Western Union 2008 Annual Report Download - page 78

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WESTERN UNION
2008 Annual Report
76
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, 2008 is as follows (options and aggregate intrinsic value in millions):
Year Ended December 31, 2008
Weighted-Average
Remaining Aggregate
Weighted-Average Contractual Term Intrinsic
Options Exercise Price (Years) Value
Outstanding at January 1, 59.4 $18.32
Granted 3.8 21.26
Exercised (17.6) 16.47
Cancelled / forfeited (2.0) 22.72
Outstanding at December 31, 43.6 $19.11 5.7 $6.8
Western Union options exercisable at December 31, 37.6 $18.90 5.3 $6.7
76
The Company received $289.7 million, $211.8 million
and $80.8 million in cash proceeds related to the exercise
of stock options during the years ended December 31,
2008, 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 13).
The Company’s calculated pool of excess tax benefits
available to absorb write-offs of deferred tax assets in
subsequent periods was approximately $15.3 million as
of December 31, 2008. The Company realized total tax
benefits during the years ended December 31, 2008, 2007
and 2006 from stock option exercises of $13.5 million,
$10.7 million and $1.9 million, respectively.
The total intrinsic value of stock options exercised
during the years ended December 31, 2008, 2007 and
2006 was $134.0 million, $91.0 million and $42.1 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, 2008 is listed below (awards/units in millions):
Year Ended December 31, 2008
Number Weighted-Average
Outstanding Grant-Date Fair Value
Non-vested at January 1, 2008 1.0 $19.39
Granted 0.5 21.86
Vested (0.2) 19.28
Forfeited (0.1) 20.32
Non-vested at December 31, 2008 1.2 $20.32
Stock-Based Compensation
The following table sets forth the total impact on earn-
ings for stock-based compensation expense recognized
in the Consolidated Statements of Income resulting from
stock options, restricted stock awards, restricted stock
units and ESPP rights for Western Union employees
for the years ended December 31, 2008, 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 benefit to earn-
ings is reflected as a positive and a reduction to earnings
is reflected as a negative.
Year Ended December 31, 2008 2007 2006
Stock-based compensation expense impact on income before income taxes $(26.3) $(50.2) $(30.1)
Income tax benefit from stock-based compensation expense 7.7 15.1 9.7
Net income impact $(18.6) $(35.1) $(20.4)
Earnings per share:
Basic $(0.03) $(0.05) $(0.03)
Diluted $(0.03) $(0.05) $(0.03)