Exhibit 99.1
Viad Corp Announces Third Quarter 2003 Results; Income from Continuing
Operations of $0.27 Per Share; Viad Corp Makes Progress Toward
Separating Payment Services Business
PHOENIX--(BUSINESS WIRE)--Oct. 23, 2003--Viad Corp (NYSE:VVI)
today announced third quarter 2003 income from continuing operations
of $0.27 per diluted share on revenue of $368.8 million, segment
operating income of $38.7 million, and income from continuing
operations of $23.3 million. Diluted earnings per share was $0.29 on
net income of $24.8 million, which included income from discontinued
operations of $1.5 million.
Robert H. Bohannon, chairman, president and chief executive
officer said, "Third quarter results were in line with our
expectations. These results reflect negative show rotation for GES and
low demand for exhibit construction, which affected Exhibitgroup.
Travelers Express had lower investment income despite significant
growth in average investment balances."
Bohannon added, "I am pleased to report that we are making good
progress in our efforts to separate Travelers Express. We have also
further strengthened the balance sheet by building cash and paying
down debt. We are continuing efforts to improve the operating
efficiency of our companies which should position us for greater
future profitability."
For the nine months ended September 30, 2003, income from
continuing operations was $0.99 per diluted share on revenue of $1.2
billion, segment operating income of $135.4 million and income from
continuing operations of $86.2 million. Diluted earnings per share was
$1.01 on net income of $87.7 million including $1.5 million of income
from discontinued operations.
Status of Proposed Spin Off
On July 24, 2003, Viad Corp announced that the board of directors
authorized the company to pursue the separation of the Travelers
Express business from the remaining Viad businesses by means of a
tax-free spin-off. The transaction is subject to a number of
conditions, including among other things, receipt of a satisfactory
ruling from the Internal Revenue Service (IRS), confirmation that the
long-term debt of Travelers Express will have an investment grade
rating, availability of satisfactory banking and credit arrangements
for each of the businesses, and final approval of the board of
directors of Viad.
The company also provides the following information with respect
to the proposed transaction:
-- On July 29, 2003, Viad Corp announced that the company will
tender for all its public debt, pay off commercial paper and
redeem its preferred stock concurrent with the transaction;
-- Viad filed a ruling request with the Internal Revenue Service
on August 5, 2003, regarding the proposed separation of
Travelers Express. The company estimates it will take six to
nine months for the IRS to complete the ruling; and
-- The transaction will not be consummated earlier than the end
of first quarter 2004.
The company gives no assurance that any such transaction will be
consummated.
Third Quarter and Year-to-Date 2003 Financial Highlights
Highlights of the 2003 third quarter, compared to third quarter
and year-to-date 2002 results, are presented below.
Q3 2003 Q3 2002 Change
------------- --------- ----------
($ in millions)
Revenue $368.8 $412.6 -10.6%
Segment operating income $ 38.7 $ 50.6 -23.5%
Operating margins (a) 10.5% 12.3% -180 bps
Income from continuing operations $ 23.3 $ 32.3 -27.8%
Net income $ 24.8 $ 32.3 -23.0%
Cash flow (EBITDA) (c) $ 47.5 $ 62.5 -24.0%
Free cash flow (c) $ 43.0 $ 53.3 -19.4%
YTD 2003 YTD 2002 Change
------------- --------- ----------
($ in millions)
Revenue $1,223.0 $1,255.9 -2.6%
Segment operating income $ 135.4 $ 149.4 -9.3%
Operating margins (a) 11.1% 11.9% -80 bps
Income from continuing operations $ 86.2 $ 90.4 -4.6%
Net income (b) $ 87.7 $ 52.6 66.7%
Cash flow (EBITDA) (c) $ 165.5 $ 177.9 -6.9%
Free cash flow (c) $ 80.8 $ 112.8 -28.4%
(a) For operating margins, the change from the prior year period is
presented in basis points.
(b) 2002 year-to-date net income includes a goodwill impairment charge
related to the initial adoption of SFAS No. 142 of $37.7 million
(net of tax). Excluding that charge, 2003 year-to-date net income
would have been down 2.9 percent as compared to the 2002 amount of
$90.4 million.
(c) EBITDA is defined by Viad as income from continuing operations
before interest expense, income taxes, depreciation and
amortization and changes in accounting principles. Free cash flow
is defined by Viad as net cash provided by operating activities,
less the change in payment service assets and obligations, capital
expenditures, and dividends. EBITDA and free cash flow are
supplemental to results presented under accounting principles
generally accepted in the United States of America (GAAP) and may
not be comparable to similarly titled measures presented by other
companies. These non-GAAP measures are used by management to
assess the company's ability to service debt, fund capital
expenditures and finance growth, and should be considered in
addition to, but not as a substitute for, other measures of
financial performance and liquidity reported in accordance with
GAAP. See Table Two for a reconciliation of net income to EBITDA,
and a reconciliation of net cash provided by operating activities
to free cash flow.
Also, during the third quarter and year-to-date:
Third Quarter 2003 Nine Months Ended
Sept. 30, 2003
- ----------------------------------- ---------------------------------
-- Debt was reduced by $6.1 -- Debt was reduced by $106.2
million to $255.4 million million compared to
compared to second quarter December 31, 2002.
2003. -- Cash and corporate
-- Cash and corporate investments investments decreased by
were $152.6 million, up $31.0 $150.9 million compared
million from the second quarter to December 31, 2002
2003. reflecting repayment of
$100 million of 6.625%
medium term notes and
acquisition of the
minority interest in
MoneyGram International
Limited.
Payment Services
Payment Services' revenue for the third quarter 2003 of $203.7
million was essentially flat to that of the third quarter 2002.
Segment operating income was down 15.5 percent to $28.5 million
compared with $33.8 million in 2002, and operating margins for the
quarter were 14.0 percent compared with 16.6 percent in the third
quarter of 2002. For the nine months ended September 30, 2003, revenue
was $596.4 million, an increase of 3.4 percent compared to revenue of
$576.5 million for the comparable period in 2002. Segment operating
income for the 2003 nine month period was $80.2 million, down 15.1
percent from $94.5 million for the comparable period in 2002.
In the third quarter 2003, MoneyGram transaction volume grew 32
percent and revenues 19 percent in comparison to the prior year third
quarter. The worldwide agent base grew by 11 percent in comparison to
the prior year quarter.
Payment Services' total average float investment balances were
$7.4 billion for the quarter, up nearly 20 percent from the prior year
quarter. Net float income (float investment income less commission
expense and excluding gains and losses) was $17.4 million in the third
quarter 2003, down $8.9 million, compared to the prior year third
quarter. Mortgage refinance activity lifted third quarter investment
volume, however, growth was mitigated by lower average investment
rates, high cash balances, and fixed-rate swap payment obligations.
See Table Three for current and historical net float margins.
"Travelers Express' results reflect depressed investment income
substantially offset by higher fee revenue related to MoneyGram," said
Bohannon. "MoneyGram annualized transaction growth has exceeded 25
percent for the last nine quarters, with international transfers and
domestic ExpressPayment leading the way. In the quarter, Travelers
Express signed Albertsons' Money Order business and renewed its
MoneyGram business, which should contribute nicely to future top-line
growth."
Bohannon added, "PrimeLink/Official Check results show
comparatively lower margins resulting from a low interest rate
environment. Travelers is working hard to drive more fee income for
this business."
Convention and Event Services
Convention and Event Services' revenue was $132.4 million, a
decrease of 22.9 percent from $171.6 million in the third quarter
2002. The third quarter 2003 returned a segment operating loss of $1.1
million as compared with segment operating income of $2.2 million in
the 2002 third quarter. The third quarter results reflect negative
show rotation at GES and weak demand for new exhibit construction at
Exhibitgroup. Last year, GES serviced the International Manufacturing
Technology Show (IMTS). IMTS is one of the largest tradeshows in the
world and occurs every other year. GES has signed the show again for
2004.
For the nine months ended September 30, 2003, revenue was $578.3
million, a 7.6 percent decrease compared to revenue of $625.9 million
for the comparable period in 2002. For the 2003 nine month period,
segment operating income was $42.8 million, up 9.9 percent from $38.9
million for the comparable period in 2002.
Bohannon said, "Results for the Convention and Event businesses
were as expected. We're pleased that operating income for the segment
has increased this year, despite industry and economic pressure. This
speaks to the effectiveness of on-going cost improvements."
Travel and Recreation Services
Travel and Recreation Services' revenue was $32.7 million, a
decrease of 12.1 percent from $37.2 million in the third quarter 2002.
Operating income was $11.3 million, down 22.8 percent from $14.6
million in the 2002 third quarter. These results reflect lower
bookings related to SARS and other travel related issues, as well as
reduced occupancy due to forest fires in Glacier National Park,
Montana.
For the nine months ended September 30, 2003, revenue was $48.3
million, down nearly 10 percent from revenue of $53.5 million for the
comparable period in 2002. Operating income for the 2003 nine month
period was $12.5 million, down 21.9 percent from $16.0 million for the
comparable period in 2002.
2003 Outlook
Viad Corp provides the following guidance for fourth quarter and
full year 2003. This guidance is subject to change as a variety of
factors can affect actual operating results. These factors are
identified in the safe harbor language at the end of this press
release.
Fourth Quarter 2003
-- Viad Corp diluted earnings per share is expected to be at the
low end of the $0.21 to $0.24 range.
-- Payment Services segment revenue is expected to increase at a
low to mid single-digit rate in comparison to fourth quarter
2002 revenue of $197.1 million.
-- Payment Services segment operating income is expected to
increase at a low to mid single-digit rate from fourth quarter
2002 segment operating income of $31.0 million. Net float
margin is expected to be in the range of 105 to 115 basis
points.
-- Convention and Event Services segment revenue is expected to
decrease at a low double-digit rate in comparison to fourth
quarter 2002 revenue of $160.4 million due to general market
softness, a shift in schedule for certain shows that typically
occur in fourth quarter but took place earlier this year, and
anticipated weak demand for new exhibit construction.
-- Convention and Event Services segment operating income is
expected to be slightly above breakeven compared to the fourth
quarter 2002 operating loss of $1.3 million, reflecting
increased operating efficiency from restructuring initiatives.
Full Year 2003
For 2003, income from continuing operations is expected to be at
the low end of the $1.20 to $1.23 range per diluted share. This range
is unchanged from guidance provided last quarter by the company.
Payment Services Segment Guidance for Full Year 2003
-- Payment Services segment revenue is expected to grow at a low
single-digit rate in comparison to 2002 revenue of $773.6
million.
-- Payment Services segment operating income is expected to
decline at a low double-digit to mid teens rate in comparison
to 2002 operating income of $125.5 million.
The revenue and operating income outlook for Payment Services
assumes that:
-- MoneyGram transaction volume continues to grow at a rate
similar to the first nine months of 2003.
-- Money Order transaction volumes will be flat to third quarter
2003 levels.
-- Average investable balances are expected to grow between $750
million and $850 million for the year.
Convention and Event Services Segment Guidance for Full Year 2003
-- Convention and Event Services segment revenue is expected to
decline at a high single to low double-digit rate in
comparison to 2002 revenue of $786.2 million, primarily due to
decreased demand for exhibit construction and negative show
rotation.
-- Convention and Event Services segment operating income is
expected to increase at a high teens rate in comparison to
2002 operating income of $37.6 million, primarily due to
on-going cost reductions and operating process improvements.
Bohannon concluded, "We look forward to 2004. Recent news of
improvement in travel and select areas of the economy should
ultimately benefit our travel and convention businesses. We're also
pleased and excited about our progress toward spinning off Travelers
Express. The separation should mean great things for the future of our
payment services business as well as for new Viad. With its own equity
currency, Travelers Express will be positioned as a formidable player
in the payment services arena."
Viad is a $1.6 billion revenue S&P MidCap 400 company. Major
subsidiaries include Travelers Express/MoneyGram of Minneapolis, GES
Exposition Services of Las Vegas and Exhibitgroup/Giltspur of Chicago.
For more information, visit the company's Web site at www.viad.com.
Forward Looking Statements
As provided by the safe harbor provision under the "Private
Securities Litigation Reform Act of 1995" Viad cautions readers that,
in addition to historical information contained herein, this press
release includes certain information, assumptions and discussions that
may constitute forward-looking statements. These forward-looking
statements are not historical facts, but reflect current estimates,
projections, or expectations or trends concerning future growth,
operating cash flows, availability of short-term borrowings, consumer
demand, new business, investment policies, productivity improvements,
ongoing cost reduction efforts, efficiency, competitiveness, tax
rates, restructuring plans (including timing and realization of cost
savings), investment yield impairment, and market risk. Actual results
could differ materially from those projected in the forward-looking
statements. Viad's businesses can be affected by a host of risks and
uncertainties. Among other things, gains and losses of customers,
consumer demand patterns, labor relations, purchasing decisions
related to customer demand for convention and event services, existing
and new competition, industry alliances, consolidation, and growth
patterns within the industries in which Viad competes and any further
deterioration in the economy may individually or in combination impact
future results. In addition to factors mentioned elsewhere, economic,
competitive, governmental, technological, capital marketplace and
other factors, including further terrorist activities or war, could
affect the forward-looking statements in this press release.
Information about Viad Corp obtained from sources other than the
company may be out-of-date or incorrect. Please rely only on company
press releases, SEC filings and other information provided by the
company.
VIAD CORP AND SUBSIDIARIES
TABLE ONE - QUARTERLY AND YEAR-TO-DATE RESULTS
(UNAUDITED)
Quarter Ended September 30,
--------------------------------
(000 omitted, except per share data) 2003 2002 %
----------- ----------- --------
Revenues (Note A) $ 368,811 $ 412,649 -10.6%
========== ========== ========
Segment operating income (Note A) $ 38,748 $ 50,618 -23.5%
Restructuring recovery (Note B) 200 413 -51.6%
Corporate activities and minority
interests (5,185) (6,390) 18.9%
Net interest expense (2,286) (123) NM
---------- ---------- --------
Income before income taxes 31,477 44,518 -29.3%
Income taxes (8,185) (12,261) 33.2%
---------- ---------- --------
Income from continuing operations 23,292 32,257 -27.8%
Income from discontinued operations
(Note C) 1,544 - NM
Change in accounting principle
(Note D) - - NM
---------- ---------- --------
Net income $ 24,836 $ 32,257 -23.0%
========== ========== ========
Diluted income per common share:
Income from continuing operations $ 0.27 $ 0.37 -27.0%
Income from discontinued operations 0.02 - NM
Change in accounting principle - - NM
---------- ---------- --------
Net income per share $ 0.29 $ 0.37 -21.6%
========== ========== ========
Basic income per common share:
Income from continuing operations $ 0.27 $ 0.37 -27.0%
Income from discontinued operations 0.02 - NM
Change in accounting principle - - NM
---------- ---------- --------
Net income per share $ 0.29 $ 0.37 -21.6%
========== ========== ========
Common shares treated as outstanding
for net income per share calculations:
Average outstanding shares 86,273 86,188 0.1%
========== ========== ========
Average outstanding and potentially
dilutive shares 86,720 86,616 0.1%
========== ========== ========
Nine Months Ended September 30,
--------------------------------
(000 omitted, except per share data) 2003 2002 %
----------- ----------- --------
Revenues (Note A) $1,222,990 $1,255,872 -2.6%
========== ========== ========
Segment operating income (Note A) $ 135,437 $ 149,405 -9.3%
Restructuring recovery (Note B) 1,476 413 NM
Corporate activities and minority
interests (11,886) (18,241) 34.8%
Net interest expense (8,403) (7,487) -12.2%
---------- ---------- --------
Income before income taxes 116,624 124,090 -6.0%
Income taxes (30,433) (33,722) 9.8%
---------- ---------- --------
Income from continuing operations 86,191 90,368 -4.6%
Income from discontinued operations
(Note C) 1,544 - NM
Change in accounting principle (Note
D) - (37,739) NM
---------- ---------- --------
Net income $ 87,735 $ 52,629 66.7%
========== ========== ========
Diluted income per common share:
Income from continuing operations $ 0.99 $ 1.03 -3.9%
Income from discontinued operations 0.02 - NM
Change in accounting principle - (0.43) NM
---------- ---------- --------
Net income per share $ 1.01 $ 0.60 68.3%
========== ========== ========
Basic income per common share:
Income from continuing operations $ 0.99 $ 1.04 -4.8%
Income from discontinued operations 0.02 - NM
Change in accounting principle - (0.44) NM
---------- ---------- --------
Net income per share $ 1.01 $ 0.60 68.3%
========== ========== ========
Common shares treated as outstanding
for net income per share calculations:
Average outstanding shares 86,168 86,325 -0.2%
========== ========== ========
Average outstanding and potentially
dilutive shares 86,524 86,961 -0.5%
========== ========== ========
NM = not meaningful
VIAD CORP AND SUBSIDIARIES
TABLE ONE - NOTES TO QUARTERLY AND YEAR-TO-DATE RESULTS
(UNAUDITED)
(A) Reportable Segments
Quarter Ended September 30,
--------------------------------
(000 omitted) 2003 2002 %
----------- ----------- --------
Revenues:
Payment Services $ 203,743 $ 203,848 -0.1%
Convention and Event Services 132,365 171,616 -22.9%
---------- ---------- --------
Reportable segments 336,108 375,464 -10.5%
Travel and Recreation Services 32,703 37,185 -12.1%
---------- ---------- --------
Total revenues $ 368,811 $ 412,649 -10.6%
========== ========== ========
Segment operating income:
Payment Services $ 28,516 $ 33,760 -15.5%
Convention and Event Services (1,054) 2,246 -146.9%
---------- ---------- --------
Reportable segments 27,462 36,006 -23.7%
Travel and Recreation Services 11,286 14,612 -22.8%
---------- ---------- --------
$ 38,748 $ 50,618 -23.5%
========== ========== ========
Nine Months Ended September 30,
--------------------------------
(000 omitted) 2003 2002 %
----------- ----------- --------
Revenues:
Payment Services $ 596,394 $ 576,515 3.4%
Convention and Event Services 578,318 625,873 -7.6%
---------- ---------- --------
Reportable segments 1,174,712 1,202,388 -2.3%
Travel and Recreation Services 48,278 53,484 -9.7%
---------- ---------- --------
Total revenues $1,222,990 $1,255,872 -2.6%
========== ========== ========
Segment operating income:
Payment Services $ 80,184 $ 94,489 -15.1%
Convention and Event Services 42,751 38,900 9.9%
---------- ---------- --------
Reportable segments 122,935 133,389 -7.8%
Travel and Recreation Services 12,502 16,016 -21.9%
---------- ---------- --------
$ 135,437 $ 149,405 -9.3%
========== ========== ========
(B) Restructuring Recovery -- In the 2001 third quarter, Viad recorded
restructuring charges totaling $66.1 million ($39.9 million
after-tax) consisting of costs associated with the closure and
consolidation of certain facilities, severance and other employee
benefits in the Convention and Event Services segment. In the
third quarter 2003, second quarter 2003 and third quarter 2002,
$200,000 ($120,000 after-tax), $1.3 million ($770,000 after-tax)
and $413,000 ($249,000 after-tax), respectively, of the reserves
were reversed as certain costs originally anticipated in the
restructuring plan will not be incurred.
(C) Income from Discontinued Operations -- In the third quarter 2003,
it was determined that certain amounts accrued were in excess of
current obligations resulting in a reversal of $2.5 million ($1.5
million after-tax).
(D) Change in Accounting Principle -- In June 2002, in accordance with
Viad's adoption of SFAS No. 142, a transitional impairment test
for goodwill was completed. This test resulted in a $40.0 million
($37.7 million after-tax) impairment of goodwill associated with
the Convention and Event Services segment. This impairment was
retroactively restated to the first quarter of 2002 as a
cumulative effect of a change in accounting principle in
accordance with SFAS No. 142.
VIAD CORP AND SUBSIDIARIES
TABLE TWO - EBITDA AND FREE CASH FLOW
(UNAUDITED)
Quarter Ended September 30,
-----------------------------
(000 omitted) 2003 2002 %
--------- --------- -------
EBITDA:
Net income $ 24,836 $ 32,257 -23.0%
Change in accounting principle - - NM
Income from discontinued operations (1,544) - NM
--------- --------- -------
Income from continuing operations 23,292 32,257 -27.8%
Interest expense 2,629 5,060 48.0%
Income taxes 8,185 12,261 33.2%
Depreciation and amortization 13,404 12,967 -3.4%
--------- --------- -------
EBITDA as adjusted $ 47,510 $ 62,545 -24.0%
========= ========= =======
Quarter Ended September 30,
-----------------------------
(000 omitted) 2003 2002 %
--------- --------- -------
Free Cash Flow:
Net cash provided by (used in) operating
activities $(220,745) $ 616,796 -135.8%
Change in payment service assets and
obligations 282,410 (545,247) 151.8%
--------- --------- -------
Subtotal 61,665 71,549 -13.8%
Less:
Capital expenditures (10,943) (10,229) -7.0%
Dividends paid (7,759) (7,998) 3.0%
Dividend paid to minority interest - - NM
--------- --------- -------
Free cash flow $ 42,963 $ 53,322 -19.4%
========= ========= =======
Nine Months Ended September 30,
------------------------------
(000 omitted) 2003 2002 %
--------- --------- -------
EBITDA:
Net income $ 87,735 $ 52,629 66.7%
Change in accounting principle - 37,739 NM
Income from discontinued operations (1,544) - NM
--------- --------- -------
Income from continuing operations 86,191 90,368 -4.6%
Interest expense 10,715 15,067 28.9%
Income taxes 30,433 33,722 9.8%
Depreciation and amortization 38,198 38,720 1.3%
--------- --------- -------
EBITDA as adjusted $ 165,537 $ 177,877 -6.9%
========= ========= =======
Nine Months Ended September 30,
------------------------------
(000 omitted) 2003 2002 %
--------- --------- -------
Free Cash Flow:
Net cash provided by (used in)
operating activities $ 413,631 $ 709,412 -41.7%
Change in payment service assets and
obligations (271,774) (544,481) 50.1%
--------- --------- -------
Subtotal 141,857 164,931 -14.0%
Less:
Capital expenditures (29,126) (27,940) -4.2%
Dividends paid (23,837) (24,148) 1.3%
Dividend paid to minority interest (8,115) - NM
--------- --------- -------
Free cash flow $ 80,779 $ 112,843 -28.4%
========= ========= =======
NM = not meaningful
VIAD CORP AND SUBSIDIARIES
TABLE THREE -- NET FLOAT INCOME AND MARGIN
(UNAUDITED)
Analysis of Average Balances, Float and Average Yields and Interest
Rates:
Quarter Ended September 30,
-----------------------------------
2003
-----------------------------------
(000 omitted) Average Income/ Yield/
Balance Expense Rate
----------- ------------ ----------
Investments available or
restricted for payment
service obligations $7,390,634 $ 76,783 4.12%
Payment service
obligations (1) $6,034,968 59,408 3.91%
----------
Net float income and
margin $ 17,375 0.93%
==========
Nine Months Ended September 30,
------------------------------------
2003
------------------------------------
(000 omitted) Average Income/ Yield/
Balance Expense Rate
----------- ------------ ----------
Investments available or
restricted for payment
service obligations $7,090,293 $ 245,439 4.63%
Payment service
obligations (1) $5,723,746 179,136 4.18%
----------
Net float income and
margin $ 66,303 1.25%
==========
Changes in Float Income and Commission Expense -- Due to Changes in
Average Investable Balances and Interest Rates:
Quarter Ended September 30,
------------------------------------
2003 vs. 2002
------------------------------------
(000 omitted) Balance (2) Yield/Rate (2) Total
----------- ------------ ----------
Float income $ 17,319 $ (29,363) $ (12,044)
Commission expense $ 16,437 $ (19,570) $ (3,133)
Net float income $ 5,125 $ (14,036) $ (8,911)
Nine Months Ended September 30,
------------------------------------
2003 vs. 2002
------------------------------------
(000 omitted) Balance (2) Yield/Rate (2) Total
----------- ------------ ----------
Float income $ 52,796 $ (66,799) $ (14,003)
Commission expense $ 50,095 $ (47,195) $ 2,900
Net float income $ 16,932 $ (33,835) $ (16,903)
Quarter Ended September 30,
------------------------------------
2002
------------------------------------
(000 omitted) Average Income/ Yield/
Balance Expense Rate
------------ ----------- ---------
Investments available or
restricted for payment
service obligations $ 6,184,759 $ 88,827 5.70%
Payment service
obligations (1) $ 4,778,993 62,541 5.19%
----------
Net float income and margin $ 26,286 1.69%
==========
Nine Months Ended September 30,
------------------------------------
2002
------------------------------------
(000 omitted) Average Income/ Yield/
Balance Expense Rate
------------ ----------- ---------
Investments available or
restricted for payment
service obligations $ 5,891,404 $ 259,442 5.89%
Payment service
obligations (1) $ 4,456,885 176,236 5.29%
----------
Net float income and margin $ 83,206 1.89%
==========
Changes in Float Income and Commission Expense -- Due to Changes in
Average Investable Balances and Interest Rates:
------------------------------------
2002 vs. 2001
------------------------------------
(000 omitted) Balance (2) Yield/Rate (2) Total
------------ ----------- ---------
Float income $ 16,641 $ (6,474) $ 10,167
Commission expense $ 17,118 $ (7,421) $ 9,697
Net float income $ 5,462 $ (4,992) $ 470
Nine Months Ended September 30,
------------------------------------
2002 vs. 2001
------------------------------------
(000 omitted) Balance (2) Yield/Rate (2) Total
------------ ----------- ---------
Float income $ 52,489 $ (15,580) $ 36,909
Commission expense $ 56,618 $ (33,575) $ 23,043
Net float income $ 16,355 $ (2,489) $ 13,866
(1) Commissions are paid to financial institution customers based upon
average outstanding balances generated by the sale of official
check products only. The expense reported includes those payments
made to financial institution customers, costs associated with
swaps and the sale of receivables program. The average balance in
the table reflects only the payment service obligations for which
commissions are paid and does not include the average balance of
the sold receivables ($428 million and $440 million for third
quarter 2003 and 2002, respectively, and $434 million and $443
million for the nine months ended September 30, 2003 and 2002,
respectively) as these sold receivables are not recorded on the
Consolidated Balance Sheets. Commission expense is classified as
"Costs of services" in the Consolidated Statements of Income.
(2) Net float income for the "Balance" and "Yield/Rate" columns is not
the net of "Float income" and "Commission expense" as each of
these amounts is calculated independently.
CONTACT: Viad Corp
Patricia D. Phillips, 602/207-1040 (Investor Relations)
pphillip@viad.com