First Data 2013 Annual Report Download - page 42

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Current year acquisitions, net of cash acquired $(12.1) $ (32.9) $ (19.2)
Contributions to equity method investments — (7.9) (161.5)
Payments related to other businesses previously acquired 0.2 (4.4)3.2
Proceeds from dispositions, net of expenses paid and cash disposed 18.1 — 1.7
Proceeds from sale of property and equipment 11.8 8.0 17.1
Additions to property and equipment (194.1)(193.1)(202.9)
Payments to secure customer service contracts, including outlays for conversion, and
capitalized systems development costs (184.4)(177.2)(201.9)
Other investing activities 7.4 10.4 4.9
Net cash used in investing activities $(353.1)$(397.1)$(558.6)
Acquisitions and dispositions. The Company may finance acquisitions through a combination of internally generated funds, reinvestment of proceeds from
asset sales, short-term borrowings and equity of its parent company. The Company may also consider using long-term borrowings subject to restrictions in its
debt agreements. All acquisitions during the periods presented were funded from cash flows from operating activities or from the reinvestment of cash proceeds
from the sale of other assets. Purchases of noncontrolling interests are classified as financing activities as noted below. Although the Company considers
potential acquisitions from time to time, the Company’s plan for 2014 does not include funding of material acquisitions.
In December 2012, the Company acquired 100% of Clover Network, Inc., a provider of payment network services for total consideration of $56.1
million. The transaction called for cash consideration of $36.1 million as well as a series of contingent payments based on the achievement of specified sales
targets. These contingent payments are classified as purchase consideration if made to outside investors and compensation if made to current and future
employees. As part of the purchase price the Company recorded a $20 million liability for the contingent consideration due to outside investors based upon the
net present value of the Company’s estimate of the future payments.
In the fourth quarter of 2011, the Company funded $160 million to one of its merchant alliance partners for referrals from bank branches contributed
to the alliance as called for by the agreement that extended the term of the alliance in 2008.
The Company continues to manage its portfolio of businesses and evaluate the possible divestiture of businesses that do not match its long-term growth
objectives. For a more detailed discussion on acquisitions and dispositions refer to Note 3 to the Consolidated Financial Statements included in Item 8 of this
Form 10-K.
Capital expenditures. Capital expenditures are estimated to be approximately $425 to $475 million in 2014 and are expected to be funded by cash
flows from operations. If, however, cash flows from operating activities are insufficient, the Company will decrease its discretionary capital expenditures or
utilize its revolving credit facility.
During the periods presented, net proceeds were received for the sale of certain assets, including buildings and equipment.
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