Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 16, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity File Number | 001-32903 | ||
Entity Registrant Name | Western Union CO | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-4531180 | ||
Entity Address, Address Line One | 7001 East Belleview Avenue | ||
Entity Address, City or Town | Denver | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80237 | ||
City Area Code | 866 | ||
Local Phone Number | 405-5012 | ||
Title of 12(b) Security | Common Stock, $0.01 Par Value | ||
Trading Symbol | WU | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 8.8 | ||
Entity Common Stock, Shares Outstanding | 410,921,508 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001365135 | ||
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Revenues | $ 4,835 | $ 5,292.1 | $ 5,589.9 |
Type of Revenue | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember |
Expenses: | |||
Cost of services | $ 2,826.5 | $ 3,086.5 | $ 3,300.8 |
Type of Cost of Service | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember |
Selling, general, and administrative | $ 1,041.2 | $ 1,271.6 | $ 1,167 |
Total expenses | 3,867.7 | 4,358.1 | 4,467.8 |
Operating income | 967.3 | 934 | 1,122.1 |
Other income/(expense): | |||
Gain on divestitures of businesses (Note 5) | 524.6 | ||
Interest income | 3.2 | 6.3 | 4.8 |
Interest expense | (118.5) | (152) | (149.6) |
Other income, net | 3.1 | 8.5 | 14.1 |
Total other income/(expense), net | (112.2) | 387.4 | (130.7) |
Income before income taxes | 855.1 | 1,321.4 | 991.4 |
Provision for income taxes | 110.8 | 263.1 | 139.5 |
Net income | $ 744.3 | $ 1,058.3 | $ 851.9 |
Earnings per share: | |||
Basic (USD per share) | $ 1.81 | $ 2.47 | $ 1.89 |
Diluted (USD per share) | $ 1.79 | $ 2.46 | $ 1.87 |
Weighted-average shares outstanding: | |||
Basic (shares) | 412.3 | 427.6 | 451.8 |
Diluted (shares) | 415.2 | 430.9 | 454.4 |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Related party expenses | $ 54.6 | $ 57.1 | $ 57.6 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 744.3 | $ 1,058.3 | $ 851.9 |
Other comprehensive income, net of reclassifications and tax (Note 14): | |||
Unrealized gains/(losses) on investment securities | 33.6 | 25.8 | (4.3) |
Unrealized gains/(losses) on hedging activities | (26.9) | (11) | 50.3 |
Foreign currency translation adjustments | (19.5) | ||
Defined benefit pension plan adjustments (Note 12) | 42.8 | 7.2 | 1.8 |
Total other comprehensive income | 49.5 | 22 | 28.3 |
Comprehensive income | $ 793.8 | $ 1,080.3 | $ 880.2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 1,428.2 | $ 1,450.5 |
Settlement assets | 3,821.4 | 3,296.7 |
Property and equipment, net of accumulated depreciation of $659.9 and $616.5, respectively | 150.4 | 186.9 |
Goodwill | 2,566.6 | 2,566.6 |
Other intangible assets, net of accumulated amortization of $1,044.6 and $961.5, respectively | 505 | 494.9 |
Other assets | 1,024.7 | 762.9 |
Total assets | 9,496.3 | 8,758.5 |
Liabilities: | ||
Accounts payable and accrued liabilities | 500.9 | 601.9 |
Settlement obligations | 3,821.4 | 3,296.7 |
Income taxes payable | 928.9 | 1,019.7 |
Deferred tax liability, net | 188.9 | 152.1 |
Borrowings | 3,067.2 | 3,229.3 |
Other liabilities | 802.4 | 498.3 |
Total liabilities | 9,309.7 | 8,798 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity/(deficit): | ||
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued | ||
Common stock, $0.01 par value; 2,000 shares authorized; 411.2 shares and 418.0 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively | 4.1 | 4.2 |
Capital surplus | 885.1 | 841.2 |
Accumulated deficit | (543.1) | (675.9) |
Accumulated other comprehensive loss | (159.5) | (209) |
Total stockholders' equity/(deficit) | 186.6 | (39.5) |
Total liabilities and stockholders' equity/(deficit) | $ 9,496.3 | $ 8,758.5 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Accumulated Depreciation on Property Plant and Equipment | $ 659.9 | $ 616.5 |
Accumulated Amortization on Other Intangible Assets | $ 1,044.6 | $ 961.5 |
Stockholders' Equity: | ||
Preferred stock, par value (USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 10 | 10 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 2,000 | 2,000 |
Common stock, shares issued | 411.2 | 418 |
Common stock, shares outstanding | 411.2 | 418 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net income | $ 744.3 | $ 1,058.3 | $ 851.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 61.3 | 79.6 | 76.9 |
Amortization | 164.3 | 178.1 | 187.8 |
Gain on divestitures of businesses, excluding transaction costs (Note 5) | (532.1) | ||
Deferred income tax provision/(benefit) (Note 11) | 13.9 | (24.5) | (15.1) |
Other non-cash items, net | 145.8 | 118.4 | 66.2 |
Increase/(decrease) in cash, excluding the effects of divestitures, resulting from changes in: | |||
Other assets | (44.4) | 7.5 | (31) |
Accounts payable and accrued liabilities | (96.6) | 94.3 | (126.5) |
Income taxes payable (Note 11) | (94.4) | (36.8) | (193.1) |
Other liabilities | (16.7) | (28.2) | 4.2 |
Net cash provided by operating activities | 877.5 | 914.6 | 821.3 |
Cash flows from investing activities | |||
Payments for capitalized contract costs | (69.1) | (46.6) | (150.3) |
Payments for internal use software | (51.2) | (33) | (52) |
Purchases of property and equipment | (36.5) | (48.1) | (136.7) |
Proceeds from the sale of former corporate headquarters and other property (Note 5) | 49.4 | ||
Proceeds from divestitures of businesses, net of cash divested (Note 5) | 711.7 | ||
Purchases of non-settlement related investments | (4.9) | (6.8) | (24.2) |
Proceeds from maturity of non-settlement related investments | 0.9 | 23.4 | 13.7 |
Purchases of held-to-maturity non-settlement related investments | (1.3) | (2.8) | |
Proceeds from held-to-maturity non-settlement related investments | 33 | 23.5 | |
Other investing activities | (2) | ||
Net cash (used in)/provided by investing activities | (113.4) | 632.3 | (328.8) |
Cash flows from financing activities | |||
Cash dividends and dividend equivalents paid | (370.3) | (340.8) | (341.7) |
Common stock repurchased (Note 14) | (239.7) | (552.6) | (412.4) |
Net (repayments of)/proceeds from commercial paper | (165) | 120 | 125 |
Net proceeds from issuance of borrowings | 495.9 | 685.4 | |
Principal payments on borrowings | (824.9) | (414.4) | |
Proceeds from exercise of options | 2.2 | 36.7 | 10.1 |
Other financing activities | (0.7) | (4.1) | (9.2) |
Net cash used in financing activities | (773.5) | (1,069.8) | (357.2) |
Net change in cash, cash equivalents, and restricted cash | (9.4) | 477.1 | 135.3 |
Cash, cash equivalents, and restricted cash at beginning of period | 1,456.8 | 979.7 | 844.4 |
Cash, cash equivalents, and restricted cash at end of period | 1,447.4 | 1,456.8 | 979.7 |
Supplemental cash flow information: | |||
Interest paid | 109.6 | 151.3 | 142.5 |
Income taxes paid | 187.3 | 318.9 | 339.4 |
Cash paid for lease liabilities | 65.9 | 53.8 | |
Non-cash lease liabilities arising from obtaining right-of-use assets (Note 13) | 38.6 | 269.1 | |
Restricted cash at end of year (included in Other assets) | $ 19.2 | $ 6.3 | $ 6.3 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT) - USD ($) shares in Millions, $ in Millions | Adoption of new accounting pronouncementsAccumulated Deficit | Adoption of new accounting pronouncementsAccumulated Other Comprehensive Loss | Adoption of new accounting pronouncements | Common Stock | Capital Surplus | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning balance at Dec. 31, 2017 | $ 30.7 | $ (31.4) | $ (0.7) | $ 4.6 | $ 697.8 | $ (965.9) | $ (227.9) | $ (491.4) |
Beginning balance (shares) at Dec. 31, 2017 | 459 | |||||||
Increase/(Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 851.9 | 851.9 | ||||||
Stock-based compensation | 47.7 | 47.7 | ||||||
Common stock dividends and dividend equivalents declared | (341.7) | (341.7) | ||||||
Repurchase and retirement of common shares | $ (0.2) | (413.8) | (414) | |||||
Repurchase and retirement of common shares (shares) | (20.9) | |||||||
Shares issued under stock-based compensation plans | 10.1 | 10.1 | ||||||
Shares issued under stock-based compensation plans (shares) | 3.1 | |||||||
Other comprehensive income (Note 14) | 28.3 | 28.3 | ||||||
Ending balance at Dec. 31, 2018 | $ 4.4 | 755.6 | (838.8) | (231) | (309.8) | |||
Ending balance (shares) at Dec. 31, 2018 | 441.2 | |||||||
Increase/(Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 1,058.3 | 1,058.3 | ||||||
Stock-based compensation | 48.9 | 48.9 | ||||||
Common stock dividends and dividend equivalents declared | (342.6) | (342.6) | ||||||
Repurchase and retirement of common shares | $ (0.2) | (552.8) | (553) | |||||
Repurchase and retirement of common shares (shares) | (27.6) | |||||||
Shares issued under stock-based compensation plans | 36.7 | 36.7 | ||||||
Shares issued under stock-based compensation plans (shares) | 4.4 | |||||||
Other comprehensive income (Note 14) | 22 | 22 | ||||||
Ending balance at Dec. 31, 2019 | $ (0.6) | $ (0.6) | $ 4.2 | 841.2 | (675.9) | (209) | $ (39.5) | |
Ending balance (shares) at Dec. 31, 2019 | 418 | 418 | ||||||
Increase/(Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 744.3 | $ 744.3 | ||||||
Stock-based compensation | 41.7 | 41.7 | ||||||
Common stock dividends and dividend equivalents declared | (373.2) | (373.2) | ||||||
Repurchase and retirement of common shares | $ (0.1) | (237.7) | (237.8) | |||||
Repurchase and retirement of common shares (shares) | (9.4) | |||||||
Shares issued under stock-based compensation plans | 2.2 | 2.2 | ||||||
Shares issued under stock-based compensation plans (shares) | 2.6 | |||||||
Other comprehensive income (Note 14) | 49.5 | 49.5 | ||||||
Ending balance at Dec. 31, 2020 | $ 4.1 | $ 885.1 | $ (543.1) | $ (159.5) | $ 186.6 | |||
Ending balance (shares) at Dec. 31, 2020 | 411.2 | 411.2 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT) (Parentheticals) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT) | |||||||||||||||
Common stock dividends (USD per share) | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.90 | $ 0.80 | $ 0.76 |
Business and Basis of Presentat
Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Business and Basis of Presentation | |
Business and Basis of Presentation | 1. Business and Basis of Presentation Business The Western Union Company (“Western Union” or the “Company”) is a leader in global money 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 ® The Western Union business consists of the following segments: ● Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers, which are sent from retail agent locations worldwide or through websites and mobile devices, including Digital Money Transfer services. The Company’s money transfer service is provided through one interconnected global network. This service is available for international cross-border transfers and, in certain countries, intra-country transfers. ● 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 spot rates, which enable 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 and other services that have not been classified in the above segments are reported as Other, which primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations and the Company’s money order services. In May 2019, the Company sold a substantial majority of its United States based electronic bill payments services, as discussed in Note 5. The Company’s other services, in addition to certain corporate costs such as costs related to strategic initiatives, including costs for the review and closing of mergers, acquisitions, and divestitures, are also included in Other. See Note 18 for further information regarding the Company’s segments. 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, 2020, the amount of these net asset limitations totaled approximately $680 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. 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 Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. 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. In March 2020, the World Health Organization declared the outbreak associated with a novel coronavirus a pandemic (“COVID-19”), and governments throughout the world instituted various actions such as lockdowns, stay-at-home orders, travel restrictions, and closures of non-essential businesses in an effort to reduce the spread of COVID-19. These actions negatively impacted the Company’s ability to offer its services, at least temporarily, through a portion of its locations and its retail agent locations, during the year ended December 31, 2020. Beginning in March 2020 and continuing throughout the remainder of the year, the Company experienced a decrease in transaction volumes from retail locations, and a decrease in foreign exchange and payment services activity, which also negatively impacted revenues in these periods, partially offset by revenue and transaction growth from Digital Money Transfer services. The Company believes this decrease is mainly due to economic decline and uncertainty resulting from the pandemic. The extent to which the COVID-19 pandemic continues to impact the Company’s business, financial condition, results of operations, or cash flows will depend on future developments, which are highly uncertain and are difficult to predict. To the extent the pandemic or the related macro-economic consequences continue, the Company could potentially experience changes in estimates, including increased credit losses or intangible asset impairments in future periods. Principles of Consolidation The Company consolidates financial results when it has a controlling financial interest in a subsidiary via voting rights or 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 an entity’s operations, which generally occurs when the Company has an ownership interest between 20% and 50%. 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 and the unamortized compensation expense of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect. Shares excluded from the diluted earnings per share calculation under the treasury stock method, primarily due to outstanding restricted stock units and options to purchase shares of Western Union stock, as the assumed proceeds of the restricted stock and options per unit were above the Company’s average share price during the periods and their effect was anti-dilutive, were 1.6 million, 1.9 million, and 2.6 million, respectively, of shares for the years ended December 31, 2020, 2019, and 2018. The following table provides the calculation of diluted weighted-average shares outstanding (in millions): Year Ended December 31, 2020 2019 2018 Basic weighted-average shares outstanding 412.3 427.6 451.8 Common stock equivalents 2.9 3.3 2.6 Diluted weighted-average shares outstanding 415.2 430.9 454.4 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. ● 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 holds assets classified as Level 3 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. In addition, the Trust has other investments that are valued at net asset value, which are not quoted on an active market; however, the unit price is based on underlying investments which are traded on an active market. 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. Available-for-sale investment securities, as further discussed in Notes 8 and 9, and derivative financial instruments, as further discussed in Notes 9 and 15, are carried at fair value. Fixed-rate notes are carried at their original issuance values and adjusted over time to accrete that value to par, except for portions of notes that were hedged by interest rate swap agreements in prior years, as disclosed in Note 15. The fair values of fixed-rate notes are disclosed in Note 9 and are based on market quotations. The fair values of non-financial assets and liabilities related to the Company’s business combinations are disclosed in Note 5. The fair value of the assets in the Trust, which holds the assets for the Company’s defined benefit pension plan, is disclosed in Note 12. 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 within Net 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 within Other income, net 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 cash equivalents and are stated at cost, which approximates fair value. The Company maintains cash and cash equivalent balances, including a portion in money market funds, with a group of globally diversified banks and financial institutions. The Company limits the concentration of its cash and cash equivalents with any one institution and regularly reviews investment concentrations and credit worthiness of these institutions. Allowance for Credit Losses For the Company’s accounting policies with respect to the allowance for credit losses, refer to Note 8. Settlement Assets and Obligations Settlement assets represent funds received or to be received from agents and others 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 agents, Business Solutions customers, and others, 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. Collection of these receivables ordinarily occurs within a few days. To mitigate risk associated with potential Business Solutions customer defaults, the Company performs credit reviews on an ongoing basis. 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. Refer to Note 8 for additional details on the Company’s settlement assets and obligations. 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 furniture fixtures Property and equipment consisted of the following (in millions): December 31, 2020 2019 Equipment $ 608.9 $ 591.4 Leasehold improvements 153.3 159.2 Furniture and fixtures 45.4 49.4 Buildings 0.4 0.4 Projects in process 2.3 3.0 Total property and equipment, gross 810.3 803.4 Less accumulated depreciation (659.9) (616.5) Property and equipment, net (a) $ 150.4 $ 186.9 (a) As of December 31, 2019, Property and equipment, net excluded assets held for sale of $49.3 million, which primarily consisted of the Company’s former headquarters and land. These assets were sold in 2020 and were included in Other assets in the Company’s Consolidated Balance Sheets as of December 31, 2019. Amounts charged to expense for depreciation of property and equipment were $61.3 million, $79.6 million, and $76.9 million during the years ended December 31, 2020, 2019, and 2018, 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. In the event a reporting unit’s carrying amount exceeds its fair value, the Company recognizes an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. The Company’s annual impairment assessment did not identify any goodwill impairment during the years ended December 31, 2020, 2019, and 2018. Other Intangible Assets Other intangible assets primarily consist of contract costs (primarily amounts paid to agents in connection with establishing and renewing long-term contracts), acquired contracts, and software. Other intangible assets are generally 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 $164.3 million, $178.1 million, and $187.8 million for the years ended December 31, 2020, 2019, and 2018, respectively. 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. Acquired contracts include customer and contractual relationships and networks of subagents that are recognized in connection with the Company’s acquisitions. The Company purchases and develops software that is used in providing services and in performing administrative functions. Internal and external software development costs incurred that are directly related to the chosen design, development, and testing phases of the software are capitalized once the Company has completed all planning and analysis activities. Any other software development related costs are expensed as incurred. 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 The following table provides the components of other intangible assets (in millions): December 31, 2020 December 31, 2019 Weighted- Average Amortization Net of Net of Period Accumulated Accumulated (in years) Initial Cost Amortization Initial Cost Amortization Capitalized contract costs 6.1 $ 574.4 $ 308.0 $ 510.3 $ 271.7 Acquired contracts 11.6 561.7 75.8 584.2 124.1 Internal use software 3.7 310.3 55.5 281.2 54.7 Acquired trademarks 25.4 30.1 12.0 30.1 13.2 Other intangibles 4.3 19.4 — 19.4 — Projects in process (a) 53.7 53.7 31.2 31.2 Total other intangible assets 8.0 $ 1,549.6 $ 505.0 $ 1,456.4 $ 494.9 (a) Not applicable as the assets have not been placed in service. The estimated future aggregate amortization expense for existing other intangible assets as of December 31, 2020 is expected to be $148.5 million in 2021, $106.8 million in 2022, $78.8 million in 2023, $61.4 million in 2024, $35.1 million in 2025, and $20.7 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, 2020, 2019, and 2018. Revenue Recognition For the Company’s accounting policies with respect to revenue recognition, refer to Note 3. 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, credit losses, 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, 2020, 2019, and 2018 were $177.0 million, $209.1 million, and $180.9 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. The Company accounts for the effects of global intangible low-taxed income taxed in the United States as a component of income tax expense in the period the tax arises. 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 (“AOCL”) 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 has used derivatives to: (i) minimize its exposures related to changes in foreign currency exchange rates and, periodically, interest rates and (ii) 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. Certain of the Company’s derivative arrangements are designated as either cash flow hedges or fair value hedges at the time of inception, and others are not designated as accounting hedges. ● Cash flow hedges – 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 AOCL are reclassified to earnings in the same period the hedged item affects earnings when the instrument is effective in offsetting the change in cash flows attributable to the risk being hedged. On January 1, 2018, the Company early adopted an accounting pronouncement related to hedging activities. As a result of the new accounting pronouncement, for foreign currency cash flow hedges entered into on or after January 1, 2018, the Company excludes time value from the assessment of effectiveness, and the initial value of the excluded components is amortized into Revenues within the Consolidated Statements of Income. For foreign currency cash flow hedges entered into before January 1, 2018, all changes in the fair value of the excluded components were recognized immediately in Revenues during the years ended December 31, 2019 and 2018. ● Fair value hedges - Fair value hedges consist of hedges of fixed-rate debt, through interest rate swaps. 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. There were no fair value hedges outstanding as of December 31, 2020 and 2019. ● Undesignated - Derivative contracts entered into to reduce the foreign exchange variability related to: (i) money transfer settlement assets and obligations, generally with maturities from a few days up to one month , and (ii) 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 significant majority of these derivative contracts have a duration at inception of 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 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, and how effectiveness is being assessed. 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 other amounts 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 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. All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period. The Company generally recognizes compensation expense on awards on a straight-line basis over the requisite service period for the entire award, with an estimate for forfeitures. Refer to Note 17 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 related assets may not be fully recoverable, in accordance with the appropriate accounting guidance. Recently Adopted Accounting Pronouncements On January 1, 2020, the Company adopted a new accounting standard that requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. Additionally, the standard requires certain credit losses relating to investment securities classified as available-for-sale to be recorded through an allowance for credit losses. The Company recognized the cumulative effect of the new accounting standard as an adjustment to the January 1, 2020 balance of Accumulated deficit in the Consolidated Balance Sheets, and the adoption of the new accounting standard did not have a material impact on the Company’s January 1, 2020 accumulated deficit. In accordance with the modified retrospective On January 1, 2019, the Company adopted a new accounting standard, as amended, that requires the Company to record assets and liabilities on the balance sheet for lease-related rights and obligations and disclose key information about its leasing arrangements. The Company elected the effective date method, utilized the modified retrospective On January 1, 2018, the Company adopted a new accounting standard, as amended, regarding revenue from contracts with customers using the modified retrospective In the first quarter of 2018, the Company adopted a new accounting pronouncement that provides entities the option to reclassify tax effects included within AOCL as a result of the United States tax reform legislation enacted in December 2017 (the “Tax Act”) to retained earnings. The adoption of this standard resulted in an increase to AOCL and a decrease to Accumulated deficit in the Consolidated Balance Sheets of $31.4 million, which represents the tax effects of the lower federal tax rate on unrealized gains/(losses) on investment securities, hedging activities, and adjustments related to the Company’s defined benefit pension plan, in addition to the release of deferred taxes accrued on undistributed earnings of one of the Company’s subsidiaries that are no longer owed under the Tax Act. The Company will continue to release tax effects remaining in AOCL into income as the individual units of account are sold or otherwise extinguished. Refer to Note 14 for additional information. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue | |
Revenue | 3. Revenue On January 1, 2018, the Company adopted a new accounting standard, as amended, regarding revenue from contracts with customers using the modified retrospective approach, which was applied to all contracts with customers. 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. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of Accumulated deficit in the Consolidated Balance Sheet, and the adoption of the new accounting standard did not have a material impact on the Company’s January 1, 2018 accumulated deficit. The Company’s revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, and speed of service, as applicable. The Company also offers several other services, including foreign exchange and payment services and other bill payment services, for which revenue is impacted by similar factors. For the substantial majority of the Company’s revenues, the Company acts as the principal in transactions and reports revenue on a gross basis, as the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. The Company also provides services to financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. Generally, in these arrangements, consumers agree to terms and conditions specified by the financial institution or other third party that, among other things, establish pricing paid by the consumer for the service. The Company recognizes revenue on a net basis under these arrangements. The Company recognized $4,625.1 million, $5,033.2 million, and $5,382.6 million in revenues from contracts with customers for the years ended December 31, 2020, 2019, and 2018, respectively. There were no material upfront costs incurred to obtain contracts with customers during these same periods. Under the Company’s loyalty programs, which are primarily offered in its money transfer services, the Company must fulfill loyalty program rewards earned by customers. The loyalty program redemption activity has been and continues to be insignificant to the Company’s results of operations for the years ended December 31, 2020, 2019, and 2018, and the Company has immaterial contract liability balances as of December 31, 2020 and 2019, which primarily relate to its customer loyalty programs and other services. Contract asset balances related to customers were also immaterial as of December 31, 2020 and 2019, as the Company typically receives payment of consideration from its customers prior to satisfying performance obligations under the customer contracts. In addition to revenue generated from contracts with customers, the Company recognizes revenue from other sources, including the sale of derivative financial instruments and investment income generated on settlement assets primarily related to money transfer and money order services. The Company analyzes its different services individually to determine the appropriate basis for revenue recognition, as further described below. Revenues from consumer money transfers are included in the Company’s Consumer-to-Consumer segment, revenues from foreign exchange and payment services are included in the Company’s Business Solutions segment, and revenues from consumer bill payments and other services are not included in the Company’s segments and are reported as Other. See Note 18 for further information on the Company’s segments. Consumer Money Transfers For the Company’s money transfer services, customers agree to the Company’s terms and conditions at the time of initiating a transaction. In a money transfer, the Company has one performance obligation as the customer engages the Company to perform one integrated service which typically occurs within minutes — collect the customer’s money and make funds available for payment to a designated person in the currency requested. Therefore, the Company recognizes revenue upon completion of the following: (i) the customer’s acknowledgment of the Company’s terms and conditions and payment information has been received by the Company, (ii) the Company has agreed to process the money transfer, (iii) the Company has provided the customer a unique transaction identification number, and (iv) funds are available to be picked up by the customer’s designated receiving party. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated. Foreign Exchange and Payment Services For the Company’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with the Company to provide payment services on the customer’s behalf. In the majority of the Company’s foreign exchange and payment services, the Company makes payments to the recipient to satisfy its performance obligation to the customer, and therefore, the Company recognizes revenue on foreign exchange and payment services when this performance obligation has been fulfilled. Revenues from foreign exchange and payment services are primarily comprised of the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market. Consumer Bill Payments The Company offers several different bill payment services that vary by considerations such as: (i) who pays the fee to the Company (consumer or biller), (ii) whether the service is offered to all potential consumers, or only to those for which the Company has a relationship with the biller, and (iii) whether the service utilizes a physical agent network offered for consumers’ convenience, among other factors. The determination of which party is the Company’s customer for revenue recognition purposes is based on these considerations for each of the Company’s bill payment services. For all transactions, the Company’s customers agree to the Company’s terms and conditions, either at the time of initiating a transaction (where the consumer is determined to be the customer for revenue recognition purposes) or upon signing a contract with the Company to provide services on the biller’s behalf (where the biller is determined to be the customer for revenue recognition purposes). As with consumer money transfers, customers engage the Company to perform one integrated service — collect money from the consumer and process the bill payment transaction, thereby providing the billers real-time or near real-time information regarding their customers’ payments and simplifying the billers’ collection efforts. In May 2019, the Company sold a substantial majority of its United States based electronic bill payments services, as discussed in Note 5. Management has determined that the significant majority of the Company’s revenue is recognized at a point in time. The following tables represent the disaggregation of revenue earned from contracts with customers by product type and region for the years ended December 31, 2020, 2019, and 2018 (in millions). The regional split of revenue shown in the tables below is based upon where transactions are initiated. Year Ended December 31, 2020 Foreign Consumer Exchange Money and Payment Consumer Other Transfers Services Bill Payments Services Total Regions: North America $ 1,605.5 $ 83.6 $ 75.1 $ 57.0 $ 1,821.2 Europe and Russia/CIS 1,330.0 121.1 3.6 1.8 1,456.5 Middle East, Africa, and South Asia 630.0 1.5 0.4 — 631.9 Latin America and the Caribbean 310.1 2.4 75.8 7.9 396.2 East Asia and Oceania 257.4 60.5 1.4 — 319.3 Revenues from contracts with customers $ 4,133.0 $ 269.1 $ 156.3 $ 66.7 $ 4,625.1 Other revenues (a) 87.0 87.0 14.0 21.9 209.9 Total revenues $ 4,220.0 $ 356.1 $ 170.3 $ 88.6 $ 4,835.0 Year Ended December 31, 2019 Foreign Consumer Exchange Money and Payment Consumer Other Transfers Services Bill Payments (b) Services Total Regions: North America $ 1,653.5 $ 95.4 $ 223.0 $ 55.9 $ 2,027.8 Europe and Russia/CIS 1,350.1 127.1 3.2 4.1 1,484.5 Middle East, Africa, and South Asia 642.0 1.8 0.4 — 644.2 Latin America and the Caribbean 395.2 3.4 129.4 15.3 543.3 East Asia and Oceania 263.5 68.4 1.5 — 333.4 Revenues from contracts with customers $ 4,304.3 $ 296.1 $ 357.5 $ 75.3 $ 5,033.2 Other revenues (a) 103.5 92.7 37.3 25.4 258.9 Total revenues $ 4,407.8 $ 388.8 $ 394.8 $ 100.7 $ 5,292.1 Year Ended December 31, 2018 Foreign Consumer Exchange Money and Payment Consumer Other Transfers Services Bill Payments (b) Services Total Regions: North America $ 1,632.3 $ 97.6 $ 463.9 $ 57.4 $ 2,251.2 Europe and Russia/CIS 1,399.5 130.0 3.1 3.9 1,536.5 Middle East, Africa, and South Asia 654.4 1.5 0.3 — 656.2 Latin America and the Caribbean 393.2 3.1 152.7 13.7 562.7 East Asia and Oceania 304.6 69.9 1.5 — 376.0 Revenues from contracts with customers $ 4,384.0 $ 302.1 $ 621.5 $ 75.0 $ 5,382.6 Other revenues (a) 69.6 84.7 30.8 22.2 207.3 Total revenues $ 4,453.6 $ 386.8 $ 652.3 $ 97.2 $ 5,589.9 (a) Includes revenue from the sale of derivative financial instruments, investment income generated on settlement assets primarily related to money transfer and money order services, and other sources. (b) On February 28, 2019, the Company entered into an agreement with ACI Worldwide Corp. and ACW Worldwide, Inc. to sell its United States electronic bill payments business known as “Speedpay,” and closed the transaction on May 9, 2019. Included within North America revenues are Speedpay revenues of $125.4 million and $352.0 million for the years ended December 31, 2019 and 2018, respectively. |
Restructuring-Related Expenses
Restructuring-Related Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring-Related Expenses | |
Restructuring-Related Expenses | 4. Restructuring-Related Expenses On August 1, 2019, the Company’s Board of Directors approved a plan to change the Company’s operating model and improve its business processes and cost structure by reorganizing the Company’s senior management, including those managers reporting to the Chief Executive Officer (“CEO”), reducing its headcount, and consolidating various facilities. While certain of the expenses may be identifiable to the Company’s segments, primarily to the Company’s Consumer-to-Consumer segment, the expenses are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker (“CODM”) for purposes of performance assessment and resource allocation. These expenses are therefore excluded from the Company’s segment operating income results. These expenses are specific to this initiative; however, the types of expenses related to this initiative are similar to expenses that the Company has previously incurred and can reasonably be expected to incur in the future. As of December 31, 2020, all expenses associated with this plan have been incurred and substantially all have been and will continue to be paid in cash. The following table summarizes the activity for the years ended December 31, 2020 and 2019 for expenses related to the restructuring accruals, which are included in Accounts payable and accrued liabilities in the Company’s Consolidated Balance Sheets as of December 31, 2020 and 2019, and the total expenses incurred since the inception of the restructuring plan (in millions): Severance and Facility Relocations Related and Closures, Employee Consulting, Benefits and Other Total Balance, December 31, 2018 $ — $ — $ — Expenses (a) 98.0 17.5 115.5 Cash payments (28.6) (9.6) (38.2) Non-cash benefits/(charges) (a) 1.8 (5.8) (4.0) Balance, December 31, 2019 $ 71.2 $ 2.1 $ 73.3 Expenses (a) 11.8 25.0 36.8 Cash payments (58.7) (24.0) (82.7) Non-cash benefits/(charges) (a) 0.6 (1.8) (1.2) Balance, December 31, 2020 $ 24.9 $ 1.3 $ 26.2 Total expenses incurred $ 109.8 $ 42.5 $ 152.3 (a) Non-cash benefits/(charges) include non-cash write-offs and accelerated depreciation of ROU assets and leasehold improvements and a non-cash benefit for adjustments to stock compensation for awards forfeited by employees. These amounts have been removed from the liability balance in the table above as they do not impact the restructuring accruals. The following table presents restructuring-related expenses as reflected in the Consolidated Statements of Income (in millions): Year Ended December 31, 2020 2019 Cost of services $ 4.5 $ 39.8 Selling, general, and administrative 32.3 75.7 Total expenses, pre-tax $ 36.8 $ 115.5 Total expenses, net of tax $ 31.5 $ 90.0 |
Divestitures, Acquisitions, and
Divestitures, Acquisitions, and Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Divestitures, Acquisitions, and Goodwill | |
Divestitures, Acquisitions, and Goodwill | 5. Divestitures, Acquisitions, and Goodwill Divestitures of Businesses On February 28, 2019, the Company entered into an agreement with ACI Worldwide Corp. and ACW Worldwide, Inc. (together, “ACI”) to sell its United States electronic bill payments business known as Speedpay, which had been included as a component of Other in the Company’s segment reporting. The Company received approximately $750 million and recorded a pre-tax gain on the sale of approximately $523 million, which is included in Gain on divestitures of businesses in the accompanying Consolidated Statements of Income, in the all-cash transaction that closed on May 9, 2019. Speedpay revenues included in the Company’s results were $125.4 million and $352.0 million for the years ended December 31, 2019 and 2018, respectively. Speedpay direct operating expenses were $98.2 million and $251.2 million for the years ended December 31, 2019 and 2018, respectively. On May 6, 2019, the Company completed the sale of Paymap Inc. (“Paymap”), which provides electronic mortgage bill payment services, for contingent consideration and immaterial cash proceeds received at closing. The Company recorded an immaterial pre-tax gain related to this sale during 2019. In 2020, the Company sold its former corporate headquarters and other property and recorded an immaterial pre-tax net gain on the sales. The proceeds from these sales have been included in Cash flows from investing activities within the Company’s Consolidated Statements of Cash Flows for the year ended December 31, 2020. Investment in Saudi Digital Payments Company On November 21, 2020, the Company entered into an agreement to acquire an ownership interest in Saudi Digital Payments Company (“stc pay”), a subsidiary of Saudi Telecom Company and one of the Company’s Consumer-to-Consumer digital white label partners. Under the terms of the agreement, the transaction is intended to occur in two tranches. In the first tranche, the Company agreed to invest approximately $133 million for a 10% investment in stc pay, and, in the second tranche, the Company agreed to invest an additional approximately $67 million for an additional 5% investment in stc pay. The first tranche is expected to close in the first quarter of 2021 and the closing of the second tranche is contingent upon stc pay satisfying certain conditions. In conjunction with the transaction, the Company and stc pay have also agreed to extend and expand the terms of their commercial agreement. The Company expects to measure this investment at cost, less any impairment, adjusted for any changes resulting from observable price changes in orderly transactions for identical or similar investments in stc pay. Goodwill The following table presents changes to goodwill for the years ended December 31, 2020 and 2019 (in millions): Consumer-to- Business Consumer Solutions Other Total January 1, 2019 goodwill, net $ 1,980.7 $ 532.0 $ 212.3 $ 2,725.0 Divestitures (a) — — (158.4) (158.4) December 31, 2019 goodwill, net $ 1,980.7 $ 532.0 $ 53.9 $ 2,566.6 Additions — — — — December 31, 2020 goodwill, net $ 1,980.7 $ 532.0 $ 53.9 $ 2,566.6 (a) Related to the Speedpay and Paymap divestitures, as described above. The following table presents accumulated impairment losses as of December 31, 2020, 2019, and 2018 (in millions): As of December 31, 2020 2019 2018 Goodwill, gross $ 3,030.6 $ 3,030.6 $ 3,189.0 Accumulated impairment losses (464.0) (464.0) (464.0) Goodwill, net $ 2,566.6 $ 2,566.6 $ 2,725.0 The Company did not record any goodwill impairments during the years ended December 31, 2020, 2019, and 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies Letters of Credit and Bank Guarantees The Company had approximately $390 million in outstanding letters of credit and bank guarantees as of December 31, 2020 primarily held in connection with safeguarding consumer funds, lease arrangements, and certain agent agreements. The significant majority of the Company’s letters of credit and bank guarantees have a one-year renewal option, and the Company expects to renew prior to expiration in most circumstances. 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, and in some cases, criminal charges. The Company regularly evaluates the status of legal matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. Furthermore, in determining whether disclosure is appropriate, the Company evaluates each legal matter to assess if there is at least a reasonable possibility that a loss or additional losses may have been incurred and whether an estimate of possible loss or range of loss can be made. Unless otherwise specified below, the Company believes that there is at least a reasonable possibility that a loss or additional loss may have been incurred for each of the matters described below. For those matters that the Company believes there is at least a reasonable possibility that a loss or additional loss may have been incurred and can reasonably estimate the loss or potential loss, the reasonably possible potential litigation losses in excess of the Company’s recorded liability for probable and estimable losses was approximately $30 million as of December 31, 2020. For the remaining matters, management is unable to provide a meaningful estimate of the possible loss or range of loss because, among other reasons: (i) the proceedings are in preliminary stages; (ii) specific damages have not been sought; (iii) damage claims are unsupported and/or unreasonable; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; or (vi) novel legal issues or unsettled legal theories are being asserted. The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly, actual losses may be in excess of the established liability or the range of reasonably possible loss. Shareholder Derivative Action On January 16, 2020, Stanley Lieblein filed a shareholder derivative complaint in the Court of Chancery of the State of Delaware naming the Company’s President and Chief Executive Officer, certain current and former directors, and a former executive officer as individual defendants and the Company as a nominal defendant (the “Delaware Complaint”). Mr. Lieblein had previously filed a shareholder derivative action asserting related claims in the United States District Court for the District of Colorado, which was subsequently consolidated with multiple pending related derivative actions. Following the filing of multiple amended complaints, the United States Court of Appeals for the Tenth Circuit affirmed dismissal of the consolidated derivative action on April 16, 2019 on the ground that the plaintiffs did not have standing to proceed on behalf of the Company without making a demand on the Company’s Board of Directors. The consolidated derivative action is described in further detail in the Company’s prior disclosures. On August 1, 2019, Mr. Lieblein made a written demand on the Company’s Board of Directors to investigate and address alleged misconduct related to the Company’s anti-fraud and anti-money laundering (“AML”) compliance programs, including certain alleged misconduct at issue in the consolidated derivative action. The Company’s Board of Directors formed a special committee to evaluate Mr. Lieblein’s demand together with a related shareholder demand (the “Demand Letters”), and the special committee’s investigation was still ongoing at the time Mr. Lieblein filed the Delaware Complaint. Mr. Lieblein alleges that he filed the Delaware Complaint prior to the completion of the special committee’s investigation because of concerns regarding the statute of limitations on some of the claims asserted. Mr. Lieblein agreed to stay the action until December 31, 2020, pending completion of the special committee’s investigation. Within 60 days after December 31, 2020, Mr. Lieblein is required either to specify whether the Delaware Complaint will serve as the operative complaint in the action or file an amended complaint. The Delaware Complaint filed by Mr. Lieblein on January 16, 2020 includes allegations that the director and officer defendants declined to implement effective anti-fraud and AML compliance systems after receiving numerous red flags indicating prolonged willful illegality, condoned executive officers’ obstruction of efforts by various regulators to impose an effective compliance system on the Company, approved executive compensation packages for management that were not aligned with development of effective anti-fraud and AML compliance programs, allowed management to fail to timely report known or likely impropriety by Company employees or agents to regulatory authorities, failed to require management to adopt a risk assessment for all very high risk areas, refused to remedy the board’s oversight of executive officers, and, in effect, refused Mr. Lieblein’s shareholder demand and related request for tolling agreements. It also includes allegations that the officer defendants declined to ensure that the Company implemented effective anti-fraud and AML compliance programs after receiving red flags that those programs were inadequate, allowed Company agents to willfully ignore anti-fraud and AML recording and reporting requirements for a prolonged period, opposed efforts by various regulators to implement effective anti-fraud and AML complaint programs, caused the Company to fail to comply with its obligations under settlements with regulators, and knowingly exposed the Company to criminal and civil sanctions. The special committee completed its investigation in early December 2020 and, on the basis of its findings, recommended that the Company’s Board of Directors reject the Demand Letters and direct the Company to oppose any effort to assert claims based on or related to the Demand Letters on behalf of the Company, that no action on behalf of the Company should be brought or pursued against any of the current or former officers or directors of the Company based on the Demand Letters, and that none of the corporate governance reforms raised in the Demand Letters is necessary or appropriate. On December 16, 2020, the Board of Directors resolved to adopt the recommendations of the special committee. The Board of Directors further resolved, among other things, that none of the asserted claims has factual or legal merit. The Company thereafter informed Mr. Lieblein and the other shareholders who sent the Demand Letters that their demands have been rejected. On February 12, 2021, one of the shareholders who sent a Demand Letter sent the Company a request to inspect books and records related to the consideration of the Demand Letters pursuant to Section 220 of the Delaware General Corporation Law. The Company intends to oppose any effort by Mr. Lieblein to continue his action. The Company believes the action is without merit. The Company will likewise oppose any future action by the other shareholders who sent the Demand Letters. Other Matters In October 2015, Consumidores Financieros Asociación Civil para su Defensa, an Argentinian consumer association, filed a purported class action lawsuit in Argentina’s National Commercial Court No. 19 against the Company’s subsidiary Western Union Financial Services Argentina S.R.L. (“WUFSA”). The lawsuit alleges, among other things, that WUFSA’s fees for money transfers sent from Argentina are excessive and that WUFSA does not provide consumers with adequate information about foreign exchange rates. The plaintiff is seeking, among other things, an order requiring WUFSA to reimburse consumers for the fees they paid and the foreign exchange revenue associated with money transfers sent from Argentina, plus punitive damages. The complaint does not specify a monetary value of the claim or a time period. In November 2015, the Court declared the complaint formally admissible as a class action. The notice of claim was served on WUFSA in May 2016, and in June 2016 WUFSA filed a response to the claim and moved to dismiss it on statute of limitations and standing grounds. In April 2017, the Court deferred ruling on the motion until later in the proceedings. The process for notifying potential class members has been completed and the case is currently in the evidentiary stage. The case will be stayed until: (i) the Attorney-General instructs the Prosecutor to continue to litigate the claims on behalf of the plaintiff (during the time the registration of Consumidores Financieros before the Secretary of Commerce remains suspended); or (ii) the parties report to the Court that the plaintiff recovered its legal capacity. Due to the stage of this matter, the Company is unable to predict the outcome or the possible loss or range of loss, if any, associated with this matter. WUFSA intends to defend itself vigorously. In addition to the principal matters described above, the Company is a party to a variety of other legal matters that arise in the normal course of the Company’s business. While the results of these other legal matters cannot be predicted with certainty, management believes that the final outcome of these matters will not have a material adverse effect either individually or in the aggregate on the Company’s financial condition, results of operations, or cash flows. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | 7. Related Party Transactions The Company has ownership interests in certain of its agents accounted for under the equity method of accounting. The Company pays these agents 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, 2020, 2019, and 2018 totaled $54.6 million, $57.1 million, and $57.6 million, respectively. |
Settlement Assets and Obligatio
Settlement Assets and Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Settlement Assets and Obligations | |
Settlement Assets and Obligations | 8. Settlement Assets and Obligations Settlement assets represent funds received or to be received from agents and others 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 and obligations consisted of the following (in millions): December 31, 2020 Settlement assets: Cash and cash equivalents $ 695.7 Receivables from agents, Business Solutions customers, and others 1,188.3 Less: Allowance for credit losses (53.2) Receivables from agents, Business Solutions customers, and others, net 1,135.1 Investment securities 1,990.6 Total settlement assets $ 3,821.4 Settlement obligations: Money transfer, money order, and payment service payables $ 2,902.9 Payables to agents 918.5 Total settlement obligations $ 3,821.4 December 31, 2019 Settlement assets: Cash and cash equivalents $ 368.2 Receivables from agents, Business Solutions customers, and others 1,230.1 Investment securities 1,698.4 Total settlement assets $ 3,296.7 Settlement obligations: Money transfer, money order, and payment service payables $ 2,571.5 Payables to agents 725.2 Total settlement obligations $ 3,296.7 Allowance for Credit Losses On January 1, 2020, the Company adopted a new accounting standard related to the estimation of the allowance for credit losses, as discussed in Note 2. However, due to the short-term nature of the Company’s receivables and the Company’s historical and expected collections practice, the adoption did not have a material impact on the Company’s financial position or results of operations. Receivables from agents and others primarily represent funds collected by such agents, but in transit to the Company, and were $1,081.2 million as of December 31, 2020. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. The Company performs ongoing credit evaluations of its agents’ financial condition and credit worthiness. Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business Solutions segment. Business Solutions receivables totaled $53.9 million as of December 31, 2020. Receivables occur when funds have been paid out to a beneficiary but not yet received from the customer. Collection of these receivables ordinarily occurs within a few days. To mitigate risk associated with potential Business Solutions customer defaults, the Company performs credit reviews on an ongoing basis. The Company establishes and monitors an allowance for credit losses related to receivables from agents and others, and Business Solutions customers. The Company estimates the allowance based on its historical collections experience, adjusted for current conditions and forecasts of future economic conditions, including those related to COVID-19. Given the short-term nature of these receivables, the Company does not expect the impact of forecasted economic conditions on its allowance for credit losses to be significant. The Company has estimated credit losses based on information known as of December 31, 2020. The following table summarizes activity in the allowance for credit losses on receivables from agents and others, and Business Solutions customers (in millions): Agents and Business Solutions Others Customers Allowance for credit losses as of January 1, 2020 $ 20.4 $ 4.5 Current period provision for expected credit losses (a) 39.9 2.0 Write-offs charged against the allowance (11.9) (3.1) Recoveries of amounts previously written off 2.3 — Impacts of foreign currency exchange rates and other (1.4) 0.5 Allowance for credit losses as of December 31, 2020 $ 49.3 $ 3.9 (a) Provision does not include losses from chargebacks or fraud associated with transactions initiated through the Company’s digital channels, as these losses are not credit-related. For the year ended December 31, 2020, the Company recognized $41.3 million of losses that were not credit-related. Prior to the adoption of the new accounting standard discussed above, the Company recorded an allowance for doubtful accounts when it was probable that the related receivable balance would not be collected based on its history of collection experience, known collection issues, such as agent suspensions and bankruptcies, consumer chargebacks and insufficient funds, and other matters the Company identified in its routine collection monitoring. The allowance for doubtful accounts was $42.2 million as of December 31, 2019 and is recorded in the same balance sheet captions as the related receivable. During the years ended December 31, 2019 and 2018, the provision for doubtful accounts (bad debt expense) reflected in the Consolidated Statements of Income was $47.1 million and $43.9 million, respectively. In addition, from time to time, the Company has made advances to its agents. The Company generally owes settlement funds payable to these agents that offset these advances. These amounts advanced to agents are included within Other assets in the accompanying Consolidated Balance Sheets. As of December 31, 2020, amounts advanced to agents were $135.9 million, and the related allowance for credit losses was immaterial. Investment Securities Investment securities included in Settlement assets in the Company’s Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed-rate term notes and variable-rate demand notes. 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 2057. These securities may be used by the Company for short-term liquidity needs and held for short periods of time. Investment securities are exposed to market risk due to changes in interest rates and credit risk. 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 regulatory requirements. The Company’s investment securities are classified as available-for-sale and recorded at fair value. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification. Unrealized gains on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes. Available-for-sale securities with a fair value below the amortized cost basis are evaluated on an individual basis to determine whether the impairment is due to credit-related factors or noncredit-related factors. Factors that could indicate a credit loss exists include but are not limited to: (i) negative earnings performance, (ii) credit rating downgrades, or (iii) adverse changes in the regulatory or economic environment of the asset. Any impairment that is not credit-related is excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes, unless the Company intends to sell the impaired security or it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. Credit-related impairments are recognized immediately as an adjustment to earnings, regardless of whether the Company has the ability or intent to hold the security to maturity, and are limited to the difference between fair value and the amortized cost basis. As of and for the year ended December 31, 2020, the Company’s allowance for credit losses and provision for credit losses on its available-for-sale securities were immaterial. Proceeds from the sale and maturity of available-for-sale securities during the years ended December 31, 2020, 2019, and 2018 were $6.2 billion, $5.4 billion, and $7.7 billion. The components of investment securities are as follows (in millions): Gross Gross Net Amortized Fair Unrealized Unrealized Unrealized December 31, 2020 Cost Value Gains Losses Gains/(Losses) Settlement assets: Cash and cash equivalents: Money market funds $ 13.1 $ 13.1 $ — $ — $ — Available-for-sale securities: State and municipal debt securities (a) 1,234.1 1,303.9 69.8 — 69.8 State and municipal variable-rate demand notes 562.1 562.1 — — — Corporate and other debt securities 71.6 72.8 1.2 — 1.2 United States government agency mortgage-backed securities 50.3 51.8 1.5 — 1.5 Total available-for-sale securities 1,918.1 1,990.6 72.5 — 72.5 Total investment securities $ 1,931.2 $ 2,003.7 $ 72.5 $ — $ 72.5 Gross Gross Net Amortized Fair Unrealized Unrealized Unrealized December 31, 2019 Cost Value Gains Losses Gains/(Losses) Settlement assets: Cash and cash equivalents: Money market funds $ 24.6 $ 24.6 $ — $ — $ — Available-for-sale securities: State and municipal debt securities (a) 1,227.4 1,257.8 31.0 (0.6) 30.4 State and municipal variable-rate demand notes 276.1 276.1 — — — United States government agency mortgage-backed securities 66.3 67.2 0.9 — 0.9 Corporate debt securities 52.3 52.4 0.1 — 0.1 Other United States government agency debt securities 34.9 34.9 — — — United States Treasury securities 9.8 10.0 0.2 — 0.2 Total available-for-sale securities 1,666.8 1,698.4 32.2 (0.6) 31.6 Total investment securities $ 1,691.4 $ 1,723.0 $ 32.2 $ (0.6) $ 31.6 (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, 2020 and 2019. The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of December 31, 2020 (in millions): Fair Value Due within 1 year $ 176.3 Due after 1 year through 5 years 684.4 Due after 5 years through 10 years 452.5 Due after 10 years 677.4 Total $ 1,990.6 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 $15.0 million, $0.9 million, and $546.2 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, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 9. 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. Refer to Note 2 for additional information on how the Company measures fair value. The following tables present the Company’s assets and liabilities which are measured at fair value on a recurring basis, by balance sheet line item (in millions): Fair Value Measurement Using Total December 31, 2020 Level 1 Level 2 Fair Value Assets: Settlement assets: Measured at fair value through net income: Money market funds $ 13.1 $ — $ 13.1 Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income): State and municipal debt securities — 1,303.9 1,303.9 State and municipal variable-rate demand notes — 562.1 562.1 Corporate and other debt securities — 72.8 72.8 United States government agency mortgage-backed securities — 51.8 51.8 Other assets: Derivatives — 453.3 453.3 Total assets $ 13.1 $ 2,443.9 $ 2,457.0 Liabilities: Other liabilities: Derivatives $ — $ 430.3 $ 430.3 Total liabilities $ — $ 430.3 $ 430.3 Fair Value Measurement Using Total December 31, 2019 Level 1 Level 2 Fair Value Assets: Settlement assets: Measured at fair value through net income: Money market funds $ 24.6 $ — $ 24.6 Measured at fair value through other comprehensive income: State and municipal debt securities — 1,257.8 1,257.8 State and municipal variable-rate demand notes — 276.1 276.1 United States government agency mortgage-backed securities — 67.2 67.2 Corporate debt securities — 52.4 52.4 Other United States government agency debt securities — 34.9 34.9 United States Treasury securities 10.0 — 10.0 Other assets: Derivatives — 204.5 204.5 Total assets $ 34.6 $ 1,892.9 $ 1,927.5 Liabilities: Other liabilities: Derivatives $ — $ 159.5 $ 159.5 Total liabilities $ — $ 159.5 $ 159.5 There were no material, non-recurring fair value adjustments or transfers between Level 1 and Level 2 measurements during the years ended December 31, 2020 and 2019. Other Fair Value Measurements The carrying amounts for many of the Company’s financial instruments, including certain cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and obligations approximate fair value due to their short maturities. The Company’s borrowings are classified as Level 2 within the valuation hierarchy, and the aggregate fair value of these borrowings was based on quotes from multiple banks. Fixed-rate notes are carried in the Company’s Consolidated Balance Sheets at their original issuance values as adjusted over time to accrete that value to par. As of December 31, 2020, the carrying value and fair value of the Company’s borrowings were $3,067.2 million and $3,348.0 million, respectively (see Note 16). As of December 31, 2019, the carrying value and fair value of the Company’s borrowings were $3,229.3 million and $3,372.2 million, respectively. |
Other Assets and Other Liabilit
Other Assets and Other Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets and Other Liabilities | |
Other Assets and Other Liabilities | 10. Other Assets and Other Liabilities The following table summarizes the components of Other assets and Other liabilities (in millions): December 31, 2020 2019 Other assets: Derivatives $ 453.3 $ 204.5 ROU assets 189.1 199.7 Amounts advanced to agents 135.9 96.4 Prepaid expenses 81.0 102.4 Prepaid pension costs (Note 12) 39.9 — Equity method investments 34.5 33.0 Other (a) 91.0 126.9 Total other assets $ 1,024.7 $ 762.9 Other liabilities: Derivatives $ 430.3 $ 159.5 Operating lease liabilities 234.9 242.3 Accrued agent contract costs (b) 77.1 16.0 Pension obligations (Note 12) — 11.4 Other 60.1 69.1 Total other liabilities $ 802.4 $ 498.3 (a) Property, equipment, and land of $49.3 million, primarily related to the Company’s former headquarters, was included in Other as of December 31, 2019 and classified as held for sale. In 2020, the Company sold its former corporate headquarters and other property and recorded an immaterial gain on the sales. (b) Represents accrued and unpaid contract costs for new and renewed agent contracts. The majority of the balance as of December 31, 2020 was paid in January 2021 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 11. 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, 2020 2019 2018 Domestic $ — $ 434.7 $ (11.4) Foreign 855.1 886.7 1,002.8 Total pre-tax income $ 855.1 $ 1,321.4 $ 991.4 For the years ended December 31, 2020, 2019, and 2018, 100%, 67% and 101% of the Company’s pre-tax income was derived from foreign sources, respectively. For the year ended December 31, 2019, the Company’s domestic pre-tax income increased due to the net gain on the sales of the Speedpay and Paymap businesses, as discussed in Note 5. The provision for income taxes was as follows (in millions): Year Ended December 31, 2020 2019 2018 Federal $ 50.1 $ 153.7 $ 62.9 State and local 1.1 22.9 0.6 Foreign 59.6 86.5 76.0 Total provision for income taxes $ 110.8 $ 263.1 $ 139.5 In 2020, the Company’s federal, state, and foreign tax provisions decreased due to lower pre-tax income and discrete tax benefits in the current period. In 2019, the Company’s federal and state and local tax provisions increased due to the net gain on the sales of the Speedpay and Paymap businesses. The Company’s effective tax rates differed from statutory rates as follows: Year Ended December 31, 2020 2019 2018 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal income tax benefits 0.5 % 1.4 % 0.4 % Foreign rate differential, net of United States tax paid on foreign earnings (5.6%, 2.3%, and 4.9%, respectively) (8.3) % (5.5) % (8.2) % Divestitures — % 2.4 % — % Tax Act impact — % — % 2.3 % Base erosion anti-abuse tax (BEAT) — % — % 3.0 % Lapse of statute of limitations (0.7) % (0.5) % (2.2) % Valuation allowances 0.2 % 0.1 % — % Other 0.2 % 1.0 % (2.2) % Effective tax rate 12.9 % 19.9 % 14.1 % The decrease in the Company’s effective tax rate for the year ended December 31, 2020 compared to the prior year is primarily due to a reduction in domestic pre-tax income, and discrete tax benefits in the current period. The increase in the Company’s effective tax rate for the year ended December 31, 2019 compared to the prior year is primarily due to an increase in 2019 domestic pre-tax income due to the net gain on the sales of the Speedpay and Paymap businesses and certain discrete items recognized in the prior year, partially offset by adjustments to the Company's accounting for the implementation of the Tax Act, as finalized in the fourth quarter of 2018. The Company’s provision for income taxes consisted of the following components (in millions): Year Ended December 31, 2020 2019 2018 Current: Federal $ 35.7 $ 169.4 $ 69.2 State and local 1.9 18.1 — Foreign 59.3 100.1 85.4 Total current taxes 96.9 287.6 154.6 Deferred: Federal 14.4 (15.7) (6.3) State and local (0.8) 4.8 0.6 Foreign 0.3 (13.6) (9.4) Total deferred taxes 13.9 (24.5) (15.1) $ 110.8 $ 263.1 $ 139.5 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, 2020 2019 Deferred tax assets related to: Reserves, accrued expenses and employee-related items $ 22.9 $ 38.3 Lease liabilities 23.8 28.1 Tax attribute carryovers 30.2 31.7 Pension obligations — 4.0 Intangibles, property and equipment 15.1 13.6 Other 8.6 5.3 Valuation allowance (18.6) (19.1) Total deferred tax assets 82.0 101.9 Deferred tax liabilities related to: Intangibles, property and equipment 218.0 214.8 Lease right-of-use assets 15.8 18.7 Prepaid pension costs 7.8 — Other 14.2 6.9 Total deferred tax liabilities 255.8 240.4 Net deferred tax liability (a) $ 173.8 $ 138.5 (a) As of December 31, 2020 and 2019, deferred tax assets that cannot be fully offset by deferred tax liabilities in the respective tax jurisdictions of $15.1 million and $13.6 million, respectively, are reflected in Other assets in the Consolidated Balance Sheets. The valuation allowances are primarily the result of uncertainties regarding the Company’s ability to recognize tax benefits associated with certain United States foreign tax credit carryforwards and certain foreign and state net operating losses. Such uncertainties include generating sufficient United States foreign tax credit limitation related to passive income and generating sufficient income. 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. Outside tax basis differences of approximately $550 million as of December 31, 2020 primarily relate to remaining undistributed foreign earnings not subject to the tax on certain previously undistributed earnings of foreign subsidiaries pursuant to the Tax Act, discussed further below, and additional outside basis difference inherent in certain entities. To the extent such outside basis differences are attributable to undistributed earnings not already subject to United States tax, such undistributed earnings continue to be indefinitely reinvested in foreign operations. Upon the future realization of the Company’s basis difference, the Company could be subject to United States income taxes, state income taxes and possible withholding taxes payable to various foreign countries. However, determination of this amount of unrecognized deferred tax liability is not practicable because of complexities associated with its hypothetical calculation. In 2017, the Tax Act was enacted into United States law, and a domestic one-time tax was imposed under the Tax Act on the Company’s previously undistributed earnings of foreign subsidiaries, with certain exceptions. This tax charge, combined with the Company’s other 2017 United States taxable income and tax attributes, resulted in a 2017 United States federal tax liability of approximately $800 million, of which approximately $604 million remained as of December 31, 2020. The Company has elected to pay this liability in periodic installments through 2025. For each of the years ended December 31, 2020, 2019, and 2018, the Company made installment payments of $64.0 million. Uncertain Tax Positions The Company has established contingency reserves for a variety of material, known tax exposures. As of December 31, 2020, the total amount of tax contingency reserves was $310.5 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 and before offset of related items, is as follows (in millions): 2020 2019 Balance as of January 1 $ 293.9 $ 295.0 Increase related to current period tax positions (a) 2.8 5.2 Increase related to prior period tax positions (b) 49.7 0.8 Decrease related to prior period tax positions (1.9) (1.6) Decrease due to lapse of applicable statute of limitations (3.2) (5.3) Decrease due to effects of foreign currency exchange rates (0.6) (0.2) Balance as of December 31 $ 340.7 $ 293.9 (a) Includes recurring accruals for issues which initially arose in previous periods. (b) Includes gross accrual for tax positions associated with current audits. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $329.2 million and $283.4 million as of December 31, 2020 and 2019, 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 $1.9 million, $6.0 million, and $(0.7) million in interest and penalties during the years ended December 31, 2020, 2019, and 2018, respectively. The Company has accrued $28.6 million and $27.1 million for the payment of interest and penalties as of December 31, 2020 and 2019, respectively. The unrecognized tax benefits accrual as of December 31, 2020 consists of federal, state and foreign tax matters. It is reasonably possible that the Company’s total unrecognized tax benefits will decrease by approximately $3 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 Company’s United States federal income tax returns since 2017 are eligible to be examined. The Internal Revenue Service (“IRS”) commenced an examination of the Company’s U.S. consolidated income tax returns for 2017 and 2018 in the current year. The IRS anticipates completion of the examination phase in 2022. The United States Internal Revenue Service (“IRS”) completed its examination of the 2003 and 2004 United States federal consolidated income tax returns of First Data Corporation, from which the Company was spun out in September 2006, 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”). The Company has made payments related to the IRS Agreement in years prior to 2018, with a substantial majority of these payments in the year ended December 31, 2012. During the year ended December 31, 2018, the Company made cash payments under the IRS Agreement of approximately $120 million, including accrued interest and net of related tax benefits. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plans | |
Employee Benefit Plans | 12. Employee Benefit Plans Defined Contribution Plans The Company administers several defined contribution plans in various countries globally, including The Western Union Company Incentive Savings Plan (the “401(k)”), which covers eligible employees on the United States payroll. 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 $18.4 million for the year ended December 31, 2020 and $20.0 million for both the years ended December 31, 2019 and 2018. Defined Benefit Plan The Company has a frozen defined benefit pension plan (the “Plan”), for which the funded status is reported in the Consolidated Balance Sheets and measured as the difference between the fair value of the plan assets and the projected benefit obligation. Plan assets, which are managed in a third-party trust, primarily consist of fixed income and equity investments, and had a total fair value of $280.6 million and $237.1 million as of December 31, 2020 and 2019, respectively. Given the overfunded status of the Plan, the Company is in the process of moving towards a full allocation of fixed income investments to more closely match the Plan’s assets to its liabilities. The substantial majority of plan assets are classified as either Level 1 or Level 2 within the valuation hierarchy or 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 benefit obligation associated with the Plan will vary over time only as a result of changes in market interest rates, the life expectancy of the plan participants, and benefit payments, since the accrual of benefits was suspended when the Plan was frozen in 1988. The benefit obligation was $240.7 million and $248.5 million, and the discount rate assumption used in the measurement of this obligation was 1.66% and 2.66% for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, the fair value of the plan assets exceeded the projected benefit obligation, which resulted in prepaid pension costs of $39.9 million reported in Other assets. The Plan’s overfunded status as of December 31, 2020 is primarily due to favorable investment returns relative to the expected return on plan assets during the year then ended. As of December 31, 2019, the projected benefit obligation exceeded the fair value of the plan assets, which resulted in an unfunded pension obligation of $11.4 million reported in Other liabilities. The net periodic benefit cost associated with the Plan was $4.4 million, $4.1 million, and $3.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. The expected long-term return on plan assets assumption is 2.00% for 2021. The Company made no contributions to the Plan for both the years ended December 31, 2020 and 2019. No funding to the Plan will be required for 2021. The estimated undiscounted future benefit payments are expected to be $25.9 million in 2021, $24.2 million in 2022, $22.5 million in 2023, $20.9 million in 2024, $19.3 million in 2025, and $73.9 million in 2026 through 2030. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 13. Leases The Company leases real properties for use as administrative and sales offices, in addition to transportation, office, and other equipment. The Company determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Company is the lessee, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Operating lease ROU assets are initially measured at the present value of lease payments over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the rate cannot be readily determined, an incremental borrowing rate is used to determine the future lease payments. Lease and variable non-lease components within the Company’s lease agreements are accounted for separately. The Company has no material leases in which the Company is the lessor. The Company’s leasing arrangements are classified as operating leases, for which expense is recognized on a straight-line basis. As of December 31, 2020 and 2019, total ROU assets were $189.1 million and $199.7 million, respectively, and operating lease liabilities were $234.9 million and $242.3 million, respectively. The ROU assets and operating lease liabilities are included in Other assets and Other liabilities, respectively, in the Company’s Consolidated Balance Sheets. Cash paid for operating lease liabilities is included in Cash flows from operating activities in the Company’s Consolidated Statements of Cash Flows. Operating lease costs, which are included in Total expenses in the Company’s Consolidated Statements of Income, were $59.8 million and $56.7 million for the years ended December 31, 2020 and 2019, respectively. Short-term and variable lease costs were not material for the years ended December 31, 2020 and 2019. The Company’s leases have remaining terms from less than 1 year to 10 years. Certain of these leases contain escalation provisions and/or renewal options, giving the Company the right to extend the lease by up to 10 years. However, a significant majority of these options are not reflected in the calculation of the ROU asset and operating lease liability due to uncertainty surrounding the likelihood of renewal. The following table summarizes the weighted-average lease terms and discount rates for operating lease liabilities: December 31, 2020 December 31, 2019 Weighted-average remaining lease term (in years) 7.2 7.6 Weighted-average discount rate 5.6 % 6.5 % The following table represents maturities of operating lease liabilities as of December 31, 2020 (in millions): Due within 1 year $ 51.9 Due after 1 year through 2 years 44.5 Due after 2 years through 3 years 37.0 Due after 3 years through 4 years 32.6 Due after 4 years through 5 years 27.7 Due after 5 years 90.3 Total lease payments 284.0 Less imputed interest (49.1) Total operating lease liabilities $ 234.9 For the year ended December 31, 2018, total rent expense, net of sublease income, was $59.5 million as recorded under accounting standards in effect in that period. |
Stockholders' Equity_(Deficit)
Stockholders' Equity/(Deficit) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity/(Deficit) | |
Stockholders' Equity/(Deficit) | 14. Stockholders’ Equity/(Deficit) Accumulated Other Comprehensive Loss AOCL includes all changes in equity during a period that have not yet been recognized in income, except those resulting from transactions with shareholders. The components include unrealized gains and losses on investment securities, unrealized gains and 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 AOCL until the investment is either sold or experiences a credit loss. See Note 8 for further discussion. The effective portion of the change in fair value of derivatives that qualifies as a cash flow hedge is recorded in AOCL. Generally, amounts are recognized in income when the related forecasted transaction affects earnings. See Note 15 for further discussion. While the United States dollar is the functional currency for substantially all of the Company’s businesses, 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 these foreign currencies compared to the United States dollar. These gains and losses are accumulated in other comprehensive income/(loss). When a foreign subsidiary is substantially liquidated or sold, the cumulative translation gain or loss is removed from AOCL and recognized as a component of the gain or loss on the liquidation or sale. 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 AOCL 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 12. The following table details reclassifications out of AOCL and into Net income. All amounts reclassified from AOCL affect the line items as indicated below and the amounts in parentheses indicate decreases to Net income in the Consolidated Statements of Income. Amounts Reclassified from AOCL to Net Income Income Statement Year Ended December 31, Income for the period (in millions) Location 2020 2019 2018 Accumulated other comprehensive loss components: Gains/(losses) on investment securities: Available-for-sale securities Revenues $ 0.6 $ 0.6 $ (0.4) Income tax benefit/(expense) Provision for income taxes (0.1) (0.1) 0.1 Total reclassification adjustments related to investment securities, net of tax 0.5 0.5 (0.3) Gains/(losses) on cash flow hedges: Foreign currency contracts Revenues 1.2 14.2 (14.9) Interest rate contracts Interest expense (0.6) — (2.1) Income tax benefit/(expense) Provision for income taxes 0.1 (0.1) 0.7 Total reclassification adjustments related to cash flow hedges, net of tax 0.7 14.1 (16.3) Amortization of components of defined benefit plans: Actuarial loss Other income, net (12.1) (10.8) (11.7) Income tax benefit Provision for income taxes 2.7 2.4 2.6 Total reclassification adjustments related to defined benefit plans, net of tax (9.4) (8.4) (9.1) Total reclassifications, net of tax $ (8.2) $ 6.2 $ (25.7) The following tables summarize the components of AOCL, net of tax in the accompanying Consolidated Balance Sheets (in millions): Investment Hedging Foreign Currency Defined Benefit Securities Activities Translation Pension Plan Total As of December 31, 2019 $ 24.7 $ (3.6) $ (101.2) $ (128.9) $ (209.0) Unrealized gains/(losses) 41.5 (26.4) — 43.5 58.6 Tax benefit/(expense) (7.4) 0.2 — (10.1) (17.3) Amounts reclassified from AOCL into earnings, net of tax (0.5) (0.7) — 9.4 8.2 As of December 31, 2020 $ 58.3 $ (30.5) $ (101.2) $ (86.1) $ (159.5) Investment Hedging Foreign Currency Defined Benefit Securities Activities Translation Pension Plan Total As of December 31, 2018 $ (1.1) $ 7.4 $ (101.2) $ (136.1) $ (231.0) Unrealized gains/(losses) 33.6 2.0 — (2.0) 33.6 Tax benefit/(expense) (7.3) 1.1 — 0.8 (5.4) Amounts reclassified from AOCL into earnings, net of tax (0.5) (14.1) — 8.4 (6.2) As of December 31, 2019 $ 24.7 $ (3.6) $ (101.2) $ (128.9) $ (209.0) Investment Hedging Foreign Currency Defined Benefit Securities Activities Translation Pension Plan Total As of December 31, 2017 $ 2.7 $ (40.6) $ (76.9) $ (113.1) $ (227.9) Unrealized gains/(losses) (5.9) 35.6 — (9.3) 20.4 Tax benefit/(expense) 1.3 (1.6) — 2.0 1.7 Amounts reclassified from AOCL into earnings, net of tax 0.3 16.3 — 9.1 25.7 Foreign currency translation adjustments (a) — — (19.5) — (19.5) Reclassification of Tax Act effects into Accumulated deficit (b) 0.5 (2.3) (4.8) (24.8) (31.4) As of December 31, 2018 $ (1.1) $ 7.4 $ (101.2) $ (136.1) $ (231.0) (a) Beginning in the third quarter of 2018, all changes in the value of the Argentine peso on the Company’s monetary assets and liabilities are reflected in net income, given Argentina’s status as a highly inflationary economy. Prior to the third quarter of 2018, changes in the Argentine peso exchange rate were reflected in net income for the Company’s money transfer operations, whereas these effects were reflected in other comprehensive income for the Company’s bill payment operations. This designation did not have a material impact on the Company’s financial position and results of operations for the years ended December 31, 2020, 2019 and 2018. (b) As discussed in Note 2, in the first quarter of 2018, the Company adopted an accounting pronouncement as a result of the Tax Act and reclassified tax effects included within AOCL to Accumulated deficit in the Consolidated Balance Sheets. Cash Dividends Paid Cash dividends paid for the years ended December 31, 2020, 2019, and 2018 were $369.9 million, $340.8 million, and $341.7 million, respectively. Dividends per share declared quarterly by the Company’s Board of Directors during the years ended 2020, 2019, and 2018 were as follows: Year Q1 Q2 Q3 Q4 2020 $ 0.225 $ 0.225 $ 0.225 $ 0.225 2019 $ 0.20 $ 0.20 $ 0.20 $ 0.20 2018 $ 0.19 $ 0.19 $ 0.19 $ 0.19 On February 10, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.235 per common share payable on March 31, 2021. Share Repurchases During the years ended December 31, 2020, 2019, and 2018, 8.5 million, 26.9 million, and 20.2 million shares, respectively, have been repurchased for $217.4 million, $540.0 million, and $399.2 million, respectively, excluding commissions, at an average cost of $25.45, $20.07, and $19.81, respectively. These amounts represent shares authorized by the Board of Directors for repurchase under the publicly announced authorizations. During the first quarter 2020, the Company temporarily paused and did not resume share repurchases under a publicly announced authorization through December 31, 2020. However, the Company has resumed share repurchases in the first quarter of 2021. As of December 31, 2020, $782.6 million remained available under the share repurchase authorization approved by the Company’s Board of Directors through December 31, 2021. 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 publicly announced authorizations and shares withheld from employees to cover tax withholding obligations on restricted stock units that have vested. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2020 | |
Derivatives | |
Derivatives | 15. Derivatives The Company is exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the euro, and, to a lesser degree, the British pound, the Canadian dollar, and other currencies, related to forecasted revenues and settlement assets and obligations, as well as on certain foreign currency denominated cash and other asset and liability positions. The Company is also exposed to risk from derivative contracts, primarily from customer derivatives, arising from its cross-currency Business Solutions payment 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 has used derivatives to: (i) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (ii) facilitate cross-currency Business Solutions payments by writing derivatives to customers. The Company executes derivatives with established financial institutions; the substantial majority of these financial institutions have a credit rating of "A-" or higher from a major credit rating agency. Customer derivatives written by the Company’s Business Solutions operations primarily involve 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, while also monitoring 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 Derivatives The Company’s policy is to use longer duration foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to help 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, 2020, these 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 and thus time value is excluded from the assessment of effectiveness. As described in Note 2, foreign currency cash flow hedges entered into on or after January 1, 2018 exclude time value from the assessment of effectiveness, and the initial value of the excluded components is amortized into Revenues within the Company’s Consolidated Statements of Income. For foreign currency cash flow hedges entered into before January 1, 2018, all changes in the fair value of the excluded components were recognized immediately in Revenues. The Company also uses short duration foreign currency forward contracts, generally with maturities ranging from a few days The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of December 31, 2020 and 2019 were as follows (in millions): December 31, 2020 Contracts designated as hedges: Euro $ 428.9 Canadian dollar 131.9 British pound 71.9 Australian dollar 58.3 Swiss franc 41.1 Japanese yen 36.6 Other (a) 29.5 Contracts not designated as hedges: Euro $ 533.0 British pound 153.9 Mexican peso 105.0 Indian rupee 81.0 Canadian dollar 71.5 Australian dollar 68.1 Japanese yen 39.6 Philippine peso 35.2 Russian ruble 31.2 Indonesian rupiah 29.1 Swedish krona 26.0 Other (a) 151.5 December 31, 2019 Contracts designated as hedges: Euro $ 391.9 Canadian dollar 99.0 British pound 57.2 Australian dollar 36.1 Swiss franc 28.9 Other (a) 50.9 Contracts not designated as hedges: Euro $ 289.0 Canadian dollar 110.3 British pound 78.1 Indian rupee 61.0 Mexican peso 52.3 Japanese yen 37.7 Australian dollar 35.2 Brazilian real 32.5 Other (a) 145.6 (a) Comprised of exposures to various currencies; none of these individual currency exposures is greater than $25 million. Business Solutions Operations 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 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 the Company’s cross-currency payments operations, which primarily include spot exchanges of currency in addition to forwards and options. Foreign exchange revenues from the total portfolio of positions were $311.9 million, $343.1 million, and $342.3 million for the years ended December 31, 2020, 2019, and 2018, respectively, and were included in Revenues in the Company’s Consolidated Statements of Income. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges and the significant majority of these derivative contracts have a duration at inception of less than one year. The aggregate equivalent United States dollar notional amount of derivative customer contracts held by the Company in its Business Solutions operations for December 31, 2020 and 2019 was approximately $8.0 billion and $7.5 billion, respectively. The significant majority of customer contracts are written in the following currencies: the United States dollar, euro, and the Canadian dollar. Interest Rate Hedging Periodically, 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, variable-rate payments in order to manage its overall exposure to interest rate fluctuations. 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. Interest expense in the Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps. On November 15, 2019, the Company terminated its interest rate swaps designated as fair value hedges in connection with the repayment of $324.9 million of aggregate principal amount unsecured notes in the fourth quarter of 2019 and received cash of $0.9 million. Therefore, as of December 31, 2020 and 2019, the Company did not have any interest rate swaps designated as fair value hedges. During the fourth quarter of 2020, the Company entered into two treasury locks to partially fix the treasury yield component associated with the refinance of unsecured senior notes set to expire in 2022. The notional amounts of these treasury locks were $100.0 million and $150.0 million and were designated as cash flow hedges at the time the agreements were executed. Balance Sheet The following table summarizes the fair value of derivatives reported in the Company’s Consolidated Balance Sheets as of December 31, 2020 and 2019 (in millions): Derivative Assets Derivative Liabilities Fair Value Fair Value Balance Sheet December 31, December 31, Balance Sheet December 31, December 31, Location 2020 2019 Location 2020 2019 Derivatives designated as hedges: Foreign currency cash flow hedges Other assets $ 9.1 $ 21.0 Other liabilities $ 24.9 $ 4.8 Interest rate cash flow hedges Other assets — — Other liabilities 0.1 — Total derivatives designated as hedges $ 9.1 $ 21.0 $ 25.0 $ 4.8 Derivatives not designated as hedges: Business Solutions operations - foreign currency (a) Other assets $ 441.4 $ 182.0 Other liabilities $ 402.5 $ 151.0 Foreign currency Other assets 2.8 1.5 Other liabilities 2.8 3.7 Total derivatives not designated as hedges $ 444.2 $ 183.5 $ 405.3 $ 154.7 Total derivatives $ 453.3 $ 204.5 $ 430.3 $ 159.5 (a) In many circumstances, the Company allows its Business Solutions customers to settle part or all of their derivative contracts prior to maturity. However, the offsetting positions originally entered into with financial institution counterparties do not allow for similar settlement. To mitigate this, additional foreign currency contracts are entered into with financial institution counterparties to offset the original economic hedge contracts. This frequently results in changes in the Company’s derivative assets and liabilities that may not directly align with the performance in the underlying derivatives business. 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, 2020 and 2019 (in millions): Offsetting of Derivative Assets Gross Net Amounts Derivatives Gross Amounts Offset Presented Not Offset Amounts of in the in the in the Recognized Consolidated Consolidated Consolidated December 31, 2020 Assets Balance Sheets Balance Sheets Balance Sheets Net Amounts Derivatives subject to a master netting arrangement or similar agreement $ 165.1 $ — $ 165.1 $ (155.1) $ 10.0 Derivatives that are not or may not be subject to master netting arrangement or similar agreement 288.2 Total $ 453.3 December 31, 2019 Derivatives subject to a master netting arrangement or similar agreement $ 95.3 $ — $ 95.3 $ (74.7) $ 20.6 Derivatives that are not or may not be subject to master netting arrangement or similar agreement 109.2 Total $ 204.5 Offsetting of Derivative Liabilities Gross Net Amounts Derivatives Gross Amounts Offset Presented Not Offset Amounts of in the in the in the Recognized Consolidated Consolidated Consolidated December 31, 2020 Liabilities Balance Sheets Balance Sheets Balance Sheets Net Amounts Derivatives subject to a master netting arrangement or similar agreement $ 356.2 $ — $ 356.2 $ (155.1) $ 201.1 Derivatives that are not or may not be subject to master netting arrangement or similar agreement 74.1 Total $ 430.3 December 31, 2019 Derivatives subject to a master netting arrangement or similar agreement $ 121.8 $ — $ 121.8 $ (74.7) $ 47.1 Derivatives that are not or may not be subject to master netting arrangement or similar agreement 37.7 Total $ 159.5 Income Statement Cash Flow and Fair Value Hedges The effective portion of the change in fair value of derivatives that qualify as cash flow hedges is recorded in AOCL in the Company’s Consolidated Balance Sheets. Generally, amounts are recognized in income when the related forecasted transaction affects earnings. The following table presents the pre-tax amount of unrealized gains/(losses) recognized in other comprehensive income from cash flow hedges for the years ended December 31, 2020, 2019, and 2018 (in millions): Year Ended December 31, 2020 2019 2018 Foreign currency derivatives (a) $ (26.3) $ 2.0 $ 35.6 Interest rate derivatives (0.1) — — (a) For the years ended December 31, 2020, 2019, and 2018, gains/(losses) of $0.3 million, $1.5 million, and $0.1 million, respectively, represent amounts excluded from the assessment of effectiveness that were recognized in other comprehensive income, for which an amortization approach is applied. The following table presents the location and amount of pre-tax net gains/(losses) from fair value and cash flow hedging relationships recognized in the Consolidated Statements of Income for the years ended December 31, 2020, 2019, and 2018 (in millions): 2020 2019 2018 Interest Interest Interest Revenues Expense Revenues Expense Revenues Expense Total amounts presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded $ 4,835.0 $ (118.5) $ 5,292.1 $ (152.0) $ 5,589.9 $ (149.6) The effects of fair value and cash flow hedging: Gain/(loss) on fair value hedges: Interest rate derivatives: Hedged items — — — (0.1) — 0.6 Derivatives designated as hedging instruments — — — 1.0 — (1.6) Gain/(loss) on cash flow hedges: Foreign currency derivatives: Gains/(losses) reclassified from AOCL into earnings 1.2 — 14.2 — (14.9) — Amount excluded from effectiveness testing recognized in earnings based on an amortization approach 10.4 — 11.5 — 4.3 — Amount excluded from effectiveness testing recognized in earnings based on changes in fair value — — 2.9 — 7.5 — Interest rate derivatives: Losses reclassified from AOCL into earnings — (0.6) — — — (2.1) Undesignated Hedges The following table presents the location and amount of pre-tax net gains/(losses) from undesignated hedges in the Consolidated Statements of Income on derivatives for the years ended December 31, 2020, 2019, and 2018 (in millions): December 31, Derivatives (a) Location 2020 2019 2018 Foreign currency derivatives (b) Selling, general, and administrative $ 15.9 $ 23.9 $ 58.6 Foreign currency derivatives Revenues — 0.3 3.0 Foreign currency derivatives (c) Other income, net — — (1.8) Total gain $ 15.9 $ 24.2 $ 59.8 (a) 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. (b) 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, cash balances, and other assets and liabilities, not including amounts related to derivative activity as displayed above, and included in Selling, general, and administrative in the Consolidated Statements of Income, were $(37.0) million, $(33.1) million, and $(52.3) million for the years ended December 31, 2020, 2019, and 2018, respectively. (c) All derivative contracts executed in the Company’s revenue hedging program prior to January 1, 2018 are not designated as hedges in the final month of the contract. The change in fair value in this final month was recorded to Revenues for the year ended December 31, 2018. The amount recorded to Other income, net for the year ended December 31, 2018 relates to losses on certain undesignated foreign currency derivative contracts that were recognized after the Company determined that certain forecasted transactions were no longer probable of occurring. All cash flows associated with derivatives are included in Cash flows from operating activities in the Consolidated Statements of Cash Flows. Based on December 31, 2020 foreign exchange rates, an accumulated other comprehensive pre-tax loss of $18.9 million related to the foreign currency forward contracts is expected to be reclassified into Revenues within the next 12 months. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2020 | |
Borrowings | |
Borrowings | 16. Borrowings The Company’s outstanding borrowings consisted of the following (in millions): December 31, 2020 December 31, 2019 Commercial paper $ 80.0 $ 245.0 Notes: 3.600% notes due 2022 (a) 500.0 500.0 4.250% notes due 2023 (a) 300.0 300.0 2.850% notes due 2025 (a) 500.0 500.0 6.200% notes due 2036 (a) 500.0 500.0 6.200% notes due 2040 (a) 250.0 250.0 Term loan facility borrowing (effective rate of 1.4%) 950.0 950.0 Total borrowings at par value 3,080.0 3,245.0 Debt issuance costs and unamortized discount, net (12.8) (15.7) Total borrowings at carrying value (b) $ 3,067.2 $ 3,229.3 (a) The difference between the stated interest rate and the effective interest rate is not significant. (b) As of December 31, 2020, the Company’s weighted-average effective rate on total borrowings was approximately 3.5% . The following summarizes the Company’s maturities of notes and term loan at par value as of December 31, 2020 (in millions): Due within 1 year $ 47.5 Due after 1 year through 2 years 547.5 Due after 2 years through 3 years 395.0 Due after 3 years through 4 years 760.0 Due after 4 years through 5 years 500.0 Due after 5 years 750.0 The Company’s obligations with respect to its outstanding borrowings, 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 as defined below. The commercial paper notes may have maturities of up to 397 days from date of issuance. The Company’s commercial paper borrowings as of December 31, 2020 had a weighted-average annual interest rate of approximately 0.3% and a weighted-average term of approximately 5 days. As of December 31, 2020 and 2019, the Company had $80.0 million and $245.0 million in commercial paper borrowings outstanding, respectively. Revolving Credit Facility On December 18, 2018, the Company entered into a credit agreement providing for unsecured financing facilities in an aggregate amount of $1.5 billion, including a $250.0 million letter of credit sub-facility (“Revolving Credit Facility”). On December 18, 2019, the Company extended the final maturity date of the Revolving Credit Facility to January 8, 2025. Consistent with the prior facility, and the Term Loan Facility, as described below, the Company is required to maintain compliance with a consolidated adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) interest coverage ratio covenant of greater than 3:1 for each period of four consecutive fiscal quarters. The Revolving Credit Facility supports borrowings under the Company’s 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 December 31, 2020 and 2019, the Company had no outstanding borrowings under its Revolving Credit Facility. Term Loan Facility On December 18, 2018, the Company extended the Term Loan Facility providing for an unsecured delayed draw term loan facility in an aggregate amount of $950.0 million. In October 2016, the Company borrowed $575.0 million under the prior term loan facility. In December 2018, the Company borrowed the remaining amount available under the Term Loan Facility. The Term Loan Facility requires the Company to maintain a consolidated adjusted EBITDA interest coverage ratio of greater than 3:1 for each period of four consecutive fiscal quarters. The Term Loan Facility also contains customary representations, warranties and events of default. Generally, interest under the Term Loan Facility is calculated using a selected LIBOR rate plus an interest rate margin of 125 basis points. The interest rate margin percentage is based on certain of the Company’s credit ratings and will increase or decrease in the event of certain upgrades or downgrades in the Company’s credit ratings. In addition to the payment of interest, the Company is required to make certain periodic amortization payments with respect to the outstanding principal of the term loan, beginning in 2021. The final maturity date of the Term Loan Facility is January 8, 2024. Under the terms of the prior term loan facility, the Company was required to make certain amortization payments with respect to the outstanding principal of the prior term loan facility. For the year ended December 31, 2018, the Company made amortization payments of $14.4 million prior to the extension of the term loan agreement. Notes On November 25, 2019, the Company issued $500.0 million of aggregate principal amount of unsecured notes due January 10, 2025 (“2025 Notes”). The Company used the net proceeds from the sale of the 2025 Notes to redeem the Company’s unsecured notes that were due on April 1, 2020 and for general corporate purposes. Interest with respect to the 2025 Notes is payable semi-annually in arrears on January 10 and July 10 of each year, beginning on July 10, 2020, based on the per annum rate of 2.850%. The interest rate payable on the 2025 Notes will be increased if the debt rating assigned to these 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 the 2025 Notes exceed 4.850% per annum. The interest rate payable on the 2025 Notes may also be adjusted downward for debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 2.850% per annum. The Company may redeem the 2025 Notes, in whole or in part, at any time prior to December 10, 2024 at the greater of par or a price based on the applicable treasury rate plus 20 basis points. The Company may redeem the 2025 Notes at any time after December 10, 2024 at a price equal to par, plus accrued interest. On June 11, 2018, the Company issued $300.0 million of aggregate principal amount of unsecured notes due June 9, 2023 (“2023 Notes”). Interest with respect to the 2023 Notes is payable semi-annually in arrears on June 9 and December 9 of each year, beginning on December 9, 2018, based on the per annum rate of 4.250%. The interest rate payable on the 2023 Notes will be increased if the debt rating assigned to these 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 the 2023 Notes exceed 6.250% per annum. The interest rate payable on the 2023 Notes may also be adjusted downward for debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 4.250% per annum. The Company may redeem the 2023 Notes, in whole or in part, at any time prior to May 9, 2023 at the greater of par or a price based on the applicable treasury rate plus 25 basis points. The Company may redeem the 2023 Notes at any time after May 9, 2023 at a price equal to par, plus accrued interest. On August 22, 2017, the Company issued $250.0 million of aggregate principal amount of unsecured floating rate notes due May 22, 2019 (“Floating Rate Notes”). The Floating Rate Notes were repaid in May 2019 using proceeds from the Speedpay divestiture (see Note 5), commercial paper, and cash, including cash generated from operations. On March 15, 2017, the Company issued $400.0 million of aggregate principal amount of unsecured notes due March 15, 2022. On August 22, 2017, the Company issued an additional $100.0 million of aggregate principal amount of unsecured notes due March 15, 2022 for an aggregate principal total of $500.0 million of 3.600% unsecured notes (“2022 Notes”). The notes issued on August 22, 2017 are part of the same series and, accordingly, have the same terms and conditions as the notes issued on March 15, 2017; however, the notes issued on August 22, 2017 were issued at a premium of 101.783% and the Company received $1.57 million of accrued interest upon issuance. Interest with respect to the 2022 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2017, based on the per annum rate of 3.600%. The interest rate payable on the 2022 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 2022 Notes exceed 5.60% per annum. The interest rate payable on the 2022 Notes may also be adjusted downward for debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 3.600% per annum. The Company may redeem the 2022 Notes at any time prior to February 15, 2022 at the greater of par or a price based on the applicable treasury rate plus 25 basis points. The Company may redeem the 2022 Notes at any time after February 15, 2022 at a price equal to par, plus accrued interest. On November 22, 2013, the Company issued $250.0 million of aggregate principal amount of unsecured notes due May 22, 2019 (“2019 Notes”). The 2019 Notes were repaid in May 2019 using proceeds from the Speedpay divestiture (see Note 5), commercial paper, and cash, including cash generated from operations. On August 22, 2011, the Company issued $400.0 million of aggregate principal amount of unsecured notes due August 22, 2018 (“2018 Notes”). In August 2018, the 2018 Notes matured and were repaid. 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 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 unsecured notes due November 17, 2011 for unsecured notes due April 1, 2020 (“2020 Notes”). Interest with respect to the 2020 Notes was 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, was accreted into Interest expense over the life of the notes. On November 18, 2019, the Company announced a cash tender offer on the Company’s outstanding 2020 Notes. On November 25, 2019, the Company purchased the principal amount of $56.1 million, plus accrued interest, pursuant to the tender offer. On December 27, 2019, the Company redeemed the remaining principal amount of $268.8 million, plus accrued interest. The total premium paid to redeem the 2020 Notes was $3.1 million. On November 17, 2006, the Company issued $500.0 million of aggregate principal amount of unsecured notes due November 17, 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 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. The Revolving Credit Facility and Term Loan Facility contain covenants, subject to certain exceptions, 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, incur certain subsidiary level indebtedness, or use proceeds in violation of anti-corruption or anti-money laundering laws. The Company’s notes are subject to similar covenants except that only the 2036 Notes contain covenants limiting or restricting subsidiary indebtedness and none of the Company’s notes are subject to a covenant that limits the Company’s ability to impose restrictions on subsidiary dividends. Certain of the Company’s notes (including the 2022 2023 2025 2040 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2020 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | 17. Stock-Based Compensation Plans The Western Union Company 2006 Long-Term Incentive Plan and 2015 Long-Term Incentive Plan The Western Union Company 2015 Long-Term Incentive Plan (“2015 LTIP”), approved on May 15, 2015, provides for the granting of stock options, restricted stock awards and units, unrestricted stock awards and units, and other equity-based awards to employees and non-employee directors of the Company. Prior to this, equity-based awards were granted out of the 2006 Long-Term Incentive Plan (“2006 LTIP”). Shares available for grant under the 2015 LTIP were 21.1 million as of December 31, 2020. Options granted under the 2015 LTIP and 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 vest four Restricted stock unit grants typically vest four The compensation committee of the Company’s Board of Directors has granted the Company’s executives and certain other key employees, excluding the CEO, long-term incentive awards under the 2015 LTIP, which consisted of 50% Financial PSUs (as defined below), 30% restricted stock unit awards, and 20% TSR PSUs (as defined below) in 2020 and 2019. The CEO received long-term incentive awards under the 2015 LTIP consisting of 50% Financial PSUs, 20% TSR PSUs, 20% stock option awards, and 10% restricted stock unit awards in 2020 and 2019. The compensation committee granted Senior Vice Presidents of the Company awards under the 2015 LTIP, which consisted of 50% Financial PSUs and 50% restricted stock unit awards in 2020 and 2019. The compensation committee granted certain other non-executive employees of the Company participating in the 2015 LTIP annual equity grants consisting of restricted stock unit awards in 2020 and 2019 as well as Financial PSUs in 2020. The performance-based restricted stock units granted to the Company’s executives in 2020 are restricted stock units 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 over a three-year cumulative performance period (2020 through 2022) (“Financial PSUs”). Beginning with awards granted in February 2019, Financial PSUs accrue dividend equivalents, with dividend equivalents paid in cash to the extent that the underlying shares vest. 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 (2020 through 2022) (“TSR PSUs”). Both of these awards methodology similar to that used to value the restricted stock units discussed above, while the fair value of the TSR PSUs is determined using the Monte-Carlo simulation model. Unlike the Financial PSUs, compensation costs related to the TSR PSUs are recognized regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. The Company has also granted deferred stock units out of the 2015 LTIP to the non-employee directors of the Company. Since deferred 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. Stock Option Activity A summary of stock option activity for the year ended December 31, 2020 was as follows (options and aggregate intrinsic value in millions): Weighted-Average Remaining Aggregate Weighted-Average Contractual Term Intrinsic Options Exercise Price (Years) Value Outstanding as of January 1 4.5 $ 18.31 Granted 0.5 $ 26.20 Exercised (0.1) $ 18.76 Cancelled/forfeited — $ — Outstanding as of December 31 4.9 $ 19.11 5.4 $ 15.9 Options exercisable as of December 31 3.7 $ 18.38 4.6 $ 13.6 The Company received $2.2 million, $36.7 million, and $10.1 million in cash proceeds related to the exercise of stock options during the years ended December 31, 2020, 2019, and 2018, 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, 2020, 2019, and 2018 from stock option exercises of $0.2 million, $2.4 million, and $0.6 million, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2020, 2019, and 2018 was $0.8 million, $11.6 million, and $3.1 million, respectively. Restricted Stock Activity A summary of activity for restricted stock units and performance-based restricted stock units for the year ended December 31, 2020 was as follows (units in millions): Weighted-Average Units Grant-Date Fair Value Non-vested as of January 1 7.1 $ 17.92 Granted 2.8 $ 25.35 Vested (2.4) $ 17.86 Forfeited (0.6) $ 18.83 Non-vested as of December 31 6.9 $ 20.88 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 deferred stock units for the years ended December 31, 2020, 2019, and 2018 (in millions, except per share data): 2020 2019 2018 Stock-based compensation expense $ (41.7) $ (48.9) $ (47.7) Income tax benefit from stock-based compensation expense 6.9 8.5 8.3 Net income impact $ (34.8) $ (40.4) $ (39.4) Earnings per share impact: Basic and diluted $ (0.08) $ (0.09) $ (0.09) As of December 31, 2020, there was $1.4 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 2.7 years, and there was $62.0 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 2.0 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 for the years ended December 31, 2020, 2019, and 2018: 2020 2019 2018 Stock options granted: Weighted-average risk-free interest rate 1.5 % 2.5 % 2.8 % Weighted-average dividend yield 4.0 % 4.2 % 3.9 % Volatility 25.2 % 22.8 % 26.3 % Expected term (in years) 7.12 7.05 6.05 Weighted-average grant date fair value $ 3.96 $ 2.56 $ 3.66 Risk-free interest rate - Expected dividend yield - Expected volatility - Expected term - 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. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2020 | |
Segments | |
Segments | 18. Segments As further described in Note 1, the Company classifies its business into two segments: Consumer-to-Consumer 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 CODM in allocating resources and assessing performance. The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The segment includes five geographic regions whose functions are primarily related to generating, managing, and maintaining agent relationships and localized marketing activities. The Company includes Digital Money Transfer transactions in its regions, including transactions from the Company’s arrangements with financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. By means of common processes and systems, these regions, including Digital Money Transfer transactions, create one interconnected global network for consumer transactions, thereby constituting one Consumer-to-Consumer money transfer business and one operating segment. 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 and other services that have not been classified in the above segments are reported as Other, which primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations and the Company’s money order services. In May 2019, the Company sold a substantial majority of its United States based electronic bill payments services, as discussed in Note 5. The Company’s segments are reviewed separately below because each 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 segments are the same as those described in the summary of significant accounting policies. ● Corporate costs, including stock-based compensation and other overhead, are allocated to the segments primarily based on a percentage of the segments’ revenue compared to total revenue. ● As described in Note 4, on August 1, 2019, the Company’s Board of Directors approved an overall plan to change the Company’s operating model and improve its business processes and cost structure by reducing its headcount and consolidating various facilities. For the years ended December 31, 2020 and 2019, the Company incurred $36.8 million and $115.5 million, respectively, related to this plan. While certain of these expenses may be identifiable to the Company’s segments, primarily the Company’s Consumer-to-Consumer segment, the expenses are not included in the measurement of segment operating income provided to the CODM for purposes of assessing segment performance and decision making with respect to resource allocation. ● The CODM does not review total assets by segment for purposes of assessing segment performance and allocating resources. As such, the disclosure of total assets by segment has not been included below. ● All items not included in operating income are excluded from the segments. The following tables present the Company’s segment results for the years ended December 31, 2020, 2019, and 2018 (in millions): Year Ended December 31, 2020 2019 2018 Revenues: Consumer-to-Consumer $ 4,220.0 $ 4,407.8 $ 4,453.6 Business Solutions 356.1 388.8 386.8 Other (a) 258.9 495.5 749.5 Total consolidated revenues $ 4,835.0 $ 5,292.1 $ 5,589.9 Operating income: Consumer-to-Consumer $ 924.7 $ 975.4 $ 1,048.2 Business Solutions 24.4 46.8 23.4 Other (a) 55.0 27.3 50.5 Total segment operating income (b) 1,004.1 1,049.5 1,122.1 Restructuring-related expenses (Note 4) (36.8) (115.5) — Total consolidated operating income $ 967.3 $ 934.0 $ 1,122.1 (a) Other primarily consists of the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations. In May 2019, the Company sold a substantial majority of its United States based electronic bill payments services, as discussed in Note 5. Speedpay revenues included in the Company’s results were $125.4 million and $352.0 million for the years ended December 31, 2019 and 2018, respectively. Speedpay direct operating expenses were $98.2 million and $251.2 million for the years ended December 31, 2019 and 2018, respectively. Paymap revenues included in the Company’s results were $5.3 million and $16.2 million for the years ended December 31, 2019 and 2018, respectively. Paymap direct operating expenses were $2.2 million and $6.7 million for the years ended December 31, 2019 and 2018, respectively. (b) In the first quarter of 2020, the Company changed its expense allocation method so that its corporate data center and network engineering information technology expenses are allocated based on a percentage of relative revenue. In 2019, these costs had been allocated based in part on a percentage of relative transactions. The Company believes that an allocation method based fully on relative revenue presents a more representative view of segment profitability, as certain of the Company’s services, particularly some of its bill payment services and its money order services, have much lower revenues per transaction than the Company’s other services. Further, these technology expenses are becoming increasingly based on data storage utilized and less based on the number of transactions processed. For the year ended December 31, 2019, this change would have decreased Consumer-to-Consumer operating income and increased Other operating income by $49.6 million. Business Solutions was not materially impacted by the change in the allocation method. Year Ended December 31, 2020 2019 2018 Depreciation and amortization: Consumer-to-Consumer $ 178.5 $ 194.5 $ 189.9 Business Solutions 36.1 39.6 41.9 Other 11.0 23.6 32.9 Total consolidated depreciation and amortization $ 225.6 $ 257.7 $ 264.7 Capital expenditures: Consumer-to-Consumer $ 133.5 $ 97.0 $ 273.8 Business Solutions 10.3 7.7 11.9 Other 13.0 23.0 53.3 Total capital expenditures $ 156.8 $ 127.7 $ 339.0 The geographic split of revenue below for the Consumer-to-Consumer and Business Solutions segments and Other 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, 2020, 2019, and 2018, respectively. In addition, each individual agent or Business Solutions customer accounted for less than 10% of consolidated revenue during these periods. Information concerning principal geographic areas was as follows (in millions): Year Ended December 31, 2020 2019 2018 Revenue: United States $ 1,678.4 $ 1,896.1 $ 2,126.2 International 3,156.6 3,396.0 3,463.7 Total $ 4,835.0 $ 5,292.1 $ 5,589.9 Long-lived assets: United States (a) $ 100.4 $ 173.7 $ 207.4 International 50.0 62.5 63.0 Total $ 150.4 $ 236.2 $ 270.4 (a) Assets held for sale of $49.3 million, which primarily consisted of the Company’s former headquarters, were included in Other assets as of December 31, 2019 in the Company’s Consolidated Balance Sheets. In 2020, the Company sold its former corporate headquarters and other property and recorded an immaterial gain on the sales. |
Schedule I - Condensed Financia
Schedule I - Condensed Financial Information of the Registrant | 12 Months Ended |
Dec. 31, 2020 | |
CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT | |
Schedule I - Condensed Financial Information of the Registrant | THE WESTERN UNION COMPANY SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT The following lists the condensed financial information for the parent company as of December 31, 2020 and 2019 and Condensed Statements of Income and Comprehensive Income and Condensed Statements of Cash Flows for each of the three years in the period ended December 31, 2020. THE WESTERN UNION COMPANY CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) (in millions, except per share amounts) December 31, 2020 2019 Assets Cash and cash equivalents $ 2.1 $ 4.0 Property and equipment, net of accumulated depreciation of $37.0 and $24.8, respectively 54.0 68.5 Other assets 96.2 147.3 Investment in subsidiaries 5,661.3 5,886.9 Total assets $ 5,813.6 $ 6,106.7 Liabilities and stockholders’ equity/(deficit) Liabilities: Accounts payable and accrued liabilities $ 53.0 $ 58.0 Income taxes payable 551.5 680.4 Payable to subsidiaries, net 1,852.6 2,070.1 Borrowings 3,067.2 3,229.3 Other liabilities 102.7 108.4 Total liabilities 5,627.0 6,146.2 Stockholders’ equity/(deficit): Preferred stock, $1.00 par value; 10 shares authorized; no shares issued — — Common stock, $0.01 par value; 2,000 shares authorized; 411.2 shares and 418.0 shares issued and outstanding as of December 31, 2020 2019 4.1 4.2 Capital surplus 885.1 841.2 Accumulated deficit (543.1) (675.9) Accumulated other comprehensive loss (159.5) (209.0) Total stockholders’ equity/(deficit) 186.6 (39.5) Total liabilities and stockholders’ equity/(deficit) $ 5,813.6 $ 6,106.7 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, 2020 2019 2018 Revenues $ — $ — $ — Expenses — — — Operating income — — — Gain on divestitures of businesses (Note 4) — 524.6 — Interest income — — — Interest expense (158.5) (181.5) (197.6) Other income/(expense) 3.6 2.7 (1.0) Income/(loss) before equity in earnings of affiliates and income taxes (154.9) 345.8 (198.6) Equity in earnings of affiliates, net of tax 861.7 827.3 997.2 Income tax (expense)/benefit 37.5 (114.8) 53.3 Net income 744.3 1,058.3 851.9 Other comprehensive income, net of tax 0.4 0.2 1.6 Other comprehensive income of affiliates, net of tax 49.1 21.8 26.7 Comprehensive income $ 793.8 $ 1,080.3 $ 880.2 See Notes to Condensed Financial Statements. THE WESTERN UNION COMPANY CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) (in millions) Year Ended December 31, 2020 2019 2018 Cash flows from operating activities Net cash provided by/(used in) operating activities $ (79.0) $ 103.1 $ 539.1 Cash flows from investing activities Purchases of property and equipment and other (1.0) (9.9) (78.9) Proceeds from the sale of former corporate headquarters (Note 4) 43.6 — — Proceeds from divestitures of businesses, net of cash divested (Note 4) — 711.7 — Distributions received from/(capital contributed to) subsidiaries, net (329.4) 74.0 (456.3) Other investing activities (2.1) — — Net cash provided by/(used in) investing activities (288.9) 775.8 (535.2) Cash flows from financing activities Advances from subsidiaries, net 1,139.5 194.0 345.5 Net (repayments of)/proceeds from commercial paper (165.0) 120.0 125.0 Net proceeds from issuance of borrowings — 495.9 685.4 Principal payments on borrowings — (824.9) (414.4) Proceeds from exercise of options and other 2.2 33.3 7.9 Cash dividends and dividend equivalents paid (370.3) (340.8) (341.7) Common stock repurchased (239.7) (552.6) (412.4) Other financing activities (0.7) — — Net cash provided by/(used in) financing activities 366.0 (875.1) (4.7) Net change in cash and cash equivalents (1.9) 3.8 (0.8) Cash and cash equivalents at beginning of year 4.0 0.2 1.0 Cash and cash equivalents at end of year $ 2.1 $ 4.0 $ 0.2 Supplemental cash flow information: Non-cash financing activity, distribution of note from subsidiary (Note 3) $ 1,364.4 $ — $ 2,256.1 Cash paid for lease liabilities $ 20.7 $ 17.0 $ — Non-cash lease liabilities arising from obtaining right-of-use assets (Note 6) $ 1.5 $ 124.8 $ — 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 $680 million as of December 31, 2020 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 The Parent enters into contracts with third-party vendors on behalf of its subsidiaries. Because the Parent is a holding company, as noted above, these corporate costs are incurred by the Parent, and the expenses are then allocated to its subsidiaries based primarily on the subsidiaries’ percentage of revenues compared to total revenues. All transactions described below are with subsidiaries of the Parent. The Parent has issued multiple promissory notes payable to its 100% owned subsidiary, First Financial Management Corporation, in exchange for funds distributed to the Parent. All notes pay interest at a fixed rate, may be repaid at any time without penalty, and are included within Payable to subsidiaries, net in the Condensed Balance Sheets. These promissory notes are as follows: Amount Interest Rate Date Issued (in millions) Due Date (per annum) April 1, 2018 (a) $ 273.0 December 31, 2020 2.12 % June 1, 2018 (b) $ 229.6 February 28, 2021 2.34 % October 1, 2019 (b) $ 162.8 June 30, 2022 1.69 % December 1, 2019 (b) $ 67.4 August 31, 2022 1.61 % December 1, 2020 (b) $ 93.3 August 31, 2023 0.15 % (a) On January 1, 2021, this note was refinanced for a note payable in the amount of $289.0 million that is due September 30, 2023 and bears interest at a rate of 0.14% per annum. (b) This note refinanced a note originally issued on a prior date. On November 8, 2015, the Parent entered into a Revolving Credit Facility agreement (the “Revolver”) with its 100% owned subsidiary, RII Holdings, Inc., which expires on November 8, 2035, providing for unsecured financing facilities in an aggregate amount of $3.0 billion. As of December 31, 2020 and 2019, borrowings outstanding under the Revolver were $620.3 million and $993.6 million, respectively. The interest rate applicable for outstanding borrowings under the Revolver is the six-month LIBOR rate set on the first day of the calendar year, which was 0.26% and 1.91% as of December 31, 2020 and 2019, respectively. Outstanding borrowings under the Revolver are included within Payable to subsidiaries, net in the Condensed Balance Sheets as of December 31, 2020 and 2019. During the years ended December 31, 2020 and 2018, a portion of the outstanding balances were repaid by means of non-cash distributions by the Parent’s subsidiaries. CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT THE WESTERN UNION COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued) The Parent files its United States federal consolidated income tax return on its and certain of its affiliates’ behalf. Accordingly, the Parent has recorded income taxes payable on behalf of its subsidiaries, and these income taxes payable were significant due to the enactment of the Tax Act into United States law. Excess cash generated from operations of the Parent’s subsidiaries that is not required to meet certain regulatory requirements may be periodically distributed to the Parent in the form of a distribution, although the amounts of such distributions 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. Divestitures of Businesses On February 28, 2019, the Parent entered into an agreement with ACI to sell its United States electronic bill payments business known as Speedpay. The Parent received approximately $750 million and recorded a pre-tax gain on the sale of approximately $523 million, which is included in Gain on divestitures of businesses in the Condensed Statements of Income and Comprehensive Income, in the all-cash transaction that closed on May 9, 2019. On May 6, 2019, the Parent completed the sale of Paymap, which provides electronic mortgage bill payment services, for contingent consideration and immaterial cash proceeds received at closing. The Parent recorded an immaterial pre-tax gain related to this sale during 2019. In 2020, the Parent sold its former corporate headquarters and recorded an immaterial pre-tax gain on the sale. The proceeds from this sale have been included in Cash flows from investing activities within the Parent’s Condensed Statements of Cash Flows for the year ended December 31, 2020. 5. Commitments and Contingencies The Parent had approximately $180 million in outstanding letters of credit and bank guarantees as of December 31, 2020 primarily held in connection with certain agent agreements. The significant majority of the Parent’s letters of credit and bank guarantees have a one-year renewal option, which the Parent expects to renew prior to expiration in most circumstances. CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT THE WESTERN UNION COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued) 6. Leases The Parent leases real properties primarily for use as administrative and sales offices, in addition to transportation and other equipment. The Parent determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Parent is the lessee, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition. Operating lease ROU assets are initially measured at the present value of lease payments over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the rate cannot be readily determined, an incremental borrowing rate is used to determine the future lease payments. Lease and variable non-lease components within the Parent’s lease agreements are accounted for separately. The Parent has no material leases in which the Parent is the lessor. The Parent’s leasing arrangements are classified as operating leases, for which expense is recognized on a straight-line basis. As of December 31, 2020 and 2019, the total ROU assets were $63.1 million and $66.5 million, respectively, and lease liabilities were $100.1 million and $105.7 million, respectively. The ROU assets and operating lease liabilities were included in Other assets and Other liabilities, respectively, in the Parent’s Condensed Balance Sheets. Cash paid for operating lease liabilities is recorded as Cash flows from operating activities in the Parent’s Condensed Statements of Cash Flows. Short-term and variable lease costs were not material for the years ended December 31, 2020 and 2019. The Parent’s leases have remaining terms from 3 years to 10 years. Certain of these leases contain escalation provisions and/or renewal options, giving the Parent the right to extend the lease by up to 10 years. However, these options are not reflected in the calculation of the ROU asset and lease liability due to uncertainty surrounding the likelihood of renewal. The following table summarizes the weighted-average lease term and discount rate for operating lease liabilities as of December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Weighted-average remaining lease term (in years) 9.5 10.5 Weighted-average discount rate 5.5 % 5.7 % The following table represents maturities of operating lease liabilities as of December 31, 2020 (in millions): Due within 1 year $ 14.6 Due after 1 year through 2 years 14.8 Due after 2 years through 3 years 14.1 Due after 3 years through 4 years 13.0 Due after 4 years through 5 years 12.7 Due after 5 years 61.0 Total lease payments 130.2 Less imputed interest (30.1) Total operating lease liabilities $ 100.1 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
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. In March 2020, the World Health Organization declared the outbreak associated with a novel coronavirus a pandemic (“COVID-19”), and governments throughout the world instituted various actions such as lockdowns, stay-at-home orders, travel restrictions, and closures of non-essential businesses in an effort to reduce the spread of COVID-19. These actions negatively impacted the Company’s ability to offer its services, at least temporarily, through a portion of its locations and its retail agent locations, during the year ended December 31, 2020. Beginning in March 2020 and continuing throughout the remainder of the year, the Company experienced a decrease in transaction volumes from retail locations, and a decrease in foreign exchange and payment services activity, which also negatively impacted revenues in these periods, partially offset by revenue and transaction growth from Digital Money Transfer services. The Company believes this decrease is mainly due to economic decline and uncertainty resulting from the pandemic. The extent to which the COVID-19 pandemic continues to impact the Company’s business, financial condition, results of operations, or cash flows will depend on future developments, which are highly uncertain and are difficult to predict. To the extent the pandemic or the related macro-economic consequences continue, the Company could potentially experience changes in estimates, including increased credit losses or intangible asset impairments in future periods. |
Principles of Consolidation | Principles of Consolidation The Company consolidates financial results when it has a controlling financial interest in a subsidiary via voting rights or 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 an entity’s operations, which generally occurs when the Company has an ownership interest between 20% and 50%. |
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 and the unamortized compensation expense of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect. Shares excluded from the diluted earnings per share calculation under the treasury stock method, primarily due to outstanding restricted stock units and options to purchase shares of Western Union stock, as the assumed proceeds of the restricted stock and options per unit were above the Company’s average share price during the periods and their effect was anti-dilutive, were 1.6 million, 1.9 million, and 2.6 million, respectively, of shares for the years ended December 31, 2020, 2019, and 2018. The following table provides the calculation of diluted weighted-average shares outstanding (in millions): Year Ended December 31, 2020 2019 2018 Basic weighted-average shares outstanding 412.3 427.6 451.8 Common stock equivalents 2.9 3.3 2.6 Diluted weighted-average shares outstanding 415.2 430.9 454.4 |
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. ● 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 holds assets classified as Level 3 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. In addition, the Trust has other investments that are valued at net asset value, which are not quoted on an active market; however, the unit price is based on underlying investments which are traded on an active market. 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. Available-for-sale investment securities, as further discussed in Notes 8 and 9, and derivative financial instruments, as further discussed in Notes 9 and 15, are carried at fair value. Fixed-rate notes are carried at their original issuance values and adjusted over time to accrete that value to par, except for portions of notes that were hedged by interest rate swap agreements in prior years, as disclosed in Note 15. The fair values of fixed-rate notes are disclosed in Note 9 and are based on market quotations. The fair values of non-financial assets and liabilities related to the Company’s business combinations are disclosed in Note 5. The fair value of the assets in the Trust, which holds the assets for the Company’s defined benefit pension plan, is disclosed in Note 12. |
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 within Net 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 within Other income, net 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 cash equivalents and are stated at cost, which approximates fair value. The Company maintains cash and cash equivalent balances, including a portion in money market funds, with a group of globally diversified banks and financial institutions. The Company limits the concentration of its cash and cash equivalents with any one institution and regularly reviews investment concentrations and credit worthiness of these institutions. |
Allowance for Credit Losses | The Company establishes and monitors an allowance for credit losses related to receivables from agents and others, and Business Solutions customers. The Company estimates the allowance based on its historical collections experience, adjusted for current conditions and forecasts of future economic conditions, including those related to COVID-19. Given the short-term nature of these receivables, the Company does not expect the impact of forecasted economic conditions on its allowance for credit losses to be significant. The Company has estimated credit losses based on information known as of December 31, 2020. Prior to the adoption of the new accounting standard discussed above, the Company recorded an allowance for doubtful accounts when it was probable that the related receivable balance would not be collected based on its history of collection experience, known collection issues, such as agent suspensions and bankruptcies, consumer chargebacks and insufficient funds, and other matters the Company identified in its routine collection monitoring. The allowance for doubtful accounts was $42.2 million as of December 31, 2019 and is recorded in the same balance sheet captions as the related receivable. During the years ended December 31, 2019 and 2018, the provision for doubtful accounts (bad debt expense) reflected in the Consolidated Statements of Income was $47.1 million and $43.9 million, respectively. |
Settlement Assets and Obligations | Settlement Assets and Obligations Settlement assets represent funds received or to be received from agents and others 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 agents, Business Solutions customers, and others, 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. Collection of these receivables ordinarily occurs within a few days. To mitigate risk associated with potential Business Solutions customer defaults, the Company performs credit reviews on an ongoing basis. 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. Refer to Note 8 for additional details on the Company’s settlement assets and obligations. |
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 furniture fixtures Property and equipment consisted of the following (in millions): December 31, 2020 2019 Equipment $ 608.9 $ 591.4 Leasehold improvements 153.3 159.2 Furniture and fixtures 45.4 49.4 Buildings 0.4 0.4 Projects in process 2.3 3.0 Total property and equipment, gross 810.3 803.4 Less accumulated depreciation (659.9) (616.5) Property and equipment, net (a) $ 150.4 $ 186.9 (a) As of December 31, 2019, Property and equipment, net excluded assets held for sale of $49.3 million, which primarily consisted of the Company’s former headquarters and land. These assets were sold in 2020 and were included in Other assets in the Company’s Consolidated Balance Sheets as of December 31, 2019. Amounts charged to expense for depreciation of property and equipment were $61.3 million, $79.6 million, and $76.9 million during the years ended December 31, 2020, 2019, and 2018, respectively. |
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. In the event a reporting unit’s carrying amount exceeds its fair value, the Company recognizes an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. The Company’s annual impairment assessment did not identify any goodwill impairment during the years ended December 31, 2020, 2019, and 2018. |
Other Intangible Assets | Other Intangible Assets Other intangible assets primarily consist of contract costs (primarily amounts paid to agents in connection with establishing and renewing long-term contracts), acquired contracts, and software. Other intangible assets are generally 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 $164.3 million, $178.1 million, and $187.8 million for the years ended December 31, 2020, 2019, and 2018, respectively. 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. Acquired contracts include customer and contractual relationships and networks of subagents that are recognized in connection with the Company’s acquisitions. The Company purchases and develops software that is used in providing services and in performing administrative functions. Internal and external software development costs incurred that are directly related to the chosen design, development, and testing phases of the software are capitalized once the Company has completed all planning and analysis activities. Any other software development related costs are expensed as incurred. 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 The following table provides the components of other intangible assets (in millions): December 31, 2020 December 31, 2019 Weighted- Average Amortization Net of Net of Period Accumulated Accumulated (in years) Initial Cost Amortization Initial Cost Amortization Capitalized contract costs 6.1 $ 574.4 $ 308.0 $ 510.3 $ 271.7 Acquired contracts 11.6 561.7 75.8 584.2 124.1 Internal use software 3.7 310.3 55.5 281.2 54.7 Acquired trademarks 25.4 30.1 12.0 30.1 13.2 Other intangibles 4.3 19.4 — 19.4 — Projects in process (a) 53.7 53.7 31.2 31.2 Total other intangible assets 8.0 $ 1,549.6 $ 505.0 $ 1,456.4 $ 494.9 (a) Not applicable as the assets have not been placed in service. The estimated future aggregate amortization expense for existing other intangible assets as of December 31, 2020 is expected to be $148.5 million in 2021, $106.8 million in 2022, $78.8 million in 2023, $61.4 million in 2024, $35.1 million in 2025, and $20.7 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, 2020, 2019, and 2018. |
Revenue Recognition | The Company’s revenues are primarily derived from consideration paid by customers to transfer money. These revenues vary by transaction based upon factors such as channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, the difference between the exchange rate set by the Company to the customer and the rate available in the wholesale foreign exchange market, and speed of service, as applicable. The Company also offers several other services, including foreign exchange and payment services and other bill payment services, for which revenue is impacted by similar factors. For the substantial majority of the Company’s revenues, the Company acts as the principal in transactions and reports revenue on a gross basis, as the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. The Company also provides services to financial institutions and other third parties to enable such entities to offer money transfer services to their own customers under their brands. Generally, in these arrangements, consumers agree to terms and conditions specified by the financial institution or other third party that, among other things, establish pricing paid by the consumer for the service. The Company recognizes revenue on a net basis under these arrangements. |
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, credit losses, 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. Advertising costs for the years ended December 31, 2020, 2019, and 2018 were $177.0 million, $209.1 million, and $180.9 million, respectively. |
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. The Company accounts for the effects of global intangible low-taxed income taxed in the United States as a component of income tax expense in the period the tax arises. |
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 (“AOCL”) 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 has used derivatives to: (i) minimize its exposures related to changes in foreign currency exchange rates and, periodically, interest rates and (ii) 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. Certain of the Company’s derivative arrangements are designated as either cash flow hedges or fair value hedges at the time of inception, and others are not designated as accounting hedges. ● Cash flow hedges – 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 AOCL are reclassified to earnings in the same period the hedged item affects earnings when the instrument is effective in offsetting the change in cash flows attributable to the risk being hedged. On January 1, 2018, the Company early adopted an accounting pronouncement related to hedging activities. As a result of the new accounting pronouncement, for foreign currency cash flow hedges entered into on or after January 1, 2018, the Company excludes time value from the assessment of effectiveness, and the initial value of the excluded components is amortized into Revenues within the Consolidated Statements of Income. For foreign currency cash flow hedges entered into before January 1, 2018, all changes in the fair value of the excluded components were recognized immediately in Revenues during the years ended December 31, 2019 and 2018. ● Fair value hedges - Fair value hedges consist of hedges of fixed-rate debt, through interest rate swaps. 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. There were no fair value hedges outstanding as of December 31, 2020 and 2019. ● Undesignated - Derivative contracts entered into to reduce the foreign exchange variability related to: (i) money transfer settlement assets and obligations, generally with maturities from a few days up to one month , and (ii) 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 significant majority of these derivative contracts have a duration at inception of 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 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, and how effectiveness is being assessed. 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 other amounts 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 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. All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period. The Company generally recognizes compensation expense on awards on a straight-line basis over the requisite service period for the entire award, with an estimate for forfeitures. Refer to Note 17 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 related assets may not be fully recoverable, in accordance with the appropriate accounting guidance. |
Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements On January 1, 2020, the Company adopted a new accounting standard that requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. Additionally, the standard requires certain credit losses relating to investment securities classified as available-for-sale to be recorded through an allowance for credit losses. The Company recognized the cumulative effect of the new accounting standard as an adjustment to the January 1, 2020 balance of Accumulated deficit in the Consolidated Balance Sheets, and the adoption of the new accounting standard did not have a material impact on the Company’s January 1, 2020 accumulated deficit. In accordance with the modified retrospective On January 1, 2019, the Company adopted a new accounting standard, as amended, that requires the Company to record assets and liabilities on the balance sheet for lease-related rights and obligations and disclose key information about its leasing arrangements. The Company elected the effective date method, utilized the modified retrospective On January 1, 2018, the Company adopted a new accounting standard, as amended, regarding revenue from contracts with customers using the modified retrospective In the first quarter of 2018, the Company adopted a new accounting pronouncement that provides entities the option to reclassify tax effects included within AOCL as a result of the United States tax reform legislation enacted in December 2017 (the “Tax Act”) to retained earnings. The adoption of this standard resulted in an increase to AOCL and a decrease to Accumulated deficit in the Consolidated Balance Sheets of $31.4 million, which represents the tax effects of the lower federal tax rate on unrealized gains/(losses) on investment securities, hedging activities, and adjustments related to the Company’s defined benefit pension plan, in addition to the release of deferred taxes accrued on undistributed earnings of one of the Company’s subsidiaries that are no longer owed under the Tax Act. The Company will continue to release tax effects remaining in AOCL into income as the individual units of account are sold or otherwise extinguished. Refer to Note 14 for additional information. |
Investment Securities | Investment Securities Investment securities included in Settlement assets in the Company’s Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed-rate term notes and variable-rate demand notes. 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 2057. These securities may be used by the Company for short-term liquidity needs and held for short periods of time. Investment securities are exposed to market risk due to changes in interest rates and credit risk. 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 regulatory requirements. The Company’s investment securities are classified as available-for-sale and recorded at fair value. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification. |
Foreign Currency - Derivatives | Foreign Currency Derivatives The Company’s policy is to use longer duration foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to help 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, 2020, these 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 and thus time value is excluded from the assessment of effectiveness. As described in Note 2, foreign currency cash flow hedges entered into on or after January 1, 2018 exclude time value from the assessment of effectiveness, and the initial value of the excluded components is amortized into Revenues within the Company’s Consolidated Statements of Income. For foreign currency cash flow hedges entered into before January 1, 2018, all changes in the fair value of the excluded components were recognized immediately in Revenues. The Company also uses short duration foreign currency forward contracts, generally with maturities ranging from a few days |
Foreign Currency - Business Solutions | Business Solutions Operations 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 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 the Company’s cross-currency payments operations, which primarily include spot exchanges of currency in addition to forwards and options. Foreign exchange revenues from the total portfolio of positions were $311.9 million, $343.1 million, and $342.3 million for the years ended December 31, 2020, 2019, and 2018, respectively, and were included in Revenues in the Company’s Consolidated Statements of Income. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges and the significant majority of these derivative contracts have a duration at inception of less than one year. The aggregate equivalent United States dollar notional amount of derivative customer contracts held by the Company in its Business Solutions operations for December 31, 2020 and 2019 was approximately $8.0 billion and $7.5 billion, respectively. The significant majority of customer contracts are written in the following currencies: the United States dollar, euro, and the Canadian dollar. |
Interest Rate Hedging | Interest Rate Hedging Periodically, 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, variable-rate payments in order to manage its overall exposure to interest rate fluctuations. 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. Interest expense in the Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps. |
Segments | The Company’s segments are reviewed separately below because each 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 segments are the same as those described in the summary of significant accounting policies. ● Corporate costs, including stock-based compensation and other overhead, are allocated to the segments primarily based on a percentage of the segments’ revenue compared to total revenue. ● As described in Note 4, on August 1, 2019, the Company’s Board of Directors approved an overall plan to change the Company’s operating model and improve its business processes and cost structure by reducing its headcount and consolidating various facilities. For the years ended December 31, 2020 and 2019, the Company incurred $36.8 million and $115.5 million, respectively, related to this plan. While certain of these expenses may be identifiable to the Company’s segments, primarily the Company’s Consumer-to-Consumer segment, the expenses are not included in the measurement of segment operating income provided to the CODM for purposes of assessing segment performance and decision making with respect to resource allocation. ● The CODM does not review total assets by segment for purposes of assessing segment performance and allocating resources. As such, the disclosure of total assets by segment has not been included below. ● All items not included in operating income are excluded from the segments. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of diluted weighted-average shares outstanding | The following table provides the calculation of diluted weighted-average shares outstanding (in millions): Year Ended December 31, 2020 2019 2018 Basic weighted-average shares outstanding 412.3 427.6 451.8 Common stock equivalents 2.9 3.3 2.6 Diluted weighted-average shares outstanding 415.2 430.9 454.4 |
Schedule of property and equipment | Property and equipment consisted of the following (in millions): December 31, 2020 2019 Equipment $ 608.9 $ 591.4 Leasehold improvements 153.3 159.2 Furniture and fixtures 45.4 49.4 Buildings 0.4 0.4 Projects in process 2.3 3.0 Total property and equipment, gross 810.3 803.4 Less accumulated depreciation (659.9) (616.5) Property and equipment, net (a) $ 150.4 $ 186.9 (a) As of December 31, 2019, Property and equipment, net excluded assets held for sale of $49.3 million, which primarily consisted of the Company’s former headquarters and land. These assets were sold in 2020 and were included in Other assets in the Company’s Consolidated Balance Sheets as of December 31, 2019. |
Schedule of components of other intangible assets | The following table provides the components of other intangible assets (in millions): December 31, 2020 December 31, 2019 Weighted- Average Amortization Net of Net of Period Accumulated Accumulated (in years) Initial Cost Amortization Initial Cost Amortization Capitalized contract costs 6.1 $ 574.4 $ 308.0 $ 510.3 $ 271.7 Acquired contracts 11.6 561.7 75.8 584.2 124.1 Internal use software 3.7 310.3 55.5 281.2 54.7 Acquired trademarks 25.4 30.1 12.0 30.1 13.2 Other intangibles 4.3 19.4 — 19.4 — Projects in process (a) 53.7 53.7 31.2 31.2 Total other intangible assets 8.0 $ 1,549.6 $ 505.0 $ 1,456.4 $ 494.9 (a) Not applicable as the assets have not been placed in service. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue | |
Disaggregation of revenue earned from contracts with customers | Management has determined that the significant majority of the Company’s revenue is recognized at a point in time. The following tables represent the disaggregation of revenue earned from contracts with customers by product type and region for the years ended December 31, 2020, 2019, and 2018 (in millions). The regional split of revenue shown in the tables below is based upon where transactions are initiated. Year Ended December 31, 2020 Foreign Consumer Exchange Money and Payment Consumer Other Transfers Services Bill Payments Services Total Regions: North America $ 1,605.5 $ 83.6 $ 75.1 $ 57.0 $ 1,821.2 Europe and Russia/CIS 1,330.0 121.1 3.6 1.8 1,456.5 Middle East, Africa, and South Asia 630.0 1.5 0.4 — 631.9 Latin America and the Caribbean 310.1 2.4 75.8 7.9 396.2 East Asia and Oceania 257.4 60.5 1.4 — 319.3 Revenues from contracts with customers $ 4,133.0 $ 269.1 $ 156.3 $ 66.7 $ 4,625.1 Other revenues (a) 87.0 87.0 14.0 21.9 209.9 Total revenues $ 4,220.0 $ 356.1 $ 170.3 $ 88.6 $ 4,835.0 Year Ended December 31, 2019 Foreign Consumer Exchange Money and Payment Consumer Other Transfers Services Bill Payments (b) Services Total Regions: North America $ 1,653.5 $ 95.4 $ 223.0 $ 55.9 $ 2,027.8 Europe and Russia/CIS 1,350.1 127.1 3.2 4.1 1,484.5 Middle East, Africa, and South Asia 642.0 1.8 0.4 — 644.2 Latin America and the Caribbean 395.2 3.4 129.4 15.3 543.3 East Asia and Oceania 263.5 68.4 1.5 — 333.4 Revenues from contracts with customers $ 4,304.3 $ 296.1 $ 357.5 $ 75.3 $ 5,033.2 Other revenues (a) 103.5 92.7 37.3 25.4 258.9 Total revenues $ 4,407.8 $ 388.8 $ 394.8 $ 100.7 $ 5,292.1 Year Ended December 31, 2018 Foreign Consumer Exchange Money and Payment Consumer Other Transfers Services Bill Payments (b) Services Total Regions: North America $ 1,632.3 $ 97.6 $ 463.9 $ 57.4 $ 2,251.2 Europe and Russia/CIS 1,399.5 130.0 3.1 3.9 1,536.5 Middle East, Africa, and South Asia 654.4 1.5 0.3 — 656.2 Latin America and the Caribbean 393.2 3.1 152.7 13.7 562.7 East Asia and Oceania 304.6 69.9 1.5 — 376.0 Revenues from contracts with customers $ 4,384.0 $ 302.1 $ 621.5 $ 75.0 $ 5,382.6 Other revenues (a) 69.6 84.7 30.8 22.2 207.3 Total revenues $ 4,453.6 $ 386.8 $ 652.3 $ 97.2 $ 5,589.9 (a) Includes revenue from the sale of derivative financial instruments, investment income generated on settlement assets primarily related to money transfer and money order services, and other sources. (b) On February 28, 2019, the Company entered into an agreement with ACI Worldwide Corp. and ACW Worldwide, Inc. to sell its United States electronic bill payments business known as “Speedpay,” and closed the transaction on May 9, 2019. Included within North America revenues are Speedpay revenues of $125.4 million and $352.0 million for the years ended December 31, 2019 and 2018, respectively. |
Restructuring-Related Expenses
Restructuring-Related Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring-Related Expenses | |
Schedule of restructuring accruals | The following table summarizes the activity for the years ended December 31, 2020 and 2019 for expenses related to the restructuring accruals, which are included in Accounts payable and accrued liabilities in the Company’s Consolidated Balance Sheets as of December 31, 2020 and 2019, and the total expenses incurred since the inception of the restructuring plan (in millions): Severance and Facility Relocations Related and Closures, Employee Consulting, Benefits and Other Total Balance, December 31, 2018 $ — $ — $ — Expenses (a) 98.0 17.5 115.5 Cash payments (28.6) (9.6) (38.2) Non-cash benefits/(charges) (a) 1.8 (5.8) (4.0) Balance, December 31, 2019 $ 71.2 $ 2.1 $ 73.3 Expenses (a) 11.8 25.0 36.8 Cash payments (58.7) (24.0) (82.7) Non-cash benefits/(charges) (a) 0.6 (1.8) (1.2) Balance, December 31, 2020 $ 24.9 $ 1.3 $ 26.2 Total expenses incurred $ 109.8 $ 42.5 $ 152.3 (a) Non-cash benefits/(charges) include non-cash write-offs and accelerated depreciation of ROU assets and leasehold improvements and a non-cash benefit for adjustments to stock compensation for awards forfeited by employees. These amounts have been removed from the liability balance in the table above as they do not impact the restructuring accruals. |
Schedule of restructuring-related expenses | The following table presents restructuring-related expenses as reflected in the Consolidated Statements of Income (in millions): Year Ended December 31, 2020 2019 Cost of services $ 4.5 $ 39.8 Selling, general, and administrative 32.3 75.7 Total expenses, pre-tax $ 36.8 $ 115.5 Total expenses, net of tax $ 31.5 $ 90.0 |
Divestitures, Acquisitions, a_2
Divestitures, Acquisitions, and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Divestitures, Acquisitions, and Goodwill | |
Schedule of changes to goodwill | The following table presents changes to goodwill for the years ended December 31, 2020 and 2019 (in millions): Consumer-to- Business Consumer Solutions Other Total January 1, 2019 goodwill, net $ 1,980.7 $ 532.0 $ 212.3 $ 2,725.0 Divestitures (a) — — (158.4) (158.4) December 31, 2019 goodwill, net $ 1,980.7 $ 532.0 $ 53.9 $ 2,566.6 Additions — — — — December 31, 2020 goodwill, net $ 1,980.7 $ 532.0 $ 53.9 $ 2,566.6 (a) Related to the Speedpay and Paymap divestitures, as described above. |
Schedule of accumulated impairment losses of goodwill | The following table presents accumulated impairment losses as of December 31, 2020, 2019, and 2018 (in millions): As of December 31, 2020 2019 2018 Goodwill, gross $ 3,030.6 $ 3,030.6 $ 3,189.0 Accumulated impairment losses (464.0) (464.0) (464.0) Goodwill, net $ 2,566.6 $ 2,566.6 $ 2,725.0 |
Settlement Assets and Obligat_2
Settlement Assets and Obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Settlement Assets and Obligations | |
Schedule of settlement assets and obligations | Settlement assets and obligations consisted of the following (in millions): December 31, 2020 Settlement assets: Cash and cash equivalents $ 695.7 Receivables from agents, Business Solutions customers, and others 1,188.3 Less: Allowance for credit losses (53.2) Receivables from agents, Business Solutions customers, and others, net 1,135.1 Investment securities 1,990.6 Total settlement assets $ 3,821.4 Settlement obligations: Money transfer, money order, and payment service payables $ 2,902.9 Payables to agents 918.5 Total settlement obligations $ 3,821.4 December 31, 2019 Settlement assets: Cash and cash equivalents $ 368.2 Receivables from agents, Business Solutions customers, and others 1,230.1 Investment securities 1,698.4 Total settlement assets $ 3,296.7 Settlement obligations: Money transfer, money order, and payment service payables $ 2,571.5 Payables to agents 725.2 Total settlement obligations $ 3,296.7 |
Schedule of activity in the allowance for credit losses | The following table summarizes activity in the allowance for credit losses on receivables from agents and others, and Business Solutions customers (in millions): Agents and Business Solutions Others Customers Allowance for credit losses as of January 1, 2020 $ 20.4 $ 4.5 Current period provision for expected credit losses (a) 39.9 2.0 Write-offs charged against the allowance (11.9) (3.1) Recoveries of amounts previously written off 2.3 — Impacts of foreign currency exchange rates and other (1.4) 0.5 Allowance for credit losses as of December 31, 2020 $ 49.3 $ 3.9 (a) Provision does not include losses from chargebacks or fraud associated with transactions initiated through the Company’s digital channels, as these losses are not credit-related. For the year ended December 31, 2020, the Company recognized $41.3 million of losses that were not credit-related. |
Schedule of components of investment securities | The components of investment securities are as follows (in millions): Gross Gross Net Amortized Fair Unrealized Unrealized Unrealized December 31, 2020 Cost Value Gains Losses Gains/(Losses) Settlement assets: Cash and cash equivalents: Money market funds $ 13.1 $ 13.1 $ — $ — $ — Available-for-sale securities: State and municipal debt securities (a) 1,234.1 1,303.9 69.8 — 69.8 State and municipal variable-rate demand notes 562.1 562.1 — — — Corporate and other debt securities 71.6 72.8 1.2 — 1.2 United States government agency mortgage-backed securities 50.3 51.8 1.5 — 1.5 Total available-for-sale securities 1,918.1 1,990.6 72.5 — 72.5 Total investment securities $ 1,931.2 $ 2,003.7 $ 72.5 $ — $ 72.5 Gross Gross Net Amortized Fair Unrealized Unrealized Unrealized December 31, 2019 Cost Value Gains Losses Gains/(Losses) Settlement assets: Cash and cash equivalents: Money market funds $ 24.6 $ 24.6 $ — $ — $ — Available-for-sale securities: State and municipal debt securities (a) 1,227.4 1,257.8 31.0 (0.6) 30.4 State and municipal variable-rate demand notes 276.1 276.1 — — — United States government agency mortgage-backed securities 66.3 67.2 0.9 — 0.9 Corporate debt securities 52.3 52.4 0.1 — 0.1 Other United States government agency debt securities 34.9 34.9 — — — United States Treasury securities 9.8 10.0 0.2 — 0.2 Total available-for-sale securities 1,666.8 1,698.4 32.2 (0.6) 31.6 Total investment securities $ 1,691.4 $ 1,723.0 $ 32.2 $ (0.6) $ 31.6 (a) The majority of these securities are fixed-rate instruments. |
Schedule of contractual maturities of investment securities within Settlement assets | The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of December 31, 2020 (in millions): Fair Value Due within 1 year $ 176.3 Due after 1 year through 5 years 684.4 Due after 5 years through 10 years 452.5 Due after 10 years 677.4 Total $ 1,990.6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Schedule of assets and liabilities by balance sheet line item measured on a recurring basis | The following tables present the Company’s assets and liabilities which are measured at fair value on a recurring basis, by balance sheet line item (in millions): Fair Value Measurement Using Total December 31, 2020 Level 1 Level 2 Fair Value Assets: Settlement assets: Measured at fair value through net income: Money market funds $ 13.1 $ — $ 13.1 Measured at fair value through other comprehensive income (net of expected credit losses recorded through net income): State and municipal debt securities — 1,303.9 1,303.9 State and municipal variable-rate demand notes — 562.1 562.1 Corporate and other debt securities — 72.8 72.8 United States government agency mortgage-backed securities — 51.8 51.8 Other assets: Derivatives — 453.3 453.3 Total assets $ 13.1 $ 2,443.9 $ 2,457.0 Liabilities: Other liabilities: Derivatives $ — $ 430.3 $ 430.3 Total liabilities $ — $ 430.3 $ 430.3 Fair Value Measurement Using Total December 31, 2019 Level 1 Level 2 Fair Value Assets: Settlement assets: Measured at fair value through net income: Money market funds $ 24.6 $ — $ 24.6 Measured at fair value through other comprehensive income: State and municipal debt securities — 1,257.8 1,257.8 State and municipal variable-rate demand notes — 276.1 276.1 United States government agency mortgage-backed securities — 67.2 67.2 Corporate debt securities — 52.4 52.4 Other United States government agency debt securities — 34.9 34.9 United States Treasury securities 10.0 — 10.0 Other assets: Derivatives — 204.5 204.5 Total assets $ 34.6 $ 1,892.9 $ 1,927.5 Liabilities: Other liabilities: Derivatives $ — $ 159.5 $ 159.5 Total liabilities $ — $ 159.5 $ 159.5 |
Other Assets and Other Liabil_2
Other Assets and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Assets and Other Liabilities | |
Schedule of components of other assets and other liabilities | The following table summarizes the components of Other assets and Other liabilities (in millions): December 31, 2020 2019 Other assets: Derivatives $ 453.3 $ 204.5 ROU assets 189.1 199.7 Amounts advanced to agents 135.9 96.4 Prepaid expenses 81.0 102.4 Prepaid pension costs (Note 12) 39.9 — Equity method investments 34.5 33.0 Other (a) 91.0 126.9 Total other assets $ 1,024.7 $ 762.9 Other liabilities: Derivatives $ 430.3 $ 159.5 Operating lease liabilities 234.9 242.3 Accrued agent contract costs (b) 77.1 16.0 Pension obligations (Note 12) — 11.4 Other 60.1 69.1 Total other liabilities $ 802.4 $ 498.3 (a) Property, equipment, and land of $49.3 million, primarily related to the Company’s former headquarters, was included in Other as of December 31, 2019 and classified as held for sale. In 2020, the Company sold its former corporate headquarters and other property and recorded an immaterial gain on the sales. (b) Represents accrued and unpaid contract costs for new and renewed agent contracts. The majority of the balance as of December 31, 2020 was paid in January 2021 . |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of 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, 2020 2019 2018 Domestic $ — $ 434.7 $ (11.4) Foreign 855.1 886.7 1,002.8 Total pre-tax income $ 855.1 $ 1,321.4 $ 991.4 |
Schedule of provision for income taxes | The provision for income taxes was as follows (in millions): Year Ended December 31, 2020 2019 2018 Federal $ 50.1 $ 153.7 $ 62.9 State and local 1.1 22.9 0.6 Foreign 59.6 86.5 76.0 Total provision for income taxes $ 110.8 $ 263.1 $ 139.5 |
Schedule of effective tax rate reconciliation | The Company’s effective tax rates differed from statutory rates as follows: Year Ended December 31, 2020 2019 2018 Federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal income tax benefits 0.5 % 1.4 % 0.4 % Foreign rate differential, net of United States tax paid on foreign earnings (5.6%, 2.3%, and 4.9%, respectively) (8.3) % (5.5) % (8.2) % Divestitures — % 2.4 % — % Tax Act impact — % — % 2.3 % Base erosion anti-abuse tax (BEAT) — % — % 3.0 % Lapse of statute of limitations (0.7) % (0.5) % (2.2) % Valuation allowances 0.2 % 0.1 % — % Other 0.2 % 1.0 % (2.2) % Effective tax rate 12.9 % 19.9 % 14.1 % |
Schedule of 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, 2020 2019 2018 Current: Federal $ 35.7 $ 169.4 $ 69.2 State and local 1.9 18.1 — Foreign 59.3 100.1 85.4 Total current taxes 96.9 287.6 154.6 Deferred: Federal 14.4 (15.7) (6.3) State and local (0.8) 4.8 0.6 Foreign 0.3 (13.6) (9.4) Total deferred taxes 13.9 (24.5) (15.1) $ 110.8 $ 263.1 $ 139.5 |
Schedule of components of deferred tax items | 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, 2020 2019 Deferred tax assets related to: Reserves, accrued expenses and employee-related items $ 22.9 $ 38.3 Lease liabilities 23.8 28.1 Tax attribute carryovers 30.2 31.7 Pension obligations — 4.0 Intangibles, property and equipment 15.1 13.6 Other 8.6 5.3 Valuation allowance (18.6) (19.1) Total deferred tax assets 82.0 101.9 Deferred tax liabilities related to: Intangibles, property and equipment 218.0 214.8 Lease right-of-use assets 15.8 18.7 Prepaid pension costs 7.8 — Other 14.2 6.9 Total deferred tax liabilities 255.8 240.4 Net deferred tax liability (a) $ 173.8 $ 138.5 (a) As of December 31, 2020 and 2019, deferred tax assets that cannot be fully offset by deferred tax liabilities in the respective tax jurisdictions of $15.1 million and $13.6 million, respectively, are reflected in Other assets in the Consolidated Balance Sheets. |
Schedule of unrecognized tax benefits reconciliation | 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 and before offset of related items, is as follows (in millions): 2020 2019 Balance as of January 1 $ 293.9 $ 295.0 Increase related to current period tax positions (a) 2.8 5.2 Increase related to prior period tax positions (b) 49.7 0.8 Decrease related to prior period tax positions (1.9) (1.6) Decrease due to lapse of applicable statute of limitations (3.2) (5.3) Decrease due to effects of foreign currency exchange rates (0.6) (0.2) Balance as of December 31 $ 340.7 $ 293.9 (a) Includes recurring accruals for issues which initially arose in previous periods. (b) Includes gross accrual for tax positions associated with current audits. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of weighted average lease terms and discount rates | The following table summarizes the weighted-average lease terms and discount rates for operating lease liabilities: December 31, 2020 December 31, 2019 Weighted-average remaining lease term (in years) 7.2 7.6 Weighted-average discount rate 5.6 % 6.5 % |
Schedule of maturities of operating lease liabilities | The following table represents maturities of operating lease liabilities as of December 31, 2020 (in millions): Due within 1 year $ 51.9 Due after 1 year through 2 years 44.5 Due after 2 years through 3 years 37.0 Due after 3 years through 4 years 32.6 Due after 4 years through 5 years 27.7 Due after 5 years 90.3 Total lease payments 284.0 Less imputed interest (49.1) Total operating lease liabilities $ 234.9 |
Stockholders' Equity_(Deficit)
Stockholders' Equity/(Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity/(Deficit) | |
Schedule of reclassifications out of Accumulated other comprehensive loss | The following table details reclassifications out of AOCL and into Net income. All amounts reclassified from AOCL affect the line items as indicated below and the amounts in parentheses indicate decreases to Net income in the Consolidated Statements of Income. Amounts Reclassified from AOCL to Net Income Income Statement Year Ended December 31, Income for the period (in millions) Location 2020 2019 2018 Accumulated other comprehensive loss components: Gains/(losses) on investment securities: Available-for-sale securities Revenues $ 0.6 $ 0.6 $ (0.4) Income tax benefit/(expense) Provision for income taxes (0.1) (0.1) 0.1 Total reclassification adjustments related to investment securities, net of tax 0.5 0.5 (0.3) Gains/(losses) on cash flow hedges: Foreign currency contracts Revenues 1.2 14.2 (14.9) Interest rate contracts Interest expense (0.6) — (2.1) Income tax benefit/(expense) Provision for income taxes 0.1 (0.1) 0.7 Total reclassification adjustments related to cash flow hedges, net of tax 0.7 14.1 (16.3) Amortization of components of defined benefit plans: Actuarial loss Other income, net (12.1) (10.8) (11.7) Income tax benefit Provision for income taxes 2.7 2.4 2.6 Total reclassification adjustments related to defined benefit plans, net of tax (9.4) (8.4) (9.1) Total reclassifications, net of tax $ (8.2) $ 6.2 $ (25.7) |
Schedule of components of accumulated other comprehensive income/(loss), net of tax | The following tables summarize the components of AOCL, net of tax in the accompanying Consolidated Balance Sheets (in millions): Investment Hedging Foreign Currency Defined Benefit Securities Activities Translation Pension Plan Total As of December 31, 2019 $ 24.7 $ (3.6) $ (101.2) $ (128.9) $ (209.0) Unrealized gains/(losses) 41.5 (26.4) — 43.5 58.6 Tax benefit/(expense) (7.4) 0.2 — (10.1) (17.3) Amounts reclassified from AOCL into earnings, net of tax (0.5) (0.7) — 9.4 8.2 As of December 31, 2020 $ 58.3 $ (30.5) $ (101.2) $ (86.1) $ (159.5) Investment Hedging Foreign Currency Defined Benefit Securities Activities Translation Pension Plan Total As of December 31, 2018 $ (1.1) $ 7.4 $ (101.2) $ (136.1) $ (231.0) Unrealized gains/(losses) 33.6 2.0 — (2.0) 33.6 Tax benefit/(expense) (7.3) 1.1 — 0.8 (5.4) Amounts reclassified from AOCL into earnings, net of tax (0.5) (14.1) — 8.4 (6.2) As of December 31, 2019 $ 24.7 $ (3.6) $ (101.2) $ (128.9) $ (209.0) Investment Hedging Foreign Currency Defined Benefit Securities Activities Translation Pension Plan Total As of December 31, 2017 $ 2.7 $ (40.6) $ (76.9) $ (113.1) $ (227.9) Unrealized gains/(losses) (5.9) 35.6 — (9.3) 20.4 Tax benefit/(expense) 1.3 (1.6) — 2.0 1.7 Amounts reclassified from AOCL into earnings, net of tax 0.3 16.3 — 9.1 25.7 Foreign currency translation adjustments (a) — — (19.5) — (19.5) Reclassification of Tax Act effects into Accumulated deficit (b) 0.5 (2.3) (4.8) (24.8) (31.4) As of December 31, 2018 $ (1.1) $ 7.4 $ (101.2) $ (136.1) $ (231.0) (a) Beginning in the third quarter of 2018, all changes in the value of the Argentine peso on the Company’s monetary assets and liabilities are reflected in net income, given Argentina’s status as a highly inflationary economy. Prior to the third quarter of 2018, changes in the Argentine peso exchange rate were reflected in net income for the Company’s money transfer operations, whereas these effects were reflected in other comprehensive income for the Company’s bill payment operations. This designation did not have a material impact on the Company’s financial position and results of operations for the years ended December 31, 2020, 2019 and 2018. (b) As discussed in Note 2, in the first quarter of 2018, the Company adopted an accounting pronouncement as a result of the Tax Act and reclassified tax effects included within AOCL to Accumulated deficit in the Consolidated Balance Sheets. |
Schedule of dividends declared | Cash dividends paid for the years ended December 31, 2020, 2019, and 2018 were $369.9 million, $340.8 million, and $341.7 million, respectively. Dividends per share declared quarterly by the Company’s Board of Directors during the years ended 2020, 2019, and 2018 were as follows: Year Q1 Q2 Q3 Q4 2020 $ 0.225 $ 0.225 $ 0.225 $ 0.225 2019 $ 0.20 $ 0.20 $ 0.20 $ 0.20 2018 $ 0.19 $ 0.19 $ 0.19 $ 0.19 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivatives | |
Schedule of notional amounts of foreign currency forward contracts | The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of December 31, 2020 and 2019 were as follows (in millions): December 31, 2020 Contracts designated as hedges: Euro $ 428.9 Canadian dollar 131.9 British pound 71.9 Australian dollar 58.3 Swiss franc 41.1 Japanese yen 36.6 Other (a) 29.5 Contracts not designated as hedges: Euro $ 533.0 British pound 153.9 Mexican peso 105.0 Indian rupee 81.0 Canadian dollar 71.5 Australian dollar 68.1 Japanese yen 39.6 Philippine peso 35.2 Russian ruble 31.2 Indonesian rupiah 29.1 Swedish krona 26.0 Other (a) 151.5 December 31, 2019 Contracts designated as hedges: Euro $ 391.9 Canadian dollar 99.0 British pound 57.2 Australian dollar 36.1 Swiss franc 28.9 Other (a) 50.9 Contracts not designated as hedges: Euro $ 289.0 Canadian dollar 110.3 British pound 78.1 Indian rupee 61.0 Mexican peso 52.3 Japanese yen 37.7 Australian dollar 35.2 Brazilian real 32.5 Other (a) 145.6 (a) Comprised of exposures to various currencies; none of these individual currency exposures is greater than $25 million. |
Schedule of fair value of derivatives | The following table summarizes the fair value of derivatives reported in the Company’s Consolidated Balance Sheets as of December 31, 2020 and 2019 (in millions): Derivative Assets Derivative Liabilities Fair Value Fair Value Balance Sheet December 31, December 31, Balance Sheet December 31, December 31, Location 2020 2019 Location 2020 2019 Derivatives designated as hedges: Foreign currency cash flow hedges Other assets $ 9.1 $ 21.0 Other liabilities $ 24.9 $ 4.8 Interest rate cash flow hedges Other assets — — Other liabilities 0.1 — Total derivatives designated as hedges $ 9.1 $ 21.0 $ 25.0 $ 4.8 Derivatives not designated as hedges: Business Solutions operations - foreign currency (a) Other assets $ 441.4 $ 182.0 Other liabilities $ 402.5 $ 151.0 Foreign currency Other assets 2.8 1.5 Other liabilities 2.8 3.7 Total derivatives not designated as hedges $ 444.2 $ 183.5 $ 405.3 $ 154.7 Total derivatives $ 453.3 $ 204.5 $ 430.3 $ 159.5 (a) In many circumstances, the Company allows its Business Solutions customers to settle part or all of their derivative contracts prior to maturity. However, the offsetting positions originally entered into with financial institution counterparties do not allow for similar settlement. To mitigate this, additional foreign currency contracts are entered into with financial institution counterparties to offset the original economic hedge contracts. This frequently results in changes in the Company’s derivative assets and liabilities that may not directly align with the performance in the underlying derivatives business. |
Schedule of gross and net fair value of derivative assets | The following tables summarize the gross and net fair value of derivative assets and liabilities as of December 31, 2020 and 2019 (in millions): Offsetting of Derivative Assets Gross Net Amounts Derivatives Gross Amounts Offset Presented Not Offset Amounts of in the in the in the Recognized Consolidated Consolidated Consolidated December 31, 2020 Assets Balance Sheets Balance Sheets Balance Sheets Net Amounts Derivatives subject to a master netting arrangement or similar agreement $ 165.1 $ — $ 165.1 $ (155.1) $ 10.0 Derivatives that are not or may not be subject to master netting arrangement or similar agreement 288.2 Total $ 453.3 December 31, 2019 Derivatives subject to a master netting arrangement or similar agreement $ 95.3 $ — $ 95.3 $ (74.7) $ 20.6 Derivatives that are not or may not be subject to master netting arrangement or similar agreement 109.2 Total $ 204.5 |
Schedule of gross and net fair value of derivative liabilities | Offsetting of Derivative Liabilities Gross Net Amounts Derivatives Gross Amounts Offset Presented Not Offset Amounts of in the in the in the Recognized Consolidated Consolidated Consolidated December 31, 2020 Liabilities Balance Sheets Balance Sheets Balance Sheets Net Amounts Derivatives subject to a master netting arrangement or similar agreement $ 356.2 $ — $ 356.2 $ (155.1) $ 201.1 Derivatives that are not or may not be subject to master netting arrangement or similar agreement 74.1 Total $ 430.3 December 31, 2019 Derivatives subject to a master netting arrangement or similar agreement $ 121.8 $ — $ 121.8 $ (74.7) $ 47.1 Derivatives that are not or may not be subject to master netting arrangement or similar agreement 37.7 Total $ 159.5 |
Schedule of amount and location of gains/(losses) from hedging activities | The following table presents the pre-tax amount of unrealized gains/(losses) recognized in other comprehensive income from cash flow hedges for the years ended December 31, 2020, 2019, and 2018 (in millions): Year Ended December 31, 2020 2019 2018 Foreign currency derivatives (a) $ (26.3) $ 2.0 $ 35.6 Interest rate derivatives (0.1) — — (a) For the years ended December 31, 2020, 2019, and 2018, gains/(losses) of $0.3 million, $1.5 million, and $0.1 million, respectively, represent amounts excluded from the assessment of effectiveness that were recognized in other comprehensive income, for which an amortization approach is applied. The following table presents the location and amount of pre-tax net gains/(losses) from fair value and cash flow hedging relationships recognized in the Consolidated Statements of Income for the years ended December 31, 2020, 2019, and 2018 (in millions): 2020 2019 2018 Interest Interest Interest Revenues Expense Revenues Expense Revenues Expense Total amounts presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded $ 4,835.0 $ (118.5) $ 5,292.1 $ (152.0) $ 5,589.9 $ (149.6) The effects of fair value and cash flow hedging: Gain/(loss) on fair value hedges: Interest rate derivatives: Hedged items — — — (0.1) — 0.6 Derivatives designated as hedging instruments — — — 1.0 — (1.6) Gain/(loss) on cash flow hedges: Foreign currency derivatives: Gains/(losses) reclassified from AOCL into earnings 1.2 — 14.2 — (14.9) — Amount excluded from effectiveness testing recognized in earnings based on an amortization approach 10.4 — 11.5 — 4.3 — Amount excluded from effectiveness testing recognized in earnings based on changes in fair value — — 2.9 — 7.5 — Interest rate derivatives: Losses reclassified from AOCL into earnings — (0.6) — — — (2.1) Undesignated Hedges The following table presents the location and amount of pre-tax net gains/(losses) from undesignated hedges in the Consolidated Statements of Income on derivatives for the years ended December 31, 2020, 2019, and 2018 (in millions): December 31, Derivatives (a) Location 2020 2019 2018 Foreign currency derivatives (b) Selling, general, and administrative $ 15.9 $ 23.9 $ 58.6 Foreign currency derivatives Revenues — 0.3 3.0 Foreign currency derivatives (c) Other income, net — — (1.8) Total gain $ 15.9 $ 24.2 $ 59.8 (a) 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. (b) 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, cash balances, and other assets and liabilities, not including amounts related to derivative activity as displayed above, and included in Selling, general, and administrative in the Consolidated Statements of Income, were $(37.0) million, $(33.1) million, and $(52.3) million for the years ended December 31, 2020, 2019, and 2018, respectively. (c) All derivative contracts executed in the Company’s revenue hedging program prior to January 1, 2018 are not designated as hedges in the final month of the contract. The change in fair value in this final month was recorded to Revenues for the year ended December 31, 2018. The amount recorded to Other income, net for the year ended December 31, 2018 relates to losses on certain undesignated foreign currency derivative contracts that were recognized after the Company determined that certain forecasted transactions were no longer probable of occurring. |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Borrowings | |
Schedule of outstanding borrowings | The Company’s outstanding borrowings consisted of the following (in millions): December 31, 2020 December 31, 2019 Commercial paper $ 80.0 $ 245.0 Notes: 3.600% notes due 2022 (a) 500.0 500.0 4.250% notes due 2023 (a) 300.0 300.0 2.850% notes due 2025 (a) 500.0 500.0 6.200% notes due 2036 (a) 500.0 500.0 6.200% notes due 2040 (a) 250.0 250.0 Term loan facility borrowing (effective rate of 1.4%) 950.0 950.0 Total borrowings at par value 3,080.0 3,245.0 Debt issuance costs and unamortized discount, net (12.8) (15.7) Total borrowings at carrying value (b) $ 3,067.2 $ 3,229.3 (a) The difference between the stated interest rate and the effective interest rate is not significant. (b) As of December 31, 2020, the Company’s weighted-average effective rate on total borrowings was approximately 3.5% . |
Schedule of maturities of borrowings | The following summarizes the Company’s maturities of notes and term loan at par value as of December 31, 2020 (in millions): Due within 1 year $ 47.5 Due after 1 year through 2 years 547.5 Due after 2 years through 3 years 395.0 Due after 3 years through 4 years 760.0 Due after 4 years through 5 years 500.0 Due after 5 years 750.0 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock-Based Compensation Plans | |
Schedule of stock option activity | A summary of stock option activity for the year ended December 31, 2020 was as follows (options and aggregate intrinsic value in millions): Weighted-Average Remaining Aggregate Weighted-Average Contractual Term Intrinsic Options Exercise Price (Years) Value Outstanding as of January 1 4.5 $ 18.31 Granted 0.5 $ 26.20 Exercised (0.1) $ 18.76 Cancelled/forfeited — $ — Outstanding as of December 31 4.9 $ 19.11 5.4 $ 15.9 Options exercisable as of December 31 3.7 $ 18.38 4.6 $ 13.6 |
Schedule of restricted stock units and performance-based restricted stock units activity | A summary of activity for restricted stock units and performance-based restricted stock units for the year ended December 31, 2020 was as follows (units in millions): Weighted-Average Units Grant-Date Fair Value Non-vested as of January 1 7.1 $ 17.92 Granted 2.8 $ 25.35 Vested (2.4) $ 17.86 Forfeited (0.6) $ 18.83 Non-vested as of December 31 6.9 $ 20.88 |
Schedule of 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 deferred stock units for the years ended December 31, 2020, 2019, and 2018 (in millions, except per share data): 2020 2019 2018 Stock-based compensation expense $ (41.7) $ (48.9) $ (47.7) Income tax benefit from stock-based compensation expense 6.9 8.5 8.3 Net income impact $ (34.8) $ (40.4) $ (39.4) Earnings per share impact: Basic and diluted $ (0.08) $ (0.09) $ (0.09) |
Schedule of 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 for the years ended December 31, 2020, 2019, and 2018: 2020 2019 2018 Stock options granted: Weighted-average risk-free interest rate 1.5 % 2.5 % 2.8 % Weighted-average dividend yield 4.0 % 4.2 % 3.9 % Volatility 25.2 % 22.8 % 26.3 % Expected term (in years) 7.12 7.05 6.05 Weighted-average grant date fair value $ 3.96 $ 2.56 $ 3.66 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segments | |
Schedule of segment results | The following tables present the Company’s segment results for the years ended December 31, 2020, 2019, and 2018 (in millions): Year Ended December 31, 2020 2019 2018 Revenues: Consumer-to-Consumer $ 4,220.0 $ 4,407.8 $ 4,453.6 Business Solutions 356.1 388.8 386.8 Other (a) 258.9 495.5 749.5 Total consolidated revenues $ 4,835.0 $ 5,292.1 $ 5,589.9 Operating income: Consumer-to-Consumer $ 924.7 $ 975.4 $ 1,048.2 Business Solutions 24.4 46.8 23.4 Other (a) 55.0 27.3 50.5 Total segment operating income (b) 1,004.1 1,049.5 1,122.1 Restructuring-related expenses (Note 4) (36.8) (115.5) — Total consolidated operating income $ 967.3 $ 934.0 $ 1,122.1 (a) Other primarily consists of the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations. In May 2019, the Company sold a substantial majority of its United States based electronic bill payments services, as discussed in Note 5. Speedpay revenues included in the Company’s results were $125.4 million and $352.0 million for the years ended December 31, 2019 and 2018, respectively. Speedpay direct operating expenses were $98.2 million and $251.2 million for the years ended December 31, 2019 and 2018, respectively. Paymap revenues included in the Company’s results were $5.3 million and $16.2 million for the years ended December 31, 2019 and 2018, respectively. Paymap direct operating expenses were $2.2 million and $6.7 million for the years ended December 31, 2019 and 2018, respectively. (b) In the first quarter of 2020, the Company changed its expense allocation method so that its corporate data center and network engineering information technology expenses are allocated based on a percentage of relative revenue. In 2019, these costs had been allocated based in part on a percentage of relative transactions. The Company believes that an allocation method based fully on relative revenue presents a more representative view of segment profitability, as certain of the Company’s services, particularly some of its bill payment services and its money order services, have much lower revenues per transaction than the Company’s other services. Further, these technology expenses are becoming increasingly based on data storage utilized and less based on the number of transactions processed. For the year ended December 31, 2019, this change would have decreased Consumer-to-Consumer operating income and increased Other operating income by $49.6 million. Business Solutions was not materially impacted by the change in the allocation method. Year Ended December 31, 2020 2019 2018 Depreciation and amortization: Consumer-to-Consumer $ 178.5 $ 194.5 $ 189.9 Business Solutions 36.1 39.6 41.9 Other 11.0 23.6 32.9 Total consolidated depreciation and amortization $ 225.6 $ 257.7 $ 264.7 Capital expenditures: Consumer-to-Consumer $ 133.5 $ 97.0 $ 273.8 Business Solutions 10.3 7.7 11.9 Other 13.0 23.0 53.3 Total capital expenditures $ 156.8 $ 127.7 $ 339.0 |
Schedule of revenue and long-lived assets by geographic areas | Information concerning principal geographic areas was as follows (in millions): Year Ended December 31, 2020 2019 2018 Revenue: United States $ 1,678.4 $ 1,896.1 $ 2,126.2 International 3,156.6 3,396.0 3,463.7 Total $ 4,835.0 $ 5,292.1 $ 5,589.9 Long-lived assets: United States (a) $ 100.4 $ 173.7 $ 207.4 International 50.0 62.5 63.0 Total $ 150.4 $ 236.2 $ 270.4 (a) Assets held for sale of $49.3 million, which primarily consisted of the Company’s former headquarters, were included in Other assets as of December 31, 2019 in the Company’s Consolidated Balance Sheets. In 2020, the Company sold its former corporate headquarters and other property and recorded an immaterial gain on the sales. |
Business and Basis of Present_2
Business and Basis of Presentation - Narrative (Details) $ in Millions | Dec. 31, 2020USD ($)item |
Business and Basis of Presentation | |
Number of countries and territories where services are primarily available through a network of agent locations (more than) | item | 200 |
Net assets subject to limitations | $ | $ 680 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Diluted Weighted-Average Shares Outstanding (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings/(Loss) Per Share | |||
Outstanding options to purchase shares of stock excluded from the diluted earnings per share calculation | 1.6 | 1.9 | 2.6 |
Calculation of diluted weighted-average shares outstanding | |||
Basic weighted-average shares outstanding | 412.3 | 427.6 | 451.8 |
Common stock equivalents | 2.9 | 3.3 | 2.6 |
Diluted weighted-average shares outstanding | 415.2 | 430.9 | 454.4 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment | |||
Property and equipment, gross | $ 810.3 | $ 803.4 | |
Accumulated depreciation | (659.9) | (616.5) | |
Property and equipment, net | 150.4 | 186.9 | |
Assets held for sale | 49.3 | ||
Depreciation of Property and Equipment | |||
Depreciation | 61.3 | 79.6 | $ 76.9 |
Equipment | |||
Property and Equipment | |||
Property and equipment, gross | 608.9 | 591.4 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | $ 153.3 | 159.2 | |
Buildings | |||
Property and Equipment | |||
Property and equipment useful life | 30 years | ||
Property and Equipment | |||
Property and equipment, gross | $ 0.4 | 0.4 | |
Furniture and fixtures | |||
Property and Equipment | |||
Property and equipment, gross | 45.4 | 49.4 | |
Projects in process | |||
Property and Equipment | |||
Property and equipment, gross | $ 2.3 | $ 3 | |
Minimum | Equipment | |||
Property and Equipment | |||
Property and equipment useful life | 3 years | ||
Minimum | Furniture and fixtures | |||
Property and Equipment | |||
Property and equipment useful life | 3 years | ||
Maximum | Equipment | |||
Property and Equipment | |||
Property and equipment useful life | 10 years | ||
Maximum | Furniture and fixtures | |||
Property and Equipment | |||
Property and equipment useful life | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill | |||
Goodwill impairment charge | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Components of Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Intangible Assets | |||
Amortization expense | $ 164.3 | $ 178.1 | $ 187.8 |
Initial Cost | 1,549.6 | 1,456.4 | |
Net of Accumulated Amortization | 505 | 494.9 | |
Estimated future aggregate amortization expense | |||
Estimated future aggregate amortization expense, 2021 | 148.5 | ||
Estimated future aggregate amortization expense, 2022 | 106.8 | ||
Estimated future aggregate amortization expense, 2023 | 78.8 | ||
Estimated future aggregate amortization expense, 2024 | 61.4 | ||
Estimated future aggregate amortization expense, 2025 | 35.1 | ||
Estimated future aggregate amortization expense, thereafter | 20.7 | ||
Capitalized contract costs | |||
Other Intangible Assets | |||
Initial Cost | 574.4 | 510.3 | |
Net of Accumulated Amortization | 308 | 271.7 | |
Acquired contracts | |||
Other Intangible Assets | |||
Initial Cost | 561.7 | 584.2 | |
Net of Accumulated Amortization | 75.8 | 124.1 | |
Internal use software | |||
Other Intangible Assets | |||
Initial Cost | 310.3 | 281.2 | |
Net of Accumulated Amortization | 55.5 | 54.7 | |
Acquired trademarks | |||
Other Intangible Assets | |||
Initial Cost | 30.1 | 30.1 | |
Net of Accumulated Amortization | 12 | 13.2 | |
Other intangibles | |||
Other Intangible Assets | |||
Initial Cost | 19.4 | 19.4 | |
Projects in process | |||
Other Intangible Assets | |||
Initial Cost | 53.7 | 31.2 | |
Net of Accumulated Amortization | $ 53.7 | $ 31.2 | |
Minimum | Internal use software | |||
Other Intangible Assets | |||
Amortization period of intangible assets | 3 years | ||
Maximum | Internal use software | |||
Other Intangible Assets | |||
Amortization period of intangible assets | 7 years | ||
Weighted Average | |||
Other Intangible Assets | |||
Amortization period of intangible assets | 8 years | ||
Weighted Average | Capitalized contract costs | |||
Other Intangible Assets | |||
Amortization period of intangible assets | 6 years 1 month 6 days | ||
Weighted Average | Acquired contracts | |||
Other Intangible Assets | |||
Amortization period of intangible assets | 11 years 7 months 6 days | ||
Weighted Average | Internal use software | |||
Other Intangible Assets | |||
Amortization period of intangible assets | 3 years 8 months 12 days | ||
Weighted Average | Acquired trademarks | |||
Other Intangible Assets | |||
Amortization period of intangible assets | 25 years 4 months 24 days | ||
Weighted Average | Other intangibles | |||
Other Intangible Assets | |||
Amortization period of intangible assets | 4 years 3 months 18 days |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Advertising Costs | |||
Advertising costs | $ 177 | $ 209.1 | $ 180.9 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Derivatives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | Uncollected settlement assets and obligations | |
Derivatives | |
Derivative contracts maturity range | 2 days |
Maximum | Uncollected settlement assets and obligations | |
Derivatives | |
Derivative contracts maturity range | 1 month |
Maximum | Foreign currency denominated cash and other asset and other liability positions | |
Derivatives | |
Derivative contracts maturity range | 1 year |
Business Solutions | Maximum | Cross Currency | |
Derivatives | |
Derivative contracts maturity range | 1 year |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2020 | |
Recently Adopted Accounting Pronouncements | ||
Reclassification of Tax Act effects into Accumulated Deficit | $ 31.4 | |
ASU 2016-13 | ||
Recently Adopted Accounting Pronouncements | ||
Change in accounting principle due to adopted Accounting Standards Update | true | |
Transition option elected | wu:AccountingStandardsUpdate201613CumulativeEffectPeriodOfAdoptionMember | |
ASU 2016-02 | ||
Recently Adopted Accounting Pronouncements | ||
Change in accounting principle due to adopted Accounting Standards Update | true | |
Practical expedients related to Lease disclosures | true | |
Transition option elected | us-gaap:AccountingStandardsUpdate201602CumulativeEffectPeriodOfAdoptionMember | |
ASU 2014-09 | ||
Recently Adopted Accounting Pronouncements | ||
Change in accounting principle due to adopted Accounting Standards Update | true | |
Transition option elected | us-gaap:AccountingStandardsUpdate201409CumulativeEffectPeriodOfAdoptionMember | |
ASU 2018-02 | ||
Recently Adopted Accounting Pronouncements | ||
Change in accounting principle due to adopted Accounting Standards Update | true |
Revenue - Narrative - (Details)
Revenue - Narrative - (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Revenue | |||
Revenues from contracts with customers | $ | $ 4,625.1 | $ 5,033.2 | $ 5,382.6 |
Consumer money transfers | |||
Revenue | |||
Revenues from contracts with customers | $ | $ 4,133 | 4,304.3 | 4,384 |
Number of performance obligations | item | 1 | ||
Number of integrated services involved in a transaction | item | 1 | ||
Consumer bill payments | |||
Revenue | |||
Revenues from contracts with customers | $ | $ 156.3 | $ 357.5 | $ 621.5 |
Number of integrated services involved in a transaction | item | 1 |
Revenue - Disaggregation of rev
Revenue - Disaggregation of revenue - (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | |||
Revenues from contracts with customers | $ 4,625.1 | $ 5,033.2 | $ 5,382.6 |
Other revenues | 209.9 | 258.9 | 207.3 |
Revenues | 4,835 | 5,292.1 | 5,589.9 |
Consumer money transfers | |||
Revenue | |||
Revenues from contracts with customers | 4,133 | 4,304.3 | 4,384 |
Other revenues | 87 | 103.5 | 69.6 |
Revenues | 4,220 | 4,407.8 | 4,453.6 |
Foreign exchange and payment services | |||
Revenue | |||
Revenues from contracts with customers | 269.1 | 296.1 | 302.1 |
Other revenues | 87 | 92.7 | 84.7 |
Revenues | 356.1 | 388.8 | 386.8 |
Consumer bill payments | |||
Revenue | |||
Revenues from contracts with customers | 156.3 | 357.5 | 621.5 |
Other revenues | 14 | 37.3 | 30.8 |
Revenues | 170.3 | 394.8 | 652.3 |
Other services | |||
Revenue | |||
Revenues from contracts with customers | 66.7 | 75.3 | 75 |
Other revenues | 21.9 | 25.4 | 22.2 |
Revenues | 88.6 | 100.7 | 97.2 |
Other services | Speedpay | Divestitures | |||
Revenue | |||
Revenues | 125.4 | 352 | |
North America | |||
Revenue | |||
Revenues from contracts with customers | 1,821.2 | 2,027.8 | 2,251.2 |
North America | Consumer money transfers | |||
Revenue | |||
Revenues from contracts with customers | 1,605.5 | 1,653.5 | 1,632.3 |
North America | Foreign exchange and payment services | |||
Revenue | |||
Revenues from contracts with customers | 83.6 | 95.4 | 97.6 |
North America | Consumer bill payments | |||
Revenue | |||
Revenues from contracts with customers | 75.1 | 223 | 463.9 |
North America | Other services | |||
Revenue | |||
Revenues from contracts with customers | 57 | 55.9 | 57.4 |
Europe and Russia/CIS | |||
Revenue | |||
Revenues from contracts with customers | 1,456.5 | 1,484.5 | 1,536.5 |
Europe and Russia/CIS | Consumer money transfers | |||
Revenue | |||
Revenues from contracts with customers | 1,330 | 1,350.1 | 1,399.5 |
Europe and Russia/CIS | Foreign exchange and payment services | |||
Revenue | |||
Revenues from contracts with customers | 121.1 | 127.1 | 130 |
Europe and Russia/CIS | Consumer bill payments | |||
Revenue | |||
Revenues from contracts with customers | 3.6 | 3.2 | 3.1 |
Europe and Russia/CIS | Other services | |||
Revenue | |||
Revenues from contracts with customers | 1.8 | 4.1 | 3.9 |
Middle East, Africa, and South Asia | |||
Revenue | |||
Revenues from contracts with customers | 631.9 | 644.2 | 656.2 |
Middle East, Africa, and South Asia | Consumer money transfers | |||
Revenue | |||
Revenues from contracts with customers | 630 | 642 | 654.4 |
Middle East, Africa, and South Asia | Foreign exchange and payment services | |||
Revenue | |||
Revenues from contracts with customers | 1.5 | 1.8 | 1.5 |
Middle East, Africa, and South Asia | Consumer bill payments | |||
Revenue | |||
Revenues from contracts with customers | 0.4 | 0.4 | 0.3 |
Latin America and the Caribbean | |||
Revenue | |||
Revenues from contracts with customers | 396.2 | 543.3 | 562.7 |
Latin America and the Caribbean | Consumer money transfers | |||
Revenue | |||
Revenues from contracts with customers | 310.1 | 395.2 | 393.2 |
Latin America and the Caribbean | Foreign exchange and payment services | |||
Revenue | |||
Revenues from contracts with customers | 2.4 | 3.4 | 3.1 |
Latin America and the Caribbean | Consumer bill payments | |||
Revenue | |||
Revenues from contracts with customers | 75.8 | 129.4 | 152.7 |
Latin America and the Caribbean | Other services | |||
Revenue | |||
Revenues from contracts with customers | 7.9 | 15.3 | 13.7 |
East Asia and Oceania | |||
Revenue | |||
Revenues from contracts with customers | 319.3 | 333.4 | 376 |
East Asia and Oceania | Consumer money transfers | |||
Revenue | |||
Revenues from contracts with customers | 257.4 | 263.5 | 304.6 |
East Asia and Oceania | Foreign exchange and payment services | |||
Revenue | |||
Revenues from contracts with customers | 60.5 | 68.4 | 69.9 |
East Asia and Oceania | Consumer bill payments | |||
Revenue | |||
Revenues from contracts with customers | $ 1.4 | $ 1.5 | $ 1.5 |
Restructuring-Related Expense_2
Restructuring-Related Expenses - Accruals (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | |
Summary of activity for expenses related to the restructuring accruals | |||
Beginning balance | $ 73.3 | ||
Expenses | 36.8 | $ 115.5 | $ 152.3 |
Cash payments | (82.7) | (38.2) | |
Non-cash benefits/(charges) | (1.2) | (4) | |
Ending balance | 26.2 | 73.3 | 26.2 |
Severance and Related Employee Benefits | |||
Summary of activity for expenses related to the restructuring accruals | |||
Beginning balance | 71.2 | ||
Expenses | 11.8 | 98 | 109.8 |
Cash payments | (58.7) | (28.6) | |
Non-cash benefits/(charges) | 0.6 | 1.8 | |
Ending balance | 24.9 | 71.2 | 24.9 |
Facility Relocations and Closures, Consulting, and Other | |||
Summary of activity for expenses related to the restructuring accruals | |||
Beginning balance | 2.1 | ||
Expenses | 25 | 17.5 | 42.5 |
Cash payments | (24) | (9.6) | |
Non-cash benefits/(charges) | (1.8) | (5.8) | |
Ending balance | $ 1.3 | $ 2.1 | $ 1.3 |
Restructuring-Related Expense_3
Restructuring-Related Expenses - Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | |
Restructuring-related expenses | |||
Expenses | $ 36.8 | $ 115.5 | $ 152.3 |
Total expenses, net of tax | 31.5 | 90 | |
Cost of services | |||
Restructuring-related expenses | |||
Expenses | 4.5 | 39.8 | |
Selling, general and administrative | |||
Restructuring-related expenses | |||
Expenses | $ 32.3 | $ 75.7 |
Divestitures, Acquisitions, a_3
Divestitures, Acquisitions, and Goodwill - Divestitures (Details) - USD ($) $ in Millions | May 09, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Divestitures and Assets Held For Sale | |||
Gain on sale | $ 524.6 | ||
Speedpay | Divestitures | |||
Divestitures and Assets Held For Sale | |||
Consideration from sale of business | $ 750 | ||
Speedpay | Divestitures | Other services | |||
Divestitures and Assets Held For Sale | |||
Gain on sale | $ 523 | ||
Revenues | 125.4 | $ 352 | |
Operating expenses | $ 98.2 | $ 251.2 |
Divestitures, Acquisitions, a_4
Divestitures, Acquisitions, and Goodwill - Investment in Saudi Digital Payments Company (Details) - Saudi Digital Payments Company $ in Millions | Nov. 21, 2020USD ($) |
First Tranche | |
Investment in Saudi Digital Payments Company | |
Investment in Saudi Digital Payments Company | $ 133 |
Investment (as a percent) | 10.00% |
Second Tranche | |
Investment in Saudi Digital Payments Company | |
Investment in Saudi Digital Payments Company | $ 67 |
Investment (as a percent) | 5.00% |
Divestitures, Acquisitions, a_5
Divestitures, Acquisitions, and Goodwill - Changes to Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes to goodwill | ||
Goodwill, beginning balance | $ 2,566.6 | $ 2,725 |
Additions | 0 | |
Divestitures | (158.4) | |
Goodwill, ending balance | 2,566.6 | 2,566.6 |
Consumer-to-Consumer | ||
Changes to goodwill | ||
Goodwill, beginning balance | 1,980.7 | 1,980.7 |
Additions | 0 | |
Divestitures | 0 | |
Goodwill, ending balance | 1,980.7 | 1,980.7 |
Business Solutions | ||
Changes to goodwill | ||
Goodwill, beginning balance | 532 | 532 |
Additions | 0 | |
Divestitures | 0 | |
Goodwill, ending balance | 532 | 532 |
Other | ||
Changes to goodwill | ||
Goodwill, beginning balance | 53.9 | 212.3 |
Additions | 0 | |
Divestitures | (158.4) | |
Goodwill, ending balance | $ 53.9 | $ 53.9 |
Divestitures, Acquisitions, a_6
Divestitures, Acquisitions, and Goodwill - Accumulated Impairment Losses (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Divestitures, Acquisitions, and Goodwill | |||
Goodwill, gross | $ 3,030.6 | $ 3,030.6 | $ 3,189 |
Accumulated impairment losses | (464) | (464) | (464) |
Goodwill, net | $ 2,566.6 | $ 2,566.6 | $ 2,725 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Commitments and Contingencies | |
Letters of credit outstanding and bank guarantees | $ 390 |
Letters of credit renewal option | 1 year |
Delaware Complaint | |
Commitments and Contingencies | |
Period plaintiffs may file an amended complaint | 60 days |
Pending Litigation | |
Commitments and Contingencies | |
Range of possible loss, portion not accrued | $ 30 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions | |||
Commission expense | $ 54.6 | $ 57.1 | $ 57.6 |
Equity Method Investee | |||
Related Party Transactions | |||
Commission expense | $ 54.6 | $ 57.1 | $ 57.6 |
Settlement Assets and Obligat_3
Settlement Assets and Obligations - Settlement Assets and Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Settlement assets: | ||
Cash and cash equivalents | $ 695.7 | $ 368.2 |
Receivables from agents, Business Solutions customers, and others | 1,188.3 | 1,230.1 |
Less: Allowance for credit losses | (53.2) | |
Receivables from agents, Business Solutions customers, and others, net | 1,135.1 | |
Investment securities | 1,990.6 | 1,698.4 |
Total settlement assets | 3,821.4 | 3,296.7 |
Settlement obligations: | ||
Money transfer, money order, and payment service payables | 2,902.9 | 2,571.5 |
Payables to agents | 918.5 | 725.2 |
Total settlement obligations | $ 3,821.4 | $ 3,296.7 |
Settlement Assets and Obligat_4
Settlement Assets and Obligations - Receivables from selling agents and Business Solutions customers (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Receivables | |||
Receivables from agents, Business Solutions customers, and others, net | $ 1,135.1 | ||
Summary of activity in allowance for credit losses | |||
Allowance for credit losses, Ending Balance | 53.2 | ||
Losses from chargebacks or fraud that are not credit-related | 41.3 | ||
Allowance for doubtful accounts | $ 42.2 | ||
Provision for doubtful accounts | 47.1 | $ 43.9 | |
Advances to agents | 135.9 | ||
Receivables from agents and others | |||
Receivables | |||
Receivables from agents, Business Solutions customers, and others, net | 1,081.2 | ||
Summary of activity in allowance for credit losses | |||
Allowance for credit losses, Beginning Balance | 20.4 | ||
Current period provision for expected credit losses | 39.9 | ||
Write-offs charged against the allowance | (11.9) | ||
Recoveries of amounts previously written off | 2.3 | ||
Impacts of foreign currency exchange rates and other | (1.4) | ||
Allowance for credit losses, Ending Balance | 49.3 | 20.4 | |
Receivables from Business Solutions customers | |||
Receivables | |||
Receivables from agents, Business Solutions customers, and others, net | 53.9 | ||
Summary of activity in allowance for credit losses | |||
Allowance for credit losses, Beginning Balance | 4.5 | ||
Current period provision for expected credit losses | 2 | ||
Write-offs charged against the allowance | (3.1) | ||
Impacts of foreign currency exchange rates and other | 0.5 | ||
Allowance for credit losses, Ending Balance | $ 3.9 | $ 4.5 |
Settlement Assets and Obligat_5
Settlement Assets and Obligations - Components of Investment Securities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investment Securities | |||
Variable rate demand notes, maximum maturity year | 2057 | ||
Proceeds from sale and maturity of available-for-sale securities | $ 6,200 | $ 5,400 | $ 7,700 |
Cash and cash equivalents | |||
Amortized Cost | 1,428.2 | 1,450.5 | |
Available-for-sale securities: | |||
Amortized Cost | 1,918.1 | 1,666.8 | |
Fair Value | 1,990.6 | 1,698.4 | |
Gross Unrealized Gains | 72.5 | 32.2 | |
Gross Unrealized Losses | (0.6) | ||
Net Unrealized Gains/ (Losses) | 72.5 | 31.6 | |
Amortized Cost | 1,931.2 | 1,691.4 | |
Fair Value | 2,003.7 | 1,723 | |
Gross Unrealized Gains | 72.5 | 32.2 | |
Gross Unrealized Losses | (0.6) | ||
Net Unrealized Gains/ (Losses) | 72.5 | 31.6 | |
Money market funds | Settlement Assets | |||
Cash and cash equivalents | |||
Amortized Cost | 13.1 | 24.6 | |
Fair Value | 13.1 | 24.6 | |
State and municipal debt securities | |||
Available-for-sale securities: | |||
Amortized Cost | 1,234.1 | 1,227.4 | |
Fair Value | 1,303.9 | 1,257.8 | |
Gross Unrealized Gains | 69.8 | 31 | |
Gross Unrealized Losses | (0.6) | ||
Net Unrealized Gains/ (Losses) | 69.8 | 30.4 | |
State and municipal variable rate demand notes | |||
Available-for-sale securities: | |||
Amortized Cost | 562.1 | 276.1 | |
Fair Value | 562.1 | 276.1 | |
Corporate and other debt securities | |||
Available-for-sale securities: | |||
Amortized Cost | 71.6 | ||
Fair Value | 72.8 | ||
Gross Unrealized Gains | 1.2 | ||
Net Unrealized Gains/ (Losses) | 1.2 | ||
Corporate debt securities | |||
Available-for-sale securities: | |||
Amortized Cost | 52.3 | ||
Fair Value | 52.4 | ||
Gross Unrealized Gains | 0.1 | ||
Net Unrealized Gains/ (Losses) | 0.1 | ||
United States government agency mortgage-backed securities | |||
Available-for-sale securities: | |||
Amortized Cost | 50.3 | 66.3 | |
Fair Value | 51.8 | 67.2 | |
Gross Unrealized Gains | 1.5 | 0.9 | |
Net Unrealized Gains/ (Losses) | $ 1.5 | 0.9 | |
Other United States government agency debt securities | |||
Available-for-sale securities: | |||
Amortized Cost | 34.9 | ||
Fair Value | 34.9 | ||
United States Treasury securities | |||
Available-for-sale securities: | |||
Amortized Cost | 9.8 | ||
Fair Value | 10 | ||
Gross Unrealized Gains | 0.2 | ||
Net Unrealized Gains/ (Losses) | $ 0.2 |
Settlement Assets and Obligat_6
Settlement Assets and Obligations - Contractual Maturities of Debt Securities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value | ||
Due within 1 year | $ 176.3 | |
Due after 1 year through 5 years | 684.4 | |
Due after 5 years through 10 years | 452.5 | |
Due after 10 years | 677.4 | |
Total | 1,990.6 | $ 1,698.4 |
State and municipal variable rate demand notes | ||
Fair Value | ||
Due after 1 year through 5 years | 15 | |
Due after 5 years through 10 years | 0.9 | |
Due after 10 years | 546.2 | |
Total | $ 562.1 | $ 276.1 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Settlement assets | $ 3,821.4 | $ 3,296.7 |
Derivatives | 453.3 | 204.5 |
Liabilities: | ||
Derivatives | 430.3 | 159.5 |
Recurring | ||
Assets: | ||
Derivatives | 453.3 | 204.5 |
Total assets | 2,457 | 1,927.5 |
Liabilities: | ||
Derivatives | 430.3 | 159.5 |
Total liabilities | 430.3 | 159.5 |
Recurring | Money market funds | ||
Assets: | ||
Settlement assets | 13.1 | 24.6 |
Recurring | State and municipal debt securities | ||
Assets: | ||
Settlement assets | 1,303.9 | 1,257.8 |
Recurring | State and municipal variable rate demand notes | ||
Assets: | ||
Settlement assets | 562.1 | 276.1 |
Recurring | United States government agency mortgage-backed securities | ||
Assets: | ||
Settlement assets | 51.8 | 67.2 |
Recurring | Corporate debt securities | ||
Assets: | ||
Settlement assets | 52.4 | |
Recurring | Corporate and other debt securities | ||
Assets: | ||
Settlement assets | 72.8 | |
Recurring | Other United States government agency debt securities | ||
Assets: | ||
Settlement assets | 34.9 | |
Recurring | United States Treasury securities | ||
Assets: | ||
Settlement assets | 10 | |
Recurring | Level 1 | ||
Assets: | ||
Total assets | 13.1 | 34.6 |
Recurring | Level 1 | Money market funds | ||
Assets: | ||
Settlement assets | 13.1 | 24.6 |
Recurring | Level 1 | United States Treasury securities | ||
Assets: | ||
Settlement assets | 10 | |
Recurring | Level 2 | ||
Assets: | ||
Derivatives | 453.3 | 204.5 |
Total assets | 2,443.9 | 1,892.9 |
Liabilities: | ||
Derivatives | 430.3 | 159.5 |
Total liabilities | 430.3 | 159.5 |
Recurring | Level 2 | State and municipal debt securities | ||
Assets: | ||
Settlement assets | 1,303.9 | 1,257.8 |
Recurring | Level 2 | State and municipal variable rate demand notes | ||
Assets: | ||
Settlement assets | 562.1 | 276.1 |
Recurring | Level 2 | United States government agency mortgage-backed securities | ||
Assets: | ||
Settlement assets | 51.8 | 67.2 |
Recurring | Level 2 | Corporate debt securities | ||
Assets: | ||
Settlement assets | 52.4 | |
Recurring | Level 2 | Corporate and other debt securities | ||
Assets: | ||
Settlement assets | $ 72.8 | |
Recurring | Level 2 | Other United States government agency debt securities | ||
Assets: | ||
Settlement assets | $ 34.9 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value Adjustments | ||
Amount of assets transferred from Level 1 to Level 2 within Fair Value Measurements | $ 0 | $ 0 |
Amount of assets transferred from Level 2 to Level 1 within Fair Value Measurements | 0 | 0 |
Amount of liabilities transferred from Level 1 to Level 2 within Fair Value Measurements | 0 | 0 |
Amount of liabilities transferred from Level 2 to Level 1 within Fair Value Measurements | 0 | 0 |
Carrying Value | ||
Other Fair Value Measurements | ||
Borrowings | 3,067.2 | 3,229.3 |
Level 2 | Fair Value | ||
Other Fair Value Measurements | ||
Borrowings | 3,348 | 3,372.2 |
Non-recurring | ||
Fair Value Adjustments | ||
Non-recurring asset fair value adjustments | 0 | 0 |
Non-recurring liability fair value adjustments | $ 0 | $ 0 |
Other Assets and Other Liabil_3
Other Assets and Other Liabilities - Summary (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Other assets: | ||
Derivatives | $ 453.3 | $ 204.5 |
ROU asset | 189.1 | 199.7 |
Amounts advanced to agents | 135.9 | 96.4 |
Prepaid expenses | 81 | 102.4 |
Prepaid pension costs | 39.9 | |
Equity method investments | 34.5 | 33 |
Other | 91 | 126.9 |
Total other assets | 1,024.7 | 762.9 |
Other liabilities: | ||
Derivatives | 430.3 | 159.5 |
Operating lease liabilities | 234.9 | 242.3 |
Accrued agent contact costs | 77.1 | 16 |
Pension obligations | 11.4 | |
Other | 60.1 | 69.1 |
Total other liabilities | $ 802.4 | 498.3 |
Assets held for sale, net | 49.3 | |
Former Headquarters | ||
Other liabilities: | ||
Assets held for sale, net | $ 49.3 |
Income Taxes - Components of Pr
Income Taxes - Components of Pre-Tax Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of pre-tax income | |||
Domestic | $ 434.7 | $ (11.4) | |
Foreign | $ 855.1 | 886.7 | 1,002.8 |
Income before income taxes | $ 855.1 | $ 1,321.4 | $ 991.4 |
Geographic Concentration Risk | |||
Components of pre-tax income | |||
Percent of pre-tax income derived from foreign sources | 100.00% | 67.00% | 101.00% |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Provision for income taxes | |||
Federal | $ 50.1 | $ 153.7 | $ 62.9 |
State and local | 1.1 | 22.9 | 0.6 |
Foreign | 59.6 | 86.5 | 76 |
Provision for income taxes | $ 110.8 | $ 263.1 | $ 139.5 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rates (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective tax rate reconciliation | |||
Federal statutory rate | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal income tax benefits | 0.50% | 1.40% | 0.40% |
Foreign rate differential, net of United States tax paid on foreign earnings (0.0%, 2.3%, and 1.1%, respectively | (8.30%) | (5.50%) | (8.20%) |
Divestitures | 2.40% | ||
Tax Act impact | 2.3 | ||
Base erosion anti-abuse tax (BEAT) | 3.00% | ||
Lapse of statute of limitations | (0.70%) | (0.50%) | (2.20%) |
Valuation allowances | 0.20% | 0.10% | |
Other | 0.20% | 1.00% | (2.20%) |
Effective tax rate | 12.90% | 19.90% | 14.10% |
US tax paid on foreign earnings | 5.60% | 2.30% | 4.90% |
Income Taxes - Current and Defe
Income Taxes - Current and Deferred Components of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Federal | $ 35.7 | $ 169.4 | $ 69.2 |
State and local | 1.9 | 18.1 | |
Foreign | 59.3 | 100.1 | 85.4 |
Total current taxes | 96.9 | 287.6 | 154.6 |
Deferred: | |||
Federal | 14.4 | (15.7) | (6.3) |
State and local | (0.8) | 4.8 | 0.6 |
Foreign | 0.3 | (13.6) | (9.4) |
Total deferred taxes | 13.9 | (24.5) | (15.1) |
Provision for income taxes | $ 110.8 | $ 263.1 | $ 139.5 |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets related to: | ||
Reserves, accrued expenses and employee-related items | $ 22.9 | $ 38.3 |
Lease liabilities | 23.8 | 28.1 |
Tax attribute carryovers | 30.2 | 31.7 |
Pension obligations | 4 | |
Intangibles, property and equipment | 15.1 | 13.6 |
Other | 8.6 | 5.3 |
Valuation allowance | (18.6) | (19.1) |
Total deferred tax assets | 82 | 101.9 |
Deferred tax liabilities related to: | ||
Intangibles, property and equipment | 218 | 214.8 |
Lease right-of-use assets | 15.8 | 18.7 |
Prepaid pension costs | 7.8 | |
Other | 14.2 | 6.9 |
Total deferred tax liabilities | 255.8 | 240.4 |
Net deferred tax liability | 173.8 | 138.5 |
Other assets | ||
Deferred tax liabilities related to: | ||
Gross deferred tax assets | $ 15.1 | $ 13.6 |
Income Taxes - Tax Act (Details
Income Taxes - Tax Act (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax and Jobs Act of 2017 | ||||
Provisional liability related to accumulated foreign earnings | $ 550 | |||
Deferred Tax Liabilities, Undistributed Foreign Earnings | 604 | $ 800 | ||
Payment of deferred tax liabilities undistributed foreign earnings | $ 64 | $ 64 | $ 64 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Tax Contingency Reserves | |||
Total tax contingency reserve | $ 310.5 | ||
Reconciliation of Unrecognized Tax Benefits | |||
Balance at beginning of period | 293.9 | $ 295 | |
Increase related to current period tax positions | 2.8 | 5.2 | |
Increase related to prior period tax positions | 49.7 | 0.8 | |
Decrease related to prior period tax positions | (1.9) | (1.6) | |
Decrease due to lapse of applicable statute of limitations | (3.2) | (5.3) | |
Decrease due to effects of foreign currency exchange rates | (0.6) | (0.2) | |
Balance at end of period | 340.7 | 293.9 | $ 295 |
Unrecognized Tax Benefits | |||
Unrecognized tax benefits that, if recognized, would affect the effective tax rate | 329.2 | 283.4 | |
Interest and penalties, recognized | 1.9 | 6 | (0.7) |
Interest and penalties, accrued | 28.6 | $ 27.1 | |
Reasonably possible decrease to the Company's total unrecognized tax benefits during the next 12 months | $ 3 | ||
Cash payments made to date as a result of the IRS Agreement | $ 120 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Contribution Plans | ||||
Total expenses | $ 18.4 | $ 20 | $ 20 | |
Defined Benefit Plan | ||||
Fair value of plan assets | 280.6 | 237.1 | ||
Benefit obligation | $ 240.7 | $ 248.5 | ||
Discount rate assumption | 1.66% | 2.66% | ||
Prepaid pension costs | $ 39.9 | |||
Unfunded pension obligations | $ 11.4 | |||
Net Periodic Benefit Cost | ||||
Net periodic benefit cost | 4.4 | 4.1 | $ 3.3 | |
Company contributions to the Plan | 0 | $ 0 | ||
Estimated future company contributions in 2021 | 0 | |||
Estimated Undiscounted Future Benefit Payments | ||||
Expected future benefit payments, 2021 | 25.9 | |||
Expected future benefit payments, 2022 | 24.2 | |||
Expected future benefit payments, 2023 | 22.5 | |||
Expected future benefit payments, 2024 | 20.9 | |||
Expected future benefit payments, 2025 | 19.3 | |||
Expected future benefit payments, 2026 through 2030 | $ 73.9 | |||
Forecast | ||||
Net Periodic Benefit Cost | ||||
Expected long-term return on plan assets assumption | 2.00% |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases | |||
ROU asset | $ 189.1 | $ 199.7 | |
Balance sheet location of ROU asset | us-gaap:OtherAssets | us-gaap:OtherAssets | |
Lease liability | $ 234.9 | $ 242.3 | |
Balance sheet location of lease liability | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities | |
Operating lease costs | $ 59.8 | $ 56.7 | |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Total rent expense under operating leases, net of sublease income | $ 59.5 | ||
Minimum | |||
Leases | |||
Lease terms | 1 year | ||
Maximum | |||
Leases | |||
Lease terms | 10 years | ||
Lease extension terms | 10 years |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Terms and Discount Rate (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted Average Lease Terms and Discount Rates | ||
Weighted average remaining lease term | 7 years 2 months 12 days | 7 years 7 months 6 days |
Weighted average discount rate | 5.60% | 6.50% |
Leases - Maturities (Details)
Leases - Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Maturities of Operating Lease Liabilities | ||
Due within 1 year | $ 51.9 | |
Due after 1 year through 2 years | 44.5 | |
Due after 2 years through 3 years | 37 | |
Due after 3 years through 4 years | 32.6 | |
Due after 4 years through 5 years | 27.7 | |
Due after 5 years | 90.3 | |
Total lease payments | 284 | |
Less imputed interest | (49.1) | |
Operating lease liabilities | $ 234.9 | $ 242.3 |
Stockholders' Equity_(Deficit_2
Stockholders' Equity/(Deficit) - Amounts Reclassified from AOCL (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investment Securities | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, net of tax | $ 0.5 | $ 0.5 | $ (0.3) |
Hedging Activities | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, net of tax | 0.7 | 14.1 | (16.3) |
Defined benefit plans | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, net of tax | (9.4) | (8.4) | (9.1) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, net of tax | (8.2) | 6.2 | (25.7) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Investment Securities | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, Provision for income taxes | (0.1) | (0.1) | 0.1 |
Reclassification from AOCL, net of tax | 0.5 | 0.5 | (0.3) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Investment Securities | Revenue | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, before tax | 0.6 | 0.6 | (0.4) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Hedging Activities | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, Provision for income taxes | 0.1 | (0.1) | 0.7 |
Reclassification from AOCL, net of tax | 0.7 | 14.1 | (16.3) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Hedging Activities | Foreign currency contracts | Revenue | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, before tax | 1.2 | 14.2 | (14.9) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Hedging Activities | Interest rate contracts | Interest Expense | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, before tax | (0.6) | (2.1) | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Defined benefit plans | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, Provision for income taxes | 2.7 | 2.4 | 2.6 |
Reclassification from AOCL, net of tax | (9.4) | (8.4) | (9.1) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Defined benefit plans | Other income, net | |||
Accumulated other comprehensive income (loss) | |||
Reclassification from AOCL, before tax | $ (12.1) | $ (10.8) | $ (11.7) |
Stockholders' Equity_(Deficit_3
Stockholders' Equity/(Deficit) - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | $ (491.4) | $ (39.5) | $ (309.8) | $ (491.4) |
Foreign currency translation adjustments | (19.5) | |||
Reclassification of Tax Act effects into Accumulated deficit | (31.4) | |||
Ending balance | 186.6 | (39.5) | (309.8) | |
Investment Securities | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | 2.7 | 24.7 | (1.1) | 2.7 |
Unrealized gains/(losses) | 41.5 | 33.6 | (5.9) | |
Tax benefit/(expense) | (7.4) | (7.3) | 1.3 | |
Amounts reclassified from AOCL into earnings, net of tax | (0.5) | (0.5) | 0.3 | |
Reclassification of Tax Act effects into Accumulated deficit | 0.5 | |||
Ending balance | 58.3 | 24.7 | (1.1) | |
Hedging Activities | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (40.6) | (3.6) | 7.4 | (40.6) |
Unrealized gains/(losses) | (26.4) | 2 | 35.6 | |
Tax benefit/(expense) | 0.2 | 1.1 | (1.6) | |
Amounts reclassified from AOCL into earnings, net of tax | (0.7) | (14.1) | 16.3 | |
Reclassification of Tax Act effects into Accumulated deficit | (2.3) | |||
Ending balance | (30.5) | (3.6) | 7.4 | |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (76.9) | (101.2) | (101.2) | (76.9) |
Foreign currency translation adjustments | (19.5) | |||
Reclassification of Tax Act effects into Accumulated deficit | (4.8) | |||
Ending balance | (101.2) | (101.2) | (101.2) | |
Defined benefit plans | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (113.1) | (128.9) | (136.1) | (113.1) |
Unrealized gains/(losses) | 43.5 | (2) | (9.3) | |
Tax benefit/(expense) | (10.1) | 0.8 | 2 | |
Amounts reclassified from AOCL into earnings, net of tax | 9.4 | 8.4 | 9.1 | |
Reclassification of Tax Act effects into Accumulated deficit | (24.8) | |||
Ending balance | (86.1) | (128.9) | (136.1) | |
Total AOCL | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | $ (227.9) | (209) | (231) | (227.9) |
Unrealized gains/(losses) | 58.6 | 33.6 | 20.4 | |
Tax benefit/(expense) | (17.3) | (5.4) | 1.7 | |
Amounts reclassified from AOCL into earnings, net of tax | 8.2 | (6.2) | 25.7 | |
Foreign currency translation adjustments | (19.5) | |||
Reclassification of Tax Act effects into Accumulated deficit | (31.4) | |||
Ending balance | $ (159.5) | $ (209) | $ (231) |
Stockholders' Equity_(Deficit_4
Stockholders' Equity/(Deficit) - Cash Dividends Paid (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 10, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash Dividends Paid | ||||||||||||||||
Cash dividends paid | $ 369.9 | $ 340.8 | $ 341.7 | |||||||||||||
Common stock dividends (USD per share) | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.90 | $ 0.80 | $ 0.76 | |
Subsequent Event | ||||||||||||||||
Cash Dividends Paid | ||||||||||||||||
Common stock dividends (USD per share) | $ 0.235 |
Stockholders' Equity_(Deficit_5
Stockholders' Equity/(Deficit) - Share Repurchases (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share Repurchases | |||
Stock repurchased and retired, publicly announced authorizations (shares) | 8.5 | 26.9 | 20.2 |
Stock repurchased and retired, publicly announced authorizations, value excluding commissions | $ 217.4 | $ 540 | $ 399.2 |
Stock repurchased and retired, publicly announced authorizations, average cost per share excluding commissions (USD per share) | $ 25.45 | $ 20.07 | $ 19.81 |
Authorized through December 31, 2021 | |||
Share Repurchases | |||
Remaining amount available under share repurchase authorization through December 31, 2021 | $ 782,600 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) $ in Millions | Dec. 27, 2019USD ($) | Nov. 25, 2019USD ($) | Nov. 15, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)derivative | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Derivatives | |||||||
Accumulated other comprehensive pre-tax gain (loss) to be reclassified into revenue within the next 12 months | $ (18.9) | ||||||
Notes due 2020 | |||||||
Derivatives | |||||||
Repayment of unsecured notes | $ 268.8 | $ 56.1 | $ 324.9 | ||||
Business Solutions | |||||||
Derivatives | |||||||
Foreign exchange revenues | $ 311.9 | $ 343.1 | $ 342.3 | ||||
Interest rate contracts | Notes due 2020 | |||||||
Derivatives | |||||||
Cash payment received for terminated swap agreement | $ 0.9 | ||||||
Cash Flow Hedges | Interest rate contracts | 3.600% notes due 2022 | |||||||
Derivatives | |||||||
Number of derivative instruments held | derivative | 2 | ||||||
Cash Flow Hedges | Interest rate contracts | 3.600% notes due 2022 | Interest Rate Swap Contract 1 | |||||||
Derivatives | |||||||
Notional amounts | $ 100 | ||||||
Cash Flow Hedges | Interest rate contracts | 3.600% notes due 2022 | Interest Rate Swap Contract 2 | |||||||
Derivatives | |||||||
Notional amounts | $ 150 | ||||||
Designated as hedges | Foreign currency contracts | |||||||
Derivatives | |||||||
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 | Foreign currency contracts | Business Solutions | |||||||
Derivatives | |||||||
Notional amounts | $ 7,500 | $ 8,000 | $ 7,500 | ||||
Minimum | Uncollected settlement assets and obligations | |||||||
Derivatives | |||||||
Foreign currency forward contracts maturity range | 2 days | ||||||
Minimum | Not designated as hedges | Uncollected settlement assets and obligations | |||||||
Derivatives | |||||||
Foreign currency forward contracts maturity range | 2 days | ||||||
Maximum | Uncollected settlement assets and obligations | |||||||
Derivatives | |||||||
Foreign currency forward contracts maturity range | 1 month | ||||||
Maximum | Foreign currency denominated cash and other asset and other liability positions | |||||||
Derivatives | |||||||
Foreign currency forward contracts maturity range | 1 year | ||||||
Maximum | Not designated as hedges | Uncollected settlement assets and obligations | |||||||
Derivatives | |||||||
Foreign currency forward contracts maturity range | 1 month | ||||||
Maximum | Not designated as hedges | Foreign currency contracts | Business Solutions | |||||||
Derivatives | |||||||
Foreign currency forward contracts maturity range | 1 year | ||||||
Maximum | Not designated as hedges | Foreign currency denominated cash and other asset and other liability positions | |||||||
Derivatives | |||||||
Foreign currency forward contracts maturity range | 1 year |
Derivatives - Notional Amounts
Derivatives - Notional Amounts of Foreign Currency Forward Contracts (Details) - Foreign currency contracts - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Other | ||
Notional amounts of foreign currency forward contracts | ||
Maximum individual currency exposure within various other currencies | $ 25 | $ 25 |
Designated as hedges | Euro | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 428.9 | 391.9 |
Designated as hedges | Canadian dollar | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 131.9 | 99 |
Designated as hedges | British pound | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 71.9 | 57.2 |
Designated as hedges | Australian dollar | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 58.3 | 36.1 |
Designated as hedges | Japanese yen | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 36.6 | |
Designated as hedges | Swiss franc | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 41.1 | 28.9 |
Designated as hedges | Other | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 29.5 | 50.9 |
Not designated as hedges | Euro | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 533 | 289 |
Not designated as hedges | Canadian dollar | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 71.5 | 110.3 |
Not designated as hedges | British pound | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 153.9 | 78.1 |
Not designated as hedges | Mexican peso | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 105 | 52.3 |
Not designated as hedges | Indian rupee | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 81 | 61 |
Not designated as hedges | Australian dollar | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 68.1 | 35.2 |
Not designated as hedges | Japanese yen | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 39.6 | 37.7 |
Not designated as hedges | Philippine peso | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 35.2 | |
Not designated as hedges | Russian ruble | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 31.2 | |
Not designated as hedges | Indonesian rupiah | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 29.1 | |
Not designated as hedges | Swedish krona | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 26 | |
Not designated as hedges | Brazilian real | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | 32.5 | |
Not designated as hedges | Other | ||
Notional amounts of foreign currency forward contracts | ||
Notional amounts | $ 151.5 | $ 145.6 |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivatives (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value of Derivatives | ||
Derivative Assets | $ 453.3 | $ 204.5 |
Derivative Liabilities | 430.3 | 159.5 |
Designated as hedges | ||
Fair Value of Derivatives | ||
Derivative Assets | 9.1 | 21 |
Derivative Liabilities | 25 | 4.8 |
Designated as hedges | Other assets | Foreign currency contracts | ||
Fair Value of Derivatives | ||
Derivative Assets | 9.1 | 21 |
Designated as hedges | Other liabilities | Interest rate contracts | ||
Fair Value of Derivatives | ||
Derivative Liabilities | 0.1 | |
Designated as hedges | Other liabilities | Foreign currency contracts | ||
Fair Value of Derivatives | ||
Derivative Liabilities | 24.9 | 4.8 |
Not designated as hedges | ||
Fair Value of Derivatives | ||
Derivative Assets | 444.2 | 183.5 |
Derivative Liabilities | 405.3 | 154.7 |
Not designated as hedges | Other assets | Foreign currency contracts | ||
Fair Value of Derivatives | ||
Derivative Assets | 2.8 | 1.5 |
Not designated as hedges | Other liabilities | Foreign currency contracts | ||
Fair Value of Derivatives | ||
Derivative Liabilities | 2.8 | 3.7 |
Not designated as hedges | Business Solutions | Other assets | Foreign currency contracts | ||
Fair Value of Derivatives | ||
Derivative Assets | 441.4 | 182 |
Not designated as hedges | Business Solutions | Other liabilities | Foreign currency contracts | ||
Fair Value of Derivatives | ||
Derivative Liabilities | $ 402.5 | $ 151 |
Derivatives - Gross and Net Fai
Derivatives - Gross and Net Fair Value of Derivative Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | $ 165.1 | $ 95.3 |
Net Amounts Presented in the Consolidated Balance Sheets | 165.1 | 95.3 |
Derivatives Not Offset in the Consolidated Balance Sheets | (155.1) | (74.7) |
Net Amounts | 10 | 20.6 |
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 288.2 | 109.2 |
Total | 453.3 | 204.5 |
Offsetting of Derivative Liabilities | ||
Gross Amounts of Recognized Liabilities | 356.2 | 121.8 |
Net Amounts Presented in the Consolidated Balance Sheets | 356.2 | 121.8 |
Derivatives Not Offset in the Consolidated Balance Sheets | (155.1) | (74.7) |
Net Amounts | 201.1 | 47.1 |
Derivatives that are not or may not be subject to master netting arrangement or similar agreement | 74.1 | 37.7 |
Total | $ 430.3 | $ 159.5 |
Derivatives - Unrealized Gains_
Derivatives - Unrealized Gains/(Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Foreign currency contracts | |||
Derivatives | |||
Gain/(Loss) recognized in OCI | $ (26.3) | $ 2 | $ 35.6 |
Gains/(losses) excluded from effectiveness testing recognized in other comprehensive income | 0.3 | $ 1.5 | $ 0.1 |
Interest rate contracts | |||
Derivatives | |||
Gain/(Loss) recognized in OCI | $ (0.1) |
Derivatives - Gains_(Losses) fr
Derivatives - Gains/(Losses) from Hedging Activities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gains/(Losses) from Derivatives | |||
Revenues | $ 4,835 | $ 5,292.1 | $ 5,589.9 |
Interest expense | (118.5) | (152) | (149.6) |
Fair Value Hedges | Interest rate contracts | Interest Expense | |||
Cash Flow and Fair Value Hedges | |||
Hedged items | (0.1) | 0.6 | |
Derivatives designated as hedging instruments | 1 | (1.6) | |
Cash Flow Hedges | Foreign currency contracts | Revenue | |||
Cash Flow and Fair Value Hedges | |||
Gains/(losses) reclassified from AOCL into earnings | 1.2 | 14.2 | (14.9) |
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach | 10.4 | 11.5 | 4.3 |
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value | $ 2.9 | 7.5 | |
Cash Flow Hedges | Interest rate contracts | Interest Expense | |||
Cash Flow and Fair Value Hedges | |||
Gains/(losses) reclassified from AOCL into earnings | $ (0.6) | $ (2.1) |
Derivatives - Undesignated Hedg
Derivatives - Undesignated Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flow and Fair Value Hedges | |||
Foreign exchange gains/(losses) on settlement assets and obligations, cash balances, and other assets and liabilities | $ (37) | $ (33.1) | $ (52.3) |
Not designated as hedges | |||
Cash Flow and Fair Value Hedges | |||
Gain/(Loss) recognized in Income on Foreign currency derivatives | 15.9 | 24.2 | 59.8 |
Not designated as hedges | Selling, general and administrative | |||
Cash Flow and Fair Value Hedges | |||
Gain/(Loss) recognized in Income on Foreign currency derivatives | $ 15.9 | 23.9 | 58.6 |
Not designated as hedges | Revenue | |||
Cash Flow and Fair Value Hedges | |||
Gain/(Loss) recognized in Income on Foreign currency derivatives | $ 0.3 | 3 | |
Not designated as hedges | Other Income, net | |||
Cash Flow and Fair Value Hedges | |||
Gain/(Loss) recognized in Income on Foreign currency derivatives | $ (1.8) |
Borrowings - Outstanding Borrow
Borrowings - Outstanding Borrowings (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||||||||
Dec. 31, 2020 | Dec. 31, 2019 | Nov. 25, 2019 | Dec. 18, 2018 | Jun. 11, 2018 | Dec. 31, 2017 | Aug. 22, 2017 | Mar. 15, 2017 | Nov. 22, 2013 | Aug. 22, 2011 | Jun. 21, 2010 | Mar. 30, 2010 | Nov. 17, 2006 | |
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 3,080 | $ 3,245 | |||||||||||
Debt issuance costs and unamortized discount, net | (12.8) | (15.7) | |||||||||||
Total borrowings at carrying value | $ 3,067.2 | 3,229.3 | |||||||||||
Weighted-average effective interest rate (as a percent) | 3.50% | ||||||||||||
Revolving credit facility | |||||||||||||
Outstanding Borrowings | |||||||||||||
Maximum borrowing capacity | $ 1,500 | ||||||||||||
Commercial paper | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 80 | 245 | |||||||||||
Maximum days to maturity | 397 days | ||||||||||||
Weighted-average effective interest rate (as a percent) | 0.30% | ||||||||||||
Weighted-average term | 5 days | ||||||||||||
Notes due 2018 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 400 | ||||||||||||
3.350% notes due 2019 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 250 | ||||||||||||
Floating rate notes due 2019 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 250 | ||||||||||||
Notes due 2020 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Stated interest rate (as a percent) | 5.253% | ||||||||||||
3.600% notes due 2022 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 500 | $ 500 | $ 100 | $ 400 | |||||||||
Total borrowings at carrying value | $ 500 | ||||||||||||
Stated interest rate (as a percent) | 3.60% | 3.60% | 3.60% | 3.60% | |||||||||
4.250% notes due 2023 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 300 | $ 300 | $ 300 | ||||||||||
Stated interest rate (as a percent) | 4.25% | 4.25% | 4.25% | ||||||||||
2.850% notes due 2025 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 500 | $ 500 | $ 500 | ||||||||||
Stated interest rate (as a percent) | 2.85% | 2.85% | 2.85% | ||||||||||
6.200% notes due 2036 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 500 | $ 500 | $ 500 | ||||||||||
Stated interest rate (as a percent) | 6.20% | 6.20% | 6.20% | ||||||||||
6.200% notes due 2040 | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 250 | $ 250 | $ 250 | ||||||||||
Stated interest rate (as a percent) | 6.20% | 6.20% | 6.20% | ||||||||||
Term loan facility borrowing (effective rate of 1.4%) | |||||||||||||
Outstanding Borrowings | |||||||||||||
Total borrowings at par value | $ 950 | $ 950 | |||||||||||
Effective interest rate (as a percent) | 1.40% | ||||||||||||
Maximum borrowing capacity | $ 950 |
Borrowings - Maturity Schedule
Borrowings - Maturity Schedule of Borrowings (Details) $ in Millions | Dec. 31, 2020USD ($) |
Borrowings maturities at par value | |
Due within 1 year | $ 47.5 |
Due after 1 year through 2 years | 547.5 |
Due after 2 years through 3 years | 395 |
Due after 3 years through 4 years | 760 |
Due after 4 years through 5 years | 500 |
Due after 5 years | $ 750 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) $ in Thousands | Dec. 27, 2019 | Nov. 25, 2019 | Aug. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 18, 2018 | Jun. 11, 2018 | Dec. 31, 2017 | Mar. 15, 2017 | Oct. 31, 2016 | Nov. 22, 2013 | Aug. 22, 2011 | Jun. 21, 2010 | Mar. 30, 2010 | Nov. 17, 2006 |
Long-term and Short-term Debt Instruments | |||||||||||||||||
Weighted-average effective interest rate (as a percent) | 3.50% | ||||||||||||||||
Total borrowings at par value | $ 3,245,000 | $ 3,080,000 | $ 3,245,000 | ||||||||||||||
Repayment of long-term debt | 824,900 | $ 414,400 | |||||||||||||||
Commercial paper | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Threshold over which Commercial Paper Program limit will be reduced for borrowings on Revolving Credit Facility | $ 1,500,000 | ||||||||||||||||
Maximum days to maturity | 397 days | ||||||||||||||||
Weighted-average effective interest rate (as a percent) | 0.30% | ||||||||||||||||
Weighted-average term | 5 days | ||||||||||||||||
Total borrowings at par value | 245,000 | $ 80,000 | 245,000 | ||||||||||||||
Revolving credit facility | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Maximum borrowing capacity | $ 1,500,000 | ||||||||||||||||
EBITDA interest coverage ratio | 3 | ||||||||||||||||
Interest rate margin on revolving credit facility (as a percent) | 1.10% | ||||||||||||||||
Facility fee (as a percent) | 0.15% | ||||||||||||||||
Revolver balance outstanding at the end of period | 0 | $ 0 | 0 | ||||||||||||||
Letter of credit sub-facility | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Maximum borrowing capacity | 250,000 | ||||||||||||||||
Term loan facility borrowing (effective rate of 1.4%) | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | 950,000 | $ 950,000 | 950,000 | ||||||||||||||
Maximum borrowing capacity | $ 950,000 | ||||||||||||||||
EBITDA interest coverage ratio | 3 | ||||||||||||||||
Outstanding borrowings under term loan facility | $ 575,000 | ||||||||||||||||
Term loan facility, interest rate margin (as a percent) | 1.25% | ||||||||||||||||
Repayment of long-term debt | $ 14,400 | ||||||||||||||||
Effective interest rate (as a percent) | 1.40% | ||||||||||||||||
2.850% notes due 2025 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | $ 500,000 | $ 500,000 | $ 500,000 | $ 500,000 | |||||||||||||
Stated interest rate (as a percent) | 2.85% | 2.85% | 2.85% | 2.85% | |||||||||||||
Premium on early redemptions (as a percent) | 0.20% | ||||||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||||
2.850% notes due 2025 | Maximum | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Effective interest rate (as a percent) | 4.85% | ||||||||||||||||
2.850% notes due 2025 | Minimum | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Effective interest rate (as a percent) | 2.85% | ||||||||||||||||
4.250% notes due 2023 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | $ 300,000 | $ 300,000 | $ 300,000 | $ 300,000 | |||||||||||||
Stated interest rate (as a percent) | 4.25% | 4.25% | 4.25% | 4.25% | |||||||||||||
Premium on early redemptions (as a percent) | 0.25% | ||||||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||||
4.250% notes due 2023 | Maximum | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Effective interest rate (as a percent) | 6.25% | ||||||||||||||||
4.250% notes due 2023 | Minimum | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Effective interest rate (as a percent) | 4.25% | ||||||||||||||||
Floating rate notes due 2019 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | $ 250,000 | ||||||||||||||||
3.600% notes due 2022 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | $ 100,000 | $ 500,000 | $ 500,000 | $ 500,000 | $ 400,000 | ||||||||||||
Stated interest rate (as a percent) | 3.60% | 3.60% | 3.60% | 3.60% | 3.60% | ||||||||||||
Redemption price (as a percent) | 101.783% | ||||||||||||||||
Accrued interest received upon issuance | $ 1,570 | ||||||||||||||||
Premium on early redemptions (as a percent) | 0.25% | ||||||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||||
3.600% notes due 2022 | Maximum | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Effective interest rate (as a percent) | 5.60% | ||||||||||||||||
3.600% notes due 2022 | Minimum | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Effective interest rate (as a percent) | 3.60% | ||||||||||||||||
3.350% notes due 2019 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | $ 250,000 | ||||||||||||||||
Notes due 2018 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | $ 400,000 | ||||||||||||||||
6.200% notes due 2040 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 | |||||||||||||
Stated interest rate (as a percent) | 6.20% | 6.20% | 6.20% | 6.20% | |||||||||||||
Premium on early redemptions (as a percent) | 0.30% | ||||||||||||||||
Repurchase provisions, percentage of principal | 101.00% | ||||||||||||||||
Notes due 2020 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Stated interest rate (as a percent) | 5.253% | ||||||||||||||||
Repayment of unsecured notes | $ 268,800 | $ 56,100 | $ 324,900 | ||||||||||||||
Debt instrument, original face amount | $ 303,700 | ||||||||||||||||
Unamortized premium of debt instrument | $ 21,200 | ||||||||||||||||
Premium given to note holders (as a percent) | 7.00% | ||||||||||||||||
Total premium paid to redeem | $ 3,100 | ||||||||||||||||
6.200% notes due 2036 | |||||||||||||||||
Long-term and Short-term Debt Instruments | |||||||||||||||||
Total borrowings at par value | $ 500,000 | $ 500,000 | $ 500,000 | $ 500,000 | |||||||||||||
Stated interest rate (as a percent) | 6.20% | 6.20% | 6.20% | 6.20% | |||||||||||||
Premium on early redemptions (as a percent) | 0.25% |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Long-Term Incentive Plan | |||
Volatility (as a percent) | 25.20% | 22.80% | 26.30% |
Options granted (shares) | 500,000 | ||
Expected term (in years) | 7 years 1 month 13 days | 7 years 18 days | 6 years 18 days |
Chief Executive Officer | |||
Long-Term Incentive Plan | |||
Expected term (in years) | 7 years | 7 years | 6 years |
Non-executive employees | |||
Long-Term Incentive Plan | |||
Options granted (shares) | 0 | 0 | 0 |
Director | |||
Long-Term Incentive Plan | |||
Expected term (in years) | 8 years | 8 years | 7 years |
Employee Stock Option | |||
Long-Term Incentive Plan | |||
Options expiration period | 10 years | ||
Award vesting period | 4 years | ||
Unrecognized compensation cost | $ 1.4 | ||
Weighted average recognition period | 2 years 8 months 12 days | ||
Expected term (in years) | 10 years | ||
Award vesting (as a percent) | 25.00% | ||
Restricted Stock Units | |||
Long-Term Incentive Plan | |||
Award vesting period | 4 years | ||
Award vesting (as a percent) | 25.00% | ||
Financial PSUs | |||
Long-Term Incentive Plan | |||
Award vesting (as a percent) | 100.00% | ||
Financial PSUs | Minimum | |||
Long-Term Incentive Plan | |||
Stock units granted that recipients receive as performance based restricted stock units (as a percent) | 0.00% | 0.00% | |
Financial PSUs | Maximum | |||
Long-Term Incentive Plan | |||
Stock units granted that recipients receive as performance based restricted stock units (as a percent) | 200.00% | 200.00% | |
TSR PSUs | |||
Long-Term Incentive Plan | |||
Award vesting period | 3 years | ||
Award vesting (as a percent) | 100.00% | ||
RSUs and PSUs | |||
Long-Term Incentive Plan | |||
Unrecognized compensation cost | $ 62 | ||
Weighted average recognition period | 2 years | ||
2015 LTIP | |||
Long-Term Incentive Plan | |||
Shares available for grant (shares) | 21,100,000 | ||
2015 LTIP | Employee Stock Option | Chief Executive Officer | |||
Long-Term Incentive Plan | |||
Long-term incentive award stock option awards (as a percent) | 20.00% | 20.00% | |
2015 LTIP | Restricted Stock Units | Executives excluding CEO | |||
Long-Term Incentive Plan | |||
Long-term incentive award restricted stock units (as a percent) | 30.00% | 30.00% | |
2015 LTIP | Restricted Stock Units | Chief Executive Officer | |||
Long-Term Incentive Plan | |||
Long-term incentive award restricted stock units (as a percent) | 10.00% | 10.00% | |
2015 LTIP | Restricted Stock Units | Senior Vice Presidents | |||
Long-Term Incentive Plan | |||
Long-term incentive award restricted stock units (as a percent) | 50.00% | 50.00% | |
2015 LTIP | Financial PSUs | |||
Long-Term Incentive Plan | |||
Award vesting period | 3 years | ||
2015 LTIP | Financial PSUs | Executives excluding CEO | |||
Long-Term Incentive Plan | |||
Long-term incentive award performance based restricted stock units (as a percent) | 50.00% | 50.00% | |
2015 LTIP | Financial PSUs | Chief Executive Officer | |||
Long-Term Incentive Plan | |||
Long-term incentive award performance based restricted stock units (as a percent) | 50.00% | 50.00% | |
2015 LTIP | Financial PSUs | Senior Vice Presidents | |||
Long-Term Incentive Plan | |||
Long-term incentive award performance based restricted stock units (as a percent) | 50.00% | 50.00% | |
2015 LTIP | TSR PSUs | Executives excluding CEO | |||
Long-Term Incentive Plan | |||
Long-term incentive award performance based restricted stock units (as a percent) | 20.00% | 20.00% | |
2015 LTIP | TSR PSUs | Chief Executive Officer | |||
Long-Term Incentive Plan | |||
Long-term incentive award performance based restricted stock units (as a percent) | 20.00% | 20.00% |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Option Activity | |||
Outstanding at beginning of period | 4.5 | ||
Granted | 0.5 | ||
Exercised | (0.1) | ||
Outstanding at end of period | 4.9 | 4.5 | |
Options exercisable at end of period | 3.7 | ||
Weighted-Average Exercise Price | |||
Outstanding at beginning of period | $ 18.31 | ||
Granted | 26.20 | ||
Exercised | 18.76 | ||
Outstanding at end of period | 19.11 | $ 18.31 | |
Options exercisable at end of period | $ 18.38 | ||
Stock Options, Additional Disclosures | |||
Weighted-average remaining contractual term, outstanding at end of period (years) | 5 years 4 months 24 days | ||
Weighted-average remaining contractual term, options exercisable at end of period (years) | 4 years 7 months 6 days | ||
Aggregate intrinsic value, outstanding at end of period | $ 15.9 | ||
Aggregate intrinsic value, options exercisable at end of period | 13.6 | ||
Cash Proceeds from Exercise of Stock Options | |||
Cash received from exercise of stock options | 2.2 | $ 36.7 | $ 10.1 |
Tax benefit from exercise of stock options | 0.2 | 2.4 | 0.6 |
Intrinsic value of stock options exercised | $ 0.8 | $ 11.6 | $ 3.1 |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Activity of Restricted Stock Units and Performance-Based Restricted Stock Units (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Restricted Stock Activity | |
Non-vested at beginning of period | shares | 7.1 |
Granted | shares | 2.8 |
Vested | shares | (2.4) |
Forfeited | shares | (0.6) |
Non-vested at end of period | shares | 6.9 |
Restricted Stock Weighted-Average Grant-Date Fair Value | |
Non-vested at beginning of period | $ / shares | $ 17.92 |
Granted | $ / shares | 25.35 |
Vested | $ / shares | 17.86 |
Forfeited | $ / shares | 18.83 |
Non-vested at end of period | $ / shares | $ 20.88 |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Impact on Earnings (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-Based Compensation | |||
Stock-based compensation expense | $ (41.7) | $ (48.9) | $ (47.7) |
Income tax benefit from stock-based compensation expense | 6.9 | 8.5 | 8.3 |
Net income impact | $ (34.8) | $ (40.4) | $ (39.4) |
Earnings per share: | |||
Basic and diluted (USD per share) | $ (0.08) | $ (0.09) | $ (0.09) |
Stock-Based Compensation Plan_6
Stock-Based Compensation Plans - Assumptions for the Black-Scholes Option Pricing Model (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock options granted: | |||
Weighted-average risk-free interest rate (as a percent) | 1.50% | 2.50% | 2.80% |
Weighted-average dividend yield (as a percent) | 4.00% | 4.20% | 3.90% |
Volatility (as a percent) | 25.20% | 22.80% | 26.30% |
Expected term (in years) | 7 years 1 month 13 days | 7 years 18 days | 6 years 18 days |
Weighted-average grant date fair value (USD per share) | $ 3.96 | $ 2.56 | $ 3.66 |
Segments - Narrative (Details)
Segments - Narrative (Details) $ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2020USD ($)regionsegmentcustomer | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($) | |
Segments | |||
Restructuring-related expenses and business transformation expenses | $ 36.8 | $ 115.5 | $ 152.3 |
Utilized to allocate revenue to the country where the transaction is initiated (as a percent) | 100.00% | ||
Operating Segments | |||
Segments | |||
Number of operating segments | segment | 2 | ||
Operating Segments | Consumer-to-Consumer | |||
Segments | |||
Number of consumers in money transfer | customer | 2 | ||
Number of geographic regions in segment | region | 5 | ||
Not Allocated To Segments | |||
Segments | |||
Restructuring-related expenses and business transformation expenses | $ 36.8 | $ 115.5 |
Segments - Reportable Segments
Segments - Reportable Segments Results (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Revenues: | ||||
Total consolidated revenues | $ 4,835 | $ 5,292.1 | $ 5,589.9 | |
Operating income: | ||||
Total operating income | 967.3 | 934 | 1,122.1 | |
Restructuring-related expenses and business transformation expenses | (36.8) | (115.5) | $ (152.3) | |
Depreciation and amortization: | ||||
Total consolidated depreciation and amortization | 225.6 | 257.7 | 264.7 | |
Capital expenditures: | ||||
Total capital expenditures | 156.8 | 127.7 | 339 | |
Consumer-to-Consumer | Change in Accounting Method | ||||
Operating income: | ||||
Total operating income | (49.6) | |||
Other | Change in Accounting Method | ||||
Operating income: | ||||
Total operating income | 49.6 | |||
Operating Segments | ||||
Operating income: | ||||
Total operating income | 1,004.1 | 1,049.5 | 1,122.1 | |
Operating Segments | Consumer-to-Consumer | ||||
Revenues: | ||||
Total consolidated revenues | 4,220 | 4,407.8 | 4,453.6 | |
Operating income: | ||||
Total operating income | 924.7 | 975.4 | 1,048.2 | |
Depreciation and amortization: | ||||
Total consolidated depreciation and amortization | 178.5 | 194.5 | 189.9 | |
Capital expenditures: | ||||
Total capital expenditures | 133.5 | 97 | 273.8 | |
Operating Segments | Business Solutions | ||||
Revenues: | ||||
Total consolidated revenues | 356.1 | 388.8 | 386.8 | |
Operating income: | ||||
Total operating income | 24.4 | 46.8 | 23.4 | |
Depreciation and amortization: | ||||
Total consolidated depreciation and amortization | 36.1 | 39.6 | 41.9 | |
Capital expenditures: | ||||
Total capital expenditures | 10.3 | 7.7 | 11.9 | |
Operating Segments | Other | ||||
Revenues: | ||||
Total consolidated revenues | 258.9 | 495.5 | 749.5 | |
Operating income: | ||||
Total operating income | 55 | 27.3 | 50.5 | |
Depreciation and amortization: | ||||
Total consolidated depreciation and amortization | 11 | 23.6 | 32.9 | |
Capital expenditures: | ||||
Total capital expenditures | 13 | 23 | 53.3 | |
Operating Segments | Other | Speedpay | Divestitures | ||||
Revenues: | ||||
Revenues | 125.4 | 352 | ||
Operating income: | ||||
Operating expenses | 98.2 | 251.2 | ||
Operating Segments | Other | Paymap | Divestitures | ||||
Revenues: | ||||
Revenues | 5.3 | 16.2 | ||
Operating income: | ||||
Operating expenses | 2.2 | $ 6.7 | ||
Not Allocated To Segments | ||||
Operating income: | ||||
Restructuring-related expenses and business transformation expenses | $ (36.8) | $ (115.5) |
Segments - Information on Princ
Segments - Information on Principal Geographic Areas (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue: | |||
Revenues | $ 4,835 | $ 5,292.1 | $ 5,589.9 |
Long-lived assets: | |||
Property and equipment, net | 150.4 | 186.9 | |
Assets held for sale | 49.3 | ||
Operating Segments | |||
Long-lived assets: | |||
Property and equipment, net | 150.4 | 236.2 | 270.4 |
United States | Operating Segments | |||
Revenue: | |||
Revenues | 1,678.4 | 1,896.1 | 2,126.2 |
Long-lived assets: | |||
Property and equipment, net | 100.4 | 173.7 | 207.4 |
International | Operating Segments | |||
Revenue: | |||
Revenues | 3,156.6 | 3,396 | 3,463.7 |
Long-lived assets: | |||
Property and equipment, net | $ 50 | $ 62.5 | $ 63 |
Schedule I - Condensed Financ_2
Schedule I - Condensed Financial Information of the Registrant - Condensed Balance Sheets (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||||
Cash and cash equivalents | $ 1,428.2 | $ 1,450.5 | ||
Property and equipment, net of accumulated depreciation of $37.0 and $24.8, respectively | 150.4 | 186.9 | ||
Other assets | 1,024.7 | 762.9 | ||
Total assets | 9,496.3 | 8,758.5 | ||
Liabilities: | ||||
Accounts payable and accrued liabilities | 500.9 | 601.9 | ||
Income taxes payable | 928.9 | 1,019.7 | ||
Borrowings | 3,067.2 | 3,229.3 | ||
Other liabilities | 802.4 | 498.3 | ||
Total liabilities | 9,309.7 | 8,798 | ||
Stockholders' equity/(deficit): | ||||
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued | ||||
Common stock, $0.01 par value; 2,000 shares authorized; 411.2 shares and 418.0 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 4.1 | 4.2 | ||
Capital surplus | 885.1 | 841.2 | ||
Accumulated deficit | (543.1) | (675.9) | ||
Accumulated other comprehensive loss | (159.5) | (209) | ||
Total stockholders' equity/(deficit) | 186.6 | (39.5) | $ (309.8) | $ (491.4) |
Total liabilities and stockholders' equity/(deficit) | 9,496.3 | 8,758.5 | ||
Balance Sheet Parenthetical | ||||
Accumulated depreciation | $ 659.9 | $ 616.5 | ||
Preferred stock, par value (USD per share) | $ 1 | $ 1 | ||
Preferred stock, shares authorized | 10 | 10 | ||
Preferred stock, shares issued | 0 | 0 | ||
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 2,000 | 2,000 | ||
Common stock, shares issued | 411.2 | 418 | ||
Common stock, shares outstanding | 411.2 | 418 | ||
Parent Company | Reportable Legal Entities | ||||
Assets: | ||||
Cash and cash equivalents | $ 2.1 | $ 4 | ||
Property and equipment, net of accumulated depreciation of $37.0 and $24.8, respectively | 54 | 68.5 | ||
Other assets | 96.2 | 147.3 | ||
Investment in subsidiaries | 5,661.3 | 5,886.9 | ||
Total assets | 5,813.6 | 6,106.7 | ||
Liabilities: | ||||
Accounts payable and accrued liabilities | 53 | 58 | ||
Income taxes payable | 551.5 | 680.4 | ||
Payable to subsidiaries, net | 1,852.6 | 2,070.1 | ||
Borrowings | 3,067.2 | 3,229.3 | ||
Other liabilities | 102.7 | 108.4 | ||
Total liabilities | 5,627 | 6,146.2 | ||
Stockholders' equity/(deficit): | ||||
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued | ||||
Common stock, $0.01 par value; 2,000 shares authorized; 411.2 shares and 418.0 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 4.1 | 4.2 | ||
Capital surplus | 885.1 | 841.2 | ||
Accumulated deficit | (543.1) | (675.9) | ||
Accumulated other comprehensive loss | (159.5) | (209) | ||
Total stockholders' equity/(deficit) | 186.6 | (39.5) | ||
Total liabilities and stockholders' equity/(deficit) | 5,813.6 | 6,106.7 | ||
Balance Sheet Parenthetical | ||||
Accumulated depreciation | $ 37 | $ 24.8 | ||
Preferred stock, par value (USD per share) | $ 1 | $ 1 | ||
Preferred stock, shares authorized | 10 | 10 | ||
Preferred stock, shares issued | 0 | 0 | ||
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | 2,000 | 2,000 | ||
Common stock, shares issued | 411.2 | 418 | ||
Common stock, shares outstanding | 411.2 | 418 |
Schedule I - Condensed Financ_3
Schedule I - Condensed Financial Information of the Registrant - Condensed Statements of Income/(Loss) and Comprehensive Income/(Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONDENSED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS) | |||
Revenues | $ 4,835 | $ 5,292.1 | $ 5,589.9 |
Expenses | 3,867.7 | 4,358.1 | 4,467.8 |
Operating income | 967.3 | 934 | 1,122.1 |
Gain on divestitures of businesses (Note 5) | 524.6 | ||
Interest income | 3.2 | 6.3 | 4.8 |
Interest expense | (118.5) | (152) | (149.6) |
Other income/(expense) | 3.1 | 8.5 | 14.1 |
Income tax (expense)/benefit | (110.8) | (263.1) | (139.5) |
Net income | 744.3 | 1,058.3 | 851.9 |
Other comprehensive income, net of tax | 49.5 | 22 | 28.3 |
Comprehensive income | 793.8 | 1,080.3 | 880.2 |
Parent Company | Reportable Legal Entities | |||
CONDENSED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS) | |||
Gain on divestitures of businesses (Note 5) | 524.6 | ||
Interest expense | (158.5) | (181.5) | (197.6) |
Other income/(expense) | 3.6 | 2.7 | (1) |
Income/(loss) before equity in earnings/(losses) of affiliates and income taxes | (154.9) | 345.8 | (198.6) |
Equity in earnings of affiliates, net of tax | 861.7 | 827.3 | 997.2 |
Income tax (expense)/benefit | 37.5 | (114.8) | 53.3 |
Net income | 744.3 | 1,058.3 | 851.9 |
Other comprehensive income, net of tax | 0.4 | 0.2 | 1.6 |
Other comprehensive income of affiliates, net of tax | 49.1 | 21.8 | 26.7 |
Comprehensive income | $ 793.8 | $ 1,080.3 | $ 880.2 |
Schedule I - Condensed Financ_4
Schedule I - Condensed Financial Information of the Registrant - Condensed Statements of Cash Flow (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net cash provided by/(used in) operating activities | $ 877.5 | $ 914.6 | $ 821.3 |
Cash flows from investing activities | |||
Purchases of property and equipment and other | (36.5) | (48.1) | (136.7) |
Proceeds from the sale of former corporate headquarters and other property (Note 4) | 49.4 | ||
Proceeds from divestitures of businesses, net of cash divested (Note 4) | 711.7 | ||
Other investing activities | (2) | ||
Net cash (used in)/provided by investing activities | (113.4) | 632.3 | (328.8) |
Cash flows from financing activities | |||
Net (repayments of)/proceeds from commercial paper | (165) | 120 | 125 |
Net proceeds from issuance of borrowings | 495.9 | 685.4 | |
Principal payments on borrowings | (824.9) | (414.4) | |
Proceeds from exercise of options and other | 2.2 | 36.7 | 10.1 |
Cash dividends and dividend equivalents paid | (370.3) | (340.8) | (341.7) |
Common stock repurchased | (239.7) | (552.6) | (412.4) |
Other financing activities | (0.7) | (4.1) | (9.2) |
Net cash used in financing activities | (773.5) | (1,069.8) | (357.2) |
Net change in cash, cash equivalents, and restricted cash | (9.4) | 477.1 | 135.3 |
Cash, cash equivalents, and restricted cash at beginning of period | 1,456.8 | 979.7 | 844.4 |
Cash, cash equivalents, and restricted cash at end of period | 1,447.4 | 1,456.8 | 979.7 |
Supplemental cash flow information: | |||
Cash paid for lease liabilities | 65.9 | 53.8 | |
Non-cash lease liabilities arising from obtaining right-of-use assets (Note 6) | 38.6 | 269.1 | |
Parent Company | Reportable Legal Entities | |||
Cash flows from operating activities | |||
Net cash provided by/(used in) operating activities | (79) | 103.1 | 539.1 |
Cash flows from investing activities | |||
Purchases of property and equipment and other | (1) | (9.9) | (78.9) |
Proceeds from the sale of former corporate headquarters and other property (Note 4) | 43.6 | ||
Proceeds from divestitures of businesses, net of cash divested (Note 4) | 711.7 | ||
Distributions received from/(capital contributed to) subsidiaries, net | (329.4) | 74 | (456.3) |
Other investing activities | (2.1) | ||
Net cash (used in)/provided by investing activities | (288.9) | 775.8 | (535.2) |
Cash flows from financing activities | |||
Advances from subsidiaries, net | 1,139.5 | 194 | 345.5 |
Net (repayments of)/proceeds from commercial paper | (165) | 120 | 125 |
Net proceeds from issuance of borrowings | 495.9 | 685.4 | |
Principal payments on borrowings | (824.9) | (414.4) | |
Proceeds from exercise of options and other | 2.2 | 33.3 | 7.9 |
Cash dividends and dividend equivalents paid | (370.3) | (340.8) | (341.7) |
Common stock repurchased | (239.7) | (552.6) | (412.4) |
Other financing activities | (0.7) | ||
Net cash used in financing activities | 366 | (875.1) | (4.7) |
Net change in cash, cash equivalents, and restricted cash | (1.9) | 3.8 | (0.8) |
Cash, cash equivalents, and restricted cash at beginning of period | 4 | 0.2 | 1 |
Cash, cash equivalents, and restricted cash at end of period | 2.1 | 4 | 0.2 |
Supplemental cash flow information: | |||
Non-cash financing activity, distribution of note from subsidiary (Note 3) | 1,364.4 | $ 2,256.1 | |
Cash paid for lease liabilities | 20.7 | 17 | |
Non-cash lease liabilities arising from obtaining right-of-use assets (Note 6) | $ 1.5 | $ 124.8 |
Schedule I - Condensed Financ_5
Schedule I - Condensed Financial Information of the Registrant - Narrative (Details) - USD ($) $ in Millions | May 09, 2019 | Dec. 31, 2019 | Jan. 01, 2021 | Dec. 31, 2020 | Dec. 01, 2020 | Dec. 01, 2019 | Oct. 01, 2019 | Jun. 01, 2018 | Apr. 01, 2018 | Nov. 08, 2015 |
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||
Net assets subject to limitations | $ 680 | |||||||||
Gain on sale | $ 524.6 | |||||||||
Letters of credit outstanding and bank guarantees | 390 | |||||||||
Speedpay | Divestitures | ||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||
Consideration from sale of business | $ 750 | |||||||||
Speedpay | Divestitures | Other services | ||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||
Gain on sale | 523 | |||||||||
Parent Company | Reportable Legal Entities | ||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||
Net assets subject to limitations | 680 | |||||||||
Notes payable to subsidiary | $ 93.3 | $ 67.4 | $ 162.8 | $ 229.6 | $ 273 | |||||
Stated interest rate (as a percent) | 0.15% | 1.61% | 1.69% | 2.34% | 2.12% | |||||
Gain on sale | $ 524.6 | |||||||||
Letters of credit outstanding and bank guarantees | $ 180 | |||||||||
Parent Company | Reportable Legal Entities | Revolver - Parent Company | ||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||
Stated interest rate (as a percent) | 1.91% | 0.26% | ||||||||
Maximum borrowing capacity on unsecured borrowing facilities | $ 3,000 | |||||||||
Outstanding borrowings on unsecured financing facilities | $ 993.6 | $ 620.3 | ||||||||
Parent Company | Reportable Legal Entities | Speedpay | Divestitures | ||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||
Consideration from sale of business | 750 | |||||||||
Parent Company | Reportable Legal Entities | Speedpay | Divestitures | Other services | ||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||
Gain on sale | $ 523 | |||||||||
Parent Company | Reportable Legal Entities | Subsequent Event | ||||||||||
NOTES TO CONDENSED FINANCIAL STATEMENTS | ||||||||||
Notes payable to subsidiary | $ 289 | |||||||||
Stated interest rate (as a percent) | 0.14% |
Schedule I - Condensed Financ_6
Schedule I - Condensed Financial Information of the Registrant - Lease (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
ROU asset | $ 189.1 | $ 199.7 |
Balance sheet location of ROU asset | us-gaap:OtherAssets | us-gaap:OtherAssets |
Lease liability | $ 234.9 | $ 242.3 |
Balance sheet location of lease liability | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | |
Weighted Average Lease Terms and Discount Rates | ||
Weighted average remaining lease term | 7 years 2 months 12 days | 7 years 7 months 6 days |
Weighted average discount rate | 5.60% | 6.50% |
Maturities of Operating Lease Liabilities | ||
Due within 1 year | $ 51.9 | |
Due after 1 year through 2 years | 44.5 | |
Due after 2 years through 3 years | 37 | |
Due after 3 years through 4 years | 32.6 | |
Due after 4 years through 5 years | 27.7 | |
Due after 5 years | 90.3 | |
Total lease payments | 284 | |
Less imputed interest | (49.1) | |
Operating lease liabilities | $ 234.9 | $ 242.3 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms | 10 years | |
Lease extension terms | 10 years | |
Reportable Legal Entities | Parent Company | ||
Lessee, Lease, Description [Line Items] | ||
ROU asset | $ 63.1 | $ 66.5 |
Balance sheet location of ROU asset | us-gaap:OtherAssets | us-gaap:OtherAssets |
Lease liability | $ 100.1 | $ 105.7 |
Balance sheet location of lease liability | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | true |
Weighted Average Lease Terms and Discount Rates | ||
Weighted average remaining lease term | 9 years 6 months | 10 years 6 months |
Weighted average discount rate | 5.50% | 5.70% |
Maturities of Operating Lease Liabilities | ||
Due within 1 year | $ 14.6 | |
Due after 1 year through 2 years | 14.8 | |
Due after 2 years through 3 years | 14.1 | |
Due after 3 years through 4 years | 13 | |
Due after 4 years through 5 years | 12.7 | |
Due after 5 years | 61 | |
Total lease payments | 130.2 | |
Less imputed interest | (30.1) | |
Operating lease liabilities | $ 100.1 | $ 105.7 |
Reportable Legal Entities | Parent Company | Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms | 3 years | |
Reportable Legal Entities | Parent Company | Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms | 10 years | |
Lease extension terms | 10 years |