First Data 2007 Annual Report Download - page 203

Chase Paymentech
NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
For the years ended December 31, 2007 and 2006 and
the year ended December 31, 2005 (unaudited)
2007 2006
Deferred tax assets related to:
Accrued expenses and reserves $ 187 $ 185
Accrued pension benefits 1,419 1,293
Other employee benefits 4,803 3,920
Tax attribute carryforwards 651 620
Other 117 14
Total deferred tax assets 7,177 6,032
Valuation allowance (651) (620)
Realizable deferred tax assets 6,526 5,412
Deferred tax liabilities related to:
Depreciation and amortization (37,119) (33,257)
Net deferred tax liabilities $ (30,593) $ (27,845)
As of December 31, 2007 and 2006, the Company had recorded a valuation allowance of $651 thousand and $620 thousand respectively, against U.S. capital
loss carryforwards. It is more likely than not that the tax benefit of those capital losses will not be recognized due to statutory limitations.
Income tax payments of $72.3 million in 2007 are less than current expense primarily due to the benefit of deferral due to tax fiscal year and tax benefits
associated with the exercise of stock options. Net income tax payments of $58.2 million in 2006 are less than current expense primarily due to refunds
received from prior years, the benefit of deferral due to tax fiscal year and tax benefits associated with the exercise of stock options. Income tax payments of
$51.8 million in 2005 are less than current expense primarily due to tax benefits associated with the exercise of stock options and the benefit of deferral due to
tax fiscal year.
NOTE 13 – SEGMENT REPORTING
Operating segments are defined by SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information, as components of an enterprise
about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate
resources and in assessing performance. The Company's CODM is its Chief Executive Officer. The Company classifies its business into two reporting
segments for financial reporting purposes consisting of its U.S. and Canadian operations.
The business segments measurements provided to, and evaluated by, the Company's CODM are computed in accordance with the accounting policies
described in Note 2.
The Company's U.S. operations process electronic payments of credit, debit, fleet, and stored value card transactions primarily for merchants throughout
North America.
The Company's Canadian operations process electronic payments of credit and debit card transactions, including the rental of point-of-sale equipment for
merchants in Canada.
Financial information for the Company's operating segments is summarized as follows (in thousands):
As of and for the year ended December 31, 2007
U.S. Canada
Corporate
and
eliminations Combined
Revenues:
Transaction and processing services $ 1,170,621 $ 81,790 $ — $ 1,252,411
Transaction and processing services – inter-segment 17,152 — (17,152) —
Point-of-sale equipment and supplies 3,777 30,044 — 33,821
Total segment reporting revenues $ 1,191,550 $ 111,834 $ (17,152) $ 1,286,232
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