The Western Union Company (WU) 10-Q 6 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	3 Months Ended Mar. 31, 2010	Apr. 30, 2010	Jun. 30, 2009
Document and Entity Information [Abstract]
Company Name	Western Union CO
Entity Central Index Key (CIK)	0001365135
Form Type	10-Q
Report Period	2010-03-31
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Company Fiscal Year End Date	--12-31
Company Well-known Seasoned Issuer (WKSI)	Yes
Entity Voluntary Filers	No
Current with Filings	Yes
Accelerated Filing Status	Large Accelerated Filer
Public Float			11.5
Entity Common Stock, Shares Outstanding		672,144,960

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenues:
Transaction fees	965.7	958.5
Foreign exchange revenues	238.1	205.1
Commission and other revenues	28.9	37.6
Total revenues	1232.7	1201.2
Expenses:
Cost of services	714.6	669.1
Selling, general and administrative	202.3	191.2
Total expenses	916.9	860.3
Operating income	315.8	340.9
Other income/(expense):
Interest income	0.9	3.7
Interest expense	-38.8	(40)
Derivative losses, net	-0.9	-3.6
Other income/(expense), net	(1)	4.2
Total other expense, net	-39.8	-35.7
Income before income taxes	276	305.2
Provision for income taxes	68.1	81.3
Net income	207.9	223.9
Earnings per share:
Basic	0.3	0.32
Diluted	0.3	0.32
Weighted-average shares outstanding:
Basic	681.9	707.1
Diluted	684.2	708

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Assets
Cash and cash equivalents	1529.8	1685.2
Settlement assets	2287.6	2389.1
Property and equipment, net of accumulated depreciation of $347.1 and $335.4, respectively	196	204.3
Goodwill	2157.9	2143.4
Other intangible assets, net of accumulated amortization of $374.7 and $355.4, respectively	474.5	489.2
Other assets	395.2	442.2
Total assets	7,041	7353.4
Liabilities:
Accounts payable and accrued liabilities	465.5	501.2
Settlement obligations	2287.6	2389.1
Income taxes payable	317.5	519
Deferred tax liability, net	282.3	268.9
Borrowings	3,048	3048.5
Other liabilities	259.5	273.2
Total liabilities	6660.4	6999.9
Commitments and contingencies (Note 6)
Stockholders' equity:
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued	0	0
Common stock, $0.01 par value; 2,000 shares authorized; 674.7 shares and 686.5 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively	6.7	6.9
Capital surplus	59.7	40.7
Retained earnings	400.5	433.2
Accumulated other comprehensive loss	-86.3	-127.3
Total stockholders' equity	380.6	353.5
Total liabilities and stockholders' equity	$7,041	7353.4

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
Assets
Accumulated depreciation on property and equipment	347.1	335.4
Accumulated amortization on other intangible assets	374.7	355.4
Stockholders' equity:
Preferred stock, par value	1	1
Preferred stock, shares authorized	10	10
Preferred stock, shares issued	0	0
Common stock, par value	0.01	0.01
Common stock, shares authorized	2,000	2,000
Common stock, shares issued	674.7	686.5
Common stock, shares outstanding	674.7	686.5

2_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash flows from operating activities
Net income	207.9	223.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	14.7	13.3
Amortization	27.3	22.4
Stock compensation expense	10.4	8.4
Other non-cash items, net	3.8	13.5
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in:
Other assets	46.4	20.6
Accounts payable and accrued liabilities	-35.5	-8.2
Income taxes payable (Note 13)	-202.1	68.9
Other liabilities	1.5	-6.2
Net cash provided by operating activities	74.4	356.6
Cash flows from investing activities
Capitalization of contract costs	-3.7	-3.2
Capitalization of purchased and developed software	-3.9	-2.2
Purchases of property and equipment	-7.1	-10.4
Acquisition of business, net of cash acquired		-143.6
Proceeds from receivable for securities sold		193.6
Repayments of notes receivable issued to agents	16.9	5.4
Net cash provided by investing activities	2.2	39.6
Cash flows from financing activities
Proceeds from exercise of options	8.6	4.5
Cash dividends paid	-40.5
Common stock repurchased	-200.1	-100.1
Net repayments of commercial paper		-82.8
Net proceeds from issuance of borrowings		496.6
Principal payments on borrowings		(500)
Net cash used in financing activities	(232)	-181.8
Net change in cash and cash equivalents	-155.4	214.4
Cash and cash equivalents at beginning of period	1685.2	1295.6
Cash and cash equivalents at end of period	1529.8	1,510
Supplemental cash flow information:
Interest paid	13.7	10.8
Income taxes paid (Note 13)	266.8	8
Non-cash exchange of 5.400% notes due 2011 for 5.253% notes due 2020	303.7

Business and Basis of Presentat

Business and Basis of Presentation
	3 Months Ended Mar. 31, 2010
Business and Basis of Presentation [Abstract]
Business and Basis of Presentation	1. Business and Basis of Presentation Business The Western Union Company (Western Union or the Company) is a leader in global money transfer and payment services, providing people and businesses with fast, reliable and convenient ways to send money and make payments around the world. The Western Union brand is globally recognized. The Companys services are available through a network of agent locations in more than 200 countries and territories. Each location in the Companys agent network is capable of providing one or more of the Companys services. The Western Union business consists of the following segments: Consumer-to-consumermoney transfer services between consumers, primarily through a global network of third-party agents using the Companys multi-currency, real-time money transfer processing systems. This service is available for international cross-border transfersthat is, the transfer of funds from one country to anotherand, in certain countries, intra-country transfersthat is, money transfers from one location to another in the same country. Global business paymentsthe processing of payments from consumers or businesses to other businesses. The Companys business payments services allow consumers to make payments to a variety of organizations including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. As described further in Note3, the Company acquired Canada-based Custom House, Ltd. (Custom House), a provider of international business-to-business payment services, which is included in this segment. Custom House facilitates cross-border, cross-currency payment transactions. While the Company continues to pursue further international expansion of its offerings in this segment, the significant majority of the segments revenue was generated in the United States during all periods presented. All businesses that have not been classified into the consumer-to-consumer or global business payments segments are reported as Other and primarily include the Companys money order services business. There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located, or which constitute undistributed earnings of affiliates of the Company accounted for under the equity method of accounting. However, there are generally no limitations on the use of these assets within those countries. Additionally, the Company must meet minimum capital requirements in some countries in order to maintain operating licenses. As of March31, 2010, the amount of net assets subject to these limitations totaled nearly $200million. Various aspects of the Companys services and businesses are subject to United States federal, state and local regulation, as well as regulation by foreign jurisdictions, including certain banking and other financial services regulations. Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form10-Q and Article10 of Regu

Earnings Per Share and Dividend

Earnings Per Share and Dividends
	3 Months Ended Mar. 31, 2010
Earnings Per Share and Dividends [Abstract]
Earnings Per Share and Dividends	2. Earnings Per Share and Dividends Earnings Per Share The calculation of basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested, using the treasury stock method. The treasury stock method assumes proceeds from the exercise price of stock options, the unamortized compensation expense and assumed tax benefits of options and restricted stock are available to acquire shares at an average market price throughout the year, and therefore, reduce the dilutive effect. For the three months ended March31, 2010 and 2009, there were 35.6million and 43.1million, respectively, of outstanding options to purchase shares of Western Union stock excluded from the diluted earnings per share calculation as their effect was anti-dilutive. The following table provides the calculation of diluted weighted-average shares outstanding (in millions): Three Months Ended March31, 2010 2009 Basic weighted-average shares outstanding 681.9 707.1 Common stock equivalents 2.3 0.9 Diluted weighted-average shares outstanding 684.2 708.0 Cash Dividends Paid During the first quarter of 2010, the Companys Board of Directors declared a quarterly cash dividend of $0.06 per common share representing $40.5million in total dividends. This amount was paid on March31, 2010 to shareholders of record on March19, 2010. During the first quarter of 2009, no dividend was declared or paid.

Acquisitions

Acquisitions
	3 Months Ended Mar. 31, 2010
Acquisitions [Abstract]
Acquisitions	3. Acquisitions Custom House, Ltd. On September1, 2009, the Company acquired Canada-based Custom House, a provider of international business-to-business payment services, for $371.0million. The acquisition of Custom House has allowed the Company to enter the international business-to-business payments market. Custom House facilitates cross-border, cross-currency payment transactions. These payment transactions are conducted through various channels including the telephone and internet. The significant majority of Custom Houses revenue is from exchanges of currency at the spot rate enabling customers to make cross-currency payments. In addition, this business writes foreign currency forward and option contracts for their customers to facilitate future payments. The duration of these derivatives contracts is generally nine months or less. The results of operations for Custom House have been included in the Companys consolidated financial statements from the date of acquisition, September1, 2009. The Company recorded the assets and liabilities of Custom House at fair value, excluding the deferred tax liability described below. The following table summarizes the preliminary allocation of purchase price: Assets: Cash acquired $ 2.5 Settlement assets 152.5 Property and equipment 6.7 Goodwill 272.2 Other intangible assets 118.1 Other assets 78.1 Total assets $ 630.1 Liabilities: Accounts payable and accrued liabilities $ 23.5 Settlement obligations 152.5 Deferred tax liability, net 31.9 Other liabilities 51.2 Total liabilities 259.1 Total consideration, including cash acquired $ 371.0 The valuation of assets acquired resulted in $118.1million of identifiable intangible assets, $99.8million of which were attributable to customer and other contractual relationships and were valued using an income approach and $18.3million of other intangibles, which were valued using both income and cost approaches. These fair values were derived using primarily unobservable Level3 inputs which require significant management judgment and estimation. For the remaining assets and liabilities, fair value approximated carrying value. The intangible assets related to customer and other contractual relationships are being amortized over 10 to 12years. The remaining intangibles are being amortized over three to five years. The goodwill recognized of $272.2million is attributable to the projected long-term business growth in current and new markets and an assembled workforce. All goodwill relates entirely to the global business payments segment. The preliminary assessment of goodwill expected to be deductible for United States income tax purposes is approximately $225.1million. The net deferred tax liability of $31.9million and the resulting impacts on goodwill are preliminary and will be completed once the Company finalizes its tax review for this acquisition.

Receivable for Securities Sold

Receivable for Securities Sold
	3 Months Ended Mar. 31, 2010
Receivable for Securities Sold [Abstract]
Receivable for Securities Sold	4. Receivable for Securities Sold On September15, 2008, Western Union requested redemption of its shares in the Reserve International Liquidity Fund, Ltd. (the Fund), a money market fund, totaling $298.1million. Western Union included the value of the receivable in Other assets in the Condensed Consolidated Balance Sheets. At the time the redemption request was made, the Company was informed by the Reserve Management Company, the Funds investment advisor (the Manager), that the Companys redemption trades would be honored at a $1.00 per share net asset value. In 2009, the Company received partial distributions totaling $255.5million from the Fund. The Company continues to vigorously pursue collection of the remaining balance and believes it has a right to full payment of the remaining amount based on the written and verbal representations from the Manager and the Companys legal position. However, given the increased uncertainty surrounding the numerous third-party legal claims associated with the Fund, the Company reserved $12million representing the estimated impact of a pro-rata distribution of the Fund during the quarter ended June30, 2009. As of March31, 2010, the Company had a remaining receivable balance of $30.6million, net of the related reserve. If further deterioration occurs in the underlying assets in the Fund, or if the Fund incurs significant legal and/or administrative costs during the distribution process, the Company may record additional reserves related to the remaining receivable balance, which could negatively affect its financial position, results of operations and cash flows.

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
Fair Value Measurements [Abstract]
Fair Value Measurements	5. Fair Value Measurements Fair value, as defined by the relevant accounting standards, represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For additional information on how Western Union measures fair value, refer to the Companys Annual Report on Form10-K for the year ended December31, 2009. The following table reflects assets and liabilities that were measured and carried at fair value on a recurring basis as of March31, 2010 (in millions): Assets/ Liabilities Fair Value Measurement Using at Fair Level 1 Level 2 Level 3 Value Assets: State and municipal obligations $ $ 881.2 $ $ 881.2 State and municipal variable rate demand notes 258.1 258.1 Corporate debt securities 20.5 20.5 Other 0.2 0.2 Derivatives 94.3 0.1 94.4 Total assets $ 0.2 $ 1,254.1 $ 0.1 $ 1,254.4 Liabilities: Derivatives $ $ 70.2 $ $ 70.2 Total liabilities $ $ 70.2 $ $ 70.2 The Level3 assets above represent an immaterial portion of the derivatives portfolio related to the Custom House acquisition for which credit judgments are deemed to be a significant input to the determination of fair value. No non-recurring fair value adjustments were recorded during the three months ended March31, 2010. Other Fair Value Measurements The carrying amounts for Western Union financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, settlement receivables and settlement obligations approximate fair value due to their short maturities. The Companys borrowings had a carrying value and fair value of $3,048.0million and $3,250.4million, respectively, at March31, 2010 and had a carrying value and fair value of $3,048.5million and $3,211.3million, respectively, at December31, 2009 (see Note12).

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies [Abstract]
Commitments and Contingencies	6. Commitments and Contingencies Letters of Credit and Bank Guarantees The Company had $88.8million in outstanding letters of credit and bank guarantees at March31, 2010 with expiration dates through 2015, the majority of which contain a one-year renewal option. The letters of credit and bank guarantees are primarily held in connection with lease arrangements and certain agent agreements. The Company expects to renew the letters of credit and bank guarantees prior to expiration in most circumstances. Litigation and Related Contingencies During the third quarter of 2009, the Company recorded an accrual of $71.0million for an anticipated agreement and settlement with the State of Arizona. On February11, 2010, the Company signed this agreement and settlement, which resolved all outstanding legal issues and claims with the State and requires the Company to fund a multi-state not-for-profit organization promoting safety and security along the UnitedStates and Mexico border, in which California, Texas and New Mexico will participate with Arizona. The accrual includes amounts for reimbursement to the State of Arizona for its costs associated with this matter. In addition, as part of the agreement and settlement, the Company expects to make certain investments in its compliance programs along the United States and Mexico border and to engage a monitor for that program, which are expected to cost up to $23million over the next two to four years. During the first quarter of 2010, cash payments of $17.0million were made related to the agreement and settlement. The United States Department of Justice (DOJ) served one of the Companys subsidiaries with a grand jury subpoena requesting documents in connection with an investigation into money transfers from the UnitedStates to the Dominican Republic during the last several years. The Company is cooperating fully with the DOJ investigation. Due to the stage of the DOJ investigation, the Company is unable to predict the outcome of the investigation or the possible loss or range of loss, if any, associated with the resolution of any charges that may be brought against the Company. In the normal course of business, Western Union is subject to claims and litigation. Management of the Company believes such matters involving a reasonably possible chance of loss will not, individually or in the aggregate, result in a material adverse effect on the Companys financial position, results of operations and cash flows. The Company accrues for loss contingencies as they become probable and estimable. In May 2007, the Company initiated litigation against MoneyGram Payment Systems, Inc. (MoneyGram) for infringement of the Companys Money Transfer by Phone patents by MoneyGrams FormFree service. On September24, 2009, a jury found that MoneyGram was liable for patent infringement and awarded the Company $16.5million in damages. This case is on appeal to the United States Court of Appeals for the Federal Circuit. In accordance with its policies, the Company does not recognize gain contingencies in earnings until realization and collectability are assured and, therefore, due to MoneyG

Related Party Transactions

Related Party Transactions
	3 Months Ended Mar. 31, 2010
Related Party Transactions [Abstract]
Related Party Transactions	7. Related Party Transactions The Company has ownership interests in certain of its agents accounted for under the equity method of accounting. The Company pays these agents, as it does its other agents, commissions for money transfer and other services provided on the Companys behalf. Commission expense recognized for these agents for the three months ended March31, 2010 and 2009 totaled $44.7million and $53.5million, respectively. Commission expense recognized for FEXCO prior to February24, 2009, the date of the acquisition (see Note3), was considered a related party transaction. In July 2009, the Company appointed a director who is also a director for a company holding significant investments in two of the Companys existing agents. These agents had been agents of the Company prior to the director being appointed to the board. The Company recognized commission expense of $13.5million and $12.4million for the three months ended March31, 2010 and 2009, respectively, related to these agents.

Settlement Assets and Obligatio

Settlement Assets and Obligations
	3 Months Ended Mar. 31, 2010
Settlement Assets and Obligations [Abstract]
Settlement Assets and Obligations	8. Settlement Assets and Obligations Settlement assets represent funds received or to be received from agents for unsettled money transfers, money orders and consumer payments. Western Union records corresponding settlement obligations relating to amounts payable under money transfers, money orders and consumer payment service arrangements. Settlement assets and obligations also include amounts receivable from and payable to businesses for the value of customer cross-currency payment transactions related to the global business payments segment. Settlement assets and obligations consisted of the following (in millions): March31, December31, 2010 2009 Settlement assets: Cash and cash equivalents $ 224.6 $ 161.9 Receivables from selling agents and business-to-business customers 903.0 1,004.4 Investment securities 1,160.0 1,222.8 $ 2,287.6 $ 2,389.1 Settlement obligations: Money transfer, money order and payment service payables $ 1,832.9 $ 1,954.8 Payables to agents 454.7 434.3 $ 2,287.6 $ 2,389.1 Investment securities consist primarily of high-quality state and municipal debt obligations. Substantially all of the Companys investment securities were marketable securities during the periods presented. The Company is required to maintain specific high-quality, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable state and foreign country requirements. Western Union does not hold investment securities for trading purposes. All investment securities are classified as available-for-sale and recorded at fair value. Investment securities are exposed to market risk due to changes in interest rates and credit risk. Western Union regularly monitors credit risk and attempts to mitigate its exposure by making high-quality investments and through investment diversification. At March31, 2010, the majority of the Companys investment securities had credit ratings of AA- or better from a major credit rating agency. Unrealized gains and losses on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive income or loss, net of related deferred taxes. Gains and losses on investments are calculated using the specific-identification method and are recognized during the period the investment is sold or when an investment experiences an other-than-temporary decline in value. In the fourth quarter of 2009, as further described in Note15, the Company received cash from Integrated Payment Systems Inc. (IPS), a subsidiary of First Data, in connection with the Company assuming the responsibility of issuing money orders. The Company invested the cash received from IPS in investment securities, including variable rate demand notes. Generally,

Comprehensive Income

Comprehensive Income
	3 Months Ended Mar. 31, 2010
Comprehensive Income [Abstract]
Comprehensive Income	9. Comprehensive Income The components of other comprehensive income, net of tax, were as follows (in millions): Three Months Ended March31, 2010 2009 Net income $ 207.9 $ 223.9 Unrealized gains/losses on investments securities: Unrealized gains 2.4 2.0 Tax expense (0.9 ) (0.7 ) Reclassification of gains into earnings (0.9 ) (1.7 ) Tax expense 0.4 0.6 Net unrealized gains on investment securities 1.0 0.2 Unrealized gains/losses on hedging activities: Unrealized gains 35.0 32.1 Tax expense (4.2 ) (4.6 ) Reclassification of losses/(gains) into earnings 0.4 (17.4 ) Tax (expense)/benefit (0.4 ) 2.7 Net unrealized gains on hedging activities 30.8 12.8 Foreign currency translation adjustments: Foreign currency translation adjustments 10.7 (20.3 ) Tax expense/(benefit) (2.4 ) 7.1 Reclassification of gains into earnings (a) (23.1 ) Tax expense 8.1 Net foreign currency translation adjustments 8.3 (28.2 ) Pension liability adjustments: Reclassification of losses into earnings 1.6 0.9 Tax benefit (0.7 ) (0.4 ) Net pension liability adjustments 0.9 0.5 Total other comprehensive income $ 248.9 $ 209.2 (a) The three months ended March31, 2009 include the impact to the foreign currency translation account of the surrender of the Companys interest in FEXCO Group. See Note3.

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Mar. 31, 2010
Employee Benefit Plans [Abstract]
Employee Benefit Plans	10. Employee Benefit Plans The Company has two frozen defined benefit pension plans for which it had a recorded unfunded pension obligation of $123.7million and $124.2million as of March31, 2010 and December31, 2009, respectively, included in Other liabilities in the Condensed Consolidated Balance Sheets. The Company is required to fund $15million to the plans in 2010, and may make an additional discretionary contribution of up to $10million. The following table provides the components of net periodic benefit cost for the plans (in millions): Three Months Ended March31, 2010 2009 Interest cost $ 5.0 $ 5.9 Expected return on plan assets (5.1 ) (6.2 ) Amortization of actuarial loss 1.6 0.9 Net periodic benefit cost $ 1.5 $ 0.6

Derivatives

Derivatives
	3 Months Ended Mar. 31, 2010
Derivatives [Abstract]
Derivatives	11. Derivatives The Company is exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the euro, and to a lesser degree the British pound, Canadian dollar and other currencies, related to forecasted money transfer revenues and on money transfer settlement assets and obligations. Subsequent to the acquisition of Custom House, the Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency business-to-business payments operations. Additionally, the Company is exposed to interest rate risk related to changes in market rates both prior to and subsequent to the issuance of debt. The Company uses derivatives to (a)minimize its exposures related to changes in foreign currency exchange rates and interest rates and (b)facilitate cross-currency business-to-business payments by writing derivatives to customers. The Company executes derivatives related to its consumer-to-consumer business with established financial institutions, with the substantial majority of these financial institutions having credit ratings of A- or better from a major credit rating agency. The Company executes global business payments derivatives, as a result of its acquisition of Custom House, mostly with small and medium size enterprises. The credit risk inherent in both the consumer-to-consumer and global business payments agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. The Company performs a review of the credit risk of these counterparties at the inception of the contract and on an ongoing basis. The Company also monitors the concentration of its contracts with any individual counterparty. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements, but takes action (including termination of contracts) when doubt arises about the counterparties ability to perform. The Companys hedged foreign currency exposures are in liquid currencies, consequently there is minimal risk that appropriate derivatives to maintain the hedging program would not be available in the future. Foreign CurrencyConsumer-to-Consumer The Companys policy is to use longer-term foreign currency forward contracts, with maturities of up to 36months at inception and a targeted weighted-average maturity of approximately one year, to mitigate some of the risk that changes in foreign currency exchange rates compared to the United States dollar could have on forecasted revenues denominated in other currencies related to its business. At March31, 2010, the Companys longer-term foreign currency forward contracts had maturities of a maximum of 24months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash flow hedges of forecasted revenue, with effectiveness assessed based on changes in the spot rate of the affected currencies during the period of designation. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge that are excluded from the measure of effectiveness a

Borrowings

Borrowings
	3 Months Ended Mar. 31, 2010
Borrowings [Abstract]
Borrowings	12. Borrowings The Companys outstanding borrowings consisted of the following (in millions): March31, 2010 December31, 2009 Due in greater than one year (a): 5.400%notes (effective rate of 2.7%) due 2011 (b)(e) $ 696.3 $ 1,000.0 6.500%notes due 2014 (c) 500.0 500.0 5.930%notes due 2016 (c) 1,000.0 1,000.0 5.253%notes (effective rate of 5.7%) due 2020 (b) 324.9 6.200%notes due 2036 (c) 500.0 500.0 Other borrowings 6.0 6.0 Total borrowings at par value 3,027.2 3,006.0 Fair value hedge accounting adjustments, net (a) 46.3 47.1 Unamortized discount, net (b) (25.5 ) (4.6 ) Total borrowings at carrying value (d) $ 3,048.0 $ 3,048.5 (a) The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to Interest expense over the life of the related notes, and cause the effective rate of interest to differ from the notes stated rate. (b) On March30, 2010, the Company exchanged $303.7million of aggregate principal amount of the 5.400%notes due 2011 (2011 Notes) for 5.253%notes due 2020 (2020 Notes). The effective interest rate of the 2020 Notes differs from the stated rate as the notes have a par value of $324.9million. The $21.2million premium is being accreted over the life of the 2020 Notes. See below for additional detail relating to the note exchange. (c) The difference between the stated interest rate and the effective interest rate is not significant. (d) At March31, 2010, the Companys weighted average effective rate on total borrowings was 5.2%. (e) The effective interest rate related to the 2011 Notes includes the impact of the interest rate swaps entered into in conjunction with the assumption of the money order investments from IPS (see Note15). The aggregate fair value of our long-term debt, based on quotes from multiple banks, excluding the impact of discounts and related interest rate swaps, was $3,250.4million and $3,211.3million at March31, 2010 and December31, 2009, respectively. The Companys maturities of borrowings at par value as of March31, 2010 are $700million in 2011, $500million in 2014 and $1.8billion thereafter. The Companys obligations with respect to its outstanding borrowings, as described above, rank equally. 2020 Notes On March30, 2010, the Company exchanged $303.7million of aggregate principal amount of the 2011 Notes for notes due

Income Taxes

Income Taxes
	3 Months Ended Mar. 31, 2010
Income Taxes [Abstract]
Income Taxes	13. Income Taxes The Companys effective tax rates on pre-tax income for the three months ended March31, 2010 and 2009 were 24.7% and 26.6%, respectively. The Company continues to benefit from an increasing proportion of profits being foreign-derived and therefore taxed at lower rates than its combined federal and state tax rates in the United States. Uncertain Tax Positions The Company has established contingency reserves for material, known tax exposures, including potential tax audit adjustments with respect to its international operations, which were restructured in 2003. The Companys tax reserves reflect managements judgment as to the resolution of the issues involved if subject to judicial review. While the Company believes its reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to these reserves, the Companys income tax expense would include (i)any changes in tax reserves arising from material changes during the period in the facts and circumstances (i.e., new information) surrounding a tax issue, and (ii)any difference from the Companys tax position as recorded in the financial statements and the final resolution of a tax issue during the period. Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Companys financial statements, and are reflected in Income taxes payable in the Condensed Consolidated Balance Sheets. The total amount of unrecognized tax benefits as of March31, 2010 and December31, 2009 was $503.4million and $477.2million, respectively, excluding interest and penalties. A substantial portion of the Companys unrecognized tax benefits relate to the 2003 restructuring of the Companys international operations whereby the Companys income from certain foreign-to-foreign money transfer transactions has been taxed at relatively low foreign tax rates compared to the Companys combined federal and state tax rates in the United States. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $494.7million and $468.6million as of March31, 2010 and December31, 2009, respectively, excluding interest and penalties. The Company recognizes interest and penalties with respect to unrecognized tax benefits in Provision for income taxes in its Condensed Consolidated Statements of Income, and records the associated liability in Income taxes payable in its Condensed Consolidated Balance Sheets. The Company recognized $2.4million and $4.3million in interest and penalties during the three months ended March31, 2010 and 2009, respectively. The Company has accrued $47.9million and $45.5million for the payment of interest and penalties at March31, 2010 and December31, 2009, respectively. Subject to the matter referenced in the paragraph below, the Company has identified no other uncertain tax positions for which it is reasonably possible that the total amount of unrecognized ta

Stock Compensation Plans

Stock Compensation Plans
	3 Months Ended Mar. 31, 2010
Stock Compensation Plans [Abstract]
Stock Compensation Plans	14. Stock Compensation Plans For the three months ended March31, 2010 and 2009, the Company recognized stock-based compensation expense of $10.4million and $8.4million, respectively, resulting from stock options, restricted stock awards, restricted stock units and deferred stock units in the Condensed Consolidated Statements of Income. During the first quarter of 2010, the Company granted 3.8million options at a weighted-average exercise price of $16.01 and 1.3million restricted stock units at a weighted-average grant date fair value of $15.56. As of March31, 2010, the Company had 44.6million outstanding options at a weighted-average exercise price of $18.54, and had 35.4million options exercisable at a weighted-average exercise price of $19.09. Approximately 37% of the outstanding options at March31, 2010, were held by employees of First Data. The Company had 3.5million non-vested restricted stock awards and units at a weighted-average grant-date fair value of $14.91 as of March31, 2010. The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted in the three months ended March31, 2010: Stock options granted: Weighted-average risk-free interest rate 2.7 % Weighted-average dividend yield 1.3 % Volatility 34.0 % Expected term (in years) 5.7 Weighted-average grant date fair value $ 5.08 All assumptions used to calculate the fair value of Western Unions stock options granted during the three months ended March31, 2010 were determined on a consistent basis with those assumptions disclosed in the Companys Annual Report on Form10-K for the year ended December31, 2009.

Segments

Segments
	3 Months Ended Mar. 31, 2010
Segments [Abstract]
Segments	15. Segments As previously described in Note1, the Company classifies its businesses into two reportable segments: consumer-to-consumer and global business payments. Operating segments are defined as components of an enterprise that engage in business activities, about which separate financial information is available that is evaluated regularly by the Companys chief operating decision maker (CODM) in deciding where to allocate resources and in assessing performance. The consumer-to-consumer reporting segment is viewed as one global network where a money transfer can be sent from one location to another, anywhere in the world. The segment consists of three regions, which primarily coordinate agent network management and marketing activities. The CODM makes decisions regarding resource allocation and monitors performance based on specific corridors within and across these regions, but also reviews total revenue and operating profit of each region. These regions frequently interact on transactions with consumers and share processes, systems and licenses, thereby constituting one global consumer-to-consumer money transfer network. The regions and corridors generally offer the same services distributed by the same agent network, have the same types of customers, are subject to similar regulatory requirements, are processed on the same system and have similar economic characteristics, allowing the geographic regions to be aggregated into one reporting segment. The global business payments segment processes payments from consumers or businesses to other businesses. The results of the Companys existing consumer-to-business operations as well as the recently acquired Custom House business have been combined in this segment as both are focused on facilitating payments. For further information on Custom House, see Note3. All businesses that have not been classified into consumer-to-consumer or global business payments are reported as Other. These businesses primarily include the Companys money order services businesses. Effective October1, 2009 (the Transition Date), IPS assigned and transferred to the Company certain operating assets used by IPS to issue Western Union branded money orders and approximately $860million of cash sufficient to satisfy all outstanding money order liabilities. On the Transition Date, the Company assumed IPSs role as issuer of the money orders, including its obligation to pay outstanding money orders, and terminated the existing agreement whereby IPS paid Western Union a fixed return of 5.5% on the outstanding money order balances. Following the Transition Date, Western Union invested the cash received from IPS in high-quality, investment grade securities, primarily tax exempt United States state and municipal securities, in accordance with applicable regulations, which are the same as those currently governing the investment of the Companys United States originated money transfer principal. The Company now derives investment income from actual interest generated on money order settlement assets invested in those securities. In 2008, the Company entered into interest rate swaps on certain of it