WESTERN UNION CO, 10-K filed on 2/22/2013
Annual Report
Document and Entity Information (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Feb. 15, 2013
Jun. 29, 2012
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-K 
 
 
Document Period End Date
Dec. 31, 2012 
 
 
Document Fiscal Year Focus
2012 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Common Stock, Shares Outstanding
 
568,767,242 
 
Entity Public Float
 
 
$ 10.2 
Consolidated Statements of Income (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction fees
 
 
 
 
 
 
 
 
 
 
 
 
$ 4,210.0 
$ 4,220.2 
$ 4,055.3 
Foreign exchange revenues
 
 
 
 
 
 
 
 
 
 
 
 
1,332.7 
1,151.2 
1,018.8 
Other revenues
 
 
 
 
 
 
 
 
 
 
 
 
122.1 
120.0 
118.6 
Total revenues
1,424.7 
1,421.6 
1,425.1 
1,393.4 
1,431.3 
1,410.8 
1,366.3 
1,283.0 
 
 
 
 
5,664.8 
5,491.4 
5,192.7 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
 
 
 
 
 
 
 
 
 
 
 
3,194.2 
3,102.0 
2,978.4 
Selling, general and administrative
 
 
 
 
 
 
 
 
 
 
 
 
1,140.6 
1,004.4 
914.2 
Total expenses
1,138.7 1 2
1,056.0 2
1,079.2 2
1,060.9 2
1,072.9 3
1,047.8 4
1,015.6 4
970.1 4
 
 
 
 
4,334.8 1 2 5
4,106.4 3 4 5
3,892.6 5
Operating income
286.0 
365.6 
345.9 
332.5 
358.4 
363.0 
350.7 
312.9 
 
 
 
 
1,330.0 
1,385.0 
1,300.1 
Other income/(expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
5.5 
5.2 
2.8 
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
(179.6)
(181.9)
(169.9)
Derivative gains/(losses), net
 
 
 
 
 
 
 
 
 
 
 
 
0.5 
14.0 
(2.5)
Other income, net
 
 
 
 
 
 
 
 
 
 
 
 
12.4 
52.3 
14.7 
Total other expense, net
(41.2)
(41.8)
(35.8)
(42.4)
(5.8)6
(49.1)
(17.3)6
(38.2)
 
 
 
 
(161.2)
(110.4)6
(154.9)
Income before income taxes
244.8 
323.8 
310.1 
290.1 
352.6 
313.9 
333.4 
274.7 
 
 
 
 
1,168.8 
1,274.6 
1,145.2 
Provision for income taxes
6.9 
54.3 
38.9 
42.8 
(99.7)7
74.2 
70.2 
64.5 
 
 
 
 
142.9 
109.2 7
235.3 
Net income
$ 237.9 
$ 269.5 
$ 271.2 
$ 247.3 
$ 452.3 
$ 239.7 
$ 263.2 
$ 210.2 
 
 
 
 
$ 1,025.9 
$ 1,165.4 
$ 909.9 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$ 0.40 
$ 0.45 
$ 0.44 
$ 0.40 
$ 0.73 
$ 0.38 
$ 0.42 
$ 0.32 
 
 
 
 
$ 1.70 
$ 1.85 
$ 1.37 
Diluted
$ 0.40 
$ 0.45 
$ 0.44 
$ 0.40 
$ 0.73 
$ 0.38 
$ 0.41 
$ 0.32 
 
 
 
 
$ 1.69 
$ 1.84 
$ 1.36 
Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
588.0 
601.5 
610.9 
619.1 
619.4 
624.9 
631.1 
646.9 
 
 
 
 
604.9 
630.6 
666.5 
Diluted
590.2 
604.2 
613.1 
621.9 
621.7 
627.1 
635.8 
652.1 
 
 
 
 
607.4 
634.2 
668.9 
Cash dividends declared per common share
$ 0.125 
$ 0.1 
$ 0.1 
$ 0.1 
$ 0.08 
$ 0.08 
$ 0.08 
$ 0.07 
$ 0.07 
$ 0.06 
$ 0.06 
$ 0.06 
$ 0.425 
$ 0.31 
$ 0.25 
Consolidated Statements of Income (Parentheticals) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Income Statement [Abstract]
 
 
 
Total related party expenses
$ 95.0 
$ 190.7 
$ 236.4 
Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Statement of Other Comprehensive Income [Abstract]
 
 
 
Net income
$ 1,025.9 
$ 1,165.4 
$ 909.9 
Unrealized gains/(losses) on investment securities:
 
 
 
Unrealized gains/(losses)
9.9 
9.7 
(0.5)
Tax (expense)/benefit
(3.7)
(3.6)
0.1 
Reclassification of gains into earnings
(5.5)
(6.9)
(4.7)
Tax expense
2.1 
2.6 
1.8 
Net unrealized gains/(losses) on investment securities
2.8 
1.8 
(3.3)
Unrealized gains/(losses) on hedging activities:
 
 
 
Unrealized gains/(losses)
(20.1)
(5.2)
15.8 
Tax benefit
3.1 
5.6 
0.7 
Reclassification of (gains)/losses into earnings
(9.8)
33.0 
(23.0)
Tax expense/(benefit)
(0.2)
(6.4)
1.6 
Net unrealized gains/(losses) on hedging activities
(27.0)
27.0 
(4.9)
Foreign currency translation adjustments:
 
 
 
Foreign currency translation adjustments
(4.6)
(3.7)
8.4 
Tax (expense)/benefit
2.4 
1.7 
(1.8)
Net foreign currency translation adjustments
(2.2)
(2.0)
6.6 
Defined benefit pension plan:
 
 
 
Unrealized losses
(20.5)
(28.4)
(13.7)
Tax benefit
6.2 
10.9 
5.9 
Reclassification of losses into earnings
10.5 
8.1 
6.2 
Tax benefit
(3.9)
(3.1)
(2.3)
Net defined benefit pension plan adjustments
(7.7)
(12.5)
(3.9)
Total other comprehensive income/(loss)
(34.1)
14.3 
(5.5)
Comprehensive income
$ 991.8 
$ 1,179.7 
$ 904.4 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Assets
 
 
Cash and cash equivalents
$ 1,776.5 
$ 1,370.9 
Settlement assets
3,114.6 
3,091.2 
Property and equipment, net of accumulated depreciation of $384.5 and $429.7, respectively
196.1 
198.1 
Goodwill
3,179.7 
3,198.9 
Other intangible assets, net of accumulated amortization of $519.7 and $462.5, respectively
878.9 
847.4 
Other assets
319.9 
363.4 
Total assets
9,465.7 
9,069.9 
Liabilities:
 
 
Accounts payable and accrued liabilities
556.2 
535.0 
Settlement obligations
3,114.6 
3,091.2 
Income taxes payable
218.3 
302.4 
Deferred tax liability, net
352.1 
389.7 
Borrowings, carrying value
4,029.2 1
3,583.2 1
Other liabilities
254.7 
273.6 
Total liabilities
8,525.1 
8,175.1 
Commitments and contingencies (Note 6)
   
   
Stockholders' equity:
 
 
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued
0 
0 
Common stock, $0.01 par value; 2,000 shares authorized; 572.1 shares and 619.4 shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively
5.7 
6.2 
Capital surplus
332.8 
247.1 
Retained earnings
754.7 
760.0 
Accumulated other comprehensive loss
(152.6)
(118.5)
Total stockholders' equity
940.6 
894.8 
Total liabilities and stockholders' equity
$ 9,465.7 
$ 9,069.9 
Consolidated Balance Sheets (Parentheticals) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Assets
 
 
Accumulated depreciation
$ 384.5 
$ 429.7 
Accumulated amortization
$ 519.7 
$ 462.5 
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
572,100,000 
619,400,000 
Common stock, shares outstanding
572,100,000 
619,400,000 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Cash flows from operating activities
 
 
 
Net income
$ 1,025.9 
$ 1,165.4 
$ 909.9 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation
61.7 
61.0 
61.5 
Amortization
184.4 
131.6 
114.4 
Deferred income tax (benefit)/provision
(35.2)
21.2 
28.6 
Gain on revaluation of equity interests (Note 3)
0 
(49.9)
0 
Other non-cash items, net
77.2 
29.8 
37.9 
Increase/(decrease) in cash, excluding the effects of acquisitions, resulting from changes in:
 
 
 
Other assets
(27.8)
(27.7)
28.1 
Accounts payable and accrued liabilities
9.3 
(43.0)
10.5 
Income taxes payable (Note 10)
(79.9)
(62.3)
(159.2)
Other liabilities
(30.3)
(51.2)
(37.3)
Net cash provided by operating activities
1,185.3 
1,174.9 
994.4 
Cash flows from investing activities
 
 
 
Capitalization of contract costs
(174.9)
(96.7)
(35.0)
Capitalization of purchased and developed software
(32.4)
(13.0)
(25.4)
Purchases of property and equipment
(60.9)
(52.8)
(53.3)
Acquisition of businesses, net of cash acquired (Note 3)
10.0 
(1,218.6)
(4.7)
Net proceeds from settlement of foreign currency forward contracts related to acquisitions
0 
20.8 
0 
Proceeds from receivable for securities sold
0 
0 
36.9 
Repayments of notes receivable issued to agents
0 
0 
16.9 
Net cash used in investing activities
(258.2)
(1,360.3)
(64.6)
Cash flows from financing activities
 
 
 
Proceeds from exercise of options
53.4 
100.0 
42.1 
Cash dividends paid
(254.2)
(194.2)
(165.3)
Common stock repurchased
(766.5)
(803.9)
(581.4)
Net (repayments of)/proceeds from commercial paper
(297.0)
297.0 
0 
Net proceeds from issuance of borrowings
742.8 
696.3 
247.0 
Principal payments on borrowings
0 
(696.3)
0 
Net cash used in financing activities
(521.5)
(601.1)
(457.6)
Net change in cash and cash equivalents
405.6 
(786.5)
472.2 
Cash and cash equivalents at beginning of year
1,370.9 
2,157.4 
1,685.2 
Cash and cash equivalents at end of year
1,776.5 
1,370.9 
2,157.4 
Supplemental cash flow information:
 
 
 
Interest paid
181.8 
191.3 
175.5 
Income taxes paid (Note 10)
257.1 
144.9 
365.4 
Non-cash exchange of 5.400% notes due 2011 for 5.253% notes due 2020 (Note 15)
$ 0 
$ 0 
$ 303.7 
Consolidated Statements of Cash Flows (Parentheticals)
Nov. 17, 2006
Notes Payable, 2011 [Member]
Mar. 30, 2010
Notes Payable, 2020 [Member]
Stated interest rate
5.40% 
5.253% 
Consolidated Statements of Stockholders' Equity (USD $)
In Millions
Total
Common Stock
Capital Surplus
Retained Earnings
Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2009
$ 353.5 
$ 6.9 
$ 40.7 
$ 433.2 
$ (127.3)
Balance, shares at Dec. 31, 2009
 
686.5 
 
 
 
Net income
909.9 
 
 
909.9 
 
Stock-based compensation and other
34.6 
 
34.6 
 
 
Common stock dividends
(165.3)
 
 
(165.3)
 
Repurchase and retirement of common shares, shares
(35.6)
(35.7)
 
 
 
Repurchase and retirement of common shares
(586.6)
(0.4)
 
(586.2)
 
Shares issued under stock-based compensation plans, shares
 
3.2 
 
 
 
Shares issued under stock-based compensation plans
44.1 
0 
44.1 
 
 
Tax adjustments from employee stock option plans
(2.0)
 
(2.0)
 
 
Unrealized gains/(losses) on investment securities, net of tax
(3.3)
 
 
 
(3.3)
Unrealized gains/(losses) on hedging activities, net of tax
(4.9)
 
 
 
(4.9)
Foreign currency translation adjustment, net of tax
6.6 
 
 
 
6.6 
Defined benefit pension plan liability adjustment, net of tax
(3.9)
 
 
 
(3.9)
Balance at Dec. 31, 2010
582.7 
6.5 
117.4 
591.6 
(132.8)
Balance, shares at Dec. 31, 2010
 
654.0 
 
 
 
Net income
1,165.4 
 
 
1,165.4 
 
Stock-based compensation
31.2 
 
31.2 
 
 
Common stock dividends
(194.2)
 
 
(194.2)
 
Repurchase and retirement of common shares, shares
(40.3)
(40.5)
 
 
 
Repurchase and retirement of common shares
(803.2)
(0.4)
 
(802.8)
 
Shares issued under stock-based compensation plans, shares
 
5.9 
 
 
 
Shares issued under stock-based compensation plans
98.8 
0.1 
98.7 
 
 
Tax adjustments from employee stock option plans
(0.2)
 
(0.2)
 
 
Unrealized gains/(losses) on investment securities, net of tax
1.8 
 
 
 
1.8 
Unrealized gains/(losses) on hedging activities, net of tax
27.0 
 
 
 
27.0 
Foreign currency translation adjustment, net of tax
(2.0)
 
 
 
(2.0)
Defined benefit pension plan liability adjustment, net of tax
(12.5)
 
 
 
(12.5)
Balance at Dec. 31, 2011
894.8 
6.2 
247.1 
760.0 
(118.5)
Balance, shares at Dec. 31, 2011
 
619.4 
 
 
 
Net income
1,025.9 
 
 
1,025.9 
 
Stock-based compensation
34.0 
 
34.0 
 
 
Common stock dividends
(254.2)
 
 
(254.2)
 
Repurchase and retirement of common shares, shares
(51.0)
(51.3)
 
 
 
Repurchase and retirement of common shares
(777.5)
(0.5)
 
(777.0)
 
Shares issued under stock-based compensation plans, shares
 
4.0 
 
 
 
Shares issued under stock-based compensation plans
51.9 
0 
51.9 
 
 
Tax adjustments from employee stock option plans
(0.2)
 
(0.2)
 
 
Unrealized gains/(losses) on investment securities, net of tax
2.8 
 
 
 
2.8 
Unrealized gains/(losses) on hedging activities, net of tax
(27.0)
 
 
 
(27.0)
Foreign currency translation adjustment, net of tax
(2.2)
 
 
 
(2.2)
Defined benefit pension plan liability adjustment, net of tax
(7.7)
 
 
 
(7.7)
Balance at Dec. 31, 2012
$ 940.6 
$ 5.7 
$ 332.8 
$ 754.7 
$ (152.6)
Balance, shares at Dec. 31, 2012
 
572.1 
 
 
 
Formation of the Entity and Basis of Presentation
Formation of the Entity and Basis of Presentation
Formation of the Entity and Basis of Presentation
The Western Union Company (“Western Union” or the “Company”) is a leader in global money movement and payment services, providing people and businesses with fast, reliable and convenient ways to send money and make payments around the world. The Western Union® brand is globally recognized. The Company’s services are 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. This segment consists of United States bill payments, Pago Fácil (bill payments in Argentina), and international bill payments. 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. Travelex Global Business Payments (“TGBP”), which was acquired in November 2011 (see Note 3), is included in this segment.
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.
The Company's previously reported segments were Consumer-to-Consumer, Global Business Payments, and Other. The changes in the Company's segment structure primarily relate to the separation of the Global Business Payments segment into two new reportable segments, Consumer-to-Business and Business Solutions. All prior segment information has been reclassified to reflect these new segments.
There are legal or regulatory limitations on transferring certain assets of the Company outside of the countries where these assets are located, or these assets constitute undistributed earnings of affiliates of the Company accounted for under the equity method of accounting. However, there are generally no limitations on the use of these assets within those countries. Additionally, the Company must meet minimum capital requirements in some countries in order to maintain operating licenses. As of December 31, 2012, 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.
Spin-off from First Data
On January 26, 2006, the First Data Board of Directors announced its intention to pursue the distribution of all of its money transfer and consumer payments businesses and its interest in a Western Union money transfer agent, as well as its related assets, including real estate, through a tax-free distribution to First Data shareholders (the “Spin-off”). Effective on September 29, 2006, First Data completed the separation and the distribution of these businesses by distributing The Western Union Company common stock to First Data shareholders (the “Distribution”). Prior to the Distribution, the Company had been a segment of First Data.
Basis of Presentation
The financial statements in this Annual Report on Form 10-K are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated.
Consistent with industry practice, the accompanying Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting settlement in long-term investment securities.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Principles of Consolidation

The Company consolidates financial results when it has both the power to direct the activities of an entity that most significantly impact the entity's economic performance and the ability to absorb losses or the right to receive benefits of the entity that could potentially be significant to the entity. The Company utilizes the equity method of accounting when it is able to exercise significant influence over the entity's operations, which generally occurs when the Company has an ownership interest of between 20% and 50% in an entity.

Earnings Per Share

The calculation of basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. 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.

As of December 31, 2012, 2011 and 2010 there were 23.3 million, 17.1 million and 34.0 million, respectively, of outstanding options to purchase shares of Western Union stock excluded from the diluted earnings per share calculation, as their effect was anti-dilutive.

The following table provides the calculation of diluted weighted-average shares outstanding (in millions):
 
For the Year Ended December 31,
 
2012
 
2011
 
2010
Basic weighted-average shares outstanding
604.9

 
630.6

 
666.5

Common stock equivalents
2.5

 
3.6

 
2.4

Diluted weighted-average shares outstanding
607.4

 
634.2

 
668.9



Fair Value Measurements

The Company determines the fair values of its assets and liabilities that are recognized or disclosed at fair value in accordance with the hierarchy described below. The fair values of the assets and liabilities held in the Company's defined benefit plan trust (“Trust”) are recognized or disclosed utilizing the same hierarchy. The following three levels of inputs may be used to measure fair value:

•
Level 1: Quoted prices in active markets for identical assets or liabilities.

•
Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For most of these assets, the Company utilizes pricing services that use multiple prices as inputs to determine daily market values. In addition, the Trust has other investments that fall within Level 2 that are valued at net asset value which is not quoted on an active market; however, the unit price is based on underlying investments which are traded on an active market. Further, these investments have no redemption restrictions, and redemptions can generally be done monthly or quarterly with required notice ranging from one to 45 days.

•
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include items where the determination of fair value requires significant management judgment or estimation. The Company has Level 3 assets that are recognized and disclosed at fair value on a non-recurring basis related to the Company's business combinations, where the values of the intangible assets and goodwill acquired in a purchase are derived utilizing one of the three recognized approaches: the market approach, the income approach or the cost approach.

Carrying amounts for many of the Company's financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, settlement receivables and settlement obligations, and commercial paper borrowings approximate fair value due to their short maturities. Investment securities, included in settlement assets, and derivative financial instruments are carried at fair value and included in Note 8. Fixed rate notes are carried at their original issuance values as adjusted over time to accrete that value to par, except for portions of notes hedged by interest rate swap agreements as disclosed in Note 14. The fair values of fixed rate notes are also disclosed in Note 8 and are based on market quotations. For more information on the fair value of financial instruments, see Note 8.

The fair values of non-financial assets and liabilities related to the Company's business combinations are disclosed in Note 3. The fair values of financial assets and liabilities related to the Trust are disclosed in Note 11.

Business Combinations

The Company accounts for all business combinations where control over another entity is obtained using the acquisition method of accounting, which requires that most assets (both tangible and intangible), liabilities (including contingent consideration), and remaining noncontrolling interests be recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets less liabilities and noncontrolling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or noncontrolling interests made subsequent to the acquisition date, but within the measurement period, which is one year or less, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is remeasured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and existing book value. Results of operations of the acquired company are included in the Company's results from the date of the acquisition forward and include amortization expense arising from acquired intangible assets. The Company expenses all costs as incurred related to or involved with an acquisition in “Selling, general and administrative” expenses.

Cash and Cash Equivalents

Highly liquid investments (other than those included in settlement assets) with maturities of three months or less at the date of purchase (that are readily convertible to cash) are considered to be cash equivalents and are stated at cost, which approximates fair value.

The Company maintains cash and cash equivalent balances with various financial institutions, including a substantial portion in money market funds. The Company limits the concentration of its cash and cash equivalents with any one institution. The Company regularly reviews investment concentrations and credit worthiness of these institutions, and has relationships with a globally diversified list of banks and financial institutions.

Allowance for Doubtful Accounts

The Company records an allowance for doubtful accounts when it is probable that the related receivable balance will not be collected based on its history of collection experience, known collection issues, such as agent suspensions and bankruptcies, and other matters the Company identifies in its routine collection monitoring. The allowance for doubtful accounts was $46.8 million and $28.5 million as of December 31, 2012 and 2011, respectively, and is recorded in the same Consolidated Balance Sheet caption as the related receivable. During the years ended December 31, 2012, 2011 and 2010, the provision for doubtful accounts (bad debt expense) reflected in the Consolidated Statements of Income was $44.9 million, $24.3 million and $19.1 million, respectively.

Settlement Assets and Obligations

Settlement assets represent funds received or to be received from agents for unsettled money transfers, money orders and consumer payments. The Company records corresponding settlement obligations relating to amounts payable under money transfers, money orders and consumer payment service arrangements. Settlement assets and obligations also include amounts receivable from and payable to businesses for the value of customer cross-currency payment transactions related to the Business Solutions segment.

Settlement assets consist of cash and cash equivalents, receivables from selling agents and Business Solutions customers, and investment securities. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Cash equivalents consist of short-term time deposits, commercial paper and other highly liquid investments. Receivables from selling agents represent funds collected by such agents, but in transit to the Company. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. In addition, the Company performs ongoing credit evaluations of its agents' financial condition and credit worthiness. See Note 7 for information concerning the Company's investment securities.

Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business Solutions segment. Receivables occur when funds have been paid out to a beneficiary but not yet received from the customer. Aside from these receivables, the credit risk associated with spot foreign currency exchange contracts is largely mitigated, as in most cases the Company requires the receipt of funds from customers before releasing the associated cross-currency payment.

Settlement obligations consist of money transfer, money order and payment service payables and payables to agents. Money transfer payables represent amounts to be paid to transferees when they request their funds. Money order payables represent amounts not yet presented for payment. Most agents typically settle with transferees first and then obtain reimbursement from the Company. Payment service payables represent amounts to be paid to utility companies, auto finance companies, mortgage servicers, financial service providers, government agencies and others. Due to the agent funding and settlement process, payables to agents represent amounts due to agents for money transfers that have been settled with transferees.

Settlement assets and obligations consisted of the following (in millions):
 
December 31,
 
2012
 
2011
Settlement assets:
 
 
 
Cash and cash equivalents
$
574.5

 
$
712.5

Receivables from selling agents and Business Solutions customers
1,025.3

 
1,046.7

Investment securities
1,514.8

 
1,332.0

 
$
3,114.6

 
$
3,091.2

Settlement obligations:
 
 
 
Money transfer, money order and payment service payables
$
2,297.1

 
$
2,242.3

Payables to agents
817.5

 
848.9

 
$
3,114.6

 
$
3,091.2



Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the lesser of the estimated life of the related assets (generally three to 10 years for equipment, furniture and fixtures, and 30 years for buildings) or the lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are charged to expense as incurred.

Property and equipment consisted of the following (in millions):
 
December 31,
 
2012
 
2011
Equipment
$
384.6

 
$
434.8

Buildings
80.0

 
80.1

Leasehold improvements
65.6

 
61.1

Furniture and fixtures
33.4

 
33.1

Land and improvements
16.9

 
16.9

Projects in process
0.1

 
1.8

 
580.6

 
627.8

Less accumulated depreciation
(384.5
)
 
(429.7
)
Property and equipment, net
$
196.1

 
$
198.1



Amounts charged to expense for depreciation of property and equipment were $61.7 million, $61.0 million and $61.5 million during the years ended December 31, 2012, 2011 and 2010, respectively.

Goodwill

Goodwill represents the excess of purchase price over the fair value of tangible and other intangible assets acquired, less liabilities assumed arising from business combinations. The Company's annual impairment assessment did not identify any goodwill impairment during the years ended December 31, 2012, 2011 and 2010.

Other Intangible Assets

Other intangible assets primarily consist of acquired contracts, contract costs (primarily amounts paid to agents in connection with establishing and renewing long-term contracts) and software. Other intangible assets are amortized on a straight-line basis over the length of the contract or benefit periods. Included in the Consolidated Statements of Income is amortization expense of $184.4 million, $131.6 million and $114.4 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Acquired contracts include customer and contractual relationships and networks of subagents that are recognized in connection with the Company's acquisitions.

The Company capitalizes initial payments for new and renewed agent contracts to the extent recoverable through future operations or penalties in the case of early termination. The Company's accounting policy is to limit the amount of capitalized costs for a given contract to the lesser of the estimated future cash flows from the contract or the termination fees the Company would receive in the event of early termination of the contract.

The Company develops software that is used in providing services. Software development costs are capitalized once technological feasibility of the software has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed all planning and designing activities that are necessary to determine that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is available for general use. Software development costs and purchased software are generally amortized over a term of three to five years.

The following table provides the components of other intangible assets (in millions):
 
 
December 31, 2012
 
December 31, 2011
 
 
Weighted-
Average
Amortization
Period
(in years)
 
Initial Cost
 


Net of
Accumulated
Amortization
 
Initial Cost
 


Net of
Accumulated
Amortization
Acquired contracts
 
11.3
 
$
627.2

 
$
466.2

 
$
629.5

 
$
526.5

Capitalized contract costs
 
6.1
 
457.2

 
303.7

 
399.1

 
213.8

Internal use software
 
3.2
 
221.0

 
54.7

 
197.4

 
61.0

Acquired trademarks
 
22.7
 
43.4

 
28.4

 
41.5

 
31.0

Projects in process
 
3.0
 
15.4

 
15.4

 
0.8

 
0.8

Other intangibles
 
2.7
 
34.4

 
10.5

 
41.6

 
14.3

Total other intangible assets
 
8.4
 
$
1,398.6

 
$
878.9

 
$
1,309.9

 
$
847.4



The estimated future aggregate amortization expense for existing other intangible assets as of December 31, 2012 is expected to be $188.4 million in 2013, $161.0 million in 2014, $117.4 million in 2015, $89.7 million in 2016, $75.0 million in 2017 and $247.4 million thereafter.

Other intangible assets are reviewed for impairment on an annual basis and whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. In such reviews, estimated undiscounted cash flows associated with these assets or operations are compared with their carrying values to determine if a write-down to fair value (normally measured by the present value technique) is required. The Company did not record any impairment related to other intangible assets during the years ended December 31, 2012 and 2011, and recorded impairments of approximately $9 million for the year ended December 31, 2010.

Revenue Recognition

The Company's revenues are primarily derived from consumer money transfer transaction fees that are based on the principal amount of the money transfer and the locations from and to which funds are transferred. The Company also offers several global payments services, including payments from consumers or businesses to other businesses. Transaction fees are set by the Company and recorded as revenue at the time of sale.

In certain consumer money transfer and Business Solutions transactions involving different currencies, the Company generates revenue based on the difference between the exchange rate set by the Company to the customer and the rate at which the Company or its agents are able to acquire the currency. This foreign exchange revenue is recorded at the time the related consumer money transfer transaction fee revenue is recognized or at the time a customer initiates a transaction through the Company's Business Solutions payment service operations.

Cost of Services

Cost of services primarily consists of agent commissions and expenses for call centers, settlement operations and related information technology costs. Expenses within these functions include personnel, software, equipment, telecommunications, bank fees, depreciation, amortization and other expenses incurred in connection with providing money transfer and other payment services.

Advertising Costs

Advertising costs are charged to operating expenses as incurred or at the time the advertising first takes place. Advertising costs for the years ended December 31, 2012, 2011 and 2010 were $177.5 million, $174.8 million and $163.9 million, respectively.

Income Taxes

The Company accounts for income taxes under the liability method, which requires that deferred tax assets and liabilities be determined based on the expected future income tax consequences of events that have been recognized in the consolidated financial statements. Deferred tax assets and liabilities are recognized based on temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse.

The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

Foreign Currency Translation

The United States dollar is the functional currency for substantially all of the Company's businesses. Revenues and expenses are translated at average exchange rates prevailing during the period. Foreign currency denominated assets and liabilities for those entities for which the local currency is the functional currency are translated into United States dollars based on exchange rates at the end of the year. The effects of foreign exchange gains and losses arising from the translation of assets and liabilities of these entities are included as a component of “Accumulated other comprehensive loss.” Foreign currency denominated monetary assets and liabilities of operations in which the United States dollar is the functional currency are remeasured based on exchange rates at the end of the period and are recognized in operations. Non-monetary assets and liabilities of these operations are remeasured at historical rates in effect when the asset was recognized or the liability was incurred.

Derivatives

The Company uses derivatives to (a) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (b) facilitate cross-currency Business Solutions payments by writing derivatives to customers. The Company recognizes all derivatives in the “Other assets” and “Other liabilities” captions in the accompanying Consolidated Balance Sheets at their fair value. All cash flows associated with derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows, except for cash flows associated with foreign currency forward contracts entered into in order to reduce the economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated in foreign currencies, which are recorded in investing activities.

•
Cash Flow hedges - Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in “Accumulated other comprehensive loss.” Cash flow hedges consist of foreign currency hedging of forecasted revenues, as well as hedges of the forecasted issuance of fixed rate debt. Derivative fair value changes that are captured in “Accumulated other comprehensive loss” are reclassified to earnings in the same period or periods the hedged item affects earnings, to the extent the change in the fair value of the instrument is effective in offsetting the change in fair value of the hedged item. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately in “Derivative gains/(losses), net.”

•
Fair Value hedges - Changes in the fair value of derivatives that are designated as fair value hedges of fixed rate debt are recorded in “Interest expense.” The offsetting change in value of the related debt instrument attributable to changes in the benchmark interest rate is also recorded in “Interest expense.”

•
Undesignated - Derivative contracts entered into to reduce the variability related to (a) money transfer settlement assets and obligations, generally with maturities of a few days up to one month, and (b) certain money transfer related foreign currency denominated cash positions, generally with maturities of less than one year, are not designated as hedges for accounting purposes and changes in their fair value are included in “Selling, general and administrative.” In addition, changes in fair value of derivative contracts, consisting of forward contracts with maturities of less than one year entered into to reduce the economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated in foreign currencies, are recorded in “Derivative gains/(losses), net.” The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency Business Solutions payments operations. The duration of these derivative contracts at inception is generally less than one year. The Company aggregates its foreign exchange exposures in its cross-currency Business Solutions payments operations, including the exposure generated by the derivative contracts it writes to its customers, and typically hedges the net exposure through offsetting contracts with established financial institution counterparties (economic hedge contract) as part of a broader foreign currency portfolio, including significant spot exchanges of currency in addition to forwards and options. The changes in fair value related to these contracts are recorded in “Foreign exchange revenues.”

The fair value of the Company's derivatives is derived from standardized models that use market based inputs (e.g., forward prices for foreign currency).

The details of each designated hedging relationship are formally documented at the inception of the arrangement, including the risk management objective, hedging strategy, hedged item, specific risks being hedged, the derivative instrument, how effectiveness is being assessed and how ineffectiveness, if any, will be measured. The derivative must be highly effective in offsetting the changes in cash flows or fair value of the hedged item, and effectiveness is evaluated quarterly on a retrospective and prospective basis.

Stock-Based Compensation

The Company currently has a stock-based compensation plan that provides for grants of Western Union stock options, restricted stock awards and restricted and unrestricted stock units to employees and non-employee directors of the Company who perform services for the Company. In addition, the Company has a stock-based compensation plan that provides for grants of Western Union stock options and stock unit awards to non-employee directors of the Company. Prior to the Spin-off, employees of Western Union participated in First Data's stock-based compensation plans.

All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period and also requires an estimate of forfeitures when calculating compensation expense. The Company recognizes compensation expense on awards on a straight-line basis over the requisite service period for the entire award. Refer to Note 16 for additional discussion regarding details of the Company's stock-based compensation plans.

Severance and Other Related Expenses

The Company records severance-related expenses once they are both probable and estimable in accordance with the provisions of the applicable accounting guidance for severance provided under an ongoing benefit arrangement. One-time, involuntary benefit arrangements and other costs are generally recognized when the liability is incurred. Expenses arising under the Company's defined benefit pension plans from curtailing future service of employees participating in the plans and providing enhanced benefits are recognized in earnings when it is probable and reasonably estimable. The Company also evaluates impairment issues associated with restructuring and other activities when the carrying amount of the assets may not be fully recoverable, in accordance with the appropriate accounting guidance.
Acquisitions
Acquisitions
Acquisitions

On November 7, 2011, the Company acquired the business-to-business payment business known as Travelex Global Business Payments from Travelex Holdings Limited for cash consideration of £596 million ($956.5 million), net of a final working capital adjustment which resulted in a return of £15 million ($24.1 million) of purchase consideration in the third quarter of 2012. In connection with the July 5, 2011 purchase agreement, on May 4, 2012, the Company also acquired the French assets of TGBP for cash consideration of £3 million ($4.8 million) after receiving regulatory approval. For the year ended December 31, 2011, the Company incurred $20.7 million of costs associated with the closing of the TGBP acquisition. With the acquisition of TGBP and the Company's existing Business Solutions business, the Company has the ability to leverage TGBP's business-to-business payments market expertise, distribution, products and capabilities with Western Union's brand, existing Business Solutions operations, global infrastructure and relationships, and financial strength. The results of operations for TGBP have been included in the Company's consolidated financial statements from the date of acquisition.

On October 31, 2011 and April 20, 2011, the Company acquired the remaining 70% interests in European-based Finint S.r.l. (“Finint”) and Angelo Costa S.r.l. (“Costa”), respectively, two of the Company's largest agents providing services in a number of European countries. The Company previously held a 30% equity interest in each of these agents. The Company expects these acquisitions will help accelerate the introduction of additional Western Union products and services and will leverage its existing European infrastructure to build new opportunities across the European Union. The acquisitions do not impact the Company's money transfer revenue, because the Company was already recording all of the revenue arising from money transfers originating at Finint's and Costa's subagents. As of the acquisition dates, the Company no longer incurs commission costs for transactions related to Finint and Costa; rather the Company now pays commissions to Finint and Costa subagents, resulting in lower overall commission expense. The Company's operating expenses include costs attributable to Finint's and Costa's operations subsequent to the acquisition dates.

The Company acquired the remaining 70% interest in Finint for cash consideration of €99.6 million ($139.4 million). The Company revalued its previous 30% equity interest to fair value of approximately $47.7 million on the acquisition date, resulting in total value of $187.1 million. In conjunction with the revaluation, the Company recognized a gain of $20.5 million, recorded in “Other income, net” in the Consolidated Statements of Income, for the amount by which the fair value of the 30% equity interest exceeded its previous carrying value.

The Company acquired the remaining 70% interest in Costa for cash consideration of €95 million ($135.7 million). The Company revalued its previous 30% equity interest to fair value of approximately $46.2 million on the acquisition date, resulting in total value of $181.9 million. In conjunction with the revaluation, the Company recognized a gain of $29.4 million, recorded in “Other income, net” in the Consolidated Statements of Income, for the amount by which the fair value of the 30% equity interest exceeded its previous carrying value.

All assets and liabilities have been recorded at fair value, excluding deferred tax liabilities. The following table summarizes the final allocations of consideration for TGBP, Finint and Costa (in millions):
 
Travelex Global Business
Payments (b)
 
Finint S.r.l.
 
Angelo Costa
S.r.l.
Assets:
 
 
 
 
 
Cash and cash equivalents
$
30.7

 
$
—

 
$
—

Settlement assets
160.4

 
52.2

 
46.3

Property and equipment
5.1

 
0.5

 
3.0

Goodwill
704.3

 
153.6

 
174.2

Other intangible assets
314.2

 
64.8

 
51.4

Other assets
45.3

 
2.0

 
1.5

Total assets
$
1,260.0

 
$
273.1

 
$
276.4

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
Accounts payable and accrued liabilities
$
49.6

 
$
6.1

 
$
10.8

Settlement obligations
160.4

 
57.5

 
55.7

Income taxes payable
1.7

 
3.1

 
10.3

Deferred tax liability, net
65.5

 
15.8

 
15.5

Other liabilities
21.5

 
3.5

 
2.2

Total liabilities
298.7

 
86.0

 
94.5

Total consideration (a)
$
961.3

 
$
187.1

 
$
181.9

____________________
(a)
Total consideration includes cash consideration transferred and the revaluation of the Company's previous equity interest, if any, to fair value on the acquisition date.
(b)
Amounts include the impact of the acquisition of the French assets of TGBP on May 4, 2012 and the final working capital adjustment in the third quarter of 2012.

The valuation of assets acquired was derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation, and resulted in identifiable intangible assets as follows (in millions):
 
Travelex Global Business
Payments (a)
 
Finint S.r.l.
 
Angelo Costa
S.r.l.
Customer and other contractual relationships
$
264.5

 
$
—

 
$
—

Network of subagents
—

 
53.9

 
44.6

Other
49.7

 
10.9

 
6.8

Total identifiable intangible assets
$
314.2

 
$
64.8

 
$
51.4


____________________
(a)
Amounts include the impact of the acquisition of the French assets of TGBP on May 4, 2012.

Customer and other contractual relationships and network of subagents identifiable intangible assets were valued using an income approach and are being amortized over 9 to 15 years. Other intangibles were valued using both income and cost approaches and are being amortized over one to five years. For the remaining assets and liabilities, excluding goodwill and deferred tax liabilities, fair value approximated carrying value.

The goodwill recognized for TGBP of $704.3 million is attributable to expected synergies, the projected long-term business growth in current and new markets and an assembled workforce and relates entirely to the Business Solutions segment. The goodwill recognized for Finint and Costa of $153.6 million and $174.2 million, respectively, is attributable to growth opportunities that will arise from the Company directly managing its agent relationships, expected synergies, projected long-term business growth and an assembled workforce and relates entirely to the Consumer-to-Consumer segment. Goodwill expected to be deductible for income tax purposes for TGBP, Finint and Costa is approximately $488.4 million, $97.0 million and $104.9 million, respectively.

The following table presents changes to goodwill for the years ended December 31, 2012 and 2011 (in millions):
 
Consumer-to-Consumer
 
Consumer-to-Business
 
Business Solutions
 
Other
 
Total
January 1, 2011 balance
$
1,619.9

 
$
227.2

 
$
289.4

 
$
15.2

 
$
2,151.7

Acquisitions
325.4

 
—

 
728.7

 
—

 
1,054.1

Currency translation
—

 
(2.3
)
 
(4.4
)
 
(0.2
)
 
(6.9
)
December 31, 2011 balance
$
1,945.3

 
$
224.9

 
$
1,013.7

 
$
15.0

 
$
3,198.9

Purchase price adjustments
2.4

 
—

 
(24.4
)
 
—

 
(22.0
)
Currency translation
—

 
(3.8
)
 
6.7
 
(0.1
)
 
2.8
December 31, 2012 balance
$
1,947.7

 
$
221.1

 
$
996.0

 
$
14.9

 
$
3,179.7

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 years ended December 31, 2012, 2011 and 2010 totaled $66.1 million, $131.9 million and $183.5 million, respectively. Commission expense recognized for Finint prior to October 31, 2011 and Costa prior to April 20, 2011, the date of the acquisitions (see Note 3), was considered a related party transaction.

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. As of December 31, 2012, this company holds a significant investment in 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 $28.9 million, $58.8 million, and $52.9 million for the years ended December 31, 2012, 2011 and 2010, respectively, related to these agents during the period the agents were affiliated with the Company's director.
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 December 31, 2012 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.

During 2009, the Company recorded an accrual of $71.0 million for an agreement and settlement with the State of Arizona and other states, which was paid in 2010. On February 11, 2010, the Company signed this 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. The accrual included amounts for reimbursement to the State of Arizona for its costs associated with this matter. In addition, as part of the agreement and settlement, the Company 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. A replacement monitor has been identified and is subject to court appointment. 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'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 the normal course of business, the Company is subject to claims and litigation. Management of the Company believes such matters involving a reasonably possible chance of loss will not, individually or in the aggregate, result in a material adverse effect on the 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 10).
Investment Securities
Investment Securities
Investment Securities

Investment securities, classified within “Settlement assets” in the Consolidated Balance Sheets, 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 that have varying maturities through 2049. 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 December 31, 2012, 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. Proceeds from the sale and maturity of available-for-sale securities during the years ended December 31, 2012, 2011 and 2010 were $16.3 billion, $14.2 billion and $14.7 billion, respectively.

Gains and losses on investments are calculated using the specific-identification method and are recognized during the period in which the investment is sold or when an investment experiences an other-than-temporary decline in value. Factors that could indicate an impairment exists include, but are not limited to: earnings performance, changes in credit rating or adverse changes in the regulatory or economic environment of the asset. If potential impairment exists, the Company assesses whether it has the intent to sell the debt security, more likely than not will be required to sell the debt security before its anticipated recovery or expects that some of the contractual cash flows will not be received. The Company had no material other-than-temporary impairments during the periods presented.

The components of investment securities are as follows (in millions):
December 31, 2012
 
Amortized
Cost
 
 
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Net
Unrealized
Gains/ (Losses)
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

 
 
 
 
 
 
 
 
 
 
December 31, 2011
 
Amortized
Cost
 
 
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Net
Unrealized
Gains/ (Losses)
State and municipal debt securities (a)
$
858.5

 
$
866.5

 
$
10.4

 
$
(2.4
)
 
$
8.0

State and municipal variable rate demand notes
376.9

 
376.9

 
—

 
—

 
—

Corporate debt and other
88.7

 
88.6

 
0.6

 
(0.7
)
 
(0.1
)
 
$
1,324.1

 
$
1,332.0

 
$
11.0

 
$
(3.1
)
 
$
7.9

____________

(a)
The majority of these securities are fixed rate instruments.

There were no investments with a single issuer or individual securities representing greater than 10% of total investment securities as of December 31, 2012 and 2011.

The following summarizes contractual maturities of investment securities as of December 31, 2012 (in millions):

 
Amortized
Cost
 
Fair
Value
Due within 1 year
$
228.5

 
$
229.5

Due after 1 year through 5 years
785.0

 
795.9

Due after 5 years through 10 years
79.3

 
79.6

Due after 10 years
409.7

 
409.8

 
$
1,502.5

 
$
1,514.8



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 $21.0 million, $15.5 million, $26.0 million and $400.8 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.
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 Note 2.

The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions):
  
Fair Value Measurement Using
 
Assets/
Liabilities at
Fair
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

 
 
 
 
 
 
 
 
 
Fair Value Measurement Using
 
Assets/
Liabilities at
Fair
Value
December 31, 2011
Level 1
 
Level 2
 
Level 3
 
Assets:
 
 
 
 
 
 
 
State and municipal debt securities
$
—

 
$
866.5

 
$
—

 
$
866.5

State and municipal variable rate demand notes
—

 
376.9

 
—

 
376.9

Corporate debt and other
0.1

 
88.5

 
—

 
88.6

Derivatives
—

 
124.8

 
—

 
124.8

Total assets
$
0.1

 
$
1,456.7

 
$
—

 
$
1,456.8

Liabilities:
 
 
 
 
 
 
 
Commercial paper
$
—

 
$
297.0

 
$
—

 
$
297.0

Notes and other borrowings
—

 
3,563.5

 
—

 
3,563.5

Total borrowings
—

 
3,860.5

 
—

 
3,860.5

Derivatives
—

 
86.6

 
—

 
86.6

Total liabilities
$
—

 
$
3,947.1

 
$
—

 
$
3,947.1



No non-recurring fair value adjustments were recorded during the years ended December 31, 2012 and 2011, except those associated with acquisitions, as disclosed in Note 3.

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, settlement receivables and settlement obligations, and commercial paper borrowings approximate fair value due to their short maturities. The aggregate fair value of the Company's borrowings, excluding commercial paper borrowings, was based on quotes from multiple banks and excluded the impact of related interest rate swaps. All the assets and liabilities in the above tables were carried at fair value in the Consolidated Balance Sheets, with the exception of borrowings, which had a carrying value of $4,029.2 million and $3,583.2 million as of December 31, 2012 and 2011, respectively (see Note 15).

The fair value of the assets in the Trust, which holds the assets for the Company's defined benefit plan, is disclosed in Note 11.
Other Assets and Other Liabilities
Other Assets and Other Liabilities
Other Assets and Other Liabilities

The following table summarizes the components of other assets and other liabilities (in millions):

 
December 31,
 
2012
 
2011
Other assets:
 
 
 
Derivatives
$
96.8

 
$
124.8

Prepaid expenses
56.9

 
54.5

Equity method investments
41.0

 
41.3

Amounts advanced to agents, net of discounts
37.7

 
34.1

Other receivables
21.4

 
37.6

Debt issue costs
17.3

 
15.8

Deferred customer set up costs
15.9

 
18.0

Accounts receivable, net
15.6

 
14.8

Other
17.3

 
22.5

Total other assets
$
319.9

 
$
363.4

Other liabilities:
 
 
 
Pension obligations
$
102.1

 
$
112.7

Derivatives
86.1

 
86.6

Deferred revenue
30.5

 
33.6

Other
36.0

 
40.7

Total other liabilities
$
254.7

 
$
273.6

Income Taxes
Income Taxes
Income Taxes

The components of pre-tax income, generally based on the jurisdiction of the legal entity, were as follows (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Components of pre-tax income:
 
 
 
 
 
Domestic
$
94.8

 
$
423.9

 
$
151.4

Foreign
1,074.0

 
850.7

 
993.8

 
$
1,168.8

 
$
1,274.6

 
$
1,145.2



For the years ended December 31, 2012, 2011 and 2010, 92%, 67% and 87% of the Company's pre-tax income was derived from foreign sources, respectively. For the year ended December 31, 2011, the increase in domestic pre-tax income and decrease in foreign pre-tax income were primarily due to the pre-tax impact of the Company's agreement with the United States Internal Revenue Service (“IRS Agreement”) resolving substantially all of the issues related to the Company's restructuring of its international operations in 2003.

The provision for income taxes was as follows (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Federal
$
92.5

 
$
78.1

 
$
132.2

State and local
(14.8
)
 
4.5

 
39.8

Foreign
65.2

 
26.6

 
63.3

 
$
142.9

 
$
109.2

 
$
235.3



Domestic taxes have been incurred on certain pre-tax income amounts that were generated by the Company's foreign operations. Accordingly, the percentage obtained by dividing the total federal, state and local tax provision by the domestic pre-tax income, all as shown in the preceding tables, may be higher than the statutory tax rates in the United States.

The Company's effective tax rates differed from statutory rates as follows:
 
Year Ended December 31,
 
2012
 
2011
 
2010
Federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of federal income tax benefits
0.6
 %
 
2.0
 %
 
1.9
 %
Foreign rate differential, net of U.S. tax paid on foreign earnings (5.1%, 1.2%, and 5.1%, respectively)
(22.5
)%
 
(14.0
)%
 
(12.0
)%
IRS Agreement
—
 %
 
(16.1
)%
 
—
 %
Other
(0.9
)%
 
1.7
 %
 
(4.4
)%
Effective tax rate
12.2
 %
 
8.6
 %
 
20.5
 %


For the years ended December 31, 2012 and 2011, the Company's effective tax rate significantly decreased due to the IRS Agreement, which resolved substantially all of the issues related to the Company's restructuring of its international operations in 2003, as described below, and resulted in a tax benefit of $204.7 million related to the adjustment of reserves associated with this matter for the year ended December 31, 2011. For the year ended December 31, 2012, the Company's effective tax rate was also impacted by benefits from favorable tax settlements and changes in the mix of foreign and U.S. income and applicable tax rates, and for the year ended December 31, 2011, the Company's effective tax rate was also impacted by higher taxes associated with the Finint and Costa remeasurement gains (see Note 3). The tax rate for the year ended December 31, 2010 was impacted by a cumulative tax planning benefit from certain foreign acquisitions and the settlement with the United States Internal Revenue
Service (“IRS”) of certain issues relating to the 2002-2004 tax years. The Company continues to benefit from a significant proportion of its profits being foreign-derived, and therefore taxed at lower rates than its combined federal and state tax rates in the United States. 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.
The Company's provision for income taxes consisted of the following components (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Current:
 
 
 
 
 
Federal
$
117.2

 
$
36.2

 
$
103.6

State and local
(2.5
)
 
0.6

 
30.1

Foreign
63.4

 
51.2

 
73.0

Total current taxes
178.1

 
88.0

 
206.7

Deferred:
 
 
 
 
 
Federal
(24.7
)
 
41.9

 
28.6

State and local
(12.3
)
 
3.9

 
9.7

Foreign
1.8

 
(24.6
)
 
(9.7
)
Total deferred taxes
(35.2
)
 
21.2

 
28.6

 
$
142.9

 
$
109.2

 
$
235.3



Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of the Company's assets and liabilities. The following table outlines the principal components of deferred tax items (in millions):
 
December 31,
 
2012
 
2011
Deferred tax assets related to:
 
 
 
Reserves, accrued expenses and employee-related items
$
65.7

 
$
40.6

Pension obligations
36.7

 
40.0

Tax attribute carryovers
4.2

 
11.9

Other
22.8

 
20.6

Total deferred tax assets
129.4

 
113.1

Deferred tax liabilities related to:
 
 
 
Intangibles, property and equipment
481.5

 
502.8

Total deferred tax liabilities
481.5

 
502.8

Net deferred tax liability
$
352.1

 
$
389.7


Uncertain Tax Positions

The Company has established contingency reserves for a variety of material, known tax exposures. As of December 31, 2012, the total amount of tax contingency reserves was $111.9 million, including accrued interest and penalties, net of related benefits. The Company's tax reserves reflect management's judgment as to the resolution of the issues involved if subject to judicial review or other settlement. While the Company believes its reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to these reserves, the Company's income tax expense would include (i) any changes in tax reserves arising from material changes during the period in the facts and circumstances (i.e., new information) surrounding a tax issue and (ii) any difference from the Company's tax position as recorded in the financial statements and the final resolution of a tax issue during the period. Such resolution could materially increase or decrease income tax expense in the Company's consolidated financial statements in future periods and could impact operating cash flows.
Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Company's consolidated financial statements, and are reflected in “Income taxes payable” in the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in millions):
 
2012
 
2011
Balance as of January 1,
$
123.7

 
$
618.7

Increases - positions taken in current period (a)
13.1

 
143.1

Increases - positions taken in prior periods (b)
—

 
34.1

Increases - acquisitions
—

 
9.7

Decreases - positions taken in prior periods
(6.1
)
 
(27.9
)
Decreases - settlements with taxing authorities
(24.1
)
 
(650.9
)
Decreases - lapse of applicable statute of limitations
(3.4
)
 
(3.1
)
Balance as of December 31,
$
103.2

 
$
123.7

____________

(a)
Includes recurring accruals for issues which initially arose in previous periods.
(b)
Changes to positions taken in prior periods relate to changes in estimates used to calculate prior period unrecognized tax benefits.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $93.5 million and $115.6 million as of December 31, 2012 and 2011, respectively, excluding interest and penalties.

The Company recognizes interest and penalties with respect to unrecognized tax benefits in “Provision for income taxes” in its Consolidated Statements of Income, and records the associated liability in “Income taxes payable” in its Consolidated Balance Sheets. The Company recognized $0.5 million, $(4.0) million, and $6.9 million in interest and penalties during the years ended December 31, 2012, 2011 and 2010, respectively. The Company has accrued $20.0 million and $20.7 million for the payment of interest and penalties as of December 31, 2012 and 2011, respectively.

The unrecognized tax benefits accrual as of December 31, 2012 consists of federal, state and foreign tax matters. It is reasonably possible that the Company's total unrecognized tax benefits will decrease by approximately $25 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 the years 2005 and 2006. The Company's United States federal income tax returns since the Spin-off are also eligible to be examined.

The 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. In the first quarter of 2010, the Company made a $250 million tax deposit relating to United States federal tax liabilities, including those arising from the Company’s 2003 international restructuring, which had been previously accrued in the Company’s consolidated financial statements. The deposit was recorded as a reduction to “Income taxes payable” in the Consolidated Balance Sheets and a decrease in cash flows from operating activities in the Consolidated Statement of Cash Flows. The deposit limited the further accrual of interest charges with respect to such tax liabilities, to the extent of the deposit. 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 December 31, 2012, 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 $4.4 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.
Employee Benefit Plans
Pension and Other Postretirement Benefits Disclosure [Text Block]
Employee Benefit Plans

Defined Contribution Plans

The Western Union Company Incentive Savings Plan (“401(k)”) covers eligible employees on the United States payroll of the Company. Employees who make voluntary contributions to this plan receive up to a 4% Company matching contribution. All matching contributions are immediately vested.

The Company administers more than 25 defined contribution plans in various countries globally on behalf of approximately 1,500 employee participants as of December 31, 2012. Such plans have vesting and employer contribution provisions that vary by country.

In addition, the Company sponsors a non-qualified deferred compensation plan for a select group of highly compensated United States employees. The plan provides tax-deferred contributions and the restoration of Company matching contributions otherwise limited under the 401(k).

The aggregate amount charged to expense in connection with all of the above plans was $15.3 million, $12.8 million and $12.0 million during the years ended December 31, 2012, 2011 and 2010, respectively.

Defined Benefit Plan

The Company has one frozen defined benefit pension plan (“Plan”) for which it has recorded unfunded pension obligations of $102.1 million and $112.7 million as of December 31, 2012 and 2011, respectively, included in “Other liabilities” in the Consolidated Balance Sheets. The Company made contributions of approximately $25 million to the Plan in both years ended December 31, 2012 and 2011, including discretionary contributions of $5 million and $3 million for the years ended December 31, 2012 and 2011, respectively. The Company will be required to fund approximately $23 million to the Plan in 2013.

The Company recognizes the funded status of the Plan in its Consolidated Balance Sheets with a corresponding adjustment to “Accumulated other comprehensive loss,” net of tax.

The following table provides a reconciliation of the changes in the Plan's projected benefit obligation, fair value of assets and the funded status (in millions):
 
2012
 
2011
Change in projected benefit obligation
 
 
 
Projected benefit obligation as of January 1,
$
414.4

 
$
402.9

Interest cost
14.7

 
17.9

Actuarial loss
30.2

 
35.3

Benefits paid
(40.5
)
 
(41.7
)
Projected benefit obligation as of December 31,
$
418.8

 
$
414.4

Change in plan assets
 
 
 
Fair value of plan assets as of January 1,
$
301.7

 
$
290.1

Actual return on plan assets
30.5

 
28.3

Benefits paid
(40.5
)
 
(41.7
)
Company contributions
25.0

 
25.0

Fair value of plan assets as of December 31,
316.7

 
301.7

Funded status of the plan as of December 31,
$
(102.1
)
 
$
(112.7
)
Accumulated benefit obligation as of December 31,
$
418.8

 
$
414.4



Differences in expected returns on plan assets estimated at the beginning of the year versus actual returns, and assumptions used to estimate the beginning of year projected benefit obligation versus the end of year obligation (principally discount rate and mortality assumptions) are, on a combined basis, considered actuarial gains and losses. Such actuarial gains and losses are recognized as a component of “Comprehensive income” and amortized to income over the average remaining life expectancy of the plan participants. Included in “Accumulated other comprehensive loss” as of December 31, 2012 is $12.4 million ($7.8 million, net of tax) of actuarial losses that are expected to be recognized in net periodic pension cost during the year ended December 31, 2013.

The following table provides the amounts recognized in the Consolidated Balance Sheets (in millions):
 
December 31,
 
2012
 
2011
Accrued benefit liability
$
(102.1
)
 
$
(112.7
)
Accumulated other comprehensive loss (pre-tax)
206.8

 
196.8

Net amount recognized
$
104.7

 
$
84.1



The following table provides the components of net periodic benefit cost for the Plan (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Interest cost
$
14.7

 
$
17.9

 
$
20.1

Expected return on plan assets
(20.8
)
 
(21.3
)
 
(20.4
)
Amortization of actuarial loss
10.5

 
8.1

 
6.2

Net periodic benefit cost
$
4.4

 
$
4.7

 
$
5.9



The accrued loss related to the pension liability included in “Accumulated other comprehensive loss”, net of tax, increased $7.7 million, $12.5 million and $3.9 million in 2012, 2011 and 2010, respectively.

The rate assumptions used in the measurement of the Company's benefit obligation were as follows:
 
2012
 
2011
Discount rate
3.03
%
 
3.72
%


The rate assumptions used in the measurement of the Company's net cost were as follows:
 
2012
 
2011
 
2010
Discount rate
3.72
%
 
4.69
%
 
5.30
%
Expected long-term return on plan assets
7.00
%
 
7.00
%
 
6.50
%


The Company measures the Plan's obligations and annual expense using assumptions that reflect best estimates and are consistent to the extent that each assumption reflects expectations of future economic conditions. As the bulk of the pension benefits will not be paid for many years, the computation of pension expenses and benefits is based on assumptions about future interest rates and expected rates of return on plan assets. In general, pension obligations are most sensitive to the discount rate assumption, and it is set based on the rate at which the pension benefits could be settled effectively. The discount rate is determined by matching the timing and amount of anticipated payouts under the Plan to the rates from an AA spot rate yield curve. The curve is derived from AA bonds of varying maturities.

The estimated undiscounted future benefit payments are expected to be $39.2 million in 2013, $37.8 million in 2014, $36.3 million in 2015, $34.8 million in 2016, $33.2 million in 2017 and $141.0 million in 2018 through 2022.

The Company employs a building block approach in determining the long-term rate of return for plan assets. Historical markets are studied and long-term historical risk, return, and co-variance relationships between equities, fixed-income securities, and alternative investments are considered consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. Consideration is given to diversification, re-balancing and yields anticipated on fixed income securities held. Historical returns are reviewed within the context of current economic conditions to check for reasonableness and appropriateness. The Company then applies this rate against a calculated value for its plan assets. The calculated value recognizes changes in the fair value of plan assets over a five-year period.

Pension plan asset allocation as of December 31, 2012 and 2011, and target allocations based on investment policies, were as follows:
 
Percentage of Plan Assets
as of Measurement Date
Asset Class
2012
 
2011
Equity investments
16
%
 
17
%
Debt securities
62
%
 
61
%
Alternative investments
22
%
 
22
%

 
Target Allocation
Equity investments
15%
Debt securities
60%
Alternative investments
25%


The assets of the Company's Plan are managed in a third-party Trust. The investment policy and allocation of the assets in the Trust are overseen by the Company's Investment Council. The Company employs a total return investment approach whereby a mix of equity, fixed income, and alternative investments are used in an effort to maximize the long-term return of plan assets. Risk tolerance is established through careful consideration of plan liabilities and plan funded status. The investment portfolio contains a diversified blend of equity, fixed-income, and alternative investments (e.g. hedge funds, royalty rights and private equity funds). Furthermore, equity investments are diversified across United States and non-United States stocks, as well as securities deemed to be growth, value, and small and large capitalizations. Alternative investments, the significant majority of which are hedge funds, are used in an effort to enhance long-term returns while improving portfolio diversification. Hedge fund strategy types include, but are not limited to: commodities/currencies, equity long-short, global-macro, relative value, event driven, and multi-strategy. The Plan holds derivative contracts directly which consist of interest rate swap agreements, under which the Plan is committed to pay a short-term LIBOR-based variable interest rate in exchange for a fixed interest rate based on five and ten-year maturities. Additionally, derivatives are held indirectly through funds in which the Plan is invested. Derivatives are used by the Plan to help reduce the Plan's exposure to interest rate volatility and to provide an additional source of return. Cash held by the Plan is used to satisfy margin requirements on the derivatives. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset and liability studies.

The following tables reflect investments of the Trust that were measured and carried at fair value (in millions). For information on how the Company measures fair value, refer to Note 2.

December 31, 2012
Fair Value Measurement Using
 
Total Assets
Asset Class
Level 1
 
Level 2
 
Level 3
 
at Fair Value
Equity investments:
 
 
 
 
 
 
 
Domestic
$
24.2

 
$
—

 
$
—

 
$
24.2

International (a)
1.4

 
25.0

 
—

 
26.4

Debt securities:
 
 
 
 
 
 
 
Corporate debt (b)
—

 
131.4

 
—

 
131.4

U.S. treasury bonds
52.3

 
—

 
—

 
52.3

State and municipal debt securities
—

 
4.4

 
—

 
4.4

Other
—

 
3.1

 
—

 
3.1

Alternative investments:
 
 
 
 
 
 
 
Hedge funds (c)
—

 
44.7

 
—

 
44.7

Royalty rights and private equity (d)
—

 
—

 
23.8

 
23.8

Total investments of the Trust at fair value
$
77.9

 
$
208.6

 
$
23.8

 
$
310.3

Other assets


 


 


 
6.4

Total investments of the Trust
$
77.9

 
$
208.6

 
$
23.8

 
$
316.7


December 31, 2011
Fair Value Measurement Using
 
Total Assets
Asset Class
Level 1
 
Level 2
 
Level 3
 
at Fair Value
Equity investments:
 
 
 
 
 
 
 
Domestic
$
28.1

 
$
—

 
$
—

 
$
28.1

International
—

 
22.4

 
—

 
22.4

Debt securities:
 
 
 
 
 
 
 
Corporate debt (b)
—

 
134.1

 
—

 
134.1

U.S. treasury bonds
39.8

 
—

 
—

 
39.8

U.S. government agencies
—

 
4.7

 
—

 
4.7

Other
—

 
3.0

 
—

 
3.0

Alternative investments:
 
 
 
 
 
 
 
Hedge funds (c)
—

 
52.8

 
—

 
52.8

Royalty rights and private equity (d)
—

 
—

 
13.6

 
13.6

Total investments of the Trust at fair value
$
67.9

 
$
217.0

 
$
13.6

 
$
298.5

Other assets
 
 
 
 
 
 
3.2

Total investments of the Trust
$
67.9

 
$
217.0

 
$
13.6

 
$
301.7

____________
(a)
Funds included herein have redemption frequencies of daily to monthly, with redemption notice periods of one to ten business days.
(b)
Substantially all corporate debt securities are investment grade securities.
(c)
Hedge funds generally hold liquid and readily priceable securities, such as public equities, exchange-traded derivatives, and corporate bonds. Hedge funds themselves do not have readily available market quotations, and therefore are valued using the Net Asset Value (“NAV”) per share provided by the investment sponsor or third party administrator. Funds investing in diverse hedge fund strategies (primarily commingled funds) with the following composition of underlying hedge fund investments within the pension plans at December 31, 2012: commodities/currencies (24%), equity long/short (21%), global-macro (16%), relative value (16%), event driven (13%), and multi-strategy (10%). As of December 31, 2012, funds included herein had redemption frequencies of monthly to quarterly, with redemption notice periods of one to 45 days.
(d)
Diversified investments in royalty rights related to the sale of pharmaceutical products by third parties. Also included are private equity funds with a focus on venture capital. These investments are illiquid, with investment distributions expected to be received over the next five to seven years.


The maturities of debt securities as of December 31, 2012 range from less than one year to approximately 32 years with a weighted-average maturity of 15 years.

The following tables provide summaries of changes in the fair value of the Trust's Level 3 financial assets (in millions):
 
Royalty Rights
 
 Private Equity
 
 Total
Balance, January 1, 2011
$
—

 
$
1.3

 
$
1.3

Actual return on plan assets:
 
 
 
 
 
Relating to assets still held as of the reporting date
—

 
(0.8
)
 
(0.8
)
Relating to assets sold during the period
—

 
0.9

 
0.9

Net purchases and sales
11.4

 
0.8

 
12.2

Balance, December 31, 2011
$
11.4

 
$
2.2

 
$
13.6

Actual return on plan assets:
 
 
 
 
 
Relating to assets still held as of the reporting date
1.6

 
0.1

 
1.7

Relating to assets sold during the period
0.8

 
(0.1
)
 
0.7

Net purchases and sales
7.6

 
0.2

 
7.8

Balance, December 31, 2012
$
21.4

 
$
2.4

 
$
23.8



Royalty rights are held through investment funds. These investments are priority interests in contractual royalty revenue derived from the sale of pharmaceutical products that entitle the investment fund to receive a portion of revenue from the patent-protected product. The fair value of the Company's investment in royalty rights is estimated using consensus sales estimates for the pharmaceutical products obtained from third-party experts, which are multiplied by the contractual royalty rate, and then discounted by an interest rate based off the estimated weighted average cost of capital of the pharmaceutical sector (approximately 12%).

Private equity funds invest in the non-marketable securities of individual private companies. These private companies ultimately may become public in the future. The fair value of the Company's investment in private equity funds is estimated using many types of inputs, including historical sales multiples, valuations of comparable public companies, and recently completed equity financings.
Operating Lease Commitments
Operating Lease Commitments
Operating Lease Commitments

The Company leases certain real properties for use as customer service centers and administrative and sales offices. The Company also leases data communications terminals, computers and office equipment. Certain of these leases contain renewal options and escalation provisions. Total rent expense under operating leases, net of sublease income, was $53.9 million, $44.2 million and $34.7 million during the years ended December 31, 2012, 2011 and 2010, respectively.

As of December 31, 2012, the minimum aggregate rental commitments under all non-cancelable operating leases, net of sublease income commitments aggregating $1.0 million through 2017, were as follows (in millions):
Year Ending December 31,
 
2013
$
40.3

2014
30.6

2015
24.8

2016
18.5

2017
14.4

Thereafter
21.1

Total future minimum lease payments
$
149.7

Stockholders' Equity
Stockholders' Equity
Stockholders' Equity

Accumulated other comprehensive loss

Accumulated other comprehensive loss includes all changes in equity during a period that have yet to be recognized in income, except those resulting from transactions with shareholders. The major components include unrealized gains and losses on investment securities, gains or losses from cash flow hedging activities, foreign currency translation adjustments and defined benefit pension plan liability adjustments.

Unrealized gains and losses on investment securities that are available for sale, primarily state and municipal debt securities, are included in “Accumulated other comprehensive loss” until the investment is either sold or deemed other-than-temporarily impaired. See Note 7 for further discussion.

The effective portion of the change in fair value of derivatives that qualify as cash flow hedges are recorded in “Accumulated other comprehensive loss.” Generally, amounts are recognized in income when the related forecasted transaction affects earnings. See Note 14 for further discussion.

The assets and liabilities of foreign subsidiaries whose functional currency is not the United States dollar are translated using the appropriate exchange rate as of the end of the year. Foreign currency translation adjustments represent unrealized gains and losses on assets and liabilities arising from the difference in the foreign country currency compared to the United States dollar. These gains and losses are accumulated in comprehensive income. When a foreign subsidiary is substantially liquidated, the cumulative translation gain or loss is removed from “Accumulated other comprehensive loss” and is recognized as a component of the gain or loss on the sale of the subsidiary.

The defined benefit pension plan liability adjustment is recognized for the difference between estimated assumptions (e.g., asset returns, discount rates, mortality) and actual results. The amount in “Accumulated other comprehensive loss” is amortized to income over the remaining life expectancy of the plan participants. Details of the pension plan's assets and obligations are explained further in Note 11.
The components of accumulated other comprehensive loss, net of tax, were as follows (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Unrealized gains on investment securities
$
7.7

 
$
4.9

 
$
3.1

Unrealized gains/(losses) on hedging activities
(21.9
)
 
5.1

 
(21.9
)
Foreign currency translation adjustment
(8.5
)
 
(6.3
)
 
(4.3
)
Defined benefit pension liability adjustment
(129.9
)
 
(122.2
)
 
(109.7
)
 
$
(152.6
)
 
$
(118.5
)
 
$
(132.8
)


Cash Dividends Paid

During 2012, the Company's Board of Directors declared a quarterly cash dividend of $0.125 per common share in the fourth quarter and $0.10 per common share in each of the first three quarters, representing $254.2 million in total dividends. Of this amount, $72.0 million was paid on December 31, 2012, $59.9 million was paid on October 8, 2012, $60.7 million was paid on June 29, 2012 and $61.6 million was paid on March 30, 2012. During 2011, the Company's Board of Directors declared quarterly cash dividends of $0.08 per common share in each of the last three quarters of 2011 and $0.07 per common share in the first quarter of 2011, representing $194.2 million in total dividends. Of this amount, $49.6 million was paid on both December 30, 2011 and October 7, 2011, $50.3 million was paid on June 30, 2011 and $44.7 million was paid on March 31, 2011. During 2010, the Company's Board of Directors declared quarterly cash dividends of $0.07 per common share in the fourth quarter and $0.06 per common share in each of the first three quarters representing $165.3 million in total dividends. Of this amount, $45.8 million was paid on December 31, 2010, $39.4 million was paid on October 14, 2010, $39.6 million was paid on June 30, 2010 and $40.5 million was paid on March 31, 2010.

On February 21, 2013, the Company's Board of Directors declared a quarterly cash dividend of $0.125 per share payable on March 29, 2013.

Share Repurchases

During the years ended December 31, 2012, 2011 and 2010, 51.0 million, 40.3 million and 35.6 million shares, respectively, have been repurchased for $771.9 million, $800.0 million and $584.5 million, respectively, excluding commissions, at an average cost of $15.12, $19.83 and $16.44 per share, respectively. As of December 31, 2012, $393.6 million remains available under share repurchase authorizations approved by the Board of Directors through December 31, 2013.
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, 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 December 31, 2012, the Company’s longer-term foreign currency forward contracts had maturities of a maximum of 24 months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash flow hedges of forecasted revenue, with effectiveness assessed based on changes in the spot rate of the affected currencies during the period of designation. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge that are excluded from the measure of effectiveness are recognized immediately in “Derivative gains/(losses), net” within the Company’s Consolidated Statements of Income.
The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up to one month, to offset foreign exchange rate fluctuations on settlement assets and obligations between initiation and settlement. In addition, forward contracts, typically with maturities of less than one year, 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 December 31, 2012 were as follows (in millions):
Contracts not designated as hedges:
 
Euro
$
254.9

Canadian dollar
47.3

British pound
40.8

Other
179.8

Contracts designated as hedges:
 
Euro
$
485.2

Canadian dollar
126.7

British pound
95.6

Australian dollar
48.1

Other
83.3



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 $332.0 million, $154.6 million, and $105.0 million for the years ended December 31, 2012, 2011 and 2010, 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 December 31, 2012 were approximately $3.9 billion. The significant majority of customer contracts are written in major currencies such as the Canadian dollar, euro, British pound, and Australian dollar.

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 utilizing the short-cut method, which permits an assumption of no ineffectiveness if certain criteria are met. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within “Borrowings” in the Consolidated Balance Sheets and “Interest expense” in the Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.

The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change in fair value of the derivatives is recorded in “Accumulated other comprehensive loss” in the Consolidated Balance Sheets.

As of December 31, 2012 and 2011, the Company held interest rate swaps in an aggregate notional amount of $800.0 million and $500.0 million, respectively. Of this aggregate notional amount held at December 31, 2012, $500.0 million related to notes due in 2014 and $300.0 million related to notes due in 2018.

Balance Sheet
The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011 (in millions):
 
Derivative Assets
 
Derivative Liabilities
 
 
 
Fair Value
 
 
 
Fair Value
 
Balance Sheet
Location
 
December 31,
2012
 
December 31,
2011
 
Balance Sheet
Location
 
December 31,
2012
 
December 31,
2011
Derivatives — hedges:
 
 
 
 
 
 
 
 
 
 
 
Interest rate fair value hedges — Corporate
Other assets
 
$
13.1

 
$
4.4

 
Other liabilities
 
$
—

 
$
—

Foreign currency cash flow hedges — Consumer-to-Consumer
Other assets
 
10.8

 
37.0

 
Other liabilities
 
17.6

 
6.6

Total
 
 
$
23.9

 
$
41.4

 
 
 
$
17.6

 
$
6.6

Derivatives — undesignated:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency — Business Solutions
Other assets
 
$
71.9

 
$
79.8

 
Other liabilities
 
$
66.5

 
$
67.6

Foreign currency — Consumer-to-Consumer
Other assets
 
1.0

 
3.6

 
Other liabilities
 
2.0

 
12.4

Total
 
 
$
72.9

 
$
83.4

 
 
 
$
68.5

 
$
80.0

Total derivatives
 
 
$
96.8

 
$
124.8

 
 
 
$
86.1

 
$
86.6


The following table summarizes the net fair value of derivatives held as of December 31, 2012 and their expected maturities (in millions):
 
Total
 
2013
 
2014
 
Thereafter
Foreign currency cash flow hedges — Consumer-to-Consumer
$
(6.8
)
 
$
(1.8
)
 
$
(5.0
)
 
$
—

Foreign currency undesignated hedges — Consumer-to-Consumer
(1.0
)
 
(1.0
)
 
—

 
—

Foreign currency undesignated hedges — Business Solutions
5.4

 
5.4

 
—

 
—

Interest rate fair value hedges — Corporate
13.1

 
—

 
12.9

 
0.2

Total
$
10.7

 
$
2.6

 
$
7.9

 
$
0.2


Income Statement
The following tables summarize the location and amount of gains and losses of derivatives in the Consolidated Statements of Income segregated by designated, qualifying hedging instruments and those that are not, for the years ended December 31, 2012, 2011 and 2010 (in millions):
Fair Value Hedges
The following table presents the location and amount of gains/(losses) from fair value hedges for the years ended December 31, 2012, 2011 and 2010 (in millions):
 
 
Gain/(Loss) Recognized in Income on
Derivatives
 
 
 
Gain/(Loss) Recognized in Income on
Related Hedged Item (a)
 
 
Income
Statement
Location
 
Amount
 
 
 
Income
Statement
Location
 
Amount
Derivatives
 
 
2012
 
2011
 
2010
 
Hedged Item
 
 
2012
 
2011
 
2010
Interest rate contracts
 
Interest expense
 
$
3.9

 
$
11.8

 
$
13.3

 
Fixed-rate debt
 
Interest expense
 
$
3.7

 
$
12.6

 
$
10.5

Total gain
 
 
 
$
3.9

 
$
11.8

 
$
13.3

 
 
 
 
 
$
3.7

 
$
12.6

 
$
10.5


Cash Flow Hedges
The following table presents the location and amount of gains/(losses) from cash flow hedges for the years ended December 31, 2012, 2011 and 2010 (in millions):
 
 
Gain/(Loss) Recognized
 
Gain/(Loss) Reclassified
 
Gain/(Loss) Recognized in Income on
 
 
in OCI on Derivatives
 
from Accumulated OCI into Income
 
Derivatives (Ineffective Portion and Amount
 
 
(Effective Portion)
 
(Effective Portion)
 
Excluded from Effectiveness Testing) (b)
 
 
Amount
 
Income
Statement Location
 
Amount
 
Income
Statement Location
 
Amount
Derivatives
 
2012
 
2011
 
2010
 
 
2012
 
2011
 
2010
 
 
2012
 
2011
 
2010
Foreign currency contracts
 
$
(20.1
)
 
$
16.4

 
$
20.0

 
Revenue
 
$
13.4

 
$
(30.3
)
 
$
24.5

 
Derivative
gains/(losses), net
 
$
(0.1
)
 
$
(10.2
)
 
$
(1.5
)
Interest rate contracts (c)
 
—

 
(21.6
)
 
(4.2
)
 
Interest expense
 
(3.6
)
 
(2.7
)
 
(1.5
)
 
Interest expense
 
—

 
—

 
(0.1
)
Total gain/(loss)
 
$
(20.1
)
 
$
(5.2
)
 
$
15.8

 
 
 
$
9.8

 
$
(33.0
)
 
$
23.0

 
 
 
$
(0.1
)
 
$
(10.2
)
 
$
(1.6
)

Undesignated Hedges
The following table presents the location and amount of net gains/(losses) from undesignated hedges for the years ended December 31, 2012, 2011 and 2010 (in millions):
 
 
Gain/(Loss) Recognized in Income on Derivatives (d)
 
 
Income Statement Location
 
Amount
Derivatives
 
 
 
2012
 
2011
 
2010
Foreign currency contracts (e)
Selling, general and administrative
 
$
(10.6
)
 
$
5.9

 
$
(1.0
)
Foreign currency contracts (f)
Derivative gains/(losses), net
 
0.6

 
21.9

 
0.6

Total gain/(loss)
 
 
$
(10.0
)
 
$
27.8

 
$
(0.4
)
 ____________________
(a)
The 2012 gain of $3.7 million was comprised of a loss in value on the debt of $3.9 million and amortization of hedge accounting adjustments of $7.6 million. The 2011 gain of $12.6 million was comprised of a loss in value on the debt of $11.8 million and amortization of hedge accounting adjustments of $24.4 million. The 2010 gain of $10.5 million was comprised of a loss in value on the debt of $13.3 million and amortization of hedge accounting adjustments of $23.8 million.
(b)
The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.
(c)
The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative’s fair value in “Accumulated other comprehensive loss” in the Consolidated Balance Sheets. These amounts are reclassified to “Interest expense” in the Consolidated Statements of Income over the life of the related notes.
(d)
The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.
(e)
The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gain/(loss) on settlement assets and obligations and cash balances were $7.8 million, $(20.5) million and $(2.5) million for the years ended 2012, 2011 and 2010, 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. Additionally, in the year ended December 31, 2011, the Company entered into derivative contracts, consisting of foreign currency forward contracts with maturities of less than one year, to reduce the economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated in foreign currencies, primarily for the TGBP acquisition, and recorded a net gain of $20.8 million in “Derivatives gains/(losses), net.”

An accumulated other comprehensive pre-tax gain of $1.9 million related to the foreign currency forward contracts is expected to be reclassified into revenue within the next 12 months as of December 31, 2012. Approximately $3.6 million of net losses on the forecasted debt issuance hedges are expected to be recognized in “Interest expense” in the Consolidated Statements of Income within the next 12 months as of December 31, 2012. 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):
 
December 31, 2012
 
December 31, 2011
Due in less than one year:
 
 
 
Commercial paper
$
—

 
$
297.0

Floating rate notes (effective rate of 0.9%) due 2013
300.0

 
300.0

Due in greater than one year (a):
 
 
 
6.500% notes (effective rate of 5.6%) due 2014
500.0

 
500.0

2.375% notes (effective rate of 2.4%) due 2015 (b)
250.0

 
—

5.930% notes due 2016 (c)
1,000.0

 
1,000.0

2.875% notes (effective rate of 3.0%) due 2017 (b)
500.0

 
—

3.650% notes (effective rate of 4.4%) due 2018
400.0

 
400.0

5.253% notes due 2020 (c)
324.9

 
324.9

6.200% notes due 2036 (c)
500.0

 
500.0

6.200% notes due 2040 (c)
250.0

 
250.0

Other borrowings
5.8

 
8.8

Total borrowings at par value
4,030.7

 
3,580.7

Fair value hedge accounting adjustments, net (a)
20.2

 
23.9

Unamortized discount, net
(21.7
)
 
(21.4
)
Total borrowings at carrying value (d)
$
4,029.2

 
$
3,583.2

____________________ 
(a)
The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in “Interest expense” in the Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.
(b)
On December 10, 2012, the Company issued $250.0 million of aggregate principal amount of 2.375% unsecured fixed rate notes due 2015 (“2015 Notes”) and $500.0 million of aggregate principal amount of 2.875% unsecured fixed rate notes due 2017 (“2017 Notes”). The interest rate on the 2015 Notes and 2017 Notes may be adjusted under certain circumstances as described below.
(c)
The difference between the stated interest rate and the effective interest rate is not significant.
(d)
As of December 31, 2012, the Company's weighted-average effective rate on total borrowings was approximately 4.8%.

The Company's maturities of borrowings at par value as of December 31, 2012 are $300.0 million in 2013, $500.0 million in 2014, $250.0 million in 2015, $1.0 billion in 2016, $500.0 million in 2017 and approximately $1.5 billion thereafter.

The Company's obligations with respect to its outstanding borrowings, as described above, rank equally.

Commercial Paper Program
 
Pursuant to the Company's commercial paper program, the Company may issue unsecured commercial paper notes in an amount not to exceed $1.5 billion outstanding at any time, reduced to the extent of borrowings outstanding on the Company's Revolving Credit Facility. The Commercial Paper Notes may have maturities of up to 397 days from date of issuance. The Company had no commercial paper borrowings outstanding as of December 31, 2012. During the years ended December 31, 2012 and 2011, the average commercial paper balance outstanding was $161.3 million and $89.7 million, respectively, and the maximum balance outstanding was $422.8 million and $784.1 million, respectively. Proceeds from the Company's commercial paper borrowings were used for general corporate purposes.

Revolving Credit Facility

On September 23, 2011, the Company entered into a credit agreement which expires January 2017 providing for unsecured financing facilities in an aggregate amount of $1.65 billion, including a $250.0 million letter of credit sub-facility and a $150.0 million swing line sub-facility (“Revolving Credit Facility”). The Revolving Credit Facility contains certain covenants that, among other things, limit or restrict the Company's ability to sell or transfer assets or merge or consolidate with another company, grant certain types of security interests, incur certain types of liens, impose restrictions on subsidiary dividends, enter into sale and leaseback transactions, or incur certain subsidiary level indebtedness, subject to certain exceptions. The Company is required to maintain compliance with a consolidated interest coverage ratio covenant. The Revolving Credit Facility supports borrowings under the Company's $1.5 billion commercial paper program.

Interest due under the Revolving Credit Facility is fixed for the term of each borrowing and is payable according to the terms of that borrowing. Generally, interest is calculated using a selected LIBOR rate plus an interest rate margin of 100 basis points. A facility fee of 12.5 basis points is also payable quarterly on the total facility, regardless of usage. Both the interest rate margin and facility fee percentage are based on certain of the Company's credit ratings.

As of and during the years ended December 31, 2012 and 2011, the Company had no outstanding borrowings under the Revolving Credit Facility. As of December 31, 2012, the Company had no commercial paper borrowings outstanding and as of December 31, 2011, the Company had $297.0 million of commercial paper borrowings outstanding, which left $1,650.0 million and $1,353.0 million remaining that was available to borrow on the Revolving Credit Facility, respectively.

Notes

On December 10, 2012, the Company issued $250.0 million and $500.0 million of aggregate principal amounts of unsecured notes due December 10, 2015 and December 10, 2017, respectively. Interest with respect to the 2015 Notes and 2017 Notes is payable semi-annually in arrears on June 10 and December 10 of each year, currently based on the per annum interest rates of 2.375% and 2.875%, respectively. The interest rates payable on the 2015 Notes and 2017 Notes will be increased if the debt rating assigned to such notes is downgraded by an applicable credit rating agency, beginning at a downgrade below investment grade. However, in no event will the interest rate on either the 2015 Notes or 2017 Notes be increased by more than 2.00% above 2.375% and 2.875% per annum, respectively. The interest rates on the 2015 Notes and 2017 Notes may also be adjusted downward for debt rating upgrades subsequent to any debt rating downgrades but may not be adjusted below 2.375% and 2.875% per annum. The 2015 Notes and 2017 Notes are subject to covenants that, among other things, limit or restrict the ability of the Company to sell or transfer assets or merge or consolidate with another company, and limit or restrict the Company's and certain of its subsidiaries' ability to incur certain types of security interests, or enter into sale and leaseback transactions. If a change of control triggering event occurs, holders of the 2015 Notes and 2017 Notes may require the Company to repurchase some or all of their notes at a price equal to 101% of the principal amount of their notes, plus any accrued and unpaid interest. The Company may redeem the 2015 Notes and 2017 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 35 and 40 basis points, respectively.

On August 22, 2011, the Company issued $400.0 million of aggregate principal amount of unsecured notes due August 22, 2018 (“2018 Notes”). Interest with respect to the 2018 Notes is payable semi-annually in arrears on February 22 and August 22 of each year, based on the fixed per annum interest rate of 3.650%. The 2018 Notes are subject to covenants that, among other things, limit or restrict the ability of the Company to sell or transfer assets or merge or consolidate with another company, and limit or restrict the Company's and certain of its subsidiaries' ability to incur certain types of security interests, or enter into certain sale and leaseback transactions. If a change of control triggering event occurs, holders of the 2018 Notes may require the Company to repurchase some or all of their notes at a price equal to 101% of the principal amount of their notes, plus any accrued and unpaid interest. The Company may redeem the 2018 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 35 basis points.

On March 7, 2011, the Company issued $300.0 million of aggregate principal amount of unsecured floating rate notes due March 7, 2013 (“2013 Notes”). Interest with respect to the 2013 Notes is payable quarterly in arrears on each March 7, June 7, September 7 and December 7, beginning June 7, 2011, at a per annum interest rate equal to the three-month LIBOR plus 58 basis points (reset quarterly). The 2013 Notes are subject to covenants that, among other things, limit or restrict the ability of the Company to sell or transfer assets or merge or consolidate with another company, and limit or restrict the Company's and certain of its subsidiaries' ability to incur certain types of security interests, or enter into sale and leaseback transactions. If a change of control triggering event occurs, holders of the 2013 Notes may require the Company to repurchase some or all of their notes at a price equal to 101% of the principal amount of their notes, plus any accrued and unpaid interest. The Company has the ability to use existing financing sources, including the Revolving Credit Facility or commercial paper program, and cash, including cash generated from operations and proceeds from the 2015 Notes and 2017 Notes to repay this debt obligation.

On June 21, 2010, the Company issued $250.0 million of aggregate principal amount of unsecured notes due June 21, 2040 (“2040 Notes”). Interest with respect to the 2040 Notes is payable semi-annually on June 21 and December 21 each year based on the fixed per annum interest rate of 6.200%. The 2040 Notes are subject to covenants that, among other things, limit or restrict the Company's and certain of its subsidiaries' ability to grant certain types of security interests or enter into sale and leaseback transactions. The Company may redeem the 2040 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 30 basis points.

On March 30, 2010, the Company exchanged $303.7 million of aggregate principal amount of the 2011 Notes for unsecured notes due April 1, 2020 (“2020 Notes”). Interest with respect to the 2020 Notes is payable semi-annually on April 1 and October 1 each year based on the fixed per annum interest rate of 5.253%. In connection with the exchange, note holders were given a 7% premium ($21.2 million), which approximated market value at the exchange date, as additional principal. As this transaction was accounted for as a debt modification, this premium was not charged to expense. Rather, the premium, along with the offsetting hedge accounting adjustments, will be accreted into “Interest expense” over the life of the notes. The 2020 Notes are subject to covenants that, among other things, limit or restrict the Company's and certain of its subsidiaries' ability to grant certain types of security interests, incur debt (in the case of significant subsidiaries), or enter into sale and leaseback transactions. The Company may redeem the 2020 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 15 basis points.

The 2020 Notes were originally issued in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). On October 8, 2010, the Company exchanged the 2020 Notes for notes registered under the Securities Act, pursuant to the terms of a Registration Rights Agreement.

On February 26, 2009, the Company issued $500.0 million of aggregate principal amount of unsecured notes due February 26, 2014 (“2014 Notes”). Interest with respect to the 2014 Notes is payable semi-annually on February 26 and August 26 each year based on the fixed per annum interest rate of 6.500%. The 2014 Notes are subject to covenants that, among other things, limit or restrict the Company's and certain of its subsidiaries' ability to grant certain types of security interests or enter into sale and leaseback transactions. The Company may redeem the 2014 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 50 basis points.

On November 17, 2006, the Company issued $1.0 billion aggregate principal amount of 5.400% Notes due 2011 (“2011 Notes”) and $500.0 million aggregate principal amount of 6.200% Notes due 2036 (“2036 Notes”). The 2011 Notes were redeemed upon maturity in November 2011.

Interest with respect to the 2036 Notes is payable semi-annually on May 17 and November 17 each year based on the fixed per annum interest rate of 6.200%. The 2036 Notes are subject to covenants that, among other things, limit or restrict the Company's and certain of its subsidiaries' ability to grant certain types of security interests, incur debt (in the case of significant subsidiaries), or enter into sale and leaseback transactions. The Company may redeem the 2036 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 25 basis points.

On September 29, 2006, the Company issued $1.0 billion of aggregate principal amount of unsecured notes maturing on October 1, 2016 (“2016 Notes”). Interest on the 2016 Notes is payable semi-annually on April 1 and October 1 each year based on a fixed per annum interest rate of 5.930%. The 2016 Notes are subject to covenants that, among other things, limit or restrict the Company's and certain of its subsidiaries' ability to grant certain types of security interests, incur debt (in the case of significant subsidiaries) or enter into sale and leaseback transactions. The Company may redeem the 2016 Notes at any time prior to maturity at the greater of par or a price based on the applicable treasury rate plus 20 basis points.
Stock Compensation Plans
Stock Compensation Plans
Stock Compensation Plans

Stock Compensation Plans

The Western Union Company 2006 Long-Term Incentive Plan

The Western Union Company 2006 Long-Term Incentive Plan (“2006 LTIP”) provides for the granting of stock options, restricted stock units, unrestricted stock awards and other equity-based awards to employees who perform services for the Company. A maximum of 120.0 million shares of common stock may be awarded under the 2006 LTIP, of which 35.0 million shares are available as of December 31, 2012.

Options granted under the 2006 LTIP are issued with exercise prices equal to the fair market value of Western Union common stock on the grant date, have 10-year terms, and typically vest over four equal annual increments beginning 12 months after the date of grant, with the exception of options granted to retirement eligible employees, which will vest on a prorated basis, upon termination. Compensation expense related to stock options is recognized over the requisite service period.

Restricted stock awards and units granted under the 2006 LTIP typically become 100% vested on the three year anniversary of the grant date, with the exception of restricted stock units granted to retirement eligible employees, which will vest on a prorated basis, upon termination. The fair value of the awards granted is measured based on the fair value of the shares on the date of grant. Certain share unit grants do not provide for the payment of dividend equivalents. For those grants, the value of the grants is reduced by the net present value of the foregone dividend equivalent payments. The related compensation expense is recognized over the requisite service period which is the same as the vesting period.

The compensation committee of the Company's Board of Directors has also granted the Company's executives and other key employees long-term incentive awards under the 2006 LTIP which consist of two-thirds performance based restricted stock unit awards and one-third stock option awards. The performance based restricted stock units are restricted stock awards. The grant date fair value is fixed and the amount of restricted stock units depends upon certain financial and strategic performance objectives being met over a two-year period plus an additional one-year vesting period after the two-year performance period. For the 2012 awards, achievement is also limited if certain total shareholder return metrics are not met over the three year vesting period. The actual number of performance based restricted stock units that the recipients receive ranges from 0% to 300% of the target number of stock units granted under the LTIP based on the achievement of the performance objectives. Additionally, the compensation committee granted non-executive employees of the Company participating in the 2006 LTIP annual equity grants of two-thirds restricted stock units and one-third stock option awards, or all restricted stock units depending on their employment grade level.

In 2012, the Company started granting bonus stock units out of the 2006 LTIP to the non-employee directors of the Company. Since bonus stock units vest immediately, compensation expense is recognized on the date of grant based on the fair value of the awards when granted. These awards may be settled immediately unless the participant elects to defer the receipt of common shares under the applicable plan rules.

The Western Union Company 2006 Non-Employee Director Equity Compensation Plan

The Western Union Company 2006 Non-Employee Director Equity Compensation Plan (“2006 Director Plan”) provides for the granting of equity-based awards to non-employee directors of the Company. Options granted under the 2006 Director Plan are issued with exercise prices equal to the fair market value of Western Union common stock at the grant date, have 10-year terms, and vest immediately. Since options and deferred stock units under this plan vest immediately, compensation expense is recognized on the date of grant based on the fair value of the awards when granted. Awards under the plan may be settled immediately unless the participant elects to defer the receipt of the common shares under applicable plan rules. A maximum of 1.5 million shares of common stock may be awarded under the 2006 Director Plan. As of December 31, 2012, the Company has awarded 1.1 million options and 0.3 million unrestricted stock units to non-employee directors of the Company.

Impact of Spin-Off to Stock-Based Awards Granted Under First Data Plans

At the time of the Spin-off, First Data converted stock options, restricted stock awards and restricted stock units (collectively, “Stock-Based Awards”) of First Data stock held by Western Union and First Data employees. For Western Union employees, each outstanding First Data Stock-Based Award was converted to new Western Union Stock-Based Awards. For First Data employees, each outstanding First Data Stock-Based Award held prior to the Spin-off was converted into one replacement First Data Stock-Based Award and one Western Union Stock-Based Award. The new Western Union and First Data Stock-Based Awards maintained their pre-conversion aggregate intrinsic values, and, in the case of stock options, their ratio of the exercise price per share to their fair value per share.

After the Spin-off, the Company receives all cash proceeds related to the exercise of all Western Union stock options, recognizes all stock compensation expense and retains the resulting tax benefits relating to Western Union awards held by Western Union employees. First Data recognizes all stock-based compensation expense and retains all associated tax benefits for Western Union Stock-Based Awards held by First Data employees.

Stock Option Activity

A summary of Western Union stock option activity for the year ended December 31, 2012 was as follows (options and aggregate intrinsic value in millions):
 
Year Ended December 31, 2012
 
Options
 
Weighted-Average
Exercise Price
 
Weighted-Average Remaining
Contractual Term
(Years)
 
 
Aggregate
Intrinsic
Value
Outstanding as of January 1
30.7

 
$
19.05

 
 
 
 
Granted
2.7

 
17.85

 
 
 
 
Exercised
(3.0
)
 
17.15

 
 
 
 
Cancelled/forfeited
(3.4
)
 
24.45

 
 
 
 
Outstanding as of December 31
27.0

 
$
18.46

 
4.2

 
$
2.9

Options exercisable as of December 31
22.4

 
$
18.69

 
3.3

 
$
2.1



As of December 31, 2012, approximately 26% of outstanding options to purchase shares of common stock of the Company were held by employees of First Data, all of which have vested.

The Company received $51.9 million, $98.8 million and $44.1 million in cash proceeds related to the exercise of stock options during the years ended December 31, 2012, 2011 and 2010, respectively. Upon the exercise of stock options, shares of common stock are issued from authorized common shares.

The Company's calculated pool of excess tax benefits available to absorb write-offs of deferred tax assets in subsequent periods was approximately $4.6 million as of December 31, 2012. The Company realized total tax benefits during the years ended December 31, 2012, 2011 and 2010 from stock option exercises of $1.2 million, $4.8 million and $1.4 million, respectively.

The total intrinsic value of stock options exercised during the years ended December 31, 2012, 2011 and 2010 was $5.1 million, $20.6 million and $8.2 million, respectively.

Restricted Stock Activity

A summary of Western Union activity for restricted stock units and performance based restricted stock units for the year ended December 31, 2012 is listed below (units in millions):

 
Year Ended December 31, 2012
 
Number
Outstanding
 
Weighted-Average
Grant-Date Fair Value
Non-vested as of January 1
3.9
 
$
16.85

Granted
2.7
 
16.68

Vested
(1.0)
 
13.38

Forfeited
(0.8)
 
17.24

Non-vested as of December 31
4.8
 
$
17.38



Stock-Based Compensation

The following table sets forth the total impact on earnings for stock-based compensation expense recognized in the Consolidated Statements of Income resulting from stock options, restricted stock units, performance based restricted stock units and bonus stock units for the years ended December 31, 2012, 2011 and 2010 (in millions, except per share data).

 
Year Ended December 31,
 
2012
 
2011
 
2010
Stock-based compensation expense
$
(34.0
)
 
$
(31.2
)
 
$
(35.9
)
Income tax benefit from stock-based compensation expense
10.0

 
9.8

 
11.6

Net income impact
$
(24.0
)
 
$
(21.4
)
 
$
(24.3
)
Earnings per share:
 
 
 
 
 
Basic and Diluted
$
(0.04
)
 
$
(0.03
)
 
$
(0.04
)


As of December 31, 2012, there was $15.2 million of total unrecognized compensation cost, net of assumed forfeitures, related to non-vested stock options which is expected to be recognized over a weighted-average period of 2.5 years, and there was $34.1 million of total unrecognized compensation cost, net of assumed forfeitures, related to non-vested restricted stock units and performance based restricted stock units which is expected to be recognized over a weighted-average period of 1.8 years.

Fair Value Assumptions

The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted.
 
Year Ended December 31,
 
2012
 
2011
 
2010
Stock options granted:
 
 
 
 
 
Weighted-average risk-free interest rate
1.2
%
 
2.5
%
 
2.7
%
Weighted-average dividend yield
1.8
%
 
1.4
%
 
1.3
%
Volatility
33.2
%
 
31.0
%
 
33.9
%
Expected term (in years)
6.09

 
5.80

 
5.80

Weighted-average grant date fair value
$
4.90

 
$
5.99

 
$
5.12



Risk-free interest rate - The risk-free rate for stock options granted during the period is determined by using a United States Treasury rate for the period that coincided with the expected terms listed above.

Expected dividend yield - The Company's expected annual dividend yield is the calculation of the annualized Western Union dividend divided by an average Western Union stock price on each respective grant date.

Expected volatility - For the Company's executives and non-employee directors, the expected volatility for the 2012, 2011 and 2010 grants was 33.2%, 29.7% and 32.8%, respectively. The expected volatility for the Company's non-executive employees was 33.2%, 31.9% and 34.5% for the 2012, 2011 and 2010 grants, respectively. The Company used a blend of implied and historical volatility. The Company's implied volatility was calculated using the market price of traded options on Western Union's common stock and the historical volatility of Western Union stock data. Prior to 2012, the Company's historical volatility represented a blend of Western Union and First Data (prior to the Spin-off) stock data.

Expected term - For 2012, Western Union's expected term for all employees was approximately 6 years. For 2011 and 2010, Western Union's expected term was approximately 5 years for non-executive employees and approximately 7 years for executives and non-employee directors. The Company's expected term of options was based upon, among other things, historical exercises, the vesting term of the Company's options and the options' contractual term of ten years.

The assumptions used to calculate the fair value of options granted will be evaluated and revised, as necessary, to reflect market conditions and the Company's historical experience and future expectations. The calculated fair value is recognized as compensation cost in the Company's consolidated financial statements over the requisite service period of the entire award. Compensation cost is recognized only for those options expected to vest, with forfeitures estimated at the date of grant and evaluated and adjusted periodically to reflect the Company's historical experience and future expectations. Any change in the forfeiture assumption will be accounted for as a change in estimate, with the cumulative effect of the change on periods previously reported being reflected in the consolidated financial statements of the period in which the change is made. In the future, as more historical data is available to calculate the volatility of Western Union stock and the actual terms Western Union employees hold options, expected volatility and expected term may change which could change the grant-date fair value of future stock option awards and, ultimately, the recorded compensation expense.
Segments
Segments
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 CODM in deciding where to allocate resources and in assessing performance.

The Consumer-to-Consumer operating segment facilitates money transfers between two consumers. The Company's money transfer service is viewed by the Company as one interconnected global network where a money transfer can be sent from one location to another, around the world, 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 Company's reportable segments are reviewed separately below because each reportable segment represents a strategic business unit that offers different products and serves different markets. The business segment measurements provided to, and evaluated by, the Company's CODM are computed in accordance with the following principles:

•
The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

•
Corporate and other overhead is allocated to the segments primarily based on a percentage of the segments' revenue compared to total revenue.

•
Costs incurred for the investigation and closing of acquisitions are included in “Other.”

•
There were no restructuring and related expenses incurred during the year ended December 31, 2012, but the Company incurred expenses of $46.8 million and $59.5 million for the years ended December 31, 2011 and 2010, respectively. These expenses were not allocated to the Company's segments. While these items were identifiable to the Company's segments, they were not included in the measurement of segment operating profit provided to the CODM for purposes of assessing segment performance and decision making with respect to resource allocation. For additional information on restructuring and related activities, refer to Note 4.

•
All items not included in operating income are excluded from the segments.


In the first quarter of 2012, the Company began assessing performance and allocating resources based on the segment structure described above. Segment results for the years ended December 31, 2011 and 2010 have been reclassified to reflect this structure. The following tables present the Company's reportable segment results for the years ended December 31, 2012, 2011 and 2010, respectively (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenues:
 
 
 
 
 
Consumer-to-Consumer:
 
 
 
 
 
Transaction fees
$
3,545.6

 
$
3,580.2

 
$
3,434.3

Foreign exchange revenues
988.5

 
983.1

 
905.8

Other revenues
50.2

 
45.1

 
43.3

 
4,584.3

 
4,608.4

 
4,383.4

Consumer-to-Business:
 
 
 
 
 
Transaction fees
573.6

 
581.8

 
576.5

Foreign exchange revenues
3.4

 
5.7

 
3.6

Other revenues
26.9

 
28.4

 
30.6

 
603.9

 
615.9

 
610.7

Business Solutions:
 
 
 
 
 
Transaction fees
34.9

 
5.9

 
1.3

Foreign exchange revenues
332.0

 
154.6

 
105.0

Other revenues
0.5

 
0.6

 
0.4

 
367.4

 
161.1

 
106.7

Other:
 
 
 
 
 
Total revenues
109.2

 
106.0

 
91.9

 
109.2

 
106.0

 
91.9

Total consolidated revenues
$
5,664.8

 
$
5,491.4

 
$
5,192.7

Operating income/(loss):
 
 
 
 
 
Consumer-to-Consumer
$
1,266.9

 
$
1,316.0

 
$
1,243.3

Consumer-to-Business
137.6

 
146.9

 
146.2

Business Solutions (a)
(54.8
)
 
(9.6
)
 
(24.2
)
Other
(19.7
)
 
(21.5
)
 
(5.7
)
Total segment operating income
1,330.0

 
1,431.8

 
1,359.6

Restructuring and related expenses (Note 4)
—

 
(46.8
)
 
(59.5
)
Total consolidated operating income
$
1,330.0

 
$
1,385.0

 
$
1,300.1

 
 
 
 
 
 

____________________ 
(a)
During the years ended December 31, 2012 and 2011, the Company incurred $42.8 million and $4.8 million, respectively, of integration expenses related to the acquisition of TGBP. There were no TGBP integration expenses incurred during the year ended December 31, 2010. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition, which are included in Other.
 
Year Ended December 31,
 
2012
 
2011
 
2010
Assets:
 
 
 
 
 
Consumer-to-Consumer
$
4,854.2

 
$
4,644.6

 
$
5,014.3

Consumer-to-Business
1,029.6

 
955.8

 
730.1

Business Solutions
2,012.6

 
1,906.2

 
718.5

Other
1,569.3

 
1,563.3

 
1,466.3

Total assets
$
9,465.7

 
$
9,069.9

 
$
7,929.2

 
 
 
 
 
 
Depreciation and amortization:
 
 
 
 
 
Consumer-to-Consumer
$
158.2

 
$
141.0

 
$
130.5

Consumer-to-Business
14.7

 
18.8

 
18.3

Business Solutions
65.7

 
26.8

 
17.7

Other
7.5

 
4.7

 
8.5

Total segment depreciation and amortization
246.1

 
191.3

 
175.0

Restructuring and related expenses (Note 4)
—

 
1.3

 
0.9

Total consolidated depreciation and amortization
$
246.1

 
$
192.6

 
$
175.9

 
 
 
 
 
 
Capital expenditures:
 
 
 
 
 
Consumer-to-Consumer
$
219.1

 
$
138.4

 
$
85.3

Consumer-to-Business
21.8

 
13.4

 
17.5

Business Solutions
16.1

 
6.7

 
4.0

Other
11.2

 
4.0

 
6.9

Total capital expenditures
$
268.2

 
$
162.5

 
$
113.7



Information concerning principal geographic areas was as follows (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue:
 
 
 
 
 
United States
$
1,593.1

 
$
1,568.6

 
$
1,516.0

International
4,071.7

 
3,922.8

 
3,676.7

Total
$
5,664.8

 
$
5,491.4

 
$
5,192.7

Long-lived assets:
 
 
 
 
 
United States
$
148.2

 
$
152.1

 
$
159.4

International
47.9

 
46.0

 
37.1

Total
$
196.1

 
$
198.1

 
$
196.5



The Consumer-to-Consumer geographic split is determined based upon the region where the money transfer is initiated and the region where the money transfer is paid. For transactions originated and paid in different regions, the Company splits the revenue between the two regions, with each region receiving 50%. For money transfers initiated and paid in the same region, 100% of the revenue is attributed to that region. The geographic split of revenue above for the Consumer-to-Business and Business Solutions segments is based upon the country where the transaction is initiated with 100% of the revenue allocated to that country. Long-lived assets, consisting of “Property and equipment, net,” are presented based upon the location of the assets.

A significant majority of the Company's Consumer-to-Consumer transactions involve at least one non-United States location. Based on the method used to attribute revenue between countries described in the paragraph above, each individual country outside the United States accounted for less than 10% of revenue for the years ended December 31, 2012, 2011 and 2010, respectively. In addition, each individual agent, Consumer-to-Business, or Business Solutions customer accounted for less than 10% of revenue during these periods.
Quarterly Financial Information (Unaudited)
Quarterly Financial Information (Unaudited)
Quarterly Financial Information (Unaudited)

Summarized quarterly results for the years ended December 31, 2012 and 2011 were as follows (in millions, except per share data):
2012 by Quarter:
Q1
 
Q2
 
Q3
 
Q4
 
Year Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
Revenues
$
1,393.4

 
$
1,425.1

 
$
1,421.6

 
$
1,424.7

 
$
5,664.8

Expenses (a) (b)
1,060.9

 
1,079.2

 
1,056.0

 
1,138.7

 
4,334.8

Operating income
332.5

 
345.9

 
365.6

 
286.0

 
1,330.0

Other expense, net
42.4

 
35.8

 
41.8

 
41.2

 
161.2

Income before income taxes
290.1

 
310.1

 
323.8

 
244.8

 
1,168.8

Provision for income taxes
42.8

 
38.9

 
54.3

 
6.9

 
142.9

Net income
$
247.3

 
$
271.2

 
$
269.5

 
$
237.9

 
$
1,025.9

Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.40

 
$
0.44

 
$
0.45

 
$
0.40

 
$
1.70

Diluted
$
0.40

 
$
0.44

 
$
0.45

 
$
0.40

 
$
1.69

Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
619.1

 
610.9

 
601.5

 
588.0

 
604.9

Diluted
621.9

 
613.1

 
604.2

 
590.2

 
607.4

____________
 
 
 
 
 
 
 
 
 
(a)
Includes $6.4 million in the first quarter, $14.5 million in the second quarter, $10.3 million in the third quarter, and $11.6 million in the fourth quarter of integration expenses related to the acquisition of TGBP.

(b)
Includes $30.9 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 4.
2011 by Quarter:
Q1
 
Q2
 
Q3
 
Q4
 
Year Ended December 31, 2011
 
 
 
 
 
 
 
 
 
 
Revenues
$
1,283.0

 
$
1,366.3

 
$
1,410.8

 
$
1,431.3

 
$
5,491.4

Expenses (c) (d)
970.1

 
1,015.6

 
1,047.8

 
1,072.9

 
4,106.4

Operating income
312.9

 
350.7

 
363.0

 
358.4

 
1,385.0

Other expense, net (e)
38.2

 
17.3

 
49.1

 
5.8

 
110.4

Income before income taxes
274.7

 
333.4

 
313.9

 
352.6

 
1,274.6

Provision for/(benefit from) income taxes (f)
64.5

 
70.2

 
74.2

 
(99.7
)
 
109.2

Net income
$
210.2

 
$
263.2

 
$
239.7

 
$
452.3

 
$
1,165.4

Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.32

 
$
0.42

 
$
0.38

 
$
0.73

 
$
1.85

Diluted
$
0.32

 
$
0.41

 
$
0.38

 
$
0.73

 
$
1.84

Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
646.9

 
631.1

 
624.9

 
619.4

 
630.6

Diluted
652.1

 
635.8

 
627.1

 
621.7

 
634.2

____________
 
 
 
 
 
 
 
 
 
(c)
Includes $24.0 million in the first quarter, $8.9 million in the second quarter and $13.9 million in the third quarter of restructuring and related expenses. For more information, see Note 4.

(d)
Includes $4.8 million in the fourth quarter of integration expenses related to the acquisition of TGBP.

(e)
The second quarter includes a gain of $29.4 million, recognized in connection with the remeasurement of the Company's former equity interest in Costa to fair value. The fourth quarter includes a net gain of $20.8 million recorded on derivative contracts, consisting of foreign currency forward contracts with maturities of less than one year, entered into to reduce the economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated in foreign currencies, primarily for the TGBP acquisition. The fourth quarter also includes a gain of $20.5 million, recognized in connection with the remeasurement of the Company's former equity interest in Finint to fair value.

(f)
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 recognized a tax benefit of $204.7 million in the fourth quarter related to the adjustment of reserves associated with this matter.
Condensed Financial Information of the Registrant
Condensed Financial Information of the Registrant
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

The following lists the condensed financial information for the parent company as of December 31, 2012 and 2011 and statements of income and comprehensive income and cash flows for each of the three years in the period ended December 31, 2012.

THE WESTERN UNION COMPANY

CONDENSED BALANCE SHEETS
(PARENT COMPANY ONLY)
(in millions, except per share amounts)

 
December 31,
 
2012
 
2011
Assets
 
 
 
Cash and cash equivalents
$
383.7

 
$
1.1

Property and equipment, net of accumulated depreciation of $14.4 and $12.3, respectively
33.6

 
32.6

Income tax deposit
—

 
250.0

Other assets
68.4

 
55.9

Investment in subsidiaries
5,420.3

 
4,708.8

Total assets
$
5,906.0

 
$
5,048.4

 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
79.3

 
$
72.0

Income taxes payable
88.3

 
406.1

Payable to subsidiaries, net
773.5

 
99.7

Borrowings
4,023.4

 
3,574.4

Other liabilities
0.9

 
1.4

Total liabilities
4,965.4

 
4,153.6

Stockholders' equity:
 
 
 
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued
—

 
—

Common stock, $0.01 par value; 2,000 shares authorized; 572.1 shares and 619.4 shares issued and outstanding as of December 31, 2012 and 2011, respectively
5.7

 
6.2

Capital surplus
332.8

 
247.1

Retained earnings
754.7

 
760.0

Accumulated other comprehensive loss
(152.6
)
 
(118.5
)
Total stockholders' equity
940.6

 
894.8

Total liabilities and stockholders' equity
$
5,906.0

 
$
5,048.4









See Notes to Condensed Financial Statements.
THE WESTERN UNION COMPANY

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(PARENT COMPANY ONLY)
(in millions)

 
For the Years Ended December 31,
 
2012
 
2011
 
2010
Revenues
$
—

 
$
—

 
$
—

Expenses
—

 
—

 
—

Operating income
—

 
—

 
—

Interest income
0.2

 
0.1

 
0.2

Interest expense
(178.6
)
 
(181.0
)
 
(168.7
)
Other expense
—

 
(0.1
)
 
(3.3
)
Loss before equity in earnings of affiliates and income taxes
(178.4
)
 
(181.0
)
 
(171.8
)
Equity in earnings of affiliates, net of tax
1,136.1

 
1,276.7

 
1,012.5

Income tax benefit
68.2

 
69.7

 
69.2

Net income
1,025.9

 
1,165.4

 
909.9

Other comprehensive income/(loss), net of tax
2.0

 
(11.7
)
 
(1.6
)
Other comprehensive income/(loss) of affiliates, net of tax
(36.1
)
 
26.0

 
(3.9
)
Comprehensive income
$
991.8

 
$
1,179.7

 
$
904.4































See Notes to Condensed Financial Statements.
THE WESTERN UNION COMPANY

CONDENSED STATEMENTS OF CASH FLOWS
(PARENT COMPANY ONLY)
(in millions)

 
For the Years Ended December 31,
 
2012
 
2011
 
2010
Cash flows from operating activities
 
 
 
 
 
Net cash provided by operating activities
$
228.3

 
$
698.1

 
$
631.6

Cash flows from investing activities
 
 
 
 
 
Purchases of property and equipment
(3.3
)
 
(4.2
)
 
—

Net cash used in investing activities
(3.3
)
 
(4.2
)
 
—

Cash flows from financing activities
 
 
 
 
 
Advances from/(to) subsidiaries, net
679.1

 
(180.9
)
 
(112.7
)
Net proceeds from issuance of borrowings
742.8

 
696.3

 
247.0

Principal payments on borrowings
—

 
(696.3
)
 
—

Net (repayments of)/proceeds from commercial paper
(297.0
)
 
297.0

 
—

Proceeds from exercise of options
53.4

 
100.0

 
42.1

Cash dividends paid
(254.2
)
 
(194.2
)
 
(165.3
)
Common stock repurchased
(766.5
)
 
(803.9
)
 
(581.4
)
Net cash provided by/(used in) financing activities
157.6

 
(782.0
)
 
(570.3
)
Net change in cash and cash equivalents
382.6

 
(88.1
)
 
61.3

Cash and cash equivalents at beginning of year
1.1

 
89.2

 
27.9

Cash and cash equivalents at end of year
$
383.7

 
$
1.1

 
$
89.2




























See Notes to Condensed Financial Statements.

CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

THE WESTERN UNION COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS

1.  Basis of Presentation

The Western Union Company (the “Parent”) is a holding company that conducts substantially all of its business operations through its subsidiaries. Under a parent company only presentation, the Parent's investments in its consolidated subsidiaries are presented under the equity method of accounting, and the condensed financial statements do not present the financial statements of the Parent and its subsidiaries on a consolidated basis. These financial statements should be read in conjunction with The Western Union Company's consolidated financial statements.

2.  Restricted Net Assets

Certain assets of the Parent's subsidiaries totaling approximately $305 million constitute restricted net assets, as there are legal or regulatory limitations on transferring such assets outside of the countries where the respective assets are located, or because they constitute undistributed earnings of affiliates of the Parent accounted for under the equity method of accounting. Additionally, certain of the Parent's subsidiaries must meet minimum capital requirements in some countries in order to maintain operating licenses. As of December 31, 2012, the Parent is in a stockholders' equity position of $940.6 million, and as such, the restricted net assets of the Parent's subsidiaries currently exceeds 25% of the consolidated net assets of the Parent and its subsidiaries, thus requiring this Schedule I, “Condensed Financial Information of the Registrant.”

3.  Related Party Transactions

On October 1, 2012, the Parent issued a promissory note payable to its 100% owned subsidiary First Financial Management Corporation in the amount of $268.2 million in exchange for funds distributed to the Parent. The promissory note is due on June 30, 2015, bears interest at the fixed rate of 0.23% per annum, and may be repaid at any time without penalty. The promissory note is included within “Payable to subsidiaries, net” in the Condensed Balance Sheets as of December 31, 2012.

Excess cash generated from operations of the Parent's subsidiaries that is not required to meet certain regulatory requirements is paid periodically to the Parent and is also included within “Payable to subsidiaries, net” in the Condensed Balance Sheets as of December 31, 2012 and 2011. The Parent's subsidiaries periodically distribute excess cash balances to the Parent in the form of a dividend, although the amounts of such dividends may vary from year to year.

The Parent files a consolidated United States federal income tax return, and also a number of consolidated state income tax returns on behalf of its subsidiaries. In these circumstances, the Parent is responsible for remitting income tax payments on behalf of the consolidated group. The Parent's provision for income taxes has been computed as if it were a separate tax-paying entity.

4.  Commitments and Contingencies

The Parent had $14.5 million in outstanding letters of credit and bank guarantees as of December 31, 2012 with expiration dates through 2013. The letters of credit and bank guarantees are primarily held in connection with credit-related dealings, which include, but are not limited to, derivatives and foreign exchange transactions. The Company expects to renew the letters of credit and bank guarantees prior to expiration in most circumstances.
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2012
Accounting Policies [Abstract]
 
Basis of Presentation
Text Block 
Use of Estimates
Text Block 
Principles of Consolidation
Text Block 
Earnings Per Share
Text Block 
Fair Value Measurements
Text Block 
Business Combinations
Text Block 
Cash and Cash Equivalents
Text Block 
Allowance for Doubtful Accounts
Allowance for Doubtful AccountsThe Company records an allowance for doubtful accounts when it is probable that the related receivable balance will not be collected based on its history of collection experience, known collection issues, such as agent suspensions and bankruptcies, and other matters the Company identifies in its routine collection monitoring. The allowance for doubtful accounts was $46.8 million and $28.5 million as of December 31, 2012 and 2011, respectively, and is recorded in the same Consolidated Balance Sheet caption as the related receivable. During the years ended December 31, 2012, 2011 and 2010, the provision for doubtful accounts (bad debt expense) reflected in the Consolidated Statements of Income was $44.9 million, $24.3 million and $19.1 million, respectively. 
Settlement Assets and Obligations
Text Block 
Property and Equipment
Text Block 
Goodwill
Text Block 
Other Intangible Assets
Text Block 
Revenue Recognition
Text Block 
Cost of Services
Text Block 
Advertising Costs
Text Block 
Income Taxes
Text Block 
Foreign Currency Translation
Text Block 
Derivatives
Text Block 
Stock-Based Compensation
Text Block 
Severance and Other Related Expenses
Text Block 
Consumer-to-Consumer Foreign Currency Derivatives
Text Block 
Business Solutions Foreign Currency Derivatives
Text Block 
Corporate Interest Rate Hedging
Text Block 
Basis of Presentation 
Basis of Presentation
The financial statements in this Annual Report on Form 10-K are presented on a consolidated basis and include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated.
Consistent with industry practice, the accompanying Consolidated Balance Sheets are unclassified due to the short-term nature of the Company’s settlement obligations contrasted with the Company’s ability to invest cash awaiting settlement in long-term investment securities.
Use of Estimates 
Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
Principles of Consolidation 
Principles of Consolidation

The Company consolidates financial results when it has both the power to direct the activities of an entity that most significantly impact the entity's economic performance and the ability to absorb losses or the right to receive benefits of the entity that could potentially be significant to the entity. The Company utilizes the equity method of accounting when it is able to exercise significant influence over the entity's operations, which generally occurs when the Company has an ownership interest of between 20% and 50% in an entity.
Earnings Per Share 
Earnings Per Share

The calculation of basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Unvested shares of restricted stock are excluded from basic shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock have vested, using the treasury stock method. The treasury stock method assumes proceeds from the exercise price of stock options, the unamortized compensation expense and assumed tax benefits of options and restricted stock are available to acquire shares at an average market price throughout the period, and therefore, reduce the dilutive effect.
Fair Value Measurements 
Fair Value Measurements

The Company determines the fair values of its assets and liabilities that are recognized or disclosed at fair value in accordance with the hierarchy described below. The fair values of the assets and liabilities held in the Company's defined benefit plan trust (“Trust”) are recognized or disclosed utilizing the same hierarchy. The following three levels of inputs may be used to measure fair value:

•
Level 1: Quoted prices in active markets for identical assets or liabilities.

•
Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For most of these assets, the Company utilizes pricing services that use multiple prices as inputs to determine daily market values. In addition, the Trust has other investments that fall within Level 2 that are valued at net asset value which is not quoted on an active market; however, the unit price is based on underlying investments which are traded on an active market. Further, these investments have no redemption restrictions, and redemptions can generally be done monthly or quarterly with required notice ranging from one to 45 days.

•
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include items where the determination of fair value requires significant management judgment or estimation. The Company has Level 3 assets that are recognized and disclosed at fair value on a non-recurring basis related to the Company's business combinations, where the values of the intangible assets and goodwill acquired in a purchase are derived utilizing one of the three recognized approaches: the market approach, the income approach or the cost approach.

Carrying amounts for many of the Company's financial instruments, including cash and cash equivalents, settlement cash and cash equivalents, settlement receivables and settlement obligations, and commercial paper borrowings approximate fair value due to their short maturities. Investment securities, included in settlement assets, and derivative financial instruments are carried at fair value and included in Note 8. Fixed rate notes are carried at their original issuance values as adjusted over time to accrete that value to par, except for portions of notes hedged by interest rate swap agreements as disclosed in Note 14. The fair values of fixed rate notes are also disclosed in Note 8 and are based on market quotations. For more information on the fair value of financial instruments, see Note 8.

The fair values of non-financial assets and liabilities related to the Company's business combinations are disclosed in Note 3. The fair values of financial assets and liabilities related to the Trust are disclosed in Note 11.
Business Combinations 
Business Combinations

The Company accounts for all business combinations where control over another entity is obtained using the acquisition method of accounting, which requires that most assets (both tangible and intangible), liabilities (including contingent consideration), and remaining noncontrolling interests be recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets less liabilities and noncontrolling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or noncontrolling interests made subsequent to the acquisition date, but within the measurement period, which is one year or less, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is remeasured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and existing book value. Results of operations of the acquired company are included in the Company's results from the date of the acquisition forward and include amortization expense arising from acquired intangible assets. The Company expenses all costs as incurred related to or involved with an acquisition in “Selling, general and administrative” expenses.
Cash and Cash Equivalents 
Cash and Cash Equivalents

Highly liquid investments (other than those included in settlement assets) with maturities of three months or less at the date of purchase (that are readily convertible to cash) are considered to be cash equivalents and are stated at cost, which approximates fair value.

The Company maintains cash and cash equivalent balances with various financial institutions, including a substantial portion in money market funds. The Company limits the concentration of its cash and cash equivalents with any one institution. The Company regularly reviews investment concentrations and credit worthiness of these institutions, and has relationships with a globally diversified list of banks and financial institutions.
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 consist of cash and cash equivalents, receivables from selling agents and Business Solutions customers, and investment securities. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Cash equivalents consist of short-term time deposits, commercial paper and other highly liquid investments. Receivables from selling agents represent funds collected by such agents, but in transit to the Company. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. In addition, the Company performs ongoing credit evaluations of its agents' financial condition and credit worthiness. See Note 7 for information concerning the Company's investment securities.

Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business Solutions segment. Receivables occur when funds have been paid out to a beneficiary but not yet received from the customer. Aside from these receivables, the credit risk associated with spot foreign currency exchange contracts is largely mitigated, as in most cases the Company requires the receipt of funds from customers before releasing the associated cross-currency payment.

Settlement obligations consist of money transfer, money order and payment service payables and payables to agents. Money transfer payables represent amounts to be paid to transferees when they request their funds. Money order payables represent amounts not yet presented for payment. Most agents typically settle with transferees first and then obtain reimbursement from the Company. Payment service payables represent amounts to be paid to utility companies, auto finance companies, mortgage servicers, financial service providers, government agencies and others. Due to the agent funding and settlement process, payables to agents represent amounts due to agents for money transfers that have been settled with transferees.

Property and Equipment 
Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the lesser of the estimated life of the related assets (generally three to 10 years for equipment, furniture and fixtures, and 30 years for buildings) or the lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are charged to expense as incurred.
Goodwill 
Goodwill

Goodwill represents the excess of purchase price over the fair value of tangible and other intangible assets acquired, less liabilities assumed arising from business combinations. The Company's annual impairment assessment did not identify any goodwill impairment during the years ended December 31, 2012, 2011 and 2010.
Other Intangible Assets 
Other intangible assets are reviewed for impairment on an annual basis and whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. In such reviews, estimated undiscounted cash flows associated with these assets or operations are compared with their carrying values to determine if a write-down to fair value (normally measured by the present value technique) is required.
Other Intangible Assets

Other intangible assets primarily consist of acquired contracts, contract costs (primarily amounts paid to agents in connection with establishing and renewing long-term contracts) and software. Other intangible assets are amortized on a straight-line basis over the length of the contract or benefit periods. Included in the Consolidated Statements of Income is amortization expense of $184.4 million, $131.6 million and $114.4 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Acquired contracts include customer and contractual relationships and networks of subagents that are recognized in connection with the Company's acquisitions.

The Company capitalizes initial payments for new and renewed agent contracts to the extent recoverable through future operations or penalties in the case of early termination. The Company's accounting policy is to limit the amount of capitalized costs for a given contract to the lesser of the estimated future cash flows from the contract or the termination fees the Company would receive in the event of early termination of the contract.

The Company develops software that is used in providing services. Software development costs are capitalized once technological feasibility of the software has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed all planning and designing activities that are necessary to determine that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Capitalization of costs ceases when the product is available for general use. Software development costs and purchased software are generally amortized over a term of three to five years.

Revenue Recognition 
Revenue Recognition

The Company's revenues are primarily derived from consumer money transfer transaction fees that are based on the principal amount of the money transfer and the locations from and to which funds are transferred. The Company also offers several global payments services, including payments from consumers or businesses to other businesses. Transaction fees are set by the Company and recorded as revenue at the time of sale.

In certain consumer money transfer and Business Solutions transactions involving different currencies, the Company generates revenue based on the difference between the exchange rate set by the Company to the customer and the rate at which the Company or its agents are able to acquire the currency. This foreign exchange revenue is recorded at the time the related consumer money transfer transaction fee revenue is recognized or at the time a customer initiates a transaction through the Company's Business Solutions payment service operations.
Cost of Services 
Cost of Services

Cost of services primarily consists of agent commissions and expenses for call centers, settlement operations and related information technology costs. Expenses within these functions include personnel, software, equipment, telecommunications, bank fees, depreciation, amortization and other expenses incurred in connection with providing money transfer and other payment services.
Advertising Costs 
Advertising Costs

Advertising costs are charged to operating expenses as incurred or at the time the advertising first takes place. Advertising costs for the years ended December 31, 2012, 2011 and 2010 were $177.5 million, $174.8 million and $163.9 million, respectively.
Income Taxes 
Income Taxes

The Company accounts for income taxes under the liability method, which requires that deferred tax assets and liabilities be determined based on the expected future income tax consequences of events that have been recognized in the consolidated financial statements. Deferred tax assets and liabilities are recognized based on temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse.

The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.
Foreign Currency Translation 
Foreign Currency Translation

The United States dollar is the functional currency for substantially all of the Company's businesses. Revenues and expenses are translated at average exchange rates prevailing during the period. Foreign currency denominated assets and liabilities for those entities for which the local currency is the functional currency are translated into United States dollars based on exchange rates at the end of the year. The effects of foreign exchange gains and losses arising from the translation of assets and liabilities of these entities are included as a component of “Accumulated other comprehensive loss.” Foreign currency denominated monetary assets and liabilities of operations in which the United States dollar is the functional currency are remeasured based on exchange rates at the end of the period and are recognized in operations. Non-monetary assets and liabilities of these operations are remeasured at historical rates in effect when the asset was recognized or the liability was incurred.
Derivatives 
Derivatives

The Company uses derivatives to (a) minimize its exposures related to changes in foreign currency exchange rates and interest rates and (b) facilitate cross-currency Business Solutions payments by writing derivatives to customers. The Company recognizes all derivatives in the “Other assets” and “Other liabilities” captions in the accompanying Consolidated Balance Sheets at their fair value. All cash flows associated with derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows, except for cash flows associated with foreign currency forward contracts entered into in order to reduce the economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated in foreign currencies, which are recorded in investing activities.

•
Cash Flow hedges - Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in “Accumulated other comprehensive loss.” Cash flow hedges consist of foreign currency hedging of forecasted revenues, as well as hedges of the forecasted issuance of fixed rate debt. Derivative fair value changes that are captured in “Accumulated other comprehensive loss” are reclassified to earnings in the same period or periods the hedged item affects earnings, to the extent the change in the fair value of the instrument is effective in offsetting the change in fair value of the hedged item. The portions of the change in fair value that are either considered ineffective or are excluded from the measure of effectiveness are recognized immediately in “Derivative gains/(losses), net.”

•
Fair Value hedges - Changes in the fair value of derivatives that are designated as fair value hedges of fixed rate debt are recorded in “Interest expense.” The offsetting change in value of the related debt instrument attributable to changes in the benchmark interest rate is also recorded in “Interest expense.”

•
Undesignated - Derivative contracts entered into to reduce the variability related to (a) money transfer settlement assets and obligations, generally with maturities of a few days up to one month, and (b) certain money transfer related foreign currency denominated cash positions, generally with maturities of less than one year, are not designated as hedges for accounting purposes and changes in their fair value are included in “Selling, general and administrative.” In addition, changes in fair value of derivative contracts, consisting of forward contracts with maturities of less than one year entered into to reduce the economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated in foreign currencies, are recorded in “Derivative gains/(losses), net.” The Company is also exposed to risk from derivative contracts written to its customers arising from its cross-currency Business Solutions payments operations. The duration of these derivative contracts at inception is generally less than one year. The Company aggregates its foreign exchange exposures in its cross-currency Business Solutions payments operations, including the exposure generated by the derivative contracts it writes to its customers, and typically hedges the net exposure through offsetting contracts with established financial institution counterparties (economic hedge contract) as part of a broader foreign currency portfolio, including significant spot exchanges of currency in addition to forwards and options. The changes in fair value related to these contracts are recorded in “Foreign exchange revenues.”

The fair value of the Company's derivatives is derived from standardized models that use market based inputs (e.g., forward prices for foreign currency).

The details of each designated hedging relationship are formally documented at the inception of the arrangement, including the risk management objective, hedging strategy, hedged item, specific risks being hedged, the derivative instrument, how effectiveness is being assessed and how ineffectiveness, if any, will be measured. The derivative must be highly effective in offsetting the changes in cash flows or fair value of the hedged item, and effectiveness is evaluated quarterly on a retrospective and prospective basis.

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, 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.
Stock-Based Compensation 
Stock-Based Compensation

The Company currently has a stock-based compensation plan that provides for grants of Western Union stock options, restricted stock awards and restricted and unrestricted stock units to employees and non-employee directors of the Company who perform services for the Company. In addition, the Company has a stock-based compensation plan that provides for grants of Western Union stock options and stock unit awards to non-employee directors of the Company. Prior to the Spin-off, employees of Western Union participated in First Data's stock-based compensation plans.

All stock-based compensation to employees is required to be measured at fair value and expensed over the requisite service period and also requires an estimate of forfeitures when calculating compensation expense. The Company recognizes compensation expense on awards on a straight-line basis over the requisite service period for the entire award. Refer to Note 16 for additional discussion regarding details of the Company's stock-based compensation plans.
Severance and Other Related Expenses 
Severance and Other Related Expenses

The Company records severance-related expenses once they are both probable and estimable in accordance with the provisions of the applicable accounting guidance for severance provided under an ongoing benefit arrangement. One-time, involuntary benefit arrangements and other costs are generally recognized when the liability is incurred. Expenses arising under the Company's defined benefit pension plans from curtailing future service of employees participating in the plans and providing enhanced benefits are recognized in earnings when it is probable and reasonably estimable. The Company also evaluates impairment issues associated with restructuring and other activities when the carrying amount of the assets may not be fully recoverable, in accordance with the appropriate accounting guidance.
Consumer-to-Consumer Foreign Currency 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 December 31, 2012, the Company’s longer-term foreign currency forward contracts had maturities of a maximum of 24 months with a weighted-average maturity of approximately one year. These contracts are accounted for as cash flow hedges of forecasted revenue, with effectiveness assessed based on changes in the spot rate of the affected currencies during the period of designation. Accordingly, all changes in the fair value of the hedges not considered effective or portions of the hedge that are excluded from the measure of effectiveness are recognized immediately in “Derivative gains/(losses), net” within the Company’s Consolidated Statements of Income.
The Company also uses short duration foreign currency forward contracts, generally with maturities from a few days up to one month, to offset foreign exchange rate fluctuations on settlement assets and obligations between initiation and settlement. In addition, forward contracts, typically with maturities of less than one year, are utilized to offset foreign exchange rate fluctuations on certain foreign currency denominated cash positions. None of these contracts are designated as accounting hedges.
Business Solutions Foreign Currency 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 $332.0 million, $154.6 million, and $105.0 million for the years ended December 31, 2012, 2011 and 2010, 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.
Corporate 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 utilizing the short-cut method, which permits an assumption of no ineffectiveness if certain criteria are met. The change in fair value of the interest rate swaps is offset by a change in the carrying value of the debt being hedged within “Borrowings” in the Consolidated Balance Sheets and “Interest expense” in the Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.

The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change in fair value of the derivatives is recorded in “Accumulated other comprehensive loss” in the Consolidated Balance Sheets.
Summary of Significant Accounting Policies (Tables)
Calculation of diluted weighted-average shares outstanding 
The following table provides the calculation of diluted weighted-average shares outstanding (in millions):
 
For the Year Ended December 31,
 
2012
 
2011
 
2010
Basic weighted-average shares outstanding
604.9

 
630.6

 
666.5

Common stock equivalents
2.5

 
3.6

 
2.4

Diluted weighted-average shares outstanding
607.4

 
634.2

 
668.9

Settlement assets and obligations 
Settlement assets and obligations consisted of the following (in millions):
 
December 31,
 
2012
 
2011
Settlement assets:
 
 
 
Cash and cash equivalents
$
574.5

 
$
712.5

Receivables from selling agents and Business Solutions customers
1,025.3

 
1,046.7

Investment securities
1,514.8

 
1,332.0

 
$
3,114.6

 
$
3,091.2

Settlement obligations:
 
 
 
Money transfer, money order and payment service payables
$
2,297.1

 
$
2,242.3

Payables to agents
817.5

 
848.9

 
$
3,114.6

 
$
3,091.2

Property and equipment 
Property and equipment consisted of the following (in millions):
 
December 31,
 
2012
 
2011
Equipment
$
384.6

 
$
434.8

Buildings
80.0

 
80.1

Leasehold improvements
65.6

 
61.1

Furniture and fixtures
33.4

 
33.1

Land and improvements
16.9

 
16.9

Projects in process
0.1

 
1.8

 
580.6

 
627.8

Less accumulated depreciation
(384.5
)
 
(429.7
)
Property and equipment, net
$
196.1

 
$
198.1

Components of other intangible assets 
The following table provides the components of other intangible assets (in millions):
 
 
December 31, 2012
 
December 31, 2011
 
 
Weighted-
Average
Amortization
Period
(in years)
 
Initial Cost
 


Net of
Accumulated
Amortization
 
Initial Cost
 


Net of
Accumulated
Amortization
Acquired contracts
 
11.3
 
$
627.2

 
$
466.2

 
$
629.5

 
$
526.5

Capitalized contract costs
 
6.1
 
457.2

 
303.7

 
399.1

 
213.8

Internal use software
 
3.2
 
221.0

 
54.7

 
197.4

 
61.0

Acquired trademarks
 
22.7
 
43.4

 
28.4

 
41.5

 
31.0

Projects in process
 
3.0
 
15.4

 
15.4

 
0.8

 
0.8

Other intangibles
 
2.7
 
34.4

 
10.5

 
41.6

 
14.3

Total other intangible assets
 
8.4
 
$
1,398.6

 
$
878.9

 
$
1,309.9

 
$
847.4

Acquisitions (Tables)
Schedule of final allocations of consideration 
The following table summarizes the final allocations of consideration for TGBP, Finint and Costa (in millions):
 
Travelex Global Business
Payments (b)
 
Finint S.r.l.
 
Angelo Costa
S.r.l.
Assets:
 
 
 
 
 
Cash and cash equivalents
$
30.7

 
$
—

 
$
—

Settlement assets
160.4

 
52.2

 
46.3

Property and equipment
5.1

 
0.5

 
3.0

Goodwill
704.3

 
153.6

 
174.2

Other intangible assets
314.2

 
64.8

 
51.4

Other assets
45.3

 
2.0

 
1.5

Total assets
$
1,260.0

 
$
273.1

 
$
276.4

 
 
 
 
 
 
Liabilities:
 
 
 
 
 
Accounts payable and accrued liabilities
$
49.6

 
$
6.1

 
$
10.8

Settlement obligations
160.4

 
57.5

 
55.7

Income taxes payable
1.7

 
3.1

 
10.3

Deferred tax liability, net
65.5

 
15.8

 
15.5

Other liabilities
21.5

 
3.5

 
2.2

Total liabilities
298.7

 
86.0

 
94.5

Total consideration (a)
$
961.3

 
$
187.1

 
$
181.9

____________________
(a)
Total consideration includes cash consideration transferred and the revaluation of the Company's previous equity interest, if any, to fair value on the acquisition date.
(b)
Amounts include the impact of the acquisition of the French assets of TGBP on May 4, 2012 and the final working capital adjustment in the third quarter of 2012.

Schedule of identifiable intangible assets 
The valuation of assets acquired was derived using primarily unobservable Level 3 inputs, which require significant management judgment and estimation, and resulted in identifiable intangible assets as follows (in millions):
 
Travelex Global Business
Payments (a)
 
Finint S.r.l.
 
Angelo Costa
S.r.l.
Customer and other contractual relationships
$
264.5

 
$
—

 
$
—

Network of subagents
—

 
53.9

 
44.6

Other
49.7

 
10.9

 
6.8

Total identifiable intangible assets
$
314.2

 
$
64.8

 
$
51.4


____________________
(a)
Amounts include the impact of the acquisition of the French assets of TGBP on May 4, 2012.
Schedule of changes to goodwill 
The following table presents changes to goodwill for the years ended December 31, 2012 and 2011 (in millions):
 
Consumer-to-Consumer
 
Consumer-to-Business
 
Business Solutions
 
Other
 
Total
January 1, 2011 balance
$
1,619.9

 
$
227.2

 
$
289.4

 
$
15.2

 
$
2,151.7

Acquisitions
325.4

 
—

 
728.7

 
—

 
1,054.1

Currency translation
—

 
(2.3
)
 
(4.4
)
 
(0.2
)
 
(6.9
)
December 31, 2011 balance
$
1,945.3

 
$
224.9

 
$
1,013.7

 
$
15.0

 
$
3,198.9

Purchase price adjustments
2.4

 
—

 
(24.4
)
 
—

 
(22.0
)
Currency translation
—

 
(3.8
)
 
6.7
 
(0.1
)
 
2.8
December 31, 2012 balance
$
1,947.7

 
$
221.1

 
$
996.0

 
$
14.9

 
$
3,179.7

Investment Securities (Tables)
Components of investment securities 
The components of investment securities are as follows (in millions):
December 31, 2012
 
Amortized
Cost
 
 
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Net
Unrealized
Gains/ (Losses)
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

 
 
 
 
 
 
 
 
 
 
December 31, 2011
 
Amortized
Cost
 
 
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Net
Unrealized
Gains/ (Losses)
State and municipal debt securities (a)
$
858.5

 
$
866.5

 
$
10.4

 
$
(2.4
)
 
$
8.0

State and municipal variable rate demand notes
376.9

 
376.9

 
—

 
—

 
—

Corporate debt and other
88.7

 
88.6

 
0.6

 
(0.7
)
 
(0.1
)
 
$
1,324.1

 
$
1,332.0

 
$
11.0

 
$
(3.1
)
 
$
7.9

____________

(a)
The majority of these securities are fixed rate instruments.
Contractual maturities of investment securities 
The following summarizes contractual maturities of investment securities as of December 31, 2012 (in millions):

 
Amortized
Cost
 
Fair
Value
Due within 1 year
$
228.5

 
$
229.5

Due after 1 year through 5 years
785.0

 
795.9

Due after 5 years through 10 years
79.3

 
79.6

Due after 10 years
409.7

 
409.8

 
$
1,502.5

 
$
1,514.8

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
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

 
 
 
 
 
 
 
 
 
Fair Value Measurement Using
 
Assets/
Liabilities at
Fair
Value
December 31, 2011
Level 1
 
Level 2
 
Level 3
 
Assets:
 
 
 
 
 
 
 
State and municipal debt securities
$
—

 
$
866.5

 
$
—

 
$
866.5

State and municipal variable rate demand notes
—

 
376.9

 
—

 
376.9

Corporate debt and other
0.1

 
88.5

 
—

 
88.6

Derivatives
—

 
124.8

 
—

 
124.8

Total assets
$
0.1

 
$
1,456.7

 
$
—

 
$
1,456.8

Liabilities:
 
 
 
 
 
 
 
Commercial paper
$
—

 
$
297.0

 
$
—

 
$
297.0

Notes and other borrowings
—

 
3,563.5

 
—

 
3,563.5

Total borrowings
—

 
3,860.5

 
—

 
3,860.5

Derivatives
—

 
86.6

 
—

 
86.6

Total liabilities
$
—

 
$
3,947.1

 
$
—

 
$
3,947.1



No non-recurring fair value adjustments were recorded during the years ended December 31, 2012 and 2011, except those associated with acquisitions, as disclosed in Note 3.
Other Assets and Other Liabilities (Tables)
Components of other assets and other liabilities
The following table summarizes the components of other assets and other liabilities (in millions):

 
December 31,
 
2012
 
2011
Other assets:
 
 
 
Derivatives
$
96.8

 
$
124.8

Prepaid expenses
56.9

 
54.5

Equity method investments
41.0

 
41.3

Amounts advanced to agents, net of discounts
37.7

 
34.1

Other receivables
21.4

 
37.6

Debt issue costs
17.3

 
15.8

Deferred customer set up costs
15.9

 
18.0

Accounts receivable, net
15.6

 
14.8

Other
17.3

 
22.5

Total other assets
$
319.9

 
$
363.4

Other liabilities:
 
 
 
Pension obligations
$
102.1

 
$
112.7

Derivatives
86.1

 
86.6

Deferred revenue
30.5

 
33.6

Other
36.0

 
40.7

Total other liabilities
$
254.7

 
$
273.6

Income Taxes (Tables)
Components of pre-tax income 
The components of pre-tax income, generally based on the jurisdiction of the legal entity, were as follows (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Components of pre-tax income:
 
 
 
 
 
Domestic
$
94.8

 
$
423.9

 
$
151.4

Foreign
1,074.0

 
850.7

 
993.8

 
$
1,168.8

 
$
1,274.6

 
$
1,145.2

Provision for income taxes 
The provision for income taxes was as follows (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Federal
$
92.5

 
$
78.1

 
$
132.2

State and local
(14.8
)
 
4.5

 
39.8

Foreign
65.2

 
26.6

 
63.3

 
$
142.9

 
$
109.2

 
$
235.3

Effective tax rate reconciliation 
The Company's effective tax rates differed from statutory rates as follows:
 
Year Ended December 31,
 
2012
 
2011
 
2010
Federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of federal income tax benefits
0.6
 %
 
2.0
 %
 
1.9
 %
Foreign rate differential, net of U.S. tax paid on foreign earnings (5.1%, 1.2%, and 5.1%, respectively)
(22.5
)%
 
(14.0
)%
 
(12.0
)%
IRS Agreement
—
 %
 
(16.1
)%
 
—
 %
Other
(0.9
)%
 
1.7
 %
 
(4.4
)%
Effective tax rate
12.2
 %
 
8.6
 %
 
20.5
 %
Components of provision for income taxes, current and deferred 
The Company's provision for income taxes consisted of the following components (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Current:
 
 
 
 
 
Federal
$
117.2

 
$
36.2

 
$
103.6

State and local
(2.5
)
 
0.6

 
30.1

Foreign
63.4

 
51.2

 
73.0

Total current taxes
178.1

 
88.0

 
206.7

Deferred:
 
 
 
 
 
Federal
(24.7
)
 
41.9

 
28.6

State and local
(12.3
)
 
3.9

 
9.7

Foreign
1.8

 
(24.6
)
 
(9.7
)
Total deferred taxes
(35.2
)
 
21.2

 
28.6

 
$
142.9

 
$
109.2

 
$
235.3

Deferred tax assets and liabilities 
The following table outlines the principal components of deferred tax items (in millions):
 
December 31,
 
2012
 
2011
Deferred tax assets related to:
 
 
 
Reserves, accrued expenses and employee-related items
$
65.7

 
$
40.6

Pension obligations
36.7

 
40.0

Tax attribute carryovers
4.2

 
11.9

Other
22.8

 
20.6

Total deferred tax assets
129.4

 
113.1

Deferred tax liabilities related to:
 
 
 
Intangibles, property and equipment
481.5

 
502.8

Total deferred tax liabilities
481.5

 
502.8

Net deferred tax liability
$
352.1

 
$
389.7

Unrecognized tax benefits reconciliation 
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in millions):
 
2012
 
2011
Balance as of January 1,
$
123.7

 
$
618.7

Increases - positions taken in current period (a)
13.1

 
143.1

Increases - positions taken in prior periods (b)
—

 
34.1

Increases - acquisitions
—

 
9.7

Decreases - positions taken in prior periods
(6.1
)
 
(27.9
)
Decreases - settlements with taxing authorities
(24.1
)
 
(650.9
)
Decreases - lapse of applicable statute of limitations
(3.4
)
 
(3.1
)
Balance as of December 31,
$
103.2

 
$
123.7

____________

(a)
Includes recurring accruals for issues which initially arose in previous periods.
(b)
Changes to positions taken in prior periods relate to changes in estimates used to calculate prior period unrecognized tax benefits.
Employee Benefit Plans (Tables)
Reconciliation of the changes in the Plan's projected benefit obligation, fair value of plan assets, and the funded status 
The following table provides a reconciliation of the changes in the Plan's projected benefit obligation, fair value of assets and the funded status (in millions):
 
2012
 
2011
Change in projected benefit obligation
 
 
 
Projected benefit obligation as of January 1,
$
414.4

 
$
402.9

Interest cost
14.7

 
17.9

Actuarial loss
30.2

 
35.3

Benefits paid
(40.5
)
 
(41.7
)
Projected benefit obligation as of December 31,
$
418.8

 
$
414.4

Change in plan assets
 
 
 
Fair value of plan assets as of January 1,
$
301.7

 
$
290.1

Actual return on plan assets
30.5

 
28.3

Benefits paid
(40.5
)
 
(41.7
)
Company contributions
25.0

 
25.0

Fair value of plan assets as of December 31,
316.7

 
301.7

Funded status of the plan as of December 31,
$
(102.1
)
 
$
(112.7
)
Accumulated benefit obligation as of December 31,
$
418.8

 
$
414.4

Amounts recognized in the Consolidated Balance Sheets 
The following table provides the amounts recognized in the Consolidated Balance Sheets (in millions):
 
December 31,
 
2012
 
2011
Accrued benefit liability
$
(102.1
)
 
$
(112.7
)
Accumulated other comprehensive loss (pre-tax)
206.8

 
196.8

Net amount recognized
$
104.7

 
$
84.1

Components of net periodic benefit cost for the Plan 
The following table provides the components of net periodic benefit cost for the Plan (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Interest cost
$
14.7

 
$
17.9

 
$
20.1

Expected return on plan assets
(20.8
)
 
(21.3
)
 
(20.4
)
Amortization of actuarial loss
10.5

 
8.1

 
6.2

Net periodic benefit cost
$
4.4

 
$
4.7

 
$
5.9

Assumptions used in the measurement of the Company's benefit obligation 
The rate assumptions used in the measurement of the Company's benefit obligation were as follows:
 
2012
 
2011
Discount rate
3.03
%
 
3.72
%
Rate assumptions used in the measurement of the Company's net cost 
The rate assumptions used in the measurement of the Company's net cost were as follows:
 
2012
 
2011
 
2010
Discount rate
3.72
%
 
4.69
%
 
5.30
%
Expected long-term return on plan assets
7.00
%
 
7.00
%
 
6.50
%
Pension plan asset allocations 
Pension plan asset allocation as of December 31, 2012 and 2011, and target allocations based on investment policies, were as follows:
 
Percentage of Plan Assets
as of Measurement Date
Asset Class
2012
 
2011
Equity investments
16
%
 
17
%
Debt securities
62
%
 
61
%
Alternative investments
22
%
 
22
%

 
Target Allocation
Equity investments
15%
Debt securities
60%
Alternative investments
25%
Investments of the Trust measured at fair value 
The following tables reflect investments of the Trust that were measured and carried at fair value (in millions). For information on how the Company measures fair value, refer to Note 2.

December 31, 2012
Fair Value Measurement Using
 
Total Assets
Asset Class
Level 1
 
Level 2
 
Level 3
 
at Fair Value
Equity investments:
 
 
 
 
 
 
 
Domestic
$
24.2

 
$
—

 
$
—

 
$
24.2

International (a)
1.4

 
25.0

 
—

 
26.4

Debt securities:
 
 
 
 
 
 
 
Corporate debt (b)
—

 
131.4

 
—

 
131.4

U.S. treasury bonds
52.3

 
—

 
—

 
52.3

State and municipal debt securities
—

 
4.4

 
—

 
4.4

Other
—

 
3.1

 
—

 
3.1

Alternative investments:
 
 
 
 
 
 
 
Hedge funds (c)
—

 
44.7

 
—

 
44.7

Royalty rights and private equity (d)
—

 
—

 
23.8

 
23.8

Total investments of the Trust at fair value
$
77.9

 
$
208.6

 
$
23.8

 
$
310.3

Other assets


 


 


 
6.4

Total investments of the Trust
$
77.9

 
$
208.6

 
$
23.8

 
$
316.7


December 31, 2011
Fair Value Measurement Using
 
Total Assets
Asset Class
Level 1
 
Level 2
 
Level 3
 
at Fair Value
Equity investments:
 
 
 
 
 
 
 
Domestic
$
28.1

 
$
—

 
$
—

 
$
28.1

International
—

 
22.4

 
—

 
22.4

Debt securities:
 
 
 
 
 
 
 
Corporate debt (b)
—

 
134.1

 
—

 
134.1

U.S. treasury bonds
39.8

 
—

 
—

 
39.8

U.S. government agencies
—

 
4.7

 
—

 
4.7

Other
—

 
3.0

 
—

 
3.0

Alternative investments:
 
 
 
 
 
 
 
Hedge funds (c)
—

 
52.8

 
—

 
52.8

Royalty rights and private equity (d)
—

 
—

 
13.6

 
13.6

Total investments of the Trust at fair value
$
67.9

 
$
217.0

 
$
13.6

 
$
298.5

Other assets
 
 
 
 
 
 
3.2

Total investments of the Trust
$
67.9

 
$
217.0

 
$
13.6

 
$
301.7

____________
(a)
Funds included herein have redemption frequencies of daily to monthly, with redemption notice periods of one to ten business days.
(b)
Substantially all corporate debt securities are investment grade securities.
(c)
Hedge funds generally hold liquid and readily priceable securities, such as public equities, exchange-traded derivatives, and corporate bonds. Hedge funds themselves do not have readily available market quotations, and therefore are valued using the Net Asset Value (“NAV”) per share provided by the investment sponsor or third party administrator. Funds investing in diverse hedge fund strategies (primarily commingled funds) with the following composition of underlying hedge fund investments within the pension plans at December 31, 2012: commodities/currencies (24%), equity long/short (21%), global-macro (16%), relative value (16%), event driven (13%), and multi-strategy (10%). As of December 31, 2012, funds included herein had redemption frequencies of monthly to quarterly, with redemption notice periods of one to 45 days.
(d)
Diversified investments in royalty rights related to the sale of pharmaceutical products by third parties. Also included are private equity funds with a focus on venture capital. These investments are illiquid, with investment distributions expected to be received over the next five to seven years.
Summaries of changes in the fair value of the Trust's Level 3 financial assets 
The following tables provide summaries of changes in the fair value of the Trust's Level 3 financial assets (in millions):
 
Royalty Rights
 
 Private Equity
 
 Total
Balance, January 1, 2011
$
—

 
$
1.3

 
$
1.3

Actual return on plan assets:
 
 
 
 
 
Relating to assets still held as of the reporting date
—

 
(0.8
)
 
(0.8
)
Relating to assets sold during the period
—

 
0.9

 
0.9

Net purchases and sales
11.4

 
0.8

 
12.2

Balance, December 31, 2011
$
11.4

 
$
2.2

 
$
13.6

Actual return on plan assets:
 
 
 
 
 
Relating to assets still held as of the reporting date
1.6

 
0.1

 
1.7

Relating to assets sold during the period
0.8

 
(0.1
)
 
0.7

Net purchases and sales
7.6

 
0.2

 
7.8

Balance, December 31, 2012
$
21.4

 
$
2.4

 
$
23.8

Operating Lease Commitments (Tables)
Minimum aggregate rental commitments under all non-cancelable operating leases
As of December 31, 2012, the minimum aggregate rental commitments under all non-cancelable operating leases, net of sublease income commitments aggregating $1.0 million through 2017, were as follows (in millions):
Year Ending December 31,
 
2013
$
40.3

2014
30.6

2015
24.8

2016
18.5

2017
14.4

Thereafter
21.1

Total future minimum lease payments
$
149.7

Stockholders' Equity (Tables)
Components of accumulated other comprehensive loss, net of tax
The components of accumulated other comprehensive loss, net of tax, were as follows (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Unrealized gains on investment securities
$
7.7

 
$
4.9

 
$
3.1

Unrealized gains/(losses) on hedging activities
(21.9
)
 
5.1

 
(21.9
)
Foreign currency translation adjustment
(8.5
)
 
(6.3
)
 
(4.3
)
Defined benefit pension liability adjustment
(129.9
)
 
(122.2
)
 
(109.7
)
 
$
(152.6
)
 
$
(118.5
)
 
$
(132.8
)
Derivatives (Tables)
Notional amounts of foreign currency forward contracts 
The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of December 31, 2012 were as follows (in millions):
Contracts not designated as hedges:
 
Euro
$
254.9

Canadian dollar
47.3

British pound
40.8

Other
179.8

Contracts designated as hedges:
 
Euro
$
485.2

Canadian dollar
126.7

British pound
95.6

Australian dollar
48.1

Other
83.3



Fair value of derivatives 
The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011 (in millions):
 
Derivative Assets
 
Derivative Liabilities
 
 
 
Fair Value
 
 
 
Fair Value
 
Balance Sheet
Location
 
December 31,
2012
 
December 31,
2011
 
Balance Sheet
Location
 
December 31,
2012
 
December 31,
2011
Derivatives — hedges:
 
 
 
 
 
 
 
 
 
 
 
Interest rate fair value hedges — Corporate
Other assets
 
$
13.1

 
$
4.4

 
Other liabilities
 
$
—

 
$
—

Foreign currency cash flow hedges — Consumer-to-Consumer
Other assets
 
10.8

 
37.0

 
Other liabilities
 
17.6

 
6.6

Total
 
 
$
23.9

 
$
41.4

 
 
 
$
17.6

 
$
6.6

Derivatives — undesignated:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency — Business Solutions
Other assets
 
$
71.9

 
$
79.8

 
Other liabilities
 
$
66.5

 
$
67.6

Foreign currency — Consumer-to-Consumer
Other assets
 
1.0

 
3.6

 
Other liabilities
 
2.0

 
12.4

Total
 
 
$
72.9

 
$
83.4

 
 
 
$
68.5

 
$
80.0

Total derivatives
 
 
$
96.8

 
$
124.8

 
 
 
$
86.1

 
$
86.6

Fair value of derivatives, by maturity 
The following table summarizes the net fair value of derivatives held as of December 31, 2012 and their expected maturities (in millions):
 
Total
 
2013
 
2014
 
Thereafter
Foreign currency cash flow hedges — Consumer-to-Consumer
$
(6.8
)
 
$
(1.8
)
 
$
(5.0
)
 
$
—

Foreign currency undesignated hedges — Consumer-to-Consumer
(1.0
)
 
(1.0
)
 
—

 
—

Foreign currency undesignated hedges — Business Solutions
5.4

 
5.4

 
—

 
—

Interest rate fair value hedges — Corporate
13.1

 
—

 
12.9

 
0.2

Total
$
10.7

 
$
2.6

 
$
7.9

 
$
0.2

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 years ended December 31, 2012, 2011 and 2010 (in millions):
 
 
Gain/(Loss) Recognized in Income on
Derivatives
 
 
 
Gain/(Loss) Recognized in Income on
Related Hedged Item (a)
 
 
Income
Statement
Location
 
Amount
 
 
 
Income
Statement
Location
 
Amount
Derivatives
 
 
2012
 
2011
 
2010
 
Hedged Item
 
 
2012
 
2011
 
2010
Interest rate contracts
 
Interest expense
 
$
3.9

 
$
11.8

 
$
13.3

 
Fixed-rate debt
 
Interest expense
 
$
3.7

 
$
12.6

 
$
10.5

Total gain
 
 
 
$
3.9

 
$
11.8

 
$
13.3

 
 
 
 
 
$
3.7

 
$
12.6

 
$
10.5

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 years ended December 31, 2012, 2011 and 2010 (in millions):
 
 
Gain/(Loss) Recognized
 
Gain/(Loss) Reclassified
 
Gain/(Loss) Recognized in Income on
 
 
in OCI on Derivatives
 
from Accumulated OCI into Income
 
Derivatives (Ineffective Portion and Amount
 
 
(Effective Portion)
 
(Effective Portion)
 
Excluded from Effectiveness Testing) (b)
 
 
Amount
 
Income
Statement Location
 
Amount
 
Income
Statement Location
 
Amount
Derivatives
 
2012
 
2011
 
2010
 
 
2012
 
2011
 
2010
 
 
2012
 
2011
 
2010
Foreign currency contracts
 
$
(20.1
)
 
$
16.4

 
$
20.0

 
Revenue
 
$
13.4

 
$
(30.3
)
 
$
24.5

 
Derivative
gains/(losses), net
 
$
(0.1
)
 
$
(10.2
)
 
$
(1.5
)
Interest rate contracts (c)
 
—

 
(21.6
)
 
(4.2
)
 
Interest expense
 
(3.6
)
 
(2.7
)
 
(1.5
)
 
Interest expense
 
—

 
—

 
(0.1
)
Total gain/(loss)
 
$
(20.1
)
 
$
(5.2
)
 
$
15.8

 
 
 
$
9.8

 
$
(33.0
)
 
$
23.0

 
 
 
$
(0.1
)
 
$
(10.2
)
 
$
(1.6
)
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 years ended December 31, 2012, 2011 and 2010 (in millions):
 
 
Gain/(Loss) Recognized in Income on Derivatives (d)
 
 
Income Statement Location
 
Amount
Derivatives
 
 
 
2012
 
2011
 
2010
Foreign currency contracts (e)
Selling, general and administrative
 
$
(10.6
)
 
$
5.9

 
$
(1.0
)
Foreign currency contracts (f)
Derivative gains/(losses), net
 
0.6

 
21.9

 
0.6

Total gain/(loss)
 
 
$
(10.0
)
 
$
27.8

 
$
(0.4
)
 ____________________
(a)
The 2012 gain of $3.7 million was comprised of a loss in value on the debt of $3.9 million and amortization of hedge accounting adjustments of $7.6 million. The 2011 gain of $12.6 million was comprised of a loss in value on the debt of $11.8 million and amortization of hedge accounting adjustments of $24.4 million. The 2010 gain of $10.5 million was comprised of a loss in value on the debt of $13.3 million and amortization of hedge accounting adjustments of $23.8 million.
(b)
The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.
(c)
The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative’s fair value in “Accumulated other comprehensive loss” in the Consolidated Balance Sheets. These amounts are reclassified to “Interest expense” in the Consolidated Statements of Income over the life of the related notes.
(d)
The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.
(e)
The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations as well as certain foreign currency denominated positions. Foreign exchange gain/(loss) on settlement assets and obligations and cash balances were $7.8 million, $(20.5) million and $(2.5) million for the years ended 2012, 2011 and 2010, 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. Additionally, in the year ended December 31, 2011, the Company entered into derivative contracts, consisting of foreign currency forward contracts with maturities of less than one year, to reduce the economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated in foreign currencies, primarily for the TGBP acquisition, and recorded a net gain of $20.8 million in “Derivatives gains/(losses), net.
Borrowings (Tables)
Borrowings
The Company’s outstanding borrowings consisted of the following (in millions):
 
December 31, 2012
 
December 31, 2011
Due in less than one year:
 
 
 
Commercial paper
$
—

 
$
297.0

Floating rate notes (effective rate of 0.9%) due 2013
300.0

 
300.0

Due in greater than one year (a):
 
 
 
6.500% notes (effective rate of 5.6%) due 2014
500.0

 
500.0

2.375% notes (effective rate of 2.4%) due 2015 (b)
250.0

 
—

5.930% notes due 2016 (c)
1,000.0

 
1,000.0

2.875% notes (effective rate of 3.0%) due 2017 (b)
500.0

 
—

3.650% notes (effective rate of 4.4%) due 2018
400.0

 
400.0

5.253% notes due 2020 (c)
324.9

 
324.9

6.200% notes due 2036 (c)
500.0

 
500.0

6.200% notes due 2040 (c)
250.0

 
250.0

Other borrowings
5.8

 
8.8

Total borrowings at par value
4,030.7

 
3,580.7

Fair value hedge accounting adjustments, net (a)
20.2

 
23.9

Unamortized discount, net
(21.7
)
 
(21.4
)
Total borrowings at carrying value (d)
$
4,029.2

 
$
3,583.2

____________________ 
(a)
The Company utilizes interest rate swaps designated as fair value hedges to effectively change the interest rate payments on a portion of its notes from fixed-rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The changes in fair value of these interest rate swaps result in an offsetting hedge accounting adjustment recorded to the carrying value of the related note. These hedge accounting adjustments will be reclassified as reductions to or increases in “Interest expense” in the Consolidated Statements of Income over the life of the related notes, and cause the effective rate of interest to differ from the notes’ stated rate.
(b)
On December 10, 2012, the Company issued $250.0 million of aggregate principal amount of 2.375% unsecured fixed rate notes due 2015 (“2015 Notes”) and $500.0 million of aggregate principal amount of 2.875% unsecured fixed rate notes due 2017 (“2017 Notes”). The interest rate on the 2015 Notes and 2017 Notes may be adjusted under certain circumstances as described below.
(c)
The difference between the stated interest rate and the effective interest rate is not significant.
(d)
As of December 31, 2012, the Company's weighted-average effective rate on total borrowings was approximately 4.8%.
Stock Compensation Plans (Tables)
Stock option activity 
A summary of Western Union stock option activity for the year ended December 31, 2012 was as follows (options and aggregate intrinsic value in millions):
 
Year Ended December 31, 2012
 
Options
 
Weighted-Average
Exercise Price
 
Weighted-Average Remaining
Contractual Term
(Years)
 
 
Aggregate
Intrinsic
Value
Outstanding as of January 1
30.7

 
$
19.05

 
 
 
 
Granted
2.7

 
17.85

 
 
 
 
Exercised
(3.0
)
 
17.15

 
 
 
 
Cancelled/forfeited
(3.4
)
 
24.45

 
 
 
 
Outstanding as of December 31
27.0

 
$
18.46

 
4.2

 
$
2.9

Options exercisable as of December 31
22.4

 
$
18.69

 
3.3

 
$
2.1

Restricted stock units and performance based restricted stock units activity 
A summary of Western Union activity for restricted stock units and performance based restricted stock units for the year ended December 31, 2012 is listed below (units in millions):

 
Year Ended December 31, 2012
 
Number
Outstanding
 
Weighted-Average
Grant-Date Fair Value
Non-vested as of January 1
3.9
 
$
16.85

Granted
2.7
 
16.68

Vested
(1.0)
 
13.38

Forfeited
(0.8)
 
17.24

Non-vested as of December 31
4.8
 
$
17.38

Impact on earnings for stock-based compensation expense 
The following table sets forth the total impact on earnings for stock-based compensation expense recognized in the Consolidated Statements of Income resulting from stock options, restricted stock units, performance based restricted stock units and bonus stock units for the years ended December 31, 2012, 2011 and 2010 (in millions, except per share data).

 
Year Ended December 31,
 
2012
 
2011
 
2010
Stock-based compensation expense
$
(34.0
)
 
$
(31.2
)
 
$
(35.9
)
Income tax benefit from stock-based compensation expense
10.0

 
9.8

 
11.6

Net income impact
$
(24.0
)
 
$
(21.4
)
 
$
(24.3
)
Earnings per share:
 
 
 
 
 
Basic and Diluted
$
(0.04
)
 
$
(0.03
)
 
$
(0.04
)
Assumptions for the Black-Scholes option pricing model to determine the value of options granted 
The Company used the following assumptions for the Black-Scholes option pricing model to determine the value of Western Union options granted.
 
Year Ended December 31,
 
2012
 
2011
 
2010
Stock options granted:
 
 
 
 
 
Weighted-average risk-free interest rate
1.2
%
 
2.5
%
 
2.7
%
Weighted-average dividend yield
1.8
%
 
1.4
%
 
1.3
%
Volatility
33.2
%
 
31.0
%
 
33.9
%
Expected term (in years)
6.09

 
5.80

 
5.80

Weighted-average grant date fair value
$
4.90

 
$
5.99

 
$
5.12

Segments (Tables)
Segment results 
The following tables present the Company's reportable segment results for the years ended December 31, 2012, 2011 and 2010, respectively (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenues:
 
 
 
 
 
Consumer-to-Consumer:
 
 
 
 
 
Transaction fees
$
3,545.6

 
$
3,580.2

 
$
3,434.3

Foreign exchange revenues
988.5

 
983.1

 
905.8

Other revenues
50.2

 
45.1

 
43.3

 
4,584.3

 
4,608.4

 
4,383.4

Consumer-to-Business:
 
 
 
 
 
Transaction fees
573.6

 
581.8

 
576.5

Foreign exchange revenues
3.4

 
5.7

 
3.6

Other revenues
26.9

 
28.4

 
30.6

 
603.9

 
615.9

 
610.7

Business Solutions:
 
 
 
 
 
Transaction fees
34.9

 
5.9

 
1.3

Foreign exchange revenues
332.0

 
154.6

 
105.0

Other revenues
0.5

 
0.6

 
0.4

 
367.4

 
161.1

 
106.7

Other:
 
 
 
 
 
Total revenues
109.2

 
106.0

 
91.9

 
109.2

 
106.0

 
91.9

Total consolidated revenues
$
5,664.8

 
$
5,491.4

 
$
5,192.7

Operating income/(loss):
 
 
 
 
 
Consumer-to-Consumer
$
1,266.9

 
$
1,316.0

 
$
1,243.3

Consumer-to-Business
137.6

 
146.9

 
146.2

Business Solutions (a)
(54.8
)
 
(9.6
)
 
(24.2
)
Other
(19.7
)
 
(21.5
)
 
(5.7
)
Total segment operating income
1,330.0

 
1,431.8

 
1,359.6

Restructuring and related expenses (Note 4)
—

 
(46.8
)
 
(59.5
)
Total consolidated operating income
$
1,330.0

 
$
1,385.0

 
$
1,300.1

 
 
 
 
 
 

____________________ 
(a)
During the years ended December 31, 2012 and 2011, the Company incurred $42.8 million and $4.8 million, respectively, of integration expenses related to the acquisition of TGBP. There were no TGBP integration expenses incurred during the year ended December 31, 2010. TGBP integration expense consists primarily of severance and other benefits, retention, direct and incremental expense consisting of facility relocation, consolidation and closures; IT systems integration; amortization of a transitional trademark license; and other expenses such as training, travel and professional fees. Integration expense does not include costs related to the completion of the TGBP acquisition, which are included in Other.
 
Year Ended December 31,
 
2012
 
2011
 
2010
Assets:
 
 
 
 
 
Consumer-to-Consumer
$
4,854.2

 
$
4,644.6

 
$
5,014.3

Consumer-to-Business
1,029.6

 
955.8

 
730.1

Business Solutions
2,012.6

 
1,906.2

 
718.5

Other
1,569.3

 
1,563.3

 
1,466.3

Total assets
$
9,465.7

 
$
9,069.9

 
$
7,929.2

 
 
 
 
 
 
Depreciation and amortization:
 
 
 
 
 
Consumer-to-Consumer
$
158.2

 
$
141.0

 
$
130.5

Consumer-to-Business
14.7

 
18.8

 
18.3

Business Solutions
65.7

 
26.8

 
17.7

Other
7.5

 
4.7

 
8.5

Total segment depreciation and amortization
246.1

 
191.3

 
175.0

Restructuring and related expenses (Note 4)
—

 
1.3

 
0.9

Total consolidated depreciation and amortization
$
246.1

 
$
192.6

 
$
175.9

 
 
 
 
 
 
Capital expenditures:
 
 
 
 
 
Consumer-to-Consumer
$
219.1

 
$
138.4

 
$
85.3

Consumer-to-Business
21.8

 
13.4

 
17.5

Business Solutions
16.1

 
6.7

 
4.0

Other
11.2

 
4.0

 
6.9

Total capital expenditures
$
268.2

 
$
162.5

 
$
113.7

Revenue and long-lived assets by geographic areas, domestic and foreign 
Information concerning principal geographic areas was as follows (in millions):
 
Year Ended December 31,
 
2012
 
2011
 
2010
Revenue:
 
 
 
 
 
United States
$
1,593.1

 
$
1,568.6

 
$
1,516.0

International
4,071.7

 
3,922.8

 
3,676.7

Total
$
5,664.8

 
$
5,491.4

 
$
5,192.7

Long-lived assets:
 
 
 
 
 
United States
$
148.2

 
$
152.1

 
$
159.4

International
47.9

 
46.0

 
37.1

Total
$
196.1

 
$
198.1

 
$
196.5

Quarterly Financial Information (Unaudited) (Tables)
Schedule of quarterly results
Summarized quarterly results for the years ended December 31, 2012 and 2011 were as follows (in millions, except per share data):
2012 by Quarter:
Q1
 
Q2
 
Q3
 
Q4
 
Year Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
Revenues
$
1,393.4

 
$
1,425.1

 
$
1,421.6

 
$
1,424.7

 
$
5,664.8

Expenses (a) (b)
1,060.9

 
1,079.2

 
1,056.0

 
1,138.7

 
4,334.8

Operating income
332.5

 
345.9

 
365.6

 
286.0

 
1,330.0

Other expense, net
42.4

 
35.8

 
41.8

 
41.2

 
161.2

Income before income taxes
290.1

 
310.1

 
323.8

 
244.8

 
1,168.8

Provision for income taxes
42.8

 
38.9

 
54.3

 
6.9

 
142.9

Net income
$
247.3

 
$
271.2

 
$
269.5

 
$
237.9

 
$
1,025.9

Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.40

 
$
0.44

 
$
0.45

 
$
0.40

 
$
1.70

Diluted
$
0.40

 
$
0.44

 
$
0.45

 
$
0.40

 
$
1.69

Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
619.1

 
610.9

 
601.5

 
588.0

 
604.9

Diluted
621.9

 
613.1

 
604.2

 
590.2

 
607.4

____________
 
 
 
 
 
 
 
 
 
(a)
Includes $6.4 million in the first quarter, $14.5 million in the second quarter, $10.3 million in the third quarter, and $11.6 million in the fourth quarter of integration expenses related to the acquisition of TGBP.

(b)
Includes $30.9 million in the fourth quarter of expenses related to productivity and cost-savings initiatives. For more information, see Note 4.
2011 by Quarter:
Q1
 
Q2
 
Q3
 
Q4
 
Year Ended December 31, 2011
 
 
 
 
 
 
 
 
 
 
Revenues
$
1,283.0

 
$
1,366.3

 
$
1,410.8

 
$
1,431.3

 
$
5,491.4

Expenses (c) (d)
970.1

 
1,015.6

 
1,047.8

 
1,072.9

 
4,106.4

Operating income
312.9

 
350.7

 
363.0

 
358.4

 
1,385.0

Other expense, net (e)
38.2

 
17.3

 
49.1

 
5.8

 
110.4

Income before income taxes
274.7

 
333.4

 
313.9

 
352.6

 
1,274.6

Provision for/(benefit from) income taxes (f)
64.5

 
70.2

 
74.2

 
(99.7
)
 
109.2

Net income
$
210.2

 
$
263.2

 
$
239.7

 
$
452.3

 
$
1,165.4

Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.32

 
$
0.42

 
$
0.38

 
$
0.73

 
$
1.85

Diluted
$
0.32

 
$
0.41

 
$
0.38

 
$
0.73

 
$
1.84

Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
646.9

 
631.1

 
624.9

 
619.4

 
630.6

Diluted
652.1

 
635.8

 
627.1

 
621.7

 
634.2

____________
 
 
 
 
 
 
 
 
 
(c)
Includes $24.0 million in the first quarter, $8.9 million in the second quarter and $13.9 million in the third quarter of restructuring and related expenses. For more information, see Note 4.

(d)
Includes $4.8 million in the fourth quarter of integration expenses related to the acquisition of TGBP.

(e)
The second quarter includes a gain of $29.4 million, recognized in connection with the remeasurement of the Company's former equity interest in Costa to fair value. The fourth quarter includes a net gain of $20.8 million recorded on derivative contracts, consisting of foreign currency forward contracts with maturities of less than one year, entered into to reduce the economic variability related to the cash amounts used to fund acquisitions of businesses with purchase prices denominated in foreign currencies, primarily for the TGBP acquisition. The fourth quarter also includes a gain of $20.5 million, recognized in connection with the remeasurement of the Company's former equity interest in Finint to fair value.

(f)
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 recognized a tax benefit of $204.7 million in the fourth quarter related to the adjustment of reserves associated with this matter.
Condensed Financial Information of the Registrant (Tables)
Schedule of Condensed Financial Statements Balance Sheets 
CONDENSED BALANCE SHEETS
(PARENT COMPANY ONLY)
(in millions, except per share amounts)

 
December 31,
 
2012
 
2011
Assets
 
 
 
Cash and cash equivalents
$
383.7

 
$
1.1

Property and equipment, net of accumulated depreciation of $14.4 and $12.3, respectively
33.6

 
32.6

Income tax deposit
—

 
250.0

Other assets
68.4

 
55.9

Investment in subsidiaries
5,420.3

 
4,708.8

Total assets
$
5,906.0

 
$
5,048.4

 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
79.3

 
$
72.0

Income taxes payable
88.3

 
406.1

Payable to subsidiaries, net
773.5

 
99.7

Borrowings
4,023.4

 
3,574.4

Other liabilities
0.9

 
1.4

Total liabilities
4,965.4

 
4,153.6

Stockholders' equity:
 
 
 
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued
—

 
—

Common stock, $0.01 par value; 2,000 shares authorized; 572.1 shares and 619.4 shares issued and outstanding as of December 31, 2012 and 2011, respectively
5.7

 
6.2

Capital surplus
332.8

 
247.1

Retained earnings
754.7

 
760.0

Accumulated other comprehensive loss
(152.6
)
 
(118.5
)
Total stockholders' equity
940.6

 
894.8

Total liabilities and stockholders' equity
$
5,906.0

 
$
5,048.4


Schedule of Condensed Financial Statements Income Statement 
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(PARENT COMPANY ONLY)
(in millions)

 
For the Years Ended December 31,
 
2012
 
2011
 
2010
Revenues
$
—

 
$
—

 
$
—

Expenses
—

 
—

 
—

Operating income
—

 
—

 
—

Interest income
0.2

 
0.1

 
0.2

Interest expense
(178.6
)
 
(181.0
)
 
(168.7
)
Other expense
—

 
(0.1
)
 
(3.3
)
Loss before equity in earnings of affiliates and income taxes
(178.4
)
 
(181.0
)
 
(171.8
)
Equity in earnings of affiliates, net of tax
1,136.1

 
1,276.7

 
1,012.5

Income tax benefit
68.2

 
69.7

 
69.2

Net income
1,025.9

 
1,165.4

 
909.9

Other comprehensive income/(loss), net of tax
2.0

 
(11.7
)
 
(1.6
)
Other comprehensive income/(loss) of affiliates, net of tax
(36.1
)
 
26.0

 
(3.9
)
Comprehensive income
$
991.8

 
$
1,179.7

 
$
904.4


Schedule of Condensed Financial Statements Cash Flow Statement 
CONDENSED STATEMENTS OF CASH FLOWS
(PARENT COMPANY ONLY)
(in millions)

 
For the Years Ended December 31,
 
2012
 
2011
 
2010
Cash flows from operating activities
 
 
 
 
 
Net cash provided by operating activities
$
228.3

 
$
698.1

 
$
631.6

Cash flows from investing activities
 
 
 
 
 
Purchases of property and equipment
(3.3
)
 
(4.2
)
 
—

Net cash used in investing activities
(3.3
)
 
(4.2
)
 
—

Cash flows from financing activities
 
 
 
 
 
Advances from/(to) subsidiaries, net
679.1

 
(180.9
)
 
(112.7
)
Net proceeds from issuance of borrowings
742.8

 
696.3

 
247.0

Principal payments on borrowings
—

 
(696.3
)
 
—

Net (repayments of)/proceeds from commercial paper
(297.0
)
 
297.0

 
—

Proceeds from exercise of options
53.4

 
100.0

 
42.1

Cash dividends paid
(254.2
)
 
(194.2
)
 
(165.3
)
Common stock repurchased
(766.5
)
 
(803.9
)
 
(581.4
)
Net cash provided by/(used in) financing activities
157.6

 
(782.0
)
 
(570.3
)
Net change in cash and cash equivalents
382.6

 
(88.1
)
 
61.3

Cash and cash equivalents at beginning of year
1.1

 
89.2

 
27.9

Cash and cash equivalents at end of year
$
383.7

 
$
1.1

 
$
89.2



Formation of the Entity and Basis of Presentation (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
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 available through network of agent locations (in countries and territories)
200 
Summary of Significant Accounting Policies (Details)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Antidilutive outstanding options excluded from diluted EPS calculation
 
 
 
 
 
 
 
 
23.3 
17.1 
34.0 
Basic weighted-average shares outstanding
588.0 
601.5 
610.9 
619.1 
619.4 
624.9 
631.1 
646.9 
604.9 
630.6 
666.5 
Common stock equivalents
 
 
 
 
 
 
 
 
2.5 
3.6 
2.4 
Diluted weighted-average shares outstanding
590.2 
604.2 
613.1 
621.9 
621.7 
627.1 
635.8 
652.1 
607.4 
634.2 
668.9 
Summary of Significant Accounting Policies (Details 1) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Settlement assets:
 
 
Cash and cash equivalents
$ 574.5 
$ 712.5 
Receivables from selling agents and Business Solutions customers
1,025.3 
1,046.7 
Investment securities
1,514.8 
1,332.0 
Total settlement assets
3,114.6 
3,091.2 
Settlement obligations:
 
 
Money transfer, money order and payment service payables
2,297.1 
2,242.3 
Payables to agents
817.5 
848.9 
Total settlement obligations
$ 3,114.6 
$ 3,091.2 
Summary of Significant Accounting Policies (Details 2) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Property and Equipment (Textual) [Abstract]
 
 
 
Depreciation
$ 61.7 
$ 61.0 
$ 61.5 
Property And Equipment
 
 
 
Property and equipment, gross
580.6 
627.8 
 
Accumulated depreciation
(384.5)
(429.7)
 
Property and equipment, net
196.1 
198.1 
196.5 
Equipment [Member]
 
 
 
Property And Equipment
 
 
 
Property and equipment, gross
384.6 
434.8 
 
Buildings [Member]
 
 
 
Property and Equipment (Textual) [Abstract]
 
 
 
Property, plant and equipment useful life
30 years 
 
 
Property And Equipment
 
 
 
Property and equipment, gross
80.0 
80.1 
 
Leasehold improvements [Member]
 
 
 
Property And Equipment
 
 
 
Property and equipment, gross
65.6 
61.1 
 
Furniture and fixtures [Member]
 
 
 
Property And Equipment
 
 
 
Property and equipment, gross
33.4 
33.1 
 
Land and improvements [Member]
 
 
 
Property And Equipment
 
 
 
Property and equipment, gross
16.9 
16.9 
 
Projects in process [Member]
 
 
 
Property And Equipment
 
 
 
Property and equipment, gross
$ 0.1 
$ 1.8 
 
Minimum [Member] |
Equipment [Member]
 
 
 
Property and Equipment (Textual) [Abstract]
 
 
 
Property, plant and equipment useful life
3 years 
 
 
Minimum [Member] |
Furniture and fixtures [Member]
 
 
 
Property and Equipment (Textual) [Abstract]
 
 
 
Property, plant and equipment useful life
3 years 
 
 
Maximum [Member] |
Equipment [Member]
 
 
 
Property and Equipment (Textual) [Abstract]
 
 
 
Property, plant and equipment useful life
10 years 
 
 
Maximum [Member] |
Furniture and fixtures [Member]
 
 
 
Property and Equipment (Textual) [Abstract]
 
 
 
Property, plant and equipment useful life
10 years 
 
 
Summary of Significant Accounting Policies (Details 3) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Other Intangible Assets
 
 
Weighted-Average Amortization Period (in years)
8 years 4 months 24 days 
 
Initial Cost
$ 1,398.6 
$ 1,309.9 
Net of Accumulated Amortization
878.9 
847.4 
Acquired contracts [Member]
 
 
Other Intangible Assets
 
 
Weighted-Average Amortization Period (in years)
11 years 3 months 18 days 
 
Initial Cost
627.2 
629.5 
Net of Accumulated Amortization
466.2 
526.5 
Capitalized contract costs [Member]
 
 
Other Intangible Assets
 
 
Weighted-Average Amortization Period (in years)
6 years 1 month 6 days 
 
Initial Cost
457.2 
399.1 
Net of Accumulated Amortization
303.7 
213.8 
Internal use software [Member]
 
 
Other Intangible Assets
 
 
Weighted-Average Amortization Period (in years)
3 years 2 months 12 days 
 
Initial Cost
221.0 
197.4 
Net of Accumulated Amortization
54.7 
61.0 
Acquired trademarks [Member]
 
 
Other Intangible Assets
 
 
Weighted-Average Amortization Period (in years)
22 years 8 months 12 days 
 
Initial Cost
43.4 
41.5 
Net of Accumulated Amortization
28.4 
31.0 
Projects in process [Member]
 
 
Other Intangible Assets
 
 
Weighted-Average Amortization Period (in years)
3 years 
 
Initial Cost
15.4 
0.8 
Net of Accumulated Amortization
15.4 
0.8 
Other intangibles [Member]
 
 
Other Intangible Assets
 
 
Weighted-Average Amortization Period (in years)
2 years 8 months 12 days 
 
Initial Cost
34.4 
41.6 
Net of Accumulated Amortization
$ 10.5 
$ 14.3 
Maximum [Member] |
Internal use software [Member]
 
 
Other Intangible Assets
 
 
Amortization period of intangible assets
5 years 
 
Minimum [Member] |
Internal use software [Member]
 
 
Other Intangible Assets
 
 
Amortization period of intangible assets
3 years 
 
Summary of Significant Accounting Policies (Details Numeric) (USD $)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Accounting Policies [Abstract]
 
 
 
Allowance for doubtful accounts
$ 46,800,000 
$ 28,500,000 
 
Provision for doubtful accounts
44,900,000 
24,300,000 
19,100,000 
Goodwill impairment loss
0 
0 
0 
Amortization expense
184,400,000 
131,600,000 
114,400,000 
Estimated future aggregate amortization expense, 2013
188,400,000 
 
 
Estimated future aggregate amortization expense, 2014
161,000,000 
 
 
Estimated future aggregate amortization expense, 2015
117,400,000 
 
 
Estimated future aggregate amortization expense, 2016
89,700,000 
 
 
Estimated future aggregate amortization expense, 2017
75,000,000 
 
 
Estimated future aggregate amortization expense, thereafter
247,400,000 
 
 
Impairment of intangible assets excluding goodwill
0 
0 
9,000,000 
Advertising costs
$ 177,500,000 
$ 174,800,000 
$ 163,900,000 
Acquisitions (Details) (USD $)
In Millions, unless otherwise specified
Nov. 7, 2011
Travelex Global Business Payments [Member]
Oct. 31, 2011
Finint S.r.l. [Member]
Apr. 20, 2011
Angelo Costa S.r.l. [Member]
Assets:
 
 
 
Cash and cash equivalents
$ 30.7 1
$ 0 
$ 0 
Settlement assets
160.4 1
52.2 
46.3 
Property and equipment
5.1 1
0.5 
3.0 
Goodwill
704.3 1
153.6 
174.2 
Other intangible assets
314.2 1 2
64.8 
51.4 
Other assets
45.3 1
2.0 
1.5 
Total assets
1,260.0 1
273.1 
276.4 
Liabilities:
 
 
 
Accounts payable and accrued liabilities
49.6 1
6.1 
10.8 
Settlement obligations
160.4 1
57.5 
55.7 
Income taxes payable
1.7 1
3.1 
10.3 
Deferred tax liability, net
65.5 1
15.8 
15.5 
Other liabilities
21.5 1
3.5 
2.2 
Total liabilities
298.7 1
86.0 
94.5 
Total consideration
$ 961.3 1 3
$ 187.1 3
$ 181.9 3
Acquisitions (Details 1) (USD $)
In Millions, unless otherwise specified
Nov. 7, 2011
Travelex Global Business Payments [Member]
Oct. 31, 2011
Finint S.r.l. [Member]
Apr. 20, 2011
Angelo Costa S.r.l. [Member]
Nov. 7, 2011
Customer and other contractual relationships [Member]
Travelex Global Business Payments [Member]
Oct. 31, 2011
Customer and other contractual relationships [Member]
Finint S.r.l. [Member]
Apr. 20, 2011
Customer and other contractual relationships [Member]
Angelo Costa S.r.l. [Member]
Nov. 7, 2011
Network of subagents [Member]
Travelex Global Business Payments [Member]
Oct. 31, 2011
Network of subagents [Member]
Finint S.r.l. [Member]
Apr. 20, 2011
Network of subagents [Member]
Angelo Costa S.r.l. [Member]
Nov. 7, 2011
Other [Member]
Travelex Global Business Payments [Member]
Oct. 31, 2011
Other [Member]
Finint S.r.l. [Member]
Apr. 20, 2011
Other [Member]
Angelo Costa S.r.l. [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Identifiable intangible assets
$ 314.2 1 2
$ 64.8 
$ 51.4 
$ 264.5 2
$ 0 
$ 0 
$ 0 2
$ 53.9 
$ 44.6 
$ 49.7 2
$ 10.9 
$ 6.8 
Acquisitions (Details 2) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Goodwill
 
 
Goodwill, beginning balance
$ 3,198.9 
$ 2,151.7 
Acquisitions
 
1,054.1 
Purchase price adjustments
(22.0)
 
Currency translation
2.8 
(6.9)
Goodwill, ending balance
3,179.7 
3,198.9 
Consumer-to-Consumer [Member]
 
 
Goodwill
 
 
Goodwill, beginning balance
1,945.3 
1,619.9 
Acquisitions
 
325.4 
Purchase price adjustments
2.4 
 
Currency translation
0 
0 
Goodwill, ending balance
1,947.7 
1,945.3 
Consumer-to-Business [Member]
 
 
Goodwill
 
 
Goodwill, beginning balance
224.9 
227.2 
Acquisitions
 
0 
Purchase price adjustments
0 
 
Currency translation
(3.8)
(2.3)
Goodwill, ending balance
221.1 
224.9 
Business Solutions [Member]
 
 
Goodwill
 
 
Goodwill, beginning balance
1,013.7 
289.4 
Acquisitions
 
728.7 
Purchase price adjustments
(24.4)
 
Currency translation
6.7 
(4.4)
Goodwill, ending balance
996.0 
1,013.7 
Other [Member]
 
 
Goodwill
 
 
Goodwill, beginning balance
15.0 
15.2 
Acquisitions
 
0 
Purchase price adjustments
0 
 
Currency translation
(0.1)
(0.2)
Goodwill, ending balance
$ 14.9 
$ 15.0 
Acquisitions (Details Numeric)
In Millions, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2012
USD ($)
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2011
Travelex Global Business Payments [Member]
USD ($)
Nov. 7, 2011
Travelex Global Business Payments [Member]
USD ($)
Nov. 7, 2011
Travelex Global Business Payments [Member]
GBP (£)
May 4, 2012
Travelex Global Business Payments French Acquisition [Member]
USD ($)
May 4, 2012
Travelex Global Business Payments French Acquisition [Member]
GBP (£)
Dec. 31, 2011
Finint S.r.l. [Member]
USD ($)
Dec. 31, 2011
Finint S.r.l. [Member]
USD ($)
Oct. 31, 2011
Finint S.r.l. [Member]
USD ($)
Oct. 31, 2011
Finint S.r.l. [Member]
EUR (€)
Jun. 30, 2011
Angelo Costa S.r.l. [Member]
USD ($)
Dec. 31, 2011
Angelo Costa S.r.l. [Member]
USD ($)
Apr. 20, 2011
Angelo Costa S.r.l. [Member]
USD ($)
Apr. 20, 2011
Angelo Costa S.r.l. [Member]
EUR (€)
Dec. 31, 2012
Minimum [Member]
Customer and other contractual relationships and network of subagents [Member]
Dec. 31, 2012
Minimum [Member]
Other intangibles [Member]
Dec. 31, 2012
Maximum [Member]
Customer and other contractual relationships and network of subagents [Member]
Dec. 31, 2012
Maximum [Member]
Other intangibles [Member]
Nov. 7, 2011
Business Solutions [Member]
Travelex Global Business Payments [Member]
USD ($)
Oct. 31, 2011
Consumer-to-Consumer [Member]
Finint S.r.l. [Member]
USD ($)
Apr. 20, 2011
Consumer-to-Consumer [Member]
Angelo Costa S.r.l. [Member]
USD ($)
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash consideration
 
 
 
 
$ 956.5 
£ 596.0 
$ 4.8 
£ 3.0 
 
 
$ 139.4 
€ 99.6 
 
 
$ 135.7 
€ 95.0 
 
 
 
 
 
 
 
Final working capital adjustment
 
 
 
 
24.1 
15.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs associated with closing acquisition
 
 
 
20.7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining interest acquired (percentage)
 
 
 
 
 
 
 
 
 
 
70.00% 
70.00% 
 
 
70.00% 
70.00% 
 
 
 
 
 
 
 
Previous equity interest held (percentage)
 
 
 
 
 
 
 
 
 
 
30.00% 
30.00% 
 
 
30.00% 
30.00% 
 
 
 
 
 
 
 
Fair value of previous equity interest held
 
 
 
 
 
 
 
 
 
 
47.7 
 
 
 
46.2 
 
 
 
 
 
 
 
 
Gain recognized on revaluation of previous equity interest held
0 
49.9 
0 
 
 
 
 
 
20.5 
20.5 
 
 
29.4 
29.4 
 
 
 
 
 
 
 
 
 
Total value
 
 
 
 
961.3 1 2
 
 
 
 
 
187.1 1
 
 
 
181.9 1
 
 
 
 
 
 
 
 
Amortization period of intangible assets acquired (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9 years 
1 year 
15 years 
5 years 
 
 
 
Goodwill
 
 
 
 
704.3 2
 
 
 
 
 
153.6 
 
 
 
174.2 
 
 
 
 
 
704.3 
153.6 
174.2 
Goodwill expected to be deductible for income tax purposes
 
 
 
 
$ 488.4 
 
 
 
 
 
$ 97.0 
 
 
 
$ 104.9 
 
 
 
 
 
 
 
 
Related Party Transactions (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Related Party Transactions
 
 
 
Related party transactions
$ 95.0 
$ 190.7 
$ 236.4 
Equity Method Investee [Member]
 
 
 
Related Party Transactions
 
 
 
Related party transactions
66.1 
131.9 
183.5 
Director [Member]
 
 
 
Related Party Transactions
 
 
 
Related party transactions
$ 28.9 
$ 58.8 
$ 52.9 
Number of agents that are related parties
1 
2 
2 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Feb. 11, 2010
Dec. 31, 2009
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 accrual
 
 
71.0 
Settlement agreement to invest in compliance
 
$ 23.0 
 
Investment Securities (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Available-for-sale investment securities [Abstract]
 
 
Amortized Cost
$ 1,502.5 
$ 1,324.1 
Fair Value
1,514.8 
1,332.0 
Gross Unrealized Gains
12.6 
11.0 
Gross Unrealized Losses
(0.3)
(3.1)
Net Unrealized Gains/(Losses)
12.3 
7.9 
State and municipal debt securities [Member]
 
 
Available-for-sale investment securities [Abstract]
 
 
Amortized Cost
991.5 1
858.5 1
Fair Value
1,003.7 1
866.5 1
Gross Unrealized Gains
12.5 1
10.4 1
Gross Unrealized Losses
(0.3)1
(2.4)1
Net Unrealized Gains/(Losses)
12.2 1
8.0 1
State and municipal variable rate demand notes [Member]
 
 
Available-for-sale investment securities [Abstract]
 
 
Amortized Cost
463.3 
376.9 
Fair Value
463.3 
376.9 
Gross Unrealized Gains
0 
0 
Gross Unrealized Losses
0 
0 
Net Unrealized Gains/(Losses)
0 
0 
Corporate debt and other [Member]
 
 
Available-for-sale investment securities [Abstract]
 
 
Amortized Cost
47.7 
88.7 
Fair Value
47.8 
88.6 
Gross Unrealized Gains
0.1 
0.6 
Gross Unrealized Losses
0 
(0.7)
Net Unrealized Gains/(Losses)
$ 0.1 
$ (0.1)
Investment Securities (Details 1) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Contractual maturities of investment securities [Abstract]
 
Due within 1 year - Amortized Cost
$ 228.5 
Due after 1 year through 5 years - Amortized Cost
785.0 
Due after 5 years through 10 years - Amortized Cost
79.3 
Due after 10 years - Amortized Cost
409.7 
Total investment securities - Amortized Cost
1,502.5 
Due within 1 year - Fair Value
229.5 
Due after 1 year through 5 years - Fair Value
795.9 
Due after 5 years through 10 years - Fair Value
79.6 
Due after 10 years - Fair Value
409.8 
Total investment securities - Fair Value
1,514.8 
Variable rate demand note [Member]
 
Contractual maturities of investment securities [Abstract]
 
Due within 1 year - Fair Value
21.0 
Due after 1 year through 5 years - Fair Value
15.5 
Due after 5 years through 10 years - Fair Value
26.0 
Due after 10 years - Fair Value
$ 400.8 
Investment Securities (Details Numeric) (USD $)
In Billions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Additional available-for-sale Securities (Numeric)
 
 
 
Proceeds from sale and maturity of available-for-sale securities
$ 16.3 
$ 14.2 
$ 14.7 
Maximum [Member]
 
 
 
Additional available-for-sale Securities (Numeric)
 
 
 
Variable rate demand notes, maximum maturity year
2049 
 
 
Variable rate demand notes, period of time held
30 days 
 
 
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Assets:
 
 
Derivatives
$ 96.8 
$ 124.8 
Liabilities:
 
 
Derivatives
86.1 
86.6 
Fair Value Measurements (Numeric) [Abstract]
 
 
Borrowings, carrying value
4,029.2 1
3,583.2 1
Recurring [Member]
 
 
Assets:
 
 
State and municipal debt securities
1,003.7 
866.5 
State and municipal variable rate demand notes
463.3 
376.9 
Corporate debt and other
47.8 
88.6 
Derivatives
96.8 
124.8 
Total assets
1,611.6 
1,456.8 
Liabilities:
 
 
Commercial paper
 
297.0 
Notes and other borrowings
4,200.8 
3,563.5 
Total borrowings
 
3,860.5 
Derivatives
86.1 
86.6 
Total liabilities
4,286.9 
3,947.1 
Recurring [Member] |
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 
0.1 
Derivatives
0 
0 
Total assets
0 
0.1 
Liabilities:
 
 
Commercial paper
 
0 
Notes and other borrowings
0 
0 
Total borrowings
 
0 
Derivatives
0 
0 
Total liabilities
0 
0 
Recurring [Member] |
Level 2 [Member]
 
 
Assets:
 
 
State and municipal debt securities
1,003.7 
866.5 
State and municipal variable rate demand notes
463.3 
376.9 
Corporate debt and other
47.8 
88.5 
Derivatives
96.8 
124.8 
Total assets
1,611.6 
1,456.7 
Liabilities:
 
 
Commercial paper
 
297.0 
Notes and other borrowings
4,200.8 
3,563.5 
Total borrowings
 
3,860.5 
Derivatives
86.1 
86.6 
Total liabilities
4,286.9 
3,947.1 
Recurring [Member] |
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:
 
 
Commercial paper
 
0 
Notes and other borrowings
0 
0 
Total borrowings
 
0 
Derivatives
0 
0 
Total liabilities
$ 0 
$ 0 
Other Assets and Other Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Other assets:
 
 
Derivatives
$ 96.8 
$ 124.8 
Prepaid expenses
56.9 
54.5 
Equity method investments
41.0 
41.3 
Amounts advanced to agents, net of discounts
37.7 
34.1 
Other receivables
21.4 
37.6 
Debt issue costs
17.3 
15.8 
Deferred customer set up costs
15.9 
18.0 
Accounts receivable, net
15.6 
14.8 
Other
17.3 
22.5 
Total other assets
319.9 
363.4 
Other liabilities:
 
 
Pension obligations
102.1 
112.7 
Derivatives
86.1 
86.6 
Deferred revenue
30.5 
33.6 
Other
36.0 
40.7 
Total other liabilities
$ 254.7 
$ 273.6 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Components of pre-tax income
 
 
 
 
 
 
 
 
 
 
 
Domestic
 
 
 
 
 
 
 
 
$ 94.8 
$ 423.9 
$ 151.4 
Foreign
 
 
 
 
 
 
 
 
1,074.0 
850.7 
993.8 
Income before income taxes
$ 244.8 
$ 323.8 
$ 310.1 
$ 290.1 
$ 352.6 
$ 313.9 
$ 333.4 
$ 274.7 
$ 1,168.8 
$ 1,274.6 
$ 1,145.2 
Income Taxes (Details 1) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Provision for Income Taxes
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
$ 92.5 
$ 78.1 
$ 132.2 
State and local
 
 
 
 
 
 
 
 
(14.8)
4.5 
39.8 
Foreign
 
 
 
 
 
 
 
 
65.2 
26.6 
63.3 
Provision for income taxes
$ 6.9 
$ 54.3 
$ 38.9 
$ 42.8 
$ (99.7)1
$ 74.2 
$ 70.2 
$ 64.5 
$ 142.9 
$ 109.2 1
$ 235.3 
Income Taxes (Details 2)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Effective tax rate reconciliation
 
 
 
Federal statutory rate
35.00% 
35.00% 
35.00% 
State income taxes, net of federal income tax benefits
0.60% 
2.00% 
1.90% 
Foreign rate differential, net of U.S. tax paid on foreign earnings (5.1%, 1.2%, and 5.1%, respectively)
(22.50%)
(14.00%)
(12.00%)
IRS Agreement
0.00% 
(16.10%)
0.00% 
Other
(0.90%)
1.70% 
(4.40%)
Effective tax rate
12.20% 
8.60% 
20.50% 
U.S. tax paid on foreign earnings
5.10% 
1.20% 
5.10% 
Income Taxes (Details 3) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Current:
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
$ 117.2 
$ 36.2 
$ 103.6 
State and local
 
 
 
 
 
 
 
 
(2.5)
0.6 
30.1 
Foreign
 
 
 
 
 
 
 
 
63.4 
51.2 
73.0 
Total current taxes
 
 
 
 
 
 
 
 
178.1 
88.0 
206.7 
Deferred:
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
(24.7)
41.9 
28.6 
State and local
 
 
 
 
 
 
 
 
(12.3)
3.9 
9.7 
Foreign
 
 
 
 
 
 
 
 
1.8 
(24.6)
(9.7)
Total deferred taxes
 
 
 
 
 
 
 
 
(35.2)
21.2 
28.6 
Provision for income taxes
$ 6.9 
$ 54.3 
$ 38.9 
$ 42.8 
$ (99.7)1
$ 74.2 
$ 70.2 
$ 64.5 
$ 142.9 
$ 109.2 1
$ 235.3 
Income Taxes (Details 4) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Deferred tax assets related to:
 
 
Reserves, accrued expenses and employee-related items
$ 65.7 
$ 40.6 
Pension obligations
36.7 
40.0 
Tax attribute carryovers
4.2 
11.9 
Other
22.8 
20.6 
Total deferred tax assets
129.4 
113.1 
Deferred tax liabilities related to:
 
 
Intangibles, property and equipment
481.5 
502.8 
Total deferred tax liabilities
481.5 
502.8 
Net deferred tax liability
$ 352.1 
$ 389.7 
Income Taxes (Details 5) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Unrecognized tax benefits reconciliation
 
 
Balance as of January 1,
$ 123.7 
$ 618.7 
Increases - positions taken in current period
13.1 1
143.1 1
Increases - positions taken in prior periods
0 2
34.1 2
Increases - acquisitions
0 
9.7 
Decreases - positions taken in prior periods
(6.1)
(27.9)
Decreases - settlements with taxing authorities
(24.1)
(650.9)
Decreases - lapse of applicable statute of limitations
(3.4)
(3.1)
Balance as of December 31,
$ 103.2 
$ 123.7 
Income Taxes (Details Numeric) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Mar. 31, 2010
Income Taxes (Numeric) [Abstract]
 
 
 
 
 
Tax benefit related to the IRS Agreement
$ 204,700,000 
 
$ 204,700,000 
 
 
Total tax contingency reserve
 
111,900,000 
 
 
 
Unrecognized tax benefits that, if recognized, would affect the effective tax rate
115,600,000 
93,500,000 
115,600,000 
 
 
Interest and penalties recognized
 
500,000 
(4,000,000)
6,900,000 
 
Interest and penalties accrued
20,700,000 
20,000,000 
20,700,000 
 
 
Amount that the Company's total unrecognized tax benefits could decrease by during next 12 months
 
25,000,000 
 
 
 
Cash payments expected to be made related to IRS Agreement
 
190,000,000 
 
 
 
Cash payments made as a result of the IRS Agreement
 
92,400,000 
 
 
 
Refundable tax deposit
 
 
 
 
250,000,000 
Accumulated foreign earnings
 
$ 4,400,000,000 
 
 
 
Foreign Tax Authority [Member] |
Pre-tax Income [Member] |
Geographic Concentration Risk [Member]
 
 
 
 
 
Income Taxes (Numeric) [Abstract]
 
 
 
 
 
Percent of pre-tax income derived from foreign sources
 
92.00% 
67.00% 
87.00% 
 
Employee Benefit Plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Change in projected benefit obligation
 
 
 
Projected benefit obligation as of January 1,
$ 414.4 
$ 402.9 
 
Interest cost
14.7 
17.9 
20.1 
Actuarial loss
30.2 
35.3 
 
Benefits paid
(40.5)
(41.7)
 
Projected benefit obligation as of December 31,
418.8 
414.4 
402.9 
Change in plan assets
 
 
 
Fair value of plan assets as of January 1,
301.7 
290.1 
 
Actual return on plan assets
30.5 
28.3 
 
Benefits paid
(40.5)
(41.7)
 
Contributions by the Company
25.0 
25.0 
 
Fair value of plan assets as of December 31,
316.7 
301.7 
290.1 
Funded status of the plan as of December 31,
(102.1)
(112.7)
 
Accumulated benefit obligation as of December 31,
$ 418.8 
$ 414.4 
 
Employee Benefit Plans (Details 1) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Reconciliation of pension amounts recognized in the balance sheet
 
 
 
Accrued benefit liability
$ (102.1)
$ (112.7)
 
Accumulated other comprehensive loss (pre-tax)
206.8 
196.8 
 
Net amount recognized
104.7 
84.1 
 
Net periodic benefit cost
 
 
 
Interest cost
14.7 
17.9 
20.1 
Expected return on plan assets
(20.8)
(21.3)
(20.4)
Amortization of actuarial loss
10.5 
8.1 
6.2 
Net periodic benefit cost
$ 4.4 
$ 4.7 
$ 5.9 
Employee Benefit Plans (Details 2)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Pension benefit obligation, weighted-average rate assumptions
 
 
 
Discount rate
3.03% 
3.72% 
 
Net benefit cost, weighted-average rate assumptions
 
 
 
Discount rate
3.72% 
4.69% 
5.30% 
Expected long-term return on plan assets
7.00% 
7.00% 
6.50% 
Equity securities [Member]
 
 
 
Pension plan asset allocation
 
 
 
Percentage of Plan assets
16.00% 
17.00% 
 
Target allocation
15.00% 
 
 
Debt securities [Member]
 
 
 
Pension plan asset allocation
 
 
 
Percentage of Plan assets
62.00% 
61.00% 
 
Target allocation
60.00% 
 
 
Alternative investments [Member]
 
 
 
Pension plan asset allocation
 
 
 
Percentage of Plan assets
22.00% 
22.00% 
 
Target allocation
25.00% 
 
 
Employee Benefit Plans (Details 3) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust at fair value, excluding other assets
$ 310.3 
$ 298.5 
 
Other assets
6.4 
3.2 
 
Total investments of the Trust
316.7 
301.7 
290.1 
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
77.9 
67.9 
 
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
208.6 
217.0 
 
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
23.8 
13.6 
1.3 
Domestic equity [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
24.2 
28.1 
 
Domestic equity [Member] |
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
24.2 
28.1 
 
Domestic equity [Member] |
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 
0 
 
Domestic equity [Member] |
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 
0 
 
International equity [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
26.4 1
22.4 
 
International equity [Member] |
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
1.4 1
0 
 
International equity [Member] |
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
25.0 1
22.4 
 
International equity [Member] |
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 1
0 
 
Corporate debt securities [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
131.4 2
134.1 2
 
Corporate debt securities [Member] |
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 2
0 2
 
Corporate debt securities [Member] |
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
131.4 2
134.1 2
 
Corporate debt securities [Member] |
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 2
0 2
 
U.S. treasury bonds [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
52.3 
39.8 
 
U.S. treasury bonds [Member] |
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
52.3 
39.8 
 
U.S. treasury bonds [Member] |
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 
0 
 
U.S. treasury bonds [Member] |
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 
0 
 
State and municipal debt securities [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
4.4 
4.7 
 
State and municipal debt securities [Member] |
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 
0 
 
State and municipal debt securities [Member] |
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
4.4 
4.7 
 
State and municipal debt securities [Member] |
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 
0 
 
Other debt [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
3.1 
3.0 
 
Other debt [Member] |
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 
0 
 
Other debt [Member] |
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
3.1 
3.0 
 
Other debt [Member] |
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 
0 
 
Hedge funds [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
44.7 3
52.8 3
 
Hedge funds [Member] |
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 3
0 3
 
Hedge funds [Member] |
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
44.7 3
52.8 3
 
Hedge funds [Member] |
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 3
0 3
 
Royalty rights and private equity [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
23.8 4
13.6 4
 
Royalty rights and private equity [Member] |
Level 1 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 4
0 4
 
Royalty rights and private equity [Member] |
Level 2 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
0 4
0 4
 
Royalty rights and private equity [Member] |
Level 3 [Member]
 
 
 
Fair value measurement of Trust investments
 
 
 
Total investments of the Trust
$ 23.8 4
$ 13.6 4
 
[3] Hedge funds generally hold liquid and readily priceable securities, such as public equities, exchange-traded derivatives, and corporate bonds. Hedge funds themselves do not have readily available market quotations, and therefore are valued using the Net Asset Value (“NAV”) per share provided by the investment sponsor or third party administrator. Funds investing in diverse hedge fund strategies (primarily commingled funds) with the following composition of underlying hedge fund investments within the pension plans at December 31, 2012: commodities/currencies (24%), equity long/short (21%), global-macro (16%), relative value (16%), event driven (13%), and multi-strategy (10%). As of December 31, 2012, funds included herein had redemption frequencies of monthly to quarterly, with redemption notice periods of one to 45 days.
Employee Benefit Plans (Details 4) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2012
Level 3 [Member]
Dec. 31, 2011
Level 3 [Member]
Dec. 31, 2012
Level 3 [Member]
Royalty rights [Member]
Dec. 31, 2011
Level 3 [Member]
Royalty rights [Member]
Dec. 31, 2012
Level 3 [Member]
Private equity [Member]
Dec. 31, 2011
Level 3 [Member]
Private equity [Member]
Summary of changes in Level 3 Trust investments
 
 
 
 
 
 
 
 
 
Fair value of plan assets as of January 1,
$ 316.7 
$ 301.7 
$ 290.1 
$ 13.6 
$ 1.3 
$ 11.4 
$ 0 
$ 2.2 
$ 1.3 
Actual return on plan assets relating to assets still held as of the reporting date
 
 
 
1.7 
(0.8)
1.6 
0 
0.1 
(0.8)
Actual return on plan assets relating to assets sold during the period
 
 
 
0.7 
0.9 
0.8 
0 
(0.1)
0.9 
Net purchases and sales
 
 
 
7.8 
12.2 
7.6 
11.4 
0.2 
0.8 
Fair value of plan assets as of December 31,
$ 316.7 
$ 301.7 
$ 290.1 
$ 23.8 
$ 13.6 
$ 21.4 
$ 11.4 
$ 2.4 
$ 2.2 
Employee Benefit Plans (Details Numeric) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Defined Contribution Plan [Abstract]
 
 
 
Employer matching contribution percentage
4.00% 
 
 
Number of defined contribution plans
25 
 
 
Number of employee participants
1,500 
 
 
Total expenses
$ 15.3 
$ 12.8 
$ 12.0 
Defined Benefit Plan [Abstract]
 
 
 
Unfunded pension obligations
102.1 
112.7 
 
Contributions by the Company
25.0 
25.0 
 
Discretionary contributions by the Company
5 
3 
 
Estimated contributions, next fiscal year
23 
 
 
Actuarial losses
12.4 
 
 
Actuarial losses, net of tax
7.8 
 
 
Liability adjustment, net of tax
7.7 
12.5 
3.9 
Expected future benefit payments, year one
39.2 
 
 
Expected future benefit payments, year two
37.8 
 
 
Expected future benefit payments, year three
36.3 
 
 
Expected future benefit payments, year four
34.8 
 
 
Expected future benefit payments, year five
33.2 
 
 
Expected future benefit payments, after year five
$ 141.0 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Estimated Weighted Average Cost Of Capital Of The Pharmaceutical Sector
12.00% 
 
 
Weighted-average [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Debt securities maturity range
15 years 
 
 
Minimum [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Debt securities maturity range
1 year 
 
 
Maximum [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Debt securities maturity range
32 years 
 
 
Commodities/currencies [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Composition of underlying hedge fund investments
24.00% 
 
 
Equity long/short [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Composition of underlying hedge fund investments
21.00% 
 
 
Global-macro [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Composition of underlying hedge fund investments
16.00% 
 
 
Relative value [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Composition of underlying hedge fund investments
16.00% 
 
 
Event driven [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Composition of underlying hedge fund investments
13.00% 
 
 
Multi-strategy [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Composition of underlying hedge fund investments
10.00% 
 
 
International equity [Member] |
Minimum [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Redemption frequency
1 day 
 
 
Redemption notice period
1 day 
 
 
International equity [Member] |
Maximum [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Redemption frequency
1 month 
 
 
Redemption notice period
10 days 
 
 
Hedge funds [Member] |
Minimum [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Redemption frequency
1 month 
 
 
Redemption notice period
1 day 
 
 
Hedge funds [Member] |
Maximum [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Redemption frequency
3 months 
 
 
Redemption notice period
45 days 
 
 
Royalty rights and private equity [Member] |
Minimum [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Period over which distributions are expected to be received
5 years 
 
 
Royalty rights and private equity [Member] |
Maximum [Member]
 
 
 
Employee Benefit Plans (Additional Numeric) [Abstract]
 
 
 
Period over which distributions are expected to be received
7 years 
 
 
Operating Lease Commitments (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Operating leases, rent expense, net [Abstract]
 
 
 
Total rent expense under operating leases, net of sublease income
$ 53.9 
$ 44.2 
$ 34.7 
Operating leases, future minimum lease payments [Abstract]
 
 
 
Sublease income commitments through 2017
1.0 
 
 
Operating leases, future minimum lease payments due 2013
40.3 
 
 
Operating leases, future minimum lease payments due 2014
30.6 
 
 
Operating leases, future minimum lease payments due 2015
24.8 
 
 
Operating leases, future minimum lease payments due 2016
18.5 
 
 
Operating leases, future minimum lease payments due 2017
14.4 
 
 
Operating leases, future minimum lease payments due thereafter
21.1 
 
 
Total future minimum lease payments
$ 149.7 
 
 
Stockholders' Equity (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Components of accumulated other comprehensive loss, net of tax
 
 
 
Unrealized gains on investment securities
$ 7.7 
$ 4.9 
$ 3.1 
Unrealized gains/(losses) on hedging activities
(21.9)
5.1 
(21.9)
Foreign currency translation adjustment
(8.5)
(6.3)
(4.3)
Defined benefit pension liability adjustment
(129.9)
(122.2)
(109.7)
Accumulated other comprehensive loss, net of tax
$ (152.6)
$ (118.5)
$ (132.8)
Stockholders' Equity (Details Numeric) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Mar. 31, 2013
Dividend Declared [Member]
Stockholders' Equity (Numeric) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends declared per common share
$ 0.125 
$ 0.1 
$ 0.1 
$ 0.1 
$ 0.08 
$ 0.08 
$ 0.08 
$ 0.07 
$ 0.07 
$ 0.06 
$ 0.06 
$ 0.06 
$ 0.425 
$ 0.31 
$ 0.25 
$ 0.125 
Cash dividends paid
$ 72.0 
$ 59.9 
$ 60.7 
$ 61.6 
$ 49.6 
$ 49.6 
$ 50.3 
$ 44.7 
$ 45.8 
$ 39.4 
$ 39.6 
$ 40.5 
$ 254.2 
$ 194.2 
$ 165.3 
 
Repurchase of common shares
 
 
 
 
 
 
 
 
 
 
 
 
51.0 
40.3 
35.6 
 
Repurchase of common shares excluding commission
 
 
 
 
 
 
 
 
 
 
 
 
771.9 
800.0 
584.5 
 
Average cost of repurchase of common shares excluding commission
 
 
 
 
 
 
 
 
 
 
 
 
$ 15.12 
$ 19.83 
$ 16.44 
 
Dollar amount of shares available to be repurchased
 
 
 
 
 
 
 
 
 
 
 
 
$ 393.6 
 
 
 
Derivatives (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Euro [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
$ 254.9 
Contracts designated as hedges
485.2 
Canadian dollar [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
47.3 
Contracts designated as hedges
126.7 
British pound [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
40.8 
Contracts designated as hedges
95.6 
Australian dollar [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts designated as hedges
48.1 
Other [Member]
 
Notional amounts of foreign currency forward contracts [Abstract]
 
Contracts not designated as hedges
179.8 
Contracts designated as hedges
$ 83.3 
Derivatives (Details 1) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Fair Value Of Derivatives [Abstract]
 
 
Derivative Assets, Fair Value
$ 96.8 
$ 124.8 
Derivative Liabilities, Fair Value
86.1 
86.6 
Designated as a hedging instrument [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Assets, Fair Value
23.9 
41.4 
Derivative Liabilities, Fair Value
17.6 
6.6 
Undesignated [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Assets, Fair Value
72.9 
83.4 
Derivative Liabilities, Fair Value
68.5 
80.0 
Interest rate fair value hedges - Corporate [Member] |
Other Assets [Member] |
Designated as a hedging instrument [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Assets, Fair Value
13.1 
4.4 
Interest rate fair value hedges - Corporate [Member] |
Other Liabilities [Member] |
Designated as a hedging instrument [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Liabilities, Fair Value
0 
0 
Foreign currency [Member] |
Business Solutions [Member] |
Other Assets [Member] |
Undesignated [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Assets, Fair Value
71.9 
79.8 
Foreign currency [Member] |
Business Solutions [Member] |
Other Liabilities [Member] |
Undesignated [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Liabilities, Fair Value
66.5 
67.6 
Foreign currency [Member] |
Consumer-to-Consumer [Member] |
Other Assets [Member] |
Designated as a hedging instrument [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Assets, Fair Value
10.8 
37.0 
Foreign currency [Member] |
Consumer-to-Consumer [Member] |
Other Assets [Member] |
Undesignated [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Assets, Fair Value
1.0 
3.6 
Foreign currency [Member] |
Consumer-to-Consumer [Member] |
Other Liabilities [Member] |
Designated as a hedging instrument [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Liabilities, Fair Value
17.6 
6.6 
Foreign currency [Member] |
Consumer-to-Consumer [Member] |
Other Liabilities [Member] |
Undesignated [Member]
 
 
Fair Value Of Derivatives [Abstract]
 
 
Derivative Liabilities, Fair Value
$ 2.0 
$ 12.4 
Derivatives (Details 2) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Fair value of derivatives, by maturity [Abstract]
 
Interest rate fair value hedges — Corporate
$ 13.1 
Total
10.7 
2013 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Interest rate fair value hedges — Corporate
0 
Total
2.6 
2014 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Interest rate fair value hedges — Corporate
12.9 
Total
7.9 
2015 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Interest rate fair value hedges — Corporate
0 
Total
0 
2016 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Interest rate fair value hedges — Corporate
0 
Total
0 
2017 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Interest rate fair value hedges — Corporate
0 
Total
0 
Thereafter [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Interest rate fair value hedges — Corporate
0.2 
Total
0.2 
Consumer-to-Consumer [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency cash flow hedges — Consumer-to-Consumer
(6.8)
Foreign currency undesignated hedges
(1.0)
Consumer-to-Consumer [Member] |
2013 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency cash flow hedges — Consumer-to-Consumer
(1.8)
Foreign currency undesignated hedges
(1.0)
Consumer-to-Consumer [Member] |
2014 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency cash flow hedges — Consumer-to-Consumer
(5.0)
Foreign currency undesignated hedges
0 
Consumer-to-Consumer [Member] |
2015 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency cash flow hedges — Consumer-to-Consumer
0 
Foreign currency undesignated hedges
0 
Consumer-to-Consumer [Member] |
2016 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency cash flow hedges — Consumer-to-Consumer
0 
Foreign currency undesignated hedges
0 
Consumer-to-Consumer [Member] |
2017 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency cash flow hedges — Consumer-to-Consumer
0 
Foreign currency undesignated hedges
0 
Consumer-to-Consumer [Member] |
Thereafter [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency cash flow hedges — Consumer-to-Consumer
0 
Foreign currency undesignated hedges
0 
Business Solutions [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency undesignated hedges
5.4 
Business Solutions [Member] |
2013 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency undesignated hedges
5.4 
Business Solutions [Member] |
2014 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency undesignated hedges
0 
Business Solutions [Member] |
2015 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency undesignated hedges
0 
Business Solutions [Member] |
2016 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency undesignated hedges
0 
Business Solutions [Member] |
2017 [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency undesignated hedges
0 
Business Solutions [Member] |
Thereafter [Member]
 
Fair value of derivatives, by maturity [Abstract]
 
Foreign currency undesignated hedges
$ 0 
Derivatives (Details 3) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
$ 0.5 
$ 14.0 
$ (2.5)
Gain/(Loss) Recognized in Income on Undesignated Hedges
(10.0)
27.8 
(0.4)
Fair Value Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in Income on Derivatives
3.9 
11.8 
13.3 
Gain/(Loss) Recognized in Income on Related Hedged Item
3.7 
12.6 
10.5 
Cash Flow Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)
(20.1)
(5.2)
15.8 
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
9.8 
(33.0)
23.0 
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(0.1)
(10.2)
(1.6)
Derivative gains/(losses) [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in Income on Undesignated Hedges
0.6 1
21.9 1
0.6 1
Selling, general and administrative [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in Income on Undesignated Hedges
(10.6)2
5.9 2
(1.0)2
Interest rate contracts [Member] |
Cash Flow Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)
0 3
(21.6)3
(4.2)3
Interest rate contracts [Member] |
Interest expense [Member] |
Fair Value Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in Income on Derivatives
3.9 
11.8 
13.3 
Interest rate contracts [Member] |
Interest expense [Member] |
Cash Flow Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
(3.6)3
(2.7)3
(1.5)3
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
0 
0 
(0.1)
Fixed-rate debt [Member] |
Interest expense [Member] |
Fair Value Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in Income on Related Hedged Item
3.7 4
12.6 4
10.5 4
Foreign currency contracts [Member] |
Cash Flow Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)
(20.1)
16.4 
20.0 
Foreign currency contracts [Member] |
Revenue [Member] |
Cash Flow Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
13.4 
(30.3)
24.5 
Foreign currency contracts [Member] |
Derivative gains/(losses) [Member] |
Cash Flow Hedges [Member]
 
 
 
Hedges [Abstract]
 
 
 
Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
$ (0.1)5
$ (10.2)5
$ (1.5)5
Derivatives (Details Numeric) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Derivatives (Numeric) [Abstract]
 
 
 
Foreign exchange revenues
$ 1,332.7 
$ 1,151.2 
$ 1,018.8 
Notional amount of interest rate swaps
800.0 
500.0 
 
Foreign exchange gain/(loss) on settlement assets and obligations and cash balances
7.8 
(20.5)
(2.5)
Net gain from settlement of foreign currency forward contracts related to acquisitions
 
20.8 
 
Accumulated other comprehensive pre-tax gain to be reclassified into revenue in next 12 months
1.9 
 
 
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, 2018 [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Notional amount of interest rate swaps
300.0 
 
 
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Foreign exchange revenues
988.5 
983.1 
905.8 
Business Solutions [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Foreign exchange revenues
332.0 
154.6 
105.0 
Business Solutions notional amounts of foreign currency derivative customer contracts
3,900.0 
 
 
Fair Value Hedges [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Gain recognized in income on related hedged item
3.7 
12.6 
10.5 
Fair Value Hedges [Member] |
Fixed-rate debt [Member] |
Interest Expense [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Gain recognized in income on related hedged item
3.7 1
12.6 1
10.5 1
Loss in value of debt
3.9 
11.8 
13.3 
Amortization of hedge accounting adjustments
$ 7.6 
$ 24.4 
$ 23.8 
Designated as a hedging instrument [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Derivative policy targeted weighted-average maturity
1 year 
 
 
Derivative weighted-average maturity
1 year 
 
 
Designated as a hedging instrument [Member] |
Maximum [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Derivative policy contract maturity period maximum
36 months 
 
 
Maximum remaining maturity of foreign currency derivatives
24 months 
 
 
Undesignated [Member] |
Maximum [Member] |
Business Solutions [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Derivative average maturity
1 year 
 
 
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 
 
 
Uncollected settlement assets and obligations [Member] |
Undesignated [Member] |
Minimum [Member] |
Foreign currency denominated cash positions [Member] |
Consumer-to-Consumer [Member]
 
 
 
Derivatives (Numeric) [Abstract]
 
 
 
Foreign currency forward contracts maturity range minimum
2 days 
 
 
Uncollected settlement assets and obligations [Member] |
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 month 
 
 
Borrowings (Details) (USD $)
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Floating rate notes (effective rate of 0.9%) due 2013 [Member]
Dec. 31, 2011
Floating rate notes (effective rate of 0.9%) due 2013 [Member]
Mar. 7, 2011
Floating rate notes (effective rate of 0.9%) due 2013 [Member]
Dec. 31, 2012
6.500% notes (effective rate of 5.6%) due 2014 [Member]
Dec. 31, 2011
6.500% notes (effective rate of 5.6%) due 2014 [Member]
Feb. 26, 2009
6.500% notes (effective rate of 5.6%) due 2014 [Member]
Dec. 31, 2012
2.375% notes (effective rate of 2.4%) due 2015 [Member]
Dec. 10, 2012
2.375% notes (effective rate of 2.4%) due 2015 [Member]
Dec. 31, 2011
2.375% notes (effective rate of 2.4%) due 2015 [Member]
Dec. 31, 2012
5.930% notes due 2016 [Member]
Dec. 31, 2011
5.930% notes due 2016 [Member]
Sep. 29, 2006
5.930% notes due 2016 [Member]
Dec. 31, 2012
2.875% notes (effective rate of 3.0%) due 2017 [Member]
Dec. 10, 2012
2.875% notes (effective rate of 3.0%) due 2017 [Member]
Dec. 31, 2011
2.875% notes (effective rate of 3.0%) due 2017 [Member]
Dec. 31, 2012
3.650% notes (effective rate of 4.4%) due 2018 [Member]
Dec. 31, 2011
3.650% notes (effective rate of 4.4%) due 2018 [Member]
Aug. 22, 2011
3.650% notes (effective rate of 4.4%) due 2018 [Member]
Dec. 31, 2012
5.253% notes due 2020 [Member]
Dec. 31, 2011
5.253% notes due 2020 [Member]
Mar. 30, 2010
5.253% notes due 2020 [Member]
Dec. 31, 2012
6.200% notes due 2036 [Member]
Dec. 31, 2011
6.200% notes due 2036 [Member]
Nov. 17, 2006
6.200% notes due 2036 [Member]
Dec. 31, 2012
6.200% notes due 2040 [Member]
Dec. 31, 2011
6.200% notes due 2040 [Member]
Jun. 21, 2010
6.200% notes due 2040 [Member]
Dec. 31, 2012
Other borrowings [Member]
Dec. 31, 2011
Other borrowings [Member]
Dec. 31, 2012
Commercial paper
Dec. 31, 2011
Commercial paper
Borrowings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total borrowings at par value
$ 4,030,700,000 
$ 3,580,700,000 
$ 300,000,000 
$ 300,000,000 
$ 300,000,000 
$ 500,000,000 1
$ 500,000,000 1
$ 500,000,000 
$ 250,000,000 1 2
$ 250,000,000 
$ 0 1 2
$ 1,000,000,000 1 3
$ 1,000,000,000 1 3
$ 1,000,000,000 
$ 500,000,000 1 2
$ 500,000,000 
$ 0 1 2
$ 400,000,000 1
$ 400,000,000 1
$ 400,000,000 
$ 324,900,000 1 3
$ 324,900,000 1 3
 
$ 500,000,000 1 3
$ 500,000,000 1 3
$ 500,000,000 
$ 250,000,000 1 3
$ 250,000,000 1 3
$ 250,000,000 
$ 5,800,000 
$ 8,800,000 
$ 0 
$ 297,000,000 
Debt instrument, original face amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
303,700,000 
 
 
 
 
 
 
 
 
 
 
Fair value hedge accounting adjustments, net
20,200,000 1
23,900,000 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized discount, net
(21,700,000)
(21,400,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings, carrying value
$ 4,029,200,000 4
$ 3,583,200,000 4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
 
 
 
 
 
 
 
6.50% 
 
2.375% 
 
 
 
5.93% 
 
2.875% 
 
 
 
3.65% 
 
 
5.253% 
 
 
6.20% 
 
 
6.20% 
 
 
 
 
Effective interest rate
 
 
0.90% 
 
 
5.60% 
 
 
2.40% 
 
 
 
 
 
3.00% 
 
 
4.40% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average effective interest rate
4.80% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings (Details Numeric) (USD $)
12 Months Ended 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Revolving Credit Facility [Member]
Dec. 31, 2011
Revolving Credit Facility [Member]
Dec. 31, 2012
Floating Rate Notes Payable, 2013 [Member]
Dec. 31, 2011
Floating Rate Notes Payable, 2013 [Member]
Mar. 7, 2011
Floating Rate Notes Payable, 2013 [Member]
Dec. 31, 2012
Letter of credit sub-facility [Member]
Dec. 31, 2012
Swing line sub-facility [Member]
Dec. 31, 2012
Notes Payable, 2014 [Member]
Dec. 31, 2011
Notes Payable, 2014 [Member]
Feb. 26, 2009
Notes Payable, 2014 [Member]
Dec. 31, 2012
Notes Payable, 2015 [Member]
Dec. 10, 2012
Notes Payable, 2015 [Member]
Dec. 31, 2011
Notes Payable, 2015 [Member]
Dec. 10, 2012
Notes Payable, 2015 [Member]
Minimum [Member]
Dec. 31, 2012
Notes Payable, 2016 [Member]
Dec. 31, 2011
Notes Payable, 2016 [Member]
Sep. 29, 2006
Notes Payable, 2016 [Member]
Dec. 31, 2012
Notes Payable, 2017 [Member]
Dec. 10, 2012
Notes Payable, 2017 [Member]
Dec. 31, 2011
Notes Payable, 2017 [Member]
Dec. 10, 2012
Notes Payable, 2017 [Member]
Minimum [Member]
Dec. 31, 2012
Notes Payable, 2018 [Member]
Dec. 31, 2011
Notes Payable, 2018 [Member]
Aug. 22, 2011
Notes Payable, 2018 [Member]
Dec. 31, 2012
Notes Payable, 2020 [Member]
Dec. 31, 2011
Notes Payable, 2020 [Member]
Mar. 30, 2010
Notes Payable, 2020 [Member]
Dec. 31, 2012
Notes Payable, 2036 [Member]
Dec. 31, 2011
Notes Payable, 2036 [Member]
Nov. 17, 2006
Notes Payable, 2036 [Member]
Dec. 31, 2012
Notes Payable, 2040 [Member]
Dec. 31, 2011
Notes Payable, 2040 [Member]
Jun. 21, 2010
Notes Payable, 2040 [Member]
Nov. 17, 2006
Notes Payable, 2011 [Member]
Dec. 31, 2012
Commercial Paper [Member]
Dec. 31, 2011
Commercial Paper [Member]
Dec. 31, 2012
Commercial Paper [Member]
Maximum [Member]
Maturities of borrowings at par value [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of borrowings in the next twelve months
$ 300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of borrowings in year two
500,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of borrowings in year three
250,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of borrowings in year four
1,000,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of borrowings in year five
500,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of borrowings after year five
1,500,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Paper Program [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum issuance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,500,000,000 
 
 
Maximum days to maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
397 days 
Average balance outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
161,300,000 
89,700,000 
 
Maximum balance outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
422,800,000 
784,100,000 
 
Revolving Credit Facility [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
1,650,000,000 
 
 
 
 
250,000,000 
150,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate margin
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commitment fee
 
 
0.125% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance outstanding
 
 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining borrowing capacity
 
 
1,650,000,000 
1,353,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total borrowings at par value
4,030,700,000 
3,580,700,000 
 
 
300,000,000 
300,000,000 
300,000,000 
 
 
500,000,000 1
500,000,000 1
500,000,000 
250,000,000 1 2
250,000,000 
0 1 2
 
1,000,000,000 1 3
1,000,000,000 1 3
1,000,000,000 
500,000,000 1 2
500,000,000 
0 1 2
 
400,000,000 1
400,000,000 1
400,000,000 
324,900,000 1 3
324,900,000 1 3
 
500,000,000 1 3
500,000,000 1 3
500,000,000 
250,000,000 1 3
250,000,000 1 3
250,000,000 
1,000,000,000 
0 
297,000,000 
 
Debt instrument, original face amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
303,700,000 
 
 
 
 
 
 
 
 
 
 
Unamortized premium of debt instrument
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 21,200,000 
 
 
 
 
 
 
 
 
 
 
Stated interest rate
 
 
 
 
 
 
 
 
 
 
 
6.50% 
 
2.375% 
 
 
 
 
5.93% 
 
2.875% 
 
 
 
 
3.65% 
 
 
5.253% 
 
 
6.20% 
 
 
6.20% 
5.40% 
 
 
 
Effective interest rate
 
 
 
 
0.90% 
 
 
 
 
5.60% 
 
 
2.40% 
 
 
 
 
 
 
3.00% 
 
 
 
4.40% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium on early redemptions
 
 
 
 
 
 
 
 
 
0.50% 
 
 
0.35% 
 
 
 
0.20% 
 
 
0.40% 
 
 
 
0.35% 
 
 
0.15% 
 
 
0.25% 
 
 
0.30% 
 
 
 
 
 
 
Repurchase provisions, percentage of principal
 
 
 
 
101.00% 
 
 
 
 
 
 
 
101.00% 
 
 
 
 
 
 
101.00% 
 
 
 
101.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basis spread on floating rate debt
 
 
 
 
 
 
0.58% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premium given to note holders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.00% 
 
 
 
 
 
 
 
 
 
 
Minimum interest charged after credit rating upgrade
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.375% 
 
 
 
 
 
 
2.875% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum interest increase after credit rating downgrade
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Compensation Plans (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Stock Option Activity
 
Outstanding as of January 1
30.7 
Granted
2.7 
Exercised
(3.0)
Cancelled/forfeited
(3.4)
Outstanding as of December 31
27.0 
Options exercisable as of December 31
22.4 
Weighted-Average Exercise Price [Abstract]
 
Outstanding as of January 1
$ 19.05 
Granted
$ 17.85 
Exercised
$ 17.15 
Cancelled/forfeited
$ 24.45 
Outstanding as of December 31
$ 18.46 
Options exercisable as of December 31
$ 18.69 
Weighted-Average Remaining Contractual Term, Outstanding as of December 31
4 years 2 months 12 days 
Weighted-Average Remaining Contractual Term, Options exercisable as of December 31
3 years 3 months 18 days 
Aggregate Intrinsic Value, Outstanding as of December 31
$ 2.9 
Aggregate Intrinsic Value, Options exercisable as of December 31
$ 2.1 
Stock Compensation Plans (Details 1) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Restricted Stock Activity
 
Non-vested as of January 1
3.9 
Granted
2.7 
Vested
(1.0)
Forfeited
(0.8)
Non-vested as of December 31
4.8 
Restricted Stock Weighted-Average Grant-Date Fair Value
 
Non-vested as of January 1
$ 16.85 
Granted
$ 16.68 
Vested
$ 13.38 
Forfeited
$ 17.24 
Non-vested as of December 31
$ 17.38 
Stock Compensation Plans (Details 2) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Stock-Based Compensation
 
 
 
Stock-based compensation expense
$ (34.0)
$ (31.2)
$ (35.9)
Income tax benefit from stock-based compensation expense
10.0 
9.8 
11.6 
Net income impact
$ (24.0)
$ (21.4)
$ (24.3)
Earnings per share:
 
 
 
Earnings Per Share Basic Impact
$ (0.04)
$ (0.03)
$ (0.04)
Earnings Per Share Diluted Impact
$ (0.04)
$ (0.03)
$ (0.04)
Stock Compensation Plans (Details 3)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Stock options granted:
 
 
 
Weighted-average risk-free interest rate
1.20% 
2.50% 
2.70% 
Weighted-average dividend yield
1.80% 
1.40% 
1.30% 
Volatility
33.20% 
31.00% 
33.90% 
Expected term (in years)
6 years 1 month 2 days 
5 years 9 months 18 days 
5 years 9 months 18 days 
Weighted-average grant date fair value
$ 4.90 
$ 5.99 
$ 5.12 
Stock Compensation Plans (Details Numeric) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Percentage of total options outstanding held by FDC employees
26.00% 
 
 
Cash received from exercise of stock options
$ 51.9 
$ 98.8 
$ 44.1 
Excess tax benefits pool
4.6 
 
 
Tax benefit realized from exercise of stock options
1.2 
4.8 
1.4 
Intrinsic value of stock options exercised
5.1 
20.6 
8.2 
Volatility
33.20% 
31.00% 
33.90% 
Expected term
6 years 1 month 2 days 
5 years 9 months 18 days 
5 years 9 months 18 days 
Non-executive employees [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Volatility
33.20% 
31.90% 
34.50% 
Expected term
6 years 1 month 2 days 
5 years 
5 years 
Executives and non-employee directors [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Volatility
33.20% 
29.70% 
32.80% 
Expected term
6 years 1 month 2 days 
7 years 
7 years 
Non-Vested Stock Options [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Unrecognized Compensation Cost
15.2 
 
 
Weighted Average Recognition Period
2 years 6 months 
 
 
Non-Vested Restricted Stock Units [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Unrecognized Compensation Cost
$ 34.1 
 
 
Weighted Average Recognition Period
1 year 9 months 18 days 
 
 
2006 Long-Term Incentive Plan [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Authorized shares to be granted
120,000,000 
 
 
Shares available for grant
35,000,000 
 
 
2006 Long-Term Incentive Plan [Member] |
Executives [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Long Term Incentive Award Performance Based Restricted Stock Units Percentage
67.00% 
 
 
Long Term Incentive Award Stock Option Awards Percentage
33.00% 
 
 
2006 Long-Term Incentive Plan [Member] |
Non-executive employees [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Long Term Incentive Award Performance Based Restricted Stock Units Percentage
67.00% 
 
 
Long Term Incentive Award Stock Option Awards Percentage
33.00% 
 
 
2006 Long-Term Incentive Plan [Member] |
Employee Stock Option [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Options expiration period
10 years 
 
 
Award vesting period
4 years 
 
 
2006 Long-Term Incentive Plan [Member] |
Restricted Stock Units [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Restricted stock vesting percentage
1.0 
 
 
Award vesting period
3 years 
 
 
2006 Long-Term Incentive Plan [Member] |
Performance Stock Units [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Award vesting period
1 year 
 
 
Performance Period for Performance Based Restricted Stock Units
2 years 
 
 
2006 Long-Term Incentive Plan [Member] |
Performance Stock Units [Member] |
Minimum [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Percentage of stock units granted that recipients receive as performance based restricted stock units
0.00% 
 
 
2006 Long-Term Incentive Plan [Member] |
Performance Stock Units [Member] |
Maximum [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Percentage of stock units granted that recipients receive as performance based restricted stock units
300.00% 
 
 
2006 Non-Employee Director Plan [Member]
 
 
 
Stock Compensation Plans (Numeric) [Abstract]
 
 
 
Authorized shares to be granted
1,500,000 
 
 
Options expiration period
10 years 
 
 
Options Issued
1,100,000 
 
 
Unrestricted Stock Units Issued
300,000 
 
 
Segments (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 24 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Transaction fees
 
 
 
 
 
 
 
 
$ 4,210.0 
$ 4,220.2 
$ 4,055.3 
 
Foreign exchange revenues
 
 
 
 
 
 
 
 
1,332.7 
1,151.2 
1,018.8 
 
Other revenues
 
 
 
 
 
 
 
 
122.1 
120.0 
118.6 
 
Total revenues
1,424.7 
1,421.6 
1,425.1 
1,393.4 
1,431.3 
1,410.8 
1,366.3 
1,283.0 
5,664.8 
5,491.4 
5,192.7 
 
Operating income/(loss):
 
 
 
 
 
 
 
 
 
 
 
 
Total operating income
286.0 
365.6 
345.9 
332.5 
358.4 
363.0 
350.7 
312.9 
1,330.0 
1,385.0 
1,300.1 
 
Restructuring and related expenses (Note 4)
 
 
 
 
0 
(13.9)
(8.9)
(24.0)
0 
(46.8)
(59.5)
(106.3)
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
9,465.7 
 
 
 
9,069.9 
 
 
 
9,465.7 
9,069.9 
7,929.2 
9,069.9 
Depreciation and amortization:
 
 
 
 
 
 
 
 
 
 
 
 
Total depreciation and amortization
 
 
 
 
 
 
 
 
246.1 
192.6 
175.9 
 
Capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
Total capital expenditures
 
 
 
 
 
 
 
 
268.2 
162.5 
113.7 
 
Consumer-to-Consumer [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Transaction fees
 
 
 
 
 
 
 
 
3,545.6 
3,580.2 
3,434.3 
 
Foreign exchange revenues
 
 
 
 
 
 
 
 
988.5 
983.1 
905.8 
 
Other revenues
 
 
 
 
 
 
 
 
50.2 
45.1 
43.3 
 
Total revenues
 
 
 
 
 
 
 
 
4,584.3 
4,608.4 
4,383.4 
 
Operating income/(loss):
 
 
 
 
 
 
 
 
 
 
 
 
Total operating income
 
 
 
 
 
 
 
 
1,266.9 
1,316.0 
1,243.3 
 
Restructuring and related expenses (Note 4)
 
 
 
 
 
 
 
 
 
(33.7)
(44.7)
(78.4)
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
4,854.2 
 
 
 
4,644.6 
 
 
 
4,854.2 
4,644.6 
5,014.3 
4,644.6 
Depreciation and amortization:
 
 
 
 
 
 
 
 
 
 
 
 
Total depreciation and amortization
 
 
 
 
 
 
 
 
158.2 
141.0 
130.5 
 
Capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
Total capital expenditures
 
 
 
 
 
 
 
 
219.1 
138.4 
85.3 
 
Consumer-to-Business [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Transaction fees
 
 
 
 
 
 
 
 
573.6 
581.8 
576.5 
 
Foreign exchange revenues
 
 
 
 
 
 
 
 
3.4 
5.7 
3.6 
 
Other revenues
 
 
 
 
 
 
 
 
26.9 
28.4 
30.6 
 
Total revenues
 
 
 
 
 
 
 
 
603.9 
615.9 
610.7 
 
Operating income/(loss):
 
 
 
 
 
 
 
 
 
 
 
 
Total operating income
 
 
 
 
 
 
 
 
137.6 
146.9 
146.2 
 
Restructuring and related expenses (Note 4)
 
 
 
 
 
 
 
 
 
(6.2)
(9.8)
(16.0)
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
1,029.6 
 
 
 
955.8 
 
 
 
1,029.6 
955.8 
730.1 
955.8 
Depreciation and amortization:
 
 
 
 
 
 
 
 
 
 
 
 
Total depreciation and amortization
 
 
 
 
 
 
 
 
14.7 
18.8 
18.3 
 
Capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
Total capital expenditures
 
 
 
 
 
 
 
 
21.8 
13.4 
17.5 
 
Business Solutions [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Transaction fees
 
 
 
 
 
 
 
 
34.9 
5.9 
1.3 
 
Foreign exchange revenues
 
 
 
 
 
 
 
 
332.0 
154.6 
105.0 
 
Other revenues
 
 
 
 
 
 
 
 
0.5 
0.6 
0.4 
 
Total revenues
 
 
 
 
 
 
 
 
367.4 
161.1 
106.7 
 
Operating income/(loss):
 
 
 
 
 
 
 
 
 
 
 
 
Total operating income
 
 
 
 
 
 
 
 
(54.8)1
(9.6)1
(24.2)1
 
Restructuring and related expenses (Note 4)
 
 
 
 
 
 
 
 
 
(5.0)
(3.0)
(8.0)
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
2,012.6 
 
 
 
1,906.2 
 
 
 
2,012.6 
1,906.2 
718.5 
1,906.2 
Depreciation and amortization:
 
 
 
 
 
 
 
 
 
 
 
 
Total depreciation and amortization
 
 
 
 
 
 
 
 
65.7 
26.8 
17.7 
 
Capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
Total capital expenditures
 
 
 
 
 
 
 
 
16.1 
6.7 
4.0 
 
Other [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
109.2 
106.0 
91.9 
 
Operating income/(loss):
 
 
 
 
 
 
 
 
 
 
 
 
Total operating income
 
 
 
 
 
 
 
 
(19.7)
(21.5)
(5.7)
 
Restructuring and related expenses (Note 4)
 
 
 
 
 
 
 
 
 
(1.9)
(2.0)
(3.9)
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
1,569.3 
 
 
 
1,563.3 
 
 
 
1,569.3 
1,563.3 
1,466.3 
1,563.3 
Depreciation and amortization:
 
 
 
 
 
 
 
 
 
 
 
 
Total depreciation and amortization
 
 
 
 
 
 
 
 
7.5 
4.7 
8.5 
 
Capital expenditures:
 
 
 
 
 
 
 
 
 
 
 
 
Total capital expenditures
 
 
 
 
 
 
 
 
11.2 
4.0 
6.9 
 
Total segment [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Operating income/(loss):
 
 
 
 
 
 
 
 
 
 
 
 
Total operating income
 
 
 
 
 
 
 
 
1,330.0 
1,431.8 
1,359.6 
 
Depreciation and amortization:
 
 
 
 
 
 
 
 
 
 
 
 
Total depreciation and amortization
 
 
 
 
 
 
 
 
246.1 
191.3 
175.0 
 
Restructuring and Related Expenses [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization:
 
 
 
 
 
 
 
 
 
 
 
 
Total depreciation and amortization
 
 
 
 
 
 
 
 
$ 0 
$ 1.3 
$ 0.9 
 
Segments (Details 1) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Revenue:
 
 
 
 
 
 
 
 
 
 
 
United States
 
 
 
 
 
 
 
 
$ 1,593.1 
$ 1,568.6 
$ 1,516.0 
International
 
 
 
 
 
 
 
 
4,071.7 
3,922.8 
3,676.7 
Total revenues
1,424.7 
1,421.6 
1,425.1 
1,393.4 
1,431.3 
1,410.8 
1,366.3 
1,283.0 
5,664.8 
5,491.4 
5,192.7 
Long-lived assets:
 
 
 
 
 
 
 
 
 
 
 
United States
148.2 
 
 
 
152.1 
 
 
 
148.2 
152.1 
159.4 
International
47.9 
 
 
 
46.0 
 
 
 
47.9 
46.0 
37.1 
Property and equipment, net
$ 196.1 
 
 
 
$ 198.1 
 
 
 
$ 196.1 
$ 198.1 
$ 196.5 
Segments (Details Numeric) (USD $)
3 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 12 Months Ended 24 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Dec. 31, 2012
Consumer-to-Consumer [Member]
Dec. 31, 2011
Consumer-to-Consumer [Member]
Dec. 31, 2010
Consumer-to-Consumer [Member]
Dec. 31, 2011
Consumer-to-Consumer [Member]
Dec. 31, 2012
Consumer-to-Business [Member]
Dec. 31, 2011
Consumer-to-Business [Member]
Dec. 31, 2010
Consumer-to-Business [Member]
Dec. 31, 2011
Consumer-to-Business [Member]
Dec. 31, 2012
Business Solutions [Member]
Dec. 31, 2011
Business Solutions [Member]
Dec. 31, 2010
Business Solutions [Member]
Dec. 31, 2011
Business Solutions [Member]
Dec. 31, 2012
Travelex Global Business Payments [Member]
Sep. 30, 2012
Travelex Global Business Payments [Member]
Jun. 30, 2012
Travelex Global Business Payments [Member]
Mar. 31, 2012
Travelex Global Business Payments [Member]
Dec. 31, 2011
Travelex Global Business Payments [Member]
Dec. 31, 2012
Travelex Global Business Payments [Member]
Dec. 31, 2011
Travelex Global Business Payments [Member]
Dec. 31, 2010
Travelex Global Business Payments [Member]
Segment (Numeric) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring and Related Expenses
$ 0 
$ 13,900,000 
$ 8,900,000 
$ 24,000,000 
$ 0 
$ 46,800,000 
$ 59,500,000 
$ 106,300,000 
 
$ 33,700,000 
$ 44,700,000 
$ 78,400,000 
 
$ 6,200,000 
$ 9,800,000 
$ 16,000,000 
 
$ 5,000,000 
$ 3,000,000 
$ 8,000,000 
 
 
 
 
 
 
 
 
Percentage utilized to split revenue for transactions initiated and paid in different regions
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage utilized to split revenue for Consumer-to-Consumer transactions initiated and paid in the same region
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage utilized to split revenue for Consumer-to-Business and Business Solutions transactions
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
TGBP integration expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 11,600,000 
$ 10,300,000 
$ 14,500,000 
$ 6,400,000 
$ 4,800,000 
$ 42,800,000 
$ 4,800,000 
$ 0 
Quarterly Financial Information (Unaudited) (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended 24 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Quarterly Financial Data [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Productivity and cost-savings initiatives expenses
$ 30,900,000 
 
 
 
 
 
 
 
$ 30,900,000 1
 
 
 
Restructuring and Related Expenses
 
 
 
 
0 
13,900,000 
8,900,000 
24,000,000 
0 
46,800,000 
59,500,000 
106,300,000 
Gain recognized in remeasurement of former equity interest in another company
 
 
 
 
 
 
 
 
0 
49,900,000 
0 
 
Net gain from settlement of foreign currency forward contracts related to acquisitions
 
 
 
 
 
 
 
 
 
20,800,000 
 
 
Tax benefit related to the IRS Agreement
 
 
 
 
204,700,000 
 
 
 
 
204,700,000 
 
 
2012 and 2011 by Quarter:
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
1,424,700,000 
1,421,600,000 
1,425,100,000 
1,393,400,000 
1,431,300,000 
1,410,800,000 
1,366,300,000 
1,283,000,000 
5,664,800,000 
5,491,400,000 
5,192,700,000 
 
Expenses
1,138,700,000 2 3
1,056,000,000 3
1,079,200,000 3
1,060,900,000 3
1,072,900,000 4
1,047,800,000 5
1,015,600,000 5
970,100,000 5
4,334,800,000 2 3 6
4,106,400,000 4 5 6
3,892,600,000 6
 
Operating income
286,000,000 
365,600,000 
345,900,000 
332,500,000 
358,400,000 
363,000,000 
350,700,000 
312,900,000 
1,330,000,000 
1,385,000,000 
1,300,100,000 
 
Other expense, net
41,200,000 
41,800,000 
35,800,000 
42,400,000 
5,800,000 7
49,100,000 
17,300,000 7
38,200,000 
161,200,000 
110,400,000 7
154,900,000 
 
Income before income taxes
244,800,000 
323,800,000 
310,100,000 
290,100,000 
352,600,000 
313,900,000 
333,400,000 
274,700,000 
1,168,800,000 
1,274,600,000 
1,145,200,000 
 
Provision for income taxes
6,900,000 
54,300,000 
38,900,000 
42,800,000 
(99,700,000)8
74,200,000 
70,200,000 
64,500,000 
142,900,000 
109,200,000 8
235,300,000 
 
Net income
237,900,000 
269,500,000 
271,200,000 
247,300,000 
452,300,000 
239,700,000 
263,200,000 
210,200,000 
1,025,900,000 
1,165,400,000 
909,900,000 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$ 0.40 
$ 0.45 
$ 0.44 
$ 0.40 
$ 0.73 
$ 0.38 
$ 0.42 
$ 0.32 
$ 1.70 
$ 1.85 
$ 1.37 
 
Diluted
$ 0.40 
$ 0.45 
$ 0.44 
$ 0.40 
$ 0.73 
$ 0.38 
$ 0.41 
$ 0.32 
$ 1.69 
$ 1.84 
$ 1.36 
 
Weighted-average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
588.0 
601.5 
610.9 
619.1 
619.4 
624.9 
631.1 
646.9 
604.9 
630.6 
666.5 
 
Diluted
590.2 
604.2 
613.1 
621.9 
621.7 
627.1 
635.8 
652.1 
607.4 
634.2 
668.9 
 
Angelo Costa S.r.l. [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Financial Data [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Gain recognized in remeasurement of former equity interest in another company
 
 
 
 
 
 
29,400,000 
 
 
29,400,000 
 
 
Finint S.r.l. [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Financial Data [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Gain recognized in remeasurement of former equity interest in another company
 
 
 
 
20,500,000 
 
 
 
 
20,500,000 
 
 
Travelex Global Business Payments [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Financial Data [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
TGBP integration expenses
11,600,000 
10,300,000 
14,500,000 
6,400,000 
4,800,000 
 
 
 
42,800,000 
4,800,000 
0 
 
Net gain from settlement of foreign currency forward contracts related to acquisitions
 
 
 
 
$ 20,800,000 
 
 
 
 
 
 
 
Condensed Balance Sheets (Details) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Mar. 31, 2010
Dec. 31, 2009
Assets:
 
 
 
 
 
Cash and cash equivalents
$ 1,776.5 
$ 1,370.9 
$ 2,157.4 
 
$ 1,685.2 
Property and equipment, net of accumulated depreciation of $14.4 and $12.3, respectively
196.1 
198.1 
196.5 
 
 
Income tax deposit
 
 
 
250.0 
 
Other assets
319.9 
363.4 
 
 
 
Total assets
9,465.7 
9,069.9 
7,929.2 
 
 
Liabilities:
 
 
 
 
 
Accounts payable and accrued liabilities
556.2 
535.0 
 
 
 
Income taxes payable
218.3 
302.4 
 
 
 
Borrowings, carrying value
4,029.2 1
3,583.2 1
 
 
 
Other liabilities
254.7 
273.6 
 
 
 
Total liabilities
8,525.1 
8,175.1 
 
 
 
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; 572.1 shares and 619.4 shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively
5.7 
6.2 
 
 
 
Capital surplus
332.8 
247.1 
 
 
 
Retained earnings
754.7 
760.0 
 
 
 
Accumulated other comprehensive loss
(152.6)
(118.5)
(132.8)
 
 
Total stockholders' equity
940.6 
894.8 
582.7 
 
353.5 
Total liabilities and stockholders' equity
9,465.7 
9,069.9 
 
 
 
Condensed Financial Information of Registrant (Parenthetical) [Abstract]
 
 
 
 
 
Accumulated depreciation
384.5 
429.7 
 
 
 
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 outstanding
572,100,000 
619,400,000 
 
 
 
Common stock, shares issued
572,100,000 
619,400,000 
 
 
 
Parent Company [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Cash and cash equivalents
383.7 
1.1 
89.2 
 
27.9 
Property and equipment, net of accumulated depreciation of $14.4 and $12.3, respectively
33.6 
32.6 
 
 
 
Income tax deposit
0 
250.0 
 
 
 
Other assets
68.4 
55.9 
 
 
 
Investment in subsidiaries
5,420.3 
4,708.8 
 
 
 
Total assets
5,906.0 
5,048.4 
 
 
 
Liabilities:
 
 
 
 
 
Accounts payable and accrued liabilities
79.3 
72.0 
 
 
 
Income taxes payable
88.3 
406.1 
 
 
 
Payable to subsidiaries, net
773.5 
99.7 
 
 
 
Borrowings, carrying value
4,023.4 
3,574.4 
 
 
 
Other liabilities
0.9 
1.4 
 
 
 
Total liabilities
4,965.4 
4,153.6 
 
 
 
Stockholders' Equity:
 
 
 
 
 
Preferred stock, $1.00 par value; 10 shares authorized, no shares issued
0 
0 
 
 
 
Common stock, $0.01 par value; 2,000 shares authorized; 572.1 shares and 619.4 shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively
5.7 
6.2 
 
 
 
Capital surplus
332.8 
247.1 
 
 
 
Retained earnings
754.7 
760.0 
 
 
 
Accumulated other comprehensive loss
(152.6)
(118.5)
 
 
 
Total stockholders' equity
940.6 
894.8 
 
 
 
Total liabilities and stockholders' equity
5,906.0 
5,048.4 
 
 
 
Condensed Financial Information of Registrant (Parenthetical) [Abstract]
 
 
 
 
 
Accumulated depreciation
$ 14.4 
$ 12.3 
 
 
 
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 outstanding
572,100,000 
619,400,000 
 
 
 
Common stock, shares issued
572,100,000 
619,400,000 
 
 
 
Condensed Statements of Income and Comprehensive Income (Details 1) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Parent Company
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 1,424.7 
$ 1,421.6 
$ 1,425.1 
$ 1,393.4 
$ 1,431.3 
$ 1,410.8 
$ 1,366.3 
$ 1,283.0 
$ 5,664.8 
$ 5,491.4 
$ 5,192.7 
Expenses
1,138.7 1 2
1,056.0 1
1,079.2 1
1,060.9 1
1,072.9 3
1,047.8 4
1,015.6 4
970.1 4
4,334.8 1 2 5
4,106.4 3 4 5
3,892.6 5
Operating income
286.0 
365.6 
345.9 
332.5 
358.4 
363.0 
350.7 
312.9 
1,330.0 
1,385.0 
1,300.1 
Interest income
 
 
 
 
 
 
 
 
5.5 
5.2 
2.8 
Interest expense
 
 
 
 
 
 
 
 
(179.6)
(181.9)
(169.9)
Other expense
 
 
 
 
 
 
 
 
12.4 
52.3 
14.7 
Income before income taxes
244.8 
323.8 
310.1 
290.1 
352.6 
313.9 
333.4 
274.7 
1,168.8 
1,274.6 
1,145.2 
Income tax benefit
(6.9)
(54.3)
(38.9)
(42.8)
99.7 6
(74.2)
(70.2)
(64.5)
(142.9)
(109.2)6
(235.3)
Net income
237.9 
269.5 
271.2 
247.3 
452.3 
239.7 
263.2 
210.2 
1,025.9 
1,165.4 
909.9 
Other comprehensive income/(loss), net of tax
 
 
 
 
 
 
 
 
(34.1)
14.3 
(5.5)
Comprehensive income
 
 
 
 
 
 
 
 
991.8 
1,179.7 
904.4 
Parent Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Parent Company
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
0 
0 
0 
Expenses
 
 
 
 
 
 
 
 
0 
0 
0 
Operating income
 
 
 
 
 
 
 
 
0 
0 
0 
Interest income
 
 
 
 
 
 
 
 
0.2 
0.1 
0.2 
Interest expense
 
 
 
 
 
 
 
 
(178.6)
(181.0)
(168.7)
Other expense
 
 
 
 
 
 
 
 
0 
(0.1)
(3.3)
Income before income taxes
 
 
 
 
 
 
 
 
(178.4)
(181.0)
(171.8)
Equity in earnings of affiliates, net of tax
 
 
 
 
 
 
 
 
1,136.1 
1,276.7 
1,012.5 
Income tax benefit
 
 
 
 
 
 
 
 
68.2 
69.7 
69.2 
Net income
 
 
 
 
 
 
 
 
1,025.9 
1,165.4 
909.9 
Other comprehensive income/(loss), net of tax
 
 
 
 
 
 
 
 
2.0 
(11.7)
(1.6)
Other comprehensive income/(loss) of affiliates, net of tax
 
 
 
 
 
 
 
 
(36.1)
26.0 
(3.9)
Comprehensive income
 
 
 
 
 
 
 
 
$ 991.8 
$ 1,179.7 
$ 904.4 
Condensed Statements of Cash Flows (Details 2) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Cash flows from operating activities
 
 
 
Net cash provided by operating activities
$ 1,185.3 
$ 1,174.9 
$ 994.4 
Cash flows from investing activities
 
 
 
Purchases of property and equipment
(60.9)
(52.8)
(53.3)
Net cash used in investing activities
(258.2)
(1,360.3)
(64.6)
Cash flows from financing activities
 
 
 
Net proceeds from issuance of borrowings
742.8 
696.3 
247.0 
Principal payments on borrowings
0 
(696.3)
0 
Net (repayments of)/proceeds from commercial paper
(297.0)
297.0 
0 
Proceeds from exercise of options
53.4 
100.0 
42.1 
Cash dividends paid
(254.2)
(194.2)
(165.3)
Common stock repurchased
(766.5)
(803.9)
(581.4)
Net cash used in financing activities
(521.5)
(601.1)
(457.6)
Net change in cash and cash equivalents
405.6 
(786.5)
472.2 
Cash and cash equivalents at beginning of year
1,370.9 
2,157.4 
1,685.2 
Cash and cash equivalents at end of year
1,776.5 
1,370.9 
2,157.4 
Parent Company [Member]
 
 
 
Cash flows from operating activities
 
 
 
Net cash provided by operating activities
228.3 
698.1 
631.6 
Cash flows from investing activities
 
 
 
Purchases of property and equipment
(3.3)
(4.2)
0 
Net cash used in investing activities
(3.3)
(4.2)
0 
Cash flows from financing activities
 
 
 
Advances from/(to) subsidiaries, net
679.1 
(180.9)
(112.7)
Net proceeds from issuance of borrowings
742.8 
696.3 
247.0 
Principal payments on borrowings
0 
(696.3)
0 
Net (repayments of)/proceeds from commercial paper
(297.0)
297.0 
0 
Proceeds from exercise of options
53.4 
100.0 
42.1 
Cash dividends paid
(254.2)
(194.2)
(165.3)
Common stock repurchased
(766.5)
(803.9)
(581.4)
Net cash used in financing activities
157.6 
(782.0)
(570.3)
Net change in cash and cash equivalents
382.6 
(88.1)
61.3 
Cash and cash equivalents at beginning of year
1.1 
89.2 
27.9 
Cash and cash equivalents at end of year
$ 383.7 
$ 1.1 
$ 89.2 
Condensed FInancial Information of the Registrant (Details Numeric) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Parent Company Numerics
 
 
 
 
Net assets subject to limitations
$ 305 
 
 
 
Total stockholders' equity
940.6 
894.8 
582.7 
353.5 
Letters of credit outstanding and bank guarantees
100.0 
 
 
 
Parent Company [Member]
 
 
 
 
Parent Company Numerics
 
 
 
 
Net assets subject to limitations
305 
 
 
 
Total stockholders' equity
940.6 
894.8 
 
 
Note payable to subsidiary
268.2 
 
 
 
Stated interest rate
0.23% 
 
 
 
Letters of credit outstanding and bank guarantees
$ 14.5