First Data 2012 Annual Report Download - page 44

There were no expenditures, other than professional fees, or receipts of cash associated with the registration statement or
exchange offer described above.
During 2012, 2011 and 2010, the Company entered into capital leases, net of trade-ins, totaling approximately $55 million, $106
million and $65 million, respectively.
As discussed above, the Company acquired 100% of Clover Network, Inc. and recorded a $20 million liability for the
contingent consideration due to outside investors based upon the net present value of the Company’ s estimate of the future payments.
Also discussed above, the Company acquired the remaining approximately 30 percent noncontrolling interest in Omnipay for
approximately 37.1 million euro, of which 19.0 million euro ($25.1 million) was paid in April 2012 with the remainder to be paid in
April 2013.
In November 2011, the Company contributed the assets of its transportation business to an alliance in exchange for a 30%
noncontrolling interest in the alliance. Refer to Note 18 to the Company’ s Consolidated Financial Statements in Item 8 of this
Form 10-K for additional information.
Guarantees and covenants. All obligations under the senior secured revolving credit facility and senior secured term loan
facility are unconditionally guaranteed by substantially all existing and future, direct and indirect, wholly owned, material domestic
subsidiaries of the Company other than IPS. The senior secured facilities contain a number of covenants that, among other things,
restrict the Company’ s ability to incur additional indebtedness; create liens; enter into sale-leaseback transactions; engage in mergers
or consolidations; sell or transfer assets; pay dividends and distributions or repurchase the Company’ s or its parent company’ s capital
stock; make investments, loans or advances; prepay certain indebtedness; make certain acquisitions; engage in certain transactions
with affiliates; amend material agreements governing certain indebtedness; and change its lines of business. The senior secured
facilities also require the Company to not exceed a maximum senior secured leverage ratio and contain certain customary affirmative
covenants and events of default, including a change of control. The senior secured term loan facility also requires mandatory
prepayments based on a percentage of excess cash flow generated by the Company.
All obligations under the senior secured notes, senior second lien notes, PIK toggle senior second lien notes, senior notes and
senior subordinated notes are similarly guaranteed in accordance with their terms by each of the Company’ s domestic subsidiaries that
guarantee obligations under the Company’ s senior secured term loan facility described above. These notes and facilities also contain a
number of covenants similar to those described for the senior secured obligations noted above. The Company is in compliance with all
applicable covenants as of December 31, 2012 and anticipates it will remain in compliance in future periods.
Although all of the above described indebtedness contain restrictions on the Company’ s ability to incur additional indebtedness,
these restrictions are subject to numerous qualifications and exceptions, including the ability to incur indebtedness in connection with
the Company’ s settlement operations. The Company believes that the indebtedness that can be incurred under these exceptions as well
as additional credit under the existing senior secured revolving credit facility are sufficient to satisfy the Company’ s intermediate and
long-term needs.
Covenant compliance. Under the senior secured revolving credit and term loan facilities, certain limitations, restrictions and
defaults could occur if the Company is not able to satisfy and remain in compliance with specified financial ratios. The Company has
agreed that it will not permit the Consolidated Senior Secured Debt to Consolidated EBITDA (both as defined in the agreement) Ratio
for any 12 month period (last four fiscal quarters) ending during a period set forth below to be greater than the ratio set forth below
opposite such period:
The breach of this covenant could result in a default under the senior secured revolving credit facility and the senior secured
term loan credit facility and the lenders could elect to declare all amounts borrowed due and payable. Any such acceleration could also
result in a default under the indentures for the senior secured notes, senior second lien notes, PIK toggle senior second lien notes,
senior notes and senior subordinated notes. As of December 31, 2012, the Company is in compliance with this covenant with
Consolidated Senior Secured Debt of $11,985.1 million, Consolidated EBITDA of $2,913.8 million and a Ratio of 4.11 to 1.00.
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Period Ratio
October 1, 2012 to September 30, 2013 6.25 to 1.00
Thereafte
r
6.00 to 1.00