WESTERN UNION CO, 10-Q filed on 5/6/2013
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2013
Apr. 30, 2013
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
Western Union CO 
 
Entity Central Index Key
0001365135 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q1 
 
Amendment Flag
false 
 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Entity Common Stock, Shares Outstanding
 
557,111,446 
Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Revenues:
 
 
Transaction fees
$ 978.0 
$ 1,040.9 
Foreign exchange revenues
312.4 
322.6 
Other revenues
35.0 
29.9 
Total revenues
1,325.4 
1,393.4 
Expenses:
 
 
Cost of services
759.4 
783.0 
Selling, general and administrative
269.1 
277.9 
Total expenses
1,028.5 
1,060.9 
Operating income
296.9 
332.5 
Other income/(expense):
 
 
Interest income
0.4 
1.5 
Interest expense
(48.9)
(44.4)
Derivative gains, net
0.5 
1.6 
Other income/(expense), net
1.3 
(1.1)
Total other expense, net
(46.7)
(42.4)
Income before income taxes
250.2 
290.1 
Provision for income taxes
38.2 
42.8 
Net income
$ 212.0 
$ 247.3 
Earnings per share:
 
 
Basic
$ 0.37 
$ 0.40 
Diluted
$ 0.37 
$ 0.40 
Weighted-average shares outstanding:
 
 
Basic
567.6 
619.1 
Diluted
569.7 
621.9 
Cash dividends declared per common share
$ 0.125 
$ 0.10 
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Statement of Other Comprehensive Income [Abstract]
 
 
Net income
$ 212.0 
$ 247.3 
Other comprehensive income/(loss), net of tax
 
 
Unrealized gains/(losses) on investment securities
(0.9)
2.8 
Unrealized gains/(losses) on hedging activities
20.4 
(21.2)
Foreign currency translation adjustments
(3.1)
2.8 
Defined benefit pension plan adjustments
2.5 
1.6 
Total other comprehensive income/(loss)
18.9 
(14.0)
Comprehensive income
$ 230.9 
$ 233.3 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Assets
 
 
Cash and cash equivalents
$ 1,417.1 
$ 1,776.5 
Settlement assets
3,319.2 
3,114.6 
Property and equipment, net of accumulated depreciation of $402.2 and $384.5, respectively
198.7 
196.1 
Goodwill
3,178.5 
3,179.7 
Other intangible assets, net of accumulated amortization of $562.3 and $519.7, respectively
863.3 
878.9 
Other assets
384.9 
319.9 
Total assets
9,361.7 
9,465.7 
Liabilities:
 
 
Accounts payable and accrued liabilities
524.2 
556.2 
Settlement obligations
3,319.2 
3,114.6 
Income taxes payable
228.5 
218.3 
Deferred tax liability, net
354.0 
352.1 
Borrowings
3,726.8 1
4,029.2 
Other liabilities
291.4 
254.7 
Total liabilities
8,444.1 
8,525.1 
Commitments and contingencies (Note 5)
   
   
Stockholders' equity:
 
 
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued
0 
0 
Common stock, $0.01 par value; 2,000 shares authorized; 559.4 shares and 572.1 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively
5.6 
5.7 
Capital surplus
342.9 
332.8 
Retained earnings
702.8 
754.7 
Accumulated other comprehensive loss
(133.7)
(152.6)
Total stockholders' equity
917.6 
940.6 
Total liabilities and stockholders' equity
$ 9,361.7 
$ 9,465.7 
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $)
In Millions, except Share data, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Assets
 
 
Accumulated depreciation
$ 402.2 
$ 384.5 
Accumulated amortization
$ 562.3 
$ 519.7 
Stockholders' equity:
 
 
Preferred stock, par value
$ 1 
$ 1 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
0 
0 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
2,000,000,000 
2,000,000,000 
Common stock, shares issued
559,400,000 
572,100,000 
Common stock, shares outstanding
559,400,000 
572,100,000 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Cash flows from operating activities
 
 
Net income
$ 212.0 
$ 247.3 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation
15.4 
15.3 
Amortization
47.5 
48.6 
Other non-cash items, net
9.3 
1.6 
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in:
 
 
Other assets
(10.4)
(10.1)
Accounts payable and accrued liabilities
(36.1)
(35.7)
Income taxes payable (Note 12)
7.3 
(40.1)
Other liabilities
(7.7)
(11.9)
Net cash provided by operating activities
237.3 
215.0 
Cash flows from investing activities
 
 
Capitalization of contract costs
(11.8)
(55.8)
Capitalization of purchased and developed software
(8.8)
(5.8)
Purchases of property and equipment
(17.3)
(14.2)
Net cash used in investing activities
(37.9)
(75.8)
Cash flows from financing activities
 
 
Proceeds from exercise of options
1.7 
41.2 
Cash dividends paid
(70.3)
(61.6)
Common stock repurchased
(190.2)
(146.8)
Net proceeds from commercial paper
0 
53.0 
Principal payments on borrowings
(300.0)
0 
Net cash used in financing activities
(558.8)
(114.2)
Net change in cash and cash equivalents
(359.4)
25.0 
Cash and cash equivalents at beginning of period
1,776.5 
1,370.9 
Cash and cash equivalents at end of period
1,417.1 
1,395.9 
Supplemental cash flow information:
 
 
Interest paid
16.0 
23.1 
Income taxes paid (Note 12)
$ 29.6 
$ 89.5 
Business and Basis of Presentation
Business and Basis of Presentation
Business and Basis of Presentation
Business
The Western Union Company (“Western Union” or the “Company”) is a leader in global money movement and payment services, providing people and businesses with fast, reliable and convenient ways to send money and make payments around the world. The Western Union® brand is globally recognized. The Company’s services are primarily available through a network of agent locations in more than 200 countries and territories. Each location in the Company’s agent network is capable of providing one or more of the Company’s services.
The Western Union business consists of the following segments:
•
Consumer-to-Consumer - The Consumer-to-Consumer operating segment facilitates money transfers between two consumers, primarily through a network of third-party agents. The Company’s multi-currency, real-time money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world. This service is available for international cross-border transfers - that is, the transfer of funds from one country to another - and, in certain countries, intra-country transfers - that is, money transfers from one location to another in the same country. This segment also includes money transfer transactions that can be initiated through the Company’s websites and account based money transfers.
•
Consumer-to-Business - The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses. The significant majority of the segment’s revenue was generated in the United States during all periods presented.
•
Business Solutions - The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The majority of the segment’s business relates to exchanges of currency at the spot rate which enables customers to make cross-currency payments. In addition, in certain countries, the Company writes foreign currency forward and option contracts for customers to facilitate future payments.
All businesses that have not been classified in the above segments are reported as “Other” and include the Company’s money order, prepaid services, mobile money transfer, and other businesses and services, in addition to costs for the investigation and closing of acquisitions.
There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located. However, there are generally no limitations on the use of these assets within those countries. Additionally, the Company must meet minimum capital requirements in some countries in order to maintain operating licenses. As of March 31, 2013, the amount of net assets subject to these limitations totaled approximately $305 million.
Various aspects of the Company’s services and businesses are subject to United States federal, state and local regulation, as well as regulation by foreign jurisdictions, including certain banking and other financial services regulations.
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted.
The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts have been eliminated.
In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position and cash flows as of March 31, 2013 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
Consistent with industry practice, the accompanying Condensed Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting settlement in long-term investment securities.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
Earnings Per Share and Dividends
Earnings Per Share and Dividends
Earnings Per Share and Dividends
Earnings Per Share
The calculation of basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested, using the treasury stock method. The treasury stock method assumes proceeds from the exercise price of stock options, the unamortized compensation expense and assumed tax benefits of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.
For the three months ended March 31, 2013 and 2012, there were 25.5 million and 20.5 million, respectively, of outstanding options to purchase shares of Western Union stock excluded from the diluted earnings per share calculation, as their effect was anti-dilutive.
The following table provides the calculation of diluted weighted-average shares outstanding (in millions):
 
Three Months Ended
March 31,
 
2013
 
2012
Basic weighted-average shares outstanding
567.6

 
619.1

Common stock equivalents
2.1

 
2.8

Diluted weighted-average shares outstanding
569.7

 
621.9


Cash Dividends Paid
During the first quarter of 2013 and 2012, the Company’s Board of Directors declared quarterly cash dividends of $0.125 and $0.10 per common share, respectively, representing $70.3 million and $61.6 million, respectively, in total dividends, which were paid on March 29, 2013 and March 30, 2012, respectively.
Productivity and Cost-Savings Initiatives Expenses
Productivity and Cost-Savings Initiatives Expenses
Productivity and Cost-Savings Initiatives Expenses
In the fourth quarter of 2012, the Company began implementing additional initiatives to improve productivity and reduce costs. Additional productivity and cost-savings initiatives were implemented in the first quarter of 2013 and will be implemented in the remainder of 2013.
The following table summarizes the activity for the employee termination benefits and other costs related to the productivity and cost-savings initiatives accruals as of March 31, 2013 and the total expenses expected to be incurred (in millions):
 
Severance, Outplacement and Related Benefits
 
Other (b)
 
Total
Balance, December 31, 2012
$
25.7

 
$
1.6

 
$
27.3

Expenses (a)
1.9

 
2.3

 
4.2

Cash payments
(6.7
)
 
(2.4
)
 
(9.1
)
Non-cash benefit/(expense) (a)
0.1

 
(0.2
)
 
(0.1
)
Balance, March 31, 2013
$
21.0

 
$
1.3

 
$
22.3

 
 
 
 
 
 
Cumulative expenses incurred to date
$
30.8

 
$
4.3

 
$
35.1

Estimated additional expenses expected to be incurred
16.0

 
28.0

 
44.0

Total expenses
$
46.8

 
$
32.3

 
$
79.1

____________
 
 
 
 
(a)
Expenses include a non-cash benefit for adjustments to stock compensation for awards forfeited by employees. Other expenses also include non-cash write-offs and accelerated depreciation of fixed assets and leasehold improvements. These amounts were recognized outside of the accrual.
(b)
Other expenses primarily related to the relocation of various operations to new and existing Company facilities and third-party providers including expenses for hiring, training, relocation, travel and professional fees. All such expenses were or will be recorded when incurred.
The following table presents productivity and cost-savings initiatives expenses as reflected in the Condensed Consolidated Statements of Income (in millions):
 
Three Months Ended March 31, 2013
Cost of services
$
1.6

Selling, general and administrative
2.6

Total expenses, pre-tax
$
4.2

Total expenses, net of tax
$
3.3

There were no productivity and cost-savings initiatives expenses incurred during the three months ended March 31, 2012.
The following table summarizes productivity and cost-savings initiatives expenses incurred by reportable segment (in millions):

 
Consumer-to-Consumer
 
Consumer-to-Business
 
Other
 
Total
2012 expenses
 
$
20.9

 
$
4.0

 
$
6.0

 
$
30.9

First quarter 2013
 
3.2

 
0.5

 
0.5

 
4.2

Cumulative expenses incurred to date
 
$
24.1

 
$
4.5

 
$
6.5

 
$
35.1

Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
Fair value, as defined by the relevant accounting standards, represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For additional information on how the Company measures fair value, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions):
  
Fair Value Measurement Using
 
Assets/
Liabilities at
Fair
Value
March 31, 2013
Level 1
 
Level 2
 
Level 3
 
Assets:
 
 
 
 
 
 
 
State and municipal debt securities
$
—

 
$
954.4

 
$
—

 
$
954.4

State and municipal variable rate demand notes
—

 
248.9

 
—

 
248.9

Corporate debt and other
—

 
21.9

 
—

 
21.9

Derivatives
—

 
154.1

 
—

 
154.1

Total assets
$
—

 
$
1,379.3

 
$
—

 
$
1,379.3

Liabilities:
 
 
 
 
 
 
 
Notes and other borrowings
$
—

 
$
3,925.4

 
$
—

 
$
3,925.4

Derivatives
—

 
119.3

 
—

 
119.3

Total liabilities
$
—

 
$
4,044.7

 
$
—

 
$
4,044.7

 
 
 
 
 
 
 
 
 
Fair Value Measurement Using
 
Assets/
Liabilities at
Fair
Value
December 31, 2012
Level 1
 
Level 2
 
Level 3
 
Assets:
 
 
 
 
 
 
 
State and municipal debt securities
$
—

 
$
1,003.7

 
$
—

 
$
1,003.7

State and municipal variable rate demand notes
—

 
463.3

 
—

 
463.3

Corporate debt and other
—

 
47.8

 
—

 
47.8

Derivatives
—

 
96.8

 
—

 
96.8

Total assets
$
—

 
$
1,611.6

 
$
—

 
$
1,611.6

Liabilities:
 
 
 
 
 
 
 
Notes and other borrowings
$
—

 
$
4,200.8

 
$
—

 
$
4,200.8

Derivatives
—

 
86.1

 
—

 
86.1

Total liabilities
$
—

 
$
4,286.9

 
$
—

 
$
4,286.9


No non-recurring fair value adjustments were recorded during the three months ended March 31, 2013 and 2012.
Other Fair Value Measurements
The carrying amounts for many of the Company’s financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and settlement obligations approximate fair value due to their short maturities. The aggregate fair value of the Company’s borrowings was based on quotes from multiple banks and excluded the impact of related interest rate swaps. All the assets and liabilities in the above tables were carried at fair value in the Condensed Consolidated Balance Sheets, with the exception of borrowings, which had a carrying value of $3,726.8 million and $4,029.2 million as of March 31, 2013 and December 31, 2012, respectively (see Note 11).
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Letters of Credit and Bank Guarantees
The Company had approximately $100 million in outstanding letters of credit and bank guarantees as of March 31, 2013 with expiration dates through 2016, the majority of which contain a one-year renewal option. The letters of credit and bank guarantees are primarily held in connection with lease arrangements and certain agent agreements. The Company expects to renew the letters of credit and bank guarantees prior to expiration in most circumstances.
Litigation and Related Contingencies
The Company and one of its subsidiaries are defendants in two purported class action lawsuits: James P. Tennille v. The Western Union Company and Robert P. Smet v. The Western Union Company, both of which are pending in the United States District Court for the District of Colorado. The original complaints asserted claims for violation of various consumer protection laws, unjust enrichment, conversion and declaratory relief, based on allegations that the Company waits too long to inform consumers if their money transfers are not redeemed by the recipients and that the Company uses the unredeemed funds to generate income until the funds are escheated to state governments. The Tennille complaint was served on the Company on April 27, 2009. The Smet complaint was served on the Company on April 6, 2010. On September 21, 2009, the Court granted the Company’s motion to dismiss the Tennille complaint and gave the plaintiff leave to file an amended complaint. On October 21, 2009, Tennille filed an amended complaint. The Company moved to dismiss the Tennille amended complaint and the Smet complaint. On November 8, 2010, the Court denied the motion to dismiss as to the plaintiffs’ unjust enrichment and conversion claims. On February 4, 2011, the Court dismissed plaintiffs’ consumer protection claims. On March 11, 2011, the plaintiffs filed an amended complaint that adds a claim for breach of fiduciary duty, various elements to its declaratory relief claim and Western Union Financial Services, Inc. as a defendant. On April 25, 2011, the Company and Western Union Financial Services, Inc. filed a motion to dismiss the breach of fiduciary duty and declaratory relief claims. Western Union Financial Services, Inc. also moved to compel arbitration of the plaintiffs’ claims and to stay the action pending arbitration. On November 21, 2011, the Court denied the motion to compel arbitration and the stay request. Both companies appealed the decision. On January 24, 2012, the United States Court of Appeals for the Tenth Circuit granted the companies’ request to stay the District Court proceedings pending their appeal. During the fourth quarter of 2012, the parties executed a settlement agreement, which the Court preliminarily approved on January 3, 2013. The settlement agreement, which is subject to the Court’s final approval, would result in a substantial amount of the settlement proceeds to be paid from the Company’s existing related unclaimed property liabilities. If a settlement agreement is not approved, the Company and Western Union Financial Services, Inc. intend to vigorously defend themselves against both lawsuits.
On February 11, 2010, the Company signed an agreement and settlement, which resolved all outstanding legal issues and claims with the State of Arizona and required the Company to fund a multi-state not-for-profit organization promoting safety and security along the United States and Mexico border, in which California, Texas and New Mexico are participating with Arizona. As part of the agreement and settlement, the Company has made and expects to make certain investments in its compliance programs along the United States and Mexico border and a monitor has been engaged for those programs. On January 23, 2013, the monitor announced his intention to resign, and a new monitor was appointed effective March 15, 2013. Pursuant to the terms and conditions of the agreement and settlement, the costs of the investments in the Company’s programs and for the monitor were expected to be $23.0 million over the period from signing through 2013; however, actual costs have exceeded this amount. In addition, in the fourth quarter of 2012, the Company’s Business Solutions business was included in the scope of the monitor’s review. The Company is considering entering into an extension of the term of the agreement and settlement, or another arrangement with the State of Arizona, either of which would require the approval of the State of Arizona and could have further adverse effects on the Company’s business, including additional costs. The monitor has made a number of recommendations related to the Company’s compliance programs. While the Company has devoted significant time and resources to these efforts, it is expected that not every recommendation of the monitor will be fully implemented within the required timeframe ending on July 31, 2013. If the Company is not able to negotiate an extension of the agreement and settlement or other arrangement and the State of Arizona determines that the Company has committed a willful and material breach, the State of Arizona has indicated that it will pursue remedies under the agreement and settlement, which could include initiating civil or criminal actions. The pursuit by the State of Arizona of remedies under the agreement and settlement could have a material adverse effect on the Company’s business, financial condition or results of operations.
On March 20, 2012, the Company was served with a federal grand jury subpoena issued by the United States Attorney’s Office for the Central District of California (“USAO”) seeking documents relating to Shen Zhou International (“US Shen Zhou”), a former Western Union agent located in Monterey Park, California. The principal of US Shen Zhou was indicted in 2010 and is currently awaiting trial in U.S. v. Zhi He Wang (SA CR 10-196, C.D. Cal.). Concurrent with the government’s service of the subpoena, the government notified the Company that it is a target of an ongoing investigation into structuring and money laundering. Since March 20, 2012, the Company has received additional subpoenas from the USAO seeking additional documents relating to US Shen Zhou, materials relating to certain other former and current agents and other materials relating to the Company’s anti-money laundering compliance policies and procedures. The government has interviewed several current and former Western Union employees and has served grand jury subpoenas seeking testimony from several current and former employees. The government’s investigation is ongoing and the Company may receive additional requests for information as part of the investigation. The Company continues to cooperate fully with the government. The Company is unable to predict the outcome of the government’s investigation, or the possible loss or range of loss, if any, which could be associated with the resolution of any possible criminal charges or civil claims that may be brought against the Company. Should such charges or claims be brought, the Company could face significant fines, damage awards or regulatory consequences which could have a material adverse effect on the Company’s business, financial condition and results of operations.
In addition, in the normal course of business, the Company is subject to other claims and litigation. Management of the Company believes such matters involving a reasonably possible chance of loss will not, individually or in the aggregate, result in a material adverse effect on the Company’s financial condition, results of operations and cash flows. The Company accrues for loss contingencies as they become probable and estimable.
On January 26, 2006, the First Data Corporation (“First Data”) Board of Directors announced its intention to pursue the distribution of all of its money transfer and consumer payments business and its interest in a Western Union money transfer agent, as well as its related assets, including real estate, through a tax-free distribution to First Data shareholders (the “Spin-off”). The Spin-off resulted in the formation of the Company and these assets and businesses no longer being part of First Data. Pursuant to the separation and distribution agreement with First Data in connection with the Spin-off, First Data and the Company are each liable for, and agreed to perform, all liabilities with respect to their respective businesses. In addition, the separation and distribution agreement also provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of the Company’s business with the Company and financial responsibility for the obligations and liabilities of First Data’s retained businesses with First Data. The Company also entered into a tax allocation agreement that sets forth the rights and obligations of First Data and the Company with respect to taxes imposed on their respective businesses both prior to and after the Spin-off as well as potential tax obligations for which the Company may be liable in conjunction with the Spin-off (see Note 12).
Related Party Transactions
Related Party Transactions
Related Party Transactions
The Company has ownership interests in certain of its agents accounted for under the equity method of accounting. The Company pays these agents, as it does its other agents, commissions for money transfer and other services provided on the Company’s behalf. Commission expense recognized for these agents for the three months ended March 31, 2013 and 2012 totaled $15.2 million and $16.1 million, respectively.
The Company has a director who is also a director for a company that previously held significant investments in two of the Company’s existing agents. During the three months ended March 31, 2012, this company sold its interest in one of these agents, so that for the three months ended March 31, 2013, this company held a significant investment in only one agent. These agents had been agents of the Company prior to the director being appointed to the board. The Company recognized commission expense of $4.1 million and $14.0 million for the three months ended March 31, 2013 and 2012, respectively, related to these agents during the period the agents were affiliated with the Company’s director.
Settlement Assets and Obligations
Settlement Assets and Obligations
Settlement Assets and Obligations
Settlement assets represent funds received or to be received from agents for unsettled money transfers, money orders and consumer payments. The Company records corresponding settlement obligations relating to amounts payable under money transfers, money orders and consumer payment service arrangements. Settlement assets and obligations also include amounts receivable from, and payable to, businesses for the value of customer cross-currency payment transactions related to the Business Solutions segment.
Settlement assets and obligations consisted of the following (in millions):
 
March 31,
2013
 
December 31,
2012
Settlement assets:
 
 
 
Cash and cash equivalents
$
932.0

 
$
574.5

Receivables from selling agents and Business Solutions customers
1,162.0

 
1,025.3

Investment securities
1,225.2

 
1,514.8

 
$
3,319.2

 
$
3,114.6

Settlement obligations:
 
 
 
Money transfer, money order and payment service payables
$
2,489.4

 
$
2,297.1

Payables to agents
829.8

 
817.5

 
$
3,319.2

 
$
3,114.6


Investment securities consist primarily of highly-rated state and municipal debt securities, including variable rate demand notes. Variable rate demand note securities can be put (sold at par) typically on a daily basis with settlement periods ranging from the same day to one week, but have varying maturities through 2044. Generally, these securities are used by the Company for short-term liquidity needs and are held for short periods of time, typically less than 30 days. The Company is required to hold specific highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable state and foreign country requirements. The substantial majority of the Company’s investment securities are classified as available-for-sale and recorded at fair value. Investment securities are exposed to market risk due to changes in interest rates and credit risk. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification. As of March 31, 2013, the majority of the Company’s investment securities had credit ratings of “AA-” or better from a major credit rating agency.
Unrealized gains and losses on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive income or loss, net of related deferred taxes. Gains and losses on investments are calculated using the specific-identification method and are recognized during the period in which the investment is sold or when an investment experiences an other-than-temporary decline in value. Proceeds from the sale and maturity of available-for-sale securities during the three months ended March 31, 2013 and 2012 were $4.6 billion and $3.0 billion, respectively.
The components of investment securities are as follows (in millions):
March 31, 2013
Amortized
Cost
 
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Net
Unrealized
Gains
State and municipal debt securities (a)
$
943.6

 
$
954.4

 
$
11.6

 
$
(0.8
)
 
$
10.8

State and municipal variable rate demand notes
248.9

 
248.9

 
—

 
—

 
—

Corporate debt and other
21.8

 
21.9

 
0.1

 
—

 
0.1

 
$
1,214.3

 
$
1,225.2

 
$
11.7

 
$
(0.8
)
 
$
10.9

December 31, 2012
Amortized
Cost
 
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Net
Unrealized
Gains
State and municipal debt securities (a)
$
991.5

 
$
1,003.7

 
$
12.5

 
$
(0.3
)
 
$
12.2

State and municipal variable rate demand notes
463.3

 
463.3

 
—

 
—

 
—

Corporate debt and other
47.7

 
47.8

 
0.1

 
—

 
0.1

 
$
1,502.5

 
$
1,514.8

 
$
12.6

 
$
(0.3
)
 
$
12.3

____________________ 
(a)
The majority of these securities are fixed-rate instruments.
The following summarizes the contractual maturities of investment securities as of March 31, 2013 (in millions):
 
Fair
Value
Due within 1 year
$
209.3

Due after 1 year through 5 years
725.1

Due after 5 years through 10 years
57.0

Due after 10 years
233.8

 
$
1,225.2


Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations or the Company may have the right to put the obligation prior to its contractual maturity, as with variable rate demand notes. Variable rate demand notes, having a fair value of $6.1 million, $14.5 million, $8.8 million and $219.5 million, are included in the “Due within 1 year,” “Due after 1 year through 5 years,” “Due after 5 years through 10 years” and “Due after 10 years” categories, respectively, in the table above.
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
The following table summarizes the components of accumulated other comprehensive loss, net of tax (in millions). All amounts reclassified from accumulated other comprehensive loss affect the line items noted below within the Condensed Consolidated Statements of Income.
 
2013
 
2012
Unrealized gains on investment securities as of January 1,
$
7.7

 
$
4.9

Unrealized gains
1.5

 
5.9

Tax expense
(0.6
)
 
(2.2
)
Reclassification of gains into “Other revenues”
(2.9
)
 
(1.4
)
Tax expense related to reclassifications
1.1

 
0.5

Net unrealized gains/(losses) on investment securities
(0.9
)
 
2.8

Unrealized gains on investment securities as of March 31,
$
6.8

 
$
7.7

 
 
 
 
Unrealized gains/(losses) on hedging activities as of January 1,
$
(21.9
)
 
$
5.1

Unrealized gains/(losses)
23.8

 
(23.0
)
Tax (expense)/benefit
(3.7
)
 
3.4

Reclassification of gains into “Transaction fees”
(0.4
)
 
(1.9
)
Reclassification of gains into “Foreign exchange revenues”
(0.1
)
 
(0.6
)
Reclassification of losses into “Interest expense”
0.9

 
0.9

Tax benefit related to reclassifications
(0.1
)
 
—

Net unrealized gains/(losses) on hedging activities
20.4

 
(21.2
)
Unrealized losses on hedging activities as of March 31,
$
(1.5
)
 
$
(16.1
)
 
 
 
 
Foreign currency translation adjustments as of January 1,
$
(8.5
)
 
$
(6.3
)
Foreign currency translation adjustments
(2.3
)
 
3.3

Tax expense
(0.8
)
 
(0.5
)
Net foreign currency translation adjustments
(3.1
)
 
2.8

Foreign currency translation adjustments as of March 31,
$
(11.6
)
 
$
(3.5
)
 
 
 
 
Defined benefit pension plan adjustments as of January 1,
$
(129.9
)
 
$
(122.2
)
Reclassification of losses into “Cost of services”
3.1

 
2.6

Tax benefit related to reclassifications and other
(0.6
)
 
(1.0
)
Net defined benefit pension plan adjustments
2.5

 
1.6

Defined benefit pension plan adjustments as of March 31,
$
(127.4
)
 
$
(120.6
)
Accumulated other comprehensive loss as of March 31,
$
(133.7
)
 
$
(132.5
)
Employee Benefit Plan
Employee Benefit Plan
Employee Benefit Plan
The Company has one frozen defined benefit pension plan (the “Plan”) for which it had recorded unfunded pension obligations of $93.3 million and $102.1 million as of March 31, 2013 and December 31, 2012, respectively, included in “Other liabilities” in the Condensed Consolidated Balance Sheets. The Company is required to fund $23 million to the Plan in 2013. During the three months ended March 31, 2013, the Company made contributions of approximately $7 million to the Plan.
The following table provides the components of net periodic benefit cost for the Plan (in millions):
 
Three Months Ended
March 31,
 
2013
 
2012
Interest cost
$
3.0

 
$
3.7

Expected return on plan assets
(5.2
)
 
(5.2
)
Amortization of actuarial loss
3.1

 
2.6

Net periodic benefit cost
$
0.9

 
$
1.1

Derivatives
Derivatives
Derivatives
The Company is exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the euro, and to a lesser degree the Canadian dollar, British pound, Australian dollar, Mexican peso, and other currencies, related to forecasted money transfer revenues and on money transfer settlement assets and obligations. The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency Business Solutions payments operations. Additionally, the Company is exposed to interest rate risk related to changes in market rates both prior to and subsequent to the issuance of debt. The Company uses derivatives to (a) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (b) facilitate cross-currency Business Solutions payments by writing derivatives to customers.
The Company executes derivatives with established financial institutions, with the substantial majority of these financial institutions having credit ratings of “A-” or better from a major credit rating agency. The Company also writes Business Solutions derivatives mostly with small and medium size enterprises. The primary credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. The Company performs a review of the credit risk of these counterparties at the inception of the contract and on an ongoing basis. The Company also monitors the concentration of its contracts with any individual counterparty. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements, but takes action (including termination of contracts) when doubt arises about the counterparties’ ability to perform. The Company’s hedged foreign currency exposures are in liquid currencies; consequently, there is minimal risk that appropriate derivatives to maintain the hedging program would not be available in the future.
Foreign Currency — Consumer-to-Consumer
The Company’s policy is to use longer-term foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to mitigate some of the risk that changes in foreign currency exchange rates compared to the United States dollar could have on forecasted revenues denominated in other currencies related to its business. As of March 31, 2013, the Company’s longer-term foreign currency forward contracts had maturities of a maximum of 24 months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash flow hedges of forecasted revenue, with effectiveness assessed based on changes in the spot rate of the affected currencies during the period of designation. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge that are excluded from the measure of effectiveness are recognized immediately in “Derivative gains, net” within the Company’s Condensed Consolidated Statements of Income.
The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up to one month, to offset foreign exchange rate fluctuations on settlement assets and obligations between initiation and settlement. In addition, forward contracts, typically with maturities of less than one year, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash positions. None of these contracts are designated as accounting hedges.
The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2013 were as follows (in millions):
Contracts not designated as hedges:
 
Euro
$
203.7

Canadian dollar
50.6

Mexican peso
40.2

British pound
35.5

Other (a)
152.2

Contracts designated as hedges:
 
Euro
$
459.8

Canadian dollar
128.0

British pound
94.8

Australian dollar
47.8

Other
85.6


 ____________________
(a)
Comprised of exposures to fourteen different currencies. None of these individual currency exposures is greater than $25 million.
Foreign Currency — Business Solutions
The Company writes derivatives, primarily foreign currency forward contracts and option contracts, mostly with small and medium size enterprises and derives a currency spread from this activity as part of its Business Solutions operations. The Company aggregates its Business Solutions payments foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts). The derivatives written are part of the broader portfolio of foreign currency positions arising from its cross-currency Business Solutions payments operations, which primarily include spot exchanges of currency in addition to forwards and options. Foreign exchange revenues from the total portfolio of positions were $84.0 million and $80.1 million for the three months ended March 31, 2013 and 2012, respectively. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges. The duration of these derivative contracts at inception is generally less than one year.
The aggregate equivalent United States dollar notional amounts of foreign currency derivative customer contracts held by the Company in its Business Solutions operations as of March 31, 2013 were approximately $4.2 billion. The significant majority of customer contracts are written in major currencies such as the Canadian dollar, euro, Australian dollar and British pound.
Interest Rate Hedging — Corporate
The Company utilizes interest rate swaps to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The Company designates these derivatives as fair value hedges. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within “Borrowings” in the Condensed Consolidated Balance Sheets and “Interest expense” in the Condensed Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps and hedge ineffectiveness.
The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change in fair value of the derivatives is recorded in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets.
The Company held interest rate swaps in an aggregate notional amount of $1,050.0 million and $800.0 million as of March 31, 2013 and December 31, 2012, respectively. Of this aggregate notional amount held at March 31, 2013, $500.0 million related to notes due in 2014, $250.0 million related to notes due in 2015, and $300.0 million related to notes due in 2018.
Balance Sheet
The following table summarizes the fair value of derivatives reported in the Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012 (in millions):
 
Derivative Assets
 
Derivative Liabilities
 
 
 
Fair Value
 
 
 
Fair Value
 
Balance Sheet
Location
 
March 31,
2013
 
December 31,
2012
 
Balance Sheet
Location
 
March 31,
2013
 
December 31,
2012
Derivatives — hedges:
 
 
 
 
 
 
 
 
 
 
 
Interest rate fair value hedges — Corporate
Other assets
 
$
4.0

 
$
13.1

 
Other liabilities
 
$
0.1

 
$
—

Foreign currency cash flow hedges — Consumer-to-Consumer
Other assets
 
25.3

 
10.8

 
Other liabilities
 
7.7

 
17.6

Total
 
 
$
29.3

 
$
23.9

 
 
 
$
7.8

 
$
17.6

Derivatives — undesignated:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency — Business Solutions
Other assets
 
$
122.0

 
$
71.9

 
Other liabilities
 
$
111.1

 
$
66.5

Foreign currency — Consumer-to-Consumer
Other assets
 
2.8

 
1.0

 
Other liabilities
 
0.4

 
2.0

Total
 
 
$
124.8

 
$
72.9

 
 
 
$
111.5

 
$
68.5

Total derivatives
 
 
$
154.1

 
$
96.8

 
 
 
$
119.3

 
$
86.1


    
The fair values of derivative assets and liabilities associated with contracts that include netting language that the Company believes to be enforceable have been netted in the following tables to present the Company’s net exposure with these counterparties. The Company’s rights under these agreements generally allow for transactions to be settled on a net basis, including upon early termination, which could occur upon the counterparty’s default, a change in control, or other conditions.
In addition, certain of the Company’s other agreements include netting provisions, the enforceability of which may vary from jurisdiction to jurisdiction and depending on the circumstances. Due to the uncertainty related to the enforceability of these provisions, the derivative balances associated with these agreements are included within “Derivatives not subject to master netting arrangement or similar agreement” in the following tables. In certain circumstances, the Company may require its Business Solutions customers to maintain collateral balances which may mitigate the risk associated with potential customer defaults.

 
The following tables summarize the gross and net fair value of derivative assets and liabilities as of March 31, 2013 and December 31, 2012 (in millions):
Offsetting of Derivative Assets
March 31, 2013
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
 
Net Amounts Presented in the Condensed Consolidated Balance Sheets
 
Derivatives Not Offset in the Condensed Consolidated Balance Sheets
 
Net Amounts
Derivatives subject to a master netting arrangement or similar agreement
 
$
63.0

 
$
—

 
$
63.0

 
$
(28.8
)
 
$
34.2

Derivatives that are not or may not be subject to master netting arrangement or similar agreement
 
91.1

 
 
 
 
 
 
 
 
Total
 
$
154.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
 
 
Derivatives subject to a master netting arrangement or similar agreement
 
$
39.1

 
$
—

 
$
39.1

 
$
(19.6
)
 
$
19.5

Derivatives that are not or may not be subject to master netting arrangement or similar agreement
 
57.7

 
 
 
 
 
 
 
 
Total
 
$
96.8

 
 
 
 
 
 
 
 
Offsetting of Derivative Liabilities
March 31, 2013
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
 
Net Amounts Presented in the Condensed Consolidated Balance Sheets
 
Derivatives Not Offset in the Condensed Consolidated Balance Sheets
 
Net Amounts
Derivatives subject to a master netting arrangement or similar agreement
 
$
37.5

 
$
—

 
$
37.5

 
$
(28.8
)
 
$
8.7

Derivatives that are not or may not be subject to master netting arrangement or similar agreement
 
81.8

 
 
 
 
 
 
 
 
Total
 
$
119.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
 
 
Derivatives subject to a master netting arrangement or similar agreement
 
$
30.5

 
$
—

 
$
30.5

 
$
(19.6
)
 
$
10.9

Derivatives that are not or may not be subject to master netting arrangement or similar agreement
 
55.6

 
 
 
 
 
 
 
 
Total
 
$
86.1

 
 
 
 
 
 
 
 

Income Statement
The following tables summarize the location and amount of gains and losses of derivatives in the Condensed Consolidated Statements of Income segregated by designated, qualifying hedging instruments and those that are not, for the three months ended March 31, 2013 and 2012 (in millions):
Fair Value Hedges
The following table presents the location and amount of gains/(losses) from fair value hedges for the three months ended March 31, 2013 and 2012 (in millions):
 
 
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
 
 
March 31,
2013
 
March 31,
2012
 
Hedged  Item
 
 
March 31,
2013
 
March 31,
2012
 
 
March 31,
2013
 
March 31, 2012
Interest rate contracts
 
Interest  expense
 
$
(0.6
)
 
$
1.7

 
Fixed-rate debt
 
Interest expense
 
$
3.3

 
$
0.2

 
Interest  expense
 
$
(0.1
)
 
$
—

Total gain/(loss)
 
 
 
$
(0.6
)

$
1.7

 
 
 
 
 
$
3.3

 
$
0.2

 
 
 
$
(0.1
)
 
$
—


Cash Flow Hedges
The following table presents the location and amount of gains/(losses) from cash flow hedges for the three months ended March 31, 2013 and 2012 (in millions):
 
 
Gain/(Loss) Recognized
in OCI on Derivatives
(Effective Portion)
 
Gain/(Loss) Reclassified from
Accumulated OCI into Income
(Effective Portion)
 
Gain/(Loss) Recognized in Income on
Derivatives (Ineffective Portion and Amount
Excluded from Effectiveness Testing) (b)
 
 
Amount
 
Income
Statement Location
 
Amount
 
Income
Statement Location
 
Amount
Derivatives
 
March 31, 2013
 
March 31, 2012
 
 
March 31, 2013
 
March 31, 2012
 
 
March 31, 2013
 
March 31, 2012
Foreign currency contracts
 
$
23.8

 
$
(23.0
)
 
Revenue
 
$
0.5

 
$
2.5

 
Derivative gains, net
 
$
(0.2
)
 
$
1.4

Interest rate contracts (c)
 
—

 
—

 
Interest expense
 
(0.9
)
 
(0.9
)
 
Interest expense
 
—

 
—

Total gain/(loss)
 
$
23.8

 
$
(23.0
)
 
 
 
$
(0.4
)
 
$
1.6

 
 
 
$
(0.2
)
 
$
1.4


Undesignated Hedges
The following table presents the location and amount of net gains/(losses) from undesignated hedges for the three months ended March 31, 2013 and 2012 (in millions):
 
 
Gain/(Loss) Recognized in Income on Derivatives (d)
 
 
Income Statement Location
 
Amount
 
 
 
 
Three Months Ended
March 31,
Derivatives
 
 
 
2013
 
2012
Foreign currency contracts (e)
Selling, general and administrative
 
$
7.7

 
$
(14.8
)
Foreign currency contracts (f)
Derivative gains, net
 
0.7

 
0.2

Total gain/(loss)
 
 
$
8.4

 
$
(14.6
)
 ____________________
(a)
The gain of $3.3 million and $0.2 million in the three months ended March 31, 2013 and 2012, respectively, was comprised of a gain/(loss) in value on the debt of $0.6 million and $(1.7) million, respectively, and amortization of hedge accounting adjustments of $2.7 million and $1.9 million, respectively.
(b)
The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.
(c)
The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative’s fair value in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets. These amounts are reclassified to “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes.
(d)
The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.
(e)
The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations and cash balances, not including amounts related to derivatives activity as displayed above, for the three months ended March 31, 2013 and 2012, were $(6.2) million and $16.1 million, respectively.
(f)
The derivative contracts used in the Company’s revenue hedging program are not designated as hedges in the final month of the contract.
An accumulated other comprehensive pre-tax gain of $17.3 million related to the foreign currency forward contracts is expected to be reclassified into revenue within the next 12 months as of March 31, 2013. Approximately $3.6 million of net losses on the forecasted debt issuance hedges are expected to be recognized in “Interest expense” in the Condensed Consolidated Statements of Income within the next 12 months as of March 31, 2013. No amounts have been reclassified into earnings as a result of the underlying transaction being considered probable of not occurring within the specified time period.
Borrowings
Borrowings
Borrowings
The Company’s outstanding borrowings consisted of the following (in millions):
 
March 31, 2013
 
December 31, 2012
Due in less than one year:
 
 
 
Commercial paper (a)
$
—

 
$
—

Floating rate notes (b)
—

 
300.0

Due in greater than one year (c):
 
 
 
6.500% notes (effective rate of 5.5%) due 2014
500.0

 
500.0

2.375% notes due 2015 (d)
250.0

 
250.0

5.930% notes due 2016 (d)
1,000.0

 
1,000.0

2.875% notes due 2017 (d)
500.0

 
500.0

3.650% notes due 2018 (d)
400.0

 
400.0

5.253% notes due 2020 (d)
324.9

 
324.9

6.200% notes due 2036 (d)
500.0

 
500.0

6.200% notes due 2040 (d)
250.0

 
250.0

Other borrowings
5.8

 
5.8

Total borrowings at par value
3,730.7

 
4,030.7

Fair value hedge accounting adjustments, net (c)
17.0

 
20.2

Unamortized discount, net
(20.9
)
 
(21.7
)
Total borrowings at carrying value (e)
$
3,726.8

 
$
4,029.2

____________________ 
(a)
Pursuant to the Company’s commercial paper program, the Company may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Company’s Revolving Credit Facility in excess of $150 million. The commercial paper notes may have maturities of up to 397 days from date of issuance.
(b)
The floating rate notes due in March 2013 were repaid using the Company’s cash, including cash generated from operations and proceeds from the Company’s issuance of notes due 2015 and 2017.
(c)
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 Condensed Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.
(d)
The difference between the stated interest rate and the effective interest rate is not significant.
(e)
As of March 31, 2013, the Company’s weighted-average effective rate on total borrowings was approximately 5.0%.
The Company’s maturities of borrowings at par value as of March 31, 2013 are $500.0 million in 2014, $250.0 million in 2015, $1.0 billion in 2016, $500.0 million in 2017, $400.0 million in 2018, and approximately $1.1 billion thereafter.
The Company’s obligations with respect to its outstanding borrowings, as described above, rank equally.
Income Taxes
Income Taxes
Income Taxes
The Company’s effective tax rates on pre-tax income for the three months ended March 31, 2013 and 2012 were 15.3% and 14.8%, respectively. For the three months ended March 31, 2013 and 2012, 97% and 85% of the Company’s pre-tax income was derived from foreign sources, respectively. However, certain portions of the Company’s foreign source income are subject to United States federal and state income tax as earned due to the nature of the income, and dividend repatriations of the Company’s foreign source income are generally subject to United States federal and state income tax.
Uncertain Tax Positions
The Company has established contingency reserves for a variety of material, known tax exposures. The Company’s tax reserves reflect management’s judgment as to the resolution of the issues involved if subject to judicial review or other settlement. While the Company believes its reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to these reserves, the Company’s income tax expense would include (i) any changes in tax reserves arising from material changes during the period in the facts and circumstances (i.e., new information) surrounding a tax issue and (ii) any difference from the Company’s tax position as recorded in the financial statements and the final resolution of a tax issue during the period. Such resolution could materially increase or decrease income tax expense in the Company’s consolidated financial statements in future periods and could impact operating cash flows.
Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Company’s consolidated financial statements, and are reflected in “Income taxes payable” in the Condensed Consolidated Balance Sheets. The total amount of unrecognized tax benefits as of March 31, 2013 and December 31, 2012 was $104.3 million and $103.2 million, respectively, excluding interest and penalties. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $94.6 million and $93.5 million as of March 31, 2013 and December 31, 2012, respectively, excluding interest and penalties.
The Company recognizes interest and penalties with respect to unrecognized tax benefits in “Provision for income taxes” in its Condensed Consolidated Statements of Income, and records the associated liability in “Income taxes payable” in its Condensed Consolidated Balance Sheets. The Company recognized $0.7 million and $(1.5) million in interest and penalties during the three months ended March 31, 2013 and 2012, respectively. The Company has accrued $20.8 million and $20.0 million for the payment of interest and penalties as of March 31, 2013 and December 31, 2012, respectively.
The unrecognized tax benefits accrual as of March 31, 2013 consists of federal, state and foreign tax matters. It is reasonably possible that the Company’s total unrecognized tax benefits will decrease by approximately $24.0 million during the next 12 months in connection with various matters which may be resolved.
The Company and its subsidiaries file tax returns for the United States, for multiple states and localities, and for various non-United States jurisdictions, and the Company has identified the United States as its major tax jurisdiction, as the income tax imposed by any one foreign country is not material to the Company. The United States federal income tax returns of First Data, which include the Company, are eligible to be examined for 2005 and 2006. The Company’s United States federal income tax returns since the Spin-off are also eligible to be examined.
The United States Internal Revenue Service (“IRS”) completed its examination of the United States federal consolidated income tax returns of First Data for 2003 and 2004, which included the Company, and issued a Notice of Deficiency in December 2008. In December 2011, the Company reached an agreement with the IRS resolving substantially all of the issues related to the Company’s restructuring of its international operations in 2003. As a result of the IRS Agreement, the Company expects to make cash payments of approximately $190 million, of which $92.4 million were made in the year ended December 31, 2012, including $65 million paid during the three months ended March 31, 2012. No payments were made in the three months ended March 31, 2013. The IRS completed its examination of the United States federal consolidated income tax returns of First Data, which include the Company’s 2005 and pre-Spin-off 2006 taxable periods and issued its report on October 31, 2012 (“FDC 30-Day Letter”). Furthermore, the IRS completed its examination of the Company’s United States federal consolidated income tax returns for the 2006 post-Spin-off period through 2009 and issued its report also on October 31, 2012 (“WU 30-Day Letter”). Both the FDC 30-Day Letter and the WU 30-Day Letter propose tax adjustments affecting the Company, some of which are agreed and some of which are unagreed. Both First Data and the Company filed their respective protests with the IRS Appeals Division on November 28, 2012 related to the unagreed proposed adjustments. The Company believes its reserves are adequate with respect to both the agreed and unagreed adjustments.
As of March 31, 2013, no provision had been made for United States federal and state income taxes on certain of the Company’s outside tax basis differences, which primarily relate to accumulated foreign earnings of approximately $4.6 billion, which are expected to be reinvested outside the United States indefinitely. Upon distribution of those earnings to the United States in the form of actual or constructive dividends, the Company would be subject to United States income taxes (subject to an adjustment for foreign tax credits), state income taxes and possible withholding taxes payable to various foreign countries. Such taxes could be significant. Determination of this amount of unrecognized deferred United States tax liability is not practicable because of the complexities associated with its hypothetical calculation.
Tax Allocation Agreement with First Data
The Company and First Data each are liable for taxes imposed on their respective businesses both prior to and after the Spin-off. If such taxes have not been appropriately apportioned between First Data and the Company, subsequent adjustments may occur that may impact the Company’s financial condition or results of operations.
Also under the tax allocation agreement, with respect to taxes and other liabilities that result from a final determination that is inconsistent with the anticipated tax consequences of the Spin-off (as set forth in the private letter ruling and relevant tax opinion) (“Spin-off Related Taxes”), the Company will be liable to First Data for any such Spin-off Related Taxes attributable solely to actions taken by or with respect to the Company. In addition, the Company will also be liable for half of any Spin-off Related Taxes (i) that would not have been imposed but for the existence of both an action by the Company and an action by First Data or (ii) where the Company and First Data each take actions that, standing alone, would have resulted in the imposition of such Spin-off Related Taxes. The Company may be similarly liable if it breaches certain representations or covenants set forth in the tax allocation agreement. If the Company is required to indemnify First Data for taxes incurred as a result of the Spin-off being taxable to First Data, it likely would have a material adverse effect on the Company’s business, financial condition and results of operations. First Data generally will be liable for all Spin-off Related Taxes, other than those described above.
Stock Compensation Plans
Stock Compensation Plans
Stock Compensation Plans
For the three months ended March 31, 2013 and 2012, the Company recognized stock-based compensation expense of $10.4 million and $10.5 million, respectively, resulting from stock options, restricted stock units, performance-based restricted stock units and bonus stock units in the Condensed Consolidated Statements of Income. During the three months ended March 31, 2013, the Company granted 3.9 million options at a weighted-average exercise price of $14.00, 2.2 million restricted stock units at a weighted-average grant date fair value of $12.64 and 0.8 million performance-based restricted stock units at a weighted-average grant date fair value of $13.56. The performance-based restricted stock units granted in 2013 are restricted stock units, primarily granted to the Company’s executives, which require certain financial objectives to be met during 2013 and 2014 plus an additional vesting period and are subject to a payout modifier based on the Company’s relative total shareholder return over a three year performance period (2013 through 2015).
As of March 31, 2013, the Company had 28.2 million outstanding options at a weighted-average exercise price of $17.96, and had 21.6 million options exercisable at a weighted-average exercise price of $18.60. The Company had 6.8 million non-vested restricted stock units at a weighted-average grant date fair value of $15.71 as of March 31, 2013.
The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted in the three months ended March 31, 2013:
Stock options granted:
 
Weighted-average risk-free interest rate
1.2
%
Weighted-average dividend yield
3.7
%
Volatility
35.3
%
Expected term (in years)
6.09

Weighted-average grant date fair value
$
3.20


All assumptions used to calculate the fair value of Western Union’s stock options granted during the three months ended March 31, 2013 were determined on a consistent basis with those assumptions disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
Segments
Segments
Segments
As previously described in Note 1, the Company classifies its businesses into three segments: Consumer-to-Consumer, Consumer-to-Business and Business Solutions. Operating segments are defined as components of an enterprise that engage in business activities, about which separate financial information is available that is evaluated regularly by the Company’s chief operating decision maker in deciding where to allocate resources and in assessing performance.
The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The Company’s money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world, including related transactions that can be initiated through the Company’s websites and account based money transfers. The segment includes six regions whose functions are limited to generating, managing and maintaining agent relationships and localized marketing activities. These regions interact on transactions with consumers and share common processes, systems and licenses, thereby constituting one global Consumer-to-Consumer money transfer business and one operating segment.
The Consumer-to-Business operating segment facilitates bill payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies and other businesses.
The Business Solutions operating segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals.
All businesses that have not been classified in the above segments are reported as “Other” and include the Company’s money order, prepaid services, mobile money transfer, and other businesses and services.
The following table presents the Company’s reportable segment results for the three months ended March 31, 2013 and 2012 (in millions):
 
Three Months Ended
March 31,
 
2013
 
2012
Revenues:
 
 
 
Consumer-to-Consumer:
 
 
 
Transaction fees
$
809.6

 
$
872.0

Foreign exchange revenues
225.6

 
239.4

Other revenues
15.0

 
13.2

 
1,050.2

 
1,124.6

Consumer-to-Business:
 
 
 
Transaction fees
145.8

 
147.7

Foreign exchange and other revenues
7.9

 
7.4

 
153.7

 
155.1

Business Solutions:
 
 
 
Foreign exchange revenues
84.0

 
80.1

Transaction fees and other revenues
8.8

 
6.8

 
92.8

 
86.9

Other:
 
 
 
Total revenues
28.7

 
26.8

Total consolidated revenues
$
1,325.4

 
$
1,393.4

Operating income/(loss):
 
 
 
Consumer-to-Consumer
$
267.1

 
$
311.3

Consumer-to-Business
37.9

 
41.1

Business Solutions (a)
(6.2
)
 
(14.8
)
Other
(1.9
)
 
(5.1
)
Total consolidated operating income
$
296.9

 
$
332.5


____________________ 
(a)
During the three months ended March 31, 2013 and 2012, the Company incurred $3.9 million and $6.4 million, respectively, of integration expenses related to the acquisition of Travelex Global Business Payments (“TGBP”), which was acquired in November 2011. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition, which are included in Other.
Business and Basis of Presentation (Policies)
Basis of Presentation 
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and were prepared in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X. In compliance with those instructions, certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted.
The unaudited condensed consolidated financial statements in this quarterly report are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. Results of operations and cash flows for the interim periods are not necessarily indicative of the results that may be expected for the entire year. All significant intercompany transactions and accounts have been eliminated.
In the opinion of management, these condensed consolidated financial statements include all the normal recurring adjustments necessary to fairly present the Company’s condensed consolidated results of operations, financial position and cash flows as of March 31, 2013 and for all periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
Consistent with industry practice, the accompanying Condensed Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting settlement in long-term investment securities.
Use of Estimates 
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
Earnings Per Share 
Earnings Per Share
The calculation of basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested, using the treasury stock method. The treasury stock method assumes proceeds from the exercise price of stock options, the unamortized compensation expense and assumed tax benefits of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.
Investment Securities 
Investment securities consist primarily of highly-rated state and municipal debt securities, including variable rate demand notes. Variable rate demand note securities can be put (sold at par) typically on a daily basis with settlement periods ranging from the same day to one week, but have varying maturities through 2044. Generally, these securities are used by the Company for short-term liquidity needs and are held for short periods of time, typically less than 30 days. The Company is required to hold specific highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable state and foreign country requirements. The substantial majority of the Company’s investment securities are classified as available-for-sale and recorded at fair value. Investment securities are exposed to market risk due to changes in interest rates and credit risk. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification. As of March 31, 2013, the majority of the Company’s investment securities had credit ratings of “AA-” or better from a major credit rating agency.
Unrealized gains and losses on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive income or loss, net of related deferred taxes. Gains and losses on investments are calculated using the specific-identification method and are recognized during the period in which the investment is sold or when an investment experiences an other-than-temporary decline in value. Proceeds from the sale and maturity of available-for-sale securities during the three months ended March 31, 2013 and 2012 were $4.6 billion and $3.0 billion, respectively.
Derivatives 
The Company is exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the euro, and to a lesser degree the Canadian dollar, British pound, Australian dollar, Mexican peso, and other currencies, related to forecasted money transfer revenues and on money transfer settlement assets and obligations. The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency Business Solutions payments operations. Additionally, the Company is exposed to interest rate risk related to changes in market rates both prior to and subsequent to the issuance of debt. The Company uses derivatives to (a) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (b) facilitate cross-currency Business Solutions payments by writing derivatives to customers.
The Company executes derivatives with established financial institutions, with the substantial majority of these financial institutions having credit ratings of “A-” or better from a major credit rating agency. The Company also writes Business Solutions derivatives mostly with small and medium size enterprises. The primary credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. The Company performs a review of the credit risk of these counterparties at the inception of the contract and on an ongoing basis. The Company also monitors the concentration of its contracts with any individual counterparty. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements, but takes action (including termination of contracts) when doubt arises about the counterparties’ ability to perform. The Company’s hedged foreign currency exposures are in liquid currencies; consequently, there is minimal risk that appropriate derivatives to maintain the hedging program would not be available in the future.
Foreign Currency Consumer-to-Consumer Derivatives 
Foreign Currency — Consumer-to-Consumer
The Company’s policy is to use longer-term foreign currency forward contracts, with maturities of up to 36 months at inception and a targeted weighted-average maturity of approximately one year, to mitigate some of the risk that changes in foreign currency exchange rates compared to the United States dollar could have on forecasted revenues denominated in other currencies related to its business. As of March 31, 2013, the Company’s longer-term foreign currency forward contracts had maturities of a maximum of 24 months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash flow hedges of forecasted revenue, with effectiveness assessed based on changes in the spot rate of the affected currencies during the period of designation. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge that are excluded from the measure of effectiveness are recognized immediately in “Derivative gains, net” within the Company’s Condensed Consolidated Statements of Income.
The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up to one month, to offset foreign exchange rate fluctuations on settlement assets and obligations between initiation and settlement. In addition, forward contracts, typically with maturities of less than one year, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash positions. None of these contracts are designated as accounting hedges.
Foreign Currency Business Solutions Derivatives 
Foreign Currency — Business Solutions
The Company writes derivatives, primarily foreign currency forward contracts and option contracts, mostly with small and medium size enterprises and derives a currency spread from this activity as part of its Business Solutions operations. The Company aggregates its Business Solutions payments foreign currency exposures arising from customer contracts, including the derivative contracts described above, and hedges the resulting net currency risks by entering into offsetting contracts with established financial institution counterparties (economic hedge contracts). The derivatives written are part of the broader portfolio of foreign currency positions arising from its cross-currency Business Solutions payments operations, which primarily include spot exchanges of currency in addition to forwards and options. Foreign exchange revenues from the total portfolio of positions were $84.0 million and $80.1 million for the three months ended March 31, 2013 and 2012, respectively. None of the derivative contracts used in Business Solutions operations are designated as accounting hedges. The duration of these derivative contracts at inception is generally less than one year.
Interest Rate Hedging 
Interest Rate Hedging — Corporate
The Company utilizes interest rate swaps to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The Company designates these derivatives as fair value hedges. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within “Borrowings” in the Condensed Consolidated Balance Sheets and “Interest expense” in the Condensed Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps and hedge ineffectiveness.
The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change in fair value of the derivatives is recorded in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets.
Earnings Per Share and Dividends (Tables)
Calculation of diluted weighted-average shares outstanding
The following table provides the calculation of diluted weighted-average shares outstanding (in millions):
 
Three Months Ended
March 31,
 
2013
 
2012
Basic weighted-average shares outstanding
567.6

 
619.1

Common stock equivalents
2.1

 
2.8

Diluted weighted-average shares outstanding
569.7

 
621.9

Productivity and Cost-Savings Initiatives Expenses (Tables)
Schedule of productivity and cost-savings initiatives accrual by type of cost 
The following table summarizes the activity for the employee termination benefits and other costs related to the productivity and cost-savings initiatives accruals as of March 31, 2013 and the total expenses expected to be incurred (in millions):
 
Severance, Outplacement and Related Benefits
 
Other (b)
 
Total
Balance, December 31, 2012
$
25.7

 
$
1.6

 
$
27.3

Expenses (a)
1.9

 
2.3

 
4.2

Cash payments
(6.7
)
 
(2.4
)
 
(9.1
)
Non-cash benefit/(expense) (a)
0.1

 
(0.2
)
 
(0.1
)
Balance, March 31, 2013
$
21.0

 
$
1.3

 
$
22.3

 
 
 
 
 
 
Cumulative expenses incurred to date
$
30.8

 
$
4.3

 
$
35.1

Estimated additional expenses expected to be incurred
16.0

 
28.0

 
44.0

Total expenses
$
46.8

 
$
32.3

 
$
79.1

____________
 
 
 
 
(a)
Expenses include a non-cash benefit for adjustments to stock compensation for awards forfeited by employees. Other expenses also include non-cash write-offs and accelerated depreciation of fixed assets and leasehold improvements. These amounts were recognized outside of the accrual.
(b)
Other expenses primarily related to the relocation of various operations to new and existing Company facilities and third-party providers including expenses for hiring, training, relocation, travel and professional fees. All such expenses were or will be recorded when incurred.
Schedule of productivity and cost-savings initiatives expenses in the Condensed Consolidated Statements of Income 
The following table presents productivity and cost-savings initiatives expenses as reflected in the Condensed Consolidated Statements of Income (in millions):
 
Three Months Ended March 31, 2013
Cost of services
$
1.6

Selling, general and administrative
2.6

Total expenses, pre-tax
$
4.2

Total expenses, net of tax
$
3.3

There were no productivity and cost-savings initiatives expenses incurred during the three months ended March 31, 2012.
Schedule of productivity and cost-savings initiatives expenses incurred by reportable segment 
The following table summarizes productivity and cost-savings initiatives expenses incurred by reportable segment (in millions):

 
Consumer-to-Consumer
 
Consumer-to-Business
 
Other
 
Total
2012 expenses
 
$
20.9

 
$
4.0

 
$
6.0

 
$
30.9

First quarter 2013
 
3.2

 
0.5

 
0.5

 
4.2

Cumulative expenses incurred to date
 
$
24.1

 
$
4.5

 
$
6.5

 
$
35.1

Fair Value Measurements (Tables)
Fair value measurements of assets and liabilities
The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions):
  
Fair Value Measurement Using
 
Assets/
Liabilities at
Fair
Value
March 31, 2013
Level 1
 
Level 2
 
Level 3
 
Assets:
 
 
 
 
 
 
 
State and municipal debt securities
$
—

 
$
954.4

 
$
—

 
$
954.4

State and municipal variable rate demand notes
—

 
248.9

 
—

 
248.9

Corporate debt and other
—

 
21.9

 
—

 
21.9

Derivatives
—

 
154.1

 
—

 
154.1

Total assets
$
—

 
$
1,379.3

 
$
—

 
$
1,379.3

Liabilities:
 
 
 
 
 
 
 
Notes and other borrowings
$
—

 
$
3,925.4

 
$
—

 
$
3,925.4

Derivatives
—

 
119.3

 
—

 
119.3

Total liabilities
$
—

 
$
4,044.7

 
$
—

 
$
4,044.7

 
 
 
 
 
 
 
 
 
Fair Value Measurement Using
 
Assets/
Liabilities at
Fair
Value
December 31, 2012
Level 1
 
Level 2
 
Level 3
 
Assets:
 
 
 
 
 
 
 
State and municipal debt securities
$
—

 
$
1,003.7

 
$
—

 
$
1,003.7

State and municipal variable rate demand notes
—

 
463.3

 
—

 
463.3

Corporate debt and other
—

 
47.8

 
—

 
47.8

Derivatives
—

 
96.8

 
—

 
96.8

Total assets
$
—

 
$
1,611.6

 
$
—

 
$
1,611.6

Liabilities:
 
 
 
 
 
 
 
Notes and other borrowings
$
—

 
$
4,200.8

 
$
—

 
$
4,200.8

Derivatives
—

 
86.1

 
—

 
86.1

Total liabilities
$
—

 
$
4,286.9

 
$
—

 
$
4,286.9

Settlement Assets and Obligations (Tables)
Settlement assets and obligations 
Settlement assets and obligations consisted of the following (in millions):
 
March 31,
2013
 
December 31,
2012
Settlement assets:
 
 
 
Cash and cash equivalents
$
932.0

 
$
574.5

Receivables from selling agents and Business Solutions customers
1,162.0

 
1,025.3

Investment securities
1,225.2

 
1,514.8

 
$
3,319.2

 
$
3,114.6

Settlement obligations:
 
 
 
Money transfer, money order and payment service payables
$
2,489.4

 
$
2,297.1

Payables to agents
829.8

 
817.5

 
$
3,319.2

 
$
3,114.6

Components of investment securities 
The components of investment securities are as follows (in millions):
March 31, 2013
Amortized
Cost
 
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Net
Unrealized
Gains
State and municipal debt securities (a)
$
943.6

 
$
954.4

 
$
11.6

 
$
(0.8
)
 
$
10.8

State and municipal variable rate demand notes
248.9

 
248.9

 
—

 
—

 
—

Corporate debt and other
21.8

 
21.9

 
0.1

 
—

 
0.1

 
$
1,214.3

 
$
1,225.2

 
$
11.7

 
$
(0.8
)
 
$
10.9

December 31, 2012
Amortized
Cost
 
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Net
Unrealized
Gains
State and municipal debt securities (a)
$
991.5

 
$
1,003.7

 
$
12.5

 
$
(0.3
)
 
$
12.2

State and municipal variable rate demand notes
463.3

 
463.3

 
—

 
—

 
—

Corporate debt and other
47.7

 
47.8

 
0.1

 
—

 
0.1

 
$
1,502.5

 
$
1,514.8

 
$
12.6

 
$
(0.3
)
 
$
12.3

____________________ 
(a)
The majority of these securities are fixed-rate instruments.
Contractual maturities of investment securities 
The following summarizes the contractual maturities of investment securities as of March 31, 2013 (in millions):
 
Fair
Value
Due within 1 year
$
209.3

Due after 1 year through 5 years
725.1

Due after 5 years through 10 years
57.0

Due after 10 years
233.8

 
$
1,225.2

Accumulated Other Comprehensive Loss (Tables)
Components of accumulated other comprehensive loss, net of tax
The following table summarizes the components of accumulated other comprehensive loss, net of tax (in millions). All amounts reclassified from accumulated other comprehensive loss affect the line items noted below within the Condensed Consolidated Statements of Income.
 
2013
 
2012
Unrealized gains on investment securities as of January 1,
$
7.7

 
$
4.9

Unrealized gains
1.5

 
5.9

Tax expense
(0.6
)
 
(2.2
)
Reclassification of gains into “Other revenues”
(2.9
)
 
(1.4
)
Tax expense related to reclassifications
1.1

 
0.5

Net unrealized gains/(losses) on investment securities
(0.9
)
 
2.8

Unrealized gains on investment securities as of March 31,
$
6.8

 
$
7.7

 
 
 
 
Unrealized gains/(losses) on hedging activities as of January 1,
$
(21.9
)
 
$
5.1

Unrealized gains/(losses)
23.8

 
(23.0
)
Tax (expense)/benefit
(3.7
)
 
3.4

Reclassification of gains into “Transaction fees”
(0.4
)
 
(1.9
)
Reclassification of gains into “Foreign exchange revenues”
(0.1
)
 
(0.6
)
Reclassification of losses into “Interest expense”
0.9

 
0.9

Tax benefit related to reclassifications
(0.1
)
 
—

Net unrealized gains/(losses) on hedging activities
20.4

 
(21.2
)
Unrealized losses on hedging activities as of March 31,
$
(1.5
)
 
$
(16.1
)
 
 
 
 
Foreign currency translation adjustments as of January 1,
$
(8.5
)
 
$
(6.3
)
Foreign currency translation adjustments
(2.3
)
 
3.3

Tax expense
(0.8
)
 
(0.5
)
Net foreign currency translation adjustments
(3.1
)
 
2.8

Foreign currency translation adjustments as of March 31,
$
(11.6
)
 
$
(3.5
)
 
 
 
 
Defined benefit pension plan adjustments as of January 1,
$
(129.9
)
 
$
(122.2
)
Reclassification of losses into “Cost of services”
3.1

 
2.6

Tax benefit related to reclassifications and other
(0.6
)
 
(1.0
)
Net defined benefit pension plan adjustments
2.5

 
1.6

Defined benefit pension plan adjustments as of March 31,
$
(127.4
)
 
$
(120.6
)
Accumulated other comprehensive loss as of March 31,
$
(133.7
)
 
$
(132.5
)
Employee Benefit Plans (Tables)
Components of net periodic benefit cost for the Plan
The following table provides the components of net periodic benefit cost for the Plan (in millions):
 
Three Months Ended
March 31,
 
2013
 
2012
Interest cost
$
3.0

 
$
3.7

Expected return on plan assets
(5.2
)
 
(5.2
)
Amortization of actuarial loss
3.1

 
2.6

Net periodic benefit cost
$
0.9

 
$
1.1

Derivatives (Tables)
Notional amounts of foreign currency forward contracts 
The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2013 were as follows (in millions):
Contracts not designated as hedges:
 
Euro
$
203.7

Canadian dollar
50.6

Mexican peso
40.2

British pound
35.5

Other (a)
152.2

Contracts designated as hedges:
 
Euro
$
459.8

Canadian dollar
128.0

British pound
94.8

Australian dollar
47.8

Other
85.6


 ____________________
(a)
Comprised of exposures to fourteen different currencies. None of these individual currency exposures is greater than $25 million.
Fair value of derivatives 
The following table summarizes the fair value of derivatives reported in the Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012 (in millions):
 
Derivative Assets
 
Derivative Liabilities
 
 
 
Fair Value
 
 
 
Fair Value
 
Balance Sheet
Location
 
March 31,
2013
 
December 31,
2012
 
Balance Sheet
Location
 
March 31,
2013
 
December 31,
2012
Derivatives — hedges:
 
 
 
 
 
 
 
 
 
 
 
Interest rate fair value hedges — Corporate
Other assets
 
$
4.0

 
$
13.1

 
Other liabilities
 
$
0.1

 
$
—

Foreign currency cash flow hedges — Consumer-to-Consumer
Other assets
 
25.3

 
10.8

 
Other liabilities
 
7.7

 
17.6

Total
 
 
$
29.3

 
$
23.9

 
 
 
$
7.8

 
$
17.6

Derivatives — undesignated:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency — Business Solutions
Other assets
 
$
122.0

 
$
71.9

 
Other liabilities
 
$
111.1

 
$
66.5

Foreign currency — Consumer-to-Consumer
Other assets
 
2.8

 
1.0

 
Other liabilities
 
0.4

 
2.0

Total
 
 
$
124.8

 
$
72.9

 
 
 
$
111.5

 
$
68.5

Total derivatives
 
 
$
154.1

 
$
96.8

 
 
 
$
119.3

 
$
86.1

Gross and net fair value of derivative assets and liabilities 
The following tables summarize the gross and net fair value of derivative assets and liabilities as of March 31, 2013 and December 31, 2012 (in millions):
Offsetting of Derivative Assets
March 31, 2013
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
 
Net Amounts Presented in the Condensed Consolidated Balance Sheets
 
Derivatives Not Offset in the Condensed Consolidated Balance Sheets
 
Net Amounts
Derivatives subject to a master netting arrangement or similar agreement
 
$
63.0

 
$
—

 
$
63.0

 
$
(28.8
)
 
$
34.2

Derivatives that are not or may not be subject to master netting arrangement or similar agreement
 
91.1

 
 
 
 
 
 
 
 
Total
 
$
154.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
 
 
Derivatives subject to a master netting arrangement or similar agreement
 
$
39.1

 
$
—

 
$
39.1

 
$
(19.6
)
 
$
19.5

Derivatives that are not or may not be subject to master netting arrangement or similar agreement
 
57.7

 
 
 
 
 
 
 
 
Total
 
$
96.8

 
 
 
 
 
 
 
 
Offsetting of Derivative Liabilities
March 31, 2013
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
 
Net Amounts Presented in the Condensed Consolidated Balance Sheets
 
Derivatives Not Offset in the Condensed Consolidated Balance Sheets
 
Net Amounts
Derivatives subject to a master netting arrangement or similar agreement
 
$
37.5

 
$
—

 
$
37.5

 
$
(28.8
)
 
$
8.7

Derivatives that are not or may not be subject to master netting arrangement or similar agreement
 
81.8

 
 
 
 
 
 
 
 
Total
 
$
119.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
 
 
Derivatives subject to a master netting arrangement or similar agreement
 
$
30.5

 
$
—

 
$
30.5

 
$
(19.6
)
 
$
10.9

Derivatives that are not or may not be subject to master netting arrangement or similar agreement
 
55.6

 
 
 
 
 
 
 
 
Total
 
$
86.1

 
 
 
 
 
 
 
 
Location and amount of gains/(losses) from fair value hedges 
The following table presents the location and amount of gains/(losses) from fair value hedges for the three months ended March 31, 2013 and 2012 (in millions):
 
 
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
 
 
March 31,
2013
 
March 31,
2012
 
Hedged  Item
 
 
March 31,
2013
 
March 31,
2012
 
 
March 31,
2013
 
March 31, 2012
Interest rate contracts
 
Interest  expense
 
$
(0.6
)
 
$
1.7

 
Fixed-rate debt
 
Interest expense
 
$
3.3

 
$
0.2

 
Interest  expense
 
$
(0.1
)
 
$
—

Total gain/(loss)
 
 
 
$
(0.6
)

$
1.7

 
 
 
 
 
$
3.3

 
$
0.2

 
 
 
$
(0.1
)
 
$
—

Location and amount of gains/(losses) from cash flow hedges 
The following table presents the location and amount of gains/(losses) from cash flow hedges for the three months ended March 31, 2013 and 2012 (in millions):
 
 
Gain/(Loss) Recognized
in OCI on Derivatives
(Effective Portion)
 
Gain/(Loss) Reclassified from
Accumulated OCI into Income
(Effective Portion)
 
Gain/(Loss) Recognized in Income on
Derivatives (Ineffective Portion and Amount
Excluded from Effectiveness Testing) (b)
 
 
Amount
 
Income
Statement Location
 
Amount
 
Income
Statement Location
 
Amount
Derivatives
 
March 31, 2013
 
March 31, 2012
 
 
March 31, 2013
 
March 31, 2012
 
 
March 31, 2013
 
March 31, 2012
Foreign currency contracts
 
$
23.8

 
$
(23.0
)
 
Revenue
 
$
0.5

 
$
2.5

 
Derivative gains, net
 
$
(0.2
)
 
$
1.4

Interest rate contracts (c)
 
—

 
—

 
Interest expense
 
(0.9
)
 
(0.9
)
 
Interest expense
 
—

 
—

Total gain/(loss)
 
$
23.8

 
$
(23.0
)
 
 
 
$
(0.4
)
 
$
1.6

 
 
 
$
(0.2
)
 
$
1.4

Location and amount of net gains/(losses) from undesignated hedges 
The following table presents the location and amount of net gains/(losses) from undesignated hedges for the three months ended March 31, 2013 and 2012 (in millions):
 
 
Gain/(Loss) Recognized in Income on Derivatives (d)
 
 
Income Statement Location
 
Amount
 
 
 
 
Three Months Ended
March 31,
Derivatives
 
 
 
2013
 
2012
Foreign currency contracts (e)
Selling, general and administrative
 
$
7.7

 
$
(14.8
)
Foreign currency contracts (f)
Derivative gains, net
 
0.7

 
0.2

Total gain/(loss)
 
 
$
8.4

 
$
(14.6
)
 ____________________
(a)
The gain of $3.3 million and $0.2 million in the three months ended March 31, 2013 and 2012, respectively, was comprised of a gain/(loss) in value on the debt of $0.6 million and $(1.7) million, respectively, and amortization of hedge accounting adjustments of $2.7 million and $1.9 million, respectively.
(b)
The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.
(c)
The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative’s fair value in “Accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets. These amounts are reclassified to “Interest expense” in the Condensed Consolidated Statements of Income over the life of the related notes.
(d)
The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.
(e)
The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations and cash balances, not including amounts related to derivatives activity as displayed above, for the three months ended March 31, 2013 and 2012, were $(6.2) million and $16.1 million, respectively.
(f)
The derivative contracts used in the Company’s revenue hedging program are not designated as hedges in the final month of the contract
Borrowings (Tables)
Borrowings
The Company’s outstanding borrowings consisted of the following (in millions):
 
March 31, 2013
 
December 31, 2012
Due in less than one year:
 
 
 
Commercial paper (a)
$
—

 
$
—

Floating rate notes (b)
—

 
300.0

Due in greater than one year (c):
 
 
 
6.500% notes (effective rate of 5.5%) due 2014
500.0

 
500.0

2.375% notes due 2015 (d)
250.0

 
250.0

5.930% notes due 2016 (d)
1,000.0

 
1,000.0

2.875% notes due 2017 (d)
500.0

 
500.0

3.650% notes due 2018 (d)
400.0

 
400.0

5.253% notes due 2020 (d)
324.9

 
324.9

6.200% notes due 2036 (d)
500.0

 
500.0

6.200% notes due 2040 (d)
250.0

 
250.0

Other borrowings
5.8

 
5.8

Total borrowings at par value
3,730.7

 
4,030.7

Fair value hedge accounting adjustments, net (c)
17.0

 
20.2

Unamortized discount, net
(20.9
)
 
(21.7
)
Total borrowings at carrying value (e)
$
3,726.8

 
$
4,029.2

____________________ 
(a)
Pursuant to the Company’s commercial paper program, the Company may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Company’s Revolving Credit Facility in excess of $150 million. The commercial paper notes may have maturities of up to 397 days from date of issuance.
(b)
The floating rate notes due in March 2013 were repaid using the Company’s cash, including cash generated from operations and proceeds from the Company’s issuance of notes due 2015 and 2017.
(c)
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 Condensed Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.
(d)
The difference between the stated interest rate and the effective interest rate is not significant.
(e)
As of March 31, 2013, the Company’s weighted-average effective rate on total borrowings was approximately 5.0%.
Stock Compensation Plans (Tables)
Assumptions for the Black-Scholes option pricing model to determine the value of options granted
The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted in the three months ended March 31, 2013:
Stock options granted:
 
Weighted-average risk-free interest rate
1.2
%
Weighted-average dividend yield
3.7
%
Volatility
35.3
%
Expected term (in years)
6.09

Weighted-average grant date fair value
$
3.20

Segments (Tables)
Segment Results
The following table presents the Company’s reportable segment results for the three months ended March 31, 2013 and 2012 (in millions):
 
Three Months Ended
March 31,
 
2013
 
2012
Revenues:
 
 
 
Consumer-to-Consumer:
 
 
 
Transaction fees
$
809.6

 
$
872.0

Foreign exchange revenues
225.6

 
239.4

Other revenues
15.0

 
13.2

 
1,050.2

 
1,124.6

Consumer-to-Business:
 
 
 
Transaction fees
145.8

 
147.7

Foreign exchange and other revenues
7.9

 
7.4

 
153.7

 
155.1

Business Solutions:
 
 
 
Foreign exchange revenues
84.0

 
80.1

Transaction fees and other revenues
8.8

 
6.8

 
92.8

 
86.9

Other:
 
 
 
Total revenues
28.7

 
26.8

Total consolidated revenues
$
1,325.4

 
$
1,393.4

Operating income/(loss):
 
 
 
Consumer-to-Consumer
$
267.1

 
$
311.3

Consumer-to-Business
37.9

 
41.1

Business Solutions (a)
(6.2
)
 
(14.8
)
Other
(1.9
)
 
(5.1
)
Total consolidated operating income
$
296.9

 
$
332.5


____________________ 
(a)
During the three months ended March 31, 2013 and 2012, the Company incurred $3.9 million and $6.4 million, respectively, of integration expenses related to the acquisition of Travelex Global Business Payments (“TGBP”), which was acquired in November 2011. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition, which are included in Other.
Business and Basis of Presentation (Details Numeric) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Net assets subject to limitations
$ 305 
Minimum [Member]
 
Entity Location [Line Items]
 
Number of countries and territories where services are primarily available through network of agent locations (in countries and territories)
200 
Earnings Per Share and Dividends (Details)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Earnings Per Share, Diluted [Abstract]
 
 
Basic weighted-average shares outstanding
567.6 
619.1 
Common stock equivalents
2.1 
2.8 
Diluted weighted-average shares outstanding
569.7 
621.9 
Earnings Per Share and Dividends (Details Numeric) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Earnings Per Share and Dividends [Abstract]
 
 
Anti-dilutive outstanding options excluded from diluted EPS calculation
25.5 
20.5 
Cash dividends declared per common share
$ 0.125 
$ 0.10 
Cash dividends declared
$ 70.3 
$ 61.6 
Cash dividends paid
$ 70.3 
$ 61.6 
Productivity and Cost-Savings Initiatives Expenses (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Mar. 31, 2012
Mar. 31, 2013
Productivity and Cost-Savings Initiatives Accrual
 
 
 
 
Balance, December 31, 2012
$ 27.3 
 
 
 
Expenses
4.2 1
30.9 
0 
35.1 
Cash payments
(9.1)
 
 
 
Non-cash benefit/(expense)
(0.1)1
 
 
 
Balance, March 31, 2013
22.3 
27.3 
 
22.3 
Cumulative expenses incurred to date
4.2 1
30.9 
0 
35.1 
Estimated additional expenses expected to be incurred
44.0 
 
 
44.0 
Total expenses
 
 
 
79.1 
Severance, Outplacement and Related Benefits [Member]
 
 
 
 
Productivity and Cost-Savings Initiatives Accrual
 
 
 
 
Balance, December 31, 2012
25.7 
 
 
 
Expenses
1.9 1
 
 
30.8 
Cash payments
(6.7)
 
 
 
Non-cash benefit/(expense)
0.1 1
 
 
 
Balance, March 31, 2013
21.0 
 
 
21.0 
Cumulative expenses incurred to date
1.9 1
 
 
30.8 
Estimated additional expenses expected to be incurred
16.0 
 
 
16.0 
Total expenses
 
 
 
46.8 
Other [Member]
 
 
 
 
Productivity and Cost-Savings Initiatives Accrual
 
 
 
 
Balance, December 31, 2012
1.6 2
 
 
 
Expenses
2.3 1 2
 
 
4.3 2
Cash payments
(2.4)2
 
 
 
Non-cash benefit/(expense)
(0.2)1 2
 
 
 
Balance, March 31, 2013
1.3 2
 
 
1.3 2
Cumulative expenses incurred to date
2.3 1 2
 
 
4.3 2
Estimated additional expenses expected to be incurred
28.0 2
 
 
28.0 2
Total expenses
 
 
 
$ 32.3 2
Productivity and Cost-Savings Initiatives Expenses (Details 1) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Schedule of Productivity and Cost-Savings Initiatives Expenses in Income Statement [Abstract]
 
 
Cost of services
$ 759.4 
$ 783.0 
Selling, general and administrative
269.1 
277.9 
Total expenses, pre-tax
1,028.5 
1,060.9 
Productivity and Cost-Savings Initiatives [Member]
 
 
Schedule of Productivity and Cost-Savings Initiatives Expenses in Income Statement [Abstract]
 
 
Cost of services
1.6 
 
Selling, general and administrative
2.6 
 
Total expenses, pre-tax
4.2 
 
Total expenses, net of tax
$ 3.3 
 
Productivity and Cost-Savings Initiatives Expenses (Details 2) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Mar. 31, 2012
Mar. 31, 2013
Productivity and Cost-Savings Initiatives
 
 
 
 
Expenses
$ 4.2 1
$ 30.9 
$ 0 
$ 35.1 
Consumer-to-Consumer [Member]
 
 
 
 
Productivity and Cost-Savings Initiatives
 
 
 
 
Expenses
3.2 
20.9 
 
24.1 
Consumer-to-Business [Member]
 
 
 
 
Productivity and Cost-Savings Initiatives
 
 
 
 
Expenses
0.5 
4.0 
 
4.5 
Other [Member]
 
 
 
 
Productivity and Cost-Savings Initiatives
 
 
 
 
Expenses
$ 0.5 
$ 6.0 
 
$ 6.5 
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Assets:
 
 
State and municipal debt securities
$ 954.4 
$ 1,003.7 
State and municipal variable rate demand notes
248.9 
463.3 
Corporate debt and other
21.9 
47.8 
Derivatives
154.1 
96.8 
Total assets
1,379.3 
1,611.6 
Liabilities:
 
 
Notes and other borrowings
3,925.4 
4,200.8 
Derivatives
119.3 
86.1 
Total liabilities
4,044.7 
4,286.9 
Level 1 [Member]
 
 
Assets:
 
 
State and municipal debt securities
0 
0 
State and municipal variable rate demand notes
0 
0 
Corporate debt and other
0 
0 
Derivatives
0 
0 
Total assets
0 
0 
Liabilities:
 
 
Notes and other borrowings
0 
0 
Derivatives
0 
0 
Total liabilities
0 
0 
Level 2 [Member]
 
 
Assets:
 
 
State and municipal debt securities
954.4 
1,003.7 
State and municipal variable rate demand notes
248.9 
463.3 
Corporate debt and other
21.9 
47.8 
Derivatives
154.1 
96.8 
Total assets
1,379.3 
1,611.6 
Liabilities:
 
 
Notes and other borrowings
3,925.4 
4,200.8 
Derivatives
119.3 
86.1 
Total liabilities
4,044.7 
4,286.9 
Level 3 [Member]
 
 
Assets:
 
 
State and municipal debt securities
0 
0 
State and municipal variable rate demand notes
0 
0 
Corporate debt and other
0 
0 
Derivatives
0 
0 
Total assets
0 
0 
Liabilities:
 
 
Notes and other borrowings
0 
0 
Derivatives
0 
0 
Total liabilities
$ 0 
$ 0 
Fair Value Measurements (Details Numeric) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Fair Value Disclosures [Abstract]
 
 
Borrowings, carrying value
$ 3,726.8 1
$ 4,029.2 
Commitments and Contingencies (Details Numeric) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Feb. 11, 2010
Commitments and Contingencies Disclosure [Abstract]
 
 
Letters of credit outstanding and bank guarantees
$ 100 
 
Letters of credit renewal option
1 year 
 
Number of purported class-action lawsuits
2 
 
Settlement agreement to invest in compliance
 
$ 23.0 
Related Party Transactions (Details Numeric) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Equity Method Investee [Member]
 
 
Related Party Transactions
 
 
Related party transactions
$ 15.2 
$ 16.1 
Director [Member]
 
 
Related Party Transactions
 
 
Related party transactions
$ 4.1 
$ 14.0 
Number of related party agents
1 
2 
Settlement Assets and Obligations (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Settlement assets:
 
 
Cash and cash equivalents
$ 932.0 
$ 574.5 
Receivables from selling agents and Business Solutions customers
1,162.0 
1,025.3 
Investment securities
1,225.2 
1,514.8 
Total settlement assets
3,319.2 
3,114.6 
Settlement obligations:
 
 
Money transfer, money order and payment service payables
2,489.4 
2,297.1 
Payables to agents
829.8 
817.5 
Total settlement obligations
$ 3,319.2 
$ 3,114.6 
Settlement Assets and Obligations (Details 1) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Amortized Cost
$ 1,214.3 
$ 1,502.5 
Fair Value
1,225.2 
1,514.8 
Gross Unrealized Gains
11.7 
12.6 
Gross Unrealized Losses
(0.8)
(0.3)
Net Unrealized Gains
10.9 
12.3 
State and municipal debt securities [Member]
 
 
Amortized Cost
943.6 1
991.5 1
Fair Value
954.4 1
1,003.7 1
Gross Unrealized Gains
11.6 1
12.5 1
Gross Unrealized Losses
(0.8)1
(0.3)1
Net Unrealized Gains
10.8 1
12.2 1
State and municipal variable rate demand notes [Member]
 
 
Amortized Cost
248.9 
463.3 
Fair Value
248.9 
463.3 
Gross Unrealized Gains
0 
0 
Gross Unrealized Losses
0 
0 
Net Unrealized Gains
0 
0 
Corporate debt and other [Member]
 
 
Amortized Cost
21.8 
47.7 
Fair Value
21.9 
47.8 
Gross Unrealized Gains
0.1 
0.1 
Gross Unrealized Losses
0 
0 
Net Unrealized Gains
$ 0.1 
$ 0.1 
Settlement Assets and Obligations (Details 2) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Contractual maturities of investment securities [Abstract]
 
Due within 1 year
$ 209.3 
Due after 1 year through 5 years
725.1 
Due after 5 years through 10 years
57.0 
Due after 10 years
233.8 
Total investment securities - Fair Value
1,225.2 
Variable rate demand notes [Member]
 
Contractual maturities of investment securities [Abstract]
 
Due within 1 year
6.1 
Due after 1 year through 5 years
14.5 
Due after 5 years through 10 years
8.8 
Due after 10 years
$ 219.5 
Settlement Assets and Obligations (Details Numeric) (USD $)
In Billions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Settlement Assets And Obligations (Numeric) [Abstract]
 
 
Proceeds from the sale and maturity of available-for-sale securities
$ 4.6 
$ 3.0 
Maximum [Member]
 
 
Settlement Assets And Obligations (Numeric) [Abstract]
 
 
Variable rate demand notes, maximum maturity year
2044 
 
Variable rate demand notes, period of time held
30 days 
 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Unrealized gains/(losses) on investment securities:
 
 
 
Unrealized gains on investment securities as of January 1,
$ 7.7 
$ 4.9 
 
Unrealized gains
1.5 
5.9 
 
Tax expense
(0.6)
(2.2)
 
Reclassification of gains into Other revenues
(2.9)
(1.4)
 
Tax expense related to reclassifications
1.1 
0.5 
 
Net unrealized gains/(losses) on investment securities
(0.9)
2.8 
 
Unrealized gains on investment securities as of March 31,
6.8 
7.7 
 
Unrealized gains/(losses) on hedging activities:
 
 
 
Unrealized gains/(losses) on hedging activities as of January 1,
(21.9)
5.1 
 
Unrealized gains/(losses)
23.8 
(23.0)
 
Tax (expense)/benefit
(3.7)
3.4 
 
Reclassification of gains into Transaction fees
(0.4)
(1.9)
 
Reclassification of gains into Foreign exchange revenues
(0.1)
(0.6)
 
Reclassification of losses into Interest expense
0.9 
0.9 
 
Tax benefit related to reclassifications
(0.1)
0 
 
Net unrealized gains/(losses) on hedging activities
20.4 
(21.2)
 
Unrealized losses on hedging activities as of March 31,
(1.5)
(16.1)
 
Foreign currency translation adjustments:
 
 
 
Foreign currency translation adjustments as of January 1,
(8.5)
(6.3)
 
Foreign currency translation adjustments
(2.3)
3.3 
 
Tax expense
(0.8)
(0.5)
 
Net foreign currency translation adjustments
(3.1)
2.8 
 
Foreign currency translation adjustments as of March 31,
(11.6)
(3.5)
 
Defined benefit pension plan adjustments:
 
 
 
Defined benefit pension plan adjustments as of January 1,
(129.9)
(122.2)
 
Reclassification of losses into “Cost of services”
3.1 
2.6 
 
Tax benefit related to reclassifications and other
(0.6)
(1.0)
 
Net defined benefit pension plan adjustments
2.5 
1.6 
 
Defined benefit pension plan adjustments as of March 31,
(127.4)
(120.6)
 
Accumulated other comprehensive loss as of March 31,
$ (133.7)
$ (132.5)
$ (152.6)
Employee Benefit Plan (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Net periodic benefit cost
 
 
Interest cost
$ 3.0 
$ 3.7 
Expected return on plan assets
(5.2)
(5.2)
Amortization of actuarial loss
3.1 
2.6 
Net periodic benefit cost
$ 0.9 
$ 1.1 
Employee Benefit Plan (Details Numeric) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Compensation and Retirement Disclosure [Abstract]
 
 
Unfunded pension obligation
$ 93.3 
$ 102.1 
Projected contributions by the Company in 2013
23 
 
Contributions by the Company
$ 7 
 
Derivatives (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Euro [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
$ 203.7 
Contracts designated as hedges
459.8 
Canadian dollar [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
50.6 
Contracts designated as hedges
128.0 
Mexican peso [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
40.2 
British pound [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
35.5 
Contracts designated as hedges
94.8 
Australian dollar [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts designated as hedges
47.8 
Other [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
152.2 1
Contracts designated as hedges
85.6 
Number of currency exposures within 'Other'
14 
Maximum [Member] |
Other [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Maximum individual currency exposure within 'Other'
$ 25 
Derivatives (Details 1) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Fair Value Of Derivatives [Abstract]
 
 
Derivative Asset, Fair Value
$ 154.1 
$ 96.8 
Derivative Liability, Fair Value
119.3 
86.1 
Designated Hedges [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Asset, Fair Value
29.3 
23.9 
Derivative Liability, Fair Value
7.8 
17.6 
Designated Hedges [Member] |
Other Assets [Member] |
Interest rate fair value hedges - Corporate [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Asset, Fair Value
4.0 
13.1 
Designated Hedges [Member] |
Other Liabilities [Member] |
Interest rate fair value hedges - Corporate [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Liability, Fair Value
0.1 
0 
Designated Hedges [Member] |
Consumer-to-Consumer [Member] |
Other Assets [Member] |
Foreign currency [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Asset, Fair Value
25.3 
10.8 
Designated Hedges [Member] |
Consumer-to-Consumer [Member] |
Other Liabilities [Member] |
Foreign currency [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Liability, Fair Value
7.7 
17.6 
Undesignated [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Asset, Fair Value
124.8 
72.9 
Derivative Liability, Fair Value
111.5 
68.5 
Undesignated [Member] |
Business Solutions [Member] |
Other Assets [Member] |
Foreign currency [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Asset, Fair Value
122.0 
71.9 
Undesignated [Member] |
Business Solutions [Member] |
Other Liabilities [Member] |
Foreign currency [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Liability, Fair Value
111.1 
66.5 
Undesignated [Member] |
Consumer-to-Consumer [Member] |
Other Assets [Member] |
Foreign currency [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Asset, Fair Value
2.8 
1.0 
Undesignated [Member] |
Consumer-to-Consumer [Member] |
Other Liabilities [Member] |
Foreign currency [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Liability, Fair Value
$ 0.4 
$ 2.0 
Derivatives (Details 2) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Derivative [Line Items]
 
 
Derivative Asset, Fair Value
$ 154.1 
$ 96.8 
Derivative Liability, Fair Value
119.3 
86.1 
Subject to netting [Member]
 
 
Derivative [Line Items]
 
 
Derivative Asset, Fair Value
63.0 
39.1 
Gross Amounts Offset in the Balance Sheets
0 
0 
Derivatives Not Offset in the Balance Sheets
(28.8)
(19.6)
Derivative Asset Net Amounts
34.2 
19.5 
Derivative Liability, Fair Value
37.5 
30.5 
Gross Amounts Offset in the Balance Sheets
0 
0 
Derivatives Not Offset in the Balance Sheets
(28.8)
(19.6)
Derivative Liability Net Amounts
8.7 
10.9 
Not subject to netting [Member]
 
 
Derivative [Line Items]
 
 
Derivative Asset, Fair Value
91.1 
57.7 
Derivative Liability, Fair Value
$ 81.8 
$ 55.6 
Derivatives (Details 3) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
$ 0.5 
$ 1.6 
Gain/(Loss) Recognized in Income on Undesignated Hedges
8.4 
(14.6)
Fair Value Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in Income on Derivatives
(0.6)
1.7 
Gain/(Loss) Recognized in Income on Related Hedged Item
3.3 
0.2 
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(0.1)
0 
Cash Flow Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)
23.8 
(23.0)
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
(0.4)
1.6 
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(0.2)
1.4 
Selling, general and administrative [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in Income on Undesignated Hedges
7.7 1
(14.8)1
Derivative gains, net [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in Income on Undesignated Hedges
0.7 2
0.2 2
Foreign currency contracts [Member] |
Cash Flow Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)
23.8 
(23.0)
Foreign currency contracts [Member] |
Revenue [Member] |
Cash Flow Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
0.5 
2.5 
Foreign currency contracts [Member] |
Derivative gains, net [Member] |
Cash Flow Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(0.2)3
1.4 3
Interest rate contracts [Member] |
Cash Flow Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)
0 4
0 4
Interest rate contracts [Member] |
Interest expense [Member] |
Fair Value Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in Income on Derivatives
(0.6)
1.7 
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(0.1)
0 
Interest rate contracts [Member] |
Interest expense [Member] |
Cash Flow Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
(0.9)4
(0.9)4
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
0 
0 
Fixed-rate debt [Member] |
Interest expense [Member] |
Fair Value Hedges [Member]
 
 
Hedges [Abstract]
 
 
Gain/(Loss) Recognized in Income on Related Hedged Item
$ 3.3 5
$ 0.2 5
Derivatives (Details Numeric) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Derivatives (Numeric) [Abstract]
 
 
 
Foreign exchange revenues
$ 312.4 
$ 322.6 
 
Notional amount of interest rate swaps
1,050.0 
 
800.0 
Foreign exchange gain/(loss) on settlement assets and obligations and cash balances
(6.2)
16.1 
 
Accumulated other comprehensive pre-tax gain to be reclassified into revenue in next 12 months
17.3 
 
 
Losses forecasted to be recognized on debt issuance hedges in next 12 months
3.6 
 
 
Notes Payable, 2014 [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Notional amount of interest rate swaps
500.0 
 
 
Notes Payable, 2015 [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Notional amount of interest rate swaps
250.0 
 
 
Notes Payable, 2018 [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Notional amount of interest rate swaps
300.0 
 
 
Business Solutions [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Foreign exchange revenues
84.0 
80.1 
 
Business Solutions notional amounts of foreign currency derivative customer contracts
4,200.0 
 
 
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Foreign exchange revenues
225.6 
239.4 
 
Fair Value Hedges [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Gain recognized in income on related hedged item
3.3 
0.2 
 
Fair Value Hedges [Member] |
Fixed-rate debt [Member] |
Interest Expense [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Gain recognized in income on related hedged item
3.3 1
0.2 1
 
Gain/(Loss) in value of debt
0.6 
(1.7)
 
Amortization of hedge accounting adjustments
$ 2.7 
$ 1.9 
 
Designated Hedges [Member] |
Foreign currency contracts [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Derivative policy targeted weighted-average maturity
1 year 
 
 
Derivative weighted-average maturity
1 year 
 
 
Designated Hedges [Member] |
Maximum [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Maximum remaining maturity of foreign currency derivatives
24 months 
 
 
Designated Hedges [Member] |
Maximum [Member] |
Foreign currency contracts [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Derivative policy contract maturity period maximum
36 months 
 
 
Undesignated [Member] |
Maximum [Member] |
Foreign currency contracts [Member] |
Business Solutions [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Business Solutions derivative average maturity
1 year 
 
 
Undesignated [Member] |
Maximum [Member] |
Uncollected settlement assets and obligations [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Foreign currency forward contracts maturity range maximum
1 month 
 
 
Undesignated [Member] |
Maximum [Member] |
Foreign currency denominated cash positions [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Foreign currency forward contracts maturity range maximum
1 year 
 
 
Undesignated [Member] |
Minimum [Member] |
Uncollected settlement assets and obligations [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Foreign currency forward contracts maturity range minimum
2 days 
 
 
Borrowings (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Borrowings [Abstract]
 
 
Total borrowings at par value
$ 3,730.7 
$ 4,030.7 
Fair value hedge accounting adjustments, net
17.0 1
20.2 1
Unamortized discount, net
(20.9)
(21.7)
Borrowings, carrying value
3,726.8 2
4,029.2 
Weighted-average effective interest rate
5.00% 
 
Floating rate notes
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
0 3
300.0 3
6.500% notes (effective rate of 5.5%) due 2014
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
500.0 1
500.0 1
Stated interest rate
6.50% 
 
Effective interest rate
5.50% 
 
2.375% notes due 2015
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
250.0 1 4
250.0 1 4
Stated interest rate
2.375% 
 
5.930% notes due 2016
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
1,000.0 1 4
1,000.0 1 4
Stated interest rate
5.93% 
 
2.875% notes due 2017
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
500.0 1 4
500.0 1 4
Stated interest rate
2.875% 
 
3.650% notes due 2018
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
400.0 1 4
400.0 1 4
Stated interest rate
3.65% 
 
5.253% notes due 2020
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
324.9 1 4
324.9 1 4
Stated interest rate
5.253% 
 
6.200% notes due 2036
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
500.0 1 4
500.0 1 4
Stated interest rate
6.20% 
 
6.200% notes due 2040
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
250.0 1 4
250.0 1 4
Stated interest rate
6.20% 
 
Other borrowings
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
5.8 
5.8 
Commercial paper
 
 
Borrowings [Abstract]
 
 
Total borrowings at par value
$ 0 5
$ 0 5
Borrowings (Details Numeric) (USD $)
3 Months Ended
Mar. 31, 2013
Maturities of long-term debt [Abstract]
 
Maturities of borrowings in 2014
$ 500,000,000 
Maturities of borrowings in 2015
250,000,000 
Maturities of borrowings in 2016
1,000,000,000 
Maturities of borrowings in 2017
500,000,000 
Maturities of borrowings in 2018
400,000,000 
Maturities of borrowings after 2018
1,100,000,000 
Commercial paper [Member]
 
Borrowings [Abstract]
 
Maximum issuance, reduced by borrowings in excess of amount
150,000,000 
Maximum [Member] |
Commercial paper [Member]
 
Borrowings [Abstract]
 
Maximum issuance
$ 1,500,000,000 
Maximum days to maturity
397 days 
Income Taxes (Details Numeric) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Income Taxes [Abstract]
 
 
 
Effective tax rates
15.30% 
14.80% 
 
Unrecognized tax benefits excluding interest and penalties
$ 104,300,000 
 
$ 103,200,000 
Unrecognized tax benefits that, if recognized, would affect the effective tax rate
94,600,000 
 
93,500,000 
Interest and penalties, recognized
700,000 
(1,500,000)
 
Interest and penalties, accrued
20,800,000 
 
20,000,000 
Reasonably possible decrease to the Company's total unrecognized tax benefits during the next 12 months
24,000,000 
 
 
Expected cash payments as a result of the IRS Agreement
190,000,000 
 
 
Cash payments made as a result of the IRS Agreement
0 
65,000,000 
92,400,000 
Provision for accumulated foreign earnings
0 
 
 
Accumulated foreign earnings
$ 4,600,000,000 
 
 
Pre-tax income [Member] |
Geographic concentration risk [Member] |
Foreign tax authority [Member]
 
 
 
Income Taxes [Abstract]
 
 
 
Percent of pre-tax income derived from foreign sources
97.00% 
85.00% 
 
Stock Compensation Plans (Details)
3 Months Ended
Mar. 31, 2013
Stock options granted:
 
Weighted-average risk-free interest rate
1.20% 
Weighted-average dividend yield
3.70% 
Volatility
35.30% 
Expected term (in years)
6 years 1 month 2 days 
Weighted-average grant date fair value
$ 3.20 
Stock Compensation Plans (Details Numeric) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Stock Compensation Plans (Numeric) [Abstract]
 
 
Stock-based compensation expense
$ 10.4 
$ 10.5 
Options granted
3.9 
 
Options granted, weighted-average exercise price
$ 14.00 
 
Outstanding options
28.2 
 
Outstanding options, weighted-average exercise price
$ 17.96 
 
Options exercisable
21.6 
 
Options exercisable, weighted-average exercise price
$ 18.60 
 
Restricted Stock Units [Member]
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
Units granted
2.2 
 
Units granted, weighted-average grant date fair value
$ 12.64 
 
Non-vested restricted stock units
6.8 
 
Non-vested restricted stock units, weighted-average grant date fair value
$ 15.71 
 
Performance-Based Restricted Stock Units [Member]
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
Units granted
0.8 
 
Units granted, weighted-average grant date fair value
$ 13.56 
 
Award vesting period
3 years 
 
Segments (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Revenues:
 
 
Transaction fees
$ 978.0 
$ 1,040.9 
Foreign exchange revenues
312.4 
322.6 
Other revenues
35.0 
29.9 
Total revenues
1,325.4 
1,393.4 
Operating income/(loss):
 
 
Operating income/(loss)
296.9 
332.5 
Consumer-to-Consumer [Member]
 
 
Revenues:
 
 
Transaction fees
809.6 
872.0 
Foreign exchange revenues
225.6 
239.4 
Other revenues
15.0 
13.2 
Total revenues
1,050.2 
1,124.6 
Operating income/(loss):
 
 
Operating income/(loss)
267.1 
311.3 
Consumer-to-Business [Member]
 
 
Revenues:
 
 
Transaction fees
145.8 
147.7 
Foreign exchange and other revenues
7.9 
7.4 
Total revenues
153.7 
155.1 
Operating income/(loss):
 
 
Operating income/(loss)
37.9 
41.1 
Business Solutions [Member]
 
 
Revenues:
 
 
Foreign exchange revenues
84.0 
80.1 
Transaction fees and other revenues
8.8 
6.8 
Total revenues
92.8 
86.9 
Operating income/(loss):
 
 
Operating income/(loss)
(6.2)1
(14.8)1
Other [Member]
 
 
Revenues:
 
 
Total revenues
28.7 
26.8 
Operating income/(loss):
 
 
Operating income/(loss)
$ (1.9)
$ (5.1)
Segments (Details Numeric) (Travelex Global Business Payments [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Travelex Global Business Payments [Member]
 
 
Segment (Numeric) [Abstract]
 
 
Integration expenses
$ 3.9 
$ 6.4