First Data 2008 Annual Report Download - page 129

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(a) Does not consider cash acquired or debt assumed. Does not reflect cash paid or received in years subsequent to initial acquisition.
(b) The receipt of the Company's proportionate 49% share of the alliance was accounted for as a purchase business combination.
(c) The consideration for FDD is substantially offset by the proceeds from the sale of its wholly owned subsidiary easycash.
2008 Acquisitions
In January 2008, the Company entered into a joint venture with AIB, of which the Company owns 50.1%. The joint venture provides card acquiring
services in the Republic of Ireland, the United Kingdom and elsewhere in Europe. The preliminary purchase price allocation resulted in identifiable intangible
assets of $64 million, which are being amortized over 10 years, a trade name of $37 million that is being amortized over 15 years and goodwill of $66 million.
The joint venture with AIB is consolidated and reported in the International segment.
In February 2008, the Company purchased the remaining interest in Unified Network Payment Solutions ("UNPS") located in Canada. UNPS is
consolidated and reported as part of the International segment.
In July 2008, FDC and its parent, Holdings, purchased the remaining 18.2% and 13.6% of the outstanding equity of Money Network, respectively, not
already owned by the Company. The purchase price paid by Holdings consisted of shares of its common stock. FDC subsequently purchased Holdings'
interest in Money Network for an amount equivalent to the value of the shares issued by Holdings as purchase consideration. Money Network is reported as
part of the Prepaid Services segment.
In September 2008, the Company purchased 50% of EUFISERV's inter-bank processing business (subsequently renamed Trionis). Trionis will provide
services across Europe. The Company accounts for its investment under the equity method of accounting within the International segment.
On November 1, 2008, the Company and JPMorgan Chase terminated their merchant alliance joint venture, Chase Paymentech SolutionsTM ("CPS"),
which was the Company's largest merchant alliance. The Company received its proportionate 49% share of the assets of the joint venture, including domestic
merchant contracts, an equity investment in Merchant Link, a full-service ISO and Agent Bank unit, and a portion of the employees. The new domestic owned
and managed business is being operated as part of FDC's Merchant Services segment. First Data will continue to provide transaction processing and related
services for certain merchants of the joint venture that were allocated to JPMorgan Chase but are resident on First Data's processing platforms. First Data has
historically accounted for its minority interest in the joint venture under the equity method of accounting. Beginning November 1, 2008, the portion of the
alliance's business received by the Company in the separation is reflected on a consolidated basis throughout the financial statements. CPS accounted for the
vast majority of the "Equity earnings in affiliates" and the processing and other fees noted in footnote (b) on the face of the Consolidated Statements of
Operations. The receipt of the Company's proportionate share of CPS was accounted for as a purchase business combination. The assets and liabilities
received were recorded at their fair values. Purchase accounting and the allocation of the purchase price is preliminary. As a result of the alliance termination
and subsequent business combination, the Company assessed its deferred tax liabilities established at the time of the merger and reversed $836 million of
those liabilities through purchase accounting for the Company's proportionate share of CPS. The preliminary purchase price allocation resulted in identifiable
intangible assets of $1,047 million, which are being amortized over three to approximately nine years, and goodwill of $696 million.
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