First Data 2007 Annual Report Download - page 98

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an
Amendment of FASB Statements No. 87, 88, 106, and 132(R)." This statement requires a company to recognize the funded status of a benefit plan as an asset
or a liability in its statement of financial position. In addition, a company is required to measure plan assets and benefit obligations as of the date of its fiscal
year-end statement of financial position. The Company adopted the recognition provisions and disclosure requirements as of December 31, 2006. As a result
of the merger, the Company measured the benefit plan assets and obligations as of the merger date and allocated purchase price to each plan equal to its
funded status. Additionally, for its new basis of accounting, the Company elected December 31 as the measurement date for its plans. As such, the
measurement date provisions of SFAS No. 158 will have no impact on the Company's financial position or results of operations.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of
FASB Statement No. 115." This Statement permits entities to measure many financial instruments and certain other items at fair value. This election is made
on an instrument-by-instrument basis and is irrevocable. Unrealized gains and losses on items for which the fair value option has been elected are reported in
earnings. This statement is effective for fiscal years beginning after November 15, 2007. The Company did not elect the fair value option for any of its
existing financial assets and liabilities.
In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations." The new standard will significantly change the financial accounting
and reporting of business combination transactions in the consolidated financial statements. It will require an acquirer to recognize, at the acquisition date, the
assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at their full fair values as of that date. In a business combination
achieved in stages (step acquisitions), the acquirer will be required to remeasure its previously held equity interest in the acquiree at its acquisition-date fair
value and recognize the resulting gain or loss in earnings. The acquisition-related transaction and restructuring costs will no longer be included as part of the
capitalized cost of the acquired entity but will be required to be accounted for separately in accordance with applicable generally accepted accounting
principles in the U.S. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after December 15, 2008.
In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in Consolidated Financial Statements." The statement clarifies the definition
of a non-controlling (or minority) interest and requires that non-controlling interests in subsidiaries be reported as a component of equity in the consolidated
statement of financial position and requires that earnings attributed to the non-controlling interests be reported as part of consolidated earnings and not as a
separate component of income or expense. However, it will also require expanded disclosures of the attribution of consolidated earnings to the controlling and
non-controlling interests on the face of the consolidated income statement. SFAS No. 160 will require that changes in a parent's controlling ownership
interest, that do not result in a loss of control of the subsidiary, are accounted for as equity transactions among shareholders in the consolidated entity
therefore resulting in no gain or loss recognition in the income statement. Only when a subsidiary is deconsolidated will a parent recognize a gain or loss in
net income. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008, and will be applied prospectively except for the presentation
and disclosure requirements that will be applied retrospectively for all periods presented. The Company is currently evaluating the impact of SFAS No. 160 to
its financial position and results of operations.
Note 2: Merger
On April 1, 2007, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with New Omaha Holdings L.P., a Delaware
limited partnership ("Parent"), and Omaha Acquisition Corporation, a Delaware corporation and a subsidiary of Parent ("Sub"). Parent is controlled by
affiliates of KKR. On September 24, 2007, under the terms of the Merger Agreement, Sub merged with and into the Company (the "merger") with the
Company continuing as the surviving corporation and a subsidiary of First Data Holdings, Inc. ("Holdings"; formerly known as New Omaha Holdings
Corporation), a Delaware corporation and a subsidiary of Parent.
As of the effective time of the merger, each issued and outstanding share of common stock of the Company was cancelled and converted into the right
to receive $34.00 in cash, without interest (other than shares owned by Parent, Sub or Holdings, which were cancelled and given no consideration).
Additionally, vesting of FDC stock options, restricted stock awards and restricted stock units was accelerated upon closing of the merger. As a result, holders
of stock options received cash equal to the intrinsic value of the awards based on a market price of $34.00 per share while holders of restricted stock awards
and restricted stock units received $34.00 per share in cash, without interest. Vesting of Western Union options, restricted stock awards and restricted stock
units held by FDC employees was also accelerated upon closing of the merger.
96