First Data 2008 Annual Report Download - page 78

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Cash Flows from Investing Activities from Continuing Operations
Successor Predecessor
Source/(use) (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
Merger, net of cash acquired — $ (25,756.2) — —
Current period acquisitions, net of cash acquired $ (267.1) (136.6) $ (690.3) $ (287.5)
Payments related to other businesses previously acquired (35.6) (0.5) (50.0) (51.1)
Proceeds from dispositions, net of expenses paid and cash disposed 215.1 — — 198.7
Additions to property and equipment, net (283.9) (55.2) (275.5) (170.4)
Payments to secure customer service contracts, including outlays for conversion, and capitalized
systems development costs (163.9) (57.5) (123.7) (129.7)
Proceeds from the sale of marketable securities 74.9 14.1 11.8 45.0
Dividend received from discontinued operations — — — 2,500.0
Cash retained by Western Union — — — (1,327.8)
Other investing activities (1.3) 108.7 (9.5) 202.6
Net cash (used in) provided by investing activities from continuing operations $ (461.8) $ (25,883.2) $ (1,137.2) $ 979.8
Merger
As discussed in Note 2 to the Consolidated Financial Statements included in Item 8 of this Form 10-K, the Company merged with an entity controlled
by affiliates of KKR on September 24, 2007. The $25.8 billion represents the use of cash to purchase the FDC shares from its shareholders as well as other
related transaction costs.
Acquisitions
The Company finances acquisitions through a combination of internally generated funds, short-term borrowings and equity of its parent company. The
Company continues to pursue opportunities that strategically fit into the business. Additionally, the Company continues to manage its portfolio of businesses
and evaluate the possible divestiture of businesses that do not match its long-term growth objectives. For a more detailed discussion on acquisitions in 2008,
the 2007 successor period, the 2007 predecessor period and 2006 refer to Note 4 to the Consolidated Financial Statements included in Item 8 of this Form 10-
K. All acquisitions during these periods were funded from cash flows from operating activities other than the acquisition of the Company's proportionate
share of CPS discussed in "significant non-cash transactions" below.
The Company expects to fund significantly less in 2009 for acquisitions than in prior years. During 2009, the Company anticipates funding certain of its
merchant alliance partners for referrals contributed to the alliances. If cash flows from operating activities are not sufficient to fund acquisitions, the Company
may borrow against its revolving credit facility or find other sources of financing.
Payments Related to Other Businesses Previously Acquired
For all periods, payments related to other businesses previously acquired related mostly to contingent consideration largely associated with a merchant
alliance. The payment in 2008 was recognized as a part of
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