First Data 2009 Annual Report Download - page 152

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company has $39.7 million in outstanding letters of credit at December 31, 2009, all of which expire
prior to February 20, 2011 with a one-year renewal option ($39.6 million of these letters of credit were issued
under the Company’s senior secured revolving credit facility). The letters of credit are held in connection with
certain business combinations, lease arrangements, bankcard association agreements and other security
agreements. The Company expects to renew most of the letters of credit prior to expiration.
On July 2, 2004, a class action complaint was filed against the Company, its subsidiary Concord EFS, Inc.,
and various financial institutions. Plaintiffs claim that the defendants violated antitrust laws by conspiring to
artificially inflate foreign ATM fees that were ultimately charged to ATM cardholders. Plaintiffs seek a
declaratory judgment, injunctive relief, compensatory damages, attorneys’ fees, costs and such other relief as the
nature of the case may require or as may seem just and proper to the court. Five similar suits were filed and
served in July, August and October 2004 (referred to collectively as the “ATM Fee Antitrust Litigation”). On
August 3, 2007, Concord filed a motion for summary judgment seeking to dismiss plaintiffs’ per se claims,
arguing that there are procompetitive justifications for the ATM interchange. On March 24, 2008, the Court
entered an order granting the defendants’ motions for partial summary judgment, finding that the claims raised in
this case would need to be addressed under a “Rule of Reason” analysis. On February 2, 2009, the Plaintiffs filed
a Second Amended Complaint and on April 6, 2009, the defendants filed a Motion to Dismiss the Second
Amended Complaint. On September 4, 2009, the Court entered an order dismissing the Second Amended
Complaint and, on October 16, 2009, the Plaintiffs filed a Third Amended Complaint. The defendants filed a
motion to dismiss the Third Amended Complaint on November 13, 2009. The Company believes the complaints
are without merit and intends to vigorously defend them.
In the normal course of business, the Company is subject to claims and litigation, including indemnification
obligations to purchasers of former subsidiaries. Management of the Company believes that such matters will not
have a material adverse effect on the Company’s results of operations, liquidity or financial condition.
Note 13: First Data Corporation Stockholders’ Equity and Redeemable Noncontrolling Interests
Dividends
The Company’s senior secured revolving credit facility, senior secured term loan facility, senior notes,
senior PIK notes, and senior subordinated notes contain restrictions on the Company’s ability to pay
dividends. The restrictions are subject to numerous qualifications and exceptions, including an exception that
allows the Company to pay a dividend to repurchase, under certain circumstances, the equity of Parent held by
employees, officers and directors that were obtained in connection with the stock compensation plans. The
Company paid cash dividends to its parent totaling $1.8 million during 2008. Cash dividends of $45.3 million
were declared for the predecessor period from January 1, 2007 through September 24, 2007. No dividends were
paid in 2009.
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