PART I [Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements, emphasizing that actual outcomes may differ due to various risks, uncertainties, and assumptions - The report contains forward-looking statements that are not guarantees of future performance and involve risks, uncertainties, and assumptions. Readers should consider all uncertainties and risks discussed in Part I, Item 1A, Risk Factors[13](index=13&type=chunk) - Possible events or factors that could cause results to differ materially include changes in general economic conditions, failure to compete effectively, geopolitical tensions, and inability to maintain agent networks[14](index=14&type=chunk)[15](index=15&type=chunk) - Risks also include changes in foreign exchange rates, tax laws, security breaches, vendor failures, and non-compliance with various regulations[18](index=18&type=chunk)[20](index=20&type=chunk) [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Western Union is a global leader in money movement and payment services, primarily through its Consumer-to-Consumer segment, with a vast agent network and digital services - Western Union is a leader in global money movement and payment services, with a vision to be the world leader in branded payments and accessible consumer financial services[21](index=21&type=chunk) - As of December 31, 2022, the company's global network included agent locations in over **200 countries and territories** and many branded or partner websites, with approximately **400,000 agent locations** conducting money transfer activity in the previous 12 months[22](index=22&type=chunk) - The company is selling its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC, with the sale expected to be completed in three closings by Q2 2023[23](index=23&type=chunk) [Overview](index=6&type=section&id=Overview) Western Union is a global leader in money movement and payment services, aiming to expand its financial services portfolio and access channels, including a new digital wallet - Western Union's vision is to be the world leader of branded payments and accessible consumer financial services, serving aspiring populations globally[21](index=21&type=chunk) - The company's global network, as of December 31, 2022, included agent locations in over **200 countries and territories** and numerous branded or partner websites[22](index=22&type=chunk) - Western Union is working to provide consumers and business clients with access to an expanding portfolio of financial services and to expand service access, including through the recent launch of its digital wallet in certain countries[24](index=24&type=chunk) [Our Segments](index=6&type=section&id=Our%20Segments) Western Union manages its business through Consumer-to-Consumer (C2C) and Business Solutions segments, with C2C being the core business and Business Solutions undergoing divestiture - Western Union's business is managed through two segments: Consumer-to-Consumer and Business Solutions, with other services reported as 'Other'[25](index=25&type=chunk)[26](index=26&type=chunk) Consolidated Revenue Components (2020-2022) | Segment | 2022 | 2021 | 2020 | | :------------------ | :--- | :--- | :--- | | Consumer-to-Consumer | 89 % | 87 % | 87 % | | Business Solutions | 5 % | 8 % | 8 % | | Other | 6 % | 5 % | 5 %| - No individual country outside the United States accounted for more than approximately **9% of consolidated revenue** for 2020-2022[28](index=28&type=chunk) [Consumer-to-Consumer Segment](index=7&type=section&id=Consumer-to-Consumer%20Segment) The C2C segment, representing 89% of 2022 revenues, focuses on cross-border money transfers via retail and digital channels, facing intense competition and increasing regulation - Consumer-to-Consumer money transfers are the core business, representing **89% of total consolidated revenues for 2022**, with a substantial majority being cross-border transactions[30](index=30&type=chunk) - Revenues are primarily derived from customer fees and foreign exchange spreads, varying by channel, send/receive locations, principal amount, and currency differences[31](index=31&type=chunk)[32](index=32&type=chunk) - The segment offers retail and digital money transfer options, with digital channels allowing funding via credit/debit cards, electronic funds transfers, and online banking[34](index=34&type=chunk)[35](index=35&type=chunk) - Key industry trends include increasing regulation (anti-money laundering, consumer protection, data privacy) and increased competition from electronic, mobile, and internet-based services, as well as digital currencies[41](index=41&type=chunk)[42](index=42&type=chunk) [Business Solutions Segment](index=10&type=section&id=Business%20Solutions%20Segment) The Business Solutions segment, 5% of 2022 revenues, provides cross-border payment and foreign exchange solutions for SMEs and is currently being divested - The Business Solutions segment represented **5% of total consolidated revenues for 2022**[45](index=45&type=chunk) - The company entered into an agreement to sell its Business Solutions business for **$910.0 million**, with the first closing on March 1, 2022, and the second on December 31, 2022 (including UK operations)[45](index=45&type=chunk) - Services primarily facilitate cross-border, cross-currency transactions and foreign exchange solutions for small and medium-sized enterprises[45](index=45&type=chunk) [Other](index=10&type=section&id=Other) The 'Other' category includes bill payment services and money orders, along with the recently launched digital wallet, generating 6% of total consolidated revenues in 2022 - The 'Other' segment primarily includes bill payment services in Argentina and the United States, and money order services, along with certain corporate costs[46](index=46&type=chunk) - This segment also includes the digital wallet, allowing consumers to load and spend funds or initiate money transfers[46](index=46&type=chunk) - Other revenue is primarily derived from transaction fees paid by customers and billers, representing **6% of total consolidated revenues for 2022**[46](index=46&type=chunk) [Intellectual Property](index=10&type=section&id=Intellectual%20Property) Western Union's globally recognized trademarks and patents covering its services are material to its business, with significant annual investment in brand support - The Western Union® brand, Black & Yellow trade dress, and other trademarks (Orlandi Valuta®, Vigo®, Pago Fácil®, Quick Collect®, Quick PaySM, Quick Cash®, Western Union Convenience Pay®) are material to the company[49](index=49&type=chunk) - The company invests significantly each year to support its brands, with agents also contributing financial resources in some regions[49](index=49&type=chunk) - Western Union owns patents and patent applications covering various technologies related to its products and services, including money transfer, compliance analytics, fraud prevention, and mobile applications[49](index=49&type=chunk) [Regulation](index=11&type=section&id=Regulation) Western Union's business is subject to extensive and evolving global regulations covering anti-money laundering, consumer protection, and data privacy, with non-compliance leading to significant penalties - The business is subject to a wide range of laws and regulations globally, including strict requirements for anti-money laundering, terrorist financing, fraud prevention, consumer protection, and data privacy[51](index=51&type=chunk) - Failure to comply can result in regulatory action, civil/criminal penalties, license suspension/revocation, service limitations, business model changes, loss of consumer confidence, and asset seizure[51](index=51&type=chunk) - The company entered into Joint Settlement Agreements in 2017 and the NYDFS Consent Order in 2018 to resolve investigations related to anti-money laundering programs[51](index=51&type=chunk)[52](index=52&type=chunk) [Money Transfer and Payment Instrument Licensing and Regulation](index=11&type=section&id=Money%20Transfer%20and%20Payment%20Instrument%20Licensing%20and%20Regulation) Money transfer services are heavily regulated by anti-money laundering laws and economic sanctions programs, requiring compliance with licensing, reporting, and asset composition rules - Most services are subject to anti-money laundering laws, including the Bank Secrecy Act (BSA) in the U.S., requiring risk-based programs, reporting of large cash transactions, and customer/agent information maintenance[52](index=52&type=chunk) - Economic and trade sanctions programs (e.g., OFAC) prohibit or restrict transactions with certain countries, regions, governments, and individuals[54](index=54&type=chunk) - In the U.S., almost all states license certain services and require specific amounts and compositions of eligible assets (e.g., highly-rated, investment-grade securities) to satisfy outstanding settlement obligations[55](index=55&type=chunk) - The majority of EU business is managed through an Irish payment institution subsidiary, regulated by the Central Bank of Ireland under PSD2, which imposes rules on competition, innovation, transparency, consumer protection, and security[58](index=58&type=chunk) [Consumer Protection Regulations](index=14&type=section&id=Consumer%20Protection%20Regulations) The CFPB, established by the Dodd-Frank Act, significantly impacts Western Union by enforcing federal consumer protection laws, leading to enhanced disclosure and error resolution requirements - The Dodd-Frank Act created the CFPB, which implements and enforces federal consumer protection laws, including those for money transfer services[67](index=67&type=chunk) - CFPB regulations require enhanced written pre-transaction disclosures, transaction receipts (including fees, exchange rates, taxes), error resolution obligations, and transaction cancellation rights for international transfers from the U.S[67](index=67&type=chunk) - The company faces increased costs and potential adverse effects due to evolving global consumer protection laws and increased coordination among governmental agencies[68](index=68&type=chunk) [Derivatives Regulations](index=15&type=section&id=Derivatives%20Regulations) Derivatives regulations, including Dodd-Frank, EMIR, and MiFID II, subject Western Union's hedging transactions to reporting and potential clearing requirements, increasing compliance costs - Rules under the Dodd-Frank Act (CFTC), EMIR (EU), and MiFID II (UK) subject foreign exchange and corporate interest rate hedging transactions to reporting, recordkeeping, and other requirements[69](index=69&type=chunk) - Derivatives regulations have increased business costs, and future requirements (e.g., registration, increased regulation of contracts) will lead to additional costs or impact hedging activities[69](index=69&type=chunk) - Post-Brexit, the company may face differing UK regulatory requirements, potentially increasing service costs[69](index=69&type=chunk) [Unclaimed Property Regulations](index=15&type=section&id=Unclaimed%20Property%20Regulations) Western Union is subject to unclaimed property laws requiring remittance of unclaimed funds to government authorities, with potential for significant financial impact if accruals differ from claims - The company is subject to unclaimed property laws in the U.S. and other countries, requiring turnover of unclaimed property (e.g., money transfers, money orders) to government authorities[70](index=70&type=chunk) - Western Union has a program to comply with these laws and is subject to audits regarding its escheatment practices[70](index=70&type=chunk) - Differences between accrued amounts for unclaimed property and amounts claimed by jurisdictions could significantly impact results of operations and cash flows[70](index=70&type=chunk) [Privacy Regulations and Information Security Standards](index=15&type=section&id=Privacy%20Regulations%20and%20Information%20Security%20Standards) Handling personal information subjects Western Union to stringent global data privacy and security laws, where breaches or non-compliance can lead to significant costs and reputational damage - The company's activities involving personal information are subject to information security, data privacy, data protection, and data breach laws in the U.S., EU, and other countries[71](index=71&type=chunk) - U.S. laws like the Gramm-Leach-Bliley Act and state laws (CCPA, CPA) apply, with the FTC bringing enforcement actions for privacy/data security violations[72](index=72&type=chunk) - The EU's GDPR imposes significant obligations and increased penalties for non-compliance, influencing other jurisdictions[73](index=73&type=chunk) - Emerging data localization laws require local hosting or restricted cross-border transfer of personal information, posing operational and technological challenges and increasing costs[74](index=74&type=chunk) [Banking Regulations](index=17&type=section&id=Banking%20Regulations) Western Union operates subsidiaries under banking licenses in Austria and Brazil, subjecting it to regulation and supervision by authorities like the Austrian Financial Market Authority and NYDFS - Western Union has subsidiaries operating under banking licenses from the Austrian Financial Market Authority and the Brazilian Central Bank[77](index=77&type=chunk) - The company is subject to regulation, examination, and supervision by the NYDFS, which has authority over its Austrian banking license subsidiary[77](index=77&type=chunk) - An Agreement of Supervision with the NYDFS imposes various regulatory requirements, including operational limitations and capital requirements, on the Austrian subsidiary[77](index=77&type=chunk) [London Interbank Offered Rate ("LIBOR") Transition](index=17&type=section&id=London%20Interbank%20Offered%20Rate%20(%22LIBOR%22)%20Transition) Western Union has transitioned all significant contracts away from LIBOR by December 31, 2022, adopting alternatives like SOFR, following the Financial Conduct Authority's cessation announcement - The Financial Conduct Authority announced the cessation of LIBOR submissions after 2021, with certain USD LIBOR settings continuing through June 2023[78](index=78&type=chunk) - As of December 31, 2022, Western Union has transitioned all significant contracts away from LIBOR[78](index=78&type=chunk) - Alternatives such as the Secured Overnight Financing Rate (SOFR) have been endorsed and are in use for many market transactions[78](index=78&type=chunk) [Other](index=17&type=section&id=Other) Western Union's services are also subject to card association rules and regulations, including PCI DSS, requiring annual reviews and imposing fines for non-compliance - Some services are subject to card association rules and regulations, including the Payment Card Industry Data Security Standard (PCI DSS)[79](index=79&type=chunk) - Compliance with PCI DSS is required for all merchants and service providers that store, process, and transmit payment card data[79](index=79&type=chunk) - The company is subject to annual reviews for PCI compliance and faces fines for non-compliance[79](index=79&type=chunk) [Human Capital Management](index=17&type=section&id=Human%20Capital%20Management) Western Union employed approximately 8,900 individuals globally as of December 31, 2022, focusing on attracting, developing, and engaging a diverse workforce through training and competitive benefits - As of December 31, 2022, Western Union employed approximately **8,900 individuals** across more than 50 countries[80](index=80&type=chunk) - Recruitment efforts focus on identifying talent with critical skills in areas like cloud, data architecture, cybersecurity, and payment systems[81](index=81&type=chunk) - The company invests in employee growth through self-paced digital and facilitated learning, on-the-job experiences, and mandatory ethics and compliance education[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) - Western Union is committed to diversity and inclusion, with over **50% of its global workforce being women** and **37% of senior management positions held by women** as of December 31, 2022[87](index=87&type=chunk) [Available Information](index=19&type=section&id=Available%20Information) Western Union's public filings, including 10-K, 10-Q, and 8-K reports, are available free of charge on its investor relations website and the SEC's website - The company's Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments are available free of charge on its investor relations website (www.westernunion.com) and the SEC's website (www.sec.gov)[91](index=91&type=chunk) [Information About our Executive Officers](index=19&type=section&id=Information%20About%20our%20Executive%20Officers) This section lists Western Union's executive officers as of February 23, 2023, including their positions and brief professional backgrounds Western Union Executive Officers (as of February 23, 2023) | Name | Age | Position | | :---------------- | :-- | :------------------------------------------------ | | Devin McGranahan | 53 | President, Chief Executive Officer, and Director | | Matt Cagwin | 48 | Chief Financial Officer | | Benjamin Adams | 51 | Chief Legal Officer and Interim Chief People Officer | | Giovanni Angelini | 53 | President, Europe and Africa | | Cherie Axelrod | 57 | Chief Enterprise Risk Officer | | Jean Claude Farah | 52 | President, Middle East and Asia Pacific | | Gabriella Fitzgerald | 51 | President, North America | | Andrew Walker | 56 | Chief Operations Officer | - Devin McGranahan joined Western Union in December 2021, previously serving as Executive Vice President, Senior Group President, Global Business Solutions at Fiserv, Inc[93](index=93&type=chunk) - Matt Cagwin became Chief Financial Officer in January 2023, having previously served as Interim CFO and Head of Business Unit Financial Planning and Analysis[94](index=94&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks that could materially impact Western Union's business, financial condition, results of operations, and cash flows - Key risk factors include adverse changes in the global economy, intense competition, dependence on consumer confidence and agent networks, rapid technological changes, and risks associated with international operations[104](index=104&type=chunk)[106](index=106&type=chunk) - Other significant risks involve cybersecurity breaches, reliance on third-party vendors, challenges in realizing benefits from restructuring, credit and fraud risks, changes in tax laws, and intellectual property protection[106](index=106&type=chunk) - Regulatory and litigation risks include increasingly strict legal and regulatory requirements (anti-money laundering, consumer protection), the impact of consent agreements with regulators, and potential class-action lawsuits[105](index=105&type=chunk)[106](index=106&type=chunk) [Risks Relating to Our Business and Industry](index=22&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Industry) Western Union faces risks from global economic downturns, intense competition, and potential deterioration in customer confidence, highly dependent on its agent network and technological adaptation - Demand for services is vulnerable to global economic downturns, high unemployment, inflation, and geopolitical events like the Russia/Ukraine conflict, which led to suspension of operations in Russia and Belarus[108](index=108&type=chunk)[110](index=110&type=chunk) - The company operates in highly competitive and rapidly evolving industries, facing competition from global/niche money transfer providers, banks, digital channels (including cryptocurrencies), and informal networks[112](index=112&type=chunk)[114](index=114&type=chunk) - Maintaining the agent network under favorable terms is crucial, as attrition can occur due to competition, agent dissatisfaction, non-compliance, or difficulties in banking relationships[121](index=121&type=chunk) - A substantial portion of revenue is generated in foreign currencies, exposing the company to foreign exchange rate fluctuations, which are partially mitigated by hedging activities[127](index=127&type=chunk) [Risks Relating to Cybersecurity and Third-Party Vendors](index=28&type=section&id=Risks%20Relating%20to%20Cybersecurity%20and%20Third-Party%20Vendors) Western Union is exposed to significant cybersecurity risks due to handling confidential information, where breaches or system interruptions could severely impact operations, reputation, and financial results - Breaches of information security safeguards could adversely affect operations, damage reputation, and impact business, financial condition, results of operations, and cash flows[141](index=141&type=chunk)[142](index=142&type=chunk) - The company collects, transfers, and retains confidential and personal information, making it subject to various data privacy and security laws globally[141](index=141&type=chunk) - Reliance on third-party vendors for services like cloud software, operating systems, and call centers means cessation or defects in these services could cause temporary business disruption[145](index=145&type=chunk) [Risks Relating to Acquisitions, Divestitures, and Restructuring Activities](index=30&type=section&id=Risks%20Relating%20to%20Acquisitions,%20Divestitures,%20and%20Restructuring%20Activities) Acquisitions involve integration complexities and regulatory compliance challenges, while divestitures carry risks like operational separation difficulties and retention of contingent liabilities - Acquisitions create risks related to valuation, integration of people, products, services, and technology, and the need to improve regulatory compliance[146](index=146&type=chunk)[147](index=147&type=chunk) - Divestitures, including the sale of the Business Solutions business, involve risks such as separation difficulties, diversion of management attention, potential loss of key employees, and retention of uncertain contingent liabilities[150](index=150&type=chunk) - Restructuring initiatives, like the operating expense redeployment program announced in October 2022, aim to optimize costs but may not realize anticipated benefits and could lead to workforce disruptions[151](index=151&type=chunk) [General Risks](index=31&type=section&id=General%20Risks) General risks include adverse impacts from changes in tax laws, potential credit rating downgrades increasing borrowing costs, substantial debt obligations, and the ability to attract and retain key employees - Changes in tax laws (e.g., Tax Act, Inflation Reduction Act of 2022, OECD's BEPS 2.0) or their interpretation could adversely affect the company's tax expense and financial condition[152](index=152&type=chunk)[154](index=154&type=chunk) - Unfavorable resolution of tax audits or contingencies could result in higher tax expense, with **$237.2 million in unrecognized tax benefits** as of December 31, 2022[155](index=155&type=chunk) - Downgrades in credit ratings could increase interest expense, damage perceptions of financial strength, and lead to additional regulatory capital requirements[156](index=156&type=chunk) - The company had approximately **$2.6 billion in consolidated indebtedness** as of December 31, 2022, which could restrict operations and limit funds for other purposes[163](index=163&type=chunk)[164](index=164&type=chunk) [Risks Relating to Our Regulatory and Litigation Environment](index=34&type=section&id=Risks%20Relating%20to%20Our%20Regulatory%20and%20Litigation%20Environment) Western Union operates in a highly regulated environment, facing increasing scrutiny and evolving laws across numerous jurisdictions, with non-compliance leading to significant liabilities and reputational damage - The business is subject to a wide range of increasing laws and regulations, including those for anti-money laundering, countering terrorist financing, sanctions, anti-fraud, consumer protection, and data privacy[165](index=165&type=chunk) - Failure to comply with these requirements by the company, its agents, or subagents can result in adverse effects on business, financial condition, results of operations, cash flows, and reputation, including civil and criminal penalties[166](index=166&type=chunk)[167](index=167&type=chunk) - The company is subject to regulations like the FCPA and UK Bribery Act, prohibiting improper payments, and faces significant risks due to its global operations[168](index=168&type=chunk) - The Dodd-Frank Act and CFPB regulations have imposed additional obligations, including enhanced consumer disclosures and error resolution, and the company is responsible for agent compliance failures[185](index=185&type=chunk) [Risks Relating to Significant Regulatory Requirements](index=34&type=section&id=Risks%20Relating%20to%20Significant%20Regulatory%20Requirements) Western Union faces increasing compliance costs and operational demands due to evolving regulatory requirements in anti-money laundering, sanctions, and fraud prevention, potentially impacting profitability - Increasing regulatory requirements for money transfer services, including anti-money laundering and fraud prevention, lead to higher compliance costs and potential agent attrition[179](index=179&type=chunk) - The company and its agents rely on bank accounts, but banks often view MSBs as high-risk, making it difficult to establish or maintain banking relationships[181](index=181&type=chunk) - Regulatory initiatives and changes in laws could reduce or limit fees, profit margins, and foreign exchange spreads, adversely affecting financial results[175](index=175&type=chunk) - Global regulatory divergence and political trends like economic nationalism could result in laws that adversely impact the ability to conduct business in certain jurisdictions[177](index=177&type=chunk) [Risks Relating to Consent Agreements and Litigation](index=41&type=section&id=Risks%20Relating%20to%20Consent%20Agreements%20and%20Litigation) Western Union is subject to ongoing consent agreements with regulators, imposing heightened compliance requirements and costs, and faces various other litigations with unpredictable outcomes - The company is subject to consent agreements (Joint Settlement Agreements, NYDFS Consent Order) that impose heightened requirements for agent oversight and consumer protection, leading to additional costs and potential business loss[197](index=197&type=chunk) - Failure to comply with continuing obligations under these agreements could result in criminal prosecution, civil litigation, significant fines, and other regulatory consequences[197](index=197&type=chunk) - Western Union is subject to litigation, including class-action lawsuits, and regulatory actions alleging violations of consumer protection, anti-money laundering, and other laws, with unpredictable outcomes and potential for substantial fines or penalties[198](index=198&type=chunk) [Item 1B. Unresolved Staff Comments](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item indicates that there are no unresolved staff comments from the SEC - There are no unresolved staff comments[199](index=199&type=chunk) [Item 2. Properties](index=42&type=section&id=Item%202.%20Properties) As of December 31, 2022, Western Union occupied leased facilities in nearly 45 countries, including its corporate headquarters in Denver, Colorado, and key operational locations - As of December 31, 2022, Western Union occupied leased facilities in nearly **45 countries**[200](index=200&type=chunk) - Corporate headquarters are in Denver, Colorado, with key operational and leadership locations in Dublin, Ireland, and Barbados[200](index=200&type=chunk) - The company operates shared service centers in Lithuania, Costa Rica, India, and the Philippines[200](index=200&type=chunk) [Item 3. Legal Proceedings](index=42&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Part II, Item 8, Financial Statements and Supplementary Data, Note 6, Commitments and Contingencies - Information on legal proceedings is incorporated by reference to Note 6, Commitments and Contingencies, in the financial statements[202](index=202&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Western Union - This item is not applicable[203](index=203&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=43&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Western Union's common stock trades on the NYSE under "WU"; as of February 17, 2023, there were 373,652,005 shares outstanding, with repurchases and dividends declared - Western Union's common stock trades on the New York Stock Exchange under the symbol **"WU"**[206](index=206&type=chunk) - As of February 17, 2023, **373,652,005 shares** of common stock were outstanding[7](index=7&type=chunk) Stock Repurchases for Q4 2022 | Period | Total Number of Shares Purchased | Average Price Paid per Share ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | | :--------------- | :----------------------------- | :------------------------------- | :-------------------------------------------------------------------- | :----------------------------------------------------------------------------------- | | October 1 - 31 | 102,097 | 13.47 | — | 823.2 | | November 1 - 30 | 5,891,930 | 13.75 | 5,888,977 | 742.2 | | December 1 - 31 | 6,802,617 | 13.86 | 6,783,007 | 648.2 | | Total | 12,796,644 | 13.81 | 12,671,984 | | - On February 10, 2022, the Board authorized **$1.0 billion in common stock repurchases** through December 31, 2024, with **$648.2 million remaining** as of December 31, 2022[208](index=208&type=chunk) [Dividend Policy and Share Repurchases](index=43&type=section&id=Dividend%20Policy%20and%20Share%20Repurchases) Western Union declared quarterly cash dividends of $0.235 per common share in 2022 and for Q1 2023, with future decisions dependent on financial condition and regulatory constraints - Quarterly cash dividends of **$0.235 per common share** were declared in 2022 and for Q1 2023[210](index=210&type=chunk)[211](index=211&type=chunk) - Future dividend and share repurchase decisions depend on financial condition, earnings, liquidity, debt obligations, capital requirements, and regulatory constraints[210](index=210&type=chunk) - A **1% excise tax** on net share repurchases after December 31, 2022, will increase the cost of repurchasing shares[210](index=210&type=chunk) [Item 6. [Reserved]](index=43&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Western Union's financial condition and results for 2022, covering consolidated results, segment performance, capital resources, liquidity, and critical accounting policies - The discussion analyzes consolidated results, segment performance (Consumer-to-Consumer, Business Solutions, Other), capital resources, liquidity, and critical accounting policies[213](index=213&type=chunk)[214](index=214&type=chunk) - Revenues and operating income for 2022 were impacted by fluctuations in the United States dollar against foreign currencies, resulting in a **$185.5 million decrease in revenues** and a **$5.0 million negative impact on operating income**[218](index=218&type=chunk) - The Business Solutions divestiture is expected to be fully completed in Q2 2023, with two closings already completed in 2022, resulting in gains of **$151.4 million and $96.9 million**[219](index=219&type=chunk) - Operations in Russia and Belarus were suspended in March 2022 due to the conflict, negatively impacting revenues by approximately **$28 million in 2022** (compared to $145 million in 2021)[221](index=221&type=chunk) [Overview](index=44&type=section&id=Overview) Western Union is a leading provider of money movement and payment services, structured into Consumer-to-Consumer and Business Solutions segments, with other services reported separately - Western Union is a leading provider of money movement and payment services, operating in Consumer-to-Consumer and Business Solutions segments[214](index=214&type=chunk) - The Consumer-to-Consumer segment facilitates money transfers primarily through retail agent locations and digital channels, forming one interconnected global network[215](index=215&type=chunk) - The Business Solutions segment provides payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium-sized enterprises, and is expected to be fully divested in Q2 2023[215](index=215&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Western Union's 2022 consolidated results show a 12% revenue decrease and 21% operating income decrease, primarily due to foreign currency and the Business Solutions divestiture, while net income increased by 13% Consolidated Results of Operations (2021-2022) | Metric | 2022 (in millions) | 2021 (in millions) | % Change | | :--------------------------------- | :----------------- | :----------------- | :------- | | Revenues | $4,475.5 | $5,070.8 | (12)% | | Total expenses | $3,590.6 | $3,947.7 | (9)% | | Operating income | $884.9 | $1,123.1 | (21)% | | Gain on divestiture of business | $248.3 | — | (a) | | Total other income/(expense), net | $123.7 | ($187.7) | (a) | | Income before income taxes | $1,008.6 | $935.4 | 8% | | Provision for income taxes | $98.0 | $129.6 | (24)% | | Net income | $910.6 | $805.8 | 13% | | Basic EPS | $2.35 | $1.98 | 19% | | Diluted EPS | $2.34 | $1.97 | 19% | - Foreign currency fluctuations, net of hedges, decreased revenues by **$185.5 million** and operating income by **$5.0 million** in 2022 compared to 2021[218](index=218&type=chunk) - The Business Solutions divestiture generated gains of **$151.4 million** (first closing) and **$96.9 million** (second closing) in 2022[219](index=219&type=chunk) - The effective tax rate decreased to **9.7% in 2022** from 13.9% in 2021, primarily due to the reversal of uncertain tax positions and completion of IRS examinations[234](index=234&type=chunk) [Revenues Overview](index=46&type=section&id=Revenues%20Overview) Consolidated revenues decreased by 12% to $4,475.5 million in 2022, primarily due to foreign currency fluctuations and the Business Solutions divestiture, alongside transaction declines - Revenues are primarily derived from customer payments for money transfers, influenced by channel, locations, principal amount, and foreign exchange rates[224](index=224&type=chunk) Consolidated Revenue Results (2021-2022) | Metric | 2022 (in millions) | 2021 (in millions) | % Change | | :---------------------------------------------------------------- | :----------------- | :----------------- | :------- | | Revenues, as reported - (GAAP) | $4,475.5 | $5,070.8 | (12)% | | Foreign currency impact | | | 4% | | Divestitures impact | | | 4% | | Revenue change, constant currency adjusted, excluding Business Solutions - (Non-GAAP) | | | (4)% | - GAAP and non-GAAP revenues decreased due to foreign exchange rate fluctuations, the Business Solutions divestiture, and a transaction decline in the Consumer-to-Consumer segment, including the suspension of operations in Russia and Belarus[228](index=228&type=chunk) [Operating Expenses Overview](index=47&type=section&id=Operating%20Expenses%20Overview) Total operating expenses decreased by 9% in 2022, driven by lower agent commissions and the Business Solutions divestiture, partially offset by increased IT investments and marketing costs - An operating expense redeployment program was announced in October 2022, aiming to redeploy approximately **$150 million in expenses over 5 years** through optimizations in vendor management, real estate, marketing, and people costs[229](index=229&type=chunk) - Cost of services decreased primarily due to lower Consumer-to-Consumer money transfer agent commissions and the Business Solutions divestiture, partially offset by increased IT investments[230](index=230&type=chunk) - Selling, general, and administrative expenses decreased due to the Business Solutions divestiture and lower employee-related expenses, partially offset by increased marketing, severance, and exit costs[231](index=231&type=chunk) [Total Other Income/(Expense), Net](index=48&type=section&id=Total%20Other%20Income/(Expense),%20Net) Total other income/(expense), net, significantly improved in 2022, benefiting from gains on the Business Solutions divestiture and the absence of prior-year pension settlement charges - Total other income/(expense), net, benefited from gains on the first two closings of the Business Solutions divestiture and a reduction in net periodic pension costs due to the termination of the U.S. defined benefit pension plan in 2021[233](index=233&type=chunk) - The prior year included a **$47.9 million gain** on the sale of a noncontrolling interest in a private company and **$109.8 million in pension settlement charges**[223](index=223&type=chunk)[233](index=233&type=chunk) - Expenses associated with payment obligations to the Business Solutions buyer for a measure of profits from EU and UK operations partially offset the benefits[233](index=233&type=chunk) [Income Taxes](index=48&type=section&id=Income%20Taxes) The effective tax rate decreased to 9.7% in 2022 from 13.9% in 2021, primarily due to the reversal of uncertain tax positions and completion of IRS examinations - Effective tax rates were **9.7% in 2022** and **13.9% in 2021**[234](index=234&type=chunk) - The decrease in the effective tax rate was primarily due to the reversal of uncertain tax positions (statute of limitations expirations, completion of IRS examination for 2017-2018) and prior-period tax expense related to changes in permanent reinvestment assertions[234](index=234&type=chunk) - As of December 31, 2022, total tax contingency reserves were **$237.2 million**, including accrued interest and penalties[235](index=235&type=chunk) - A significant proportion of profits (**95% in 2022, 106% in 2021**) are foreign-derived, making the overall effective tax rate susceptible to changes in foreign tax laws[236](index=236&type=chunk) [Earnings Per Share](index=48&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share increased by 19% in 2022, driven by higher net income and a lower number of weighted-average shares outstanding due to stock repurchases Earnings Per Share (2021-2022) | Metric | 2022 | 2021 | % Change | | :-------------------------- | :--- | :--- | :------- | | Basic EPS | $2.35 | $1.98 | 19% | | Diluted EPS | $2.34 | $1.97 | 19% | | Basic Weighted-Average Shares Outstanding (millions) | 387.2 | 406.8 | | | Diluted Weighted-Average Shares Outstanding (millions) | 388.4 | 408.9 | | - EPS for 2022 benefited from increased net income and a lower number of shares outstanding due to stock repurchases[238](index=238&type=chunk) - **8.0 million shares** were excluded from diluted EPS calculation in 2022 (vs. 2.3 million in 2021) due to anti-dilutive effects of outstanding options and restricted stock units[237](index=237&type=chunk) [Segment Discussion](index=49&type=section&id=Segment%20Discussion) Western Union's segments include Consumer-to-Consumer (C2C), Business Solutions, and Other, with C2C revenues decreasing by 9% and Business Solutions by 53% in 2022 - The company's segments are Consumer-to-Consumer and Business Solutions, with other services reported as 'Other'[239](index=239&type=chunk) - Exit costs related to Russia/Belarus operations (**$10.0 million**) and Business Solutions divestiture (**$7.7 million**), along with operating expense redeployment program costs (**$21.8 million**), are excluded from segment operating income[240](index=240&type=chunk) Segment Revenues as Percentage of Consolidated Total (2021-2022) | Segment | 2022 | 2021 | | :------------------ | :--- | :--- | | Consumer-to-Consumer | 89 % | 87 % | | Business Solutions | 5 % | 8 % | | Other | 6 % | 5 % | [Consumer-to-Consumer Segment](index=49&type=section&id=Consumer-to-Consumer%20Segment) The C2C segment experienced a 9% revenue decrease and a 10% transaction decrease in 2022, impacted by foreign currency and the suspension of Russia/Belarus operations Consumer-to-Consumer Segment Results (2021-2022) | Metric | 2022 (in millions) | 2021 (in millions) | % Change | | :-------------------------- | :----------------- | :----------------- | :------- | | Revenues | $3,993.5 | $4,394.0 | (9)% | | Operating income | $765.1 | $977.6 | (22)% | | Operating income margin | 19% | 22% | | | Consumer-to-Consumer transactions | 274.1 | 305.9 | (10)% | - Consumer-to-Consumer cross-border principal transferred decreased to **$93.6 billion in 2022** from $104.1 billion in 2021, primarily due to transaction declines and foreign exchange fluctuations[250](index=250&type=chunk) Consumer-to-Consumer Regional Revenue and Transaction Growth (2022) | Region | Revenue Growth / (Decline) as Reported - (GAAP) | Foreign Exchange Translation Impact | Constant Currency Revenue Growth / (Decline) - (Non-GAAP) | Transaction Growth / (Decline) | | :------------------------------------------ | :--------------------------------------------- | :---------------------------------- | :------------------------------------------------------- | :----------------------------- | | North America (United States & Canada) | (4)% | 0% | (4)% | (5)% | | Europe and Russia/CIS | (20)% | (5)% | (15)% | (25)% | | Middle East, Africa, and South Asia | (4)% | (2)% | (2)% | (1)% | | Latin America and the Caribbean | 4% | (3)% | 7% | 5% | | East Asia and Oceania | (13)% | (4)% | (9)% | (12)% | | Total Consumer-to-Consumer | (9)% | (3)% | (6)% | (10)% | | Branded Digital | (3)% | (2)% | (1)% | 0% | - Branded Digital represented approximately **22% of Consumer-to-Consumer revenues in 2022**, up from 20% in 2021[249](index=249&type=chunk) [Business Solutions](index=52&type=section&id=Business%20Solutions) Business Solutions revenue decreased by 53% in 2022 to $196.9 million, primarily due to the first closing of its sale and a negative impact from foreign currency exchange rates Business Solutions Segment Results (2021-2022) | Metric | 2022 (in millions) | 2021 (in millions) | % Change | | :---------------------- | :----------------- | :----------------- | :------- | | Revenues | $196.9 | $421.8 | (53)% | | Operating income | $58.5 | $95.5 | (39)% | | Operating income margin | 30% | 23% | | - Revenue decrease was primarily due to the first closing of the Business Solutions divestiture on March 1, 2022[256](index=256&type=chunk) - Operating income margin improved due to a reduction in depreciation and amortization expenses after the business was classified as held for sale[257](index=257&type=chunk) - Corporate costs stopped being allocated to the Business Solutions segment effective January 1, 2022[258](index=258&type=chunk) [Other](index=52&type=section&id=Other) The 'Other' segment, including bill payment and money order services, saw revenues increase by 12% to $285.1 million in 2022, driven by transaction volume in Argentina Other Segment Results (2021-2022) | Metric | 2022 (in millions) | 2021 (in millions) | % Change | | :---------------------- | :----------------- | :----------------- | :------- | | Revenues | $285.1 | $255.0 | 12% | | Operating income | $100.8 | $50.0 | (a) | | Operating income margin | 35% | 20% | | - Revenue increase was primarily due to transaction growth in cash-based bill payment services in Argentina and business-to-consumer payments[261](index=261&type=chunk) - Operating income increased due to higher revenues, reimbursement for transition services after the Business Solutions sale, and decreased costs related to strategic initiatives[262](index=262&type=chunk) [Capital Resources and Liquidity](index=53&type=section&id=Capital%20Resources%20and%20Liquidity) Western Union's liquidity sources include operating activities, cash balances, and a $1.5 billion revolving credit facility, with cash provided by operating activities decreasing to $581.6 million in 2022 - Primary liquidity sources are cash generated from operating activities, existing cash balances, and a **$1.5 billion revolving credit facility** expiring in January 2025[263](index=263&type=chunk)[266](index=266&type=chunk) - Cash and cash equivalents were **$1,291.1 million** as of December 31, 2022, including $5.2 million related to Business Solutions[268](index=268&type=chunk) - Investment securities, primarily highly-rated state and municipal debt, totaled **$1,333.4 million** as of December 31, 2022, held to comply with state licensing requirements[271](index=271&type=chunk) - Cash provided by operating activities decreased to **$581.6 million in 2022** from $1,045.3 million in 2021, negatively impacted by lower net income (excluding divestiture gains) and higher income taxes paid[273](index=273&type=chunk) [Cash and Investment Securities](index=53&type=section&id=Cash%20and%20Investment%20Securities) As of December 31, 2022, Western Union held $1,291.1 million in cash and $1,333.4 million in investment securities, primarily highly-rated state and municipal debt, to comply with licensing requirements Cash and Investment Securities (2021-2022) | Metric | December 31, 2022 (in millions) | December 31, 2021 (in millions) | | :-------------------------- | :------------------------------ | :------------------------------ | | Cash and cash equivalents | $1,291.1 | $1,246.0 | | Investment securities | $1,333.4 | $1,398.9 | - Investment securities consist primarily of highly-rated state and municipal debt securities, required to have credit ratings of **"A-" or better**[271](index=271&type=chunk) - The company monitors credit risk and diversifies investments, with no single issuer or security representing more than **10% of the portfolio** as of December 31, 2022[272](index=272&type=chunk) [Cash Flows from Operating Activities](index=54&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Cash provided by operating activities decreased to $581.6 million in 2022 from $1,045.3 million in 2021, primarily due to lower net income (excluding the Business Solutions divestiture gain) and higher income taxes paid Cash Provided by Operating Activities (2021-2022) | Metric | 2022 (in millions) | 2021 (in millions) | | :-------------------------------- | :----------------- | :----------------- | | Net cash provided by operating activities | $581.6 | $1,045.3 | - The decrease was primarily due to lower net income (excluding the Business Solutions divestiture gain) and higher income taxes paid, including those related to the divestiture[273](index=273&type=chunk) - Working capital fluctuations also impacted cash provided by operating activities[273](index=273&type=chunk) [Financing Resources](index=54&type=section&id=Financing%20Resources) As of December 31, 2022, Western Union had $2,616.8 million in total borrowings, with a $1.5 billion Revolving Credit Facility supporting its commercial paper program and general liquidity Outstanding Borrowings (December 31, 2022) | Type | Amount (in millions) | | :-------------------------- | :------------------- | | Commercial paper | $180.0 | | 4.250% notes due 2023 | $300.0 | | 2.850% notes due 2025 | $500.0 | | 1.350% notes due 2026 | $600.0 | | 2.750% notes due 2031 | $300.0 | | 6.200% notes due 2036 | $500.0 | | 6.200% notes due 2040 | $250.0 | | Total borrowings at carrying value | $2,616.8 | - The weighted-average effective rate on total borrowings was approximately **3.9%** as of December 31, 2022[275](index=275&type=chunk) - The **$1.5 billion Revolving Credit Facility**, expiring in January 2025, was amended in October 2022 to transition from LIBOR to SOFR, Euro Interbank Offered Rate, or Sterling Overnight Index Average[278](index=278&type=chunk) - The company's consolidated interest coverage ratio was **11:1 for 2022**, well above the required 3:1 covenant[286](index=286&type=chunk) [Cash Priorities](index=56&type=section&id=Cash%20Priorities) Western Union prioritizes maintaining strong liquidity and an investment-grade capital structure, with future growth and shareholder returns dependent on generating excess operating cash and adequate financing - The company's objective is to maintain strong liquidity and a capital structure consistent with investment-grade credit ratings[289](index=289&type=chunk) - Liquidity is supported by existing cash, operating cash flows, commercial paper markets, and the Revolving Credit Facility[289](index=289&type=chunk) - Future growth, investments, acquisitions, shareholder returns, and debt/tax servicing depend on generating excess operating cash from subsidiaries and securing adequate financing[290](index=290&type=chunk) [Capital Expenditures](index=57&type=section&id=Capital%20Expenditures) Total capital expenditures, including contract costs, property and equipment, and software, were $208.2 million in 2022, supporting IT infrastructure and agent contracts Total Capital Expenditures (2021-2022) | Metric | 2022 (in millions) | 2021 (in millions) | | :---------------------------------------------------------------- | :----------------- | :----------------- | | Total aggregate amount paid for contract costs, purchases of property and equipment, and purchased and developed software | $208.2 | $214.6 | - Capital expenditures include investments in information technology infrastructure and costs for new and renewed agent contracts[292](index=292&type=chunk) [Share Repurchases and Dividends](index=57&type=section&id=Share%20Repurchases%20and%20Dividends) In 2022, Western Union repurchased 22.3 million shares for $351.8 million and declared quarterly cash dividends of $0.235 per common share, totaling $361.6 million Share Repurchases and Dividends (2021-2022) | Metric | 2022 (in millions) | 2021 (in millions) | | :---------------------------------------------------------------- | :----------------- | :----------------- | | Shares repurchased | 22.3 | 19.5 | | Value of shares repurchased | $351.8 | $400.0 | | Average cost per share | $15.81 | $20.56 | | Total dividends declared | $361.6 | $380.5 | - A **$1.0 billion common stock repurchase authorization**, approved in February 2022, had **$648.2 million remaining** as of December 31, 2022[293](index=293&type=chunk) - Quarterly cash dividends of **$0.235 per common share** were declared in all four quarters of 2022 and for Q1 2023[294](index=294&type=chunk) [Material Cash Requirements](index=57&type=section&id=Material%20Cash%20Requirements) Western Union's material cash requirements include $300.0 million in notes maturing in June 2023, projected interest payments, a $478 million federal tax liability, and operating lease obligations - Notes with an aggregate principal amount of **$300.0 million** will mature in June 2023[295](index=295&type=chunk) - Total projected interest payments on outstanding borrowings are **$845.7 million**, with **$83.5 million** expected in the next 12 months[296](index=296&type=chunk) - A 2017 U.S. federal tax liability of approximately **$478 million** remained as of December 31, 2022, payable in periodic installments through 2025[297](index=297&type=chunk) - The company had approximately **$390 million in outstanding letters of credit and bank guarantees** as of December 31, 2022, primarily for regulatory requirements, leases, and agent agreements[303](index=303&type=chunk) [Debt Service Requirements](index=57&type=section&id=Debt%20Service%20Requirements) Western Union has $300.0 million in notes maturing in June 2023, which it plans to repay or refinance, with total projected interest payments on outstanding borrowings amounting to $845.7 million - Notes with an aggregate principal amount of **$300.0 million** will mature in June 2023[295](index=295&type=chunk) - Total projected interest payments on outstanding borrowings are **$845.7 million**, with **$83.5 million** expected to be paid in the next 12 months[296](index=296&type=chunk) [2017 United States Federal Tax Liability](index=57&type=section&id=2017%20United%20States%20Federal%20Tax%20Liability) A 2017 U.S. federal tax liability of approximately $800 million had $478 million remaining as of December 31, 2022, payable in periodic installments through 2025, adversely affecting cash flows - A 2017 U.S. federal tax liability of approximately **$800 million**, imposed by the Tax Act on previously undistributed foreign earnings, had approximately **$478 million remaining** as of December 31, 2022[297](index=297&type=chunk) - The company elected to pay this liability in periodic installments through 2025, with payments of **$63.7 million in 2022** and **$63.4 million in 2021**[297](index=297&type=chunk) - These payments adversely affect cash flows and liquidity and may impact future share repurchases[297](index=297&type=chunk) [Operating Leases](index=57&type=section&id=Operating%20Leases) Western Union leases real properties for offices and equipment, with details on leasing arrangements and future maturities of operating lease liabilities provided in Note 13 to the financial statements - The company leases real properties for administrative and sales offices, transportation, office, and other equipment[298](index=298&type=chunk) - Details on leasing arrangements and future maturities of operating lease liabilities are provided in Note 13, Leases[298](index=298&type=chunk) [Foreign Currency Derivative Contracts](index=58&type=section&id=Foreign%20Currency%20Derivative%20Contracts) Western Union uses foreign currency derivatives to minimize exposure to exchange rate changes, primarily related to its Business Solutions segment, with most contracts having a duration of less than one year - The company uses derivatives to minimize exposures related to changes in foreign currency exchange rates[299](index=299&type=chunk) - The substantial majority of these derivative contracts relate to the Business Solutions segment and have a duration at inception of less than one year[299](index=299&type=chunk) - Further details are available in Note 15, Derivatives[299](index=299&type=chunk) [Purchase Obligations](index=58&type=section&id=Purchase%20Obligations) As of December 31, 2022, Western Union had approximately $240 million in outstanding purchase obligations, with about $140 million expected to be paid within the next 12 months - As of December 31, 2022, outstanding purchase obligations totaled approximately **$240 million**[300](index=300&type=chunk) - Approximately **$140 million** of these obligations are expected to be paid in the next 12 months[300](index=300&type=chunk) - Historically, the company has not had significant defaults on contractual obligations or incurred significant termination penalties[300](index=300&type=chunk) [Pension Plan](index=58&type=section&id=Pension%20Plan) Western Union terminated and settled its frozen defined benefit pension plan in Q4 2021, resulting in approximately $109.8 million in charges, with remaining assets funding defined contribution plan contributions - The company terminated and settled its frozen defined benefit pension plan in Q4 2021[302](index=302&type=chunk) - Approximately **$109.8 million in charges** were incurred in 2021 due to the pension settlement[302](index=302&type=chunk) - Remaining restricted cash and investments from the settlement are used to fund future contributions to the defined contribution plan[302](index=302&type=chunk) [Other Commercial Commitments](index=58&type=section&id=Other%20Commercial%20Commitments) As of December 31, 2022, Western Union had approximately $390 million in outstanding letters of credit and bank guarantees, primarily for regulatory requirements, lease arrangements, and agent agreements - Approximately **$390 million in outstanding letters of credit and bank guarantees** as of December 31, 2022[303](index=303&type=chunk) - These commitments are primarily held in connection with regulatory requirements, lease arrangements, and certain agent agreements[303](index=303&type=chunk) - Many letters of credit and bank guarantees are expected to be renewed prior to expiration[303](index=303&type=chunk) [Critical Accounting Policies and Estimates](index=59&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Western Union's financial statements rely on critical accounting policies and estimates requiring significant management judgment, including those for income taxes, derivatives, goodwill, and other intangible assets - Critical accounting policies and estimates require significant management judgment and are essential for portraying financial condition and results of operations[305](index=305&type=chunk)[306](index=306&type=chunk) - Key areas of estimation include income taxes, derivative financial instruments, goodwill, and other intangible assets[307](index=307&type=chunk)[312](index=312&type=chunk)[317](index=317&type=chunk)[324](index=324&type=chunk) - Actual results may differ from these estimates, potentially impacting reported amounts for revenues, expenses, assets, liabilities, and disclosures[305](index=305&type=chunk) [Income Taxes](index=59&type=section&id=Income%20Taxes) The determination of worldwide income tax provision requires significant judgment due to complex tax laws, with tax contingency reserves of $237.2 million as of December 31, 2022 - The determination of worldwide income tax provision requires significant judgment due to complexities in interpreting tax laws across many jurisdictions[308](index=308&type=chunk) - Tax benefits from uncertain tax positions are recognized only when it is more likely than not that the position will be sustained upon examination[309](index=309&type=chunk) - As of December 31, 2022, tax contingency reserves totaled **$237.2 million**, including accrued interest and penalties[311](index=311&type=chunk) - Differences between reserves and ultimate resolution of tax issues could materially impact income tax expense and operating cash flows[311](index=311&type=chunk) [Derivative Financial Instruments](index=59&type=section&id=Derivative%20Financial%20Instruments) Western Union uses derivatives to manage foreign currency and interest rate exposures, with all derivatives recognized at fair value on the balance sheet, and cash flow hedges impacting AOCL - Derivatives are used to minimize foreign currency and interest rate exposures and to facilitate cross-currency Business Solutions payments[312](index=312&type=chunk) - All derivatives are recognized at fair value on the Consolidated Balance Sheets[312](index=312&type=chunk) - Cash flow hedges (e.g., for forecasted revenues) have fair value changes captured in AOCL and reclassified to earnings when the hedged item affects earnings[313](index=313&type=chunk) - If hedges no longer qualify for accounting, the change in fair value would be reflected in earnings, potentially having a significant impact on reported results; as of December 31, 2022, the cumulative pre-tax unrealized gain in AOCL was **$26.0 million**[316](index=316&type=chunk) [Goodwill](index=60&type=section&id=Goodwill) Goodwill, representing 25% of consolidated assets ($2,096.0 million as of December 31, 2022), is assessed annually for impairment at the reporting unit level, requiring significant judgment in fair value calculations - Goodwill represents the excess of purchase price over fair value of acquired assets and liabilities, and is assessed annually for impairment at the reporting unit level[317](index=317&type=chunk) - The assessment involves a qualitative review and, if needed, a quantitative discounted cash flow analysis, requiring significant judgment in assumptions[318](index=318&type=chunk)[320](index=320&type=chunk) - The carrying value of goodwill was **$2,096.0 million** as of December 31, 2022, representing approximately **25% of consolidated assets**[322](index=322&type=chunk) - No goodwill impairments were recorded in 2022, 2021, or 2020. Goodwill related to the Business Solutions reporting unit is classified as Assets held for sale[323](index=323&type=chunk) [Other Intangible Assets](index=61&type=section&id=Other%20Intangible%20Assets) Other intangible assets, with a net carrying value of $459.3 million as of December 31, 2022, primarily include capitalized agent contract costs and software, amortized and reviewed annually for impairment - Other intangible assets primarily consist of capitalized agent contract costs and software, amortized on a straight-line basis[324](index=324&type=chunk) - These assets are reviewed for impairment annually or when circumstances indicate carrying amounts may not be recoverable, requiring estimates of undiscounted cash flows[324](index=324&type=chunk)[325](index=325&type=chunk) - The net carrying value of other intangible assets was **$459.3 million** as of December 31, 2022, including $1.4 million related to the Business Solutions business held for sale[326](index=326&type=chunk) - Immaterial impairments related to other intangible assets were recorded during 2022, 2021, and 2020[326](index=326&type=chunk) [Recent Accounting Pronouncements](index=61&type=section&id=Recent%20Accounting%20Pronouncements) Information on recent accounting pronouncements is referenced to Note 2, Summary of Significant Accounting Policies, in the financial statements - Refer to Note 2, Summary of Significant Accounting Policies, for further discussion on recent accounting pronouncements[327](index=327&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Western Union is exposed to market risks from foreign currency exchange rates, interest rates, and credit risk, which are managed through business structure, hedging, and diversification - The company is exposed to market risks from changes in foreign currency exchange rates, interest rates, and credit risk[329](index=329&type=chunk) - A risk management program is in place to manage these exposures[329](index=329&type=chunk) - Losses from credit risk have been **less than 2% of consolidated revenues** in all periods presented[341](index=341&type=chunk) [Foreign Currency Exchange Rates](index=62&type=section&id=Foreign%20Currency%20Exchange%20Rates) Western Union manages foreign exchange risk through its business structure and short-duration forward contracts, with longer-term contracts hedging forecasted revenues, primarily in EUR, GBP, and CAD - Foreign exchange risk is managed through business structure and active risk management, primarily settling with agents in USD, MXN, or EUR[330](index=330&type=chunk) - Short-duration foreign currency forward contracts (days to one month) are used to offset fluctuations between transaction initiation and settlement[330](index=330&type=chunk) - Longer-term foreign currency forward contracts (up to 36 months) are used to mitigate risks on forecasted revenues, primarily in EUR, GBP, and CAD[331](index=331&type=chunk) - A hypothetical **10% strengthening or weakening of the USD** would result in an approximate **$40 million decrease/increase to pre-tax annual income**[332](index=332&type=chunk) [Interest Rates](index=62&type=section&id=Interest%20Rates) Western Union holds approximately $2.7 billion in interest-bearing assets, with $1.6 billion at floating rates, and manages interest rate exposure through investment mix and debt terms - The company holds approximately **$2.7 billion in interest-bearing assets** as of December 31, 2022, with approximately **$1.6 billion bearing interest at floating rates**[333](index=333&type=chunk) - Float

The Western Union Company (NYSE:WU) Q4 2022 Results Conference Call February 7, 2023 4:30 PM ET Company Participants Brad Windbigler - IR Devin McGranahan - CEO Matthew Cagwin - CFO Conference Call Participants Tien-Tsin Huang - JPMorgan Darrin Peller - Wolfe Research David Togut - Evercore Ramsey El-Assal - Barclays Rayna Kumar - UBS Chris Zhong - Credit Suisse Will Nance - Goldman Sachs Ken Suchoski - Autonomous James Faucette - Morgan Stanley Operator Good day, and welcome to the Western Union Fourth Qua ...

Start Time: 16:30 January 1, 0000 5:32 PM ET The Western Union Company (NYSE:WU) Q3 2022 Earnings Conference Call November 01, 2022, 16:30 PM ET Company Participants Devin McGranahan - President and CEO Matt Cagwin - Interim CFO Brad Windbigler - Head, Treasury and IR Conference Call Participants Will Nance - Goldman Sachs Vasundhara Govil - Keefe, Bruyette & Woods Timothy Chiodo - Credit Suisse Tien-tsin Huang - JPMorgan Darrin Peller - Wolfe Research Rayna Kumar - UBS Ramsey El-Assal - Barclays Jason Kupf ...

[PART I FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides unaudited financial statements and management's discussion of financial condition and results [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited condensed consolidated financial statements, including income, balance sheets, cash flows, and equity [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This statement summarizes the Company's revenues, expenses, operating income, and net income Condensed Consolidated Statements of Income (in millions, except per share) | Metric (in millions, except per share) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | % Change (YoY) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | % Change (YoY) | |:---------------------------------------|:--------------------------------|:--------------------------------|:---------------|:-------------------------------|:-------------------------------|:---------------| | Revenues | $1,089.6 | $1,286.3 | (15)% | $3,383.6 | $3,786.0 | (11)% | | Total expenses | $857.8 | $967.7 | (11)% | $2,650.3 | $2,979.7 | (11)% | | Operating income | $231.8 | $318.6 | (27)% | $733.3 | $806.3 | (9)% | | Income before income taxes | $193.7 | $291.5 | (34)% | $792.1 | $754.5 | 5% | | Net income | $173.9 | $232.7 | (25)% | $661.2 | $637.0 | 4% | | Basic EPS | $0.45 | $0.57 | (21)% | $1.70 | $1.56 | 9% | | Diluted EPS | $0.45 | $0.57 | (21)% | $1.70 | $1.55 | 10% | | Basic weighted-average shares | 386.5 | 406.3 | | 388.8 | 409.1 | | | Diluted weighted-average shares | 387.6 | 408.0 | | 389.9 | 411.3 | | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement details net income and other comprehensive income components, leading to total comprehensive income Condensed Consolidated Statements of Comprehensive Income (in millions) | Metric (in millions) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | |:---------------------|:--------------------------------|:--------------------------------|:-------------------------------|:-------------------------------| | Net income | $173.9 | $232.7 | $661.2 | $637.0 | | Total other comprehensive income/(loss) | $(4.4) | $12.6 | $(69.1) | $32.8 | | Comprehensive income | $169.5 | $245.3 | $592.1 | $669.8 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents the Company's financial position, including total assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (in millions) | Metric (in millions) | September 30, 2022 | December 31, 2021 | |:---------------------|:-------------------|:------------------| | Total assets | $8,901.3 | $8,823.5 | | Total liabilities | $8,373.0 | $8,467.9 | | Total stockholders' equity | $528.3 | $355.6 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash flows from operating, investing, and financing activities, showing changes in cash Condensed Consolidated Statements of Cash Flows (in millions) | Metric (in millions) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | |:---------------------|:-------------------------------|:-------------------------------| | Net cash provided by operating activities | $522.4 | $686.0 | | Net cash provided by investing activities | $366.7 | $192.6 | | Net cash used in financing activities | $(890.3) | $(883.8) | | Net change in cash and cash equivalents, including settlement, and restricted cash | $(1.2) | $(5.2) | | Cash and cash equivalents, including settlement, and restricted cash at end of period | $2,109.7 | $2,137.9 | - The Company revised its cash flow presentation in Q4 2021 to classify changes in settlement cash associated with settlement obligations as a financing activity and changes from settlement investments as an investing activity. Prior periods were revised to conform, with no impact on net income, financial position, or operating cash flows[29](index=29&type=chunk)[30](index=30&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement outlines changes in stockholders' equity components, including common shares, capital surplus, and deficit Condensed Consolidated Statements of Stockholders' Equity (in millions) | Metric (in millions) | Balance, Dec 31, 2021 | Balance, Sep 30, 2022 | |:---------------------|:----------------------|:----------------------| | Common Shares | 393.8 | 385.9 | | Common Stock Amount | $3.9 | $3.9 | | Capital Surplus | $941.0 | $983.0 | | Accumulated Deficit | $(537.2) | $(337.4) | | Accumulated Other Comprehensive Loss | $(52.1) | $(121.2) | | Total Stockholders' Equity | $355.6 | $528.3 | - Total stockholders' equity increased from **$355.6 million** at December 31, 2021, to **$528.3 million** at September 30, 2022, driven by net income and stock-based compensation, partially offset by common stock dividends and share repurchases[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Business and Basis of Presentation](index=10&type=section&id=1.%20Business%20and%20Basis%20of%20Presentation) This note describes the Company's business segments, financial statement basis, and cash flow presentation revisions - Western Union is a global leader in money movement and payment services, operating through Consumer-to-Consumer, Business Solutions, and Other segments. The Business Solutions segment is currently undergoing a three-phase divestiture, with the first closing completed in March 2022[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The Company's financial statements are unaudited and prepared in accordance with Form 10-Q and Article 10 of Regulation S-X, with certain information condensed or omitted compared to annual GAAP statements[24](index=24&type=chunk)[26](index=26&type=chunk) - Beginning in Q4 2021, the Company revised its cash flow presentation to classify changes in settlement cash associated with settlement obligations as a financing activity and changes from settlement investments as an investing activity. This change was immaterial and did not affect previously reported net income, financial position, or operating cash flows[29](index=29&type=chunk)[30](index=30&type=chunk) [2. Revenue](index=12&type=section&id=2.%20Revenue) This note details revenue recognition policies and provides a breakdown of revenues by product and region - Revenues are primarily derived from customer consideration for money transfers, varying by channel, locations, principal amount, currency exchange rates, and service speed. The Company acts as principal for most transactions, recognizing revenue on a gross basis[34](index=34&type=chunk) Revenues from Contracts with Customers by Product Type and Region (in millions) | Regions (3 Months Ended Sep 30, 2022) | Consumer Money Transfers | Foreign Exchange and Payment Services | Consumer Bill Payments | Other Services | Total | |:--------------------------------------|:-------------------------|:--------------------------------------|:-----------------------|:---------------|:------| | North America | $383.6 | $— | $17.2 | $15.2 | $416.0 | | Europe and CIS | $251.3 | $26.0 | $6.0 | $— | $283.3 | | Middle East, Africa, and South Asia | $156.6 | $— | $0.1 | $— | $156.7 | | Latin America and the Caribbean | $97.0 | $— | $23.4 | $2.1 | $1

The Western Union Company. (NYSE:WU) Q2 2022 Earnings Conference Call August 3, 2022 4:30 PM ET Company Participants Brad Windbigler - Head, Treasury and Investor Relations Devin McGranahan - Chief Executive Officer Raj Agrawal - Chief Financial Officer Conference Call Participants Ken Suchoski - Autonomous Research Darrin Peller - Wolfe Research Timothy Chiodo - Credit Suisse Rayna Kumar - UBS Ramsey El-Assal - Barclays David Togut - Evercore Partners Vasu Govil - KBW Jason Kupferberg - Bank of America Jam ...

The Western Union Company (NYSE:WU) Q1 2022 Earnings Conference Call April 28, 2022 4:30 PM ET Company Participants Brad Windbigler - Head, Treasury and Investor Relations Devin McGranahan - Chief Executive Officer Raj Agrawal - Chief Financial Officer Conference Call Participants Bryan Keane - Deutsche Bank David Togut - Evercore Tien-tsin Huang - JPMorgan Ashwin Shirvaikar - Citi Darrin Peller - Wolfe Research Ken Suchoski - Autonomous Rayna Kumar - UBS Jason Kupferberg - Bank of America Operator Good day ...

it UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-32903 THE WESTERN UNION COMPANY Delaware (State or Other Jurisdiction of Incorporation or Organization) 20-4531180 (I.R.S. Employer Ide ...

The Western Union Company (NYSE:WU) Q4 2021 Earnings Conference Call February 10, 2022 4:30 PM ET Company Participants Brad Windbigler - Head of Treasury & IR Devin McGranahan - CEO Raj Agarwal - CFO Conference Call Participants Tien Tsin Huang - JP Morgan Darrin Peller - Wolfe Research Vasu Govil - KBW Ashwin Shirvaikar - Citi Ken Suchoski - Autonomous David Togut - Evercore ISI Cassie Chan - Bank of America Jenny Friedman - Susquehanna Operator Good day, and welcome to the Western Union Fourth Quarter and ...