003
Increased Productivity in New Send Agents
Agent Productivity and Market Strength
Direct to Bank Account
Direct Connect
ATM
Home Delivery
Agent Locations
Loyalty Programs
Western Union.com
Telephone Money Transfer
Single Source Provider of End-to-End Payment Solutions
Building a Global Brand
• Significant investment
• Brand awareness > > > drives transactions
– Media (TV, radio, print)
– Local marketing events
– Loyalty programs
– Signage
[GRAPHIC]
Loyalty Card Programs
• Build relationships
• Improve retention and frequency
• Enhance compliance
• Drive revenue
Customer Loyalty Improves Profitability
Leverage & Diversify Product Offerings
Consumer Money Transfer
Bill Payments
Prepaid Services
Many More Services To Meet Customer Needs
Consumer to Business
Billions of Electronic Bill Payments
(US Transactions)
7.1B
3.8B
2002
Source: TowerGroup
Western Union: Choice and Convenience
• Quick Collect
• E Commerce
• Paymap
2008
Well Positioned For Significant Market Opportunity
Prepaid Services
$125B Prepaid wireless market
$42B U.S. gift card sales market
$17B In gift card sales during the 2003
holiday season
Source: Baskerville Strategic Research, Bain & Co., National Retail Federation
Fast Growing—Big Market Opportunity
Why
Western Union Wins
• Huge global growth opportunities
• Unmatched distribution network
• Strong brand
• Diverse product offerings
Ultimate Focus on Shareholder Return
Charlie Fote
Card Issuing / eONE / International Discussion
Card Issuing Services Update
• New leadership
• 70 million account pipeline
• Contract update
Emerging Payments Update
• B2B
• Government Contracts
• Encorus
First Data International
Around the World Update
First Data International: Key Initiatives
• Innovate new products & enter new geographies
• Grow existing customers through superior service
• Leverage existing platforms and capabilities
• Expand VisionPLUS® solutions and merchant services opportunities
Europe
Building on Existing Leadership Position
• Won new card issuing relationships
• Extended existing card issuing relationships
• Launched new products
Europe
Building on Existing Leadership Position
• Led EMV smart card migration
• Integrated TeleCash and Active
• Growth in merchant business
• Converted Deutsche Postbank alliance
Latin America & Canada
Enabling Commerce Through Complete Offerings
• Strong transaction growth
• Launched ScotiaPOS merchant services alliance in Mexico
• Formed PROCESA processing company in Panama
• Expanded client relationships
Australia, New Zealand & South Asia
Significant, Diverse Market Opportunity
• Announced Cashcard Australia acquisition
• Converted Westpac to VisionPLUS
• Implemented DCC product at Commonwealth Bank
• Executing market entry strategy in S. Asia
China & North Asia
Investment for the Long Term
• China Everbright Bank running on Shanghai data center
• Expanding VisionPLUS opportunities
– Processing pipeline
– Additional software sales
– Ongoing professional services
Japan
Building Relationships for the Long Term
• Restructured ongoing partnership
– Nihon Card Processing Co., Ltd. (NICAP)
• Responding to interest on merchant capability
Why First Data Wins
• Participating in the high-growth payment market
• Successfully identifying & integrating acquisitions
• Finding creative entry points into new markets
• Leveraging First Data’s strengths
• Strong cash flow
Ultimate Focus on Shareholder Return
Leveraging First Data’s Strengths
• Reputation
• Management expertise
• Superior product offerings
• Distribution channels
• Strong Balance sheet
Ultimate Focus on Shareholder Return
Why First Data is a Good Investment
• #1 in the markets we serve
• Leveraging infrastructure
• Leveraging distribution
• Record of flawless execution
• Leading edge products
• Highly predictable recurring revenue
Ultimate Focus on Shareholder Return
Questions & Answers
Appendix
Cautionary Information Regarding Forward-Looking Statements
Statements in this press release regarding First Data Corporation’s business which are not historical facts, including the revenue and earnings projections, 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) no unanticipated developments that delay or negatively impact the integration of Concord EFS, Inc. according to the Company’s integration plans, including its plans to integrate IT systems, eliminate duplicative overhead and costs, and retain customers and critical employees; (b) receipt of Concord shareholder approval without any unexpected delay and no material deterioration in Concord’s business prior to closing; (c) the divestiture of NYCE Corporation within the time period allowed in the Company’s agreement with the Department of Justice on terms reasonable to the Company; (d) continued growth at rates approximating recent levels for card-based payment transactions, consumer money transfer transactions and other product markets; (e) successful conversions under service contracts with major clients; (f) renewal of material contracts in the Company’s business units consistent with past experience; (g) timely, successful and cost-effective implementation of processing systems to provide new products, improved functionality and increased efficiencies; (h) successful and timely integration of significant businesses and technologies acquired by the Company and realization of anticipated synergies; (i) 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; (j) absence of 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; (k) 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; (l) 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; (m) anticipation of and response to technological changes, particularly with respect to e-commerce; (n) attracting and retaining qualified key employees; (o) 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; (p) continuation of the existing interest rate environment so as to avoid increases in agent fees related to Payment Services’ products and increases in interest on the Company’s borrowings; (q) absence of significant changes in foreign exchange spreads on retail money transfer transactions, particularly in high-volume corridors, without a corresponding increase in volume or consumer fees; (r) continued political stability in countries in which Western Union has material operations; (s) implementation of Western Union agent agreements with governmental entities according to schedule and no interruption of relations with countries in which Western Union has or is implementing material agent agreements; (t) no unanticipated developments relating to previously disclosed lawsuits, investigations or similar matters; (u) 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; (v) no material breach of security of any of our systems; and (w) successfully managing the potential both for patent protection and patent liability in the context of rapidly developing legal framework for expansive software
patent protection.
Not a Proxy Solicitation
This communication is not a solicitation of a proxy from any security holder of Concord EFS, Inc. First Data Corporation has filed a proxy statement/prospectus with the Securities and Exchange Commission (SEC) concerning the planned merger of Concord EFS, Inc. with a subsidiary of First Data Corporation. WE URGE INVESTORS TO READ THE DEFINITIVE VERSION OF THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov. In addition, documents filed with the SEC by First Data Corporation will be available free of charge from First Data Investor Relations, 6200 S. Quebec St., Suite 340, Greenwood Village, CO, 80111. Documents filed with the SEC by Concord EFS, Inc. will be available free of charge from Concord Investor Relations, 2525 Horizon Lake Drive, Suite 120, Memphis, TN, 38133.
First Data, its directors and executive officers and other members of its management and employees, may be deemed to be participants in the solicitation of proxies in connection with the planned merger. Information about the directors and executive officers of First Data and their ownership of First Data stock is set forth in the proxy statement for First Data’s 2003 annual meeting of stockholders. Investors may obtain additional information regarding the interests of the participants by reading the proxy statement/prospectus.
February 3, 2004