Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 13, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Western Union CO | ||
Entity Central Index Key | 1365135 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Common Stock, Shares Outstanding | 521,445,073 | ||
Entity Public Float | $9.10 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Revenues: | |||||||||||||||||||||||
Transaction fees | $4,083.60 | $4,065.80 | $4,210 | ||||||||||||||||||||
Foreign exchange revenues | 1,386.30 | 1,348 | 1,332.70 | ||||||||||||||||||||
Other revenues | 137.3 | 128.2 | 122.1 | ||||||||||||||||||||
Total revenues | 1,409.90 | 1,440.90 | 1,405.60 | 1,350.80 | 1,421.90 | 1,408.80 | 1,385.90 | 1,325.40 | 5,607.20 | 5,542 | 5,664.80 | ||||||||||||
Expenses: | |||||||||||||||||||||||
Cost of services | 3,297.40 | 3,235 | 3,194.20 | ||||||||||||||||||||
Selling, general and administrative | 1,169.30 | 1,199.60 | 1,140.60 | ||||||||||||||||||||
Total expenses | 1,133.80 | [1] | 1,126.80 | 1,127.30 | 1,078.80 | 1,183.50 | [2],[3] | 1,113.50 | [2],[3] | 1,109.10 | [2],[3] | 1,028.50 | [2],[3] | 4,466.70 | [1],[4] | 4,434.60 | [2],[3],[4] | 4,334.80 | [4] | ||||
Operating income | 276.1 | 314.1 | 278.3 | 272 | 238.4 | 295.3 | 276.8 | 296.9 | 1,140.50 | 1,107.40 | 1,330 | ||||||||||||
Other income/(expense): | |||||||||||||||||||||||
Interest income | 11.5 | 9.4 | 5.5 | ||||||||||||||||||||
Interest expense | -176.6 | -195.6 | -179.6 | ||||||||||||||||||||
Derivative gains/(losses), net | -2.2 | -1.3 | 0.5 | ||||||||||||||||||||
Other income/(expense), net | -5 | 7 | 12.4 | ||||||||||||||||||||
Total other expense, net | -40.2 | -41.3 | -46.2 | -44.6 | -45.6 | -43.6 | -44.6 | -46.7 | -172.3 | -180.5 | -161.2 | ||||||||||||
Income before income taxes | 235.9 | 272.8 | 232.1 | 227.4 | 192.8 | 251.7 | 232.2 | 250.2 | 968.2 | 926.9 | 1,168.80 | ||||||||||||
Provision for income taxes | 14.4 | 38.7 | 38.3 | 24.4 | 19.4 | 37.3 | 33.6 | 38.2 | 115.8 | 128.5 | 142.9 | ||||||||||||
Net income | $221.50 | $234.10 | $193.80 | $203 | $173.40 | $214.40 | $198.60 | $212 | $852.40 | $798.40 | $1,025.90 | ||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic (in dollars per share) | $0.42 | $0.44 | $0.36 | $0.37 | $0.31 | $0.39 | $0.36 | $0.37 | $1.60 | $1.43 | $1.70 | ||||||||||||
Diluted (in dollars per share) | $0.42 | $0.44 | $0.36 | $0.37 | $0.31 | $0.39 | $0.36 | $0.37 | $1.59 | $1.43 | $1.69 | ||||||||||||
Weighted-average shares outstanding, basic: | |||||||||||||||||||||||
Basic (in shares) | 522.8 | 527.8 | 537.1 | 545.9 | 551.2 | 552.1 | 555.7 | 567.6 | 533.4 | 556.6 | 604.9 | ||||||||||||
Weighted-average shares outstanding, diluted: | |||||||||||||||||||||||
Diluted (in shares) | 526.9 | 531.2 | 539.9 | 549.2 | 555 | 555.8 | 558.3 | 569.7 | 536.8 | 559.7 | 607.4 | ||||||||||||
Cash dividends declared per common share (in dollars per share) | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.10 | $0.10 | $0.10 | $0.50 | $0.50 | $0.43 | ||||||||
[1] | Includes $30.3 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||||||
[2] | Includes $3.9 million in the first quarter, $6.2 million in the second quarter, $3.8 million in the third quarter, and $5.4 million in the fourth quarter of integration expenses related to the acquisition of TGBP. | ||||||||||||||||||||||
[3] | Includes $4.2 million in the first quarter, $13.5 million in the second quarter, $6.2 million in the third quarter, and $33.0 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||||||
[4] | As further described in Note 6, total expenses include amounts for related parties of $70.2 million, $80.6 million and $95.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Consolidated_Statements_of_Inc1
Consolidated Statements of Income (Parentheticals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Total related party expenses | $70.20 | $80.60 | $95 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||||||||||
Net income | $221.50 | $234.10 | $193.80 | $203 | $173.40 | $214.40 | $198.60 | $212 | $852.40 | $798.40 | $1,025.90 |
Other comprehensive income/(loss), net of tax (Note 13): | |||||||||||
Unrealized gains/(losses) on investment securities | 4.8 | -3.6 | 2.8 | ||||||||
Unrealized gains/(losses) on hedging activities | 81.6 | -11.1 | -27 | ||||||||
Foreign currency translation adjustments | -27.6 | -13.1 | -2.2 | ||||||||
Defined benefit pension plan adjustments | -8.7 | 11.4 | -7.7 | ||||||||
Total other comprehensive income/(loss) | 50.1 | -16.4 | -34.1 | ||||||||
Comprehensive income | $902.50 | $782 | $991.80 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Millions, unless otherwise specified | |||
Assets | |||
Cash and cash equivalents | $1,783.20 | $2,073.10 | |
Settlement assets | 3,313.70 | 3,270.40 | |
Property and equipment, net of accumulated depreciation of $478.5 and $428.6, respectively | 206.4 | 209.9 | |
Goodwill | 3,169.20 | 3,172 | |
Other intangible assets, net of accumulated amortization of $820.0 and $672.3, respectively | 748.1 | 833.8 | |
Other assets | 669.8 | 562.1 | |
Total assets | 9,890.40 | 10,121.30 | |
Liabilities: | |||
Accounts payable and accrued liabilities | 600.4 | 638.9 | |
Settlement obligations | 3,313.70 | 3,270.40 | |
Income taxes payable | 166.3 | 216.9 | |
Deferred tax liability, net | 305 | 319.2 | |
Borrowings | 3,720.40 | [1] | 4,213 |
Other liabilities | 484.2 | 358.2 | |
Total liabilities | 8,590 | 9,016.60 | |
Commitments and contingencies (Note 5) | |||
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; 521.5 shares and 548.8 shares issued and outstanding as of December 31, 2014 and 2013, respectively | 5.2 | 5.5 | |
Capital surplus | 445.4 | 390.9 | |
Retained earnings | 968.7 | 877.3 | |
Accumulated other comprehensive loss | -118.9 | -169 | |
Total stockholders' equity | 1,300.40 | 1,104.70 | |
Total liabilities and stockholders' equity | $9,890.40 | $10,121.30 | |
[1] | As of December 31, 2014, the Company’s weighted-average effective rate on total borrowings was approximately 4.4%. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Assets | ||
Accumulated depreciation | $478.50 | $428.60 |
Accumulated amortization | $820 | $672.30 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $1 | $1 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 521,500,000 | 548,800,000 |
Common stock, shares outstanding | 521,500,000 | 548,800,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net income | $852.40 | $798.40 | $1,025.90 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 66.6 | 64.2 | 61.7 |
Amortization | 205.3 | 198.6 | 184.4 |
Deferred income tax benefit | -26.8 | -39.3 | -35.2 |
Other non-cash items, net | 49.5 | 53.3 | 77.2 |
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in: | |||
Other assets | -31.1 | -55.4 | -27.8 |
Accounts payable and accrued liabilities | -29.4 | 81.1 | 9.3 |
Income taxes payable (Note 10) | -39.3 | 3.4 | -79.9 |
Other liabilities | -1.3 | -15.7 | -30.3 |
Net cash provided by operating activities | 1,045.90 | 1,088.60 | 1,185.30 |
Cash flows from investing activities | |||
Capitalization of contract costs | -73.1 | -119.3 | -174.9 |
Capitalization of purchased and developed software | -38.1 | -41.8 | -32.4 |
Purchases of property and equipment | -67.8 | -80.2 | -60.9 |
Purchases of non-settlement related investments | 0 | -100 | 0 |
Proceeds from sale of non-settlement related investments | 100.2 | 0 | 0 |
Acquisition of businesses, net (Note 4) | -10.6 | 0 | 10 |
Net cash used in investing activities | -89.4 | -341.3 | -258.2 |
Cash flows from financing activities | |||
Proceeds from exercise of options | 14.2 | 28.9 | 53.4 |
Cash dividends paid | -265.2 | -277.2 | -254.2 |
Common stock repurchased (Note 13) | -495.4 | -399.7 | -766.5 |
Net repayments of commercial paper | 0 | 0 | -297 |
Net proceeds from issuance of borrowings | 0 | 497.3 | 742.8 |
Principal payments on borrowings | -500 | -300 | 0 |
Net cash used in financing activities | -1,246.40 | -450.7 | -521.5 |
Net change in cash and cash equivalents | -289.9 | 296.6 | 405.6 |
Cash and cash equivalents at beginning of year | 2,073.10 | 1,776.50 | 1,370.90 |
Cash and cash equivalents at end of year | 1,783.20 | 2,073.10 | 1,776.50 |
Supplemental cash flow information: | |||
Interest paid | 170.8 | 193.7 | 181.8 |
Income taxes paid (Note 10) | $179.40 | $158 | $257.10 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Loss |
In Millions, unless otherwise specified | |||||
Balance at Dec. 31, 2011 | $894.80 | $6.20 | $247.10 | $760 | ($118.50) |
Balance, shares at Dec. 31, 2011 | 619.4 | ||||
Increase/(Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 1,025.90 | 1,025.90 | |||
Stock-based compensation and other | 34 | 34 | |||
Common stock dividends | -254.2 | -254.2 | |||
Repurchase and retirement of common shares, shares | -51.3 | ||||
Repurchase and retirement of common shares | -777.5 | -0.5 | -777 | ||
Shares issued under stock-based compensation plans, shares | 4 | ||||
Shares issued under stock-based compensation plans | 51.9 | 51.9 | |||
Tax adjustments from employee stock option plans | -0.2 | -0.2 | |||
Unrealized gains/(losses) on investment securities, net of tax | 2.8 | 2.8 | |||
Unrealized gains/(losses) on hedging activities, net of tax | -27 | -27 | |||
Foreign currency translation adjustment, net of tax | -2.2 | -2.2 | |||
Defined benefit pension plan adjustment, net of tax | -7.7 | -7.7 | |||
Balance at Dec. 31, 2012 | 940.6 | 5.7 | 332.8 | 754.7 | -152.6 |
Balance, shares at Dec. 31, 2012 | 572.1 | ||||
Increase/(Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 798.4 | 798.4 | |||
Stock-based compensation and other | 34.2 | 34.2 | |||
Common stock dividends | -277.2 | -277.2 | |||
Repurchase and retirement of common shares, shares | -26.1 | ||||
Repurchase and retirement of common shares | -398.8 | -0.2 | -398.6 | ||
Shares issued under stock-based compensation plans, shares | 2.8 | ||||
Shares issued under stock-based compensation plans | 28.6 | 28.6 | |||
Tax adjustments from employee stock option plans | -4.7 | -4.7 | |||
Unrealized gains/(losses) on investment securities, net of tax | -3.6 | -3.6 | |||
Unrealized gains/(losses) on hedging activities, net of tax | -11.1 | -11.1 | |||
Foreign currency translation adjustment, net of tax | -13.1 | -13.1 | |||
Defined benefit pension plan adjustment, net of tax | 11.4 | 11.4 | |||
Balance at Dec. 31, 2013 | 1,104.70 | 5.5 | 390.9 | 877.3 | -169 |
Balance, shares at Dec. 31, 2013 | 548.8 | 548.8 | |||
Increase/(Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 852.4 | 852.4 | |||
Stock-based compensation and other | 39.7 | 39.7 | |||
Common stock dividends | -265.2 | -265.2 | |||
Repurchase and retirement of common shares, shares | -29.8 | ||||
Repurchase and retirement of common shares | -496.1 | -0.3 | -495.8 | ||
Shares issued under stock-based compensation plans, shares | 2.5 | ||||
Shares issued under stock-based compensation plans | 14.8 | 14.8 | |||
Unrealized gains/(losses) on investment securities, net of tax | 4.8 | 4.8 | |||
Unrealized gains/(losses) on hedging activities, net of tax | 81.6 | 81.6 | |||
Foreign currency translation adjustment, net of tax | -27.6 | -27.6 | |||
Defined benefit pension plan adjustment, net of tax | -8.7 | -8.7 | |||
Balance at Dec. 31, 2014 | $1,300.40 | $5.20 | $445.40 | $968.70 | ($118.90) |
Balance, shares at Dec. 31, 2014 | 521.5 | 521.5 |
Formation_of_the_Entity_and_Ba
Formation of the Entity and Basis of Presentation | 12 Months Ended | |
Dec. 31, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Formation of the Entity and Basis of Presentation | Formation of the Entity and Basis of Presentation | |
The Western Union Company ("Western Union" or the "Company") is a leader in global money movement 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 Company's services are primarily available through a network of agent locations in more than 200 countries and territories. Each location in the Company's agent network is capable of providing one or more of the Company's services. | ||
The Western Union business consists of the following segments: | ||
• | Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers between two consumers, primarily through a network of third-party agents. The Company's multi-currency, real-time money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world. This service is available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through websites, mobile devices, and account based money transfers. | |
• | Consumer-to-Business - The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. The significant majority of the segment's revenue was generated in the United States during all periods presented, with the remainder primarily generated in Argentina. | |
• | Business Solutions - The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The majority of the segment's business relates to exchanges of currency at the spot rate which enables customers to make cross-currency payments. In addition, in certain countries, the Company writes foreign currency forward and option contracts for customers to facilitate future payments. | |
All businesses that have not been classified in the above segments are reported as "Other" and include the Company's money order and other services, in addition to costs for the review and closing of acquisitions. | ||
There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located. 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 December 31, 2014, the amount of net assets subject to these limitations totaled approximately $300 million. | ||
Various aspects of the Company's 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. | ||
Spin-off from First Data | ||
On January 26, 2006, the First Data Corporation ("First Data") Board of Directors announced its intention to pursue the distribution of all of its money transfer and consumer payments businesses and its interest in a Western Union money transfer agent, as well as its related assets, including real estate, through a tax-free distribution to First Data shareholders (the "Spin-off"). Effective on September 29, 2006, First Data completed the separation and the distribution of these businesses by distributing The Western Union Company common stock to First Data shareholders (the "Distribution"). Prior to the Distribution, the Company had been a segment of First Data. | ||
Basis of Presentation | ||
The financial statements in this Annual Report on Form 10-K are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated. | ||
Consistent with industry practice, the accompanying Consolidated Balance Sheets are unclassified due to the short-term nature of the Company's settlement obligations contrasted with the Company's ability to invest cash awaiting settlement in long-term investment securities. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |||||||||||||||||||
Use of Estimates | ||||||||||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. | ||||||||||||||||||||
Principles of Consolidation | ||||||||||||||||||||
The Company consolidates financial results when it has both the power to direct the activities of an entity that most significantly impact the entity's economic performance and the ability to absorb losses or the right to receive benefits of the entity that could potentially be significant to the entity. The Company utilizes the equity method of accounting when it is able to exercise significant influence over the entity's operations, which generally occurs when the Company has an ownership interest of between 20% and 50% in an entity. | ||||||||||||||||||||
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. Outstanding options to purchase Western Union stock and 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 period, and therefore, reduce the dilutive effect. | ||||||||||||||||||||
For the years ended December 31, 2014, 2013 and 2012, there were 15.5 million, 21.2 million and 23.3 million, 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): | ||||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Basic weighted-average shares outstanding | 533.4 | 556.6 | 604.9 | |||||||||||||||||
Common stock equivalents | 3.4 | 3.1 | 2.5 | |||||||||||||||||
Diluted weighted-average shares outstanding | 536.8 | 559.7 | 607.4 | |||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||
The Company determines the fair values of its assets and liabilities that are recognized or disclosed at fair value in accordance with the hierarchy described below. The fair values of the assets and liabilities held in the Company's defined benefit plan trust ("Trust") are recognized or disclosed utilizing the same hierarchy. The following three levels of inputs may be used to measure fair value: | ||||||||||||||||||||
• | Level 1: Quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||
• | Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For most of these assets, the Company utilizes pricing services that use multiple prices as inputs to determine daily market values. In addition, the Trust has other investments that fall within Level 2 that are valued at net asset value which is not quoted on an active market; however, the unit price is based on underlying investments which are traded on an active market. The individual redemption restrictions of Trust investments measured at net asset value are also considered when determining whether Level 2 classification is appropriate. | |||||||||||||||||||
• | Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include items where the determination of fair value requires significant management judgment or estimation. The Company has Level 3 assets that are recognized and disclosed at fair value on a non-recurring basis related to the Company's business combinations, where the values of the intangible assets and goodwill acquired in a purchase are derived utilizing one of the three recognized approaches: the market approach, the income approach or the cost approach. | |||||||||||||||||||
Carrying amounts for many of the Company's financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and settlement obligations approximate fair value due to their short maturities. Investment securities and derivative financial instruments are carried at fair value and included in Note 8. Fixed rate notes are carried at their original issuance values as adjusted over time to accrete that value to par, except for portions of notes hedged by interest rate swap agreements as disclosed in Note 14. The fair values of fixed rate notes are also disclosed in Note 8 and are based on market quotations. For more information on the fair value of financial instruments, see Note 8. | ||||||||||||||||||||
The fair values of non-financial assets and liabilities related to the Company's business combinations are disclosed in Note 4. The fair values of financial assets and liabilities related to the Trust are disclosed in Note 11. | ||||||||||||||||||||
Business Combinations | ||||||||||||||||||||
The Company accounts for all business combinations where control over another entity is obtained using the acquisition method of accounting, which requires that most assets (both tangible and intangible), liabilities (including contingent consideration), and remaining noncontrolling interests be recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets less liabilities and noncontrolling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or noncontrolling interests made subsequent to the acquisition date, but within the measurement period, which is one year or less, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is remeasured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and existing book value. Results of operations of the acquired company are included in the Company's results from the date of the acquisition forward and include amortization expense arising from acquired intangible assets. The Company expenses all costs as incurred related to or involved with an acquisition in "Selling, general and administrative" expenses. | ||||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||
Highly liquid investments (other than those included in settlement assets) with maturities of three months or less at the date of purchase (that are readily convertible to cash) are considered to be cash equivalents and are stated at cost, which approximates fair value. | ||||||||||||||||||||
The Company maintains cash and cash equivalent balances with various financial institutions, including a portion in money market funds. The Company limits the concentration of its cash and cash equivalents with any one institution. The Company regularly reviews investment concentrations and credit worthiness of these institutions, and has relationships with a globally diversified list of banks and financial institutions. | ||||||||||||||||||||
Allowance for Doubtful Accounts | ||||||||||||||||||||
The Company records an allowance for doubtful accounts when it is probable that the related receivable balance will not be collected based on its history of collection experience, known collection issues, such as agent suspensions and bankruptcies, and other matters the Company identifies in its routine collection monitoring. The allowance for doubtful accounts was $37.2 million and $38.3 million as of December 31, 2014 and 2013, respectively, and is recorded in the same Consolidated Balance Sheet caption as the related receivable. During the years ended December 31, 2014, 2013 and 2012, the provision for doubtful accounts (bad debt expense) reflected in the Consolidated Statements of Income was $50.7 million, $50.1 million and $44.9 million, respectively. | ||||||||||||||||||||
Settlement Assets and Obligations | ||||||||||||||||||||
Settlement assets represent funds received or to be received from agents for unsettled money transfers, money orders and consumer payments. The Company 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, customers for the value of their cross-currency payment transactions related to the Business Solutions segment. | ||||||||||||||||||||
Settlement assets consist of cash and cash equivalents, receivables from selling agents and Business Solutions customers, and investment securities. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Cash equivalents consist of short-term time deposits, commercial paper and other highly liquid investments. Receivables from selling agents represent funds collected by such agents, but in transit to the Company. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. In addition, the Company performs ongoing credit evaluations of its agents' financial condition and credit worthiness. See Note 7 for information concerning the Company's investment securities. | ||||||||||||||||||||
Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business Solutions segment. Receivables occur when funds have been paid out to a beneficiary but not yet received from the customer. Aside from these receivables, the credit risk associated with spot foreign currency exchange contracts is largely mitigated, as in most cases the Company requires the receipt of funds from customers before releasing the associated cross-currency payment. | ||||||||||||||||||||
Settlement obligations consist of money transfer, money order and payment service payables and payables to agents. Money transfer payables represent amounts to be paid to transferees when they request their funds. Most agents typically settle with transferees first and then obtain reimbursement from the Company. Money order payables represent amounts not yet presented for payment. Payment service payables represent amounts to be paid to utility companies, auto finance companies, mortgage servicers, financial service providers, government agencies and others. Due to the agent funding and settlement process, payables to agents represent amounts due to agents for money transfers that have been settled with transferees. | ||||||||||||||||||||
Settlement assets and obligations consisted of the following (in millions): | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Settlement assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 834.3 | $ | 538.6 | ||||||||||||||||
Receivables from selling agents and Business Solutions customers | 1,006.90 | 981.3 | ||||||||||||||||||
Investment securities | 1,472.50 | 1,750.50 | ||||||||||||||||||
$ | 3,313.70 | $ | 3,270.40 | |||||||||||||||||
Settlement obligations: | ||||||||||||||||||||
Money transfer, money order and payment service payables | $ | 2,356.70 | $ | 2,376.60 | ||||||||||||||||
Payables to agents | 957 | 893.8 | ||||||||||||||||||
$ | 3,313.70 | $ | 3,270.40 | |||||||||||||||||
Property and Equipment | ||||||||||||||||||||
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the lesser of the estimated life of the related assets (generally three to 10 years for equipment and furniture and fixtures, and 30 years for buildings) or the lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are charged to expense as incurred. | ||||||||||||||||||||
Property and equipment consisted of the following (in millions): | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Equipment | $ | 464.6 | $ | 416.1 | ||||||||||||||||
Buildings | 87.8 | 82.3 | ||||||||||||||||||
Leasehold improvements | 81.1 | 80.3 | ||||||||||||||||||
Furniture and fixtures | 32.2 | 33.3 | ||||||||||||||||||
Land and improvements | 17 | 16.9 | ||||||||||||||||||
Projects in process | 2.2 | 9.6 | ||||||||||||||||||
684.9 | 638.5 | |||||||||||||||||||
Less accumulated depreciation | (478.5 | ) | (428.6 | ) | ||||||||||||||||
Property and equipment, net | $ | 206.4 | $ | 209.9 | ||||||||||||||||
Amounts charged to expense for depreciation of property and equipment were $66.6 million, $64.2 million and $61.7 million during the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
Goodwill represents the excess of purchase price over the fair value of tangible and other intangible assets acquired, less liabilities assumed arising from business combinations. The Company's annual impairment assessment did not identify any goodwill impairment during the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||||||
Other Intangible Assets | ||||||||||||||||||||
Other intangible assets primarily consist of acquired contracts, contract costs (primarily amounts paid to agents in connection with establishing and renewing long-term contracts) and software. Other intangible assets are amortized on a straight-line basis over the length of the contract or benefit periods. Included in the Consolidated Statements of Income is amortization expense of $205.3 million, $198.6 million and $184.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||
Acquired contracts include customer and contractual relationships and networks of subagents that are recognized in connection with the Company's acquisitions. | ||||||||||||||||||||
The Company capitalizes initial payments for new and renewed agent contracts to the extent recoverable through future operations or penalties in the case of early termination. The Company's accounting policy is to limit the amount of capitalized costs for a given contract to the lesser of the estimated future cash flows from the contract or the termination fees the Company would receive in the event of early termination of the contract. | ||||||||||||||||||||
The Company purchases and develops software that is used in providing services and in performing administrative functions. Software development costs are capitalized once technological feasibility of the software has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed all planning and designing activities that are necessary to determine that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is available for general use. Software development costs and purchased software are generally amortized over a term of three to five years. | ||||||||||||||||||||
The following table provides the components of other intangible assets (in millions): | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Weighted- | Initial Cost | Net of | Initial Cost | Net of | ||||||||||||||||
Average | Accumulated | Accumulated | ||||||||||||||||||
Amortization | Amortization | Amortization | ||||||||||||||||||
Period | ||||||||||||||||||||
(in years) | ||||||||||||||||||||
Acquired contracts | 11.4 | $ | 630.8 | $ | 374.9 | $ | 632 | $ | 414.3 | |||||||||||
Capitalized contract costs | 5.6 | 559.6 | 276.6 | 528.5 | 315.2 | |||||||||||||||
Internal use software | 3.3 | 301.6 | 60.1 | 264.9 | 65.1 | |||||||||||||||
Acquired trademarks | 24.5 | 36.4 | 22.7 | 38 | 25.3 | |||||||||||||||
Projects in process | 3 | 12.2 | 12.2 | 9.6 | 9.6 | |||||||||||||||
Other intangibles | 3.9 | 27.5 | 1.6 | 33.1 | 4.3 | |||||||||||||||
Total other intangible assets | 7.9 | $ | 1,568.10 | $ | 748.1 | $ | 1,506.10 | $ | 833.8 | |||||||||||
The estimated future aggregate amortization expense for existing other intangible assets as of December 31, 2014 is expected to be $209.7 million in 2015, $152.6 million in 2016, $124.3 million in 2017, $65.8 million in 2018, $55.7 million in 2019 and $140.0 million thereafter. | ||||||||||||||||||||
Other intangible assets are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. In such reviews, estimated undiscounted cash flows associated with these assets or operations are compared with their carrying values to determine if a write-down to fair value (normally measured by the present value technique) is required. The Company recorded immaterial impairments related to other intangible assets during the years ended December 31, 2014 and December 31, 2013, and did not record any impairment during the year ended December 31, 2012. | ||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||
The Company's revenues are primarily derived from consumer money transfer transaction fees that are based on the principal amount of the money transfer and the locations from and to which funds are transferred. The Company also offers several payments services, including payments from consumers or businesses to other businesses. Transaction fees are set by the Company and recorded as revenue at the time of sale. | ||||||||||||||||||||
In certain consumer money transfer and Business Solutions transactions involving different send and receive currencies, the Company generates revenue based on the difference between the exchange rate set by the Company to the consumer or business and the rate at which the Company or its agents are able to acquire the currency. This foreign exchange revenue is recorded at the time the related consumer money transfer transaction fee revenue is recognized or at the time a customer initiates a transaction through the Company's Business Solutions payment service operations. | ||||||||||||||||||||
Cost of Services | ||||||||||||||||||||
Cost of services primarily consists of agent commissions and expenses for call centers, settlement operations and related information technology costs. Expenses within these functions include personnel, software, equipment, telecommunications, bank fees, depreciation, amortization and other expenses incurred in connection with providing money transfer and other payment services. | ||||||||||||||||||||
Advertising Costs | ||||||||||||||||||||
Advertising costs are charged to operating expenses as incurred. Advertising costs for the years ended December 31, 2014, 2013 and 2012 were $162.7 million, $165.1 million and $177.5 million, respectively. | ||||||||||||||||||||
Income Taxes | ||||||||||||||||||||
The Company accounts for income taxes under the liability method, which requires that deferred tax assets and liabilities be determined based on the expected future income tax consequences of events that have been recognized in the consolidated financial statements. Deferred tax assets and liabilities are recognized based on temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. The Company assesses the realizability of its deferred tax assets. A valuation allowance must be established when, based upon available evidence, it is more likely than not that all or a portion of the deferred tax assets will not be realized. | ||||||||||||||||||||
The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. | ||||||||||||||||||||
Foreign Currency Translation | ||||||||||||||||||||
The United States dollar is the functional currency for substantially all of the Company's businesses. Revenues and expenses are translated at average exchange rates prevailing during the period. Foreign currency denominated assets and liabilities for those businesses for which the local currency is the functional currency are translated into United States dollars based on exchange rates at the end of the year. The effects of foreign exchange gains and losses arising from the translation of assets and liabilities of these businesses are included as a component of "Accumulated other comprehensive loss" in the accompanying Consolidated Balance Sheets. Foreign currency denominated monetary assets and liabilities of businesses for which the United States dollar is the functional currency are remeasured based on exchange rates at the end of the period, and the resulting remeasurement gains and losses are recognized in net income. Non-monetary assets and liabilities of these operations are remeasured at historical rates in effect when the asset was recognized or the liability was incurred. | ||||||||||||||||||||
Derivatives | ||||||||||||||||||||
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 Solutions payments by writing derivatives to customers. The Company recognizes all derivatives in the "Other assets" and "Other liabilities" captions in the accompanying Consolidated Balance Sheets at their fair value. All cash flows associated with derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows. | ||||||||||||||||||||
• | Cash Flow hedges - Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in "Accumulated other comprehensive loss." Cash flow hedges consist of foreign currency hedging of forecasted revenues, as well as hedges of the forecasted issuance of fixed rate debt. Derivative fair value changes that are captured in "Accumulated other comprehensive loss" are reclassified to earnings in the same period or periods the hedged item affects earnings, to the extent the instrument is effective in offsetting the change in cash flows attributable to the risk being hedged. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately in "Derivative gains/(losses), net." | |||||||||||||||||||
• | Fair Value hedges - Changes in the fair value of derivatives that are designated as fair value hedges of fixed rate debt are recorded in "Interest expense." The offsetting change in value of the related debt instrument attributable to changes in the benchmark interest rate is also recorded in "Interest expense." | |||||||||||||||||||
• | Undesignated - Derivative contracts entered into to reduce the variability related to (a) money transfer settlement assets and obligations, generally with maturities from a few days up to one month, and (b) certain foreign currency denominated cash and other asset and liability positions, typically with maturities of less than one year at inception, are not designated as hedges for accounting purposes and changes in their fair value are included in "Selling, general and administrative." The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency Business Solutions payments operations. The duration of these derivative contracts at inception is generally less than one year. The Company aggregates its Business Solutions payments foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts) as part of a broader foreign currency portfolio, including significant spot exchanges of currency in addition to forwards and options. The changes in fair value related to these contracts are recorded in "Foreign exchange revenues." | |||||||||||||||||||
The fair value of the Company's derivatives is derived from standardized models that use market based inputs (e.g., forward prices for foreign currency). | ||||||||||||||||||||
The details of each designated hedging relationship are formally documented at the inception of the arrangement, including the risk management objective, hedging strategy, hedged item, specific risks being hedged, the derivative instrument, how effectiveness is being assessed and how ineffectiveness, if any, will be measured. The derivative must be highly effective in offsetting the changes in cash flows or fair value of the hedged item, and effectiveness is evaluated quarterly on a retrospective and prospective basis. | ||||||||||||||||||||
Legal Contingencies | ||||||||||||||||||||
The Company is a party to certain legal and regulatory proceedings with respect to a variety of matters. The Company records an accrual for these contingencies to the extent that a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued. When no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the range is accrued. | ||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||
The Company currently has a stock-based compensation plan that provides for grants of Western Union stock options, restricted stock awards and restricted and unrestricted stock units to employees and non-employee directors of the Company who perform services for the Company. In addition, the Company has a stock-based compensation plan that provides for grants of Western Union stock options and stock unit awards to non-employee directors of the Company. | ||||||||||||||||||||
All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period and also requires an estimate of forfeitures when calculating compensation expense. The Company recognizes compensation expense on awards on a straight-line basis over the requisite service period for the entire award. Refer to Note 16 for additional discussion regarding details of the Company's stock-based compensation plans. | ||||||||||||||||||||
Severance and Other Related Expenses | ||||||||||||||||||||
The Company records severance-related expenses once they are both probable and estimable in accordance with the provisions of the applicable accounting guidance for severance provided under an ongoing benefit arrangement. One-time, involuntary benefit arrangements and other costs are generally recognized when the liability is incurred. The Company also evaluates impairment issues associated with restructuring and other activities when the carrying amount of the assets may not be fully recoverable, in accordance with the appropriate accounting guidance. | ||||||||||||||||||||
New Accounting Pronouncement | ||||||||||||||||||||
In May 2014, the Financial Accounting Standards Board issued a new accounting pronouncement regarding revenue from contracts with customers. This new standard provides guidance on recognizing revenue, including a five step model to determine when revenue recognition is appropriate. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Adoption of the new standard is effective for reporting periods beginning after December 15, 2016, with early adoption not permitted. Management is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations, and related disclosures, and will adopt the provisions of this new standard in the first quarter of 2017. |
Productivity_and_CostSavings_I
Productivity and Cost-Savings Initiatives Expenses | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Productivity and Cost-Savings Initiatives Expenses [Abstract] | |||||||||||||||||||||
Productivity and Cost-Savings Initiatives Expenses | Productivity and Cost-Savings Initiatives Expenses | ||||||||||||||||||||
During each of the three years in the period ended December 31, 2014, the Company implemented initiatives to improve productivity and reduce costs. A significant majority of the productivity and cost-savings initiatives costs relate to severance and related expenses, and for the year ended December 31, 2013, these costs also included costs related to termination benefits received by certain of the Company's former executives. During the years ended December 31, 2014, 2013 and 2012, the Company incurred $30.3 million, $56.9 million and $30.9 million of expenses and made cash payments of $42.9 million, $41.8 million and $5.6 million, respectively, related to productivity and cost-savings initiatives. | |||||||||||||||||||||
The following table presents the above expenses related to productivity and cost-savings initiatives as reflected in the Consolidated Statements of Income (in millions): | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Cost of services | $ | 11.6 | $ | 24.3 | $ | 5.5 | |||||||||||||||
Selling, general and administrative | 18.7 | 32.6 | 25.4 | ||||||||||||||||||
Total expenses, pre-tax | $ | 30.3 | $ | 56.9 | $ | 30.9 | |||||||||||||||
Total expenses, net of tax | $ | 20.2 | $ | 40.2 | $ | 20.2 | |||||||||||||||
The following table summarizes the above expenses incurred by reportable segment (in millions): | |||||||||||||||||||||
Consumer-to-Consumer | Consumer-to-Business | Business Solutions | Other | Total | |||||||||||||||||
2012 expenses | $ | 20.9 | $ | 4 | $ | — | $ | 6 | $ | 30.9 | |||||||||||
2013 expenses | 43.8 | 5.4 | 3.6 | 4.1 | 56.9 | ||||||||||||||||
2014 expenses | 15.7 | 6.7 | 7.3 | 0.6 | 30.3 | ||||||||||||||||
As of December 31, 2014 and 2013, amounts remaining to be paid related to productivity and cost-savings initiatives were $33.6 million and $46.4 million, respectively. |
Acquisitions
Acquisitions | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||
Acquisitions | Acquisitions | |||||||||||||||||||
During the first quarter of 2014, the Company acquired the Brazilian retail, walk-in foreign exchange operations of Fitta DTVM S.A. and Fitta Turismo Ltda. for total consideration of $18.5 million. Of the total consideration, $15.6 million was allocated to identifiable intangible assets, the majority of which relates to contractual relationships. The identifiable intangible assets are being amortized over a period of two to twelve years with a weighted average life of ten years. The Company recognized $2.4 million of goodwill related to this acquisition. | ||||||||||||||||||||
The following table presents changes to goodwill for the years ended December 31, 2014 and 2013 (in millions): | ||||||||||||||||||||
Consumer-to-Consumer | Consumer-to-Business | Business Solutions | Other | Total | ||||||||||||||||
January 1, 2013 balance | $ | 1,947.70 | $ | 221.1 | $ | 996 | $ | 14.9 | $ | 3,179.70 | ||||||||||
Currency translation | — | (6.4 | ) | — | (1.3 | ) | (7.7 | ) | ||||||||||||
December 31, 2013 balance | $ | 1,947.70 | $ | 214.7 | $ | 996 | $ | 13.6 | $ | 3,172.00 | ||||||||||
Acquisitions | 2.4 | — | — | — | 2.4 | |||||||||||||||
Currency translation | — | (5.0 | ) | — | (0.2 | ) | (5.2 | ) | ||||||||||||
December 31, 2014 balance | $ | 1,950.10 | $ | 209.7 | $ | 996 | $ | 13.4 | $ | 3,169.20 | ||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
Letters of Credit and Bank Guarantees | |
The Company had approximately $210 million in outstanding letters of credit and bank guarantees as of December 31, 2014. The letters of credit and bank guarantees are primarily held in connection with lease arrangements, certain agent agreements, and in relation to an uncertain tax position. The letters of credit and bank guarantees have expiration dates through 2018, with the majority having a one-year renewal option. The Company expects to renew the letters of credit and bank guarantees prior to expiration in most circumstances. The bank guarantees related to the uncertain tax position were extinguished in January 2015 after resolution of the related matter. | |
Litigation and Related Contingencies | |
The Company is subject to certain claims and litigation that could result in losses, including damages, fines and/or civil penalties, which could be significant, or criminal charges. Substantially all of the Company's contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. The Company does not currently believe that any of these matters, individually or in the aggregate, will have a material adverse effect on its financial position. However, litigation is inherently unpredictable and the Company could incur judgments, enter into settlements or revise its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its financial position, results of operations or cash flows in the periods in which amounts are accrued or paid. The principal pending matters the Company is a party to are discussed below. | |
State of Arizona Settlement Agreement | |
On February 11, 2010, Western Union Financial Services, Inc. ("WUFSI"), a subsidiary of the Company, signed a settlement agreement ("Southwest Border Agreement"), which resolved all outstanding legal issues and claims with the State of Arizona (the "State") and required the Company to fund a multi-state not-for-profit organization promoting safety and security along the United States and Mexico border, in which California, Texas and New Mexico are participating with Arizona. As part of the Southwest Border Agreement, the Company has made and expects to make certain investments in its compliance programs along the United States and Mexico border and a monitor (the "Monitor") has been engaged for those programs. The Company has incurred, and expects to continue to incur, significant costs in connection with the Southwest Border Agreement. The Monitor has made a number of recommendations related to the Company's compliance programs, which the Company is implementing, including programs related to our Business Solutions segment. | |
On January 31, 2014, the Southwest Border Agreement was amended to extend its term until December 31, 2017 (the "Amendment"). The Amendment imposes additional obligations on the Company and WUFSI in connection with WUFSI’s anti-money laundering ("AML") compliance programs and cooperation with law enforcement. In particular, the Amendment requires WUFSI to continue implementing the primary and secondary recommendations made by the Monitor appointed pursuant to the Southwest Border Agreement related to WUFSI’s AML compliance program, and includes, among other things, timeframes for implementing such primary and secondary recommendations. Under the Amendment, the Monitor could make additional primary recommendations until January 1, 2015 and may make additional secondary recommendations until January 31, 2017. After these dates, the Monitor may only make additional primary or secondary recommendations, as applicable, that meet certain requirements as set forth in the Amendment. Primary recommendations may also be re-classified as secondary recommendations. | |
The Amendment provides that if WUFSI is unable to implement an effective AML compliance program along the U.S. and Mexico border, as determined by the Monitor and subject to limited judicial review, within the timeframes to implement the Monitor’s primary recommendations, the State may, within 180 days after the Monitor delivers its final report on the primary recommendations on December 31, 2016, and subsequent to any judicial review of the Monitor’s findings, elect one, and only one, of the following remedies: (i) assert a willful and material breach of the Southwest Border Agreement and pursue remedies under the Southwest Border Agreement, which could include initiating civil or criminal actions; or (ii) require WUFSI to pay (a) $50 million plus (b) $1 million per primary recommendation or group of primary recommendations that WUFSI fails to implement successfully. There are currently more than 70 primary recommendations and groups of primary recommendations. | |
If the Monitor concludes that WUFSI has implemented an effective AML compliance program along the U.S. and Mexico border within the timeframes to implement the Monitor’s primary recommendations, the State cannot pursue either of the remedies above, except that the State may require WUFSI to pay $1 million per primary recommendation or group of primary recommendations that WUFSI fails to implement successfully. | |
If, at the conclusion of the timeframe to implement the secondary recommendations on December 31, 2017, the Monitor concludes that WUFSI has not implemented an effective AML compliance program along the U.S. and Mexico border, the State cannot assert a willful and material breach of the Southwest Border Agreement but may require WUFSI to pay an additional $25 million. Additionally, if the Monitor determines that WUFSI has implemented an effective AML compliance program along the U.S. and Mexico border but has not implemented some of the Monitor’s secondary recommendations or groups of secondary recommendations that were originally classified as primary recommendations or groups of primary recommendations on the date of the Amendment, the State may require WUFSI to pay $500,000 per such secondary recommendation or group of recommendations. There is no monetary penalty associated with secondary recommendations that are classified as such on the date of the Amendment or any new secondary recommendations that the Monitor makes after the date of the Amendment. | |
The Amendment requires WUFSI to continue funding the Monitor’s reasonable expenses in $500,000 increments as requested by the Monitor. The Amendment also requires WUFSI to make a one-time payment of $250,000, which was paid in March 2014, and thereafter $150,000 per month for five years to fund the activities and expenses of a money transfer transaction data analysis center formed by WUFSI and a Financial Crimes Task Force comprised of federal, state and local law enforcement representatives, including those from the State. In addition, California, Texas, and New Mexico are also participating in the money transfer transaction data analysis center. | |
The changes in WUFSI’s AML program required by the Southwest Border Agreement, including the Amendment, and the Monitor’s recommendations have had, and will continue to have, adverse effects on the Company’s business, including additional costs. Additionally, if WUFSI is not able to implement a successful AML compliance program along the U.S. and Mexico border or timely implement the Monitor’s recommendations, each as determined by the Monitor, the State may pursue remedies under the Southwest Border Agreement and Amendment, including assessment of fines and civil and criminal actions. Such fines and actions could have a material adverse effect on the Company’s business, financial condition or results of operations. | |
United States Department of Justice Investigations | |
On March 20, 2012, the Company was served with a federal grand jury subpoena issued by the United States Attorney's Office for the Central District of California ("USAO-CDCA") seeking documents relating to Shen Zhou International ("US Shen Zhou"), a former Western Union agent located in Monterey Park, California. The principal of US Shen Zhou was indicted in 2010 and in December 2013, pled guilty to one count of structuring international money transfers in violation of United States federal law in U.S. v. Zhi He Wang (SA CR 10-196, C.D. Cal.). Concurrent with the government's service of the subpoena, the government notified the Company that it is a target of an ongoing investigation into structuring and money laundering. Since March 20, 2012, the Company has received additional subpoenas from the USAO-CDCA seeking additional documents relating to US Shen Zhou, materials relating to certain other former and current agents and other materials relating to the Company's AML compliance policies and procedures. The government has interviewed several current and former Western Union employees and has served grand jury subpoenas seeking testimony from several current and former employees. The government's investigation is ongoing and the Company may receive additional requests for information as part of the investigation. The Company is cooperating fully with the government. The Company is unable to predict the outcome of the government's investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations. | |
In March 2012, the Company was served with a federal grand jury subpoena issued by the United States Attorney’s Office for the Eastern District of Pennsylvania (“USAO-EDPA”) seeking documents relating to Hong Fai General Contractor Corp. (formerly known as Yong General Construction) (“Hong Fai”), a former Western Union agent located in Philadelphia, Pennsylvania. Since March 2012, the Company has received additional subpoenas from the USAO-EDPA seeking additional documents relating to Hong Fai. The government has interviewed several current Western Union employees. The government's investigation is ongoing and the Company may receive additional requests for information as part of the investigation. The Company is cooperating fully with the government. The Company is unable to predict the outcome of the government's investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations. | |
On November 25, 2013, the Company was served with a federal grand jury subpoena issued by the United States Attorney’s Office for the Middle District of Pennsylvania (“USAO-MDPA”) seeking documents relating to complaints made to the Company by consumers anywhere in the world relating to fraud-induced money transfers since January 1, 2008. Concurrent with the government's service of the subpoena, the government notified the Company that it is the subject of the investigation. Since November 25, 2013, the Company has received additional subpoenas from the USAO-MDPA seeking documents relating to certain Western Union agents and Western Union’s agent suspension and termination policies. The government's investigation is ongoing and the Company may receive additional requests for information as part of the investigation. The Company is cooperating fully with the government. The Company is unable to predict the outcome of the government's investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations. | |
On March 6, 2014, the Company was served with a federal grand jury subpoena issued by the United States Attorney’s Office for the Southern District of Florida (“USAO-SDFL”) seeking a variety of AML compliance materials, including documents relating to the Company’s AML, Bank Secrecy Act (“BSA”), Suspicious Activity Report (“SAR”) and Currency Transaction Report procedures, transaction monitoring protocols, BSA and AML training programs and publications, AML compliance investigation reports, compliance-related agent termination files, SARs, BSA audits, BSA and AML-related management reports and AML compliance staffing levels. The subpoena also calls for Board meeting minutes and organization charts. The period covered by the subpoena is January 1, 2007 to November 27, 2013. The Company has received additional subpoenas from the USAO-SDFL and the Broward County, Florida Sheriff’s Office relating to the investigation, including a federal grand jury subpoena issued by the USAO-SDFL on March 14, 2014, seeking information about 33 agent locations in Costa Rica such as ownership and operating agreements, SARs and AML compliance and BSA filings for the period January 1, 2008 to November 27, 2013. Subsequently, the USAO-SDFL served the Company with seizure warrants requiring the Company to seize all money transfers sent from the United States to two agent locations located in Costa Rica for a 10-day period beginning in late March 2014. On July 8, 2014, the government served a grand jury subpoena calling for records relating to transactions sent from the United States to Nicaragua and Panama between September 1, 2013 and October 31, 2013. The government has also notified the Company that it is a target of the investigation. The investigation is ongoing and the Company may receive additional requests for information or seizure warrants as part of the investigation. The Company is cooperating fully with the government. The Company is unable to predict the outcome of the government's investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company's business, financial condition and results of operations. | |
Shareholder Action and Other Matters | |
On December 10, 2013, City of Taylor Police and Fire Retirement System filed a purported class action complaint in the United States District Court for the District of Colorado against The Western Union Company, its President and Chief Executive Officer and a former executive officer of the Company, asserting claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Securities and Exchange Commission rule 10b-5 against all defendants. On September 26, 2014, the Court appointed SEB Asset Management S.A. and SEB Investment Management AB as lead plaintiffs. On October 27, 2014, lead plaintiffs filed a consolidated amended class action complaint, which asserts the same claims as the original complaint, except that it brings the claims under section 20(a) of the Exchange Act only against the individual defendants. The consolidated amended complaint also adds as a defendant another former executive officer of the Company. The consolidated amended complaint alleges that, during the purported class period, February 7, 2012 through October 30, 2012, defendants made false or misleading statements or failed to disclose adverse material facts known to them, including those regarding: (1) the competitive advantage the Company derived from its compliance program; (2) the Company’s ability to increase market share, make limited price adjustments and withstand competitive pressures; (3) the effect of compliance measures under the Southwest Border Agreement on agent retention and business in Mexico; and (4) the Company’s progress in implementing an anti-money laundering program for the Southwest Border Area. On December 11, 2014, the defendants filed a motion to dismiss the consolidated amended complaint. On January 5, 2015, plaintiffs filed an opposition to defendants’ motion to dismiss the consolidated amended complaint. On January 23, 2015, defendants filed a reply brief in support of their motion to dismiss the consolidated amended complaint. This action is in a preliminary stage and the Company is unable to predict the outcome, or the possible loss or range of loss, if any, which could be associated with this action. The Company and the named individuals intend to vigorously defend themselves in this matter. | |
The Company and one of its subsidiaries are defendants in two purported class action lawsuits: James P. Tennille v. The Western Union Company and Robert P. Smet v. The Western Union Company, both of which are pending in the United States District Court for the District of Colorado. The original complaints asserted claims for violation of various consumer protection laws, unjust enrichment, conversion and declaratory relief, based on allegations that the Company waits too long to inform consumers if their money transfers are not redeemed by the recipients and that the Company uses the unredeemed funds to generate income until the funds are escheated to state governments. The Tennille complaint was served on the Company on April 27, 2009. The Smet complaint was served on the Company on April 6, 2010. On September 21, 2009, the Court granted the Company's motion to dismiss the Tennille complaint and gave the plaintiff leave to file an amended complaint. On October 21, 2009, Tennille filed an amended complaint. The Company moved to dismiss the Tennille amended complaint and the Smet complaint. On November 8, 2010, the Court denied the motion to dismiss as to the plaintiffs' unjust enrichment and conversion claims. On February 4, 2011, the Court dismissed the plaintiffs' consumer protection claims. On March 11, 2011, the plaintiffs filed an amended complaint that adds a claim for breach of fiduciary duty, various elements to its declaratory relief claim and WUFSI as a defendant. On April 25, 2011, the Company and WUFSI filed a motion to dismiss the breach of fiduciary duty and declaratory relief claims. WUFSI also moved to compel arbitration of the plaintiffs' claims and to stay the action pending arbitration. On November 21, 2011, the Court denied the motion to compel arbitration and the stay request. Both companies appealed the decision. On January 24, 2012, the United States Court of Appeals for the Tenth Circuit granted the companies' request to stay the District Court proceedings pending their appeal. During the fourth quarter of 2012, the parties executed a settlement agreement, which the Court preliminarily approved on January 3, 2013. On June 25, 2013, the Court entered an order certifying the class and granting final approval to the settlement. Under the approved settlement, a substantial amount of the settlement proceeds, as well as all of the class counsel’s fees, administrative fees and other expenses, would be paid from the class members' unclaimed money transfer funds, which are included within "Settlement obligations" in the Company's Consolidated Balance Sheets. During the final approval hearing, the Court overruled objections to the settlement that had been filed by several class members. In July 2013, two of those class members filed notices of appeal. The United States Court of Appeals for the Tenth Circuit heard oral arguments on March 18, 2014. The settlement requires Western Union to deposit the class members' unclaimed money transfer funds into a class settlement fund, from which class member claims, administrative fees and class counsel’s fees, as well as other expenses will be paid. On November 6, 2013, the Attorney General of California notified Western Union of the California Controller’s position that Western Union’s deposit of the unclaimed money transfer funds into the class settlement fund pursuant to the settlement “will not satisfy Western Union’s obligations to report and remit funds” under California’s unclaimed property law, and that “Western Union will remain liable to the State of California” for the funds that would have escheated to California in the absence of the settlement. The State of Pennsylvania and District of Columbia have expressed similar views. Thus, there is reason to believe that these and potentially other jurisdictions may bring actions against the Company seeking reimbursement for amounts equal to the class counsel’s fees, administrative costs and other expenses that are paid from the class settlement fund. If such actions are brought or claims that may otherwise require Western Union to incur additional escheatment-related liabilities are asserted, Western Union would defend itself vigorously. | |
In August 2013, the Consumer Financial Protection Bureau (the “CFPB”) served Paymap, Inc. (“Paymap”), a subsidiary of the Company which operates solely in the United States, with a civil investigative demand requesting information and documents about Paymap’s Equity Accelerator service, which is designed to help consumers pay off their mortgages more quickly. The CFPB’s investigation sought to determine whether Paymap’s marketing of the Equity Accelerator service violated the Consumer Financial Protection Act’s prohibition against unfair, deceptive and abusive acts and practices (“UDAAP”). The Company cooperated with the investigation. After reviewing information and documents provided by the Company, in August 2014, the CFPB advised the Company of its view that certain aspects of Paymap’s marketing violated UDAAP. The Company has advised the CFPB that it disagrees with the CFPB’s position. The Company is in discussions with the CFPB and is seeking to reach an appropriate resolution of this matter. Due to the early stage of the discussions, the Company is unable to predict whether the CFPB will institute an enforcement action to bring any claims against the Company as a result of the investigation, or the possible range of loss, if any, which could be associated with such an action. Should the CFPB institute an enforcement action against the Company, the Company could face significant restitution payments to certain Equity Accelerator consumers, civil money penalties, or regulatory consequences that could have a material adverse effect on the Company’s business, financial condition and results of operations. | |
On March 12, 2014, Jason Douglas filed a purported class action complaint in the United States District Court for the Northern District of Illinois asserting a claim under the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq., based on allegations that since 2009, the Company has sent text messages to class members’ wireless telephones without their consent. The plaintiff has not sought and the Court has not granted class certification. The Company intends to vigorously defend itself in this matter. However, due to the preliminary stage of the lawsuit and the uncertainty as to whether it will ever be certified as a class action, the potential outcome cannot be determined. | |
On January 26, 2006, the First Data Corporation ("First Data") Board of Directors announced its intention to pursue the distribution of all of its money transfer and consumer payments business and its interest in a Western Union money transfer agent, as well as its related assets, including real estate, through a tax-free distribution to First Data shareholders (the “Spin-off”). The Spin-off resulted in the formation of the Company and these assets and businesses no longer being part of First Data. Pursuant to the separation and distribution agreement with First Data in connection with the Spin-off, First Data and the Company are each liable for, and agreed to perform, all liabilities with respect to their respective businesses. In addition, the separation and distribution agreement also provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of the Company's business with the Company and financial responsibility for the obligations and liabilities of First Data's retained businesses with First Data. The Company also entered into a tax allocation agreement that sets forth the rights and obligations of First Data and the Company with respect to taxes imposed on their respective businesses both prior to and after the Spin-off as well as potential tax obligations for which the Company may be liable in conjunction with the Spin-off (see Note 10). |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 Company's behalf. Commission expense recognized for these agents for the years ended December 31, 2014, 2013 and 2012 totaled $70.2 million, $65.5 million and $66.1 million, respectively. | |
Prior to 2014, the Company had a director who was also a director for a company that previously held significant investments in two of the Company's existing agents. During the first quarter of 2012, this company sold its interest in one of these agents, so that for the year ended December 31, 2013, this company held a significant investment in only one agent. These agents had been agents of the Company prior to the director being appointed to the board. The Company recognized commission expense of $15.1 million and $28.9 million for the years ended December 31, 2013 and 2012, respectively, related to these agents during the periods the agents were affiliated with the Company's director. In 2014, this director did not stand for re-election as a director with the Company. |
Investment_Securities
Investment Securities | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Marketable Securities [Abstract] | ||||||||||||||||||||
Investment Securities | Investment Securities | |||||||||||||||||||
Investment securities included in "Settlement assets" in the Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed rate term notes, variable rate demand notes and a short-term bond mutual fund. The short-term bond mutual fund can be redeemed daily and holds fixed income securities with combined average maturities of one year or less. Variable rate demand note securities can be put (sold at par) typically on a daily basis with settlement periods ranging from the same day to one week, but have varying maturities through 2050. Generally, these securities are used by the Company for short-term liquidity needs and are held for short periods of time, typically less than 30 days. The Company is required to hold highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable state and foreign country requirements. | ||||||||||||||||||||
In 2013, the Company invested in a short-term taxable bond mutual fund which held a diversified portfolio of fixed income securities. During the first quarter of 2014, the Company sold this investment for $100.2 million, which was also the fair value of this investment as of December 31, 2013. The investment was included in "Other assets" in the Company's Consolidated Balance Sheets as of December 31, 2013. | ||||||||||||||||||||
The substantial majority of the Company's 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 investing in highly-rated securities and through investment diversification. | ||||||||||||||||||||
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. Proceeds from the sale and maturity of available-for-sale securities during the years ended December 31, 2014, 2013 and 2012 were $17.7 billion, $19.0 billion and $16.3 billion, respectively. | ||||||||||||||||||||
Gains and losses on investments are calculated using the specific-identification method and are recognized during the period in which the investment is sold or when an investment experiences an other-than-temporary decline in value. Factors that could indicate an impairment exists include, but are not limited to: earnings performance, changes in credit rating or adverse changes in the regulatory or economic environment of the asset. If potential impairment exists, the Company assesses whether it has the intent to sell the debt security, more likely than not will be required to sell the debt security before its anticipated recovery or expects that some of the contractual cash flows will not be received. The Company had no material other-than-temporary impairments during the periods presented. | ||||||||||||||||||||
The components of investment securities are as follows (in millions): | ||||||||||||||||||||
December 31, 2014 | Gross | Gross | Net | |||||||||||||||||
Amortized | Fair | Unrealized | Unrealized | Unrealized | ||||||||||||||||
Cost | Value | Gains | Losses | Gains/ (Losses) | ||||||||||||||||
Settlement assets: | ||||||||||||||||||||
State and municipal debt securities (a) | $ | 1,024.20 | $ | 1,038.10 | $ | 15.1 | $ | (1.2 | ) | $ | 13.9 | |||||||||
State and municipal variable rate demand notes | 316.8 | 316.8 | — | — | — | |||||||||||||||
Corporate and other debt securities | 70.5 | 70.5 | 0.1 | (0.1 | ) | — | ||||||||||||||
Short-term state and municipal bond mutual fund | 47.1 | 47.1 | — | — | — | |||||||||||||||
$ | 1,458.60 | $ | 1,472.50 | $ | 15.2 | $ | (1.3 | ) | $ | 13.9 | ||||||||||
31-Dec-13 | Gross | Gross | Net | |||||||||||||||||
Amortized | Fair | Unrealized | Unrealized | Unrealized | ||||||||||||||||
Cost | Value | Gains | Losses | Gains/ (Losses) | ||||||||||||||||
Settlement assets: | ||||||||||||||||||||
State and municipal debt securities (a) | $ | 868.1 | $ | 874.2 | $ | 7.8 | $ | (1.7 | ) | $ | 6.1 | |||||||||
State and municipal variable rate demand notes | 865 | 865 | — | — | — | |||||||||||||||
Other debt securities | 11.2 | 11.3 | 0.1 | — | 0.1 | |||||||||||||||
$ | 1,744.30 | $ | 1,750.50 | $ | 7.9 | $ | (1.7 | ) | $ | 6.2 | ||||||||||
Other assets: | ||||||||||||||||||||
Short-term taxable bond mutual fund | 100 | 100.2 | 0.2 | — | 0.2 | |||||||||||||||
$ | 1,844.30 | $ | 1,850.70 | $ | 8.1 | $ | (1.7 | ) | $ | 6.4 | ||||||||||
____________ | ||||||||||||||||||||
(a) | The majority of these securities are fixed rate instruments. | |||||||||||||||||||
There were no investments with a single issuer or individual securities representing greater than 10% of total investment securities as of December 31, 2014 and 2013. | ||||||||||||||||||||
The following summarizes the contractual maturities of settlement-related debt securities as of December 31, 2014 (in millions): | ||||||||||||||||||||
Amortized | Fair | |||||||||||||||||||
Cost | Value | |||||||||||||||||||
Due within 1 year | $ | 150.5 | $ | 151.1 | ||||||||||||||||
Due after 1 year through 5 years | 556 | 558.7 | ||||||||||||||||||
Due after 5 years through 10 years | 383.1 | 393.7 | ||||||||||||||||||
Due after 10 years | 321.9 | 321.9 | ||||||||||||||||||
$ | 1,411.50 | $ | 1,425.40 | |||||||||||||||||
Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations or the Company may have the right to put the obligation prior to its contractual maturity, as with variable rate demand notes. Variable rate demand notes, having a fair value of $6.0 million, $3.5 million and $307.3 million are included in the "Due after 1 year through 5 years," "Due after 5 years through 10 years" and "Due after 10 years" categories, respectively, in the table above. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements | 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 the Company measures fair value, refer to Note 2. | ||||||||||||||||
The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions): | ||||||||||||||||
Fair Value Measurement Using | Assets/ | |||||||||||||||
Liabilities at | ||||||||||||||||
Fair | ||||||||||||||||
December 31, 2014 | Level 1 | Level 2 | Level 3 | Value | ||||||||||||
Assets: | ||||||||||||||||
Settlement assets: | ||||||||||||||||
State and municipal debt securities | $ | — | $ | 1,038.10 | $ | — | $ | 1,038.10 | ||||||||
State and municipal variable rate demand notes | — | 316.8 | — | 316.8 | ||||||||||||
Corporate and other debt securities | — | 70.5 | — | 70.5 | ||||||||||||
Short-term state and municipal bond mutual fund | 47.1 | — | — | 47.1 | ||||||||||||
Other assets: | ||||||||||||||||
Derivatives | — | 423 | — | 423 | ||||||||||||
Total assets | $ | 47.1 | $ | 1,848.40 | $ | — | $ | 1,895.50 | ||||||||
Liabilities: | ||||||||||||||||
Notes and other borrowings | $ | — | $ | 3,890.50 | $ | — | $ | 3,890.50 | ||||||||
Derivatives | — | 317.1 | — | 317.1 | ||||||||||||
Total liabilities | $ | — | $ | 4,207.60 | $ | — | $ | 4,207.60 | ||||||||
Fair Value Measurement Using | Assets/ | |||||||||||||||
Liabilities at | ||||||||||||||||
Fair | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Value | ||||||||||||
Assets: | ||||||||||||||||
Settlement assets: | ||||||||||||||||
State and municipal debt securities | $ | — | $ | 874.2 | $ | — | $ | 874.2 | ||||||||
State and municipal variable rate demand notes | — | 865 | — | 865 | ||||||||||||
Other debt securities | — | 11.3 | — | 11.3 | ||||||||||||
Other assets: | ||||||||||||||||
Short-term taxable bond mutual fund | 100.2 | — | — | 100.2 | ||||||||||||
Derivatives | — | 224.3 | — | 224.3 | ||||||||||||
Total assets | $ | 100.2 | $ | 1,974.80 | $ | — | $ | 2,075.00 | ||||||||
Liabilities: | ||||||||||||||||
Notes and other borrowings | $ | — | $ | 4,343.20 | $ | — | $ | 4,343.20 | ||||||||
Derivatives | — | 223.4 | — | 223.4 | ||||||||||||
Total liabilities | $ | — | $ | 4,566.60 | $ | — | $ | 4,566.60 | ||||||||
No non-recurring fair value adjustments were recorded during the years ended December 31, 2014 and 2013, except those associated with acquisitions. The valuation of assets acquired, as disclosed in Note 4, was derived primarily using unobservable Level 3 inputs, which require significant management judgment and estimation. | ||||||||||||||||
Other Fair Value Measurements | ||||||||||||||||
The carrying amounts for many of the Company's financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and settlement obligations approximate fair value due to their short maturities. The aggregate fair value of the Company's borrowings was based on quotes from multiple banks and excluded the impact of related interest rate swaps. All the assets and liabilities in the above tables were carried at fair value in the Consolidated Balance Sheets, with the exception of borrowings, which had a carrying value of $3,720.4 million and $4,213.0 million as of December 31, 2014 and 2013, respectively (see Note 15). | ||||||||||||||||
The fair value of the assets in the Trust, which holds the assets for the Company's defined benefit plan, is disclosed in Note 11. |
Other_Assets_and_Other_Liabili
Other Assets and Other Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Other Assets and Other Liabilities [Abstract] | ||||||||
Other Assets and Other Liabilities | Other Assets and Other Liabilities | |||||||
The following table summarizes the components of other assets and other liabilities (in millions): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Other assets: | ||||||||
Derivatives | $ | 423 | $ | 224.3 | ||||
Short-term taxable bond mutual fund (Note 7) | — | 100.2 | ||||||
Prepaid expenses | 63 | 69 | ||||||
Amounts advanced to agents, net of discounts | 45.2 | 41.8 | ||||||
Equity method investments | 41.6 | 41 | ||||||
Other | 97 | 85.8 | ||||||
Total other assets | $ | 669.8 | $ | 562.1 | ||||
Other liabilities: | ||||||||
Derivatives | $ | 317.1 | $ | 223.4 | ||||
Pension obligations | 74.9 | 70.4 | ||||||
Other | 92.2 | 64.4 | ||||||
Total other liabilities | $ | 484.2 | $ | 358.2 | ||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
The components of pre-tax income, generally based on the jurisdiction of the legal entity, were as follows (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Domestic | $ | 34.7 | $ | (28.4 | ) | $ | 94.8 | |||||
Foreign | 933.5 | 955.3 | 1,074.00 | |||||||||
$ | 968.2 | $ | 926.9 | $ | 1,168.80 | |||||||
For the years ended December 31, 2014, 2013 and 2012, 96%, 103% and 92% of the Company's pre-tax income was derived from foreign sources, respectively. | ||||||||||||
The provision for income taxes was as follows (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal | $ | 57 | $ | 88.3 | $ | 92.5 | ||||||
State and local | 4.9 | (3.7 | ) | (14.8 | ) | |||||||
Foreign | 53.9 | 43.9 | 65.2 | |||||||||
$ | 115.8 | $ | 128.5 | $ | 142.9 | |||||||
Domestic taxes have been incurred on certain pre-tax income amounts that were generated by the Company's foreign operations. Accordingly, the percentage obtained by dividing the total federal, state and local tax provision by the domestic pre-tax income, all as shown in the preceding tables, may be higher than the statutory tax rates in the United States. | ||||||||||||
The Company's effective tax rates differed from statutory rates as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal statutory rate | 35 | % | 35 | % | 35 | % | ||||||
State income taxes, net of federal income tax benefits | 0.6 | % | 0.7 | % | 0.6 | % | ||||||
Foreign rate differential, net of U.S. tax paid on foreign earnings (4.3%, 9.2% and 5.1%, respectively) | (24.0 | )% | (22.9 | )% | (22.5 | )% | ||||||
Other | 0.4 | % | 1.1 | % | (0.9 | )% | ||||||
Effective tax rate | 12 | % | 13.9 | % | 12.2 | % | ||||||
The decrease in the Company's effective tax rate for the year ended December 31, 2014 compared to 2013 is primarily due to the combined effect of various discrete items, including those related to foreign currency fluctuations on certain income tax attributes, and changes in tax contingency reserves, partially offset by changes in the composition of earnings between foreign and domestic. The increase in the Company's effective tax rate for the year ended December 31, 2013 compared to 2012 is primarily due to the combined effect of various discrete items, partially offset by an increasing proportion of profits that were foreign-derived in 2013, and generally taxed at lower rates than the Company's combined federal and state tax rates in the United States. The Company continues to benefit from a significant proportion of its profits being foreign-derived, and generally taxed at lower rates than its combined federal and state tax rates in the United States. Certain portions of the Company's foreign source income are subject to United States federal and state income tax as earned due to the nature of the income, and dividend repatriations of the Company's foreign source income are generally subject to United States federal and state income tax. | ||||||||||||
The Company's provision for income taxes consisted of the following components (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | 76.1 | $ | 86.1 | $ | 117.2 | ||||||
State and local | 4.7 | 8.1 | (2.5 | ) | ||||||||
Foreign | 61.8 | 73.6 | 63.4 | |||||||||
Total current taxes | 142.6 | 167.8 | 178.1 | |||||||||
Deferred: | ||||||||||||
Federal | (19.1 | ) | 2.2 | (24.7 | ) | |||||||
State and local | 0.2 | (11.8 | ) | (12.3 | ) | |||||||
Foreign | (7.9 | ) | (29.7 | ) | 1.8 | |||||||
Total deferred taxes | (26.8 | ) | (39.3 | ) | (35.2 | ) | ||||||
$ | 115.8 | $ | 128.5 | $ | 142.9 | |||||||
Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of the Company's assets and liabilities. The following table outlines the principal components of deferred tax items (in millions): | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets related to: | ||||||||||||
Reserves, accrued expenses and employee-related items | $ | 81.8 | $ | 57 | ||||||||
Tax attribute carryovers | 41 | 22.3 | ||||||||||
Pension obligations | 26.7 | 25.6 | ||||||||||
Intangibles, property and equipment | 12.1 | 14.9 | ||||||||||
Other | 13.6 | 29.7 | ||||||||||
Valuation allowance | (46.6 | ) | (16.4 | ) | ||||||||
Total deferred tax assets | 128.6 | 133.1 | ||||||||||
Deferred tax liabilities related to: | ||||||||||||
Intangibles, property and equipment | 428.1 | 449.2 | ||||||||||
Other | 5.5 | 3.1 | ||||||||||
Total deferred tax liabilities | 433.6 | 452.3 | ||||||||||
Net deferred tax liability | $ | 305 | $ | 319.2 | ||||||||
The valuation allowances are primarily the result of uncertainties regarding the Company's ability to recognize tax benefits associated with certain foreign net operating losses, certain U.S. foreign tax credit carryforwards, and certain foreign undistributed earnings. Such uncertainties include generating sufficient income, generating sufficient U.S. foreign tax credit limitation related to passive income, and demonstrating the ability to distribute certain foreign earnings. Changes in circumstances, or the identification and implementation of relevant tax planning strategies, could make it foreseeable that the Company will recover these deferred tax assets in the future, which could lead to a reversal of these valuation allowances and a reduction in income tax expense. | ||||||||||||
Uncertain Tax Positions | ||||||||||||
The Company has established contingency reserves for a variety of material, known tax exposures. As of December 31, 2014, the total amount of tax contingency reserves was $96.8 million, including accrued interest and penalties, net of related items. The Company's tax reserves reflect management's judgment as to the resolution of the issues involved if subject to judicial review or other settlement. 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 Company's 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 Company's tax position as recorded in the financial statements and the final resolution of a tax issue during the period. Such resolution could materially increase or decrease income tax expense in the Company's consolidated financial statements in future periods and could impact operating cash flows. | ||||||||||||
Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Company's consolidated financial statements, and are reflected in "Income taxes payable" in the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in millions): | ||||||||||||
2014 | 2013 | |||||||||||
Balance as of January 1, | $ | 117.5 | $ | 103.2 | ||||||||
Increases - positions taken in current period (a) | 12.2 | 18.5 | ||||||||||
Increases - positions taken in prior periods (b) | 5.7 | 15.6 | ||||||||||
Decreases - positions taken in prior periods | (23.9 | ) | (8.7 | ) | ||||||||
Decreases - settlements with taxing authorities | (8.1 | ) | (4.1 | ) | ||||||||
Decreases - lapse of applicable statute of limitations | (7.2 | ) | (7.0 | ) | ||||||||
Decreases - effects of foreign currency exchange rates | (2.8 | ) | — | |||||||||
Balance as of December 31, | $ | 93.4 | $ | 117.5 | ||||||||
____________ | ||||||||||||
(a) | Includes recurring accruals for issues which initially arose in previous periods. | |||||||||||
(b) | Changes to positions taken in prior periods relate to changes in estimates used to calculate prior period unrecognized tax benefits. | |||||||||||
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $82.4 million and $108.9 million as of December 31, 2014 and 2013, respectively, excluding interest and penalties. | ||||||||||||
The Company recognizes interest and penalties with respect to unrecognized tax benefits in "Provision for income taxes" in its Consolidated Statements of Income, and records the associated liability in "Income taxes payable" in its Consolidated Balance Sheets. The Company recognized $1.5 million, $(1.8) million and $0.5 million in interest and penalties during the years ended December 31, 2014, 2013 and 2012, respectively. The Company has accrued $15.1 million and $17.7 million for the payment of interest and penalties as of December 31, 2014 and 2013, respectively. | ||||||||||||
The unrecognized tax benefits accrual as of December 31, 2014 consists of federal, state and foreign tax matters. It is reasonably possible that the Company's total unrecognized tax benefits will decrease by approximately $26 million during the next 12 months in connection with various matters which may be resolved. | ||||||||||||
The Company and its subsidiaries file tax returns for the United States, for multiple states and localities, and for various non-United States jurisdictions, and the Company has identified the United States as its major tax jurisdiction, as the income tax imposed by any one foreign country is not material to the Company. The United States federal income tax returns of First Data, which include the Company, are eligible to be examined for 2005 and 2006. The Company's United States federal income tax returns since the Spin-off are also eligible to be examined. | ||||||||||||
The United States Internal Revenue Service ("IRS") completed its examination of the United States federal consolidated income tax returns of First Data for 2003 and 2004, which included the Company, and issued a Notice of Deficiency in December 2008. In December 2011, the Company reached an agreement with the IRS resolving substantially all of the issues related to the Company's restructuring of its international operations in 2003 ("IRS Agreement"). As a result of the IRS Agreement, the Company expects to make cash payments of approximately $190 million, plus additional accrued interest, of which $94.1 million has been paid as of December 31, 2014. A substantial majority of these payments were made in the year ended December 31, 2012. The Company expects to pay the remaining amount in 2015 and beyond. The IRS completed its examination of the United States federal consolidated income tax returns of First Data, which include the Company's 2005 and pre-Spin-off 2006 taxable periods and issued its report on October 31, 2012 ("FDC 30-Day Letter"). Furthermore, the IRS completed its examination of the Company's United States federal consolidated income tax returns for the 2006 post-Spin-off period through 2009 and issued its report also on October 31, 2012 ("WU 30-Day Letter"). Both the FDC 30-Day Letter and the WU 30-Day Letter propose tax adjustments affecting the Company, some of which are agreed and some of which are unagreed. Both First Data and the Company filed their respective protests with the IRS Appeals Division on November 28, 2012 related to the unagreed proposed adjustments. Discussions with the IRS concerning these adjustments are ongoing. The Company believes its reserves are adequate with respect to both the agreed and unagreed adjustments. | ||||||||||||
As of December 31, 2014, no provision has been made for United States federal and state income taxes on certain of the Company's outside tax basis differences, which primarily relate to accumulated foreign earnings of approximately $5.6 billion, which have been reinvested and are expected to continue to be reinvested outside the United States indefinitely. Over the last several years, such earnings have been used to pay for the Company's international acquisitions and operations and provide initial Company funding of global principal payouts for Consumer-to-Consumer and Business Solutions transactions. Upon distribution of those earnings to the United States in the form of actual or constructive dividends, the Company would be subject to United States income taxes (subject to an adjustment for foreign tax credits), state income taxes and possible withholding taxes payable to various foreign countries. Such taxes could be significant. Determination of this amount of unrecognized United States deferred tax liability is not practicable because of the complexities associated with its hypothetical calculation. | ||||||||||||
Tax Allocation Agreement with First Data | ||||||||||||
The Company and First Data each are liable for taxes imposed on their respective businesses both prior to and after the Spin-off. If such taxes have not been appropriately apportioned between First Data and the Company, subsequent adjustments may occur that may impact the Company's financial condition or results of operations. | ||||||||||||
Also under the tax allocation agreement, with respect to taxes and other liabilities that result from a final determination that is inconsistent with the anticipated tax consequences of the Spin-off (as set forth in the private letter ruling and relevant tax opinion) ("Spin-off Related Taxes"), the Company will be liable to First Data for any such Spin-off Related Taxes attributable solely to actions taken by or with respect to the Company. In addition, the Company will also be liable for half of any Spin-off Related Taxes (i) that would not have been imposed but for the existence of both an action by the Company and an action by First Data or (ii) where the Company and First Data each take actions that, standing alone, would have resulted in the imposition of such Spin-off Related Taxes. The Company may be similarly liable if it breaches certain representations or covenants set forth in the tax allocation agreement. If the Company is required to indemnify First Data for taxes incurred as a result of the Spin-off being taxable to First Data, it likely would have a material adverse effect on the Company's business, financial condition and results of operations. First Data generally will be liable for all Spin-off Related Taxes, other than those described above. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans | |||||||||||||||
Defined Contribution Plans | ||||||||||||||||
The Western Union Company Incentive Savings Plan (the "401(k)") covers eligible employees on the United States payroll of the Company. Employees who make voluntary contributions to this plan receive up to a 4% Company matching contribution. All matching contributions are immediately vested. | ||||||||||||||||
The Company administers more than 25 defined contribution plans in various countries globally on behalf of approximately 2,000 employee participants as of December 31, 2014. Such plans have vesting and employer contribution provisions that vary by country. | ||||||||||||||||
In addition, the Company sponsors a non-qualified deferred compensation plan for a select group of highly compensated United States employees. The plan provides tax-deferred contributions and the restoration of Company matching contributions otherwise limited under the 401(k). | ||||||||||||||||
The aggregate amount charged to expense in connection with all of the above plans was $17.4 million, $16.9 million and $15.3 million during the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||
Defined Benefit Plan | ||||||||||||||||
The Company has a frozen defined benefit pension plan (the "Plan") for which it had a recorded unfunded pension obligation of $74.9 million and $70.4 million as of December 31, 2014 and 2013, respectively, included in "Other liabilities" in the Consolidated Balance Sheets. The Company made contributions of $13.2 million and $15.7 million to the Plan in the years ended December 31, 2014 and 2013, respectively. The Company will be required to fund approximately $18 million to the Plan in 2015. | ||||||||||||||||
The Company recognizes the funded status of the Plan in its Consolidated Balance Sheets with a corresponding adjustment to "Accumulated other comprehensive loss," net of tax. | ||||||||||||||||
The following table provides a reconciliation of the changes in the Plan's projected benefit obligation, fair value of assets and the funded status (in millions): | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Change in projected benefit obligation: | ||||||||||||||||
Projected benefit obligation as of January 1, | $ | 366.2 | $ | 418.8 | ||||||||||||
Interest cost | 13.6 | 12.1 | ||||||||||||||
Actuarial loss/(gain) | 35.8 | (25.4 | ) | |||||||||||||
Benefits paid | (37.8 | ) | (39.3 | ) | ||||||||||||
Projected benefit obligation as of December 31, | $ | 377.8 | $ | 366.2 | ||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets as of January 1, | $ | 295.8 | $ | 316.7 | ||||||||||||
Actual return on plan assets | 31.7 | 2.7 | ||||||||||||||
Benefits paid | (37.8 | ) | (39.3 | ) | ||||||||||||
Company contributions | 13.2 | 15.7 | ||||||||||||||
Fair value of plan assets as of December 31, | 302.9 | 295.8 | ||||||||||||||
Funded status of the Plan as of December 31, | $ | (74.9 | ) | $ | (70.4 | ) | ||||||||||
Accumulated benefit obligation as of December 31, | $ | 377.8 | $ | 366.2 | ||||||||||||
Differences in expected returns on plan assets estimated at the beginning of the year versus actual returns, and assumptions used to estimate the beginning of year projected benefit obligation versus the end of year obligation (principally discount rate and mortality assumptions) are, on a combined basis, considered actuarial gains and losses. Such actuarial gains and losses are recognized as a component of "Comprehensive income" and amortized to income over the average remaining life expectancy of the plan participants. Included in "Accumulated other comprehensive loss" as of December 31, 2014 is $11.5 million ($7.2 million, net of tax) of actuarial losses that are expected to be recognized in net periodic benefit cost during the year ended December 31, 2015. | ||||||||||||||||
The following table provides the amounts recognized in the Consolidated Balance Sheets (in millions): | ||||||||||||||||
December 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Accrued benefit liability | $ | (74.9 | ) | $ | (70.4 | ) | ||||||||||
Accumulated other comprehensive loss (pre-tax) | 200.9 | 187 | ||||||||||||||
Net amount recognized | $ | 126 | $ | 116.6 | ||||||||||||
The following table provides the components of net periodic benefit cost for the Plan (in millions): | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Interest cost | $ | 13.6 | $ | 12.1 | $ | 14.7 | ||||||||||
Expected return on plan assets | (20.2 | ) | (20.7 | ) | (20.8 | ) | ||||||||||
Amortization of actuarial loss | 10.4 | 12.4 | 10.5 | |||||||||||||
Net periodic benefit cost | $ | 3.8 | $ | 3.8 | $ | 4.4 | ||||||||||
The rate assumptions used in the measurement of the Company's benefit obligation were as follows: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Discount rate | 3.27 | % | 3.91 | % | ||||||||||||
The rate assumptions used in the measurement of the Company's net cost were as follows: | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Discount rate | 3.91 | % | 3.03 | % | 3.72 | % | ||||||||||
Expected long-term return on plan assets | 7 | % | 7 | % | 7 | % | ||||||||||
The Company measures the Plan's obligations and annual expense using assumptions that reflect best estimates and are consistent to the extent that each assumption reflects expectations of future economic conditions. As the bulk of the pension benefits will not be paid for many years, the computation of pension expenses and benefits is based on assumptions about future interest rates and expected rates of return on plan assets. In general, pension obligations are most sensitive to the discount rate assumption, and it is set based on the rate at which the pension benefits could be settled effectively. The discount rate is determined by matching the timing and amount of anticipated payouts under the Plan to the rates from an AA spot rate yield curve. The curve is derived from AA bonds of varying maturities. | ||||||||||||||||
The estimated undiscounted future benefit payments are expected to be $36.4 million in 2015, $35.0 million in 2016, $33.5 million in 2017, $32.0 million in 2018, $30.5 million in 2019 and $128.5 million in 2020 through 2024. | ||||||||||||||||
The Company employs a building block approach in determining the long-term rate of return for plan assets. Historical markets are studied and long-term historical risk, return, and co-variance relationships between equities, fixed-income securities, and alternative investments are considered consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. Consideration is given to diversification, re-balancing and yields anticipated on fixed income securities held. Historical returns are reviewed within the context of current economic conditions to check for reasonableness and appropriateness. The Company then applies this rate against a calculated value for its plan assets. The calculated value recognizes changes in the fair value of plan assets over a five-year period. | ||||||||||||||||
Pension plan asset allocation as of December 31, 2014 and 2013, and target allocations based on investment policies, were as follows: | ||||||||||||||||
Percentage of Plan Assets | ||||||||||||||||
as of Measurement Date | ||||||||||||||||
Asset Class | 2014 | 2013 | ||||||||||||||
Equity investments | 17 | % | 18 | % | ||||||||||||
Debt securities | 63 | % | 59 | % | ||||||||||||
Alternative investments | 20 | % | 23 | % | ||||||||||||
Target Allocation | ||||||||||||||||
Equity investments | 20% | |||||||||||||||
Debt securities | 60% | |||||||||||||||
Alternative investments | 20% | |||||||||||||||
The Plan's assets are managed in a third-party Trust. The investment policy and allocation of the assets in the Trust are overseen by the Company's Investment Council. The Company employs a total return investment approach whereby a mix of equity, fixed income, and alternative investments are used in an effort to improve the long-term risk adjusted return of plan assets. Risk tolerance is established through careful consideration of plan liabilities and plan funded status. The investment portfolio contains a diversified blend of equity, fixed-income, and alternative investments (e.g. hedge funds, royalty rights and private equity funds). Furthermore, equity investments are diversified across United States and non-United States stocks, as well as securities deemed to be growth, value, and small and large capitalizations. Alternative investments, the majority of which are hedge funds, are used in an effort to enhance long-term returns while improving portfolio diversification. Hedge fund strategy types include, but are not limited to: relative value, equity long-short, commodities/currencies, multi-strategy, event driven, and global-macro. The Plan holds interest rate derivative contracts directly, including interest rate futures that are based on U.S. treasury bond rates ranging from two years to twenty-five years. The Plan may also hold interest rate swaps, under which the Plan is committed to pay or receive a short-term LIBOR-based variable interest rate in exchange for a fixed interest rate, primarily based on five and ten-year maturities. Additionally, derivatives are held indirectly through funds in which the Plan is invested. Derivatives are used by the Plan to help reduce the Plan's exposure to interest rate volatility and to provide an additional source of return. Cash held by the Plan is used to satisfy margin requirements on the derivatives or meet liquidity needs, including benefit payments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset and liability studies. | ||||||||||||||||
The following tables reflect investments of the Trust that were measured and carried at fair value (in millions). For information on how the Company measures fair value, refer to Note 2. | ||||||||||||||||
31-Dec-14 | Fair Value Measurement Using | Total Assets | ||||||||||||||
Asset Class | Level 1 | Level 2 | Level 3 | at Fair Value | ||||||||||||
Equity investments: | ||||||||||||||||
Domestic | $ | 26.8 | $ | — | $ | — | $ | 26.8 | ||||||||
International (a) | 1.5 | 24 | — | 25.5 | ||||||||||||
Debt securities: | ||||||||||||||||
Corporate debt (b) | — | 132.9 | — | 132.9 | ||||||||||||
U.S. treasury bonds | 44.8 | — | — | 44.8 | ||||||||||||
State and municipal debt securities | — | 4.4 | — | 4.4 | ||||||||||||
Other | — | 5.6 | — | 5.6 | ||||||||||||
Alternative investments: | ||||||||||||||||
Hedge funds (c) | — | 31.9 | — | 31.9 | ||||||||||||
Royalty rights and private equity (d) | — | — | 28.5 | 28.5 | ||||||||||||
Total investments of the Trust at fair value | $ | 73.1 | $ | 198.8 | $ | 28.5 | $ | 300.4 | ||||||||
Other assets | 2.5 | |||||||||||||||
Total investments of the Trust | $ | 73.1 | $ | 198.8 | $ | 28.5 | $ | 302.9 | ||||||||
31-Dec-13 | Fair Value Measurement Using | Total Assets | ||||||||||||||
Asset Class | Level 1 | Level 2 | Level 3 | at Fair Value | ||||||||||||
Equity investments: | ||||||||||||||||
Domestic | $ | 26.2 | $ | — | $ | — | $ | 26.2 | ||||||||
International (a) | 1.5 | 26.5 | — | 28 | ||||||||||||
Debt securities: | ||||||||||||||||
Corporate debt (b) | — | 127.3 | — | 127.3 | ||||||||||||
U.S. treasury bonds | 36.8 | — | — | 36.8 | ||||||||||||
State and municipal debt securities | — | 3.9 | — | 3.9 | ||||||||||||
Other | — | 4.4 | — | 4.4 | ||||||||||||
Alternative investments: | ||||||||||||||||
Hedge funds (c) | — | 42.4 | — | 42.4 | ||||||||||||
Royalty rights and private equity (d) | — | — | 25.9 | 25.9 | ||||||||||||
Total investments of the Trust at fair value | $ | 64.5 | $ | 204.5 | $ | 25.9 | $ | 294.9 | ||||||||
Other assets | 0.9 | |||||||||||||||
Total investments of the Trust | $ | 64.5 | $ | 204.5 | $ | 25.9 | $ | 295.8 | ||||||||
____________ | ||||||||||||||||
(a) | Funds included herein have monthly redemption frequencies, with redemption notice periods of one to ten business days. | |||||||||||||||
(b) | Substantially all corporate debt securities are investment grade securities. | |||||||||||||||
(c) | Hedge funds generally hold liquid and readily priceable securities, such as public equities, exchange-traded derivatives, and corporate bonds. Hedge funds themselves do not have readily available market quotations, and therefore are valued using the Net Asset Value ("NAV") per share provided by the investment sponsor or third party administrator. Funds investing in diverse hedge fund strategies (primarily commingled funds) had the following composition of underlying hedge fund investments within the pension plan at December 31, 2014: equity long/short (28%), commodities/currencies (24%), relative value (23%), event driven (13%) and multi-strategy (12%). As of December 31, 2014, funds included herein had redemption frequencies of monthly to quarterly, with redemption notice periods of three to 60 days. | |||||||||||||||
(d) | Diversified investments in royalty rights related to the sale of pharmaceutical products by third parties. Also included are private equity funds with a focus on venture capital. These investments are illiquid, with investment distributions expected to be received over the lives of the funds, which are uncertain but based on the voting rights of investors and the maturities of the underlying investments. | |||||||||||||||
The maturities of debt securities as of December 31, 2014 range from less than one year to approximately 31 years with a weighted-average maturity of 14 years. | ||||||||||||||||
The following tables provide summaries of changes in the fair value of the Trust's Level 3 financial assets (in millions): | ||||||||||||||||
Royalty Rights | Private Equity | Total | ||||||||||||||
Balance, January 1, 2013 | $ | 21.4 | $ | 2.4 | $ | 23.8 | ||||||||||
Actual return on plan assets: | ||||||||||||||||
Relating to assets still held as of the reporting date | 2.3 | 0.3 | 2.6 | |||||||||||||
Relating to assets sold during the year | 1.6 | 0.1 | 1.7 | |||||||||||||
Net purchases and sales | (2.0 | ) | (0.2 | ) | (2.2 | ) | ||||||||||
Balance, December 31, 2013 | $ | 23.3 | $ | 2.6 | $ | 25.9 | ||||||||||
Actual return on plan assets: | ||||||||||||||||
Relating to assets still held as of the reporting date | 4.1 | 0.6 | 4.7 | |||||||||||||
Relating to assets sold during the year | — | 0.1 | 0.1 | |||||||||||||
Net purchases and sales | (2.2 | ) | — | (2.2 | ) | |||||||||||
Balance, December 31, 2014 | $ | 25.2 | $ | 3.3 | $ | 28.5 | ||||||||||
Royalty rights are held through investment funds. These investments are priority interests in contractual royalty revenue derived from the sale of pharmaceutical products that entitle the investment fund to receive a portion of revenue from the patent-protected product. The investment funds either acquire royalties directly or invest in debt instruments secured by the cash flow from one or more royalties. The fair value of the direct investments in royalty rights is estimated using consensus Wall Street analysts' sales estimates for the pharmaceutical products, which are multiplied by the contractual royalty rate, and then discounted by an interest rate based off the estimated weighted average cost of capital of the pharmaceutical sector, which is then adjusted for liquidity and diversification considerations. After these adjustments, this discount rate was approximately 10% as of December 31, 2014. Debt instruments secured by royalties are generally valued based on actual product sales versus revenue projections at the time of investment and are subject to impairment testing. | ||||||||||||||||
Private equity funds invest in the non-marketable securities of individual private companies. These private companies ultimately may become public in the future. The fair value of the Plan's investment in private equity funds is estimated using many types of inputs, including historical sales multiples, valuations of comparable public companies, and recently completed equity financings. |
Operating_Lease_Commitments
Operating Lease Commitments | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Leases, Operating [Abstract] | ||||
Operating Lease Commitments | Operating Lease Commitments | |||
The Company leases certain real properties for use as customer service centers and administrative and sales offices. The Company also leases automobiles and office equipment. Certain of these leases contain renewal options and escalation provisions. Total rent expense under operating leases, net of sublease income, was $54.0 million, $54.1 million and $53.9 million during the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
As of December 31, 2014, the minimum aggregate rental commitments under all non-cancelable operating leases were as follows (in millions): | ||||
Year Ending December 31, | ||||
2015 | $ | 39.2 | ||
2016 | 34 | |||
2017 | 26.8 | |||
2018 | 19.6 | |||
2019 | 10.6 | |||
Thereafter | 14.2 | |||
Total future minimum lease payments | $ | 144.4 | ||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Equity [Abstract] | |||||||||||||||||
Stockholders' Equity | Stockholders' Equity | ||||||||||||||||
Accumulated other comprehensive loss | |||||||||||||||||
Accumulated other comprehensive loss includes all changes in equity during a period that have yet to be recognized in income, except those resulting from transactions with shareholders. The major components include unrealized gains and losses on investment securities, unrealized gains or losses from cash flow hedging activities, foreign currency translation adjustments and defined benefit pension plan adjustments. | |||||||||||||||||
Unrealized gains and losses on investment securities that are available for sale, primarily state and municipal debt securities, are included in "Accumulated other comprehensive loss" until the investment is either sold or deemed other-than-temporarily impaired. See Note 7 for further discussion. | |||||||||||||||||
The effective portion of the change in fair value of derivatives that qualify as cash flow hedges are recorded in "Accumulated other comprehensive loss." Generally, amounts are recognized in income when the related forecasted transaction affects earnings. See Note 14 for further discussion. | |||||||||||||||||
The assets and liabilities of foreign subsidiaries whose functional currency is not the United States dollar are translated using the appropriate exchange rate as of the end of the year. Foreign currency translation adjustments represent unrealized gains and losses on assets and liabilities arising from the difference in the foreign country currency compared to the United States dollar. These gains and losses are accumulated in comprehensive income. When a foreign subsidiary is substantially liquidated, the cumulative translation gain or loss is removed from "Accumulated other comprehensive loss" and is recognized as a component of the gain or loss on the sale of the subsidiary. | |||||||||||||||||
The defined benefit pension plan adjustment is recognized for the difference between estimated assumptions (e.g., asset returns, discount rates, mortality) and actual results. The amount in "Accumulated other comprehensive loss" is amortized to income over the remaining life expectancy of the plan participants. Details of the pension plan's assets and obligations are explained further in Note 11. | |||||||||||||||||
The following table summarizes the components of accumulated other comprehensive loss, net of tax (in millions). All amounts reclassified from accumulated other comprehensive loss affect the line items as indicated below within the Consolidated Statements of Income. | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Unrealized gains on investment securities, beginning of period | $ | 4.1 | $ | 7.7 | $ | 4.9 | |||||||||||
Unrealized gains/(losses) | 15.5 | (0.1 | ) | 9.9 | |||||||||||||
Tax (expense)/benefit | (5.7 | ) | 0.1 | (3.7 | ) | ||||||||||||
Reclassification of gains into "Other revenues" | (7.8 | ) | (5.8 | ) | (5.5 | ) | |||||||||||
Reclassification of gains into "Interest income" | (0.2 | ) | — | — | |||||||||||||
Tax expense related to reclassifications | 3 | 2.2 | 2.1 | ||||||||||||||
Net unrealized gains/(losses) on investment securities | 4.8 | (3.6 | ) | 2.8 | |||||||||||||
Unrealized gains on investment securities, end of period | $ | 8.9 | $ | 4.1 | $ | 7.7 | |||||||||||
Unrealized gains/(losses) on hedging activities, beginning of period | $ | (33.0 | ) | $ | (21.9 | ) | $ | 5.1 | |||||||||
Unrealized gains/(losses) | 84 | (3.1 | ) | (20.1 | ) | ||||||||||||
Tax (expense)/benefit | (3.7 | ) | (1.7 | ) | 3.1 | ||||||||||||
Reclassification of gains into "Transaction fees" | (1.2 | ) | (7.6 | ) | (10.3 | ) | |||||||||||
Reclassification of gains into "Foreign exchange revenues" | (0.4 | ) | (2.8 | ) | (3.1 | ) | |||||||||||
Reclassification of losses into "Interest expense" | 3.6 | 3.6 | 3.6 | ||||||||||||||
Tax expense/(benefit) related to reclassifications | (0.7 | ) | 0.5 | (0.2 | ) | ||||||||||||
Net unrealized gains/(losses) on hedging activities | 81.6 | (11.1 | ) | (27.0 | ) | ||||||||||||
Unrealized gains/(losses) on hedging activities, end of period | $ | 48.6 | $ | (33.0 | ) | $ | (21.9 | ) | |||||||||
Foreign currency translation adjustments, beginning of period | $ | (21.6 | ) | $ | (8.5 | ) | $ | (6.3 | ) | ||||||||
Foreign currency translation adjustments | (14.8 | ) | (17.7 | ) | (4.6 | ) | |||||||||||
Tax (expense)/benefit | (12.8 | ) | 4.6 | 2.4 | |||||||||||||
Net foreign currency translation adjustments | (27.6 | ) | (13.1 | ) | (2.2 | ) | |||||||||||
Foreign currency translation adjustments, end of period | $ | (49.2 | ) | $ | (21.6 | ) | $ | (8.5 | ) | ||||||||
Defined benefit pension plan adjustments, beginning of period | $ | (118.5 | ) | $ | (129.9 | ) | $ | (122.2 | ) | ||||||||
Unrealized gains/(losses) | (24.3 | ) | 7.4 | (20.5 | ) | ||||||||||||
Tax (expense)/benefit | 9 | (3.9 | ) | 6.2 | |||||||||||||
Reclassification of losses into "Cost of services" | 10.4 | 12.4 | 10.5 | ||||||||||||||
Tax benefit related to reclassifications and other | (3.8 | ) | (4.5 | ) | (3.9 | ) | |||||||||||
Net defined benefit pension plan adjustments | (8.7 | ) | 11.4 | (7.7 | ) | ||||||||||||
Defined benefit pension plan adjustments, end of period | $ | (127.2 | ) | $ | (118.5 | ) | $ | (129.9 | ) | ||||||||
Accumulated other comprehensive loss, end of period | $ | (118.9 | ) | $ | (169.0 | ) | $ | (152.6 | ) | ||||||||
Cash Dividends Paid | |||||||||||||||||
Cash dividends paid for the years ended December 31, 2014, 2013 and 2012 were $265.2 million, $277.2 million and $254.2 million, respectively. Dividends per share declared quarterly by the Company's Board of Directors during the years ended 2014, 2013 and 2012 were as follows: | |||||||||||||||||
Year | Q1 | Q2 | Q3 | Q4 | |||||||||||||
2014 | $ | 0.125 | $ | 0.125 | $ | 0.125 | $ | 0.125 | |||||||||
2013 | $ | 0.125 | $ | 0.125 | $ | 0.125 | $ | 0.125 | |||||||||
2012 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.125 | |||||||||
On February 10, 2015, the Company's Board of Directors declared a quarterly cash dividend of $0.155 per common share payable on March 31, 2015. | |||||||||||||||||
Share Repurchases | |||||||||||||||||
During the years ended December 31, 2014, 2013 and 2012, 29.3 million, 25.7 million and 51.0 million shares, respectively, have been repurchased for $488.1 million, $393.6 million and $771.9 million, respectively, excluding commissions, at an average cost of $16.63, $15.29 and $15.12 per share, respectively. These amounts represent shares authorized by the Board of Directors for repurchase under the publicly announced authorizations. As of December 31, 2014, $11.9 million remained available under the share repurchase authorization approved by the Company's Board of Directors through June 30, 2015. The amounts included in the "Common stock repurchased" line in the Company's Consolidated Statements of Cash Flows represent both shares authorized by the Board of Directors for repurchase under the publicly announced authorization, described earlier, as well as shares withheld from employees to cover tax withholding obligations on restricted stock units that have vested. | |||||||||||||||||
On February 10, 2015, the Company's Board of Directors authorized $1.2 billion of common stock repurchases through December 31, 2017. |
Derivatives
Derivatives | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Derivatives | 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 Canadian dollar, British pound, Australian dollar, Swiss franc, and other currencies, related to forecasted money transfer revenues and on money transfer settlement assets and obligations. The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency Business Solutions 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 Solutions payments by writing derivatives to customers. | |||||||||||||||||||||||||||||||||||||||||||||
The Company executes derivatives 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 also writes Business Solutions derivatives mostly with small and medium size enterprises. The primary credit risk inherent in derivative 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 when doubt arises about the counterparties' ability to perform. These actions may include requiring Business Solutions customers to post or increase collateral, and for all counterparties, the possible termination of the related contracts. The Company's 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 Currency — Consumer-to-Consumer | |||||||||||||||||||||||||||||||||||||||||||||
The Company's policy is to use longer-term foreign currency forward contracts, with maturities of up to 36 months 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. As of December 31, 2014, the Company's longer-term foreign currency forward contracts had maturities of a maximum of 24 months 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 are recognized immediately in "Derivative gains/(losses), net" within the Company's Consolidated Statements of Income. | |||||||||||||||||||||||||||||||||||||||||||||
The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up to one month, to offset foreign exchange rate fluctuations on settlement assets and obligations between initiation and settlement. In addition, forward contracts, typically with maturities of less than one year at inception, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash and other asset and liability positions. None of these contracts are designated as accounting hedges. | |||||||||||||||||||||||||||||||||||||||||||||
The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of December 31, 2014 were as follows (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Contracts designated as hedges: | |||||||||||||||||||||||||||||||||||||||||||||
Euro | $ | 391.4 | |||||||||||||||||||||||||||||||||||||||||||
Canadian dollar | 114.1 | ||||||||||||||||||||||||||||||||||||||||||||
British pound | 80.8 | ||||||||||||||||||||||||||||||||||||||||||||
Australian dollar | 52.7 | ||||||||||||||||||||||||||||||||||||||||||||
Swiss franc | 44 | ||||||||||||||||||||||||||||||||||||||||||||
Other | 95.4 | ||||||||||||||||||||||||||||||||||||||||||||
Contracts not designated as hedges: | |||||||||||||||||||||||||||||||||||||||||||||
Euro | $ | 294.4 | |||||||||||||||||||||||||||||||||||||||||||
Canadian dollar | 77.1 | ||||||||||||||||||||||||||||||||||||||||||||
British pound | 70.2 | ||||||||||||||||||||||||||||||||||||||||||||
Australian dollar | 30.1 | ||||||||||||||||||||||||||||||||||||||||||||
Other (a) | 147.8 | ||||||||||||||||||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||||||||||||||
(a) | Comprised of exposures to 17 different currencies. None of these individual currency exposures is greater than $25 million. | ||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency — Business Solutions | |||||||||||||||||||||||||||||||||||||||||||||
The Company writes derivatives, primarily foreign currency forward contracts and option contracts, mostly with small and medium size enterprises and derives a currency spread from this activity as part of its Business Solutions operations. The Company aggregates its Business Solutions payments foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts). The derivatives written are part of the broader portfolio of foreign currency positions arising from its cross-currency payments operations, which primarily include spot exchanges of currency in addition to forwards and options. The resulting foreign exchange revenues from the total portfolio of positions comprise Business Solutions foreign exchange revenues. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges. The duration of these derivative contracts at inception is generally less than one year. | |||||||||||||||||||||||||||||||||||||||||||||
The aggregate equivalent United States dollar notional amounts of foreign currency derivative customer contracts held by the Company in its Business Solutions operations as of December 31, 2014 were approximately $5.5 billion. The significant majority of customer contracts are written in major currencies such as the Australian dollar, British pound, Canadian dollar, and euro. | |||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Hedging — Corporate | |||||||||||||||||||||||||||||||||||||||||||||
The Company utilizes interest rate swaps 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 Company designates these derivatives as fair value hedges. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within "Borrowings" in the Consolidated Balance Sheets and "Interest expense" in the Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps. | |||||||||||||||||||||||||||||||||||||||||||||
The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change in fair value of the derivatives is recorded in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets. | |||||||||||||||||||||||||||||||||||||||||||||
The Company held interest rate swaps in an aggregate notional amount of $975.0 million and $1,550.0 million as of December 31, 2014 and 2013, respectively. Of this aggregate notional amount held at December 31, 2014, $500.0 million related to notes due in 2017, $300.0 million related to notes due in 2018, and $175.0 million related to notes due in 2020. | |||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of December 31, 2014 and December 31, 2013 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet | December 31, | December 31, | Balance Sheet | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||
Location | 2014 | 2013 | Location | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
Derivatives — hedges: | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate fair value hedges — Corporate | Other assets | $ | 3.5 | $ | 11.4 | Other liabilities | $ | 1.9 | $ | 7.8 | |||||||||||||||||||||||||||||||||||
Foreign currency cash flow hedges — Consumer-to-Consumer | Other assets | 66.1 | 11.1 | Other liabilities | 3.5 | 27.7 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 69.6 | $ | 22.5 | $ | 5.4 | $ | 35.5 | |||||||||||||||||||||||||||||||||||||
Derivatives — undesignated: | |||||||||||||||||||||||||||||||||||||||||||||
Foreign currency — Business Solutions | Other assets | $ | 349.4 | $ | 201.2 | Other liabilities | $ | 310.2 | $ | 186.2 | |||||||||||||||||||||||||||||||||||
Foreign currency — Consumer-to-Consumer | Other assets | 4 | 0.6 | Other liabilities | 1.5 | 1.7 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 353.4 | $ | 201.8 | $ | 311.7 | $ | 187.9 | |||||||||||||||||||||||||||||||||||||
Total derivatives | $ | 423 | $ | 224.3 | $ | 317.1 | $ | 223.4 | |||||||||||||||||||||||||||||||||||||
The following table summarizes the net fair value of derivatives held as of December 31, 2014 and their expected maturities (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||||||||||||||||||
Foreign currency cash flow hedges — Consumer-to-Consumer | $ | 62.6 | $ | 44.5 | $ | 18.1 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Foreign currency undesignated hedges — Consumer-to-Consumer | 2.5 | 2.5 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Foreign currency undesignated hedges — Business Solutions | 39.2 | 38.2 | 1 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Interest rate fair value hedges — Corporate | 1.6 | — | — | (1.0 | ) | (0.9 | ) | — | 3.5 | ||||||||||||||||||||||||||||||||||||
Total | $ | 105.9 | $ | 85.2 | $ | 19.1 | $ | (1.0 | ) | $ | (0.9 | ) | $ | — | $ | 3.5 | |||||||||||||||||||||||||||||
The fair values of derivative assets and liabilities associated with contracts that include netting language that the Company believes to be enforceable have been netted in the following tables to present the Company's net exposure with these counterparties. The Company's rights under these agreements generally allow for transactions to be settled on a net basis, including upon early termination, which could occur upon the counterparty's default, a change in control, or other conditions. | |||||||||||||||||||||||||||||||||||||||||||||
In addition, certain of the Company's other agreements include netting provisions, the enforceability of which may vary from jurisdiction to jurisdiction and depending on the circumstances. Due to the uncertainty related to the enforceability of these provisions, the derivative balances associated with these agreements are included within "Derivatives that are not or may not be subject to master netting arrangement or similar agreement" in the following tables. In certain circumstances, the Company may require its Business Solutions customers to maintain collateral balances which may mitigate the risk associated with potential customer defaults. | |||||||||||||||||||||||||||||||||||||||||||||
The following tables summarize the gross and net fair value of derivative assets and liabilities as of December 31, 2014 and December 31, 2013 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Offsetting of Derivative Assets | |||||||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheets | Net Amounts Presented | Derivatives Not Offset | Net Amounts | ||||||||||||||||||||||||||||||||||||||||
in the Consolidated Balance Sheets | in the Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 255.1 | $ | — | $ | 255.1 | $ | (134.8 | ) | $ | 120.3 | ||||||||||||||||||||||||||||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 167.9 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 423 | |||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 118.4 | $ | — | $ | 118.4 | $ | (93.3 | ) | $ | 25.1 | ||||||||||||||||||||||||||||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 105.9 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 224.3 | |||||||||||||||||||||||||||||||||||||||||||
Offsetting of Derivative Liabilities | |||||||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheets | Net Amounts Presented | Derivatives Not Offset | Net Amounts | ||||||||||||||||||||||||||||||||||||||||
in the Consolidated Balance Sheets | in the Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 169.3 | $ | — | $ | 169.3 | $ | (134.8 | ) | $ | 34.5 | ||||||||||||||||||||||||||||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 147.8 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 317.1 | |||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 146.1 | $ | — | $ | 146.1 | $ | (93.3 | ) | $ | 52.8 | ||||||||||||||||||||||||||||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 77.3 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 223.4 | |||||||||||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||||
The following tables summarize the location and amount of gains and losses of derivatives in the Consolidated Statements of Income segregated by designated, qualifying hedging instruments and those that are not, for the years ended December 31, 2014, 2013 and 2012 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Fair Value Hedges | |||||||||||||||||||||||||||||||||||||||||||||
The following table presents the location and amount of gains/(losses) from fair value hedges for the years ended December 31, 2014, 2013 and 2012 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Gain/(Loss) Recognized in Income on | Gain/(Loss) Recognized in Income on | Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||||||||||||||||||||||||||||||
Derivatives | Related Hedged Item (a) | ||||||||||||||||||||||||||||||||||||||||||||
Income | Amount | Income | Amount | Income | Amount | ||||||||||||||||||||||||||||||||||||||||
Statement | Statement | Statement | |||||||||||||||||||||||||||||||||||||||||||
Derivatives | Location | 2014 | 2013 | 2012 | Hedged | Location | 2014 | 2013 | 2012 | Location | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||
Item | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts | Interest expense | $ | 17.5 | $ | (8.5 | ) | $ | 3.9 | Fixed-rate debt | Interest expense | $ | (4.4 | ) | $ | 19.3 | $ | 3.7 | Interest expense | $ | (0.7 | ) | $ | — | $ | — | ||||||||||||||||||||
Total gain/(loss) | $ | 17.5 | $ | (8.5 | ) | $ | 3.9 | $ | (4.4 | ) | $ | 19.3 | $ | 3.7 | $ | (0.7 | ) | $ | — | $ | — | ||||||||||||||||||||||||
Cash Flow Hedges | |||||||||||||||||||||||||||||||||||||||||||||
The following table presents the location and amount of gains/(losses) from cash flow hedges for the years ended December 31, 2014, 2013 and 2012 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Gain/(Loss) Recognized | Gain/(Loss) Reclassified | Gain/(Loss) Recognized in Income on | |||||||||||||||||||||||||||||||||||||||||||
in OCI on Derivatives | from Accumulated OCI into Income | Derivatives (Ineffective Portion and Amount | |||||||||||||||||||||||||||||||||||||||||||
(Effective Portion) | (Effective Portion) | Excluded from Effectiveness Testing) (b) | |||||||||||||||||||||||||||||||||||||||||||
Amount | Income | Amount | Income | Amount | |||||||||||||||||||||||||||||||||||||||||
Derivatives | 2014 | 2013 | 2012 | Statement Location | 2014 | 2013 | 2012 | Statement Location | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 84 | $ | (3.1 | ) | $ | (20.1 | ) | Revenue | $ | 1.6 | $ | 10.4 | $ | 13.4 | Derivative | $ | (4.4 | ) | $ | (0.4 | ) | $ | (0.1 | ) | ||||||||||||||||||||
gains/(losses), net | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts (c) | — | — | — | Interest expense | (3.6 | ) | (3.6 | ) | (3.6 | ) | Interest expense | — | — | — | |||||||||||||||||||||||||||||||
Total gain/(loss) | $ | 84 | $ | (3.1 | ) | $ | (20.1 | ) | $ | (2.0 | ) | $ | 6.8 | $ | 9.8 | $ | (4.4 | ) | $ | (0.4 | ) | $ | (0.1 | ) | |||||||||||||||||||||
Undesignated Hedges | |||||||||||||||||||||||||||||||||||||||||||||
The following table presents the location and amount of net gains/(losses) from undesignated hedges for the years ended December 31, 2014, 2013 and 2012 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Gain/(Loss) Recognized in Income on Derivatives (d) | |||||||||||||||||||||||||||||||||||||||||||||
Income Statement Location | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts (e) | Selling, general and administrative | $ | 46.5 | $ | (3.7 | ) | $ | (10.6 | ) | ||||||||||||||||||||||||||||||||||||
Foreign currency contracts (f) | Derivative gains/(losses), net | 2.2 | (0.9 | ) | 0.6 | ||||||||||||||||||||||||||||||||||||||||
Total gain/(loss) | $ | 48.7 | $ | (4.6 | ) | $ | (10.0 | ) | |||||||||||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||||||||||||||
(a) | The 2014 loss of $4.4 million was comprised of a loss in value on the debt of $16.8 million and amortization of hedge accounting adjustments of $12.4 million. The 2013 gain of $19.3 million was comprised of a gain in value on the debt of $8.5 million and amortization of hedge accounting adjustments of $10.8 million. The 2012 gain of $3.7 million was comprised of a loss in value on the debt of $3.9 million and amortization of hedge accounting adjustments of $7.6 million. | ||||||||||||||||||||||||||||||||||||||||||||
(b) | The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates. | ||||||||||||||||||||||||||||||||||||||||||||
(c) | The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative's fair value in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets. These amounts are reclassified to "Interest expense" in the Consolidated Statements of Income over the life of the related notes. | ||||||||||||||||||||||||||||||||||||||||||||
(d) | The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above. | ||||||||||||||||||||||||||||||||||||||||||||
(e) | The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations and cash balances, not including amounts related to derivatives activity as displayed above, were $(51.8) million, $(5.4) million and $7.8 million for the years ended 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
(f) | The derivative contracts used in the Company's revenue hedging program are not designated as hedges in the final month of the contract. | ||||||||||||||||||||||||||||||||||||||||||||
An accumulated other comprehensive pre-tax gain of $46.2 million related to the foreign currency forward contracts is expected to be reclassified into revenue within the next 12 months as of December 31, 2014. Approximately $3.6 million of net losses on the forecasted debt issuance hedges are expected to be recognized in "Interest expense" in the Consolidated Statements of Income within the next 12 months as of December 31, 2014. No amounts have been reclassified into earnings as a result of the underlying transaction being considered probable of not occurring within the specified time period. |
Borrowings
Borrowings | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Borrowings | Borrowings | |||||||
The Company’s outstanding borrowings consisted of the following (in millions): | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Notes: | ||||||||
6.500% notes due 2014 | $ | — | $ | 500 | ||||
Floating rate notes (effective rate of 1.2%) due 2015 | 250 | 250 | ||||||
2.375% notes due 2015 (a) | 250 | 250 | ||||||
5.930% notes due 2016 (a) | 1,000.00 | 1,000.00 | ||||||
2.875% notes (effective rate of 2.0%) due 2017 | 500 | 500 | ||||||
3.650% notes due 2018 (a) | 400 | 400 | ||||||
3.350% notes due 2019 (a) | 250 | 250 | ||||||
5.253% notes (effective rate of 4.6%) due 2020 | 324.9 | 324.9 | ||||||
6.200% notes due 2036 (a) | 500 | 500 | ||||||
6.200% notes due 2040 (a) | 250 | 250 | ||||||
Other borrowings | 5.6 | 5.7 | ||||||
Total borrowings at par value | 3,730.50 | 4,230.60 | ||||||
Fair value hedge accounting adjustments, net (b) | 5.3 | 0.9 | ||||||
Unamortized discount, net | (15.4 | ) | (18.5 | ) | ||||
Total borrowings at carrying value (c) | $ | 3,720.40 | $ | 4,213.00 | ||||
____________________ | ||||||||
(a) | The difference between the stated interest rate and the effective interest rate is not significant. | |||||||
(b) | 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 or increases in "Interest expense" in the Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate. | |||||||
(c) | As of December 31, 2014, the Company’s weighted-average effective rate on total borrowings was approximately 4.4%. | |||||||
The following summarizes the Company's maturities of borrowings at par value as of December 31, 2014 (in millions): | ||||||||
Due within 1 year | $ | 500 | ||||||
Due after 1 year through 2 years | 1,000.00 | |||||||
Due after 2 years through 3 years | 505.6 | |||||||
Due after 3 years through 4 years | 400 | |||||||
Due after 4 years through 5 years | 250 | |||||||
Due after 5 years | 1,074.90 | |||||||
The Company’s obligations with respect to its outstanding notes, as described below, rank equally. | ||||||||
Commercial Paper Program | ||||||||
Pursuant to the Company’s commercial paper program, the Company may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Company’s Revolving Credit Facility in excess of $150 million. The Commercial Paper Notes may have maturities of up to 397 days from date of issuance. The Company had no commercial paper borrowings outstanding as of December 31, 2014 and 2013. | ||||||||
Revolving Credit Facility | ||||||||
On September 23, 2011, the Company entered into a credit agreement which expires January 2017 providing for unsecured financing facilities in an aggregate amount of $1.65 billion, including a $250.0 million letter of credit sub-facility and a $150.0 million swing line sub-facility ("Revolving Credit Facility"). The Revolving Credit Facility contains certain covenants that, among other things, limit or restrict the Company’s ability to sell or transfer assets or merge or consolidate with another company, grant certain types of security interests, incur certain types of liens, impose restrictions on subsidiary dividends, enter into sale and leaseback transactions, or incur certain subsidiary level indebtedness, subject to certain exceptions. The Company is required to maintain compliance with a consolidated interest coverage ratio covenant. The Revolving Credit Facility supports borrowings under the Company’s $1.5 billion commercial paper program. | ||||||||
Interest due under the Revolving Credit Facility is fixed for the term of each borrowing and is payable according to the terms of that borrowing. Generally, interest is calculated using a selected LIBOR rate plus an interest rate margin of 110 basis points. A facility fee of 15 basis points is also payable quarterly on the total facility, regardless of usage. Both the interest rate margin and facility fee percentage are based on certain of the Company’s credit ratings. | ||||||||
As of and during the years ended December 31, 2014 and 2013, the Company had no outstanding borrowings under the Revolving Credit Facility. | ||||||||
Notes | ||||||||
On November 22, 2013, the Company issued $250.0 million of aggregate principal amount of unsecured notes due May 22, 2019 ("2019 Notes"). Interest with respect to the 2019 Notes is payable semi-annually in arrears on May 22 and November 22 of each year, beginning on May 22, 2014, based on the fixed per annum rate of 3.350%. The interest rate payable on the 2019 Notes will be increased if the debt rating assigned to the note is downgraded by an applicable credit rating agency, beginning at a downgrade below investment grade. However, in no event will the interest rate on the 2019 Notes be increased by more than 2.00% above 3.350% per annum. The interest rate payable on the 2019 Notes may also be adjusted downward for debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 3.350% per annum. The 2019 Notes are subject to covenants that, among other things, limit or restrict the ability of the Company to sell or transfer assets or merge or consolidate with another company, and limit or restrict the Company's and certain of its subsidiaries' ability to incur certain types of security interests, or enter into sale and leaseback transactions. The Company may redeem the 2019 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 30 basis points. | ||||||||
On August 22, 2013, the Company issued $250.0 million of aggregate principal amount of unsecured floating rate notes due August 21, 2015 ("2015 Floating Rate Notes"). Interest with respect to the 2015 Floating Rate Notes is payable quarterly in arrears on each February 21, May 21, August 21 and November 21, beginning November 21, 2013, at a per annum rate equal to the three-month LIBOR plus 1.0% (reset quarterly). The 2015 Floating Rate Notes are subject to covenants that, among other things, limit or restrict the ability of the Company to sell or transfer assets or merge or consolidate with another company, and limit or restrict the Company’s and certain of its subsidiaries’ ability to incur certain types of security interests, or enter into sale and leaseback transactions. | ||||||||
On December 10, 2012, the Company issued $250.0 million and $500.0 million of aggregate principal amounts of unsecured notes due December 10, 2015 ("2015 Fixed Rate Notes") and December 10, 2017 ("2017 Notes"), respectively. Interest with respect to the 2015 Fixed Rate Notes and 2017 Notes is payable semi-annually in arrears on June 10 and December 10 of each year, currently based on the per annum rates of 2.375% and 2.875%, respectively. The interest rates payable on the 2015 Fixed Rate Notes and 2017 Notes will be increased if the debt rating assigned to such notes is downgraded by an applicable credit rating agency, beginning at a downgrade below investment grade. However, in no event will the interest rate on either the 2015 Fixed Rate Notes or 2017 Notes be increased by more than 2.00% above 2.375% and 2.875% per annum, respectively. The interest rates on the 2015 Fixed Rate Notes and 2017 Notes may also be adjusted downward for debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 2.375% and 2.875% per annum. The 2015 Fixed Rate Notes and 2017 Notes are subject to covenants that, among other things, limit or restrict the ability of the Company to sell or transfer assets or merge or consolidate with another company, and limit or restrict the Company’s and certain of its subsidiaries’ ability to incur certain types of security interests, or enter into sale and leaseback transactions. The Company may redeem the 2015 Fixed Rate Notes and 2017 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 35 and 40 basis points, respectively. | ||||||||
On August 22, 2011, the Company issued $400.0 million of aggregate principal amount of unsecured notes due August 22, 2018 ("2018 Notes"). Interest with respect to the 2018 Notes is payable semi-annually in arrears on February 22 and August 22 of each year, based on the fixed per annum rate of 3.650%. The 2018 Notes are subject to covenants that, among other things, limit or restrict the ability of the Company to sell or transfer assets or merge or consolidate with another company, and limit or restrict the Company’s and certain of its subsidiaries’ ability to incur certain types of security interests, or enter into certain sale and leaseback transactions. The Company may redeem the 2018 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 35 basis points. | ||||||||
On March 7, 2011, the Company issued $300.0 million of aggregate principal amount of unsecured floating rate notes due March 7, 2013 ("2013 Notes"). Interest with respect to the 2013 Notes was payable quarterly in arrears on each March 7, June 7, September 7 and December 7, beginning June 7, 2011, at a per annum rate equal to the three-month LIBOR plus 58 basis points (reset quarterly). The 2013 Notes were redeemed upon maturity in March 2013. | ||||||||
On June 21, 2010, the Company issued $250.0 million of aggregate principal amount of unsecured notes due June 21, 2040 ("2040 Notes"). Interest with respect to the 2040 Notes is payable semi-annually on June 21 and December 21 each year based on the fixed per annum rate of 6.200%. The 2040 Notes are subject to covenants that, among other things, limit or restrict the Company’s and certain of its subsidiaries’ ability to grant certain types of security interests or enter into sale and leaseback transactions. The Company may redeem the 2040 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 30 basis points. | ||||||||
On March 30, 2010, the Company exchanged $303.7 million of aggregate principal amount of the 2011 Notes for unsecured notes due April 1, 2020 ("2020 Notes"). Interest with respect to the 2020 Notes is payable semi-annually on April 1 and October 1 each year based on the fixed per annum rate of 5.253%. In connection with the exchange, note holders were given a 7% premium ($21.2 million), which approximated market value at the exchange date, as additional principal. As this transaction was accounted for as a debt modification, this premium was not charged to expense. Rather, the premium, along with the offsetting hedge accounting adjustments, will be accreted into "Interest expense" over the life of the notes. The 2020 Notes are subject to covenants that, among other things, limit or restrict the Company’s and certain of its subsidiaries’ ability to grant certain types of security interests, incur debt (in the case of significant subsidiaries), or enter into sale and leaseback transactions. The Company may redeem the 2020 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 15 basis points. | ||||||||
The 2020 Notes were originally issued in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). On October 8, 2010, the Company exchanged the 2020 Notes for notes registered under the Securities Act, pursuant to the terms of a Registration Rights Agreement. | ||||||||
On February 26, 2009, the Company issued $500.0 million of aggregate principal amount of unsecured notes due February 26, 2014 ("2014 Notes"). Interest with respect to the 2014 Notes was payable semi-annually on February 26 and August 26 each year based on the fixed per annum rate of 6.500%. The 2014 Notes were redeemed upon maturity in February 2014. | ||||||||
On November 17, 2006, the Company issued $500.0 million aggregate principal amount of 6.200% Notes due 2036 ("2036 Notes"). Interest with respect to the 2036 Notes is payable semi-annually on May 17 and November 17 each year based on the fixed per annum rate of 6.200%. The 2036 Notes are subject to covenants that, among other things, limit or restrict the Company’s and certain of its subsidiaries’ ability to grant certain types of security interests, incur debt (in the case of significant subsidiaries), or enter into sale and leaseback transactions. The Company may redeem the 2036 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 25 basis points. | ||||||||
On September 29, 2006, the Company issued $1.0 billion of aggregate principal amount of unsecured notes maturing on October 1, 2016 ("2016 Notes"). Interest on the 2016 Notes is payable semi-annually on April 1 and October 1 each year based on a fixed per annum rate of 5.930%. The 2016 Notes are subject to covenants that, among other things, limit or restrict the Company’s and certain of its subsidiaries’ ability to grant certain types of security interests, incur debt (in the case of significant subsidiaries) or enter into sale and leaseback transactions. The Company may redeem the 2016 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 20 basis points. | ||||||||
Certain of the Company’s notes (the 2019 Notes, 2015 Floating Rate Notes, 2015 Fixed Rate Notes, 2017 Notes, and 2018 Notes) include a change of control triggering event provision, as defined in the terms of the notes. If a change of control triggering event occurs, holders of the notes may require the Company to repurchase some or all of their notes at a price equal to 101% of the principal amount of their notes, plus any accrued and unpaid interest. A change of control triggering event will occur when there is a change of control involving the Company and among other things, within a specified period in relation to the change of control, the notes are downgraded from an investment grade rating to below an investment grade rating by all three major credit rating agencies. |
Stock_Compensation_Plans
Stock Compensation Plans | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock Compensation Plans | Stock Compensation Plans | ||||||||||||
Stock Compensation Plans | |||||||||||||
The Western Union Company 2006 Long-Term Incentive Plan | |||||||||||||
The Western Union Company 2006 Long-Term Incentive Plan ("2006 LTIP") provides for the granting of stock options, restricted stock units, unrestricted stock awards and other equity-based awards to employees and others who perform services for the Company. A maximum of 120.0 million shares of common stock may be awarded under the 2006 LTIP, of which 37.5 million shares are available as of December 31, 2014. | |||||||||||||
Options granted under the 2006 LTIP are issued with exercise prices equal to the fair market value of Western Union common stock on the grant date, have 10-year terms, and typically vest over four equal annual increments beginning 12 months after the date of grant, with the exception of options granted to retirement eligible employees, which generally will vest on a prorated basis, upon termination. Compensation expense related to stock options is recognized over the requisite service period, which is the same as the vesting period. | |||||||||||||
Restricted stock units under the 2006 LTIP that were granted in 2014 typically vest over four equal annual increments beginning 12 months after the date of grant and restricted stock units granted prior to 2014 typically become 100% vested on the three year anniversary of the grant date. Restricted stock units granted to retirement eligible employees generally vest on a prorated basis upon termination. The fair value of the awards granted is measured based on the fair value of the shares on the date of grant. Certain share unit grants do not provide for the payment of dividend equivalents. For those grants, the value of the grants is reduced by the net present value of the foregone dividend equivalent payments. The related compensation expense is recognized over the requisite service period, which is the same as the vesting period. | |||||||||||||
The compensation committee of the Company's Board of Directors has granted the Company's executives and other certain key employees long-term incentive awards under the 2006 LTIP, which in 2014 consisted of 80% performance-based restricted stock unit awards and 20% stock option awards and in 2013 consisted of approximately two-thirds performance-based restricted stock unit awards and approximately one-third stock option awards. The compensation committee granted the remaining non-executive employees of the Company participating in the 2006 LTIP (other than those non-executive employees receiving the performance-based restricted stock units described above) annual equity grants consisting solely of restricted stock units for 2014 and in 2013 consisting of two-thirds restricted stock units and one-third stock option awards, or all restricted stock units depending on their employment grade level. | |||||||||||||
The performance-based restricted stock units granted in 2014 are restricted stock units, primarily granted to the Company's executives and consist of two separate awards. The first award consists of performance-based restricted stock units, which require the Company to meet certain financial objectives during 2014, 2015 and 2016. The second award consists of performance-based restricted stock units with a market condition tied to the Company's total shareholder return in relation to the S&P 500 index as calculated over a three-year performance period (2014 through 2016). The actual number of performance-based restricted stock units that the recipients will receive for the 2014 awards will range from 0% up to 150% of the target number of stock units granted based on actual financial and total shareholder return performance results. The performance-based restricted stock units granted in 2013, primarily granted to the Company's executives, are restricted stock units with both performance and market conditions, which require certain financial objectives to be met during 2013 and 2014 plus an additional vesting period and are subject to a payout modifier based on the Company's relative total shareholder return in relation to the S&P 500 index as calculated over a three year performance period (2013 through 2015). The grant date fair value of the performance-based restricted stock units is fixed and the amount of restricted stock units released depends upon certain financial and/or total shareholder return performance objectives being met over the performance period. The fair value of the performance-based restricted stock units tied solely to performance conditions is measured similar to the restricted stock units discussed above, while the fair value of the performance-based restricted stock units that are tied to a market condition are determined using the Monte-Carlo simulation model. Unlike the performance-based awards tied solely to performance conditions, compensation costs related to awards with market conditions are recognized regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. | |||||||||||||
In 2012, the Company started granting bonus stock units out of the 2006 LTIP to the non-employee directors of the Company. Since bonus stock units vest immediately, compensation expense is recognized on the date of grant based on the fair value of the awards when granted. These awards may be settled immediately unless the participant elects to defer the receipt of common shares under the applicable plan rules. Prior to making equity grants to non-employee directors out of the 2006 LTIP, the Company granted non-employee directors of the Company options and unrestricted stock units out of the 2006 Non-Employee Director Equity Compensation Plan, which was fully utilized in 2013. | |||||||||||||
Stock Option Activity | |||||||||||||
A summary of Western Union stock option activity for the year ended December 31, 2014 was as follows (options and aggregate intrinsic value in millions): | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||
Options | Weighted-Average | Weighted-Average Remaining | |||||||||||
Exercise Price | Contractual Term | Aggregate | |||||||||||
(Years) | Intrinsic | ||||||||||||
Value | |||||||||||||
Outstanding as of January 1 | 23.8 | $ | 18.05 | ||||||||||
Granted | 0.9 | $ | 16.01 | ||||||||||
Exercised | (1.1 | ) | $ | 14.11 | |||||||||
Cancelled/forfeited | (7.2 | ) | $ | 18.94 | |||||||||
Outstanding as of December 31 | 16.4 | $ | 17.8 | 4.7 | $ | 20.7 | |||||||
Options exercisable as of December 31 | 12.5 | $ | 18.5 | 3.6 | $ | 10.9 | |||||||
The Company received $14.2 million, $28.6 million and $51.9 million in cash proceeds related to the exercise of stock options during the years ended December 31, 2014, 2013 and 2012, respectively. Upon the exercise of stock options, shares of common stock are issued from authorized common shares. | |||||||||||||
The Company realized total tax benefits during the years ended December 31, 2014, 2013 and 2012 from stock option exercises of $0.9 million, $1.3 million and $1.2 million, respectively. | |||||||||||||
The total intrinsic value of stock options exercised during the years ended December 31, 2014, 2013 and 2012 was $3.5 million, $4.2 million and $5.1 million, respectively. | |||||||||||||
Restricted Stock Activity | |||||||||||||
A summary of Western Union activity for restricted stock units and performance-based restricted stock units for the year ended December 31, 2014 is listed below (units in millions): | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||
Number | Weighted-Average | ||||||||||||
Outstanding | Grant-Date Fair Value | ||||||||||||
Non-vested as of January 1 | 6.3 | $ | 15.69 | ||||||||||
Granted | 3.6 | $ | 14.74 | ||||||||||
Vested | -1.4 | $ | 19.27 | ||||||||||
Forfeited | -0.9 | $ | 14.57 | ||||||||||
Non-vested as of December 31 | 7.6 | $ | 14.68 | ||||||||||
Stock-Based Compensation | |||||||||||||
The following table sets forth the total impact on earnings for stock-based compensation expense recognized in the Consolidated Statements of Income resulting from stock options, restricted stock units, performance-based restricted stock units and bonus stock units for the years ended December 31, 2014, 2013 and 2012 (in millions, except per share data). | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock-based compensation expense | $ | (39.7 | ) | $ | (34.5 | ) | $ | (34.0 | ) | ||||
Income tax benefit from stock-based compensation expense | 11.5 | 10 | 10 | ||||||||||
Net income impact | $ | (28.2 | ) | $ | (24.5 | ) | $ | (24.0 | ) | ||||
Earnings per share: | |||||||||||||
Basic and Diluted | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
As of December 31, 2014, there was $8.2 million of total unrecognized compensation cost, net of assumed forfeitures, related to non-vested stock options which is expected to be recognized over a weighted-average period of 2.1 years, and there was $45.7 million of total unrecognized compensation cost, net of assumed forfeitures, related to non-vested restricted stock units and performance-based restricted stock units which is expected to be recognized over a weighted-average period of 2.3 years. | |||||||||||||
Fair Value Assumptions | |||||||||||||
The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted. | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock options granted: | |||||||||||||
Weighted-average risk-free interest rate | 1.9 | % | 1.2 | % | 1.2 | % | |||||||
Weighted-average dividend yield | 3.1 | % | 3.7 | % | 1.8 | % | |||||||
Volatility | 33.8 | % | 35.3 | % | 33.2 | % | |||||||
Expected term (in years) | 6.09 | 6.09 | 6.09 | ||||||||||
Weighted-average grant date fair value | $ | 3.95 | $ | 3.2 | $ | 4.9 | |||||||
Risk-free interest rate - The risk-free rate for stock options granted during the period is determined by using a United States Treasury rate for the period that coincided with the expected terms listed above. | |||||||||||||
Expected dividend yield - The Company's expected annual dividend yield is the calculation of the annualized Western Union dividend divided by an average Western Union stock price on each respective grant date. | |||||||||||||
Expected volatility - For the Company's executives and non-employee directors, the expected volatility for the 2014, 2013 and 2012 grants was 33.8%, 35.3% and 33.2%, respectively. The expected volatility for the Company's non-executive employees was 35.2% and 33.2% for the 2013 and 2012 grants, respectively. There were no options granted to non-executive employees in 2014. The Company used a blend of implied and historical volatility. The Company's implied volatility was calculated using the market price of traded options on Western Union's common stock and the historical volatility of Western Union stock data. | |||||||||||||
Expected term - For 2014, 2013 and 2012, Western Union's expected term for all employees was approximately 6 years. The Company's expected term of options was based upon, among other things, historical exercises, the vesting term of the Company's options and the options' contractual term of ten years. | |||||||||||||
The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and the Company's historical experience and future expectations. The calculated fair value is recognized as compensation cost in the Company's consolidated financial statements over the requisite service period of the entire award. Compensation cost is recognized only for those options expected to vest, with forfeitures estimated at the date of grant and evaluated and adjusted periodically to reflect the Company's historical experience and future expectations. Any change in the forfeiture assumption is accounted for as a change in estimate, with the cumulative effect of the change on periods previously reported being reflected in the consolidated financial statements of the period in which the change is made. In the future, as more historical data is available to calculate the volatility of Western Union stock and the actual terms Western Union employees hold options, expected volatility and expected term may change which could change the grant-date fair value of future stock option awards and, ultimately, the recorded compensation expense. |
Segments
Segments | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Segments | Segments | |||||||||||
As previously described in Note 1, the Company classifies its businesses into three segments: Consumer-to-Consumer, Consumer-to-Business and Business Solutions. 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 Company's Chief Operating Decision Maker ("CODM") in deciding where to allocate resources and in assessing performance. | ||||||||||||
The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The Company's money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world. The segment includes five geographic regions whose functions are limited to generating, managing and maintaining agent relationships and localized marketing activities and also includes the Company's online money transfer service conducted through Western Union branded websites ("westernunion.com"). By means of common processes and systems, these regions and westernunion.com create an interconnected network for consumer transactions, thereby constituting one global Consumer-to-Consumer money transfer business and one operating segment. | ||||||||||||
The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. | ||||||||||||
The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. | ||||||||||||
All businesses that have not been classified in the above segments are reported as "Other" and include the Company's money order and other services. | ||||||||||||
The Company's reportable segments are reviewed separately below because each reportable segment represents a strategic business unit that offers different products and serves different markets. The business segment measurements provided to, and evaluated by, the Company's CODM are computed in accordance with the following principles: | ||||||||||||
• | The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. | |||||||||||
• | Corporate and other overhead is allocated to the segments primarily based on a percentage of the segments' revenue compared to total revenue. | |||||||||||
• | Costs incurred for the review and closing of acquisitions are included in "Other." | |||||||||||
• | All items not included in operating income are excluded from the segments. | |||||||||||
The following tables present the Company's reportable segment results for the years ended December 31, 2014, 2013 and 2012, respectively (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenues: | ||||||||||||
Consumer-to-Consumer: | ||||||||||||
Transaction fees | $ | 3,421.80 | $ | 3,396.10 | $ | 3,545.60 | ||||||
Foreign exchange revenues | 998.9 | 981.3 | 988.5 | |||||||||
Other revenues | 65.1 | 56.2 | 50.2 | |||||||||
4,485.80 | 4,433.60 | 4,584.30 | ||||||||||
Consumer-to-Business: | ||||||||||||
Transaction fees | 572.7 | 579.1 | 573.6 | |||||||||
Foreign exchange and other revenues | 26.1 | 29.4 | 30.3 | |||||||||
598.8 | 608.5 | 603.9 | ||||||||||
Business Solutions: | ||||||||||||
Foreign exchange revenues | 363.1 | 355.5 | 332 | |||||||||
Transaction fees and other revenues | 41.5 | 37.4 | 35.4 | |||||||||
404.6 | 392.9 | 367.4 | ||||||||||
Other: | ||||||||||||
Total revenues | 118 | 107 | 109.2 | |||||||||
Total consolidated revenues | $ | 5,607.20 | $ | 5,542.00 | $ | 5,664.80 | ||||||
Operating income/(loss): | ||||||||||||
Consumer-to-Consumer | $ | 1,050.40 | $ | 1,030.40 | $ | 1,266.90 | ||||||
Consumer-to-Business | 98.7 | 121.9 | 137.6 | |||||||||
Business Solutions (a) | (12.1 | ) | (27.0 | ) | (54.8 | ) | ||||||
Other | 3.5 | (17.9 | ) | (19.7 | ) | |||||||
Total consolidated operating income | $ | 1,140.50 | $ | 1,107.40 | $ | 1,330.00 | ||||||
____________________ | ||||||||||||
(a) | During the years ended December 31, 2013 and 2012, the Company incurred $19.3 million and $42.8 million, respectively, of integration expenses related to the acquisition of Travelex Global Business Payments ("TGBP"), which was acquired in November 2011. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition, which are included in Other. | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Assets: | ||||||||||||
Consumer-to-Consumer | $ | 5,049.70 | $ | 5,321.90 | $ | 4,854.20 | ||||||
Consumer-to-Business | 1,060.20 | 1,129.90 | 1,029.60 | |||||||||
Business Solutions | 2,430.70 | 2,256.40 | 2,012.60 | |||||||||
Other | 1,349.80 | 1,413.10 | 1,569.30 | |||||||||
Total assets | $ | 9,890.40 | $ | 10,121.30 | $ | 9,465.70 | ||||||
Depreciation and amortization: | ||||||||||||
Consumer-to-Consumer | $ | 191.5 | $ | 179.4 | $ | 158.2 | ||||||
Consumer-to-Business | 17.3 | 15.8 | 14.7 | |||||||||
Business Solutions | 56.1 | 59.6 | 65.7 | |||||||||
Other | 7 | 8 | 7.5 | |||||||||
Total consolidated depreciation and amortization | $ | 271.9 | $ | 262.8 | $ | 246.1 | ||||||
Capital expenditures: | ||||||||||||
Consumer-to-Consumer | $ | 132.1 | $ | 174 | $ | 219.1 | ||||||
Consumer-to-Business | 27.3 | 36.9 | 21.8 | |||||||||
Business Solutions | 13 | 14.8 | 16.1 | |||||||||
Other | 6.6 | 15.6 | 11.2 | |||||||||
Total capital expenditures | $ | 179 | $ | 241.3 | $ | 268.2 | ||||||
Information concerning principal geographic areas was as follows (in millions): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 1,564.60 | $ | 1,523.70 | $ | 1,593.10 | ||||||
International | 4,042.60 | 4,018.30 | 4,071.70 | |||||||||
Total | $ | 5,607.20 | $ | 5,542.00 | $ | 5,664.80 | ||||||
Long-lived assets: | ||||||||||||
United States | $ | 158.1 | $ | 156.6 | $ | 148.2 | ||||||
International | 48.3 | 53.3 | 47.9 | |||||||||
Total | $ | 206.4 | $ | 209.9 | $ | 196.1 | ||||||
The Consumer-to-Consumer geographic split is determined based upon the region where the money transfer is initiated and the region where the money transfer is paid. For transactions originated and paid in different regions, the Company splits the revenue between the two regions, with each region receiving 50%. For money transfers initiated and paid in the same region, 100% of the revenue is attributed to that region. The geographic split of revenue above for the Consumer-to-Business and Business Solutions segments is based upon the country where the transaction is initiated with 100% of the revenue allocated to that country. Long-lived assets, consisting of "Property and equipment, net," are presented based upon the location of the assets. | ||||||||||||
Based on the method used to attribute revenue between countries described in the paragraph above, each individual country outside the United States accounted for less than 10% of consolidated revenue for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, each individual agent, Consumer-to-Business, or Business Solutions customer accounted for less than 10% of consolidated revenue during these periods. |
Quarterly_Financial_Informatio
Quarterly Financial Information (Unaudited) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) | ||||||||||||||||||||
Summarized quarterly results for the years ended December 31, 2014 and 2013 were as follows (in millions, except per share data): | |||||||||||||||||||||
2014 by Quarter: | Q1 | Q2 | Q3 | Q4 | Year Ended December 31, 2014 | ||||||||||||||||
Revenues | $ | 1,350.80 | $ | 1,405.60 | $ | 1,440.90 | $ | 1,409.90 | $ | 5,607.20 | |||||||||||
Expenses (a) | 1,078.80 | 1,127.30 | 1,126.80 | 1,133.80 | 4,466.70 | ||||||||||||||||
Operating income | 272 | 278.3 | 314.1 | 276.1 | 1,140.50 | ||||||||||||||||
Other expense, net | 44.6 | 46.2 | 41.3 | 40.2 | 172.3 | ||||||||||||||||
Income before income taxes | 227.4 | 232.1 | 272.8 | 235.9 | 968.2 | ||||||||||||||||
Provision for income taxes | 24.4 | 38.3 | 38.7 | 14.4 | 115.8 | ||||||||||||||||
Net income | $ | 203 | $ | 193.8 | $ | 234.1 | $ | 221.5 | $ | 852.4 | |||||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.37 | $ | 0.36 | $ | 0.44 | $ | 0.42 | $ | 1.6 | |||||||||||
Diluted | $ | 0.37 | $ | 0.36 | $ | 0.44 | $ | 0.42 | $ | 1.59 | |||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||
Basic | 545.9 | 537.1 | 527.8 | 522.8 | 533.4 | ||||||||||||||||
Diluted | 549.2 | 539.9 | 531.2 | 526.9 | 536.8 | ||||||||||||||||
(a) | Includes $30.3 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||||
2013 by Quarter: | Q1 | Q2 | Q3 | Q4 | Year Ended December 31, 2013 | ||||||||||||||||
Revenues | $ | 1,325.40 | $ | 1,385.90 | $ | 1,408.80 | $ | 1,421.90 | $ | 5,542.00 | |||||||||||
Expenses (b) (c) | 1,028.50 | 1,109.10 | 1,113.50 | 1,183.50 | 4,434.60 | ||||||||||||||||
Operating income | 296.9 | 276.8 | 295.3 | 238.4 | 1,107.40 | ||||||||||||||||
Other expense, net | 46.7 | 44.6 | 43.6 | 45.6 | 180.5 | ||||||||||||||||
Income before income taxes | 250.2 | 232.2 | 251.7 | 192.8 | 926.9 | ||||||||||||||||
Provision for income taxes | 38.2 | 33.6 | 37.3 | 19.4 | 128.5 | ||||||||||||||||
Net income | $ | 212 | $ | 198.6 | $ | 214.4 | $ | 173.4 | $ | 798.4 | |||||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.37 | $ | 0.36 | $ | 0.39 | $ | 0.31 | $ | 1.43 | |||||||||||
Diluted | $ | 0.37 | $ | 0.36 | $ | 0.39 | $ | 0.31 | $ | 1.43 | |||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||
Basic | 567.6 | 555.7 | 552.1 | 551.2 | 556.6 | ||||||||||||||||
Diluted | 569.7 | 558.3 | 555.8 | 555 | 559.7 | ||||||||||||||||
____________ | |||||||||||||||||||||
(b) | Includes $3.9 million in the first quarter, $6.2 million in the second quarter, $3.8 million in the third quarter, and $5.4 million in the fourth quarter of integration expenses related to the acquisition of TGBP. | ||||||||||||||||||||
(c) | Includes $4.2 million in the first quarter, $13.5 million in the second quarter, $6.2 million in the third quarter, and $33.0 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. |
Schedule_I_Condensed_Financial
Schedule I - Condensed Financial Information of the Registrant | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||
Condensed Financial Information of the Registrant | SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT | |||||||||||
The following lists the condensed financial information for the parent company as of December 31, 2014 and 2013 and statements of income and comprehensive income and cash flows for each of the three years in the period ended December 31, 2014. | ||||||||||||
THE WESTERN UNION COMPANY | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
(PARENT COMPANY ONLY) | ||||||||||||
(in millions, except per share amounts) | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Assets | ||||||||||||
Cash and cash equivalents | $ | 144.2 | $ | 151.4 | ||||||||
Property and equipment, net of accumulated depreciation of $19.1 and $17.0, respectively | 40.9 | 41 | ||||||||||
Other assets | 46.5 | 160.4 | ||||||||||
Investment in subsidiaries | 6,083.10 | 5,534.10 | ||||||||||
Total assets | $ | 6,314.70 | $ | 5,886.90 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Liabilities: | ||||||||||||
Accounts payable and accrued liabilities | $ | 56.1 | $ | 76.8 | ||||||||
Income taxes payable | 59.7 | 76.3 | ||||||||||
Payable to subsidiaries, net | 1,181.30 | 413.2 | ||||||||||
Borrowings | 3,714.80 | 4,207.30 | ||||||||||
Other liabilities | 2.4 | 8.6 | ||||||||||
Total liabilities | 5,014.30 | 4,782.20 | ||||||||||
Stockholders’ equity: | ||||||||||||
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued | — | — | ||||||||||
Common stock, $0.01 par value; 2,000 shares authorized; 521.5 shares and 548.8 shares issued and outstanding as of December 31, 2014 and 2013, respectively | 5.2 | 5.5 | ||||||||||
Capital surplus | 445.4 | 390.9 | ||||||||||
Retained earnings | 968.7 | 877.3 | ||||||||||
Accumulated other comprehensive loss | (118.9 | ) | (169.0 | ) | ||||||||
Total stockholders’ equity | 1,300.40 | 1,104.70 | ||||||||||
Total liabilities and stockholders’ equity | $ | 6,314.70 | $ | 5,886.90 | ||||||||
See Notes to Condensed Financial Statements. | ||||||||||||
THE WESTERN UNION COMPANY | ||||||||||||
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||||||||||
(PARENT COMPANY ONLY) | ||||||||||||
(in millions) | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenues | $ | — | $ | — | $ | — | ||||||
Expenses | — | — | — | |||||||||
Operating income | — | — | — | |||||||||
Interest income | 0.6 | 0.4 | 0.2 | |||||||||
Interest expense | (176.5 | ) | (195.7 | ) | (178.6 | ) | ||||||
Loss before equity in earnings of affiliates and income taxes | (175.9 | ) | (195.3 | ) | (178.4 | ) | ||||||
Equity in earnings of affiliates, net of tax | 960.8 | 919 | 1,136.10 | |||||||||
Income tax benefit | 67.5 | 74.7 | 68.2 | |||||||||
Net income | 852.4 | 798.4 | 1,025.90 | |||||||||
Other comprehensive income, net of tax | 2.2 | 2.2 | 2 | |||||||||
Other comprehensive income/(loss) of affiliates, net of tax | 47.9 | (18.6 | ) | (36.1 | ) | |||||||
Comprehensive income | $ | 902.5 | $ | 782 | $ | 991.8 | ||||||
See Notes to Condensed Financial Statements. | ||||||||||||
THE WESTERN UNION COMPANY | ||||||||||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||||
(PARENT COMPANY ONLY) | ||||||||||||
(in millions) | ||||||||||||
For the Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net cash provided by operating activities | $ | 380.8 | $ | 689.1 | $ | 228.3 | ||||||
Cash flows from investing activities | ||||||||||||
Purchases of property and equipment | (5.7 | ) | (8.5 | ) | (3.3 | ) | ||||||
Capital contributed to subsidiaries | (4.2 | ) | — | — | ||||||||
Purchases of non-settlement related investments | — | (100.0 | ) | — | ||||||||
Proceeds from sale of non-settlement related investments | 100.2 | — | — | |||||||||
Net cash provided by/(used in) investing activities | 90.3 | (108.5 | ) | (3.3 | ) | |||||||
Cash flows from financing activities | ||||||||||||
Advances from/(to) subsidiaries, net | 768.1 | (362.2 | ) | 679.1 | ||||||||
Net proceeds from issuance of borrowings | — | 497.3 | 742.8 | |||||||||
Principal payments on borrowings | (500.0 | ) | (300.0 | ) | — | |||||||
Net repayments of commercial paper | — | — | (297.0 | ) | ||||||||
Proceeds from exercise of options | 14.2 | 28.9 | 53.4 | |||||||||
Cash dividends paid | (265.2 | ) | (277.2 | ) | (254.2 | ) | ||||||
Common stock repurchased | (495.4 | ) | (399.7 | ) | (766.5 | ) | ||||||
Net cash provided by/(used in) financing activities | (478.3 | ) | (812.9 | ) | 157.6 | |||||||
Net change in cash and cash equivalents | (7.2 | ) | (232.3 | ) | 382.6 | |||||||
Cash and cash equivalents at beginning of year | 151.4 | 383.7 | 1.1 | |||||||||
Cash and cash equivalents at end of year | $ | 144.2 | $ | 151.4 | $ | 383.7 | ||||||
See Notes to Condensed Financial Statements. | ||||||||||||
CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT | ||||||||||||
THE WESTERN UNION COMPANY | ||||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||||
1. Basis of Presentation | ||||||||||||
The Western Union Company (the "Parent") is a holding company that conducts substantially all of its business operations through its subsidiaries. Under a parent company only presentation, the Parent's investments in its consolidated subsidiaries are presented under the equity method of accounting, and the condensed financial statements do not present the financial statements of the Parent and its subsidiaries on a consolidated basis. These financial statements should be read in conjunction with The Western Union Company's consolidated financial statements. | ||||||||||||
2. Restricted Net Assets | ||||||||||||
Certain assets of the Parent's subsidiaries totaling approximately $300 million constitute restricted net assets, as there are legal or regulatory limitations on transferring such assets outside of the countries where the respective assets are located. Additionally, certain of the Parent's subsidiaries must meet minimum capital requirements in some countries in order to maintain operating licenses. | ||||||||||||
3. Related Party Transactions | ||||||||||||
On October 1, 2012, the Parent issued a promissory note payable to its 100% owned subsidiary First Financial Management Corporation in the amount of $268.2 million in exchange for funds distributed to the Parent. The promissory note is due on June 30, 2015, bears interest at the fixed rate of 0.23% per annum, and may be repaid at any time without penalty. The promissory note is included within "Payable to subsidiaries, net" in the Condensed Balance Sheets as of December 31, 2014 and 2013. | ||||||||||||
On June 1, 2014, the Parent issued a promissory note payable to its 100% owned subsidiary First Financial Management Corporation in the amount of $65.0 million in exchange for funds distributed to the Parent. The promissory note is due on February 28, 2017, bears interest at the fixed rate of 0.33% per annum, and may be repaid at any time without penalty. The promissory note is included within "Payable to subsidiaries, net" in the Condensed Balance Sheets as of December 31, 2014. | ||||||||||||
On August 2, 2014, the Parent entered into a credit agreement (the "Facility") with its 100% owned subsidiary Custom House Holdings (USA), Ltd., which expires August 2, 2034, providing for unsecured financing facilities in an aggregate amount of $700.0 million. As of December 31, 2014, $506.3 million of borrowings were outstanding under the Facility. The interest rate applicable for outstanding borrowings under the Facility is the six-month LIBOR rate set on the first day of the calendar year, which was 0.35% for the year ended December 31, 2014. Outstanding borrowings under the Facility are included within "Payable to subsidiaries, net" in the Condensed Balance Sheets as of December 31, 2014. | ||||||||||||
Excess cash generated from operations of the Parent's subsidiaries that is not required to meet certain regulatory requirements is paid periodically to the Parent and is also included within "Payable to subsidiaries, net" in the Condensed Balance Sheets as of December 31, 2014 and 2013. The Parent's subsidiaries also periodically distribute excess cash balances to the Parent in the form of a dividend, although the amounts of such dividends may vary from year to year. | ||||||||||||
The Parent files a consolidated United States federal income tax return, and also a number of consolidated state income tax returns on behalf of its subsidiaries. In these circumstances, the Parent is responsible for remitting income tax payments on behalf of the consolidated group. The Parent's provision for income taxes has been computed as if it were a separate tax-paying entity. | ||||||||||||
4. Commitments and Contingencies | ||||||||||||
The Parent had $3.5 million in outstanding letters of credit and bank guarantees as of December 31, 2014 with expiration dates through 2015. The letters of credit and bank guarantees are primarily held in connection with certain agent agreements. The Company expects to renew the letters of credit and bank guarantees prior to expiration in most circumstances. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation | |
The financial statements in this Annual Report on Form 10-K are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated. | ||
Consistent with industry practice, the accompanying Consolidated Balance Sheets are unclassified due to the short-term nature of the Company's settlement obligations contrasted with the Company's ability to invest cash awaiting settlement in long-term investment securities. | ||
Use of Estimates | Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. | ||
Principles of Consolidation | Principles of Consolidation | |
The Company consolidates financial results when it has both the power to direct the activities of an entity that most significantly impact the entity's economic performance and the ability to absorb losses or the right to receive benefits of the entity that could potentially be significant to the entity. The Company utilizes the equity method of accounting when it is able to exercise significant influence over the entity's operations, which generally occurs when the Company has an ownership interest of between 20% and 50% in an entity. | ||
Earnings Per Share | 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. Outstanding options to purchase Western Union stock and 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 period, and therefore, reduce the dilutive effect. | ||
Fair Value Measurements | Fair Value Measurements | |
The Company determines the fair values of its assets and liabilities that are recognized or disclosed at fair value in accordance with the hierarchy described below. The fair values of the assets and liabilities held in the Company's defined benefit plan trust ("Trust") are recognized or disclosed utilizing the same hierarchy. The following three levels of inputs may be used to measure fair value: | ||
• | Level 1: Quoted prices in active markets for identical assets or liabilities. | |
• | Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For most of these assets, the Company utilizes pricing services that use multiple prices as inputs to determine daily market values. In addition, the Trust has other investments that fall within Level 2 that are valued at net asset value which is not quoted on an active market; however, the unit price is based on underlying investments which are traded on an active market. The individual redemption restrictions of Trust investments measured at net asset value are also considered when determining whether Level 2 classification is appropriate. | |
• | Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include items where the determination of fair value requires significant management judgment or estimation. The Company has Level 3 assets that are recognized and disclosed at fair value on a non-recurring basis related to the Company's business combinations, where the values of the intangible assets and goodwill acquired in a purchase are derived utilizing one of the three recognized approaches: the market approach, the income approach or the cost approach. | |
Carrying amounts for many of the Company's financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and settlement obligations approximate fair value due to their short maturities. Investment securities and derivative financial instruments are carried at fair value and included in Note 8. Fixed rate notes are carried at their original issuance values as adjusted over time to accrete that value to par, except for portions of notes hedged by interest rate swap agreements as disclosed in Note 14. The fair values of fixed rate notes are also disclosed in Note 8 and are based on market quotations. For more information on the fair value of financial instruments, see Note 8. | ||
The fair values of non-financial assets and liabilities related to the Company's business combinations are disclosed in Note 4. The fair values of financial assets and liabilities related to the Trust are disclosed in Note 11. | ||
Business Combinations | Business Combinations | |
The Company accounts for all business combinations where control over another entity is obtained using the acquisition method of accounting, which requires that most assets (both tangible and intangible), liabilities (including contingent consideration), and remaining noncontrolling interests be recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets less liabilities and noncontrolling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or noncontrolling interests made subsequent to the acquisition date, but within the measurement period, which is one year or less, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is remeasured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and existing book value. Results of operations of the acquired company are included in the Company's results from the date of the acquisition forward and include amortization expense arising from acquired intangible assets. The Company expenses all costs as incurred related to or involved with an acquisition in "Selling, general and administrative" expenses. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents | |
Highly liquid investments (other than those included in settlement assets) with maturities of three months or less at the date of purchase (that are readily convertible to cash) are considered to be cash equivalents and are stated at cost, which approximates fair value. | ||
The Company maintains cash and cash equivalent balances with various financial institutions, including a portion in money market funds. The Company limits the concentration of its cash and cash equivalents with any one institution. The Company regularly reviews investment concentrations and credit worthiness of these institutions, and has relationships with a globally diversified list of banks and financial institutions. | ||
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts | |
The Company records an allowance for doubtful accounts when it is probable that the related receivable balance will not be collected based on its history of collection experience, known collection issues, such as agent suspensions and bankruptcies, and other matters the Company identifies in its routine collection monitoring. | ||
Settlement Assets and Obligations | Settlement Assets and Obligations | |
Settlement assets represent funds received or to be received from agents for unsettled money transfers, money orders and consumer payments. The Company 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, customers for the value of their cross-currency payment transactions related to the Business Solutions segment. | ||
Settlement assets consist of cash and cash equivalents, receivables from selling agents and Business Solutions customers, and investment securities. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Cash equivalents consist of short-term time deposits, commercial paper and other highly liquid investments. Receivables from selling agents represent funds collected by such agents, but in transit to the Company. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. In addition, the Company performs ongoing credit evaluations of its agents' financial condition and credit worthiness. See Note 7 for information concerning the Company's investment securities. | ||
Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business Solutions segment. Receivables occur when funds have been paid out to a beneficiary but not yet received from the customer. Aside from these receivables, the credit risk associated with spot foreign currency exchange contracts is largely mitigated, as in most cases the Company requires the receipt of funds from customers before releasing the associated cross-currency payment. | ||
Settlement obligations consist of money transfer, money order and payment service payables and payables to agents. Money transfer payables represent amounts to be paid to transferees when they request their funds. Most agents typically settle with transferees first and then obtain reimbursement from the Company. Money order payables represent amounts not yet presented for payment. Payment service payables represent amounts to be paid to utility companies, auto finance companies, mortgage servicers, financial service providers, government agencies and others. Due to the agent funding and settlement process, payables to agents represent amounts due to agents for money transfers that have been settled with transferees. | ||
Property and Equipment | Property and Equipment | |
Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the lesser of the estimated life of the related assets (generally three to 10 years for equipment and furniture and fixtures, and 30 years for buildings) or the lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are charged to expense as incurred. | ||
Goodwill | Goodwill | |
Goodwill represents the excess of purchase price over the fair value of tangible and other intangible assets acquired, less liabilities assumed arising from business combinations. | ||
Other Intangible Assets | Other Intangible Assets | |
Other intangible assets primarily consist of acquired contracts, contract costs (primarily amounts paid to agents in connection with establishing and renewing long-term contracts) and software. Other intangible assets are amortized on a straight-line basis over the length of the contract or benefit periods. Included in the Consolidated Statements of Income is amortization expense of $205.3 million, $198.6 million and $184.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||
Acquired contracts include customer and contractual relationships and networks of subagents that are recognized in connection with the Company's acquisitions. | ||
The Company capitalizes initial payments for new and renewed agent contracts to the extent recoverable through future operations or penalties in the case of early termination. The Company's accounting policy is to limit the amount of capitalized costs for a given contract to the lesser of the estimated future cash flows from the contract or the termination fees the Company would receive in the event of early termination of the contract. | ||
The Company purchases and develops software that is used in providing services and in performing administrative functions. Software development costs are capitalized once technological feasibility of the software has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed all planning and designing activities that are necessary to determine that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is available for general use. Software development costs and purchased software are generally amortized over a term of three to five years. | ||
Other intangible assets are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. In such reviews, estimated undiscounted cash flows associated with these assets or operations are compared with their carrying values to determine if a write-down to fair value (normally measured by the present value technique) is required. | ||
Revenue Recognition | Revenue Recognition | |
The Company's revenues are primarily derived from consumer money transfer transaction fees that are based on the principal amount of the money transfer and the locations from and to which funds are transferred. The Company also offers several payments services, including payments from consumers or businesses to other businesses. Transaction fees are set by the Company and recorded as revenue at the time of sale. | ||
In certain consumer money transfer and Business Solutions transactions involving different send and receive currencies, the Company generates revenue based on the difference between the exchange rate set by the Company to the consumer or business and the rate at which the Company or its agents are able to acquire the currency. This foreign exchange revenue is recorded at the time the related consumer money transfer transaction fee revenue is recognized or at the time a customer initiates a transaction through the Company's Business Solutions payment service operations. | ||
Cost of Services | Cost of Services | |
Cost of services primarily consists of agent commissions and expenses for call centers, settlement operations and related information technology costs. Expenses within these functions include personnel, software, equipment, telecommunications, bank fees, depreciation, amortization and other expenses incurred in connection with providing money transfer and other payment services. | ||
Advertising Costs | Advertising Costs | |
Advertising costs are charged to operating expenses as incurred. | ||
Income Taxes | Income Taxes | |
The Company accounts for income taxes under the liability method, which requires that deferred tax assets and liabilities be determined based on the expected future income tax consequences of events that have been recognized in the consolidated financial statements. Deferred tax assets and liabilities are recognized based on temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. The Company assesses the realizability of its deferred tax assets. A valuation allowance must be established when, based upon available evidence, it is more likely than not that all or a portion of the deferred tax assets will not be realized. | ||
The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. | ||
Foreign Currency Translation | Foreign Currency Translation | |
The United States dollar is the functional currency for substantially all of the Company's businesses. Revenues and expenses are translated at average exchange rates prevailing during the period. Foreign currency denominated assets and liabilities for those businesses for which the local currency is the functional currency are translated into United States dollars based on exchange rates at the end of the year. The effects of foreign exchange gains and losses arising from the translation of assets and liabilities of these businesses are included as a component of "Accumulated other comprehensive loss" in the accompanying Consolidated Balance Sheets. Foreign currency denominated monetary assets and liabilities of businesses for which the United States dollar is the functional currency are remeasured based on exchange rates at the end of the period, and the resulting remeasurement gains and losses are recognized in net income. Non-monetary assets and liabilities of these operations are remeasured at historical rates in effect when the asset was recognized or the liability was incurred. | ||
Derivatives | Derivatives | |
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 Solutions payments by writing derivatives to customers. The Company recognizes all derivatives in the "Other assets" and "Other liabilities" captions in the accompanying Consolidated Balance Sheets at their fair value. All cash flows associated with derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows. | ||
• | Cash Flow hedges - Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in "Accumulated other comprehensive loss." Cash flow hedges consist of foreign currency hedging of forecasted revenues, as well as hedges of the forecasted issuance of fixed rate debt. Derivative fair value changes that are captured in "Accumulated other comprehensive loss" are reclassified to earnings in the same period or periods the hedged item affects earnings, to the extent the instrument is effective in offsetting the change in cash flows attributable to the risk being hedged. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately in "Derivative gains/(losses), net." | |
• | Fair Value hedges - Changes in the fair value of derivatives that are designated as fair value hedges of fixed rate debt are recorded in "Interest expense." The offsetting change in value of the related debt instrument attributable to changes in the benchmark interest rate is also recorded in "Interest expense." | |
• | Undesignated - Derivative contracts entered into to reduce the variability related to (a) money transfer settlement assets and obligations, generally with maturities from a few days up to one month, and (b) certain foreign currency denominated cash and other asset and liability positions, typically with maturities of less than one year at inception, are not designated as hedges for accounting purposes and changes in their fair value are included in "Selling, general and administrative." The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency Business Solutions payments operations. The duration of these derivative contracts at inception is generally less than one year. The Company aggregates its Business Solutions payments foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts) as part of a broader foreign currency portfolio, including significant spot exchanges of currency in addition to forwards and options. The changes in fair value related to these contracts are recorded in "Foreign exchange revenues." | |
The fair value of the Company's derivatives is derived from standardized models that use market based inputs (e.g., forward prices for foreign currency). | ||
The details of each designated hedging relationship are formally documented at the inception of the arrangement, including the risk management objective, hedging strategy, hedged item, specific risks being hedged, the derivative instrument, how effectiveness is being assessed and how ineffectiveness, if any, will be measured. The derivative must be highly effective in offsetting the changes in cash flows or fair value of the hedged item, and effectiveness is evaluated quarterly on a retrospective and prospective basis. | ||
Legal Contingencies | Legal Contingencies | |
The Company is a party to certain legal and regulatory proceedings with respect to a variety of matters. The Company records an accrual for these contingencies to the extent that a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued. When no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the range is accrued. | ||
Stock-Based Compensation | Stock-Based Compensation | |
The Company currently has a stock-based compensation plan that provides for grants of Western Union stock options, restricted stock awards and restricted and unrestricted stock units to employees and non-employee directors of the Company who perform services for the Company. In addition, the Company has a stock-based compensation plan that provides for grants of Western Union stock options and stock unit awards to non-employee directors of the Company. | ||
All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period and also requires an estimate of forfeitures when calculating compensation expense. The Company recognizes compensation expense on awards on a straight-line basis over the requisite service period for the entire award. Refer to Note 16 for additional discussion regarding details of the Company's stock-based compensation plans. | ||
Severance and Other Related Expenses | Severance and Other Related Expenses | |
The Company records severance-related expenses once they are both probable and estimable in accordance with the provisions of the applicable accounting guidance for severance provided under an ongoing benefit arrangement. One-time, involuntary benefit arrangements and other costs are generally recognized when the liability is incurred. The Company also evaluates impairment issues associated with restructuring and other activities when the carrying amount of the assets may not be fully recoverable, in accordance with the appropriate accounting guidance. | ||
New Accounting Pronouncement | New Accounting Pronouncement | |
In May 2014, the Financial Accounting Standards Board issued a new accounting pronouncement regarding revenue from contracts with customers. This new standard provides guidance on recognizing revenue, including a five step model to determine when revenue recognition is appropriate. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Adoption of the new standard is effective for reporting periods beginning after December 15, 2016, with early adoption not permitted. Management is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations, and related disclosures, and will adopt the provisions of this new standard in the first quarter of 2017. | ||
Investment Securities | Investment Securities | |
Investment securities included in "Settlement assets" in the Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed rate term notes, variable rate demand notes and a short-term bond mutual fund. The short-term bond mutual fund can be redeemed daily and holds fixed income securities with combined average maturities of one year or less. Variable rate demand note securities can be put (sold at par) typically on a daily basis with settlement periods ranging from the same day to one week, but have varying maturities through 2050. Generally, these securities are used by the Company for short-term liquidity needs and are held for short periods of time, typically less than 30 days. The Company is required to hold highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable state and foreign country requirements. | ||
In 2013, the Company invested in a short-term taxable bond mutual fund which held a diversified portfolio of fixed income securities. During the first quarter of 2014, the Company sold this investment for $100.2 million, which was also the fair value of this investment as of December 31, 2013. The investment was included in "Other assets" in the Company's Consolidated Balance Sheets as of December 31, 2013. | ||
The substantial majority of the Company's 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 investing in highly-rated securities and through investment diversification. | ||
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. Proceeds from the sale and maturity of available-for-sale securities during the years ended December 31, 2014, 2013 and 2012 were $17.7 billion, $19.0 billion and $16.3 billion, respectively. | ||
Gains and losses on investments are calculated using the specific-identification method and are recognized during the period in which the investment is sold or when an investment experiences an other-than-temporary decline in value. Factors that could indicate an impairment exists include, but are not limited to: earnings performance, changes in credit rating or adverse changes in the regulatory or economic environment of the asset. If potential impairment exists, the Company assesses whether it has the intent to sell the debt security, more likely than not will be required to sell the debt security before its anticipated recovery or expects that some of the contractual cash flows will not be received. The Company had no material other-than-temporary impairments during the periods presented. | ||
Foreign Currency — Consumer-to-Consumer | Foreign Currency — Consumer-to-Consumer | |
The Company's policy is to use longer-term foreign currency forward contracts, with maturities of up to 36 months 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. As of December 31, 2014, the Company's longer-term foreign currency forward contracts had maturities of a maximum of 24 months 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 are recognized immediately in "Derivative gains/(losses), net" within the Company's Consolidated Statements of Income. | ||
The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up to one month, to offset foreign exchange rate fluctuations on settlement assets and obligations between initiation and settlement. In addition, forward contracts, typically with maturities of less than one year at inception, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash and other asset and liability positions. None of these contracts are designated as accounting hedges. | ||
Foreign Currency — Business Solutions | Foreign Currency — Business Solutions | |
The Company writes derivatives, primarily foreign currency forward contracts and option contracts, mostly with small and medium size enterprises and derives a currency spread from this activity as part of its Business Solutions operations. The Company aggregates its Business Solutions payments foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts). The derivatives written are part of the broader portfolio of foreign currency positions arising from its cross-currency payments operations, which primarily include spot exchanges of currency in addition to forwards and options. The resulting foreign exchange revenues from the total portfolio of positions comprise Business Solutions foreign exchange revenues. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges. The duration of these derivative contracts at inception is generally less than one year. | ||
Interest Rate Hedging — Corporate | Interest Rate Hedging — Corporate | |
The Company utilizes interest rate swaps 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 Company designates these derivatives as fair value hedges. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within "Borrowings" in the Consolidated Balance Sheets and "Interest expense" in the Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps. | ||
The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change in fair value of the derivatives is recorded in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||
Schedule of diluted weighted-average shares outstanding | The following table provides the calculation of diluted weighted-average shares outstanding (in millions): | |||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Basic weighted-average shares outstanding | 533.4 | 556.6 | 604.9 | |||||||||||||||||
Common stock equivalents | 3.4 | 3.1 | 2.5 | |||||||||||||||||
Diluted weighted-average shares outstanding | 536.8 | 559.7 | 607.4 | |||||||||||||||||
Settlement assets and obligations | Settlement assets and obligations consisted of the following (in millions): | |||||||||||||||||||
December 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Settlement assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 834.3 | $ | 538.6 | ||||||||||||||||
Receivables from selling agents and Business Solutions customers | 1,006.90 | 981.3 | ||||||||||||||||||
Investment securities | 1,472.50 | 1,750.50 | ||||||||||||||||||
$ | 3,313.70 | $ | 3,270.40 | |||||||||||||||||
Settlement obligations: | ||||||||||||||||||||
Money transfer, money order and payment service payables | $ | 2,356.70 | $ | 2,376.60 | ||||||||||||||||
Payables to agents | 957 | 893.8 | ||||||||||||||||||
$ | 3,313.70 | $ | 3,270.40 | |||||||||||||||||
Property and equipment | Property and equipment consisted of the following (in millions): | |||||||||||||||||||
December 31, | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Equipment | $ | 464.6 | $ | 416.1 | ||||||||||||||||
Buildings | 87.8 | 82.3 | ||||||||||||||||||
Leasehold improvements | 81.1 | 80.3 | ||||||||||||||||||
Furniture and fixtures | 32.2 | 33.3 | ||||||||||||||||||
Land and improvements | 17 | 16.9 | ||||||||||||||||||
Projects in process | 2.2 | 9.6 | ||||||||||||||||||
684.9 | 638.5 | |||||||||||||||||||
Less accumulated depreciation | (478.5 | ) | (428.6 | ) | ||||||||||||||||
Property and equipment, net | $ | 206.4 | $ | 209.9 | ||||||||||||||||
Components of other intangible assets | The following table provides the components of other intangible assets (in millions): | |||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Weighted- | Initial Cost | Net of | Initial Cost | Net of | ||||||||||||||||
Average | Accumulated | Accumulated | ||||||||||||||||||
Amortization | Amortization | Amortization | ||||||||||||||||||
Period | ||||||||||||||||||||
(in years) | ||||||||||||||||||||
Acquired contracts | 11.4 | $ | 630.8 | $ | 374.9 | $ | 632 | $ | 414.3 | |||||||||||
Capitalized contract costs | 5.6 | 559.6 | 276.6 | 528.5 | 315.2 | |||||||||||||||
Internal use software | 3.3 | 301.6 | 60.1 | 264.9 | 65.1 | |||||||||||||||
Acquired trademarks | 24.5 | 36.4 | 22.7 | 38 | 25.3 | |||||||||||||||
Projects in process | 3 | 12.2 | 12.2 | 9.6 | 9.6 | |||||||||||||||
Other intangibles | 3.9 | 27.5 | 1.6 | 33.1 | 4.3 | |||||||||||||||
Total other intangible assets | 7.9 | $ | 1,568.10 | $ | 748.1 | $ | 1,506.10 | $ | 833.8 | |||||||||||
Productivity_and_CostSavings_I1
Productivity and Cost-Savings Initiatives Expenses (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Productivity and Cost-Savings Initiatives Expenses [Abstract] | |||||||||||||||||||||
Schedule of productivity and cost-savings initiatives expenses in the Consolidated Statements of Income | The following table presents the above expenses related to productivity and cost-savings initiatives as reflected in the Consolidated Statements of Income (in millions): | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Cost of services | $ | 11.6 | $ | 24.3 | $ | 5.5 | |||||||||||||||
Selling, general and administrative | 18.7 | 32.6 | 25.4 | ||||||||||||||||||
Total expenses, pre-tax | $ | 30.3 | $ | 56.9 | $ | 30.9 | |||||||||||||||
Total expenses, net of tax | $ | 20.2 | $ | 40.2 | $ | 20.2 | |||||||||||||||
Schedule of productivity and cost-savings initiatives expenses incurred by reportable segment | The following table summarizes the above expenses incurred by reportable segment (in millions): | ||||||||||||||||||||
Consumer-to-Consumer | Consumer-to-Business | Business Solutions | Other | Total | |||||||||||||||||
2012 expenses | $ | 20.9 | $ | 4 | $ | — | $ | 6 | $ | 30.9 | |||||||||||
2013 expenses | 43.8 | 5.4 | 3.6 | 4.1 | 56.9 | ||||||||||||||||
2014 expenses | 15.7 | 6.7 | 7.3 | 0.6 | 30.3 | ||||||||||||||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||
Schedule of changes to goodwill | The following table presents changes to goodwill for the years ended December 31, 2014 and 2013 (in millions): | |||||||||||||||||||
Consumer-to-Consumer | Consumer-to-Business | Business Solutions | Other | Total | ||||||||||||||||
January 1, 2013 balance | $ | 1,947.70 | $ | 221.1 | $ | 996 | $ | 14.9 | $ | 3,179.70 | ||||||||||
Currency translation | — | (6.4 | ) | — | (1.3 | ) | (7.7 | ) | ||||||||||||
December 31, 2013 balance | $ | 1,947.70 | $ | 214.7 | $ | 996 | $ | 13.6 | $ | 3,172.00 | ||||||||||
Acquisitions | 2.4 | — | — | — | 2.4 | |||||||||||||||
Currency translation | — | (5.0 | ) | — | (0.2 | ) | (5.2 | ) | ||||||||||||
December 31, 2014 balance | $ | 1,950.10 | $ | 209.7 | $ | 996 | $ | 13.4 | $ | 3,169.20 | ||||||||||
Investment_Securities_Tables
Investment Securities (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Marketable Securities [Abstract] | ||||||||||||||||||||
Components of investment securities | The components of investment securities are as follows (in millions): | |||||||||||||||||||
December 31, 2014 | Gross | Gross | Net | |||||||||||||||||
Amortized | Fair | Unrealized | Unrealized | Unrealized | ||||||||||||||||
Cost | Value | Gains | Losses | Gains/ (Losses) | ||||||||||||||||
Settlement assets: | ||||||||||||||||||||
State and municipal debt securities (a) | $ | 1,024.20 | $ | 1,038.10 | $ | 15.1 | $ | (1.2 | ) | $ | 13.9 | |||||||||
State and municipal variable rate demand notes | 316.8 | 316.8 | — | — | — | |||||||||||||||
Corporate and other debt securities | 70.5 | 70.5 | 0.1 | (0.1 | ) | — | ||||||||||||||
Short-term state and municipal bond mutual fund | 47.1 | 47.1 | — | — | — | |||||||||||||||
$ | 1,458.60 | $ | 1,472.50 | $ | 15.2 | $ | (1.3 | ) | $ | 13.9 | ||||||||||
31-Dec-13 | Gross | Gross | Net | |||||||||||||||||
Amortized | Fair | Unrealized | Unrealized | Unrealized | ||||||||||||||||
Cost | Value | Gains | Losses | Gains/ (Losses) | ||||||||||||||||
Settlement assets: | ||||||||||||||||||||
State and municipal debt securities (a) | $ | 868.1 | $ | 874.2 | $ | 7.8 | $ | (1.7 | ) | $ | 6.1 | |||||||||
State and municipal variable rate demand notes | 865 | 865 | — | — | — | |||||||||||||||
Other debt securities | 11.2 | 11.3 | 0.1 | — | 0.1 | |||||||||||||||
$ | 1,744.30 | $ | 1,750.50 | $ | 7.9 | $ | (1.7 | ) | $ | 6.2 | ||||||||||
Other assets: | ||||||||||||||||||||
Short-term taxable bond mutual fund | 100 | 100.2 | 0.2 | — | 0.2 | |||||||||||||||
$ | 1,844.30 | $ | 1,850.70 | $ | 8.1 | $ | (1.7 | ) | $ | 6.4 | ||||||||||
____________ | ||||||||||||||||||||
(a) | The majority of these securities are fixed rate instruments. | |||||||||||||||||||
Contractual maturities of debt securities | The following summarizes the contractual maturities of settlement-related debt securities as of December 31, 2014 (in millions): | |||||||||||||||||||
Amortized | Fair | |||||||||||||||||||
Cost | Value | |||||||||||||||||||
Due within 1 year | $ | 150.5 | $ | 151.1 | ||||||||||||||||
Due after 1 year through 5 years | 556 | 558.7 | ||||||||||||||||||
Due after 5 years through 10 years | 383.1 | 393.7 | ||||||||||||||||||
Due after 10 years | 321.9 | 321.9 | ||||||||||||||||||
$ | 1,411.50 | $ | 1,425.40 | |||||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair value measurements of assets and liabilities | The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions): | |||||||||||||||
Fair Value Measurement Using | Assets/ | |||||||||||||||
Liabilities at | ||||||||||||||||
Fair | ||||||||||||||||
December 31, 2014 | Level 1 | Level 2 | Level 3 | Value | ||||||||||||
Assets: | ||||||||||||||||
Settlement assets: | ||||||||||||||||
State and municipal debt securities | $ | — | $ | 1,038.10 | $ | — | $ | 1,038.10 | ||||||||
State and municipal variable rate demand notes | — | 316.8 | — | 316.8 | ||||||||||||
Corporate and other debt securities | — | 70.5 | — | 70.5 | ||||||||||||
Short-term state and municipal bond mutual fund | 47.1 | — | — | 47.1 | ||||||||||||
Other assets: | ||||||||||||||||
Derivatives | — | 423 | — | 423 | ||||||||||||
Total assets | $ | 47.1 | $ | 1,848.40 | $ | — | $ | 1,895.50 | ||||||||
Liabilities: | ||||||||||||||||
Notes and other borrowings | $ | — | $ | 3,890.50 | $ | — | $ | 3,890.50 | ||||||||
Derivatives | — | 317.1 | — | 317.1 | ||||||||||||
Total liabilities | $ | — | $ | 4,207.60 | $ | — | $ | 4,207.60 | ||||||||
Fair Value Measurement Using | Assets/ | |||||||||||||||
Liabilities at | ||||||||||||||||
Fair | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | Value | ||||||||||||
Assets: | ||||||||||||||||
Settlement assets: | ||||||||||||||||
State and municipal debt securities | $ | — | $ | 874.2 | $ | — | $ | 874.2 | ||||||||
State and municipal variable rate demand notes | — | 865 | — | 865 | ||||||||||||
Other debt securities | — | 11.3 | — | 11.3 | ||||||||||||
Other assets: | ||||||||||||||||
Short-term taxable bond mutual fund | 100.2 | — | — | 100.2 | ||||||||||||
Derivatives | — | 224.3 | — | 224.3 | ||||||||||||
Total assets | $ | 100.2 | $ | 1,974.80 | $ | — | $ | 2,075.00 | ||||||||
Liabilities: | ||||||||||||||||
Notes and other borrowings | $ | — | $ | 4,343.20 | $ | — | $ | 4,343.20 | ||||||||
Derivatives | — | 223.4 | — | 223.4 | ||||||||||||
Total liabilities | $ | — | $ | 4,566.60 | $ | — | $ | 4,566.60 | ||||||||
Other_Assets_and_Other_Liabili1
Other Assets and Other Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Other Assets and Other Liabilities [Abstract] | ||||||||
Components of other assets and other liabilities | The following table summarizes the components of other assets and other liabilities (in millions): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Other assets: | ||||||||
Derivatives | $ | 423 | $ | 224.3 | ||||
Short-term taxable bond mutual fund (Note 7) | — | 100.2 | ||||||
Prepaid expenses | 63 | 69 | ||||||
Amounts advanced to agents, net of discounts | 45.2 | 41.8 | ||||||
Equity method investments | 41.6 | 41 | ||||||
Other | 97 | 85.8 | ||||||
Total other assets | $ | 669.8 | $ | 562.1 | ||||
Other liabilities: | ||||||||
Derivatives | $ | 317.1 | $ | 223.4 | ||||
Pension obligations | 74.9 | 70.4 | ||||||
Other | 92.2 | 64.4 | ||||||
Total other liabilities | $ | 484.2 | $ | 358.2 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of pre-tax income | The components of pre-tax income, generally based on the jurisdiction of the legal entity, were as follows (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Domestic | $ | 34.7 | $ | (28.4 | ) | $ | 94.8 | |||||
Foreign | 933.5 | 955.3 | 1,074.00 | |||||||||
$ | 968.2 | $ | 926.9 | $ | 1,168.80 | |||||||
Provision for income taxes | The provision for income taxes was as follows (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal | $ | 57 | $ | 88.3 | $ | 92.5 | ||||||
State and local | 4.9 | (3.7 | ) | (14.8 | ) | |||||||
Foreign | 53.9 | 43.9 | 65.2 | |||||||||
$ | 115.8 | $ | 128.5 | $ | 142.9 | |||||||
Effective tax rate reconciliation | The Company's effective tax rates differed from statutory rates as follows: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal statutory rate | 35 | % | 35 | % | 35 | % | ||||||
State income taxes, net of federal income tax benefits | 0.6 | % | 0.7 | % | 0.6 | % | ||||||
Foreign rate differential, net of U.S. tax paid on foreign earnings (4.3%, 9.2% and 5.1%, respectively) | (24.0 | )% | (22.9 | )% | (22.5 | )% | ||||||
Other | 0.4 | % | 1.1 | % | (0.9 | )% | ||||||
Effective tax rate | 12 | % | 13.9 | % | 12.2 | % | ||||||
Components of provision for income taxes, current and deferred | The Company's provision for income taxes consisted of the following components (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | 76.1 | $ | 86.1 | $ | 117.2 | ||||||
State and local | 4.7 | 8.1 | (2.5 | ) | ||||||||
Foreign | 61.8 | 73.6 | 63.4 | |||||||||
Total current taxes | 142.6 | 167.8 | 178.1 | |||||||||
Deferred: | ||||||||||||
Federal | (19.1 | ) | 2.2 | (24.7 | ) | |||||||
State and local | 0.2 | (11.8 | ) | (12.3 | ) | |||||||
Foreign | (7.9 | ) | (29.7 | ) | 1.8 | |||||||
Total deferred taxes | (26.8 | ) | (39.3 | ) | (35.2 | ) | ||||||
$ | 115.8 | $ | 128.5 | $ | 142.9 | |||||||
Components of deferred tax items | The following table outlines the principal components of deferred tax items (in millions): | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred tax assets related to: | ||||||||||||
Reserves, accrued expenses and employee-related items | $ | 81.8 | $ | 57 | ||||||||
Tax attribute carryovers | 41 | 22.3 | ||||||||||
Pension obligations | 26.7 | 25.6 | ||||||||||
Intangibles, property and equipment | 12.1 | 14.9 | ||||||||||
Other | 13.6 | 29.7 | ||||||||||
Valuation allowance | (46.6 | ) | (16.4 | ) | ||||||||
Total deferred tax assets | 128.6 | 133.1 | ||||||||||
Deferred tax liabilities related to: | ||||||||||||
Intangibles, property and equipment | 428.1 | 449.2 | ||||||||||
Other | 5.5 | 3.1 | ||||||||||
Total deferred tax liabilities | 433.6 | 452.3 | ||||||||||
Net deferred tax liability | $ | 305 | $ | 319.2 | ||||||||
Unrecognized tax benefits reconciliation | A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in millions): | |||||||||||
2014 | 2013 | |||||||||||
Balance as of January 1, | $ | 117.5 | $ | 103.2 | ||||||||
Increases - positions taken in current period (a) | 12.2 | 18.5 | ||||||||||
Increases - positions taken in prior periods (b) | 5.7 | 15.6 | ||||||||||
Decreases - positions taken in prior periods | (23.9 | ) | (8.7 | ) | ||||||||
Decreases - settlements with taxing authorities | (8.1 | ) | (4.1 | ) | ||||||||
Decreases - lapse of applicable statute of limitations | (7.2 | ) | (7.0 | ) | ||||||||
Decreases - effects of foreign currency exchange rates | (2.8 | ) | — | |||||||||
Balance as of December 31, | $ | 93.4 | $ | 117.5 | ||||||||
____________ | ||||||||||||
(a) | Includes recurring accruals for issues which initially arose in previous periods. | |||||||||||
(b) | Changes to positions taken in prior periods relate to changes in estimates used to calculate prior period unrecognized tax benefits. |
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||
Reconciliation of the changes in the Plan's projected benefit obligation, fair value of assets and the funded status | The following table provides a reconciliation of the changes in the Plan's projected benefit obligation, fair value of assets and the funded status (in millions): | |||||||||||||||
2014 | 2013 | |||||||||||||||
Change in projected benefit obligation: | ||||||||||||||||
Projected benefit obligation as of January 1, | $ | 366.2 | $ | 418.8 | ||||||||||||
Interest cost | 13.6 | 12.1 | ||||||||||||||
Actuarial loss/(gain) | 35.8 | (25.4 | ) | |||||||||||||
Benefits paid | (37.8 | ) | (39.3 | ) | ||||||||||||
Projected benefit obligation as of December 31, | $ | 377.8 | $ | 366.2 | ||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets as of January 1, | $ | 295.8 | $ | 316.7 | ||||||||||||
Actual return on plan assets | 31.7 | 2.7 | ||||||||||||||
Benefits paid | (37.8 | ) | (39.3 | ) | ||||||||||||
Company contributions | 13.2 | 15.7 | ||||||||||||||
Fair value of plan assets as of December 31, | 302.9 | 295.8 | ||||||||||||||
Funded status of the Plan as of December 31, | $ | (74.9 | ) | $ | (70.4 | ) | ||||||||||
Accumulated benefit obligation as of December 31, | $ | 377.8 | $ | 366.2 | ||||||||||||
Amounts recognized in the Consolidated Balance Sheets | The following table provides the amounts recognized in the Consolidated Balance Sheets (in millions): | |||||||||||||||
December 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Accrued benefit liability | $ | (74.9 | ) | $ | (70.4 | ) | ||||||||||
Accumulated other comprehensive loss (pre-tax) | 200.9 | 187 | ||||||||||||||
Net amount recognized | $ | 126 | $ | 116.6 | ||||||||||||
Components of net periodic benefit cost for the Plan | The following table provides the components of net periodic benefit cost for the Plan (in millions): | |||||||||||||||
Year Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Interest cost | $ | 13.6 | $ | 12.1 | $ | 14.7 | ||||||||||
Expected return on plan assets | (20.2 | ) | (20.7 | ) | (20.8 | ) | ||||||||||
Amortization of actuarial loss | 10.4 | 12.4 | 10.5 | |||||||||||||
Net periodic benefit cost | $ | 3.8 | $ | 3.8 | $ | 4.4 | ||||||||||
Rate assumptions used in the measurement of the Company's benefit obligation and net cost | The rate assumptions used in the measurement of the Company's benefit obligation were as follows: | |||||||||||||||
2014 | 2013 | |||||||||||||||
Discount rate | 3.27 | % | 3.91 | % | ||||||||||||
The rate assumptions used in the measurement of the Company's net cost were as follows: | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Discount rate | 3.91 | % | 3.03 | % | 3.72 | % | ||||||||||
Expected long-term return on plan assets | 7 | % | 7 | % | 7 | % | ||||||||||
Pension plan asset allocations and target allocations based on investment policies | Pension plan asset allocation as of December 31, 2014 and 2013, and target allocations based on investment policies, were as follows: | |||||||||||||||
Percentage of Plan Assets | ||||||||||||||||
as of Measurement Date | ||||||||||||||||
Asset Class | 2014 | 2013 | ||||||||||||||
Equity investments | 17 | % | 18 | % | ||||||||||||
Debt securities | 63 | % | 59 | % | ||||||||||||
Alternative investments | 20 | % | 23 | % | ||||||||||||
Target Allocation | ||||||||||||||||
Equity investments | 20% | |||||||||||||||
Debt securities | 60% | |||||||||||||||
Alternative investments | 20% | |||||||||||||||
Investments of the Trust measured and carried at fair value | The following tables reflect investments of the Trust that were measured and carried at fair value (in millions). For information on how the Company measures fair value, refer to Note 2. | |||||||||||||||
31-Dec-14 | Fair Value Measurement Using | Total Assets | ||||||||||||||
Asset Class | Level 1 | Level 2 | Level 3 | at Fair Value | ||||||||||||
Equity investments: | ||||||||||||||||
Domestic | $ | 26.8 | $ | — | $ | — | $ | 26.8 | ||||||||
International (a) | 1.5 | 24 | — | 25.5 | ||||||||||||
Debt securities: | ||||||||||||||||
Corporate debt (b) | — | 132.9 | — | 132.9 | ||||||||||||
U.S. treasury bonds | 44.8 | — | — | 44.8 | ||||||||||||
State and municipal debt securities | — | 4.4 | — | 4.4 | ||||||||||||
Other | — | 5.6 | — | 5.6 | ||||||||||||
Alternative investments: | ||||||||||||||||
Hedge funds (c) | — | 31.9 | — | 31.9 | ||||||||||||
Royalty rights and private equity (d) | — | — | 28.5 | 28.5 | ||||||||||||
Total investments of the Trust at fair value | $ | 73.1 | $ | 198.8 | $ | 28.5 | $ | 300.4 | ||||||||
Other assets | 2.5 | |||||||||||||||
Total investments of the Trust | $ | 73.1 | $ | 198.8 | $ | 28.5 | $ | 302.9 | ||||||||
31-Dec-13 | Fair Value Measurement Using | Total Assets | ||||||||||||||
Asset Class | Level 1 | Level 2 | Level 3 | at Fair Value | ||||||||||||
Equity investments: | ||||||||||||||||
Domestic | $ | 26.2 | $ | — | $ | — | $ | 26.2 | ||||||||
International (a) | 1.5 | 26.5 | — | 28 | ||||||||||||
Debt securities: | ||||||||||||||||
Corporate debt (b) | — | 127.3 | — | 127.3 | ||||||||||||
U.S. treasury bonds | 36.8 | — | — | 36.8 | ||||||||||||
State and municipal debt securities | — | 3.9 | — | 3.9 | ||||||||||||
Other | — | 4.4 | — | 4.4 | ||||||||||||
Alternative investments: | ||||||||||||||||
Hedge funds (c) | — | 42.4 | — | 42.4 | ||||||||||||
Royalty rights and private equity (d) | — | — | 25.9 | 25.9 | ||||||||||||
Total investments of the Trust at fair value | $ | 64.5 | $ | 204.5 | $ | 25.9 | $ | 294.9 | ||||||||
Other assets | 0.9 | |||||||||||||||
Total investments of the Trust | $ | 64.5 | $ | 204.5 | $ | 25.9 | $ | 295.8 | ||||||||
____________ | ||||||||||||||||
(a) | Funds included herein have monthly redemption frequencies, with redemption notice periods of one to ten business days. | |||||||||||||||
(b) | Substantially all corporate debt securities are investment grade securities. | |||||||||||||||
(c) | Hedge funds generally hold liquid and readily priceable securities, such as public equities, exchange-traded derivatives, and corporate bonds. Hedge funds themselves do not have readily available market quotations, and therefore are valued using the Net Asset Value ("NAV") per share provided by the investment sponsor or third party administrator. Funds investing in diverse hedge fund strategies (primarily commingled funds) had the following composition of underlying hedge fund investments within the pension plan at December 31, 2014: equity long/short (28%), commodities/currencies (24%), relative value (23%), event driven (13%) and multi-strategy (12%). As of December 31, 2014, funds included herein had redemption frequencies of monthly to quarterly, with redemption notice periods of three to 60 days. | |||||||||||||||
(d) | Diversified investments in royalty rights related to the sale of pharmaceutical products by third parties. Also included are private equity funds with a focus on venture capital. These investments are illiquid, with investment distributions expected to be received over the lives of the funds, which are uncertain but based on the voting rights of investors and the maturities of the underlying investments. | |||||||||||||||
Summary of changes in the fair value of the Trust's Level 3 financial assets | The following tables provide summaries of changes in the fair value of the Trust's Level 3 financial assets (in millions): | |||||||||||||||
Royalty Rights | Private Equity | Total | ||||||||||||||
Balance, January 1, 2013 | $ | 21.4 | $ | 2.4 | $ | 23.8 | ||||||||||
Actual return on plan assets: | ||||||||||||||||
Relating to assets still held as of the reporting date | 2.3 | 0.3 | 2.6 | |||||||||||||
Relating to assets sold during the year | 1.6 | 0.1 | 1.7 | |||||||||||||
Net purchases and sales | (2.0 | ) | (0.2 | ) | (2.2 | ) | ||||||||||
Balance, December 31, 2013 | $ | 23.3 | $ | 2.6 | $ | 25.9 | ||||||||||
Actual return on plan assets: | ||||||||||||||||
Relating to assets still held as of the reporting date | 4.1 | 0.6 | 4.7 | |||||||||||||
Relating to assets sold during the year | — | 0.1 | 0.1 | |||||||||||||
Net purchases and sales | (2.2 | ) | — | (2.2 | ) | |||||||||||
Balance, December 31, 2014 | $ | 25.2 | $ | 3.3 | $ | 28.5 | ||||||||||
Operating_Lease_Commitments_Ta
Operating Lease Commitments (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Leases, Operating [Abstract] | ||||
Minimum aggregate rental commitments under all non-cancelable operating leases | As of December 31, 2014, the minimum aggregate rental commitments under all non-cancelable operating leases were as follows (in millions): | |||
Year Ending December 31, | ||||
2015 | $ | 39.2 | ||
2016 | 34 | |||
2017 | 26.8 | |||
2018 | 19.6 | |||
2019 | 10.6 | |||
Thereafter | 14.2 | |||
Total future minimum lease payments | $ | 144.4 | ||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Equity [Abstract] | |||||||||||||||||
Components of accumulated other comprehensive loss, net of tax | The following table summarizes the components of accumulated other comprehensive loss, net of tax (in millions). All amounts reclassified from accumulated other comprehensive loss affect the line items as indicated below within the Consolidated Statements of Income. | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Unrealized gains on investment securities, beginning of period | $ | 4.1 | $ | 7.7 | $ | 4.9 | |||||||||||
Unrealized gains/(losses) | 15.5 | (0.1 | ) | 9.9 | |||||||||||||
Tax (expense)/benefit | (5.7 | ) | 0.1 | (3.7 | ) | ||||||||||||
Reclassification of gains into "Other revenues" | (7.8 | ) | (5.8 | ) | (5.5 | ) | |||||||||||
Reclassification of gains into "Interest income" | (0.2 | ) | — | — | |||||||||||||
Tax expense related to reclassifications | 3 | 2.2 | 2.1 | ||||||||||||||
Net unrealized gains/(losses) on investment securities | 4.8 | (3.6 | ) | 2.8 | |||||||||||||
Unrealized gains on investment securities, end of period | $ | 8.9 | $ | 4.1 | $ | 7.7 | |||||||||||
Unrealized gains/(losses) on hedging activities, beginning of period | $ | (33.0 | ) | $ | (21.9 | ) | $ | 5.1 | |||||||||
Unrealized gains/(losses) | 84 | (3.1 | ) | (20.1 | ) | ||||||||||||
Tax (expense)/benefit | (3.7 | ) | (1.7 | ) | 3.1 | ||||||||||||
Reclassification of gains into "Transaction fees" | (1.2 | ) | (7.6 | ) | (10.3 | ) | |||||||||||
Reclassification of gains into "Foreign exchange revenues" | (0.4 | ) | (2.8 | ) | (3.1 | ) | |||||||||||
Reclassification of losses into "Interest expense" | 3.6 | 3.6 | 3.6 | ||||||||||||||
Tax expense/(benefit) related to reclassifications | (0.7 | ) | 0.5 | (0.2 | ) | ||||||||||||
Net unrealized gains/(losses) on hedging activities | 81.6 | (11.1 | ) | (27.0 | ) | ||||||||||||
Unrealized gains/(losses) on hedging activities, end of period | $ | 48.6 | $ | (33.0 | ) | $ | (21.9 | ) | |||||||||
Foreign currency translation adjustments, beginning of period | $ | (21.6 | ) | $ | (8.5 | ) | $ | (6.3 | ) | ||||||||
Foreign currency translation adjustments | (14.8 | ) | (17.7 | ) | (4.6 | ) | |||||||||||
Tax (expense)/benefit | (12.8 | ) | 4.6 | 2.4 | |||||||||||||
Net foreign currency translation adjustments | (27.6 | ) | (13.1 | ) | (2.2 | ) | |||||||||||
Foreign currency translation adjustments, end of period | $ | (49.2 | ) | $ | (21.6 | ) | $ | (8.5 | ) | ||||||||
Defined benefit pension plan adjustments, beginning of period | $ | (118.5 | ) | $ | (129.9 | ) | $ | (122.2 | ) | ||||||||
Unrealized gains/(losses) | (24.3 | ) | 7.4 | (20.5 | ) | ||||||||||||
Tax (expense)/benefit | 9 | (3.9 | ) | 6.2 | |||||||||||||
Reclassification of losses into "Cost of services" | 10.4 | 12.4 | 10.5 | ||||||||||||||
Tax benefit related to reclassifications and other | (3.8 | ) | (4.5 | ) | (3.9 | ) | |||||||||||
Net defined benefit pension plan adjustments | (8.7 | ) | 11.4 | (7.7 | ) | ||||||||||||
Defined benefit pension plan adjustments, end of period | $ | (127.2 | ) | $ | (118.5 | ) | $ | (129.9 | ) | ||||||||
Accumulated other comprehensive loss, end of period | $ | (118.9 | ) | $ | (169.0 | ) | $ | (152.6 | ) | ||||||||
Schedule of dividends declared | Dividends per share declared quarterly by the Company's Board of Directors during the years ended 2014, 2013 and 2012 were as follows: | ||||||||||||||||
Year | Q1 | Q2 | Q3 | Q4 | |||||||||||||
2014 | $ | 0.125 | $ | 0.125 | $ | 0.125 | $ | 0.125 | |||||||||
2013 | $ | 0.125 | $ | 0.125 | $ | 0.125 | $ | 0.125 | |||||||||
2012 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.125 | |||||||||
Derivatives_Tables
Derivatives (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Notional amounts of foreign currency forward contracts | The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of December 31, 2014 were as follows (in millions): | ||||||||||||||||||||||||||||||||||||||||||||
Contracts designated as hedges: | |||||||||||||||||||||||||||||||||||||||||||||
Euro | $ | 391.4 | |||||||||||||||||||||||||||||||||||||||||||
Canadian dollar | 114.1 | ||||||||||||||||||||||||||||||||||||||||||||
British pound | 80.8 | ||||||||||||||||||||||||||||||||||||||||||||
Australian dollar | 52.7 | ||||||||||||||||||||||||||||||||||||||||||||
Swiss franc | 44 | ||||||||||||||||||||||||||||||||||||||||||||
Other | 95.4 | ||||||||||||||||||||||||||||||||||||||||||||
Contracts not designated as hedges: | |||||||||||||||||||||||||||||||||||||||||||||
Euro | $ | 294.4 | |||||||||||||||||||||||||||||||||||||||||||
Canadian dollar | 77.1 | ||||||||||||||||||||||||||||||||||||||||||||
British pound | 70.2 | ||||||||||||||||||||||||||||||||||||||||||||
Australian dollar | 30.1 | ||||||||||||||||||||||||||||||||||||||||||||
Other (a) | 147.8 | ||||||||||||||||||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||||||||||||||
(a) | Comprised of exposures to 17 different currencies. None of these individual currency exposures is greater than $25 million. | ||||||||||||||||||||||||||||||||||||||||||||
Fair value of derivatives | The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of December 31, 2014 and December 31, 2013 (in millions): | ||||||||||||||||||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet | December 31, | December 31, | Balance Sheet | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||||
Location | 2014 | 2013 | Location | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
Derivatives — hedges: | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate fair value hedges — Corporate | Other assets | $ | 3.5 | $ | 11.4 | Other liabilities | $ | 1.9 | $ | 7.8 | |||||||||||||||||||||||||||||||||||
Foreign currency cash flow hedges — Consumer-to-Consumer | Other assets | 66.1 | 11.1 | Other liabilities | 3.5 | 27.7 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 69.6 | $ | 22.5 | $ | 5.4 | $ | 35.5 | |||||||||||||||||||||||||||||||||||||
Derivatives — undesignated: | |||||||||||||||||||||||||||||||||||||||||||||
Foreign currency — Business Solutions | Other assets | $ | 349.4 | $ | 201.2 | Other liabilities | $ | 310.2 | $ | 186.2 | |||||||||||||||||||||||||||||||||||
Foreign currency — Consumer-to-Consumer | Other assets | 4 | 0.6 | Other liabilities | 1.5 | 1.7 | |||||||||||||||||||||||||||||||||||||||
Total | $ | 353.4 | $ | 201.8 | $ | 311.7 | $ | 187.9 | |||||||||||||||||||||||||||||||||||||
Total derivatives | $ | 423 | $ | 224.3 | $ | 317.1 | $ | 223.4 | |||||||||||||||||||||||||||||||||||||
Fair value of derivatives, by maturity | The following table summarizes the net fair value of derivatives held as of December 31, 2014 and their expected maturities (in millions): | ||||||||||||||||||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||||||||||||||||||
Foreign currency cash flow hedges — Consumer-to-Consumer | $ | 62.6 | $ | 44.5 | $ | 18.1 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Foreign currency undesignated hedges — Consumer-to-Consumer | 2.5 | 2.5 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Foreign currency undesignated hedges — Business Solutions | 39.2 | 38.2 | 1 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Interest rate fair value hedges — Corporate | 1.6 | — | — | (1.0 | ) | (0.9 | ) | — | 3.5 | ||||||||||||||||||||||||||||||||||||
Total | $ | 105.9 | $ | 85.2 | $ | 19.1 | $ | (1.0 | ) | $ | (0.9 | ) | $ | — | $ | 3.5 | |||||||||||||||||||||||||||||
Gross and net fair value of derivative assets | Offsetting of Derivative Assets | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheets | Net Amounts Presented | Derivatives Not Offset | Net Amounts | ||||||||||||||||||||||||||||||||||||||||
in the Consolidated Balance Sheets | in the Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 255.1 | $ | — | $ | 255.1 | $ | (134.8 | ) | $ | 120.3 | ||||||||||||||||||||||||||||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 167.9 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 423 | |||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 118.4 | $ | — | $ | 118.4 | $ | (93.3 | ) | $ | 25.1 | ||||||||||||||||||||||||||||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 105.9 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 224.3 | |||||||||||||||||||||||||||||||||||||||||||
Gross and net fair value of derivative liabilities | Offsetting of Derivative Liabilities | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheets | Net Amounts Presented | Derivatives Not Offset | Net Amounts | ||||||||||||||||||||||||||||||||||||||||
in the Consolidated Balance Sheets | in the Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 169.3 | $ | — | $ | 169.3 | $ | (134.8 | ) | $ | 34.5 | ||||||||||||||||||||||||||||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 147.8 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 317.1 | |||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 146.1 | $ | — | $ | 146.1 | $ | (93.3 | ) | $ | 52.8 | ||||||||||||||||||||||||||||||||||
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 77.3 | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 223.4 | |||||||||||||||||||||||||||||||||||||||||||
Location and amount of gains/(losses) from hedging activities | Fair Value Hedges | ||||||||||||||||||||||||||||||||||||||||||||
The following table presents the location and amount of gains/(losses) from fair value hedges for the years ended December 31, 2014, 2013 and 2012 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Gain/(Loss) Recognized in Income on | Gain/(Loss) Recognized in Income on | Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||||||||||||||||||||||||||||||||||||
Derivatives | Related Hedged Item (a) | ||||||||||||||||||||||||||||||||||||||||||||
Income | Amount | Income | Amount | Income | Amount | ||||||||||||||||||||||||||||||||||||||||
Statement | Statement | Statement | |||||||||||||||||||||||||||||||||||||||||||
Derivatives | Location | 2014 | 2013 | 2012 | Hedged | Location | 2014 | 2013 | 2012 | Location | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||
Item | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts | Interest expense | $ | 17.5 | $ | (8.5 | ) | $ | 3.9 | Fixed-rate debt | Interest expense | $ | (4.4 | ) | $ | 19.3 | $ | 3.7 | Interest expense | $ | (0.7 | ) | $ | — | $ | — | ||||||||||||||||||||
Total gain/(loss) | $ | 17.5 | $ | (8.5 | ) | $ | 3.9 | $ | (4.4 | ) | $ | 19.3 | $ | 3.7 | $ | (0.7 | ) | $ | — | $ | — | ||||||||||||||||||||||||
Cash Flow Hedges | |||||||||||||||||||||||||||||||||||||||||||||
The following table presents the location and amount of gains/(losses) from cash flow hedges for the years ended December 31, 2014, 2013 and 2012 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Gain/(Loss) Recognized | Gain/(Loss) Reclassified | Gain/(Loss) Recognized in Income on | |||||||||||||||||||||||||||||||||||||||||||
in OCI on Derivatives | from Accumulated OCI into Income | Derivatives (Ineffective Portion and Amount | |||||||||||||||||||||||||||||||||||||||||||
(Effective Portion) | (Effective Portion) | Excluded from Effectiveness Testing) (b) | |||||||||||||||||||||||||||||||||||||||||||
Amount | Income | Amount | Income | Amount | |||||||||||||||||||||||||||||||||||||||||
Derivatives | 2014 | 2013 | 2012 | Statement Location | 2014 | 2013 | 2012 | Statement Location | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 84 | $ | (3.1 | ) | $ | (20.1 | ) | Revenue | $ | 1.6 | $ | 10.4 | $ | 13.4 | Derivative | $ | (4.4 | ) | $ | (0.4 | ) | $ | (0.1 | ) | ||||||||||||||||||||
gains/(losses), net | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate contracts (c) | — | — | — | Interest expense | (3.6 | ) | (3.6 | ) | (3.6 | ) | Interest expense | — | — | — | |||||||||||||||||||||||||||||||
Total gain/(loss) | $ | 84 | $ | (3.1 | ) | $ | (20.1 | ) | $ | (2.0 | ) | $ | 6.8 | $ | 9.8 | $ | (4.4 | ) | $ | (0.4 | ) | $ | (0.1 | ) | |||||||||||||||||||||
Undesignated Hedges | |||||||||||||||||||||||||||||||||||||||||||||
The following table presents the location and amount of net gains/(losses) from undesignated hedges for the years ended December 31, 2014, 2013 and 2012 (in millions): | |||||||||||||||||||||||||||||||||||||||||||||
Gain/(Loss) Recognized in Income on Derivatives (d) | |||||||||||||||||||||||||||||||||||||||||||||
Income Statement Location | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Derivatives | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts (e) | Selling, general and administrative | $ | 46.5 | $ | (3.7 | ) | $ | (10.6 | ) | ||||||||||||||||||||||||||||||||||||
Foreign currency contracts (f) | Derivative gains/(losses), net | 2.2 | (0.9 | ) | 0.6 | ||||||||||||||||||||||||||||||||||||||||
Total gain/(loss) | $ | 48.7 | $ | (4.6 | ) | $ | (10.0 | ) | |||||||||||||||||||||||||||||||||||||
____________________ | |||||||||||||||||||||||||||||||||||||||||||||
(a) | The 2014 loss of $4.4 million was comprised of a loss in value on the debt of $16.8 million and amortization of hedge accounting adjustments of $12.4 million. The 2013 gain of $19.3 million was comprised of a gain in value on the debt of $8.5 million and amortization of hedge accounting adjustments of $10.8 million. The 2012 gain of $3.7 million was comprised of a loss in value on the debt of $3.9 million and amortization of hedge accounting adjustments of $7.6 million. | ||||||||||||||||||||||||||||||||||||||||||||
(b) | The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates. | ||||||||||||||||||||||||||||||||||||||||||||
(c) | The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative's fair value in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets. These amounts are reclassified to "Interest expense" in the Consolidated Statements of Income over the life of the related notes. | ||||||||||||||||||||||||||||||||||||||||||||
(d) | The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above. | ||||||||||||||||||||||||||||||||||||||||||||
(e) | The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations and cash balances, not including amounts related to derivatives activity as displayed above, were $(51.8) million, $(5.4) million and $7.8 million for the years ended 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
(f) | The derivative contracts used in the Company's revenue hedging program are not designated as hedges in the final month of the contract. |
Borrowings_Tables
Borrowings (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Borrowings | The Company’s outstanding borrowings consisted of the following (in millions): | |||||||
December 31, 2014 | December 31, 2013 | |||||||
Notes: | ||||||||
6.500% notes due 2014 | $ | — | $ | 500 | ||||
Floating rate notes (effective rate of 1.2%) due 2015 | 250 | 250 | ||||||
2.375% notes due 2015 (a) | 250 | 250 | ||||||
5.930% notes due 2016 (a) | 1,000.00 | 1,000.00 | ||||||
2.875% notes (effective rate of 2.0%) due 2017 | 500 | 500 | ||||||
3.650% notes due 2018 (a) | 400 | 400 | ||||||
3.350% notes due 2019 (a) | 250 | 250 | ||||||
5.253% notes (effective rate of 4.6%) due 2020 | 324.9 | 324.9 | ||||||
6.200% notes due 2036 (a) | 500 | 500 | ||||||
6.200% notes due 2040 (a) | 250 | 250 | ||||||
Other borrowings | 5.6 | 5.7 | ||||||
Total borrowings at par value | 3,730.50 | 4,230.60 | ||||||
Fair value hedge accounting adjustments, net (b) | 5.3 | 0.9 | ||||||
Unamortized discount, net | (15.4 | ) | (18.5 | ) | ||||
Total borrowings at carrying value (c) | $ | 3,720.40 | $ | 4,213.00 | ||||
____________________ | ||||||||
(a) | The difference between the stated interest rate and the effective interest rate is not significant. | |||||||
(b) | 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 or increases in "Interest expense" in the Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate. | |||||||
(c) | As of December 31, 2014, the Company’s weighted-average effective rate on total borrowings was approximately 4.4%. | |||||||
Borrowings maturities | The following summarizes the Company's maturities of borrowings at par value as of December 31, 2014 (in millions): | |||||||
Due within 1 year | $ | 500 | ||||||
Due after 1 year through 2 years | 1,000.00 | |||||||
Due after 2 years through 3 years | 505.6 | |||||||
Due after 3 years through 4 years | 400 | |||||||
Due after 4 years through 5 years | 250 | |||||||
Due after 5 years | 1,074.90 | |||||||
Stock_Compensation_Plans_Table
Stock Compensation Plans (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock option activity | A summary of Western Union stock option activity for the year ended December 31, 2014 was as follows (options and aggregate intrinsic value in millions): | ||||||||||||
Year Ended December 31, 2014 | |||||||||||||
Options | Weighted-Average | Weighted-Average Remaining | |||||||||||
Exercise Price | Contractual Term | Aggregate | |||||||||||
(Years) | Intrinsic | ||||||||||||
Value | |||||||||||||
Outstanding as of January 1 | 23.8 | $ | 18.05 | ||||||||||
Granted | 0.9 | $ | 16.01 | ||||||||||
Exercised | (1.1 | ) | $ | 14.11 | |||||||||
Cancelled/forfeited | (7.2 | ) | $ | 18.94 | |||||||||
Outstanding as of December 31 | 16.4 | $ | 17.8 | 4.7 | $ | 20.7 | |||||||
Options exercisable as of December 31 | 12.5 | $ | 18.5 | 3.6 | $ | 10.9 | |||||||
Restricted stock units and performance based restricted stock units activity | A summary of Western Union activity for restricted stock units and performance-based restricted stock units for the year ended December 31, 2014 is listed below (units in millions): | ||||||||||||
Year Ended December 31, 2014 | |||||||||||||
Number | Weighted-Average | ||||||||||||
Outstanding | Grant-Date Fair Value | ||||||||||||
Non-vested as of January 1 | 6.3 | $ | 15.69 | ||||||||||
Granted | 3.6 | $ | 14.74 | ||||||||||
Vested | -1.4 | $ | 19.27 | ||||||||||
Forfeited | -0.9 | $ | 14.57 | ||||||||||
Non-vested as of December 31 | 7.6 | $ | 14.68 | ||||||||||
Impact on earnings for stock-based compensation expense | The following table sets forth the total impact on earnings for stock-based compensation expense recognized in the Consolidated Statements of Income resulting from stock options, restricted stock units, performance-based restricted stock units and bonus stock units for the years ended December 31, 2014, 2013 and 2012 (in millions, except per share data). | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock-based compensation expense | $ | (39.7 | ) | $ | (34.5 | ) | $ | (34.0 | ) | ||||
Income tax benefit from stock-based compensation expense | 11.5 | 10 | 10 | ||||||||||
Net income impact | $ | (28.2 | ) | $ | (24.5 | ) | $ | (24.0 | ) | ||||
Earnings per share: | |||||||||||||
Basic and Diluted | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
Assumptions for the Black-Scholes option pricing model to determine the value of options granted | The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted. | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock options granted: | |||||||||||||
Weighted-average risk-free interest rate | 1.9 | % | 1.2 | % | 1.2 | % | |||||||
Weighted-average dividend yield | 3.1 | % | 3.7 | % | 1.8 | % | |||||||
Volatility | 33.8 | % | 35.3 | % | 33.2 | % | |||||||
Expected term (in years) | 6.09 | 6.09 | 6.09 | ||||||||||
Weighted-average grant date fair value | $ | 3.95 | $ | 3.2 | $ | 4.9 | |||||||
Segments_Tables
Segments (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Segment results | The following tables present the Company's reportable segment results for the years ended December 31, 2014, 2013 and 2012, respectively (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenues: | ||||||||||||
Consumer-to-Consumer: | ||||||||||||
Transaction fees | $ | 3,421.80 | $ | 3,396.10 | $ | 3,545.60 | ||||||
Foreign exchange revenues | 998.9 | 981.3 | 988.5 | |||||||||
Other revenues | 65.1 | 56.2 | 50.2 | |||||||||
4,485.80 | 4,433.60 | 4,584.30 | ||||||||||
Consumer-to-Business: | ||||||||||||
Transaction fees | 572.7 | 579.1 | 573.6 | |||||||||
Foreign exchange and other revenues | 26.1 | 29.4 | 30.3 | |||||||||
598.8 | 608.5 | 603.9 | ||||||||||
Business Solutions: | ||||||||||||
Foreign exchange revenues | 363.1 | 355.5 | 332 | |||||||||
Transaction fees and other revenues | 41.5 | 37.4 | 35.4 | |||||||||
404.6 | 392.9 | 367.4 | ||||||||||
Other: | ||||||||||||
Total revenues | 118 | 107 | 109.2 | |||||||||
Total consolidated revenues | $ | 5,607.20 | $ | 5,542.00 | $ | 5,664.80 | ||||||
Operating income/(loss): | ||||||||||||
Consumer-to-Consumer | $ | 1,050.40 | $ | 1,030.40 | $ | 1,266.90 | ||||||
Consumer-to-Business | 98.7 | 121.9 | 137.6 | |||||||||
Business Solutions (a) | (12.1 | ) | (27.0 | ) | (54.8 | ) | ||||||
Other | 3.5 | (17.9 | ) | (19.7 | ) | |||||||
Total consolidated operating income | $ | 1,140.50 | $ | 1,107.40 | $ | 1,330.00 | ||||||
____________________ | ||||||||||||
(a) | During the years ended December 31, 2013 and 2012, the Company incurred $19.3 million and $42.8 million, respectively, of integration expenses related to the acquisition of Travelex Global Business Payments ("TGBP"), which was acquired in November 2011. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition, which are included in Other. | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Assets: | ||||||||||||
Consumer-to-Consumer | $ | 5,049.70 | $ | 5,321.90 | $ | 4,854.20 | ||||||
Consumer-to-Business | 1,060.20 | 1,129.90 | 1,029.60 | |||||||||
Business Solutions | 2,430.70 | 2,256.40 | 2,012.60 | |||||||||
Other | 1,349.80 | 1,413.10 | 1,569.30 | |||||||||
Total assets | $ | 9,890.40 | $ | 10,121.30 | $ | 9,465.70 | ||||||
Depreciation and amortization: | ||||||||||||
Consumer-to-Consumer | $ | 191.5 | $ | 179.4 | $ | 158.2 | ||||||
Consumer-to-Business | 17.3 | 15.8 | 14.7 | |||||||||
Business Solutions | 56.1 | 59.6 | 65.7 | |||||||||
Other | 7 | 8 | 7.5 | |||||||||
Total consolidated depreciation and amortization | $ | 271.9 | $ | 262.8 | $ | 246.1 | ||||||
Capital expenditures: | ||||||||||||
Consumer-to-Consumer | $ | 132.1 | $ | 174 | $ | 219.1 | ||||||
Consumer-to-Business | 27.3 | 36.9 | 21.8 | |||||||||
Business Solutions | 13 | 14.8 | 16.1 | |||||||||
Other | 6.6 | 15.6 | 11.2 | |||||||||
Total capital expenditures | $ | 179 | $ | 241.3 | $ | 268.2 | ||||||
Revenue and long-lived assets by geographic areas | Information concerning principal geographic areas was as follows (in millions): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 1,564.60 | $ | 1,523.70 | $ | 1,593.10 | ||||||
International | 4,042.60 | 4,018.30 | 4,071.70 | |||||||||
Total | $ | 5,607.20 | $ | 5,542.00 | $ | 5,664.80 | ||||||
Long-lived assets: | ||||||||||||
United States | $ | 158.1 | $ | 156.6 | $ | 148.2 | ||||||
International | 48.3 | 53.3 | 47.9 | |||||||||
Total | $ | 206.4 | $ | 209.9 | $ | 196.1 | ||||||
Quarterly_Financial_Informatio1
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||
Schedule of quarterly results | Summarized quarterly results for the years ended December 31, 2014 and 2013 were as follows (in millions, except per share data): | ||||||||||||||||||||
2014 by Quarter: | Q1 | Q2 | Q3 | Q4 | Year Ended December 31, 2014 | ||||||||||||||||
Revenues | $ | 1,350.80 | $ | 1,405.60 | $ | 1,440.90 | $ | 1,409.90 | $ | 5,607.20 | |||||||||||
Expenses (a) | 1,078.80 | 1,127.30 | 1,126.80 | 1,133.80 | 4,466.70 | ||||||||||||||||
Operating income | 272 | 278.3 | 314.1 | 276.1 | 1,140.50 | ||||||||||||||||
Other expense, net | 44.6 | 46.2 | 41.3 | 40.2 | 172.3 | ||||||||||||||||
Income before income taxes | 227.4 | 232.1 | 272.8 | 235.9 | 968.2 | ||||||||||||||||
Provision for income taxes | 24.4 | 38.3 | 38.7 | 14.4 | 115.8 | ||||||||||||||||
Net income | $ | 203 | $ | 193.8 | $ | 234.1 | $ | 221.5 | $ | 852.4 | |||||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.37 | $ | 0.36 | $ | 0.44 | $ | 0.42 | $ | 1.6 | |||||||||||
Diluted | $ | 0.37 | $ | 0.36 | $ | 0.44 | $ | 0.42 | $ | 1.59 | |||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||
Basic | 545.9 | 537.1 | 527.8 | 522.8 | 533.4 | ||||||||||||||||
Diluted | 549.2 | 539.9 | 531.2 | 526.9 | 536.8 | ||||||||||||||||
(a) | Includes $30.3 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||||
2013 by Quarter: | Q1 | Q2 | Q3 | Q4 | Year Ended December 31, 2013 | ||||||||||||||||
Revenues | $ | 1,325.40 | $ | 1,385.90 | $ | 1,408.80 | $ | 1,421.90 | $ | 5,542.00 | |||||||||||
Expenses (b) (c) | 1,028.50 | 1,109.10 | 1,113.50 | 1,183.50 | 4,434.60 | ||||||||||||||||
Operating income | 296.9 | 276.8 | 295.3 | 238.4 | 1,107.40 | ||||||||||||||||
Other expense, net | 46.7 | 44.6 | 43.6 | 45.6 | 180.5 | ||||||||||||||||
Income before income taxes | 250.2 | 232.2 | 251.7 | 192.8 | 926.9 | ||||||||||||||||
Provision for income taxes | 38.2 | 33.6 | 37.3 | 19.4 | 128.5 | ||||||||||||||||
Net income | $ | 212 | $ | 198.6 | $ | 214.4 | $ | 173.4 | $ | 798.4 | |||||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.37 | $ | 0.36 | $ | 0.39 | $ | 0.31 | $ | 1.43 | |||||||||||
Diluted | $ | 0.37 | $ | 0.36 | $ | 0.39 | $ | 0.31 | $ | 1.43 | |||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||
Basic | 567.6 | 555.7 | 552.1 | 551.2 | 556.6 | ||||||||||||||||
Diluted | 569.7 | 558.3 | 555.8 | 555 | 559.7 | ||||||||||||||||
____________ | |||||||||||||||||||||
(b) | Includes $3.9 million in the first quarter, $6.2 million in the second quarter, $3.8 million in the third quarter, and $5.4 million in the fourth quarter of integration expenses related to the acquisition of TGBP. | ||||||||||||||||||||
(c) | Includes $4.2 million in the first quarter, $13.5 million in the second quarter, $6.2 million in the third quarter, and $33.0 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. |
Formation_of_the_Entity_and_Ba1
Formation of the Entity and Basis of Presentation (Details Numeric) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net assets subject to limitations | $300 |
Minimum [Member] | |
Entity Location [Line Items] | |
Number of countries and territories where services are primarily available through a network of agent locations | 200 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details Numeric) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Allowance for doubtful accounts | $37.20 | $38.30 | |
Provision for doubtful accounts | 50.7 | 50.1 | 44.9 |
Goodwill impairments | 0 | 0 | 0 |
Advertising costs | $162.70 | $165.10 | $177.50 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Weighted-average shares outstanding, diluted: | |||||||||||
Outstanding options to purchase excluded from the diluted earnings per share calculation | 15.5 | 21.2 | 23.3 | ||||||||
Basic weighted-average shares outstanding | 522.8 | 527.8 | 537.1 | 545.9 | 551.2 | 552.1 | 555.7 | 567.6 | 533.4 | 556.6 | 604.9 |
Common stock equivalents | 3.4 | 3.1 | 2.5 | ||||||||
Diluted weighted-average shares outstanding | 526.9 | 531.2 | 539.9 | 549.2 | 555 | 555.8 | 558.3 | 569.7 | 536.8 | 559.7 | 607.4 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Settlement assets: | ||
Cash and cash equivalents | $834.30 | $538.60 |
Receivables from selling agents and Business Solutions customers | 1,006.90 | 981.3 |
Investment securities | 1,472.50 | 1,750.50 |
Total settlement assets | 3,313.70 | 3,270.40 |
Settlement obligations: | ||
Money transfer, money order and payment service payables | 2,356.70 | 2,376.60 |
Payables to agents | 957 | 893.8 |
Total settlement obligations | $3,313.70 | $3,270.40 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property and Equipment (Textual) [Abstract] | |||
Depreciation | $66.60 | $64.20 | $61.70 |
Property And Equipment | |||
Property and equipment, gross | 684.9 | 638.5 | |
Accumulated depreciation | -478.5 | -428.6 | |
Property and equipment, net | 206.4 | 209.9 | 196.1 |
Equipment [Member] | |||
Property And Equipment | |||
Property and equipment, gross | 464.6 | 416.1 | |
Buildings [Member] | |||
Property and Equipment (Textual) [Abstract] | |||
Property, plant and equipment useful life | 30 years | ||
Property And Equipment | |||
Property and equipment, gross | 87.8 | 82.3 | |
Leasehold improvements [Member] | |||
Property And Equipment | |||
Property and equipment, gross | 81.1 | 80.3 | |
Furniture and fixtures [Member] | |||
Property And Equipment | |||
Property and equipment, gross | 32.2 | 33.3 | |
Land and improvements [Member] | |||
Property And Equipment | |||
Property and equipment, gross | 17 | 16.9 | |
Projects in process [Member] | |||
Property And Equipment | |||
Property and equipment, gross | $2.20 | $9.60 | |
Minimum [Member] | Equipment [Member] | |||
Property and Equipment (Textual) [Abstract] | |||
Property, plant and equipment useful life | 3 years | ||
Minimum [Member] | Furniture and fixtures [Member] | |||
Property and Equipment (Textual) [Abstract] | |||
Property, plant and equipment useful life | 3 years | ||
Maximum [Member] | Equipment [Member] | |||
Property and Equipment (Textual) [Abstract] | |||
Property, plant and equipment useful life | 10 years | ||
Maximum [Member] | Furniture and fixtures [Member] | |||
Property and Equipment (Textual) [Abstract] | |||
Property, plant and equipment useful life | 10 years |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Intangible Assets | |||
Weighted-Average Amortization Period (in years) | 7 years 10 months 25 days | ||
Initial Cost | $1,568.10 | $1,506.10 | |
Net of Accumulated Amortization | 748.1 | 833.8 | |
Intangible Assets, (Textual) [Abstract] | |||
Amortization expense | 205.3 | 198.6 | 184.4 |
Estimated future aggregate amortization expense, 2015 | 209.7 | ||
Estimated future aggregate amortization expense, 2016 | 152.6 | ||
Estimated future aggregate amortization expense, 2017 | 124.3 | ||
Estimated future aggregate amortization expense, 2018 | 65.8 | ||
Estimated future aggregate amortization expense, 2019 | 55.7 | ||
Estimated future aggregate amortization expense, thereafter | 140 | ||
Intangible Impairments | 0 | 0 | 0 |
Acquired contracts [Member] | |||
Other Intangible Assets | |||
Weighted-Average Amortization Period (in years) | 11 years 5 months 10 days | ||
Initial Cost | 630.8 | 632 | |
Net of Accumulated Amortization | 374.9 | 414.3 | |
Capitalized contract costs [Member] | |||
Other Intangible Assets | |||
Weighted-Average Amortization Period (in years) | 5 years 7 months 15 days | ||
Initial Cost | 559.6 | 528.5 | |
Net of Accumulated Amortization | 276.6 | 315.2 | |
Internal use software [Member] | |||
Other Intangible Assets | |||
Weighted-Average Amortization Period (in years) | 3 years 4 months 2 days | ||
Initial Cost | 301.6 | 264.9 | |
Net of Accumulated Amortization | 60.1 | 65.1 | |
Acquired trademarks [Member] | |||
Other Intangible Assets | |||
Weighted-Average Amortization Period (in years) | 24 years 6 months 15 days | ||
Initial Cost | 36.4 | 38 | |
Net of Accumulated Amortization | 22.7 | 25.3 | |
Projects in process [Member] | |||
Other Intangible Assets | |||
Weighted-Average Amortization Period (in years) | 3 years | ||
Initial Cost | 12.2 | 9.6 | |
Net of Accumulated Amortization | 12.2 | 9.6 | |
Other intangibles [Member] | |||
Other Intangible Assets | |||
Weighted-Average Amortization Period (in years) | 3 years 10 months 25 days | ||
Initial Cost | 27.5 | 33.1 | |
Net of Accumulated Amortization | $1.60 | $4.30 | |
Minimum [Member] | Internal use software [Member] | |||
Intangible Assets, (Textual) [Abstract] | |||
Amortization period of intangible assets | 3 years | ||
Maximum [Member] | Internal use software [Member] | |||
Intangible Assets, (Textual) [Abstract] | |||
Amortization period of intangible assets | 5 years |
Productivity_and_CostSavings_I2
Productivity and Cost-Savings Initiatives Expenses (Details Numeric) (USD $) | 3 Months Ended | 12 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Productivity and Cost-Savings Initiatives Expenses [Abstract] | ||||||||
Expenses | $30.30 | $33 | $6.20 | $13.50 | $4.20 | $30.30 | $56.90 | $30.90 |
Cash payments | 42.9 | 41.8 | 5.6 | |||||
Remaining payments | $33.60 | $46.40 | $33.60 | $46.40 |
Productivity_and_CostSavings_I3
Productivity and Cost-Savings Initiatives Expenses (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Schedule of Productivity and Cost-Savings Initiatives Expenses in Income Statement [Abstract] | |||||||||||||||||||
Cost of services | $3,297.40 | $3,235 | $3,194.20 | ||||||||||||||||
Selling, general and administrative | 1,169.30 | 1,199.60 | 1,140.60 | ||||||||||||||||
Total expenses, pre-tax | 1,133.80 | [1] | 1,126.80 | 1,127.30 | 1,078.80 | 1,183.50 | [2],[3] | 1,113.50 | [2],[3] | 1,109.10 | [2],[3] | 1,028.50 | [2],[3] | 4,466.70 | [1],[4] | 4,434.60 | [2],[3],[4] | 4,334.80 | [4] |
Productivity and Cost-Savings Initiatives [Member] | |||||||||||||||||||
Schedule of Productivity and Cost-Savings Initiatives Expenses in Income Statement [Abstract] | |||||||||||||||||||
Cost of services | 11.6 | 24.3 | 5.5 | ||||||||||||||||
Selling, general and administrative | 18.7 | 32.6 | 25.4 | ||||||||||||||||
Total expenses, pre-tax | 30.3 | 56.9 | 30.9 | ||||||||||||||||
Total expenses, net of tax | $20.20 | $40.20 | $20.20 | ||||||||||||||||
[1] | Includes $30.3 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||
[2] | Includes $3.9 million in the first quarter, $6.2 million in the second quarter, $3.8 million in the third quarter, and $5.4 million in the fourth quarter of integration expenses related to the acquisition of TGBP. | ||||||||||||||||||
[3] | Includes $4.2 million in the first quarter, $13.5 million in the second quarter, $6.2 million in the third quarter, and $33.0 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||
[4] | As further described in Note 6, total expenses include amounts for related parties of $70.2 million, $80.6 million and $95.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Productivity_and_CostSavings_I4
Productivity and Cost-Savings Initiatives Expenses (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Productivity and cost-savings initiatives by segment | ||||||||
Expenses | $30.30 | $33 | $6.20 | $13.50 | $4.20 | $30.30 | $56.90 | $30.90 |
Consumer-to-Consumer [Member] | ||||||||
Productivity and cost-savings initiatives by segment | ||||||||
Expenses | 15.7 | 43.8 | 20.9 | |||||
Consumer-to-Business [Member] | ||||||||
Productivity and cost-savings initiatives by segment | ||||||||
Expenses | 6.7 | 5.4 | 4 | |||||
Business Solutions [Member] | ||||||||
Productivity and cost-savings initiatives by segment | ||||||||
Expenses | 7.3 | 3.6 | 0 | |||||
Other [Member] | ||||||||
Productivity and cost-savings initiatives by segment | ||||||||
Expenses | $0.60 | $4.10 | $6 |
Acquisitions_Details_Numeric
Acquisitions (Details Numeric) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Business Acquisition [Line Items] | ||||
Weighted average life of identifiable intangible assets (in years) | 7 years 10 months 25 days | |||
Goodwill | $3,169.20 | $3,172 | $3,179.70 | |
Brazilian foreign exchange operations [Member] | ||||
Business Acquisition [Line Items] | ||||
Total consideration | 18.5 | |||
Identifiable intangible assets | 15.6 | |||
Weighted average life of identifiable intangible assets (in years) | 10 years | |||
Goodwill | $2.40 | |||
Brazilian foreign exchange operations [Member] | Minimum [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization period of identifiable intangible assets (in years) | 2 years | |||
Brazilian foreign exchange operations [Member] | Maximum [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization period of identifiable intangible assets (in years) | 12 years |
Acquisitions_Details
Acquisitions (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $3,172 | $3,179.70 |
Acquisitions | 2.4 | |
Currency translation | -5.2 | -7.7 |
Goodwill, ending balance | 3,169.20 | 3,172 |
Consumer-to-Consumer [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 1,947.70 | 1,947.70 |
Acquisitions | 2.4 | |
Currency translation | 0 | 0 |
Goodwill, ending balance | 1,950.10 | 1,947.70 |
Consumer-to-Business [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 214.7 | 221.1 |
Acquisitions | 0 | |
Currency translation | -5 | -6.4 |
Goodwill, ending balance | 209.7 | 214.7 |
Business Solutions [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 996 | 996 |
Acquisitions | 0 | |
Currency translation | 0 | 0 |
Goodwill, ending balance | 996 | 996 |
Other [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 13.6 | 14.9 |
Acquisitions | 0 | |
Currency translation | -0.2 | -1.3 |
Goodwill, ending balance | $13.40 | $13.60 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Numeric) (USD $) | 12 Months Ended | 1 Months Ended | 11 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Apr. 10, 2014 | Apr. 06, 2010 | Jan. 31, 2014 | Mar. 14, 2014 | Jul. 31, 2013 | |
agent | class_member | |||||
Letters of Credit and Bank Guarantees [Abstract] | ||||||
Letters of credit outstanding and bank guarantees | $210,000,000 | |||||
Letters of credit renewal option | 1 year | |||||
Southern District of Florida [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of locations subpoenaed | 33 | |||||
Number of agent locations with seizure warrants | 2 | |||||
Period in which all money transfers sent from certain agent locations were seized | 10 days | |||||
District of Colorado [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of class action lawsuits | 2 | |||||
Number of class members who filed appeals | 2 | |||||
Primary recommendations [Member] | State of Arizona [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Remedy election period | 180 days | |||||
Number of remedies | 1 | |||||
Settlement amount contingently payable for ineffective program implementation | 50,000,000 | |||||
Settlement amount for individual recommendation implementation failure | 1,000,000 | |||||
Secondary recommendations [Member] | State of Arizona [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement amount contingently payable for ineffective program implementation | 25,000,000 | |||||
Settlement amount for individual recommendation implementation failure | 500,000 | |||||
Money Transfer Transaction Data Analysis Center [Member] | State of Arizona [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
One-time settlement payment | 250,000 | |||||
Monthly settlement payment | 150,000 | |||||
Monthly settlement payment funding period | 5 years | |||||
Expense reimbursement increments | $500,000 | |||||
Minimum [Member] | Primary recommendations [Member] | State of Arizona [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of primary settlement recommendations | 70 |
Related_Party_Transactions_Det
Related Party Transactions (Details Numeric) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 |
agent | ||||
Related Party Transactions | ||||
Commission expense | $70.20 | $80.60 | $95 | |
Equity Method Investee [Member] | ||||
Related Party Transactions | ||||
Commission expense | 70.2 | 65.5 | 66.1 | |
Director [Member] | ||||
Related Party Transactions | ||||
Commission expense | $15.10 | $28.90 | ||
Number of related party agents | 1 | 2 |
Investment_Securities_Details_
Investment Securities (Details Numeric) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Additional available-for-sale Securities (Numeric) | |||
Variable rate demand notes, maximum maturity year | 2050 | ||
Available-for-sale Securities | $1,850,700,000 | ||
Proceeds from sale of non-settlement related investments | 100,200,000 | 0 | 0 |
Proceeds from sale and maturity of available-for-sale securities | 17,700,000,000 | 19,000,000,000 | 16,300,000,000 |
Maximum [Member] | |||
Additional available-for-sale Securities (Numeric) | |||
Variable rate demand notes, period of time held | 30 days | ||
Short-term bond mutual fund [Member] | |||
Additional available-for-sale Securities (Numeric) | |||
Available-for-sale Securities | 100,200,000 | ||
Proceeds from sale of non-settlement related investments | $100,200,000 |
Investment_Securities_Details
Investment Securities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | $1,844.30 | |||
Fair Value | 1,850.70 | |||
Gross Unrealized Gains | 8.1 | |||
Gross Unrealized Losses | -1.7 | |||
Net Unrealized Gains/(Losses) | 6.4 | |||
Settlement assets [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 1,458.60 | 1,744.30 | ||
Fair Value | 1,472.50 | 1,750.50 | ||
Gross Unrealized Gains | 15.2 | 7.9 | ||
Gross Unrealized Losses | -1.3 | -1.7 | ||
Net Unrealized Gains/(Losses) | 13.9 | 6.2 | ||
State and municipal debt securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 1,024.20 | [1] | 868.1 | [1] |
Fair Value | 1,038.10 | [1] | 874.2 | [1] |
Gross Unrealized Gains | 15.1 | [1] | 7.8 | [1] |
Gross Unrealized Losses | -1.2 | [1] | -1.7 | [1] |
Net Unrealized Gains/(Losses) | 13.9 | [1] | 6.1 | [1] |
State and municipal variable rate demand notes [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 316.8 | 865 | ||
Fair Value | 316.8 | 865 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Net Unrealized Gains/(Losses) | 0 | 0 | ||
Corporate and other debt securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 70.5 | 11.2 | ||
Fair Value | 70.5 | 11.3 | ||
Gross Unrealized Gains | 0.1 | 0.1 | ||
Gross Unrealized Losses | -0.1 | 0 | ||
Net Unrealized Gains/(Losses) | 0 | 0.1 | ||
Short-term state and municipal bond mutual fund | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 47.1 | |||
Fair Value | 47.1 | |||
Gross Unrealized Gains | 0 | |||
Gross Unrealized Losses | 0 | |||
Net Unrealized Gains/(Losses) | 0 | |||
Short-term taxable bond mutual fund | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 100 | |||
Fair Value | 100.2 | |||
Gross Unrealized Gains | 0.2 | |||
Gross Unrealized Losses | 0 | |||
Net Unrealized Gains/(Losses) | $0.20 | |||
[1] | The majority of these securities are fixed rate instruments. |
Investment_Securities_Details_1
Investment Securities (Details 1) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Settlement assets [Member] | |
Amortized Cost | |
Due within 1 year | $150.50 |
Due after 1 year through 5 years | 556 |
Due after 5 years through 10 years | 383.1 |
Due after 10 years | 321.9 |
Total investment securities | 1,411.50 |
Fair Value | |
Due within 1 year | 151.1 |
Due after 1 year through 5 years | 558.7 |
Due after 5 years through 10 years | 393.7 |
Due after 10 years | 321.9 |
Total investment securities | 1,425.40 |
Variable rate demand notes [Member] | |
Fair Value | |
Due after 1 year through 5 years | 6 |
Due after 5 years through 10 years | 3.5 |
Due after 10 years | $307.30 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
In Millions, unless otherwise specified | |||
Other Assets [Abstract] | |||
Short-term taxable bond mutual fund | $0 | $100.20 | |
Derivatives | 423 | 224.3 | |
Liabilities [Abstract] | |||
Derivatives | 317.1 | 223.4 | |
Fair Value Measurements (Numeric) [Abstract] | |||
Total borrowings at carrying value | 3,720.40 | [1] | 4,213 |
Recurring [Member] | |||
Settlement Assets [Abstract] | |||
State and municipal debt securities | 1,038.10 | 874.2 | |
State and municipal variable rate demand notes | 316.8 | 865 | |
Corporate and other debt securities | 70.5 | 11.3 | |
Short-term state and municipal bond mutual fund | 47.1 | ||
Other Assets [Abstract] | |||
Short-term taxable bond mutual fund | 100.2 | ||
Derivatives | 423 | 224.3 | |
Total assets | 1,895.50 | 2,075 | |
Liabilities [Abstract] | |||
Notes and other borrowings | 3,890.50 | 4,343.20 | |
Derivatives | 317.1 | 223.4 | |
Total liabilities | 4,207.60 | 4,566.60 | |
Recurring [Member] | Level 1 [Member] | |||
Settlement Assets [Abstract] | |||
State and municipal debt securities | 0 | 0 | |
State and municipal variable rate demand notes | 0 | 0 | |
Corporate and other debt securities | 0 | 0 | |
Short-term state and municipal bond mutual fund | 47.1 | ||
Other Assets [Abstract] | |||
Short-term taxable bond mutual fund | 100.2 | ||
Derivatives | 0 | 0 | |
Total assets | 47.1 | 100.2 | |
Liabilities [Abstract] | |||
Notes and other borrowings | 0 | 0 | |
Derivatives | 0 | 0 | |
Total liabilities | 0 | 0 | |
Recurring [Member] | Level 2 [Member] | |||
Settlement Assets [Abstract] | |||
State and municipal debt securities | 1,038.10 | 874.2 | |
State and municipal variable rate demand notes | 316.8 | 865 | |
Corporate and other debt securities | 70.5 | 11.3 | |
Short-term state and municipal bond mutual fund | 0 | ||
Other Assets [Abstract] | |||
Short-term taxable bond mutual fund | 0 | ||
Derivatives | 423 | 224.3 | |
Total assets | 1,848.40 | 1,974.80 | |
Liabilities [Abstract] | |||
Notes and other borrowings | 3,890.50 | 4,343.20 | |
Derivatives | 317.1 | 223.4 | |
Total liabilities | 4,207.60 | 4,566.60 | |
Recurring [Member] | Level 3 [Member] | |||
Settlement Assets [Abstract] | |||
State and municipal debt securities | 0 | 0 | |
State and municipal variable rate demand notes | 0 | 0 | |
Corporate and other debt securities | 0 | 0 | |
Short-term state and municipal bond mutual fund | 0 | ||
Other Assets [Abstract] | |||
Short-term taxable bond mutual fund | 0 | ||
Derivatives | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities [Abstract] | |||
Notes and other borrowings | 0 | 0 | |
Derivatives | 0 | 0 | |
Total liabilities | $0 | $0 | |
[1] | As of December 31, 2014, the Company’s weighted-average effective rate on total borrowings was approximately 4.4%. |
Other_Assets_and_Other_Liabili2
Other Assets and Other Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other assets: | ||
Derivatives | $423 | $224.30 |
Short-term taxable bond mutual fund (Note 7) | 0 | 100.2 |
Prepaid expenses | 63 | 69 |
Amounts advanced to agents, net of discounts | 45.2 | 41.8 |
Equity method investments | 41.6 | 41 |
Other | 97 | 85.8 |
Total other assets | 669.8 | 562.1 |
Other liabilities: | ||
Derivatives | 317.1 | 223.4 |
Pension obligations | 74.9 | 70.4 |
Other | 92.2 | 64.4 |
Total other liabilities | $484.20 | $358.20 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Components of pre-tax income | |||||||||||
Domestic | $34.70 | ($28.40) | $94.80 | ||||||||
Foreign | 933.5 | 955.3 | 1,074 | ||||||||
Income before income taxes | $235.90 | $272.80 | $232.10 | $227.40 | $192.80 | $251.70 | $232.20 | $250.20 | $968.20 | $926.90 | $1,168.80 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Provision for income taxes | |||||||||||
Federal | $57 | $88.30 | $92.50 | ||||||||
State and local | 4.9 | -3.7 | -14.8 | ||||||||
Foreign | 53.9 | 43.9 | 65.2 | ||||||||
Provision for income taxes | $14.40 | $38.70 | $38.30 | $24.40 | $19.40 | $37.30 | $33.60 | $38.20 | $115.80 | $128.50 | $142.90 |
Income_Taxes_Details_2
Income Taxes (Details 2) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Effective tax rate reconciliation | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal income tax benefits | 0.60% | 0.70% | 0.60% |
Foreign rate differential, net of U.S. tax paid on foreign earnings (4.3%, 9.2% and 5.1%, respectively) | -24.00% | -22.90% | -22.50% |
Other | 0.40% | 1.10% | -0.90% |
Effective tax rate | 12.00% | 13.90% | 12.20% |
U.S. tax paid on foreign earnings | 4.30% | 9.20% | 5.10% |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||||||||||
Federal | $76.10 | $86.10 | $117.20 | ||||||||
State and local | 4.7 | 8.1 | -2.5 | ||||||||
Foreign | 61.8 | 73.6 | 63.4 | ||||||||
Total current taxes | 142.6 | 167.8 | 178.1 | ||||||||
Deferred: | |||||||||||
Federal | -19.1 | 2.2 | -24.7 | ||||||||
State and local | 0.2 | -11.8 | -12.3 | ||||||||
Foreign | -7.9 | -29.7 | 1.8 | ||||||||
Total deferred taxes | -26.8 | -39.3 | -35.2 | ||||||||
Provision for income taxes | $14.40 | $38.70 | $38.30 | $24.40 | $19.40 | $37.30 | $33.60 | $38.20 | $115.80 | $128.50 | $142.90 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Deferred tax assets related to: | ||
Reserves, accrued expenses and employee-related items | $81.80 | $57 |
Tax attribute carryovers | 41 | 22.3 |
Pension obligations | 26.7 | 25.6 |
Intangibles, property and equipment | 12.1 | 14.9 |
Other | 13.6 | 29.7 |
Valuation allowance | -46.6 | -16.4 |
Total deferred tax assets | 128.6 | 133.1 |
Deferred tax liabilities related to: | ||
Intangibles, property and equipment | 428.1 | 449.2 |
Other | 5.5 | 3.1 |
Total deferred tax liabilities | 433.6 | 452.3 |
Net deferred tax liability | $305 | $319.20 |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Unrecognized tax benefits reconciliation | ||||
Balance as of January 1, | $117.50 | $103.20 | ||
Increases - positions taken in current period | 12.2 | [1] | 18.5 | [1] |
Increases - positions taken in prior periods | 5.7 | [2] | 15.6 | [2] |
Decreases - positions taken in prior periods | -23.9 | -8.7 | ||
Decreases - settlements with taxing authorities | -8.1 | -4.1 | ||
Decreases - lapse of applicable statute of limitations | -7.2 | -7 | ||
Decreases - effects of foreign currency exchange rates | -2.8 | 0 | ||
Balance as of December 31, | $93.40 | $117.50 | ||
[1] | Includes recurring accruals for issues which initially arose in previous periods. | |||
[2] | Changes to positions taken in prior periods relate to changes in estimates used to calculate prior period unrecognized tax benefits. |
Income_Taxes_Details_Numeric
Income Taxes (Details Numeric) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Uncertain Tax Positions [Abstract] | |||
Total tax contingency reserve | $96,800,000 | ||
Unrecognized tax benefits that, if recognized, would affect the effective tax rate | 82,400,000 | 108,900,000 | |
Interest and penalties, recognized | 1,500,000 | -1,800,000 | 500,000 |
Interest and penalties, accrued | 15,100,000 | 17,700,000 | |
Reasonably possible decrease to the Company's total unrecognized tax benefits during the next 12 months | 26,000,000 | ||
Expected cash payments as a result of the IRS Agreement | 190,000,000 | ||
Cash payments made to date as a result of the IRS Agreement | 94,100,000 | ||
Provision for certain outside tax basis differences, which primarily relate to accumulated foreign earnings | 0 | ||
Accumulated foreign earnings | $5,600,000,000 | ||
Foreign Tax Authority [Member] | Pre-tax Income [Member] | Geographic Concentration Risk [Member] | |||
Components of pre-tax income | |||
Percent of pre-tax income derived from foreign sources | 96.00% | 103.00% | 92.00% |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Change in projected benefit obligation: | |||
Projected benefit obligation as of January 1, | $366.20 | $418.80 | |
Interest cost | 13.6 | 12.1 | 14.7 |
Actuarial (gain)/loss | 35.8 | -25.4 | |
Benefits paid | -37.8 | -39.3 | |
Projected benefit obligation as of December 31, | 377.8 | 366.2 | 418.8 |
Change in plan assets: | |||
Fair value of plan assets as of January 1, | 295.8 | 316.7 | |
Actual return on plan assets | 31.7 | 2.7 | |
Benefits paid | -37.8 | -39.3 | |
Company contributions | 13.2 | 15.7 | |
Fair value of plan assets as of December 31, | 302.9 | 295.8 | 316.7 |
Funded status of the plan as of December 31, | -74.9 | -70.4 | |
Accumulated benefit obligation as of December 31, | $377.80 | $366.20 |
Employee_Benefit_Plans_Details1
Employee Benefit Plans (Details 1) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of pension amounts recognized in the Consolidated Balance Sheets | |||
Accrued benefit liability | ($74.90) | ($70.40) | |
Accumulated other comprehensive loss (pre-tax) | 200.9 | 187 | |
Net amount recognized | 126 | 116.6 | |
Components of the net periodic benefit cost | |||
Interest cost | 13.6 | 12.1 | 14.7 |
Expected return on plan assets | -20.2 | -20.7 | -20.8 |
Amortization of actuarial loss | 10.4 | 12.4 | 10.5 |
Net periodic benefit cost | $3.80 | $3.80 | $4.40 |
Employee_Benefit_Plans_Details2
Employee Benefit Plans (Details 2) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Pension benefit obligation, weighted-average rate assumptions | |||
Discount rate | 3.27% | 3.91% | |
Net benefit cost, weighted-average rate assumptions | |||
Discount rate | 3.91% | 3.03% | 3.72% |
Expected long-term return on plan assets | 7.00% | 7.00% | 7.00% |
Equity investments [Member] | |||
Pension plan asset allocation | |||
Percentage of Plan Assets | 17.00% | 18.00% | |
Target Allocation | 20.00% | ||
Debt securities [Member] | |||
Pension plan asset allocation | |||
Percentage of Plan Assets | 63.00% | 59.00% | |
Target Allocation | 60.00% | ||
Alternative investments [Member] | |||
Pension plan asset allocation | |||
Percentage of Plan Assets | 20.00% | 23.00% | |
Target Allocation | 20.00% |
Employee_Benefit_Plans_Details3
Employee Benefit Plans (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust at fair value, excluding other assets | $300.40 | $294.90 | |||
Other assets | 2.5 | 0.9 | |||
Total investments of the Trust | 302.9 | 295.8 | 316.7 | ||
Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 73.1 | 64.5 | |||
Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 198.8 | 204.5 | |||
Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 28.5 | 25.9 | 23.8 | ||
Domestic equity [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 26.8 | 26.2 | |||
Domestic equity [Member] | Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 26.8 | 26.2 | |||
Domestic equity [Member] | Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | 0 | |||
Domestic equity [Member] | Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | 0 | |||
International equity [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 25.5 | [1] | 28 | [1] | |
International equity [Member] | Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 1.5 | [1] | 1.5 | [1] | |
International equity [Member] | Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 24 | [1] | 26.5 | [1] | |
International equity [Member] | Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | [1] | 0 | [1] | |
Corporate debt [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 132.9 | [2] | 127.3 | [2] | |
Corporate debt [Member] | Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | [2] | 0 | [2] | |
Corporate debt [Member] | Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 132.9 | [2] | 127.3 | [2] | |
Corporate debt [Member] | Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | [2] | 0 | [2] | |
U.S. treasury bonds [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 44.8 | 36.8 | |||
U.S. treasury bonds [Member] | Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 44.8 | 36.8 | |||
U.S. treasury bonds [Member] | Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | 0 | |||
U.S. treasury bonds [Member] | Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | 0 | |||
State and municipal debt securities [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 4.4 | 3.9 | |||
State and municipal debt securities [Member] | Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | 0 | |||
State and municipal debt securities [Member] | Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 4.4 | 3.9 | |||
State and municipal debt securities [Member] | Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | 0 | |||
Other debt [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 5.6 | 4.4 | |||
Other debt [Member] | Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | 0 | |||
Other debt [Member] | Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 5.6 | 4.4 | |||
Other debt [Member] | Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | 0 | |||
Hedge funds [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 31.9 | [3] | 42.4 | [3] | |
Hedge funds [Member] | Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | [3] | 0 | [3] | |
Hedge funds [Member] | Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 31.9 | [3] | 42.4 | [3] | |
Hedge funds [Member] | Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | [3] | 0 | [3] | |
Royalty rights and private equity [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 28.5 | [4] | 25.9 | [4] | |
Royalty rights and private equity [Member] | Level 1 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | [4] | 0 | [4] | |
Royalty rights and private equity [Member] | Level 2 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | 0 | [4] | 0 | [4] | |
Royalty rights and private equity [Member] | Level 3 [Member] | |||||
Fair value measurement of Trust investments | |||||
Total investments of the Trust | $28.50 | [4] | $25.90 | [4] | |
[1] | Funds included herein have monthly redemption frequencies, with redemption notice periods of one to ten business days. | ||||
[2] | Substantially all corporate debt securities are investment grade securities. | ||||
[3] | Hedge funds generally hold liquid and readily priceable securities, such as public equities, exchange-traded derivatives, and corporate bonds. Hedge funds themselves do not have readily available market quotations, and therefore are valued using the Net Asset Value ("NAV") per share provided by the investment sponsor or third party administrator. Funds investing in diverse hedge fund strategies (primarily commingled funds) had the following composition of underlying hedge fund investments within the pension plan at December 31, 2014: equity long/short (28%), commodities/currencies (24%), relative value (23%), event driven (13%), and multi-strategy (12%). As of December 31, 2014, funds included herein had redemption frequencies of monthly to quarterly, with redemption notice periods of three to 60 days. | ||||
[4] | Diversified investments in royalty rights related to the sale of pharmaceutical products by third parties. Also included are private equity funds with a focus on venture capital. These investments are illiquid, with investment distributions expected to be received over the lives of the funds, which are uncertain but based on the voting rights of investors and the maturities of the underlying investments. |
Employee_Benefit_Plans_Details4
Employee Benefit Plans (Details 4) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of changes in Level 3 Trust investments | |||
Fair value of plan assets as of January 1, | $316.70 | ||
Fair value of plan assets as of December 31, | 302.9 | 295.8 | 316.7 |
Level 3 [Member] | |||
Summary of changes in Level 3 Trust investments | |||
Fair value of plan assets as of January 1, | 25.9 | 23.8 | |
Actual return on plan assets relating to assets still held as of the reporting date | 4.7 | 2.6 | |
Actual return on plan assets relating to assets sold during the year | 0.1 | 1.7 | |
Net purchases and sales | -2.2 | -2.2 | |
Fair value of plan assets as of December 31, | 28.5 | 25.9 | |
Level 3 [Member] | Royalty Rights [Member] | |||
Summary of changes in Level 3 Trust investments | |||
Fair value of plan assets as of January 1, | 23.3 | 21.4 | |
Actual return on plan assets relating to assets still held as of the reporting date | 4.1 | 2.3 | |
Actual return on plan assets relating to assets sold during the year | 0 | 1.6 | |
Net purchases and sales | -2.2 | -2 | |
Fair value of plan assets as of December 31, | 25.2 | 23.3 | |
Level 3 [Member] | Private Equity [Member] | |||
Summary of changes in Level 3 Trust investments | |||
Fair value of plan assets as of January 1, | 2.6 | 2.4 | |
Actual return on plan assets relating to assets still held as of the reporting date | 0.6 | 0.3 | |
Actual return on plan assets relating to assets sold during the year | 0.1 | 0.1 | |
Net purchases and sales | 0 | -0.2 | |
Fair value of plan assets as of December 31, | $3.30 | $2.60 |
Employee_Benefit_Plans_Details5
Employee Benefit Plans (Details Numeric) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
plan | |||
employee | |||
Defined Contribution Plan [Abstract] | |||
Employer matching contribution percentage | 4.00% | ||
Number of defined contribution plans | 25 | ||
Number of employee participants | 2,000 | ||
Total expenses | $17.40 | $16.90 | $15.30 |
Defined Benefit Plan [Abstract] | |||
Unfunded pension obligations | 74.9 | 70.4 | |
Contributions by the Company | 13.2 | 15.7 | |
Estimated contributions, next fiscal year | 18 | ||
Actuarial losses | 11.5 | ||
Actuarial losses, net of tax | 7.2 | ||
Expected future benefit payments, 2015 | 36.4 | ||
Expected future benefit payments, 2016 | 35 | ||
Expected future benefit payments, 2017 | 33.5 | ||
Expected future benefit payments, 2018 | 32 | ||
Expected future benefit payments, 2019 | 30.5 | ||
Expected future benefit payments, 2020 through 2024 | $128.50 | ||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Estimated weighted-average cost of capital of the Pharmaceutical Sector | 10.00% | ||
Weighted-average [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Debt securities maturity range | 14 years | ||
Minimum [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Debt securities maturity range | 1 year | ||
Maximum [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Debt securities maturity range | 31 years | ||
Equity long/short [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Composition of underlying hedge fund investments | 28.00% | ||
Commodities/currencies [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Composition of underlying hedge fund investments | 24.00% | ||
Relative value [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Composition of underlying hedge fund investments | 23.00% | ||
Event driven [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Composition of underlying hedge fund investments | 13.00% | ||
Multi-strategy [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Composition of underlying hedge fund investments | 12.00% | ||
International equity [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Redemption frequency | 1 month | ||
International equity [Member] | Minimum [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Redemption notice period | 1 day | ||
International equity [Member] | Maximum [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Redemption notice period | 10 days | ||
Hedge funds [Member] | Minimum [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Redemption frequency | 1 month | ||
Redemption notice period | 3 days | ||
Hedge funds [Member] | Maximum [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Redemption frequency | 3 months | ||
Redemption notice period | 60 days | ||
Interest rate futures [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Lower range of derivative contract maturities | 2 years | ||
Upper range of derivative contract maturities | 25 years | ||
Interest rate contracts [Member] | Minimum [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Derivative, Remaining Maturity | 5 years | ||
Interest rate contracts [Member] | Maximum [Member] | |||
Defined Benefit Plan (Additional Numeric) [Abstract] | |||
Derivative, Remaining Maturity | 10 years |
Operating_Lease_Commitments_De
Operating Lease Commitments (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating leases, rent expense, net [Abstract] | |||
Total rent expense under operating leases, net of sublease income | $54 | $54.10 | $53.90 |
Operating leases, future minimum lease payments [Abstract] | |||
Operating leases, future minimum lease payments due 2015 | 39.2 | ||
Operating leases, future minimum lease payments due 2016 | 34 | ||
Operating leases, future minimum lease payments due 2017 | 26.8 | ||
Operating leases, future minimum lease payments due 2018 | 19.6 | ||
Operating leases, future minimum lease payments due 2019 | 10.6 | ||
Operating leases, future minimum lease payments due thereafter | 14.2 | ||
Total future minimum lease payments | $144.40 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Unrealized gains on investment securities: | |||
Unrealized gains on investment securities, beginning of period | $4.10 | $7.70 | $4.90 |
Unrealized gains/(losses) | 15.5 | -0.1 | 9.9 |
Tax (expense)/benefit | -5.7 | 0.1 | -3.7 |
Reclassification of gains into Other revenues | -7.8 | -5.8 | -5.5 |
Reclassification of gains into Interest income | -0.2 | 0 | 0 |
Tax expense related to reclassifications | 3 | 2.2 | 2.1 |
Net unrealized gains/(losses) on investment securities | 4.8 | -3.6 | 2.8 |
Unrealized gains on investment securities, end of period | 8.9 | 4.1 | 7.7 |
Unrealized gains/(losses) on hedging activities: | |||
Unrealized gains/(losses) on hedging activities, beginning of period | -33 | -21.9 | 5.1 |
Unrealized gains/(losses) | 84 | -3.1 | -20.1 |
Tax (expense)/benefit | -3.7 | -1.7 | 3.1 |
Reclassification of gains into Transaction fees | -1.2 | -7.6 | -10.3 |
Reclassification of gains into Foreign exchange revenues | -0.4 | -2.8 | -3.1 |
Reclassification of losses into Interest expense | 3.6 | 3.6 | 3.6 |
Tax expense/(benefit) related to reclassifications | -0.7 | 0.5 | -0.2 |
Net unrealized gains/(losses) on hedging activities | 81.6 | -11.1 | -27 |
Unrealized gains/(losses) on hedging activities, end of period | 48.6 | -33 | -21.9 |
Foreign currency translation adjustments: | |||
Foreign currency translation adjustments, beginning of period | -21.6 | -8.5 | -6.3 |
Foreign currency translation adjustments | -14.8 | -17.7 | -4.6 |
Tax (expense)/benefit | -12.8 | 4.6 | 2.4 |
Net foreign currency translation adjustments | -27.6 | -13.1 | -2.2 |
Foreign currency translation adjustments, end of period | -49.2 | -21.6 | -8.5 |
Defined benefit pension plan adjustments: | |||
Defined benefit pension plan adjustments, beginning of period | -118.5 | -129.9 | -122.2 |
Unrealized gains/(losses) | -24.3 | 7.4 | -20.5 |
Tax (expense)/benefit | 9 | -3.9 | 6.2 |
Reclassification of losses into Cost of services | 10.4 | 12.4 | 10.5 |
Tax benefit related to reclassifications and other | -3.8 | -4.5 | -3.9 |
Net defined benefit pension plan adjustments | -8.7 | 11.4 | -7.7 |
Defined benefit pension plan adjustments, end of period | -127.2 | -118.5 | -129.9 |
Accumulated other comprehensive loss, end of period | ($118.90) | ($169) | ($152.60) |
Stockholders_Equity_Details_1
Stockholders' Equity (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2015 |
Cash Dividends | ||||||||||||||||
Cash dividends paid | $265.20 | $277.20 | $254.20 | |||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Cash dividends declared per common share (in dollars per share) | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | $0.10 | $0.10 | $0.10 | $0.50 | $0.50 | $0.43 | |
Dividend Declared [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Cash dividends declared per common share (in dollars per share) | $0.16 |
Stockholders_Equity_Details_Nu
Stockholders' Equity (Details Numeric) (USD $) | 12 Months Ended | |||
Share data in Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 10, 2015 |
Equity [Abstract] | ||||
Stock repurchased and retired, publicly announced authorizations, shares | 29.3 | 25.7 | 51 | |
Stock repurchased and retired, publicly announced authorizations, value excluding commissions | $488,100,000 | $393,600,000 | $771,900,000 | |
Stock repurchased and retired, publicly announced authorizations, average cost per share excluding commissions | $16.63 | $15.29 | $15.12 | |
Remaining amount available under share repurchase authorization through June 30, 2015 | 11,900,000 | |||
Share Repurchase Program [Member] | ||||
Subsequent Event [Line Items] | ||||
Authorized amount available under share repurchase authorization through December 31, 2017 | $1,200,000,000 |
Derivatives_Details
Derivatives (Details) (USD $) | Dec. 31, 2014 | |
In Millions, unless otherwise specified | ||
Undesignated hedges [Member] | Euro [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | $294.40 | |
Undesignated hedges [Member] | Canadian dollar [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 77.1 | |
Undesignated hedges [Member] | British pound [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 70.2 | |
Undesignated hedges [Member] | Australian dollar [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 30.1 | |
Undesignated hedges [Member] | Other [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 147.8 | [1] |
Number of currency exposures within 'Other' | 17 | |
Maximum individual currency exposure within 'Other' | 25 | |
Designated as hedges [Member] | Euro [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 391.4 | |
Designated as hedges [Member] | Canadian dollar [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 114.1 | |
Designated as hedges [Member] | British pound [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 80.8 | |
Designated as hedges [Member] | Australian dollar [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 52.7 | |
Designated as hedges [Member] | Swiss franc [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | 44 | |
Designated as hedges [Member] | Other [Member] | ||
Notional amounts of foreign currency forward contracts [Abstract] | ||
Notional amounts | $95.40 | |
[1] | Comprised of exposures to 17 different currencies. None of these individual currency exposures is greater than $25 million. |
Derivatives_Details_Numeric
Derivatives (Details Numeric) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Foreign exchange gain/(loss) on settlement assets and obligations and cash balances | ($51.80) | ($5.40) | $7.80 | |||
Accumulated other comprehensive pre-tax gain to be reclassified into revenue in next 12 months | 46.2 | |||||
Losses forecasted to be recognized on debt issuance hedges in next 12 months | 3.6 | |||||
Business Solutions [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Notional amounts | 5,500 | |||||
Interest rate contracts [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Notional amounts | 975 | 1,550 | ||||
Interest rate contracts [Member] | Notes Payable, 2017 [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Notional amounts | 500 | |||||
Interest rate contracts [Member] | Notes Payable, 2018 [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Notional amounts | 300 | |||||
Interest rate contracts [Member] | Notes Payable, 2020 [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Notional amounts | 175 | |||||
Fair Value Hedges [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Gain/(Loss) Recognized in Income on Related Hedged Item | -4.4 | [1] | 19.3 | [1] | 3.7 | [1] |
Fair Value Hedges [Member] | Fixed-rate debt [Member] | Interest Expense [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Gain/(Loss) Recognized in Income on Related Hedged Item | -4.4 | [1] | 19.3 | [1] | 3.7 | [1] |
Gain/(loss) in value of debt | -16.8 | 8.5 | -3.9 | |||
Amortization of hedge accounting adjustments | $12.40 | $10.80 | $7.60 | |||
Designated as hedges [Member] | Foreign currency contracts [Member] | Consumer-to-Consumer [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Derivative policy contract maturity period maximum | 36 months | |||||
Derivative policy targeted weighted-average maturity | 1 year | |||||
Maximum remaining maturity of foreign currency derivatives | 24 months | |||||
Derivative weighted-average maturity | 1 year | |||||
Not designated as hedges [Member] | Business Solutions [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Derivative weighted-average maturity | 1 year | |||||
Not designated as hedges [Member] | Uncollected settlement assets and obligations [Member] | Consumer-to-Consumer [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Foreign currency forward contracts maturity range minimum | 2 days | |||||
Foreign currency forward contracts maturity range maximum | 1 month | |||||
Not designated as hedges [Member] | Foreign currency denominated cash positions [Member] | Consumer-to-Consumer [Member] | ||||||
Derivative instruments, gain/(loss) [Line Items] | ||||||
Foreign currency forward contracts maturity range maximum | 1 year | |||||
[1] | The 2014 loss of $4.4 million was comprised of a loss in value on the debt of $16.8 million and amortization of hedge accounting adjustments of $12.4 million. The 2013 gain of $19.3 million was comprised of a gain in value on the debt of $8.5 million and amortization of hedge accounting adjustments of $10.8 million. The 2012 gain of $3.7 million was comprised of a loss in value on the debt of $3.9 million and amortization of hedge accounting adjustments of $7.6 million. |
Derivatives_Details_1
Derivatives (Details 1) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Assets | $423 | $224.30 |
Derivative Liabilities | 317.1 | 223.4 |
Designated hedges [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Assets | 69.6 | 22.5 |
Derivative Liabilities | 5.4 | 35.5 |
Designated hedges [Member] | Other Assets [Member] | Interest rate fair value hedges - Corporate [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Assets | 3.5 | 11.4 |
Designated hedges [Member] | Other Liabilities [Member] | Interest rate fair value hedges - Corporate [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Liabilities | 1.9 | 7.8 |
Designated hedges [Member] | Consumer-to-Consumer [Member] | Other Assets [Member] | Foreign currency contracts [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Assets | 66.1 | 11.1 |
Designated hedges [Member] | Consumer-to-Consumer [Member] | Other Liabilities [Member] | Foreign currency contracts [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Liabilities | 3.5 | 27.7 |
Undesignated hedges [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Assets | 353.4 | 201.8 |
Derivative Liabilities | 311.7 | 187.9 |
Undesignated hedges [Member] | Consumer-to-Consumer [Member] | Other Assets [Member] | Foreign currency contracts [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Assets | 4 | 0.6 |
Undesignated hedges [Member] | Consumer-to-Consumer [Member] | Other Liabilities [Member] | Foreign currency contracts [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Liabilities | 1.5 | 1.7 |
Undesignated hedges [Member] | Business Solutions [Member] | Other Assets [Member] | Foreign currency contracts [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Assets | 349.4 | 201.2 |
Undesignated hedges [Member] | Business Solutions [Member] | Other Liabilities [Member] | Foreign currency contracts [Member] | ||
Fair Value of Derivatives [Abstract] | ||
Derivative Liabilities | $310.20 | $186.20 |
Derivatives_Details_2
Derivatives (Details 2) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Fair value of derivatives, by maturity [Abstract] | |
Total | $105.90 |
Consumer-to-Consumer [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency cash flow hedges | 62.6 |
Foreign currency undesignated hedges | 2.5 |
Business Solutions [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency undesignated hedges | 39.2 |
Interest rate fair value hedges - Corporate [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Interest rate fair value hedges | 1.6 |
2015 [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Total | 85.2 |
2015 [Member] | Consumer-to-Consumer [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency cash flow hedges | 44.5 |
Foreign currency undesignated hedges | 2.5 |
2015 [Member] | Business Solutions [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency undesignated hedges | 38.2 |
2015 [Member] | Interest rate fair value hedges - Corporate [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Interest rate fair value hedges | 0 |
2016 [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Total | 19.1 |
2016 [Member] | Consumer-to-Consumer [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency cash flow hedges | 18.1 |
Foreign currency undesignated hedges | 0 |
2016 [Member] | Business Solutions [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency undesignated hedges | 1 |
2016 [Member] | Interest rate fair value hedges - Corporate [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Interest rate fair value hedges | 0 |
2017 [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Total | -1 |
2017 [Member] | Consumer-to-Consumer [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency cash flow hedges | 0 |
Foreign currency undesignated hedges | 0 |
2017 [Member] | Business Solutions [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency undesignated hedges | 0 |
2017 [Member] | Interest rate fair value hedges - Corporate [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Interest rate fair value hedges | -1 |
2018 [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Total | -0.9 |
2018 [Member] | Consumer-to-Consumer [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency cash flow hedges | 0 |
Foreign currency undesignated hedges | 0 |
2018 [Member] | Business Solutions [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency undesignated hedges | 0 |
2018 [Member] | Interest rate fair value hedges - Corporate [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Interest rate fair value hedges | -0.9 |
2019 [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Total | 0 |
2019 [Member] | Consumer-to-Consumer [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency cash flow hedges | 0 |
Foreign currency undesignated hedges | 0 |
2019 [Member] | Business Solutions [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency undesignated hedges | 0 |
2019 [Member] | Interest rate fair value hedges - Corporate [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Interest rate fair value hedges | 0 |
Thereafter [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Total | 3.5 |
Thereafter [Member] | Consumer-to-Consumer [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency cash flow hedges | 0 |
Foreign currency undesignated hedges | 0 |
Thereafter [Member] | Business Solutions [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Foreign currency undesignated hedges | 0 |
Thereafter [Member] | Interest rate fair value hedges - Corporate [Member] | |
Fair value of derivatives, by maturity [Abstract] | |
Interest rate fair value hedges | $3.50 |
Derivatives_Details_3
Derivatives (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivative [Line Items] | ||
Derivative Assets | $423 | $224.30 |
Derivative Liabilities | 317.1 | 223.4 |
Subject to netting [Member] | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | 255.1 | 118.4 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Derivative Assets | 255.1 | 118.4 |
Derivatives Not Offset in the Consolidated Balance Sheets | -134.8 | -93.3 |
Derivative Asset Net Amounts | 120.3 | 25.1 |
Gross Amounts of Recognized Liabilities | 169.3 | 146.1 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Derivative Liabilities | 169.3 | 146.1 |
Derivatives Not Offset in the Consolidated Balance Sheets | -134.8 | -93.3 |
Derivative Liability Net Amounts | 34.5 | 52.8 |
Not subject to netting [Member] | ||
Derivative [Line Items] | ||
Derivative asset not subject to netting | 167.9 | 105.9 |
Derivative liability not subject to netting | $147.80 | $77.30 |
Derivatives_Details_4
Derivatives (Details 4) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | ($2.20) | ($1.30) | $0.50 | |||
Fair Value Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in Income on Derivatives | 17.5 | -8.5 | 3.9 | |||
Gain/(Loss) Recognized in Income on Related Hedged Item | -4.4 | [1] | 19.3 | [1] | 3.7 | [1] |
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | -0.7 | 0 | 0 | |||
Cash Flow Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion) | 84 | -3.1 | -20.1 | |||
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | -2 | 6.8 | 9.8 | |||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | -4.4 | [2] | -0.4 | [2] | -0.1 | [2] |
Interest rate contracts [Member] | Cash Flow Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion) | 0 | [3] | 0 | [3] | 0 | [3] |
Interest rate contracts [Member] | Interest expense [Member] | Fair Value Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in Income on Derivatives | 17.5 | -8.5 | 3.9 | |||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | -0.7 | 0 | 0 | |||
Interest rate contracts [Member] | Interest expense [Member] | Cash Flow Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | -3.6 | [3] | -3.6 | [3] | -3.6 | [3] |
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | [3] | 0 | [3] | 0 | [3] |
Fixed-rate debt [Member] | Interest expense [Member] | Fair Value Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in Income on Related Hedged Item | -4.4 | [1] | 19.3 | [1] | 3.7 | [1] |
Foreign currency contracts [Member] | Cash Flow Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion) | 84 | -3.1 | -20.1 | |||
Foreign currency contracts [Member] | Revenue [Member] | Cash Flow Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | 1.6 | 10.4 | 13.4 | |||
Foreign currency contracts [Member] | Derivative gains/(losses),net [Member] | Cash Flow Hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | -4.4 | [2] | -0.4 | [2] | -0.1 | [2] |
Undesignated hedges [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in Income on Undesignated Hedges | 48.7 | -4.6 | -10 | |||
Undesignated hedges [Member] | Selling, general and administrative [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in Income on Undesignated Hedges | 46.5 | [4] | -3.7 | [4] | -10.6 | [4] |
Undesignated hedges [Member] | Derivative gains/(losses),net [Member] | ||||||
Hedges [Abstract] | ||||||
Gain/(Loss) Recognized in Income on Undesignated Hedges | $2.20 | [5] | ($0.90) | [5] | $0.60 | [5] |
[1] | The 2014 loss of $4.4 million was comprised of a loss in value on the debt of $16.8 million and amortization of hedge accounting adjustments of $12.4 million. The 2013 gain of $19.3 million was comprised of a gain in value on the debt of $8.5 million and amortization of hedge accounting adjustments of $10.8 million. The 2012 gain of $3.7 million was comprised of a loss in value on the debt of $3.9 million and amortization of hedge accounting adjustments of $7.6 million. | |||||
[2] | The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates. | |||||
[3] | The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative's fair value in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets. These amounts are reclassified to "Interest expense" in the Consolidated Statements of Income over the life of the related notes. | |||||
[4] | The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations and cash balances, not including amounts related to derivatives activity as displayed above, were $(51.8) million, $(5.4) million and $7.8 million for the years ended 2014, 2013 and 2012, respectively. | |||||
[5] | The derivative contracts used in the Company's revenue hedging program are not designated as hedges in the final month of the contract. |
Borrowings_Details
Borrowings (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 26, 2009 | Aug. 22, 2013 | Dec. 10, 2012 | Sep. 29, 2006 | Aug. 22, 2011 | Nov. 22, 2013 | Mar. 30, 2010 | Nov. 17, 2006 | Jun. 21, 2010 | ||
Borrowings | |||||||||||||
Total borrowings at par value | $3,730,500,000 | $4,230,600,000 | |||||||||||
Fair value hedge accounting adjustments, net | 5,300,000 | [1] | 900,000 | [1] | |||||||||
Unamortized discount, net | -15,400,000 | -18,500,000 | |||||||||||
Total borrowings at carrying value | 3,720,400,000 | [2] | 4,213,000,000 | ||||||||||
Weighted-average effective interest rate | 4.40% | ||||||||||||
6.500% notes due 2014 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 0 | 500,000,000 | 500,000,000 | ||||||||||
Stated interest rate | 6.50% | 6.50% | |||||||||||
Floating rate notes (effective rate of 1.2%) due 2015 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||||
Effective interest rate | 1.20% | ||||||||||||
2.375% notes due 2015 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 250,000,000 | [3] | 250,000,000 | [3] | 250,000,000 | ||||||||
Stated interest rate | 2.38% | 2.38% | 2.38% | ||||||||||
5.930% notes due 2016 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 1,000,000,000 | [3] | 1,000,000,000 | [3] | 1,000,000,000 | ||||||||
Stated interest rate | 5.93% | 5.93% | 5.93% | ||||||||||
2.875% notes (effective rate of 2.0%) due 2017 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 500,000,000 | 500,000,000 | 500,000,000 | ||||||||||
Stated interest rate | 2.88% | 2.88% | 2.88% | ||||||||||
Effective interest rate | 2.00% | ||||||||||||
3.650% notes due 2018 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 400,000,000 | [3] | 400,000,000 | [3] | 400,000,000 | ||||||||
Stated interest rate | 3.65% | 3.65% | 3.65% | ||||||||||
3.350% notes due 2019 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 250,000,000 | [3] | 250,000,000 | [3] | 250,000,000 | ||||||||
Stated interest rate | 3.35% | 3.35% | 3.35% | ||||||||||
5.253% notes (effective rate of 4.6%) due 2020 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 324,900,000 | 324,900,000 | |||||||||||
Stated interest rate | 5.25% | 5.25% | 5.25% | ||||||||||
Effective interest rate | 4.60% | ||||||||||||
6.200% notes due 2036 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 500,000,000 | [3] | 500,000,000 | [3] | 500,000,000 | ||||||||
Stated interest rate | 6.20% | 6.20% | 6.20% | ||||||||||
6.200% notes due 2040 [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | 250,000,000 | [3] | 250,000,000 | [3] | 250,000,000 | ||||||||
Stated interest rate | 6.20% | 6.20% | 6.20% | ||||||||||
Other borrowings [Member] | |||||||||||||
Borrowings | |||||||||||||
Total borrowings at par value | $5,600,000 | $5,700,000 | |||||||||||
[1] | 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 or increases in "Interest expense" in the Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate. | ||||||||||||
[2] | As of December 31, 2014, the Company’s weighted-average effective rate on total borrowings was approximately 4.4%. | ||||||||||||
[3] | The difference between the stated interest rate and the effective interest rate is not significant. |
Borrowings_Details_1
Borrowings (Details 1) (USD $) | Dec. 31, 2014 |
Borrowings maturities at par value [Abstract] | |
Due within 1 year | $500,000,000 |
Due after 1 year through 2 years | 1,000,000,000 |
Due after 2 years through 3 years | 505,600,000 |
Due after 3 years through 4 years | 400,000,000 |
Due after 4 years through 5 years | 250,000,000 |
Due after 5 years | $1,074,900,000 |
Borrowings_Details_Numeric
Borrowings (Details Numeric) (USD $) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 23, 2011 | Mar. 07, 2011 | Feb. 26, 2009 | Aug. 22, 2013 | Dec. 10, 2012 | Sep. 29, 2006 | Aug. 22, 2011 | Nov. 22, 2013 | Mar. 30, 2010 | Nov. 17, 2006 | Jun. 21, 2010 | |||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | $3,730,500,000 | 4,230,600,000 | |||||||||||||
Revolving Credit Facility [Member] | |||||||||||||||
Revolving Credit Facility [Abstract] | |||||||||||||||
Maximum borrowing capacity | 1,650,000,000 | ||||||||||||||
Interest rate margin | 1.10% | ||||||||||||||
Facility fee | 0.15% | ||||||||||||||
Balance outstanding | 0 | 0 | |||||||||||||
Letter of credit sub-facility [Member] | |||||||||||||||
Revolving Credit Facility [Abstract] | |||||||||||||||
Maximum borrowing capacity | 250,000,000 | ||||||||||||||
Swing line sub-facility [Member] | |||||||||||||||
Revolving Credit Facility [Abstract] | |||||||||||||||
Maximum borrowing capacity | 150,000,000 | ||||||||||||||
Floating Rate Notes Payable, 2013 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 300,000,000 | ||||||||||||||
Basis spread on floating rate debt | 0.58% | ||||||||||||||
Notes Payable, 2014 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 0 | 500,000,000 | 500,000,000 | ||||||||||||
Stated interest rate | 6.50% | 6.50% | |||||||||||||
Floating rate notes due 2015 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||
Basis spread on floating rate debt | 1.00% | ||||||||||||||
Notes Payable, 2015 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 250,000,000 | [1] | 250,000,000 | [1] | 250,000,000 | ||||||||||
Stated interest rate | 2.38% | 2.38% | 2.38% | ||||||||||||
Premium on early redemptions | 0.35% | ||||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||
Notes Payable, 2015 [Member] | Maximum [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Maximum interest increase after credit rating downgrade | 2.00% | ||||||||||||||
Notes Payable, 2015 [Member] | Minimum [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Minimum interest charged after credit rating upgrade | 2.38% | ||||||||||||||
Notes Payable, 2016 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 1,000,000,000 | [1] | 1,000,000,000 | [1] | 1,000,000,000 | ||||||||||
Stated interest rate | 5.93% | 5.93% | 5.93% | ||||||||||||
Premium on early redemptions | 0.20% | ||||||||||||||
Notes Payable, 2017 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 500,000,000 | 500,000,000 | 500,000,000 | ||||||||||||
Stated interest rate | 2.88% | 2.88% | 2.88% | ||||||||||||
Premium on early redemptions | 0.40% | ||||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||
Notes Payable, 2017 [Member] | Maximum [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Maximum interest increase after credit rating downgrade | 2.00% | ||||||||||||||
Notes Payable, 2017 [Member] | Minimum [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Minimum interest charged after credit rating upgrade | 2.88% | ||||||||||||||
Notes Payable, 2018 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 400,000,000 | [1] | 400,000,000 | [1] | 400,000,000 | ||||||||||
Stated interest rate | 3.65% | 3.65% | 3.65% | ||||||||||||
Premium on early redemptions | 0.35% | ||||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||
Notes Payable, 2019 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 250,000,000 | [1] | 250,000,000 | [1] | 250,000,000 | ||||||||||
Stated interest rate | 3.35% | 3.35% | 3.35% | ||||||||||||
Premium on early redemptions | 0.30% | ||||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||
Notes Payable, 2019 [Member] | Maximum [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Maximum interest increase after credit rating downgrade | 2.00% | ||||||||||||||
Notes Payable, 2019 [Member] | Minimum [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Minimum interest charged after credit rating upgrade | 3.35% | ||||||||||||||
Notes Payable, 2020 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 324,900,000 | 324,900,000 | |||||||||||||
Debt instrument, original face amount | 303,700,000 | ||||||||||||||
Unamortized premium of debt instrument | 21,200,000 | ||||||||||||||
Stated interest rate | 5.25% | 5.25% | 5.25% | ||||||||||||
Premium on early redemptions | 0.15% | ||||||||||||||
Premium given to note holders | 7.00% | ||||||||||||||
Notes Payable, 2036 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 500,000,000 | [1] | 500,000,000 | [1] | 500,000,000 | ||||||||||
Stated interest rate | 6.20% | 6.20% | 6.20% | ||||||||||||
Premium on early redemptions | 0.25% | ||||||||||||||
Notes Payable, 2040 [Member] | |||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | 250,000,000 | [1] | 250,000,000 | [1] | 250,000,000 | ||||||||||
Stated interest rate | 6.20% | 6.20% | 6.20% | ||||||||||||
Premium on early redemptions | 0.30% | ||||||||||||||
Commercial paper [Member] | |||||||||||||||
Commercial Paper Program [Abstract] | |||||||||||||||
Commercial Paper Program Maximum Amount of Issuance | 1,500,000,000 | ||||||||||||||
Threshold over which Commercial Paper Program limit will be reduced for borrowings on Revolving Credit Facility | 150,000,000 | ||||||||||||||
Maximum days to maturity | 397 days | ||||||||||||||
Notes [Abstract] | |||||||||||||||
Total borrowings at par value | $0 | 0 | |||||||||||||
[1] | The difference between the stated interest rate and the effective interest rate is not significant. |
Stock_Compensation_Plans_Detai
Stock Compensation Plans (Details) (USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Stock Option Activity | |
Outstanding as of January 1 | 23.8 |
Granted | 0.9 |
Exercised | -1.1 |
Cancelled/forfeited | -7.2 |
Outstanding as of December 31 | 16.4 |
Options exercisable as of December 31 | 12.5 |
Weighted-Average Exercise Price | |
Outstanding as of January 1 (in dollars per share) | $18.05 |
Granted (in dollars per share) | $16.01 |
Exercised (in dollars per share) | $14.11 |
Cancelled/forfeited (in dollars per share) | $18.94 |
Outstanding as of December 31 (in dollars per share) | $17.80 |
Stock Options, Additional Disclosures | |
Options exercisable as of December 31 (in dollars per share) | $18.50 |
Weighted-Average Remaining Contractual Term, Outstanding as of December 31 | 4 years 8 months 12 days |
Weighted-Average Remaining Contractual Term, Options exercisable as of December 31 | 3 years 7 months 6 days |
Aggregate Intrinsic Value, Outstanding as of December 31 (in dollars) | $20.70 |
Aggregate Intrinsic Value, Options exercisable as of December 31 (in dollars) | $10.90 |
Stock_Compensation_Plans_Detai1
Stock Compensation Plans (Details 1) (USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Restricted Stock Activity | |
Non-vested as of January 1 | 6.3 |
Granted | 3.6 |
Vested | -1.4 |
Forfeited | -0.9 |
Non-vested as of December 31 | 7.6 |
Restricted Stock Weighted-Average Grant-Date Fair Value | |
Non-vested as of January 1 (in dollars per share) | $15.69 |
Granted (in dollars per share) | $14.74 |
Vested (in dollars per share) | $19.27 |
Forfeited (in dollars per share) | $14.57 |
Non-vested as of December 31 (in dollars per share) | $14.68 |
Stock_Compensation_Plans_Detai2
Stock Compensation Plans (Details 2) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock-Based Compensation | |||
Stock-based compensation expense | ($39.70) | ($34.50) | ($34) |
Income tax benefit from stock-based compensation expense | 11.5 | 10 | 10 |
Net income impact | ($28.20) | ($24.50) | ($24) |
Earnings per share: | |||
Basic and Diluted (in dollars per share) | ($0.05) | ($0.04) | ($0.04) |
Stock_Compensation_Plans_Detai3
Stock Compensation Plans (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock options granted: | |||
Weighted-average risk-free interest rate | 1.90% | 1.20% | 1.20% |
Weighted-average dividend yield | 3.10% | 3.70% | 1.80% |
Volatility | 33.80% | 35.30% | 33.20% |
Expected term (in years) | 6 years 1 month 2 days | 6 years 1 month 2 days | 6 years 1 month 2 days |
Weighted-average grant date fair value | $3.95 | $3.20 | $4.90 |
Stock_Compensation_Plans_Detai4
Stock Compensation Plans (Details Numeric) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Compensation Plans (Numeric) [Abstract] | |||
Cash received from exercise of stock options | $14.20 | $28.60 | $51.90 |
Tax benefit realized from exercise of stock options | 0.9 | 1.3 | 1.2 |
Intrinsic value of stock options exercised | 3.5 | 4.2 | 5.1 |
Volatility | 33.80% | 35.30% | 33.20% |
Expected term (in years) | 6 years 1 month 2 days | 6 years 1 month 2 days | 6 years 1 month 2 days |
Non-executive employees [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Volatility | 35.20% | 33.20% | |
Executives and non-employee directors [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Volatility | 33.80% | 35.30% | 33.20% |
Non-Vested Stock Options [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Unrecognized Compensation Cost | 8.2 | ||
Weighted Average Recognition Period | 2 years 1 month 6 days | ||
Non-Vested Restricted Stock Units [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Unrecognized Compensation Cost | $45.70 | ||
Weighted Average Recognition Period | 2 years 3 months 18 days | ||
2006 Long-Term Incentive Plan [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Authorized shares to be granted | 120,000,000 | ||
Shares available for grant | 37,500,000 | ||
2006 Long-Term Incentive Plan [Member] | Executives [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Long Term Incentive Award Performance Based Restricted Stock Units Percentage | 80.00% | 67.00% | |
Long Term Incentive Award Stock Option Awards Percentage | 20.00% | 33.00% | |
2006 Long-Term Incentive Plan [Member] | Non-executive employees [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Long Term Incentive Award Performance Based Restricted Stock Units Percentage | 100.00% | 67.00% | |
Long Term Incentive Award Stock Option Awards Percentage | 0.00% | 33.00% | |
2006 Long-Term Incentive Plan [Member] | Employee Stock Option [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Options expiration period | 10 years | ||
Award vesting period | 4 years | ||
2006 Long-Term Incentive Plan [Member] | Restricted Stock Units [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Restricted stock vesting percentage | 0.25 | 1 | |
Award vesting period | 4 years | 3 years | |
2006 Long-Term Incentive Plan [Member] | Performance Shares [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Award vesting period | 3 years | 3 years | |
Performance Period for Performance Based Restricted Stock Units | 3 years | 2 years | |
2006 Long-Term Incentive Plan [Member] | Performance Shares [Member] | Minimum [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Percentage of stock units granted that recipients receive as performance based restricted stock units | 0.00% | ||
2006 Long-Term Incentive Plan [Member] | Performance Shares [Member] | Maximum [Member] | |||
Stock Compensation Plans (Numeric) [Abstract] | |||
Percentage of stock units granted that recipients receive as performance based restricted stock units | 150.00% |
Segments_Details_Numeric
Segments (Details Numeric) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | |||||||
Segment (Numeric) [Abstract] | |||||||
Number of operating segments | 3 | ||||||
Travelex Global Business Payments [Member] | |||||||
Segment (Numeric) [Abstract] | |||||||
TGBP integration expenses | $5.40 | $3.80 | $6.20 | $3.90 | $19.30 | $42.80 | |
Consumer-to-Consumer [Member] | |||||||
Segment (Numeric) [Abstract] | |||||||
Number of geographic regions in segment | 5 | ||||||
Number of regions in revenue split | 2 | ||||||
Percentage utilized to split revenue for transactions originated and paid in different regions | 50.00% | ||||||
Percentage utilized to split revenue for money transfers initiated and paid in the same region | 100.00% | ||||||
Consumer-to-Business [Member] | |||||||
Segment (Numeric) [Abstract] | |||||||
Percentage utilized to allocate revenue to the country where the transaction is initiated | 100.00% | ||||||
Business Solutions [Member] | |||||||
Segment (Numeric) [Abstract] | |||||||
Percentage utilized to allocate revenue to the country where the transaction is initiated | 100.00% |
Segments_Details
Segments (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Revenues: | |||||||||||||
Transaction fees | $4,083.60 | $4,065.80 | $4,210 | ||||||||||
Foreign exchange revenues | 1,386.30 | 1,348 | 1,332.70 | ||||||||||
Other revenues | 137.3 | 128.2 | 122.1 | ||||||||||
Total revenues | 1,409.90 | 1,440.90 | 1,405.60 | 1,350.80 | 1,421.90 | 1,408.80 | 1,385.90 | 1,325.40 | 5,607.20 | 5,542 | 5,664.80 | ||
Operating income/(loss): | |||||||||||||
Operating income/(loss) | 276.1 | 314.1 | 278.3 | 272 | 238.4 | 295.3 | 276.8 | 296.9 | 1,140.50 | 1,107.40 | 1,330 | ||
Assets: | |||||||||||||
Total assets | 9,890.40 | 10,121.30 | 9,890.40 | 10,121.30 | 9,465.70 | ||||||||
Depreciation and amortization: | |||||||||||||
Total depreciation and amortization | 271.9 | 262.8 | 246.1 | ||||||||||
Capital expenditures: | |||||||||||||
Total capital expenditures | 179 | 241.3 | 268.2 | ||||||||||
Consumer-to-Consumer [Member] | |||||||||||||
Revenues: | |||||||||||||
Transaction fees | 3,421.80 | 3,396.10 | 3,545.60 | ||||||||||
Foreign exchange revenues | 998.9 | 981.3 | 988.5 | ||||||||||
Other revenues | 65.1 | 56.2 | 50.2 | ||||||||||
Total revenues | 4,485.80 | 4,433.60 | 4,584.30 | ||||||||||
Operating income/(loss): | |||||||||||||
Operating income/(loss) | 1,050.40 | 1,030.40 | 1,266.90 | ||||||||||
Assets: | |||||||||||||
Total assets | 5,049.70 | 5,321.90 | 5,049.70 | 5,321.90 | 4,854.20 | ||||||||
Depreciation and amortization: | |||||||||||||
Total depreciation and amortization | 191.5 | 179.4 | 158.2 | ||||||||||
Capital expenditures: | |||||||||||||
Total capital expenditures | 132.1 | 174 | 219.1 | ||||||||||
Consumer-to-Business [Member] | |||||||||||||
Revenues: | |||||||||||||
Transaction fees | 572.7 | 579.1 | 573.6 | ||||||||||
Foreign exchange and other revenues | 26.1 | 29.4 | 30.3 | ||||||||||
Total revenues | 598.8 | 608.5 | 603.9 | ||||||||||
Operating income/(loss): | |||||||||||||
Operating income/(loss) | 98.7 | 121.9 | 137.6 | ||||||||||
Assets: | |||||||||||||
Total assets | 1,060.20 | 1,129.90 | 1,060.20 | 1,129.90 | 1,029.60 | ||||||||
Depreciation and amortization: | |||||||||||||
Total depreciation and amortization | 17.3 | 15.8 | 14.7 | ||||||||||
Capital expenditures: | |||||||||||||
Total capital expenditures | 27.3 | 36.9 | 21.8 | ||||||||||
Business Solutions [Member] | |||||||||||||
Revenues: | |||||||||||||
Foreign exchange revenues | 363.1 | 355.5 | 332 | ||||||||||
Transaction fees and other revenues | 41.5 | 37.4 | 35.4 | ||||||||||
Total revenues | 404.6 | 392.9 | 367.4 | ||||||||||
Operating income/(loss): | |||||||||||||
Operating income/(loss) | -12.1 | -27 | [1] | -54.8 | [1] | ||||||||
Assets: | |||||||||||||
Total assets | 2,430.70 | 2,256.40 | 2,430.70 | 2,256.40 | 2,012.60 | ||||||||
Depreciation and amortization: | |||||||||||||
Total depreciation and amortization | 56.1 | 59.6 | 65.7 | ||||||||||
Capital expenditures: | |||||||||||||
Total capital expenditures | 13 | 14.8 | 16.1 | ||||||||||
Other [Member] | |||||||||||||
Revenues: | |||||||||||||
Total revenues | 118 | 107 | 109.2 | ||||||||||
Operating income/(loss): | |||||||||||||
Operating income/(loss) | 3.5 | -17.9 | -19.7 | ||||||||||
Assets: | |||||||||||||
Total assets | 1,349.80 | 1,413.10 | 1,349.80 | 1,413.10 | 1,569.30 | ||||||||
Depreciation and amortization: | |||||||||||||
Total depreciation and amortization | 7 | 8 | 7.5 | ||||||||||
Capital expenditures: | |||||||||||||
Total capital expenditures | $6.60 | $15.60 | $11.20 | ||||||||||
[1] | During the years ended December 31, 2013 and 2012, the Company incurred $19.3 million and $42.8 million, respectively, of integration expenses related to the acquisition of Travelex Global Business Payments ("TGBP"), which was acquired in November 2011. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition, which are included in Other. |
Segments_Details_1
Segments (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue: | |||||||||||
Revenues | $1,409.90 | $1,440.90 | $1,405.60 | $1,350.80 | $1,421.90 | $1,408.80 | $1,385.90 | $1,325.40 | $5,607.20 | $5,542 | $5,664.80 |
Long-lived assets: | |||||||||||
Long-lived assets | 206.4 | 209.9 | 206.4 | 209.9 | 196.1 | ||||||
United States [Member] | |||||||||||
Revenue: | |||||||||||
Revenues | 1,564.60 | 1,523.70 | 1,593.10 | ||||||||
Long-lived assets: | |||||||||||
Long-lived assets | 158.1 | 156.6 | 158.1 | 156.6 | 148.2 | ||||||
International [Member] | |||||||||||
Revenue: | |||||||||||
Revenues | 4,042.60 | 4,018.30 | 4,071.70 | ||||||||
Long-lived assets: | |||||||||||
Long-lived assets | $48.30 | $53.30 | $48.30 | $53.30 | $47.90 |
Quarterly_Financial_Informatio2
Quarterly Financial Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||
Productivity and cost-savings initiatives expenses | $30.30 | $33 | $6.20 | $13.50 | $4.20 | $30.30 | $56.90 | $30.90 | |||||||||||
2014 and 2013 by Quarter: | |||||||||||||||||||
Revenues | 1,409.90 | 1,440.90 | 1,405.60 | 1,350.80 | 1,421.90 | 1,408.80 | 1,385.90 | 1,325.40 | 5,607.20 | 5,542 | 5,664.80 | ||||||||
Expenses | 1,133.80 | [1] | 1,126.80 | 1,127.30 | 1,078.80 | 1,183.50 | [2],[3] | 1,113.50 | [2],[3] | 1,109.10 | [2],[3] | 1,028.50 | [2],[3] | 4,466.70 | [1],[4] | 4,434.60 | [2],[3],[4] | 4,334.80 | [4] |
Operating income | 276.1 | 314.1 | 278.3 | 272 | 238.4 | 295.3 | 276.8 | 296.9 | 1,140.50 | 1,107.40 | 1,330 | ||||||||
Other expense, net | 40.2 | 41.3 | 46.2 | 44.6 | 45.6 | 43.6 | 44.6 | 46.7 | 172.3 | 180.5 | 161.2 | ||||||||
Income before income taxes | 235.9 | 272.8 | 232.1 | 227.4 | 192.8 | 251.7 | 232.2 | 250.2 | 968.2 | 926.9 | 1,168.80 | ||||||||
Provision for income taxes | 14.4 | 38.7 | 38.3 | 24.4 | 19.4 | 37.3 | 33.6 | 38.2 | 115.8 | 128.5 | 142.9 | ||||||||
Net income | 221.5 | 234.1 | 193.8 | 203 | 173.4 | 214.4 | 198.6 | 212 | 852.4 | 798.4 | 1,025.90 | ||||||||
Earnings per share: | |||||||||||||||||||
Basic (in dollars per share) | $0.42 | $0.44 | $0.36 | $0.37 | $0.31 | $0.39 | $0.36 | $0.37 | $1.60 | $1.43 | $1.70 | ||||||||
Diluted (in dollars per share) | $0.42 | $0.44 | $0.36 | $0.37 | $0.31 | $0.39 | $0.36 | $0.37 | $1.59 | $1.43 | $1.69 | ||||||||
Weighted-average shares outstanding, basic: | |||||||||||||||||||
Basic (in shares) | 522.8 | 527.8 | 537.1 | 545.9 | 551.2 | 552.1 | 555.7 | 567.6 | 533.4 | 556.6 | 604.9 | ||||||||
Weighted-average shares outstanding, diluted: | |||||||||||||||||||
Diluted (in shares) | 526.9 | 531.2 | 539.9 | 549.2 | 555 | 555.8 | 558.3 | 569.7 | 536.8 | 559.7 | 607.4 | ||||||||
Travelex Global Business Payments [Member] | |||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||
TGBP integration expenses | $5.40 | $3.80 | $6.20 | $3.90 | $19.30 | $42.80 | |||||||||||||
[1] | Includes $30.3 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||
[2] | Includes $3.9 million in the first quarter, $6.2 million in the second quarter, $3.8 million in the third quarter, and $5.4 million in the fourth quarter of integration expenses related to the acquisition of TGBP. | ||||||||||||||||||
[3] | Includes $4.2 million in the first quarter, $13.5 million in the second quarter, $6.2 million in the third quarter, and $33.0 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||
[4] | As further described in Note 6, total expenses include amounts for related parties of $70.2 million, $80.6 million and $95.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Schedule_I_Condensed_Financial1
Schedule I - Condensed Financial Information of the Registrant - Condensed Balance Sheets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
In Millions, except Share data, unless otherwise specified | |||||
Assets: | |||||
Cash and cash equivalents | $1,783.20 | $2,073.10 | $1,776.50 | $1,370.90 | |
Property and equipment, net of accumulated depreciation of $19.1 and $17.0, respectively | 206.4 | 209.9 | 196.1 | ||
Other assets | 669.8 | 562.1 | |||
Total assets | 9,890.40 | 10,121.30 | 9,465.70 | ||
Liabilities: | |||||
Accounts payable and accrued liabilities | 600.4 | 638.9 | |||
Income taxes payable | 166.3 | 216.9 | |||
Borrowings | 3,720.40 | [1] | 4,213 | ||
Other liabilities | 484.2 | 358.2 | |||
Total liabilities | 8,590 | 9,016.60 | |||
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; 521.5 shares and 548.8 shares issued and outstanding as of December 31, 2014 and 2013, respectively | 5.2 | 5.5 | |||
Capital surplus | 445.4 | 390.9 | |||
Retained earnings | 968.7 | 877.3 | |||
Accumulated other comprehensive loss | -118.9 | -169 | -152.6 | ||
Total stockholders' equity | 1,300.40 | 1,104.70 | 940.6 | 894.8 | |
Total liabilities and stockholders' equity | 9,890.40 | 10,121.30 | |||
Condensed Financial Information of Registrant (Parenthetical) [Abstract] | |||||
Accumulated depreciation | 478.5 | 428.6 | |||
Preferred stock, par value (in dollars per share) | $1 | $1 | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, shares issued | 0 | 0 | |||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |||
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | |||
Common stock, shares outstanding | 521,500,000 | 548,800,000 | |||
Common stock, shares issued | 521,500,000 | 548,800,000 | |||
Parent Company [Member] | |||||
Assets: | |||||
Cash and cash equivalents | 144.2 | 151.4 | 383.7 | 1.1 | |
Property and equipment, net of accumulated depreciation of $19.1 and $17.0, respectively | 40.9 | 41 | |||
Other assets | 46.5 | 160.4 | |||
Investment in subsidiaries | 6,083.10 | 5,534.10 | |||
Total assets | 6,314.70 | 5,886.90 | |||
Liabilities: | |||||
Accounts payable and accrued liabilities | 56.1 | 76.8 | |||
Income taxes payable | 59.7 | 76.3 | |||
Payable to subsidiaries, net | 1,181.30 | 413.2 | |||
Borrowings | 3,714.80 | 4,207.30 | |||
Other liabilities | 2.4 | 8.6 | |||
Total liabilities | 5,014.30 | 4,782.20 | |||
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; 521.5 shares and 548.8 shares issued and outstanding as of December 31, 2014 and 2013, respectively | 5.2 | 5.5 | |||
Capital surplus | 445.4 | 390.9 | |||
Retained earnings | 968.7 | 877.3 | |||
Accumulated other comprehensive loss | -118.9 | -169 | |||
Total stockholders' equity | 1,300.40 | 1,104.70 | |||
Total liabilities and stockholders' equity | 6,314.70 | 5,886.90 | |||
Condensed Financial Information of Registrant (Parenthetical) [Abstract] | |||||
Accumulated depreciation | $19.10 | $17 | |||
Preferred stock, par value (in dollars per share) | $1 | $1 | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, shares issued | 0 | 0 | |||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |||
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 | |||
Common stock, shares outstanding | 521,500,000 | 548,800,000 | |||
Common stock, shares issued | 521,500,000 | 548,800,000 | |||
[1] | As of December 31, 2014, the Company’s weighted-average effective rate on total borrowings was approximately 4.4%. |
Schedule_I_Condensed_Financial2
Schedule I - Condensed Financial Information of the Registrant - Condensed Statements of Income and Comprehensive Income (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||
Parent Company | |||||||||||||||||||
Revenues | $1,409.90 | $1,440.90 | $1,405.60 | $1,350.80 | $1,421.90 | $1,408.80 | $1,385.90 | $1,325.40 | $5,607.20 | $5,542 | $5,664.80 | ||||||||
Expenses | 1,133.80 | [1] | 1,126.80 | 1,127.30 | 1,078.80 | 1,183.50 | [2],[3] | 1,113.50 | [2],[3] | 1,109.10 | [2],[3] | 1,028.50 | [2],[3] | 4,466.70 | [1],[4] | 4,434.60 | [2],[3],[4] | 4,334.80 | [4] |
Operating income | 276.1 | 314.1 | 278.3 | 272 | 238.4 | 295.3 | 276.8 | 296.9 | 1,140.50 | 1,107.40 | 1,330 | ||||||||
Investment Income, Net | 11.5 | 9.4 | 5.5 | ||||||||||||||||
Interest expense | -176.6 | -195.6 | -179.6 | ||||||||||||||||
Other expense | -5 | 7 | 12.4 | ||||||||||||||||
Income tax benefit | -14.4 | -38.7 | -38.3 | -24.4 | -19.4 | -37.3 | -33.6 | -38.2 | -115.8 | -128.5 | -142.9 | ||||||||
Net income | 221.5 | 234.1 | 193.8 | 203 | 173.4 | 214.4 | 198.6 | 212 | 852.4 | 798.4 | 1,025.90 | ||||||||
Other comprehensive income, net of tax | 50.1 | -16.4 | -34.1 | ||||||||||||||||
Comprehensive income | 902.5 | 782 | 991.8 | ||||||||||||||||
Parent Company [Member] | |||||||||||||||||||
Parent Company | |||||||||||||||||||
Revenues | 0 | 0 | 0 | ||||||||||||||||
Expenses | 0 | 0 | 0 | ||||||||||||||||
Operating income | 0 | 0 | 0 | ||||||||||||||||
Investment Income, Net | 0.6 | 0.4 | 0.2 | ||||||||||||||||
Interest expense | -176.5 | -195.7 | -178.6 | ||||||||||||||||
Income before income taxes | -175.9 | -195.3 | -178.4 | ||||||||||||||||
Equity in earnings of affiliates, net of tax | 960.8 | 919 | 1,136.10 | ||||||||||||||||
Income tax benefit | 67.5 | 74.7 | 68.2 | ||||||||||||||||
Net income | 852.4 | 798.4 | 1,025.90 | ||||||||||||||||
Other comprehensive income, net of tax | 2.2 | 2.2 | 2 | ||||||||||||||||
Other comprehensive income/(loss) of affiliates, net of tax | 47.9 | -18.6 | -36.1 | ||||||||||||||||
Comprehensive income | $902.50 | $782 | $991.80 | ||||||||||||||||
[1] | Includes $30.3 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||
[2] | Includes $3.9 million in the first quarter, $6.2 million in the second quarter, $3.8 million in the third quarter, and $5.4 million in the fourth quarter of integration expenses related to the acquisition of TGBP. | ||||||||||||||||||
[3] | Includes $4.2 million in the first quarter, $13.5 million in the second quarter, $6.2 million in the third quarter, and $33.0 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 3. | ||||||||||||||||||
[4] | As further described in Note 6, total expenses include amounts for related parties of $70.2 million, $80.6 million and $95.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Schedule_I_Condensed_Financial3
Schedule I - Condensed Financial Information of the Registrant - Condensed Statements of Cash Flows (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net cash provided by operating activities | $1,045.90 | $1,088.60 | $1,185.30 |
Cash flows from investing activities | |||
Purchases of property and equipment | -67.8 | -80.2 | -60.9 |
Purchases of non-settlement related investments | 0 | -100 | 0 |
Proceeds from Sale of Available-for-sale Securities, Equity | 100.2 | 0 | 0 |
Net cash used in investing activities | -89.4 | -341.3 | -258.2 |
Cash flows from financing activities | |||
Net proceeds from issuance of borrowings | 0 | 497.3 | 742.8 |
Principal payments on borrowings | -500 | -300 | 0 |
Net repayments of commercial paper | 0 | 0 | -297 |
Proceeds from exercise of options | 14.2 | 28.9 | 53.4 |
Cash dividends paid | -265.2 | -277.2 | -254.2 |
Common stock repurchased | -495.4 | -399.7 | -766.5 |
Net cash used in financing activities | -1,246.40 | -450.7 | -521.5 |
Net change in cash and cash equivalents | -289.9 | 296.6 | 405.6 |
Cash and cash equivalents at beginning of year | 2,073.10 | 1,776.50 | 1,370.90 |
Cash and cash equivalents at end of year | 1,783.20 | 2,073.10 | 1,776.50 |
Parent Company [Member] | |||
Cash flows from operating activities | |||
Net cash provided by operating activities | 380.8 | 689.1 | 228.3 |
Cash flows from investing activities | |||
Purchases of property and equipment | -5.7 | -8.5 | -3.3 |
Capital contributed to subsidiaries | -4.2 | 0 | 0 |
Purchases of non-settlement related investments | 0 | -100 | 0 |
Proceeds from Sale of Available-for-sale Securities, Equity | 100.2 | 0 | 0 |
Net cash used in investing activities | 90.3 | -108.5 | -3.3 |
Cash flows from financing activities | |||
Advances from/(to) subsidiaries, net | 768.1 | -362.2 | 679.1 |
Net proceeds from issuance of borrowings | 0 | 497.3 | 742.8 |
Principal payments on borrowings | -500 | -300 | 0 |
Net repayments of commercial paper | 0 | 0 | -297 |
Proceeds from exercise of options | 14.2 | 28.9 | 53.4 |
Cash dividends paid | -265.2 | -277.2 | -254.2 |
Common stock repurchased | -495.4 | -399.7 | -766.5 |
Net cash used in financing activities | -478.3 | -812.9 | 157.6 |
Net change in cash and cash equivalents | -7.2 | -232.3 | 382.6 |
Cash and cash equivalents at beginning of year | 151.4 | 383.7 | 1.1 |
Cash and cash equivalents at end of year | $144.20 | $151.40 | $383.70 |
Recovered_Sheet1
Schedule I - Condensed FInancial Information of the Registrant (Details Numeric) (USD $) | Dec. 31, 2014 | Aug. 02, 2014 | Jun. 01, 2014 | Sep. 30, 2012 |
Parent Company Numerics | ||||
Net assets subject to limitations | $300,000,000 | |||
Letters of credit outstanding and bank guarantees | 210,000,000 | |||
Parent Company [Member] | ||||
Parent Company Numerics | ||||
Net assets subject to limitations | 300,000,000 | |||
Note payable to subsidiary | 65,000,000 | 268,200,000 | ||
Stated interest rate | 0.35% | 0.33% | 0.23% | |
Maximum borrowing capacity on unsecured borrowing facilities | 700,000,000 | |||
Outstanding borrowings on unsecured financing facilities | 506,300,000 | |||
Letters of credit outstanding and bank guarantees | $3,500,000 |