First Data 2008 Annual Report Download - page 121

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
options, restricted stock awards and restricted stock units was accelerated upon closing of the merger. As a result, holders of stock options received cash equal
to the intrinsic value of the awards based on a market price of $34.00 per share while holders of restricted stock awards and restricted stock units received
$34.00 per share in cash, without interest. Vesting of Western Union options, restricted stock awards and restricted stock units held by FDC employees was
also accelerated upon closing of the merger.
The merger was financed by a combination of the following: borrowings under the Company's senior secured credit facilities, senior unsecured term
loan facility agreement, senior subordinated term loan facility, and the equity investment of Holdings. The purchase price was approximately $26.6 billion
including $179.2 million in capitalized transaction costs and excluding assumed debt. The merger was funded primarily through a $7.2 billion equity
contribution from Holdings and $22.0 billion in debt financing discussed more fully in Note 10.
Purchase Price Allocation
The total purchase price was allocated to the Company's net tangible and identifiable intangible assets based on their estimated fair values as set forth
below. A portion of the valuation of identifiable intangible assets was allocated to the Company's investments in unconsolidated joint ventures (reflected in
the "Investment in affiliates" line of the Consolidated Balance Sheets). The excess of the purchase price over the net tangible and identifiable intangible assets
was recorded as goodwill. The Company finalized its purchase accounting in the third quarter of 2008 though certain adjustments related to income tax
matters were made in the fourth quarter 2008.
(in millions)
Property and equipment $ 1,047.3
Customer relationships 6,353.3
Software 852.5
Trade names 813.6
Other intangibles 157.0
Goodwill 18,354.2
Investment in affiliates 3,596.0
Deferred taxes (3,408.7)
Other assets and liabilities acquired, net (1,180.2)
Total purchase price $ 26,585.0
The estimated weighted-average useful lives (excluding the impact of accelerated amortization and the First Data trade name which was determined to
have an indefinite life) associated with intangible assets are approximately:
Customer relationships 14 years
Software 6 years
Trade names 15 years
Other intangibles 16 years
Investment in affiliates 11 years
Total weighted-average useful lives 13 years
The Company generally uses straight-line amortization for intangible assets other than for customer relationships for which the pattern of economic
benefits are known and for which an accelerated method of amortization is used to more appropriately allocate the cost of the relationships to the periods that
will benefit
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