First Data 2008 Annual Report Download - page 82

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
2015. On September 24, 2007 and in conjunction with the merger, the Company repurchased $2.0 billion of debt. In December 2007, the Company paid off its
medium-term note due in 2008 for $25.6 million. During the successor 2007 period, the Company made payments of $32.0 million related to its senior
secured term loan facility.
In September 2006, the Company paid off senior notes in the amount of $650 million. In November and December 2006, the Company repurchased
approximately $1.7 billion of its long-term debt with proceeds from the spin-off.
Payments for capital leases were $57.1 million for 2008, $14.3 million for the successor period from September 25, 2007 through December 31, 2007,
$35.0 million for the predecessor period from January 1, 2007 through September 24, 2007 and $40.4 million for the year ended December 31, 2006.
Proceeds from Issuance of Long-Term Debt
On September 24, 2007, the Company entered into several new debt instruments in conjunction with the merger. Details of each instrument are
described in Note 10 to the Consolidated Financial Statements included in Item 8 of this Form 10-K. The current adverse economic conditions in the U.S. and
around the world and the potential negative impact such conditions could have on the Company's results of operations, have impacted the Company's debt
ratings and could have further impact based on future economic developments. As of March 24, 2009, the Company's long-term corporate family rating from
Moody's was B2 (negative watch). The long-term local issuer credit rating from Standard and Poor's was B (stable). The long-term issuer default rating from
Fitch was B+ (negative outlook). Additionally, these economic conditions and the Company's current level of debt may impair the ability of the Company to
get additional funding beyond its revolving credit facility.
In 2008, the Company received $100.4 million from its senior secured term loan facility as a result of a draw on the Company's delayed draw term loan
when an equal amount of pre-merger notes were repaid. As of December 31, 2008, the Company's ability to draw on its delayed draw term loan expired.
The Company received $21.2 billion, net of debt issuance costs, in the successor period from September 25, 2007 through September 30, 2007 resulting
from debt issued in conjunction with the merger. Also in the successor 2007 period, the Company received $25.6 million from its senior secured term loan
facility as a result of a draw on the Company's delayed draw term loan when an equal amount of pre-merger notes were repaid.
Proceeds from Issuance of Common Stock
The Company received proceeds in the 2007 successor period representing equity funding from its parent, First Data Holdings, Inc. ("Holdings")
related to the merger. Proceeds during the 2007 predecessor period and during 2006 resulted from stock option exercises and purchases under the Company's
employee stock purchase plan.
Capital Contributed by Parent
During 2008, the Company received capital contributions from Holdings, comprised mostly of the proceeds from purchases of shares in Holdings by
certain management employees of FDC. The Company used these contributions to fund operations.
Excess Tax Benefit from Share-based Payment Arrangement
The excess tax benefit from share-based payment arrangements is discussed in the "Cash Flows from Operating Activities from Continuing Operations"
section above.
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