First Data 2008 Annual Report Download - page 163

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
$589,282 of additional expense incurred in operating the aircraft from September 24, 2007 until the date of purchase that previously had not been reimbursed.
In 2008, 2007 and 2006, the Company incurred $290,704, $1,029,999 and $807,374, respectively, in expenses to the charter company for the charter of the
aircraft.
Note 13: Commitments and Contingencies
The Company leases certain of its facilities and equipment under operating lease agreements, substantially all of which contain renewal options and
escalation provisions. Total rent expense for operating leases was $77.2 million for 2008, $24.8 million for the successor period from September 25, 2007
through December 31, 2007, $64.6 million for the predecessor period from January 1, 2007 through September 24, 2007 and $85.0 million for 2006.
Future minimum aggregate rental commitments at December 31, 2008 under all noncancelable leases, net of sublease income, were $244.5 million and
are due in the following years $59.8 million for 2009, $51.7 million for 2010, $39.7 million for 2011, $24.4 million for 2012, $18.7 million for 2013 and
$50.2 million thereafter. The sublease income is earned from leased space which FDC concurrently subleases to third parties with comparable time periods.
Certain future lease rental income exceeds lease payments and was excluded from the rental commitment amounts above. At December 31, 2008, these
amounts totaled $0.7 million in FDC obligations. In addition, the Company has certain guarantees imbedded in leases and other agreements wherein the
Company is required to relieve the counterparty in the event of changes in the tax code or rates. The Company believes the fair value of such guarantees is
insignificant due to the likelihood and extent of the potential changes.
The Company has $54.0 million in outstanding letters of credit at December 31, 2008, all of which expire prior to February 28, 2010 with a one-year
renewal option ($39.7 million of these letters of credit were issued under the Company's senior secured revolving credit facility). The letters of credit are held
in connection with certain business combinations, lease arrangements, bankcard association agreements and other security agreements. The Company expects
to renew the letters of credit prior to expiration.
On July 2, 2004, a class action complaint was filed against the Company, its subsidiary Concord EFS, Inc., and various financial institutions. Plaintiffs
claim that the defendants violated antitrust laws by conspiring to artificially inflate foreign ATM fees that were ultimately charged to ATM cardholders.
Plaintiffs seek a declaratory judgment, injunctive relief, compensatory damages, attorneys' fees, costs and such other relief as the nature of the case may
require or as may seem just and proper to the court. Five similar suits were filed and served in July, August and October 2004 (referred to collectively as the
"ATM Fee Antitrust Litigation").
On August 3, 2007, Concord EFS, Inc. filed a motion for summary judgment seeking to dismiss plaintiffs' per se claims, arguing that there are
procompetitive justifications for the ATM interchange. On March 24, 2008, the Court entered an order granting the defendants' motions for partial summary
judgment, finding that the claims raised in this case would need to be addressed under a "Rule of Reason" analysis. On February 2, 2009, the Plaintiffs filed a
Second Amended Complaint. The Motion to Dismiss the Second Amended Complaint is due on April 6, 2009.
The Company believes the complaints are without merit and intends to vigorously defend them.
In the normal course of business, the Company is subject to claims and litigation, including indemnification obligations to purchasers of former
subsidiaries. Management of the Company believes that such matters will not have a material adverse effect on the Company's results of operations, liquidity
or financial condition.
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