First Data 2009 Annual Report Download - page 229

Chase Paymentech
NOTES TO COMBINED FINANCIAL STATEMENTS
For the years ended December 31, 2007 and 2006 and
the year ended December 31, 2005 (unaudited)
NOTE 1—ORGANIZATION AND BUSINESS
Organization
The accompanying combined financial statements include all entities commonly owned by First Data
Corporation and its subsidiaries (FDC) and JPMorgan Chase & Co. and its subsidiaries (JPMorgan Chase). The
common ownership of these entities, which are primarily joint ventures, occurred over the course of several years
and involved multiple transactions between FDC, JPMorgan Chase, Bank One Corporation (Bank One) and the
joint ventures. The commonly owned entities include corporations, a general partnership and limited liability
companies (LLCs) and are functionally grouped into two operating divisions and a group of holding companies.
These entities and their form are shown below, by functional grouping, and are collectively referred to as Chase
Paymentech, or the Company:
Name of Entity Form of Entity
Holding Companies
FDC Offer Corp. Corporation (incorporated in Delaware in 1999)
Subsidiaries:
Paymentech, Inc. Corporation (incorporated in Delaware in 1995)
Paymentech Management Resources, Inc. Corporation (incorporated in Delaware in 1995)
Paymentech Employee Resources LLC LLC (formed in Delaware in 1999)
Chase Merchant Services, LLC LLC (formed in Delaware in 1997)
Chase Paymentech—U.S. Operations
Chase Paymentech Solutions, LLC LLC (formed in Delaware in 1996)
Subsidiaries:
Merchant-Link, LLC LLC (formed in Delaware in 1999)
Paymentech Salem Services, LLC LLC (formed in Delaware in 2003)
S3 Financial Services, LLC LLC (formed in Delaware in 2005)
Chase Alliance Partners, LLC LLC (formed in Delaware in 2007)
Paymentech, LLC LLC (formed in Delaware in 2007)
Chase Paymentech—Canadian Operations
Chase Paymentech Solutions General Partnership (formed in Ontario in 2002)
In June 2007, PTI General Partner, LLC and BOPS Holding, LLC, formerly subsidiaries of Chase
Paymentech Solutions, LLC, were merged into Chase Paymentech Solutions, LLC. Also in June 2007, Chase
Alliance Partners, L.P. and Paymentech, L.P., formerly subsidiaries of Chase Paymentech Solutions, LLC, were
merged into Chase Alliance Partners, LLC and Paymentech, LLC, respectively. These mergers had no impact on
the operations of the Company.
The aggregate beneficial ownership in Chase Paymentech is approximately 51% ownership by JPMorgan
Chase and approximately 49% ownership by FDC. On September 24, 2007, FDC was acquired by Kohlberg
Kravis Roberts & Co (KKR). KKR’s acquisition of FDC is a change in control, which gives JPMorgan Chase the
option to terminate the Company. On May 23, 2008, FDC and JPMorgan Chase entered into an agreement (the
“Separation Agreement”) to end the joint ownership of the Company. The Separation Agreement allows for each
owner to receive their ownership share of the Company’s net assets including merchant contracts, by value, and
their share of sales and certain service professionals. The separation is anticipated to occur prior to December 31,
2008. The accompanying financial statements do not include any adjustments that might result from the outcome
of this transaction.
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