First Data 2011 Annual Report Download - page 50

operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not
intended to be a measure of free cash flow available for management's discretionary use as it does not consider certain cash
requirements such as interest payments, tax payments and debt service requirements. The presentation of EBITDA has
limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of FDC's results as
reported under GAAP. Management believes EBITDA is helpful in highlighting trends because EBITDA excludes the results
of decisions that are outside the control of operating management and can differ significantly from company to company
depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and
capital investments. Management compensates for the limitations of using non-GAAP financial measures by using them to
supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than
GAAP results alone.
Consolidated EBITDA (or debt covenant EBITDA) is defined as EBITDA adjusted to exclude certain non-cash items, non-
recurring items that FDC does not expect to continue at the same level in the future and certain items management believes
will impact future operating results and adjusted to include near-term cost savings projected to be achieved within twelve
months on an annualized basis (see Note 8 above). Consolidated EBITDA is further adjusted to add net income attributable to
noncontrolling interests of certain non-wholly-owned subsidiaries and exclude other miscellaneous adjustments that are used
in calculating covenant compliance under the agreements governing FDC's senior unsecured debt and/or senior secured credit
facilities. The Company believes that the inclusion of supplementary adjustments to EBITDA are appropriate to provide
additional information to investors about items that will impact the calculation of EBITDA that is used to determine covenant
compliance under the agreements governing FDC's senior unsecured debt and/or senior secured credit facilities. Since not all
companies use identical calculations, this presentation of Consolidated EBITDA may not be comparable to other similarly
titled measures of other companies.
Off-balance sheet arrangements
During 2011, 2010 and 2009, the Company did not engage in any off-balance sheet financing activities other than those
included in the "Contractual obligations" discussion below and those reflected in Note 11 to the Company's Consolidated Financial
Statements in Item 8 of this Form 10-K.
Contractual obligations
The Company's contractual obligations as of December 31, 2011 are as follows:
Payments Due by Period
(in millions) Total
Less than
1 year 1-3 years 4-5 years
After
5 years
Borrowings (a) $ 33,283.2 $ 1,801.3 $ 9,661.9 $ 6,507.3 $ 15,312.7
Capital lease obligations (b) 176.4 65.8 89.5 20.1 1.0
Operating leases 267.0 57.6 76.3 46.6 86.5
Pension plan contributions (c) 32.2 32.2
Purchase obligations (d):
Technology and telecommunications (e) 869.7 625.9 137.6 50.0 56.2
All other (f) 505.1 246.1 63.7 73.5 121.8
Other long-term liabilities 12.3 9.7 1.8 0.7 0.1
$ 35,145.9 $ 2,838.6 $ 10,030.8 $ 6,698.2 $ 15,578.3
(a) Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates. Includes $991.9
million of PIK toggle notes for which it is assumed the Company will pay interest in cash. Also includes $11,916.1 million of
variable rate debt and the impact of interest rates swaps. Borrowings and interest rate swaps are discussed in Note 8 and Note 6,
respectively, to the Company's Consolidated Financial Statements in Item 8 of this Form 10-K. Interest payments for the
variable rate debt and the associated interest rate swaps were calculated using interest rates as of December 31, 2011.
(b) Represents future payments on existing capital leases, including interest expense, through scheduled expiration dates.
(c) The amount of pension plan contributions depends upon various factors that cannot be accurately estimated beyond a one-year
time frame.
(d) Many of the Company's contracts contain clauses that allow the Company to terminate the contract with notice, and with or
without a termination penalty. Termination penalties are generally an amount less than the original obligation. Certain contracts
also have an automatic renewal clause if the Company does not provide written notification of its intent to terminate the
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