First Data 2007 Annual Report Download - page 130

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In the normal course of business, the Company is subject to claims and litigation, including indemnification obligations to purchasers of former
subsidiaries. Management of the Company believes that such matters will not have a material adverse effect on the Company's results of operations, liquidity
or financial condition.
In addition, the Company has certain guarantees imbedded in leases and other agreements wherein the Company is required to relieve the counterparty
in the event of changes in the tax code or rates. The Company believes the fair value of such guarantees is insignificant due to the likelihood and extent of the
potential changes.
Note 14: Stockholders' Equity
Dividends
In February 2005, the Company increased its quarterly dividend for common stockholders of record as of April 1, 2005 to $0.06 per common share
from $0.02 per common share. Subsequent to the spin-off and in December 2006, the Company reduced its quarterly dividends from $0.06 per common share
to $0.03 per common share for common stockholders of record as of January 2, 2007. Cash dividends of $45.3 million, $160.5 million and $184.9 million
were declared for the predecessor periods from January 1, 2007 through September 24, 2007 and the years ended December 31, 2006 and 2005, respectively.
As a result of the merger, the Company no longer pays cash dividends.
As a result of the spin-off, FDC recorded a net increase to retained earnings of $554.5 million which represented the distribution of the net liabilities
and certain equity balances related to Western Union to shareholders. Such distribution occurred shortly after and is net of the transfer by Western Union of
$1 billion of Western Union notes and $2.5 billion in cash to FDC as well as the net settlement of various intercompany balances and realignment of certain
operating assets.
Other Comprehensive Income
The income tax effects allocated to and the cumulative balance of each component of OCI are as follows (in millions):
Beginning
Balance
Pretax
Gain
(Loss)
Amount
Tax
(Benefit)
Expense
Net-of-
Tax
Amount
Western
Union
Dividend
Ending
Balance
Successor
September 25, 2007 through December 31, 2007
Unrealized gains (losses) on hedging activities $ — $ (174.0) $ (64.9) $ (109.1) $ — $ (109.1)
Foreign currency translation adjustment — 25.8 11.8 14.0 — 14.0
Minimum pension liability adjustment — 2.5 0.9 1.6 — 1.6
$ — $ (145.7) $ (52.2) $ (93.5) $ — $ (93.5)
Predecessor
January 1, 2007 through September 24, 2007
Unrealized gains (losses) on securities $ 18.1 $ (29.0) $ (10.8) $ (18.2) $ — $ (0.1)
Unrealized gains (losses) on hedging activities (4.4) 0.9 0.5 0.4 — (4.0)
Foreign currency translation adjustment 79.2 96.0 (27.1) 123.1 — 202.3
Minimum pension liability adjustment (63.5) — — — — (63.5)
Adjustment to initially apply SFAS No. 158 (46.3) — — — — (46.3)
$ (16.9) $ 67.9 $ (37.4) $ 105.3 $ — $ 88.4
December 31, 2006
Unrealized gains (losses) on securities $ (49.2) $ 107.1 $ 38.2 $ 68.9 $ (1.6) $ 18.1
Unrealized gains (losses) on hedging activities (6.7) 3.3 1.0 2.3 — (4.4)
Foreign currency translation adjustment 31.2 102.4 44.0 58.4 (10.4) 79.2
Minimum pension liability adjustment (141.6) 2.4 (1.6) 4.0 74.1 (63.5)
Adjustment to initially apply SFAS No. 158 — (74.0) (27.7) (46.3) — (46.3)
$ (166.3) $ 141.2 $ 53.9 $ 87.3 $ 62.1 $ (16.9)
December 31, 2005
Unrealized gains (losses) on securities $ 71.4 $ (185.5) $ (64.9) $ (120.6) $ — $ (49.2)
Unrealized gains (losses) on hedging activities (18.3) 18.1 6.5 11.6 — (6.7)
Foreign currency translation adjustment 108.7 (117.3) (39.8) (77.5) — 31.2
Minimum pension liability adjustment (163.6) 33.9 11.9 22.0 — (141.6)
$ (1.8) $ (250.8) $ (86.3) $ (164.5) $ — $ (166.3)
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