First Data 2007 Annual Report Download - page 65

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Other Investing Activities
The source of cash from other investing activities in the 2007 successor period related most significantly to $49.5 million from activity associated with
the Company's First Financial Bank which was dissolved prior to December 31, 2007, $44.3 million from the sale of strategic investments and a decrease of
$34.6 million in regulatory, restricted and escrow cash balances. These sources were partially offset by a use related to $20.2 million in payments for
termination of interest rate and cross currency swaps. The use of cash in the 2007 predecessor period related to sources of $75.0 million in distributions from
certain strategic investments, proceeds from the sale of merchant portfolios and proceeds from the sale of investments as well as $48.6 million related to
activity associated with the Company's First Financial Bank. Offsetting these sources were uses related to $85.2 million in payments for termination of
interest rate and cross currency swaps, a $31.1 million increase in regulatory, restricted and escrow cash balances and the distribution of $27.6 million to a
minority holder of proceeds received from the sale of Taxware.
The source of cash for other investing activities in 2006 related to $168.9 million in activity from the date of acquisition for FDD related to a reduction
in settlement cash, a $162.2 million reduction in regulatory, restricted and escrow cash balances, $56.2 million of proceeds from the sale of investments and
other activity and proceeds of $27.1 million from the sale of corporate aircraft. Partially offsetting these sources were uses related to a contingent payment of
$29.9 million related to the 2004 disposition of NYCE (all but $1.6 million of which was accrued at December 31, 2005), a net cash outflow of $32.6 million
associated with the sale of a facility related to the Concord merger, $101.6 million in payments related to certain derivative financial instruments, and a use of
$47.7 million resulting from the purchase of investments related to the Company's First Financial Bank and other activity.
The use of cash for other investing activities for 2005 related to payments of $92.2 million related to certain derivative financial instruments, the
purchase of $72.9 million of investments related to the Company's First Financial Bank, and the payment of $10.3 million of Concord related merger costs,
partially offset by an $87.3 million decrease in regulatory, restricted and escrow cash balances.
Cash Flows from Financing Activities from Continuing Operations
Successor Predecessor
Period from
September 25
through
December 31,
2007
Period from
January 1
through
September 24,
2007
Year ended December 31,
Source/(use) (in millions) 2006 2005
Short-term borrowings, net $ 238.5 $ 26.3 $ 176.0 $ 39.6
Proceeds from issuance of long-term debt 21,245.7 — — 995.6
Principal payments on long-term debt (2,033.3) (126.6) (2,412.8) (242.2)
Proceeds from issuance of common stock 7,224.4 187.4 729.8 319.5
Excess tax benefit from share-based payment arrangement — 219.8 124.2 —
Purchase of treasury shares — (371.8) (1,252.5) (2,222.7)
Cash dividends — (67.7) (183.6) (155.0)
Net cash provided by (used in) financing activities from continuing operations $ 26,675.3 $ (132.6) $ (2,818.9) $ (1,265.2)
Short-Term Borrowings, net
The Company had a $1.5 billion commercial paper program in the predecessor period that was supported by a $1.5 billion revolving credit facility, both
of which terminated in conjunction with the merger. The increase in short-term borrowings in the successor period related to a net $60 million drawn down on
the senior secured revolving credit facility discussed below as well as timing of net draws on credit lines associated with settlement activity.
Principal Payments on Long-Term Debt
In January 2007, the Company repurchased $32.4 million of its 4.7% senior notes due August 1, 2013, $30.2 million of its 4.85% senior notes due
October 1, 2014, and $28.0 million of its 4.95% senior notes due June 15, 2015. In conjunction with the debt repurchases, the Company de-designated as a
hedge a portion of the associated interest rate swaps so that the portion of the swaps remaining designated as fair value hedges corresponded to the remaining
principal amount of the corresponding debt instruments. The Company recognized a $1.4 million pretax gain upon the debt repurchase.
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