First Data 2011 Annual Report Download - page 81

obligations for amounts payable to merchants and for payment instruments not yet presented for settlement. The difference in the
aggregate amount of such assets and liabilities is primarily due to unrealized net investment gains and losses, which are reported as
OCI in equity. The principal components of FDC's settlement assets and obligations are as follows:
As of December 31,
(in millions) 2011 2010
Settlement assets:
Current settlement assets:
Cash and cash equivalents $ 1,650.3 $ 1,896.0
Investment securities 105.7 39.2
Due from card associations and bank partners 8,353.3 4,194.8
Due from merchants 549.0 542.0
Due from selling agents — 22.0
10,658.3 6,694.0
Long-term settlement assets:
Investment securities 181.0 365.1
$ 10,839.3 $ 7,059.1
Settlement obligations:
Current settlement obligations:
Payment instruments outstanding $ 459.6 $ 775.5
Card settlements due to merchants 10,378.2 6,283.4
$ 10,837.8 $ 7,058.9
As of December 31, 2011 and 2010, the Company's cash equivalents consisted primarily of money market funds and
commercial paper. See Note 5 of these Consolidated Financial Statements for information concerning the Company's investment
securities.
FDC generated revenues from its investment of certain settlement assets, the majority of which pertained to cash equivalents
and investment securities. As of December 31, 2011, the official check portfolio was invested in cash equivalents as well as short-term
and long-term investments, substantially all of which were highly-rated (in the "A" category or higher). The following table presents
the official check investment portfolio average balances and total investment revenues:
Year ended December 31,
2011 2010 2009
Official check investment portfolio average balances (in
billions) $ 0.6 $ 1.0 $ 2.7
Investment revenues from the official check portfolio (before
commissions to certain selling agents) (in millions) (a) $ 0.8 $ (17.6) $ 31.1
(a) Includes impairment charges of $5.2 million and $28.2 million for the years ended December 31, 2011 and 2010. Refer to
Note 5 of these Consolidated Financial Statements for additional information.
Note 5: Investment Securities
The majority of the Company's investment securities are a component of settlement assets and represent the investment of funds
received by the Company from prior year sales of payment instruments (official checks and financial institution money orders) by
authorized agents. The Company's investment securities, excluding those classified as cash equivalents, within current settlement
assets primarily consisted of municipal obligations and corporate bonds as of December 31, 2011 and of corporate bonds as of
December 31, 2010. The Company's long-term settlement assets were primarily comprised of SLARS and U.S. Government
guaranteed securities as of December 31, 2011 and of SLARS and corporate bonds as of December 31, 2010. Realized gains and
losses and OTTI on investments classified as settlement assets are recorded in the "Product sales and other" line item of the
Consolidated Statements of Operations. The Company carried other investments, primarily cost method investments, which are
included in the "Other current assets" and "Other long-term assets" line items of the Consolidated Balance Sheets and are discussed
further below. Realized gains and losses on these investments are recorded in the "Other income (expense)" line item of the
Consolidated Statements of Operations described in Note 9 of these Consolidated Financial Statements.
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