Western Union 2012 Annual Report Download - page 134

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THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
129
Impact of Spin-Off to Stock-Based Awards Granted Under First Data Plans
At the time of the Spin-off, First Data converted stock options, restricted stock awards and restricted stock units (collectively,
“Stock-Based Awards”) of First Data stock held by Western Union and First Data employees. For Western Union employees, each
outstanding First Data Stock-Based Award was converted to new Western Union Stock-Based Awards. For First Data employees,
each outstanding First Data Stock-Based Award held prior to the Spin-off was converted into one replacement First Data Stock-
Based Award and one Western Union Stock-Based Award. The new Western Union and First Data Stock-Based Awards maintained
their pre-conversion aggregate intrinsic values, and, in the case of stock options, their ratio of the exercise price per share to their
fair value per share.
After the Spin-off, the Company receives all cash proceeds related to the exercise of all Western Union stock options, recognizes
all stock compensation expense and retains the resulting tax benefits relating to Western Union awards held by Western Union
employees. First Data recognizes all stock-based compensation expense and retains all associated tax benefits for Western Union
Stock-Based Awards held by First Data employees.
Stock Option Activity
A summary of Western Union stock option activity for the year ended December 31, 2012 was as follows (options and aggregate
intrinsic value in millions):
Year Ended December 31, 2012
Options
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
(Years)
Aggregate
Intrinsic
Val ue
Outstanding as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.7 $ 19.05
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 17.85
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.0) 17.15
Cancelled/forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.4) 24.45
Outstanding as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . 27.0 $ 18.46 4.2 $ 2.9
Options exercisable as of December 31 . . . . . . . . . . . . . . . . . . 22.4 $ 18.69 3.3 $ 2.1
As of December 31, 2012, approximately 26% of outstanding options to purchase shares of common stock of the Company
were held by employees of First Data, all of which have vested.
The Company received $51.9 million, $98.8 million and $44.1 million in cash proceeds related to the exercise of stock options
during the years ended December 31, 2012, 2011 and 2010, respectively. Upon the exercise of stock options, shares of common
stock are issued from authorized common shares.
The Company's calculated pool of excess tax benefits available to absorb write-offs of deferred tax assets in subsequent periods
was approximately $4.6 million as of December 31, 2012. The Company realized total tax benefits during the years ended
December 31, 2012, 2011 and 2010 from stock option exercises of $1.2 million, $4.8 million and $1.4 million, respectively.
The total intrinsic value of stock options exercised during the years ended December 31, 2012, 2011 and 2010 was $5.1 million,
$20.6 million and $8.2 million, respectively.