First Data 2008 Annual Report Download - page 88

FIRST DATA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Consolidated EBITDA (or debt covenant EBITDA) is defined as Adjusted EBITDA plus projected near-term cost savings further adjusted to exclude
other adjustments that will be used in calculating covenant compliance under the agreements governing the Company's senior unsecured debt and/or
senior secured credit facilities. The Company believes that the inclusion of supplementary adjustments to Adjusted EBITDA plus projected near-term
cost savings applied in presenting Consolidated EBITDA are appropriate to provide additional information to investors about items that will impact the
calculation of EBITDA that is used to determine covenant compliance under the agreements governing the Company's senior unsecured debt and/or
senior secured credit facilities. Since not all companies use identical calculations, this presentation of Consolidated EBITDA may not be comparable to
other similarly titled measures of other companies.
Off-Balance Sheet Arrangements
During 2008, the Company did not engage in any off-balance sheet financing activities. During the predecessor 2007 and 2006 periods, other than
facility and equipment leasing arrangements, the Company did not engage in off-balance sheet financing activities. Prior to the merger, the Company had
several synthetic operating lease arrangements. On September 20, 2007, the Company purchased the buildings and equipment under its synthetic operating
lease arrangements as contractually required due to change in control provisions contained in the agreements. In 2006, the Company purchased one of the
buildings under its synthetic operating lease arrangements and contributed it to Western Union as part of the spin-off. The Company also purchased the
Memphis facility under the synthetic lease and sold it to a third party for less than the liability assumed in the Concord merger. Rent expense related to
synthetic operating leases was $4.7 million for the predecessor period from January 1, 2007 through September 24, 2007 and $9.0 million for the year ended
December 31, 2006.
Contractual Obligations
The Company's contractual obligations as of December 31, 2008 are as follows (in millions):
Payments Due by Period
Total
Less than
1 year 1-3 years 4-5 years
After
5 years
Borrowings (a) $ 31,994.1 $ 1,844.3 $ 4,450.0 $ 3,125.1 $ 22,574.7
Capital lease obligations (b) 234.2 57.0 89.2 23.4 64.6
Operating leases 244.5 59.8 91.4 43.1 50.2
Pension plan contributions (c) 34.4 34.4 — — —
Purchase obligations (d):
Technology and telecommunications (e) 748.9 571.7 149.1 23.7 4.4
All other (f) 369.0 219.3 126.3 23.4 —
Other long-term liabilities 83.7 45.7 37.1 0.5 0.4
$ 33,708.8 $ 2,832.2 $ 4,943.1 $ 3,239.2 $ 22,694.3
(a) Includes future cash interest payments on long-term borrowings through scheduled maturity dates. Includes $12,732.3 million of variable rate debt.
Also includes the impact of interest rates swaps that convert $7,500 million of the variable rate debt to fixed rates. The swaps expire in 2010 and 2012.
Interest payments for the variable rate debt and the associated interest rate swaps were calculated using interest rates as of December 31, 2008.
(b) Includes future payments on capital leases, including interest expense, through scheduled expiration dates.
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