First Data 2009 Annual Report Download - page 175

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 18: Fair Value Measurement
Fair value of financial instruments
Carrying amounts for certain of FDC’s financial instruments (cash and cash equivalents and short-term
borrowings) approximate fair value due to their short maturities. Accordingly, these instruments are not
presented in the following table. The following table provides the estimated fair values of the remaining financial
instruments (in millions):
2009 2008
December 31 Carrying Value Fair Value Carrying Value Fair Value
Financial instruments:
Settlement assets:
Short-term investment securities ........... $ 250.9 $ 250.9 $ 121.9 $ 121.9
Long-term investment securities ........... $ 480.7 $ 480.7 $ 732.7 $ 732.7
Other current assets:
Short-term investment securities ........... $ 5.0 $ 5.0 $ 12.3 $ 12.3
Other long-term assets:
Long-term investment securities ........... $ 25.6 $ 25.6 $ 27.5 $ 27.5
Derivative financial instruments ........... $ 1.2 $ 1.2 $ 11.7 $ 11.7
Other current liabilities:
Derivative financial instruments ........... $ 6.4 $ 6.4 $ 5.7 $ 5.7
Long-term borrowings:
Long-term borrowings ................... $22,304.9 $20,135.4 $22,075.2 $12,662.1
Other long-term liabilities:
Derivative financial instruments ........... $ 465.1 $ 465.1 $ 595.6 $ 595.6
The estimated fair values of investment securities and derivative financial instruments are described below.
Refer to Notes 6 and 7 for additional information regarding the Company’s investment securities and derivative
financial instruments, respectively.
The estimated fair market values of long-term borrowings were primarily based on market trading prices.
For additional information regarding the Company’s borrowings, refer to Note 9 of these Consolidated Financial
Statements.
Concentration of credit risk
The Company’s investment securities are diversified across multiple issuers with no single issuer
representing more than 12% of the total carrying value of its investment portfolio (investment securities plus cash
and cash equivalents). In addition to investment securities, the Company maintains other financial instruments
with various financial institutions. The Company generally limits its concentration of financial instruments with
any one institution to 10% of the aggregate value of its investment portfolio and limits its derivative financial
instruments credit risk by maintaining contracts with counterparties rating “A” or higher. The Company
periodically reviews the credit standings of these institutions.
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