GPN » Topics » Taxes

This excerpt taken from the GPN 8-K filed Nov 23, 2009.

3.13 Taxes.

Except as set forth in Schedule 3.13 specifically with respect to each subparagraph of this Section 3.13:

(a) All Tax Returns required to be filed by or with respect to each Company on or before the date hereof have been filed within the time and in the manner prescribed by Law, and all such Tax Returns are true, correct and complete in all material respects.

(b) All Taxes owed or required to be paid by each Company, whether or not shown on any Tax Return, have been timely paid; and each Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

(c) There are no outstanding agreements, waivers or arrangements extending the statutory period of limitation applicable to any claim for, or the period for the collection or assessment of, Taxes due from or with respect to each Company, no power of attorney granted by or with respect to each Company relating to Taxes is currently in force, and no extension of time for filing any Tax Return required to be filed by or on behalf of each Company is currently in force.

(d) No audit, examination, investigation or other action or proceeding with respect to Taxes of each Company or the Tax Returns of each Company is currently pending, and no Shareholder nor any Company has received any communication from any Taxing Authority which has caused or could reasonably have caused them to believe that an audit, examination, investigation or proceeding is forthcoming.

(e) There are no Liens (other than Permitted Encumbrances) for Taxes (other than for Taxes not yet due and payable) upon any of the assets of each Company.

(f) Schedule 3.13(f) lists all United States federal, state and local, and all foreign Tax Returns filed with respect to each Company for taxable periods ended on or after December 31, 2005 and indicates those Tax Returns that have been audited or subject to similar examination by a Taxing Authority and those Tax Returns that currently are the subject of such audit or examination. No deficiency for any Taxes has been proposed in writing against any of the Companies, which deficiency has not been paid in full. No claim has ever been made by any Taxing Authority in any jurisdiction in which any Company does not file Tax Returns that such Company is or may be subject to taxation by that jurisdiction. None of the Companies has received written notice from any Taxing Authority of any unresolved questions or claims concerning its Tax liability.

 

25


(g) No Company has participated or engaged in any “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4 (or any corresponding or similar provision of state, local or foreign law). No Company is a party to any understanding or arrangement described in Section 6662(d)(2)(C)(ii) of the Code or Treasury Regulations Section 1.6011-4(b) or is a material advisor as defined in Section 6111(b) of the Code.

(h) The unpaid Taxes of each Company for all taxable periods (or portions thereof) ending (i) on or before May 31, 2009 did not, as of such date, exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Balance Sheets (rather than in any notes thereof) and (ii) on or before the Closing Date will not, as of the Closing Date, exceed that reserve as adjusted to reflect the ordinary operations of each Company after May 31, 2009 and through the Closing Date in accordance with the past customs and practice of each Company in filing their Tax Returns.

(i) No Company is now, nor has any Company been in the last five (5) years, a member of an affiliated group or required to file a consolidated, combined or unitary Tax Return (other than the group of which GPN is or was the parent). No Company is a party to or bound by, nor do they have any obligation under, any Tax allocation, Tax sharing, Tax indemnity agreement or similar contract or arrangement. No Company has any liability for the Taxes of any Person other than GPN and any of the Companies, as applicable, under Treasury Regulation 1.1502-6 (or any similar provision of federal, state, local or foreign Law), or as a transferee or successor, by Contract or otherwise.

(j) No Company has distributed stock of another corporation, or has had its stock distributed by another corporation, in a transaction that was governed, or purported or intended to be governed, in whole or in part, by Code Section 355 or 361. There is no limitation on the utilization by each Company of its net operating losses, built-in losses, Tax credits or other similar items under Sections 382, 383 or 384 of the Code (or any corresponding or similar provisions of applicable state, local, or foreign law) or the separate return limitation year rules under the consolidated return provisions of the Treasury Regulations (or any corresponding or similar provisions of applicable state, local, or foreign law), other than any such limitation arising as a result of the consummation of the transactions contemplated by this Agreement.

(k) Each of the Companies (i) have been treated as a corporation for U.S. and non-U.S. Tax purposes and (ii) is, and will be through the Closing Date, a member of a consolidated group (within the meaning of Treasury Regulation 1.1502-1(h)) of which GPN is the common parent. No Subsidiary of any Company organized in a jurisdiction outside the United States (A) has made an election to be treated as a domestic corporation pursuant to Section 897(i) of the Code or (B) conducts any trade or business within the United States or holds an investment in any United States property (within the meaning of Section 956 of the Code) or any United States real property interest (within the meaning of Section 897 of the Code). No Company has or had, a permanent establishment in any foreign country, as defined in any applicable Tax treaty or convention between the United States and such foreign country. No Company owns,

 

26


directly or indirectly, any interests in an entity that has been or would be treated as a “passive foreign investment company” within the meaning of Section 1297 of the Code or as a “controlled foreign corporation” within the meaning of Section 957 of the Code.

(l) No Shareholder is a “foreign person” within the meaning of Treasury Regulation Section 1.1445-2(b). No Company is a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.

(m) No Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date, (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax law) executed on or prior to the Closing Date, (iii) intercompany transaction or excess loss account described in the Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local, or non-U.S. Tax law), (iv) installment sale or open transaction made on or prior to the Closing Date, or (v) prepaid amount received on or prior to the Closing Date. No indebtedness of any Company constitutes “corporate acquisition indebtedness” within the meaning of Section 279(b) of the Code (ignoring for this purpose Section 279(b)(4)).

(n) No Company is a party to any agreement, contract, arrangement or plan that could reasonably be expected to result, separately or in the aggregate, in the payment of any “excess parachute payments” within the meaning of Section 280G of the Code (without regard to the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code).

These excerpts taken from the GPN 10-K filed Jul 30, 2008.

Taxes

 

We define operating taxes as those that are unrelated to income taxes, such as sales and property taxes. During the course of operations, we must interpret the meaning of various operating tax matters in the United States and in the foreign jurisdictions in which we do business. Taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to such operating tax matters, which could result in the payment of additional taxes in those jurisdictions.

 

During fiscal 2008, we determined that an accrued liability relating to a contingent operating tax item was no longer deemed to be probable. We made this determination as a result of consultation with outside legal counsel and further analysis of applicable legislation. As such, we released the related liability and recorded a $7.0 million reduction to sales, general and administrative expenses during fiscal 2008 in the accompanying statements of income. This reversal was a non-cash item and has been reflected as an adjustment to reconcile net income to net cash provided by operating activities in our statement of cash flows.

 

As of May 31, 2008 we did not have a liability for operating tax items. As of May 31, 2007, we had liabilities in the amount of $8.5 million for operating tax items. The amount of the liability is based on management’s best estimate given our history with similar matters and interpretations of current laws and regulations.

 

Taxes

 

STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%">We define operating taxes as those that are unrelated to income taxes, such as sales and property taxes. During the course of operations, we must
interpret the meaning of various operating tax matters in the United States and in the foreign jurisdictions in which we do business. Taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax
laws and regulations as they relate to such operating tax matters, which could result in the payment of additional taxes in those jurisdictions.

 

STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%">During fiscal 2008, we determined that an accrued liability relating to a contingent operating tax item was no longer deemed to be probable. We made
this determination as a result of consultation with outside legal counsel and further analysis of applicable legislation. As such, we released the related liability and recorded a $7.0 million reduction to sales, general and administrative
expenses during fiscal 2008 in the accompanying statements of income. This reversal was a non-cash item and has been reflected as an adjustment to reconcile net income to net cash provided by operating activities in our statement of cash flows.

 

As of May 31, 2008 we did not have a liability for
operating tax items. As of May 31, 2007, we had liabilities in the amount of $8.5 million for operating tax items. The amount of the liability is based on management’s best estimate given our history with similar matters and
interpretations of current laws and regulations.

 

Credit Facilities

 

In November 2006, we entered into a five year, $350 million
unsecured revolving credit facility agreement with a syndicate of banks based in the United States, which we refer to as our U.S. Credit Facility. The credit agreement contains certain financial and non-financial covenants and events of default
customary for financings of this nature. We complied with these covenants as of May 31, 2008. The facility expires in November 2011, and borrowings bear a variable interest rate based on a market short-term floating rate plus a margin that
varies according to our leverage position.

 

In addition, the
U.S. Credit Facility allows us to expand the facility size to $700 million by requesting additional commitments from existing or new lenders. We plan to use the U.S. Credit Facility to fund future strategic acquisitions, to provide a source of
working capital, and for general corporate purposes. As of both May 31, 2008 and May 31, 2007, we had no borrowings outstanding on our U.S. Credit Facility.

SIZE="1"> 

In November 2006, we entered into an amendment to our credit facility, which we refer to as our Canadian Credit Facility,
with the Canadian Imperial Bank of Commerce, or CIBC, as administrative agent and lender. The Canadian Credit Facility is a facility which consists of a line of credit of $25 million Canadian dollars, or $25.2 million United States dollars based on
the May 31, 2008 exchange rate. In addition, the Canadian Credit Facility allows us to expand the size of the uncommitted facility to $50 million Canadian dollars during the peak holiday season and does not have a fixed term. The Canadian
Credit Facility carries no termination date, but can be terminated by CIBC with advance notice. The Canadian Credit Facility has a variable interest rate based on the Canadian dollar London Interbank Offered Rate plus a margin.

STYLE="margin-top:0px;margin-bottom:0px"> 

The Canadian Credit Facility allows us to provide certain Canadian merchants
with “same day value” for their Visa credit card deposits. Same day value is the practice of giving merchants value for credit card transactions on the date of the applicable sale even though we receive the corresponding settlement funds
from Visa Canada/International at a later date. The amounts borrowed under the Canadian Credit Facility are restricted in use to pay Canadian Visa merchants and such amounts are generally received from Visa Canada/International on the following day.

 


82







Table of Contents


Index to Financial Statements



NOTES TO CONSOLIDATED

ALIGN="center">FINANCIAL STATEMENTS—(Continued)

 


Our obligations under the Canadian Credit Facility are secured by a first priority security interest
in the members’ accounts receivable from Visa Canada/International and Interac Associates for our transactions processed through the CIBC Visa BIN and Interac debit network, the bank accounts in which the settlement funds are deposited, and by
guarantees from certain of our subsidiaries. These guarantees are subordinate to any guarantees granted by such subsidiaries under our U.S. Credit Facility. The Canadian Credit Facility also contains certain financial and non-financial covenants and
events of default customary for financings of this nature. We complied with these covenants as of May 31, 2008. As of both May 31, 2008 and May 31, 2007, we had no borrowings outstanding on our Canadian Credit Facility.

STYLE="margin-top:0px;margin-bottom:0px"> 

In April 2008, we entered into a new unsecured revolving credit agreement
with the National Bank of Canada, which we refer to as our NBC Credit Facility. The terms of this facility will be subject to annual review on March 31 of each year. The NBC Credit Facility is a facility which consists of a line of credit of
$40 million Canadian, or $40.3 million United States dollars based on the May 31, 2008 exchange rate, and a line of credit of $5 million United States dollars. We are able to expand the size of the facility to $80 million Canadian on certain
Canadian holidays. The NBC Credit Facility is subject to revision and renewal each March 31 and has a variable interest rate based on the National Bank of Canada prime rate. The NBC Credit Facility contains certain financial and non-financial
covenants and events of default customary for financings of this nature. We complied with these covenants as of May 31, 2008.

 

STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%">We will use the NBC Credit Facility to provide certain Canadian merchants with same day value for their United States and Canadian dollar MasterCard
credit card transactions and debit card transactions. As of May 31, 2008 we had $0.1 million of borrowings outstanding on our NBC Credit Facility, based on the exchange rate in effect on that date.

STYLE="margin-top:0px;margin-bottom:0px"> 

During the fiscal year 2008, our Chinese subsidiary in the Asia-Pacific
region entered into a revolving credit facility to provide a source of working capital. This credit facility is denominated in Chinese Renminbi and has a variable interest rate based on the lending rate stipulated by the People’s Bank of China.
This facility is subject to annual review up to and including June 30, 2008. As of May 31, 2008, this facility totaled $2.5 million, of which we had $0.6 million of borrowings outstanding, based on the exchange rate in effect on that date.

 

During the fiscal year 2008, our subsidiary in Macau in the
Asia-Pacific region entered into a revolving overdraft facility which allows us to fund merchants prior to receipt of corresponding settlement funds from Visa and MasterCard. This is denominated in Macau Pataca and has a variable interest rate based
on the lending rate stipulated by The Hongkong and Shanghai Banking Corporation Limited, plus a margin. This facility is subject to review at any time and in any event by January 1, 2009, and subject to overriding right of withdrawal and
repayment on demand. As of May 31, 2008, this facility totaled $3.8 million, of which we had $0.9 million of borrowings outstanding, based on the exchange rate in effect on that date.

STYLE="margin-top:0px;margin-bottom:0px"> 

This excerpt taken from the GPN 10-K filed Jul 30, 2007.

Taxes

 

During the course of operations, we must interpret the meaning of various sales, property, income, and other tax laws in foreign and domestic federal and state tax jurisdictions in order to account for our operations. Taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits, which could result in additional taxes due in those jurisdictions. We have established a liability in the aggregate amount of $11.5 million for matters that are probable of loss in future periods. The amount of the liability is based on management’s best estimate given our history with similar matters and interpretations of current laws and regulations.

 

This excerpt taken from the GPN 10-K filed Aug 4, 2006.

Taxes

 

During the course of operations, we must interpret the meaning of various sales, property, income, and other tax laws in foreign and U.S. federal and state tax jurisdictions in order to account for our operations. Taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits, which could result in additional taxes due in those jurisdictions. We have established a liability in the aggregate amount of approximately $14.0 million for matters that are probable of loss in future periods. The amount of the liability is based on management’s best estimate given our history with similar matters and interpretations of current laws and regulations.

 

This excerpt taken from the GPN 10-Q filed Apr 7, 2006.

Taxes

During the course of operations, management of the Company must interpret the meaning of various sales, property, income, and other tax laws in foreign and U.S. federal and state tax jurisdictions in order to account for its operations. Taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits, which could result in additional taxes due in those jurisdictions. As of February 28, 2006, the Company has liabilities totaling $12.7 million for income tax and other matters that are probable of loss in future periods. The amount of the liability is based on management’s best estimate given the Company’s history with similar matters and interpretations of current laws and regulations.

This excerpt taken from the GPN 10-Q filed Jan 3, 2006.

Taxes

 

During the course of operations, management of the Company must interpret the meaning of various sales, property, income, and other tax laws in foreign and U.S. federal and state tax jurisdictions in order to account for its operations. Taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits, which could result in additional taxes due in those jurisdictions. The Company has established a liability in the aggregate amount of approximately $13.0 million for income tax and other matters that are probable of loss in future periods. The amount of the liability is based on management’s best estimate given the Company’s history with similar matters and interpretations of current laws and regulations.

 

This excerpt taken from the GPN 10-Q filed Oct 7, 2005.

Taxes

 

During the course of operations, management of the Company must interpret the meaning of various sales, property, income, and other tax laws in foreign and U.S. federal and state tax jurisdictions in order to account for its operations. Taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits, which could result in additional taxes due in those jurisdictions. The Company has established a liability in the aggregate amount of approximately $13.0 million for matters that are probable of loss in future periods. The amount of the liability is based on management’s best estimate given the Company’s history with similar matters and interpretations of current laws and regulations.

 

This excerpt taken from the GPN 10-K filed Aug 15, 2005.

Taxes

 

During the course of operations, management of the Company must interpret the meaning of various sales, property, income, and other tax laws in foreign and U.S. federal and state tax jurisdictions in order to account for its operations. Taxing authorities in those various jurisdictions may arrive at different interpretations of applicable tax laws and regulations as they relate to the amount, timing or inclusion of revenue and expenses or the sustainability of income tax credits, which could result in additional taxes due in those jurisdictions. The Company has established a liability in the aggregate amount of approximately $13.0 million for matters that are probable of loss in future periods. The amount of the liability is based on management’s best estimate given the Company’s history with similar matters and interpretations of current laws and regulations.

 

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki