Western Union 2007 Annual Report Download - page 77

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75
Notes to Consolidated Financial Statements
Stock Option Activity
A summary of Western Union stock option activity relating to Western Union and First Data employees for the year ended December
31, 2007 is as follows (options and aggregate intrinsic value in millions):
Year Ended December 31, 2007
Weighted-Average Aggregate
Weighted-Average Remaining Intrinsic
Options Exercise Price Contractual Term Value
Outstanding at January 1, 73.8 $17.84
Granted 0.7 21.77
Exercised (13.6) 15.62
Cancelled/forfeited (1.5) 21.05
Outstanding at December 31, 59.4 $18.32 5.9 $377.1
Western Union options exercisable at December 31, 54.7 $18.21 5.6 $354.7
The Company received $211.8 million and $80.8 million in cash
proceeds related to the exercise of stock options during the years
ended December 31, 2007 and 2006, respectively. Upon the
exercise of stock options, shares of common stock are issued
from authorized common shares. The Company maintains a share
repurchase program (Note 11).
The Company’s calculated pool of excess tax benefi ts available
to absorb write-offs of deferred tax assets in subsequent periods
was approximately $10.6 million as of December 31, 2007. The
Company realized total tax benefi ts during the years ended
December 31, 2007 and 2006 from stock option exercises of
$10.7 million and $1.9 million, respectively.
The total intrinsic value of stock options exercised during the
years ended December 31, 2007, 2006 and 2005 was $91.0
million, $42.1 million and $6.9 million, respectively.
Restricted Stock Awards and Restricted Stock Units
A summary of Western Union activity for restricted stock awards and units relating to Western Union and First Data employees for
the year ended December 31, 2007 is listed below (awards/units in millions):
Year Ended December 31, 2007
Number Weighted-Average
Outstanding Grant-Date Fair Value
Non-vested at January 1, 2007 3.0 $19.80
Granted 0.1 21.86
Vested (1.9) 19.94
Forfeited (0.2) 19.70
Non-vested at December 31, 2007 1.0 $19.39
Stock-Based Compensation
The following table sets forth the total impact on earnings for
stock-based compensation expense recognized in the Consoli-
dated Statements of Income resulting from stock options, restricted
stock awards, restricted stock units and ESPP rights for Western
Union employees for the year ended December 31, 2007 and
2006 (in millions, except per share data). Although Western Union
has not adopted an employee stock purchase plan, the Company’s
employees were allowed to participate in First Data’s ESPP prior
to the Spin-off. A benefi t to earnings is refl ected as a positive and
a reduction to earnings is refl ected as a negative.
Year Ended December 31, 2007 2006
Stock-based compensation expense impact on income before income taxes $(50.2) $(30.1)
Income tax benefi t from stock-based compensation expense 15.1 9.7
Net income impact $(35.1) $(20.4)
Earnings per share:
Basic $(0.05) $(0.03)
Diluted $(0.05) $(0.03)