First Data 2013 Annual Report Download - page 47

intended to be a measure of free cash flow available for management’s discretionary use as it does not consider certain cash requirements such as
interest payments, tax payments and debt service requirements. The presentation of EBITDA has limitations as an analytical tool and should not be
considered in isolation or as a substitute for analysis of First Data’s results as reported under GAAP. Management believes EBITDA is helpful in
highlighting trends because EBITDA excludes the results of decisions that are outside the control of operating management and can differ
significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which
companies operate and capital investments. Management compensates for the limitations of using non-GAAP financial measures by using them to
supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.
Consolidated EBITDA (or debt covenant EBITDA) is defined as EBITDA adjusted to exclude certain non-cash items, non-recurring items that First
Data does not expect to continue at the same level in the future and certain items management believes will impact future operating results and
adjusted to include near-term cost savings projected to be achieved within twelve months on an annualized basis (see Note 12 above). Consolidated
EBITDA is further adjusted to add net income attributable to noncontrolling interests and redeemable noncontrolling interest of certain non-wholly-
owned subsidiaries and exclude other miscellaneous adjustments that are used in calculating covenant compliance under the agreements governing
First Data’s senior unsecured debt and/or senior secured credit facilities. The Company believes that the inclusion of supplementary adjustments to
EBITDA are appropriate to provide additional information to investors about items that will impact the calculation of EBITDA that is used to
determine covenant compliance under the agreements governing First Data’s senior unsecured debt and/or senior secured credit facilities. Since not all
companies use identical calculations, this presentation of Consolidated EBITDA may not be comparable to other similarly titled measures of other
companies.
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During 2013, 2012 and 2011, the Company did not engage in any off-balance sheet financing activities other than those included in the “Contractual
obligations” discussion below and those reflected in Note 11 to the Company’s Consolidated Financial Statements in Item 8 of this Form 10-K.
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The Company’s contractual obligations as of December 31, 2013 are as follows:
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  
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
Borrowings (a) $34,305.7 $1,890.6 $4,295.4 $11,356.1 $16,763.6
Capital lease obligations (b) 174.9 81.5 91.0 2.4 —
Operating leases 284.2 54.9 93.4 64.2 71.7
Pension plan contributions (c) 90.1 14.9 16.4 16.4 42.4
Purchase obligations (d):
Technology and telecommunications (e) 559.5 215.2 296.4 43.6 4.3
All other (f) 312.8 71.5 105.9 100.8 34.6
Other long-term liabilities 139.0 18.1 90.7 30.0 0.2
$35,866.2 $ 2,346.7 $ 4,989.2 $11,613.5 $16,916.8
(a) Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Includes $4.0 billion of variable rate
debt (including the impact of interest rate swaps). Borrowings and interest rate swaps are discussed in Note 8 and Note 6, respectively, to the
Company’s Consolidated Financial Statements in Item 8 of this Form 10-K. Interest payments for the variable rate debt and the associated interest rate
swaps were calculated using interest rates as of December 31, 2013. Does not reflect extensions and repricing amendments entered into in January and
February 2014. See Note 8 to the Company’s Consolidated Financial Statements in Item 8 of this Form 10-K.
(b) Represents future payments on existing capital leases, including interest expense, through scheduled expiration dates.
(c) Includes future pension plan contributions for all plans in 2014 and future contractual commitments for the United Kingdom (“U.K.”) plan through
2024 which are subject to change. The amount of pension plan contributions depends upon various factors that cannot be accurately estimated beyond
a one-year time frame other than the U.K. plan.
(d) Many of the Company’s contracts contain clauses that allow the Company to terminate the contract with notice, and with or without a termination
penalty. Termination penalties are generally an amount less than the original obligation. Certain contracts
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