First Data 2011 Annual Report Download - page 79

upon the November 1, 2008 termination of the Chase Paymentech Solutions ("CPS") alliance, though certain other assets were
included as well. Rockmount's contribution was in the form of cash totaling $321.7 million of which $128.7 million represents the
cash contributed to Rockmount by the Company for its 40% investment noted above.
The formation of BAMS was accounted for by the Company as a sale of a noncontrolling interest in a subsidiary and a purchase
business combination. The Company recorded a gain of approximately $33 million ($21 million, net of taxes), through adjustments to
additional paid-in capital and noncontrolling interest. The gain was not material as the assets comprising the most significant portion
of the Company's contribution were adjusted to fair value in the fourth quarter 2008 in connection with the November 1, 2008
termination of the CPS alliance.
The assets contributed to BAMS by the Company continue to be recorded at the Company's carrying basis, which for the
majority of assets was established effective November 1, 2008 as described immediately above net of applicable amortization expense
subsequently recognized, and the assets contributed by BofA were recorded at their estimated fair value. The fair value of the BofA
contribution to BAMS was determined by estimating the BAMS enterprise value and attributing the appropriate portion of that value
to such contribution. The Company relied in part upon a third-party valuation firm in determining the enterprise value of BAMS. All
key assumptions and valuations were determined by and were the responsibility of management. The value attributed to the net
tangible and identifiable intangible assets contributed by BofA was based on their estimated fair values. During the fourth quarter of
2009 the final valuation was completed and the purchase price allocation resulted in identifiable intangible assets of $1,317 million,
which will be amortized over a range estimated to be 11 to 20 years, and goodwill of $2,127 million.
In December 2009, the Company formed a merchant acquiring alliance with ICICI Bank, ICICI Merchant Services. ICICI
Merchant Services provides card acquiring services in India. The Company owns 81% of the alliance which is consolidated and
reported in the International segment. During the fourth quarter of 2010 the final valuation was completed and the purchase price
allocation resulted in identifiable intangible assets of $34 million, which will be amortized over five to 10 years, and goodwill of $41
million.
The aggregate cash paid for acquisitions during the year ended December 31, 2009 was approximately $87 million, net of cash
acquired. The aggregate purchase price allocation associated with acquisitions during 2009 resulted in identifiable intangible assets
and goodwill as follows:
Purchase price
allocation
(in millions)
Weighted-average
useful life
Customer relationships $ 971.4 11 years
Trade names 389.0 20 years
Other intangibles 13.7 9 years
Total identifiable intangibles $ 1,374.1 14 years
Goodwill (a) $ 2,168.5
(a) Much of the goodwill in the BAMS transaction represents synergies in processing and other strengths of the respective partners.
None of the goodwill is deductible for tax purposes.
Additional information. The pro forma impact of all 2009 acquisitions on net income was not material.
2009 Dispositions
In August 2009, the Company divested its debit and credit card issuing and acquiring processing business in Austria which was
reported as part of the International segment. The Company recognized a loss on the sale of $37.2 million, comprised of a $21.9
million loss classified as "Other income (expense)" and a $15.3 million income tax expense in the Consolidated Statements of
Operations.
In November 2009, the Company sold a merchant acquiring business in Canada which was reported as part of the International
segment. The Company recognized a loss on the sale of $7.8 million, comprised of a $10.0 million gain classified as "Other income
(expense)" and a $17.8 million income tax expense in the Consolidated Statements of Operations.
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