First Data 2008 Annual Report Download - page 122

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
from them. Deferred tax liabilities were recorded related to the allocation of the purchase price to intangible assets. Less than 5% of goodwill resulting from
the merger is deductible for tax purposes at a local jurisdiction level. The allocation of goodwill by segment was as follows (in millions):
Merchant Services $10,947.2
Financial Services 3,666.3
International 3,077.4
Prepaid Services 601.3
Integrated Payment Systems —
All Other and Corporate 62.0
$18,354.2
Goodwill is reviewed at least annually for impairment. The Company performed its annual goodwill impairment test in the fourth quarter 2008 and
recorded an impairment of $3.2 billion as discussed in Note 3.
Merger Related Restructuring Charges
During the fourth quarter of 2007, the Company implemented a plan that provided strategic direction for the Company under its new leadership. The
plan anticipated capturing efficiencies related to the simplification of domestic and international operations and other near term cost saving initiatives as well
as certain reductions in personnel. In accordance with this plan and in November 2007, the Company terminated approximately 1,600 employees across the
organization representing all levels of employees and approximately 6% of its worldwide work force. A majority of them ceased working before
December 31, 2007. Additional actions occurred during first, second, and third quarters of 2008 resulting in the termination of over 500 employees across the
organization reflected in purchase accounting.
The following table summarizes the Company's utilization of restructuring accruals related to the merger recorded in purchase accounting for the
successor period from September 25, 2007 through December 31, 2007 and the year ended December 31, 2008:
(in millions)
Employee
Severance
Accrual at September 24, 2007 $ —
Charges recorded in purchase accounting 120.1
Cash payments (27.7)
Accrual at December 31, 2007 $ 92.4
Charges recorded in purchase accounting 48.1
Cash payments (118.2)
Other adjustments including foreign exchange (10.4)
Remaining accrual at December 31, 2008 $ 11.9
Merger and Other Related Costs
During the predecessor period from January 1, 2007 through September 24, 2007, the Company expensed merger related costs consisting primarily of
investment banking, accounting and legal fees totaling $69.7 million. The Company recorded $2.9 million of additional merger related costs in the successor
period from September 25, 2007 through December 31, 2007. The Company also recognized a pretax charge of $175.9
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