First Data 2007 Annual Report Download - page 104

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
significantly reduced the scale of its operations. These actions and the reduced business outlook led the Company to record asset impairment charges of
approximately $28.4 million related to goodwill, other assets and fixed assets. Several smaller unrelated impairment charges were also taken in 2005.
Litigation and regulatory settlements
In the predecessor period from January 1, 2007 through September 24, 2007, the Company recorded a $5.0 million litigation accrual associated with a
judgment against the Company pertaining to a vendor contract issue and a benefit of $2.5 million related to the Visa settlement originally recorded in 2006
both in All Other and Corporate. During 2006, the Company recorded a benefit of approximately $45 million due to the settlement with Visa within All Other
and Corporate. Also in 2006, excess litigation accruals in the Commercial Services segment totaling $7.5 million were released. The Company recorded
minority interest expense of $3.5 million associated with this release. Additionally, a $15.0 million settlement associated with a patent infringement lawsuit
against TeleCheck was recorded, clearing all past and future claims related to this litigation, as was a charge of $2.7 million related to the settlement of a
claim within All Other and Corporate.
Other
The majority of the benefit recorded during the 2007 predecessor period related to the release of a portion of the domestic escheatment accrual made in
the fourth quarter 2005. The release was prompted by reaching resolution with a large majority of states as to the Company's escheatment liability. During
2005, the Company recognized a charge related to an additional accrual of domestic and international escheatment liabilities related to years prior to 2005.
Additionally, other charges related to the reimbursement to certain clients for the misallocation of certain pass-through billings, the majority of which related
to 2004. The misallocations had no impact on prior period expenses.
Note 4: Business Combinations, Asset Acquisitions and Dispositions
Initial Consideration (b)
Businesses and Assets Acquired Month Total Cash
(in millions)
2007:
Successor
First Data Government Solutions ("FDGS") minority holder buyout November $ 73.8 $ 73.8
Merchant Solutions Joint Venture November 29.7 29.7
Three other acquisitions and merchant portfolio acquisitions 48.7 48.7
$ 152.2 $ 152.2
Predecessor
Instant Cash Services® ("Instant Cash") March $ 125.7 $ 125.7
FundsXpress June 134.9 134.9
First Data Polska (formerly POLCARD SA) August 331.9 331.9
Four other acquisitions and merchant portfolio acquisitions 122.1 122.1
$ 714.6 $ 714.6
2006:
ClearCheck, Inc. ("ClearCheck") March $ 18.7 $ 18.7
First Data Deutschland ("FDD", formerly Gesellschaft fur Zahlungssysteme) (a) June 3.1 3.1
Peace Software ("Peace") August 85.1 85.1
First Data Cono Sur ("Cono Sur", formerly ArgenCard) December 193.8 193.8
Three other acquisitions and merchant portfolio acquisitions 34.7 34.7
$ 335.4 $ 335.4
2005:
International Card Services Joint Venture ("ICS") June $ 27.1 $ 27.1
EuroProcessing International ("EPI") July 131.2 131.2
First Data Austria (formerly Austrian Payment Systems Services GmbH) November 163.8 163.8
First Data Korea (formerly Korea Mobile Payment Services) November 57.0 57.0
Three other acquisitions and merchant portfolio acquisitions 107.8 107.8
$ 486.9 $ 486.9
(a) The consideration for FDD is substantially offset by the proceeds from the sale of its wholly owned subsidiary easycash.
(b) Does not consider cash acquired or debt assumed.
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