First Data 2009 Annual Report Download - page 151

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Transactions and Balances Involving Company Executives
The Company has engaged in the following transactions with The Labry Companies and Plane Fish, LLC.
Mr. Labry, an executive officer of First Data, is the sole shareholder of The Labry Companies, Inc. and sole
member of Plane Fish, LLC.
On January 31, 2006, First Data Merchant Services Corporation (“FDMS”), a wholly owned subsidiary of
the Company, entered into a four year, eight month sublease agreement with The Labry Companies, Inc. for
approximately 3,600 square feet of office space in Memphis, Tennessee, including furniture, fixtures and
equipment, on customary terms. During 2008 and 2007, the Company paid approximately $71,000 and $170,846,
respectively, to The Labry Companies, Inc. under the sublease. On June 1, 2008, FDMS terminated the sublease
agreement and paid a fee to The Labry Companies of approximately $220,000 pursuant to the sublease
agreement. First Data Merchant Services Corporation entered into a direct lease agreement with the landlord for
additional space and a longer term as of June 1, 2008. The Labry Companies, Inc. will retain the furniture,
fixtures and equipment following the expiration or termination of the lease, or upon Mr. Labry’s separation from
the Company.
The Company has engaged in a transaction associated with Plane Fish, LLC, of which Mr. Labry, an
executive officer of the Company, is the sole member. Plane Fish, LLC owned an aircraft which it leased to a
charter company. The charter company made the aircraft available to its customers, including the Company,
which used the aircraft solely in connection with business-related travel by Mr. Labry and other company
employees. On March 17, 2008, a third party leasing company acquired the aircraft from Plane Fish, LLC for
$8.5 million and the Company now leases the plane from the third party leasing company through a capital lease.
The Company negotiated the $8.5 million purchase price with Plane Fish, LLC and arranged for the third party
leasing company to purchase the aircraft with the Company’s commitment to lease the aircraft. The Company
also reimbursed Plane Fish, LLC for $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 and 2007, the
Company incurred $290,704 and $1,029,999, respectively, in expenses to the charter company for the charter of
the aircraft.
Note 12: 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 $80.5
million for 2009, $77.2 million for 2008, $24.8 million for the successor period from September 25, 2007
through December 31, 2007 and $64.6 million for the predecessor period from January 1, 2007 through
September 24, 2007.
Future minimum aggregate rental commitments at December 31, 2009 under all noncancelable operating
leases, net of sublease income, were $229.8 million and are due in the following years $62.1 million for 2010,
$44.9 million for 2011, $30.0 million for 2012, $22.6 million for 2013, $14.0 million for 2014 and $56.2 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, 2009, 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.
151