First Data 2008 Annual Report Download - page 138

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
majority of the investment portfolio from long-term state and municipal obligations to more liquid investments of shorter duration, though still generally tax
exempt. Realized pretax gains and (losses) from the sale of these investment securities reclassified out of OCI into "Investment income" were $(0.6) million in
2008, $(1.2) million in the successor period from September 25, 2007 through December 31, 2007, $4.4 million in the predecessor period from January 1,
2007 through September 24, 2007 and $0.3 million in 2006. The Company recognized other than temporary impairments during 2008 of $60.3 million related
to this investment portfolio as discussed in Note 20. The Company uses specific identification to determine the cost of a security sold and the amount of gains
and losses reclassified out of OCI. The Company received proceeds from the sale of long-term investments of $0.5 billion in 2008, $0.7 billion in the
successor period from September 25, 2007 through December 31, 2007, $10.9 billion in the predecessor period from January 1, 2007 through September 24,
2007 and $18.5 million in 2006.
The Company also maintains various other investments many of which are classified as available-for-sale and carried at fair market value of $12.9
million and $43.6 million at December 31, 2008 and 2007, respectively. Such investments are recorded in the "Other current assets" and "Other long-term
assets" line items of the Consolidated Balance Sheets and include primarily shares of a money market fund described in Note 20. In addition, the Company
has investments in non-marketable equity securities and other investments that are carried at cost of $26.9 million and $27.5 million at December 31, 2008
and 2007, respectively, and are also recorded in the "Other long-term assets" line item of the Consolidated Balance Sheets. Realized gains and losses
associated with the investments described above are recognized in the "Other income (expense)" line item of the Consolidated Statements of Operations.
The principal components of investment securities are as follows (in millions):
Successor Cost (1)
Gross
Unrealized
Gain
Gross
Unrealized
(Loss)
Fair
Value
December 31, 2008
Student loan auction rate securities (2) $ 505.5 $ — $ (13.3) $ 492.2
Corporate bonds 342.1 — (4.4) 337.7
Other securities:
Cost-based investments 26.9 — — 26.9
Other 37.6 — — 37.6
Total other 64.5 — — 64.5
Totals $ 912.1 $ — $ (17.7) $ 894.4
December 31, 2007
State and municipal obligations $ 1,080.0 $ — $ — $ 1,080.0
Other securities:
Cost-based investments 27.5 — — 27.5
Equity 43.0 — — 43.0
Preferred stock 6.4 — — 6.4
Total other 76.9 — — 76.9
Totals $ 1,156.9 $ — $ — $ 1,156.9
(1) Represents amortized cost for debt securities.
(2) Beginning in February of 2008, the auction mechanism for these investments began failing so remaining securities after that time are considered
illiquid; however, the majority of the remaining securities as of December 31, 2008
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