Western Union 2009 Annual Report Download - page 74

income for such period and (f) extraordinary losses or charges, minus extraordinary gains, in each case
determined in accordance with United States GAAP for such period, to interest expense) for each period
comprising the four most recent consecutive fiscal quarters. Our consolidated interest coverage ratio was 10:1
for the year ended December 31, 2009.
As of December 31, 2009, we were in compliance with our debt covenants. A violation of our debt
covenants could impair our ability to borrow, and outstanding amounts borrowed could become due, thereby
restricting our ability to use our excess cash for other purposes.
Cash Priorities
Liquidity
Our objective is to maintain strong liquidity and a capital structure consistent with our current credit
ratings. We have existing cash balances, cash flows from operating activities, access to the commercial paper
markets and our $1.5 billion revolving credit facility available to support the needs of our business.
Capital Expenditures
The total aggregate amount paid for contract costs, purchases of property and equipment, and purchased
and developed software was $98.9 million, $153.7 million and $192.1 million in 2009, 2008 and 2007,
respectively. Amounts paid for new and renewed agent contract costs vary depending on the terms of existing
contracts as well as the timing of new and renewed contract signings. Other capital expenditures during 2009,
2008 and 2007 included investments in our information technology, purchased and developed software and, in
2008 and 2007, the renovation of certain facilities.
Acquisition of Businesses
On September 1, 2009, we acquired Canada-based Custom House, a provider of international
business-to-business payment services, for cash consideration of $371.0 million for 100% of the common
shares of this business and acquired cash of $2.5 million.
On February 24, 2009, we acquired the money transfer business of European-based FEXCO Group
Holdings (“FEXCO Group”) one of our largest agents providing services in a number of European countries,
primarily the United Kingdom, Spain, Sweden and Ireland. We surrendered our 24.65% interest in FEXCO
Group and paid A123.1 million ($157.4 million) as consideration for 100% of the common shares of the
money transfer business and acquired cash of $11.8 million.
In December 2008, we acquired 80% of our existing money transfer agent in Peru for a purchase price of
$35.0 million. The aggregate consideration paid was $29.7 million, net of a holdback reserve of $3.0 million
and cash acquired of $2.3 million.
On August 1, 2008, we acquired the money transfer assets from our existing money transfer agent in
Panama for a purchase price of $18.3 million, which is net of cash acquired. The consideration paid was
$14.3 million, net of a holdback reserve of $4.0 million.
We expect that we will continue to pursue opportunities to acquire companies, particularly outside of the
United States, that complement our existing businesses worldwide.
Share Repurchases and Dividends
At December 31, 2009, common stock repurchases of up to $1.0 billion have been authorized by the
Board of Directors through December 31, 2012. During the years ended December 31, 2009, 2008 and 2007,
24.8 million, 58.1 million and 34.7 million shares, respectively, have been repurchased for $400.0 million,
$1,313.9 million and $726.5 million, respectively, excluding commissions, at an average cost of $16.10, $22.60
and $20.93 per share, respectively.
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