þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended: December 31, 2017
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¨
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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DELAWARE
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20-4531180
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.01 Par Value
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The New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging growth company
¨
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
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PAGE
NUMBER
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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changes in general economic conditions and economic conditions in the regions and industries in which we operate, including global economic and trade downturns, or significantly slower growth or declines in the money transfer, payment service, and other markets in which we operate, including downturns or declines related to interruptions in migration patterns, or non-performance by our banks, lenders, insurers, or other financial services providers;
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failure to compete effectively in the money transfer and payment service industry, including among other things, with respect to price, with global and niche or corridor money transfer providers, banks and other money transfer and payment service providers, including electronic, mobile and Internet-based services, card associations, and card-based payment providers, and with digital currencies and related protocols, and other innovations in technology and business models;
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political conditions and related actions in the United States and abroad which may adversely affect our business and economic conditions as a whole, including interruptions of United States or other government relations with countries in which we have or are implementing significant business relationships with agents or clients;
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deterioration in customer confidence in our business, or in money transfer and payment service providers generally;
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our ability to adopt new technology and develop and gain market acceptance of new and enhanced services in response to changing industry and consumer needs or trends;
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changes in, and failure to manage effectively, exposure to foreign exchange rates, including the impact of the regulation of foreign exchange spreads on money transfers and payment transactions;
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any material breach of security, including cybersecurity, or safeguards of or interruptions in any of our systems or those of our vendors or other third parties;
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cessation of or defects in various services provided to us by third-party vendors;
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mergers, acquisitions and integration of acquired businesses and technologies into our Company, and the failure to realize anticipated financial benefits from these acquisitions, and events requiring us to write down our goodwill;
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failure to manage credit and fraud risks presented by our agents, clients and consumers;
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failure to maintain our agent network and business relationships under terms consistent with or more advantageous to us than those currently in place, including due to increased costs or loss of business as a result of increased compliance requirements or difficulty for us, our agents or their subagents in establishing or maintaining relationships with banks needed to conduct our services;
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decisions to change our business mix;
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changes in tax laws, or their interpretation, including with respect to United States tax reform legislation enacted in December 2017 (the "Tax Act") and potential related state income tax impacts, and unfavorable resolution of tax contingencies;
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adverse rating actions by credit rating agencies;
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our ability to realize the anticipated benefits from business transformation, productivity and cost-savings, and other related initiatives, which may include decisions to downsize or to transition operating activities from one location to another, and to minimize any disruptions in our workforce that may result from those initiatives;
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our ability to protect our brands and our other intellectual property rights and to defend ourselves against potential intellectual property infringement claims;
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our ability to attract and retain qualified key employees and to manage our workforce successfully;
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material changes in the market value or liquidity of securities that we hold;
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restrictions imposed by our debt obligations;
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liabilities or loss of business resulting from a failure by us, our agents or their subagents to comply with laws and regulations and regulatory or judicial interpretations thereof, including laws and regulations designed to protect consumers, or detect and prevent money laundering, terrorist financing, fraud and other illicit activity;
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increased costs or loss of business due to regulatory initiatives and changes in laws, regulations and industry practices and standards, including changes in interpretations in the United States, the European Union and globally, affecting us, our agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services, including related to anti-money laundering regulations, anti-fraud measures, our licensing arrangements, customer due diligence, agent and subagent due diligence, registration and monitoring requirements, consumer protection requirements, remittances, and immigration;
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liabilities, increased costs or loss of business and unanticipated developments resulting from governmental investigations and consent agreements with or enforcement actions by regulators, including those associated with the settlement agreements with the United States Department of Justice, certain United States Attorney's Offices, the United States Federal Trade Commission, the Financial Crimes Enforcement Network of the United States Department of Treasury, and various state attorneys general (the "Joint Settlement Agreements"), and those associated with the January 4, 2018 consent order which resolved a matter with the New York State Department of Financial Services (the "NYDFS Consent Order");
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liabilities resulting from litigation, including class-action lawsuits and similar matters, and regulatory actions, including costs, expenses, settlements and judgments;
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failure to comply with regulations and evolving industry standards regarding consumer privacy and data use and security, including with respect to the General Data Protection Regulation ("GDPR") approved by the European Union ("EU");
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the ongoing impact on our business from the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), as well as regulations issued pursuant to it and the actions of the Consumer Financial Protection Bureau ("CFPB") and similar legislation and regulations enacted by other governmental authorities in the United States and abroad related to consumer protection;
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effects of unclaimed property laws or their interpretation or the enforcement thereof;
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failure to maintain sufficient amounts or types of regulatory capital or other restrictions on the use of our working capital to meet the changing requirements of our regulators worldwide;
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changes in accounting standards, rules and interpretations or industry standards affecting our business;
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adverse tax consequences from our spin-off from First Data Corporation;
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catastrophic events; and
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management's ability to identify and manage these and other risks.
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Year Ended December 31,
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2017
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2016
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2015
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Consumer-to-Consumer
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79
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%
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79
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%
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79
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%
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Business Solutions
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7
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%
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7
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%
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7
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%
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Other
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14
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%
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14
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%
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14
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%
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100
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%
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100
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%
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100
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%
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•
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Walk-in money transfer.
The significant majority of our remittances constitute walk-in transactions in which payment is collected by one of our agents and is available for pick-up at another agent location, usually within minutes. We offer a variety of methods for consumers to initiate transactions. In select markets, consumers may stage a transaction either online or using a mobile device and subsequently pay for the transaction at one of our agent locations. Additionally, in certain agent locations, consumers can enter a transaction at a self-service kiosk and subsequently pay for the transaction at the counter of the location.
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Online money transfer.
In certain countries, consumers can initiate a money transfer from a Western Union branded website, including through their mobile devices. As of
December 31, 2017
, we were providing online money transfer services through Western Union branded websites in 42 countries. Additionally, in certain countries, consumers can initiate a Western Union money transfer through their bank’s online banking services.
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Global money transfer providers
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Global money transfer providers allow consumers to send money to a wide variety of locations, in both their home countries and abroad.
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Regional money transfer providers
- Regional money transfer providers, or "niche" providers, provide the same services as global money transfer providers, but focus on a smaller group of geographic corridors or services within one region, such as North America to the Caribbean, Central or South America, or Western Europe to North Africa.
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Electronic channels
- Online money transfer service providers, including certain electronic payment providers, allow consumers to send and receive money electronically using the Internet or through mobile devices. Electronic channels also include digital wallets, digital currencies, and social media and other predominantly communication or commerce-oriented platforms that offer money transfer services.
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Banks, postbanks, and post offices
- Banks, postbanks, and post offices of all sizes compete with us in a number of ways, including bank transfer and wire services, payment instrument issuances, and card-based services.
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Informal networks
- Informal networks enable people to transfer funds without formal mechanisms and often without compliance with government reporting requirements. We believe that such networks comprise a significant share of the market.
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Alternative channels
- Alternative channels for sending and receiving money include mail and commercial courier services, and card-based options, such as ATM cards and stored-value cards.
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prohibit, restrict, and/or impose taxes or fees on money transfer transactions in, to or from certain countries or with certain governments, individuals and entities;
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impose additional customer identification and customer, agent, and subagent due diligence requirements;
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impose additional reporting or recordkeeping requirements, or require enhanced transaction monitoring;
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limit the types of entities capable of providing money transfer services, impose additional licensing or registration requirements on us, our agents, or their subagents, or impose additional requirements on us with regard to selection or oversight of our agents or their subagents;
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impose minimum capital or other financial requirements on us or our agents and their subagents;
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limit or restrict the revenue which may be generated from money transfers, including transaction fees and revenue derived from foreign exchange;
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require enhanced disclosures to our money transfer customers;
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require the principal amount of money transfers originated in a country to be invested in that country or held in trust until they are paid;
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limit the number or principal amount of money transfers which may be sent to or from a jurisdiction, whether by an individual, through one agent or in aggregate;
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restrict or limit our ability to process transactions using centralized databases, for example, by requiring that transactions be processed using a database maintained in a particular country or region; and
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prohibit or limit exclusive arrangements with our agents and subagents.
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Name
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Age
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Position
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Hikmet Ersek
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57
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President, Chief Executive Officer and Director
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Rajesh K. Agrawal
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52
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Executive Vice President, Chief Financial Officer
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Odilon Almeida
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56
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Executive Vice President, President - Global Money Transfer
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Jean Claude Farah
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47
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Executive Vice President, President - Global Payments
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Sheri Rhodes
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49
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Executive Vice President, Chief Technology Officer
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Caroline Tsai
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48
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Executive Vice President, General Counsel and Secretary
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Richard L. Williams
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52
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Executive Vice President, Chief Human Resources Officer
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•
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Risks Relating to Our Business and Industry;
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Risks Related to Our Regulatory and Litigation Environment; and
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Risks Related to the Spin-Off.
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Demand for our services could soften, including due to low consumer confidence, high unemployment, changes in foreign exchange rates, or reduced global trade.
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Our Consumer-to-Consumer money transfer business relies in large part on migration, which brings workers to countries with greater economic opportunities than those available in their native countries. A significant portion of money transfers are sent by international migrants. Migration is affected by (among other factors) overall economic conditions, the availability of job opportunities, including with respect to the technology industry, changes in immigration laws, restrictions on immigration, and political or other events (such as war, terrorism or health emergencies) that would make it more difficult for workers to migrate or work abroad. Changes to these factors could adversely affect our remittance volume and could have an adverse effect on our business, financial condition, results of operations, and cash flows.
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•
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Many of our consumers work in industries that may be impacted by deteriorating economic conditions more quickly or significantly than other industries. The prospect of reduced job opportunities, especially in retail, healthcare, construction, and hospitality, or weakness in the regional economies could adversely affect the number of money transfer transactions, the principal amounts transferred and correspondingly our results of operations. If general market softness in the economies of countries important to migrant workers occurs, our results of operations could be adversely impacted. Additionally, if our consumer transactions decline, if the amount of money that consumers send per transaction declines, or if migration patterns shift due to weak or deteriorating economic conditions or immigration laws, our financial condition, results of operations, and cash flows may be adversely affected.
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•
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Our agents or clients could experience reduced sales or business as a result of a deterioration in economic conditions. As a result, our agents could reduce their numbers of locations or hours of operation, or cease doing business altogether. Businesses using our services may make fewer cross-currency payments or may have fewer customers making payments to them through us, particularly businesses in those industries that may be more affected by an economic downturn.
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Our Business Solutions business is heavily dependent on global trade. A downturn in global trade or the failure of long-term import growth rates to return to historic levels could have an adverse effect on our business, financial condition, results of operations, and cash flows. Additionally, as customer hedging activity in our Business Solutions business generally varies with currency volatility, we have experienced and may experience in the future lower foreign exchange revenues in periods of lower currency volatility.
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•
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Our exposure to receivables from our agents, consumers and businesses could impact us. For more information on this risk, see risk factor
"
We face credit, liquidity and fraud risks from our agents, consumers, businesses, and third-party processors that could adversely affect our business, financial condition, results of operations, and cash flows
."
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The market value of the securities in our investment portfolio may substantially decline. The impact of that decline in value may adversely affect our liquidity, financial condition, and results of operations.
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•
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The counterparties to the derivative financial instruments that we use to reduce our exposure to various market risks, including changes in interest rates and foreign exchange rates, may fail to honor their obligations, which could expose us to risks we had sought to mitigate. This includes the exposure generated by the Business Solutions business, where we write derivative contracts to our customers as part of our cross-currency payments business, and we typically hedge the net exposure through offsetting contracts with established financial institution counterparties. That failure could have an adverse effect on our financial condition, results of operations, and cash flows.
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We may be unable to refinance our existing indebtedness, or finance our obligations to pay tax on certain of our previously undistributed earnings pursuant to the Tax Act on favorable terms, as such amounts become due or we may have to refinance or obtain new financing on unfavorable terms, which could require us to dedicate a substantial portion of our cash flow from operations to payments on our debt or tax obligations, thereby reducing funds available for working capital, capital expenditures, acquisitions, share repurchases, dividends, and other purposes.
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Our revolving credit facility with a consortium of banks is one source for funding liquidity needs and also backs our commercial paper program. If any of the banks participating in our credit facility fails to fulfill its lending commitment to us, our short-term liquidity and ability to support borrowings under our commercial paper program could be adversely affected.
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•
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The third-party service providers on whom we depend may experience difficulties in their businesses, which may impair their ability to provide services to us and have a potential impact on our own business. The impact of a change or temporary stoppage of services may have an adverse effect on our business, financial condition, results of operations, and cash flows.
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•
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Banks upon which we rely to conduct our business could fail or be unable to satisfy their obligations to us. This could lead to our inability to access funds and/or credit losses for us and could adversely impact our ability to conduct our business.
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Insurers we utilize to mitigate our exposures to litigation and other risks may be unable to or refuse to satisfy their obligations to us, which could have an adverse effect on our liquidity, financial condition, results of operations, and cash flows.
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•
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If market disruption or volatility occurs, we could experience difficulty in accessing capital on favorable terms and our business, financial condition, results of operations, and cash flows could be adversely impacted.
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•
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changes or proposed changes in laws or regulations or regulator or judicial interpretation thereof that have the effect of making it more difficult or less desirable to transfer money using consumer money transfer and payment service providers, including additional consumer due diligence, identification, reporting, and recordkeeping requirements;
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•
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the quality of our services and our customer experience, and our ability to meet evolving customer needs and preferences, including consumer preferences related to our westernunion.com and mobile money transfer services;
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•
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failure of our agents or their subagents to deliver services in accordance with our requirements;
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•
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reputational concerns resulting from actual or perceived events, including those related to fraud or consumer protection in connection with the Joint Settlement Agreements, the NYDFS Consent Order, or other matters;
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•
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actions by federal, state or foreign regulators that interfere with our ability to transfer consumers' money reliably, for example, attempts to seize money transfer funds, or limit our ability to or prohibit us from transferring money in certain corridors;
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•
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federal, state or foreign legal requirements, including those that require us to provide consumer or transaction data either pursuant to our agreement signed on February 11, 2010 with the State of Arizona regarding our anti-money laundering ("AML") compliance programs along the United States and Mexico border ("Southwest Border Agreement") and requirements under the Joint Settlement Agreements or other requirements or to a greater extent than is currently required;
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•
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any significant interruption in our systems, including by unauthorized entry and computer viruses, fire, natural disaster, power loss, telecommunications failure, terrorism, vendor failure, or disruptions in our workforce; and
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•
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any breach of our computer systems or other data storage facilities, or of certain of our third-party providers, resulting in a compromise of personal or other data.
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•
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realizing the anticipated financial benefits from these acquisitions and where necessary, improving internal controls of these acquired businesses;
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•
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managing geographically separated organizations, systems and facilities;
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•
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managing multi-jurisdictional operating, tax and financing structures;
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integrating personnel with diverse business backgrounds and organizational cultures;
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integrating the acquired technologies into our Company;
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complying with regulatory requirements, including those particular to the industry and jurisdiction of the acquired business;
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enforcing intellectual property rights in some foreign countries;
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•
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entering new markets with the services of the acquired businesses; and
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•
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general economic and political conditions, including legal and other barriers to cross-border investment in general, or by United States companies in particular.
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•
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limiting our ability to pay dividends to our stockholders or to repurchase stock consistent with our historical practices;
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•
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increasing our vulnerability to changing economic, regulatory and industry conditions;
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•
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limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industry;
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•
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limiting our ability to borrow additional funds; and
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requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt or tax obligations, thereby reducing funds available for working capital, capital expenditures, acquisitions and other purposes.
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ITEM 5.
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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
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Common Stock
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Dividends
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||||||||
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Market Price
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Declared
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||||||||
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High
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Low
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per Share
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||||||
2017
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||||||
First Quarter
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$
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22.70
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$
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19.25
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$
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0.175
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Second Quarter
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$
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20.35
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$
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18.52
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$
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0.175
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Third Quarter
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$
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20.40
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$
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18.39
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$
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0.175
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Fourth Quarter
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$
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20.67
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$
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18.72
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$
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0.175
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2016
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|
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||||||
First Quarter
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$
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19.61
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$
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16.02
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$
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0.16
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Second Quarter
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$
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20.57
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$
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18.07
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$
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0.16
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Third Quarter
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$
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21.80
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|
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$
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18.81
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|
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$
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0.16
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Fourth Quarter
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$
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22.26
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|
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$
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19.38
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$
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0.16
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Period
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Total Number of
Shares Purchased*
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Average Price
Paid per Share
|
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Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs**
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Remaining Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans or
Programs (In millions)
|
||||||
October 1 - 31
|
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6,707
|
|
|
$
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19.52
|
|
|
—
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|
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$
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955.5
|
|
November 1 - 30
|
|
635,599
|
|
|
$
|
19.69
|
|
|
610,873
|
|
|
$
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943.5
|
|
December 1 - 31
|
|
2,115
|
|
|
$
|
19.54
|
|
|
—
|
|
|
$
|
943.5
|
|
Total
|
|
644,421
|
|
|
$
|
19.69
|
|
|
610,873
|
|
|
|
*
|
These amounts represent both shares authorized by the Board of Directors for repurchase under a publicly announced authorization, as described below, as well as shares withheld from employees to cover tax withholding obligations on restricted stock units that have vested.
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**
|
On February 9, 2017, the Board of Directors authorized $1.2 billion of common stock repurchases through December 31, 2019, of which $943.5 million remained available as of December 31, 2017. In certain instances, management has historically and may continue to establish prearranged written plans pursuant to Rule 10b5-1. A Rule 10b5-1 plan permits us to repurchase shares at times when we may otherwise be unable to do so, provided the plan is adopted when we are not aware of material non-public information.
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|
Year Ended December 31,
|
||||||||||||||||||
(in millions, except per share data)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Statements of Income/(Loss) Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
5,524.3
|
|
|
$
|
5,422.9
|
|
|
$
|
5,483.7
|
|
|
$
|
5,607.2
|
|
|
$
|
5,542.0
|
|
Operating expenses (a)
|
5,050.9
|
|
|
4,939.2
|
|
|
4,374.3
|
|
|
4,466.7
|
|
|
4,434.6
|
|
|||||
Operating income (a)
|
473.4
|
|
|
483.7
|
|
|
1,109.4
|
|
|
1,140.5
|
|
|
1,107.4
|
|
|||||
Interest income (b)
|
4.9
|
|
|
3.5
|
|
|
10.9
|
|
|
11.5
|
|
|
9.4
|
|
|||||
Interest expense (c)
|
(142.1
|
)
|
|
(152.5
|
)
|
|
(167.9
|
)
|
|
(176.6
|
)
|
|
(195.6
|
)
|
|||||
Other income/(expense), net, excluding interest income and interest expense
|
11.3
|
|
|
7.0
|
|
|
(10.6
|
)
|
|
(7.2
|
)
|
|
5.7
|
|
|||||
Income before income taxes (a) (b) (c)
|
347.5
|
|
|
341.7
|
|
|
941.8
|
|
|
968.2
|
|
|
926.9
|
|
|||||
Net income/(loss) (a) (b) (c) (d)
|
(557.1
|
)
|
|
253.2
|
|
|
837.8
|
|
|
852.4
|
|
|
798.4
|
|
|||||
Depreciation and amortization
|
262.9
|
|
|
263.2
|
|
|
270.2
|
|
|
271.9
|
|
|
262.8
|
|
|||||
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities (e)
|
$
|
735.8
|
|
|
$
|
1,041.9
|
|
|
$
|
1,071.1
|
|
|
$
|
1,045.9
|
|
|
$
|
1,088.6
|
|
Capital expenditures (f)
|
(177.1
|
)
|
|
(229.8
|
)
|
|
(266.5
|
)
|
|
(179.0
|
)
|
|
(241.3
|
)
|
|||||
Common stock repurchased (g)
|
(502.8
|
)
|
|
(501.6
|
)
|
|
(511.3
|
)
|
|
(495.4
|
)
|
|
(399.7
|
)
|
|||||
Earnings/(Loss) Per Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic (a) (b) (c) (g)
|
$
|
(1.19
|
)
|
|
$
|
0.52
|
|
|
$
|
1.63
|
|
|
$
|
1.60
|
|
|
$
|
1.43
|
|
Diluted (a) (b) (c) (g)
|
$
|
(1.19
|
)
|
|
$
|
0.51
|
|
|
$
|
1.62
|
|
|
$
|
1.59
|
|
|
$
|
1.43
|
|
Cash dividends declared per common share (h)
|
$
|
0.70
|
|
|
$
|
0.64
|
|
|
$
|
0.62
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
Key Indicators (unaudited):
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer-to-Consumer transactions
|
275.8
|
|
|
268.3
|
|
|
261.5
|
|
|
254.9
|
|
|
242.3
|
|
|
As of December 31,
|
||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Settlement assets
|
$
|
4,188.9
|
|
|
$
|
3,749.1
|
|
|
$
|
3,308.7
|
|
|
$
|
3,313.7
|
|
|
$
|
3,270.4
|
|
Total assets
|
9,231.4
|
|
|
9,419.6
|
|
|
9,449.2
|
|
|
9,877.5
|
|
|
10,105.4
|
|
|||||
Settlement obligations
|
4,188.9
|
|
|
3,749.1
|
|
|
3,308.7
|
|
|
3,313.7
|
|
|
3,270.4
|
|
|||||
Total borrowings
|
3,033.6
|
|
|
2,786.1
|
|
|
3,215.9
|
|
|
3,707.5
|
|
|
4,197.1
|
|
|||||
Total liabilities
|
9,722.8
|
|
|
8,517.4
|
|
|
8,044.3
|
|
|
8,577.1
|
|
|
9,000.7
|
|
|||||
Total stockholders’ equity/(deficit)
|
(491.4
|
)
|
|
902.2
|
|
|
1,404.9
|
|
|
1,300.4
|
|
|
1,104.7
|
|
(a)
|
For the year ended December 31, 2017, operating expenses included a non-cash goodwill impairment charge of $464.0 million related to our Business Solutions reporting unit, as described in Part II, Item 8,
Financial Statements and Supplementary Data
, Note 4, "Goodwill," and $60.0 million of expenses related to the NYDFS Consent Order. For the year ended December 31, 2016, operating expenses included $601.0 million of expenses as a result of the Joint Settlement Agreements, as described in Part II, Item 8,
Financial Statements and Supplementary Data
, Note 5, "Commitments and Contingencies." For the year ended December 31, 2015, operating expenses included $35.3 million of expenses as a result of the Paymap Settlement Agreement.
|
|
|
(b)
|
Interest income consists of interest earned on cash balances not required to satisfy settlement obligations.
|
|
|
(c)
|
Interest expense primarily relates to our outstanding borrowings.
|
|
|
(d)
|
For the year ended December 31, 2017, the Company's provision for income taxes included an estimated $828 million related to the enactment of the Tax Act into United States law, primarily due to a tax on certain previously undistributed earnings of foreign subsidiaries, partially offset by the remeasurement of deferred tax assets and liabilities and other tax balances to reflect the lower federal income tax rate, among other effects, as discussed in Part II, Item 8,
Financial Statements and Supplementary Data
, Note 10, "Income Taxes." Certain of the law's impacts have been provisionally estimated and will likely be adjusted in future periods as the Company completes its accounting for these matters in 2018.
|
|
|
(e)
|
Net cash provided by operating activities during the year ended December 31, 2017 was impacted by cash payments of $591 million due under the Joint Settlement Agreements and payments of $77.3 million related to our business transformation initiative as discussed in Part II, Item 8,
Financial Statements and Supplementary Data,
Note 3, "Business Transformation and Productivity and Cost-Savings Initiatives Expenses."
|
|
|
(f)
|
Capital expenditures include capitalization of contract costs, capitalization of purchased and developed software and purchases of property and equipment.
|
|
|
(g)
|
On February 9, 2017, the Board of Directors authorized $1.2 billion of common stock repurchases through December 31, 2019, of which $943.5 million remained available as of December 31, 2017. During the years ended December 31, 2017, 2016, 2015, 2014, and 2013, we repurchased 24.9 million, 24.8 million, 25.1 million, 29.3 million, and 25.7 million shares, respectively, under authorizations from our Board of Directors.
|
|
|
(h)
|
Cash dividends per share declared quarterly by the Company's Board of Directors were as follows:
|
Year
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
2017
|
|
$
|
0.175
|
|
|
$
|
0.175
|
|
|
$
|
0.175
|
|
|
$
|
0.175
|
|
2016
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
2015
|
|
$
|
0.155
|
|
|
$
|
0.155
|
|
|
$
|
0.155
|
|
|
$
|
0.155
|
|
2014
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
2013
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
•
|
Consumer-to-Consumer
- The Consumer-to-Consumer operating segment facilitates money transfers between two consumers, primarily through a network of third-party agents. Our multi-currency money transfer service is viewed by us as one interconnected global network where a money transfer can be sent from one location to another, around the world. This service is available for international cross-border transfers and, in certain countries, intra-country transfers. This segment also includes money transfer transactions that can be initiated through websites and mobile devices.
|
•
|
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, we write foreign currency forward and option contracts for customers to facilitate future payments.
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
Year Ended December 31,
|
|
2017
|
|
2016
|
||||||||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
|
vs. 2016
|
|
vs. 2015
|
||||||||
Revenues
|
$
|
5,524.3
|
|
|
$
|
5,422.9
|
|
|
$
|
5,483.7
|
|
|
2
|
%
|
|
(1
|
)%
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
|
3,355.4
|
|
|
3,270.0
|
|
|
3,199.4
|
|
|
3
|
%
|
|
2
|
%
|
|||
Selling, general and administrative
|
1,231.5
|
|
|
1,669.2
|
|
|
1,174.9
|
|
|
(26
|
)%
|
|
42
|
%
|
|||
Goodwill impairment charge
|
464.0
|
|
|
—
|
|
|
—
|
|
|
(a)
|
|
|
—
|
%
|
|||
Total expenses
|
5,050.9
|
|
|
4,939.2
|
|
|
4,374.3
|
|
|
2
|
%
|
|
13
|
%
|
|||
Operating income
|
473.4
|
|
|
483.7
|
|
|
1,109.4
|
|
|
(2
|
)%
|
|
(56
|
)%
|
|||
Other income/(expense):
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
4.9
|
|
|
3.5
|
|
|
10.9
|
|
|
41
|
%
|
|
(68
|
)%
|
|||
Interest expense
|
(142.1
|
)
|
|
(152.5
|
)
|
|
(167.9
|
)
|
|
(7
|
)%
|
|
(9
|
)%
|
|||
Derivative gains, net
|
7.1
|
|
|
4.5
|
|
|
1.2
|
|
|
56
|
%
|
|
(a)
|
|
|||
Other income/(expense), net
|
4.2
|
|
|
2.5
|
|
|
(11.8
|
)
|
|
77
|
%
|
|
(a)
|
|
|||
Total other expense, net
|
(125.9
|
)
|
|
(142.0
|
)
|
|
(167.6
|
)
|
|
(11
|
)%
|
|
(15
|
)%
|
|||
Income before income taxes
|
347.5
|
|
|
341.7
|
|
|
941.8
|
|
|
2
|
%
|
|
(64
|
)%
|
|||
Provision for income taxes
|
904.6
|
|
|
88.5
|
|
|
104.0
|
|
|
(a)
|
|
|
(15
|
)%
|
|||
Net income/(loss)
|
$
|
(557.1
|
)
|
|
$
|
253.2
|
|
|
$
|
837.8
|
|
|
(a)
|
|
|
(70
|
)%
|
Earnings/(loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(1.19
|
)
|
|
$
|
0.52
|
|
|
$
|
1.63
|
|
|
(a)
|
|
|
(68
|
)%
|
Diluted
|
$
|
(1.19
|
)
|
|
$
|
0.51
|
|
|
$
|
1.62
|
|
|
(a)
|
|
|
(69
|
)%
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
467.9
|
|
|
490.2
|
|
|
512.6
|
|
|
|
|
|
|||||
Diluted
|
467.9
|
|
|
493.5
|
|
|
516.7
|
|
|
|
|
|
(a)
|
Calculation not meaningful.
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
Year Ended December 31,
|
|
2017
|
|
2016
|
||||||||||||
(dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
vs. 2016
|
|
vs. 2015
|
||||||||
Revenues, as reported - (GAAP)
|
$
|
5,524.3
|
|
|
$
|
5,422.9
|
|
|
$
|
5,483.7
|
|
|
2
|
%
|
|
(1
|
)%
|
Foreign currency impact (a)
|
|
|
|
|
|
|
1
|
%
|
|
4
|
%
|
||||||
Revenue change, constant currency adjusted - (Non-GAAP)
|
|
|
|
|
|
|
|
|
|
3
|
%
|
|
3
|
%
|
(a)
|
The strengthening of the United States dollar compared to foreign currencies, net of the impact of foreign currency hedges, resulted in a reduction to revenues of $61.3 million and $217.1 million for the years ended December 31, 2017 and 2016, respectively, when compared to foreign currency rates in the prior year.
|
•
|
With respect to the United States taxation of certain previously undistributed earnings of foreign subsidiaries, the determination of the amount of earnings, the amount of assets which are to be included as cash and other specified assets, and which are therefore subject to the higher effective tax rate specified in the Tax Act, and the related potential foreign tax implications are provisional and subject to further analysis, including our completion of the calculation for our 2017 federal, state, and foreign income tax returns. In addition, we are completing this analysis for a significant number of our controlled foreign corporations, as the analysis must be completed for each of the subsidiaries and not consolidated at a higher level. Therefore, the amount of this tax may change until we finalize the calculation. The estimated tax provision amount related to this matter was $916 million in the year ended
December 31, 2017
.
|
•
|
We recorded a provisional $87 million benefit for the remeasurement of deferred tax assets and liabilities and other tax balances to reflect the lower federal income tax rate, among other effects. We are still analyzing certain aspects of the Tax Act and refining the calculations, which could potentially affect the measurement of these balances, and the amount is also subject to our completion of the calculation for the 2017 federal, state, and foreign income tax returns.
|
•
|
We have provisionally estimated the total amount of outside basis differences with respect to our foreign subsidiaries as of December 31, 2017 to be $254 million (after giving effect to the Tax Act), and no deferred income tax effects have been recognized with respect to such outside basis differences. These outside tax basis differences primarily relate to the remaining undistributed foreign earnings not subject to the tax on certain previously undistributed earnings of foreign subsidiaries pursuant to the Tax Act 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. The amount of total outside basis differences and appropriate deferred tax effects are impacted by the application of the Tax Act and will be finalized during 2018.
|
•
|
Subsequent to the enactment of the Tax Act, we must make an accounting policy election to account for the tax effects of global intangible low-tax income either as a component of income tax expense in the period the tax arises, or as a component of deferred taxes on the related investments in foreign subsidiaries. We are currently evaluating these provisions of the Tax Act and the related implications and have not finalized our accounting policy election. We will finalize this accounting policy election in 2018.
|
•
|
The accounting policies of the reportable 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 above, for the year ended
December 31, 2017
, we recognized a non-cash goodwill impairment charge of
$464.0 million
related to our Business Solutions reporting unit. While the impairment was identifiable to our Business Solutions segment, it was not allocated to the segment, as it was 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.
|
•
|
As described above, we incurred $60.0 million of expenses related to the NYDFS Consent Order during the year ended
December 31, 2017
, and expenses of $8.0 million and $601.0 million related to the Joint Settlement Agreements during the years ended
December 31, 2017
and
2016
, respectively. While these expenses were identifiable to our Consumer-to-Consumer segment, they were 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.
|
•
|
We incurred expenses related to the WU Way of
$94.4 million
and
$20.3 million
during the years ended
December 31, 2017
and
2016
, respectively. A majority of these expenses related to severance and related employee benefits and consulting service fees. While certain items related to the initiative were identifiable to our segments, they were 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, beginning in the fourth quarter of 2016. For additional information on this business transformation initiative, see Part II, Item 8,
Financial Statements and Supplementary Data,
Note 3, "Business Transformation and Productivity and Cost-Savings Initiatives Expenses."
We believe that
the expenses associated with the WU Way initiative are effectively complete as of
December 31, 2017
.
|
•
|
Costs incurred for the review and closing of acquisitions are included in "Other."
|
•
|
All items not included in operating income are excluded from the segments.
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Consumer-to-Consumer
|
79
|
%
|
|
79
|
%
|
|
79
|
%
|
Business Solutions
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
Other
|
14
|
%
|
|
14
|
%
|
|
14
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
Year Ended December 31,
|
|
2017
|
|
2016
|
||||||||||||
(dollars and transactions in millions)
|
2017
|
|
2016
|
|
2015
|
|
vs. 2016
|
|
vs. 2015
|
||||||||
Revenues
|
$
|
4,354.5
|
|
|
$
|
4,304.6
|
|
|
$
|
4,343.9
|
|
|
1
|
%
|
|
(1
|
)%
|
Operating income
|
$
|
1,002.4
|
|
|
$
|
1,008.7
|
|
|
$
|
1,042.0
|
|
|
(1
|
)%
|
|
(3
|
)%
|
Operating income margin
|
23
|
%
|
|
23
|
%
|
|
24
|
%
|
|
|
|
|
|||||
Key indicator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer-to-Consumer transactions
|
275.8
|
|
|
268.3
|
|
|
261.5
|
|
|
3
|
%
|
|
3
|
%
|
Region Description
|
|
Former Region Description
|
|
Significant Changes
|
North America (United States and Canada) ("NA")
|
|
North America
|
|
Excludes Mexico
|
Europe and Russia/CIS ("EU & CIS")
|
|
Europe and CIS
|
|
None
|
Middle East, Africa, and South Asia ("MEASA")
|
|
Middle East and Africa
|
|
Includes India and certain other South Asian countries (a)
|
Latin America and the Caribbean ("LACA")
|
|
Latin America and the Caribbean
|
|
Includes Mexico
|
East Asia and Oceania ("APAC")
|
|
Asia Pacific
|
|
Excludes India and certain other South Asian countries (a)
|
(a)
|
These other South Asian countries include Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka.
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||
|
Revenue Growth/(Decline), as Reported - (GAAP)
|
|
Foreign Exchange Translation Impact
|
|
Constant Currency Revenue Growth/(Decline) (a) - (Non-GAAP)
|
|
Transaction Growth/(Decline)
|
|
Revenue Growth/(Decline), as Reported - (GAAP)
|
|
Foreign Exchange Translation Impact
|
|
Constant Currency Revenue Growth/(Decline) (a) - (Non-GAAP)
|
|
Transaction Growth/(Decline)
|
||||||||
Consumer-to-Consumer regional growth/(decline):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
NA
|
2
|
%
|
|
(1
|
)%
|
|
3
|
%
|
|
3
|
%
|
|
6
|
%
|
|
(1
|
)%
|
|
7
|
%
|
|
7
|
%
|
EU & CIS
|
1
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
7
|
%
|
|
(2
|
)%
|
|
(3
|
)%
|
|
1
|
%
|
|
4
|
%
|
MEASA
|
(8
|
)%
|
|
(1
|
)%
|
|
(7
|
)%
|
|
(10
|
)%
|
|
(10
|
)%
|
|
(2
|
)%
|
|
(8
|
)%
|
|
(11
|
)%
|
LACA
|
22
|
%
|
|
(1
|
)%
|
|
23
|
%
|
|
17
|
%
|
|
(3
|
)%
|
|
(10
|
)%
|
|
7
|
%
|
|
13
|
%
|
APAC
|
(2
|
)%
|
|
(2
|
)%
|
|
0
|
%
|
|
0
|
%
|
|
(2
|
)%
|
|
(2
|
)%
|
|
0
|
%
|
|
(6
|
)%
|
Total Consumer-to-Consumer growth/(decline):
|
1
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
3
|
%
|
|
(1
|
)%
|
|
(3
|
)%
|
|
2
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
westernunion.com (b)
|
23
|
%
|
|
(1
|
)%
|
|
24
|
%
|
|
24
|
%
|
|
22
|
%
|
|
(2
|
)%
|
|
24
|
%
|
|
27
|
%
|
(a)
|
Constant currency revenue growth assumes that revenues denominated in foreign currencies are translated to the United States dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year.
|
(b)
|
Westernunion.com revenues have also been included in each region, as described earlier.
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Consumer-to-Consumer revenue as a percentage of segment revenue:
|
|
|
|
|
|
|||
NA
|
37
|
%
|
|
36
|
%
|
|
34
|
%
|
EU & CIS
|
31
|
%
|
|
31
|
%
|
|
31
|
%
|
MEASA
|
16
|
%
|
|
18
|
%
|
|
20
|
%
|
LACA
|
8
|
%
|
|
7
|
%
|
|
7
|
%
|
APAC
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
Year Ended December 31,
|
|
2017
|
|
2016
|
||||||||||||
(dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
vs. 2016
|
|
vs. 2015
|
||||||||
Revenues
|
$
|
383.9
|
|
|
$
|
396.0
|
|
|
$
|
398.7
|
|
|
(3
|
)%
|
|
(1
|
)%
|
Operating income
|
$
|
13.6
|
|
|
$
|
21.1
|
|
|
$
|
2.8
|
|
|
(36
|
)%
|
|
(a)
|
|
Operating income margin
|
4
|
%
|
|
5
|
%
|
|
1
|
%
|
|
|
|
|
(a)
|
Calculation not meaningful.
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
Year Ended December 31,
|
|
2017
|
|
2016
|
||||||||||||
(dollars in millions)
|
2017
|
|
2016
|
|
2015
|
|
vs. 2016
|
|
vs. 2015
|
||||||||
Revenues
|
$
|
785.9
|
|
|
$
|
722.3
|
|
|
$
|
741.1
|
|
|
9
|
%
|
|
(3
|
)%
|
Operating income
|
$
|
83.8
|
|
|
$
|
75.2
|
|
|
$
|
64.6
|
|
|
11
|
%
|
|
16
|
%
|
Operating income margin
|
11
|
%
|
|
10
|
%
|
|
9
|
%
|
|
|
|
|
Notes:
|
|
||
3.650% notes (effective rate of 5.0%) due 2018
|
$
|
400.0
|
|
3.350% notes due 2019 (a)
|
250.0
|
|
|
Floating rate notes (effective rate of 2.5%) due 2019 (b)
|
250.0
|
|
|
5.253% notes due 2020 (a)
|
324.9
|
|
|
3.600% notes (effective rate of 3.7%) due 2022 (c)
|
500.0
|
|
|
6.200% notes due 2036 (a)
|
500.0
|
|
|
6.200% notes due 2040 (a)
|
250.0
|
|
|
Term loan facility borrowing (effective rate of 3.0%)
|
575.0
|
|
|
Total borrowings at par value
|
3,049.9
|
|
|
Fair value hedge accounting adjustments, net (d)
|
0.5
|
|
|
Debt issuance costs and unamortized discount, net
|
(16.8
|
)
|
|
Total borrowings at carrying value (e)
|
$
|
3,033.6
|
|
(a)
|
The difference between the stated interest rate and the effective interest rate is not significant.
|
(b)
|
On August 22, 2017, we issued $250.0 million of aggregate principal amount of unsecured floating rate notes due May 22, 2019 ("Floating Rate Notes").
|
(c)
|
On March 15, 2017, we issued $400.0 million of aggregate principal amount of 3.600% unsecured notes due in 2022. On August 22, 2017, we issued an additional $100.0 million of aggregate principal amount of 3.600% unsecured notes, for an aggregate principal total of $500.0 million of 3.600% unsecured notes ("2022 Notes").
|
(d)
|
We utilize interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of our notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage our overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in "Interest expense" in the Consolidated Statements of Income/(Loss) over the life of the related notes and cause the effective rate of interest to differ from the notes’ stated rate.
|
(e)
|
As of
December 31, 2017
, our weighted-average effective rate on total borrowings was approximately
4.5%
.
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5 Years
|
||||||||||
Items related to amounts included on our balance sheet:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings, including interest (a)
|
$
|
4,209.7
|
|
|
$
|
542.3
|
|
|
$
|
1,098.3
|
|
|
$
|
1,113.8
|
|
|
$
|
1,455.3
|
|
2017 United States federal income taxes (including Tax Act taxes on certain previously undistributed foreign earnings) (b)
|
780.0
|
|
|
62.0
|
|
|
124.0
|
|
|
124.0
|
|
|
470.0
|
|
|||||
IRS Agreement and related state tax payments (c)
|
100.0
|
|
|
100.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unrecognized tax benefits (d)
|
350.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency and interest rate derivative contracts (e)
|
263.0
|
|
|
234.4
|
|
|
28.6
|
|
|
—
|
|
|
—
|
|
|||||
Other (f)
|
85.0
|
|
|
76.6
|
|
|
8.2
|
|
|
0.2
|
|
|
—
|
|
|||||
Other Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase obligations (g)
|
167.5
|
|
|
86.9
|
|
|
68.4
|
|
|
12.2
|
|
|
—
|
|
|||||
Operating leases (h)
|
278.8
|
|
|
43.2
|
|
|
67.9
|
|
|
49.0
|
|
|
118.7
|
|
|||||
Total
|
$
|
6,234.4
|
|
|
$
|
1,145.4
|
|
|
$
|
1,395.4
|
|
|
$
|
1,299.2
|
|
|
$
|
2,044.0
|
|
(a)
|
We have estimated our interest payments based on (i) the assumption that no debt issuances or renewals will occur upon the maturity dates of our notes and (ii) an estimate of future interest rates on our interest rate swap agreements based on projected LIBOR rates. However, we plan to refinance all or a portion our notes maturing in 2018.
|
(b)
|
The Tax Act imposes United States tax on certain of our previously undistributed foreign earnings. This tax charge, combined with our other 2017 United States taxable income and tax attributes, results in an estimated United States federal tax liability of $780 million at December 31, 2017, which we have elected to pay in periodic installments over the next eight years. Under the terms of the law, we owe 8% of this liability in each of the first five years after the enactment (2018 through 2022), with 15%, 20%, and 25% of the tax owed in 2023, 2024, and 2025, respectively.
|
(c)
|
In December 2011, we reached an agreement with the IRS resolving substantially all of the issues related to the restructuring of our international operations in 2003. As a result of the IRS Agreement, we have made cash payments to the IRS and various state tax authorities of $94.1 million as of December 31, 2017. We have estimated that we may make payments of approximately $100 million in 2018 (plus interest) to cover the remaining portion; however, certain or all of these payments may be made after 2018.
|
(d)
|
Unrecognized tax benefits include associated interest and penalties. The timing of related cash payments for substantially all of these liabilities is inherently uncertain because the ultimate amount and timing of such liabilities is affected by factors which are variable and outside our control.
|
(e)
|
Represents the liability position of our foreign currency and interest rate derivative contracts as of December 31, 2017, which will fluctuate based on market conditions.
|
(f)
|
This line item primarily includes the $60 million payment required and paid in January 2018 pursuant to the NYDFS Consent Order and accrued and unpaid initial payments for new and renewed agent contracts as of December 31, 2017.
|
(g)
|
Many of our contracts contain clauses that allow us to terminate the contract with notice and with a termination penalty. Termination penalties are generally an amount less than the original obligation. Obligations under certain contracts are usage-based and are, therefore, estimated in the above amounts. Historically, we have not had any significant defaults of our contractual obligations or incurred significant penalties for termination of our contractual obligations.
|
(h)
|
We have entered into lease agreements to move employees in our current corporate headquarters to other locations in the Denver, Colorado area, and we expect to relocate during the second half of 2018.
|
•
|
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 "Accumulated other comprehensive loss" are reclassified to earnings in the same period or periods the hedged item affects earnings, to the extent the instrument is effective in offsetting the change in cash flows attributable to the risk being hedged. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately in "Derivative gains/(losses), net."
|
•
|
Fair value hedges - Fair value hedges consist of hedges of fixed rate debt, through interest rate swaps. The changes in fair value of these hedges, along with offsetting changes in fair value of the related debt instrument attributable to changes in the benchmark interest rate, are recorded in "Interest expense."
|
|
/s/ Ernst & Young LLP
|
Denver, Colorado
|
|
February 22, 2018
|
|
|
/s/ Ernst & Young LLP
|
|
|
We have served as the Company’s auditor since 2006.
|
|
|
|
Denver, Colorado
|
|
February 22, 2018
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
5,524.3
|
|
|
$
|
5,422.9
|
|
|
$
|
5,483.7
|
|
Expenses:
|
|
|
|
|
|
||||||
Cost of services
|
3,355.4
|
|
|
3,270.0
|
|
|
3,199.4
|
|
|||
Selling, general and administrative
|
1,231.5
|
|
|
1,669.2
|
|
|
1,174.9
|
|
|||
Goodwill impairment charge
|
464.0
|
|
|
—
|
|
|
—
|
|
|||
Total expenses*
|
5,050.9
|
|
|
4,939.2
|
|
|
4,374.3
|
|
|||
Operating income
|
473.4
|
|
|
483.7
|
|
|
1,109.4
|
|
|||
Other income/(expense):
|
|
|
|
|
|
||||||
Interest income
|
4.9
|
|
|
3.5
|
|
|
10.9
|
|
|||
Interest expense
|
(142.1
|
)
|
|
(152.5
|
)
|
|
(167.9
|
)
|
|||
Derivative gains, net
|
7.1
|
|
|
4.5
|
|
|
1.2
|
|
|||
Other income/(expense), net
|
4.2
|
|
|
2.5
|
|
|
(11.8
|
)
|
|||
Total other expense, net
|
(125.9
|
)
|
|
(142.0
|
)
|
|
(167.6
|
)
|
|||
Income before income taxes
|
347.5
|
|
|
341.7
|
|
|
941.8
|
|
|||
Provision for income taxes (Note 10)
|
904.6
|
|
|
88.5
|
|
|
104.0
|
|
|||
Net income/(loss)
|
$
|
(557.1
|
)
|
|
$
|
253.2
|
|
|
$
|
837.8
|
|
Earnings/(loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(1.19
|
)
|
|
$
|
0.52
|
|
|
$
|
1.63
|
|
Diluted
|
$
|
(1.19
|
)
|
|
$
|
0.51
|
|
|
$
|
1.62
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
467.9
|
|
|
490.2
|
|
|
512.6
|
|
|||
Diluted
|
467.9
|
|
|
493.5
|
|
|
516.7
|
|
|||
Cash dividends declared per common share
|
$
|
0.70
|
|
|
$
|
0.64
|
|
|
$
|
0.62
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income/(loss)
|
$
|
(557.1
|
)
|
|
$
|
253.2
|
|
|
$
|
837.8
|
|
Other comprehensive income/(loss), net of tax (Note 13):
|
|
|
|
|
|
||||||
Unrealized gains/(losses) on investment securities
|
6.5
|
|
|
(11.6
|
)
|
|
(1.1
|
)
|
|||
Unrealized losses on hedging activities
|
(74.4
|
)
|
|
(7.6
|
)
|
|
(7.2
|
)
|
|||
Foreign currency translation adjustments
|
(6.2
|
)
|
|
(4.7
|
)
|
|
(16.8
|
)
|
|||
Defined benefit pension plan adjustments
|
9.0
|
|
|
5.0
|
|
|
0.1
|
|
|||
Total other comprehensive loss
|
(65.1
|
)
|
|
(18.9
|
)
|
|
(25.0
|
)
|
|||
Comprehensive income/(loss)
|
$
|
(622.2
|
)
|
|
$
|
234.3
|
|
|
$
|
812.8
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
838.2
|
|
|
$
|
877.5
|
|
Settlement assets
|
4,188.9
|
|
|
3,749.1
|
|
||
Property and equipment, net of accumulated depreciation of $635.7 and $600.0, respectively
|
214.2
|
|
|
220.5
|
|
||
Goodwill
|
2,727.9
|
|
|
3,162.0
|
|
||
Other intangible assets, net of accumulated amortization of $1,042.7 and $958.2, respectively
|
586.3
|
|
|
664.2
|
|
||
Other assets
|
675.9
|
|
|
746.3
|
|
||
Total assets
|
$
|
9,231.4
|
|
|
$
|
9,419.6
|
|
Liabilities and Stockholders' Equity/(Deficit)
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities (Note 5)
|
$
|
718.5
|
|
|
$
|
1,129.6
|
|
Settlement obligations
|
4,188.9
|
|
|
3,749.1
|
|
||
Income taxes payable (Note 10)
|
1,252.0
|
|
|
407.3
|
|
||
Deferred tax liability, net
|
173.0
|
|
|
85.9
|
|
||
Borrowings
|
3,033.6
|
|
|
2,786.1
|
|
||
Other liabilities
|
356.8
|
|
|
359.4
|
|
||
Total liabilities
|
9,722.8
|
|
|
8,517.4
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 5)
|
|
|
|
||||
|
|
|
|
||||
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; 459.0 shares and 481.5 shares issued and outstanding as of December 31, 2017 and 2016, respectively
|
4.6
|
|
|
4.8
|
|
||
Capital surplus
|
697.8
|
|
|
640.9
|
|
||
Retained earnings/(accumulated deficit)
|
(965.9
|
)
|
|
419.3
|
|
||
Accumulated other comprehensive loss
|
(227.9
|
)
|
|
(162.8
|
)
|
||
Total stockholders' equity/(deficit)
|
(491.4
|
)
|
|
902.2
|
|
||
Total liabilities and stockholders' equity/(deficit)
|
$
|
9,231.4
|
|
|
$
|
9,419.6
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income/(loss)
|
$
|
(557.1
|
)
|
|
$
|
253.2
|
|
|
$
|
837.8
|
|
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
77.1
|
|
|
74.2
|
|
|
67.7
|
|
|||
Amortization
|
185.8
|
|
|
189.0
|
|
|
202.5
|
|
|||
Goodwill impairment charge (Note 4)
|
464.0
|
|
|
—
|
|
|
—
|
|
|||
Deferred income tax provision/(benefit) (Note 10)
|
69.5
|
|
|
(174.2
|
)
|
|
(39.9
|
)
|
|||
Other non-cash items, net
|
124.2
|
|
|
98.3
|
|
|
63.7
|
|
|||
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in:
|
|
|
|
|
|
||||||
Other assets
|
(68.7
|
)
|
|
(71.4
|
)
|
|
(107.4
|
)
|
|||
Accounts payable and accrued liabilities (Note 5)
|
(417.6
|
)
|
|
522.8
|
|
|
14.2
|
|
|||
Income taxes payable (Note 10)
|
850.4
|
|
|
190.9
|
|
|
47.1
|
|
|||
Other liabilities
|
8.2
|
|
|
(40.9
|
)
|
|
(14.6
|
)
|
|||
Net cash provided by operating activities
|
735.8
|
|
|
1,041.9
|
|
|
1,071.1
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Capitalization of contract costs
|
(74.8
|
)
|
|
(107.3
|
)
|
|
(122.8
|
)
|
|||
Capitalization of purchased and developed software
|
(33.2
|
)
|
|
(53.7
|
)
|
|
(49.3
|
)
|
|||
Purchases of property and equipment
|
(69.1
|
)
|
|
(68.8
|
)
|
|
(94.4
|
)
|
|||
Purchases of non-settlement related investments and other
|
(192.1
|
)
|
|
(64.7
|
)
|
|
(110.9
|
)
|
|||
Proceeds from maturity of non-settlement related investments and other
|
203.8
|
|
|
53.2
|
|
|
100.3
|
|
|||
Purchases of held-to-maturity non-settlement related investments
|
(42.7
|
)
|
|
(39.7
|
)
|
|
(9.3
|
)
|
|||
Proceeds from held-to-maturity non-settlement related investments
|
28.4
|
|
|
9.9
|
|
|
—
|
|
|||
Acquisition of businesses, net (Note 4)
|
(24.9
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(204.6
|
)
|
|
(271.1
|
)
|
|
(286.4
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Cash dividends paid
|
(325.6
|
)
|
|
(312.2
|
)
|
|
(316.5
|
)
|
|||
Common stock repurchased (Note 13)
|
(502.8
|
)
|
|
(501.6
|
)
|
|
(511.3
|
)
|
|||
Net proceeds from issuance of borrowings
|
746.2
|
|
|
575.0
|
|
|
—
|
|
|||
Principal payments on borrowings
|
(500.0
|
)
|
|
(1,005.4
|
)
|
|
(500.0
|
)
|
|||
Proceeds from exercise of options and other
|
11.7
|
|
|
35.0
|
|
|
75.8
|
|
|||
Net cash used in financing activities
|
(570.5
|
)
|
|
(1,209.2
|
)
|
|
(1,252.0
|
)
|
|||
Net change in cash and cash equivalents
|
(39.3
|
)
|
|
(438.4
|
)
|
|
(467.3
|
)
|
|||
Cash and cash equivalents at beginning of year
|
877.5
|
|
|
1,315.9
|
|
|
1,783.2
|
|
|||
Cash and cash equivalents at end of year
|
$
|
838.2
|
|
|
$
|
877.5
|
|
|
$
|
1,315.9
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
128.0
|
|
|
$
|
159.0
|
|
|
$
|
161.8
|
|
Income taxes (refunded)/paid
|
$
|
(11.6
|
)
|
|
$
|
68.4
|
|
|
$
|
92.8
|
|
|
|
|
Capital Surplus
|
|
Retained Earnings/(Accumulated Deficit)
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders' Equity/(Deficit)
|
|||||||||||||
|
|
|
|
|
|
|||||||||||||||||
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2014
|
521.5
|
|
|
$
|
5.2
|
|
|
$
|
445.4
|
|
|
$
|
968.7
|
|
|
$
|
(118.9
|
)
|
|
$
|
1,300.4
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
837.8
|
|
|
—
|
|
|
837.8
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
42.2
|
|
|
—
|
|
|
—
|
|
|
42.2
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(316.5
|
)
|
|
—
|
|
|
(316.5
|
)
|
|||||
Repurchase and retirement of common shares
|
(25.7
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(512.7
|
)
|
|
—
|
|
|
(513.0
|
)
|
|||||
Shares issued under stock-based compensation plans
|
6.6
|
|
|
0.1
|
|
|
78.9
|
|
|
—
|
|
|
—
|
|
|
79.0
|
|
|||||
Unrealized losses on investment securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|||||
Unrealized losses on hedging activities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.2
|
)
|
|
(7.2
|
)
|
|||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.8
|
)
|
|
(16.8
|
)
|
|||||
Defined benefit pension plan adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||||
Balance, December 31, 2015
|
502.4
|
|
|
5.0
|
|
|
566.5
|
|
|
977.3
|
|
|
(143.9
|
)
|
|
1,404.9
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
253.2
|
|
|
—
|
|
|
253.2
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
41.8
|
|
|
—
|
|
|
—
|
|
|
41.8
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(312.2
|
)
|
|
—
|
|
|
(312.2
|
)
|
|||||
Repurchase and retirement of common shares
|
(25.8
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(499.0
|
)
|
|
—
|
|
|
(499.2
|
)
|
|||||
Shares issued under stock-based compensation plans
|
4.9
|
|
|
—
|
|
|
32.6
|
|
|
—
|
|
|
—
|
|
|
32.6
|
|
|||||
Unrealized losses on investment securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.6
|
)
|
|
(11.6
|
)
|
|||||
Unrealized losses on hedging activities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
|
(7.6
|
)
|
|||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.7
|
)
|
|
(4.7
|
)
|
|||||
Defined benefit pension plan adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
|
5.0
|
|
|||||
Balance, December 31, 2016
|
481.5
|
|
|
4.8
|
|
|
640.9
|
|
|
419.3
|
|
|
(162.8
|
)
|
|
902.2
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(557.1
|
)
|
|
—
|
|
|
(557.1
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
43.9
|
|
|
—
|
|
|
—
|
|
|
43.9
|
|
|||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(325.6
|
)
|
|
—
|
|
|
(325.6
|
)
|
|||||
Repurchase and retirement of common shares
|
(25.7
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(502.5
|
)
|
|
—
|
|
|
(502.7
|
)
|
|||||
Shares issued under stock-based compensation plans
|
3.2
|
|
|
—
|
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
13.0
|
|
|||||
Unrealized gains on investment securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|
6.5
|
|
|||||
Unrealized losses on hedging activities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74.4
|
)
|
|
(74.4
|
)
|
|||||
Foreign currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.2
|
)
|
|
(6.2
|
)
|
|||||
Defined benefit pension plan adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.0
|
|
|
9.0
|
|
|||||
Balance, December 31, 2017
|
459.0
|
|
|
$
|
4.6
|
|
|
$
|
697.8
|
|
|
$
|
(965.9
|
)
|
|
$
|
(227.9
|
)
|
|
$
|
(491.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Consumer-to-Consumer
- The Consumer-to-Consumer operating segment facilitates money transfers between
two
consumers, primarily through a network of third-party agents. The Company's multi-currency money transfer service is viewed by the Company as
one
interconnected global network where a money transfer can be sent from
one
location to another, around the world. This service is available for international cross-border transfers and, in certain countries, intra- country transfers. This segment also includes money transfer transactions that can be initiated through websites and mobile devices.
|
•
|
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.
|
|
For the Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Basic weighted-average shares outstanding
|
467.9
|
|
|
490.2
|
|
|
512.6
|
|
Common stock equivalents
|
—
|
|
|
3.3
|
|
|
4.1
|
|
Diluted weighted-average shares outstanding
|
467.9
|
|
|
493.5
|
|
|
516.7
|
|
•
|
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 has Level 3 assets that are recognized and disclosed at fair value on a non-recurring basis related to the Company's business combinations, where the values of the intangible assets and goodwill acquired in a purchase are derived utilizing one of the three recognized approaches: the market approach, the income approach or the cost approach.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Settlement assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,264.8
|
|
|
$
|
1,190.0
|
|
Receivables from selling agents and Business Solutions customers
|
1,573.9
|
|
|
1,327.3
|
|
||
Investment securities
|
1,350.2
|
|
|
1,231.8
|
|
||
|
$
|
4,188.9
|
|
|
$
|
3,749.1
|
|
Settlement obligations:
|
|
|
|
||||
Money transfer, money order and payment service payables
|
$
|
2,789.2
|
|
|
$
|
2,598.2
|
|
Payables to agents
|
1,399.7
|
|
|
1,150.9
|
|
||
|
$
|
4,188.9
|
|
|
$
|
3,749.1
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Equipment
|
$
|
604.7
|
|
|
$
|
585.5
|
|
Buildings
|
88.6
|
|
|
88.3
|
|
||
Leasehold improvements
|
87.4
|
|
|
84.3
|
|
||
Furniture and fixtures
|
42.0
|
|
|
40.4
|
|
||
Land and improvements
|
17.0
|
|
|
17.0
|
|
||
Projects in process
|
10.2
|
|
|
5.0
|
|
||
Total property and equipment, gross
|
849.9
|
|
|
820.5
|
|
||
Less accumulated depreciation
|
(635.7
|
)
|
|
(600.0
|
)
|
||
Property and equipment, net
|
$
|
214.2
|
|
|
$
|
220.5
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||||||||
|
|
Weighted-
Average
Amortization
Period
(in years)
|
|
Initial Cost
|
|
Net of
Accumulated
Amortization
|
|
Initial Cost
|
|
Net of
Accumulated
Amortization
|
|||||||||
Acquired contracts
|
|
11.5
|
|
$
|
600.4
|
|
|
$
|
220.0
|
|
|
$
|
599.6
|
|
|
$
|
264.4
|
|
|
Capitalized contract costs
|
|
6.2
|
|
559.5
|
|
|
268.2
|
|
|
559.2
|
|
|
294.0
|
|
|||||
Internal use software
|
|
3.2
|
|
387.8
|
|
|
53.1
|
|
|
371.3
|
|
|
56.4
|
|
|||||
Acquired trademarks
|
|
24.8
|
|
33.2
|
|
|
16.9
|
|
|
34.2
|
|
|
18.5
|
|
|||||
Projects in process
|
|
3.0
|
|
28.1
|
|
|
28.1
|
|
|
30.6
|
|
|
30.6
|
|
|||||
Other intangibles
|
|
4.6
|
|
20.0
|
|
|
—
|
|
|
27.5
|
|
|
0.3
|
|
|||||
Total other intangible assets
|
|
7.7
|
|
$
|
1,629.0
|
|
|
$
|
586.3
|
|
|
$
|
1,622.4
|
|
|
$
|
664.2
|
|
•
|
Cash flow hedges - Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in "Accumulated other comprehensive loss." Cash flow hedges consist of foreign currency hedging of forecasted revenues, as well as hedges of the forecasted issuance of fixed rate debt. Derivative fair value changes that are captured in "Accumulated other comprehensive loss" are reclassified to earnings in the same period or periods the hedged item affects earnings, to the extent the instrument is effective in offsetting the change in cash flows attributable to the risk being hedged. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately in "
Derivative gains, net
."
|
•
|
Fair value hedges - Changes in the fair value of derivatives that are designated as fair value hedges of fixed rate debt are recorded in "Interest expense." The offsetting change in value of the related debt instrument attributable to changes in the benchmark interest rate is also recorded in "Interest expense."
|
•
|
Undesignated - Derivative contracts entered into to reduce the variability related to (a) money transfer settlement assets and obligations, generally with maturities from a few days up to
one month
, and (b) certain foreign currency denominated cash and other asset and liability positions, typically with maturities of less than
one year
at inception, are not designated as hedges for accounting purposes and changes in their fair value are included in "Selling, general and administrative." The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency Business Solutions payments operations. The duration of these derivative contracts at inception is generally less than
one year
. The Company aggregates its Business Solutions payments foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts) as part of a broader foreign currency portfolio, including significant spot exchanges of currency in addition to forwards and options. The changes in fair value related to these contracts are recorded in "Revenues."
|
|
Consulting Service Fees
|
|
Severance and Related Employee Benefits
|
|
Other
|
|
Total
|
||||||||
Balance, December 31, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Expenses
|
16.4
|
|
|
3.9
|
|
|
—
|
|
|
20.3
|
|
||||
Cash payments
|
(7.4
|
)
|
|
—
|
|
|
—
|
|
|
(7.4
|
)
|
||||
Balance, December 31, 2016
|
$
|
9.0
|
|
|
$
|
3.9
|
|
|
$
|
—
|
|
|
$
|
12.9
|
|
Expenses (a)
|
36.1
|
|
|
44.2
|
|
|
14.1
|
|
|
94.4
|
|
||||
Cash payments
|
(36.9
|
)
|
|
(28.2
|
)
|
|
(12.2
|
)
|
|
(77.3
|
)
|
||||
Non-cash benefits/charges (a)
|
—
|
|
|
3.3
|
|
|
(0.3
|
)
|
|
3.0
|
|
||||
Balance, December 31, 2017
|
$
|
8.2
|
|
|
$
|
23.2
|
|
|
$
|
1.6
|
|
|
$
|
33.0
|
|
(a)
|
Expenses incurred during 2017 include a non-cash benefit for adjustments to stock compensation for awards forfeited by employees and other immaterial items. These benefits and charges have been removed from the liability balance in the table above as they do not impact the business transformation accruals.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
Business Transformation
|
|
Productivity and Cost-Savings Initiatives
|
||||||||
Cost of services
|
$
|
35.7
|
|
|
$
|
2.5
|
|
|
$
|
1.0
|
|
Selling, general and administrative
|
58.7
|
|
|
17.8
|
|
|
10.1
|
|
|||
Total expenses, pre-tax
|
$
|
94.4
|
|
|
$
|
20.3
|
|
|
$
|
11.1
|
|
Total expenses, net of tax
|
$
|
63.3
|
|
|
$
|
12.9
|
|
|
$
|
7.2
|
|
|
|
Business Transformation
|
||||||||||||||
|
|
Consumer-to-Consumer
|
|
Business Solutions
|
|
Other
|
|
Total
|
||||||||
2017 expenses
|
|
$
|
30.8
|
|
|
$
|
16.1
|
|
|
$
|
13.6
|
|
|
$
|
60.5
|
|
2016 expenses
|
|
2.7
|
|
|
0.6
|
|
|
0.5
|
|
|
3.8
|
|
|
Consumer-to-Consumer
|
|
Business Solutions
|
|
Other
|
|
Total
|
||||||||
January 1, 2016 goodwill, net
|
$
|
1,950.1
|
|
|
$
|
996.0
|
|
|
$
|
217.7
|
|
|
$
|
3,163.8
|
|
Currency translation
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
(1.8
|
)
|
||||
December 31, 2016 goodwill, net
|
$
|
1,950.1
|
|
|
$
|
996.0
|
|
|
$
|
215.9
|
|
|
$
|
3,162.0
|
|
Goodwill impairment charge
|
—
|
|
|
(464.0
|
)
|
|
—
|
|
|
(464.0
|
)
|
||||
Acquisitions
|
30.9
|
|
|
—
|
|
|
—
|
|
|
30.9
|
|
||||
Currency translation
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
||||
December 31, 2017 goodwill, net
|
$
|
1,981.0
|
|
|
$
|
532.0
|
|
|
$
|
214.9
|
|
|
$
|
2,727.9
|
|
|
|
As of December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Goodwill, gross
|
|
$
|
3,191.9
|
|
|
$
|
3,162.0
|
|
|
$
|
3,163.8
|
|
Accumulated impairment losses
|
|
(464.0
|
)
|
|
—
|
|
|
—
|
|
|||
Goodwill, net
|
|
$
|
2,727.9
|
|
|
$
|
3,162.0
|
|
|
$
|
3,163.8
|
|
December 31, 2017
|
Amortized
Cost
|
|
Fair
Value
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Net
Unrealized
Gains/ (Losses)
|
||||||||||
Settlement assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal debt securities (a)
|
$
|
955.7
|
|
|
$
|
960.0
|
|
|
$
|
7.9
|
|
|
$
|
(3.6
|
)
|
|
$
|
4.3
|
|
State and municipal variable rate demand notes
|
319.6
|
|
|
319.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Corporate and other debt securities
|
60.9
|
|
|
60.8
|
|
|
0.2
|
|
|
(0.3
|
)
|
|
(0.1
|
)
|
|||||
United States Treasury securities
|
9.9
|
|
|
9.8
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||||
|
1,346.1
|
|
|
1,350.2
|
|
|
8.1
|
|
|
(4.0
|
)
|
|
4.1
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign corporate debt securities
|
56.2
|
|
|
56.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
1,402.3
|
|
|
$
|
1,406.4
|
|
|
$
|
8.1
|
|
|
$
|
(4.0
|
)
|
|
$
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
Amortized
Cost
|
|
Fair
Value
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Net
Unrealized
Gains/ (Losses)
|
||||||||||
Settlement assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal debt securities (a)
|
$
|
1,008.5
|
|
|
$
|
1,002.4
|
|
|
$
|
5.0
|
|
|
$
|
(11.1
|
)
|
|
$
|
(6.1
|
)
|
State and municipal variable rate demand notes
|
203.4
|
|
|
203.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Corporate and other debt securities
|
26.0
|
|
|
26.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
1,237.9
|
|
|
1,231.8
|
|
|
5.0
|
|
|
(11.1
|
)
|
|
(6.1
|
)
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign corporate debt securities
|
36.2
|
|
|
36.2
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|||||
|
$
|
1,274.1
|
|
|
$
|
1,268.0
|
|
|
$
|
5.1
|
|
|
$
|
(11.2
|
)
|
|
$
|
(6.1
|
)
|
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due within 1 year
|
$
|
102.5
|
|
|
$
|
102.4
|
|
Due after 1 year through 5 years
|
525.7
|
|
|
527.6
|
|
||
Due after 5 years through 10 years
|
275.6
|
|
|
277.1
|
|
||
Due after 10 years
|
442.3
|
|
|
443.1
|
|
||
|
$
|
1,346.1
|
|
|
$
|
1,350.2
|
|
|
Fair Value Measurement Using
|
|
Assets/
Liabilities at
Fair
Value
|
||||||||||||
December 31, 2017
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Settlement assets:
|
|
|
|
|
|
|
|
||||||||
State and municipal debt securities
|
$
|
—
|
|
|
$
|
960.0
|
|
|
$
|
—
|
|
|
$
|
960.0
|
|
State and municipal variable rate demand notes
|
—
|
|
|
319.6
|
|
|
—
|
|
|
319.6
|
|
||||
Corporate and other debt securities
|
—
|
|
|
60.8
|
|
|
—
|
|
|
60.8
|
|
||||
United States Treasury securities
|
9.8
|
|
|
—
|
|
|
—
|
|
|
9.8
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
273.4
|
|
|
—
|
|
|
273.4
|
|
||||
Total assets
|
$
|
9.8
|
|
|
$
|
1,613.8
|
|
|
$
|
—
|
|
|
$
|
1,623.6
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
263.0
|
|
|
$
|
—
|
|
|
$
|
263.0
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
263.0
|
|
|
$
|
—
|
|
|
$
|
263.0
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fair Value Measurement Using
|
|
Assets/
Liabilities at
Fair
Value
|
||||||||||||
December 31, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Settlement assets:
|
|
|
|
|
|
|
|
||||||||
State and municipal debt securities
|
$
|
—
|
|
|
$
|
1,002.4
|
|
|
$
|
—
|
|
|
$
|
1,002.4
|
|
State and municipal variable rate demand notes
|
—
|
|
|
203.4
|
|
|
—
|
|
|
203.4
|
|
||||
Corporate and other debt securities
|
—
|
|
|
26.0
|
|
|
—
|
|
|
26.0
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
—
|
|
|
365.6
|
|
|
—
|
|
|
365.6
|
|
||||
Total assets
|
$
|
—
|
|
|
$
|
1,597.4
|
|
|
$
|
—
|
|
|
$
|
1,597.4
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
$
|
—
|
|
|
$
|
262.3
|
|
|
$
|
—
|
|
|
$
|
262.3
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
262.3
|
|
|
$
|
—
|
|
|
$
|
262.3
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Other assets:
|
|
|
|
||||
Derivatives
|
$
|
273.4
|
|
|
$
|
365.6
|
|
Prepaid expenses
|
120.5
|
|
|
126.9
|
|
||
Amounts advanced to agents, net of discounts
|
53.5
|
|
|
58.0
|
|
||
Equity method investments
|
29.1
|
|
|
40.1
|
|
||
Other
|
199.4
|
|
|
155.7
|
|
||
Total other assets
|
$
|
675.9
|
|
|
$
|
746.3
|
|
Other liabilities:
|
|
|
|
||||
Derivatives
|
$
|
263.0
|
|
|
$
|
262.3
|
|
Pension obligations
|
15.0
|
|
|
26.4
|
|
||
Other
|
78.8
|
|
|
70.7
|
|
||
Total other liabilities
|
$
|
356.8
|
|
|
$
|
359.4
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic
|
$
|
(238.8
|
)
|
|
$
|
(546.4
|
)
|
|
$
|
(27.0
|
)
|
Foreign
|
586.3
|
|
|
888.1
|
|
|
968.8
|
|
|||
|
$
|
347.5
|
|
|
$
|
341.7
|
|
|
$
|
941.8
|
|
•
|
With respect to the United States taxation of certain previously undistributed earnings of foreign subsidiaries, the determination of the amount of earnings, the amount of assets which are to be included as cash and other specified assets, and which are therefore subject to the higher effective tax rate specified in the Tax Act, and the related potential foreign tax implications are provisional and subject to further analysis, including the Company's completion of the calculation for the 2017 federal, state, and foreign income tax returns. In addition, the Company is completing this analysis for a significant number of its controlled foreign corporations, as the analysis must be completed for each of the subsidiaries and not consolidated at a higher level. Therefore, the amount of this tax may change until the Company finalizes the calculation. The estimated tax provision amount related to this matter was
$916 million
in the year ended December 31, 2017.
|
•
|
The Company recorded a provisional
$87 million
benefit for the remeasurement of deferred tax assets and liabilities and other tax balances to reflect the lower federal income tax rate, among other effects. The Company is still analyzing certain aspects of the Tax Act and refining the calculations, which could potentially affect the measurement of these balances, and the amount is also subject to the Company's completion of the calculation for the 2017 federal, state, and foreign income tax returns.
|
•
|
The Company has provisionally estimated the total amount of outside basis differences with respect to its foreign subsidiaries as of December 31, 2017 to be
$254 million
(after giving effect to the Tax Act), and no deferred income tax effects have been recognized with respect to such outside basis differences. These outside tax basis differences primarily relate to the remaining undistributed foreign earnings not subject to the tax on certain previously undistributed earnings of foreign subsidiaries pursuant to the Tax Act 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 the complexities associated with its hypothetical calculation. The amount of total outside basis differences and appropriate deferred tax effects are impacted by the application of the Tax Act and will be finalized during 2018.
|
•
|
Subsequent to the enactment of the Tax Act, the Company must make an accounting policy election to account for the tax effects of global intangible low-tax income either as a component of income tax expense in the period the tax arises, or as a component of deferred taxes on the related investments in foreign subsidiaries. The Company is currently evaluating these provisions of the Tax Act and the related implications and has not finalized its accounting policy election. The Company will finalize its accounting policy election in 2018.
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal income tax benefits
|
1.7
|
%
|
|
1.2
|
%
|
|
0.4
|
%
|
Foreign rate differential, net of United States tax paid on foreign earnings (1.1%, 24.8% and 3.4%, respectively)
|
(69.3
|
)%
|
|
(50.8
|
)%
|
|
(24.6
|
)%
|
Tax Act impact
|
251.5
|
%
|
|
—
|
%
|
|
—
|
%
|
Joint Settlement Agreements impact
|
—
|
%
|
|
62.1
|
%
|
|
—
|
%
|
NYDFS Consent Order impact
|
6.0
|
%
|
|
—
|
%
|
|
—
|
%
|
Goodwill impairment
|
46.7
|
%
|
|
—
|
%
|
|
—
|
%
|
Lapse of statute of limitations
|
(10.0
|
)%
|
|
(11.3
|
)%
|
|
(0.8
|
)%
|
Valuation allowances
|
0.8
|
%
|
|
(2.8
|
)%
|
|
(0.9
|
)%
|
Other
|
(2.1
|
)%
|
|
(7.5
|
)%
|
|
1.9
|
%
|
Effective tax rate
|
260.3
|
%
|
|
25.9
|
%
|
|
11.0
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
774.4
|
|
|
$
|
186.2
|
|
|
$
|
59.6
|
|
State and local
|
1.0
|
|
|
13.1
|
|
|
5.4
|
|
|||
Foreign
|
59.7
|
|
|
63.4
|
|
|
78.9
|
|
|||
Total current taxes
|
835.1
|
|
|
262.7
|
|
|
143.9
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
74.1
|
|
|
(142.7
|
)
|
|
(26.4
|
)
|
|||
State and local
|
4.4
|
|
|
(10.2
|
)
|
|
(6.4
|
)
|
|||
Foreign
|
(9.0
|
)
|
|
(21.3
|
)
|
|
(7.1
|
)
|
|||
Total deferred taxes
|
69.5
|
|
|
(174.2
|
)
|
|
(39.9
|
)
|
|||
|
$
|
904.6
|
|
|
$
|
88.5
|
|
|
$
|
104.0
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets related to:
|
|
|
|
||||
Reserves, accrued expenses and employee-related items
|
$
|
44.8
|
|
|
$
|
279.8
|
|
Tax attribute carryovers
|
27.1
|
|
|
39.1
|
|
||
Pension obligations
|
4.6
|
|
|
11.1
|
|
||
Intangibles, property and equipment
|
11.9
|
|
|
9.7
|
|
||
Other
|
10.7
|
|
|
14.8
|
|
||
Valuation allowance
|
(19.9
|
)
|
|
(22.0
|
)
|
||
Total deferred tax assets
|
79.2
|
|
|
332.5
|
|
||
Deferred tax liabilities related to:
|
|
|
|
||||
Intangibles, property and equipment
|
239.4
|
|
|
394.4
|
|
||
Other
|
0.9
|
|
|
14.3
|
|
||
Total deferred tax liabilities
|
240.3
|
|
|
408.7
|
|
||
Net deferred tax liability (a)
|
$
|
161.1
|
|
|
$
|
76.2
|
|
(a)
|
As of
December 31, 2017
and
2016
, deferred tax assets that cannot be fully offset by deferred tax liabilities in the respective tax jurisdictions of
$11.9 million
and
$9.7 million
, respectively, are reflected in "Other assets" in the Consolidated Balance Sheets.
|
|
2017
|
|
2016
|
||||
Balance as of January 1,
|
$
|
352.0
|
|
|
$
|
105.6
|
|
Increase related to current period tax positions (a)
|
9.0
|
|
|
223.6
|
|
||
Increase related to prior period tax positions
|
—
|
|
|
71.7
|
|
||
Decrease related to prior period tax positions
|
(19.8
|
)
|
|
(14.9
|
)
|
||
Decrease due to lapse of applicable statute of limitations
|
(14.0
|
)
|
|
(33.1
|
)
|
||
Increase/(decrease) due to effects of foreign currency exchange rates
|
1.8
|
|
|
(0.9
|
)
|
||
Balance as of December 31,
|
$
|
329.0
|
|
|
$
|
352.0
|
|
(a)
|
Includes recurring accruals for issues which initially arose in previous periods.
|
Year Ending December 31,
|
|
||
2018
|
$
|
43.2
|
|
2019
|
35.5
|
|
|
2020
|
32.4
|
|
|
2021
|
26.3
|
|
|
2022
|
22.7
|
|
|
Thereafter
|
118.7
|
|
|
Total future minimum lease payments
|
$
|
278.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Unrealized gains/(losses) on investment securities, beginning of year
|
$
|
(3.8
|
)
|
|
$
|
7.8
|
|
|
$
|
8.9
|
|
Unrealized gains/(losses)
|
12.6
|
|
|
(14.9
|
)
|
|
0.4
|
|
|||
Tax (expense)/benefit
|
(4.6
|
)
|
|
5.4
|
|
|
(0.1
|
)
|
|||
Reclassification of gains into "Revenues"
|
(2.4
|
)
|
|
(3.3
|
)
|
|
(2.2
|
)
|
|||
Tax expense related to reclassifications
|
0.9
|
|
|
1.2
|
|
|
0.8
|
|
|||
Net unrealized gains/(losses) on investment securities
|
6.5
|
|
|
(11.6
|
)
|
|
(1.1
|
)
|
|||
Unrealized gains/(losses) on investment securities, end of year
|
$
|
2.7
|
|
|
$
|
(3.8
|
)
|
|
$
|
7.8
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain/(losses) on hedging activities, beginning of year
|
$
|
33.8
|
|
|
$
|
41.4
|
|
|
$
|
48.6
|
|
Unrealized gains/(losses)
|
(73.9
|
)
|
|
34.3
|
|
|
70.8
|
|
|||
Tax (expense)/benefit
|
2.2
|
|
|
1.0
|
|
|
(7.0
|
)
|
|||
Reclassification of gains into "Revenues"
|
(4.8
|
)
|
|
(48.0
|
)
|
|
(77.8
|
)
|
|||
Reclassification of losses into "Interest expense"
|
3.3
|
|
|
3.6
|
|
|
3.6
|
|
|||
Tax expense/(benefit) related to reclassifications
|
(1.2
|
)
|
|
1.5
|
|
|
3.2
|
|
|||
Net unrealized gains/(losses) on hedging activities
|
(74.4
|
)
|
|
(7.6
|
)
|
|
(7.2
|
)
|
|||
Unrealized gains/(losses) on hedging activities, end of year
|
$
|
(40.6
|
)
|
|
$
|
33.8
|
|
|
$
|
41.4
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments, beginning of year
|
$
|
(70.7
|
)
|
|
$
|
(66.0
|
)
|
|
$
|
(49.2
|
)
|
Foreign currency translation adjustments
|
(6.8
|
)
|
|
(5.4
|
)
|
|
(20.3
|
)
|
|||
Tax benefit
|
0.6
|
|
|
0.7
|
|
|
3.5
|
|
|||
Net foreign currency translation adjustments
|
(6.2
|
)
|
|
(4.7
|
)
|
|
(16.8
|
)
|
|||
Foreign currency translation adjustments, end of year
|
$
|
(76.9
|
)
|
|
$
|
(70.7
|
)
|
|
$
|
(66.0
|
)
|
|
|
|
|
|
|
|
|||||
Defined benefit pension plan adjustments, beginning of year
|
$
|
(122.1
|
)
|
|
$
|
(127.1
|
)
|
|
$
|
(127.2
|
)
|
Unrealized gains/(losses)
|
2.3
|
|
|
(2.9
|
)
|
|
(9.7
|
)
|
|||
Tax (expense)/benefit
|
(0.5
|
)
|
|
1.1
|
|
|
2.5
|
|
|||
Reclassification of losses into "Cost of services"
|
11.3
|
|
|
10.7
|
|
|
11.4
|
|
|||
Tax benefit related to reclassifications
|
(4.1
|
)
|
|
(3.9
|
)
|
|
(4.1
|
)
|
|||
Net defined benefit pension plan adjustments
|
9.0
|
|
|
5.0
|
|
|
0.1
|
|
|||
Defined benefit pension plan adjustments, end of year
|
$
|
(113.1
|
)
|
|
$
|
(122.1
|
)
|
|
$
|
(127.1
|
)
|
Accumulated other comprehensive loss, end of year
|
$
|
(227.9
|
)
|
|
$
|
(162.8
|
)
|
|
$
|
(143.9
|
)
|
Year
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
2017
|
|
$
|
0.175
|
|
|
$
|
0.175
|
|
|
$
|
0.175
|
|
|
$
|
0.175
|
|
2016
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
2015
|
|
$
|
0.155
|
|
|
$
|
0.155
|
|
|
$
|
0.155
|
|
|
$
|
0.155
|
|
Contracts designated as hedges:
|
|
||
Euro
|
$
|
384.7
|
|
British pound
|
103.4
|
|
|
Canadian dollar
|
92.9
|
|
|
Australian dollar
|
52.4
|
|
|
Swiss franc
|
32.4
|
|
|
Other
|
62.6
|
|
|
Contracts not designated as hedges:
|
|
||
Euro
|
$
|
320.0
|
|
British pound
|
74.1
|
|
|
Australian dollar
|
51.3
|
|
|
Canadian dollar
|
46.8
|
|
|
Mexican peso
|
42.8
|
|
|
Indian rupee
|
35.9
|
|
|
Brazilian real
|
29.7
|
|
|
Other (a)
|
156.6
|
|
(a)
|
Comprised of exposures to
21
different currencies. None of these individual currency exposures is greater than
$25 million
.
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||
|
Balance Sheet
Location
|
|
December 31,
2017 |
|
December 31,
2016 |
|
Balance Sheet
Location
|
|
December 31,
2017 |
|
December 31,
2016 |
||||||||
Derivatives — hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate fair value hedges
|
Other assets
|
|
$
|
3.3
|
|
|
$
|
6.7
|
|
|
Other liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency cash flow hedges
|
Other assets
|
|
8.0
|
|
|
48.4
|
|
|
Other liabilities
|
|
36.1
|
|
|
1.2
|
|
||||
Total
|
|
|
$
|
11.3
|
|
|
$
|
55.1
|
|
|
|
|
$
|
36.1
|
|
|
$
|
1.2
|
|
Derivatives — undesignated:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Business Solutions operations — foreign currency (a)
|
Other assets
|
|
$
|
260.2
|
|
|
$
|
307.2
|
|
|
Other liabilities
|
|
$
|
221.6
|
|
|
$
|
258.3
|
|
Foreign currency
|
Other assets
|
|
1.9
|
|
|
3.3
|
|
|
Other liabilities
|
|
5.3
|
|
|
2.8
|
|
||||
Total
|
|
|
$
|
262.1
|
|
|
$
|
310.5
|
|
|
|
|
$
|
226.9
|
|
|
$
|
261.1
|
|
Total derivatives
|
|
|
$
|
273.4
|
|
|
$
|
365.6
|
|
|
|
|
$
|
263.0
|
|
|
$
|
262.3
|
|
(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 to the growth in the underlying derivatives business.
|
December 31, 2017
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts Presented
in the Consolidated Balance Sheets
|
|
Derivatives Not Offset
in the Consolidated Balance Sheets
|
|
Net Amounts
|
||||||||||
Derivatives subject to a master netting arrangement or similar agreement
|
|
$
|
115.4
|
|
|
$
|
—
|
|
|
$
|
115.4
|
|
|
$
|
(98.7
|
)
|
|
$
|
16.7
|
|
Derivatives that are not or may not be subject to master netting arrangement or similar agreement
|
|
158.0
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
273.4
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to a master netting arrangement or similar agreement
|
|
$
|
256.3
|
|
|
$
|
—
|
|
|
$
|
256.3
|
|
|
$
|
(146.4
|
)
|
|
$
|
109.9
|
|
Derivatives that are not or may not be subject to master netting arrangement or similar agreement
|
|
109.3
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
365.6
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts Presented
in the Consolidated Balance Sheets
|
|
Derivatives Not Offset
in the Consolidated Balance Sheets
|
|
Net Amounts
|
||||||||||
Derivatives subject to a master netting arrangement or similar agreement
|
|
$
|
214.9
|
|
|
$
|
—
|
|
|
$
|
214.9
|
|
|
$
|
(98.7
|
)
|
|
$
|
116.2
|
|
Derivatives that are not or may not be subject to master netting arrangement or similar agreement
|
|
48.1
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
263.0
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives subject to a master netting arrangement or similar agreement
|
|
$
|
152.6
|
|
|
$
|
—
|
|
|
$
|
152.6
|
|
|
$
|
(146.4
|
)
|
|
$
|
6.2
|
|
Derivatives that are not or may not be subject to master netting arrangement or similar agreement
|
|
109.7
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
262.3
|
|
|
|
|
|
|
|
|
|
|
|
Gain/(Loss) Recognized in Income on
Derivatives
|
|
|
|
Gain/(Loss) Recognized in Income on
Related Hedged Item (a)
|
|
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
||||||||||||||||||||||||||||||||||||
|
|
Income
Statement
Location
|
|
Amount
|
|
|
|
Income
Statement
Location
|
|
Amount
|
|
Income
Statement
Location
|
|
Amount
|
||||||||||||||||||||||||||||||
Derivatives
|
|
|
2017
|
|
2016
|
|
2015
|
|
Hedged
Item
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||
Interest rate contracts
|
|
Interest expense
|
|
$
|
(1.8
|
)
|
|
$
|
6.2
|
|
|
$
|
15.2
|
|
|
Fixed-rate debt
|
|
Interest expense
|
|
$
|
3.9
|
|
|
$
|
3.2
|
|
|
$
|
(2.3
|
)
|
|
Interest expense
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
0.8
|
|
Total gain/(loss)
|
|
|
|
$
|
(1.8
|
)
|
|
$
|
6.2
|
|
|
$
|
15.2
|
|
|
|
|
|
|
$
|
3.9
|
|
|
$
|
3.2
|
|
|
$
|
(2.3
|
)
|
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
0.8
|
|
|
|
Gain/(Loss) Recognized
|
|
Gain/(Loss) Reclassified
|
|
Gain/(Loss) Recognized in Income on
|
||||||||||||||||||||||||||||||||||
|
|
in OCI on Derivatives
|
|
from Accumulated OCI into Income
|
|
Derivatives (Ineffective Portion and Amount
|
||||||||||||||||||||||||||||||||||
|
|
(Effective Portion)
|
|
(Effective Portion)
|
|
Excluded from Effectiveness Testing) (b)
|
||||||||||||||||||||||||||||||||||
|
|
Amount
|
|
Income
Statement Location
|
|
Amount
|
|
Income
Statement Location
|
|
Amount
|
||||||||||||||||||||||||||||||
Derivatives
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||
Foreign currency contracts
|
|
$
|
(73.9
|
)
|
|
$
|
34.3
|
|
|
$
|
70.8
|
|
|
Revenue
|
|
$
|
4.8
|
|
|
$
|
48.0
|
|
|
$
|
77.8
|
|
|
Derivative gains, net
|
|
$
|
9.0
|
|
|
$
|
3.7
|
|
|
$
|
(0.1
|
)
|
Interest rate contracts (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Interest expense
|
|
(3.3
|
)
|
|
(3.6
|
)
|
|
(3.6
|
)
|
|
Interest expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total gain/(loss)
|
|
$
|
(73.9
|
)
|
|
$
|
34.3
|
|
|
$
|
70.8
|
|
|
|
|
$
|
1.5
|
|
|
$
|
44.4
|
|
|
$
|
74.2
|
|
|
|
|
$
|
9.0
|
|
|
$
|
3.7
|
|
|
$
|
(0.1
|
)
|
|
|
Gain/(Loss) Recognized in Income on Derivatives (d)
|
||||||||||||
|
|
Income Statement Location
|
|
Amount
|
||||||||||
Derivatives
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign currency contracts (e)
|
Selling, general and administrative
|
|
$
|
(20.5
|
)
|
|
$
|
13.2
|
|
|
$
|
35.9
|
|
|
Foreign currency contracts (f)
|
Derivative gains, net
|
|
(0.5
|
)
|
|
0.8
|
|
|
1.3
|
|
||||
Total gain/(loss)
|
|
|
$
|
(21.0
|
)
|
|
$
|
14.0
|
|
|
$
|
37.2
|
|
(a)
|
The
2017
gain of
$3.9 million
consisted of a gain in value on the debt of
$2.0 million
and amortization of hedge accounting adjustments of
$1.9 million
. The
2016
gain of
$3.2 million
was comprised of a loss in value on the debt of
$6.2 million
and amortization of hedge accounting adjustments of
$9.4 million
. The
2015
loss of
$2.3 million
was comprised of a loss in value on the debt of
$16.0 million
and amortization of hedge accounting adjustments of
$13.7 million
.
|
(b)
|
The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.
|
(c)
|
The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivatives' fair value in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets. These amounts are reclassified to "Interest expense" in the Consolidated Statements of Income/(Loss) over the life of the related notes.
|
(d)
|
The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.
|
(e)
|
The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations, cash balances, and other assets and liabilities, not including amounts related to derivatives activity as displayed above and included in "Selling, general, and administrative" in the Consolidated Statements of Income/(Loss) were
$17.5 million
,
$(21.4) million
, and
$(36.1) million
for the years ended
2017
,
2016
, and
2015
, respectively.
|
(f)
|
The derivative contracts used in the Company's revenue hedging program are not designated as hedges in the final month of the contract.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Notes:
|
|
|
|
||||
2.875% notes due 2017 (a)
|
$
|
—
|
|
|
$
|
500.0
|
|
3.650% notes (effective rate of 5.0%) due 2018
|
400.0
|
|
|
400.0
|
|
||
3.350% notes due 2019 (b)
|
250.0
|
|
|
250.0
|
|
||
Floating rate notes (effective rate of 2.5%) due 2019 (c)
|
250.0
|
|
|
—
|
|
||
5.253% notes due 2020 (b)
|
324.9
|
|
|
324.9
|
|
||
3.600% notes (effective rate of 3.7%) due 2022 (d)
|
500.0
|
|
|
—
|
|
||
6.200% notes due 2036 (b)
|
500.0
|
|
|
500.0
|
|
||
6.200% notes due 2040 (b)
|
250.0
|
|
|
250.0
|
|
||
Term loan facility borrowing (effective rate of 3.0%)
|
575.0
|
|
|
575.0
|
|
||
Total borrowings at par value
|
3,049.9
|
|
|
2,799.9
|
|
||
Fair value hedge accounting adjustments, net (e)
|
0.5
|
|
|
4.4
|
|
||
Debt issuance costs and unamortized discount, net
|
(16.8
|
)
|
|
(18.2
|
)
|
||
Total borrowings at carrying value (f)
|
$
|
3,033.6
|
|
|
$
|
2,786.1
|
|
(a)
|
Proceeds from the unsecured floating rate notes due May 22, 2019 ("Floating Rate Notes") and the August 22, 2017 sale of
3.600%
unsecured notes due March 15, 2022 ("2022 Notes"), as well as cash generated from operations, were used to repay the December 2017 maturity of
$500.0 million
of aggregate principal amount unsecured notes, as discussed further below.
|
(b)
|
The difference between the stated interest rate and the effective interest rate is not significant.
|
(c)
|
On August 22, 2017, the Company issued
$250.0 million
of aggregate principal amount of Floating Rate Notes.
|
(d)
|
On March 15, 2017, the Company issued
$400.0 million
of aggregate principal amount of 2022 Notes. On August 22, 2017, the Company issued an additional
$100.0 million
of aggregate principal amount of 2022 Notes, for an aggregate principal total of
$500.0 million
of 2022 Notes.
|
(e)
|
The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in "Interest expense" in the Consolidated Statements of Income/(Loss) over the life of the related notes and cause the effective rate of i
nterest to differ from the notes’ stated rate.
|
(f)
|
As of
December 31, 2017
, the Company’s weighted-average effective rate on total borrowings was approximately
4.5%
.
|
Due within 1 year
|
$
|
414.3
|
|
Due after 1 year through 2 years
|
528.8
|
|
|
Due after 2 years through 3 years
|
368.0
|
|
|
Due after 3 years through 4 years
|
488.8
|
|
|
Due after 4 years through 5 years
|
500.0
|
|
|
Due after 5 years
|
750.0
|
|
|
Year Ended December 31, 2017
|
|||||||||||
|
Options
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average Remaining
Contractual Term
(Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding as of January 1
|
8.1
|
|
|
$
|
17.46
|
|
|
|
|
|
||
Granted
|
0.4
|
|
|
$
|
19.99
|
|
|
|
|
|
||
Exercised
|
(0.8
|
)
|
|
$
|
15.57
|
|
|
|
|
|
||
Cancelled/forfeited
|
(0.4
|
)
|
|
$
|
19.97
|
|
|
|
|
|
||
Outstanding as of December 31
|
7.3
|
|
|
$
|
17.71
|
|
|
4.6
|
|
$
|
13.4
|
|
Options exercisable as of December 31
|
6.1
|
|
|
$
|
17.49
|
|
|
3.9
|
|
$
|
12.7
|
|
|
Year Ended December 31, 2017
|
||||
|
Number
Outstanding
|
|
Weighted-Average
Grant-Date Fair Value
|
||
Non-vested as of January 1
|
7.4
|
|
$
|
16.68
|
|
Granted
|
3.6
|
|
$
|
17.70
|
|
Vested
|
(2.4)
|
|
$
|
16.02
|
|
Forfeited
|
(1.2)
|
|
$
|
17.10
|
|
Non-vested as of December 31
|
7.4
|
|
$
|
17.32
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Stock-based compensation expense
|
$
|
(43.9
|
)
|
|
$
|
(41.8
|
)
|
|
$
|
(42.2
|
)
|
Income tax benefit from stock-based compensation expense
|
12.8
|
|
|
12.3
|
|
|
12.3
|
|
|||
Net income/(loss) impact
|
$
|
(31.1
|
)
|
|
$
|
(29.5
|
)
|
|
$
|
(29.9
|
)
|
Earnings/(loss) per share:
|
|
|
|
|
|
||||||
Basic and Diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Stock options granted:
|
|
|
|
|
|
||||||
Weighted-average risk-free interest rate
|
2.1
|
%
|
|
1.4
|
%
|
|
1.7
|
%
|
|||
Weighted-average dividend yield
|
3.5
|
%
|
|
3.3
|
%
|
|
3.6
|
%
|
|||
Volatility
|
24.7
|
%
|
|
27.9
|
%
|
|
28.2
|
%
|
|||
Expected term (in years)
|
6.05
|
|
|
6.32
|
|
|
6.00
|
|
|||
Weighted-average grant date fair value
|
$
|
3.39
|
|
|
$
|
3.44
|
|
|
$
|
3.58
|
|
•
|
The accounting policies of the reportable 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, for the year ended
December 31, 2017
, the Company recognized a goodwill impairment charge of
$464.0 million
related to its Business Solutions reporting unit. While the impairment was identifiable to the Business Solutions segment, it was not allocated to the segment, as it was 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.
|
•
|
Expenses of
$60.0 million
related to the NYDFS Consent Order for the year ended
December 31, 2017
, and expenses of
$8.0 million
and
$601.0 million
related to the Joint Settlement Agreements for the years ended
December 31, 2017
and
2016
, respectively, were not allocated to the segments. While these items were identifiable to the Company's Consumer-to-Consumer segment, they were 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. For additional information on the NYDFS Consent Order and the Joint Settlement Agreements, see Note 5.
|
•
|
Business transformation expenses of
$94.4 million
and
$20.3 million
for the years ended
December 31, 2017
and
2016
, respectively, were not allocated to the segments. While certain of these items were identifiable to the Company's segments, they were 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. For additional information on business transformation related activities, see Note 3.
|
•
|
Costs incurred for the review and closing of acquisitions are included in "Other."
|
•
|
All items not included in operating income are excluded from the segments.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Consumer-to-Consumer
|
$
|
4,354.5
|
|
|
$
|
4,304.6
|
|
|
$
|
4,343.9
|
|
Business Solutions
|
383.9
|
|
|
396.0
|
|
|
398.7
|
|
|||
Other (a)
|
785.9
|
|
|
722.3
|
|
|
741.1
|
|
|||
Total consolidated revenues
|
$
|
5,524.3
|
|
|
$
|
5,422.9
|
|
|
$
|
5,483.7
|
|
Operating income:
|
|
|
|
|
|
||||||
Consumer-to-Consumer
|
$
|
1,002.4
|
|
|
$
|
1,008.7
|
|
|
$
|
1,042.0
|
|
Business Solutions
|
13.6
|
|
|
21.1
|
|
|
2.8
|
|
|||
Other (a) (b)
|
83.8
|
|
|
75.2
|
|
|
64.6
|
|
|||
Total segment operating income
|
1,099.8
|
|
|
1,105.0
|
|
|
1,109.4
|
|
|||
Goodwill impairment charge (Note 4)
|
(464.0
|
)
|
|
—
|
|
|
—
|
|
|||
NYDFS Consent Order (Note 5)
|
(60.0
|
)
|
|
—
|
|
|
—
|
|
|||
Joint Settlement Agreements (Note 5)
|
(8.0
|
)
|
|
(601.0
|
)
|
|
—
|
|
|||
Business transformation expenses (Note 3)
|
(94.4
|
)
|
|
(20.3
|
)
|
|
—
|
|
|||
Total consolidated operating income
|
$
|
473.4
|
|
|
$
|
483.7
|
|
|
$
|
1,109.4
|
|
(a)
|
Other consists primarily of the Company's bill payments businesses in the United States and Argentina.
|
(b)
|
During the year ended December 31, 2015, Other operating income included
$35.3 million
of expenses related to a settlement agreement between the Consumer Financial Protection Bureau and one of the Company's subsidiaries, Paymap, Inc.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Assets:
|
|
|
|
|
|
||||||
Consumer-to-Consumer
|
$
|
4,850.8
|
|
|
$
|
4,467.7
|
|
|
$
|
4,738.7
|
|
Business Solutions (a)
|
1,575.5
|
|
|
2,370.8
|
|
|
2,384.4
|
|
|||
Other
|
2,805.1
|
|
|
2,581.1
|
|
|
2,326.1
|
|
|||
Total assets
|
$
|
9,231.4
|
|
|
$
|
9,419.6
|
|
|
$
|
9,449.2
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Consumer-to-Consumer
|
$
|
183.0
|
|
|
$
|
183.5
|
|
|
$
|
183.4
|
|
Business Solutions
|
42.5
|
|
|
50.8
|
|
|
57.4
|
|
|||
Other
|
37.4
|
|
|
28.9
|
|
|
29.4
|
|
|||
Total consolidated depreciation and amortization
|
$
|
262.9
|
|
|
$
|
263.2
|
|
|
$
|
270.2
|
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Consumer-to-Consumer
|
$
|
120.2
|
|
|
$
|
167.7
|
|
|
$
|
191.0
|
|
Business Solutions
|
8.8
|
|
|
11.4
|
|
|
19.2
|
|
|||
Other
|
48.1
|
|
|
50.7
|
|
|
56.3
|
|
|||
Total capital expenditures
|
$
|
177.1
|
|
|
$
|
229.8
|
|
|
$
|
266.5
|
|
(a)
|
The decrease in Business Solutions assets is primarily due to a goodwill impairment charge recognized in the fourth quarter of 2017 in this segment, as further discussed in Note 4.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
|
|
||||||
United States
|
$
|
2,159.0
|
|
|
$
|
2,091.5
|
|
|
$
|
1,962.1
|
|
International
|
3,365.3
|
|
|
3,331.4
|
|
|
3,521.6
|
|
|||
Total
|
$
|
5,524.3
|
|
|
$
|
5,422.9
|
|
|
$
|
5,483.7
|
|
Long-lived assets:
|
|
|
|
|
|
||||||
United States
|
$
|
156.8
|
|
|
$
|
174.0
|
|
|
$
|
182.9
|
|
International
|
57.4
|
|
|
46.5
|
|
|
48.9
|
|
|||
Total
|
$
|
214.2
|
|
|
$
|
220.5
|
|
|
$
|
231.8
|
|
2017 by Quarter:
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Year Ended December 31, 2017
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues
|
$
|
1,302.4
|
|
|
$
|
1,378.9
|
|
|
$
|
1,404.7
|
|
|
$
|
1,438.3
|
|
|
$
|
5,524.3
|
|
|
Expenses (a) (b) (c)
|
1,062.9
|
|
|
1,164.1
|
|
|
1,133.1
|
|
|
1,690.8
|
|
|
5,050.9
|
|
||||||
Operating income/(loss)
|
239.5
|
|
|
214.8
|
|
|
271.6
|
|
|
(252.5
|
)
|
|
473.4
|
|
||||||
Other expense, net
|
26.4
|
|
|
30.4
|
|
|
32.4
|
|
|
36.7
|
|
|
125.9
|
|
||||||
Income/(loss) before income taxes
|
213.1
|
|
|
184.4
|
|
|
239.2
|
|
|
(289.2
|
)
|
|
347.5
|
|
||||||
Provision for income taxes (d)
|
51.4
|
|
|
17.9
|
|
|
3.6
|
|
|
831.7
|
|
|
904.6
|
|
||||||
Net income/(loss)
|
$
|
161.7
|
|
|
$
|
166.5
|
|
|
$
|
235.6
|
|
|
$
|
(1,120.9
|
)
|
|
$
|
(557.1
|
)
|
|
Earnings/(loss) per share:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
$
|
0.34
|
|
|
$
|
0.35
|
|
|
$
|
0.51
|
|
|
$
|
(2.44
|
)
|
|
$
|
(1.19
|
)
|
|
Diluted
|
$
|
0.33
|
|
|
$
|
0.35
|
|
|
$
|
0.51
|
|
|
$
|
(2.44
|
)
|
|
$
|
(1.19
|
)
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
479.8
|
|
|
469.4
|
|
|
462.8
|
|
|
459.6
|
|
|
467.9
|
|
||||||
Diluted
|
483.4
|
|
|
472.0
|
|
|
465.4
|
|
|
459.6
|
|
|
467.9
|
|
(a)
|
Includes a goodwill impairment charge of
$464.0 million
in the fourth quarter related to the Company's Business Solutions reporting unit. For more information, see Note 4.
|
(b)
|
Includes a
$49 million
accrual in the second quarter and an
$11 million
accrual in the fourth quarter as a result of the NYDFS Consent Order, and an additional
$8 million
of expenses in the third quarter related to the independent compliance auditor required pursuant to the terms of the Joint Settlement Agreements, as described further in Note 5.
|
(c)
|
Includes
$14.3 million
,
$35.0 million
,
$9.9 million
, and
$35.2 million
in the first, second, third, and fourth quarters, respectively, of expenses related to business transformation. For more information, see Note 3.
|
(d)
|
Includes an estimated
$828 million
in the fourth quarter of 2017 related to the enactment of the Tax Act into United States law, primarily due to a tax on certain previously undistributed earnings of foreign subsidiaries, partially offset by the remeasurement of deferred tax assets and liabilities and other tax balances to reflect the lower federal income tax rate, among other effects. This tax charge, combined with the Company’s other 2017 United States taxable income and tax attributes, results in an estimated United States federal tax liability of
$780 million
at December 31, 2017, which the Company has elected to pay in periodic installments over the next eight years. As discussed in Note 10, certain of the law's impacts have been provisionally estimated and will likely be adjusted in future periods as the Company completes its accounting for these matters in 2018.
|
2016 by Quarter:
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Year Ended December 31, 2016
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues
|
$
|
1,297.7
|
|
|
$
|
1,375.7
|
|
|
$
|
1,377.8
|
|
|
$
|
1,371.7
|
|
|
$
|
5,422.9
|
|
|
Expenses (e) (f)
|
1,039.1
|
|
|
1,115.4
|
|
|
1,099.5
|
|
|
1,685.2
|
|
|
4,939.2
|
|
||||||
Operating income/(loss)
|
258.6
|
|
|
260.3
|
|
|
278.3
|
|
|
(313.5
|
)
|
|
483.7
|
|
||||||
Other expense, net
|
41.1
|
|
|
37.8
|
|
|
38.3
|
|
|
24.8
|
|
|
142.0
|
|
||||||
Income/(loss) before income taxes
|
217.5
|
|
|
222.5
|
|
|
240.0
|
|
|
(338.3
|
)
|
|
341.7
|
|
||||||
Provision for income taxes
|
31.8
|
|
|
16.9
|
|
|
23.1
|
|
|
16.7
|
|
|
88.5
|
|
||||||
Net income/(loss)
|
$
|
185.7
|
|
|
$
|
205.6
|
|
|
$
|
216.9
|
|
|
$
|
(355.0
|
)
|
|
$
|
253.2
|
|
|
Earnings/(loss) per share:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
$
|
0.37
|
|
|
$
|
0.42
|
|
|
$
|
0.45
|
|
|
$
|
(0.73
|
)
|
|
$
|
0.52
|
|
|
Diluted
|
$
|
0.37
|
|
|
$
|
0.42
|
|
|
$
|
0.44
|
|
|
$
|
(0.73
|
)
|
|
$
|
0.51
|
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
500.0
|
|
|
490.3
|
|
|
487.0
|
|
|
483.6
|
|
|
490.2
|
|
||||||
Diluted
|
503.2
|
|
|
493.0
|
|
|
490.3
|
|
|
483.6
|
|
|
493.5
|
|
||||||
____________
|
|
|
|
|
|
|
|
|
|
(e)
|
Includes
$15 million
of accruals in each of the second and third quarters and
$571 million
of additional expenses in the fourth quarter as a result of the Joint Settlement Agreements, as described further in Note 5.
|
(f)
|
Includes
$2.1 million
,
$5.0 million
, and
$13.2 million
in the second, third, and fourth quarters, respectively, of expenses related to business transformation. For more information, see Note 3.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1.0
|
|
|
$
|
0.3
|
|
Property and equipment, net of accumulated depreciation of $28.5 and $26.6, respectively
|
33.9
|
|
|
34.7
|
|
||
Other assets
|
34.2
|
|
|
39.4
|
|
||
Investment in subsidiaries
|
7,236.2
|
|
|
7,291.7
|
|
||
Total assets
|
$
|
7,305.3
|
|
|
$
|
7,366.1
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity/(Deficit)
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
74.6
|
|
|
$
|
645.5
|
|
Income taxes payable
|
887.0
|
|
|
20.9
|
|
||
Payable to subsidiaries, net
|
3,800.8
|
|
|
3,010.6
|
|
||
Borrowings
|
3,033.6
|
|
|
2,786.1
|
|
||
Other liabilities
|
0.7
|
|
|
0.8
|
|
||
Total liabilities
|
7,796.7
|
|
|
6,463.9
|
|
||
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; 459.0 shares and 481.5 shares issued and outstanding as of December 31, 2017 and 2016, respectively
|
4.6
|
|
|
4.8
|
|
||
Capital surplus
|
697.8
|
|
|
640.9
|
|
||
Retained earnings/(accumulated deficit)
|
(965.9
|
)
|
|
419.3
|
|
||
Accumulated other comprehensive loss
|
(227.9
|
)
|
|
(162.8
|
)
|
||
Total stockholders’ equity/(deficit)
|
(491.4
|
)
|
|
902.2
|
|
||
Total liabilities and stockholders’ equity/(deficit)
|
$
|
7,305.3
|
|
|
$
|
7,366.1
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Expenses
|
—
|
|
|
—
|
|
|
—
|
|
|||
Operating income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Interest income
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Interest expense
|
(177.0
|
)
|
|
(168.1
|
)
|
|
(171.2
|
)
|
|||
Other expense
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
Loss before equity in earnings/(losses) of affiliates and income taxes
|
(177.6
|
)
|
|
(168.1
|
)
|
|
(171.0
|
)
|
|||
Equity in earnings/(losses) of affiliates, net of tax
|
(436.1
|
)
|
|
357.1
|
|
|
943.3
|
|
|||
Income tax benefit
|
56.6
|
|
|
64.2
|
|
|
65.5
|
|
|||
Net income/(loss)
|
(557.1
|
)
|
|
253.2
|
|
|
837.8
|
|
|||
Other comprehensive income, net of tax
|
2.1
|
|
|
2.3
|
|
|
2.2
|
|
|||
Other comprehensive loss of affiliates, net of tax
|
(67.2
|
)
|
|
(21.2
|
)
|
|
(27.2
|
)
|
|||
Comprehensive income/(loss)
|
$
|
(622.2
|
)
|
|
$
|
234.3
|
|
|
$
|
812.8
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net cash (used in)/provided by operating activities
|
$
|
(605.0
|
)
|
|
$
|
192.0
|
|
|
$
|
327.1
|
|
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of property and equipment and other
|
(0.7
|
)
|
|
(5.9
|
)
|
|
(0.1
|
)
|
|||
Capital contributed to subsidiaries, net
|
—
|
|
|
(7.3
|
)
|
|
(17.9
|
)
|
|||
Distributions received from subsidiaries, net
|
307.3
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by/(used in) investing activities
|
306.6
|
|
|
(13.2
|
)
|
|
(18.0
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Advances from subsidiaries, net
|
868.3
|
|
|
1,024.0
|
|
|
796.1
|
|
|||
Net proceeds from issuance of borrowings
|
746.2
|
|
|
575.0
|
|
|
—
|
|
|||
Principal payments on borrowings
|
(500.0
|
)
|
|
(1,000.0
|
)
|
|
(500.0
|
)
|
|||
Proceeds from exercise of options and other
|
13.0
|
|
|
35.0
|
|
|
79.7
|
|
|||
Cash dividends paid
|
(325.6
|
)
|
|
(312.2
|
)
|
|
(316.5
|
)
|
|||
Common stock repurchased
|
(502.8
|
)
|
|
(501.6
|
)
|
|
(511.3
|
)
|
|||
Net cash provided by/(used in) financing activities
|
299.1
|
|
|
(179.8
|
)
|
|
(452.0
|
)
|
|||
Net change in cash and cash equivalents
|
0.7
|
|
|
(1.0
|
)
|
|
(142.9
|
)
|
|||
Cash and cash equivalents at beginning of year
|
0.3
|
|
|
1.3
|
|
|
144.2
|
|
|||
Cash and cash equivalents at end of year
|
$
|
1.0
|
|
|
$
|
0.3
|
|
|
$
|
1.3
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Non-cash investing activity, capital contribution to subsidiary (Note 3)
|
$
|
916.0
|
|
|
$
|
591.0
|
|
|
$
|
—
|
|
Non-cash financing activity, distribution of note from subsidiary (Note 3)
|
$
|
80.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Date Issued
|
|
Amount (in millions)
|
|
Due Date
|
|
Interest Rate (per annum)
|
|||
June 1, 2015
|
|
$
|
87.5
|
|
|
February 28, 2018
|
|
0.43
|
%
|
July 1, 2015 (a)
|
|
$
|
268.2
|
|
|
March 31, 2018
|
|
0.43
|
%
|
September 1, 2015
|
|
$
|
226.2
|
|
|
May 31, 2018
|
|
0.54
|
%
|
January 1, 2017
|
|
$
|
158.8
|
|
|
September 30, 2019
|
|
0.96
|
%
|
March 1, 2017 (a)
|
|
$
|
65.5
|
|
|
November 30, 2019
|
|
1.01
|
%
|
|
The Western Union Company (Registrant)
|
|
|
|
|
February 22, 2018
|
By:
|
/
S
/ H
IKMET
E
RSEK
|
|
|
Hikmet Ersek
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Hikmet Ersek
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 22, 2018
|
Hikmet Ersek
|
|
|
|
|
|
|
|
|
|
/s/ Rajesh K. Agrawal
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
February 22, 2018
|
Rajesh K. Agrawal
|
|
|
|
|
|
|
|
|
|
/s/ Amintore T.X. Schenkel
|
|
Senior Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)
|
|
February 22, 2018
|
Amintore T.X. Schenkel
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey A. Joerres
|
|
Non-Executive Chairman of the Board of Directors
|
|
February 22, 2018
|
Jeffrey A. Joerres
|
|
|
|
|
|
|
|
|
|
/s/ Martin I. Cole
|
|
Director
|
|
February 22, 2018
|
Martin I. Cole
|
|
|
|
|
|
|
|
|
|
/s/ Richard A. Goodman
|
|
Director
|
|
February 22, 2018
|
Richard A. Goodman
|
|
|
|
|
|
|
|
|
|
/s/ Betsy D. Holden
|
|
Director
|
|
February 22, 2018
|
Betsy D. Holden
|
|
|
|
|
|
|
|
|
|
/s/ Roberto G. Mendoza
|
|
Director
|
|
February 22, 2018
|
Roberto G. Mendoza
|
|
|
|
|
|
|
|
|
|
/s/ Michael A. Miles, Jr.
|
|
Director
|
|
February 22, 2018
|
Michael A. Miles, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Robert W. Selander
|
|
Director
|
|
February 22, 2018
|
Robert W. Selander
|
|
|
|
|
|
|
|
|
|
/s/ Frances Fragos Townsend
|
|
Director
|
|
February 22, 2018
|
Frances Fragos Townsend
|
|
|
|
|
|
|
|
|
|
/s/ Solomon D. Trujillo
|
|
Director
|
|
February 22, 2018
|
Solomon D. Trujillo
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
|
$
|
347.5
|
|
|
$
|
341.7
|
|
|
$
|
941.8
|
|
|
$
|
968.2
|
|
|
$
|
926.9
|
|
Fixed charges
|
|
161.4
|
|
|
157.1
|
|
|
175.6
|
|
|
182.7
|
|
|
198.8
|
|
|||||
Other adjustments
|
|
(5.2
|
)
|
|
2.7
|
|
|
(6.9
|
)
|
|
(3.2
|
)
|
|
(0.7
|
)
|
|||||
Total earnings (a)
|
|
$
|
503.7
|
|
|
$
|
501.5
|
|
|
$
|
1,110.5
|
|
|
$
|
1,147.7
|
|
|
$
|
1,125.0
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
142.1
|
|
|
$
|
152.5
|
|
|
$
|
167.9
|
|
|
$
|
176.6
|
|
|
$
|
195.6
|
|
Other adjustments
|
|
19.3
|
|
|
4.6
|
|
|
7.7
|
|
|
6.1
|
|
|
3.2
|
|
|||||
Total fixed charges (b)
|
|
$
|
161.4
|
|
|
$
|
157.1
|
|
|
$
|
175.6
|
|
|
$
|
182.7
|
|
|
$
|
198.8
|
|
Ratio of earnings to fixed charges (a/b)
|
|
3.1
|
|
|
3.2
|
|
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6.3
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6.3
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5.7
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|
Name of Subsidiary
|
|
Jurisdiction of
Incorporation
|
Western Union Peru S.A. (formerly A. Serviban S.A.)
|
|
Peru
|
American Rapid Corporation
|
|
Delaware, USA
|
Banco Western Union do Brasil S.A.
|
|
Brazil
|
Custom House Currency Exchange (Australia) Pty. Limited
|
|
Australia
|
Custom House Currency Exchange (Singapore) Pte. Limited
|
|
Singapore
|
Custom House Financial Ltd.
|
|
Federal, Canada
|
Custom House Financial (UK) Limited
|
|
United Kingdom
|
Custom House Holdings (USA) Ltd.
|
|
Washington, USA
|
Custom House (Online) Ltd.
|
|
Federal, Canada
|
Custom House ULC
|
|
British Columbia, Canada
|
Custom House USA, LLC
|
|
Delaware, USA
|
E Commerce Group Products Inc.
|
|
New York, USA
|
First Financial Management Corporation
|
|
Georgia, USA
|
Global Collection Services, S.A.
|
|
Argentina
|
Global Corporate Real Estate Advisors, LLC
|
|
Colorado, USA
|
Grupo Dinámico Empresarial, S.A. de C.V.
|
|
Mexico
|
Money Transfer Financial Services Limited
|
|
Ireland
|
MT (Bermuda) 1 Ltd
|
|
Bermuda
|
MT (Bermuda) 2 Ltd
|
|
Bermuda
|
MT Caribbean Holdings SRL
|
|
Barbados
|
MT Financial Holdings Ltd.
|
|
Bermuda
|
MT Global Holdings Ltd.
|
|
Bermuda
|
MT Group Ltd.
|
|
Bermuda
|
MT Group Investment Holdings Ltd.
|
|
Bermuda
|
MT Holdings (Bermuda) Ltd.
|
|
Bermuda
|
MT Holdings Limited
|
|
Bermuda
|
MT Holdings Switzerland GmbH
|
|
Switzerland
|
MT International Holdings, Ltd.
|
|
Bermuda
|
MT International Operations SRL
|
|
Barbados
|
MT International Operations Partnership
|
|
Bermuda
|
MT Network Holdings Ltd.
|
|
Bermuda
|
MT Payment Services Operations EU/EEA Limited
|
|
Ireland
|
MT Worldwide Holdings Ltd.
|
|
Bermuda
|
Operaciones Internacionales OV, S.A. de C.V.
|
|
Mexico
|
Paymap Inc.
|
|
Delaware, USA
|
PT Western Union Indonesia
|
|
Indonesia
|
Red Global S.A.
|
|
Argentina
|
RII Holdings, Inc.
|
|
Delaware, USA
|
Ruesch Holding, LLC
|
|
Delaware, USA
|
Ruesch International (Delaware), LLC
|
|
Delaware, USA
|
Ruesch International L.L.C.
|
|
Delaware, USA
|
Servicio Electrónico de Pago S.A.
|
|
Argentina
|
Servicio Integral de Envios, S. de R.L. de C.V.
|
|
Mexico
|
Servicios de Apoyo GDE, S.A. de C.V.
|
|
Mexico
|
SpeedPay, Inc.
|
|
New York, USA
|
The Western Union Real Estate Holdings LLC
|
|
Delaware, USA
|
Transfer Express de Panama S.A.
|
|
Panama
|
Union del Oeste de Costa Rica SRL
|
|
Costa Rica
|
Vigo Remittance Canada Company
|
|
Nova Scotia, Canada
|
Vigo Remittance Corp.
|
|
Delaware, USA
|
Western Union Acquisition Partnership
|
|
Australia
|
Western Union Benelux MT Ltd.
|
|
Ireland
|
Western Union (Bermuda) Holding Finance Ltd.
|
|
Bermuda
|
Western Union Business Solutions (Australia) Pty Limited
|
|
Australia
|
Western Union Business Solutions (Hong Kong) Limited
|
|
Hong Kong
|
Western Union Business Solutions Japan KK
|
|
Japan
|
Western Union Business Solutions (Malta) Limited
|
|
Malta
|
Western Union Business Solutions (SA) Limited
|
|
United Kingdom
|
Western Union Business Solutions (Singapore) Pte Limited
|
|
Singapore
|
Western Union Business Solutions (UK) Limited
|
|
United Kingdom
|
Western Union Business Solutions (USA), LLC
|
|
Delaware, USA
|
Western Union Chile Limitada
|
|
Chile
|
Western Union Communications, Inc.
|
|
Delaware, USA
|
Western Union Consulting Services (Beijing), Co., Ltd.
|
|
China
|
Western Union Corretora de Cambio S.A.
|
|
Brazil
|
Western Union do Brasil Participacoes Limitada
|
|
Brazil
|
Western Union do Brasil Serviços e Participações Ltda.
|
|
Brazil
|
Western Union Financial Holdings L.L.C.
|
|
New York, USA
|
Western Union Financial Services Argentina S.R.L.
|
|
Argentina
|
Western Union Financial Services (Australia) PTY Ltd.
|
|
Australia
|
Western Union Financial Services (Canada), Inc./Services Financiers Western Union (Canada) Inc.
|
|
Ontario, Canada
|
Western Union Financial Services Eastern Europe LLC
|
|
Delaware, USA
|
Western Union Financial Services GmbH
|
|
Austria
|
Western Union Financial Services (Hong Kong) Limited
|
|
Hong Kong
|
Western Union Financial Services International (France) SARL
|
|
France
|
Western Union Financial Services (Korea) Inc.
|
|
Korea
|
Western Union Financial Services (Luxembourg) S.á.r.l.
|
|
Luxembourg
|
Western Union Financial Services, Inc.
|
|
Colorado, USA
|
Western Union GB Limited
|
|
United Kingdom
|
Western Union Global Network Pte. Ltd
|
|
Singapore
|
Western Union (Hellas) International Holdings S.A.
|
|
Greece
|
Western Union Holdings, Inc.
|
|
Georgia, USA
|
Western Union International Bank GmbH
|
|
Austria
|
Western Union International Limited
|
|
Ireland
|
Western Union Ireland Holdings Limited
|
|
Ireland
|
Western Union Italy Holdings Srl
|
|
Italy
|
Western Union Japan K.K.
|
|
Japan
|
Western Union, LLC
|
|
Colorado, USA
|
Western Union Luxembourg Holdings 1 S.á.r.l.
|
|
Luxembourg
|
Western Union Luxembourg Holdings 2 S.á.r.l.
|
|
Luxembourg
|
Western Union Luxembourg Holdings 3 S.á.r.l.
|
|
Luxembourg
|
Western Union Malta Holdings Limited
|
|
Malta
|
Western Union Malta Limited
|
|
Malta
|
Western Union Morocco SARL
|
|
Morocco
|
Western Union MT (Australia) Pty. Ltd.
|
|
Australia
|
Western Union MT East
|
|
Russian Federation
|
Western Union Network Belgium SPRL
|
|
Belgium
|
Western Union Network (Canada) Company
|
|
Nova Scotia, Canada
|
Western Union Network (France) SAS
|
|
France
|
Western Union Network (Ireland) Limited
|
|
Ireland
|
Western Union Northern Europe GmbH
|
|
Germany
|
Western Union Online Limited
|
|
Ireland
|
Western Union Overseas Limited
|
|
Ireland
|
Western Union Payment Services (India) Private Limited
|
|
India
|
Western Union Payment Services Ireland Limited
|
|
Ireland
|
Western Union Payment Services Network (Canada) ULC
|
|
British Columbia, Canada
|
Western Union Payment Services Network EU/EEA Limited
|
|
Ireland
|
Western Union Payment Services UK Limited
|
|
United Kingdom
|
Western Union Payments (Malaysia) SDN. BHD.
|
|
Malaysia
|
Western Union Processing Lithuania, UAB
|
|
Lithuania
|
Western Union Processing Limited
|
|
Ireland
|
Western Union Provision of Advertising and Marketing Services (Hellas) MEPE
|
|
Greece
|
Western Union Regional Panama S.A.
|
|
Panama
|
Western Union Retail Services Belgium
|
|
Belgium
|
Western Union Retail Services GB Limited
|
|
United Kingdom
|
Western Union Retail Services Ireland Limited
|
|
Ireland
|
Western Union Retail Services Italy S.r.l.
|
|
Italy
|
Western Union Retail Services Norway AS
|
|
Norway
|
Western Union Retail Services RO SRL
|
|
Romania
|
Western Union Retail Services Spain S.A.
|
|
Spain
|
Western Union Retail Services Sweden AB
|
|
Sweden
|
Western Union Services, Inc.
|
|
Maryland, USA
|
Western Union Services India Private Limited
|
|
India
|
Western Union Services (Philippines) Inc.
|
|
Philippines
|
Western Union Services Singapore Private Limited
|
|
Singapore
|
Western Union Services S.L.
|
|
Spain
|
Western Union Services (Spain) S.L.
|
|
Spain
|
Western Union Singapore Limited
|
|
Bermuda
|
Western Union South Africa (PTY) Limited
|
|
South Africa
|
Western Union Support Services (Nigeria) Limited
|
|
Nigeria
|
Western Union Turkey Odeme Hizmetleri Anonim Sirketi
|
|
Turkey
|
WU BP Peru S.R.L.
|
|
Peru
|
Western Union Ireland Partnership
|
|
Ireland
|
WUBS Financial Services (Singapore) Pte Limited
|
|
Singapore
|
WUBS Investments Ltd.
|
|
United Kingdom
|
WUBS Payments Limited
|
|
United Kingdom
|
WU Technology Engineering Services Private Limited
|
|
India
|
(1)
|
Registration Statement (Form S-3 No. 333-213943) of The Western Union Company, and
|
(2)
|
Registration Statement (Form S-8 Nos. 333-137665 and 333-204183) pertaining to The Western Union Company 2006 Long-Term Incentive Plan, The Western Union Company 2006 Non-Employee Director Equity Compensation Plan, The Western Union Company Supplemental Incentive Savings Plan, and The Western Union Company 2015 Long-Term Incentive Plan;
|
|
/s/ Ernst & Young LLP
|
Denver, Colorado
|
|
February 22, 2018
|
|
Date:
|
February 22, 2018
|
/
S
/ H
IKMET
E
RSEK
|
|
|
Hikmet Ersek
|
|
|
President and Chief Executive Officer
|
Date:
|
February 22, 2018
|
/
S
/ R
AJESH
K. A
GRAWAL
|
|
|
Rajesh K. Agrawal
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of The Western Union Company.
|
Date:
|
February 22, 2018
|
/s/ H
IKMET
E
RSEK
|
|
|
Hikmet Ersek
|
|
|
President and Chief Executive Officer
|
Date:
|
February 22, 2018
|
/s/ R
AJESH
K. A
GRAWAL
|
|
|
Rajesh K. Agrawal
|
|
|
Executive Vice President and Chief Financial Officer
|