First Data 2014 Annual Report Download - page 75

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The Management Agreement terminates automatically upon the consummation of an initial public offering and may be terminated at any time by mutual
consent of the Company and KKR. The Management Agreement also contains customary exculpation and indemnification provisions in favor of KKR and its
affiliates. During 2014, 2013 and 2012, the Company incurred $20 million in management fees in each year.
Certain members of the Company’s Board of Directors are affiliated with KKR.
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In 2014, 2013, and 2012, KKR Capital Markets LLC (KCM) assisted the Company in arranging and coordinating the Company’s request for an extension of
the maturity of certain commitments and loans under its senior secured lending facility. The Company paid KCM $1 million for such services in each year.
Also during 2014, 2013, and 2012, the Company entered into purchase agreements in which KCM agreed to serve as one of the initial purchasers for
offerings of secured notes and receive a portion of the underwriting commissions for the offerings. Under the terms of the agreements, the Company paid
underwriting commissions to KCM of $7 million in each year.
On April 2, 2013 and April 8, 2013, the Company entered into engagement letters with KCM and others, pursuant to which KCM agreed to assist in arranging
and coordinating the Company’s request for a reduction of interest rate for certain loans under its senior secured lending facility. The Company paid KCM $3
million for such services.
During 2014, 2013, and 2012, the Company paid $7 million, $11 million, and $12 million, respectively, of expenses to KKR Capstone Americas LLC, a
consulting company that works exclusively with KKR’s portfolio companies, for consulting, financial, and other advisory services provided to the
Company.
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The Company leases certain of its facilities and equipment under operating lease agreements, substantially all of which contain renewal options and
escalation provisions. The following table presents the amounts associated with total rent expense for operating leases:
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 
2014 $ 77.4
2013 76.1
2012 72.4
Future minimum aggregate rental commitments as of December 31, 2014 under all noncancelable operating leases, net of sublease income are due in the
following years:
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 
2015 $ 60.1
2016 53.7
2017 42.8
2018 37.5
2019 31.7
Thereafter 77.2
Total $ 303.0
Sublease income is earned from leased space and leased equipment which FDC concurrently subleases to third parties with comparable time periods. As of
December 31, 2014, sublease amounts totaled $5 million in FDC obligations. In addition, the Company has certain guarantees imbedded in leases and other
agreements wherein the Company is required to relieve the counterparty in the event of changes in the tax code or rates. The Company believes the fair value
of such guarantees is insignificant due to the likelihood and extent of the potential changes.
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