First Data 2009 Annual Report Download - page 69

FIRST DATA CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Cash Flows from Investing Activities
Successor Predecessor
Year ended
December 31,
Period from
September 25,
2007
through
December 31,
Period from
January 1,
2007
through
September 24,
Source/(use) (in millions) 2009 2008 2007 2007
Merger, net of cash acquired ............................ — — $(25,756.2) —
Current period acquisitions, net of cash acquired ............ $ (86.5) $(188.7) (62.8) $ (690.3)
Payments related to other businesses previously acquired ..... (14.7) (35.6) (0.5) (50.0)
Proceeds from dispositions, net of expenses paid and cash
disposed .......................................... 88.1 215.1 — —
Proceeds from sale of property and equipment .............. 29.4 — — —
Additions to property and equipment, net .................. (199.1) (283.9) (55.2) (275.5)
Payments to secure customer service contracts, including
outlays for conversion, and capitalized systems development
costs ............................................. (180.0) (163.9) (57.5) (123.7)
Proceeds from the sale of marketable securities ............. 3.9 74.9 14.1 11.8
Other investing activities ............................... (48.7) (1.3) 108.7 18.1
Net cash used in investing activities ...................... $(407.6) $(383.4) $(25,809.4) $(1,109.6)
Merger
As discussed in Note 2 to the Consolidated Financial Statements included in Item 8 of this Form 10-K, the
Company merged with an entity controlled by affiliates of KKR on September 24, 2007. The $25.8 billion
represents the use of cash to purchase the FDC shares from its shareholders as well as other related transaction
costs.
Acquisitions
The Company finances acquisitions through a combination of internally generated funds, short-term
borrowings and equity of its parent company. The Company continues to pursue opportunities that strategically
fit into the business. The Company currently does not expect to fund material acquisitions in 2010. If cash flows
from operating activities are not sufficient to fund acquisitions, the Company may borrow against its revolving
credit facility or find other sources of financing.
The Company continues to manage its portfolio of businesses and evaluate the possible divestiture of
businesses that do not match its long-term growth objectives. For a more detailed discussion on acquisitions in
2009, 2008, the 2007 successor period and the 2007 predecessor period refer to Note 4 to the Consolidated
Financial Statements included in Item 8 of this Form 10-K. The Company funded significantly less in 2009 for
acquisitions than in prior years. All acquisitions during these periods were funded from cash flows from
operating activities or from the reinvestment of cash proceeds from sale of other assets other than the acquisition
of the Company’s proportionate share of the BAMS alliance and CPS discussed in “significant non-cash
transactions” below. Purchases of noncontrolling interests are classified as financing activities as noted below.
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