First Data 2008 Annual Report Download - page 83

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Purchase of Treasury Shares
During the predecessor period in 2007, the Company repurchased 11.2 million shares for $335.3 million related to employee benefit plans. During
2006, the Company repurchased 22.4 million shares for $961.1 million related to employee benefit plans. The decrease in shares purchased in 2007 compared
to 2006 was a result of a significant number of stock option exercises during the first quarter 2006. The difference between the cost of shares repurchased
noted in the table above and the amount reflected in the Consolidated Statements of Cash Flows is due to timing of trade settlements. The Company did not
repurchase any shares under its board authorized stock repurchase programs during the predecessor period in 2007. The Company repurchased 13.1 million
shares for $325.8 million under its board authorized stock repurchase programs in 2006.
Cash Dividends
The Company paid cash dividends to Holdings in 2008 to fund miscellaneous, minor operational needs. The decrease in cash dividends from the
predecessor period in 2007 is due to the merger and the associated suspension of regular quarterly dividends. The decrease in cash dividends in the 2007
predecessor period compared to 2006 was due most significantly to the Company decreasing its quarterly dividend from $0.06 per share to $0.03 per share for
common stockholders of record subsequent to the Western Union spin-off.
Letters, Lines of Credit and Other
Total Available Total Outstanding
As of December 31, As of December 31,
(in millions) 2008 2008 2007
Letters of Credit (a) $ 514.3 $ 54.0 $ 37.4
Lines of Credit and Other (b) $ 608.9 $ 294.7 $ 302.1
(a) Up to $500 million of the Company's $2.0 billion senior secured revolving credit facility is available for letters of credit of which $39.7 million of
letters of credit were issued under the facility as of December 31, 2008. An additional $14.3 million of letters of credit were outstanding associated with
other arrangements. Outstanding letters of credit are held in connection with certain business combinations, lease arrangements, bankcard association
agreements and other security agreements. All letters of credit expire prior to February 28, 2010 with a one-year renewal option. The Company expects
to renew most of the letters of credit prior to expiration.
(b) Represents $382.5 million of committed lines of credit as well as certain uncommitted lines of credit and other agreements that are available to fund
settlement activity and are associated with First Data Deutschland, Cashcard Australia, Ltd., the joint venture with AIB, First Data Polska and the
Merchant Solutions joint venture. Except for $14.0 million available for working capital needs, the Company cannot use these lines of credit for general
corporate purposes. Certain of these arrangements are uncommitted but, as of the period presented, the Company had borrowings outstanding against
them. The totals available in functional currencies as of December 31, 2008 were approximately 305 million euro, 160 million Australian dollar,
205 million Polish zloty and 2.5 billion Korean won.
The Company believes its liquidity exposure associated with its lines of credit is slightly increased as a result of the weakening of the global economy;
however, the Company does not believe this will have any impact on the overall liquidity of the Company. In the event one or more of the aforementioned
lines of credit is no longer available, the Company will utilize its existing cash, cash flows from operating activities or its revolving credit facility to meet its
liquidity needs.
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