First Data 2009 Annual Report Download - page 179

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Other current and long-term assets- Available-for-sale securities
The Company held certain other investments that were classified as available-for-sale and were classified as
Level 2.
Derivative financial instruments
The Company uses derivative instruments to mitigate certain risks. The Company’s derivatives are not
exchange listed and therefore the fair value is estimated using Bloomberg analytics models that are based on
readily observable market inputs. These models reflect the contractual terms of the derivatives, such as notional
value and expiration date, as well as market-based observables including interest and foreign currency exchange
rates, yield curves and the credit quality of the counterparties. The models also incorporate the Company’s
creditworthiness in order to appropriately reflect non-performance risk. Inputs to the derivative pricing models
are generally observable and do not contain a high level of subjectivity and, accordingly, the Company’s
derivatives were classified within Level 2 of the fair value hierarchy. While the Company believes its estimates
result in a reasonable reflection of the fair value of these instruments, the estimated values may not be
representative of actual values that could have been realized as of December 31, 2009 or that will be realized in
the near future. Refer to Note 7 for additional information regarding the Company’s derivative financial
instruments.
Assets and liabilities measured at fair value on a non-recurring basis
Assets other than financial instruments carried at fair value as of December 31, 2009 and measured at fair
value on a non-recurring basis are classified in the table below according to the fair value hierarchy:
Fair Value Measurement Using
As of December 31, 2009
(in millions)
Quoted prices in
active markets
for identical assets
(Level 1)
Significant other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
Total
Losses
Assets:
Property and equipment
Building ...................... $— $— $65.7 $65.7 $ (5.9)
Goodwill ......................... — — — — (16.6)
Customer relationships .............. — — 23.8 23.8 (146.9)
Other intangibles:
Software ...................... — — 4.9 4.9 (7.9)
Other ........................ — — 0.5 0.5 (7.9)
Other long-term assets ............... — — 0.7 0.7 (0.5)
Totals ................................ $— $— $95.6 $95.6 $(185.7)
During the year ended December 31, 2009, the Company recorded impairments on assets with a total
carrying value of $281.3 million, as a result of changes in management’s expectations with respect to projected
cash flows, ongoing negative cash flows for certain assets or asset groups or due to the discontinued use of
certain assets.
The fair values of the impaired assets were estimated primarily using an income approach, based on
management’s current cash flow projections and using assumptions that management believes are consistent with
market participant assumptions. All key assumptions and valuations were determined by and are the responsibility
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