The Western Union Company (NYSE: WU) today reported financial
results for the third quarter.
Highlights for the quarter include:
-- Revenue of $1.3 billion, up 10%
-- Earnings per share of $0.28, or $0.30 excluding a $0.02 per
share non-cash charge for the acceleration of stock
compensation expense related to the acquisition of First Data
by KKR
-- Operating income margin of 26%, or 28% excluding the non-cash
charge
-- Year-to-date cash provided by operating activities of $883
million
-- Consumer-to-consumer revenue increased 10%, transactions up
15%
-- Consumer-to-business revenue grew 14%, transactions up 71%
-- Completed the quarter with 320,000 agent locations
Western Union President and Chief Executive Officer Christina Gold
said, "I am pleased that we achieved third quarter performance
consistent with our expectations. Our consumer-to-consumer segment
posted strong performance driven by especially robust results within
our international business. Our Mexico business continued to improve
in a stable pricing environment and again outperformed the market. We
were further encouraged by improving transaction trends in our
domestic business."
Total consumer-to-consumer revenue in the third quarter grew 10%
to $1.1 billion including $16 million from Euro translation, on
transaction growth of 15%. The segment benefited from improving trends
across its three business categories: international, Mexico and
domestic. The international consumer-to-consumer business increased
revenue 16% while growing transactions 20%. A subset of the
international business, those transactions that originate outside of
the United States and total nearly one-half of Western Union's total
revenue, grew even faster, posting 23% revenue growth and 29%
transaction growth. The Mexico business, which posted a decline in
revenue of 1% and transaction growth of 7%, performed better than the
previous quarter suggesting improving fundamentals. The domestic
business also posted slight improvement with revenue and transactions
declining 10% and 4%, respectively.
In the third quarter, operating income was $330 million and
operating income margin was 26% (28% excluding the non-cash stock
compensation expense) compared to 30% in last year's third quarter.
Both operating income and operating income margin for third quarter
2007 were impacted by the $22 million non-cash stock compensation
expense and an additional $4 million of incremental independent public
company expenses. Net income was $216 million and was also impacted by
$46 million of incremental pretax interest expense, compared to the
third quarter of 2006.
Western Union benefits from a geographically diverse revenue
stream and favorable trends in the global remittance market. According
to The World Bank, the number of worldwide immigrants is nearly 200
million or approximately 3% of the world's population. The World Bank
also shows that India has become the number one remittance recipient
market and China the number three with each country exceeding $20
billion in annual remittances. Reflecting these macroeconomic trends,
Western Union's India and China transactions grew 69% and 28%,
respectively, in the third quarter. Revenue growth for the quarter in
each of these two countries exceeded 40%.
The third quarter was a successful period for signing major
contracts and adding new agent locations in the world's top remittance
markets. In the United States, Western Union renewed several
long-standing relationships including Safeway, which further
strengthens its relationship with 8 of the top ten supermarket chains,
and Kmart, building on the existing ten year relationship. In Canada,
Western Union welcomed Wal-Mart to the agent network. In Europe, key
signings and renewals included Caixa Central de Credito Agricola Mutuo
in Portugal, Portuguese Post Office (CTT Correios) and the Millennium
Bank in Greece. Western Union also re-signed three key agents in the
Philippines -- Universal Storefront Services Corporation, e-Business
Services Inc and PETNET -- which together represent nearly 4,800
locations. The company remains on track to achieve its year-end goal
of 325,000 agent locations.
Consistent with its strategy of making equity investments in key
agents throughout its global agent network, Western Union announced
its plan to expand its equity stake in a joint venture with its
Singapore agent, Hersing Corporation Ltd, with more than 60 locations
throughout that country.
Revenue in the consumer-to-business segment grew 14% to $180
million in the quarter, including $17 million of revenue from the
December 2006 acquisition of Pago Facil.
Western Union recently reached several important milestones in the
area of new products and services. In October, the company announced
an agreement to facilitate the development of global mobile payment
services together with GSMA, the global trade association representing
more than 700 mobile phone operators throughout the world.
In the consumer-to-business area, Google expanded its use of the
Western Union(R) Quick Cash(R) service in nine countries to pay
publisher partners in its AdSense(TM) advertising program where it is
time-consuming and unreliable to send payments by check. Western Union
and Yodlee, Inc. joined forces to offer a range of online payment
capabilities. The program is the first ever capable of linking
financial institutions' online bill-payment services directly to
Western Union's thousands of billers.
During the third quarter, Western Union repurchased 15.3 million
shares for $300 million at an average cost of $19.59 per share. The
company has now repurchased a total of 29.2 million shares for $601
million and has nearly $400 million remaining under its
board-authorized repurchase plan.
Based on the results through nine months and the current trends in
the business, management expects full-year 2007 GAAP revenue growth of
10%. Management also expects GAAP EPS in the range of $1.09 to $1.11,
which now includes the $0.02 non-cash charge. The full-year 2007 tax
rate is expected to be approximately 30%, down from 31%, as a result
of increased foreign-derived profits compared to U.S.-derived profits.
Full-year 2007 average diluted shares outstanding are assumed to be
approximately 772 million shares.
Management continues to expect full-year cash provided by
operating activities of more than $1 billion and capital expenditures
to be less than $200 million.
Gold concluded, "It has been a very busy first year as a newly
formed public company, and thanks to the efforts of 6,000 dedicated
employees and a loyal agent and customer base, we are achieving the
goals we set for ourselves. Together, we will continue to build upon
Western Union's industry leadership role and create long-term value
for our shareholders."
Non-Cash Charge for Accelerated Stock Compensation Expense
In the third quarter 2007, the company recognized a $22 million,
or a $0.02 per share, non-cash charge in accordance with FAS 123R
accounting for stock-based compensation resulting from the previously
announced acceleration of vesting in Western Union stock options and
awards granted to current Western Union employees prior to the
spin-off from First Data. Under the terms of the plan, vesting was
accelerated for these options and awards as a result of the change of
control that occurred when an affiliate of Kohlberg, Kravis, Roberts &
Co. acquired First Data Corporation, Western Union's former parent
company, on September 24, 2007.
Non-GAAP Measures
Western Union's management presents EPS and operating income
margin excluding the non-cash charge associated with the acceleration
of vesting of certain stock options and awards as a result of the
acquisition of First Data Corporation by KKR, which are non-GAAP
measures, as they provide more meaningful information.
Reconciliations of non-GAAP to comparable GAAP measures are
available in the accompanying schedules and in the "Investor
Relations" section of the company's web site at www.westernunion.com.
Investor and Analyst Conference
Western Union President and Chief Executive Officer Christina Gold
will host a conference call and webcast at 8:30 a.m. Eastern Time
today. Joining Christina on the conference call will be Scott
Scheirman, Executive Vice President and Chief Financial Officer. To
listen to the conference call live via telephone, dial 866-203-3206
(U.S.) or +1-617-213-8848 (outside the U.S.) ten minutes prior to the
start of the call. The pass code is 17239557.
The conference call will also be available via webcast at
www.westernunion.com. Registration for the event is required, so
please allow at least five minutes to register prior to the scheduled
start time.
A replay of the call will be available one hour after the call
ends through October 31, 2007 at 5:00 p.m. Eastern Time at
888-286-8010 (U.S.) or +1-617-801-6888 (outside the U.S.). The pass
code is 45441670. A webcast replay will be available at
www.westernunion.com for the same time period.
Please note: All statements made by Western Union officers on this
call are the property of Western Union and subject to copyright
protection. Other than the replay, Western Union has not authorized,
and disclaims responsibility for, any recording, replay or
distribution of any transcription of this call.
Definition of Incremental Independent Public Company Expenses
Incremental independent public company expenses include the costs
of staffing additions and related costs to replace support previously
provided by First Data Corporation, Western Union's corporate parent
until September 29, 2006, as well as additional costs for corporate
governance, information technology, corporate branding and global
public affairs, benefits and payroll administration, procurement,
workforce reorganization, stock compensation, and other expenses
related to being a stand-alone public company. These costs also
include recruiting and relocation expenses associated with hiring
management positions new to Western Union, other employee compensation
expenses, and temporary labor used to develop ongoing processes. These
expenses are those in excess of amounts allocated to the company by
First Data prior to September 29, 2006 or beyond amounts that the
company presumes First Data would have allocated subsequently thereto.
The company expects most of these expenses will continue to be
incurred in future periods.
Safe Harbor Compliance Statement for Forward-Looking Statements
This press release contains forward-looking statements regarding
projected future results. Forward-looking statements include all
statements that do not relate solely to historical or current facts,
and generally can be identified by the use of words such as "may,"
"believe," "will," "expect," "project," "estimate," "anticipate,"
"plan," "could," "would," "likely," "intend" or "continue." All
forward-looking statements are inherently uncertain as they are based
on various expectations and assumptions concerning future events and
they are subject to numerous known and unknown risks and uncertainties
which could cause actual events or results to differ materially from
those projected. These factors include, but are not limited to: the
impact of our spin-off from First Data Corporation; changes in
immigration laws, patterns and other factors related to immigrants;
the integration of significant businesses and technologies we acquire
and the realization of anticipated synergies from these acquisitions;
technological changes, particularly with respect to e-commerce; our
ability to attract and retain qualified key employees; changes in
laws, regulations or industry standards affecting our businesses;
changes in foreign exchange rates or spreads, including those
applicable to money transfer transactions; changes in the political or
economic climate in countries in which we operate; continued growth in
the consumer money transfer market and other markets in which we
operate at rates approximating recent levels; our ability to compete
effectively in the money transfer industry with respect to global and
niche or corridor money transfer providers, United States and
international banks, card associations, telecommunications providers,
card-based payments providers and a number of other types of
competitive service providers; our ability to maintain our agent
network; implementation of Western Union agent agreements according to
schedule; no interruption of United States government relations with
countries in which Western Union has or is implementing material agent
agreements; successfully managing the potential both for patent
protection and patent liability in the context of rapidly developing
legal framework for expansive software and other intellectual property
patent protection; successfully managing credit and fraud risks from
our agents and from consumers; unanticipated developments relating to
lawsuits, investigations or similar matters; catastrophic events; and
any material breach of security of any of our systems.
About Western Union
The Western Union Company (NYSE: WU) is a leader in global money
transfer services. Together with its affiliates, Orlandi Valuta, Vigo
and Pago Facil, Western Union provides consumers with fast, reliable
and convenient ways to send and receive money around the world, as
well as send payments and purchase money orders. It operates through a
network of more than 320,000 Agent locations in over 200 countries and
territories. Famous for its pioneering telegraph services, the
original Western Union dates back to 1851. For more information, visit
www.westernunion.com.
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THE WESTERN UNION COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
(unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------- --------------------------
2007 2006 Change 2007 2006 Change
--------- -------- ------ --------- --------- ------
Revenues:
Transaction fees $1,019.7 $940.1 8% $2,931.2 $2,731.7 7%
Foreign exchange
revenue 203.2 169.0 20% 555.6 478.6 16%
Commission and
other revenues 34.3 31.3 10% 104.3 86.7 20%
--------- -------- --------- ---------
Total revenues 1,257.2 1,140.4 10% 3,591.1 3,297.0 9%
Expenses:
Cost of services 722.2 626.0 15% 2,055.7 1,779.4 16%
Selling, general
and
administrative 204.9 177.3 16% 578.0 541.4 7%
--------- -------- --------- ---------
Total expenses
(b) 927.1 803.3 15% 2,633.7 2,320.8 13%
Operating income 330.1 337.1 -2% 957.4 976.2 -2%
Interest expense
(b) (47.1) (1.2) (a) (141.9) (1.9) (a)
Interest income 20.3 8.1 (a) 58.9 20.8 (a)
Interest income
from First Data,
net - 12.2 (a) - 35.7 (a)
Derivative
gains/(losses),
net 2.0 5.4 -63% 5.1 (21.8) (a)
Foreign exchange
effect on notes
receivable from
First Data, net - 14.2 (a) - 10.1 (a)
Other income, net 1.6 4.1 -61% 7.7 9.5 (a)
--------- -------- --------- ---------
Total other
(expense) /
income, net (23.2) 42.8 (a) (70.2) 52.4 (a)
--------- -------- --------- ---------
Income before
income taxes 306.9 379.9 -19% 887.2 1,028.6 -14%
Provision for
income taxes 90.6 121.8 -26% 273.2 331.8 -18%
--------- -------- --------- ---------
Net income $216.3 $258.1 -16% $614.0 $696.8 -12%
========= ======== ========= =========
Earnings per
share:
Basic $0.29 $0.34 -15% $0.80 $0.91 -12%
Diluted $0.28 $0.34 -18% $0.79 $0.91 -13%
Weighted-average
shares
outstanding: (c)
Basic 757.5 763.9 763.6 763.9
Diluted 767.4 764.0 776.6 763.9
(a) Calculation not meaningful
(b) Beginning third quarter of 2006, Western Union incurred higher
corporate overhead and interest costs, many of which are recurring,
as a result of its separation from First Data. Prior to September 29,
2006, the businesses that comprise Western Union were wholly-owned
subsidiaries of First Data.
(c) For all periods prior to September 29, 2006 (date of spin-off from
First Data), basic and diluted earnings per share are computed
utilizing the shares outstanding at September 29, 2006.
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THE WESTERN UNION COMPANY
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
(unaudited)
September 30, December 31,
2007 2006
------------- ------------
Assets
Cash and cash equivalents $1,669.0 $1,421.7
Settlement assets 1,411.5 1,284.2
Property and equipment, net of accumulated
depreciation of $243.7 and $213.1,
respectively 199.2 176.1
Goodwill 1,639.6 1,648.0
Other intangible assets, net of accumulated
amortization of $219.3 and $211.4,
respectively 308.3 287.7
Other assets 457.7 503.4
------------- ------------
Total assets $5,685.3 $5,321.1
============= ============
Liabilities and Stockholders' (Deficiency)
Liabilities:
Accounts payable and accrued liabilities $659.1 $554.8
Settlement obligations 1,409.8 1,282.5
Pension obligations 52.7 52.9
Deferred tax liability, net 258.8 274.8
Borrowings 3,272.6 3,323.5
Other liabilities 178.7 147.4
------------- ------------
Total liabilities 5,831.7 5,635.9
Stockholders' (Deficiency):
Preferred stock, $1.00 par value; 10
shares authorized; no shares issued - -
Common stock, $0.01 par value; 2,000
shares authorized; 772.7 shares and 772.0
shares issued, respectively 7.7 7.7
Capital deficiency (380.2) (437.1)
Retained earnings 776.2 208.0
Accumulated other comprehensive loss (88.2) (73.5)
Less treasury stock at cost, 22.8 shares
and 0.9 shares, respectively (461.9) (19.9)
------------- ------------
Total Stockholders' (Deficiency) (146.4) (314.8)
------------- ------------
Total Liabilities and Stockholders'
(Deficiency) $5,685.3 $5,321.1
============= ============
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THE WESTERN UNION COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Nine Months Ended
September 30,
-------------------
2007 2006
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $614.0 $696.8
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 35.7 24.8
Amortization 56.5 50.4
Deferred income tax provision 2.2 19.5
Realized gain on derivative instruments - (4.1)
Stock compensation expense 45.6 16.3
Other non-cash items, net 21.5 18.6
Increase (decrease) in cash, excluding the
effects of acquisitions and dispositions,
resulting from changes in:
Other assets 28.7 (37.1)
Accounts payable and accrued liabilities 95.9 (6.4)
Other liabilities (16.8) (1.2)
--------- ---------
Net cash provided by operating activities 883.3 777.6
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalization of contract costs (36.1) (106.7)
Capitalization of purchased and developed software (21.7) (8.4)
Purchases of property and equipment (64.5) (42.5)
Notes receivable issued to agents (5.9) (140.0)
Repayments of notes receivable issued to agents 16.2 12.8
Cash received on maturity of foreign currency
forwards - 4.1
--------- ---------
Net cash used in investing activities (112.0) (280.7)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments of commercial paper (49.7) -
Net (repayments)/proceeds from net borrowings under
credit facilities (3.0) 100.0
Proceeds from issuance of debt - 2,400.0
Proceeds from exercise of options 109.5 -
Purchase of treasury shares (580.8) -
Dividends to First Data - (2,953.9)
Advances from affiliates of First Data - 160.2
Repayments of notes payable to First Data - (154.5)
Repayments of notes receivable from First Data - 776.2
Additions to notes receivable from First Data - (7.5)
--------- ---------
Net cash (used in)/provided by financing activities (524.0) 320.5
Net change in cash and cash equivalents 247.3 817.4
Cash and cash equivalents at beginning of period 1,421.7 510.2
--------- ---------
Cash and cash equivalents at end of period $1,669.0 $1,327.6
========= =========
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THE WESTERN UNION COMPANY
SUMMARY SEGMENT DATA
(in millions)
(unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------- --------------------------
2007 2006 Change 2007 2006 Change
-------- -------- ------- -------- -------- --------
Revenues:
Consumer-to-
Consumer:
Transaction fees $844.2 $783.6 8% $2,407.2 $2,253.0 7%
Foreign exchange
revenue 202.5 168.6 20% 554.2 477.5 16%
Other revenues 9.1 9.0 1% 27.5 24.5 12%
-------- -------- -------- --------
Total Consumer-
to-Consumer: 1,055.8 961.2 10% 2,988.9 2,755.0 8%
Consumer-to-
Business:
Transaction fees 166.4 146.8 13% 495.6 444.5 11%
Other revenues 13.1 11.0 19% 41.0 29.6 39%
-------- -------- -------- --------
Total Consumer-
to-Business: 179.5 157.8 14% 536.6 474.1 13%
Other:
Revenue 21.9 21.4 2% 65.6 67.9 -3%
-------- -------- -------- --------
Total Other: 21.9 21.4 2% 65.6 67.9 -3%
-------- -------- -------- --------
Total revenues $1,257.2 $1,140.4 10% $3,591.1 $3,297.0 9%
======== ======== ======== ========
Operating
income:
Consumer-to-
Consumer $274.1 $280.2 -2% $774.8 $796.8 -3%
Consumer-to-
Business 52.0 53.8 -3% 168.0 166.0 1%
Other 4.0 3.1 (a) 14.6 13.4 (a)
-------- -------- -------- --------
Total operating
income $330.1 $337.1 -2% $957.4 $976.2 -2%
======== ======== ======== ========
Operating profit
margin (b):
Consumer-to-
Consumer 26.0% 29.2% -3 pts 25.9% 28.9% -3 pts
Consumer-to-
Business 29.0% 34.1% -5 pts 31.3% 35.0% -4 pts
Other 18.3% 14.5% (a) 22.3% 19.7% (a)
Total operating
profit margin 26.3% 29.6% -3 pts 26.7% 29.6% -3 pts
Depreciation and
Amortization:
Consumer-to-
Consumer $25.1 $20.2 24% $72.9 $57.9 26%
Consumer-to-
Business 5.0 4.5 11% 16.7 13.7 22%
Other 0.8 1.4 (a) 2.6 3.6 (a)
-------- -------- -------- --------
Total
depreciation
and
amortization $30.9 $26.1 18% $92.2 $75.2 23%
======== ======== ======== ========
(a) Calculation not meaningful
(b) Operating margin, excluding the $22M accelerated stock-
based compensation charge (refer to the accompanying
"Reconciliation of Non-GAAP Measures" schedule):
Consumer-to-
Consumer 27.8% 29.2% -1 pts 26.6% 28.9% -2 pts
Consumer-to-
Business 30.6% 34.1% -4 pts 31.9% 35.0% -3 pts
Other 20.1% 14.5% (a) 22.9% 19.7% (a)
Total operating
profit margin 28.0% 29.6% -2 pts 27.3% 29.6% -2 pts
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THE WESTERN UNION COMPANY
KEY INDICATORS
(in millions)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
----------------------- -------------------------
2007 2006 Change 2007 2006 Change
-------- ------ ------ -------- -------- ------
Transactions
Consumer-to-
Consumer 43.1 37.6 15% 122.6 107.5 14%
Consumer-to-
Business 101.4 59.4 71% 301.1 180.1 67%
Revenue
Consumer-to-
Consumer 1,055.8 961.2 10% 2,988.9 2,755.0 8%
Consumer-to-
Business 179.5 157.8 14% 536.6 474.1 13%
Three Months Nine Months
Ended September Ended September
30, 2007 30, 2007
----------------- -----------------
Consumer-to-Consumer Transaction
Growth
International (a) 20% 20%
Domestic (b) -4% -5%
Mexico (c) 7% 5%
Consumer-to-Consumer 15% 14%
Consumer-to-Consumer Revenue
Growth
International (a) 16% 15%
Domestic (b) -10% -10%
Mexico (c) -1% -5%
Consumer-to-Consumer 10% 8%
Three Months Nine Months
Ended September Ended September
30, 2007 30, 2007
-------------------- -------------------
Including Excluding Including Excluding
SEPSA SEPSA SEPSA SEPSA
--------- --------- --------- ---------
Consumer-to-Business
Transaction Growth 71% 1% 67% 1%
Consumer-to-Business Revenue
Growth 14% 3% 13% 3%
(a) Represents transactions between and within foreign countries
(excluding Canada and Mexico), transactions originated in the United
States or Canada and paid elsewhere, and transactions originated
outside the United States or Canada and paid in the United States or
Canada. Excludes all transactions between or within the United States
and Canada and all transactions to and from Mexico as reflected in
(b) and (c) below.
(b) Represents all transactions between and within the United States
and Canada.
(c) Represents all transactions to and from Mexico.
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RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
(in millions)
Western Union's management has presented earnings per share and
operating income margin, excluding the accelerated FAS 123R
accounting for stock-based compensation expense, resulting from the
acquisition of First Data Corporation ("First Data") by an affiliate
of Kohlberg, Kravis, Roberts & Co. ("KKR"). Western Union's
management believes these non-GAAP measures provide meaningful
supplemental information regarding our operating results to assist
management, investors, analysts, and others in understanding our
financial results and to better analyze trends in our underlying
business, because they provide consistency and comparability with
past years where the accelerated stock-based compensation charge was
not incurred.
A non-GAAP financial measure should not be considered in isolation or
as a substitute for the most comparable GAAP financial measure. A
non-GAAP financial measure reflects an additional way of viewing
aspects of our operations that, when viewed with our GAAP results and
the reconciliation to the corresponding GAAP financial measure,
provide a more complete understanding of our business. Users of the
financial statements are encouraged to review our financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure. A reconciliation of non-GAAP
measures to the most directly comparable GAAP financial measures is
included below.
Three
months
ended
September
30,
2007
---------
Net income as reported (GAAP) $216.3
Adjustments:
Accelerated vesting charge, net
of income tax benefit of $7.1
million (a) 15.2
---------
Net income adjusted $231.5
=========
Earnings per share:
As reported (GAAP) $0.28
Accelerated vesting charge (a) 0.02
---------
Adjusted $0.30
=========
Operating profit by segment
Three months ended September 30,
2007
-------------------------------------
C2C C2B Other Consolidated
--------- ------- ------ ------------
Revenue as reported (GAAP) $1,055.8 $179.5 $21.9 $1,257.2
========= ======= ====== ============
Operating income as reported
(GAAP) $274.1 $52.0 $4.0 $330.1
Adjustments:
Accelerated vesting charge (a) 18.9 3.0 0.4 22.3
--------- ------- ------ ------------
Operating income adjusted $293.0 $55.0 $4.4 $352.4
========= ======= ====== ============
Operating income margin:
As reported (GAAP) 26.0% 29.0% 18.3% 26.3%
Adjustment (a) 1.8% 1.6% 1.8% 1.7%
--------- ------- ------ ------------
Adjusted 27.8% 30.6% 20.1% 28.0%
========= ======= ====== ============
Operating profit by segment
Nine months ended September 30,
2007
-------------------------------------
C2C C2B Other Consolidated
--------- ------- ------ ------------
Revenue as reported (GAAP) $2,988.9 $536.6 $65.6 $3,591.1
========= ======= ====== ============
Operating income as reported
(GAAP) $774.8 $168.0 $14.6 $957.4
Adjustments:
Accelerated vesting charge (a) 18.9 3.0 0.4 22.3
--------- ------- ------ ------------
Operating income adjusted $793.7 $171.0 $15.0 $979.7
========= ======= ====== ============
Operating income margin:
As reported (GAAP) 25.9% 31.3% 22.3% 26.7%
Adjustment (a) 0.7% 0.6% 0.6% 0.6%
--------- ------- ------ ------------
Adjusted 26.6% 31.9% 22.9% 27.3%
========= ======= ====== ============
(a) In the third quarter 2007, the company recognized a $22 million or
a $0.02 per share charge resulting from the previously announced
acceleration of FAS 123R accounting for stock-based compensation
related to the acquisition of First Data, Western Union's former
parent company, by an affiliate of KKR.
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