First Data 2008 Annual Report Download - page 120

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Declines in value that are judged to be other than temporary in nature are recognized in the Consolidated Statements of Operations. For public company
investments, the Company's policy is to treat a decline in the investment's quoted market value that has lasted for more than six months as an other than
temporary decline in value. The Company also considers other qualitative and quantitative indicators in judging whether a decline in value is other than
temporary in nature. The Company's policy is the same for investments in non-marketable equity securities; however, their fair values are estimated. Debt
securities follow the same policy except that if the Company has the intent and ability to hold until maturity or recovery to its cost basis. Refer to Note 20 for
a detailed discussion regarding the fair value of the Company's investments.
New Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("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. SFAS No. 141(R) applies for the Company
prospectively to business combinations for which the acquisition date is on or after January 1, 2009.
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 will be applied by the Company prospectively beginning January 1, 2009 except for the presentation and disclosure
requirements that will be applied retrospectively for all periods presented.
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
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