First Data 2007 Annual Report Download - page 72

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
• engage in mergers or consolidations;
• sell or transfer assets and subsidiary stock;
• pay dividends and distributions or repurchase its capital stock;
• make certain investments, loans or advances;
• prepay certain indebtedness;
• enter into agreements that restrict the payment of dividends by subsidiaries or the repayment of intercompany loans and advances; and
• engage in certain transactions with affiliates.
Excess Tax Benefit from Share-based Payment Arrangements
The excess tax benefit from share-based payment arrangements is discussed in the "Cash Flows from Operating Activities from Continuing Operations"
section above.
Purchase of Treasury Shares
The following table presents stock repurchase programs authorized by the Board of Directors that were utilized during the year ended December 31,
2005 through the predecessor period ended September 24, 2007, disclosing total shares purchased under each program during the respective periods and the
associated cost (in millions):
Predecessor
Period from January 1
through September 24,
2007
Year ended December 31,
2006 2005
Treasury
Shares Cost
Treasury
Shares Cost
Treasury
Shares Cost
Share repurchase programs:
$1.5 billion, authorized October 2004 — — — — 22.2 $ 905.8
$2.0 billion, authorized February 2005 — — 13.1 $ 325.8 20.2 807.8
— — 13.1 $ 325.8 42.4 $ 1,713.6
Treasury stock purchases related to employee benefit plans 11.2 $ 335.3 22.4 961.1 11.3 461.4
Total stock repurchases 11.2 $ 335.3 35.5 $ 1,286.9 53.7 $ 2,175.0
The decrease in shares purchased in 2007 compared to 2006 was a result of a significant number of stock option exercises during the first quarter 2006.
The difference between the cost of shares repurchased noted in the table above and the amount reflected in the Consolidated Statements of Cash Flows is due
to timing of trade settlements.
Cash Dividends
The decrease in cash dividends in 2007 predecessor period compared to 2006 was due to the Company decreasing its quarterly dividend from $0.06 per
share to $0.03 per share for common stockholders of record subsequent to the Western Union spin-off. The Company has not paid a cash dividend since the
merger and has no current intention to pay such a dividend.
The increase in dividends paid in 2006 compared to 2005 was due to the Company increasing its quarterly dividend from $0.02 per common share in
2004 to $0.06 per common share for common stockholders of record as of April 1, 2005.
Letters of Credit
The Company had $37.4 million in outstanding letters of credit at December 31, 2007, of which nearly all expire in 2008 with a one-year renewal
option. The letters of credit are held in connection with certain business combinations, lease arrangements and bankcard association agreements. The
Company expects to renew the letters of credit prior to expiration.
The Company has lines of credit associated with First Data Deutschland which totaled approximately 160 million euro, or approximately $232 million,
as of December 31, 2007. The Company had the full amount outstanding against these lines of credit as of December 31, 2007 and $89.6 million outstanding
as of December 31, 2006.
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