First Data 2008 Annual Report Download - page 160

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(a) Amounts due from and due to unconsolidated merchant alliances increased in 2008 due to the deconsolidation of the WFMS balance sheet as of December 31, 2008 as discussed in Note
4. Partially offsetting this increase is a decrease resulting from the termination of the CPS merchant alliance joint venture on November 1, 2008 as discussed in Note 4.
Supplemental Cash Flow Information
Supplemental cash flow information for the year ended December 31, 2008, the successor period from September 25, 2007 through December 31, 2007,
the predecessor period from January 1, 2007 through September 24, 2007 and for the year ended December 31, 2006 is summarized as follows:
Successor Predecessor
(in millions)
Year ended
December 31,
2008
Period from
September 25
through
December 31,
2007
Period from
January 1
through
September 24,
2007
Year ended
December 31,
2006
Income tax payments (refunds), net $ 69.0 $ (108.0) $ 56.0 $ 86.0
Interest paid 1,424.7 480.0 90.5 263.5
Significant non-cash transactions
During 2008, the principal amount of the Company's senior unsecured PIK notes increased by $197.4 million resulting from the "payment" of accrued
interest expense. Beginning October 1, 2011, the interest on the PIK term loan facility will be required to be paid in cash and the first such payment will be
due in March 2012.
During the year ended December 31, 2008, the Company entered into approximately $89 million of capital leases.
On September 17, 2008, the Company launched a registered exchange offer to exchange the $2.2 billion aggregate principal amount of its 9.875%
senior notes due 2015 for publicly tradable notes having substantially identical terms and guarantees, except that the exchange notes will be freely tradable.
Substantially all of the notes were exchanged effective October 21, 2008. There was no expenditure, other than professional fees incurred in connection with
the Registration Statement itself, or receipt of cash associated with this exchange.
In accordance with the terms of the amended senior unsecured term loan and senior subordinated unsecured term loan facilities, the Company
exchanged substantially all of the remaining balance of its 9.875% senior unsecured cash-pay term loan bridge loans due 2015 as well as all of its 10.55%
senior unsecured PIK term loan bridge loans due 2015 and 11.25% senior subordinated unsecured term loan bridge loans due 2016 for senior unsecured cash-
pay notes, senior unsecured PIK notes and senior subordinated unsecured notes, respectively, in each case having substantially identical terms and guarantees
with the exception of interest payments being due semi-annually on March 31 and September 30 of each year instead of quarterly. The holders of the
remaining borrowings outstanding under the senior unsecured cash-pay term loan bridge loan may exchange, at the option of the lender, for senior unsecured
cash-pay notes on the 15th day of each calendar month subsequent to this initial Exchange Offering. There was no expenditure, other than professional fees
incurred in connection with the Exchange Offering itself, or receipt of cash associated with this exchange.
On November 1, 2008, the Company and JPMorgan Chase terminated their merchant alliance joint venture, 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 receipt of the Company's proportionate share of
CPS was accounted for as a business combination and was a non-cash transaction.
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