First Data 2009 Annual Report Download - page 74

FIRST DATA CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Purchase of Treasury Shares
During the predecessor period in 2007, the Company repurchased 11.2 million shares for $335.3 million
related to employee benefit plans. The difference between the cost of shares repurchased noted above and the
amount reflected in the Consolidated Statements of Cash Flows is due to timing of trade settlements. The
Company did not repurchase any shares under its board authorized stock repurchase programs during the
predecessor period in 2007.
Cash Dividends
The Company paid cash dividends to Holdings in 2008 to fund employee stock repurchases under the
employee stock program and other miscellaneous, minor operational needs. The decrease in cash dividends from
the predecessor period in 2007 is due to the merger and the associated suspension of regular quarterly dividends.
Letters, Lines of Credit and Other
Total Available Total Outstanding
As of December 31, As of December 31,
(in millions) 2009 2008 2009 2008
Letters of Credit (a) ............................................ $500.1 $514.3 $ 39.7 $ 54.0
Lines of Credit and Other (b) .................................... $563.9 $655.5 $109.2 $295.0
(a) Up to $500 million of the Company’s senior secured revolving credit facility is available for letters of credit,
of which $39.6 million and $39.7 million of letters of credit were issued under the facility as of
December 31, 2009 and 2008, respectively. An additional $0.1 million and $14.3 million of letters of credit
were outstanding associated with other arrangements as of December 31, 2009 and 2008, respectively.
Outstanding letters of credit are held in connection with certain business combinations, lease arrangements,
bankcard association agreements and other security agreements. All letters of credit expire prior to
February 20, 2011 with a one-year renewal option. The Company expects to renew most of the letters of
credit prior to expiration.
(b) As of December 31, 2009, represents $379.5 million of committed lines of credit as well as certain
uncommitted lines of credit and other agreements that are available in various currencies to fund settlement
and other activity for the Company’s international operations. Except for $14.4 million available for
working capital needs, the Company cannot use these lines of credit for general corporate purposes. Certain
of these arrangements are uncommitted but, as of the dates presented, the Company had borrowings
outstanding against them.
The Company believes its liquidity exposure associated with its lines of credit is slightly increased as a
result of the current status of the global economy; however, the Company does not believe this will have any
impact on the overall liquidity of the Company. In the event one or more of the aforementioned lines of credit
becomes unavailable, the Company will utilize its existing cash, cash flows from operating activities or its
revolving credit facility to meet its liquidity needs.
Significant Non-Cash Transactions
On June 26, 2009, the Company entered into the BAMS alliance with BofA and Rockmount as discussed in
the “Overview” section above. The Company’s and BofA’s direct contributions to the alliance consisted of
non-cash assets and liabilities.
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